Utz Brands Inc · NYSE:UTZ
Utz Brands — Utz Quality Foods — SPAC Merger (June 2020)
48 slides from Utz Brands's SPAC merger presentation, Jun 5, 2020
Slide 1: Investor Presentation June 2020
℠ Investor Presentation June 2020
Slide 2: Disclaimer
Disclaimer This investor presentation (“Investor Presentation”) is for informational purposes only to assist interested parties in making their own evaluation with respect to the proposed business combination (the “Business Combination”) between Collier Creek (“CCH”) and Utz Quality Foods, LLC (“Utz
Slide 3: Today's Participants
Today’s Participants Collier Creek Holdings Utz Roger Deromedi Chinh Chu Jason Giordano Dylan Lissette Cary Devore Chief Executive Chief Financial Current Co-Founder Co-Founder Co-Founder Officer Officer Chief Executive Chief Financial New Utz Chairman Special Advisor Director Officer Officer • Form
Slide 4: Today's Agenda
Today’s Agenda I Introduction & Investment Thesis II Business Overview III Value Creation Strategy IV Financial Overview ℠ 2
Slide 5: I. Introduction & Investment Thesis
I. Introduction & Investment Thesis
Slide 6: Utz is a Perfect Business Combination for Collier Creek
Utz is a Perfect Business Combination for Collier Creek ℠ Completed $440 million IPO in October 2018 to Leading manufacturer, marketer, and distributor of establish a new CPG “platform” company branded snacks in the U.S., including potato chips, pretzels, cheese snacks, pork skins, pub/party mix
Slide 7: Why CCH is So Excited About This Opportunity
Why CCH is So Excited About This Opportunity 1 Attractive and $26 billion in U.S. Retail Sales with 4.3% CAGR Over Last Five Years(1) Growing Salty Resilient to Economic Downturns (4% CAGR from 2007-2010)(2) with Attractive Snack Category Defensive Characteristics 2 Significant Iconic Brands w
Slide 8: Transaction Overview
Transaction Overview Enterprise Value of $1,561 million(1) Pro forma for the transaction Utz expected to have 2020E Net Debt of ~$385 million or ~3.1x 2020E Pro Forma Adj. EBITDA Transaction will be structured as an Up-C with the Company entering into a customary tax receivable arrangement wit
Slide 9: CCH Team with Proven Track Record in Food Industry: Pinnacle Foods Case Study
CCH Team with Proven Track Record in Food Industry Pinnacle Foods: Case Study Pinnacle Foods Original Brands Stock Appreciation CAGR 350 from PF IPO to Sale Pinnacle Foods 24.1% +233.3% 320 S&P 500 10.3 Consumer Staples 6.0 290 Share Price Rebased to 100 260 230 200 +72.4% 170 Net Sales ($mm) Adj. E
Slide 10: Utz a Perfect Fit for Executing CCH's Operating Playbook
Utz a Perfect Fit for Executing CCH’s Operating Playbook Support Top Management Productivity Process Fully Integrated Capacity Optimization Strong Synergies High ROI Investments Multiple Enhancing Build Reduce Lean Overhead Platform Costs and with Expand Strategic Margin ℠ Acquisitions
Slide 11: Salty Snacks Among the Best Categories in CPG
Salty Snacks Among the Best Categories in CPG 2010 – 2019 U.S. Retail Sales Growth(1) 4.3% 3.7% 3.8% 3.5% 2.6% 2.2% 2.3% 2.0% 1.8% 1.4% (2) Total Sweet Non- Baked Ice Cream Alcoholic Beauty / Home Salty Snacks Confect. Packaged Biscuits / Alcoholic Goods and Drinks Personal Care F&B Snack Bars Drink
Slide 12: Utz Consistent Sales Growth Even During Economic Downturns
Utz Consistent Sales Growth Even During Economic Downturns Net Sales ($ in millions)(1) COVID-19/ 2001 – 2019(3) CAGR $866 Recession Q1 2020 Total 8% YoY $772 Growth +12%(4) Organic(2) 4% $707 $656 $618 $559 $535 $513 $468 Recession $398 $403 $359 $318 $290 Recession $266 $254 $222 $228 $216 (3) 200
Slide 13: Attractive Value Creation Potential
Attractive Value Creation Potential Long-Term Organic Growth Model In-Line with Category Net Sales Power Brands Focus 3 – 4% (1) Adj. EBITDA 6 – 8% Productivity / Margin Enhancements Adj. EPS 8 – 10% Deleveraging (2) Exp. Dividend Yield ~2% ~40% Target Payout Ratio Initial Annualized Dividend of $0.
