Turning Point Brands, Inc. · NYSE:TPB
Turning Point Brands — Q3 2020 Earnings Presentation
22 slides from Turning Point Brands's earnings presentation, Oct 27, 2020
Slide 1: Turning Point Brands Investor Presentation Q3 2020
Turning Point Brands (NYSE: TPB) INVESTOR PRESENTATION Q3 2020 | NYSE: TPB | 5201 INTERCHANGE WAY, LOUISVILLE KY | TURNINGPOINTBRANDS.COM |
Slide 2: Disclaimer
Disclaimer 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," "intend," "plan" and "will" or, in each
Slide 3: TPB: Investment Highlights
TPB: Investment Highlights Turning Point Brands (NYSE: TPB) TPB Investment Highlights • MST product gaining share with long runway for distribution gains Resilient • Leading value brand in tobacco chew Core Business with • #1 premium rolling paper brand with unparalleled brand recognition Leading Br
Slide 4: We are a consumer products company
We are a consumer products company that markets products with active ingredients through iconic and emerging brands BROAD PORTFOLIO OF ACTIVE INGREDIENT ALTERNATIVES AND BRANDS 4 | NYSE: TPB | 5201 INTERCHANGE WAY, LOUISVILLE KY | TURNINGPOINTBRANDS.COM |
Slide 5: Powerful Distribution Infrastructure
Distribution Infrastructure Turning Point Brands (NYSE: TPB) Powerful Distribution Infrastructure North American retail presence that reaches over ~210,000 outlets + B2C online sites National Regional Product B2C B2B Distribution Sales Teams Sales Teams Distribution Distribution National sales team
Slide 6: Smokeless: Stoker's Brand Equity
Smokeless: Stoker’s Brand Equity Turning Point Brands (NYSE: TPB) Smokeless: 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’s is Moist Snuff Tob
Slide 7: Smokeless: Stoker's MST Distribution Growth
Smokeless: Stoker’s MST Distribution Growth Turning Point Brands (NYSE: TPB) Smokeless: Continued MST Distribution Gains Long Runway for Growth Currently in stores representing 76.8 70.4 72.8 74.9 ~59%1 of volume weighted 68.3 66.1 67.6 distribution 63.2 63.1 61.4 61.6 61.3 62.3 57.0 57.7 58.0 52.2
Slide 8: Zig-Zag: Brand Equity
Zig-Zag: Brand Equity Turning Point Brands (NYSE: TPB) Smoking: Iconic Brand with Leading Market Share About Zig-Zag Papers Wraps New Product Launches Embedded into pop culture #1 premium rolling paper Market leader in MYO cigar Continued roll-out of paper with a storied history that brand sold in t
Slide 9: Zig-Zag: Growth Initiatives
Zig-Zag: Growth Initiatives Turning Point Brands (NYSE: TPB) Smoking: Expanding Portfolio and Sales Channels Classic Zig-Zag Products Growth Initiatives New products and accessories Re-vamped e-commerce platform Enhanced brand Iconic Products with presence in headshops Unparalleled Recognition and d
Slide 10: Acquisition of Durfort Holdings Assets
Acquisition of Durfort Holdings Assets Turning Point Brands (NYSE: TPB) Acquisition of assets of Durfort Holdings Acquisition of assets from Durfort Holdings S.R.L. (“Durfort”) in Q2 2020 • Acquired a co-ownership interest in our long-term partner Durfort’s intellectual property related to TPB’s MYO
Slide 11: NewGen: Proprietary Products Growth
NewGen Segment Turning Point Brands (NYSE: TPB) NewGen: Proprietary Products Growth Executing on a multi-year journey to increase proprietary products sales in the NewGen segment Proprietary product gross margins (50%+) exceed third-party product gross margins (20% - 40%) 2016 2017 2018 2019 2020 20
Slide 12: Nu-X New Product Portfolio
Nu-X: New Product Portfolio Turning Point Brands (NYSE: TPB) Nu-X New Product Portfolio Robust Pipeline of New Product Introductions Nu-X Nutra Nicotine Chew Caffeine B12 - Café Disposable Solace Chew - Mint 4mg Caffeine B12 - Energy Disposable Solace Chew - Cinnamon 4mg Caffeine B12 - Tablets Solac
Slide 13: TPB: Navigating Regulated Environments
TPB: Navigating Regulated Environments Turning Point Brands (NYSE: TPB) Management of Regulatory Environments Extensive experience managing regulatory regime changes REGULATORY STRATEGY • TPB does not sell cigarettes, the primary target of the FDA • Concentrated effort to shape premarket pathway for
Slide 14: Strategic Investments
Strategic Investments Turning Point Brands (NYSE: TPB) Strategic Investments dosist and Wild Hempettes dosist – announced $15 million strategic investment on October 27, 2020 • Leading globally recognized cannabis brand with powerful marketing organization • Products currently available in CA, CO, N
Slide 15: Total Sales and Segment Breakdown
Segment Breakdown Turning Point Brands (NYSE: TPB) Total Sales and Segment Breakdown Internal initiatives leading to accelerated organic growth in our core segments Smokeless (Stoker’s) Drivers 2016 2017 2018 2019 9mo 19 9mo 20 YoY • Looseleaf: Targeted sales initiatives in 2020 Smokeless (Stoker's)
Slide 16: TPB: Financial Summary
TPB: Financial Summary Turning Point Brands (NYSE: TPB) TPB Earnings Performance Robust Adjusted EBITDA growth with significant acceleration expected for 2020 2016 – 2020E Adjusted EBITDA CAGR: ~14%* $87-90* $67.3 $64.6 $60.0 $52.4 2016 2017 2018 2019 2020E Note: $ in millions. Reference GAAP reconc
Slide 17: Building a Capital Efficient Business Model
Asset-Light Business Model Turning Point Brands (NYSE: TPB) Building a Capital Efficient Business Model Asset-light business model that generates significant free cash flow Initiatives: ADJUSTED EBITDA VS. CAPITAL EXPENDITURES ✓ Outsourced manufacturing of Adjusted EBITDA 1 Capital Expenditures most
Slide 18: Recent Business Highlights
Recent Business Highlights Turning Point Brands (NYSE: TPB) Recent Business Highlights Strong recent performance is a result of tactical repositioning of the business over the last 12 months and executing on this plan • Net Sales of $104 million versus late-July guidance of $90 to $95 million with c
Slide 19: 2020 Objectives
2020 Objectives Turning Point Brands (NYSE: TPB) 2020 in Focus: Strategies and Objectives Maximize the Core Business • Drive Stoker’s MST growth through increased distribution and same-store-sales growth • Expand Zig-Zag’s reach with new product introductions, channel specific strategies and e-comme
Slide 20: Appendix
Turning Point Brands (NYSE: TPB) Appendix | NYSE: TPB | 5201 INTERCHANGE WAY, LOUISVILLE KY | TURNINGPOINTBRANDS.COM |
Slide 21: GAAP Reconciliation
GAAP Reconciliation Turning Point Brands (NYSE: TPB) GAAP Reconciliation Reconciliation of GAAP Net Income to Adjusted EBITDA ($ in millions) 2016 2017 2018 2019 Net income attributable to Turning Point Brands, Inc. $26.9 $20.2 $25.3 $13.8 Add: Interest expense, net $26.6 $16.9 $14.8 $17.3 Loss on e
Slide 22: Thank You
Turning Point Brands (NYSE: TPB) THANK YOU | NYSE: TPB | 5201 INTERCHANGE WAY, LOUISVILLE KY | TURNINGPOINTBRANDS.COM |