Organigram Global Inc. · TSX:OGI
Organigram Global — Q1 2024 Earnings Presentation
49 slides from Organigram Global's earnings presentation, February 2024
Slide 1: Investor Presentation Q1 Fiscal 2024
INVESTOR PRESENTATION NASDAQ (OGI) TSX (OGI) Q1 Fiscal 2024 12 | 31 | 23 1
Slide 2: Cautionary Statement
CAUTIONARY STATEMENT This document is current as of December 31, 2023, except where otherwise management’s discussion and analysis and other Company documents filed from information under the heading "Cautionary Statement Regarding Certain Non- stated. The information contained in this presentation
Slide 3: Who We Are
WHO WE ARE 2022 Founded in 2013, we are an award-winning cannabis licensed producer with operations spread across Canada Our Vision: To be a respected global leader in the emerging cannabis movement 2023 Our Mission: To delight consumers with trusted brands that deliver innovative cannabis products
Slide 4: Our Strategy
OUR STRATEGY INNOVATION CONSUMER FOCUS EFFICIENCY EXPANSION Leverage our brands, product portfolio and culture of innovation to: Increase Drive Deliver long-term Reach market share profitability shareholder value new markets 4
Slide 5: Near-Term Strategy
NEAR-TERM STRATEGY Organigram continues to demonstrate a track record of innovation informed by consumer research, resulting in market share increases in several categories • Revolutionized hash with patent pending SHRED X Rip-Strips • First to market with ingestible extracts and milled flower • Int
Slide 6: Long-Term Strategy
LONG-TERM STRATEGY Organigram has strategically deployed capital to fuel automation, production efficiency, and product consistency needed to attract and retain international distribution partners • Production and packaging lines for gummies, milled flower, and pre-rolls are now highly automated • C
Slide 7: Established Trend of Revenue Growth
ESTABLISHED TREND OF REVENUE GROWTH $233.6 Annual Revenue $ millions $209.1 $161.6 $145.8 $109.8 $103.3 $97.5 $86.7 $80.4 $79.1 F2019 F2020 F2021 F2022 F2023 1 Net Revenue Gross Revenue 1. F2023 represents 13 months due to a change in 7 Organigram's y ear end.
Slide 8: Organigram Key Strengths
ORGANIGRAM KEY STRENGTHS STRONG STATE-OF-THE- HIGH NATIONAL & INNOVATION EXCELLENCE IN BALANCE SHEET ART FACILITIES PERFORMING INTERNATIONAL FOCUS EXECUTION REACH • Negligible debt (less • Moncton facility is one • $233.6M gross • National sales and • First to market with • Consumer insights- than $
Slide 9: BAT Investments in Organigram
BAT INVESTMENTS IN ORGANIGRAM March 2021 - $221 million strategic investment from subsidiary of BAT for 19.9% equity interest1 in Organigram • Product Development Collaboration (PDC) with formation of a Center of Excellence (CoE) at our Moncton campus • Focused on developing the next generation of
Slide 10: Product Development Collaboration
PRODUCT DEVELOPMENT COLLABORATION Organigram and BAT contributing complimentary capabilities and sharing a commitment to responsible category stewardship. The PDC continues to focus on the development of next generation products, adhering to the highest regulatory and compliance standards Collaborat
Slide 11: Jupiter Investment Approach
JUPITER INVESTMENT APPROACH Jupiter will target investments in emerging cannabis opportunities 1 Priority Investment Pillars Geographies • USA • All potential investments will be made against Organigram’s strategic vision • Emerging global for the future, focusing on long-term sustainable growth and
Slide 12: Strategic Investments in Innovation
STRATEGIC INVESTMENTS IN INNOVATION Organigram has a track-record of first-to-market innovations and is positioned to realize defensible competitive advantages from investments in technology Growing Portfolio of First-to-market Successes Competitive Technologies • Milled flower with custom flavour b
Slide 13: Domestic & International Expansion
DOMESTIC & INTERNATIONAL EXPANSION Organigram continues to grow domestic market share in key categories and over-indexes in international sales as a proportion of Canadian exports: Canadian Market Rest of World • #2 market share position in Canada1 • In F2023 Organigram shipped an estimated 10% of a
Slide 14: State of the Art Facilities
STATE OF THE ART FACILITIES Organigram's legacy of execution excellence & stability is established in the Canadian market, supported by three fully-scaled, state-of-the-art facilities: Moncton Winnipeg Lac-Supérieur • One of the largest indoor cannabis facilities • 51,000 sq. ft. edibles facility wi
Slide 15: Brand Portfolio
