Canopy Growth Corporation · TSX:WEED
Canopy Growth — Q1 2022 Earnings Presentation
25 slides from Canopy Growth's earnings presentation, Aug 6, 2021
Slide 1: Canopy Growth Q1 2022 Earnings Presentation
CANOPY GROWTH Q1 2022 EARNINGS PRESENTATION August 6, 2021
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 MIKE LEE CEO EVP & CFO 4
Slide 5: Agenda
AGENDA ! Key Takeaways ! Progress Against Our Key Strategic Priorities ! Q1 2022 Financial Results Review ! Q&A All financial information in this presentation is reported in Canadian dollars, unless otherwise indicated. 5
Slide 6: Key Takeaways
KEY TAKEAWAYS ANOTHER QUARTER OF STRONG DOUBLE-DIGIT REVENUE GROWTH YEAR-OVER-YEAR ! Delivered 23% growth in net revenue in Q1 2022 versus Q1 2021 ! Strong double-digit growth in both cannabis and consumer products businesses COMPLETED ACQUISITION OF ACE VALLEY AND SUPREME CANNABIS ! Commercial and
Slide 7: Recent Completed Acquisitions
RECENT COMPLETED acquisitions ! Strengthens brand portfolio by including one of ! Range of SKUs complements Canopy Growth’s Canada’s leading premium and ultra-premium brands, existing portfolio of premium vapes, pre-roll joints, 7ACRES and 7 ACRES CRAFT COLLECTIVE and gummies ! Brings a premium, low
Slide 8: Strong Innovation Pipeline
Strong INNOVATION pipeline Q4 21 & Q1 22 Q2 22 + 50+ SKUS Including: 100+ SKUS Twd.28 Flower Doja Legendary Blue Dream and Apple Pie #5 and #6 single strain products in Q1’221 Engaging New Products Focused On: Larry Flower Strong consumer ! Higher THC, Single Strain Genetics feedback Quatreau Ready-
Slide 9: Flower & Pre-roll Joints
FLOWER & Pre-roll joints Key Innovation Highlights ! Launching range of new genetics to capitalize on growing demand for single strain flower & PRJs ! QC-exclusive Vert Sour Kush PRJs launched ; Vert Koshur OG flower shipped ! Tweed Quickies & Ace Valley Pinners, small PRJs in multiple single strain
Slide 10: Vape & Concentrates
VAPE & Concentrates Key Innovation Highlights ! Launched 0.5ml and 1ml 510 cartridges under both the Tweed and Twd. Brands; seeing solid initial demand ! Launched Tweed Citrus C C-land all-in-one vape pens, with positive consumer response ! Range of vape innovations coming to market over the coming
Slide 11: Beverages
BEVERAGES Key Innovation Highlights ! Launching a range of high THC beverages to capitalize on growing market demand for high THC beverages ! Tweed Iced Tea, 5 mg THC, available in refreshing lemon and raspberry flavors, launched ! Capitalizing on the seltzer wave across the market, Tweed Fizz seltz
Slide 12: Edibles
EDIBLES Key Innovation Highlights ! Launching a range of differentiated confectionary products ! Expanded popular Twd. gummy line; expect to ship great tasting Twd. Mixed Berry shortly ! New Ace Valley gummies in Key Lime Pie, Peaches & Honey flavors launched ! Ace Valley Dream CBN gummies, Blackber
Slide 13: Q1 2022 Financial Results
Q1 2022 FINANCIAL RESULTS 13
Slide 14: Tracking Our KPI
Tracking Our KPI Meeting or Exceeding Target Approaching Target Below Target Q2 2021 Q3 2021 Q4 2021 Q1 2022 WIN WITH CONSUMER ! Maintained #1 market share in tracked #1 or #2 Market Share in Canada Canadian recreational cannabis market #1 or #2 Market Share in U.S. amid a highly competitive landsca
