Grove Collaborative Holdings, Inc. · NYSE:GROV
Grove Collaborative — Q2 2023 Earnings Presentation
41 slides from Grove Collaborative's earnings presentation, Aug 14, 2023
Slide 1: Investor Presentation
August 2023 Investor Presentation 1
Slide 2: Disclaimer
Disclaimer Basis of Presentation This Presentation (this “Presentation”) is provided for informational purposes only and has been prepared to assist interested parties in making their own evaluation with respect to a potential investment in Grove Collaborative Holdings, Inc. (“Grove”) (the “Potentia
Slide 3: Disclaimer (continued)
Disclaimer (continued) Trademarks Grove owns or has rights to various trademarks, service marks and trade names that it uses in connection with the operation of its business. This Presentation may also contain trademarks, service marks, trade names and copyrights of third parties, which are the prop
Slide 4: Non-GAAP Financial Measures
Non-GAAP Financial Measures Some of the financial information and data contained in this presentation, such as adjusted EBITDA and adjusted EBITDA margin, have not been prepared in accordance with United States generally accepted accounting principles (“GAAP”). These non-GAAP measures, and other mea
Slide 5: Executive Summary: Leading brand, unique entry point
Executive Summary: Leading brand, unique entry point 5
Slide 6: Consumer Products Have Historically Hurt Our Planet and Our Health
Consumer Products Have Historically Hurt Our Planet and Our Health. We Are Changing That. Select 2021 & 2022 GREENHOUSE GAS EMISSIONS Select 2021 & 2022 PLASTIC PACKAGING VOLUME (TONNES) PER MILLION $ OF REVENUE(1)(2) (METRIC TONNES) PER MILLION $ OF REVENUE(1) Net Zero emissions after offsets for S
Slide 7: Grove's vision for consumer products
Grove’s vision is that consumer products will be a positive force for human and environmental health. We create and curate high performance, planet-first products to make that possible. 7
Slide 8: Plastic Waste Is the #1 Issue for Our Industry
(1) Plastic Waste Is the #1 Issue for Our Industry More U.S. consumers care about plastic waste than about climate change. (2) Plastic packaging represents nearly half of all plastic waste. (3) 84% 81% 95% 83% of American shoppers are of plastic-free purchasers started of natural home shoppers are o
Slide 9: A History of Doing Well By Doing Good
A History of Doing Well By Doing Good We Use Our Connection with Consumers to Build Authentic, Disruptive Brands REVENUE & ADJUSTED EBITDA FINANCIAL RESULTS & GUIDANCE (000’s) Revenue Adjusted EBITDA(1) Pandemic bump in 2020-2021 $300 8.3x growth in 6 years $150 $0 Burn down 89% vs. peak. ($150) Adj
Slide 10: A Premier Long Term Brand
A Premier Long Term Brand. GROVE IS A MARKET LEADER IN ZERO WASTE HOME CARE. Home + personal care is $1T globally, built on single use plastic. Zero waste leadership will create a 6/30/2023 Valuation multi-billion dollar brand. That is our opportunity. ● 8.3x revenue growth since 2017 ● #1 market sh
Slide 11: The Long Term Opportunity: A Billion Dollar Brand
Change the drew photo. Photo w Drew B in it “Natural Products: Huge, High Growth TAM” SECTION 1 The Long Term Opportunity: A Billion Dollar Brand 11
Slide 12: Consumer-Led Transition to Sustainable Products Is Inevitable
Consumer-Led Transition to Sustainable Products Is Inevitable… THE TRANSITION IS GAINING MOMENTUM CONSUMER PREFERENCE IS CLEAR SUSTAINABILITY TRANSPARENCY MISSION-DRIVEN 73% 72% 74% Of shoppers believe it is Of consumers place Of retail consumers aged Global HPC Market When Did You First 25 – 34 pla
Slide 13: A Tiny Fraction of the ~$600B of Market Value
… But Represents a tiny Fraction of the ~$600B of Market Value MARKET CAP $ in billions CUMULATIVE MARKET CAP < 1% of the Category Source: Yahoo Finance data as of July 19, 2023 13
Slide 14: Grove Is at the Intersection of Category Growth Trends
