Canopy Growth Corporation · TSX:WEED
Canopy Growth — Q3 FY2022 Earnings Presentation
25 slides from Canopy Growth's earnings presentation, Feb 9, 2022
Slide 1: Canopy Growth Q3 FY2022 Earnings Presentation
CANOPY GROWTH Q3 FY2022 EARNINGS PRESENTATION February 9, 2022
Slide 2: Disclaimers and Cautionary Statements
DISCLAIMERS AND CAUTIONARY STATEMENTS This presentation contains “forward-looking statements” and “forward-looking information” within the meaning of applicable U.S. and Canadian securities laws (collectively, “forward-looking statements”), which involve certain known and unknown risks and uncertain
Slide 3: Non-GAAP Measures
NON-GAAP MEASURES Adjusted EBITDA is a non-GAAP measure used by management that is not defined by U.S. GAAP and may not be comparable to similar measures presented by other companies. Adjusted EBITDA is calculated as the reported net income (loss), adjusted to exclude income tax recovery (expense);
Slide 4: Today's Speakers
TODAY’S SPEAKERS DAVID KLEIN JUDY HONG CEO INTERIM CFO 4
Slide 5: Agenda
AGENDA ! Key Takeaways ! Progress Against Our Key Strategic Priorities ! Q3 FY2022 Financial Results Review ! Q&A ! Unless otherwise indicated, all financial information in this presentation is reported in Canadian dollars. ! Unless otherwise indicated, market share data disclosed in this presentati
Slide 6: Key Takeaways
KEY TAKEAWAYS Quarter of action drove sequential revenue growth and our best quarterly revenue for biosteel and Storz & Bickel businesses ! New high potency strain flower products arriving in market under DOJA, 7ACRES, 7ACRES Craft Collective and Tweed brands ! Tweed Rebrand drawing positive initial
Slide 7: Flower & Pre-roll joints
FLOWER & Pre-roll joints ! Maintained #1 market share in Total Canada premium flower category with 10% market share ! New high potency strains arriving in market with the launch of 10 new premium flower strains under DOJA, 7ACRES, and 7ACRES Craft Collective brands in Q3 FY2022 ! Strong consumer dem
Slide 8: Beverages & Edibles
BBEVERAGES & Edibles ! Expanded the popular Deep Space brand in Q3 FY2022 with the launch of new Deep Space XPRESS gummies, the company’s first single 10 mg THC gummy offering in Canada, and new Limon Splashdown flavor Deep Space 10 mg THC beverage ! New Deep Space Orange Orbit flavor began shipping
Slide 9: BioSteel and Storz & Bickel
BioSteel and Storz & Bickel ! BioSteel achieved record quarterly revenue, a 25% increase from the previous record from Q4 FY2021 ! Recently announced the signing of BioSteel retail authorizations with Albertsons Company, Rite Aid, Food Lion, Stop & Shop and Sheetz as well as over 20 additional natio
Slide 10: U.S. CBD
U.S. CBD ! Successful launch of whisl CBD vape with Circle-K, now on the shelves of over 3500 stores across the U.S, has made whisl the #1 CBD-only Vape1 in Food, Drug, Mass + Convenience channels according to IRI Data2 ! Martha Stewart CBD and Quatreau door count increased sequentially in Q3 FY2022
Slide 11: Driving brand awareness through activations
Driving brand awareness through activations Pushed Black Forbes.com - Holiday Friday week sales Gift Guide 2021: The across all channels Best High-Tech leveraging team Cannabis partnerships & Gear: MIGHTY+ #TeamBioSteel athletes Esquire.com - The 20 Best Weed 17,000 Pour Accessories to Fit Samples S
Slide 12: Building U.S. THC Ecosystem
Building U.S. THC Ecosystem Established dedicated internal organization to drive synergy across Strategy, M&A, and Consumer Insights capabilities to execute the Company’s North America THC strategy to establish a scalable footprint, best-in-class products and national distribution networks required
