Funko, Inc. · NASDAQ:FNKO
Funko — Investor Presentation (May 2022)
28 slides from Funko's investor presentation, May 10, 2022
Slide 1: Investor Presentation May 2022
Funki INVESTOR PRESENTATION May 2022 fy
Slide 2: Cautionary Notes
2 HOLLYWOOD UPDATE Cautionary Notes This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in this presentation, including statements regarding our future res
Slide 3: Built on the principle that everyone is a fan of something
3 is built on the principle that everyone is a fan of something, and has something for every fan FUNKO 2021
Slide 4: Funko At-A-Glance
4 Funko At-A-Glance $1.03B 75% 25% 76% 24% 2021 Net Sales U.S. International Figures Other Video Mass Distributors Loungefly Toys & Games Television Games Core Theatrical Specialty Digital Collectibles Digital Evergreen Release 25,000+ Expanding 1,000+ Retail Locations Product Categories Licensed Pr
Slide 5: Strategically Investing in the Rise of Pop Culture for Nearly Two Decades
5 We Have Been Strategically Investing in the Rise of Pop Culture for Nearly Two Decades Funko launches Digital Pop! NFTs First drop features Teenage Mutant Ninja Turtles 2005 2010 2015 Funko acquires 2019 2022 Underground Toys and Loungefly Completes IPO Brian Mariotti & Private equity firm The Che
Slide 6: Secular Trends are Fueling Growth
6 Secular Trends are Fueling Growth Content New Cultural Evolution Technology Shifts Fandom • Proliferation and • Increased accessibility • Entertainment/content • Deep fan loyalty to investment in high- to content through has become a hobby pop culture will be quality, obsession new platforms and p
Slide 7: Broad and Deeply Engaged Consumer Base
7 Broad and Deeply Engaged Consumer Base Broad Consumer Base Strong Consumer Engagement Funko has built a deeply engaged consumer base by Funko has a broad consumer base and includes connecting with them through Funko’s digital platform, men, women, boys and girls… loyalty program, social media and
Slide 8: Funko has Something for Everyone
8 Funko has Something for Everyone Movies TV Music Sports Anime Games Note: Represents a sampling of our current portfolio offerings as of November, 2021. FUNKO 2021
Slide 9: Global Distribution Across Multiple Channels
9 Global Distribution Across Multiple Channels Diversified Distribution Network Wholesale Strategies Mass Focused on Expanded Entered the Toy & Underpenetrated Shelf Space Game Aisle Specialty Geographies Digital Rapidly Growing Direct-To-Consumer Business .com Launched Distributors Enhanced Digital
Slide 10: Topline Growth Strategies
10 Topline Growth Strategies Extend Funko’s International Accelerate DTC Reach Growth Diversify our Revenue Streams Grow our Core Pop Culture Business FUNKO 2021
Slide 11: Expanding Beyond Figures
11 Expanding Beyond Figures We’ve grown our non-figures categories to more than 20% of the business while driving consistent momentum in our core Pop! figures platform Category Expansion 22% Other (Non-figures) 18% Figures 18% 23% 18% 18% 82% 82% 82% 81% 77% 78% 2016 2017 2018 2019 2020* 2021 Y/Y 23
Slide 12: Leveraging Evergreen Opportunities
12 Leveraging Evergreen Opportunities Funko has the unique ability to leverage evergreen or back catalog content by creating fun, whimsical and nostalgic programs at retail Evergreen Content Growth Expanding into Underpenetrated Genres Anime $688M Capitalizing on global popularity of anime genre Mus
Slide 13: Product Innovation is the Heart of Funko
13 Product Innovation is the Heart of Funko FUNKO 2021
Slide 14: Diversifying Our Sources of Revenue
14 Diversifying Our Sources of Revenue Leveraging ’s pop culture platform to diversify revenue streams across brand categories, channels and geographies FUNKO 2021
