Vital Farms, Inc. · NASDAQ:VITL
Vital Farms — Q4 2023 Earnings Presentation
23 slides from Vital Farms's earnings presentation, Mar 7, 2024
Slide 1: Vital Farms, Inc. March 2024 Corporate Presentation
VITAL FARMS, INC. (NASDAQ: VITL) March 2024 Corporate Presentation
Slide 2: Reporting Disclaimer
REPORTING DISCLAIMER This presentation contains, in addition to historical information, certain forward-looking statements, as defined in Private Securities Litigation Reform Act of 1995, that are based on our current assumptions, expectations and projections about future performance and events and
Slide 3: Bird of the Quarter
Bird af the Quart: | ' Adee Clever Carla knows all the tastiest - creepy crawlies live in the soft, damp, decomposing soil. Oh look, a worm!
Slide 4: Our Values Are Rooted in Conscious Capitalism
OUR VALUES ARE ROOTED IN CONSCIOUS CAPITALISM We operate a STAKEHOLDER MODEL That prioritizes the long-term benefits of each of our stakeholders Our approach has been validated by our designation as a CERTIFIED B CORPORATION, a certification reserved for businesses that balance profit and purpose to
Slide 5: We Have Developed an Alternative to Factory Farming Practices
WE HAVE DEVELOPED AN ALTERNATIVE TO FACTORY FARMING PRACTICES Year-Round Production Our Framework LIVING OPEN AIR, 108 SQUARE CONDITIONS FEET PER HEN OMNIVOROUS, FEED INCLUDING GRAIN, PLANTS, INSECTS LAND SUSTAINABLE PRACTICES MANAGEMENT DIRECT RELATIONSHIPS NETWORK WITH FAMILY FARMS 5
Slide 6: Our Model Allows Us to Deliver Quality at Scale
OUR MODEL ALLOWS US TO DELIVER QUALITY AT SCALE Network of more than National Distribution 300 Family Farms (Products in ~24,000 Retail Stores) WE DELIVER WE EGG CENTRAL DIRECTLY TO AGGREGATE ECS STATION CUSTOMERS PRODUCTS Wash Springfield, MO AND THROUGH RETAIL FROM FARM NETWORK Grade PACK, WASH, G
Slide 7: Changing Priorities Reflected in Legislative Changes, Growing Our Playing Field
CHANGING PRIORITIES ARE REFLECTED IN LEGISLATIVE CHANGES, GROWING OUR PLAYING FIELD Passed Legislation to Remove Caged Eggs California, Massachusetts, Washington, Oregon, Nevada, Michigan, Utah, Colorado, Rhode Island, Arizona Legislation in Progress Hawaii, New York, New Mexico 7
Slide 8: Supplemental Charts
SUPPLEMENTAL CHARTS
Slide 9: Benefits of a Brand: Gross Margin Stability
BENEFITS OF A BRAND: GROSS MARGIN STABILITY Less Volatile Gross Margin Post Latest Avian Influenza Outbreak 50% 40% 30% 20% 10% 0% -10% Vital Farms Gross Margin Key Competitor Gross Margin Source: Vital Farms and Cal-Maine Company Filings 9
Slide 10: Market Share Gains Continue
MARKET SHARE GAINS CONTINUE Vital Farms Egg Dollar and Volume Share Moving Higher Despite Price Gaps Widening 8.00% 6.9% 5 7.00% $4.87 6.00% 5.3% 4 5.1% $3.96 5.00% 3 $3.50 4.00% 3.3% 3.0% 3.00% 2 2.3% $1.94 2.00% 1 $1.17 $1.33 1.00% 0 0.00% 2021 2022 2023 Premium Peer Group Price Gap Conventional P
Slide 11: Market Share Growth Also Benefits from Higher Share of Wallet Spend
MARKET SHARE GROWTH ALSO BENEFITS FROM A HIGHER SHARE OF WALLET SPEND 23.7% 21.8% 20.5% 18.6% 2020 2021 2022 2023 Share of Wallet Spend (Shell Eggs) Source: Numerator Panel, Share of Wallet Spend is the average dollars spent on Vital Farms Shell Egg Units divided by the total average dollars spent o
Slide 12: Consumer Loyalty Driving Increased Buy Rates
CONSUMER LOYALTY DRIVING INCREASED BUY RATES $33.95 $27.90 $24.19 $22.43 2020 2021 2022 2023 Buy Rates of Vital Farms Shell Eggs Source: Numerator Panel, Buy Rate is the average spend per household of Vital Farms Shell Eggs in a given year for an individual consumer, among purchasers of Vital Farms.
