Advantage Solutions Inc. · NASDAQ:ADV
Advantage Solutions — Investor Presentation (March 2023)
27 slides from Advantage Solutions's investor presentation, Mar 14, 2023
Slide 1: Advantage Solutions Inc. Investor Presentation | March 2023
Advantage Solutions Inc. Investor Presentation | March 2023 NASDAQ: ADV
Slide 2: Disclaimer: Forward-Looking Statements
Disclaimer Forward-Looking Statements Certain statements in this presentation may be considered forward-looking statements within the meaning of the federal securities laws, including statements regarding the expected future performance of Advantage's business. Forward-looking statements generally r
Slide 3: Investment Highlights
Investment Highlights Market leader in outsourced sales and marketing services industry for CPG brands and retailers Large, growing $10B+ total addressable market, anchored by growing retail food industry, with clear levers to continue increasing market share Diverse range of long-standing blue-chip
Slide 4: Company Snapshot
Brands Retailers Company Snapshot 20 20 20 20 Advantage Solutions’ sales and retailer services help brands and retailers of all sizes get the right products on the shelf, whether physical or digital. Our marketing teams influence shoppers to buy those products, wherever and however they shop. 3,500+
Slide 5: The basics: What Advantage Does
The basics: What Advantage Does Essential partner to leading brands and retailers, helping clients reach consumers every day, in-store and online, through technology-enabled sales and marketing solutions Headquarter Sales Present to retailers the business case to grow client’s product distribution i
Slide 6: Advantage's Two Operating Segments
Advantage’s Two Operating Segments Sales Segment $2.5B (62% of Revenues) Leader in experiential marketing and critical in-store and online sampling programs Agency of record for many of the most recognized brands across the retail, packaged goods, technology, and hospitality industries Revenues gene
Slide 7: Sales Segment
Retail and Sales Analytics Supply Chain Analytics Category Management Space Management Customer Alignment and Partnership New Item Pitches Pricing, Promotion, and Sales Execution Sales Segment Leader in sales and merchandising services with 20%+ market share Primary Sales Segment Services HEADQUARTE
Slide 8: Marketing Segment
Marketing Segment Leading promotions and experiential/event agency in U.S. Planning and Execution Account-Specific Omnichannel Activation National Consumer Promotions Sampling and Demonstrations Festivals and Mobile Tours Logistics and Fulfillment Assisted Selling In-Store, Online, Brand, and Retail
Slide 9: Long-term clients drive recurring revenue streams
Client Description Length of Relationship (years) Service Offering Client Length of Relationship Sales Marketing 25+ 25+ 25+ 25+ 25+ 25+ 20+ 20+ Client Description Length of Relationship (years) Service Offering Client Length of Relationship Sales Marketing 25+ 25+ 25+ 15+ 15+ 10+ 10+ 10+ LONG-TERM
Slide 10: 2022 Organic Revenue Growth
organic Revenue growth 2022 Organic Revenue (1) $ in millions Presented net of foreign exchange impact. Total Advantage Sales Segment Marketing Segment 12% 8% 11% 10% 7% 7% 2% 3% 21% 9% 29% 26% % Y/Y organic growth % Y/Y organic growth % Y/Y organic growth
Slide 11: Pricing Overview
Pricing overview Commission-Based Sales – CPG product inflation generates commission lift to offset associated white collar wage inflation Cost-Plus Arrangements – Immediately pass-through wage inflation in price Sampling / Demonstration – Recoup wage inflation quickly; work and negotiate with retai
Slide 12: Customer Case Study: Maruchan
Customer Case Study: MARUCHAN For 20+ years, Advantage has evolved and grown with Maruchan NATIONAL SALES AGENCY MARKETING AGENCY Maruchan sought to grow sales and become the dominant ramen choice in the U.S. SITUATION ACTION Maruchan was looking to reach new audiences after sales began to plateau.