Grove Is at the Intersection of Category Growth Trends TOTAL U.S. HPC SEGMENT GROWTH RATES (1) Notes: 1. Conventional growth rate represents CAGR from 2019 – 2025. Clean / Natural growth rate estimated based on a variety of third-party research and represents CAGR from 2019 – 2025. eCommerce growth
Slide 15: Grove Has a Durable Competitive Advantage in Innovation
Grove Has a Durable Competitive Advantage in Innovation DTC underpins the growth story by powering Grove innovation engine Superior access to customer data and DTC preferences Insights lead to rapid innovation and more SKU INNOVATION development than competitors Better informed + faster innovation f
Slide 16: Grove Co. Wins on Efficacy and Sustainability Innovation
Grove Co. Wins on Efficacy, …While Pioneering Innovations with Truly Clean Ingredients… in Sustainability Most home care Grove Dishwasher Detergent Packs Performance vs. Leading Competitors (1) products with Competitor Brand 1 Competitor Brand 2 zero-plastic Competitor Product 1 Product 2 Product 3
Slide 17: Grove Is the Leading Digitally Enabled Brand in HPC
Grove Is the Leading Digitally Enabled Brand in HPC BRAND HIGHLIGHTS KEY STATS CLEAR WINNER IN NEXT-GEN HPC #1 Brand awareness among zero-plastic brands (1) Largest lifetime DTC customer base in the category #1 5,000+ (3) Brand in plastic free home care in the US in Retail Doors (>2x growth y/y) mar
Slide 18: Grove Is a Mass-Market Player with Broad Customer Appeal
Grove Is a Mass-Market Player with Broad Customer Appeal GROVE CUSTOMER PENETRATION BY STATE(3) Top 10 Zip Codes by Sales for DTC (5) LOCATION POPULATION Whatcom County, WA 229,247 Chattanooga, TN 179,690 Larimer County, CO 356,899 Boston, MA 684,379 San Francisco, CA 874,961 Birmingham, AL 197,575
Slide 19: Path to Profitability
Section 2 Path to Profitability 19
Slide 20: Long Term Customer Loyalty Creates Revenue Base
Long Term Customer Loyalty Creates Revenue Base NET REVENUE RETENTION BY COHORT(1) (Quarterly, 2015-2022) Asymptotic retention of ~40% Note: 1. Y-axis represents average of all quarterly cohort revenues as % of the cohort first order revenue, excludes VIP and shipping; Through FY 2022 cohorts using
Slide 21: Strong Brand Drives Organic Traffic
Grove’s Strong Brand Drives Organic Traffic and Success Across Media Types % OF TRAFFIC FROM ORGANIC SOURCES IN Q2 2023(1) 18% 82% Non-Paid Paid Note: 1. Organic sources defined as non-paid sources vs. paid brand and performance marketing sources; traffic measured by number of sessions; data is for
Slide 22: Long Term Trends Are Driving Gross Margin To Record Highs
Long Term Trends Are Driving Gross Margin To Record Highs OVERALL NET REVENUE SHARE BY BRAND Adjusted GROSS MARGIN % (1) (1) (2) Grove Brands share, while maintaining elevated mix, negatively impacted by lower % of new customer orders, which contain a higher mix of Grove Note: Brand. items in orders
Slide 23: Cost Structure to Scale with Revenue
Cost Structure to Scale with Revenue, Despite Public Company Expenses REDUCE FIXED EXPENSES 1 ADJUSTED SG&A + PRODUCT DEVELOPMENT 2021-2023 (1)(2) ➢ Consolidating software purchases across functions to drive cost savings ➢ Re-sourcing creative production to maintain speed with lower costs ➢ Eliminat
Slide 24: Customer Base Will Stabilize in 2023
Customer Base Will Stabilize in 2023 as We Lap Reduced Advertising Spend Starting in 2H 2022 $M Media Diversification + Optimization → Lower Spend + Lower CAC ➢ Full funnel channel allocation driving CAC efficiencies into 2023 ➢ Marketing stack upgrade in 2022 improving personalization and testing c
Slide 25: Catalysts for Growth
SECTION 3 Catalysts for Growth 25
Slide 26: The Retail Opportunity Is Still Early Days
The Retail Opportunity is Still Early Days 2023-2030 FOCUS ~$1 Trillion (1) Global HPC Retail Industry Bringing Grove Co. to Retail Distribution is a 2021-2025 FOCUS $180Bn (1) Game Changing U.S. HPC Retail Industry Opportunity CURRENT SALES CHANNEL U.S. Vertical HPC eCommerce Sales: <$20.0Bn (2) So
Slide 27: Our Retail Footprint Is Large + Growing
