Goodfood Market Corp. · TSX:FOOD
Goodfood Market — Investor Presentation (July 2019)
33 slides from Goodfood Market's investor presentation, July 2019
Slide 1: Investor Presentation July 2019
voodfood INVESTOR PRESENTATION JULY 2019
Slide 2: Caution Regarding Forward-Looking Statements
CAUTION REGARDING FORWARD‐LOOKING STATEMENTS This presentation may include forward‐looking statements regarding Goodfood, its business, operations or results. Often, but not always, forward‐looking statements can be identified by the use of words such as "plans", "is expected", "expects", "scheduled
Slide 3: Metrics and Non-IFRS Financial Measures
METRICS AND NON‐IFRS FINANCIAL MEASURES Goodfood reports its financial results in accordance with International Financial Reporting Standards ("IFRS"). Goodfood also uses non‐IFRS measures in this presentation that do not have any standardized meaning prescribed by IFRS, including gross merchandise
Slide 4: Investment Thesis
INVESTMENT THESIS 1 2 3 4 Fast‐growing company Leading direct to consumer National network boasts Operates Canada’s largest with 20% average monthly home meal solutions sales capacity of $750M perishable direct to growth since Q4/2015 brand in Canada capturing and reaches 35 million consumer grocery
Slide 5: Overview of Goodfood
OVERVIEW OF GOODFOOD goodfood
Slide 6: Goodfood at a Glance
GOODFOOD AT A GLANCE Goodfood sources ingredients from farms and dedicated purveyors, to manufacture and deliver ready‐to‐cook meals ordered online through a weekly subscription at www.makegoodfood.ca THE #1 HOME MEAL SOLUTIONS COMPANY IN CANADA 1,700+ $257M Employees GMS(1) run‐rate $137M FOOD LTM
Slide 7: Attractive Business Model
ATTRACTIVE BUSINESS MODEL Built‐in negative working capital allows the company to fund its growth “JUST‐IN‐TIME” MINIMAL FOOD OPERATING INVENTORY + WASTE + LEVERAGE 1 2 3 4 Meal order and payment Goodfood orders from its Fulfillment Payment received from subscribers direct farming and delivery to su
Slide 8: The Grocery Store of the Future is a Grocerant
THE GROCERY STORE OF THE FUTURE IS A GROCERANT BREAKFAST READY‐TO‐EAT READY‐TO‐COOK DINNER Ripe for innovation: $130 BILLION Groceries sold annually in Canada 8
Slide 9: Diversified Meal Options
DIVERSIFIED MEAL OPTIONS Offers 5 meal plans, 1 value brand, a growing breakfast offering and developing prepared meals HIGHER PRICE Prepared Clean15 Meals Easy‐Prep LOWER PREP TIME Classic HIGHER PREP TIME Family Vegetarian YUMM Breakfast LOWER PRICE At higher price points and available throughout
Slide 10: National Platform Reaches 95% of the Canadian Population
NATIONAL PLATFORM REACHES 95% OF THE CANADIAN POPULATION $750M of sales capacity and 302,000 sq. ft in four production facilities WESTERN CANADA EASTERN CANADA Capacity to serve Capacity to serve 150‐200K subscribers 300‐400K subscribers 2 4 3 1 1. Montreal, QC 2. Calgary, AB 3. Montreal, QC ‐ Break
Slide 11: Explosive Growth Profile
