Utz Brands Inc · NYSE:UTZ
Utz Brands — Q3 2020 Earnings Presentation
29 slides from Utz Brands's earnings presentation, Nov 5, 2020
Slide 1: Utz Brands, Inc. Q3 2020 Earnings Presentation
℠ Utz Brands, Inc. Q3 2020 Earnings Presentation November 5, 2020 HIGHLY CONFIDENTIAL 1
Slide 2: Disclaimer: Forward-Looking Statements
Disclaimer Forward-Looking Statements Certain statements made herein are not historical facts but are forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements generally are accompanied by
Slide 3: Key Messages
Key Messages . Combination of Utz and Collier Creek Successfully Consummated . Very Strong Q3 Financial Results . Q3 In-Market Performance Significantly Outpaced Salty Snack Category . Executing Well Against Our Value Creation Strategies . Ensuring Safety of Our Associates and Resiliency of Our Supp
Slide 4: Q3 Financial Results
Q3 Financial Results Very Strong Q3 Adj. Gross Profit Q3 Adj. EBITDA Q3 Net Sales (% Margin) (% Margin) YoY % +24.2%(1) +34.8% +39.8% Growth ($ in millions) ($ in millions) ($ in millions) $248.0 $99.2 $38.2 40.0% 15.4% $73.6 $199.6 36.9% $27.3 13.7% 2019 2020 2019 2020 2019 2020 (1) Q3 2020 Pro For
Slide 5: Q3 Retail Sales Significantly Outpaced the Category
Q3 Retail Sales Significantly Outpaced the Category YoY Retail Sales Growth Total General Private PepsiCo Campbell Kellogg Salty Snacks Mills Label 12.9% 13.2% 8.7% 7.9% 5.7% 13 Weeks Weeks 13 (0.3%) Ended 09/27/20 Ended (5.6%) 15.4% 9.8% 9.3% 9.8% 9.6% 4.5% 39 Weeks Weeks 39 Ended 09/27/20 Ended (4
Slide 6: 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 1. Focus on Branded 1.1 Drive Productivity 1 ℠ Snacking in the U.S. 2.2 Optimize Revenue and 2.2 Deliver Strong Value Creation Trade Synergies Strategies 3.3 Im
Slide 7: Strong Q3 Gross Profit Margin Enhancement
Strong Q3 Gross Profit Margin Enhancement Q3 Adjusted Gross Profit . Adjusted Gross Profit Margin % of Net Sales – Increased volume leverage in manufacturing – Lower commodity costs 40.0% +313bps – Mix shift to Power Brands and larger package sizes . Accelerated productivity efforts underway for 202
Slide 8: Continuing Power Brand Momentum in Q3
Continuing Power Brand Momentum in Q3 Power Brands Retail Growth(1) Foundation Brands Retail Growth(1)(2) Total Salty Snacks Utz Power Brands Total Salty Snacks Utz Foundation Brands 17.9% 15.1% 9.8% 9.8% 8.7% 8.7% 5.3% 5.8% 13 weeks 39 weeks 13 weeks 39 weeks Power Brands Foundation Brands Other(2)
Slide 9: Utz BFY Power Brands Performing Well in Natural Channel
Utz BFY Power Brands Performing Well in Natural Channel YoY Natural Channel Retail Sales Growth Total Salty Snacks 22.7% 18.5% 11.1% 10.3% 13 weeks 39 weeks Ending 09/27/20 Ending 09/27/20 Utz Natural Channel Market Share 6.6% YTD Q3 2020 Source: SPINS, Total US – Natural Enhanced Channel (TPL) 9 ℠
Slide 10: Significant Buyer & Repeat Rate Growth Aided by COVID-19
Significant Buyer & Repeat Rate Growth Aided by COVID-19 # of Buyers (in millions) Dollars per Buyer 49.5 $21.50 49.1 $21.02 49.0 $21.00 $20.50 48.5 $20.00 48.0 $19.50 $19.24 47.4 47.5 $19.00 47.0 $18.50 46.5 $18.00 52 weeks 52 weeks 52 weeks 52 weeks Ending 09/29/19 Ending 09/27/20 Ending 09/29/19
Slide 11: eCommerce Business Growth Continuing
eCommerce Business Growth Continuing IRI e-Commerce includes direct-to-the-consumer and “click and collect” Instacart eCommerce % YoY Sales Growth eCommerce % of Retail Sales 7.0% 6.0% 6.0% 191% 5.0% 4.0% 3.1% 3.0% 88% 77% 2.0% 1.0% – 13 weeks 13 weeks 13 weeks 39 weeks 39 weeks Ending 03/29/20 Endi
Slide 12: Incremental Marketing and Innovation Underway
Incremental Marketing and Innovation Underway Q4 Marketing Innovation Highlights . Increased Q4 marketing investment in digital, social and eCommerce targeted to retain new COVID-driven buyers . In October 2020, Sasha Group, a VaynerX Media Company, appointed marketing agency of record Guacamole Che
Slide 13: Strong Q3 Growth Across Most Retail Channels
Strong Q3 Growth Across Most Retail Channels YoY Retail Channel Sales Growth Total Salty Snacks MULO + C Grocery Mass Club C-Store 19.2% 19.2% 15.7% 16.4% 12.9% 12.3% 8.7% 9.3% 13 Weeks Weeks 13 Ending 09/27/20 Ending (4.8%) (7.2%) 21.9% 20.9% 17.7% 16.1% 15.4% 14.5% 11.7% 9.8% 39 Weeks Weeks 39 End
