Mgp Ingredients, Inc. · NASDAQ:MGPI
Mgp Ingredients — Investor Presentation (November 2022)
37 slides from Mgp Ingredients's investor presentation, November 2022
Slide 1: Investor Presentation Third Quarter 2022 Update
INVESTOR PRESENTATION Third Quarter 2022 Update 1
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS The forward-looking statements contained herein include, but are not limited to, statements about the expected effects on MGP Ingredients, Inc. ("the Company") of continuing consumer trends and our announced expansionary projects. Forward looking statements are usually ide
Slide 3: Mission Statement
MISSION STATEMENT Secure our future by consistently delivering superior financial results by more fully participating in all levels of the alcohol, spirits and food ingredients segments for the betterment of our shareholders, employees, partners, consumers and communities. 3
Slide 4: MGP Overview – As of December 31, 2021
MGP OVERVIEW – AS OF DECEMBER 31, 2021 MGP has a portfolio of highly attractive business units centered around its historic core DISTILLING BRANDED INGREDIENT SOLUTIONS SPIRITS(1) SOLUTIONS Sales: $184MM Sales: $353MM Sales: $91MM (29% of Total) (56% of Total) (15% of Total) Adj. GP Margin(2) : GP M
Slide 5: Distilling Solutions
DISTILLING SOLUTIONS MGP IS A LEADING SUPPLIER OF ALCOHOL SOLUTIONS TO THIRD PARTIES 2021 Total Revenue of $352,504 Products consist of the following: $19,545 $17,523 $14,916 • Brown Goods: Premium bourbon and rye whiskeys sold as aged whiskey or unaged new distillate, which is then aged by customer
Slide 6: Distilling Solutions: Unique Expertise Positions Us as Preferred Partner
DISTILLING SOLUTIONS MGP’S UNIQUE EXPERTISE POSITIONS US AS THE PREFERRED PARTNER TO OUR CUSTOMERS Atchison, KS Operations • Company HQ • Distillery Scale provides competitive pricing • One of the largest U.S. suppliers of distilled gin • Grain Neutral Spirits/Vodka Capacity supports long-term growt
Slide 7: Distilling Solutions: Positioned to Benefit from Growth in U.S. Spirits
DISTILLING SOLUTIONS MGP IS WELL POSITIONED TO CONTINUE BENEFITTING FROM GROWTH IN U.S. SPIRITS – PRIMARILY AMERICAN WHISKEY U.S. Spirits Continue To Gain Share Of Total Beverage Alcohol Growth of American Whiskey Continues To Outperform U.S. Spirits Market Share - Revenue 5-year U.S. American Whisk
Slide 8: Distilling Solutions: Four Growth Strategies
DISTILLING SOLUTIONS MGP HAS IDENTIFIED FOUR STRATEGIES TO CONTINUE DELIVERING LONG-TERM GROWTH WITHIN THE DISTILLING SOLUTIONS SEGMENT Distilling Solutions Growth Strategy Distilling Solutions Gross Profit Ladder 1. Focused Migration Away From Industrial Alcohol To White Beverage Alcohol 2. Continu
Slide 9: Branded Spirits: Luxco Acquisition Portfolio
BRANDED SPIRITS WITH THE ACQUISITION OF LUXCO, MGP HAS AN ESTABLISHED PORTFOLIO WITH A FOCUS ON GROWING HIGH POTENTIAL, HIGH MARGIN BRANDS 2021 Total Revenue of $183,566 (1)(3) Luxco Brand Examples By Price Tier: • Ultra Premium: Yellowstone Bourbon, Remus Repeal Bourbon, Blood Oath Bourbon, Rebel 1
Slide 10: Branded Spirits: Expansive Family of Brands
