Slide 1: Investor Presentation: February 26, 2019
Investor Presentation: February 26, 2019 Exhibit 99.2
Slide 2: Safe Harbor Forward Looking Statements
Safe Harbor Forward Looking Statements This presentation contains “forward-looking” statements that involve risks, uncertainties and assumptions. If the risks or uncertainties ever materialize or the assumptions prove incorrect, the Company’s results may differ materially from those expressed or imp
Slide 3: We fundamentally believe Freshpet has the potential to change the way people feed their pets
WE FUNDAMENTALLY BELIEVE THAT FRESHPET HAS THE POTENTIAL TO CHANGE THE WAY PEOPLE FEED THEIR PETS . . . FOREVER
Slide 4: Growing faster than category in all classes of trade
Growing 25 pts. faster than category in all classes of trade % Change vs YA by Class of Trade Nielsen: Freshpet RFG $ as of 12-29-18
Slide 5: Increased penetration & buying rate
Increased penetration & buying rate Total Freshpet Buying Rate, Penetration and Repeat Rate Source: TTL FP RFG, 52 weeks ending 12/29/18, Nielsen HH Panel, Internal Buy Rate Calculation, Repeat NBD-Adj Nielsen HH Panel Penetration 1.34 1.50 1.56 1.75 2.04 Repeat 65 66 68 69 70
Slide 6: 4Q18 and FY18 results compared to prior year periods
Net Sales +29.7% +26.8% Adj. EBITDA +33.8% +15.5% Adj. Gross Margin 4Q18 and FY18 results compared to prior year periods
Slide 7: Gaining SG&A leverage and reinvested for growth
Gaining SG&A leverage and reinvested for growth SG&A Leverage FY 2018 FY 2017 Y-o-Y Change Adj. SG&A % Excluding Media 28.5% 31.0% +2.4% Media% 11.1% 8.9% -2.2% Total Adj. SG&A % 39.7% 39.9% +0.2%
Slide 8: Growing distribution reach (ACV) and depth (TDP) with significant room to grow
Growing distribution reach (ACV) and depth (TDP) with significant room to grow Nielsen Mega-Channel % ACV for 13 week periods 4/5/14 through 12/29/18 Nielsen Mega-Channel TDP for 13 week periods 4/5/14 through 12/29/18 19,499 stores as of 12/31/18 Upgraded 805 stores in 2018
Slide 9: Freshpet productivity loop creates shareholder value
Freshpet productivity loop creates shareholder value
Slide 10: Dig Deeper 2019
fi réshpet DIG DEEPER 2019
Slide 11: Carrying strong momentum into 2019
Carrying strong momentum into 2019 Nielsen measured $ consumption for 7 weeks ending 2/16/19 and 2/17/18 compared to the same period prior year
Slide 12: Freshpet 2019 growth priorities
Freshpet 2019 growth priorities Expand the Freshpet consumer franchise Increase HH penetration Expand buying rate Strengthen Freshpet’s retail presence Increase ACV and TDP’s Upgrade Fridges Install 2nd Fridges Strengthen Gross Margin/Adjusted EBITDA Margin Pricing Product Innovation Efficiency gain
Slide 13: Expand the Freshpet consumer franchise: advertising
Expand the Freshpet consumer franchise Increase US advertising investment to $27 million (11+% of sales) More weeks Higher media weights
Slide 14: Innovation that attracts new users
Expand the Freshpet consumer franchise Innovation that attracts new users Homestyle Creations – Custom Dog Meals Multi-Protein Roll
Slide 15: Expand Freshpet's retail presence
Expand Freshpet’s retail presence Strong velocity growth is driving increased retailer interest Add 1500-1600 net new stores to 21,000+ ( ACV by 7%) Upgrade another 500 Fridges (beyond 1000 committed in 2018) Install 800 second Fridges Will exceed 21,000 stores in 2019 Upgraded 805 Fridges in 2018
Slide 16: Strengthen gross margin/adjusted EBITDA margin
Strengthen gross margin/adjusted EBITDA margin Pricing Targeted bag items +2% pricing impact across total line Effective in mid-Q1 Innovation Increase appeal of rolls Higher margin bag items Begins shipping end of Q1 COGS Increase yield/throughput 24/7 on 2 lines in Jan. ‘19 24/7 on final line in Q2
Slide 17: Gaining leverage in SG&A
Gaining leverage in SG&A Basis points
Slide 18: $2 Million Investment to Drive Establishment in Canada & UK
$2 Million Investment to Drive Establishment Continue measured development in Canada & UK
