Canopy Growth Corporation · TSX:WEED
Canopy Growth — Q1 FY2023 Earnings Presentation
22 slides from Canopy Growth's earnings presentation, Aug 5, 2022
Slide 1: Q1 FY2023 Earnings Presentation
CANOPY GROWTH Q1 FY2023 EARNINGS PRESENTATION August 5, 2022
Slide 2: Disclaimers and Cautionary Statements
DISCLAIMERS AND CAUTIONARY STATEMENTS This presentation contains “forward-looking statements” and “forward-looking information” within the meaning of applicable U.S. and Canadian securities laws (collectively, “forward -looking statements ”) which involve certain known and unknown risks and uncertai
Slide 3: Non-GAAP Measures
NON-GAAP MEASURES Adjusted EBITDA is a non-GAAP measure used by management that is not defined by U.S. GAAP and may not be comparable to similar measures presented by other companies. Adjusted EBITDA is calculated as the reported net income (loss), adjusted to exclude income tax recovery (expense);
Slide 4: Today's Speakers
TODAY’S SPEAKERS DAV ID KLEIN J UDY HONG CEO CFO 4
Slide 5: Agenda
AGENDA • Key Takeaways • Progress Against Key Priorities • Q1 FY2023 Financial Results Review • Q&A • Unless otherwise indicated, all financial information in this presentation is reported in Canadian dollars. • Unless otherwise indicated, market share data disclosed in this press release is calcula
Slide 6: Key Takeaways
KEY TAKEAWAYS Strong brand performance and innovation are helping stabilize market share in core segments of the Canadian adult-use market • Company maintained #1 share of combined premium flower and pre-roll segment in Q1 FY2023 1, led by in demand offerings from Doja and 7ACRES including new 7ACRE
Slide 7: Progress against Premiumization strategy
Progress against Premiumization strategy • New premium flower SKUS in Q1 FY23 under the Doja brand • New premium flower SKUS shipped under the 7ACRES brand included OG Deluxe and Fresh Biscotti in Q1 FY2023 include Lemon Zkitz, Platinum Kush Breath and Grape Gelena. • Doja OG Deluxe and Cold Creek K
Slide 8: Progress against Premiumization strategy
Progress against Premiumization strategy • New The Grape Unknown and Ginger Ale Galaxy shipped in Q1 • Launched a range of new Tweed branded flower strains including FY2023. Deep Space is #2 ranked brand in the over 5 mg THC Tiger Cake, Wedding Cake, Kush Mints and Black Triangle in beverage categor
Slide 9: Record BioSteel Revenue in Q1 FY2023
record BIOSTEEL revenue in Q1 FY2023 • BioSteel Q1 FY2023 revenue increased 167% versus the prior year driven by higher distribution of the brand’s RTD hydration drinks. • RTD ACV increased to over 21%in Q1 FY20232 up from 3% in Q1 FY2022 • Secured retail listing of RTD in 2,200 Walmart Stores acros
Slide 10: Strengthening U.S. THC Ecosystem
Strengthening U.S. THC Ecosystem INVESTING IN PLANS TO ACQUIRE LEADING COMPANIES, IN MUST-WIN CATEGORIES, WITH BRANDS THAT CAN SCALE ACROSS NORTH AMERICA ACREAGE HOLDINGS Wana Brands Acreage made solid progress in their Q1 Fiscal 22 (quarter ended Wana entered new markets–including Puerto Rico and A
Slide 11: Q1 FY2023 Financial Results
Q1 FY2023 FINANCIAL RESULTS 11
Slide 12: Q1 FY2023 Key Financial Highlights
Q1 FY2023 KEY FINANCIAL HIGHLIGHTS vs. • FY2022 Net Revenue decreased 19% due to declines (CDN in millions) Q1 FY2023 Q1 FY2022 Q1 FY2022 in our organic Canadian cannabis business and the Net Revenue $110 $136 (19)% divestiture of C 3. • Gross margin was negatively impacted by lower Adjusted Gross M
Slide 13: Revenue Performance by Segment
REVENUE PERFORMANCE BY SEGMENT vs. (in millions of Canadian dollars, unaudited ) Q1 FY2023 Q1 FY2022 Q1 FY2022 Canadian Recreational Cannabis Net Revenue Business to Business1 $26.6 $42.7 (38)% Business to Consumer $12.4 $17.3 (28)% $39.0 $60.0 (35)% Canadian Medical Cannabis Net Revenue 2 $13.4 $13
Slide 14: Revenue Performance by Form
REVENUE PERFORMANCE BY FORM vs. (in millions of Canadian dollars, unaudited ) Q1 FY2023 Q1 FY2022 Q1FY2022 Canadian Recreational Cannabis Dry Bud1,2 $38.6 $66.0 (42%) Oils and Softgels1,2 $5.2 $5.7 (9%) Beverages, Edibles, Topicals, andVapes1,2 $7.4 $9.1 (19)% Other Revenue Adjustments2 ($0.6) ($3.0
Slide 15: Gross Margin Performance
Gross Margin performance Quarterly Gross Margin Trend Drivers of Q1 FY2023 Gross Margin Performance (-) Year-over-year decrease in net revenue and continued price compression Reported Gross Margins Adjusted Gross Margins and under-absorption of fixed costs in the Canadian recreational business (-) B
Slide 16: Operating Expense Trend
OpeRATING EXPENSE Trend OpEx as a Percentage of Net Sales Quarterly Operating Expense Trend (C$ in 000s) (Q1 FY2022 vs. Q1 FY2023) 160,000 Total OpEx Total OpEx Ex-SBC 60% Q1 FY 2022 Q1 FY 2023 140,000 50% 120,000 40% 100,000 80,000 30% 60,000 20% 40,000 10% 20,000 0 0% Q1 FY2022 Q2 FY2022 Q3 FY2022
Slide 17: Adjusted EBITDA and Free Cash Flow
ADJUSTED EBITDA AND FREE CASH FLOW Adjusted EBITDA Trend (C$ in 000s) Free Cash Flow Trend (C$ in 000s) Q1 FY2022 Q2 FY2022 Q3 FY2022 Q4 FY2022 Q1 FY2023 Q1 FY2022 Q2 FY2022 Q3 FY2022 Q4 FY2022 Q1 FY2023 $0 $0 -$20,000 -$20,000 -$40,000 -$40,000 -$60,000 -$60,000 -$80,000 -$80,000 -$100,000 -$100,00
Slide 18: Appendix
Appendix 18
Slide 19: Adjusted Gross Margin (Non-GAAP) Reconciliation
ADJUSTED GROSS MARGIN 1 (NON-GAAP) RECONCILIATION 19
Slide 20: Adjusted EBITDA (Non-GAAP) Reconciliation
ADJUSTED EBITDA 1 (NON-GAAP) RECONCILIATION 20
Slide 21: Free Cash Flow (Non-GAAP) Reconciliation
FREE CASH FLOW 1 (NON-GAAP) RECONCILIATION 21
Slide 22: Thank You
Thank you 22