Utz Brands Inc · NYSE:UTZ
Utz Brands — Q4 2022 Earnings Presentation
29 slides from Utz Brands's earnings presentation, Mar 2, 2023
Slide 1: Fourth Quarter and Full-Year 2022 Earnings Presentation
Utz Brands, Inc. F O U R T H Q U A R T E R A N D F U L L - Y E A R 2 0 2 2 E A R N I N G S P R E S E N T A T I O N M A R C H 2 , 2 0 2 3
Slide 2: Disclaimer
Disclaimer Forward-Looking Statements Certain statements made herein are not historical facts but are “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, as amended. The forward-looking statements generally are acco
Slide 3: Business Overview
Business Overview H O W A R D F R I E D M A N C H I E F E X E C U T I V E O F F I C E R UTZ BRANDS, INC. Q4 2022 Earnings Presentation
Slide 4: My Early Observations of Utz
My Early Observations of Utz Unique culture with a strong work ethic and “pleased but not satisfied” mindset Critical investments in Integrated Business Management (“IBM”), revenue management, productivity, and technology, are in early innings, and have well-positioned the Company for future growth
Slide 5: Strong Execution in 2022 and Building Momentum
Strong Execution in 2022 and Building Momentum ▪ Drove market share gains in the grocery and Fiscal 2022 vs. c-store channels, and across potato chips and Fiscal 2021 Highlights pretzels ▪ Implemented pricing initiatives to help offset historically high inflation +16% Organic Net Sales growth +17% ▪
Slide 6: Summary of Fourth Quarter 2022 Results
Summary of Fourth Quarter 2022 Results Organic Net Sales growth of 15.9% ▪ Excludes the negative impact of Independent Operator (“IO”) route conversions and positive impact of acquisitions ▪ Price/Mix +17.9% and Volume -2.0% Gross margin improvement represents effects from pricing actions offsetting
Slide 7: 4th Consecutive Quarter of Double-Digit Consumption Growth
4th Consecutive Quarter of Double-Digit Consumption Growth TOTAL UTZ BRANDS THREE LARGEST POWER BRANDS Retail Sales Year-over-Year Growth RETAIL SALES GROWTH (13-Weeks Ended 1/1/23) Double-digit ~75% 14.3% growth OF TOTAL 4Q’22 IN 4Q’22 IN 4Q’22 RETAIL SALES 15.1% 15.1% % of Total Retail Sales 14.3%
Slide 8: 4Q’22 Retail Sales by Sub-Category
4Q’22 Retail Sales by Sub-Category ▪ Strong double-digit growth across Potato Chips and Pretzels ▪ Robust Potato Chip growth led by strength across Grocery, Mass, and C-store channels ▪ Tortilla Chip and Cheese Snacks share performance impacted by lapping strong performance in the Mass Channel in th
Slide 9: 4Q’22 Retail Sales by Geography
4Q’22 Retail Sales by Geography ▪ Strong growth in the Core for On The Border® and Zapp’s® ▪ Share gains in Emerging led by Utz® and Zapp’s® ▪ Expansion share performance particularly impacted by Mass channel CORE EMERGING EXPANSION Geographic Channel Retail Sales 21.6% 20.8% Year-over-Year Total Sa
Slide 10: Financial Performance
Financial Performance A J A Y K A T A R I A C H I E F F I N A N C I A L O F F I C E R UTZ BRANDS, INC. Q4 2022 Earnings Presentation
Slide 11: Full Year 2022 Financial Results Summary
Full Year 2022 Financial Results Summary FY’22 FY’21 In $ millions, except per 52-weeks ended 52-weeks Ended YoY share amounts January 1, 2023 January 2, 2022 Change Net Sales 1,408.4 1,180.7 +19.3% Organic Net Sales 1,364.2 1,180.7 +15.5% Adj. Gross Profit 504.1 425.2 +18.6% % of net sales 35.8% 36
Slide 12: Fourth Quarter Financial Results Summary
Fourth Quarter Financial Results Summary 4Q’22 4Q’21 In $ millions, except per share 13-weeks ended 13-weeks Ended YoY amounts January 1, 2023 January 2, 2022 Change Net Sales 354.7 300.9 +17.9% “Our fourth quarter Organic Organic Net Sales 348.9 300.9 +15.9% Net Sales and Adjusted Adj. Gross Profit
Slide 13: 4Q’22 Net Sales Bridge
4Q’22 Net Sales Bridge ▪ Total net sales growth of 17.9% and Organic Net 4Q’22 Net Sales Sales growth of +15.9% YoY Growth Decomposition ▪ Price/mix improvement as a result of inflation- justified actions in fiscal 2022 3.0% -1.0% 17.9% -2.0% 17.9% ▪ Organic volume growth impacted by SKU 15.9% ratio
Slide 14: 4Q’22 Adjusted EBITDA Margin Bridge