Slide 13: Q3 FY2022 Financial Results
Q3 FY2022 FINANCIAL RESULTS 13
Slide 14: Tracking Our KPI
Tracking Our KPI Meeting or Exceeding Target Approaching Target Below Target Q4 Q1 Q2 Q3 FY2021 FY2022 FY2022 FY2022 WIN WITH CONSUMER #1 or #2 Market Share in Canada ! Maintained market #1 or #2 Market Share in U.S. leadership in the premium #1 or #2 Market Share in Germany flower segment6 Net Sale
Slide 15: Q3 FY2022 Key Financial Highlights
Q3 FY2022 KEY FINANCIAL HIGHLIGHTS • Q3 FY2022 Net Revenue increased vs. (CDN in millions) Q3 FY2022 Q3 FY2021 Q3 FY2021 7% quarter-over-quarter; decreased 8% year-over-year Net Revenue $141.0 $152.5 (8%) • Gross margin was negatively impacted by lower production Adjusted Gross Margin 13% 26% (13pp)
Slide 16: Revenue Performance by Segment
REVENUE PERFORMANCE BY SEGMENT vs. (in millions of Canadian dollars, unaudited) Q3 FY2022 Q3 FY2021 Q3 FY2021 Canadian Recreational Cannabis Net Revenue Business to Business1 $33.3 $43.2 (23%) Business to Consumer $14.5 $20.2 (28%) $47.8 $63.4 (25%) Canadian Medical Cannabis Net Revenue2 $12.9 $13.9
Slide 17: Revenue Performance by Form
REVENUE PERFORMANCE BY FORM vs. (in millions of Canadian dollars, unaudited) Q3 FY2022 Q3 FY2021 Q3 FY2021 Canadian Recreational Cannabis Dry Bud1 $47.0 $66.2 (29%) Oils and Softgels1 $8.8 $7.3 21% Beverages, Edibles, Topicals, and Vapes1 $5.8 $9.6 (40%) Other Revenue Adjustments2 ($1.0) ($3.7) 73%
Slide 18: Gross Margin Performance
Gross Margin performance Quarterly Gross Margin Trend Drivers of Q3 FY2022 Gross Margin Performance (-) Charges totaling $3.1M related to the flow-through of inventory step-up associated Reported Gross Margins Adjusted Gross Margins with the acquisition of Supreme Cannabis in Q1 FY2022, and restruct
Slide 19: Opex Trend
Opex Trend OpEx as a Percentage of Net Sales Quarterly OpEx Trend (C$ in `000s) (Q3 FY2021 vs. Q3 FY2022) 180,000 Total OpEx Total OpEx Ex-SBC 50% Q3 FY2021 Q3 FY2022 160,000 45% 140,000 40% 35% 120,000 30% 100,000 25% 80,000 20% 60,000 15% 40,000 10% 20,000 5% 0 0% Q3 FY2021 Q4 FY2021 Q1 FY2022 Q2
Slide 20: Adjusted EBITDA and Free Cash Flow
ADJUSTED EBITDA AND FREE CASH FLOW Adjusted EBITDA Trend (C$ in `000s) Free Cash Flow Trend (C$ in `000s) Q3 FY2021 Q4 FY2021 Q1 FY2022 Q2 FY2022 Q3 FY2022 Q3 FY2021 Q4 FY2021 Q1 FY2022 Q2 FY2022 Q3 FY2022 $0 $0 -$20,000 -$20,000 -$40,000 -$40,000 -$60,000 -$60,000 -$80,000 -$80,000 -$100,000 -$100,
Slide 21: Appendix
Appendix 21
Slide 22: Adjusted Gross Margin (Non-GAAP) Reconciliation
ADJUSTED GROSS MARGIN 1 (NON-GAAP) RECONCILIATION !"#$%&'"()*+%%(,-*./0! 1'2+02/3/-&/+0(45+06)!!7(,'-%$*'8 "#$%%!&'()#*!%(+%+!,%-%&.%$!/01 !"#$%&'()*#+)$',$-*#*+"*#$+'..*/)$01203%$4&0/0$"#+"2*%0+5$(#*(+"%0+6 2320 2323 4%)!$%5%(6% 708319:2 70;21;2< =$'**!&>$?@(1!>*!$%A'$)%+ 031393 281;<; B+C6*)&%()*!
Slide 23: Adjusted EBITDA (Non-GAAP) Reconciliation
ADJUSTED EBITDA 1 (NON-GAAP) RECONCILIATION !"#$%&'"()*+,-!! .'/01/2324&201(560178!!9(:'4%$;'< "#$%%!&'()#*!%(+%+!,%-%&.%$!/01 !"#$%&'()*#+)$',$-*#*+"*#$+'..*/)0$(#*(+"%1+2 2320 2323 4%)!5'** 6700819:;< 67=2:1280< >(-'&%!)?@!$%-'A%$B 70=/< 7081;33< C)#%$!7D(-'&%<!%@E%(*%1!(%) 7/912=2< 2:318;F G'**!'
Slide 24: Free Cash Flow (Non-GAAP) Reconciliation
FREE CASH FLOW 1 (NON-GAAP) RECONCILIATION !"##$%&'($!)*+$,#-*.-/)/&0/*.! 12*.34556$7#&'8"#9 "#$%%!&'()#*!%(+%+!,%-%&.%$!/01 !"#$%&'()*#+)$',$-*#*+"*#$+'..*/)0$(#*(+"%1+2 2320 2323 4%)!-5*#!6*%+!7(!'8%$5)7(9!5-)7:7)7%* ;<0=>1/?3@ ;<?>1=3A@ B6$-#5*%*!'C!5(+!+%8'*7)*!'(!8$'8%$)D1!8E5()!5(+!%F678&%() <
Slide 25: Thank you
Thank you 25