Canopy Growth Corporation · TSX:WEED
Canopy Growth — Q3 FY2024 Earnings Presentation
25 slides from Canopy Growth's earnings presentation, February 2024
Slide 1: Investor Presentation: Results through Q3 Fiscal 2024
INVESTOR PRESENTATION Results through Q3 Fiscal 2024
Slide 2: Disclaimers and Cautionary Statements: Forward-Looking Information (1/3)
DISCLAIMERS AND CAUTIONARY STATEMENTS Forward-Looking Information (1/3) This presentation (including any information which has been or may be supplied in writing or orally in connection herewith or in connection with any further inquiries, this “Presentation”) contains “forward-looking statements” w
Slide 3: Disclaimers and Cautionary Statements: Forward-Looking Information (2/3)
DISCLAIMERS AND CAUTIONARY STATEMENTS Forward-Looking Information (2/3) By their nature, forward-looking statements are subject to inherent risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclus
Slide 4: Disclaimers and Cautionary Statements: Forward-Looking Information (3/3)
DISCLAIMERS AND CAUTIONARY STATEMENTS Forward-Looking Information (3/3) our ability to manage disruptions in credit markets or changes to our credit ratings; the success or timing of completion of ongoing or anticipated capital or maintenance projects; risks related to the integration of acquired bu
Slide 5: Disclaimers and Cautionary Statements: Website References
DISCLAIMERS AND CAUTIONARY STATEMENTS Website References References to information included on, or accessible through, websites do not constitute incorporation by reference of the information contained at or available through such websites, and you should not consider such information to be part of
Slide 6: Non-GAAP Measures
NON-GAAP MEASURES “Adjusted EBITDA” is a non-GAAP measure used by management that is not defined by U.S. GAAP and may not be comparable to similar measures presented by other companies. Management calculates Adjusted EBITDA as the reported net income (loss), adjusted to exclude income tax recovery (
Slide 7: Canopy Growth: Positioned for sustainable cannabis market leadership
canopy Growth: Positioned for sustainable cannabis market leadership Dedication to unleashing the power of Cannabis centered cannabis in key markets Industry-leading brands and products rooted in Brand & Consumer-led consumer preferences Global reach with A $65B CAD market opportunity by 20271 North
Slide 8: Cannabis centered: Delivering the Benefits of Cannabis to Consumers and Patients Globally
Cannabis centered: Delivering the Benefits of Cannabis to consumers and Patients Globally Canopy is dedicated to being a leader in the cannabis sector with disciplined and measured investment in emerging markets Core Canada: International: Storz & Bickel: Leading Investment Medical + Adult-Use Canna
Slide 9: Global Opportunity: A $65B Cannabis Market Opportunity by 2027
Global Opportunity: A $65b CANNABIS MARKET OPPORTUNITY BY 2027 1 CANADA ADULT-USE + MEDICAL CANNABIS INTERNATIONAL CANNABIS MARKET SIZE U.S. ADULT-USE + MEDICAL CANNABIS MARKET SIZE (2023 TO 2027), $CAD BB1 MARKET SIZE (2023 TO 2027), $CAD BB1 (2023 TO 2027), $CAD BB1 1.2 6.3 6.1 1.0 58.1 54.0 5.9 0
Slide 10: Business Transformation: Improvement in Gross Margins and Reduced Cash Burn in Q3 FY2024
BUSINESS TRANSFORMATION: SIGNIFICANT IMPROVEMENT IN GROSS MARGINS AND REDUCED CASH BURN IN Q3 FY2024 Results Achieved Actions Taken Canadian Cannabis Consolidated Gross Margin Adjusted EBITDA • Completed structural transformation to ($CAD’MM) cannabis-focused, asset-light business with 30% 28% dives
