Mgp Ingredients, Inc. · NASDAQ:MGPI
Mgp Ingredients — Investor Presentation (February 2024)
46 slides from Mgp Ingredients's investor presentation, February 2024
Slide 1: Investor Presentation Fourth Quarter 2023
INVESTOR PRESENTATION Fourth Quarter 2023
Slide 2: Forward Looking Statements and Non-GAAP Disclaimer
FORWARD LOOKING STATEMENTS AND NON-GAAP DISCLAIMER This presentation may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including without limitation statements regarding the prospects of the industries of MGP Ingredients, Inc. (the “Com
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, spirits and food ingredients segments for the betterment of our shareholders, employees, partners, consumers and communities. 3
Slide 4: MGP Overview
MGP OVERVIEW Total sales were $837MM for the year ended December 31, 2023 DISTILLING BRANDED INGREDIENT SOLUTIONS SPIRITS SOLUTIONS Sales: $451MM Sales: $254MM Sales: $132MM (54% of Total) (30% of Total) (16% of Total) GP Margin: 32.2% GP Margin : 44.4% GP Margin: 35.7% ■ Leading supplier of distill
Slide 5: Distilling Solutions
DISTILLING SOLUTIONS A LEADING SUPPLIER OF DISTILLED SPIRITS TO THIRD PARTIES 2023 Total Revenue of $451MM Products consist of the following: $29 $28 $8 • Brown Goods: Premium bourbon, rye and other whiskeys sold as aged whiskey or unaged new distillate, which is then aged by customers from two to f
Slide 6: Distilling Solutions
DISTILLING SOLUTIONS UNIQUE EXPERTISE POSITIONS US AS THE PREFERRED PARTNER TO OUR CUSTOMERS Lawrenceburg, IN Operations • Ross & Squibb Distillery Scale provides competitive pricing • Top-5 American Whiskey producer • One of the largest U.S. suppliers of rye whiskey • Bourbon Capacity supports long
Slide 7: Distilling Solutions
DISTILLING SOLUTIONS 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 American Whiskey Remains Strong Beverage Alcohol Market Share - Revenue 5-year U.S. American Whiskey Volume CAGR Beer Sp
Slide 8: Distilling Solutions
DISTILLING SOLUTIONS FOUR STRATEGIES TO CONTINUE DELIVERING LONG-TERM GROWTH WITHIN THE DISTILLING SOLUTIONS SEGMENT Distilling Solutions Growth Strategy American Whiskey is Underdeveloped Outside U.S. 1. Further develop our existing customer • Exports expected to be a key driver of long-term growth
Slide 9: Distilling Solutions
DISTILLING SOLUTIONS CUSTOMER EVOLUTION INTO NEW DISTILLATE PROVIDES LONG-TERM STABILITY AND SUSTAINABILITY New Distillate Sales Benefits 1. Attractive gross margin profile Brown Goods Revenue & Majority Type 2. Typically made to customers whose $289,191 brands are more sizeable and reliable $229,52
Slide 10: Distilling Solutions
DISTILLING SOLUTIONS PROGRESS OF PLANNED CLOSURE OF THE ATCHISON DISTILLERY • Due to their lower relative gross margin profiles, white goods and industrial alcohol sales have been de- emphasized in recent years • Beginning in 2022, as a result of increased supply into the market following COVID and
Slide 11: Distilling Solutions
DISTILLING SOLUTIONS IMPACTS OF THE PLANNED CLOSURE OF THE ATCHISON DISTILLERY ON THE CONSOLIDATED BUSINESS Pro-Forma Results(1), excluding the Atchison Distillery Overview of One-Time Expenses Consolidated Incurred one-time aggregate pre-tax charges of FY 2022 FY 2023 approximately $19.4 million fo
Slide 12: Branded Spirits
BRANDED SPIRITS AN ESTABLISHED PORTFOLIO WITH A FOCUS ON GROWING HIGH POTENTIAL, HIGH MARGIN BRANDS 2023 Total Revenue of $254MM Brand Examples By Price Tier: • Ultra Premium: Yellowstone Bourbon, Remus Gatsby $25 Bourbon, Penelope Private Select Whiskey, Remus Repeal $64 Bourbon, Blood Oath Bourbon