Slide 13: Proven Track Record Across Economic Cycles
Proven Track Record Across Economic Cycles 2008 – 2010 Revenue CAGR: 9.6% Adjusted EBITDA(1): 11.8% 15.8% 16.1% 17.8% 16.7% 17.5% 17.5% 17.4% 19.1% 19.3% 19.6% 18.2% 12.7% 13.3% 15.4% 14.5% Daymon Acquisition in December 2017 Revenue CAGR: 10.5% Adj. EBITDA CAGR(1): 7.7% Great Recession COVID-19 Pan
Slide 14: 2018-2022 Performance Trends
Note: Please see the appendix for a reconciliation of non-GAAP financial measures to most directly comparable GAAP measures. Totals may not add due to rounding. 13% % margin % margin Y/Y growth Y/Y growth Y/Y growth Y/Y growth $ in millions. $ in millions. Revenues Adjusted EBITDA 8% 2018-2022 Perfo
Slide 15: 2022 Quarterly Financial Results
Total Advantage Sales Segment Marketing Segment Revenues Adjusted EBITDA 2022 Quarterly Financial Results $ in millions. $ in millions. % margin % margin % margin Note: Please see the appendix for a reconciliation of non-GAAP financial measures to most directly comparable GAAP measures. Totals may n
Slide 16: Asset-Light Business
Asset-Light Business Note: Cash Flow Conversion defined as (Adj. EBITDA – Capex) / (Adj. EBITDA); Capital Expenditures to Sales Defined as Capex / LTM Sales; Market Data as of 12/31/2022; CPG comparables include Church & Dwight, Clorox, Coca-Cola Europacific Partners, PepsiCo, J. M. Smucker, and Rey
Slide 17: Free Cash Flow Bridge
Free cash flow bridge ~59% Conversion Rate ~19% Conversion Rate From Dave for internal discussion: May be asked how we can better manage WC and how we’d deleverage to reduce interest expense Strong cash flow characteristics in 2022 expected to improve in 2023
Slide 18: Capital Allocation Priorities
Capital Allocation Priorities Investing in recruiting and retention given challenging labor environment Focus on executing critical activities within core business to improve infrastructure and grow Enhance analytic support for HQ Sales and enhance technology for Retail teams Opportunistically repur
Slide 19: Total Debt and Capitalization Summary
Total Debt of $2.1 billion Leverage at around 4.5x net debt(1) to LTM December Adjusted EBITDA No meaningful maturities for the next 4+ years 75 bps LIBOR cap in place on $650M of First Lien Term Loan through October 2024 Debt Capitalization: Equity capitalization as of December 31, 2022: 319,690,30
Slide 20: Appendix & Non-GAAP Reconciliation
Appendix & Non-GAAP Reconciliation
Slide 21: Advantage CEO Dave Peacock
Advantage CEO Dave Peacock 20 Dave Peacock was named Advantage Solutions CEO in January 2023. His 30-plus-year career in the consumer packaged goods and retail industry includes four years as president and chief operating officer of Schnuck Markets, Inc., and two decades at Anheuser-Busch, where he
Slide 22: Non-GAAP Reconciliation (1/6)
Non-GAAP Reconciliation (1/6) Consolidated Year Ended December 31, 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Total Company (in thousands) (Unaudited)(10) (Unaudited)(10) Net income (loss) $ 5,790 $ (201,052) $ 20,622 $ (34,984) $ (24,442) $ 4,253 $ 35,072 $ (98,
Slide 23: Non-GAAP Reconciliation (2/6)
Non-GAAP Reconciliation (2/6) Three Months Ended Consolidated March 31, June 30, September 30, December 31, 2022 2022 2022 2022 Total Company (in thousands) Net income (loss) $ 17,534 $ 3,676 $ 23,227 $ (1,421,729) Add: Interest expense, net 11,883 28,188 23,557 40,831 Provision for (benefit from) i
Slide 24: Non-GAAP Reconciliation (3/6)
Non-GAAP Reconciliation (3/6) Three Months Ended March 31, June 30, September 30, December 31, 2022 2022 2022 2022 Sales Segment (in thousands) Operating income (loss) $ 18,973 $ 15,177 $ 31,765 $ (1,389,107) Add: Depreciation and amortization 40,969 40,543 39,798 40,075 Impairment of goodwill and i
Slide 25: Non-GAAP Reconciliation (4/6)
Non-GAAP Reconciliation (4/6) Year Ended December 31, 2018 2019 2020 2021 2022 Sales Segment (in thousands) Operating income (loss) $ (1,072,702) $ 127,961 $ 63,305 $ 182,529 $ (1,323,192) Add: Depreciation and amortization 157,098 161,563 171,569 170,076 161,385 Impairment of goodwill and indefinit
Slide 26: Non-GAAP Reconciliation (5/6)
Non-GAAP Reconciliation (5/6) (in millions) December 31, 2022 Current portion of long-term debt $ 14.0 Long-term debt, net of current portion 2,022.8 Less: Debt issuance costs (42.4) Total Debt 2,079.2 Less: Cash and cash equivalents 120.7 Total Net Debt $ 1,958.5
Slide 27: Non-GAAP Reconciliation (6/6)
Non-GAAP Reconciliation (6/6) Note: Numerical figures included in this slide have been subject to rounding adjustments Represents expenses related to (i) equity-based compensation expense associated with grants of Common Series D Units of Karman Topco L.P. (“Topco”) made to one of the equityholders
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