Slide 14: II. Business Overview
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Slide 15: Nearly 100-Year Old Family Company with Tremendous Heritage
Nearly 100-Year Old Family Company with Tremendous Heritage National Scale Multi-Branded Rich Heritage and Regional Expansion Snack Platform Created Today (1921–2011) (2011–2019) 1921 – Founding by Bill 1990s-2010 – Geographic 2017 – National Warehouse Distribution and Salie Utz in Expansion Through
Slide 16: Scale Player in Salty Snacks and #2 in Core Geographies
Scale Player in Salty Snacks and #2 in Core Geographies 2019 U.S. Salty Snack Retail Sales ($ in millions) (1) Core U.S. Rank Share Rank Share $16,047 Total Salty Snacks #2 7% #4 4% Potato Chips #2 12% #4 6% ~$2,000 Pork Skins #1 23% #3 12% $1,459 $1,235 Cheese #2 7% #2 4% $1,094 Pretzels #2 17% #3
Slide 17: Strong Brand Portfolio with Focus on Power Brands
Strong Brand Portfolio with Focus on Power Brands Power Brands (71% of Sales) Iconic Heritage Craft Better For You Licensed Pork Skins Foundation Brands (29% of Sales) Regional Other • Partner Brands • Private Label Chips/Cheese Note: Sales represent invoiced sales, which represent net sales before
Slide 18: Broad Distribution Across Channels and Customers
Broad Distribution Across Channels and Customers… 2019 Utz Sales by Channel(1) Illustrative Customers (2) Other Drug 6% 2% Club 6% Mass 14% Food 52% C-Store 20% No Customer Represents More than 10% Of Sales 15+ Year Average Relationship with Top Customers 1). Source: IRI MULO-C data (52-week period
Slide 19: With Excellent Retail Shelf and Display Presence
With Excellent Retail Shelf and Display Presence ℠ ℠ 15
Slide 20: Flexible, Efficient DSD and Warehouse Distribution System
Flexible, Efficient DSD and Warehouse Distribution System Direct to Warehouse Direct to Store (DSD) ~17,000 Doors 75,000+ Doors ~350 Retailer Distribution ~1,645 Total Routes Centers Direct to Warehouse 25 % Direct to 3 of the Top 4 Store Salty Snacking Companies (DSD) Operate DSD Networks(1) Networ
Slide 21: National Manufacturing Footprint with Broad Capabilities
National Manufacturing Footprint with Broad Capabilities 14 Manufacturing Facilities (4) 400 Million Lbs. Annual Capacity(1) ~69% Capacity Utilization(1) Strong Quality and Safety Record Processes Ingredients Packaging Continuous Avocado Oil Olive Oil Gluten-Free Bags Barrels Multipacks Kett
Slide 22: Track Record of Accretive and Well-Integrated Acquisitions
Track Record of Accretive and Well-Integrated Acquisitions Pre-Synergy Post-Synergy Cost Synergy Year Target Adj. EBITDA Multiple Adj. EBITDA Multiple % of Revenue 2019 11.2x 7.4x 5.8% Snacks 2017 NM 10.2x(1) 13.8% 2016 15.8x 7.6x 9.6% 2013 13.2x 5.7x 8.7% 2011 8.0x 5.6x 7.0% All Acquisitions(2) 7.4
Slide 23: Highly Experienced Management Team
Highly Experienced Management Team Name Title Years at Utz Background Dylan 24 Years Chief Executive Officer Lissette ℠ Cary EVP & Chief 4 Years Devore Financial Officer Mark 3 Years EVP, Sales & Marketing Schreiber Tucker EVP, Chief Supply 15 Years Lawrence Chain Officer Ajay 3 Years EVP, Finance &
Slide 24: III. Value Creation Strategy
III. Value Creation Strategy
Slide 25: Goal: Be Fastest Growing Pure-Play Branded Snack Platform of Scale in U.S.
