Utz Brands Inc · NYSE:UTZ
Utz Brands — Q3 2022 Earnings Presentation
27 slides from Utz Brands's earnings presentation, Nov 10, 2022
Slide 1: Utz Brands, Inc. Third Quarter 2022 Earnings Presentation
℠ Utz Brands, Inc. Third Quarter 2022 Earnings Presentation November 10, 2022 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: Third Quarter Key Messages
Third Quarter Key Messages Delivered results ahead of our expectations with Organic Net Sales growth of 12.6% Consumer demand remains robust driving record third quarter net sales Adjusted Gross and Adjusted EBITDA margins improved sequentially, and revenue management and productivity are now offset
Slide 5: Summary of Third Quarter 2022 Results
Summary of Third Quarter 2022 Results Organic Net Sales growth of 12.6% – Excludes the impact of acquisitions and excludes the impact of Independent Operator (“IO”) route conversions – Price/Mix +14.7% and Volume -2.1% Gross margin improvement represents recovery from significant inflation – Inf
Slide 6: 3rd Consecutive Quarter of Double-Digit Consumption Growth
3rd Consecutive Quarter of Double-Digit Consumption Growth Strong total Utz Brands IRI retail sales growth of 17.2% – As expected, share performance impacted by lapping strong promotional features in the Mass channel in the prior year Double-digit growth for the majority of our Power Brands Reta
Slide 7: Retail Sales by Sub-Category
Retail Sales by Sub-Category Strong double-digit growth across three largest sub-categories of Potato Chips, Tortilla Chips, and Pretzels that represent nearly 75% of sales Robust Potato Chip growth of 30% led by strength across Grocery, Mass, and C-store channels On The Border® Tortilla Chip
Slide 8: Retail Sales by Geography
Retail Sales by Geography Double digit growth across all geographies Strong growth in the Core for Utz® (+20%), On The Border® (+29%) and Zapp's® (+22%) Share gains in Emerging led by Utz®, Zapp’s®, and Boulder Canyon® Expansion share performance particularly impacted by promotional feature
Slide 9: Utz Better-for-You Brands Gaining Share in Natural Channel
Utz Better-for-You Brands Gaining Share in Natural Channel Nearly 60bps of share gains in the 12-week period ended October 2, 2022 #3 share ranking in the Natural Channel Salty Snack Category Natural Channel Retail Sales Year-over-Year Growth (13-Weeks Ended 10/2/22) Total Salty Snacks 19.5% 18.
Slide 10: Building Momentum for our Next Phase of Growth
Building Momentum for our Next Phase of Growth Executing Well Across Strategies Since Going Public 52-weeks ended 2019(1) October 2, 2022(2) Total Utz Retail Sales $972M $1.55B Market Share 3.8% 4.6% Salty Category Sales Rank #4 #3 Mass Channel Rank #4 #3 Club Channel Rank #3 #2 Tortilla Chip Share
Slide 11: Key Takeaways
Key Takeaways Strong growth momentum in resilient and growing Salty Snack Category Continuing to make investments to support our significant white space growth opportunities Margins recovering as revenue management and productivity are now offsetting inflation Recent acquisitions enabling increased
Slide 12: Financial Performance
Financial Performance Ajay Kataria, Chief Financial Officer 12
Slide 13: Third Quarter Financial Results Summary
Third Quarter Financial Results Summary 3Q’22 3Q’21 13-weeks Ended 13-weeks Ended YoY In $millions, except per share amounts October 2, 2022 October 3, 2021 Change Net Sales 362.8 312.7 +16.0% Organic Net Sales 352.1 312.7 +12.6% Adj. Gross Profit 132.6 111.8 +18.6% % of net sales 36.5% 35.8% +79 bp
Slide 14: 3Q'22 Net Sales Bridge
3Q’22 Net Sales Bridge Growth driven by Organic Net Sales growth of +12.6% and acquisitions of +4.7% Price/mix improvement continues to increase as a result of inflation-justified actions Organic volume growth impacted by: – SKU rationalization across the portfolio, in particular reductions in
Slide 15: 3Q'22 Adjusted EBITDA Margin Bridge
3Q’22 Adjusted EBITDA Margin Bridge Pricing and productivity fully offset higher gross input cost inflation – Favorable price/mix of 14.7% as benefits from pricing actions continue to build – Momentum increasing on productivity initiatives Increase in Selling & Admin expense primarily impacted b
Slide 16: Driving FY'22 Programs to Enhance Margins
Driving FY’22 Programs to Enhance Margins SKU Rationalization Adjusted EBITDA Margin – Eliminated more than 350 SKUs primarily focused on private label and certain partner brands with program (as % of Net Sales) ongoing 13.1% 12.1% Revenue Management Capabilities 10.7% – Driving price pack archi
Slide 17: Cash Flow and Balance Sheet Highlights
Cash Flow and Balance Sheet Highlights 39-Weeks Ended Cash Flow Highlights October 2, 2022 GAAP Net Cash Flows from Operations $8.1M – Impacted by $23M buyout of multiple third-party DSD rights treated as contract termination costs and booked as an expense per GAAP Net Cash Flows from Operations exc
Slide 18: Strong Liquidity and No Significant Debt Maturities Until 2028
Strong Liquidity and No Significant Debt Maturities Until 2028 Issued new real estate senior secured term loan of $88M (“Real Estate Term Loan”) on October 12, 2022 – Fixed rate at ~6% via interest rate swap – Proceeds used to pay down outstanding ABL in full, pay fees and expenses, and put cash o
Slide 19: Fiscal 2022 Outlook
Fiscal 2022 Outlook Raising net sales outlook to reflect our year-to-date performance, continued strong consumer demand, and better than expected price elasticity Raising Adjusted EBITDA outlook due to stronger sales outlook and accelerating benefits from pricing and productivity actions to full
Slide 20: Well-Positioned to Navigate the Current Environment
Well-Positioned to Navigate the Current Environment Enhanced planning capabilities helping to improve throughput and unlock bottlenecks Strong Salty Snack category with minimal price elasticity and private label penetration Proven capabilities to offset continued inflation with price and productivit
Slide 21: Appendix
Appendix yp VEGGIE STRAW ed AVOCADO OIL § CLASSIC SEA SALT @ KETTLE STYLE POTATO CHIPS Fe] ©
Slide 22: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures 22 ℠
Slide 23: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures 23 ℠
Slide 24: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures See footnotes in Utz’s 3Q’22 earnings press release dated November 10, 2022. 24 ℠
Slide 25: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures See footnotes in Utz’s 3Q’22 earnings press release dated November 10, 2022. 25 ℠
Slide 26: Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures See footnotes in Utz’s 3Q’22 earnings press release dated November 10, 2022. 26 ℠
Slide 27: Utz Geographic Classifications
Utz Geographic Classifications Core Emerging Expansion WA MT ME ND OR VT MN NH ID SD WI MA NY WY MI CT RI IA PA NE NJ NV IL IN OH DE UT CO WV MD CA KS MO VA KY DC NC TN AZ OK NM AR SC GA MS AL TX LA AK HI FL 27 ℠