BRAND PORTFOLIO 15
Slide 16: Well-Rounded Brand Portfolio
WELL-ROUNDED BRAND PORTFOLIO Pricing Segment Super Value Value Value Mainstream Mainstream Mainstream Premium Craft Pre-Milled Flower, Pre-Roll Joints, Pre-Rolls, Available / Whole Flower, Hashish, Whole Flower Infused Gummies, CBD & Minor Infused Pre-Rolls, Whole Flower Planned Whole Flower Pre-Rol
Slide 17: Dynamic Brand Performance
DYNAMIC BRAND PERFORMANCE Rip-Strip Hash on a Tear Monjour Market Share Up by 14.3% Organigram is the #1 LP in MS Points vs. Prior Year1 Concentrates • Launched in March 2023 • Monjour Holds 62% of the pure- • Organigram holds >21% of national • Over 330K units shipped CBD national market share as o
Slide 18: Dynamic Brand Performance
DYNAMIC BRAND PERFORMANCE SHRED X Heavies – 40%+ THC Infused Pre-Rolls (IPRs) Tube Style Pre-Rolls • IPR’s are the biggest contributor for growth in • Tube style pre roll segment growing at 52% year- Canada (40% of overall growth came from IPRs) 1 over-year versus cones at 0.8% (Q1 vs LY) 1 • As of
Slide 19: Strategic Investments
STRATEGIC INVESTMENTS 19
Slide 20: Investment in Disruptive Vaping Technology
INVESTMENT IN DISRUPTIVE VAPING TECHNOLOGY • In March of 2023, Organigram invested C$5.5M into Greentank, a vape R&D firm and hardware manufacturer • Greentank's heating technology is the first meaningful innovation in the vape space in almost a decade. • Invented a novel heating element which repla
Slide 21: Investment in Seed Genetics & THCV
INVESTMENT IN SEED GENETICS & THCV • In May of 2023, Organigram made its first investment into the U.S cannabis market by issuing a strategic convertible loan to Phylos • Phylos will enable Organigram to accelerate the launch of products containing THCV in the Canadian market – THCV provides consume
Slide 22: Investment in Disruptive Technology - Biosynthesis
INVESTMENT IN DISRUPTIVE TECHNOLOGY-BIOSYNTHESIS BIOSYNTHESIS How it works? A proprietary Biosynthesis can be used to produce • 49% ownership (if convertible debt converted) of Hyasynth cannabinoid manufacturing cannabinoids that are identical to those produced by the plant itself. Biologicals Inc.,
Slide 23: International
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Slide 24: Significant International Sales Growth
SIGNIFICANT INTERNATIONAL SALES GROWTH $18.9 $15.1 INTERNATIONAL NET REVENUE1 $ millions High margin international sales expected to increase further in F2024 $3.8 1. International shipments do not attract Canadian Federal excise taxes and theref ore gross, and net rev enues are equal. 2. F2023 repr
Slide 25: International Business
INTERNATIONAL BUSINESS • In F2023 shipped $18.9 million in flower vs. $15.1 million in full year F2022 • In Q1 F2024, Organigram shipped $1 million in flower to Australia • May 22, 2023: announced a new agreement to supply the German medical market through Sanity Group • January 2024: First shipment
Slide 26: Quarterly Updates & Highlights
QUARTERLY UPDATES & HIGHLIGHTS Q1 F2024 26
Slide 27: A Leading Canadian LP
A LEADING CANADIAN LP • Organigram achieved the #2 national market share position1 • Held the #1 position in milled flower, the #1 position in concentrates, the #2 position in gummies, and the #3 position in all pre-rolls nationally1 • Reintroduced Edison Jolts to market, achieving #2 brand position
Slide 28: Quarterly Revenue
QUARTERLY REVENUE 1. Q4 F23 represents a 4-month period due to a $65.7 change in Organigram's year end. Net and gross revenue here have been normalized to reflect a $60.9 3-month period. $55.2 $56.3 $52.9 $53.6 $48.4 $45.5 $43.9 $43.3 $39.5 REVENUE $38.1 $36.5 $ millions $34.5 $31.8 $32.8 1 Q2 F22 Q
Slide 29: Adjusted Gross Margin
ADJUSTED GROSS MARGIN 2. Q4 F’23 represents a 4-month period due to a change in Organigram's year end. Adjusted gross margin dollars here have been normalized to reflect a 3-month period. $13.4 $12.8 $11.2 $10.4 $9.3 34% 30% 31% ADJUSTED $8.2 GROSS MARGIN1 26% $ millions and % of 24% 23% $6.1 $5.9 N
Slide 30: Adjusted EBITDA
ADJUSTED EBITDA 1. Q4 F2023 represents 4 months due ADJUSTED to a change in Organigram's year end. Adjusted EBITDA here has EBITDA1 been normalized to reflect a 3- $ millions $5.6 $5.6 month period. $3.2 $1.6 $0.6 $0.1 -$1.8 1. Adjusted EBITDA is a non-IFRS Financial -$2.9 Measure not def ined by an
Slide 31: Q1 F2024 Strategic Highlights
Q1 F2024 STRATEGIC HIGHLIGHTS • Completed planting first seed-based production grow room resulting from strategic investment in US-based Phylos • Advanced the second tranche of US$2.75 million to Phylos for a total current investment of US$6.0 million in senior secured convertible loans due to early
