Hostess Brands — Investor Presentation (November 2016)
20 slides from Hostess Brands's investor presentation, Nov 28, 2016
Slide 1: Hostess Brands Investor Presentation
PAGE 0 ® ® HOSTESS BRANDS INVESTOR PRESENTATION November 2016
Slide 2: Disclaimer: Forward Looking Statements
PAGE 1 ® DISCLAIMER Forward Looking Statements This investor presentation contains statements reflecting our views about our future performance that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that involve substantial risks and u
Slide 3: Experienced Senior Leadership
PAGE 2 ® Hostess EXPERIENCED SENIOR LEADERSHIP Dean Metropoulos Executive Chairman Bill Toler President & CEO Tom Peterson EVP & CFO Executive Chairman of Hostess Founder and Executive Chairman of Metropoulos & Co. More than 30 years of successful experience revamping iconic brands throughout
Slide 4: I. Business Overview
PAGE 3 ® ®I. BUSINESS OVERVIEW
Slide 5: Key Business Themes
PAGE 4 ® KEY BUSINESS THEMES Iconic brands with nearly 100-year history Hostess business transformation: Significant capital investment (~$150 million) since the relaunch has driven optimization across manufacturing, distribution and implementation of highly analytical IT systems Strong cust
Slide 6: Brand Strength Driving Growth and Category
PAGE 5 ® $2.68 $3.03 $4.40 $4.44 $4.86 BRAND STRENGTH DRIVING GROWTH AND CATEGORY Special emotional relationship with consumers U.S. consumers share a special emotional relationship with the 96 year old Hostess, a brand that defines the rapidly growing “Indulgent Snacking” trend 96 year history Bran
Slide 7: Hostess Still Has Significant Headroom for Growth and Share Gains
PAGE 6 ® 16% 22% 2016 OldCo HOSTESS STILL HAS SIGNIFICANT HEADROOM FOR GROWTH AND SHARE GAINS Hostess $ share of SBG category1 Distribution expansion (more items in more stores) Custom SKUs Seasonal flavors Display execution Portfolio optimization eCommerce Significant Upside Remains Not
Slide 8: Significant Room for Growth In and Beyond SBG
PAGE 7 ® HOSTESS HAS SIGNIFICANT ROOM FOR GROWTH BOTH IN AND BEYOND SBG FREEZER AISLE FOOD-SERVICE INTERNATIONAL IN-STORE BAKERY CLUB NEW FORMS NEW FILLINGS NEW FLAVORS $1.1B $1.5B $2B LICENSING T O D A Y 1 IN -A IS L E W H IT E S P A C E 2 N E W A IS L ES A N D C H A N N E L S 2 BFY 1 Current sales
Slide 9: Opportunities for the Future
PAGE 8 ® Acquisition of Superior Cake Products, Inc.1 Cross-category licensing partnerships OPPORTUNITIES FOR THE FUTURE Core New products and platforms Line extensions and flavors Seasonal LTO programs ACV expansion White Space Frozen Retail Food Service Club International Sch
Slide 10: Hostess' Approach to Better-for-You
PAGE 9 ® HOSTESS’ APPROACH TO BETTER-FOR-YOU Objective: provide better-for-you options for consumers while maintaining brand equity and taste credentials Today – “0 grams trans fat per serving and no PHOs” Short-term – Label simplification and focus on natural flavors and colors Long-term – Fo
Slide 11: II. Financial Overview
PAGE 10 ® ®II. FINANCIAL OVERVIEW
Slide 12: Significant Growth Since Re-launch with Meaningful Upside Potential
PAGE 11 ® SIGNIFICANT GROWTH SINCE RE-LAUNCH WITH MEANINGFUL UPSIDE POTENTIAL Adj. EBITDA Capital Expenditures Net Revenue Gross Profit(1) ($ in millions) ($ in millions) ($ in millions) Notes: Superior Cake Products, Inc. figures are unaudited based upon actual/estimated results and do not contain
Slide 13: Strong Momentum Continues in Q3 2016
PAGE 12 ® 136 162 41 56 3 2 1 $139 $164 $42 $56 YTD '15 YTD '16 Q3 '15 Q3 '16 204 239 62 83 5 4 2 $209 $243 $64 $83 YTD '15 YTD '16 Q3 '15 Q3 '16 STRONG MOMENTUM CONTINUES IN Q3 2016 Adj. EBITDA Adj. EBITDA Margin Net Revenue Gross Profit(1) ($ in millions) ($ in millions) ($ in millions) Q3 2016 Hi
Slide 14: Sustainability of Margins
PAGE 13 ® SUSTAINABILITY OF MARGINS Strong margin profile driven by: (i) the health of the SBG category combined with (ii) Hostess’ leading brand position in the premium segment and (iii) a highly efficient operating model that could only be implemented through the unique circumstances around the re
Slide 15: Attractive Margin Profile Relative to Peers
PAGE 14 ® ATTRACTIVE MARGIN PROFILE RELATIVE TO PEERS LTM 9/30/16 Adj. EBITDA Margins LTM 9/30/16 FCF Conversion(1) High growth food & beverage Snacking & baking Mid-cap food (3) (2) Source: Company and public filings; WallStreet Research; FactSet. Notes: LTM as of 9/30/2016. (1) FCF conversion defi
Slide 16: III. Transaction Summary
PAGE 15 ® ®III. TRANSACTION SUMMARY
Slide 17: SPAC Transaction Terms
PAGE 16 ® At transaction close Gores share price $10.00 Shares outstanding (millions)2 130.0 Total equity value $1,300.4 Net debt $991.8 Acquisition enterprise value $2,292.2 SPAC TRANSACTION TERMS Valuation Post-transaction ownership breakdown • Acquisition enterprise value of $2,292 million • Net
Slide 18: IV. Appendix
A Goon CAKE TO Che, = RATIg “EMI IV. APPENDIX
Slide 19: Hostess Non-GAAP Reconciliations (Unaudited)
PAGE 18 ® HOSTESS NON-GAAP RECONCILIATIONS (UNAUDITED) 18 Twelve Months Ended 30-Sep-16 Nine Months Ended 30-Sep-16 Three Months Ended 30-Sep-16 Twelve Months Ended 31-Dec-15 Nine Months Ended 30-Sep-15 Three Months Ended 30-Sep-15 Twelve Months Ended 31-Dec-14 Net income (loss) $98.7 $81.5 $33.5 $8
Slide 20: Glossary
PAGE 19 ® GLOSSARY Term Definition ACV All-commodity volume (%) BFY Better-for-you C-store Convenience store ISB In-store bakery LTO Limited time offer PHO Partially hydrogenated oils SBG Sweet baked goods SKU Stock keeping unit
Hostess Brands — Investor Presentation (November 2016) on 6ix