Goal: Be Fastest Growing Pure-Play Branded Snack Platform of Scale in U.S. Reduce Continue Costs and Strategic Enhance Acquisitions Margins A. Focus on Branded A. Drive Productivity ℠ Snacking in the U.S. B. Optimize Revenue and B. Deliver Strong Value Creation Trade Synergies Strategies C. Improve
Slide 26: Reduce Costs and Enhance Margins
Reduce Costs and Enhance Margins Company Positioned for Significant Ramp-Up in Cost Savings and Margins Eleven Acquisitions Successfully Integrated Utz Adj. EBITDA Margin(2) Business – 4 to 14 Manufacturing Facilities Transformation – SKU Count Expanded ~50%, Net of Rationalizations Mid-Teens DS
Slide 27: Reduce Costs and Enhance Margins (Cont'd)
Reduce Costs and Enhance Margins (Cont’d) Expected Financial Impact e-Auctions Procurement Group Purchasing Product Design LEAN/CI Projects Manufacturing Processes Raw Materials Waste/Giveaways Forecasting and Scheduling Ongoing Annual Productivity $50 Million of Identified Savings of 3-
Slide 28: Accelerate Power Brands Through Enhanced Marketing and Innovation
Accelerate Power Brands Through Enhanced Marketing and Innovation Increase Marketing Spend Strong Momentum in Key Power Brands Advertising Expense % of Sales Retail Sales ($mm) ACV Distribution (%) $563 61% LT Target: ~3-4% 3.8% 47% $495 2014 2019 2014 2019 $46 2019: ~1% 44% $23 Utz Peer Peer Averag
Slide 29: Expand Distribution in Underpenetrated Channels and Customers
Expand Distribution in Underpenetrated Channels and Customers Share by Channel C-Store and Mass Strategies 56.9% Expand C-Store presence through 7.3% strengthened master distributor and Food 4.7% 3.6% 1.9% redistributor relationships ℠ Drive Mass distribution by 4.7% leveraging new national scal
Slide 30: Continue National Geographic Expansion
Continue National Geographic Expansion Geographic Priorities Strategies WA Focus on Large Population Markets MT ND ME OR MN VT NH – “Expansion” Markets: Florida, Texas, Mid-West ID SD WI NY MA WY MI CT NE IA PA NJ RI – “Emerging” Markets: California, Arizona NV OH IL IN DE UT CO WV MD VA Expand
Slide 31: Increase Presence in Key Sub-Categories and Adjacencies
Increase Presence in Key Sub-Categories and Adjacencies 3.8% Share in Tortillas and RTE Popcorn Strategies Represents $235mm of Incremental Retail Sales Introduce New Brands License Brands % of Total Sub- Salty Snack Utz Category Category Share Potato Chips 30% 6.1% Tortilla 22% 0.3% 3.8% Line Exten
Slide 32: Continue Strategic Acquisitions
Continue Strategic Acquisitions Near-Term Acquisition Criteria Proven Track Acquisition-Savvy Management Team A. Focus on Branded Snacking in the U.S. Record and Experienced Board with Concentration on Salty Snacks – Facilitate Geographic Expansion – Increase Presence in Sub-Categories Scalable Sign
Slide 33: IV. Financial Overview
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Slide 34: Utz Growth During COVID Significantly Better than Competitors
Utz Growth During COVID Significantly Better than Competitors Owned manufacturing network with available capacity and durable supplier relationships allowed for flexible and efficient production scale-up to meet significantly increased demand DSD distribution system with superior execution facil
Slide 35: COVID Favorable Longer-Term for Utz Brands
COVID Favorable Longer-Term for Utz Brands Stay-at-home orders reintroduced at-home cooking and eating experience Longer-Term Due to safety concerns, people will spend more time at home and avoid offices, restaurants, and Increase in public gatherings, with a potential enduring shift to “work-fr
Slide 36: Utz Phenomenal Q1 Performance
