Slide 1: Investor Presentation Q1 Fiscal 2022
Investor Presentation Q1 F isca l 2 0 2 2 June 2022 PAGE 1
Slide 2: Forward-Looking Statements
Forward-Looking Statements Certain information in this presentation contains forward-looking information. This information is based on management’s reasonable assumptions and beliefs in light of the information currently available to us and are made as of June 14, 2022. Actual results and the timing
Slide 3: Who We Are
Who We Are Roots was founded in 1973 by Michael Budman and Don Green, who met at summer camp in Algonquin Park, where they first fell in love with the ideals and beauty of Canada. Starting from a little cabin, they were inspired by nature and Canada's wilderness to create Roots. With its uncompromis
Slide 4: Our History
Our History 1973 1980 1998 2015 2017 2020 Michael Budman and Roots moves onto its Roots has created the Searchlight Capital Complete IPO on TSX New executive Don Green founded core business – selling Olympic outfits of Partners acquires 80% Searchlight Capital leadership: CEO, CFO, Roots, centered a
Slide 5: Iconic Canadian Brand with a Global Community
Iconic Canadian Brand with a Global Community 1 Rich heritage of delivering high-quality, versatile and stylish products to customers that span all ages and genders High-Quality, Versatile, Purpose-Driven Products 2 Mix of iconic classics and new pieces that resonate with customers Omni-Channel Stra
Slide 6: Our Values
OUR VALUES Community Be Genuine Integrity Freedom We are a place of While we draw inspiration We always strive to do We celebrate the inclusivity, diversity and from the world around us, what’s right and to build individuality of style as a open-mindedness. We we never forget where we trust and last
Slide 7: Meghan Roach, President & Chief Executive Officer
Meghan Roach President & Chief Executive Officer PAGE 7
Slide 8: Solid First-Quarter Results
Solid First-Quarter Results • 15.3% sales increase driven by greater customer traffic • Performance reinforces the strength of our brand • Further validates our omni-channel growth strategy • Speaks to the desirability of: o Our enhanced product portfolio o Traction through elevated brand positionin
Slide 9: Our Growth Pillars
Our Growth Pillars 1 2 3 4 Offering an Reinforcing Our Taking a Proactive Maintaining Elevated Omni- Brand Position Approach to Operational channel Experience Globally Enhancing CSR Excellence PAGE 9
Slide 10: Offering an Elevated Omni-channel Experience
Offering an Elevated Omni-channel Experience • Serve customers wherever, however and whenever they want to shop • Brick & Mortar o 107 corporate retail stores in Canada o Nine pop-up locations in Canada o Two corporate retail stores in the U.S. • E-Commerce o Company-managed and owned platform o Tma
Slide 11: Reinforcing our brand position globally
Reinforcing our brand position globally • Enhancing our product portfolio • Investments in Journey Collection o Offers more technical features o Over 40% year-over-year growth in F2021 o Strong customer traction continued in Q1-2022 • More sizes available in Salt & Pepper fleece o Broader roll out i
Slide 12: Enduring Brand Strength
Enduring Brand Strength • Loyal followers and a highly attractive customer base • Collaboration with artists, celebrities and influencers to promote brand awareness to a broader global audience o The Weeknd’s 32nd birthday party in Las Vegas o Partnership with local artists Benny Bing & Morningstar
Slide 13: CSR Initiatives
CSR Initiatives • Joined the Sustainable Apparel Coalition o Reflects our commitment to reducing our environmental footprint and promote social justice in the supply chain • Most of our apparel to be made with sustainable material o Targeting end of 2022 • Salt & Pepper, Cooper Beaver to move from r
Slide 14: Mona Kennedy, Chief Financial Officer
Mona Kennedy Chief Financial Officer PAGE 14
Slide 15: First-Quarter Sales
First-Quarter Sales Total Sales DTC Sales P&O Sales $43.1M $37.3M $37.4M $31.4M $5.9M $5.7M Q1-2021 Q1-2022 Q1-2021 Q1-2022 Q1-2021 Q1-2022 • Strong comparable sales year-over- • Reduction in Taiwan business (-) year (+) • Strong sales of Roots-branded • Corporate store traffic up sharply (+) produc
Slide 16: Gross Margin
Gross Margin Total DTC 63.0% 60.9% 61.2% 57.5% Q1-2021 Q1-2022 Q1-2021 Q1-2022 • Higher merchandise margin reflecting our discipline on promotions with reduced markdowns (+) • Favourable FX (+) • Lower subsidies and abatements (-) • Higher transportation costs (-) PAGE 16
Slide 17: Solid Financial Position
Solid Financial Position Net Debt Bridge $76.4M ($21.2M) $39.4M ($15.8M) Net Debt Repayment of LT Higher Cash Net Debt As at Debt & bank Balance As at May 1, 2021 April 30, 2022 indebtedness Leverage of 0.8x as at April 30, 2022 (in millions of $CAD) PAGE 17
Slide 18: SG&A and Adjusted EBITDA
SG&A and Adjusted EBITDA1 SG&A expenses Adjusted EBITDA 1 $31.3M $25.9M ($2.5M) ($3.2M) Q1-2021 Q1-2022 Q1-2021 Q1-2022 Q1-2021 Q1-2022 Q1-2021 Q1-2022 As reported Excluding y/y impact of As reported Excluding y/y impact of subsidies and abatements subsidies and abatements 1 This is a non-IFRS measu
Slide 19: Net Loss
Net Loss Net loss Net loss per Share ($4.9M) ($0.12) ($5.3M) ($0.13) Q1-2021 Q1-2022 Q1-2021 Q1-2022 (in millions of $CAD) PAGE 19
Slide 20: In Summary
In Summary • Fiscal 2022 off to a good start o Strong statement about the power and positioning of our brand • Q2 is tracking nicely o Customers back to our stores o No subsidy or abatement benefits this year o First half < 30% of annual sales • Alleviate supply-chain pressure o Confident about stra
Slide 21: Appendix
Appendix PAGE 21
Slide 22: Non-IFRS Measures and Industry Metrics
Non-IFRS Measures and Industry Metrics This presentation makes reference to certain non-IFRS measures including certain metrics specific to the industry in which we operate. These measures are not recognized measures under International Financial Reporting Standards as issued by the International Ac
Slide 23: Non-IFRS Measures and Industry Metrics
Non-IFRS Measures and Industry Metrics The table below provides a reconciliation of net loss to EBITDA and adjusted EBITDA for the periods presented: CAD $000s Q1 2022 Q1 2021 Net loss (5,261) (4,938) Add the impact of: Interest expense (a) 1,985 2,278 Income taxes recovery (a) (1,812) (1,745) Depre
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