Hostess Brands — Q2 2021 Earnings Presentation
20 slides from Hostess Brands's earnings presentation, Aug 4, 2021
Slide 1: Investor Presentation August 4, 2021
Investor Presentation August 4, 2021
Slide 2: Forward Looking Statements
2 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 an
Slide 3: Raising Full Year Revenue and Earnings Outlook
3 Raising Full Year Revenue and Earnings Outlook Our Mission is to Inspire Moments of Joy by Putting our into Everything We Do! Delivered 10.8% adjusted net revenue with broad-based Hostess® branded growth Outstanding retail performance driving continued market share gains and double-digit point-of-
Slide 4: Q2 Adjusted Revenue and Adjusted EBITDA Growth
$65.1 $68.4 Q2 2020 Q2 2021 4 Driven by Hostess® Brand Growth $263.0 $291.5 Q2 2020 Q2 2021 (in millions) 10.8% growth 5.1% growth Results are for three months ended June 30, 2021 and 2020. Adjusted Revenue and Adjusted EBITDA are non-GAAP financial measures. See “Use of Non-GAAP Financial Measures”
Slide 5: Net Revenue by Segment: Sweet Baked Goods and Cookies
5 Sweet Baked Goods $262.5 $232.6 $29.9 12.9% $500.2 $459.0 $41.2 9.0% Cookies 29.0 30.4 (1.4) (4.6)% 56.7 47.5 9.2 19.4% Total Adjusted Net Revenue $291.5 $263.0 $28.5 10.8% $556.9 $506.5 $50.4 10.0% Sweet Baked Goods net revenue growth driven by strong Hostess® branded sales, most notably in the C
Slide 6: Balanced Single-Serve and Multi-Pack Growth Leading the SBG Category
2.4% -4.0% 6 Multi-Pack Point-of-Sale Single-Serve Point-of-Sale Source: Nielsen, Total Nielsen Universe for the Company within the SBG Category. Q2 2021 – 13 weeks ended 7/3/21 and prior year comparable periods Q2 2020 Q2 2021 18.8% 5.4% 19.4% 10.5% Q2 2020 Q2 2021 Mobility improving; Hostess® lead
Slide 7: Growth in SBG Breakfast Sub-Category Driven by Innovation and Retail Execution
7 Growth in $3.6 Billion SBG Breakfast Sub-Category Driven by Innovation and Retail Execution 34.5% 11.9% 23.0% 4.5% -9.6% 1.4% Breakfast Pastries Doughnut Total Breakfast Hostess SBG Category POS Dollars Growth QTD vs Prior Year Source: Nielsen, Total Nielsen Universe for the Company within the SBG
Slide 8: POS Growth Ahead of the Category Driven by Share Gains
8 POS Growth Ahead of the Category Driven by Share Gains in Convenience, Grocery and Dollar Channels $0 $50 $100 $150 $200 Convenience Grocery Mass Dollar Club Drug 13 WE 7/4/2020 13 WE 7/3/2021 Market Share 29.9% 15.7% 13.6% 32.8% 23.9% 56.4% Market Share Change (bps) 324 181 (213) 596 118 813 POS
Slide 9: Growing Point-of-Sale and Expanding Market Share in Sweet Baked Goods
9 Growing Point-of-Sale and Expanding Market Share in the Sweet Baked Goods Category 2017 2018 2019 18.4% 19.1% 19.5% 2017 2018 2019 $1,117 $1,226 $1,317 17.7% 2020 $1,168 2020 Source: Nielsen, Total Nielsen Universe for the Company within the SBG Category. Point of Sale and Market Share, 52 weeks e
Slide 10: Market Share Increased to All-Time High in Convenience
23% 24% 25% 26% 27% 28% 29% 30% $460 $500 $540 $580 $620 2018 2019 2020 2021 POS Market Share 10 Market Share Increased to All-Time High Convenience POS and Market Share Source: Nielsen, Total Nielsen Universe for the Company in the Convenience channel within the SBG Category for the 52 weeks ended
Slide 11: Multi-pronged Approach to Innovation Pipeline
11 Multi-pronged Approach to Innovation Pipeline Establishing New Platforms for Continued Incremental Growth Core Development Building on Iconic Brand Favorites with Flavor Extensions Expanding Breakfast Accelerating Growth within Fastest Growing Subsegment of Category Limited-Time-Offers Keeping Pr
Slide 12: Digital First Mindset Enabling Rapid Learning & Continuous Improvement
Digital First Mindset Enabling Rapid Learning & Continuous Improvement Advertising response rates exceeding CPG benchmarks eCommerce advertising driving incremental sales Increasing Social Engagement 12
Slide 13: Successfully Executing Against Building Blocks for Accretive Growth
13 Successfully Executing Against Building Blocks for Accretive Growth Increase Depth of Distribution Increase Brand Awareness through Advertising & Marketing Leverage the Hostess-proven Merchandising Model ACV Expand Breadth of Distribution Across Key Channels Drive Incremental Growth Through Innov
Slide 14: Provides Flexibility to Invest in Growth and Generate Shareholder Value
14 Provides Flexibility to Invest in Growth and Generate Shareholder Value Disciplined Approach to Cash Management Reinvest in business for future growth Deleverage the balance sheet Strategic acquisitions Return capital to shareholders through securities repurchases ($25M executed through July ’21)
Slide 15: Double-Digit YTD Net Revenue and Earnings Growth
15 Double-Digit YTD 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 for an explanation of all no
Slide 16: 2021 Outlook
16 Adjusted Net Revenue, 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. The Company’s leverage ratio is net debt (total long-term debt less cash) divided by adjusted EB
Slide 17: Delivering Industry-Leading Total Shareholder Returns
Organic Revenue Growth Top Quartile of Peer Group1 17 Objective: Long-term leading performance in our peer group Delivering Industry-Leading Total Shareholder Returns Adjusted EBITDA Margin Top Quartile of Peer Group1 Free Cash Flow Conversion2 Top Quartile of Peer Group1 1. Peer group defined as S&
Slide 18: Appendix
18 Appendix
Slide 19: Q2 Non-GAAP Reconciliation
19 1. Acquisition, disposal and integration operating costs include $1.6 million of selling expense and $3.9 million of general and administrative expense. 2. COVID-19 operating costs are included in general and administrative expenses on the consolidated statement of operations. Total COVID-19 non-
Slide 20: Year-to-Date Non-GAAP Reconciliation
20 1. Acquisition, disposal and integration operating costs include $0.8 million of selling expense, $7.2 million of general and administrative expenses and $4.3 million of business combination transaction costs. 2. COVID-19 operating costs are included in general and administrative expenses on the