Mgp Ingredients, Inc. · NASDAQ:MGPI
Mgp Ingredients — Investor Presentation (June 2021)
28 slides from Mgp Ingredients's investor presentation, June 2021
Slide 1: Investor Presentation June 2021
INVESTOR PRESENTATION June 2021
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS Certain of the comments made in this presentation and in the question and answer session that follows may contain forward-looking statements in relation to operations, financial condition and operating results of MGP Ingredients, Inc. and such statements involve a number o
Slide 3: Mission Statement
MISSION STATEMENT Secure our future by consistently delivering superior financial results by more fully participating in all levels of the alcohol and food ingredients segments for the betterment of our shareholders, employees, partners, consumers and communities. 3
Slide 4: MGP Overview
MGP OVERVIEW1 MGP has a portfolio of highly attractive business units centered around its historic core DISTILLERY BRANDED INGREDIENT PRODUCTS SPIRITS SOLUTIONS Sales: $294MM Adj. Sales: $186MM Sales: $66MM (54% of Total) (34% of Total) (12% of Total) GP Margin: 22% Adj. GP Margin: 35% GP Margin: 16
Slide 5: Distillery Products
2020 Revenue by Product Line $15,631 DISTILLERY PRODUCTS $26,109 MGP IS A LEADING SUPPLIER OF ALCOHOL SOLUTIONS TO THIRD PARTIES $5,630 Products consist of the following: $125,059 • Brown Goods: Premium bourbon and rye whiskeys sold as aged whiskey or unaged new distillate, which is then aged $80,68
Slide 6: Distillery Products
Atchison, KS Operations • • Company HQ Distillery DISTILLERY PRODUCTS • Largest supplier of distilled gin MGP’S UNIQUE EXPERTISE POSITIONS US AS THE PREFERRED PARTNER TO OUR CUSTOMERS • Grain Neutral Spirits/Vodka • Industrial alcohol • Research & Development Scale provides competitive pricing Lawre
Slide 7: Distillery Products
DISTILLERY PRODUCTS MGP IS WELL POSITIONED TO CONTINUE BENEFITTING FROM GROWTH IN U.S. SPIRITS – PRIMARILY AMERICAN WHISKEY U.S. Spirits Continue To Gain Share Of Total Beverage Alcohol Growth of American Whiskey Continues To Outperform U.S. Spirits Market Share - Revenue 5-year U.S. American Whiske
Slide 8: Distillery Products
DISTILLERY PRODUCTS MGP HAS IDENTIFIED FIVE STRATEGIES TO CONTINUE DELIVERING LONG-TERM GROWTH WITHIN THE DISTILLERY PRODUCTS SEGMENT Distillery Products Growth Strategy Distillery Products Gross Profit Ladder 1. Focused Migration Away From Industrial Alcohol To White Beverage Alcohol 2. Continue Cu
Slide 9: Branded Spirits
BRANDED SPIRITS WITH THE ACQUISITION OF LUXCO, MGP HAS AN ESTABLISHED PORTFOLIO WITH A FOCUS ON GROWING HIGH POTENTIAL, HIGH MARGIN FOCUS BRANDS LTM Oct 2020 Revenue by Product Line Focus Brands Ezra Brooks Dos Primos Rebel Yell $93,027 The Quiet Man Bowling & Burch Gin $109,206 David Nicholson Yell
Slide 10: Branded Spirits
BRANDED SPIRITS MGP’S PLATFORM INCLUDES EXTENSIVE OPERATIONAL CAPABILITIES AND A COMPREHENSIVE NATIONAL SALES FOOTPRINT Operational Capabilities National Sales Platform ■ Sales / Distributor representation in every state across the United States and a dedicated international sales team 3 ■ Dedicated
Slide 11: Branded Spirits
BRANDED SPIRITS MGP’S BRANDED SPIRITS CONTINUE TO FOCUS AND INNOVATE WITHIN U.S. SPIRITS GROWTH – PRIMARILY HIGH-END AMERICAN WHISKEY, TEQUILA & GIN Recent innovation launches are designed to capitalize on Growth across spirits categories continues to outperform in the High-End fastest growing price
Slide 12: Branded Spirits
BRANDED SPIRITS WE’VE IDENTIFIED FIVE STRATEGIES TO CONTINUE DELIVERING LONG-TERM GROWTH WITHIN THE BRANDED SPIRITS SEGMENT Branded Spirits Growth Strategy Luxco has shifted from volume growth to value growth 1. Continued Premiumization of the Portfolio 2. Commit To Making Necessary Investments To S
Slide 13: Ingredients Solutions
2020 Revenue by Product Line $1,842 INGREDIENTS SOLUTIONS MGP IS A LEADING SUPPLIER OF SPECIALTY WHEAT STARCHES & PROTEINS $7,630 • Products consist of the following: • Specialty Wheat Starches: Premium wheat starches sold to food processors and distributors, a substantial $26,960 $41,631 portion of
Slide 14: MGP Is a Leader in Providing Ingredient Solutions
INGREDIENTS SOLUTIONS MGP IS A LEADER IN PROVIDING INGREDIENT SOLUTIONS • MGP is a global provider of specialty starches and proteins • MGP is the largest producer of wheat starches in the U.S. • MGP is the largest producer of specialty wheat proteins in the U.S. • MGP holds the number one market po
Slide 15: MGP Is Strongly Positioned to Serve Growing Specialty Plant-Based Markets
INGREDIENTS SOLUTIONS MGP IS STRONGLY POSITIONED TO SERVE GROWING SPECIALTY PLANT-BASED MARKETS • Plant-based new product launches up 65% since 20121 • Global sales of alternative meats expected to reach $100B in the next decade2 • 16% of U.S. consumers eat “meatless” once per week1 • Meat substitut
Slide 16: Ingredients Solutions Growth Strategies
INGREDIENTS SOLUTIONS MGP HAS IDENTIFIED FIVE STRATEGIES TO CONTINUE DELIVERING LONG-TERM GROWTH WITHIN THE INGREDIENTS SOLUTIONS SEGMENT Ingredients Solutions Growth Strategy What Nutrients Do Consumers See As “Healthy”? 85% Dietary Fiber in Diet– #1 1. Aggressively expand market share of 84% Vitam
Slide 17: A Culture of Continuous Improvement
OPERATIONAL EXCELLENCE A CULTURE OF CONTINUOUS IMPROVEMENT • Improving throughput while maintaining consistency of high quality products • Managing commodity cost risks • Formula-driven pricing • Locking in margins • Passing through significant swings in cost • Continued focus on safety initiative –
Slide 18: Strong Balance Sheet and Cash Flows Provide Investment for Growth
STRONG BALANCE SHEET AND CASH FLOWS PROVIDE INVESTMENT FOR GROWTH • Evaluating M&A opportunities • Maintaining a broad offering of aging whiskey inventory • Supporting new distillate growth with adequate barrel warehouse capacity • Enhancing production capabilities 2020 YE Debt to EBITDA ratio of 0.
