Organigram Global Inc. · TSX:OGI
Organigram Global — Q2 2023 Earnings Presentation
44 slides from Organigram Global's earnings presentation, Apr 12, 2023
Slide 1: Investor Presentation Q2 Fiscal 2023
INVESTOR PRESENTATION NASDAQ (OGI) TSX (OGI) Q2 Fiscal 2023 04 | 12 | 23 1
Slide 2: Cautionary Statement
CAUTIONARY STATEMENT This document is current as of April 11, 2023, except where otherwise stated. The management’s discussion and analysis and other Company documents filed from quantitative reconciliation to the most directly comparable IFRS measure, see the information contained in this presentat
Slide 3: Our Strategy
OUR STRATEGY INNOVATION CONSUMER FOCUS EFFICIENCY EXPANSION Leverage our brands, product portfolio and culture of innovation to: Increase Drive Deliver long-term Reach market share profitability shareholder value new markets 3
Slide 4: Organigram Key Strengths
ORGANIGRAM KEY STRENGTHS STRONG STATE-OF-THE- HIGH NATIONAL & INNOVATION EXCELLENCE IN BALANCE SHEET ART FACILITIES PERFORMING INTERNATIONAL FOCUS EXECUTION REACH • Negligible debt • Moncton facility is one • $209M revenue in • National sales and • First to market with • Consumer insights- of the la
Slide 5: Solid Revenue Growth
SOLID REVENUE GROWTH $209.1 $145.8 NET REVENUE AND GROSS REVENUE $113.9 $ millions $109.9 $103.4 CAGR $86.8 $82.8 $79.2 Gross Revenue (F20-F22): 42.2% Net revenue (F20-F22): 29.9%1 1. Net Revenue is a non-IFRS financial measure not defined under IFRS and which does not have any standardized meaning
Slide 6: Significant International Sales Growth
SIGNIFICANT INTERNATIONAL SALES GROWTH $16.6 $15.1 INTERNATIONAL GROSS AND NET REVENUE1,2 $ millions High margin international sales expected to increase further in F2023 $3.8 1. International shipments do not attract excise taxes and therefore gross, and net revenues are equal. 2. Net revenue is a
Slide 7: Quarterly Update
QUARTERLY UPDATE Q2 F2023 8
Slide 8: A Leading Canadian LP
A LEADING CANADIAN LP #3 market share among Canadian LPs #1 share for milled flower, #1 in hash, #1 in ingestible extracts, #3 in gummies #1 LP in the Maritimes, #2 in Ontario, #3 in Quebec Top three best-selling SKUs in Canada: SHRED Tropic Thunder, Funk Master and Gnarberry1 Source: Hifyre and int
Slide 9: Quarterly Revenue
QUARTERLY REVENUE $65.7 $60.9 $55.2 $52.9 $45.5 $43.9 $43.3 REVENUE $39.5 $38.1 $ millions $31.8 CQGR Net revenue: 5.6%1 Gross revenue: 4.8% 1. Net revenue is a non-IFRS financial measure. See the cautionary statement regarding non-IFRS financial measures. Q2 F22 Q3 F22 Q4 F22 Q1 F23 Q2 F23 Net Reve
Slide 10: Focused on Growing Gross Margins
FOCUSED ON GROWING GROSS MARGINS $13.4 $12.8 $10.4 $9.3 ADJUSTED $8.2 GROSS MARGIN1 $ millions and % of Net Revenue 26% 24% 23% 30% 34% 1. Adjusted gross margin is a non-IFRS financial measure not defined under IFRS and which does not have any standardized meaning under IFRS; please refer to the cau
Slide 11: Established a Trend of EBITDA Growth
ESTABLISHED A TREND OF EBITDA GROWTH $5.6 $5.6 ADJUSTED $3.2 EBITDA1 $ millions $1.6 $0.6 1. Adjusted EBITDA is a non-IFRS Financial Measure not defined by and does not have any standardized meaning under IFRS; please refer to the Company’s Q2 2023 MD&A for definitions and a reconciliation to IFRS.
