Hostess Brands — Q2 2023 Earnings Presentation
21 slides from Hostess Brands's earnings presentation, Aug 8, 2023
Slide 1: Investor Presentation August 8, 2023
__________________________________ Investor Presentation August 8, 2023
Slide 2: Forward Looking Statements
Forward Looking Statements This investor presentation contains statements reflecting our views about the future performance of Hostess Brands, Inc. and its subsidiaries (referred to as “Hostess Brands,” the “Company,” “we,” “us,” or “our”) that constitute “forward- looking statements” that involve s
Slide 3: Key Takeaways
3 Key Takeaways Net revenue increased 3.5%, up 10.0% on a 2-year CAGR, driven by strong net price realization Executing well with clear progress on our customer and consumer growth initiatives to deliver strong volume-driven 2H growth Hostess Brands innovation continues to outperform the categ
Slide 4: Above-algo Profit Growth Consolidated Financial Results
4 Above-algo Profit Growth Consolidated Financial Results Adjusted Gross Profit, Adjusted Gross Margin, Adjusted Operating Income, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted EPS are non-GAAP financial measures. See “Use of Non-GAAP Financial Measures” in the Appendix for an explanation of
Slide 5: Second Quarter Financial Highlights: Continued Profitable Growth
YoY Growth 5 Adjusted EBITDA and Adjusted EPS are non-GAAP financial measures. See “Use of Non-GAAP Financial Measures” and the Appendix for an explanation of all non-GAAP financial measures and reconciliations to the comparable GAAP measures. Second Quarter Financial Highlights Continued Profitable
Slide 6: Revenue Growth Driven by the Hostess Brand Lapping Double-Digit Growth
Three Months Ended June 30, Six Months Ended June 30, ($ in millions) 2023 2022 % Change 2023 2022 % Change Sweet Baked Goods $317.5 $303.5 4.6% $626.0 $599.8 4.4% Cookies $34.8 $37.0 (5.9%) $71.8 $72.7 (1.2%) Total Net Revenue $352.4 $340.5 3.5% $697.8 $672.5 3.8% 6 Revenue Growth Driven by the Hos
Slide 7: Price/Mix Continues to Drive Topline
7 Price/Mix Continues to Drive Topline Volume Declines Moderated Sequentially from the First Quarter 3.5% Organic Net Revenue Growth 10.4% (6.9)%
Slide 8: Outstanding Execution Driving Growth in Sweet Baked Goods and Cookie Categories
Q2 2021 Q2 2022 Q2 2023 8 Outstanding Execution Driving Growth in the Sweet Baked Goods and Cookie Categories Continued POS Dollar Growth Source: Nielsen, Total Nielsen Universe for the Company within the U.S. SBG Category and Cookie Category. Point of Sale, 13 weeks ending 7/3/21, 7/2/22 and 7/1/23
Slide 9: Solid Growth in Immediate Consumption Occasion
2.2% 15.2% 3.7% 16.1% 9 Single-Serve and Multi-Pack Point-of-Sale Trends Multi-Pack Point-of-Sale Single-Serve Point-of-Sale Source: Nielsen, Total Nielsen Universe for the Company within the U.S. SBG Category. Point of Sale, 13 weeks ending 7/2/22 and 7/1/23. Q2 2022 Q2 2023 Single-serve 2-year Sta
Slide 10: Consistent Track Record of Point-of-Sale Growth
10 Double Digit CAGR in the SBG Category Over the Last Five Years Consistent Track Record of Point-of-Sale Growth Dollar Market Share (52 weeks) 19.1% 19.5% 20.4% 21.7% 20.6% 2019 2020 2021 Point-of-Sale (52 weeks, in millions) $1,226 $1,318 $1,426 $1,703 $1,822 2019 2020 2021 20222022 Source: Niels
Slide 11: Flexibility to Invest in Growth and Generate Shareholder Value
11 Flexibility to Invest in Growth and Generate Shareholder Value Executing on Key Capital Allocation Priorities 4.0x** 3.3x Support Core Growth Targeted M&A Return Capital to Shareholders Manage Net Leverage $58.2 million capital expenditures in YTD 2023, including investment in new bakery to suppo
Slide 12: Raising Full-Year 2023 EBITDA and EPS Guidance
12 Raising Full-Year 2023 EBITDA and EPS Guidance Adjusted EBITDA and Adjusted EPS are non-GAAP financial measures. See “Use of Non-GAAP Financial Measures” and the Appendix for an explanation of all non-GAAP financial measures. The Company does not provide a reconciliation of forward-looking financ
Slide 13: Long-term Growth Algorithm
5-7% EBITDA Growth Mid-Single Digit Organic Revenue Growth 7-9% EPS Growth Attractive Long-Term Growth Delivering Strong Growth While Maintaining our Industry-leading Margins Long-term Growth Algorithm See "Forward Looking Statements." EBITDA is a non-GAAP financial measure defined as earnings befor
Slide 14: Our Focused Strategy is Driving Consistent Profitable Growth
14 Our Focused Strategy is Driving Consistent Profitable Growth Disciplined Execution and Cash Deployment Investing in Data and Capabilities for Growth Unlocking Potential of Talented Team Targeted Focus on Growing Snacking Occasions
Slide 15: Premier Snacking Pure-Play
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 15 Premier Snacking Pure-Play Snacking ~100% of Total Retail Sales Source: NielsenIQ Total Snacking as percentage of All Departments Cal Yr 2022 W/E 12/31/22
Slide 16: Our Portfolio is Fully Aligned with Targeted Occasions
Our Portfolio is Fully Aligned with Targeted Occasions $65B Market Opportunity $6.7B Market Size Morning Sweet Start Afternoon Reward Market Size $15.1B $9.8B Immediate Consumption Market Size $25.8B Evening Reward Market Size 16Source: McKinsey Analytics with Nielsen POS data through November 2022
Slide 17: Innovation Pipeline Driving Sustainable Growth
17 Innovation Pipeline Driving Sustainable Growth Source: Nielsen, Total Nielsen Universe for the Company within the U.S. SBG Category, 52 weeks ending 1/1/22 and 12/31/22 New Products Launched in 2023
Slide 18: Innovation Pipeline Driving Sustainable Growth: New Products Launched in 2023
18 Innovation Pipeline Driving Sustainable Growth New Products Launched in 2023 Added easy open features “Zero Sugar” re-branding
Slide 19: Appendix
Appendix 19
Slide 20: Non-GAAP Reconciliations
20 Non-GAAP Reconciliations 1. Project consulting costs are included in general and administrative on the condensed consolidated statement of operations. 2. In 2023, costs related to certain corporate initiatives and are included in other expense on the condensed consolidated statement of operations
Slide 21: Non-GAAP Reconciliations
21 Non-GAAP Reconciliations 1. Project consulting costs are included in general and administrative on the condensed consolidated statement of operations. 2. In 2023, costs related to certain corporate initiatives and are included in other expense on the condensed consolidated statement of operations