Turning Point Brands, Inc. · NYSE:TPB
Turning Point Brands — Q4 2023 Earnings Presentation
32 slides from Turning Point Brands's earnings presentation, Feb 28, 2024
Slide 1: Turning Point Brands Investor Presentation Q4 2023
Turning Point Brands (NYSE: TPB) INVESTOR PRESENTATION Q4 2023 | NYSE: TPB | 5201 INTERCHANGE WAY, LOUISVILLE KY | TURNINGPOINTBRANDS.COM |
Slide 2: Disclaimer
Disclaimer Turning Point Brands (NYSE: TPB) FORWARD LOOKING STATEMENTS This presentation contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements may generally be identified by the use of words such as "anticipate," "believe," "expect," "inten
Slide 3: Company Overview
Turning Point Brands (NYSE: TPB) Company Overview | NYSE: TPB | 5201 INTERCHANGE WAY, LOUISVILLE KY | TURNINGPOINTBRANDS.COM |
Slide 4: TPB: A Unique Consumer Products Growth Company
Turning Point Brands (NYSE: TPB) TPB: A Unique Consumer Products Growth Company Segment Comprises Majority of Profit Pool and #1 Premium and Overall Benefits from Secular #1 Loose Leaf Chew Rolling Paper Brand in the U.S. Growth Trends in and Canada and #1 in MYO and Leading MST Value Cannabinoid Co
Slide 5: Broad Portfolio of Iconic and Emerging Brands
Turning Point Brands (NYSE: TPB) TPB is a Consumer Products company that markets strong brands BROAD PORTFOLIO OF ICONIC AND EMERGING BRANDS 4 | NYSE: TPB | 5201 INTERCHANGE WAY, LOUISVILLE KY | TURNINGPOINTBRANDS.COM |
Slide 6: TPB Business Segments
Turning Point Brands (NYSE: TPB) TPB Business Segments Zig-Zag Products Stoker’s Products Rolling papers and Make-Your-Own (“MYO”) cigar wraps Loose leaf chewing tobacco and moist snuff tobacco LTM Sales1 $180mm $145mm Key Brands Continue strong growth trajectory in the near-term Capitalize on s
Slide 7: Efficient Manufacturing, Supply & Distribution Model
Turning Point Brands (NYSE: TPB) Efficient Manufacturing, Supply & Distribution Model ASSET LIGHT THIRD-PARTY NATIONAL BEST-IN-CLASS B2C AND B2B APPROACH SOURCING DISTRIBUTION SUPPLY CHAIN CAPABILITIES Asset-Light approach allows A majority of net sales are National distribution coupled Sourcing tea
Slide 8: TPB Strategic Priorities
Turning Point Brands (NYSE: TPB) TPB Strategic Priorities Grow Share of Existing Product Lines, Domestically and Internationally Increase Zig-Zag’s Presence in the Alternative Channel Expand into Adjacent Categories through Innovation and New Partnerships Accelerate Growth via National Distribution
Slide 9: TPB Key Investment Highlights
Turning Point Brands (NYSE: TPB) TPB Key Investment Highlights 1 Large, Leading Brands with Significant Scale 2 Exposure to Growing Cannabinoid Consumption Trends 3 Successful Track Record of New Product Launches and Category Expansions 4 E-Commerce Capabilities 5 Extensive Distribution Network and
Slide 10: Zig Zag Products: Iconic Brand with Leading Market Share
Large, Leading Brands with Significant Scale Turning Point Brands (NYSE: TPB) Zig Zag Products: Iconic Brand with Leading Market Share About Zig-Zag Papers Wraps New Product Launches Embedded into pop culture #1 premium and overall Market leader in MYO cigar Continued roll-out of paper with a storie
Slide 11: Zig Zag Products: Expanding Portfolio and Sales Channels
Large, Leading Brands with Significant Scale Turning Point Brands (NYSE: TPB) Zig Zag Products: Expanding Portfolio and Sales Channels Classic Zig-Zag Products Growth Initiatives New products (paper cones, natural leaf, hemp wraps, cigars, lighters, accessories etc) Re-vamped e-commerce platform (no