Slide 15: Product Expansion Beyond Core Collectibles
15 Product Expansion HOLLYWOOD Beyond Core Collectibles UPDATE Loungefly Brand Toy & Game Brands Digital Brands
Slide 16: Extending Funko's International Reach
16 Extending Funko’s International Reach International demand continues to strengthen – 28% of 2021 total net sales Focusing on underpenetrated markets through new sales and distribution Particularly strategies - APAC, strong Latin America, Canada performance in Europe (1) FUNKO 2021 (1) Europe 2021
Slide 17: Growing our Direct-to-Consumer Business
17 Growing our Direct-to-Consumer Business Strengthening our Connecting with our Driving traffic and e-commerce platform customers conversion • Improved end-to-end customer • Delivering an immersive • Utilizing special promotions experience experience and showcasing the for Funko Fan Club members ma
Slide 18: Increasing Operational Efficiency
18 Increasing Operational Efficiency Optimizing Reducing Streamlining Investing in Diversifying Inventory Levels Leasing the Organization Domestic ERP Sourcing Base Commitments FUNKO 2021
Slide 19: Experienced Management Team with a Deep Bench
19 Experienced Management Team with a Deep Bench Andrew Perlmutter Brian Mariotti Jennifer Fall Jung Tracy Daw Joe Sansone Chief Executive Officer & Director Chief Creative Officer & Director Chief Financial Officer SVP, General Counsel & Secretary Chief Global Operations Officer FUNKO 2021
Slide 20: Financial Overview
20 Financial Overview $1.03B 37.0% 14.6% $87M 2021 Net Sales 2021 Gross Margin 2021 Adjusted 2021 Cash Flow EBITDA Margin(1) from Operations 1) Adjusted EBITDA Margin is a non-GAAP financial measure. Please see the Appendix for a reconciliation to the most directly comparable GAAP measures for Adjus
Slide 21: Strong Track Record of Growth
21 Strong Track Record of Growth Net Sales Gross Margin $ millions 38.5% 37.2% 35.5% 38.2% 37.0% $1,029 $795 $686 $653 $516 2017 2018 2019 2020* 2021 2017 2018 2019 2020* 2021 Adjusted EBITDA Margin(1) Adjusted Net Income(1) 17.4% 16.5% 15.5% 14.6% $76 12.3% $50 $40 $17 $21 2017 2018 2019 2020* 2021
Slide 22: Balance Sheet & Cash Flow Highlights
22 Balance Sheet & Cash Flow Highlights Cash & Cash Equivalents Total Debt $ millions $ millions $84 $234 $247 $242 $191 $173 $52 $25 $8 $13 2017 2018 2019 2020* 2021 2017 2018 2019 2020* 2021 Cash Flow from Operations Capital Expenditures $ millions $ millions $42 $107 $34 $91 $87 $27 $28 $50 $18 $
Slide 23: Long-Term Capital Allocation Strategy
23 Long-Term Capital Allocation Strategy Invest in new revenue streams to support profitable sales growth Deploy capital to infrastructure improvements to gain operational efficiency Reduce debt levels FUNKO 2021
Slide 24: Key Considerations
24 Key Considerations • Powerful pop culture platform • Strong growth across brands, products, channels and geographies • Diversification strategy driving incremental growth • Passionate management team FUNKO 2021
Slide 25: Appendix
25 Appendix FUNKO 2021
Slide 26: Reconciliation of Non-GAAP Financial Metrics
26 Reconciliation of Non-GAAP Financial Metrics 1) Represents the reallocation of net income attributable to non-controlling interests from the assumed exchange of common units of FAH, LLC in periods in which income was attributable to non-controlling interests. 2017 2018 2019 2020 2021 2) Represent
Slide 27: Reconciliation of Non-GAAP Financial Metrics Cont.
27 Reconciliation of Non-GAAP Financial Metrics Cont. 1)Represents monitoring fees paid pursuant to a management services agreement with ACON that was entered into in connection with the ACON Acquisition, which terminated upon the consummation of the IPO in November 2017. 2) Represents non-cash char
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