Our Retail Footprint is Large + Growing Select Retail Partners Rapid Growth in Just Kicking Off Amazon Points of Distribution 5,000+ Grove’s Flagship Sustainable Grove’s Leading Sustainable Retail Doors(1) Home Supplies Brand Personal Care Brand (>2x growth y/y) 150 Unique SKUs with Retail partners
Slide 28: Well Positioned to Win in the Wellness Category
Grove is Well Positioned and Has a Right to Win in the Wellness Category 92% of respondents report 78% have made a being informed or curious purchase in the health & about purchasing health & wellness category in the (1) wellness products (1) last 6 months The global wellness 92% 78% market is more
Slide 29: M&A Provides Step-Change Upside Opportunity
M&A Provides Step-Change Upside Opportunity SYNERGY LEVERS ACCESS TO CAPITAL + HUMANCO PARTNERSHIP ➢ grove.com platform sales of acquired brand Grove announced in Q4 2022 a partnership with HumanCo, the ➢ Grove DTC fulfillment capability / target rationalization mission-driven health and wellness co
Slide 30: Large Players Have a History of Buying Natural Brands
Large Players Have a History of Buying Leading Natural / Sustainable Brands SELECT NATURAL HPC M&A ACQ. THERE IS ONE INDEPENDENT, PURE PLAY, $100MM+ REVENUE HOME CARE ACQ. BRAND FOCUSED ON HEALTH + SUSTAINABILITY ACQ. ACQ. ACQ. 30
Slide 31: Financials
SECTION 4 Financials 31
Slide 32: Balance Sheet + Available Capital
Balance Sheet + Available Capital 6/30/23 Cash + Available Liquidity 6/30/23 Cash (incl. $9M $90 restricted cash)(1) ABL availability (2) $10 (3) Total Liquidity $100 Liquidity calculation does not reflect projected working capital improvements (which may reduce ABL capacity) In July 2022, we entere
Slide 33: Driving Towards Profitability
Driving Towards Profitability % OF NET REVENUE Source: Company Financials Note: SG&A inclusive of fulfillment costs, stock-based compensation, and depreciation 33
Slide 34: Net Revenue and Adjusted EBITDA 2018-2023
NET REVENUE (2018-2023) ADJUSTED EBITDA (2018-2023) ($MM) by 21 se 20 rea ce ec sin to d 5% ed ~8 ject o pr rn Bu YOY GROWTH: 228% 122% 56% 5% -16% -18% % Margin (79%) (75%) (62%) (15%) (28%) (25%) (6.5%) ~8x growth from 2017 – 2022, even after giving back a “pandemic bump” in 2020 + 2021. We are dr
Slide 35: DTC Net Revenue per Order and Adjusted Gross Margin
(1) DTC NET REVENUE PER ORDER (2018-2023) ADJUSTED GROSS MARGIN (2018-2023) Record high in Q2 2023 YOY GROWTH: 16% 12% 27% 7% 5% 11% 660bps 120bps 1,290bps 160bps (10bps) 340bps We continue to increase our wallet share with customers While being margin accretive Notes: 1. Gross margin excludes the i
Slide 36: Sustained Long-Term Growth and Profitability
Sustained Long-Term Growth and Profitability Metric (1) Long-term target Revenue Growth 10-30% Gross Margin 55-60% SG&A: Fulfillment Cost 10-15% Other SG&A + Product Development (2) 10-15% Advertising Spend 10-15% Adj. EBITDA Margin 10-30% Notes: 1. All metrics excluding revenue growth are calculate
Slide 37: Analysis at Various Prices
Analysis at Various Prices 37
Slide 38: Supplemental Materials
APPENDIX Supplemental Materials 38
Slide 39: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation $MM (1) 2019A 2020A 2021A 2022A Q2-2022A Q2-2023A Net Loss ($161) ($72) ($136) ($88) ($35) ($11) Stock-Based Compensation $12 $8 $15 $46 $20 $5 Depreciation and Amortization $2 $4 $5 $6 $1 $1 Remeasurement of Convertible Preferred Stock Warrant Liability — $1 $1 ($2) $
Slide 40: Company Timeline
Company Timeline 2012 2020 Company founded 2015 100% Plastic as ePantry, based on Launched our 2017-2020 neutral, Carbon June 2022 selling natural 3P first Grove Brand Scaled 3 neutral for Grove Public products product FCs Scope I + II Listing on NYSE 2014 2016 2018 1H 2021 B Corp Changed name $100M
Slide 41: Grove is creating the change in CPG that the world needs
Update copy Grove is creating the change in CPG that the world needs. 41
Grove Collaborative Holdings — Q2 2023 Earnings Presentation on 6ix