Utz Brands Inc · NYSE:UTZ

Utz Brands — Investor Presentation (December 2021)

45 slides from Utz Brands's investor presentation, Dec 7, 2021

  1. Slide 1: December 2021 Utz Brands, Inc. Investor Presentation

    ℠ December 2021 Utz Brands, Inc. Investor Presentation

  2. Slide 2: Disclaimer: Forward-Looking Statements

    ℠ Disclaimer 2 Forward-Looking Statements Certain statements made herein are not historical facts but are “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, as amended. The forward-looking statements generally are

  3. Slide 3: Today's Agenda

    ℠ Today’s Agenda Value Creation StrategyII Business Overview Recent PerformanceIII IV I 3

  4. Slide 4: I. Business Overview

    I. Business Overview

  5. Slide 5: Utz Overview

    ℠ 48% 18% 9% 5% 17% 3% Utz Overview 1) Based on MULO+C Total US IRI data for 52-weeks ended 10/3/2021. Pro forma for acquisitions. 2) LTM 3Q’21 Pro Forma Net Sales and Further Adj. EBITDA reflects acquisitions of H.K. Anderson, Truco, Vitner’s and Festida Foods on a 52-week basis. Please see appendi

  6. Slide 6: 2011-2021 Rapid Geographic and Brand Portfolio Expansion Driven by Strategic M&A

    ℠ 2011-2021 – Rapid Geographic and Brand Portfolio Expansion Driven by Strategic M&A 100-Year Old Family Company with Tremendous Heritage TodayRich Heritage and Regional Expansion (1921–2011) National Scale Multi-Branded Snack Platform Created (2011–2021) 1940s-1960s – First Dedicated Manufacturing

  7. Slide 7: Salty Snacks Is a Highly Attractive CPG Category

    ℠ Salty Snacks Is a Highly Attractive CPG Category Supported by Strong Consumer Trends and Category Dynamics Source: Euromonitor International.  Category leaders compete primarily with marketing and innovation versus price  Low penetration by Private Label at 5-6% and flat for the last decade  Pr

  8. Slide 8: Scale Growth Platform in Salty Snacks Category

    ℠ Note: Utz figures include all acquisitions. 1) IRI MULO+C total US for the Salty Snacks category for the last 52-weeks ended October 3, 2021. Excludes Salsa and Queso. 2) Pro forma for acquisitions. Total United States Salty Snack Dollar Sales Last 52-Weeks Ended October 3, 2021(1) Scale is Import

  9. Slide 9: Track Record of Consistent Growth

    ℠ $216 $222 $228 $254 $266 $290 $359 $318 $398 $403 $707 $772 Track Record of Consistent Growth 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 1) Source: Internal financials. Figures for 2001 – 2020 represent Net Sales. 2) 2020 pro forma for the full year impact of Truco, HK Anderson, a

  10. Slide 10: Strong Brand Portfolio with Focus on Power Brands

    ℠ Strong Brand Portfolio with Focus on Power Brands PorkSkins Foundation Brands (13% of Retail Sales)(1,2) Iconic Heritage Power Brands (87% of Retail Sales)(1) Craft Better For You Regional / Other Licensed Other • Partner Brands • Private Label 1) Based on MULO+C Total US IRI data for 52-weeks end

  11. Slide 11: Broad Distribution Across Channels and Customers

    ℠ Broad Distribution Across Channels and Customers 15+ Year Average Relationship with Top Customers 52-Weeks Ended October 3, 2021 Retail Sales by Channel(1) Illustrative Customers 1) Based on MULO+C Total US IRI data for 52-weeks ended 10/3/2021. Pro forma for acquisitions. 2) IRI eCommerce include

  12. Slide 12: Flexible, Efficient DSD and Warehouse Distribution System

    ℠ Distributor Flexible, Efficient DSD and Warehouse Distribution System Direct to Warehouse Direct to Store (DSD) ~20,000Doors ~725Routes 80,000+Doors ~1,800+ Total Routes Utz Transition to IOs % of Routes 2016 Q3 2021 Company-Owned 67% 16% Independent Operators (IO) 33% 84% ~37,000 Doors ~525 Retai

