Vital Farms, Inc. · NASDAQ:VITL
Vital Farms — CAGNY Lunch 2024
27 slides from Vital Farms's conference presentation, May 13, 2024
Slide 1: Vital Farms, Inc. CAGNY Lunch
Vital Farms, Inc. CAGNY LUNCH May 13, 2024
Slide 2: Reporting Disclaimer
Reporting Disclaimer This presentation contains, in addition to historical information, certain forward-looking statements, as defined in Private Securities Litigation Reform Act of 1995, that are based on our current assumptions, expectations and projections about future performance and events and
Slide 3: Non-GAAP Financial Measures
Non-GAAP Financial Measures Adjusted EBITDA and Adjusted EBITDA Margin are financial measures that are not required by or presented in accordance with generally accepted accounting principles in the United States (“GAAP”). We believe that Adjusted EBITDA and Adjusted EBITDA Margin, when taken togeth
Slide 4: Thilo Wrede, Chief Financial Officer
Thilo Wrede Chief Financial Officer
Slide 5: We are Vital Farms
We are Vital Farms ORGANIC. RESTORATIVE 4 -& f (if "8 UE BLUES @ VE
Slide 6: We have built a strong and growing business
We have built a strong and growing business A PREMIUM TRUSTED BY DEMANDED BY BRAND CONSUMERS RETAILERS 10 Million ~24,000 Households Retailers A RESILIENT FARMER NETWORK A WORLD-CLASS PROCESSING FACILITY >300 Family Farms Egg Central Station 6 Source: Numerator, 52-week period ending 31-Dec-2023; SP
Slide 7: We deliver quality at scale
We deliver quality at scale FARM COLD STORAGE EGG CENTRAL STATION Supply eggs Store eggs Wash and pack eggs CUSTOMERS & DISTRIBUTORS RETAILERS & CONSUMERS Store eggs, distribute to retailers & RESTAURANTS restaurants Sell to consumers 7
Slide 8: We have delivered our growth commitment ahead of schedule
We have delivered our growth commitment ahead of schedule Net Revenue (millions) 472 394 362 301 261 214 233 199 2020 2021 2022 2023 IPO Net Revenue Forecast Net Revenue 8 Source: Vital Farms Company Filings, IPO forecasts from Investor Presentation June 17, 2020
Slide 9: Delivered strong profit despite macro noise
Delivered strong profit despite macro noise Adjusted EBITDA1 (millions) 48 39 17 19 16 10 8 8 2020 2021 2022 2023 IPO Adjusted EBITDA Forecast Adjusted EBITDA 9 Source: Vital Farms Company Filings, IPO forecasts from Investor Presentation June 17, 2020 1 Adjusted EBITDA is a non-GAAP financial measu
Slide 10: Gross margin stability supported by the strength of the brand
With gross margin stability supported by the strength of the Vital Farms brand 10 Source: Vital Farms and Cal-Maine Company Filings
Slide 11: We plan to reach $1 Billion in Net Revenue by the end of 2027
We plan to reach $1 Billion in Net Revenue by the end of 2027 FINANCIAL NEW ADDITIONAL MORE ITEMS WITH HOUSEHOLDS RETAILERS CURRENT RETAILERS GOALS (2027) $1 Billion Net Revenue 20 Million New 8,000 New Increase Average Households Stores Number of Items 35% Gross Margin ADDITIONAL FARMS LARGER SUPPL
Slide 12: We have three main drivers of Net Revenue growth
We have three main drivers of Net Revenue growth NEW ADDITIONAL MORE ITEMS WITH HOUSEHOLDS RETAILERS CURRENT RETAILERS 20 Million New 8,000 New Increase Average Households Stores Number of Items 12
Slide 13: Our target consumer base is growing meaningfully
Our target consumer base is growing meaningfully 72 MILLION These consumers: Seek organic and natural food U.S. HOUSEHOLDS Care about environmental sustainability ARE BUYING PREMIUM EGGS 34 MILLION 131 MILLION U.S. HOUSEHOLDS U.S. HOUSEHOLDS Our core consumers We call them Bridget & Ben 10 MILLION
Slide 14: How do we build our brand equity?