Slide 12: Q2 F2023 Highlights
Q2 F2023 HIGHLIGHTS • Maintained strong quarterly net revenue growth1 • $39.5 million (↑24% YoY) in Q2F23 compared to $31.8 million in Q2F22 • Expanded Adjusted gross margin1 to 34% in Q2F23 compared to 26% in Q2F22 • Fifth consecutive quarter of positive Adjusted EBITDA1 • Maintained #3 position am
Slide 13: Strong Balance Sheet and Liquidity
STRONG BALANCE SHEET AND LIQUIDITY • Capital position is healthy, and there is sufficient liquidity available for the near to medium term • On February 28, 2023, the Company had cash and short-term investments (excluding restricted funds) of $72 million • Negligible debt (less than $0.2 million) 14
Slide 14: Q2 Fiscal 2023 Key Financial Metrics
Q2 FISCAL Q2 AND SIX MONTHS ENDED 6-months 6-months FEBRUARY 28, 2023 Q2 ‘23 Q2 ‘22 % Change ended ‘23 ended ‘22 % Change Gross revenue 52.9 44.0 20% 113.8 88.3 29% 2023 KEY Excise taxes (13.4) (12.1) 11% 31.0 26.1 19% FINANCIAL Net revenue1 39.5 31.8 24% 82.8 62.2 33% Cost of sales 29.6 25.0 18% 61
Slide 15: Fiscal 2023 Outlook
FISCAL 2023 OUTLOOK • Expecting solid Fiscal ‘23 net revenue – anticipated to be significantly higher than Fiscal ‘22 due to: • Strong market share – positioned as the #3 LP1 • Continued expansion of product portfolio in multiple segments • Greater capacity to meet demand • Continuation of internati
Slide 16: Potential Upside for Gross Margins
POTENTIAL UPSIDE FOR GROSS MARGINS • Anticipate improved economies of scale and efficiencies as cultivation and production volumes continue to increase • Leverage the increased annual capacity at Moncton facility • Increase Lac-Supérieur craft cannabis and hash production • Continued investment in a
Slide 17: Brand Portfolio
BRAND PORTFOLIO 18
Slide 18: Well-Rounded Brand Portfolio
WELL-ROUNDED BRAND PORTFOLIO NEW Pricing Value Value Value Value Premium Premium Craft Segment Pre-Milled Flower, Pre-Roll Joints, Whole Flower, Hashish Available / Whole Flower CBD & Minor Cannabinoid Pre-Roll Joints, Infused Whole Flower Planned Infused Gummies, Whole Flower Hash Infused Pre-rolls
Slide 19: Operations
OPERATIONS 20
Slide 20: State-of-Art, Three-Tier Cultivation Centre
STATE-OF-ART, THREE-TIER CULTIVATION CENTRE • Located in Moncton, NB • Strain-specific grow rooms • Micro-climates provide the ability to control all critical growing environment factors • Phase 4C expansion complete and generating higher quality flower and reduced production costs • Expected yield
Slide 21: Premium Quality Cannabis and Hash Production
PREMIUM QUALITY CANNABIS AND HASH PRODUCTION • Located in Lac-Supérieur, Québec (near Mont-Tremblant) • Producer of hang dried, trimmed by hand, artisanal craft cannabis, and premium Afghan-style hash • Expansion underway to increase hash production capacity to over 2 million units per year and gree
Slide 22: Edibles and Derivatives Facilities
EDIBLES AND DERIVATIVES FACILITIES • Winnipeg-based wholly-owned subsidiary • Designed to meet EU-GMP certification standards1 • Purpose-built, highly automated, 51,000-square-foot facility with state-of-the-art equipment • Designed to produce nutraceutical-grade cannabis edibles, including pectin,
Slide 23: Investments and Collaborations
INVESTMENTS AND COLLABORATIONS 24
Slide 24: Investment in GreenTank Technologies
INVESTMENT IN GREENTANK TECHNOLOGIES • $4 million USD investment • Innovative vape technology that elevates the consumer experience • Exclusive Canadian cannabis rights for 18 months • New 510 format vape cartridge to launch before year-end FY2023 • Will transform Organigram’s vape hardware line-up
Slide 25: Investment in Disruptive Technology - Biosynthesis
INVESTMENT IN DISRUPTIVE TECHNOLOGY-BIOSYNTHESIS BIOSYNTHESIS How it works? A proprietary Biosynthesis can be used to produce cannabinoid cannabinoids that are identical to those manufacturing produced by the plant itself. system that can product rare cannabinoids. Genome engineering of yeast: A • 4
Slide 26: Product Development Collaboration & Strategic Investment
