Slide 1: Turning Point Brands Investor Presentation Q4 2022
Turning Point Brands (NYSE: TPB) INVESTOR PRESENTATION Q4 2022 | NYSE: TPB | 5201 INTERCHANGE WAY, LOUISVILLE KY | TURNINGPOINTBRANDS.COM |
Slide 2: Disclaimer
Disclaimer Turning Point Brands (NYSE: TPB) FORWARD LOOKING STATEMENTS This presentation contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements may generally be identified by the use of words such as "anticipate," "believe," "expect," "inten
Slide 3: Company Overview
Turning Point Brands (NYSE: TPB) Company Overview | NYSE: TPB | 5201 INTERCHANGE WAY, LOUISVILLE KY | TURNINGPOINTBRANDS.COM |
Slide 4: TPB: A Unique Consumer Products Growth Company
Turning Point Brands (NYSE: TPB) TPB: A Unique Consumer Products Growth Company Segment Comprises Majority of Profit Pool and #1 Premium and Overall Benefits from Secular #1 Loose Leaf Chew Rolling Paper Brand in the U.S. Growth Trends in and Canada and #1 in MYO and Leading MST Value Cannabinoid Co
Slide 5: TPB is a Consumer Products company that markets strong brands
Turning Point Brands (NYSE: TPB) TPB is a Consumer Products company that markets strong brands BROAD PORTFOLIO OF ICONIC AND EMERGING BRANDS 4 | NYSE: TPB | 5201 INTERCHANGE WAY, LOUISVILLE KY | TURNINGPOINTBRANDS.COM |
Slide 6: TPB Business Segments
Turning Point Brands (NYSE: TPB) TPB Business Segments Zig-Zag Products Stoker’s Products NewGen Products Rolling papers and Make-Your-Own Loose leaf chewing tobacco and moist Innovative vapor products (“MYO”) cigar wraps snuff tobacco LTM Sales1 $190mm $131mm $94mm Key Brands Continue strong grow
Slide 7: A Diversified Portfolio of Product Lines
Turning Point Brands (NYSE: TPB) A Diversified Portfolio of Product Lines Diversified Revenue Mix with a Majority of Profits and Growth Driven by Zig-Zag Sales Adjusted Operating Income NewGen Products 1% NewGen Products 23% Stoker's Products Zig-Zag 41% Products Zig-Zag 46% Products 58% Stoker's Pr
Slide 8: Efficient Manufacturing, Supply & Distribution Model
Turning Point Brands (NYSE: TPB) Efficient Manufacturing, Supply & Distribution Model ASSET LIGHT THIRD-PARTY NATIONAL BEST-IN-CLASS B2C AND B2B APPROACH SOURCING DISTRIBUTION SUPPLY CHAIN CAPABILITIES Asset-Light approach allows A majority of net sales are National distribution coupled Sourcing tea
Slide 9: TPB Strategic Priorities
Turning Point Brands (NYSE: TPB) TPB Strategic Priorities Grow Share of Existing Product Lines, Domestically and Internationally Expand into Adjacent Categories through Innovation and New Partnerships Increase our Mix of Proprietary Products in NewGen Accelerate Growth via National Distribution Netw
Slide 10: TPB Key Investment Highlights
Turning Point Brands (NYSE: TPB) TPB Key Investment Highlights 1 Large, Leading Brands with Significant Scale 2 Exposure to Growing Cannabinoid Consumption Trends 3 Successful Track Record of New Product Launches and Category Expansions 4 E-Commerce Capabilities 5 Extensive Distribution Network and
Slide 11: Zig Zag Products: Iconic Brand with Leading Market Share
Large, Leading Brands with Significant Scale Turning Point Brands (NYSE: TPB) Zig Zag Products: Iconic Brand with Leading Market Share About Zig-Zag Papers Wraps New Product Launches Embedded into pop culture #1 premium and overall Market leader in MYO cigar Continued roll-out of paper with a storie
Slide 12: Zig Zag Products: Expanding Portfolio and Sales Channels
Large, Leading Brands with Significant Scale Turning Point Brands (NYSE: TPB) Zig Zag Products: Expanding Portfolio and Sales Channels Classic Zig-Zag Products Growth Initiatives New products (paper cones, natural leaf, hemp wraps, cigars, lighters, accessories etc) Re-vamped e-commerce platform (no
Slide 13: Zig Zag Products: Continued Profit and Margin Growth
Large, Leading Brands with Significant Scale Turning Point Brands (NYSE: TPB) Zig Zag Products: Continued Profit and Margin Growth Rejuvenated segment with growth initiatives focused on new product introductions and channel expansions aligned with secular market growth trends Net Sales Adjusted Gros
