24 slides from Ascend Wellness Holdings Llc Class A's earnings presentation, Aug 10, 2021
Slide 1: Q2 2021 Earnings
Q2 2021 Earnings August 10 1
Slide 2: Cautionary Statement Regarding Forward Looking Statements
CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS This presentation includes forward-looking information and statements, which may include, but are not limited to, the plans, intentions, expectations, estimates, and beliefs of the Company. Words such as “expects”, “continue”, “will”, “antici
Slide 3: Abner Kurtin, Chairman, Founder and CEO
ABNER KURTIN CHAIRMAN, FOUNDER AND CEO
Slide 4: Quarterly Highlights
QUARTERLY HIGHLIGHTS • Significant progress made across retail, wholesale, and M&A front during Q2; • Increasing full year 2021 revenue guidance range to $330M - $350M Store Openings CHICAGO RIDGE BOSTON ROCHELLE PARK ILLINOIS MASSACHUSETTS NEW JERSEY Wholesale • Expansions in NJ and MI Updates 90,7
Slide 5: Q2 Financial Highlights
Q2 FINANCIAL HIGHLIGHTS Q2’20 VS. Q2’21 Net Revenue Growth Adj. EBITDA / Margin1 US$ Millions US$ Millions 24.4% +228.4% $83.4 $20.3 28.3% Profit: Growth driven by ramp in +189.2% $25.4 $7.2 wholesale production efficiency in Barry, Illinois, new Q2 '20 Q2 '21 Q2 '20 Q2 '21 store openings, and incre
Slide 6: Footprint
FOOTPRINT ILLINOIS MASSACHUSETTS NEW JERSEY 6 states2 MICHIGAN NEW YORK 18 dispensaries1 OHIO ILLINOIS1 MICHIGAN NEW JERSEY 8 retail 6 retail 2 retail 1 cultivation / processing 2 planned retail 1 planned retail 1 cultivation / processing 1 cultivation / processing MASSACHUSETTS NEW YORK2 OHIO1 1 re
Slide 7: Pipeline of Assets
PIPELINE OF ASSETS Significant upside from assets “turning on” in 2021 and continuing to scale in 2022 New Bedford, MA Hemma, Ohio Fairview Heights, IL Athol, MA Franklin, NJ East Lansing, MI Phase 1 Expansion Expansion Phase 1 Fort Lee, NJ Hemma, Ohio Grand Rapids, MI Lansing, MI 4 MedMen(1) Stores
Slide 8: Construction Progress at Grow Facilities
CONSTRUCTION PROGRESS AT GROW FACILITIES Active Canopy at State Canopy(ft2) YE21 (ft2) Barry, IL Franklin, NJ IL 55,000 113,000 MI 15,000 28,000 MA 17,000 54,000 NJ 2,000 39,000 OH 1,700 1,700 Total 90,700 235,700 Athol, MA Lansing, MI 8
Slide 9: Building Differentiated Brands
BUILDING DIFFERENTIATED BRANDS ($ in millions) (1) IL TOP BRANDS SALES Cresco Cannabis Ozone Premium Cannabis Rhythm Verano High Supply $- $5 $10 $15 $20 ASCEND’S OZONE BRAND SALES RANKED #2 IN ILLINOIS IN APRIL 1. Source: BDSA Retail Sales Tracking, April 2021. 1. Source: BDSA Retail Sales Tracking
Slide 10: Revenue Mix Goal
REVENUE MIX GOAL 50% in-house Ozone, Ozone Reserve, and Partner Brands 50% 50% 50% WHOLESALE R E TA I L third-party brands Pursuing goal to have: 50% business from wholesale, 50% of business from retail, with 50% of product sold in our retail dispensaries being our in-house Ozone, Ozone Reserve, and
Slide 11: Accelerated Expansion Through Disciplined M&A
ACCELERATED EXPANSION THROUGH DISCIPLINED M&A Two-prong M&A approach Maximize scale in existing footprint 1 Prioritize continued expansion to optimize scale in existing footprint where permits allow • 8 dispensaries1 • 1 dispensary1 • 54k planned Canopy SQFT • 10 dispensary cap • 5 dispensary cap MA
Slide 12: Valuation Comparison
