Utz Brands Inc · NYSE:UTZ
Utz Brands — Q2 2021 Earnings Presentation
29 slides from Utz Brands's earnings presentation, Aug 12, 2021
Slide 1: Utz Brands, Inc. Q2 2021 Earnings Presentation
℠ Utz Brands, Inc. Q2 2021 Earnings Presentation August 12, 2021 1
Slide 2: Disclaimer
Disclaimer Forward-Looking Statements Certain statements made herein are not historical facts but are “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, as amended. The forward-looking statements generally are acco
Slide 3: Business Overview
Business Overview Dylan Lissette, Chief Executive Officer 3
Slide 4: Key Messages
Key Messages For the 13-weeks ended July 4, 2021, IRI retail sales two-year CAGR of 6.5% shows continued momentum 2Q’21 margins impacted by higher than planned input costs and these are expected to remain more elevated than previously anticipated Fiscal 2021 earnings outlook lowered to reflect
Slide 5: Summary of Q2 Results
Summary of Q2 Results Net Sales growth of 23% reflects the positive contribution from acquisitions and price/mix, partially offset by lapping the impact of COVID-19 in 2020 (largest lap in Q2’20) – Pro Forma Net Sales 2-year CAGR of 6.1%, an increase from 4.3% in Q1 Gross margins primarily impac
Slide 6: Two-Year Growth Rates Continue to Accelerate
Two-Year Growth Rates Continue to Accelerate As we lap peak COVID-19 pantry stocking in the year ago period, we are driving strong and accelerating two-year growth rates led by our Power Brands Retail Sales 2-Year CAGR Rolling 12-Week Trend 10% 8.8% Utz Power Brands 8.1% (87% of sales) 7.7% 7.6% 7.6
Slide 7: Power Brands’ Share Gains Continue
Power Brands’ Share Gains Continue Our long-term value creation strategies are working as we continue to prioritize our investments in Power Brands and reduce emphasis on Foundation Brands Power Brands Retail Sales Change(1) Foundation Brands Retail Sales Change(1)(2) (13-Weeks Ended 7/4/21) (13-Wee
Slide 8: Growth Across Major Sub-Categories
Growth Across Major Sub-Categories Potato chips and tortilla chips comprise over 60% of our Retail Sales and we continue to significantly outpace the category over the last two years Delivered Power Brands two-year share gains across four of five major sub-categories Sub-Category Retail Sales 2-Year
Slide 9: Expansion & Emerging Geographic Momentum Continues
Expansion & Emerging Geographic Momentum Continues Expansion and Emerging continue to outperform with Power Brands’ growth ~500bps better than the Category Good Health® and Foundation Brands contributed to ~200bps of gap to Category in the Core Geographic Channel Retail Sales 2-Year CAGR (13-Weeks E
Slide 10: Power Brands’ Share Gains in Grocery and C-Store
Power Brands’ Share Gains in Grocery and C-Store Power Brands continue to outperform the Category with continued momentum across all channels Mass gap narrowed vs. 1Q’21 and key space gains are expected in 2H’21 Retail Channel Retail Sales 2-Year CAGR (13-Weeks Ended 7/4/21) Total Salty Snacks Power
Slide 11: Sales Momentum Building in the Second Half of 2021
Sales Momentum Building in the Second Half of 2021 Lapping COVID-19 impact in 1H’20 2-Year Pro Forma Net Sales CAGR (year-over-year) Delivering key space and feature wins at a large Mass Channel retailer 6% to 7% C-store and food service channels are rebounding 5.2% Accelerating Power Brands
Slide 12: Four-Week Trends Continue to Improve
Four-Week Trends Continue to Improve Retail Sales 2-Year CAGR Rolling 4-Week Trend 9.6% 9.0% Utz Power Brands 8.6% 8.3% 8.1% 7.6% 7.6% 7.2% 7.5% Total Salty Snacks 6.8% 7.8% 5.8% 7.3% 5.9% Utz Brands 5.5% 6.9% 6.7% 5.6% 5.6% 5.1% 4.3% Utz Foundation Brands -0.7% -2.3% -2.4% -2.4% -2.9% -3.9% -3.9% 4
Slide 13: Truco Integration On Track
Truco Integration On Track TRUCO 2-Year CAGR Trend by Utz Geography 1H’21 Integration Progress and Milestones (4-Week Period Retail Sales Change %) ON THE BORDER® tortilla chips have only a 21.6% 50% ACV and we are leveraging the Utz sales Truco (Core) force to drive increasing growth and unlock r
Slide 14: Financial Performance
Financial Performance Cary Devore, Chief Financial Officer 14
Slide 15: Second Quarter 2021 Financial Results Summary
Second Quarter 2021 Financial Results Summary 2Q’20 2Q’21 YoY Results Results Change In $millions, except per share amounts Net Sales 242.0 297.9 23.1% Pro Forma Net Sales 311.7 299.2 (4.0%) Adj. Gross Profit 90.4 105.4 16.6% % of net sales 37.4% 35.4% (200bps) Adj. SG&A 58.9 72.3 22.8% % of net sal