Slide 13: Penelope Bourbon Acquisition
BRANDED SPIRITS PENELOPE BOURBON ACQUISITION Transaction Overview Rationale • Acquired 100% of Penelope Bourbon • Enhances presence in growing American Whiskey category purchase price as follows: • Expands portfolio of premium-plus price point • Upfront: $105.0M upon closing brands • Earnout: additi
Slide 14: Penelope Bourbon Overview
BRANDED SPIRITS PENELOPE BOURBON OVERVIEW EXPANSIVE PREMIUM+ WHISKEY FAMILY One of the fastest growing FOUR GRAIN SERIES COOPER SERIES whiskey brands in the US +90% CORE BRANDS LIMITED RELEASES Source: Nielsen 52 weeks Sales CY All Growth Trend by American Whiskey Spirits Category thru January 27, 2
Slide 15: Expansive Family of Brands
BRANDED SPIRITS 1EXPANSIVE FAMILY OF BRANDS REMUS GATSBY RESERVE Straight Bourbon REMUS REPEAL Whiskey RESERVE SRP: $199.99 Straight Bourbon Whiskey OLD EZRA SRP: $99.99 YELLOWSTONE 7-Year Straight American Single Rye Whiskey Malt Whiskey SRP: $79.99 SRP: $54.99 THE QUIET MAN 8-Year Irish Whiskey YE
Slide 16: Branded Spirits
BRANDED SPIRITS AN ESTABLISHED PORTFOLIO WITH A FOCUS ON GROWING HIGH POTENTIAL, HIGH MARGIN BRANDS National Sales Platform Operational Capabilities Diverse Portfolio of Brands • Sales / Distributor representation in every U.S. state and a dedicated international sales team • Dedicated sales and mar
Slide 17: Branded Spirits
BRANDED SPIRITS CONTINUE TO FOCUS AND INNOVATE WITHIN U.S. SPIRITS PRICE TIERS THAT ARE GROWING – 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 Pric
Slide 18: Branded Spirits
BRANDED SPIRITS FOUR STRATEGIES TO CONTINUE DELIVERING LONG-TERM GROWTH WITHIN THE BRANDED SPIRITS SEGMENT Branded Spirits Growth Strategy Focus on the Right Marketing Support 1. Points of distribution expansion • Paid Social (Facebook, 2. Increase innovation AWARENESS Instagram) • Online/Streaming
Slide 19: Ingredient Solutions
INGREDIENT SOLUTIONS A LEADING SUPPLIER OF SPECIALTY WHEAT STARCHES & PROTEINS 2023 Total Revenue of $132MM Products consist of the following: $1 • Specialty Wheat Starches: Premium wheat starches sold to food processors and distributors, a substantial portion of $17 which are modified for special a
Slide 20: Ingredient Solutions
INGREDIENT SOLUTIONS STRONGLY POSITIONED TO SERVE SPECIALTY PLANT-BASED MARKETS • High protein diet tops the list as the most common diet pattern, while plant- based eating has dropped to seventh place, down from fourth place last year. 1 • 19% of consumers surveyed eat more plant-based meat and sea
Slide 21: Ingredient Solutions
INGREDIENT SOLUTIONS THREE STRATEGIES TO CONTINUE DELIVERING LONG-TERM GROWTH WITHIN THE INGREDIENT SOLUTIONS SEGMENT Ingredient Solutions Growth Strategy Top Nutrients Americans are Seeking to Consume* 1. Expand and optimize our dietary fiber, 67% Protein plant proteins and clean label starches 61%
Slide 22: Aggressively Expand Fibersym and Arise Platforms
INGREDIENT SOLUTIONS AGGRESSIVELY EXPAND FIBERSYM AND ARISE PLATFORMS Fibersym RW Overview Strategy • Granular RS4-type resistant wheat • Products: Expand Fibersym RW dietary fiber, clean label starch pregels, and Arise wheat protein isolates • Allows formulators to boost the fiber content and to lo
Slide 23: Expand Textured Plant Proteins
INGREDIENT SOLUTIONS EXPAND TEXTURED PLANT PROTEINS U.S. product launches and plant-based claims Strategy Region 2018 2019 2020 2021 2022 • Product: Introduce new and innovative textured plant proteins, and Ingredients Inclusions, created from a variety U.S. 291 539 637 772 817 of plant sources desi
Slide 24: Operational Excellence