Slide 12: Zig Zag Products: Continued Profit and Margin Growth
Large, Leading Brands with Significant Scale Turning Point Brands (NYSE: TPB) Zig Zag Products: Continued Profit and Margin Growth Rejuvenated segment with growth initiatives focused on new product introductions and channel expansions aligned with secular market growth trends Net Sales Adjusted Gros
Slide 13: CLIPPER Distribution Agreement
Successful Track Record of New Product Launches and Category Turning Point Brands (NYSE: TPB) CLIPPER Distribution Agreement Expansions CLIPPER and Zig-Zag are iconic, lifestyle brands with gold standard products and a long, respected history ▪ Entered into agreement with Flamagas for exclusive dist
Slide 14: Poised to Benefit from Cannabinoid Consumption Growth
Exposure to Growing Cannabinoid Consumption Trends Turning Point Brands (NYSE: TPB) Poised to Benefit from Cannabinoid Consumption Growth Large potential Total Addressable Market with significant opportunity for TPB expansion US Legal Cannabis Market1 New Products Hemp Wraps $ in billions Evolving m
Slide 15: Positioned to Capture Growing Cannabinoid Consumption
Exposure to Growing Cannabinoid Consumption Trends Turning Point Brands (NYSE: TPB) Positioned to Capture Growing Cannabinoid Consumption 24 U.S. states and DC have legalized adult-use and 39 states and DC allow for medical cannabis 1H 2021: VA, NM, NY, and CT passed measures to legalize adult WA NH
Slide 16: Legalization Trends
Exposure to Growing Cannabinoid Consumption Trends Turning Point Brands (NYSE: TPB) Legalization Trends % of U.S. adult population living in recreational use states projected to double from 30% to 60% from 2021-2026 60% 58% 60% States with operational Adult-Use Retail % of 21 or older US population
Slide 17: Stoker's Products: Iconic Brand with Sustained Growth
Large, Leading Brands with Significant Scale Turning Point Brands (NYSE: TPB) Stoker’s Products: Iconic Brand with Sustained Growth About Stoker's MST TUBS MST Cans Chew Building brand equity for Introduced a larger tub format Accelerating strength from #1 discount and overall over 80 years. Stoker’
Slide 18: Stoker's Products: Continued MST Distribution Gains
Large, Leading Brands with Significant Scale Turning Point Brands (NYSE: TPB) Stoker’s Products: Continued MST Distribution Gains Long Runway for Growth 81.7 Currently in stores representing 77.4 77.6 78.6 ~67%1 of volume weighted 70.4 distribution 61.6 63.1 57.0 Additional ~30-50k stores targeted f
Slide 19: Stoker's Products: Continued Profit and Margin Growth
Large, Leading Brands with Significant Scale Turning Point Brands (NYSE: TPB) Stoker’s Products: Continued Profit and Margin Growth Smokeless Net Sales and Gross Profit have shown steady growth Net Sales Adjusted Gross Profit $82 $145 $71 $131 $68 $124 $116 $62 $100 $53 2019 2020 2021 2022 2023 2019
Slide 20: Modern Oral Market: Significant Opportunity with FRĒ
Successful Track Record of New Product Launches and Category Turning Point Brands (NYSE: TPB) Modern Oral Market Expansions Significant opportunity with FRĒ in a large and growing market Modern Oral Market Size ▪ The modern oral market is trending towards a >$2 160 100% billion market in 2024 with s
Slide 21: Extensive Distribution Network and Data Driven Sales Organization
