Utz Brands Inc · NYSE:UTZ
Utz Brands — Q1 2021 Earnings Presentation
29 slides from Utz Brands's earnings presentation, May 13, 2021
Slide 1: Utz Brands, Inc. Q1 2021 Earnings Presentation
℠ Utz Brands, Inc. Q1 2021 Earnings Presentation May 13, 2021 HIGHLY CONFIDENTIAL 1
Slide 2: Disclaimer
Disclaimer Forward-Looking Statements Certain statements made herein are not historical facts but are “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, as amended. The forward-looking statements generally are acco
Slide 3: Business Overview
Business Overview Dylan Lissette, Chief Executive Officer HIGHLY CONFIDENTIAL 3
Slide 4: Key Messages
Key Messages Q1 net sales growth of 18% and Adjusted EBITDA growth of 30% and remain on track to deliver our full-year 2021 outlook Utz IRI retail sales two-year CAGR of 5.9% shows continued strength across our platform Continued to increase distribution in Emerging and Expansion geographies
Slide 5: Summary of Q1 Results
Summary of Q1 Results Net Sales growth of 18% reflects the positive contribution from acquisitions, partially offset by transitory events that include lapping the impact of COVID-19 in 2020 and the February 2021 snowstorms – Estimate the February storms had a 200 – 300bps negative impact to net sa
Slide 6: Lapping Significant Market Share Gains in Early 2020
Lapping Significant Market Share Gains in Early 2020 During the early stages of the COVID-19 pandemic Utz significantly outperformed the category, and we continued to gain buyers throughout the year 4-Week Period Retail Sales YoY Change % and Buyer Trends % Change Trailing 52-week vs. YAG Utz Buyers
Slide 7: Strong Buyer and Repeat Rate Growth
Strong Buyer and Repeat Rate Growth Buyer trends are strong and we are growing repeat rates relative to the prior year # of Buyers (in M) and $ per Buyer % of Buyers Repeating Purchases $ Per Buyer # of Buyers + 1.8M More Buyers 65 35 Repurchased 60.4 51.4% 52.7% Twice or More 60 58.6 30 +100bps vs.
Slide 8: Strong 2-Year Growth Rates to Begin 2021
Strong 2-Year Growth Rates to Begin 2021 As we begin to lap COVID-19 pantry stocking, we are driving strong 2-year growth rates led by our Power Brands, partially offset by our planned decline in Foundation Brands Retail Sales 2-Year CAGR Rolling 12-Week Trend 10% Utz Power Brands 7.8% 7.1% 7.1% 7.4
Slide 9: Power Brands Increased to Nearly 87% of Retail Sales
Power Brands Increased to Nearly 87% of Retail Sales Our long-term value creation strategies are working as we continue to prioritize our investments and reduce emphasis on Foundation Brands Power Brands Retail Sales Change(1) Foundation Brands Retail Sales Change(1)(2) (13-Weeks Ended 4/4/21) (13-W
Slide 10: Significant Two-Year Share Gains in our Major Sub-Categories
Significant Two-Year Share Gains in our Major Sub-Categories Potato chips and tortilla chips comprise nearly 60% of our retail sales and significantly outpaced the category over the last two years Sub-Category Retail Sales 2-Year CAGR (13-Weeks Ended 4/4/21) Total Sub-Category Power Brands Total Sal
Slide 11: Expansion & Emerging Geographic Momentum Continues
Expansion & Emerging Geographic Momentum Continues Core performance relative to market driven by Good Health® and Foundation Brands that are more weighted towards the Core Geographic Channel Retail Sales 2-Year CAGR (13-Weeks Ended 4/4/21) Total Sub-Category Power Brands Total US Core Expansion Emer
Slide 12: Driving 2-Year Share Gains in Grocery, Club and C-Store
Driving 2-Year Share Gains in Grocery, Club and C-Store Mass performance driven by a lap faced by ON THE BORDER® and we expect trends will improve as we move throughout the year Retail Channel Retail Sales 2-Year CAGR (13-Weeks Ended 4/4/21) Total Sub-Category Power Brands MULO + C Grocery Mass Club
Slide 13: Executing our Acquisition Strategy
Executing our Acquisition Strategy Truco Enterprises and Vitner’s Integration Updates Integration teams working very well together across both platforms On track to deliver cost synergy targets across manufacturing, procurement, selling expenses, and general and administrative for both transacti
Slide 14: Financial Performance
Financial Performance Cary Devore, Chief Financial Officer HIGHLY CONFIDENTIAL 14
Slide 15: First Quarter 2021 Financial Results Summary
