Advantage Solutions Inc. · NASDAQ:ADV
Advantage Solutions — Investor Presentation (September 2022)
26 slides from Advantage Solutions's investor presentation, Sep 26, 2022
Slide 1: Advantage Solutions Inc. Investor Presentation
Advantage Solutions Inc. Investor Presentation | September 2022 NASDAQ: ADV
Slide 2: Forward-Looking Statements
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 the business of Advantage Solutions Inc. (“Advantage”). Forward-looking
Slide 3: Investment Highlights
Investment Highlights Market leader in outsourced sales and marketing services industry for CPG brands and retailers Large addressable market with tangible, material growth levers Diverse range of long-standing blue-chip customers with excellent revenue retention rate Multiple sticky revenue streams
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 $2.3B (64% 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 gener
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 HEADQUARTER
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 Retaile
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: 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 11: Pricing: Working to offset inflation
Pricing: Working to offset inflation Sales Segment Marketing Segment Able to pass through price immediately on commission-based sales and cost-plus arrangements Long-term nature of merchandising contracts often results in temporary absorption of heightened costs and associated lag in implementation
Slide 12: Strategic and financially attractive acquisition program
Strategic and financially attractive acquisition program Disciplined approach to M&A delivers consistent and attractive returns Philosophy Number of Acquisitions Per Year Overview of Select Recent Acquisitions Invest where there are unmet client needs and there are… Industry tailwinds Opportunities
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: 10.4% Adj. EBITDA CAGR(1): 9.6% Great Recession COVID-19 Pan
Slide 14: 2021 trends rebounded nicely
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. Sales Segment Marketing Segment 5% % margin % margin Y/Y growth Y/Y growth Y/Y growth Y/Y growth $ in millions. $ in millions. Revenue Adju
Slide 15: 2022 Q2 results in line with expectations despite headwinds
15% (11)% 8% 31% (20)% 13% 2022 Q2 results in line with expectations despite headwinds Revenue Adjusted EBITDA Sales Segment Marketing Segment Total Advantage Note: Please see the appendix for a reconciliation of non-GAAP financial measures to most directly comparable GAAP measures. Totals may not a
Slide 16: Normalized Free cash flow bridge
Normalized Free cash flow bridge On a normalized basis(1), Advantage expects to drive 35-40% Adjusted EBITDA conversion ~20-25% of Adj. EBITDA ~35-40% of Adj. EBITDA (1) (1) Normalization takes into account non-recurring deferred payroll tax related to CARES Act, sampling/demo rebuild and higher tha
Slide 17: Capital Allocation Priorities
Capital Allocation Priorities Investing in recruiting and retention Focusing on innovation to scale and drive growth via adjacent and complementary services, especially in digital Renovating infrastructure, systems and tools to drive productivity Disciplined approach to M&A to further industry leade
Slide 18: Total Debt and Capitalization Summary
Total Debt of $2.1 billion(1) Leverage at around 4.1x net debt(1) to LTM June Adjusted EBITDA No meaningful maturities for the next 4+ years Debt Capitalization: Equity capitalization @ June 30, 2022: 318,465,749 Class A Common shares outstanding 1,610,014 Treasury shares outstanding 18,578,321 Warr
Slide 19: Appendix & Non-GAAP Reconciliation
Appendix & Non-GAAP Reconciliation
Slide 20: Our Leadership Team
Our Leadership Team Highly skilled management team with extensive industry experience and expertise 19 Brian G. Stevens Chief Financial Officer, Chief Operating Officer 23 years of experience 14 years with Advantage Dean Kaye Chief Financial Officer, North America 29 years of experience 18 years wit
Slide 21: Non-GAAP Reconciliation (1/6)
Non-GAAP Reconciliation (1/6) Consolidated Three Months Ended June 30, 2022 2021 Total Company (in thousands) Net income (loss) $ 3,676 $ 5,754 Add: Interest expense, net 28,188 37,189 Provision for income taxes 1,316 6,563 Depreciation and amortization 58,444 62,674 Equity based compensation of Top
Slide 22: Non-GAAP Reconciliation (2/6)
Non-GAAP Reconciliation (2/6) Three Months Ended June 30, 2022 2021 Sales Segment (in thousands) Operating income $ 15,177 $ 44,673 Add: Depreciation and amortization 40,543 44,710 Equity based compensation of Topco(1) (2,032) (678) Stock based compensation expense(2) 9,171 4,730 Fair value adjustme
Slide 23: Non-GAAP Reconciliation (3/6)
Non-GAAP Reconciliation (3/6) Consolidated Year Ended December 31, 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 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 $ (98,984)
Slide 24: Non-GAAP Reconciliation (4/6)
Non-GAAP Reconciliation (4/6) Year Ended December 31, 2017 2018 2019 2020 2021 Sales Segment (in thousands) Operating income $ 172,171 $ (1,072,702) $ 127,961 $ 63,305 $ 182,529 Add: Depreciation and amortization 139,634 157,098 161,563 171,569 170,076 Impairment of goodwill and indefinite-lived ass
Slide 25: Non-GAAP Reconciliation (5/6)
Non-GAAP Reconciliation (5/6) (in millions) June 30, 2022 Current portion of long-term debt $ 59.8 Long-term debt, net of current portion 2,026.0 Less: Debt issuance costs (45.4) Total Debt 2,131.2 Less: Cash and cash equivalents 115.8 Total Net Debt (11) $ 2,015.4
Slide 26: Non-GAAP Reconciliation (6/6)
Non-GAAP Reconciliation (6/6) Note: Numerical figures included in this slide have been subject to rounding adjustments Represents equity-based compensation of Karman Topco L.P. Represents non-cash compensation expense related to issuance of performance restricted stock units, restricted stock units,
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