Slide 1: 1Q 2024 Earnings Presentation
1Q 2024 Earnings Presentation May 9, 2024 1
Slide 2: Disclaimer
Disclaimer Forward-Looking Statements Advantage believes that the use of Adjusted EBITDA, Adjusted EBITDA by Segment, Adjusted EBITDA margin, Revenues net of pass-through costs, Net Debt, Certain statements in this presentation may be considered forward-looking statements within the meaning of the f
Slide 3: Branded, Experiential and Retailer Services
Serves as a strategic extension of consumer-packaged goods Branded companies’ sales and marketing teams. Services include sales, business intelligence, business process management, Services and supply chain; product innovation; and brand-driven omni-channel marketing and e-commerce solutions to get
Slide 4: 1Q 2024: In-line with Expectations
1Q 2024: In-line with Expectations ► Met expectations despite market softness and higher- ► Growth acceleration plan expected to enhance than-planned costs value creation • Reported revenues, excluding pass-through costs, was $771M • Simplification to align capabilities with economic buyers (-14% vs
Slide 5: Macro Trends Continue to Favor Advantage
Macro Trends Continue to Favor Advantage Persistent Food-at-Home Adaptation Shoppers Inflation Retailers are focused on private ~50% of manufacturers expect to Food-away-from-home pricing A growing number of financially brands (adding new items, increase trade dollars, discount continues to signific
Slide 6: Uniquely Positioned at Intersection of CPG Manufacturers and Retailers
Uniquely Positioned at Intersection of… CPG Manufacturers Retailers Physical E-Commerce Retail National Private Brand Brand 6
Slide 7: Enduring Client and Customer Relationships
Enduring Client and Customer Relationships Average relationship duration is >15 years with ~95% retention over time (top 100 clients) 1Q’24 Activity ► A leading global personal care product company returned to Branded Services ► Branded Services and Retailer Services signed a multi-million-dollar ag
Slide 8: Investments to Enhance Commercial Capabilities
Investments to Enhance Commercial Capabilities Genpact collaboration uses generative AI to deliver new and innovative business process optimization solutions Creating Advantage’s AI Core Competency Center, to weave AI into areas that benefits the business Collaboration with a retail technology compa
Slide 9: Performance Met Expectations Despite Soft Market Conditions and Higher Costs
Performance Met Expectations Despite Soft Market Conditions and Higher Costs TOTAL ADVANTAGE 1Q’24 Performance Drivers Revenues ► Full-year guidance contemplated lower 1Q $ in millions. year-over-year results due to planned Y/Y growth (10)% +1%(1) investments, internal reorganization activities, $1,
Slide 10: Soft Market Conditions and Higher Costs Impacted Performance
Soft Market Conditions and Higher Costs Impacted Performance BRANDED SERVICES 1Q’24 Performance Drivers Revenues $ in millions. ► New client wins demonstrate continued Y/Y growth (28)% (3)%(1) demand for Advantage’s scale and $508 expertise $364 $41 $50 Pass-Through Costs ► Market softness drove a d
Slide 11: Outperformance Due To Increased Activity and Strong Execution
Outperformance Due To Increased Activity and Strong Execution EXPERIENTIAL SERVICES 1Q’24 Performance Drivers Revenues ► Increased activity as event count $ in millions. reached ~88% of 2019 pre-pandemic Y/Y growth +20% +21%(1) levels $313 $260 $85 ► Average daily demo activity grew $69 Pass-Through
Slide 12: Performance Impacted by Holiday Shift and More Activities in The Prior Year
Performance Impacted by Holiday Shift and More Activities in The Prior Year RETAILER SERVICES 1Q’24 Performance Drivers Revenues $ in millions. ► An early Easter holiday limited in-store Y/Y growth (6)% activities, which reversed in April $229 $244 ► Tough prior year comparison with in- store remode
Slide 13: Capitalization Summary
Capitalization Summary As of 3/31/24 Net Debt Overview Maturity Schedule Undrawn revolver $ in millions Maturity Rate Outstanding $ in millions provides available (2) liquidity First Lien Term Loan 2027 S+4.25% $1,146 $1,602(3) Senior Secured Notes 2028 6.50% 692 $456 (5) Other Debt 5 $1,146 $692 To
Slide 14: On Track with Activities Supporting IT Transformation
On Track with Activities Supporting IT Transformation MODERNIZE TRANSFORM DIFFERENTIATE Modernize Upgrade talent Unify front-line Consolidate retail Unlock value Innovate services, product of data and through financial management staffing and demonstration systems system scheduling analytics AI/auto
Slide 15: Impact of Strategic Actions
Impact of Strategic Actions 2023 Revenues 2023 Adj. EBITDA $ in millions. Represents third party $ in millions. reseller, Atlas, $4,225 Represents third party Foodservice, Adlucent $424 reseller, Atlas, $198 $374 $25 Foodservice, Adlucent $3,693 Represents ~11 months of Advantage Smollan stake repor
Slide 16: Reaffirming 2024 Guidance
Reaffirming 2024 Guidance Strategic Action Commentary $ in millions ► Management anticipates a greater weight on Impact of 2H Adjusted EBITDA performance, with Divestitures and emphasis on price realization in response to 2023 Deconsolidation 2024 Guidance labor inflation and rebuild of sampling and
Slide 17: Simplify Advantage to Focus on Core Capabilities
Simplify Advantage to Focus on Core Capabilities 10/27/23 1/31/24 1/31/24 Divested Atlas Technology Divested foodservice businesses Collaboration with Tata Group ~$100M in proceeds w/ 7.5% stake in Consultancy Services ~$10M in proceeds at value Acxion Foodservice, an industry-leading Modernizing IT
Slide 18: Appendix
Appendix
Slide 19: Non-GAAP Reconciliation (1/6)
NON-GAAP RECONCILIATION (1/6) NET INCOME TO ADJUSTED EBITDA FROM CONTINUING AND DISCONTINUED O PERATIONS 19
Slide 20: Non-GAAP Reconciliation (2/6)
NON-GAAP RECONCILIATION (2/6) OPERATING INCOME FROM CONTINUING AND DISCONTINUED OPERATIONS TO ADJUSTED EBITDA BY SEGMENT 20
Slide 21: Non-GAAP Reconciliation (3/6)
NON-GAAP RECONCILIATION (3/6) REVENUES TO REVENUES NET OF PASS -THROUGH COSTS 21
Slide 22: Non-GAAP Reconciliation (4/6)
NON-GAAP RECONCILIATION (4/6) LTM ADJUSTED EBITDA AND NET DEBT 22
Slide 23: Non-GAAP Reconciliation (5/6)
NON-GAAP RECONCILIATION (5/6) CASH FLOW TO ADJUSTED UNLEVERED FREE CASH FLOW 23
Slide 24: Non-GAAP Reconciliation (6/6)
NON-GAAP RECONCILIATION (6/6) Note: Numerical figures included in this slide have been subject to rounding adjustments a. Represents expenses related to (i) equity-based compensation expense associated with grants of Common Series D Units of Karman Topco L.P. (“Topco”) made to one of the equity hold
Slide 25: Thank you
Thank you (A) ADVANTAGE SOLUTIONS