Slide 19: Build capability to support longer-term capacity expansion
Build capability to support longer-term capacity expansion Up to $1 Million Investment in Technical Capability Process Development & Improvement Site Design & Development Quality & Process Engineering
Slide 20: Growing into scale: Adj. EBITDA growth > net sales growth
Growing into scale: Adj. EBITDA growth > net sales growth 20182019% Change Net Sales$193.2>$240+24% Adjusted EBITDA$20.3>$28+38% $ in Millions Excluding incremental investments in Canada/UK and technical capability/capacity building, Adjusted EBITDA would be up 50+% in 2019
Slide 21: Driving net sales towards $500+ million and beyond
Driving net sales towards $500+ million and beyond
Slide 22: Topline Results – YoY Results
+26.8% +17.5% +14.3% +29.7% +19.6% +12.7% 2016 2017 2018 Q4 FY Q4 FY Q4 FY Topline Results – YoY Results Product innovation Upgraded Fridges Increased advertising
Slide 23: FY18 Results; simplifying non-GAAP measures
FY18 Results Adjusted Gross Profit % 50.2% Adjusted SG&A % 39.7% Adjusted EBITDA % 10.5% Simplifying non-GAAP measures Under our new format, you can subtract Adj. SG&A from Adj. Gross Profit to calculate FRPT’s Adj. EBITDA No change to Adjusted Gross Profit Margin or Adjusted EBITDA goals Now addbac
Slide 24: Q4 Gross Margin Bridge
Productivity gains offset by increased staffing, commodities and mix New Hires for 7-day Production Commodity & In-bound Freight Mix Shift Increased Yield and Throughput 4Q18 4Q17 Q4 Gross Margin Bridge
Slide 25: SG&A Leverage
SG&A Leverage 4Q18 4Q17 Change Adj. Gross Margin 49.4% 51.4% -2.0% Adj. SG&A % Excluding Media 27.8% 33.4% +5.6% Media % 3.7% 0.8% -2.9% Total Adj. SG&A % 31.5% 34.2% +2.7% Adjusted EBITDA % 17.9% 17.2% +0.7% Gaining leverage in SG&A
Slide 26: FY2019 Guidance
FY2019 Guidance 20182019% Change Net Sales$193.2>$240+24% Adjusted EBITDA$20.3>$28+38% $ in Millions Excluding incremental investments in Canada/UK and technical capability/capacity building, Adjusted EBITDA would be up 50+% in 2019
Slide 27: Series of actions designed to increase adjusted gross margin
Series of actions designed to increase adjusted gross margin Price increases implemented Benefit of price increases realized Innovations launched Start-up final line on 24/7 Benefit of innovations realized Benefit of 24/7 staffing realized 51+% Adj. Gross Margin target Q1 Q2 Q3 Q4
Slide 28: Bridge to $60 million EBITDA in FY2020
Bridge to $60 million EBITDA in FY2020 FY19 Adj. EBITDA Guidance Contribution on $60mm of Additional Net Sales to get to $300MM Reduced int’l investment/loss Adjusted Gross Margin Increase from 50% to 52% on $300MM net sales Increased Fixed SG&A of 4% Logistics & Brokerage Efficiencies (1/2%) FY20 A
Slide 29: Delighting pet parents, pets, shareholders and employees
Delighting pet parents, pets, shareholders and employees . . .
Slide 30: Appendix
Freshpet eS Appendix PUG OFF, PROPYLENE GLYCOL
Slide 31: Quarterly reconciliation for updated non-GAAP measures
Quarterly reconciliation for updated non-GAAP measures NON-GAAP SCHEDULES Adjusted EBITDA Three Months Ended Three Months Ended Three Months Ended Three Months Ended Twelve Months Ended Adj EBITDA inputs: YTD March 31, June 30, September 30, December 31, December 31, 2018 2017 2018 2017 2018 2017 20
Slide 32: Annual reconciliation for updated non-GAAP measures
Annual reconciliation for updated non-GAAP measures
Slide 33: Accelerated growth in mega-channel
Accelerated growth in mega-channel 2018 fresh consumption +28% Nielsen Mega-Channel: XAOC + Pet + WFM Sales Growth
Slide 34: Steady distribution growth & accelerating velocity
Steady distribution growth & accelerating velocity Nielsen Mega-Channel ACV and $M/$M ACV for 4 week periods 1/2/16 to 12/29/18
Slide 35: Advertising drove penetration gains which drove growth
Advertising drove penetration gains which drove growth Nielsen HH Panel date for Freshpet Core Dog (Rolls, Roasted Meals and Fresh from the Kitchen) – Rolling 52 week penetration data