Slide 14: CLIPPER Distribution Agreement
Successful Track Record of New Product Launches and Category Turning Point Brands (NYSE: TPB) CLIPPER Distribution Agreement Expansions CLIPPER and Zig-Zag are iconic, lifestyle brands with gold standard products and a long, respected history ▪ Entered into agreement with Flamagas for exclusive dist
Slide 15: Exposure to Growing Cannabinoid Consumption Trends
Exposure to Growing Cannabinoid Consumption Trends Turning Point Brands (NYSE: TPB) Poised to Benefit from Cannabinoid Consumption Growth Large potential Total Addressable Market with significant opportunity for TPB expansion US Legal Cannabis Market1 New Products Hemp Wraps $ in billions Evolving m
Slide 16: Positioned to Capture Growing Cannabinoid Consumption
Exposure to Growing Cannabinoid Consumption Trends Turning Point Brands (NYSE: TPB) Positioned to Capture Growing Cannabinoid Consumption 21 U.S. states and DC have legalized cannabis and 37 states and DC allow for medical cannabis programs 1H 2021: Virginia, New Mexico, WA New York and Connecticut
Slide 17: Legalization Trends
Exposure to Growing Cannabinoid Consumption Trends Turning Point Brands (NYSE: TPB) Legalization Trends % of U.S. adult population living in recreational use states will jump from 30% to 48% from 2021-2024 48% 45% States with operational Adult-Use Retail % of 21 or older US population 35% 30% 28% 22
Slide 18: Stoker's Products: Iconic Brand with Sustained Growth
Large, Leading Brands with Significant Scale Turning Point Brands (NYSE: TPB) Stoker’s Products: Iconic Brand with Sustained Growth About Stoker's MST TUBS MST Cans Chew Building brand equity for Introduced a larger tub format Accelerating strength from #1 discount and overall over 80 years. Stoker’
Slide 19: Stoker's Products: Continued MST Distribution Gains
Large, Leading Brands with Significant Scale Turning Point Brands (NYSE: TPB) Stoker’s Products: Continued MST Distribution Gains Long Runway for Growth 77.4 77.6 78.6 Currently in stores representing 70.4 ~64%1 of volume weighted distribution 61.6 63.1 57.0 Additional ~30-50k stores targeted for na
Slide 20: Stoker's Products: Continued Profit and Margin Growth
Large, Leading Brands with Significant Scale Turning Point Brands (NYSE: TPB) Stoker’s Products: Continued Profit and Margin Growth Smokeless Net Sales and Gross Profit have shown steady growth Net Sales Adjusted Gross Profit $71 $131 $68 $124 $62 $116 $53 $100 $90 $47 2018 2019 2020 2021 2022 2018
Slide 21: NewGen: Regulated Product Distribution Platform Expansions
Successful Track Record of New Product Launches and Category Turning Point Brands (NYSE: TPB) NewGen: Regulated Product Distribution Platform Expansions Navigating transitory regulatory environment 2016 2017 2018 2019 2020 2021-2023 Acquired VaporBeast, Acquired VaporShark, Acquired IVG, Acquired So
Slide 22: NewGen Business Update
Successful Track Record of New Product Launches and Category Turning Point Brands (NYSE: TPB) NewGen Business Update Expansions Remaining nimble as PMTA process develops to position the segment for upside in a post-PMTA environment Successfully Repositioned NewGen Poised for Future Growth ▪ Restruct
Slide 23: New Product Pipeline Expansions
Successful Track Record of New Product Launches and Category Turning Point Brands (NYSE: TPB) New Product Pipeline Expansions Expanding the product portfolio with an exciting lineup of new products and line extensions Zig-Zag Natural Leaf Cigars Zig-Zag Rose Cones Zig-Zag Hemp Cones Zig-Zag Palm Lea
Slide 24: Extensive Distribution Network and Data Driven Sales Organization
Extensive Distribution Network and Data Driven Sales Organization Turning Point Brands (NYSE: TPB) Powerful Distribution Infrastructure North American retail presence that reaches over ~215,000 outlets + B2C online sites National Regional Product B2C B2B Distribution Sales Teams Sales Teams Distribu
