Organigram Global Inc. · TSX:OGI
Organigram Global — Q2 2022 Earnings Presentation
43 slides from Organigram Global's earnings presentation, Apr 11, 2022
Slide 1: Organigram Investor Presentation Q2 Fiscal 2022
ORGANIGRAM INVESTOR PRESENTATION Q2 FISCAL 2022 NASDAQ (OGI) 1 TSX (OGI) 1
Slide 2: Cautionary Statement
CAUTIONARY STATEMENT This document is current as of April 11, 2022, except where otherwise stated. The information contained in this Although the Company believes that the assumptions and factors used in preparing the forward-looking information in presentation is provided by Organigram Holdings Inc
Slide 3: Strategy
INNOVATION CONSUMER FOCUS EFFICIENCY EXPANSION STRATEGY: Leverage our brands, product portfolio and culture of innovation to: 3 Increase Drive Deliver long-term Reach 3 market share profitability shareholder value new markets
Slide 4: Key Strengths
KEY STRENGTHS LEADING LICENSED THREE LEVEL INDOOR DEDICATED EDIBLES AND PRODUCER CULTIVATION DERIVATIVES FACILITIES Leading licensed producer Large indoor facility in Moncton: vape filling, CO2 extraction (LP) of quality products for Moncton, NB with unique Winnipeg: Specialized edibles, Recreationa
Slide 5: Quarterly Update (Q2 F2022)
QUARTERLY UPDATE (Q2 F2022) 5 5
Slide 6: Building a Market Leader
BUILDING A MARKET LEADER CANADIAN REC. MARKET SHARE BY $ SALES 1 • Moved from 6th to 3rd market share position, and have maintained over the last 3 months 8.0% • #1 in the largest category, flower 7.5% • #3 in gummies category 7.0% 5.4% 4.1% Q2 F21 Q3 F21 Q4 F21 Q1 F22 Q2 F22 6 1. Hifyre April 4, 20
Slide 7: Continuing a Trend of Growth: Revenue
CONTINUING A TREND OF GROWTH REVENUE $ millions $44.3 $43.9 Compound quarterly growth last three quarters: Net revenue: 16.4% Gross revenue: 14.7% $36.2 $31.8 $30.4 $29.1 $24.9 $20.3 Q3 F21 Q4 F21 Q1 F22 Q2 F22 Net Revenue Gross Revenue 7
Slide 8: Continuing a Trend of Growth: Adjusted Gross Margin
CONTINUING A TREND OF GROWTH ADJUSTED GROSS MARGIN $ millions and % of Net Revenue $8.3 $5.5 26% $3.0 18% 12% (4%) -$0.7 Q3 F21 Q4 F21 Q1 F22 Q2 F22 8
Slide 9: Continuing a Trend of Growth: Adjusted EBITDA
CONTINUING A TREND OF GROWTH ADJUSTED EBITDA $ millions +$1.6 -$1.9 -$4.8 -$9.2 Q3 F21 Q4 F21 Q1 F22 Q2 F22 9
Slide 10: Q2-2022 Highlights
Q2-2022 HIGHLIGHTS • Record-high quarterly net revenue • Achieved positive EBITDA two quarters earlier than anticipated • Reached #3 position among Canadian LPs in Jan 2022, reaching 8.4% market share1 in the month of March • Maintained #1 position in dried flower1 – the largest product category • L
Slide 11: Strong Balance Sheet and Liquidity
STRONG BALANCE SHEET AND LIQUIDITY • Capital position is healthy and there is sufficient liquidity available for the near to medium term • On February 28, 2022, the Company had cash and short-term investments (excluding restricted funds) of $151 million • Negligible debt (less than $0.2 million) 11
Slide 12: Q2 Fiscal 2022 Key Financial Metrics
Q2 FISCAL 2022 KEY FINANCIAL METRICS Select Key Financial Metrics (in $000s unless otherwise indicated) Q2-2022 Q2-2021 % Change Gross revenue 43,934 19,292 128 % Excise taxes (12,098) (4,649) 160 % Net revenue 31,836 14,643 117 % Cost of sales 24,955 31,146 (20) % Gross margin before fair value cha
Slide 13: Fiscal 2022 Outlook
FISCAL 2022 OUTLOOK • Expecting solid Q3 F22 net revenue which will be significantly higher than Q3 F21 due to: • Addition of Laurentian and its premium products and high margin brands • Stronger forecasted market growth as the retail network expands • Strong market share momentum – as of March 2022
Slide 14: Potential Upside for Gross Margins
POTENTIAL UPSIDE FOR GROSS MARGINS • Improved economies of scale and efficiencies as cultivation and production volumes continue to increase; • Continued investment in automation which will drive cost efficiencies and reduce dependence on manual labour; • New products introductions: such as SHRED X
