Hostess Brands — Q1 2020 Earnings Presentation
19 slides from Hostess Brands's earnings presentation, May 8, 2020
Slide 1: Investor Presentation May 8, 2020
Investor Presentation May 8, 2020
Slide 2: Forward Looking Statements
Forward Looking Statements This investor presentation contains statements reflecting our views about the future performance of Hostess Brands, Inc. and its subsidiaries (referred to as “Hostess Brands” or the “Company”) that constitute “forward-looking statements” that involve substantial risks and
Slide 3: A Sustainable, Profitable Growth Story
A Sustainable, Profitable Growth Story Iconic Brands LTM Net Revenue $928 million Continuous Innovation to Drive Growth LTM Adjusted EBITDA Collaborative Customer $206 million Relationships Efficient Manufacturing & LTM Operating Cash Flow Distribution Model $129 million Proven Scalable Platform Adj
Slide 4: We Appreciate the Dedication and Sacrifices of So Many
We Appreciate the Dedication and Sacrifices of So Many Our hearts are with those affected by the COVID-19 pandemic and we are thankful for all those that are working tirelessly on the front-lines to support our communities including: − The Healthcare Community − Our Employees − Our Retail and Supply
Slide 5: Executing during COVID-19 Pandemic
Executing during COVID-19 Pandemic Our Top Priorities in Response to the COVID-19 Outbreak: 1. Ensure the health and safety of our employees 2. Continue servicing our customers and consumers 3. Stay informed and nimble 4. Position ourselves to emerge a stronger and more resilient Company Dedicated t
Slide 6: Continued Growth Momentum and Execution of Key Operational Initiatives
Continued Growth Momentum and Execution of Key Operational Initiatives Q1 2020 Near-Term Impacts of COVID The Future Ahead Executing Ahead of Plan . 14.4% Net Revenue Growth* . POS take-away spiked in March with . Leverage category-leading pantry-loading - Q1 POS up 5%, distribution to drive acceler
Slide 7: Voortman Acquisition Supports Growth Initiatives
To Drive Meaningful Profitable Growth Voortman Acquisition Supports Growth Initiatives Provides Entry Into Attractive Wafer and Sugar-Free Cookie Categories Completed customer sell-in, acceptance and coverage model . Agreement reached on pricing terms and item distribution with all customers . Alig
Slide 8: Consistent Point-of-Sale and Market Share Growth in the Sweet Baked Goods Category
Consistent Point-of-Sale and Market Share Growth in the Sweet Baked Goods Category 18.8% $1.3 18.1% $1.0 $1.2 17.4% $1.2 16.6% $1.1 2017 2018 2019 2020 2017 2018 2019 2020 Source: Nielsen, Total Nielsen Universe for the Company within the SBG Category. Point of Sale and Market Share, 52 weeks ending
Slide 9: 1st Quarter Growth Across Multiple Channels
1st Quarter Growth Across Multiple Channels POS Change 2.7% 6.5% (0.7)% 23.7% 14.9% 4.2% 5.1% $140 $120 $328M $100 $320M $80 $60 (In Millions) POS Dollars $40 $20 $0 Convenience Grocery Mass Dollar Club Drug Total Hostess 13 WE 3/23/2019 13 WE 3/28/20 Market Share 24.1% 13.4% 14.8% 24.8% 22.3% 42.8%
Slide 10: Strong Growth Driven by Voortman Acquisition and Higher Consumer Demand
Strong Growth Driven by Voortman Acquisition and Higher Consumer Demand (in millions) % 9.3 3.2% Growth $243.5 Growth $51.0 $222.7 $49.4 2019 2020 2019 2020 14.4% Growth 6.4% Growth excluding ISB excluding ISB Results for quarter ended March 31, 2020 and 2019. Adjusted EBITDA is a non-GAAP financial
Slide 11: Expansion into the Cookie Category with Acquisition of Voortman
Expansion into the Cookie Category with Acquisition of Voortman Quarter Ended Change March 31, ($ in millions) 2020 2019 $ % Sweet Baked Goods $226.4 $212.9 $13.5 6.3% Cookies 17.1 - 17.1 100.0% In-Store Bakery -9.8(9.8) (100.0%) Total Net Revenue $243.5 $222.7 $20.8 9.3% 11
Slide 12: Able to Support Business in Uncertain Times
Able to Support Business in Uncertain Times History of successfully reducing leverage following acquisitions while continuing to make disciplined investments for growth . Reinvest in business for future growth 4.5x Voortman 4.5x** acquisition Target . De-leverage Proforma Long-Term 3.4x . Strategic
Slide 13: Contribution of Voortman Acquisition and Increased Demand, Partially Offset by Sale of In-Store Bakery
Contribution of Voortman Acquisition and Increased Demand, Partially Offset by Sale of In-Store Bakery Quarter Ended Change March 31, Net Revenue $243.5 $222.7 $20.8 9.3% Adjusted Gross Profit $84.3 $76.8 $7.5 9.8% Adjusted Gross Margin 34.6% 34.5% 13 bps Adjusted EBITDA $51.0 $49.4 $1.6 3.2% Adjust
Slide 14: Evolving Priorities during COVID-19 Pandemic
Evolving Priorities during COVID-19 Pandemic − Due to the rapidly, evolving situation and the high degree of uncertainty, the Company is suspending fiscal 2020 full-year guidance. − The Company’s long-term strategy and algorithm remain unchanged. − Temporary but meaningful impact caused by: • A shif
Slide 15: We delight consumers and build iconic brands supported by our core competencies
We delight consumers and build iconic brands supported by our core competencies Strong Continuous to drive profitable growth Brand Equity Innovation Strengthening our core Hostess brand and expanding Core into adjacent categories through innovation and Significant strong partnerships with our custom
Slide 16: Grow the Core, Grow through Innovation, Agility & Efficiency, Cultivate Talent, Strong Cash Flow
Improve through Cultivate Talent Leverage Strong Grow the Core Grow through Innovation Agility & Efficiency & Capabilities Cash Flow Profitably drive core Accelerate Operate at lowest Focus on investing Generate strong growth by expanding growth through practical cost and in talent, insights cash fl
Slide 17: Objective: long-term leading performance in our peer group
Objective: long-term leading performance in our peer group Organic Revenue Adjusted EBITDA Free Cash Flow Growth Margin Conversion Top Quartile of Top Quartile of Top Quartile of 1 1 Peer Group1 Peer Group Peer Group (Well ahead of the SBG Category) Delivering Industry-Leading Total Shareholder Retu
Slide 18: Appendix
Appendix 18
Slide 19: Non-GAAP Reconciliations
Non-GAAP Reconciliations Hoste Three Months Ended March 31, 2020 Three Months Ended March 31, 2019 Gross Operating Net Diluted Gross Operating Net Diluted Profit Income income _EPS. Profit Income income _EPS GAAP Results $ 793 $ 152 $ 26 $ 002 $ 752 $ 361 $ 266 $ O21 Non-GAAP adjustments: Foreign cu