Slide 32: Q1 F2024 Key Efficiency Highlights
Q1 F2024 KEY EFFICIENCY HIGHLIGHTS Moncton • Harvest of 19,860 kg in Q1 F2024 • Increasing efficiency through internalizing testing and remediation, as well as increasing automation - $2.1M in savings realized in Q1 F2024 • 53% increase in flower produced with over 24% THC content • Cantos machine p
Slide 33: Strong Balance Sheet and Liquidity
STRONG BALANCE SHEET AND LIQUIDITY • On December 31, 2023, the Company had cash of $54.6 million (including restricted cash) • In Q1 F2024, Organigram generated $7.7 million in cash flow from operations • In January 2024, the Company closed the first $41.5 million tranche of $124.6 million follow-o
Slide 34: Q1 Fiscal 2024 Key Financial Metrics
Q1 FISCAL Q1'24 Q1'23 % Change 2024 KEY Gross revenue 56.3 60.9 (8%) Excise taxes (19.8) (17.6) 13% FINANCIAL Net revenue 36.5 43.3 (16%) Cost of sales 26.9 31.6 (15%) METRICS Gross margin before fair value changes to biological assets & inventories sold Realized fair value on inventories sold and o
Slide 35: Fiscal 2024 Outlook
FISCAL 2024 OUTLOOK • Expecting solid F24 net revenue – anticipated to be higher than Fiscal23 due to: • Strong market share – positioned as the #2 LP 1 • Continued expansion of product portfolio in multiple segments • Focus on expansion in key growth categories of vapes and pre-rolls • Greater c
Slide 36: Potential Upside for Gross Margins
POTENTIAL UPSIDE FOR GROSS MARGINS • Improved economies of scale and efficiencies as cultivation and production volumes continue to increase • Targeting ~$10 million in savings in F2024 due to facility enhancements conducted in F2023 • Conversion of portion of garden to seed based production by the
Slide 37: Appendix
APPENDIX 41
Slide 38: March 2021 BAT Transaction Summary
MARCH 2021 BAT TRANSACTION SUMMARY • Subsidiary of BAT subscribed for 58.3M common shares of Organigram, which represented a 19.9% equity interest in March 2021 1 on a post-transaction basis • Total proceeds to Organigram in March 2021 of ~C$221 million (the “Investment Proceeds”) Investment • The p
Slide 39: November 2023 BAT Transaction Summary
NOVEMBER 2023 BAT TRANSACTION SUMMARY • Subject to requisite Organigram shareholder approval, regulatory approvals and other conditions, subsidiary of BAT to subscri be for, in aggregate, ~38.7 million shares of Organigram, over three tranches, at C$3.2203/share. • Total gross proceeds to Organigram
Slide 40: An uplifting & vibrant value brand focused on convenience
An uplifting & vibrant value brand focused on convenience. Tropic Thunder 7g pre-milled Wild Berry Blaze SHRED’ems Gnarberry 1g 510 v ape SHRED X Rip Strips 44
Slide 41: An imaginative brand with iconic strains and stellar extracts
An imaginative brand with iconic strains and stellar extracts. Holy Mountain Mac-1 3.5 g, R*ntz 3.5g, Pressed Hash 45
Slide 42: Delivering high-quality ounces in a variety of strains
Delivering high-quality ounces in a variety of strains. Pink Cookies I.C.C. Ultra Sour 46
Slide 43: CBD and minor cannabinoid gummies
CBD and minor cannabinoid gummies, designed for a personal wellness ritual. Monjour Berry Good Day Monjour Orchard Medley 47
Slide 44: A premium brand focused on flower & innovation
A premium brand focused on flower & innovation. Limelight 3.5g dried f lower Edison JOLTS – Electric Lemon Cherry Limelight Bubble Hash Joints 48
Slide 45: Premium hash, inspired by the timeless tradition of hashish
Premium hash, inspired by the timeless tradition of hashish. Tremblant 2g Hash 49
Slide 46: Craft cannabis featuring rare cultivars
Craft cannabis featuring rare cultivars grown with utmost attention and care. Laurentian Saisons 3.5 g 50
Slide 47: Q1 Fiscal 2024 Select Balance Sheet Metrics
Q1 FISCAL 2024 SELECT BALANCE SHEET METRICS SELECT BALANCE SHEET METRICS December 31, 2023 September 30, 2023 % Change Cash & short-term investments (excluding restricted cash) 41,815 33,864 23% Biological assets & inventories 81,234 80,953 0% Other current assets 37,240 41,159 (10%) In $000s unl
Slide 48: Q1 Fiscal 2024 Capital Structure
Q1 FISCAL 2024 CAPITAL STRUCTURE Dec 31, Sept 30, in $000s 2023 2023 Current and long-term debt 136 155 Shareholders’ equity 257,825 271,623 Total debt and shareholders’ equity 257,961 271,778 in 000s Outstanding common shares 81,162 81,162 Options 2,788 2,830 Warrants - 4,236 Top-up rights 1,745 2,
Slide 49: A Canadian Cannabis Leader
A CANADIAN CANNABIS LEADER NASDAQ (OGI) TSX (OGI) 53