EXPLOSIVE GROWTH PROFILE Revenue Gross Profit Cash Flow Provided by C$ thousands & Gross Margin % Operations 137,445 C$ thousands and % $32,825 C$ thousands 4,842 25.0% 23.9% $25,000 20.8% $20,000 18.1% 20.0% 70,502 $14,660 $15,000 15.0% $10,000 9.5% 19,796 $3,590 10.0% 2,802 $5,000 278 $267 $0 5.0%
Slide 12: One of the Fastest Growing Companies on TSX
ONE OF THE FASTEST GROWING COMPANIES ON TSX(1) Raised $60M since going public Announced doubling of refrigerated section of Calgary facility Opened Calgary Leased new breakfast $4.00 production facility facility in Montreal Completed Completed $10M $13.5M debt $3.50 Opened Montreal Announced bought
Slide 13: Management
DEDICATED LEADERSHIP OWNS 40% OF SHARES MANAGEMENT Jonathan Ferrari Neil Cuggy Philippe Adam Co‐Founder & CEO Co‐Founder, Chief Financial Officer President & COO BOARD Hamnet Hill Donald Olds Terry Yanofsky Director Director Director 13
Slide 14: Market Dynamics
MARKET DYNAMICS goodfood
Slide 15: $9B Market Opportunity in Canada
$9B MARKET OPPORTUNITY IN CANADA Uniquely positioned to gain market share in several segments Total Addressable Market1 (in C$ millions) $3,000 40% Market Growth Forecast (CAGR 19‐25)1 $2,000 $1,300 $1,400 40% $1,150 TARGETED MARKET 25% 20% 20% 20% SHARE Ready‐to‐cook Ready‐to‐cook Breakfast Prepare
Slide 16: Competitive Landscape
COMPETITIVE LANDSCAPE Goodfood has a 40% market share of the home meal solution industry in Canada(1) Website Traffic WEBSITE 1,200,000 COMPANY MONTHLY VISITS 1,000,000 940,000 800,000 600,000 300,000 400,000 200,000 150,000 ‐ Aug‐16 Feb‐17 Aug‐17 Feb‐18 Aug‐18 Feb‐19 May‐16 May‐17 May‐18 May‐19 Nov
Slide 17: Strategy & Future Growth
STRATEGY & FUTURE GROWTH goodfood
Slide 18: Highly Profitable Growth Strategy
HIGHLY PROFITABLE GROWTH STRATEGY Executing on our strategy, which delays short‐term earnings, in order to invest in market share, scale and density Increase Grow 1 Value Subscriber 2 Proposition Base and to Members Revenue Maximizing Long‐Term Shareholder Value Increase Gross 6 Margin Density and 3
Slide 19: Remarkable Accomplishments
REMARKABLE ACCOMPLISHMENTS 2017 RESULTS 2018 RESULTS 2019 RESULTS STRATEGY (FY as at August) (FY as at August) (As at May) The portion and quality of the ingredients is increasing over time while the price point remained the same • Launched vegetarian • Launched Easy‐Prep • Launched ready‐to‐blend s
Slide 20: On Track to Achieve Long Term Goals
ON TRACK TO ACHIEVE LONG TERM GOALS Target EBITDA margin of 15% once the business is fully‐scaled CURRENT FUTURE PROFITABILITY PROFITABILITY ~41% 45%+ Adj. gross INCREASE AUTOMATION ECONOMIES OF Adj. gross margin FROM 50% TO 75%+ SCALE margin REDUCED MARKETING AND ~45% FIXED COST % OF SALES ~30% Adj
Slide 21: Appendix
APPENDIX goodfood
Slide 22: Goodfood's Value Brand: Yumm.ca
GOODFOOD’S VALUE BRAND: YUMM.CA Canada’s most affordable meal‐kit targeting cost‐focused Canadian clients Launched Nationwide in May 2019, it’s the lowest priced ready‐to‐cook meal solution in Canada, starting at $6.99 per serving Limited numbers of quality ingredients allows simpler recipes tha
Slide 23: Comparable Companies
