Hostess Brands — Q2 2020 Earnings Presentation
19 slides from Hostess Brands's earnings presentation, Aug 5, 2020
Slide 1: Investor Presentation August 5, 2020
Investor Presentation August 5, 2020
Slide 2: Forward Looking Statements
Forward Looking Statements This investor presentation contains statements reflecting our views about the future performance of Hostess Brands, Inc. and its subsidiaries (referred to as “Hostess Brands” or the “Company”) that constitute “forward-looking statements” that involve substantial risks and
Slide 3: A Sustainable, Profitable Growth Story
A Sustainable, Profitable Growth Story Iconic Brands LTM Adjusted Net Revenue $950 million Continuous Innovation to Drive Growth LTM Adjusted EBITDA Collaborative Customer $216 million Relationships Efficient Manufacturing & LTM Operating Cash Flow Distribution Model $131 million Proven Scalable Pla
Slide 4: During Dynamic and Challenging Environment
During Dynamic and Challenging Environment . Prioritizing the health and safety of our employees while continuing to service our customers and consumers . Achieved strong net revenue growth and EBITDA margin expansion during volatile quarter . Continuing improvement in product and channel mix as eco
Slide 5: Well Positioned for Continued Growth
Well Positioned for Continued Growth Improve through Cultivate Talent Leverage Strong Grow the Core Grow through Innovation Agility & Efficiency & Capabilities Cash Flow 14.7% Adjusted Net Expanded Adapted Opened new R&D Voortman Revenue Growth * distribution of operational Center expandin
Slide 6: Leveraging Core Competencies to Execute During Dynamically Changing Environment
Leveraging Core Competencies to Execute During Dynamically Changing Environment Key Objectives in the 2nd Half of 2020 . Leveraging category-leading distribution to drive accelerated growth while adapting to changing consumer behaviors . Higher at-home consumption trends expected to continue to be a
Slide 7: Driven by Strong Voortman and Hostess Brand Growth
Driven by Strong Voortman® and Hostess® Brand Growth (in millions) 9.1% 18.1% $263.0 $65.1 Growth Growth $55.1 $241.1 2019 2020 2019 2020 14.7% Growth 22.6% Growth excluding ISB excluding ISB Q2 Results are for three months ended June 30, 2020 and 2019. Adjusted Net Revenue and Adjusted EBITDA are n
Slide 8: Continued Growth of Sweet Baked Goods
Continued Growth of Sweet Baked Goods Sweet Baked Goods $232.6 $229.3 $3.3 1.4% $459.0 $442.2 $16.8 3.8% Cookies 30.4 - 30.4 100.0% 47.5 - 47.5 100.0% In-Store Bakery - 11.8 (11.8) (100.0%) -21.6(21.6) (100.0%) Total Adjusted Net Revenue $263.0 $241.1 $21.9 9.1% $506.5 $463.8 $42.7 9.2% Sweet Baked
Slide 9: Driven by Efficient Integration and Strong Consumer Demand
Driven by Efficient Integration and Strong Consumer Demand Voortman Acquisition Supports Growth Initiatives Provides Entry Into Attractive Wafer and Sugar-Free Cookie Categories Completed primary integration activities: . Executed customer sell-in, acceptance and coverage model . Established go-fo
Slide 10: Consistent Point-of-Sale and Market Share Growth in the Sweet Baked Goods Category
Consistent Point-of-Sale and Market Share Growth in the Sweet Baked Goods Category $1,315 19.1% $1.0 $1,223 18.6% $1,170 18.1% $1,117 17.7% 2017 2018 2019 2020 2017 2018 2019 2020 Source: Nielsen, Total Nielsen Universe for the Company within the SBG Category. Point of Sale and Market Share, 52 week
Slide 11: Driven by Strong Growth in Grocery and Dollar Channels
Driven by Strong Growth in Grocery and Dollar Channels Convenience Channel POS Growth of 3.4% in Last 4 Weeks of Quarter POS Change 0.4% 17.9% 4.1% 37.8% (3.0)% (6.1)% 7.4% $160 $140 $120 $353M $100 $328M $80 $60 (In Millions) POS Dollars $40 $20 $0 Convenience Grocery Mass Dollar Club Drug Total Ho
Slide 12: Able to Support Business in Uncertain Times
Able to Support Business in Uncertain Times History of successfully reducing leverage following acquisitions while continuing to make disciplined investments for growth – Expect leverage of ~4x by end of 2020 . Reinvest in business for 4.5x Voortman future growth acquisition ** Target 4.3x Proforma
Slide 13: Contribution of Voortman Acquisition and Increased Demand
Contribution of Voortman Acquisition and Increased Demand, Partially Offset by Sale of In-Store Bakery Adjusted Revenue $263.0 $241.1 $21.9 9.1% $506.5 $463.8 $42.7 9.2% Adjusted Gross Profit $98.1 $83.5 $14.6 17.5% $182.4 $160.2 $22.2 13.9% Adjusted Gross Margin 37.3% 34.6% 267bps 36.0% 34.5% 141bp
Slide 14: Evolving Priorities during COVID-19 Pandemic
Evolving Priorities during COVID-19 Pandemic − Due to the rapidly, evolving situation and the high degree of uncertainty, the Company has suspended its previously issued fiscal 2020 full-year guidance. − Assuming U.S. movement restrictions and supply chain availability remain at or above current lev
Slide 15: We delight consumers and build iconic brands supported by our core competencies
We delight consumers and build iconic brands supported by our core competencies Strong Continuous to drive profitable growth Brand Equity Innovation Strengthening our core Hostess brand and expanding Core into adjacent categories through innovation and Significant strong partnerships with our custom
Slide 16: Objective: long-term leading performance in our peer group
Objective: long-term leading performance in our peer group Organic Revenue Adjusted EBITDA Free Cash Flow Growth Margin Conversion2 Top Quartile of Top Quartile of Top Quartile of 1 1 Peer Group1 Peer Group Peer Group (Well ahead of the SBG Category) Delivering Industry-Leading Total Shareholder Ret
Slide 17: Appendix
Appendix 17
Slide 18: Three Months Ended June 30, 2020 GAAP to Non-GAAP Reconciliation
Three Months Ended June 30, 2020 Three Months Ended June 30, 2019 Net Gross Operating Net Diluted Net Gross Operating Net Diluted Revenue Profit Income Income EPS Revenue Profit Income Income EPS GAAP Results $ 256.2 $ 89.4 $ 34.6 $ 17.4 $ 0.13 $ 241.1 $ 83.5 $ 36.9 $ 16.7 $ 0.1 Non-GAAP adjustments
Slide 19: Six Months Ended June 30, 2020 GAAP to Non-GAAP Reconciliation
Six Months Ended June 30, 2020 Six Months Ended June 30, 2019 Net Gross Operating Net Diluted Net Gross Operating Net Diluted Revenue Profit Income Income EPS Revenue Profit Income Income EPS GAAP Results $ 499.7 $ 168.7 $ 49.7 $ 20.0 $ 0.15 $ 463.8 $ 158.6 $ 73.0 $ 43.3 $ 0.31 Non-GAAP adjustments: