Organigram Global Inc. · TSX:OGI
Organigram Global — Q3 2022 Earnings Presentation
41 slides from Organigram Global's earnings presentation, Jul 13, 2022
Slide 1: Organigram Investor Presentation Q3 Fiscal 2022
ORGANIGRAM INVESTOR PRESENTATION Q3 FISCAL 2022 NASDAQ (OGI) 1 TSX (OGI) 1
Slide 2: Cautionary Statement
CAUTIONARY STATEMENT This document is current as of July 13, 2022, except where otherwise stated. The information contained in this Although the Company believes that the assumptions and factors used in preparing the forward-looking information in presentation is provided by Organigram Holdings Inc.
Slide 3: Strategy
INNOVATION CONSUMER FOCUS EFFICIENCY EXPANSION STRATEGY: Leverage our brands, product portfolio and culture of innovation to: 3 Increase Drive Deliver long-term Reach 3 market share profitability shareholder value new markets
Slide 4: Key Strengths
KEY STRENGTHS LEADING LICENSED THREE LEVEL INDOOR DEDICATED EDIBLES AND PRODUCER CULTIVATION DERIVATIVES FACILITIES Leading licensed producer Large indoor facility in Moncton: vape filling, CO2 extraction (LP) of quality products for Moncton, NB with unique Winnipeg: Specialized edibles, Recreationa
Slide 5: Quarterly Update (Q3 F2022)
QUARTERLY UPDATE (Q3 F2022) 5 5
Slide 6: Building a Market Leader
BUILDING A MARKET LEADER CANADIAN REC. MARKET SHARE BY $ SALES 1 8.5% • Moved from 6th to 3rd market share position, 7.7% 7.8% 7.8% and have maintained over the last 3 months • #1 in the largest category, flower 7.0% • #3 in gummies category 5.4% 4.1% Q2 F21 Q3 F21 Q4 F21 Q1 F22 Q2 F22 Q3 F22 June '
Slide 7: Continuing a Trend of Growth: Revenue
CONTINUING A TREND OF GROWTH REVENUE $ millions Compound quarterly growth last four quarters: $55.2 Net revenue: 17.0% Gross revenue: 17.3% $44.3 $43.9 $38.1 $36.2 $31.8 $30.4 $29.1 $24.9 $20.3 Q3 F21 Q4 F21 Q1 F22 Q2 F22 Q3 F22 Net Revenue Gross Revenue 7
Slide 8: Continuing a Trend of Growth: Adjusted Gross Margin
CONTINUING A TREND OF GROWTH ADJUSTED GROSS MARGIN1 $ millions and % of Net Revenue $9.3 $8.3 $5.5 24% 26% $3.0 18% 12% (4%) -$0.7 Q3 F21 Q4 F21 Q1 F22 Q2 F22 Q3 F22 1. Adjusted Gross Margin is a non-IFRS Financial Measure not defined by and does not have any standardized meaning under IFRS; 8 pleas
Slide 9: Continuing a Trend of Growth: Adjusted EBITDA
CONTINUING A TREND OF GROWTH ADJUSTED EBITDA 1 $ millions +$1.6 +$0.62 -$1.9 -$4.8 -$9.2 Q3 F21 Q4 F21 Q1 F22 Q2 F22 Q3 F22 1. Adjusted EBITDA is a non-IFRS Financial Measure not defined by and does not have any standardized meaning under IFRS; please refer to the cautionary statement at the beginni
Slide 10: Q3-2022 Highlights
Q3-2022 HIGHLIGHTS • Record-high quarterly net revenue for the Company • Continued positive EBITDA trend • Reached #3 position among Canadian LPs, reaching 8.5% market share1 in June 2022 • Maintained #1 position in dried flower1 – the largest product category • Launched extensions to core brands: S
Slide 11: Strong Balance Sheet and Liquidity
STRONG BALANCE SHEET AND LIQUIDITY • Capital position is healthy and there is sufficient liquidity available for the near to medium term • On May 31, 2022, the Company had cash and short-term investments (excluding restricted funds) of $127 million • Negligible debt (less than $0.3 million) 11
Slide 12: Q3 Fiscal 2022 Key Financial Metrics
Q3 FISCAL 2022 KEY FINANCIAL METRICS Select Key Financial Metrics (in $000s unless otherwise indicated) Q3-2022 Q3-2021 % Change Gross revenue 55,173 29,1052 90 % Excise taxes (17,058) (8,871) 94 % Net revenue 38,115 20,324 88 % Cost of sales 29,440 23,381 26 % Gross margin before fair value changes
Slide 13: Fiscal 2022 Outlook