Slide 14: Geographic Expansion Continues with Accelerated Growth
Geographic Expansion Continues with Accelerated Growth YoY Geographic Retail Sales Growth Total Salty Snacks Total US Core Expansion Emerging 19.9% 17.2% 12.9% 10.6% 10.2% 8.7% 8.5% 8.4% 13 Weeks Weeks 13 Ending 09/27/20 Ending 19.9% 20.1% 15.4% 13.3% 11.0% 9.8% 9.8% 9.8% 39 Weeks Weeks 39 Ending 09
Slide 15: Q3 Growth Across Most Salty Snack Sub-categories
Q3 Growth Across Most Salty Snack Sub-categories YoY Sub-Category Retail Sales Growth Total Sub-Category Total Cheese Potato Chips Tortillas Pretzels Popcorn Pork Rinds Salty Snacks Snacks 18.3% 19.3% 12.9% 12.8% 9.9% 10.7% 8.7% 9.9% 9.9% 6.7% 7.0% 6.6% 0.1% 13 Weeks Weeks 13 Ending 09/27/20 Ending
Slide 16: Strategic Acquisitions Continue with H.K. Anderson
Strategic Acquisitions Continue with H.K. Anderson . Provides entry into ~$100 million peanut butter filled pretzel category . Purchase price less than $10 million, funded from cash on hand . Acquisition closed November 2, 2020 . Targeting Net Sales of $12 million and Adjusted EBITDA of $2 million i
Slide 17: Financial Performance
Financial Performance HIGHLY CONFIDENTIAL 17
Slide 18: Financial Summary
Financial Summary 13 Weeks Ended(1) 39 Weeks Ended(1) ($ in millions) 27-Sep-20 Change % Change 27-Sep-20 Change % Change Net Sales $248.0 $48.4 24.2% $718.0 $151.6 26.8% Pro Forma Net Sales $248.0 $16.7 7.2% $718.0 $64.7 9.9% Adjusted Gross Profit $99.2 $25.6 34.8% $274.9 $75.3 37.7% Adjusted Gross
Slide 19: Q3 & YTD 2020 Net Sales Growth Rate Bridge
Q3 & YTD 2020 Net Sales Growth Rate Bridge Q3 Net Sales YoY Growth Decomposition YTD Net Sales YoY Growth Decomposition 19 ℠
Slide 20: Q3 & YTD 2020 Adjusted EBITDA Margin Bridge
Q3 & YTD 2020 – Adjusted EBITDA Margin Bridge Q3 Adjusted EBITDA Margin Decomposition YTD Adjusted EBITDA Margin Decomposition 20 ℠
Slide 21: Balance Sheet / Other
Balance Sheet / Other . Q3 Net Debt of $388 million . Net Debt ratio of 3.1x based on LTM Q3 2020 Normalized Further Adjusted EBITDA of $126 million . Strong cash balance and approximately $100 million available on an undrawn ABL at the end of Q3 2020 . Timelines adjusted on two key projects to prov
Slide 22: FY 2020 Outlook
FY 2020 Outlook 53-weeks Ending January 3, 2021 (excluding H.K. Anderson) . Net Sales of 10 – 11% versus 2019 Pro Forma Net Sales of $865.5 million, with 53rd week representing approximately two percentage points . Adjusted EBITDA of $129 – 132 million, including a projected 53rd week impact of appr
Slide 23: Appendix
Appendix HIGHLY CONFIDENTIAL 23
Slide 24: Reconciliation of Non-GAAP Financial Measures (Footnotes)
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures (Footnotes) – Please see Utz Brands, Inc. Form 10Q for Q3 2020 24 ℠
Slide 25: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures (1) (2) (3) (4) (5) (6) (7) (Footnotes) – Please see Utz Brands, Inc. Form 10Q for Q3 2020 25 ℠
Slide 26: Reconciliation of Non-GAAP Financial Measures: Income Tax Rate
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures (1) (1) Income Tax Rate Adjustment calculated as (Loss) Income before taxes plus (i) Acquisition, Step-Up Depreciation and Amortization and (ii) Other Non-Cash and/or Non-Recurring Adjustments, multiplied by an effective ca
Slide 27: Reconciliation: Net Sales and Normalized Further Adjusted EBITDA
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures Net Sales and Pro Forma Net Sales FY 2019 FY 2020 LTM (dollars in millions) Q4 Q1 Q2 Q3 Q3 Net Sales $ 201.8 $ 228.0 $ 242.0 $ 248.0 $ 919.8 Conagra DSD Snacks (Kennedy) Pre-Acquisition Net Sales 8.2 0.0 0.0 0.0 8.2 Kitchen
Slide 28: Utz Brands, Inc. Share Count
Utz Brands, Inc. Share Count (as of August 29, 2020)(1)(2) Assumes Warrants Outstanding Are Net Share Description Securities(3) Settled Notes(4) Shares of Class A Common Stock held by Public 59,369,050 59,369,050 Shares Underlying Continuing Member’s . Outstanding shares as of closing the Business C
Slide 29: Utz Geographic Regions
Utz Geographic Regions WA MT ME ND VT OR MN NH MA ID SD WI NY WY MI CT RI IA PA NE NJ NV OH IL IN DE UT CO WV MD CA KS MO VA KY DC NC TN AZ OK NM AR SC AK GA MS AL HI TX LA Core FL Expansion Emerging 29 ℠