Hostess Brands — Q2 2019 Earnings Presentation
18 slides from Hostess Brands's earnings presentation, Aug 7, 2019
Slide 1: Second Quarter 2019 Earnings Investor Presentation
® Second Quarter 2019 Earnings Investor Presentation August 7, 2019
Slide 2: Disclaimer: Forward Looking Statements
Disclaimer 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
Slide 3: Hostess Brands: Celebrating 100 Years of Delighting Consumers
Hostess Brands Celebrating 100 Years of Delighting Consumers Key Highlights LTM Net Sales: $890 million Efficient Continuous Manufacturing Proven LTM Adj. EBITDA: Iconic Brands 19.0% $196 million Innovation to and Distribution Scalable Market Share Drive Growth Model Platform LTM Operating Cash Flow
Slide 4: At Hostess Brands... We delight consumers and build iconic brands
At Hostess Brands . . . We delight consumers and build iconic brands supported by our core competencies to drive profitable growth Strong Brand Equity Strong Brand Our Growth Strategy Equity Ø Strengthening our core Hostess brand and expanding into adjacent categories through innovation and strong p
Slide 5: Strong Market Position Growing in the SBG Category
Strong Market Position Growing in the SBG Category Market Share Point-of-Sale 18.4% $1,220 CAGR $1,173 17.7% 3.9% $1,118 GainingPoint Almost Annually 1 Share 16.8% $1,045 15.7% in millions 2016 2017 2018 2019 2016 2017 2018 2019 Source: Nielsen, Total Nielsen Universe for the Company within the SBG
Slide 6: Sustainable, Profitable Growth Through Strengthening Scalable Platforms
Sustainable, Profitable Growth Through Strengthening Scalable Platforms ▪ Core Hostess continues to grow with strong customer partnerships and sharpened analytical capabilities ▪ Innovation focus to fuel growth in the core and complementary indulgent and snacking categories based on consumer-centric
Slide 7: Progress Against 2019 Growth Pillars
Progress Against 2019 Growth Pillars Pillars for Growth YTD 2019 Actions ü Grow the Core Profitably drive core growth by Multi-faceted price increase across all channels completed ü building the consumer brand and building customer Developing new tools and capabilities to improve analytics relations
Slide 8: Current Results and Outlook
Current Results and Outlook
Slide 9: Second Quarter 2019 Highlights
Second Quarter 2019 Highlights ▪ Net revenue increased $25.2 million, or 11.7%, to $241.1 million primarily from strong growth in Hostess® branded core products driven by innovation, distribution and merchandising support as well as realization of price increases. ▪ Total Company point of sale incre
Slide 10: Consolidated Financial Results
Consolidated Financial Results Meaningful Growth in Revenue, Adjusted Gross Profit and Adjusted EBITDA Quarter Ended June 30, Year-to-Date June 30, Change Change ($ in millions, except per share data) 2019 2018 $ % 2019 2018 $ % Net Revenue $ 241.1 $ 215.8 $ 25.3 11.7% $ 463.8 $ 424.6 $ 39.2 9.2% Ad
Slide 11: QTD Point of Sale & Market Share Across Multiple Channels
QTD Point of Sale & Market Share Across Multiple Channels POS Change 4.3% 1.3% 0.9% 11.8% 60.2% 6.2% $160 $140 $120 $100 ) s n o i l $80 l i M ( POS Dollars $60 $40 $20 $0 Convenience Grocery Drug Dollar Club Mass 13 WE 6/30/2018 13 WE 6/29/2019 Market Share 24.2% 13.6% 43.6% 23.2% 23.1% 16.0% Marke
Slide 12: Full-Year 2019 Guidance Update
Full-Year 2019 Guidance Update 2019 Previous 2019 Updated 2018 Actuals Guidance Guidance ($ in millions, except ratio, per share data and tax rate) Growth well above Growth well above Net Revenue $850.4 the SBG Category the SBG Category Adjusted EBITDA $186.2 $200 - $210 $200 - $210 Adjusted EPS $0.
Slide 13: Divestiture of In-Store Bakery
Divestiture of In-Store Bakery ▪ Signed definitive agreement to sell Superior In-Store Bakery operations for $65 million in cash, subject to post closing adjustments. The transaction is expected to close during the third quarter. The Superior business was acquired in 2016 for $51 million. ▪ The sale
Slide 14: A Look Ahead to 2019
A Look Ahead to 2019 Revenue Growth Well Above the SBG Category & Significant Adjusted EBITDA Growth Q1 Q2 Q3 Q4 þ Execute Pricing & þ Expand Distribution ¨ Continue ¨ Finish 2019 Launch Breakfast of New Products Distribution Build Strong with of Breakfast & Significant þ Accelerate Growth Other Inn
Slide 15: Appendix
Appendix
Slide 16: Non-GAAP Reconciliations: Adjusted Gross Profit & Adjusted Gross Margin
Non-GAAP Reconciliations Adjusted Gross Profit & Adjusted Gross Margin Three Months Three Months Six Months Six Months Ended June 30, Ended June 30, Ended June 30, Ended June 30, ($ in millions) 2019 2018 2019 2018 Net revenue $ 241.1 $ 215.8 $ 463.8 $ 424.6 Cost of goods sold 157.6 149.0 305.2 286.
Slide 17: Non-GAAP Reconciliations: Adjusted EBITDA
Non-GAAP Reconciliations Adjusted EBITDA Three Months Three Months Six Months Six Months Ended June Ended June Ended June Ended June ($ in millions) 30, 2019 30, 2018 30, 2019 30, 2018 Net income $ 16.7 $ 24.6 $ 43.3 $ 53.9 Non-GAAP adjustments: Income tax provision 9.1 0.2 7.9 6.7 Interest expense,
Slide 18: Non-GAAP Reconciliations: Adjusted Net Income & Adjusted EPS
Non-GAAP Reconciliations Adjusted Net Income & Adjusted EPS Three Months Three Months Six Months Six Months Ended June 30, Ended June Ended June Ended June ($ in millions, except shares and per share) 2019 30, 2018 30, 2019 30, 2018 Net income $ 16.7 $ 24.6 $ 43.3 $ 53.9 Non-GAAP adjustments: Tax Re