Slide 13: Financial Update
FINANCIAL UPDATE
Slide 14: Financial Summary Highlights: Q4 2023 Performance Update
FINANCIAL SUMMARY HIGHLIGHTS Q4 2023 PERFORMANCE UPDATE Highlights Financial Performance • Net revenue increased 23.4% to $135.8 ($ thousands) Q4'23 Q4'22 % Change $ Change million in the fourth quarter of 2023, compared to $110.1 million in the fourth Net Revenues $ 135,811 $ 110,081 23.4% 25,730 q
Slide 15: Financial Summary Highlights: 2023 Performance Update
FINANCIAL SUMMARY HIGHLIGHTS 2023 PERFORMANCE UPDATE Highlights Financial Performance • Net revenue increased 30.3% to $471.9 ($ thousands) 2023 FY 2022 FY % Change $ Change million in fiscal year 2023, compared to $362.1 million in fiscal year 2022. Net Net Revenues $ 471,857 $ 362,050 30.3% 109,80
Slide 16: Financial Summary Highlights: Net Revenue Growth
FINANCIAL SUMMARY HIGHLIGHTS NET REVENUE GROWTH Net Revenues Summary Net Revenues by Product Segment Highlights Growth Rates • Net revenue for Q4 2023 was $135.8 million 2023 and Q4 2023 Net Revenue Growth 2022 FY 2023 FY Q4 '22 Q4 '23 compared to $110.1 million for Q4 2022, ($ Thousands) Eggs 41% 3
Slide 17: Financial Summary Highlights: Margin Performance
FINANCIAL SUMMARY HIGHLIGHTS MARGIN PERFORMANCE Gross Profit and Margin Operating Expenses Highlights Gross Margins SG&A as a % of Net Revenues • The increase in gross profit of $11.9 million in Q4 2023 compared to Q4 2022 was driven by 30% 34% 30% 33% 21% increased pricing and sales volume. 22% 20%
Slide 18: 2024 Guidance
2024 GUIDANCE NET REVENUE Over 17% GROWTH NET REVENUES More than $552 Million ADJUSTED More than $57 Million EBITDA1 CAPITAL $35 to $45 Million EXPENDITURES The Company will continue to evaluate its capital allocation priorities and will provide updates in future earnings reports as necessary 1See a
Slide 19: Our Long-Term Financial Goals
OUR LONG-TERM FINANCIAL GOALS NET REVENUE $1 Billion by 2027 GROSS MARGIN ~35% ADJUSTED 12% to 14% of Net Revenues EBITDA MARGIN Note: These metrics are management goals only and are subject to a number of risks and uncertainties, including risks described in the "Risk Factors" in our Annual Report
Slide 20: Appendix
APPENDIX
Slide 21: Adjusted EBITDA Reconciliation
ADJUSTED EBITDA RECONCILIATION (1) Amount reflects the change in fair value of a contingent consideration liability in connection with our 2014 acquisition of certain assets of Heartland Eggs 21
Slide 22: Free Cash Flow Reconciliation
FREE CASH FLOW RECONCILIATION 22
Slide 23: Questions?
QUESTIONS? vitalfarms@icrinc.com