FISCAL 2022 OUTLOOK • Expecting solid Fiscal ‘22 net revenue which is anticipated to be significantly higher than Fiscal ‘21 due to: • Addition of Laurentian and its premium products and high margin brands • Stronger forecasted market growth as the retail network expands • Strong market share moment
Slide 14: Potential Upside for Gross Margins
POTENTIAL UPSIDE FOR GROSS MARGINS • Anticipate improved economies of scale and efficiencies as cultivation and production volumes continue to increase • Continued investment in automation which will drive cost efficiencies and reduce dependence on manual labour • Contributions from Tremblant hash a
Slide 15: Brand Portfolio
BRAND PORTFOLIO 15 15
Slide 16: Well-Rounded Brand Portfolio
WELL-ROUNDED BRAND PORTFOLIO Pricing Value Value Value Mainstream Premium Premium Craft Segment Pre-Milled Blends, Whole Flower, Whole Flower, Available / Kief-Infused Blends, Pre-Roll Joints, Pre-Roll Joints, CBD Gummies, Craft Flower Planned Distillate Vapes, Whole Flower Lozenges, Hashish Chocola
Slide 17: Operations
OPERATIONS 17 17
Slide 18: State-of-Art, Three Tier Cultivation Centre
STATE-OF-ART, THREE TIER CULTIVATION CENTRE • Located in Moncton, NB • Strain-specific grow rooms • Micro-climates provide the ability to control all critical factors affecting the growing environment • Phase 4C expansion substantially complete with 20 of 29 rooms in use and expected to result in hi
Slide 19: Premium Quality Cannabis and Hash Production
PREMIUM QUALITY CANNABIS AND HASH PRODUCTION • Located in Lac-Supérieur, Québec (near Mont-Tremblant) • Producer of hang dried, trimmed by hand, artisanal craft cannabis, and premium Afghan-style hash • Anticipate greenhouse capacity expanding from 600kg to 2,400kg of craft flower • Hash production
Slide 20: Dedicated Edibles and Derivatives Facilities
DEDICATED EDIBLES AND DERIVATIVES FACILITIES • Winnipeg-based wholly-owned subsidiary • Designed to meet EU-GMP certification standards1 • Purpose built, highly automated, 51,000 square foot facility with state-of-the- art equipment • Designed to produce nutraceutical-grade cannabis edibles, includi
Slide 21: Investments & Collaborations
INVESTMENTS & COLLABORATIONS 21 21
Slide 22: Investment in Disruptive Technology-Biosynthesis
INVESTMENT IN DISRUPTIVE TECHNOLOGY-BIOSYNTHESIS How it works? BIOSYNTHESIS • 49% ownership of Hyasynth, a pioneer in cannabinoid science A proprietary Biosynthesis can be used cannabinoid to produce cannabinoids • Supply agreement in place manufacturing that are identical to system that can those p
Slide 23: Product Development Collaboration & Strategic Investment
PRODUCT DEVELOPMENT COLLABORATION & STRATEGIC INVESTMENT TRANSACTION HIGHLIGHTS STRATEGIC RATIONALE • ~C$227M strategic investment from subsidiary of BAT for • Accelerates and strengthens Organigram’s R&D and 19.4% equity interest1 in Organigram product development activities, including granting acc
Slide 24: Alignment of Capabilities & Resources
ALIGNMENT OF CAPABILITIES & RESOURCES LEADING CONSUMER GOODS BUSINESS LEADING LICENSED PRODUCER OF HIGH- QUALITY CANNABIS PRODUCTS SOPHISTICATED MANAGEMENT STATE-OF-THE-ART FACILITIES INNOVATIVE PRODUCT PLATFORMS EXPERIENCED MANAGEMENT TEAM DEEP PLANT EXPERTISE WITH DEEP CANNABIS EXPERTISE DEEP CONS
Slide 25: International
INTERNATIONAL 25 25
Slide 26: Key International Supply Arrangements
KEY INTERNATIONAL SUPPLY ARRANGEMENTS • Q3 Fiscal 2022, shipped approximately $9.5 million of dried flower internationally • Previously fulfilled under a multi-year agreement and spot agreements for supply of dried flower to Canndoc Ltd. one of Israel’s largest and most established medical cannabis
Slide 27: Market Outlook
MARKET OUTLOOK 27 27
Slide 28: Solid Projected Growth in Rec Market
SOLID PROJECTED GROWTH IN REC MARKET CANADIAN ADULT-USE RECREATIONAL MARKET – CALENDAR YEARS (EXCLUDES MEDICAL) $ BILLIONS $8.8 $8.5 $7.9 $7.2 $6.4 $5.9 2022 2023 2024 2025 2026 2027 28 Source: The Brightfield Group, Q1 2022
