Utz Brands Inc · NYSE:UTZ
Utz Brands — Collier Creek Holdings — SPAC Merger (June 2020)
50 slides from Utz Brands's SPAC merger presentation, Jun 24, 2020
Slide 1: Analyst Day Presentation June 2020
℠ Analyst Day Presentation June 2020
Slide 2: Disclaimer and Forward-Looking Statements
℠ This investor presentation (“Investor Presentation”) is for informational purposes only to assist interested parties in makin g t heir own evaluation with respect to the proposed business combination (the “Business Combination”) between Collier Creek (“CCH”) and Utz Quality Foods, LLC (“Utz” or th
Slide 3: Today's Participants
℠ Today’s Participants Collier Creek Holdings Utz Current New Utz • Sr. Managing Director, CC Capital Jason Giordano Co - Founder Director • Founder and Sr. Managing Director, CC Capital Chinh Chu Co - Founder Special Advisor • Former Chairman, Pinnacle Foods Roger Deromedi Co - Founder Chairman Car
Slide 4: Today's Agenda
℠ Today’s Agenda Business Overview II Introduction & Investment Thesis I Value Creation Strategy III Financial Overview IV 2
Slide 5: I. Introduction & Investment Thesis
I. Introduction & Investment Thesis
Slide 6: Utz is a Perfect Business Combination for Collier Creek
℠ Utz is a Perfect Business Combination for Collier Creek 1). Source: Management estimates and internal data. Represents Adjusted Net Sales growth (before changes to independent DSD o per ator discounts) for 2017 - 2019 and Net Sales prior to 2017. Please see page 40 for reconciliation of Adjusted N
Slide 7: Why CCH is So Excited About This Opportunity
℠ Why CCH is So Excited About This Opportunity ▪ $26 billion in U.S. Retail Sales with 4.3% CAGR Over Last Five Years (1) ▪ Resilient to Economic Downturns (4% CAGR from 2007 - 2010) (2) with Attractive Defensive Characteristics Attractive and Growing Salty Snack Category ▪ Iconic Brands with Strong
Slide 8: Transaction Overview
℠ Transaction Overview ▪ Enterprise Value of $1,561 million (1) (11.6x 2021E PF Adj. EBITDA) (2) ▪ Pro forma 2020E Net Debt / PF Adj. EBITDA of 3.1x (all First - Lien) ▪ Existing Utz owners to be paid $60 million in cash consideration and issued 57.8 million rollover shares at close (3) ▪ Company to
Slide 9: Operating Benchmarking to Peers
℠ 24.8% 21.9% 21.3% 20.7% 20.3% 19.6% 19.4% 18.1% 16.6% 13.6% 10.7% 10.2% 9.0% HSY TWNK GIS CPB MDLZ BRBR PEP SMPL K Utz FLO HAIN JJSF 16.3% 14.9% 11.5% 4.9% 4.4% 4.4% 2.8% 2.3% 1.7% 1.6% 1.5% 1.3% HAIN SMPL Utz FLO TWNK PEP MDLZ HSY K BRBR CPB GIS JJSF 12.0% 11.3% 3.5% 2.5% 2.3% 2.1% 1.4% 1.3% 0.7%
Slide 10: Valuation Benchmarking to Peers
℠ 31.5x 25.9x 23.8x 22.7x 21.2x 20.8x 20.3x 18.9x 17.8x 17.2x 17.0x 15.4x 15.3x JJSF-US SMPL HAIN HSY PEP FLO BRBR MDLZ UTZ TWNK-US CPB GIS K 16.8x 16.3x 15.6x 14.7x 13.7x 13.4x 13.1x 13.1x 13.1x 12.8x 12.7x 11.6x 10.7x JJSF-US HSY MDLZ PEP HAIN BRBR K GIS FLO CPB SMPL UTZ TWNK-US 17.9x 17.7x 16.8x
Slide 11: Pinnacle Foods: Case Study
℠ Stock Appreciation CAGR from PF IPO to Sale Pinnacle Foods 24.1% S&P 500 10.3 Consumer Staples 6.0 80 110 140 170 200 230 260 290 320 350 Mar-13 Nov-13 Jun-14 Feb-15 Sep-15 Apr-16 Dec-16 Jul-17 Mar-18 Oct-18 Pinnacle Foods S&P 500 Consumer Staples $231 $675 2007 2017 $1,514 $3,144 2007 2017 Source
Slide 12: Utz a Perfect Fit for Executing CCH's Operating Playbook
℠ Portfolio Strategy Marketing/Sales Optimization New Product Innovations Distribution Expansion Utz a Perfect Fit for Executing CCH’s Operating Playbook Fully Integrated Strong Synergies Multiple Enhancing Reduce Costs and Expand Margin Build Platform with Strategic Acquisitions Support Top Managem
Slide 13: Board of Directors
℠ Name Title Bio Dylan Lissette Chief Executive Officer • CEO, Utz • 24 years at Utz Mike Rice Director; Chairman Emeritus; Special Advisor • Former Chairman & CEO, Utz • 40+ years at Utz Tim Brown Director • President & CEO, Sageworth • 25 - year Director at Utz John Lindeman Director • CFO, Hydrof
Slide 14: Utz a Perfect Fit for Executing CCH's Operating Playbook