COMPARABLE COMPANIES In millions except per share amounts Price Market Enterprise EV / Revenue EV / EBITDA Revenue Growth EV / Revenue to Growth Company Name 8-Jul-19 Cap. Value 2019E 2020E 2019E 2020E 2018A-2019E 2019E-2020E 2019E 2020E Meal Kits HelloFresh €8.67 €1,487 €1,291 0.8x 0.7x neg 27.2x 3
Slide 24: Sustainability in Action
SUSTAINABILITY IN ACTION Goodfood’s packaging is fully recyclable And just in time business model allows to reduce waste to only ~1% SELECTED GOODFOOD INITIATIVES DID YOU KNOW? • Doing box pick‐up in Canada’s major cities • On average, grocery meal greenhouse gas emissions are 33% higher than meal‐k
Slide 25: Q3-19 Financial Results
] i i | Q3-19 FINANCIAL RESULTS
Slide 26: Typical Seasonality Patterns
TYPICAL SEASONALITY PATTERNS Q1 Q2 Q3 Q4 Sept‐Oct‐Nov Dec‐Jan‐Feb Mar‐Apr‐May June‐July‐Aug Marketing campaigns Higher Higher Medium Low Order rates Higher High Medium/High Low New subscribers Higher High Medium/High Low Margins Higher Lower Higher Lower Cash flow provided by Positive for the period
Slide 27: Q3-19 Subscribers and Revenue
Q3‐19 – SUBSCRIBERS(1) AND REVENUE Continue to deliver strong triple digit growth in subscribers(1) and revenue in Q3‐19 Active Subscribers(1) Revenue End of period C$ millions 189,000 $49.9 159,000 $36.6 149% 124% 76,000 $22.2 Q3‐18 Q4‐18 Q1‐19 Q2‐19 Q3‐19 Q3‐18 Q4‐18 Q1‐19 Q2‐19 Q3‐19 (1) This is
Slide 28: Q3-19 Gross Merchandise Sales
Q3‐19 – GROSS MERCHANDISE SALES(1) The GMS run‐rate(1) reached an all‐time high, surpassing the $250M mark at the end of Q3‐19 Gross Merchandise Sales(1) GMS Run‐rate(1) C$ millions C$ millions $257 $61.2 $222 $46.5 133% 134% $26.2 $110 Q3‐18 Q4‐18 Q1‐19 Q2‐19 Q3‐19 Q3‐18 Q4‐18 Q1‐19 Q2‐19 Q3‐19 (1)
Slide 29: Q3-19 Gross Profit and Adjusted Gross Profit
Q3‐19 – GROSS PROFIT AND ADJUSTED GROSS PROFIT(1) Margins increased significantly due to investments in automation, operational efficiencies and improved buying power Gross Profit Adjusted Gross Profit(1) & Gross Margin & Adjusted Gross Margin(1) C$ millions and % C$ millions and % $16.0 $14.1 $25.4
Slide 30: Q3-19 Adjusted EBITDA and Net Loss
Q3‐19 – ADJUSTED EBITDA(1) AND NET LOSS Investing in market share leadership, scale and density which delays short‐term earnings but maximizes longer term shareholder value Adjusted EBITDA(1) (loss) Net Loss $7.0 & Adjusted EBITDA Margin(1) 20.0% C$ millions C$ millions and % $8.0 18.0% $6.0 $5.5 $7
Slide 31: Q3-19 CFO and CAPEX
Q3‐19 – CFO AND CAPEX The Company continued to invest in its growth and the launch of other meal solutions Cash Flow Provided CAPEX by Operations C$ millions C$ millions $2.8 $2.4 $1.9 $1.8 $1.5 CFO of $3.9M after 9 months Automation & capacity expansion Q3‐18 Q4‐18 Q1‐19 Q2‐19 Q3‐19 Q3‐18 Q4‐18 Q1‐
Slide 32: Q3-19 Financial Position
Q3‐19 – FINANCIAL POSITION The Company is in a very solid financial position to continue to execute its business plan Net Debt (negative) Cash and Cash Equivalents C$ millions C$ millions $39.7 $46.3 $49.7 $38.8 Public $21.8 $24.0 offering Q3‐18 Q4‐18 Q1‐19 Q2‐19 Q3‐19 Q3‐18 Q4‐18 Q1‐19 Q2‐19 Q3‐19
Slide 33: Goodfood
goodjood MAKEGOODFOOD.CA