Slide 15: Brand Portfolio
BRAND PORTFOLIO 15 15
Slide 16: Well-Rounded Brand Portfolio
WELL-ROUNDED BRAND PORTFOLIO NEW NEW NEW Pricing Value Value Value Mainstream Premium Premium Craft Segment Pre-Milled Blends, Whole Flower, Whole Flower, Available / Kief-Infused Blends, Pre-Roll Joints, Pre-Roll Joints, CBD Gummies, Craft Flower Planned Distillate Vapes, Whole Flower Lozenges, Has
Slide 17: Laurentian Acquisition Enhances Portfolio
LAURENTIAN ACQUISITION ENHANCES PORTFOLIO • Accretive on both a revenue and EBITDA basis • Accelerates and strengthens Organigram’s presence in Quebec • Strengthens Organigram’s premium portfolio • Adds Quebec’s top selling hash brand, Tremblant • Adds an artisanal craft brand 17
Slide 18: Laurentian At-a-Glance
LAURENTIAN AT-A-GLANCE COMPANY PORTFOLIO OPERATION AND FACILITIES • Established in 2020 • Premium Afghan hash SKUs: • Health Canada licensed – 2.0g & 3.5g sizes • Located in Lac-Supérieur, QC, near • Greenhouse capacity expanding from • Craft flower: Mont-Tremblant – Ethos Glue, Planet of the Grapes
Slide 19: Operations
OPERATIONS 19 19
Slide 20: State-of-Art, Three Tier Cultivation Centre
STATE-OF-ART, THREE TIER CULTIVATION CENTRE • Moncton, NB • Strain-specific grow rooms • Micro-climates provide the ability to control all critical factors affecting the growing environment • Phase 4C (under construction) and design improvements to Moncton grow rooms expected to result in higher qua
Slide 21: Premium Quality Cannabis and Hash Production
PREMIUM QUALITY CANNABIS AND HASH PRODUCTION • Lac-Supérieur, Quebec (near Mont-Tremblant) • Producer of hang dried, trimmed by hand, artisanal craft cannabis, and premium Afghan-style hash • Greenhouse capacity expanding from 600kg to 2,400kg of craft flower by the end of calendar 2022 • Hash capac
Slide 22: Dedicated Edibles and Derivatives Facilities
DEDICATED EDIBLES AND DERIVATIVES FACILITIES • Winnipeg-based wholly-owned subsidiary • 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 nutraceutical-grade cannabis edibles, includin
Slide 23: Investments & Collaborations
INVESTMENTS & COLLABORATIONS 23 23
Slide 24: Investment in Disruptive Technology-Biosynthesis
INVESTMENT IN DISRUPTIVE TECHNOLOGY-BIOSYNTHESIS BIOSYNTHESIS How it works? • 49% ownership of Hyasynth, a pioneer in cannabinoid science A proprietary Biosynthesis can be used cannabinoid to produce cannabinoids • Supply agreement in place manufacturing that are identical to system that can those p
Slide 25: Product Development Collaboration & Strategic Investment
PRODUCT DEVELOPMENT COLLABORATION & STRATEGIC INVESTMENT TRANSACTION HIGHLIGHTS STRATEGIC RATIONALE • ~C$227M strategic investment from subsidiary of BAT for • Accelerates and strengthens Organigram’s R&D and 19.4% equity interest1 in Organigram product development activities, including granting acc
Slide 26: Alignment of Capabilities & Resources
ALIGNMENT OF CAPABILITIES & RESOURCES LEADING CONSUMER GOODS BUSINESS LEADING LICENSED PRODUCER OF HIGH- QUALITY CANNABIS PRODUCTS SOPHISTICATED MANAGEMENT STATE-OF-THE-ART FACILITIES INNOVATIVE PRODUCT PLATFORMS EXPERIENCED MANAGEMENT TEAM DEEP PLANT EXPERTISE WITH DEEP CANNABIS EXPERTISE DEEP CONS
Slide 27: International
INTERNATIONAL 27 27
Slide 28: Key International Supply Agreement
KEY INTERNATIONAL SUPPLY AGREEMENT • Shipped approx. 1,700 kg of dried flower in Q2 F22 • A multi-year agreement for supply of dried flower to Canndoc Ltd. one of Israel’s largest and most established medical cannabis producers. • Under the terms, Organigram to supply up to 6,000kg of dried flower t
Slide 29: Market Outlook
MARKET OUTLOOK 29 29
Slide 30: Solid Projected Growth in Rec Market
