Mgp Ingredients, Inc. · NASDAQ:MGPI
Mgp Ingredients — Investor Presentation (June 2022)
30 slides from Mgp Ingredients's investor presentation, Jun 3, 2022
Slide 1: Investor Presentation March 2022
INVESTOR PRESENTATION March 2022 1 * updated June 3, 2022
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS Certain of the comments made in this presentation and in the question and answer session that follows may contain forward-looking statements in relation to operations, financial condition and operating results of MGP Ingredients, Inc. and such statements involve a number o
Slide 3: Mission Statement
MISSION STATEMENT Secure our future by consistently delivering superior financial results by more fully participating in all levels of the alcohol and food ingredients segments for the betterment of our shareholders, employees, partners, consumers and communities. 3
Slide 4: MGP Overview
MGP OVERVIEW MGP has a portfolio of highly attractive business units centered around its historic core DISTILLERY BRANDED INGREDIENT PRODUCTS SPIRITS(1) SOLUTIONS Sales: $184MM Sales: $353MM Sales: $91MM (29% of Total) (56% of Total) (15% of Total) Adj. GP Margin(2) : GP Margin: 32.4% GP Margin: 24.
Slide 5: Distillery Products
DISTILLERY PRODUCTS MGP IS A LEADING SUPPLIER OF ALCOHOL SOLUTIONS TO THIRD PARTIES 2021 Total Revenue of $352,504 Products consist of the following: $19,545 $17,523 $14,916 • Brown Goods: Premium bourbon and rye whiskeys sold as aged whiskey or unaged new distillate, which is then aged by customers
Slide 6: Distillery Products: Unique Expertise Positions MGP as Preferred Partner
DISTILLERY PRODUCTS MGP’S UNIQUE EXPERTISE POSITIONS US AS THE PREFERRED PARTNER TO OUR CUSTOMERS Atchison, KS Operations • Company HQ • Distillery Scale provides competitive pricing • Largest supplier of distilled gin • Grain Neutral Spirits/Vodka • Industrial alcohol Capacity supports long-term gr
Slide 7: Distillery Products: Positioned to Benefit from U.S. Spirits Growth
DISTILLERY PRODUCTS MGP IS WELL POSITIONED TO CONTINUE BENEFITTING FROM GROWTH IN U.S. SPIRITS – PRIMARILY AMERICAN WHISKEY U.S. Spirits Continue To Gain Share Of Total Beverage Alcohol Growth of American Whiskey Continues To Outperform U.S. Spirits Market Share - Revenue 5-year U.S. American Whiske
Slide 8: Five Strategies for Distillery Products Growth
DISTILLERY PRODUCTS MGP HAS IDENTIFIED FIVE STRATEGIES TO CONTINUE DELIVERING LONG-TERM GROWTH WITHIN THE DISTILLERY PRODUCTS SEGMENT Distillery Products Growth Strategy Distillery Products Gross Profit Ladder 1. Focused Migration Away From Industrial Alcohol To White Beverage Alcohol 2. Continue Cu
Slide 9: Branded Spirits: Portfolio of High Potential, High Margin Brands
BRANDED SPIRITS WITH THE ACQUISITION OF LUXCO, MGP HAS AN ESTABLISHED PORTFOLIO WITH A FOCUS ON GROWING HIGH POTENTIAL, HIGH MARGIN BRANDS 2021 Total Revenue of $183,566 (1) Luxco Brand Examples By Price Tier: • Ultra Premium: Yellowstone Select Bourbon, $19,469 $34,030 George Remus Bourbon, Blood O
Slide 10: Branded Spirits: Expansive Family of Brands
BRANDED SPIRITS YELLOWSTONE 1EXPANSIVE FAMILY OF BRANDS LIMITED Straight Bourbon ROSSVILLE Whiskey UNION SRP: $99.99 Barrel Proof Straight Rye Whiskey SRP: $69.99 GEORGE REMUS MINOR CASE Straight Bourbon Straight Rye Whiskey Whiskey SRP: $39.99 SRP: $39.99 YELLOWSTONE Straight Bourbon Whiskey SRP: $
