Utz Brands Inc · NYSE:UTZ
Utz Brands — Collier Creek Holdings — SPAC Merger (August 2020)
49 slides from Utz Brands's SPAC merger presentation, Aug 12, 2020
Slide 1: Investor Presentation August 2020
℠ Investor Presentation August 2020
Slide 2: Disclaimer and forward-looking statements
℠ This investor presentation (“Investor Presentation”) is for informational purposes only to assist interested parties in makin g t heir own evaluation with respect to the proposed business combination (the “Business Combination”) between Collier Creek (“CCH”) and Utz Quality Foods, LLC (“Utz” or th
Slide 3: Today's Participants
℠ Today’s Participants Collier Creek Holdings Utz Current New Utz • Sr. Managing Director, CC Capital Jason Giordano Co - Founder Director • Founder and Sr. Managing Director, CC Capital Chinh Chu Co - Founder Special Advisor • Former Chairman, Pinnacle Foods Roger Deromedi Co - Founder Chairman Car
Slide 4: Today's Agenda
℠ Today’s Agenda Business Overview II Introduction & Investment Thesis I Value Creation Strategy III Financial Overview IV 2
Slide 5: I. Introduction & Investment Thesis
I. Introduction & Investment Thesis
Slide 6: Utz is a Perfect Business Combination for Collier Creek
℠ Utz is a Perfect Business Combination for Collier Creek 1). Source: Management estimates and internal data. Represents annualized growth in Net Sales. Growth rate for 2017 through 2 019 excludes the negative impact from increased IO discounts related to Utz’s structural shift towards IOs from RSPs
Slide 7: Why CCH is So Excited About This Opportunity
℠ Why CCH is So Excited About This Opportunity ▪ $26 billion in U.S. Retail Sales with 4.3% CAGR Over Last Five Years (1) ▪ Resilient to Economic Downturns (4% CAGR from 2007 - 2010) (2) with Attractive Defensive Characteristics Attractive and Growing Salty Snack Category ▪ Iconic Brands with Strong
Slide 8: Transaction Overview
℠ Transaction Overview ▪ Enterprise Value of $ 1,561 million (1) ▪ Pro forma for the transaction Utz expected to have 2020E Net Debt of ~$385 million or ~3.1x 2020E Projected Further Adj. EBITDA (2) ▪ Transaction will be structured as an Up - C with the Company entering into a customary tax receivab
Slide 9: CCH Team with Proven Track Record in Food Industry: Pinnacle Foods
℠ Stock Appreciation CAGR from PF IPO to Sale Pinnacle Foods 24.1% S&P 500 10.3 Consumer Staples 6.0 80 110 140 170 200 230 260 290 320 350 Mar-13 Nov-13 Jun-14 Feb-15 Sep-15 Apr-16 Dec-16 Jul-17 Mar-18 Oct-18 Pinnacle Foods S&P 500 Consumer Staples $231 $675 2007 2017 $1,514 $3,144 2007 2017 Source
Slide 10: Utz a Perfect Fit for Executing CCH's Operating Playbook
℠ Portfolio Strategy Marketing/Sales Optimization New Product Innovations Distribution Expansion Utz a Perfect Fit for Executing CCH’s Operating Playbook Fully Integrated Strong Synergies Multiple Enhancing Reduce Costs and Expand Margin Build Platform with Strategic Acquisitions Support Top Managem
Slide 11: Salty Snacks Among the Best Categories in CPG
℠ Salty Snacks Among the Best Categories in CPG Source: IRI, the Hartman Group, and The Consumer Goods Forum. 1). Represents CAGR. 2). Defined as Euromonitor U.S. Savory Snacks category with Savory Biscuits removed. 3). Excludes dairy pro ducts. Supported by Strong Consumer Trends and Category Dynam
Slide 12: Utz Consistent Sales Growth Even During Economic Downturns