Slide 15: Q1 2022 Key Financial Highlights
Q1 2022 KEY FINANCIAL HIGHLIGHTS vs. (CDN in millions) Q1 2022 Q1 2021 • Q1 2022 Net Revenue Q1 2021 increased by 23% year-on- Net Revenue $136 $110 23% year (YoY) • Cannabis Net Revenue Adjusted Gross Margin 21% 7% 14pp increased 17% YoY; Consumer Product’s Net Adjusted EBITDA ($64) ($92) 31% Reven
Slide 16: Revenue Performance by Segment
REVENUE PERFORMANCE BY SEGMENT vs. (in millions of Canadian dollars, unaudited) Q1 2022 Q1 2021 Q1 2021 Canadian Recreational Cannabis Net Revenue Business to Business1 $42.7 $34.9 22% Business to Consumer $17.3 $9.4 84% $60.0 $44.3 35% Canadian Medical Cannabis Net Revenue2 $13.5 $13.9 (3%) $73.5 $
Slide 17: Revenue Performance by Form
REVENUE PERFORMANCE BY FORM vs. (in millions of Canadian dollars, unaudited) Q1 2022 Q1 2021 Q1 2021 Canadian Recreational Cannabis Dry Bud1 $66.0 $40.1 65% Oils and Softgels1 $5.7 $7.7 (26%) Beverages, Edibles, Topicals, and Vapes $9.1 $7.1 28% Other Revenue Adjustments2 ($3.0) ($3.4) 12% Excise Ta
Slide 18: Gross Margin Performance
Gross Margin performance Quarterly Gross Margin Trend Drivers of Q1 2022 Gross Margin Performance Reported Gross Margins Adjusted Gross Margins (-) Lower production output 26% (-) Unfavorable pack size and geographic mix in the Canadian recreational market 21% 20% 19% 19% (-) Start up costs in the U
Slide 19: Opex Trend
Opex Trend Quarterly OpEx Trend (C$ in `000s) OpEx as a Percentage of Net Sales (Q1 2021 vs. Q1 2022) 180,000 Total OpEx Total OpEx Ex-SBC 70% Q1 2021 Q1 2022 160,000 60% 140,000 50% 120,000 100,000 40% 80,000 30% 60,000 20% 40,000 10% 20,000 0 0% Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 SALES AND R&
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) Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 $0 $0 -$10,000 -$20,000 -$20,000 -$40,000 -$30,000 -$60,000 -$80,000 -$40,000 -$100,000 -$50,000 -$120,000 -$60,00
Slide 21: Appendix
Appendix 21
Slide 22: Adjusted Gross Margin (Non-GAAP) Reconciliation
ADJUSTED GROSS MARGIN (NON-GAAP) RECONCILIATION !"#$%&'"()*+%%(,-*./0!(1'2+02/3/-&/+0(45+06)!!7(,'-%$*'8! !! !! "#$%%!&'()#*!%(+%+!,-(%!./0! !"#$%&'()*#+)$',$-*#*+"*#$+'..*/)$01203%$4&0/0$"#+"2*%0+5$(#*(+"%0+6$ !! 1/12! (( 1/1/! 3%)!$%4%(-%! !! 52.601/7! !! 522/0826! !! !! !! !! !! 9$'**!&:$;<(0!:*!
Slide 23: Adjusted EBITDA (Non-GAAP) Reconciliation
ADJUSTED EBITDA (NON-GAAP) RECONCILIATION !"#$%&'"()*+,-!!(.'/01/2324&201(560178!!9(:'4%$;'<! !! !! !! !! !! !! "#$%%!&'()#*!%(+%+!,-(%!./0! !"#$%&'()*#+)$',$-*#*+"*#$+'..*/)0$(#*(+"%1+2$ !! 1/12! !! 1/1/! 3%)!4(5'&%!67'**8! !! 9.:;0;<<!!! 9621:0.118! =(5'&%!)>?!%?@%(*%!6$%5'A%$B8! !! 10;//!!! 6.0/.
Slide 24: Free Cash Flow (Non-GAAP) Reconciliation
FREE CASH FLOW (NON-GAAP) RECONCILIATION !"##$%&'($!)*+$,#-*.-/)/&0/*.!! !! !! !! !! !! !! "#$%%!&'()#*!%(+%+!,-(%!./0! !"#$%&'()*#+)$',$-*#*+"*#$+'..*/)0$(#*(+"%1+2$ !! 1/12! !! 1/1/! 3%)!45*#!-*%+!6(!'7%$5)6(8!54)696)6%*! !! :;2<=0>?/@!!! :;22?0=A<@! B-$4#5*%*!'C!5(+!+%7'*6)*!'(!7$'7%$)D0!7E5()!5(
Slide 25: Thank you
Thank you 25