BRANDED SPIRITS YELLOWSTONE 1EXPANSIVE FAMILY OF BRANDS LIMITED Straight Bourbon ROSSVILLE Whiskey UNION SRP: $99.99 Barrel Proof Straight Rye Whiskey SRP: $69.99 GEORGE REMUS MINOR CASE Straight Bourbon Straight Rye Whiskey Whiskey SRP: $39.99 SRP: $39.99 YELLOWSTONE Straight Bourbon Whiskey SRP: $
Slide 11: Branded Spirits: Luxco Acquisition Benefits
BRANDED SPIRITS COMPLETED IN APRIL 2021, THE LUXCO ACQUISITION INCREASES MGP’S SCALE IN BRANDED SPIRITS & ESTABLISHES AN ADDITIONAL PLATFORM FOR FUTURE GROWTH The Luxco Acquisition Offers Numerous Key Benefits National Sales Platform Operational Capabilities Diverse Portfolio of Brands • Sales / Dis
Slide 12: Branded Spirits: Innovation in High-End Growth Categories
BRANDED SPIRITS MGP’S BRANDED SPIRITS CONTINUE TO FOCUS AND INNOVATE WITHIN U.S. SPIRITS GROWTH – PRIMARILY HIGH-END AMERICAN WHISKEY, TEQUILA & GIN Recent Innovation Launches are Designed to Capitalize on Growth Across Spirits Categories Continues to Outperform in the High-End Fastest Growing Price
Slide 13: Branded Spirits: Five Growth Strategies
BRANDED SPIRITS WE’VE IDENTIFIED FIVE STRATEGIES TO CONTINUE DELIVERING LONG-TERM GROWTH WITHIN THE BRANDED SPIRITS SEGMENT Branded Spirits Growth Strategy Focus on the Right Marketing Support 1. Focus on the Right Categories • Paid Social (Facebook, 2. Focus on the Right Brands AWARENESS Instagram)
Slide 14: Ingredient Solutions: Leading Supplier of Specialty Wheat Starches & Proteins
INGREDIENT SOLUTIONS MGP IS A LEADING SUPPLIER OF SPECIALTY WHEAT STARCHES & PROTEINS 2021 Total Revenue of $90,650 Products consist of the following: $1,393 • Specialty Wheat Starches: Premium wheat starches sold to food processors and distributors, a substantial portion of $10,014 which is altered
Slide 15: Ingredient Solutions: Growing Specialty Plant-Based Markets
INGREDIENT SOLUTIONS MGP IS STRONGLY POSITIONED TO SERVE GROWING SPECIALTY PLANT-BASED MARKETS • One in four consumers say they are eating more protein from plant sources vs. a year ago1 • Global sales of meat alternatives expected to reach $100B in the next decade2 • Consumption of plant-based meat
Slide 16: Ingredient Solutions: Five Growth Strategies
INGREDIENT SOLUTIONS MGP HAS IDENTIFIED FIVE STRATEGIES TO CONTINUE DELIVERING LONG-TERM GROWTH WITHIN THE INGREDIENT SOLUTIONS SEGMENT Ingredient Solutions Growth Strategy What Nutrients Do Consumers See As “Healthy”? 85% Dietary Fiber in Diet– #1 1. Expand Market Share of Fibersym and 84% Vitamin
Slide 17: Aggressively Expand Fibersym and Arise Platforms
INGREDIENT SOLUTIONS AGGRESSIVELY EXPAND FIBERSYM AND ARISE PLATFORMS Fibersym® RW Overview Strategy • Granular RS4-type resistant wheat • Maximize value of existing capacities starch • SKU rationalization • Allows formulators to boost the • Develop marketing campaign to connect to end users fiber c
Slide 18: Expand Textured Plant Proteins
INGREDIENT SOLUTIONS EXPAND TEXTURED PLANT PROTEINS U.S. product launches and plant-based claims Strategy Region 2017 2018 2019 2020 2021 • Expand our production capabilities with new “in-house” U.S. 198 291 539 637 772 extrusion platform in Atchison • Innovate new products to include pea, pulses, s