Slide 11: Luxco Acquisition Increases Scale in Branded Spirits
BRANDED SPIRITS COMPLETED IN APRIL 2021, THE LUXCO ACQUISITION INCREASES MGP’S SCALE IN BRANDED SPIRITS & ESTABLISHES AN ADDITIONAL PLATFORM FOR FUTURE GROWTH The Luxco Acquisition Offers Numerous Key Benefits National Sales Platform Operational Capabilities Diverse Portfolio of Brands • Sales / Dis
Slide 12: Branded Spirits Focus and Innovation Within U.S. Spirits Growth
BRANDED SPIRITS MGP’S BRANDED SPIRITS CONTINUE TO FOCUS AND INNOVATE WITHIN U.S. SPIRITS GROWTH – PRIMARILY HIGH-END AMERICAN WHISKEY, TEQUILA & GIN Recent Innovation Launches are Designed to Capitalize on Growth Across Spirits Categories Continues to Outperform in the High-End Fastest Growing Price
Slide 13: Five Strategies for Branded Spirits Growth
BRANDED SPIRITS WE’VE IDENTIFIED FIVE STRATEGIES TO CONTINUE DELIVERING LONG-TERM GROWTH WITHIN THE BRANDED SPIRITS SEGMENT Branded Spirits Growth Strategy Focus on the Right Marketing Support 1. Focus on the Right Categories • Paid Social (Facebook, 2. Focus on the Right Brands AWARENESS Instagram)
Slide 14: Ingredient Solutions: Specialty Wheat Starches & Proteins
INGREDIENT SOLUTIONS MGP IS A LEADING SUPPLIER OF SPECIALTY WHEAT STARCHES & PROTEINS 2021 Total Revenue of $90,650 Products consist of the following: $1,393 • Specialty Wheat Starches: Premium wheat starches sold to food processors and distributors, a substantial portion of $10,014 which is altered
Slide 15: Positioned to Serve Growing Specialty Plant-Based Markets
INGREDIENT SOLUTIONS MGP IS STRONGLY POSITIONED TO SERVE GROWING SPECIALTY PLANT-BASED MARKETS • One in four consumers say they are eating more protein from plant sources vs. a year ago1 • Global sales of meat alternatives expected to reach $100B in the next decade2 • Consumption of plant-based meat
Slide 16: Five Strategies for Ingredients Solutions Growth
INGREDIENTS SOLUTIONS MGP HAS IDENTIFIED FIVE STRATEGIES TO CONTINUE DELIVERING LONG-TERM GROWTH WITHIN THE INGREDIENTS SOLUTIONS SEGMENT Ingredients Solutions Growth Strategy What Nutrients Do Consumers See As “Healthy”? 85% Dietary Fiber in Diet– #1 1. Expand Market Share of Fibersym and 84% Vitam
Slide 17: Aggressively Expand Fibersym and Arise Platforms
INGREDIENTS SOLUTIONS AGGRESSIVELY EXPAND FIBERSYM AND ARISE PLATFORMS Fibersym® RW Overview Strategy • Granular RS4-type resistant wheat • Maximize value of existing capacities starch • SKU rationalization • Allows formulators to boost the • Develop marketing campaign to connect to end users fiber
Slide 18: Expand Textured Plant Proteins
INGREDIENTS SOLUTIONS EXPAND TEXTURED PLANT PROTEINS U.S. product launches and plant-based claims Strategy Region 2015 2016 2017 2018 2019 • Expand our production capabilities with new “in-house” extrusion platform in Atchison U.S. 88 192 198 291 539 • Innovate new products to include pea, pulses, s
Slide 19: Operational Excellence
OPERATIONAL EXCELLENCE A CULTURE OF CONTINUOUS IMPROVEMENT • Improving throughput while maintaining consistency of high quality products • Managing commodity cost risks • Formula-driven pricing • Locking in margins • Passing through significant swings in cost • Continued focus on safety initiative –
