Amplify Snack Brands — Debt Investor Presentation (August 2016)
53 slides from Amplify Snack Brands's debt investor presentation, Aug 8, 2016
Slide 1: Lender Presentation August 2016
Lender Presentation August 2016 Exhibit 99.3
Slide 2: Disclaimer
Disclaimer This presentation and the accompanying oral presentation is solely for informational purposes and is intended to facilitate discussions with representatives of certain institutions regarding a potential debt financing of Amplify Snack Brands, Inc. (“Amplify” or “the Company”). Neither thi
Slide 3: Disclaimer (Cont.)
Disclaimer (Cont.) This presentation and accompanying oral presentation also contain certain financial information that is presented as “LTM ended June 30, 2016” and/or “pro forma” for the proposed acquisition by Amplify of Crisps Topco Limited and subsidiaries. “LTM ended June 30, 2016” financial i
Slide 4: Today's Presenters and Agenda
Today’s Presenters and Agenda Tom Ennis Chief Executive Officer Brian Goldberg Chief Financial Officer Presenters Agenda Transaction Overview 1 Introduction to Amplify Snack Brands 2 Financial Overview 5 Syndication Overview 6 Section Credit Highlights 4 Introduction to Tyrrells 3 Appendix 7 David M
Slide 5: Transaction Overview
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Slide 6: Transaction and company overview
Amplify Snack Brands, Inc. (“Amplify” or the “Company”) is a high growth and highly profitable snack food company focused on developing and marketing products that appeal to consumers’ growing preference for Better-For-You (“BFY”) snacks Current portfolio of brands are distributed throughout North A
Slide 7: Sources & Uses | Pro Forma Capitalization
Sources & Uses | Pro Forma Capitalization Note: Purchase price of £300 million converted to USD at August 5, 2016 spot rate of 1.31 USD / GBP Based on closing price of $13.77 as of August 5, 2016 and pro forma fully diluted shares outstanding of 78.4 million, which includes 2.1 million shares issued
Slide 8: Transaction Timetable
Transaction Timetable Key Events Key Syndication Dates Tuesday, August 9th Lenders’ Meeting Wednesday, August 24th Lender Commitments Due Friday, August 26th Close and Fund August 2016 S M T W T F S 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
Slide 9: Introduction to Amplify Snack Brands
Introduction to Amplify Snack Brands
Slide 10: Amplify is at the Center of Key F&B Industry Trends
Amplify is at the Center of Key F&B Industry Trends Capitalizing on Major Growth Opportunity in BFY Snacking Focused exclusively on BFY Snacks Globally Millennial Snacking Trends BFY Segment Driving Snack Category Growth Increasing Snacking Frequency Convenience Multi-Channel Distribution Opportunit
Slide 11: Large and Growing Snack Category
Nielsen Global Snacking Report, September 2014 Management estimates for traditional brands are based on Total Salty Snack expected growth and for BFY brands based on 2015 $ sales growth How America Eats – 2016 State of Snacking – IRI Mintel: A Snacking Nation, 9 July 2015 Large and Growing Snack Cat
Slide 12: Amplify is a Leader in BFY Snacks
CAGR: 69% PEANUT & TREE NUT FREE CHOLESTEROL & TRANS FAT FREE NO ARTIFICIAL INGREDIENTS DAIRY AND GLUTEN FREE KOSHER BFY snacking platform Experienced management Established infrastructure Leading profitability and free cash flow SkinnyPop: Our cornerstone brand Embodies BFY mission Strong brand wit
Slide 13: Leading BFY Focused Snacking Platform Today
Leading BFY Focused Snacking Platform Today… A Top 10 Domestic Salty Snack Dollar Manufacturer Source: IRI U.S. Multi-Outlet for latest 52wk ending June. 26, 2016 Note: Synder’s-Lance is pro forma for Diamond Foods acquisition Item productivity calculated as Total Dollar Sales / Avg # of Items Selli
Slide 14: Attractive Snack Markets in the U.S.
