Organigram Global Inc. · TSX:OGI
Organigram Global — Q2 2021 Earnings Presentation
24 slides from Organigram Global's earnings presentation, Apr 13, 2021
Slide 1: Q2 Fiscal 2021 Results
ORGANIGRAM Q2 FISCAL 2021 RESULTS APRIL 13, 2021 NASDAQ (OGI) TSX (OGI)
Slide 2: Cautionary Statement
CAUTIONARY STATEMENT This document is current as of April 13, 2021, except where otherwise stated. The Although the Company believes that the assumptions and factors used in preparing the forward- information contained in this presentation is provided by Organigram (“OGI” or the looking information
Slide 3: Organigram at a Glance
ORGANIGRAM AT A GLANCE LEADING LICENSED 3 LEVEL INDOOR DEDICATED EDIBLES CANADIAN INNOVATION INTERNATIONAL PRODUCER CULTIVATION AND DERIVATIVE PROVINCES Product Development Currently serving Leading licensed TECHNOLOGY FACILITIES National sales and Collaboration with BAT1 Israeli & Australian produc
Slide 4: Recent Significant Developments
RECENT SIGNIFICANT DEVELOPMENTS Product Development Collaboration Acquisition of Cannabis Soft with BAT and Strategic Investment Chew/Confectionary Company Announced March 11, 2021, Organigram forms Product Announced April 6, 2021, OGI acquired The Development Collaboration with BAT – includes strat
Slide 5: Product Development Collaboration & Strategic Investment
PRODUCT DEVELOPMENT COLLABORATION & STRATEGIC INVESTMENT TRANSACTION HIGHLIGHTS STRATEGIC RATIONALE • ~C$221M strategic investment ü Accelerates and strengthens Organigram’s R&D and from subsidiary of BAT for 19.9% product development activities, including granting access equity interest in OGI to c
Slide 6: Alignment of Capabilities & Resources
ALIGNMENT OF CAPABILITIES & RESOURCES LEADING LICENSED LEADING CONSUMER GOODS PRODUCER OF HIGH-QUALITY BUSINESS CANNABIS PRODUCTS SOPHISTICATED STATE-OF-THE-ART FACILITIES MANAGEMENT EXPERIENCED MANAGEMENT INNOVATIVE PRODUCT TEAM WITH DEEP CANNABIS PLATFORMS EXPERTISE DEEP PLANT EXPERTISE TRACK RECO
Slide 7: Product Development Collaboration
PRODUCT DEVELOPMENT COLLABORATION CENTER OF EXCELLENCE (“CoE”) • Located at Organigram’s Moncton facility • Focused on developing the next generation of cannabis products with an initial focus on CBD • Both companies to contribute scientists, researchers, and product developers to the CoE • CoE to b
Slide 8: Dedicated Edibles and Derivative Facilities
DEDICATED EDIBLES AND DERIVATIVE FACILITIES WINNIPEG, MB: • Wholly-owned subsidiary: The Edibles and Infusions Corporation (EIC) • 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 nutra
Slide 9: Dedicated Edibles and Derivative Facility
DEDICATED EDIBLES AND DERIVATIVE FACILITY MONCTON NB: • Designed under EU-GMP certification standards1 • 56,000 square feet for edibles and derivative products and additional extraction capacity (CO 2 and plans for hydrocarbon) • Includes expanded vaporizer pen filling and automated packaging, disso
Slide 10: OGI Adult-Use Recreational Brands
OGI ADULT-USE RECREATIONAL BRANDS SHRED EDISON #1 MOST MOST-SEARCHED brands on among top 12 SEARCHED for the Ontario Cannabis Store website MOST SEARCHED last 5 months Nov ‘20 & Nov/Dec‘20 & Jan/Feb ‘21 Jan/Feb/Mar‘21 NEW Pricing Value Value Value Mainstream Mainstream Segment Whole Flower, Whole Fl
Slide 11: Product Portfolio Revitalization
PRODUCT PORTFOLIO REVITALIZATION Q4 F2020 Q1 F2021 Q2 F2021 Q3 F2021 FLOWER FLOWER FLOWER Limited Time DISSOLVABLE 1.0 | 2.0 SHRED Jar of J’s FLOWER Indi Expect to launch Buds 28g Edison new SHRED Offers RE:Mix Edison 3.5g 14 Prerolls Skyway Kush more new high launch in high Pre-shredded Dissolvable
Slide 12: Strong Balance Sheet and Liquidity