OPERATIONAL EXCELLENCE A CULTURE OF CONTINUOUS IMPROVEMENT • “House of Zero Loss” operational excellence initiative • Improving throughput of existing assets while maintaining consistency of high-quality products • Lawrenceburg, IN operations increased capacity 33% from 2019 to 2023 to support growt
Slide 25: Our Approach to Sustainability
OUR APPROACH TO SUSTAINABILITY THE COMPANY’S ESG STRATEGY IS DISTILLED DOWN AND ORGANIZED INTO AN EASY TO DIGEST AND COMMUNICATE PLATFORM. At MGP, we are dedicated to operating in harmony with people and the environment. We are committed to a culture of continuous ESG Mission improvement, in which o
Slide 26: Financial Results
FINANCIAL RESULTS 26
Slide 27: Consolidated Financial Results
CONSOLIDATED FINANCIAL RESULTS THE COMPANY HAS DELIVERED RECORD RESULTS IN EACH BUSINESS SEGMENT Revenue ($MM) Adjusted Basic EPS1 ($) $837 $5.90 $782 $4.94 $627 $4.26 $363 $396 $2.51 $2.27 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 Adjusted EBITDA1 ($MM) FY 2024 Guidance2 Sales are projected
Slide 28: Strong Balance Sheet, Cash Flow, and Excellent Access to Capital
STRONG BALANCE SHEET, CASH FLOW, AND EXCELLENT ACCESS TO CAPITAL Adjusted EBITDA less CapEx and Conversion 1 $147.3 Adjusted EBITDA less CapEx • MGP has seen strong, consistent improvement in adjusted EBITDA1 Adjusted EBTIDA less CapEx as a percentage of $124.0 less capital expenditures (“CapEx”) Ad
Slide 29: 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 Branded Spirits. Capital Expenditures • In addition to maintenance and
Slide 30: Consolidated Financial Results – Year Ended December 31, 2023
CONSOLIDATED FINANCIAL RESULTS – FOR YEAR ENDED DECEMBER 31, 2023 CONSOLIDATED GROSS PROFIT INCREASED 20% TO $304.7 MILLION, REFLECTING RECORD RESULTS IN ALL THREE BUSINESS SEGMENTS • Sales increased 7% to $836.5 million. Operating Income Drivers 2022-23 ($MM) • Gross profit increased 20% to $304.7
Slide 31: Consolidated Sales
CONSOLIDATED SALES SALES WERE UP 7% WITH SALES GROWTH IN ALL THREE BUSINESS SEGMENTS Key Drivers • Distilling Solutions growth due to higher brown goods sales. Consolidated Sales Change vs Prior Year (Year Ended 12/31/2023) $MM $MM % • Branded Spirits sales increased due primarily to increased sales
Slide 32: Distilling Solutions
DISTILLING SOLUTIONS INCREASED SALES OF BROWN GOODS PRIMARILY DUE TO HIGHER AVERAGE SELLING PRICE AND HIGHER SALES VOLUME Distilling Solutions Sales Change vs Prior Year (Year ended 12/31/2023) $MM $MM % Brown Goods $289.2 $59.7 26% White Goods 58.6 (15.9) (21) Premium Beverage Alcohol 347.8 43.8 14
Slide 33: Branded Spirits
BRANDED SPIRITS INCREASED SALES OF BRANDS WITHIN PREMIUM PLUS PRICE TIERS Branded Spirits Sales Change vs Prior Year (Year ended 12/31/2023) $MM $MM % Ultra premium $63.8 $15.5 32% Super premium 13.4 1.2 9 Premium 28.3 4.1 17 Premium Plus 105.5 20.7 24 Mid 75.7 (6.9) (8) Value 47.9 0.5 1 Other 24.9
Slide 34: Ingredient Solutions
INGREDIENT SOLUTIONS INCREASED SALES ACROSS ALL PRODUCT LINES Ingredient Solutions Sales Change vs Prior Year (Year ended 12/31/2023) $MM $MM % Specialty wheat starches $66.1 $3.5 6% Specialty wheat proteins 48.3 9.0 23 Commodity wheat starches 16.4 2.4 17 Commodity wheat proteins 1.0 0.9 2,484 Tota
Slide 35: Appendix
MGP APPENDIX
Slide 36: U.S. Spirits Market
U.S. SPIRITS MARKET 9-Liter Cases (000s) 2023 Volume % Change Y/Y Total Distilled Spirits (TDS) 308,807 +1.2% Total Whiskey 74,591 -4.2% American Whiskey (Bourbon/Rye/Tennessee) 31,110 -0.4% Super Premium 5,655 +4.0% Rye (1) 1,730 +8.6% Vodka 74,908 -2.6% Super Premium 5,377 +4.2% Gin 8,977 -8.7% Su