BFY Brands Are Growing ~3x Faster than Traditional(2) Attractive Snack Markets in the U.S. (1) SkinnyPop Has Cemented its Status as a RTE Popcorn Leader L52 market sizes based on IRI L52 June 26, 2016. Management estimates for traditional brands are based on Total Salty expected growth and for BFY b
Slide 15: SkinnyPop Gaining Share in RTE Popcorn
Source: U.S. Multi-Outlet + Convenience latest 52 weeks ending June 26, 2016 SkinnyPop proprietary usage and attitude study conducted September 30, 2015 with 1,615 consumers Source: U.S. Multi-Outlet + Convenience latest 12 weeks ending June 26, 2016 SkinnyPop Is Gaining Share in Fast-Growing RTE Po
Slide 16: Industry Leading Brand Loyalty
IRI Panel Total U.S. – All Outlets latest 52 weeks ending June 26. 2016 IRI Panel Total U.S. – All Outlets latest 52 weeks ending June 26. 2016. The top 25 salty snack brands are those brands with the highest dollar retail sales in the 52 week period according to IRI data Industry Leading Brand Loya
Slide 17: Strong Retail Relationships and Economics
IRI Panel Total U.S. – All Outlets latest 52 weeks ending June 26. 2016 Greatest Frequency of Purchase(1) Premium Price(1) Highest Total in Basket Spend(1) Average price per ounce Average number of trips per buyer per year Average in basket dollars per trip Strong Retail Relationships and Economics
Slide 18: Customer Case Studies
Retail Sales $ IRI L52(1) Customer A – Food(3) Customer C - Club(3) +32% +10% +18% % Change vs. YA 19.5% 54.0% 21.1% $ Retail Sales Market Share Total $ Retail Sales: $203M, +35% vs YA Total $ Retail Sales Market Share: 17.3% (2) 26% 44% 40% +304% 10.8% +106% 1.9% Customer Case Studies Customer B –
Slide 19: Increased Distribution and Share of Shelf
Increased Distribution and Share of Shelf Distribution Gains with Room for Continued Expansion Significant Distribution Headroom Resulting in Ample Growth Runway Tools for Growing Distribution Effective Retail Merchandising Differentiated Packaging Total distribution points Avg. Top 25 Salty Snack B
Slide 20: Multiple Levers for Profitable Growth
Strong Category Growth 1 Increase Distribution and Share of Shelf 2 Increase Household Penetration 3 New Product Innovation 4 5 International Expansion Multiple Levers for Profitable Growth 6 New Brands: Build or Buy Brand Focus Multiple Levers for Profitable Growth
Slide 21: Introduction to Tyrrells
- Introduction to ‘Tswact Peranos | Tyrrells
Slide 22: Tyrrells Overview
Tyrrells Overview Diversified, International Snacking Company Iconic, market-leading brands Strong industry tailwinds Established international markets Tyrrells Brand: A Market Leader #2 premium, hand-cooked crisps brand in U.K. #1 premium, hand-cooked crisps brand in France(1) Distinctive and porta
Slide 23: Tyrrells Overview: Broad Brand Portfolio
Tyrrells Overview Broad Brand Portfolio Distinctively British Branding Bold, iconic front of pack with bags of impact and standout Quirky photo brings the flavour to life with our trademark wit Strong and simple quality/provenance message Super-clear descriptor for easy range navigation Yarra Valley
Slide 24: Tyrrells Overview: Large and Fast Growing Categories
Tyrrells Overview Note: Tyrrells crisps calculations includes Furrows. Rolling 52 weeks. L52 June 19, 2016. LTM ‘’14 – ’16 CAGRs represent volume growth. Market share includes Vegetable Chips Per management estimates Aligned with Large and Fast Growing Categories in the UK ₤3.3 billion UK salty snac
Slide 25: Combination of Two Leading BFY Snacking Platforms
Combination of Two Leading BFY Snacking Platforms $200+ million in revenue $100+ million in revenue
Slide 26: Transaction Rationale
Transaction Rationale Iconic core brand and geographically diversified BFY snack portfolio complements Amplify’s strategy Acquisition provides meaningful brand, category and geographic diversity Creates a meaningful international player in BFY snacking with another platform for substantial growth Co