℠ Portfolio Strategy Marketing/Sales Optimization New Product Innovations Distribution Expansion Utz a Perfect Fit for Executing CCH’s Operating Playbook Fully Integrated Strong Synergies Multiple Enhancing Reduce Costs and Expand Margin Build Platform with Strategic Acquisitions Support Top Managem
Slide 15: Salty Snacks Among the Best Categories in CPG
℠ Salty Snacks Among the Best Categories in CPG Source: IRI, the Hartman Group, and The Consumer Goods Forum. 1). Represents CAGR. 2). Defined as Euromonitor U.S. Savory Snacks category with Savory Biscuits removed. 3). Excludes dairy pro ducts. Supported by Strong Consumer Trends and Category Dynam
Slide 16: Consistent Sales Growth Even During Economic Downturns
℠ $216 $222 $228 $254 $266 $290 $318 $359 $398 $403 $468 $513 $535 $559 $618 $656 $707 $772 $866 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Utz Consistent Sales Growth Even During Economic Downturns 1). Source: Internal financials. Figures for 2001
Slide 17: Attractive Value Creation Potential
℠ Attractive Value Creation Potential Plus Additional Upside From Strategic Acquisitions Long - Term Organic Growth Model Adj. EBITDA 6 – 8% Productivity / Margin Enhancements Adj. EPS 8 – 10% Deleveraging ~10 – 12% 1). Based on management estimates. 2). Does not include potential incremental divide
Slide 18: II. Business Overview
ll. Business Overview AVOCADO 0
Slide 19: Family Company with Tremendous Heritage
℠ Nearly 100 - Year Old Family Company with Tremendous Heritage Today Rich Heritage and Regional Expansion (1921 – 2011) National Scale Multi - Branded Snack Platform Created (2011 – 2019) 1921 – Founding by Bill and Salie Utz in Hanover, PA 1940s - 1960s – First Dedicated Manufacturing Plant (1947)
Slide 20: Scale Player in Salty Snacks and #2 in Core Geographies
℠ $16,047 $1,235 $1,094 $972 $569 $492 $400 $260 $196 $195 $187 $171 $170 $145 $116 ~$2,000 $1,459 Pepsi Campbell Kellogg Utz General Mills Grupo Bimbo Hershey's Hain Celestial Arca Cont. Herr's Truco Gruma Conagra Mars Old Dutch All Other Branded Private Label Total Salty Snacks #2 7% #4 4% Potato
Slide 21: Strong Brand Portfolio with Focus on Power Brands
℠ Strong Brand Portfolio with Focus on Power Brands Pork Skins Power Brands (71% of Sales) Foundation Brands (29% of Sales) Iconic Heritage Craft Better For You Regional Licensed Other • Partner Brands • Private Label Note: Sales represent invoiced sales, which represent net sales before the impact
Slide 22: Broad Distribution Across Channels and Customers
℠ Food 52% C - Store 20% Mass 14% Club 6% Drug 2% Other 6% Broad Distribution Across Channels and Customers… No Customer Represents More than 10% Of Sales 15+ Year Average Relationship with Top Customers 2019 Utz Sales by Channel (1) Illustrative Customers (2) 18 1). Source: IRI MULO - C data (52 -
Slide 23: With Excellent Retail Shelf and Display Presence
℠ With Excellent Retail Shelf and Display Presence 19 ℠
Slide 24: Flexible, Efficient DSD and Warehouse Distribution System
℠ Distributor Flexible, Efficient DSD and Warehouse Distribution System Direct to Warehouse Direct to Store (DSD) ~350 Retailer Distribution ~17,000 Doors ~635 Routes ~15,000 Doors ~1,645 Total Routes 75,000+ Doors % of Routes 2016 2019 Company - Owned 67% 23% Independent Operators (IO) 33% 77% Dire
Slide 25: National Manufacturing Footprint with Broad Capabilities
℠ National Manufacturing Footprint with Broad Capabilities ▪ 400 Million Lbs. Annual Capacity (1) ▪ ~69% Capacity Utilization (1) ▪ Strong Quality and Safety Record ▪ 14 Manufacturing Facilities Packaging Multipacks Barrels Bags Trays Seasonals Resealables Olive Oil Avocado Oil Gluten - Free Organic
Slide 26: Track Record of Accretive and Well-Integrated Acquisitions
℠ 2019 11.2x 7.4x 5.8% 2017 NM 10.2x (1) 13.8% 2016 15.8x 7.6x 9.6% 2013 13.2x 5.7x 8.7% 2011 8.0x 5.6x 7.0% All Acquisitions (2) 7.4x 8.1% Track Record of Accretive and Well - Integrated Acquisitions Year Pre - Synergy Adj. EBITDA Multiple Cost Synergy % of Revenue Snacks Target Post - Synergy Adj.
