Canopy Growth Corporation · TSX:WEED
Canopy Growth — Q3 FY2024 Earnings Presentation
25 slides from Canopy Growth's earnings presentation, Feb 26, 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)
2 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 stateme
Slide 3: Disclaimers and Cautionary Statements: Forward-Looking Information (2/3)
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
Slide 4: Disclaimers and Cautionary Statements: Forward-Looking Information (3/3)
4 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 a
Slide 5: Disclaimers and Cautionary Statements: Website References, Participants in the Solicitation
5 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 o
Slide 6: Non-GAAP Measures
6 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 e xcl ude income tax re
Slide 7: Canopy Growth: Positioned for sustainable cannabis market leadership
7 canopy Growth: Positioned for sustainable cannabis market leadership Dedication to unleashing the power of cannabis in key markets Asset - light Improving adaptability to market demands, Industry leading contract manufacturing organization (CMO) partnerships Cannabis centered Brand & Consumer - le
Slide 8: Canopy is dedicated to being a leader in the cannabis sector
This information is confidential; it is not to be relied on by any 3rd party without prior written consent. 8 Canopy is dedicated to being a leader in the cannabis sector with disciplined and measured investment in emerging markets Cannabis centered: Delivering the Benefits of Cannabis to consumers
Slide 9: Global Opportunity: A $65B Cannabis Market Opportunity by 2027
9 Global Opportunity: A $65b CANNABIS MARKET OPPORTUNITY BY 2027 1 1 Represents Adult - Use and Medical Cannabis market forecasts for U.S., Canada, Germany; and Medical Cannabis forecasts for Austra lia, Poland and Czech Republic. Forecasts and estimates are subject to risk factors described in the
Slide 10: Business Transformation: Significant Improvement in Gross Margins and Reduced Cash Burn
10 • Completed structural transformation to cannabis - focused, asset - light business with divestiture of This Works • Second consecutive quarter of significant gross margin improvement and reduced cash burn • Delivered additional cost reduction of $36 MM in Q3 FY2024 , bringing the total cost redu
Slide 11: Canadian Cannabis Performance
11 • 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 the Wana ® brand edibles to the portfolio. • The Company held its ranking of top 3 supplier
Slide 12: International Medical: Strong Demand for Proven Flower Strains
12 • 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 introduce these strains to medical practitioners contributed to growth in the Austra
Slide 13: Storz & Bickel: Strong Demand for New Venty Portable Vaporizer
13 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
Slide 14: Canopy USA: U.S. THC platform demonstrates asset-light growth capabilities
14 Canopy USA 1 : U.S. THC platform demonstrates asset - light growth capabilities 1. Canopy USA holds the U.S. THC investments that were previously held by Canopy, which is expected to enable Canopy USA to exer cis e rights to acquire Acreage, Wana and Jetty and convert its conditional ownership of
Slide 15: FY2024 Business Outlook
15 FY2024 BUSINESS OUTLOOK Short - Term Focus and Priorities: • Deliver positive Adjusted EBITDA 1 in all business units exiting FY2024 • Drive revenue growth in all businesses: • Canadian cannabis : Continue to build performance momentum in priority market segments and execute against growth opport
Slide 16: Q3 FY2024 Financial Results
16 Q3 FY2024 FINANCIAL RESULTS
Slide 17: Key Financial Highlights
17 Q2 FY2024 KEY FINANCIAL HIGHLIGHTS (CDN in millions) Q3 FY2024 Q3 FY2023 (As Restated) vs. Q3 FY2023 Net Revenue $78.5 $84.9 (7%) Gross Margin 36% 6% 3,000 bps Adjusted EBITDA 1 $(9.0) $(49.7) 82% Free Cash Flow 1 $(33.9) $(79) 57% Cash / Marketable Secs. $186.1 $789.3 (76%) Canopy delivered Cons
Slide 18: Revenue Performance by Channel
18 REVENUE PERFORMANCE BY CHANNEL (in millions of Canadian dollars, unaudited ) Q3 FY2024 Q3 FY2023 (As Restated) vs. Q3 FY2023 Canadian Recreational Cannabis Net Revenue Business - to - business 1 $23.4 $21.5 9% Business - to - consumer $ - $11.0 (100%) $23.4 $32.5 (28%) Canadian Medical Cannabis N
Slide 19: Gross Margin Performance
19 GROSS MARGIN PERFORMANCE Drivers of Q3 FY2024 Consolidated Gross Margin Performance (+) Improvement in our Canada cannabis segment, primarily attributable to: • ( i ) the realized benefit of our cost savings program and strategic changes to our business; • (ii) a year - over - year decrease in wr
Slide 20: Free Cash Flow and Debt
20 FREE CASH FLOW AND DEBT Free Cash Flow 1 ($CAD’MM) (79) (34) (90) (80) (70) (60) (50) (40) (30) (20) (10) - Q3 FY23 Q3 FY24 Q3FY23 Q3 FY24 1,354 1,206 1,307 1,045 681 612 - 200 400 600 800 1,000 1,200 1,400 1,600 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Total Debt Balance ($ CAD’MM ) Free
Slide 21: Appendix
21 APPENDIX
Slide 22: Adjusted Gross Margin (Non-GAAP) Reconciliation
22 ADJUSTED GROSS MARGIN 1 (NON - GAAP) RECONCILIATION
Slide 23: Adjusted EBITDA (Non-GAAP) Reconciliation
23 ADJUSTED EBITDA 1 (NON - GAAP) RECONCILIATION
Slide 24: Free Cash Flow (Non-GAAP) Reconciliation
24 FREE CASH FLOW 1 (NON - GAAP) RECONCILIATION
Slide 25: Thank You
25 THANK YOU