Slide 27: Credit Highlights
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Slide 28: Credit Highlights
Strong Acquisition Track Record Leading BFY Focused Snacking Platform Improved Brand, Geographic and Retailer Diversity Experienced and Proven Management Team 7 Credit Highlights Strong Historical Financial Performance and Industry Leading Margins Significant Free Cash Flow Drives Rapid Deleveraging
Slide 29: Leading BFY Focused Snacking Platform
Source: IRI L52 June 26, 2016 Per management estimates ` SkinnyPop Paqui Oatmega & Perfect Cookie Large addressable market of $4.9B, which grew at +4.8% CAGR from 2010 to 2015 No current leader in fragmented BFY tortilla chip market, creating significant opportunity for growth Fastest Growing Brand
Slide 30: Strong Historical Financial Performance and Industry Leading Margins
Net Sales Adj. SG&A(2) Adj. EBITDA SG&A % of Net Sales(2) 14.1% 12.3% 15.3% 16.8% 17.3% Adj. EBITDA Margin 44.5% 44.2% 40.7% 37.8% 31.4% $ in millions CAGR: 82% $ in millions $ in millions CAGR: 58% Strong Historical Financial Performance and Industry Leading Margins 2013A 2014PF 2015A 2016 PF 2016
Slide 31: Strong Financial Performance
Strong Financial Performance $ in millions (1) Tyrrells historical net revenues calendarlized to match Amplify’s fiscal year 2 Both Amplify and Tyrrells have had strong, consistent growth in LTM Net Revenue since Q4 2014
Slide 32: Strong Cash Flow and Liquidity
Strong Cash Flow and Liquidity Source: Company filings. Selected High Growth Consumer Company Median consists of the median for Monster, Blue Buffalo, Boston Beer, WhiteWave, Freshpet and Hain Celestial Selected Snacking Company Median consists of the median for B&G Foods, Pinnacle Foods, Flowers Fo
Slide 33: Improved Brand and Geographic Diversity
Improved Brand and Geographic Diversity Pro Forma Net Sales by Brand(1) Pro Forma Net Sales by Geography(1) BFY snacking platform Iconic brands with leadership positions in multiple markets around the world Experienced management and established infrastructure Strong profitability and free cash flow
Slide 34: Diversifying Retailer Base
Diversifying Retailer Base Selected Retail Relationships Around the World 4 Strong Retailer Relationships Internationally BFY Snack Solution Provider Existing Markets A Truly International Footprint Costco
Slide 35: Paqui Amplified – A Case Study
Robust growth, facilitated by national launch in 2016 . Fast Integration and Strong National Launch Fully integrated into financial and business processes Improved profitability Improved ingredient deck New price/pack combinations New packaging 21 new SKUs New signature flavor ‘Nacho Cheese Especial
Slide 36: Oatmega: Amplifying Great Brand Momentum
Strong Acquisition Track Record Oatmega: Amplifying Great Brand Momentum Company Description Manufactures and distributes a broad range of Oatmega® bars products through a variety of retail formats nationally LTM sales with over 100% year-over-year growth Oatmega has 4 and 9 facings at Walmart and T
Slide 37: Multiple Levers for Profitable Growth
Strong Category Growth 1 Increase Distribution and Share of Shelf 2 Increase Household Penetration 3 New Product Innovation 4 5 International Expansion Multiple Levers for Profitable Growth 6 New Brands: Build or Buy Brand Focus Multiple Levers for Profitable Growth 6
Slide 38: Significant Whitespace for Future Growth
Nielson Global Snacking Report September 2014 Global Snack Markets by Region(1) Key Acquisition Criteria BFY snacking Exceptional taste profile Distinct BFY characteristics Premium brand Unique brand, product and positioning Some proof of concept at retail Meaningful revenue and margin opportunities
Slide 39: Experienced and Proven Management Team
