Utz Brands Inc · NYSE:UTZ
Utz Brands — Q4 2020 Earnings Presentation
34 slides from Utz Brands's earnings presentation, Mar 18, 2021
Slide 1: Utz Brands, Inc. Q4 2020 Earnings Presentation
℠ Utz Brands, Inc. Q4 2020 Earnings Presentation March 18, 2021 HIGHLY CONFIDENTIAL 1
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 Dylan Lissette, Chief Executive Officer HIGHLY CONFIDENTIAL 3
Slide 4: 2020 Highlights
2020 Highlights Retail sales increased 15% to $1.3B outpacing category growth of 9%, making Utz the #3 brand platform in U.S. Salty Snacks(1) and one of the fastest growing salty snack platforms of scale Power Brands retail sales grew 17% and Expansion and Emerging geographies grew 20% and 19%,
Slide 5: Strong Top-line and Bottom-line Growth
Strong Top-line and Bottom-line Growth 4Q’20(1) FY20(1) Net Sales Growth +22.1% +25.5% Pro Forma Net Sales Growth(2) +6.8% +11.9% Gross Profit Growth +24.2% +31.1% Adjusted Gross Profit Growth +27.5% +35.0% Adjusted Gross Margin 36.7% 37.9% % of Net sales Change +155bps +267bps Adjusted EBITDA Growt
Slide 6: Q4 Retail Sales Significantly Outpaced the Category
Q4 Retail Sales Significantly Outpaced the Category Major sub-categories are driving growth Sub-Category Retail Sales YoY Change Total Sub-Category Total Salty Potato Tortilla Cheese Pork Pretzels Popcorn Salsa Queso Snacks Chips Chips Snacks Rinds Ending 12/27/20 22.2% 51.6% 13 Weeks 38.2% 9.3% 10.
Slide 7: Power Brands Continue to Significantly Outpace the Category
Power Brands Continue to Significantly Outpace the Category Consistent with our strategy, Power Brands grew to 87% of retail sales as we continue to prioritize our investments and reduce emphasis on Foundation Brands Power Brands Retail Sales YoY Change(1) Foundation Brands Retail Sales YoY Change(1
Slide 8: "Better-for-You" Portfolio Performing Well in Natural Channel
“Better-for-You” Portfolio Performing Well in Natural Channel Our Boulder Canyon brand grew ~40% and had the #1 selling potato chip SKU in the Natural Channel in 2020 (Avocado Oil Sea Salt) Natural Channel Retail Sales YoY Growth Total Salty Snacks 21.2% 16.2% 10.6% 9.2% 13 weeks 52 weeks Ending 12/
Slide 9: Buyers Have Increased Significantly and Repeat Rates Have Risen
Buyers Have Increased Significantly and Repeat Rates Have Risen # of Buyers (in M) and $ per Buyer % of Buyers Repeating Purchases – Utz + Truco 60.9 57.9 Repurchased 50.5% 53.0% Twice or More $21.51 $19.51 Repurchased Once 17.8% 17.0% Bought Once, 31.7% 30.0% Did Not Repurchase 52wk 12/29/19 52wk 1
Slide 10: Strong Performance Continues Across All Major Channels
Strong Performance Continues Across All Major Channels Utz gained share in all major channels in FY 2020 Retail Channel Sales YoY Change Total Salty Snacks MULO + C Grocery Mass Club C-Store 13.8% 14.6% Ending 12/27/20 11.9% 11.6% 9.3% 10.1% 7.1% 7.9% 13 Weeks (4.1%) (6.5%) 21.3% Ending 12/27/20 15.
