Hostess Brands — Q1 2022 Earnings Presentation
24 slides from Hostess Brands's earnings presentation, May 4, 2022
Slide 1: Investor Presentation May 4, 2022
Investor Presentation MAY 4, 2022
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: Key Takeaways
Key Takeaways 3 Stellar first quarter performance Record quarterly sales with 25.1% organic net revenue growth, including double-digit volume growth 24.7% point-of-sale* growth with continued broad-based market share gains Successful pricing actions to mitigate greater cost inflation across co
Slide 4: Record High Quarterly Sales and EBITDA
4 Adjusted EBITDA and Adjusted EPS are non-GAAP financial measures. See “Use of Non-GAAP Financial Measures” and the Appendix for an explanation of all non-GAAP financial measures and reconciliations to the comparable GAAP measures. Record High Quarterly Sales and EBITDA $62.5 $77.4 Q1 2021 Q1 2022
Slide 5: Q1 Revenue Growth Driven by Hostess and Voortman
Three Months Ended March 31, Change ($ in millions) 2022 2021 $ % Sweet Baked Goods $296.4 $237.7 $58.7 24.7% Cookies 35.7 27.7 8.0 28.9% Total Net Revenue $332.1 $265.4 $66.7 25.1% 5 Q1 Revenue Growth Driven by Hostess® and Voortman® Double-digit growth across our portfolio of sweet baked goods and
Slide 6: Balanced Revenue Growth
Balanced Revenue Growth * Primarily to offset higher inflation 14.8% Growth 6 Stronger-than-expected volume growth driven by solid consumer demand and advantaged supply-chain 25.1% Organic Net Revenue Growth 10.3% Growth Net Revenue Net Revenue $265.4 $332.1
Slide 7: 9th Consecutive Quarter of 9+% Net Revenue Growth
9th Consecutive Quarter of 9+% Net Revenue Growth Accelerating quarterly growth despite tough comparisons Adjusted Net Revenue is a non-GAAP financial measures. See “Use of Non-GAAP Financial Measures” and the Appendix for an explanation of all non-GAAP financial measures and reconciliations to the
Slide 8: Accelerating POS Dollar Growth Across Portfolio
$365 $455 $35 $45 Accelerating POS Dollar Growth Across Portfolio 8 Outstanding execution drives point-of-sale growth in the Sweet Baked Goods and Cookie categories 19.5% 19.9% Source: Nielsen, Total Nielsen Universe for the Company within the SBG Category and Cookie Category. Point of Sale, 13 week
Slide 9: Single-Serve and Multi-Pack POS Growth in Q1
7.8% 22.2% 10.1% 9 20+% Single-Serve and Multi-Pack POS Growth in Q1 Multi-Pack Point-of-Sale Single-Serve Point-of-Sale Source: Nielsen, Total Nielsen Universe for the Company within the SBG Category. Q1 2022 – 13 weeks ended 4/2/2022 and prior year comparable periods. Q1 2021 Q1 2022 Single-serve
Slide 10: On-trend Innovation and Superior Retail Execution Drive Continued Market Share Gains
17.1% 24.7% Sweet Baked Goods Category 10 On-trend Innovation and Superior Retail Execution Drive Continued Market Share Gains Point-of-Sale Growth QTD vs YA Source: Nielsen, Total Nielsen Universe for the Company within the SBG Category. Point of sale changes for the 13 weeks ended 4/2/2022 vs. the
Slide 11: Consistent Track Record of Market Share Gains
Consistent Track Record of Market Share Gains 11 Outstanding execution drives POS growth and expanding market share in Sweet Baked Goods category Market Share (52 Weeks) 2018 2019 2020 18.9% 19.5% 19.9% Point-of-Sale (52 weeks, in millions) $1,149 $1,206 $1,291 $1,384 $1,640 2018 2019 2020 18.2% 202
Slide 12: Consolidated Financial Results
Consolidated Financial Results 12 Double-digit net revenue and earnings growth Adjusted Gross Profit, Adjusted Gross Margin, Adjusted Operating Income, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted EPS are non-GAAP financial measures. See “Use of Non-GAAP Financial Measures” in the Appendix f