Chief Executive Officer Chief Financial Officer Executive Vice President of Sales & Marketing Chief Executive Officer (Tyrrells) / International President, Amplify - Proposed Group Operations Director (Tyrrells) / Vice President of Manufacturing, Amplify - Proposed Senior Vice President of Supply Ch
Slide 40: Financial Overview
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Slide 41: Track Record of Strong Growth and Compelling Financial Profile
Note: PF Combined Q2 2016 LTM Adjusted EBITDA margin is NM as net sales are actual and Tyrrells EBITDA is adjusted for PF impact of acquisitions and constant currency Pro forma Q2 2016 LTM Adjusted EBITDA includes $1 million in cost synergies. Refer to reconciliation in appendix Not meaningful as Ty
Slide 42: Strong Year-to-Date 2016 Financial Performance
Strong Year-to-Date 2016 Financial Performance Q2 Results Net Sales $ in millions $ in millions Gross Margin 56.8% 56.5% 54.2% Gross Profit Adj. EBITDA $ in millions Adj. EBITDA Margins 47.9% 39.7% 36.2% CAGR 30% CAGR 27% CAGR13%
Slide 43: Conservative Financial Policy and Deleveraging
Amplify plans to maintain a conservative financial policy and consistently de-lever throughout the projected period The Company expects to utilize strong free cash flow generation to paydown a significant portion of the Senior Secured Term Loan over the next 3 years Target leverage of 4.0x to 4.5x o
Slide 44: Credit Highlights
Strong Acquisition Track Record Leading BFY Focused Snacking Platform Improved Brand, Geographic and Retailer Diversity Experienced and Proven Management Team 7 Credit Highlights Strong Historical Financial Performance and Industry Leading Margins Significant Free Cash Flow Drives Rapid Deleveraging
Slide 45: Syndication Overview
famplity | Syndication Overview
Slide 46: Summary Financing Terms
Summary Financing Terms Senior Secured Credit Facilities Revolving Credit Facility First Lien Term Loan Borrower/Issuer Amplify Snack Brands, Inc. Guarantors Parent and each existing and subsequently acquired or organized wholly-owned domestic subsidiaries (subject to customary exceptions) Security
Slide 47: Legal Structure
Legal Structure Paqui, LLC (Texas) SkinnyPop Popcorn, LLC (DE) UK Bidco (UK) Target (UK) Boundless Nutrition, LLC (TX) Target Sub (UK) Target Foreign Subsidiaries Borrower Subsidiaries Legend: $50 million Revolver $600 million Term Loan LuxCo1 (Luxembourg) LuxCo2 (Luxembourg) Irish NewCo (Ireland) L
Slide 48: Questions & Answers
Questions & Answers
Slide 49: Appendix
*#SkinnyPopLove
Slide 50: Tyrrells Management and Synergies
The Tyrrells management team will be retained to run the Tyrrells / European / Australasia business going forward The Tyrrells team is viewed favorably by Amplify management and has significant experience operating in the international market Tyrrells’ ongoing management compensation aligns with lon
Slide 51: Historical Capital Expenditures
Historical Capital Expenditures $ in millions Note: Tyrrells growth capex higher than usual in FY 2016 and LTM 6/30/16 due to one-time infrastructure investments in manufacturing facilities both in the UK and in connection with the recent acquisitions of Yarra Valley and Lisa’s LTM 6/30/2016 mainten
Slide 52: Adjusted EBITDA reconciliation notes
1. Reflects the elimination of the $0.4 million increase in cost of goods sold related to the Sponsor Acquisition. 2. Represents compensation expense associated with the Founder Contingent Compensation of $8.4 million recorded in the period from July 17, 2014 to December 31, 2014, and $18.4 million
Slide 53: Tyrrells EBITDA reconciliation notes
Source: Financials provided by Tyrrells’ management and reviewed and adjusted by Amplify management with the help of third-party service providers. Interest expense consists of (i) non-cash interest that was incurred by Tyrrells on certain related party debt obligations that were issued in connectio
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