Slide 27: Highly Experienced Management Team
℠ Highly Experienced Management Team Name Title Years at Utz Background Dylan Lissette Chief Executive Officer 24 Years Cary Devore EVP & Chief Financial Officer Mark Schreiber EVP, Sales & Marketing Tucker Lawrence EVP, Chief Supply Chain Officer Ajay Kataria EVP, Finance & Accounting Todd Staub EV
Slide 28: III. Value Creation Strategy
III. Value Creation Strategy
Slide 29: Value Creation Strategies
℠ 1. Drive Productivity 2. Optimize Revenue and Trade 3. Improve Margin Mix 1. Focus on Branded Snacking in the U.S. 2. Deliver Strong Synergies Goal: Be Fastest Growing Pure - Play Branded Snack Platform of Scale in U.S. 1. Accelerate Power Brands Through Enhanced Marketing and Innovation 2. Expand
Slide 30: Reduce Costs and Enhance Margins
℠ Reduce Costs and Enhance Margins ▪ Eleven Acquisitions Successfully Integrated – 4 to 14 Manufacturing Facilities – SKU Count Expanded ~50%, Net of Rationalizations ▪ DSD Converted to Independent Operators Business Transformation ▪ Upgraded Management and Dedicated Continuous Improvement Resources
Slide 31: Reduce Costs and Enhance Margins (Cont'd)
℠ ▪ New Trade Management Software in 2020 ▪ Leverage Insights from ERP Rollout ▪ Price Pack Architecture Initiatives Procurement ▪ e - Auctions ▪ Group Purchasing ▪ Product Design $50 Million of Identified Opportunities Over Next Three Years Ongoing Annual Productivity Savings of 3 - 4% of COGS Manu
Slide 32: Accelerate Power Brands Through Enhanced Marketing and Innovation
℠ 2019: ~1% 3.8% Utz Peer Average Accelerate Power Brands Through Enhanced Marketing and Innovation Source: Company filings, Management estimates. IRI MULO - C data for 2014 and 2019 calendar years . 1). Represents last reported fiscal year advertising expense as a % of Net Sales per most recent for
Slide 33: ℠
℠
Slide 34: Expand Distribution in Underpenetrated Channels and Customers
℠ Expand Distribution in Underpenetrated Channels and Customers Source: IRI MULO - C data (52 - week period ended 1/26/2020) for salty snack category by channel. 1). Pro Forma for Conagra Snacks and Kitchen Cooked acquisitions. 4.7% Share in C - Store and Mass Represents $210mm of Incremental Retail
Slide 35: Continue National Geographic Expansion
℠ ▪ Focus on Large Population Markets – “Expansion” Markets: Florida, Texas, Mid - West – “Emerging” Markets : California, Arizona ▪ Expand DSD Route Network ▪ Drive Power Brands via National Warehouse ▪ Make Tuck - in Acquisitions Continue National Geographic Expansion Core Expansion Emerging FL NM
Slide 36: Increase Presence in Key Sub-Categories and Adjacencies
℠ Potato Chips 30% 6.1% Tortilla 22% 0.3% Cheese 11% 4.2% RTE Popcorn 6% 1.4% Pretzel 5% 10.4% Pork Skins 2% 12.4% Total (1) 3.8% Increase Presence in Key Sub - Categories and Adjacencies Strategies Other Adjacent Snack Category Opportunities ▪ BFY / Healthy Snacks ▪ Protein Snacks ▪ Baked Snacks ▪
Slide 37: Continue Strategic Acquisitions
℠ Continue Strategic Acquisitions Scalable M&A Platform Significant Synergy Opportunities Driven by Highly Leverageable Manufacturing and Distribution System Robust Pipeline & Favorable Competitive Dynamics Utz is Logical Consolidator in Category with Numerous Opportunities ▪ Smaller Tuck - ins ▪ Tr
Slide 38: IV. Financial Overview
IV. Financial Overview AVOCADO OIL
Slide 39: Utz Growth During COVID Significantly Better than Competitors