Slide 25: Asset-light Business Model that Generates Resilient Free Cash Flow
Asset-light Business Model that Generates Resilient Free Cash Flow Turning Point Brands (NYSE: TPB) Building a Capital Efficient Business Model Asset-light business model that generates resilient free cash flow Initiatives: Adjusted EBITDA vs. Capital Expenditures Adjusted EBITDA Capital Expenditure
Slide 26: Conservative and Prudent Financial Policies
Asset-light Business Model that Generates Resilient Free Cash Flow Turning Point Brands (NYSE: TPB) Conservative and Prudent Financial Policies Turning Point has taken a prudent approach to liquidity management and has successfully de-levered 5.7x Historical Leverage Ratio1 Net Debt to Adjusted EBIT
Slide 27: Expertise to Succeed in Dynamic Regulatory Environments
Expertise to Succeed in Dynamic Regulatory Environments Turning Point Brands (NYSE: TPB) Track Record of Success Navigating an Evolving Regulatory Backdrop TPB has extensive experience managing regulatory regime changes and continues to make investments that enhance its regulatory position among com
Slide 28: Experienced Management Team
Experienced Management Team Turning Point Brands (NYSE: TPB) Highly Experienced Senior Leadership Team GRAHAM A. LOUIE BRITTANI N. SUMMER PURDY REFORMINA CUSHMAN FREIN Chief Executive Chief Financial General Counsel & Chief Revenue Officer Officer Secretary Officer Joined TPB in Joined TPB in Joined
Slide 29: Financial Update
Turning Point Brands (NYSE: TPB) Financial Update | NYSE: TPB | 5201 INTERCHANGE WAY, LOUISVILLE KY | TURNINGPOINTBRANDS.COM |
Slide 30: Recent Business Performance
Turning Point Brands (NYSE: TPB) Recent Business Performance Strong growth in our Zig-Zag and Stoker’s businesses and NewGen remains profitable • FY 2022 Financial Results: Net Sales of $415.0 million and Adjusted EBITDA1 of $97.6 million Recent • Zig-Zag Products (+8%) and Stoker’s Products (+5%) s
Slide 31: Total Sales and Segment Breakdown
Turning Point Brands (NYSE: TPB) Total Sales and Segment Breakdown Internal initiatives leading to growth in core segments Zig-Zag Products Future Drivers 2018 2019 2020 2021 2022 CAGR • Industry levered to cannabinoid consumption Zig-Zag Products • Wraps: New product introductions (ZZ Hemp Wraps $4
Slide 32: Expanding Addressable Markets
Turning Point Brands (NYSE: TPB) Expanding Addressable Markets Extending into large, tangential addressable markets provides runway for growth End Market Market Size1 Opportunity Alternative Channel ~$200mm Increase share for Zig-Zag papers (currently single- (Headshops and digit/low double-digit %)
Slide 33: Appendix
Turning Point Brands (NYSE: TPB) Appendix | NYSE: TPB | 5201 INTERCHANGE WAY, LOUISVILLE KY | TURNINGPOINTBRANDS.COM |
Slide 34: Historical Financials
Turning Point Brands (NYSE: TPB) Historical Financials Net Sales Adjusted EBITDA1 $445 $405 $415 $108 $362 $98 $333 $90 $65 $67 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 % Growth 16.4% 8.8% 11.9% 10.0% -6.8% % Margin 19.4% 18.6% 22.3% 24.3% 23.5% Capital Expenditures Free Cash Flow1 (Adjuste
Slide 35: EBITDA Adjustment Detail
Turning Point Brands (NYSE: TPB) EBITDA Adjustment Detail Reconciliation of GAAP Net Income to Adjusted EBITDA ($ in millions) 2017 2018 2019 2020 2021 2022 Net income attributable to Turning Point Brands, Inc. $20.2 $25.3 $13.8 $38.2 $52.1 $11.6 Add: Interest expense, net $16.9 $14.8 $17.3 $13.5 $2
Slide 36: Commitment to ESG
Turning Point Brands (NYSE: TPB) Commitment to ESG We believe that focusing on our consumers and customers, while proactively and productively addressing the environment, our employees, our community, and society at large, is the key to driving value for all stakeholders Improving Public • Our visio
Slide 37: THANK YOU
Turning Point Brands (NYSE: TPB) THANK YOU | NYSE: TPB | 5201 INTERCHANGE WAY, LOUISVILLE KY | TURNINGPOINTBRANDS.COM |