Slide 19: Operational Excellence
OPERATIONAL EXCELLENCE A CULTURE OF CONTINUOUS IMPROVEMENT • Improving throughput while maintaining consistency of high-quality products • Managing commodity cost risks • Formula-driven pricing • Locking in margins • Passing through significant swings in cost where feasible • Continued focus on safe
Slide 20: Environmental & Sustainability Initiatives
ENVIRONMENTAL & SUSTAINABILITY INITIATIVES RESPONSIBLY GROW OUR BRANDS AND PRODUCTS, WHILE FOSTERING A SUSTAINABLE FUTURE FOR THE ENVIRONMENT ON WHICH WE DEPEND As a small public company, MGP has begun its ESG journey As an organization, we are making our own commitments to: • Promoting a positive r
Slide 21: Financial Results
FINANCIAL RESULTS 21
Slide 22: Consolidated Financial Results
CONSOLIDATED FINANCIAL RESULTS THE COMPANY HAS DELIVERED RECORD RESULTS IN EACH BUSINESS SEGMENT Revenue ($MM) Adjusted EPS1 ($) $627 $4.26 $376 $396 $363 $2.51 $2.17 $2.27 2018 2019 2020 2021 2018 2019 2020 2021 Adjusted EBITDA1 ($MM) FY 2022 Guidance Sales are projected to be in the range of $765
Slide 23: Strong Balance Sheet, Cash Flow and Excellent Access to Capital
STRONG BALANCE SHEET, CASH FLOW AND EXCELLENT ACCESS TO CAPITAL Free Cash Flow and Conversion 1 $93.6 • MGP has seen strong, consistent improvement in free cash flow Free Cash Flow Free Cash Flow Conversion • In recent quarters, improvement in operating cash flow was driven by $51.0 record aged whis
Slide 24: Capital Allocation Priorities Remain Focused on Growth Opportunities
CAPITAL ALLOCATION PRIORITIES REMAIN FOCUSED ON GROWTH OPPORTUNITIES Capital Allocation Priorities M&A • M&A will continue to be an important lever to increase our capabilities, margin up our portfolios, and accelerate growth in all segments. Whiskey Put-Away • With our inventory in balance, matchin
Slide 25: Consolidated Financial Results – Third Quarter 2022
CONSOLIDATED FINANCIAL RESULTS – THIRD QUARTER 2022 • Sales increased 14% to $201.2 million, as a result of record third Operating Income Drivers Third Quarter 2021-22 ($MM) quarter sales across all three business segments $1.2 $33.9 $32.9 $1.9 $0.6 • Gross profit increased 3% to $59.1 million, repr
Slide 26: Q3 2022 Consolidated Sales
Q3 2022 CONSOLIDATED SALES SALES WERE UP 14% WITH GROWTH IN DISTILLING SOLUTIONS, INGREDIENT SOLUTIONS AND BRANDED SPIRITS SEGMENTS Key Drivers • Distilling Solutions growth primarily due to Fav/ (unfav) vs Prior Year increased sales of brown goods within premium Consolidated Sales beverage alcohol
Slide 27: Distilling Solutions: Sales Growth Driven by New Distillate and Aged Whiskey
DISTILLING SOLUTIONS SALES GROWTH DRIVEN BY NEW DISTILLATE AND AGED WHISKEY Distilling Solutions Sales Fav/ (Unfav) vs Prior Year (quarter ended 9/30/2022) $MM $MM % Brown Goods $57.4 $14.6 34% White Goods 20.5 (0.7) (3) Premium Beverage Alcohol 77.9 13.9 22 Industrial Alcohol 10.8 (4.0) (27) Food G
Slide 28: Branded Spirits: Sales Increased Due to Ultra Premium Price Tier