  13. Slide 13: National Manufacturing Footprint with Broad Capabilities

    ℠ National Manufacturing Footprint with Broad Capabilities  ~500 Million Lbs. Annual Capacity(1)  Low 70s% Capacity Utilization(1)  Strong Quality and Safety Record  Opportunities to Optimize Footprint 17 Manufacturing Facilities Packaging MultipacksBarrelsBags TraysSeasonal Olive OilAvocado Oi

  14. Slide 14: Track Record of Accretive and Well-Integrated Acquisitions

    ℠ 2021 9.6x 5.7x 6.1% 2021 6.0x 5.1x 7.1% 2021 8.7x 5.9x 4.4% 2020 9.3x 8.4x 2.5% 2020 5.7x 4.9x 2.4% 2019 11.2x 7.2x 6.2% 2017 NM 10.2x 13.8% 2016 15.8x 7.6x 9.6% 2013 13.2x 5.7x 8.7% 2011 8.0x 5.6x 7.0% All Acquisitions(3) 7.5x 6.5% Track Record of Accretive and Well-Integrated Acquisitions Year P

  15. Slide 15: Attractive Value Creation Potential Plus Additional Upside From Strategic Acquisitions

    ℠ Attractive Value Creation Potential Plus Additional Upside From Strategic Acquisitions Long-Term Organic Growth Model Adj. EBITDA 6 – 8% Productivity / Margin Enhancements Adj. EPS 8 – 10% Deleveraging ~10 – 12% 1) Based on management estimates and long-term historical category trend. Net Sales In

  16. Slide 16: II. Value Creation Strategy

    II. Value Creation Strategy

  17. Slide 17: Goal: Be Fastest Growing Pure-Play Branded Snack Platform of Scale in the U.S.

    ℠ Goal: Be Fastest Growing Pure-Play Branded Snack Platform of Scale in the U.S. 1. Drive Productivity 2. Optimize Revenue and Trade 3. Improve Margin Mix 1. Focus on Branded Snacking in the U.S. 2. Deliver Strong Synergies 1. Accelerate Power Brands Through Enhanced Marketing and Innovation 2. Expa

  18. Slide 18: Reduce Costs and Enhance Margins

    ℠ Reduce Costs and Enhance Margins  Manufacturing Efficiencies  Line automation  Equipment upgrades/expansion  Waste/scrap reduction  Network Optimization  Distribution optimization  Pallet/case efficiency  Order management automation  Product Design  Bag/case pack efficiencies  Packaging

  19. Slide 19: Accelerate Power Brands Through Enhanced Marketing and Innovation

    ℠ 2020: ~1% 4.0% Utz Peer Average Accelerate Power Brands Through Enhanced Marketing and Innovation Source: Company filings, Management estimates. IRI MULO-C data for 2015 and last 52-weeks ended 10/3/21. 1) Represents last reported fiscal year advertising expense as a % of Net Sales per most recent

  20. Slide 20: Flavored Pretzels and Power Brand Innovation

    ℠ Flavored Pretzels are 45% of Sub-Category and Growing nearly 20% and Utz is Meaningfully Underweight in Flavored (<10% of our mix)(1) 1) Based on MULO+C Total US IRI data for 52-weeks ended 10/3/2021. Pro forma for acquisitions. Authentic Mexican Style and Flavor Portfolio Expansion Strategic Vari

  21. Slide 21: Expand Distribution in Underpenetrated Channels and Customers

    ℠ Expand Distribution in Underpenetrated Channels and Customers Source: Based on MULO+C Total US IRI data for 52-weeks ended 10/3/2021. Pro forma for acquisitions. 1) Based on IRI data. Pro Forma for acquisitions. E-commerce includes retailer sites, click & collect, BOPIS, etc. 2) 5.2% target share

  22. Slide 22: Continue National Geographic Expansion

    ℠  Focus on Large Population Markets –Key Expansion Markets: South, Midwest, Colorado –Key Emerging Markets: Florida, Texas, California, West  Drive Power Brands  Expand DSD Route Network  Purchase 3rd party Master Distributors  Make Tuck-in Acquisitions Continue National Geographic Expansion G

  23. Slide 23: Continue Strategic Acquisitions

    ℠ Continue Strategic Acquisitions Scalable M&A Platform Significant Synergy Opportunities Driven by Highly Leverageable Manufacturing and Distribution System Robust Pipeline & Favorable Competitive Dynamics Utz is Logical Consolidator in Category with Numerous Opportunities  Smaller Tuck-ins  Tran