Slide 29: 229% Growth in Retail Stores
229% GROWTH IN RETAIL STORES CANNABIS RETAIL STORES NUMBER OF ONTARIO RETAIL STORE 3,166 IN 10 PROVINCES AUTHORIZATIONS PER MONTH Today* Sept- Dec- 2020 2020 ↑229% 1,508 963 ONTARIO ↑ 1378% 102 20 40 80 100 Jul-20 Apr-22 Quadrupled ONTARIO GREW 1378% | Canada’s 10 provinces grew 229% 5x Source: Comp
Slide 30: Appendix
APPENDIX 30 30
Slide 31: BAT Transaction Summary
BAT TRANSACTION SUMMARY • Subsidiary of BAT subscribed for 58.3M common shares of Organigram, which represented a 19.9% equity interest in March 20211 on a post-transaction basis. • Total proceeds to Organigram in March 2021 of ~C$221 million (the “Investment Proceeds”) Investment • The price per sh
Slide 32: Edison brand
At Edison, we believe in using scientific rigour to grow high-quality flower and to cultivate a deeper appreciation for the cannabis plant. We hunt for the most promising genetics and use our unique science-based growing methods to maximize the best attributes of every plant and product. Limelight 5
Slide 33: Big Bag O' Buds brand
Not all flower is worthy of an ounce, unless you’re Big Bag O’ Buds. We cultivate the best to give you big terps and big buds, all in a big bag. Ice Cream Cake | 28g Pink Cookies | 28g Ultra Sour | 28g 33
Slide 34: SHRED brand
SHRED is here to make your cannabis experience easier. From roll to bowl, SHRED is pre-milled, high-quality whole- flower that’s ready-to-use. You can trust that every pouch is top-shelf, never shake. Our new SHRED X range offers a set of Xtremely flavourful and potent products including 510 distill
Slide 35: SHRED'ems gummies
Introducing the squishy sequel to SHRED – our new infused gummies called SHRED’ems and Shred’ems POP! These gummies are squishy explosions of flavour you can pop right into your mouth. All you have to do is drop in and send it. Root Beer Blast | 4 x 2.5 mg THC Sour Apple Slap | 4 x 2.5 mg THC Crazy
Slide 36: Monjour CBD gummies
Be it physical, mental or spiritual balance you are searching for, Monjour’s range of vegan and sugar-free CBD gummies provide an easy and delicious way to incorporate a moment of wellness in your everyday. Berry Good Day | 30 x 20 mg CBD Sunny Day Citrus | 30 x 20 mg CBD CBN Bedtime Blueberry Lemon
Slide 37: Laurentian and Tremblant brands
Laurentian produces artisanal craft cannabis. Grown in a greenhouse under the sun, we offer a selection of flowers that are hand crafted and cured to perfection. Tremblant’s premium Afghan-style hashish is reminiscent of the 80’s. Black on the outside and brown on the inside, this hashish has spicy
Slide 38: Trailblazer brand
The Trailblazer brand stays true to its name, offering quality cannabis products in ready-to-use, convenient and innovative formats. Be it delicious chocolates, flavourful flower, or portable pre-rolls, we have the cannabis for the moments of brightness to keep you blazing on. Apples & Crème flower
Slide 39: Q3 Fiscal 2022 Select Balance Sheet Metrics
Q3 FISCAL 2022 SELECT BALANCE SHEET METRICS MAY 31, AUGUST 31, Select Balance Sheet Metrics (in $000s) % Change 2022 2021 Cash & short-term investments (excluding restricted cash) 127,356 183,555 (31) % Biological assets & inventories 60,579 48,818 24 % Other current assets 39,820 28,242 41 % Accoun
Slide 40: Q3 Fiscal 2022 Capital Structure
Q3 FISCAL 2022 CAPITAL STRUCTURE MAY 31, AUGUST 31, in $000s 2022 2021 Current and long-term debt 254 310 Shareholders’ equity 511,360 479,805 Total debt and shareholders’ equity 511,614 480,115 in 000s Outstanding common shares 313,690 298,786 Options 7,799 7,797 Warrants 16,944 16,944 Top-up right
Slide 41: An Emerging Cannabis Industry Leader
An Emerging Cannabis Industry Leader NASDAQ (OGI) 41 TSX (OGI) 41