Slide 20: Environmental & Sustainability Initiatives
ENVIRONMENTAL & SUSTAINABILITY INITIATIVES RESPONSIBLY GROW OUR BRANDS AND PRODUCTS, WHILE FOSTERING A SUSTAINABLE FUTURE FOR THE ENVIRONMENT ON WHICH WE DEPEND As a small public company, MGP has begun its ESG journey As an organization, we are making our own commitments to: • Promoting a positive r
Slide 21: Financial Results
MGP FINANCIAL RESULTS , 3
Slide 22: Consolidated Financial Results
CONSOLIDATED FINANCIAL RESULTS THE COMPANY HAS DELIVERED RECORD RESULTS IN EACH BUSINESS SEGMENT Revenue ($MM) Adjusted EPS1 ($) $627 $4.26 $376 $396 $363 $2.51 $2.17 $2.27 2018 2019 2020 2021 2018 2019 2020 2021 Adjusted EBITDA1 ($MM) FY 2022 Guidance Sales are projected to be in the range of $690
Slide 23: Strong Balance Sheet, Cash Flow and Excellent Access to Capital
STRONG BALANCE SHEET, CASH FLOW AND EXCELLENT ACCESS TO CAPITAL Free Cash Flow and Conversion 1 $93.6 • MGP has seen strong, consistent improvement in free cash Free Cash Flow Free Cash Flow Conversion • In recent quarters, improvement in operating cash flow was driven by $51.0 record aged whiskey,
Slide 24: Capital Allocation Priorities Remain Focused on Growth Opportunities
CAPITAL ALLOCATION PRIORITIES REMAIN FOCUSED ON GROWTH OPPORTUNITIES Capital Allocation Priorities M&A • M&A will continue to be an important lever to increase our capabilities, margin up our portfolios, and accelerate growth in all segments. Whiskey Put-Away • With our inventory in balance, matchin
Slide 25: Appendix
MGP APPENDIX
Slide 26: U.S. Spirits Market
U.S. SPIRITS MARKET 9-Liter Cases (000s) 2021 Volume % Change Total Distilled Spirits (TDS) 291,110 +9.3% Total Whiskey 76,453 +4.9% American Whiskey (Bourbon/Rye/Tennessee) 29,703 +4.5% Super Premium 4,723 +15.6% Rye 1,593 +12.9% Vodka 78,067 +1.6% Super Premium 5,669 +13.9% Gin 9,989 -1.7% Super P
Slide 27: Reconciliation of Selected GAAP to Non-GAAP Measures
RECONCILIATION OF SELECTED GAAP TO NON-GAAP MEASURES BRANDED SPIRITS GROSS PROFIT TO ADJUSTED GROSS PROFIT ($ in thousands) 2021 Branded Spirits – Gross Profit $62,644 Inventory Step-Up 2,529 Adjusted Gross Profit1 $65,173 Source: Company filings 27 Note: Branded Spirits segment includes results fro
Slide 28: Reconciliation of Selected GAAP to Non-GAAP Measures
RECONCILIATION OF SELECTED GAAP TO NON-GAAP MEASURES EARNINGS PER SHARE TO ADJUSTED EARNINGS PER SHARE 2018 2019 2020 2021 Basic EPS $2.17 $2.27 $2.37 $4.37 Insurance recoveries - - - (0.59) Inventory Step-Up – Branded Spirits - - - 0.12 Business Acquisition Costs - - 0.05 0.36 CEO Transition Costs
Slide 29: Reconciliation of Selected GAAP to Non-GAAP Measures
RECONCILIATION OF SELECTED GAAP TO NON-GAAP MEASURES NET INCOME TO ADJUSTED EBITDA AND FREE CASH FLOW ($ in thousands) 2018 2019 2020 2021 Net Income $37,284 $38,793 $40,345 $90,817 Interest 1,168 1,305 2,267 4,037 Taxes 11,696 7,144 12,256 30,279 Depreciation and Amortization 11,362 11,572 12,961 1
Slide 30: Reconciliation of Debt to Net Debt
RECONCILIATION OF DEBT TO NET DEBT ($ in thousands) 2018 2019 2020 2021 Total Debt $32,014 $41,060 $39,871 $233,399 Cash and cash equivalents 5,025 3,309 21,662 21,568 Net Debt $26,989 $37,751 $18,209 $211,831 30 Source: Company filings