Slide 1: Advantage Solutions Inc. Investor Presentation
Advantage Solutions Inc. Investor Presentation | December 2022 NASDAQ: ADV
Slide 2: Disclaimer: Forward-Looking Statements
DISCLAIMER Forward-Looking Statements Certain statements in this presentation may be considered forward-looking statements within the meaning of the federal securities laws, including statements regarding the expected future performance of the business of Advantage Solutions Inc. ("Advantage"). Forw
Slide 3: Investment Highlights
INVESTMENT HIGHLIGHTS o Market leader in outsourced sales and marketing services industry for CPG brands and retailers o Large addressable market with tangible, material growth levers o Diverse range of long-standing blue-chip customers with excellent revenue retention rate o Multiple sticky revenue
Slide 4: Company Snapshot
COMPANY SNAPSHOT Advantage Solutions' sales and retailer services help brands and retailers of all sizes get the right products on the shelf, whether physical or digital. Our marketing teams influence shoppers to buy those products, wherever and however they shop. 3,500+ Clients 72,000+ Associates 4
Slide 5: The Basics: What Advantage Does
THE BASICS: WHAT ADVANTAGE DOES Essential partner to leading brands and retailers, helping clients reach consumers every day, in-store and online, through technology-enabled sales and marketing solutions 1 Headquarter Sales Present to retailers the business case to grow client's product distribution
Slide 6: Advantage's Two Operating Segments
ADVANTAGE'S TWO OPERATING SEGMENTS 2021 Revenues of $3.6B Sales Segment $2.3B (64% of Revenues) o Leading position in U.S. outsourced sales and merchandising market: provision of essential sales & merchandising services to increase CPG sales in brick-and-mortar and online channels for brands and ret
Slide 7: Sales Segment
SALES SEGMENT Leader in sales and merchandising services with 20%+ market share Primary Sales Segment Services HEADQUARTER SALES o Customer Alignment and Partnership o New Item Pitches o Pricing, Promotion and Sales Execution ANALYTICS, INSIGHTS & INTELLIGENCE o Retail and Sales Analytics o Supply C
Slide 8: Marketing Segment
MARKETING SEGMENT Leading promotions and experiential/event agency in U.S. Primary Marketing Segment Services EVENTS & EXPERIENTIAL o Sampling and Demonstrations o Festivals and Mobile Tours o Logistics and Fulfillment o Assisted Selling o In-Store, Online, Brand and Retailer-Centric Models COMMERCE
Slide 9: Long-Term Clients Drive Recurring Revenue Streams
LONG-TERM CLIENTS DRIVE RECURRING REVENUE STREAMS Brands Client Description Length of Relationship (years) Service Offering Sales Marketing $40B+ Confectionery/Food CPG 25+ $8B+ Food & Beverage CPG 25+ $50B+ Multinational CPG 25+ $5B+ Household CPG 15+ $30B Multinational OTC Pharma 15+ $80B+ Food &
Slide 10: Organic Revenue Growth
ORGANIC REVENUE GROWTH 2022 Organic Revenue(1) $ in millions. Sales Segment $15 $12 $43 Q1'22 Q2'22 Q3'22 $65 $83 $68 Q1'22 Q2'22 Q3'22 $80 $95 $111 Q1'22 Q2'22 Q3'22 (1) Presented net of foreign exchange impact. 9
Slide 11: Customer Case Study: Maruchan
CUSTOMER CASE STUDY: MARUCHAN For 20+ years, Advantage has evolved and grown with Maruchan NATIONAL SALES AGENCY SITUATION Maruchan sought to grow sales and become the dominant ramen choice in the U.S. ACTION Hired Advantage Sales for full-service sales representation nationally. RESULTS 84% Sales g
Slide 12: Proven Track Record Across Economic Cycles
PROVEN TRACK RECORD ACROSS ECONOMIC CYCLES 2008 - 2010 Revenue CAGR: 9.6% Adjusted EBITDA(1): 11.8% Revenue CAGR: 10.4% Adj. EBITDA CAGR(1): 9.6% $907 $924 $953 $1,110 $1,171 $1,401 $1,575 $1,714 $1,895 $2,100 $2,417 $3,708 $3,785 $3,156 $3,602 $144 $149 $170 $186 $205 $245 $274 $327 $365 $411 $440
Slide 13: 2017-2021 Performance Trends