Slide 11: Expansion & Emerging Geographies Driving Share Gains
Expansion & Emerging Geographies Driving Share Gains Continued expansion across U.S. with growth across all geographies Geographic Retail Sales YoY Change Total Salty Snacks Total US Core Expansion Emerging Ending 12/27/20 13.7% 14.3% 13 Weeks 9.3% 8.4% 7.1% 6.7% 7.3% 5.7% Ending 12/27/20 20.4% 19.1
Slide 12: Outpacing Category eCommerce Growth
Outpacing Category eCommerce Growth We will continue to increase our investments in eCommerce in 2021 eCommerce Retail Sales YoY Change eCommerce % of Retail Sales Total Salty Snacks 8.2% 125% 6.8% 104% 98% 89% 4.4% 3.5% 13 weeks 52 weeks 13 weeks 13 weeks 52 weeks 52 weeks Ended 12/27/20 Ended 12/2
Slide 13: 4Q / FY20 Results & FY21 Outlook
4Q / FY20 Results & FY21 Outlook Cary Devore, Chief Financial Officer HIGHLY CONFIDENTIAL 13
Slide 14: Delivered Strong 4Q Results In-line with Our Expectations
Delivered Strong 4Q Results In-line with Our Expectations Fourth quarter results benefited from organic growth, the impact of the 53rd week, and contributions from acquisitions Pro forma net sales on a comparable 13-week basis increased 6.8% in Q4 2020(1) Net Sales Adj. Gross Profit (% margin) Adj.
Slide 15: Robust Net Sales Growth
Robust Net Sales Growth Q4 growth driven by volume gains, price/mix, acquisitions, and the 53rd week Q4 Net Sales YoY Growth Decomposition (1) (2) FY20 Net Sales YoY Growth Decomposition (1) (2) (1) Estimated impact due to conversion of employee-serviced DSD routes to independent operator-serviced r
Slide 16: Continued Margin Expansion
Continued Margin Expansion Increased volume leverage in manufacturing, price/mix, lower commodity costs, accretive acquisitions and the 53rd week drove Adjusted EBITDA margin expansion Q4 Adjusted EBITDA Margin Decomposition FY20 Adjusted EBITDA Margin Decomposition Note: Adjusted EBITDA Margin is a
Slide 17: Balance Sheet and Other Items
Balance Sheet and Other Items Balance Sheet – Strong cash balance of $46M and approximately $106 million on ABL credit facility available at fiscal 2020 year-end – On January 20, 2021 announced term loan refinancing related to the Truco Enterprises / ON THE BORDER® acquisition • Placed a new $720M
Slide 18: Fiscal 2021 Outlook
Fiscal 2021 Outlook Long-term organic growth algorithm of 3 to 4% Net Sales growth and 6 to 8% Adjusted EBITDA growth remains intact 2020 2021 Key Considerations Pro Forma (52 weeks) Outlook 2020 new buyer growth and increased retention rates provides strong foundation for 2021 Consistent with 202
Slide 19: Fiscal 2021 Outlook (cont.)
Fiscal 2021 Outlook (cont.) Additional Assumptions Funded $25M Vitner's acquisition in February 2021 with balance sheet cash Expecting 200-250 Independent Operator (“IO”) route conversions in 2021 Core D&A of $25 – $27M and step-up D&A of $57 – $59M (both comprised of approximately 2/3 cost of
Slide 20: Driving Towards 3 to 4% Annual Productivity as a % of COGS
Driving Towards 3 to 4% Annual Productivity as a % of COGS Productivity Targets(1) Key Drivers (% of COGS) 3–4% Manufacturing Efficiencies Line automation Equipment upgrades/expansion 2% Waste/scrap reduction 1% Network Optimization Distribution optimization Pallet/case efficiency Or
Slide 21: Incremental Marketing Investments In 2021
Incremental Marketing Investments In 2021 Focusing on elevating insights, expanding capabilities and creating consumer pull of our Power Brands, and in particular, Utz®, ON THE BORDER®, and Zapp’s® Shift away from sports sponsorships in order to deliver targeted brand messages Targeting growth