℠ $216 $222 $228 $254 $266 $290 $318 $359 $398 $403 $468 $513 $535 $559 $618 $656 $707 $772 $866 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Utz Consistent Sales Growth Even During Economic Downturns 1). Source: Internal financials. Figures for 2001
Slide 13: Attractive Value Creation Potential
℠ Attractive Value Creation Potential Plus Additional Upside From Strategic Acquisitions Long - Term Organic Growth Model Adj. EBITDA 6 – 8% Productivity / Margin Enhancements Adj. EPS 8 – 10% Deleveraging ~10 – 12% 1). Based on management estimates. 2). Does not include potential incremental divide
Slide 14: II. Business Overview
II. Business Overview
Slide 15: Nearly 100-Year Old Family Company with Tremendous Heritage
℠ Nearly 100 - Year Old Family Company with Tremendous Heritage Today Rich Heritage and Regional Expansion (1921 – 2011) National Scale Multi - Branded Snack Platform Created (2011 – 2019) 1921 – Founding by Bill and Salie Utz in Hanover, PA 1940s - 1960s – First Dedicated Manufacturing Plant (1947)
Slide 16: Scale Player in Salty Snacks and #2 in Core Geographies
℠ $16,047 $1,235 $1,094 $972 $569 $492 $400 $260 $196 $195 $187 $171 $170 $145 $116 ~$2,000 $1,459 Pepsi Campbell Kellogg Utz General Mills Grupo Bimbo Hershey's Hain Celestial Arca Cont. Herr's Truco Gruma Conagra Mars Old Dutch All Other Branded Private Label Total Salty Snacks #2 7% #4 4% Potato
Slide 17: Strong Brand Portfolio with Focus on Power Brands
℠ Strong Brand Portfolio with Focus on Power Brands Pork Skins Power Brands (71% of Sales) Foundation Brands (29% of Sales) Iconic Heritage Craft Better For You Regional Licensed Other • Partner Brands • Private Label Note: Sales represent FY2019 invoiced sales, which represent net sales before the
Slide 18: Broad Distribution Across Channels and Customers
℠ Food 52% C - Store 20% Mass 14% Club 6% Drug 2% Other 6% Broad Distribution Across Channels and Customers… No Customer Represents More than 10% Of Sales 15+ Year Average Relationship with Top Customers 2019 Utz Sales by Channel (1) Illustrative Customers (2) 14 1). Source: IRI MULO - C data (52 -
Slide 19: Excellent Retail Shelf and Display Presence
℠ With Excellent Retail Shelf and Display Presence 15 ℠
Slide 20: Flexible, Efficient DSD and Warehouse Distribution System
℠ Distributor Flexible, Efficient DSD and Warehouse Distribution System Direct to Warehouse Direct to Store (DSD) ~350 Retailer Distribution ~17,000 Doors ~635 Routes ~15,000 Doors ~1,645 Total Routes 75,000+ Doors % of Routes 2016 2019 Company - Owned 67% 23% Independent Operators (IO) 33% 77% Dire
Slide 21: National Manufacturing Footprint with Broad Capabilities
℠ National Manufacturing Footprint with Broad Capabilities ▪ 400 Million Lbs. Annual Capacity (1) ▪ ~69% Capacity Utilization (1) ▪ Strong Quality and Safety Record ▪ 14 Manufacturing Facilities Packaging Multipacks Barrels Bags Trays Seasonals Resealables Olive Oil Avocado Oil Gluten - Free Organic
Slide 22: Track Record of Accretive and Well-Integrated Acquisitions
℠ 2019 11.2x 7.4x 5.8% 2017 NM 10.2x (1) 13.8% 2016 15.8x 7.6x 9.6% 2013 13.2x 5.7x 8.7% 2011 8.0x 5.6x 7.0% All Acquisitions (2) 7.4x 8.1% Track Record of Accretive and Well - Integrated Acquisitions Year Pre - Synergy Adj. EBITDA Multiple Cost Synergy % of Revenue Snacks Target Post - Synergy Adj.