VALUATION COMPARISON (1) Trading at a discount relative to industry leaders 13.5x 8.7x 5.0x 3.1x EV/2022 Revenue Consensus (2) EV/2022 Adj. EBITDA Consensus AAWH Big 4 US MSOs 1. Valuation comparison as of 8/8/21. 2. Big 4 US MSOs peer group includes Green Thumb, Curaleaf, Cresco, and Trulieve. 12
Slide 13: Ascend Investment Thesis
ASCEND INVESTMENT THESIS FOCUS EXCLUSIVELY ON ACHIEVING SCALE IN SELECT LIMITED LICENSE MARKETS PORTFOLIO OF KEY FLAGSHIP LOCATIONS WITH HIGH BARRIERS TO ENTRY DISCIPLINED ALLOCATION OF CAPITAL AND SUCCESSFUL EXECUTION OF M&A MANAGEMENT TEAM WITH PROVEN TRACK RECORD OF EXECUTION IN ILLINOIS ROOM FOR
Slide 14: Daniel Neville, Chief Financial Officer
DANIEL NEVILLE CHIEF FINANC IAL OFFICER
Slide 15: Q2 Financial Highlights
Q2 FINANCIAL HIGHLIGHTS Q2’20 VS. Q2’21 Net Revenue Growth Adj. Gross Profit / Margin1 Adj. EBITDA / Margin1 US$ Millions US$ Millions 47.5% US$ Millions 24.4% +228.4% Profit: Profit: +209.3% +189.2% $83.4 $39.6 28.3% $20.3 50.4% Margin: Margin: $25.4 $12.8 $7.2 -390 bps -290 bps Q2 '20 Q2 '21 Q2 '2
Slide 16: Q2 Key Operating Metrics
Q2 KEY OPERATING METRICS 18 573k $101 REVENUE PER OPEN RETAIL DISPENSARIES(1) TOTAL RETAIL TRANSACTIONS TRANSACTION 5 ACTIVE CULTIVATION AND 11,036 $3,577 PRODUCTION FACILITIES POUND REVENUE PER POUND IN 5 STATES EQUIVALENTS SOLD EQUIVALENT (1) Including pending acquisitions of OH dispensary (Carrol
Slide 17: Wholesale Highlights
WHOLESALE HIGHLIGHTS Net wholesale revenue, excluding intercompany sales, increased to $25.4 million, representing an increase of 22.9% quarter-over-quarter Q2’20 VS. Q2’21 Lbs Sold Revenue per Lb • Significant canopy expansion in 000s $US 000’s Barry, Illinois with double +285.3% stacking. +3.8% 11
Slide 18: Retail Highlights
RETAIL HIGHLIGHTS Total retail revenue increased to $58.0 million for the second quarter of 2021, representing an increase of 27.5% quarter-over-quarter Q2’20 VS. Q2’21 Transactions Revenue per Transaction 000s • Increase in transactions in IL, MA, and NJ due to store openings and +292.5% -22.7% inc
Slide 19: Raising 2021 Full Year Net Revenue Guidance
RAISING 2021 FULL YEAR NET REVENUE GUIDANCE Raising guidance from $320 - $340M to $330 - $350M ($ in millions) Actuals Low End High End $350 Gro w t h $330 Hi gh End +1 4 4 % Yo Y $144 Low End +1 3 0 % Yo Y 2020A 2021P 19
Slide 20: Balance Sheet and Cash Flow
BALANCE SHEET AND CASH FLOW ($ in millions) (in millions)$ 6/30/21 Fully Diluted Shares • $33M in Capex, $2.5M in purchase of Outstanding Basic & 172.8 businesses net of cash acquired D i l u t e d (1) Cash & Equivalents $104.2 • $86M net proceeds from IPO, less $4M to repurchase warrants Total Debt
Slide 21: Appendix
APPENDIX
Slide 22: Use of Non-GAAP Financial Metrics and Additional Information
USE OF NON-GAAP FINANCIAL METRICS AND ADDITIONAL INFORMATION This presentation includes certain non-GAAP financial measures as defined by the SEC. Reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP
Slide 23: GAAP Reconciliations
GAAP RECONCILIATIONS $ in thousands FY 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 FY 2020 Q1 2021 Q2 2021 YTD 2021 Adjusted Gross Profit Gross Profit $ 3,287 $ 7,492 $ 12,178 $ 18,352 $ 22,892 $ 60,914 $ 29,667 $ 34,516 $ 64,183 Gross Margin 27.3% 33.2% 48.0% 44.3% 42.2% 42.4% 44.9% 41.4% 42.9% Depreciati
Slide 24: Ascend Wellness Holdings
ASCEND WELLNESS HOLDINGS HT TPS://AWHOLDINGS.COM/INVESTORS I N V E S TO R C O N TA C T : R E B E C C A KO A R , V P I N V E S TO R R E L AT I O N S IR@AWHOLDINGS.COM