Slide 22: Introducing New Innovation in High Growth Segments
Introducing New Innovation in High Growth Segments Flavored Pretzels are 35% of Sub-Category and growing over 30%, and Authentic Mexican Style and Utz is meaningfully underweight in flavored (<10% of our mix)(1) Flavor Portfolio Expansion Expansion in C-store 100 Year Celebration and Iconic Flavors
Slide 23: Closing Remarks
Closing Remarks Dylan Lissette, Chief Executive Officer HIGHLY CONFIDENTIAL 23
Slide 24: Actively Deploying Our Value Creation Strategies
Actively Deploying Our Value Creation Strategies Reduce Continue Costs and Strategic Enhance Acquisitions Margins 1 Drive Productivity 1. 1 Focus on Branded 1. ℠ Snacking in the U.S. 2 Optimize Revenue and 2. Value Creation Trade 2 Deliver Strong Synergies 2. Strategies 3 Improve Margin Mix 3. Reinv
Slide 25: Well-Positioned for Long-Term Growth
Well-Positioned for Long-Term Growth Gained Most Buyers (3M) in Salty Snack Category in 2020(1) and Repeat Rates are Increasing – New buyers diversified across demographics, income brackets and geographies – Repeat rates grew to nearly 70% and we are increasing our brand marketing / eCommerce inve
Slide 26: Celebrating 100 Years of Utz Salty Snacks
Celebrating 100 Years of Utz Salty Snacks 26 ℠
Slide 27: Appendix
Appendix HIGHLY CONFIDENTIAL 27
Slide 28: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures Net Sales and Pro Forma Net Sales 14-Wks 13-Wks 13-Wks 53-Wks 52-Wks 52-Wks Ended 1-Wk Ended Ended Ended Ended 1-Wk Ended Ended Ended (dollars in millions) 1/3/21 1/3/21 12/27/20 12/29/19 1/3/21 1/3/21 12/27/20 12/29/19 Net
Slide 29: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures Adjusted Selling and Administrative Expense 14-Wks 13-Wks 13-Wks 53-Wks 52-Wks 52-Wks Ended 1-Wk Ended Ended Ended Ended 1-Wk Ended Ended Ended (dollars in millions) 1/3/21 1/3/21 12/27/20 12/29/19 1/3/21 1/3/21 12/27/20 12
Slide 30: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures Depreciation & Amortization 14-Wks Ended 13-Wks Ended 53-Wks Ended 52-Wks Ended (dollars in millions) 1/3/21 12/29/19 1/3/21 12/29/19 Core D&A - Non-Acquisition-related included in Gross Profit $ 2.8 $ 4.5 $ 16.9 $ 13.5 Ste
Slide 31: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures Net Sales and Pro Forma Net Sales FY 2019 FY 2020 FY 2020 (dollars in millions) Q4 Q1 Q2 Q3 Q4 LTM Net Sales - 53 Weeks $ 201.8 $ 228.0 $ 242.0 $ 248.0 $ 246.3 $ 964.3 53rd Week - - - - 15.9 15.9 Net Sales - 52 Weeks 201.8
Slide 32: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures Net Debt 2020 Pro (dollars in millions) Forma(3) Term Loan $ 720.0 Capital Leases(1) 8.1 Deferred Purchase Price 1.5 Gross Debt(2) 729.6 Cash Excluding Warrant Cash (37.9) Total Net Debt $ 691.7 52-Weeks Normalized Further
Slide 33: Utz Brands, Inc. Share Count (as of January 22, 2021)
Utz Brands, Inc. Share Count (as of January 22, 2021)(1)(2) Assumes Private Placement Share Description Warrants Notes(4) Outstanding Are Net Securities(3) Settled Shares of Class A Common Stock held by Public 76,481,833 76,481,833 Outstanding shares as of close of trading on the New York Stock Ex
Slide 34: Utz Geographic Regions
Utz Geographic Regions(1) WA MT ME ND VT OR MN NH ID SD WI MA NY WY MI CT RI IA PA NE NJ NV OH IL IN DE UT CO WV MD CA KS MO VA KY DC NC TN Core AZ OK AR NM SC Expansion AK GA MS AL Emerging HI TX LA Utz Geography Share FL Positions(1) Core: 9.3% Expansion: 4.5% Emerging: 2.5% Source: IRI, Tot