Slide 16: Q2 Balance Sheet and Additional Items
Q2 Balance Sheet and Additional Items As of July 4, 2021, the Company had $26.7M of cash on hand and an undrawn revolving credit facility, providing liquidity in excess of $130M In 1H’21 realized approximately $13M in cash proceeds from asset sales, primarily related to independent operator rout
Slide 17: Q2 Net Sales Bridge
Q2 Net Sales Bridge Growth driven by acquisitions and price/mix Price/mix improved from Q1’21 and expected to build momentum in 2H Volumes impacted by COVID-19 overlap Pro Forma Net Sales 2-year CAGR of 6.1%, up from Q1’21 rate of 4.3% Q2 Net Sales YoY Growth Decomposition 2.3% -3.0% 24.2% -
Slide 18: Q2 Adjusted EBITDA Margin Bridge
Q2 Adjusted EBITDA Margin Bridge Positive contribution from Truco acquisition Favorable price/mix and modest benefits from productivity initiatives Higher inflation which includes commodities, transportation and labor Volume declines due to peak 2020 COVID-19 lap period Q2 Adjusted EBITDA Ma
Slide 19: Margins Are Expected to Improve in the Second Half of 2021
Margins Are Expected to Improve in the Second Half of 2021 Expect higher sales volumes, improved net price realization and benefits from productivity initiatives to drive better margin performance in 2H’21 1H’21 vs. 2H’21 Adjusted EBITDA Margins ~0.5% ~1.0% 14.5% to 16% ~1.5% ~-1.0% 13.0% The Compan
Slide 20: Aggressively Taking Steps to Manage Higher Inflation
Aggressively Taking Steps to Manage Higher Inflation In 2H’21 inflation is much higher than we previously expected, but we expect higher sales, pricing and productivity programs to nearly, or entirely, offset these higher costs versus last year, with pricing and productivity expected to have a meani
Slide 21: Updated Fiscal 2021 Outlook
Updated Fiscal 2021 Outlook Net sales outlook remains unchanged with growth accelerating in 2H’21 Earnings outlook updated to reflect higher inflation due to the challenging industry- wide supply chain environment Previous Updated Comments Pro Forma Net Sales Earnings outlook now assumes: Consiste
Slide 22: Fiscal 2021 Outlook (cont.)
Fiscal 2021 Outlook (cont.) Additional Assumptions Unchanged Assumptions – Funded $25 million Vitner's acquisition in February 2021 with balance sheet cash – Productivity of approximately 2% of cost of goods sold – Fully diluted shares on an as-converted basis of approximately 142 million Update
Slide 23: Summary
Summary Thanks to our more than 3,000 Utz associates for their incredible efforts to deliver for our customers and our consumers Power Brands continue to drive strong, and improving, two-year sales growth and market share gains, and momentum is building Input costs are significantly higher tha
Slide 24: Appendix
Appendix yp VEGGIE STRAW ed AVOCADO OIL § CLASSIC SEA SALT @ KETTLE STYLE POTATO CHIPS Fe] ©
Slide 25: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures Net Sales and Pro Forma Net Sales 13-Weeks Ended 26-Weeks Ended (dollars in millions) July 4, 2021 June 28, 2020 July 4, 2021 June 28, 2020 Net Sales $ 297.9 $ 242.0 $ 567.1 $ 470.0 H.K. Anderson Pre-Acquisition Net Sales -
Slide 26: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures Adjusted Selling, General and Administrative Expense 13-Weeks Ended 26-Weeks Ended (dollars in millions) July 4, 2021 June 28, 2020 July 4, 2021 June 28, 2020 Selling, General and Administrative Expense - Including Deprecia
Slide 27: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures EBITDA, Adjusted EBITDA and Further Adjusted EBITDA 13-Weeks Ended 26-Weeks Ended (dollars in millions) July 4, 2021 June 28, 2020 July 4, 2021 June 28, 2020 Net (Loss) Income $ 16.2 $ 6.6 $ (7.2) $ 8.2 Plus non-GAAP adjust
Slide 28: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures Adjusted Net Income 13-Weeks Ended 26-Weeks Ended (dollars in millions, except per share data) July 4, 2021 June 28, 2020 July 4, 2021 June 28, 2020 Net (Loss) Income $ 16.2 $ 6.6 $ (7.2) $ 8.2 Deferred Financing Fees 0.3 0
Slide 29: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures Further and Normalized Further Adjusted EBITDA FY 2020 FY 2021 (dollars in millions) Q1 Q2 Q3 Q4 FY 2020 Q1 Q2 TTM Further Adjusted EBITDA $ 40.8 $ 51.5 $ 53.6 $ 41.5 $ 187.4 $ 39.5 $ 36.7 $ 171.3 Acquisition Synergies(1) 2