4Q’22 Adjusted EBITDA Margin Bridge ▪ Pricing and productivity fully offset higher 4Q’22 Adjusted EBITDA gross input cost inflation Margin Decomposition – Benefits from inflation-justified pricing actions – Momentum increasing on productivity initiatives 1.8% -2.2% 17.9% -17.6% ▪ Increase in Selling
Slide 15: Executed FY’22 Programs to Enhance Margins
Executed FY’22 Programs to Enhance Margins SKU Rationalization ✓ Adjusted EBITDA Margin Sequentially lower Eliminated more than 350 SKUs primarily focused on private (as % of Net Sales) margins in Q4 is in-line with normal seasonality label and certain partner brands with program ongoing 12.1% 13.1%
Slide 16: Cash Flow and Balance Sheet Highlights
Cash Flow and Balance Sheet Highlights Cash Flow Highlights 52-Weeks Ended January 1, 2023 Net Cash Flows from Operations $48.2M Impacted by $23M buyout of multiple third-party DSD rights treated as contract termination costs and booked as an SD&A expense per GAAP Capital Expenditures $88.0M Kings M
Slide 17: Strong Liquidity and No Significant Debt Maturities Until 2028
Strong Liquidity and No Significant Debt Maturities Until 2028 ▪ On October 12, 2022, issued new real estate Debt Maturities Schedule (in $M as of 1/1/23(1)) senior secured term loan of $88M – Fixed rate at ~6% via interest rate swap 779 – Proceeds used to pay down outstanding ABL in full, pay fees
Slide 18: Fiscal 2023 Outlook
Fiscal 2023 Outlook Fiscal 2023 Growth versus Fiscal 2022 Actual Results Net Sales +3% to 5% Total growth ▪ Organic Net Sales growth led by price/mix and volumes consistent with fiscal 2022 +4% to 6% Organic growth ▪ IO route conversion negative impact of 1% on total net sales growth and expect IO r
Slide 19: Looking Ahead to 2023
Looking Ahead to 2023 H O W A R D F R I E D M A N C H I E F E X E C U T I V E O F F I C E R UTZ BRANDS, INC. Q4 2022 Earnings Presentation
Slide 20: Igniting Growth: Increasing our Working Media Investment
Igniting Growth: Increasing our Working Media Investment Unlocking Growth Potential by Connecting with Consumers and Building on Momentum Focusing on Power Brands Delivering what consumers CRAVE Unleashing Brands “In Real Life” Building momentum +60% Working Media Investment UTZ BRANDS, INC. Q4 2022
Slide 21: 2023 Innovation Focus on Flavor & Occasions
2023 Innovation Focus on Flavor & Occasions Capturing Pretzels Occasions On-Trend + Flavor Flavors Scaling Zapp’s Seasoned Pretzels New Seasonal Offerings and Utz Peanut and Assortments Hot & Spicy Limited Butter-filled Pretzels in Multipacks Time Offerings and Line Extensions UTZ BRANDS, INC. Q4 20
Slide 22: Building on Our Momentum with Focused Execution in 2023
Building on Our Momentum with Focused Execution in 2023 ✓ Drive strong organic growth enabled by our resilient and recession-resistant Salty Snack sub-categories ✓ Expand the reach of our Power Brands through increased advertising and enhanced innovation ✓ Increase supply chain and selling infrastru
Slide 23: Appendix
Appendix UTZ BRANDS, INC. Q4 2022 Earnings Presentation
Slide 24: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures See footnotes in Utz’s 4Q’22 earnings press release dated March 2, 2023. UTZ BRANDS, INC. Q4 2022 Earnings Presentation 24
Slide 25: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures See footnotes in Utz’s 4Q’22 earnings press release dated March 2, 2023. UTZ BRANDS, INC. Q4 2022 Earnings Presentation 25
Slide 26: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures See footnotes in Utz’s 4Q’22 earnings press release dated March 2, 2023. UTZ BRANDS, INC. Q4 2022 Earnings Presentation 26
Slide 27: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures See footnotes in Utz’s 4Q’22 earnings press release dated March 2, 2023. UTZ BRANDS, INC. Q4 2022 Earnings Presentation 27
Slide 28: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures See footnotes in Utz’s 4Q’22 earnings press release dated March 2, 2023. UTZ BRANDS, INC. Q4 2022 Earnings Presentation 28
Slide 29: Utz Geographic Classifications
Utz Geographic Classifications WA MT ME ND OR VT MN NH ID SD WI MA NY WY MI CT RI IA PA NE NJ NV IL IN OH DE UT CO WV Core MD CA KS MO VA KY DC Emerging NC Expansion TN AZ OK NM AR SC GA MS AL TX LA AK HI FL UTZ BRANDS, INC. Q4 2022 Earnings Presentation 29