Slide 37: Reconciliation of Selected GAAP to Non-GAAP Measures
RECONCILIATION OF SELECTED GAAP TO NON-GAAP MEASURES BRANDED SPIRITS GROSS PROFIT TO ADJUSTED GROSS PROFIT1 - UNAUDITED Branded Spirits segment ($ in thousands) 2019 2020 2021 2022 2023 Gross Profit $1,536 $2,187 $62,644 $95,521 $112,781 Inventory Step-Up - - 2,529 - - Adjusted Gross Profit1 $1,536
Slide 38: Reconciliation of Selected GAAP to Non-GAAP Measures
RECONCILIATION OF SELECTED GAAP TO NON-GAAP MEASURES BASIC EARNINGS PER COMMON SHARE (“EPS”) TO ADJUSTED BASIC EARNINGS PER COMMON SHARE1 - UNAUDITED 2019 2020 2021 2022 2023 Basic EPS $2.27 $2.37 $4.37 $4.94 $4.82 Impairment of long-lived assets and other - - - - 0.66 Fair value of contingent consi
Slide 39: Reconciliation of Selected GAAP to Non-GAAP Measures
RECONCILIATION OF SELECTED GAAP TO NON-GAAP MEASURES NET INCOME TO ADJUSTED EBITDA1 AND ADJUSTED EBITDA1 LESS CAPITAL EXPENDITURES2 - UNAUDITED ($ in thousands) 2019 2020 2021 2022 2023 Net Income $38,793 $40,345 $90,817 $108,872 $107,130 Interest 1,305 2,267 4,037 5,451 6,647 Taxes 7,144 12,256 30,
Slide 40: Reconciliation of Selected GAAP to Non-GAAP Measures
RECONCILIATION OF SELECTED GAAP TO NON-GAAP MEASURES NET INCOME TO ADJUSTED EBITDA1 – ADJUSTED FOR SHARE-BASED COMPENSATION EXPENSE - UNAUDITED Beginning in the first quarter 2024, the Company plans to add back share-based compensation expense to the non-GAAP adjusted EBITDA measure. ($ in thousands
Slide 41: Reconciliation of Debt to Net Debt
RECONCILIATION OF DEBT TO NET DEBT ($ in thousands) 2019 2020 2021 2022 2023 Total Debt $41,060 $39,871 $233,399 $230,335 $287,249 Cash and cash equivalents 3,309 21,662 21,568 47,889 18,388 Net Debt $37,751 $18,209 $211,831 $182,446 $268,861 41
Slide 42: Reconciliation of Selected GAAP to Non-GAAP Measures
RECONCILIATION OF SELECTED GAAP TO NON-GAAP MEASURES FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022 - UNAUDITED Operating Year Ended December 31, 2023 (in thousands) Net Income Basic EPS Diluted EPS Income Reported GAAP Results $148,613 $107,130 $4.82 $4.80 Impairment of long-lived assets and other
Slide 43: Impact of Planned Closure of the Atchison Distillery
IMPACT OF PLANNED CLOSURE OF THE ATCHISON DISTILLERY UNAUDITED PRO-FORMA RESULTS – CONSOLIDATED Change (1) Represents actual results of the Company for the year ended December 31, 2022, as reported in the (Year Ended 12/31/2022) As Reported(1) Pro-Forma(3) $ % Company’s Annual Report on Form 10-K fo
Slide 44: Impact of Planned Closure of the Atchison Distillery
IMPACT OF PLANNED CLOSURE OF THE ATCHISON DISTILLERY UNAUDITED PRO-FORMA RESULTS – DISTILLING SOLUTIONS Change (1) Represents actual results of the Company for the year ended December 31, 2022, as reported in the As Company’s Annual Report on Form 10-K for the year $ % ended December 31, 2022. Year
Slide 45: Impact of Planned Closure of the Atchison Distillery
IMPACT OF PLANNED CLOSURE OF THE ATCHISON DISTILLERY UNAUDITED PRO-FORMA RESULTS – DISTILLING SOLUTIONS Change (1) Represents actual results of the Company for the year ended December 31, 2023, as reported in the As Company’s Annual Report on Form 10-K for the $ % Year Ended December 31, 2023 Report
Slide 46: Impact of Planned Closure of the Atchison Distillery
IMPACT OF PLANNED CLOSURE OF THE ATCHISON DISTILLERY UNAUDITED PRO-FORMA RESULTS – INGREDIENT SOLUTIONS (1) Represents actual results of the Company for the year Change ended December 31, 2022, as reported in the Company’s Annual Report on Form 10-K for the year ended (Year Ended 12/31/2022) As Repo
MGP Ingredients — Investor Presentation (February 2024) on 6ix