Slide 11: Canadian Cannabis: Demand for quality products driving profitable growth
CANADIAN CANNABIS: Demand for quality products driving profitable growth of Canadian cannabis business • Canada adult-use cannabis business-to-business revenue increased 9% year-over-year to $23MM in Q3 FY2024 driven by growth in the large format products of Tweed flower as well as the addition of t
Slide 12: International Medical: Strong Demand for Proven Flower Strains
INTERNATIONAL MEDICAL: STRONG DEMAND FOR PROVEN FLOWER STRAINS EXPECTED TO DRIVE GROWTH • Canopy Growth's Australian medical cannabis business has generated 12 straight quarters of revenue growth. • Consistent shipments of proven Canadian strains Kush Mintz, Tiger Cake and OG Delux, and efforts to i
Slide 13: Storz & Bickel: Strong Demand for New Venty Portable Vaporizer
STORZ & BICKEL ®: STRONG DEMAND FOR NEW VENTY PORTABLE VAPORIZER HELPED DRIVE STRONG SEQUENTIAL REVENUE GROWTH • Demand for the new Venty vaporizer, a device priced at the top of the range for comparable portable devices, has exceeded expectations, and a second production shift was added to help mee
Slide 14: Canopy USA: U.S. THC platform demonstrates asset-light growth capabilities
Canopy USA 1: U.S. THC platform demonstrates asset-light growth capabilities WANA2 - gummies Jetty3 - extracts ACREAGE4 - MSO TERRASCEND5 - MSO An innovative North American Authentic vape experience and Vertical integration from Vertical integration in in PA, NJ, cannabis edibles brand award-winning
Slide 15: FY2024 Business Outlook and Long-Term Outlook
FY2024 BUSINESS OUTLOOK LONG-TERM OUTLOOK Short-Term Focus and Priorities: Long-term Outlook • Deliver positive Adjusted EBITDA1 in all business units exiting • Consolidation and stabilization in Canadian cannabis as FY2024 industry matures • U.S. federal permissibility opening the world’s largest •
Slide 16: Q3 FY2024 Financial Results
Q3 FY2024 FINANCIAL RESULTS
Slide 17: Key Financial Highlights
Q2 FY2024 KEY FINANCIAL HIGHLIGHTS Canopy delivered Consolidated Net Revenue of $79MM in Q3, which is up 8% compared to Q3 of last year, excluding the Q3 FY2023 divestiture of the Canada national retail business. Q3 (As vs. Main drivers of revenue were: (CDN in millions) FY2024 Restated) Q3 FY2023
Slide 18: Revenue Performance by Channel
REVENUE PERFORMANCE BY CHANNEL Q3 FY2023 vs. (in millions of Canadian dollars, unaudited) Q3 FY2024 (As Restated) Q3 FY2023 Canadian Recreational Cannabis Net Revenue Business-to-business1 $23.4 $21.5 9% Business-to-consumer $- $11.0 (100%) $23.4 $32.5 (28%) Canadian Medical Cannabis Net Revenue2 $1
Slide 19: Gross Margin Performance
GROSS MARGIN PERFORMANCE Gross Margin Year-over-Year Change By Drivers of Q3 FY2024 Reported Segment Consolidated Gross Margin Performance Consolidated Canadian Cannabis Gross Margin Gross Margin (+) Improvement in our Canada cannabis segment, primarily 50% 50% 40% 36% 40% attributable to: 30% 30% 2
Slide 20: Free Cash Flow and Debt
FREE CASH FLOW AND DEBT Free Cash Flow1 Total Debt Balance ($CAD’MM) ($CAD’MM) 1,600 - Q3 FY23 Q3 FY24 1,400 1,354 (10) 1,307 1,206 (20) 1,200 1,045 (30) 1,000 (34) (40) 800 681 (50) 612 600 (60) (70) 400 (80) 200 (79) (90) - Q3FY23 Q3 FY24 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Free cash f
Slide 21: Appendix
APPENDIX
Slide 22: Adjusted Gross Margin (Non-GAAP) Reconciliation
ADJUSTED GROSS MARGIN1 (NON-GAAP) RECONCILIATION
Slide 23: Adjusted EBITDA (Non-GAAP) Reconciliation
ADJUSTED EBITDA1 (NON-GAAP) RECONCILIATION
Slide 24: Free Cash Flow (Non-GAAP) Reconciliation
FREE CASH FLOW1 (NON-GAAP) RECONCILIATION
Slide 25: Thank You
THANK YOU 28