℠ 13% 24% 17% 19% (10%) 23% 34% 37% 17% (8%) MULO+C Food Mass Club Convenience Total SS Utz Brands 13% 13% 17% 8% 23% (7%) 9% 5% 5% 3% 6% 6% 4% 5% Total Salty Snacks Campbell's Utz Brands Private Label ▪ Consumers reassured by strong brand recognition in Core geographies ▪ Owned manufacturing networ
Slide 40: Utz Growth Significantly Outpacing Competitors throughout COVID
℠ 4% 15% 12% 12% 16% 6% 24% (10%) 8% Utz Growth Significantly Outpacing Competitors throughout COVID 33 Source: IRI MULO - C data. 1). Excludes household cleaning products. 2020 YoY Retail Sales Growth 4 - Week Period Ended 4/19/20 4 - Week Period Ended 3/22/20 4 - Week Period Ended 5/17/20 4 - Week
Slide 41: COVID Favorable Longer-Term for Utz Brands
℠ COVID Favorable Longer - Term for Utz Brands ▪ Stay - at - home orders reintroduced at - home cooking and eating experience ▪ Due to safety concerns, people will spend more time at home and avoid offices, restaurants, and public gatherings, with a potential enduring shift to “work - from - home” ▪
Slide 42: Utz Phenomenal Q1 Performance
℠ $22 $86 $108 $30 $94 $124 Q1 Q2 - Q4 Full Year $204 $661 $866 $228 $682 $910 Q1 Q2 - Q4 Full Year Utz Phenomenal Q1 Performance Pro Forma Adjusted EBITDA ($mm) (2) (% Net Sales Margin ) Net Sales ($mm) (1) 1). Pro Forma for the acquisitions of Conagra Snacks and Kitchen Cooked. 2020 numbers exclud
Slide 43: Summary Financials
℠ $707 $772 $866 $910 $928 2017 2018 2019 2020 2021 Summary Financials Net Sales Pro Forma Adj. EBITDA (% Net Sales Margin ) 1). Pro forma for the acquisitions of Conagra Snacks and Kitchen Cooked. Excludes impact of Utz’s 53 rd week. See pages 39 and 40 for reconciliation. 2). Pro forma for the acq
Slide 44: Capital Expenditures and FCF Conversion
℠ $12.1 $11.3 $8.6 $9.9 $10.0 $3.2 $1.8 $5.4 $8.4 $15.0 $4.7 $10.0 $15.2 $13.1 $18.6 $28.3 $25.0 2017A 2018A 2019A 2020E 2021E New ERP Implementation Profit Enhancing Maintenance Significant Profit - Enhancing Capex Opportunities; Strong FCF Conversion Capital Expenditures ($ in mm) % of Net Sales 1
Slide 45: Capital Focused on Driving Growth
℠ Capital Focused on Driving Growth 1 Business Growth (Including M&A) 2 Debt Reduction 3 Dividend Increase 4 Share Buyback • 2020E Net Debt / PF Adj. EBITDA of 3.1x • Target Net Leverage of 3 – 4x • Higher Net Debt / Adj. EBITDA Possible for Strategic Acquisitions, Returning to Target Range within 1
Slide 46: Collier Creek =
Collier Creek = Pas itz y origina Pie | Cheese) | AVOCADO OIL
Slide 47: Appendix
Appendix AVOCADO OIL
Slide 48: Non-GAAP Reconciliation
℠ Non - GAAP Reconciliation Note: Dollars in Millions. 1). Includes net interest expense related to third - party obligations and interest income on loans made to independent DSD operat ors to facilitate their purchase of delivery routes. 2). Accounting policy change, fair value adjustment to long -
Slide 49: Pro Forma Financials Reconciliation
℠ Pro Forma Financials Reconciliation Note: Dollars in Millions. 1). Includes Conagra Snacks and Kitchen Cooked pre - acquisition contribution. 2). Includes Conagra Snacks synergies in addition to synergies related to the acquisition of Kitchen Cooked. 3). Full year impact of anticipated incremental
Slide 50: Margin Enhancements Further Reduce Implied Entry Valuation
HIGHLY CONFIDENTIAL ℠ Net Sales $928 Adj. EBITDA $134 Adj. EBITDA Margin 14.4% 14.4% $0 11.6x 15.0% $5 11.2x 16.0% $14 10.5x 17.0% $24 9.9x 18.0% $33 9.3x Margin Enhancements Further Reduce Implied Entry Valuation Expected Financial Profile ( 2021E ) Adj. EBITDA Margin (1) Incremental EBITDA Implied