PRODUCT DEVELOPMENT COLLABORATION & STRATEGIC INVESTMENT TRANSACTION HIGHLIGHTS STRATEGIC RATIONALE • ~C$227M strategic investment from subsidiary of BAT for 19.4% equity interest 1 • Accelerates and strengthens Organigram’s R&D and product development activities, in Organigram including granting ac
Slide 27: Alignment of Capabilities & Resources
ALIGNMENT OF CAPABILITIES & RESOURCES LEADING CONSUMER GOODS LEADING LICENSED PRODUCER BUSINESS OF HIGH-QUALITY CANNABIS PRODUCTS SOPHISTICATED MANAGEMENT STATE-OF-THE-ART FACILITIES INNOVATIVE PRODUCT PLATFORMS EXPERIENCED MANAGEMENT TEAM WITH DEEP CANNABIS DEEP PLANT EXPERTISE EXPERTISE DEEP CONSU
Slide 28: International
INTERNATIONAL 29
Slide 29: Key International Supply Arrangements
KEY INTERNATIONAL SUPPLY ARRANGEMENTS • $10.8 million of flower revenue in Q2 F23, growing 116% from $5.0 million in Q2 F22 • High margin and not subject to excise tax • Continued supply of dried flower to Canndoc for processing and distribution into Israeli medical market1 • November 17, 2022: ente
Slide 30: Market Outlook
MARKET OUTLOOK 31
Slide 31: Solid Projected Growth in Rec Market
SOLID PROJECTED GROWTH IN REC MARKET $6.5 $6.3 $6.0 CANADIAN ADULT-USE $5.5 RECREATIONAL MARKET – CALENDAR YEARS (excludes Medical) $ Billions Source: The Brightfield Group, September 7, 2022 2023 2024 2025 2026 32
Slide 32: 258% Growth in Retail Stores
258% GROWTH IN RETAIL STORES 3,712 285% CANNABIS RETAIL STORES • Ontario store count grew by 1,565% 1,698 • All of Canada store count grew by 285% 1565% 963 ONTARIO Source: Source: MJBizDaily, Statistics Canada, Feb. 15, 2023 102 Jul-20 Feb-23 33
Slide 33: Appendix
APPENDIX 34
Slide 34: BAT Transaction Summary
BAT TRANSACTION SUMMARY • Subsidiary of BAT subscribed for 58.3M common shares of Organigram, which represented a 19.9% equity interest in March 20211 on a post-transaction basis. • Total proceeds to Organigram in March 2021 of ~C$221 million (the “Investment Proceeds”) Investment • The price per sh
Slide 35: An uplifting & vibrant value brand focused on convenience
An uplifting & vibrant value brand focused on convenience. Tropic Thunder 7g pre-milled Wild Berry Blaze SHRED’ems Gnarberry 1g 510 vape 36
Slide 36: An imaginative brand with iconic strains and stellar extracts
An imaginative brand with iconic strains and stellar extracts. Holy Mountain Mac-1 3.5 g, R*ntz 3.5g, Pressed Hash 37
Slide 37: Delivering high-quality ounces in a variety of strains
Delivering high-quality ounces in a variety of strains. Pink Cookies I.C.C. Ultra Sour 38
Slide 38: CBD and minor cannabinoid gummies
CBD and minor cannabinoid gummies, designed for a personal wellness ritual. Monjour Berry Good Day Monjour Orchard Medley 39
Slide 39: A premium brand focused on flower & innovation
A premium brand focused on flower & innovation. Limelight 3.5g dried flower Edison JOLTS – Electric Lemon Cherry Limelight Bubble Hash Joints 40
Slide 40: Premium hash, inspired by the timeless tradition of hashish
Premium hash, inspired by the timeless tradition of hashish. Tremblant 2g Hash 41
Slide 41: Craft cannabis featuring rare cultivars
Craft cannabis featuring rare cultivars grown with utmost attention and care. Laurentian Saisons 3.5 g 42
Slide 42: Q2 Fiscal 2023 Select Balance Sheet Metrics
Q2 FISCAL 2023 SELECT BALANCE SHEET METRICS SELECT BALANCE SHEET METRICS February 28, 2023 Aug 31, 2022 % Change Cash & short-term investments (excluding restricted cash) 71,970 98,607 (27)% Biological assets & inventories 88,654 68,282 30% Other current assets 43,409 54,734 (21)% In $000s unless Ac
Slide 43: Q2 Fiscal 2023 Capital Structure
Q2 FISCAL 2023 CAPITAL STRUCTURE FEBRUARY 28, AUGUST 31, in $000s 2023 2022 Current and long-term debt 198 235 Shareholders’ equity 509,101 508,058 Total debt and shareholders’ equity 509,299 508,293 in 000s Outstanding common shares 313,938 313,816 Options 11,974 11,051 Warrants 16,944 16,944 Top-u
Slide 44: A Canadian Cannabis Leader
A CANADIAN CANNABIS LEADER NASDAQ (OGI) TSX (OGI) 45