  24. Slide 24: III. Recent Performance

    III. Recent Performance

  25. Slide 25: Lapping Significant Market Share Gains in 2020

    ℠ Lapping Significant Market Share Gains in 2020 25 23% 10% 13% 10% 10% 9% 8% 9% 8% 8% 6% 31% 25% 27% 20% 18% 17% 15% 12% 10% 10% 8% 55,000,000 56,000,000 57,000,000 58,000,000 59,000,000 60,000,000 61,000,000 62,000,000 0% 5% 10% 15% 20% 25% 30% 35% 4W E 02 -2 3- 20 4W E 03 -2 2- 20 4W E 04 -1 9- 2

  26. Slide 26: Retail Sales Two-Year Growth Rates

    ℠ Retail Sales Two-Year Growth Rates (updated through November 28) 26 Retail Sales 2-Year CAGR Rolling 12-Week Trend Source: IRI, Total US MULO + C. trend on a pro forma basis. Total Utz portfolio returned to two-year share gains in the third quarter driven by Power Brands, and our growth rates have

  27. Slide 27: Power Brands and Foundation Brands Retail Sales

    ℠ 1) Source: IRI Custom Panel, Total US MULO + C, 13-weeks ended 10/3/2021; % YoY Growth compared to the comparable period in the prior year on a pro forma basis. 2) IRI does not include Partner Brands and Private Label retail sales. 27 Pork Skins Chips/Cheese Other(2) • Partner Brands • Private Lab

  28. Slide 28: Two-Year Growth Across Major Sub-Categories

    ℠ 28 Source: IRI, Total US MULO + C. on a pro forma basis. Two-Year Growth Across Major Sub-Categories Sub-Category Retail Sales 2-Year CAGR (13-Weeks Ended 10/3/21) Pretzels Total Salty Snacks 11.1% Potato Chips Tortilla Chips Pork Rinds Cheese Snacks 5.1% 8.0% 9.2% 7.6% 17.3% 18.0% 11.0% 9.8% 13.3

  29. Slide 29: Positive Momentum Led by Power Brands Across All Geographies

    ℠ 29 Source: IRI, Total US MULO + C. on a pro forma basis. Positive Momentum Led by Power Brands Across All Geographies Geographic Channel Retail Sales 2-Year CAGR (13-Weeks Ended 10/3/21) 7.5% 9.2%8.3% Total US 11.1% Core 5.7% Expansion Emerging 9.5% 6.8% 13.3% 16.3% 8.4% 14.0% 15.4% 13-Weeks Ended

  30. Slide 30: Strong Growth for ON THE BORDER in All Geographies

    ℠ Strong Growth for ON THE BORDER® In All Geographies 30 ON THE BORDER® Retail Sales 2-Year CAGR Rolling 12-Week Trend Source: IRI, Total US MULO + C. trend Leveraging the Utz sales platform to drive increasing growth and unlock revenue synergies Transitioned our primary DSD Distributor for ON THE B

  31. Slide 31: Share Gains in Grocery, Mass and C-Store

    ℠ 31 Source: IRI, Total US MULO + C. on a pro forma basis. Share Gains in Grocery, Mass and C-Store Retail Channel Retail Sales 2-Year CAGR (13-Weeks Ended 10/3/21) ClubMULO + C 9.5% 8.3% Grocery Mass C-Store 11.1% 7.8% 8.2% 10.4% 11.7% 14.9% 14.9% 17.0% 12.6% 13.0% 3.9% 5.7% 7.7% 13-weeks ended 10/

  32. Slide 32: Third Quarter 2021 Financial Results Summary

    ℠ Third Quarter 2021 Financial Results Summary 32 Note: Pro Forma Net Sales, Adjusted SG&A, Adjusted Gross Profit, Adjusted EBITDA, Adjusted Net Income and Adjusted EPS are Non-GAAP financial measures. See appendix for reconciliation of Non-GAAP financial measures to most directly comparable GAAP me

  33. Slide 33: Q3 Net Sales Bridge

    ℠ 33 Q3 Net Sales Bridge 1) Acquisitions include partial period results of Truco Enterprises from 12/14/2020 to 10/3/2021; H.K. Anderson from 11/2/2020 to 10/3/2021; Vitner’s from 2/8/2021 to 10/3/2021; Festida 6/7/2021 to 10/3/2021 2) Estimated impact due to conversion of employee-serviced DSD rout

