Advantage Solutions Inc. · NASDAQ:ADV
Advantage Solutions — Q3 2023 Earnings Presentation
19 slides from Advantage Solutions's earnings presentation, Nov 7, 2023
Slide 1: Q3 Earnings Presentation
Advantage Solutions Inc. Q3 Earnings Presentation
Slide 2: Disclaimer
Disclaimer Forward-Looking Statements Certain statements in this presentation may be considered forward-looking statements within the meaning of the federal securities laws, Advantage believes that the use of Adjusted EBITDA, Adjusted EBITDA by Segment, Adjusted EBITDA margin, Net Debt, Adjusted Unl
Slide 3: Q3 Key Messages
Q3 Key Messages ► Continued trend of healthy financial performance ► Increasing confidence in FY23 Adjusted EBITDA outlook • Robust quarterly revenues of $1.1 billion, an increase of 4.3% • See greater likelihood of performance around the upper end of year-over-year or 5.8% excluding unfavorable for
Slide 4: Q3 Financial Results
Q3 Financial Results Revenues Adj. EBITDA $ in millions. $ in millions. 4% 6%1 Y/Y growth Y/Y growth (4%) Total $1,096 $1,051 $20 0 $18 0 $118 $16 0 $113 Advantage $14 0 $12 0 $10 0 $80 $60 $40 % margin $20 10.3% 11.3% $- Q3'23A Q3'22A Q3'23A Q3'22A Y/Y growth (3%) (1%)1 Y/Y growth (12%) Sales $20 0
Slide 5: Healthy Organic Revenue Trends in Q3
Healthy Organic I N - S T OR E S A M P LI N G A N D D E M O N S TR A T I ON E V E N T C O U N T Revenue Trends in Q3 Sales ► Year-over-year comp impacted by +20% YOY Segment divestiture of third-party reselling business and intentional client exit ► Strong realization of pricing and growth in Europe
Slide 6: Capitalization Summary
Capitalization Summary Total Debt of $1.96 billion(1) − Leverage at around 4.2x net debt(1) to LTM September Adjusted EBITDA − No meaningful maturities for approximately 4 years Debt Capitalization: $ in millions Maturity Rate Outstanding (2) First Lien Term Loan 2027 S+4.50% $1,177 Senior Secured N
Slide 7: Embarking on Transformation (1/2)
Embarking on Transformation (1/2) Advantage is evolving from a holding company to a FOCUSING OUR EFFORTS unified enterprise. We have a strong foundation as a market leader and operate a diversified portfolio of services in attractive Simplify end markets with a fragmented customer base. Our Structur
Slide 8: Embarking on Transformation (2/2)
Embarking on Transformation (2/2) From To Intended Benefit ✓ Simplified structure focused on three Holding company of Realize collective value of capabilities and core, interconnected service disparate divisions operating synergies; more seamless execution, offerings: Branded, Retail, Experiential
Slide 9: Anticipated simplified structure will align capabilities and economic buyers
Anticipated simplified Anticipated new structure to have three distinct segments: structure will align 1.1 Branded Services (businesses serving CPG companies) capabilities and economic buyers, enabling growth 2.2 Retail Services (businesses serving retailers) Improved collaboration will allow 3.3 Ex
Slide 10: Advantage Strategic Priorities
Advantage Generate demand for consumer brands and retailers, MISSION converting Strategic shoppers into buyers in every way they shop Priorities PEOPLE PURPOSE PERFORMANCE OBJECTIVES Employer of Choice Partner of Choice Profitable Growth PILLARS People empowerment Service innovation Win in our core
Slide 11: Management
Management Planned Executive Leadership Team (ELT) Effective January 1, 2024 Dave Peacock 20 years at Anheuser- Busch, 4 as U.S. President; CEO President, Schnuck Markets Andrea Young Jack Pestello Michael Taylor Kelli Hammersmith Pam Morris- Bryce Robinson Chris Growe Francesco Tinto Thornton Chief
Slide 12: Non-GAAP Reconciliation
Non-GAAP Reconciliation
Slide 13: Non-GAAP Reconciliation (1/6)
Three Months Ended Non-GAAP Consolidated 2023 September 30, 2022 Reconciliation Total Company (in thousands) Net (loss) income $ (22,582) $ 23,227 Add: (1/6) Interest expense, net Provision for (benefit from) income taxes Depreciation and amortization 42,302 (4,323) 56,465 23,557 1,158 57,785 Equity
Slide 14: Non-GAAP Reconciliation (2/6)
Three Months Ended September 30, Sales Segment (in thousands) 2023 2022 Non-GAAP Operating income $ 5,995 $ 31,765 Add: Depreciation and amortization 38,896 39,798 Equity based compensation of Topco(1) 259 (320) Reconciliation Fair value adjustments related to contingent consideration related to acq
Slide 15: Non-GAAP Reconciliation (3/6)
Non-GAAP Three Months Ended Reconciliation Consolidated September 30, June 30, March 31, December 31, 2023 2023 2023 2022 Total Company (in thousands) (3/6) Net (loss) income $ (22,582) $ (7,846) $ (47,678) $ (1,421,729) Add: Interest expense, net 42,302 30,459 47,191 40,831 Provision for (benefit f
Slide 16: Non-GAAP Reconciliation (4/6)
Non-GAAP Three Months Ended September 30, Nine Months Ended September 30, Reconciliation (in thousands) Net cash provided by (used in) operating activities 2023 $ 75,722 2023 $ 180,712 (4/6) Add (Less): Purchases of property and equipment (11,106) (29,658) Cash payments for interest 32,737 118,019 C
Slide 17: Non-GAAP Reconciliation (5/6)
Non-GAAP Reconciliation (5/6) (in millions) Current portion of long-term debt $ September 30, 2023 14.4 $ December 31, 2022 14.0 Long-term debt, net of current portion 1,910.0 2,022.8 Less: Debt issuance costs (34.0) (42.4) Total Debt 1,958.4 2,079.2 Less: Cash and cash equivalents 171.4 120.7 Total
Slide 18: Non-GAAP Reconciliation (6/6)
Non-GAAP (1) 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 holders of Topco and (ii) equity-based compensation expense associated with the Common Series C Units of Topco. R
Slide 19: Thank you
Thank you (A) ADVANTAGE SOLUTIONS