Turning Point Brands, Inc. · NYSE:TPB
Turning Point Brands — Q2 2020 Earnings Presentation
21 slides from Turning Point Brands's earnings presentation, Jul 28, 2020
Slide 1: Turning Point Brands Investor Presentation Q2 2020
Turning Point Brands (NYSE: TPB) INVESTOR PRESENTATION Q2 2020 | NYSE: TPB | 5201 INTERCHANGE WAY, LOUISVILLE KY | TURNINGPOINTBRANDS.COM |
Slide 2: Disclaimer
Disclaimer FORWARD LOOKING STATEMENTS This presentation contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements may generally be identified by the use of words such as "anticipate," "believe," "expect," "intend," "plan" and "will" or, in each
Slide 3: TPB: Investment Highlights
TPB: Investment Highlights Turning Point Brands (NYSE: TPB) TPB Investment Highlights Leading value brand in tobacco chew with a long runway for Resilient growth in MST Core Business with #1 premium rolling paper brand with unparalleled brand Leading Brands recognition • Online distribution business
Slide 4: We are an active ingredients company that develops and distributes iconic brands and products
We are an active ingredients company that develops and distributes iconic brands and products BROAD PORTFOLIO OF ACTIVE INGREDIENT ALTERNATIVES AND BRANDS 4 | NYSE: TPB | 5201 INTERCHANGE WAY, LOUISVILLE KY | TURNINGPOINTBRANDS.COM |
Slide 5: Powerful Distribution Infrastructure
Distribution Infrastructure Turning Point Brands (NYSE: TPB) Powerful Distribution Infrastructure North American retail presence that reaches over ~210,000 outlets National Regional Product B2C B2B Distribution Sales Teams Sales Teams Distribution Distribution National sales team Regional sales team
Slide 6: Smokeless: Iconic Brand with Sustained Growth
Smokeless: Stoker’s Brand Equity Turning Point Brands (NYSE: TPB) Smokeless: Iconic Brand with Sustained Growth About Stoker's MST TUBS MST Cans Chew Building brand equity for Introduced a larger tub format Accelerating strength from #1 discount and overall chew over 80 years. Stoker’s is Moist Snuf
Slide 7: Smokeless: Continued MST Distribution Gains
Smokeless: Stoker’s MST Distribution Growth Turning Point Brands (NYSE: TPB) Smokeless: Continued MST Distribution Gains Long Runway for Growth 72.8 74.9 Currently in stores representing 70.4 ~58%1 of volume weighted 68.3 66.1 67.6 61.4 61.6 61.3 62.3 63.2 63.1 distribution 57.0 57.7 58.0 52.2 48.1
Slide 8: Smoking: Iconic Brand with Leading Market Share
Zig-Zag: Brand Equity Turning Point Brands (NYSE: TPB) Smoking: Iconic Brand with Leading Market Share About Zig-Zag Papers Wraps New Product Launches Embedded into pop culture #1 premium rolling paper Market leader in MYO cigar Continued roll-out of paper with a storied history that brand sold in t
Slide 9: Smoking: Expanding Portfolio and Sales Channels
Zig-Zag: Growth Initiatives Turning Point Brands (NYSE: TPB) Smoking: Expanding Portfolio and Sales Channels Classic Zig-Zag Products Growth Initiatives New products and accessories Re-vamped e-commerce platform Enhanced brand Iconic Products with presence in headshops Unparalleled Recognition and d
Slide 10: Acquisition of assets of Durfort Holdings
Acquisition of Durfort Holdings Assets Turning Point Brands (NYSE: TPB) Acquisition of assets of Durfort Holdings Acquisition of assets from Durfort Holdings S.R.L. (“Durfort”) announced June 10, 2020 • Acquired a co-ownership interest in our long-term partner Durfort’s intellectual property related
Slide 11: NewGen: Proprietary Products Growth
NewGen Segment Turning Point Brands (NYSE: TPB) NewGen: Proprietary Products Growth Executing on a multi-year journey to increase proprietary products sales in the NewGen segment Proprietary product gross margins (50%+) exceed third-party product gross margins (20% - 40%) 2016 2017 2018 2019 2020 20
Slide 12: NewGen: Nu-X Brands
NewGen: Nu-X Brands Rev. Streams Nu-X Ventures Brand Portfolio Wide range of products with a robust development pipeline Nu-X CBD Broad portfolio of CBD products and form factors currently in over 9,000 locations1 nationwide Solace Product portfolio includes e-liquids designed for open system vape d
Slide 13: Management of Regulatory Environments
TPB: Navigating Regulated Environments Turning Point Brands (NYSE: TPB) Management of Regulatory Environments Extensive experience managing regulatory regime changes REGULATORY STRATEGY • TPB does not sell cigarettes, the primary target of the FDA • Working with FDA to drive expected pathway for fut
Slide 14: Total Sales and Segment Breakdown
Segment Breakdown Turning Point Brands (NYSE: TPB) Total Sales and Segment Breakdown 2016 2017 2018 2019 Smokeless Looseleaf $47 $49 $48 $46 MST same-store-sales and MST 31 35 42 54 distribution gains accelerating Total Smokeless $78 $85 $90 $100 Smoking Wraps $46 $47 $49 $52 Stable results in Core
Slide 15: TPB Earnings Performance
TPB: Financial Summary Turning Point Brands (NYSE: TPB) TPB Earnings Performance Robust Adjusted EBITDA growth with continued acceleration expected for 2020 2016 – 2020E Adjusted EBITDA CAGR: ~11%* $78-83* $67.3 $64.6 $60.0 $52.4 2016 2017 2018 2019 2020E Note: $ in millions. Reference GAAP reconcil
Slide 16: Building a Capital Efficient Business Model
Asset-Light Business Model Turning Point Brands (NYSE: TPB) Building a Capital Efficient Business Model Asset-light business model that generates significant free cash flow Initiatives: ADJUSTED EBITDA VS. CAPITAL EXPENDITURES ✓ Outsourced manufacturing of Adjusted EBITDA 1 Capital Expenditures most
Slide 17: Recent Business Highlights
Recent Business Highlights Turning Point Brands (NYSE: TPB) Recent Business Highlights Strong recent performance is a result of tactical repositioning of the business over the last 12 months and executing on this plan • Net Sales of $105 million versus late-April guidance of $81 to $87 million with
Slide 18: 2020 in Focus: Strategies and Objectives
2020 Objectives Turning Point Brands (NYSE: TPB) 2020 in Focus: Strategies and Objectives Maximize the Core Business • Drive Stoker’s MST growth through increased distribution and same-store-sales growth • Expand Zig-Zag’s reach with new product introductions, channel specific strategies and e-comme
Slide 19: Appendix
Turning Point Brands (NYSE: TPB) Appendix | NYSE: TPB | 5201 INTERCHANGE WAY, LOUISVILLE KY | TURNINGPOINTBRANDS.COM |
Slide 20: GAAP Reconciliation
GAAP Reconciliation Turning Point Brands (NYSE: TPB) GAAP Reconciliation Reconciliation of GAAP Net Income to Adjusted EBITDA ($ in millions) 2016 2017 2018 2019 Net income attributable to Turning Point Brands, Inc. $26.9 $20.2 $25.3 $13.8 Add: Interest expense, net $26.6 $16.9 $14.8 $17.3 Loss on e
Slide 21: Thank You
Turning Point Brands (NYSE: TPB) THANK YOU | NYSE: TPB | 5201 INTERCHANGE WAY, LOUISVILLE KY | TURNINGPOINTBRANDS.COM |