How do we build our brand equity? We are disrupting the food 1 system (for good) 2 We live our purpose 3 We are actually bullsh*t-free 14 This comes to life in ways that are accessible and engaging for our growth consumers.
Slide 15: Many of our consumers do not accept substitutes
Many of our consumers do not accept substitutes Across our most recent research, 36% of Vital Farms shoppers will leave the store with NO EGGS if they don't find their Vital Farms product 15 Source: Past 3 Month Egg Purchasers (Total n=2000) | Various Brand Questions End Q2 2023
Slide 16: Still thousands of stores to gain
Still thousands of stores to gain Goal: Premium Eggs in ~32,000 Stores New targets: ~8,000 25% of retailers currently carrying premium eggs still have not added our high-performing products Current stores: ~24,000 16 Source: Vital Farms Company Filings. This includes Food, Natural, Whole Foods, and
Slide 17: Adding incremental items is our largest opportunity
Adding incremental items is our largest opportunity Increasing Total Distribution Points (TDPs) in the Food 1 Channel drives the most significant Net Revenue growth We are gaining momentum in Mass Channel and 2 remain under-penetrated relative to peers We can still expand our TDPs in the Natural Cha
Slide 18: Products have strong and growing velocity with minimal cannibalization
Our products have strong and growing velocity with minimal cannibalization Eggs Sold per Store per Week by SKU 1,176 New Food Retail Partner 930 Same 1,200 plus stores 5-year period 756 288 180 18 Source: SPINS latest 52 weeks ending 1-Jan-2023, with units equivalized
Slide 19: Unit velocity in mature stores is still growing
Unit velocity in mature stores is still growing Eggs Sold per Store per Week by SKU 8,262 Natural Retail Partner 7,236 Same 250 plus stores 4-year period 6,624 5,545 19 Source: SPINS 52 weeks ending 1-Jan-2023, with units equivalized
Slide 20: Updated 2024 guidance
Updated 2024 guidance NET REVENUE ADJUSTED CAPITAL NET REVENUE GROWTH EBITDA1 EXPENDITURES ~22% At least At least $35 to $575 $70 $45 Million Million Million 1See appendix for reconciliation of historic Adjusted EBITDA. Note: We cannot provide a reconciliation between our forecasted Adjusted EBITDA
Slide 21: We are off to a strong start in 2024
We are off to a strong start in 2024 Q1 ‘24 Key Financials 148.0 119.2 +24.1% +169% +109% $0.43 29.1 13.9 $0.16 Net Revenue Adjusted EBITDA1 EPS (Diluted) Q1 '23 Q1 '24 21 Source: Vital Farms Company Filings, 1Adjusted EBITDA is a non-GAAP financial measure and is reconciled to net income, its close
Slide 22: And the stock has rallied strongly this year
And the stock has rallied strongly this year Vital Farms share price $45 $40 $35 $30 $25 $20 IPO $15 $10 $5 $0 7/20 1/21 7/21 1/22 7/22 1/23 7/23 1/24 22 Source: Bloomberg as of 5-10-24
Slide 23: We are expanding our footprint to supply our growth
We are expanding our footprint to supply our growth We have a network of more than 300 family farms across the Pasture Belt We have a new facility planned in Indiana We expect to break ground in 2025 and to be fully operational by the end of 2026 23
Slide 24: Question & Answer Session
QUESTION & ANSWER SESSION
Slide 25: Appendix
APPENDIX
Slide 26: Our long-term financial goals
Our long-term financial goals ADJUSTED 2022 retailNET sales (in billions) GROSS REVENUE EBITDA MARGIN MARGIN $1B 35% 12% to By 2027 By 2027 14% of Net Revenue By 2027 Note: These metrics are management goals only, are subject to a number of risks and uncertainties, including risks described in the "
Slide 27: Historical Adjusted EBITDA Reconciliation
Historical Adjusted EBITDA Reconciliation 52-Weeks 52-Weeks 52-Weeks 53-Weeks 13-Weeks 13-Weeks Ended Ended Ended Ended Ended Ended ($ thousands) 27-Dec-20 26-Dec-21 25-Dec-22 31-Dec-23 26-Mar-23 31-Mar-24 2022 retail sales (in billions) Net income $ 8,884 $ 2,382 $ 1,230 $ 25,566 $ 7,150 $ 19,023 D