2017-2021 PERFORMANCE TRENDS Sales Segment Revenue $ in millions. Y/Y growth 17% 5% 5% 13% $1,588 $1,857 $1,955 $2,061 $2,324 FY'17A FY'18A FY'19A FY'20A FY'21A Marketing Segment Y/Y growth 123% (1)% (40)% 17% $828 $1,851 $1,830 $1,095 $1,278 FY'17A FY'18A FY'19A FY'20A FY'21A Total Advantage Y/Y gr
Slide 14: 2022 Q3 Results Demonstrate Continued Recovery
2022 Q3 RESULTS DEMONSTRATE CONTINUED RECOVERY Total Advantage $ in millions. $915 $981 $1,051 Q1'22A Q2'22A Q3'22A Sales Segment $592 $604 $646 Q1'22A Q2'22A Q3'22A Marketing Segment $323 $377 $405 Q1'22A Q2'22A Q3'22A Adjusted EBITDA $ in millions. $97 $108 $118 % margin 10.6% 11.0% 11.3% Q1'22A Q
Slide 15: Free Cash Flow Bridge
FREE CASH FLOW BRIDGE Business drives strong unlevered free cash flow conversion rate year-to-date in 2022(1) ~53% Conversion Rate ~12% Conversion Rate 2022E ADJ. EBITDA WORKING CAPITAL CAPEX TAXES UNLEVERED FREE CASH FLOW CASH INTEREST DEBT AMORTIZATION OTHER / ONE TIME LEVERED FREE CASH FLOW (PRE-
Slide 16: Capital Allocation Priorities
CAPITAL ALLOCATION PRIORITIES De-lever Balance Sheet o Expect to steadily de-lever balance sheet beginning in 2023 via cash accumulation o Current leverage: 4.2x net debt(1) to LTM September Adjusted EBITDA Organic Growth & Investment o Investing in recruiting and retention given challenging labor e
Slide 17: Capitalization Summary
CAPITALIZATION SUMMARY o Total Debt of $2.1 billion(1) - Leverage at around 4.2x net debt(1) to LTM September Adjusted EBITDA - No meaningful maturities for the next four+ years o Debt Capitalization: Maturity Rate Outstanding Asset-backed Revolver ($500M) 2027 S+1.75%(4) 0 First Lien Term Loan 2027
Slide 18: Appendix & Non-GAAP Reconciliation
Appendix & Non-GAAP Reconciliation
Slide 19: Our Leadership Team
OUR LEADERSHIP TEAM Highly skilled management team with extensive industry experience and expertise Jill Griffin Chief Executive Officer 25 years of experience 14 years with Advantage Brian G. Stevens Chief Financial Officer, Chief Operating Officer 28 years of experience 14 years with Advantage Mic
Slide 20: Non-GAAP Reconciliation (1/6)
NON-GAAP RECONCILIATION (1/6) Three Months Ended Consolidated March 31, 2022 June 30, 2022 September 30, 2022 Total Company (in thousands) Net income $ 17,534 $ 3,676 $ 23,227 Add: Interest expense, net 11,883 28,188 23,557 Provision for income taxes 9,049 1,316 1,158 Depreciation and amortization 5
Slide 21: Non-GAAP Reconciliation (2/6)
NON-GAAP RECONCILIATION (2/6) Three Months Ended March 31, 2022 June 30, 2022 September 30, 2022 Sales Segment (in thousands) Operating income $ 18,973 $ 15,177 $ 31,765 Add: Depreciation and amortization 40,969 40,543 39,798 Equity-based compensation of Topco(1) (1,652) (2,032) (320) Stock-based co
Slide 22: Non-GAAP Reconciliation (3/6)
Non-GAAP Reconciliation (3/6) Consolidated Year Ended December 31, 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Total Company (in thousands) (Unaudited)(10) (Unaudited)(10) Net income (loss) $ 5,790 $ (201,052) $ 20,622 $ (34,984) $ (24,442) $ 4,253 $ 35,072 $ (98,984)
Slide 23: Non-GAAP Reconciliation (4/6)
Non-GAAP Reconciliation (4/6) Year Ended December 31, 2017 2018 2019 2020 2021 Sales Segment (in thousands) Operating income $ 172,171 $ (1,072,702) $ 127,961 $ 63,305 $ 182,529 Add: Depreciation and amortization 139,634 157,098 161,563 171,569 170,076 Impairment of goodwill and indefinite-lived ass
Slide 24: Non-GAAP Reconciliation (5/6)
Non-GAAP Reconciliation (5/6) (in millions) September 30, 2022 Current portion of long-term debt $ 14,7 Long-term debt, net of current portion 2,024.6 Less: Debt issuance costs (43.1) Total Debt 2,082.4 Less: Cash and cash equivalents 96.2 Total Net Debt $ 1,986.2 23
Slide 25: Non-GAAP Reconciliation (6/6)
Non-GAAP Reconciliation (6/6) Note: Numerical figures included in this slide have been subject to rounding adjustments (1) Represents equity-based compensation of Karman Topco L.P. (2) Represents non-cash compensation expense related to issuance of performance restricted stock units, restricted stoc