Hostess Brands — Q1 2023 Earnings Presentation
20 slides from Hostess Brands's earnings presentation, May 9, 2023
Slide 1: Investor Presentation
__________________________________ Investor Presentation May 9, 2023
Slide 2: Disclaimer
Disclaimer 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
Slide 3: Key Takeaways
Key Takeaways Net revenue increased 4.0%, up 14.1% on 2-year CAGR as we lapped strong year-ago growth Hostess Brands’ point-of-sale growth of 0.5% in Sweet Baked Goods and 10.1% Voortman® branded growth in Cookies during the first quarter* Hostess Brands delivered another quarter of category-l
Slide 4: Consolidated Financial Results
Consolidated Financial Results Delivering Continued Net Revenue and EBITDA Growth Three Months Ended March 31, ($ in millions, except per share data) 2023 2022 % Change Net Revenue $345.4 332.1 4.0 % Adjusted Gross Profit $121.1 $115.8 4.6% Adjusted Gross Margin 35.1% 34.9% 20 bps Adjusted Operating
Slide 5: Q1 Financial Highlights
Q1 Financial Highlights Continued Profitable Growth Momentum Net Revenue Adjusted EBITDA Adjusted EPS (in millions) (in millions) YoY +35.0% +3.7% +25.1% +4.0% +23.8% +3.9% Growth $332.1 $345.4 $80 .4 $0 .28 $77.4 $0 .27 $265.4 $62.5 $0 .20 +14.1% +13.4% +18.3% 2 Year CAGR 2 Year CAGR 2 Year CAGR Q1
Slide 6: Revenue Growth Driven by Hostess and Voortman
Revenue Growth Driven by Hostess® and Voortman® 4% Organic Growth Across our Sweet Baked Goods and Cookies Portfolio Three Months Ended March 31, ($ in millions) 20 23 20 22 % C hange Sweet Baked Goods $308.4 $296.4 4.0% Cookies $37.0 $35.7 3.6% Total Net Revenue $345.4 $332.1 4.0% 6
Slide 7: Positive Price/Mix Driving Revenue Growth
Positive Price/Mix Driving Revenue Growth Q1 ‘23 Performance Reflects Impacts of Pricing Actions to Offset Inflation and Lapping Strong Q1 ’22 which Delivered 25.1% Growth (14.8% from Volume and 10.3% from Price/mix) 4.0% Organic Net Revenue Growth 14.6% (10.6)% 7
Slide 8: Continued POS Dollar Growth
Continued POS Dollar Growth Outstanding Execution Driving Growth in the Sweet Baked Goods and Cookie Categories 2 Year Stacked Point-of-Sale Growth Hostess POS (in millions) Growth Cookies Sweet Baked Cookies Goods 29.0% 10.1% 39.1% growth growth growth 0.5% SBG 24.7% growth 25.2% growth growth Q1 2
Slide 9: Single-Serve and Multi-Pack Point-of-Sale Trends
Single-Serve and Multi-Pack Point-of-Sale Trends Solid Growth in Immediate Consumption Occasions Single-Serve Point-of-Sale Q1 2022 22.2% Single-serve 2-year Stacked Growth Q1 2023 4.9% 27.1% Multi-Pack Point-of-Sale Q1 2022 26.7% Multi-pack 2-year Stacked Growth Q1 2023 (3.0%) 26.7% 23.7% 9 Source:
Slide 10: Consistent Track Record of Point-of-Sale Growth
Consistent Track Record of Point-of-Sale Growth Double Digit CAGR in the SBG Category Over the Last Five Years Point-of-Sale Market Share (52 weeks, in millions) (52 weeks) $1,807 21.7% $1,641 20.8% $1,384 19.6% 19.9% $1,292 18.9% $1,206 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 10 Source: N
Slide 11: Executing on Key Capital Allocation Priorities
Executing on Key Capital Allocation Priorities Flexibility to Invest in Growth and Generate Shareholder Value Q1 Progress Against Priorities 1 Support Core Growth $24.4 million capital expenditures in Q1 2023, including investment in new bakery to support continued growth 4.0x** 2 Targeted M&A 3.3x
Slide 12: Reaffirm 2023 Outlook
Reaffirm 2023 Outlook Delivering Above Algorithm Profitability 2023 Guidance ($ in millions, except EPS) Net Revenue Growth 4% - 6% $315 – $325 million Adjusted EBITDA (7% - 10% growth) $1.08 - $1.13 Adjusted EPS (10% - 15% growth) $150 - $170 million Capital Expenditures (Including Capacity Expansi
Slide 13: Attractive Long-Term Growth
Attractive Long-Term Growth Delivering Strong Growth While Maintaining our Industry-leading Margins Long-term Growth Algorithm Mid-Single Digit Organic Revenue 5-7% 7-9% Growth EBITDA Growth EPS Growth Delivering Top-Tier Shareholder Returns See "Forward Looking Statements." EBITDA is a non-GAAP fin
Slide 14: Our Focused Strategy is Driving Consistent Profitable Growth
Our Focused Strategy is Driving Consistent Profitable Growth Targeted Focus on Growing Snacking Occasions Unlocking Investing in Data Potential of and Capabilities Talented for Growth Team Disciplined Execution and Cash Deployment 14
Slide 15: Premier Snacking Pure-Play
Premier Snacking Pure-Play Snacking ~100% of Total Retail Sales 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Source: NielsenIQ Total Snacking as percentage of All Departments Cal Yr 2022 W/E 12/31/22 15
Slide 16: Our Portfolio is Fully Aligned with Targeted Occasions
Our Portfolio is Fully Aligned with Targeted Occasions $65B Market Opportunity Morning Afternoon Immediate Afternoon Lunchbox Sweet Start Reward Consumption Sharing Market Size Market Size Market Size Market Size Market Size $6.7B $7.2B $15.1B $9.8B $26.1B Source: McKinsey Analytics with Nielsen POS
Slide 17: Innovation Pipeline Driving Sustainable Growth
Innovation Pipeline Driving Sustainable Growth New Products Launched in 2023 Source: Nielsen, Total Nielsen Universe for the Company within the U.S. SBG Category, 52 weeks ending 4/1/23 17
Slide 18: Innovation Pipeline Driving Sustainable Growth
Innovation Pipeline Driving Sustainable Growth New Products Launched in 2023 “Zero Sugar” re-branding Added easy open features 18
Slide 19: Appendix
Appendix 19
Slide 20: Non-GAAP Reconciliations
Non-GAAP Reconciliations Three Months Ended March 31, 2023 Three Months Ended March 31, 2022 Gross Gross Operating Net Net Income Diluted Gross Gross Operating Net Net Income Diluted Profit Margin Income Income Margin EPS Profit Margin Income Income Margin EPS GAAP results $ 120.7 34.9% $ 62.1 $ 38.