Slide 23: Highly Experienced Management Team
℠ Highly Experienced Management Team Name Title Years at Utz Background Dylan Lissette Chief Executive Officer 24 Years Cary Devore EVP & Chief Financial Officer Mark Schreiber EVP, Sales & Marketing Tucker Lawrence EVP, Chief Supply Chain Officer Ajay Kataria EVP, Finance & Accounting Todd Staub EV
Slide 24: III. Value Creation Strategy
III. Value Creation Strategy
Slide 25: Value Creation Strategies
℠ 1. Drive Productivity 2. Optimize Revenue and Trade 3. Improve Margin Mix 1. Focus on Branded Snacking in the U.S. 2. Deliver Strong Synergies Goal: Be Fastest Growing Pure - Play Branded Snack Platform of Scale in U.S. 1. Accelerate Power Brands Through Enhanced Marketing and Innovation 2. Expand
Slide 26: Reduce Costs and Enhance Margins
℠ Reduce Costs and Enhance Margins ▪ Eleven Acquisitions Successfully Integrated – 4 to 14 Manufacturing Facilities – SKU Count Expanded ~50%, Net of Rationalizations ▪ DSD Converted to Independent Operators Business Transformation ▪ Upgraded Management and Dedicated Continuous Improvement Resources
Slide 27: Reduce Costs and Enhance Margins (Cont'd)
℠ ▪ New Trade Management Software in 2020 ▪ Leverage Insights from ERP Rollout ▪ Price Pack Architecture Initiatives Procurement ▪ e - Auctions ▪ Group Purchasing ▪ Product Design $50 Million of Identified Opportunities Over Next Three Years Ongoing Annual Productivity Savings of 3 - 4% of COGS Manu
Slide 28: Accelerate Power Brands Through Enhanced Marketing and Innovation
℠ 2019: ~1% 3.8% Utz Peer Average Accelerate Power Brands Through Enhanced Marketing and Innovation Source: Company filings, Management estimates. IRI MULO - C data for 2014 and 2019 calendar years . 1). Represents last reported fiscal year advertising expense as a % of Net Sales per most recent for
Slide 29: Expand Distribution in Underpenetrated Channels and Customers
℠ Expand Distribution in Underpenetrated Channels and Customers Source: IRI MULO - C data (52 - week period ended 1/26/2020) for salty snack category by channel. 1). Pro Forma for Conagra Snacks and Kitchen Cooked acquisitions. 4.7% Share in C - Store and Mass Represents $210mm of Incremental Retail
Slide 30: Continue National Geographic Expansion
℠ ▪ Focus on Large Population Markets – “Expansion” Markets: Florida, Texas, Mid - West – “Emerging” Markets : California, Arizona ▪ Expand DSD Route Network ▪ Drive Power Brands via National Warehouse ▪ Make Tuck - in Acquisitions Continue National Geographic Expansion Core Expansion Emerging FL NM
Slide 31: Increase Presence in Key Sub-Categories and Adjacencies
℠ Potato Chips 30% 6.1% Tortilla 22% 0.3% Cheese 11% 4.2% RTE Popcorn 6% 1.4% Pretzel 5% 10.4% Pork Skins 2% 12.4% Total (1) 3.8% Increase Presence in Key Sub - Categories and Adjacencies Strategies Other Adjacent Snack Category Opportunities ▪ BFY / Healthy Snacks ▪ Protein Snacks ▪ Baked Snacks ▪
Slide 32: Continue Strategic Acquisitions
℠ Continue Strategic Acquisitions Scalable M&A Platform Significant Synergy Opportunities Driven by Highly Leverageable Manufacturing and Distribution System Robust Pipeline & Favorable Competitive Dynamics Utz is Logical Consolidator in Category with Numerous Opportunities ▪ Smaller Tuck - ins ▪ Tr
Slide 33: IV. Financial Overview
IV. Financial Overview
Slide 34: Utz Sustained Impressive Retail Sales Momentum in Q2
℠ 3/22/2020 4/19/2020 5/17/2020 6/14/2020 7/12/2020 Food & Beverage 33% 12% 15% 11% 11% Total Salty Snacks 22% 9% 12% 10% 9% PepsiCo 22% 10% 12% 9% 8% Campbell's 28% 16% 16% 10% 7% Kellogg's 22% (0%) 6% 6% 13% 29% 23% 24% 18% 16% General Mills 9% (19%) (10%) (6%) (3%) Private Label 21% 5% 8% 3% 2% U
Slide 35: Increased Belief COVID Favorable for Utz's Brands Longer Term
℠ Increased Belief COVID Favorable for Utz’s Brands Longer Term ▪ Initial stay - at - home orders reintroduced at - home cooking and eating, which are likely to continue amidst continued uncertainty ▪ Even after re - openings, people will spend more time at home and avoid offices, restaurants, and p