BRANDED SPIRITS SALES INCREASED DUE TO ULTRA PREMIUM PRICE TIER, PARTIALLY OFFSET BY A DECREASE IN THE MID PRICE TIER Branded Spirits Sales Fav/ (Unfav) vs Prior Year (quarter ended 9/30/2022) $MM $MM % Ultra Premium $13.8 $2.4 21% Super Premium 3.4 0.6 20 Premium 6.0 0.3 6 Mid 20.8 (2.2) (9) Value
Slide 29: Ingredient Solutions: Sales Growth Driven by Wheat Starches
INGREDIENT SOLUTIONS SALES GROWTH DRIVEN BY SPECIALTY WHEAT STARCHES AND COMMODITY WHEAT STARCHES Ingredient Solutions Sales Fav/ (Unfav) vs Prior Year (quarter ended 9/30/2022) $MM $MM % Specialty Wheat Starches $16.2 $4.0 33% Specialty Wheat Proteins 9.7 0.8 9 Commodity Wheat Starches 3.8 1.2 45 C
Slide 30: Appendix
MGP APPENDIX
Slide 31: U.S. Spirits Market
U.S. SPIRITS MARKET 9-Liter Cases (000s) 2021 Volume % Change Total Distilled Spirits (TDS) 291,110 +9.3% Total Whiskey 76,453 +4.9% American Whiskey (Bourbon/Rye/Tennessee) 29,703 +4.5% Super Premium 4,723 +15.6% Rye 1,593 +12.9% Vodka 78,067 +1.6% Super Premium 5,669 +13.9% Gin 9,989 -1.7% Super P
Slide 32: Reconciliation of Selected GAAP to Non-GAAP Measures
RECONCILIATION OF SELECTED GAAP TO NON-GAAP MEASURES BRANDED SPIRITS GROSS PROFIT TO ADJUSTED GROSS PROFIT Branded Spirits segment ($ in thousands) 2019 2020 2021 Gross Profit $1,536 $2,187 $62,644 Inventory Step-Up - - 2,529 Adjusted Gross Profit1 $1,536 $2,187 $65,173 Adjusted Gross Margin 51.3% 5
Slide 33: Reconciliation of Selected GAAP to Non-GAAP Measures
RECONCILIATION OF SELECTED GAAP TO NON-GAAP MEASURES EARNINGS PER SHARE TO ADJUSTED EARNINGS PER SHARE 2018 2019 2020 2021 Basic EPS $2.17 $2.27 $2.37 $4.37 Insurance recoveries - - - (0.59) Inventory Step-Up – Branded Spirits - - - 0.12 Business Acquisition Costs - - 0.05 0.36 CEO Transition Costs
Slide 34: Reconciliation of Selected GAAP to Non-GAAP Measures
RECONCILIATION OF SELECTED GAAP TO NON-GAAP MEASURES NET INCOME TO ADJUSTED EBITDA AND FREE CASH FLOW ($ in thousands) 2018 2019 2020 2021 Net Income $37,284 $38,793 $40,345 $90,817 Interest 1,168 1,305 2,267 4,037 Taxes 11,696 7,144 12,256 30,279 Depreciation and Amortization 11,362 11,572 12,961 1
Slide 35: Reconciliation of Debt to Net Debt
RECONCILIATION OF DEBT TO NET DEBT ($ in thousands) 2018 2019 2020 2021 Total Debt $32,014 $41,060 $39,871 $233,399 Cash and cash equivalents 5,025 3,309 21,662 21,568 Net Debt $26,989 $37,751 $18,209 $211,831 35 Source: Company filings
Slide 36: Reconciliation of Selected GAAP to Non-GAAP Measures
RECONCILIATION OF SELECTED GAAP TO NON-GAAP MEASURES FOR THE QUARTER ENDED SEPTEMBER 30, 2021, AND 2022 Gross Operating Net Diluted Quarter Ended September 30, 2022 (in thousands) Basic EPS Profit Income Income EPS Reported GAAP Results $59,048 $33,864 $23,628 $1.07 $1.06 No adjustments for the peri
Slide 37: Reconciliation of Selected GAAP to Non-GAAP Measures
RECONCILIATION OF SELECTED GAAP TO NON-GAAP MEASURES RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA – THIRD QUARTER Quarter Ended Quarter Ended ($ in thousands) 9/30/2022 9/30/2021 Net Income $23,628 $23,673 Interest Expense 1,350 1,116 Income Tax Expense 7,533 7,674 Depreciation and Amortization 5
MGP Ingredients — Investor Presentation (November 2022) on 6ix