Extensive Distribution Network and Data Driven Sales Organization Turning Point Brands (NYSE: TPB) Powerful Distribution Infrastructure North American retail presence that reaches over ~215,000 outlets + B2C online sites National Regional Product B2C B2B Distribution Sales Teams Sales Teams Distribu
Slide 22: Asset-light Business Model Generating Resilient Free Cash Flow
Asset-light Business Model that Generates Resilient Free Cash Flow Turning Point Brands (NYSE: TPB) Building a Capital Efficient Business Model Asset-light business model that generates resilient free cash flow Adjusted EBITDA vs. Capital Expenditures Initiatives: Adjusted EBITDA Capital Expenditure
Slide 23: Conservative and Prudent Financial Policies
Asset-light Business Model that Generates Resilient Free Cash Flow Turning Point Brands (NYSE: TPB) Conservative and Prudent Financial Policies Turning Point has taken a prudent approach to liquidity management 5.7x Historical Leverage Ratio1 Net Debt to Adjusted EBITDA 3.1x 3.1x 2.8x 2.7x 2.6x 2015
Slide 24: Expertise to Succeed in Dynamic Regulatory Environments
Expertise to Succeed in Dynamic Regulatory Environments Turning Point Brands (NYSE: TPB) Track Record of Success Navigating an Evolving Regulatory Backdrop TPB has extensive experience managing regulatory regime changes and continues to make investments that enhance its regulatory position among com
Slide 25: Experienced Management Team
Experienced Management Team Turning Point Brands (NYSE: TPB) Highly Experienced Senior Leadership Team GRAHAM A. LOUIE BRITTANI N. SUMMER PURDY REFORMINA CUSHMAN FREIN Chief Executive Chief Financial General Counsel & Chief Revenue Officer Officer Secretary Officer Joined TPB in Joined TPB in Joined
Slide 26: Financial Update
Turning Point Brands (NYSE: TPB) Financial Update | NYSE: TPB | 5201 INTERCHANGE WAY, LOUISVILLE KY | TURNINGPOINTBRANDS.COM |
Slide 27: Recent Business Performance
Turning Point Brands (NYSE: TPB) Recent Business Performance Strong outlook in our Zig-Zag and Stoker’s businesses • Q4 2023 Financial Results: Net Sales of $97.1 million (-6.1%) and Adjusted EBITDA1 of $24.8 million (+7.5% YoY) Recent • Zig-Zag Products Q4 sales were down 3% yoy but stable excludin
Slide 28: Expanding Addressable Markets
Turning Point Brands (NYSE: TPB) Expanding Addressable Markets Extending into large, tangential addressable markets provides runway for growth End Market Market Size1 Opportunity Alternative Channel ~$200mm Increase share for Zig-Zag papers (currently (Headshops and single-digit/low double-digit %)
Slide 29: Appendix
Turning Point Brands (NYSE: TPB) Appendix | NYSE: TPB | 5201 INTERCHANGE WAY, LOUISVILLE KY | TURNINGPOINTBRANDS.COM |
Slide 30: Historical Financials
Turning Point Brands (NYSE: TPB) Historical Financials Net Sales Adjusted EBITDA1 $445 $108 $405 $415 $405 $362 $98 $95 $90 $67 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 % Growth 8.8% 11.9% 10.0% -6.8% -2.3% % Margin 18.6% 22.3% 24.3% 23.5% 23.5% Capital Expenditures Adjusted EBITDA1 Less Ca
Slide 31: EBITDA Adjustment Detail
Turning Point Brands (NYSE: TPB) EBITDA Adjustment Detail Reconciliation of GAAP Net Income to Adjusted EBITDA ($ in millions) 2019 2020 2021 2022 2023 Q4 23 Net income attributable to Turning Point Brands, Inc. $13.8 $38.2 $52.1 $11.6 $38.5 $10.1 Add: Interest expense, net $17.3 $13.5 $20.5 $19.5 $
Slide 32: Thank You
Turning Point Brands (NYSE: TPB) THANK YOU | NYSE: TPB | 5201 INTERCHANGE WAY, LOUISVILLE KY | TURNINGPOINTBRANDS.COM |