Slide 13: Raising Full-Year 2022 Guidance
Raising Full-Year 2022 Guidance ($ in millions, except EPS) Updated Guidance Previous Guidance Net Revenue Growth At least 12% 5% - 8% Adjusted EBITDA Towards the higher end of $280 – $290 $280 – $290 Adjusted EPS $0.93 - $0.98* $0.93 – $0.98* Capital Expenditures $120 – $140 (Including Capacity Exp
Slide 14: Executing on Key Capital Allocation Priorities
Executing on Key Capital Allocation Priorities 14 Flexibility to invest in growth and generate shareholder value 4.0x** 3.3x Support Core Growth Targeted M&A Return Capital to Shareholders Maintain Targeted Net Leverage 3.0x – 4.0x Capex of $24.9M during Q1 ‘22, including $11.5M investment in new ba
Slide 15: Attractive Long-Term Growth Algorithm
Attractive Long-Term Growth Algorithm Recent Investor Day unveiled a leading sales and profit growth algorithm Long-term Growth Algorithm to Deliver Top-Tier Shareholder Returns Mid-Single Digit Organic Revenue Growth 5-7% EBITDA Growth 7-9% EPS Growth See "Forward Looking Statements." EBITDA is a n
Slide 16: Key Enablers of Our Differentiated Growth
Key Enablers of Our Differentiated Growth Our BUSINESS MODEL is best-in-class Our INNOVATION & MARKETING are gaining momentum Our business sits in GROWING SPACES 1 2 3 Catapult Hostess Brands into the next phase of organic growth 16
Slide 17: Access to Large Attractive Growth Opportunities
Access to Large Attractive Growth Opportunities Expanding addressable market beyond traditional category view by targeting key snacking occasions Source: NielsenIQ Total Universe select categories through October 2021 Occasions: Hostess Consumer Snacking Survey (N=6082; 12/2020), McKinsey Analytics
Slide 18: Targeting Five Key Snacking Occasions
Targeting Five Key Snacking Occasions Expanding addressable market by targeting key snacking occasions Source: Hostess Consumer Snacking Survey (N=6082; 12/2020), McKinsey Analytics with Nielsen POS data through October 2021 IRI 2021 Snacking Survey 18
Slide 19: Long-term Growth Enabled By Our Best-in-Class Business Model
Long-term Growth Enabled By Our Best-in-Class Business Model Our unique business model created sustainable competitive advantage Best-in-Class Business Model for Impulse CategoriesUnique Go- to-Market Approach Wide Availability Beloved Brands Operational Excellence 1 2 3 4 19
Slide 20: Our Innovation & Marketing are Gaining Momentum
Our Innovation & Marketing are Gaining Momentum Incremental Innovation High ROI Marketing Communication
Slide 21: Strong Innovation in Targeted Consumer Occasions
Strong Innovation in Targeted Consumer Occasions Launching in 2H 2022 and part of the $6.2B lunchbox occasion Launched in January 2022 and part of the $19.3B afternoon sharing occasion Launched in February 2022 and part of the $5.8B morning sweet start occasion Launched in June 2021 and part of the
Slide 22: Brand Activation is Helping Fuel Consumer Interest
Brand Activation is Helping Fuel Consumer Interest Increasing top-of-mind awareness and consideration 22 Investing in high ROI ecommerce advertising and improvement to digital shelf Driving Social Engagement Announced Hostess Boost™ Jumbo Donettes® via earned media and influencers, resulting in Over
Slide 23: Appendix
Appendix
Slide 24: Non-GAAP Reconciliations
Non-GAAP Reconciliations 24 1. Project consulting costs are included in general and administrative expenses on the consolidated statement of operations. 2. In 2022, costs related to certain corporate initiatives, of which $0.1 million is included in cost of goods sold and $0.1 million is included in