STRONG BALANCE SHEET AND LIQUIDITY • On April 1, 2021, repaid all outstanding balances ($58.5 million) under the Credit Agreement with BMO and a syndicate of lenders • Annual interest savings of $2.7 million1 • The Company has cash and short-term investments of $232 million as of April 13, 2021 • Cu
Slide 13: Q3 Fiscal 2021 Outlook
Q3 FISCAL 2021 OUTLOOK • Net revenue expected to be higher in Q3 F2021 vs Q2 F2021 on improved demand fulfillment subject to the risk of: • Positive COVID-19 cases shutting down the facility and requiring staff to isolate • Potential suppressed demand due to COVID-19 restrictions for cannabis retail
Slide 14: Significant Potential Upside for Gross Margins
SIGNIFICANT POTENTIAL UPSIDE FOR GROSS MARGINS Potential to further improve adjusted gross margins over time: • Expect to gain economies of scale and efficiencies as cultivation scales up • Potential for greater contribution from higher margin products/formats: o New dried flower strains under Ediso
Slide 15: Canadian Retail Network Growing
CANADIAN RETAIL NETWORK GROWING CANNABIS RETAIL STORES IN 10 NUMBER OF ONTARIO RETAIL STORE PROVINCES AUTHORIZATIONS PER MONTH 1,794 87% Sept- Dec- Today* 2020 2020 963 468% ONTARIO 102 ONTARIO 579 20 40 80 120 Jul-2020 Apr-2021 Quadrupled ONTARIO GREW 468% | Canada’s 10 provinces grew 87% Six times
Slide 16: Canadian Adult-Use Rec Market Growth
CANADIAN ADULT-USE REC MARKET GROWTH ANNUALIZED RUN RATE • Canadian adult-use recreational sales $3.7B appear to have rebounded from Jan/Feb Ontario 2021 in March 2021 to new all time high 556 of $305M or $3.7B annualized for strong $2.2B year-over-year growth of 68% • The Brightfield Group estimate
Slide 17: Appendix
APPENDIX
Slide 18: BAT Transaction Summary
BAT TRANSACTION SUMMARY • Subsidiary of BAT subscribed for 58.3M common shares of OGI, which represents a 19.9% equity interest1 on a post-transaction basis, at a price of C$3.792 per share Investment • Total proceeds to OGI of ~C$221 million (the “Investment Proceeds”) • The price per share is base
Slide 19: A high-quality cannabis brand
A high-quality cannabis brand. Limelight 3.5g | 7g | 15 g | Prerolls Bytes Milk Chocolate Remix Powder CBD:THC Pax Distillate 0.5 g Feather Distillate 0.3 g 18
Slide 20: A cannabis brand designed in celebration of progress
A cannabis brand designed in celebration of progress and the road less travelled. Freeze 28 g Torch Distillate 0.5 g | 1 g Buds 3.5g | 7g | 15 g | Prerolls Snax Mint Chocolate 19
Slide 21: Designed to break down the barriers to purchasing
Designed to break down the barriers to purchasing in the legal realm: price and convenience. Shred 7g | 15 g Shred Jar of J’s | 14 x 0.5 g 20
Slide 22: Created for savvy cannabis lovers
Created for savvy Quality flower, cannabis lovers looking high THC and to explore the dank and classic buds in dreamy world of Indicas. one big bag. Indi | 3.5g Big Bag O’ Buds | 28g 21
Slide 23: Q2 Fiscal 2021 Key Financial Metrics
Q2 FISCAL 2021 KEY FINANCIAL METRICS Select Key Financial Metrics (in $000s) unless otherwise indicated Q2 2021 Q2 2020 % Change Gross revenue 19,292 27,309 -29% Excise taxes (4,649) (4,088) 14% Net revenue 14,643 23,221 -37% Cost of sales 31,146 15,811 97% Gross margin before fair value changes to
Slide 24: Q2 Fiscal 2021 Key Balance Sheet and Share Metrics
Q2 FISCAL 2021 KEY BALANCE SHEET and SHARE METRICS Select Balance Sheet Metrics (in $000s) 28-Feb-21 31-Aug-20 % Change Cash & short-term investments 71,123 74,728 -5% Biological assets & inventories 43,374 71,759 -40% Other current assets 17,757 23,717 -25% Accounts payable & accrued liabilities 13