First Quarter 2021 Financial Results Summary 1Q’20 1Q’21 YoY Results Results Change In $millions, except per share amounts Net Sales 228.0 269.2 18.0% Pro Forma Net Sales 275.2 269.2 (2.2%) Adj. Gross Profit 85.3 104.5 22.5% % of net sales 37.4% 38.8% 140bps Adj. SG&A 57.0 67.2 18.1% % of net sales
Slide 16: Q1 Net Sales Bridge
Q1 Net Sales Bridge Year-over-year growth driven by positive price/mix and acquisitions Volumes impacted by COVID-19 overlap and February 2021 snowstorms Pro Forma Net Sales 2-year CAGR of 4.3% Q1 Net Sales YoY Growth Decomposition 21.5% 18.0% 1.9% -4.7% -0.6% (1) (2) Price/Mix Volume IO Disco
Slide 17: Q1 Adjusted EBITDA Margin Bridge
Q1 Adjusted EBITDA Margin Bridge Adj. EBITDA margin expansion driven by acquisition of Truco Favorable price/mix through pricing actions and improved product and channel mix Delivery cost increases from higher spot market rates and contract delivery costs Q1 Adjusted EBITDA Margin Decompositio
Slide 18: Q1 Balance Sheet and Other Items
Q1 Balance Sheet and Other Items $181M in cash during Q4 2020 and Q1 2021 from the exercise of the public warrants and forward purchase warrants, simplifying our capital structure Placed a new $720M Term Loan B due 2028 that extended the maturity profile by over three years and reset certain cre
Slide 19: Reaffirming Our Fiscal 2021 Outlook
Reaffirming Our Fiscal 2021 Outlook Long-term organic growth algorithm of 3 to 4% Net Sales growth and 6 to 8% Adjusted EBITDA growth remains intact 2020 Key Assumptions 2021 Pro Forma FY 2021 Outlook excludes the impact of the (52 weeks) Outlook pending acquisition of Festida Foods, which is expe
Slide 20: Fiscal 2021 Outlook (cont.)
Fiscal 2021 Outlook (cont.) Additional Assumptions Funded $25M Vitner's acquisition in February 2021 with balance sheet cash Expecting 200-250 Independent Operator (“IO”) route conversions in 2021 Core D&A of $25 – $27M and step-up D&A of $50 – $53M (comprised of approximately 40% cost of good
Slide 21: Appendix
Appendix HIGHLY CONFIDENTIAL 21
Slide 22: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures Net Sales and Pro Forma Net Sales 13-Weeks Ended (dollars in millions) April 4, 2021 March 29, 2020 Net Sales $ 269.2 $ 228.0 HKA Pre-Acquisition Net Sales - 2.3 Vitner's Pre-Acquisition Net Sales - 3.9 Truco Pre-Acquisitio
Slide 23: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures Adjusted Selling, General and Administrative Expense 13-Weeks Ended (dollars in millions) April 4, 2021 March 29, 2020 Selling, General and Administrative Expense - Incl Depreciation and Amortization $ 86.7 $ 68.3 Depreciat
Slide 24: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures EBITDA, Adjusted EBITDA and Further Adjusted EBITDA 13-Weeks Ended (dollars in millions) April 4, 2021 March 29, 2020 Net (Loss) Income $ (23.3) $ 1.7 Plus non-GAAP adjustments: Income Tax (Benefit) or Expense 1.0 1.5 Depre
Slide 25: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures Adjusted Net Income 13-Weeks Ended (dollars in millions, except per share data) April 4, 2021 March 29, 2020 Net (Loss) Income $ (23.3) $ 1.7 Deferred Financing Fees 2.7 0.8 Depreciation and Amortization 19.4 8.9 Non-Acquis
Slide 26: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures Further and Normalized Further Adjusted EBITDA FY 2020 FY 2021 (dollars in millions) Q1 Q2 Q3 Q4 FY 2020 Q1 TTM Further Adjusted EBITDA $ 39.6 $ 49.7 $ 52.1 $ 40.2 $ 181.6 $ 37.9 $ 179.9 Acquisition Synergies(1) 2.9 2.6 2.0
Slide 27: Continued eCommerce Growth Outpacing the Category
Continued eCommerce Growth Outpacing the Category eCommerce Retail Sales YoY Change eCommerce % of Retail Sales (13-Weeks Ended 4/4/21) Total Salty Snacks 68.8% 7.1% 64.3% 57.6% 4.9% 42.5% YoY Growth 2-Year CAGR 13-weeks 13-weeks Ended 4/5/20 Ended 4/4/21 Source: IRI eMarket Insights and IRI Syndica
Slide 28: "Better-for-You" Portfolio Performing Well in Natural Channel
“Better-for-You” Portfolio Performing Well in Natural Channel Natural Channel Retail Sales YoY Growth (13-Weeks Ended 4/4/21) Total Salty Snacks 7.1% 5.5% (-2.5%) (-4.3%) YoY Growth 2-Year CAGR Source: SPINS, Total US – Natural Enhanced Channel (TPL) 28 ℠
Slide 29: Utz Geographies
Utz Geographies(1) WA MT ME ND VT OR MN NH ID SD WI MA NY WY MI CT RI IA PA NE NJ NV OH IL IN DE UT CO WV MD CA KS MO VA KY DC NC TN Core AZ OK AR NM SC Expansion AK GA MS AL Emerging HI TX LA Utz Geography Share FL Positions(1) Core: 9.3% Expansion: 4.5% Emerging: 2.5% Source: IRI, Total US M