Slide 19: Q1 2021 Financial Results
Q1 2021 FINANCIAL RESULTS 19
Slide 20: Q1 Sales Were Up 9.3% with Double Digit Growth in Distillery Products
Q1 SALES WERE UP 9.3% WITH DOUBLE DIGIT GROWTH IN DISTILLERY PRODUCTS Consolidated Sales Key Drivers (quarter ended 3/31/21) Fav / (Unfav) vs Prior Year • Distillery Products growth primarily due increased sales of premium beverage $MM $MM % alcohol, primarily due to higher aged Distillery Products
Slide 21: Double-Digit Sales Growth of Aged Whiskey Despite Pandemic Uncertainty
DISTILLERY PRODCUTS DOUBLE-DIGIT SALES PERCENTAGE GROWTH OF AGED WHISKEY DESPITE PANDEMIC UNCERTAINTY Distillery Products Sales (quarter ended 3/31/21) Fav / (Unfav) vs Prior Year $MM $MM % Brown Goods $43.4 $14.3 49.3% White Goods 16.9 (0.1) (0.3) Premium Beverage Alcohol 60.3 14.3 31.1 Industrial
Slide 22: Sales Growth Remained Consistent Compared to Prior Year
INGREDIENT SOLUTIONS SALES GROWTH REMAINED CONSISTENT COMPARED TO PRIOR YEAR Ingredient Solutions Sales (quarter ended 3/31/21) $MM Fav / (Unfav) vs Prior Year $MM % Specialty wheat starches $10.2 $0.0 0.1% Specialty wheat proteins 6.1 (0.3) (5.0) Commodity wheat starches 2.3 0.4 21.6 Commodity whea
Slide 23: Operating Income Increased Due to Increased Gross Profit in Distillery Products
OPERATING INCOME INCREASED DUE TO INCREASED GROSS PROFIT IN DISTILLERY PRODUCTS SEGMENT Operating Income Drivers First Quarter 2020-21 ($MM) $10.1 $(1.0) $(2.3) $20.5 $13.7 Q1 2020 Distillery Gross Profit Ingredients Gross Profit SG&A Q1 2021 23 Note: Totals in presentation may not foot due to round
Slide 24: EPS Reflects Strong Performance in Operations
EPS REFLECTS STRONG PERFORMANCE IN OPERATIONS Earnings Per Share Drivers First Quarter 2020-21 $0.30 $0.02 $0.01 $0.90 $0.57 Q1 2020 Operations Change in effective tax rate Change in weighted average Q1 2021 shares outstanding 24 Note: Totals in presentation may not foot due to rounding
Slide 25: Appendix
APPENDIX 25
Slide 26: U.S. Spirits Market
U.S. SPIRITS MARKET 9-Liter Cases (000s) 2020 Volume % Change Total Distilled Spirits (TDS) 251,351 +5.3% Total Whiskey 72,854 +5.1% American Whiskey (Bourbon/Rye/Tennessee) 28,434 +7.0% Super Premium 4,087 +17.4% Rye ~1,400 +16.3% Vodka 76,863 +3.7% Super Premium 4,978 -2.9% Gin 10,167 +4.2% Super
Slide 27: Reconciliation of GAAP to Non-GAAP – Operating Income
RECONCILIATION OF GAAP TO NON-GAAP – OPERATING INCOME Reconciliation of GAAP to Non GAAP Measures Operating Income (Dollars in Thousands) Quarter Ended March 31, 2021 2020 Reported GAAP Operating Income $ 20,500 $ 13,708 Adjusted to remove: Business acquisition costs (a) 1,890 - CEO transition costs
Slide 28: Reconciliation of GAAP to Non-GAAP
RECONCILIATION OF GAAP TO NON-GAAP Reconciliation of GAAP to Non GAAP Measures EBITDA (Dollars in Thousands) 2020 2019 2018 2017 Net Income $ 40,345 $ 38,793 $ 37,284 $ 41,823 Interest 2,267 1,305 1,168 1,184 Taxes 12,256 7,144 11,696 10,935 Depreciation / Amortization 12,961 11,572 11,362 11,308 EB