Utz Phenomenal Q1 Performance More than half of Q1 year-over-year EBITDA growth generated pre-COVID – Strong performance from recent Conagra Snacks acquisition (Q1 year-over-year Net Sales and Adjusted EBITDA +10% and +28%, respectively) Pro Forma Adjusted EBITDA ($mm)(2) Net Sales ($mm)(1) (% Net
Slide 37: Summary Financials
Summary Financials Pro Forma Adj. EBITDA 100.0% Net Sales (% Net Sales Margin ) 90.0% ($ in mm) $134 $910 $928 $124 80.0% $866 $108 70.0% $772 $707 60.0% $80 50.0% $73 40.0% 30.0% 20.0% 13.6% 14.4% 10.0% 12.4% 10.4% 10.4% 0.0% (1) (1) (2) (2) (2) 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 Net
Slide 38: Significant Profit-Enhancing Capex Opportunities; Strong FCF Conversion
Significant Profit-Enhancing Capex Opportunities; Strong FCF Conversion Capital Expenditures ($ in mm) New ERP Implementation Profit Enhancing $28.3 Maintenance $25.0 $10.0 $18.6 $15.0 $15.2 $4.7 $13.1 $8.4 $3.2 $1.8 $5.4 $18.3 $13.9 $12.1 $11.3 $9.9 $10.0 $8.6 (3) 2017A 2018A 2019A 2020E 2021E % of
Slide 39: Capital Focused on Driving Growth
Capital Focused on Driving Growth Cash Flow Priorities Target Leverage Business Growth 1 (Including M&A) • 2020E Net Debt / PF Adj. EBITDA of 3.1x • Target Net Leverage of 3 – 4x • Higher Net Debt / Adj. EBITDA Possible for Strategic Acquisitions, Returning to Target 2 Debt Reduction Range within 1
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Slide 41: Appendix
Appendix , vega
Slide 42: Transaction Overview
Transaction Overview Enterprise Value of $1,561 million(1) (11.6x 2021E PF Adj. EBITDA)(2) Pro forma 2020E Net Debt / PF Adj. EBITDA of 3.1x (all First-Lien) Existing Utz owners to be paid $60 million in cash consideration and issued 57.8 million rollover shares at close(3) Company to enter
Slide 43: Operating Benchmarking to Peers
Operating Benchmarking to Peers 12.0% 11.3% Peer Median: 1.3% CY 2019 – 2021E 3.5% 2.5% 2.3% 2.1% Net Sales 1.4% 1.3% 0.7% CAGR (0.0%) (0.1%) (1.0%) BRBR SMPL (1) Utz (2) PEP FLO TWNK (3) MDLZ (4) HSY K (5) GIS CPB HAIN (6) (7.0%) JJSF 16.3% 14.9% 11.5% Peer Median: 2.5% CY 4.9% 2019 – 2021E 4.4% 4.
Slide 44: Valuation Benchmarking to Peers (1-Year Average Multiples)
Valuation Benchmarking to Peers (1-Year Average Multiples) 17.9x 17.7x Peer Median: 14.8x 16.8x 16.3x 15.8x 14.9x 14.6x 13.5x 13.4x 13.3x 12.8x 12.1x 11.2x NTM EBITDA Multiple SMPL JJSF-US HSY MDLZ PEP HAIN BRBR (1) K FLO GIS CPB Utz (2) TWNK-US 16.8x 16.3x Peer Median: 13.3x 15.6x 14.7x 13.7x 13.4x
Slide 45: Margin Enhancements Further Reduce Implied Entry Valuation
Margin Enhancements Further Reduce Implied Entry Valuation ($ in millions) Pro Forma Normalized Financial Profile ℠ Adj. EBITDA Incremental % of Identified Implied Margin(1) EBITDA Opportunities(2) Multiple Current Financial Profile (2020E) 15% $12 25% 11.4x Net Sales $910 (4) 16% $22 43% 10.7x Adj.
Slide 46: Expected Board of Directors
Expected Board of Directors Collier Creek Director Nominees Family Director Nominees Name Title Bio Name Title Bio • Former Chairman, Roger Pinnacle Foods, Dylan Chief Executive • CEO, Utz Chairman Deromedi • Former CEO, Kraft Lissette Officer • 24 years at Utz Foods • Former EVP & Chief Director; F
Slide 47: Non-GAAP Reconciliation
Non-GAAP Reconciliation Non-GAAP Reconciliation Fiscal Year Ended, Fiscal Quarter Ended, December December December March 31, March 29, 31, 2017 30, 2018 29, 2019 2019 2020 Net Sales (Per GAAP) $707 $772 $768 $178 $228 Net Independent DSD Operator Discounts 40 58 77 17 21 Sales Adjusted Net Sales $7
Slide 48: Pro Forma Financials Reconciliation
Pro Forma Financials Reconciliation Pro Forma Adjusted EBITDA Reconciliation Historicals Projections Historicals 2017A 2018A 2019A 2020E 2021E Q1'19A Q1'20A Net Sales (GAAP) $707 $772 $768 $927 $928 $178 $228 Pre-Acquisition Net Sales (1) - - 97 - - 26 - Net Impact of 53rd Week - - - (17) - - - Sale