SOLID PROJECTED GROWTH IN REC MARKET CANADIAN ADULT-USE RECREATIONAL MARKET – CALENDAR YEARS (EXCLUDES MEDICAL) $ BILLIONS $8.8 $8.5 $7.9 $7.2 $6.4 2023 2024 2025 2026 2027 Source: The Brightfield Group, Q1 2022 30
Slide 31: 229% Growth in Retail Stores
229% GROWTH IN RETAIL STORES CANNABIS RETAIL STORES NUMBER OF ONTARIO RETAIL STORE 3,166 IN 10 PROVINCES AUTHORIZATIONS PER MONTH Today* Sept- Dec- 2020 2020 ↑229% 1,508 963 ONTARIO ↑ 1378% 102 20 40 80 100 Jul-20 Apr-22 Quadrupled ONTARIO GREW 1378% | Canada’s 10 provinces grew 229% 5x Source: Comp
Slide 32: Appendix
APPENDIX 32 32
Slide 33: BAT Transaction Summary
BAT TRANSACTION SUMMARY • Subsidiary of BAT subscribed for 58.3M common shares of Organigram, which represented a 19.9% equity interest in March 20211 on a post-transaction basis. • Total proceeds to Organigram in March 2021 of ~C$221 million (the “Investment Proceeds”) Investment • The price per sh
Slide 34: Edison brand
At Edison, we believe in using scientific rigour to grow high-quality flower and to cultivate a deeper appreciation for the cannabis plant. We hunt for the most promising genetics and use our unique science-based growing methods to maximize the best attributes of every plant and product. Feather 510
Slide 35: Big Bag O' Buds brand
Not all flower is worthy of an ounce, unless you’re Big Bag O’ Buds. We cultivate the best to give you big terps and big buds, all in a big bag. Ice Cream Cake 28g Lemon Margy 28g Ultra Sour 28g 35
Slide 36: SHRED brand
SHRED is here to make your cannabis experience easier. From roll to bowl, SHRED is pre-milled, high-quality whole- flower that’s ready-to-use. You can trust that every pouch is top-shelf, never shake. Our new SHRED X range offers a set of Xtremely flavourful and potent products including 510 distill
Slide 37: SHRED'ems gummies
Introducing the squishy sequel to SHRED – our new infused gummies called SHRED’ems and Shred’ems POP! These gummies are squishy explosions of flavour you can pop right into your mouth. All you have to do is drop in and send it. Shred’ems Gummies 2 x 5 mg THC | 4 x 2.5 mg THC 37
Slide 38: Monjour brand
Be it physical, mental or spiritual balance you are searching for, Monjour’s range of vegan and sugar-free CBD gummies provide an easy and delicious way to incorporate a moment of wellness in your everyday. Monjour 30 x 20 mg CBD Monjour Bare 30 x 20 mg CBD Monjour Bare 4 x 7.5mg CBN + 20mg CBD + 2.
Slide 39: Trailblazer brand
The Trailblazer brand stays true to its name, offering quality cannabis products in ready-to-use, convenient and innovative formats. Be it delicious chocolates, flavourful flower, or portable pre-rolls, we have the cannabis for the moments of brightness to keep you blazing on. Torch 510 Distillate V
Slide 40: Laurentian and Tremblant brands
Laurentian produces artisanal craft cannabis. Grown in a greenhouse under the sun, we offer a selection of flowers that are hand crafted and cured to perfection. Tremblant’s premium Afghan-style hashish is reminiscent of the 80’s. Black on the outside and brown on the inside, this hashish has spicy
Slide 41: Q2 Fiscal 2022 Select Balance Sheet Metrics
Q2 FISCAL 2022 SELECT BALANCE SHEET METRICS FEBRUARY 28, AUGUST 31, Select Balance Sheet Metrics (in $000s) % Change 2022 2021 Cash & short-term investments 150,745 183,555 (18) % Biological assets & inventories 56,187 48,818 (15) % Other current assets 29,627 28,242 5 % Accounts payable & accrued l
Slide 42: Q2 Fiscal 2022 Capital Structure
Q2 FISCAL 2022 CAPITAL STRUCTURE FEBRUARY 28, AUGUST 31, in $000s 2022 2021 Current and long-term debt 272 310 Shareholders’ equity 513,386 479,805 Total debt and shareholders’ equity 513,658 480,115 in 000s Outstanding common shares 313,690 232,088 Options 7,783 7,797 Warrants 16,944 16,944 Top-up
Slide 43: An Emerging Cannabis Industry Leader
An Emerging Cannabis Industry Leader NASDAQ (OGI) 43 TSX (OGI) 43