  34. Slide 34: Q3 Adjusted EBITDA Margin Bridge

    ℠ SG&A (ex- Transportation) 3Q20 0.7%3.6% -0.8% Price/Mix 1.0% Acquisitions 1.0% Productivity -6.5% Volume Inflation 3Q21 15.4% 14.3% 34 Q3 Adjusted EBITDA Margin Bridge Q3 Adjusted EBITDA Margin Decomposition Note: Adjusted EBITDA Margin is a Non-GAAP financial measure. See appendix for reconciliat

  35. Slide 35: Implementing Pricing Actions in Response to Rising Input Costs

    ℠ 35 Implementing Pricing Actions in Response to Rising Input Costs Gross Input Cost Inflation % vs. 2020 Price/Mix Contribution as a % of Net Sales 1Q’21 2Q’21 3Q’21 4Q’21E 1.9% 2.3% 4.2% Pricing actions are building to help offset rising inflation Our total input costs across not only commodities,

  36. Slide 36: Strong Liquidity and No Significant Debt Maturities Until 2028

    ℠ Strong Liquidity and No Significant Debt Maturities Until 2028 36 Strong Liquidity • $159M of liquidity as of 10/3/21 • $26M Cash + $133M available ABL as of 10/3/21 • More than 5x interest coverage • 1% principal amortization on term loan annually Well-Priced Credit Structure • Term Loan B priced

  37. Slide 37: Capital Focused on Driving Growth

    ℠ Capital Focused on Driving Growth 1 Business Growth (Including M&A) 2 Debt Reduction 3 Dividend Increase 4 Share Buyback • Target Net Leverage of 3 – 4x • Higher Net Debt / Adj. EBITDA Possible for Strategic Acquisitions, Returning to Target Range within 1 – 2 Years • LTM Q3 Net Debt / Normalized

  38. Slide 38: Appendix

    Appendix POTATO CHIPS ~ el = T

  39. Slide 39: Reconciliation: Net Sales and Pro Forma Net Sales

    ℠ Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures 39 Net Sales and Pro Forma Net Sales October 3, 2021 September 27, 2020 October 3, 2021 September 27, 2020 (dollars in millions) (Successor) (Combined Successor and Predecessor) (Successor) (Combined Successor and Predece

  40. Slide 40: Reconciliation: Gross Profit and Adjusted Gross Profit

    ℠ Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures 40 Gross Profit, Adjusted Gross Profit and PF Adj Gross Profit October 3, 2021 September 27, 2020 October 3, 2021 September 27, 2020 (dollars in millions) (Successor) (Combined Successor and Predecessor) (Successor) (Comb

  41. Slide 41: Reconciliation: Adjusted SG&A Expense

    ℠ Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures 41 Adjusted Selling, General and Administrative Expense October 3, 2021 September 27, 2020 October 3, 2021 September 27, 2020 (dollars in millions) (Successor) (Combined Successor and Predecessor) (Successor) (Combined Su

  42. Slide 42: Reconciliation: Adjusted Net Income

    ℠ 42 Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures (1) Income Tax Rate Adjustment calculated as Income (Loss) before taxes plus (i) Acquisition, Step-Up Depreciation and Amortization and (ii) Other Non-Cash and/or Non-Recurring Adjustments, less the difference between

  43. Slide 43: Reconciliation: Depreciation and Amortization Expense

    ℠ 43 Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures Depreciation and Amortization Expense October 3, 2021 September 27, 2020 October 3, 2021 September 27, 2020 (dollars in millions) (Successor) (Combined Successor and Predecessor) (Successor) (Combined Successor and Pre

  44. Slide 44: Reconciliation: EBITDA, Adjusted EBITDA and Further Adjusted EBITDA

    ℠ 44 Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures (1) Income Tax Rate Adjustment calculated as (Loss) Income before taxes plus (i) Acquisition, Step-Up Depreciation and Amortization and (ii) Other Non-Cash and/or Non-Recurring Adjustments, multiplied by an effective c

  45. Slide 45: Reconciliation: Footnotes and Supplemental Items

    ℠ 45 Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures (1) Represents identified integration-related cost savings expected to be realized from the elimination of certain procurement, manufacturing, and logistics as well as​ selling, general and administrative expenses in c

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