Slide 36: Strong Utz Financial Results Continued in Q2
℠ $22 $29 $51 $30 $33 $63 Q1 Q2 - Q4 Full Year $204 $218 $422 $228 $242 $470 Q1 Q2 - Q4 Full Year Strong Utz Financial Results Continued in Q2 Pro Forma Net Sales ($mm ) (2) 1). Unmeasured channels, which are currently estimated at approximately 30% of Utz’s invoiced sales, include natural grocery,
Slide 37: Updated 2020 Utz Projections
℠ $422 $444 $866 $470 $462 $932 Q1 Q2 - Q4 Full Year $51 $57 $108 $63 $61 $124 Q1 Q2 - Q4 Full Year Updated 2020 Utz Projections Pro Forma Net Sales ($mm) (1) 1). Includes the full period impact of the acquisitions of Conagra Snacks and Kitchen Cooked. 2020 numbers exclude the impact of the 53 rd we
Slide 38: Updated Utz Summary Financials
℠ $108 $124 $134 12% 13% 14% 2019 2020E 2021E $866 $928 $932 2019 2020E 2021E 12% 8% 0% Updated Utz Summary Financials 1). 2019 is pro forma for the acquisitions of Conagra Snacks and Kitchen Cooked. 2020 excludes impact of Utz’s 53 rd week. See pages 39 and 40 for reconciliation. 2). 2019 is pro fo
Slide 39: Significant Profit-Enhancing Capex Opportunities; Strong FCF Conversion
℠ $12.1 $11.3 $8.6 $9.9 $10.0 $3.2 $1.8 $5.4 $8.4 $15.0 $4.7 $10.0 $15.2 $13.1 $18.6 $28.3 $25.0 2017A 2018A 2019A 2020E 2021E New ERP Implementation Profit Enhancing Maintenance Significant Profit - Enhancing Capex Opportunities; Strong FCF Conversion Capital Expenditures ($ in mm) % of Net Sales 1
Slide 40: Capital Focused on Driving Growth
℠ Capital Focused on Driving Growth 1 Business Growth (Including M&A) 2 Debt Reduction 3 Dividend Increase 4 Share Buyback • 2020E Net Debt / Projected Further Adj. EBITDA of 3.1x • Target Net Leverage of 3 – 4x • Higher Net Leverage Possible for Strategic Acquisitions, Returning to Target Range wit
Slide 41: Put
Put BG BRANDS~ Collier Creek
Slide 42: Appendix
Appendix
Slide 43: Transaction Overview
℠ Transaction Overview ▪ Enterprise Value of $ 1,561 million (1) (11.6x 2021E Projected Further Adj. EBITDA ) (2) ▪ Pro forma 2020E Net Debt / Projected Further Adj. EBITDA of 3.1x (all First - Lien) ▪ Existing Utz owners to be paid $60 million in cash consideration and issued 57.8 million rollover
Slide 44: Operating Benchmarking to Peers
℠ 17.1% 14.0% 11.5% 5.4% 5.1% 4.4% 4.0% 3.2% 2.7% 2.0% 1.7% 0.9% HAIN SMPL Utz TWNK FLO PEP MDLZ HSY K CPB BRBR GIS JJSF 11.3% 9.6% 3.5% 3.3% 2.6% 2.5% 2.4% 1.4% 1.1% 0.5% 0.4% (0.9%) BRBR SMPL Utz PEP TWNK MDLZ FLO K HSY GIS CPB HAIN JJSF 25.5% 22.7% 20.9% 20.6% 20.3% 19.8% 19.0% 18.4% 16.7% 13.3%
Slide 45: Valuation Benchmarking to Peers
℠ 32.0x 25.1x 23.3x 22.4x 21.4x 21.3x 20.5x 18.7x 17.8x 17.3x 16.6x 15.8x 15.7x JJSF-US HAIN SMPL HSY BRBR PEP FLO MDLZ UTZ CPB TWNK-US K GIS 16.9x 16.1x 15.4x 14.7x 14.2x 14.0x 13.4x 13.4x 13.3x 13.0x 12.9x 11.6x 10.5x JJSF-US HSY MDLZ PEP HAIN BRBR SMPL K GIS FLO CPB UTZ TWNK-US 18.5x 16.9x 16.7x
Slide 46: Board of Directors
℠ Name Title Bio Dylan Lissette Chief Executive Officer • CEO, Utz • 24 years at Utz Mike Rice Director; Chairman Emeritus; Special Advisor • Former Chairman & CEO, Utz • 40+ years at Utz Tim Brown Director • President & CEO, Sageworth • 25 - year Director at Utz John Lindeman Director • CFO, Hydrof
Slide 47: Non-GAAP Reconciliation
℠ Non - GAAP Reconciliation Note: Dollars in Millions. 1 ). Includes GAAP interest expense related to third - party obligations, net of interest income, on loans made to independent DSD operators to purchase delivery routes . 2). Includes fair value adjustment to incentive program, mark - to - marke
Slide 48: Pro Forma Financials Reconciliation
℠ Pro Forma Financials Reconciliation Note: Dollars in Millions. 1). Includes Conagra Snacks and Kitchen Cooked pre - acquisition contribution . 40 Non-GAAP Reconciliation Historical Projections Historical 2017A 2018A 2019A 2020E 2021E Q1'19 Q2'19 Q1'20 Q2'20 Net Sales (GAAP) $707 $772 $768 $949 $92
Slide 49: Normalized / Projected Further Adjusted EBITDA
℠ Normalized / Projected Further Adjusted EBITDA 41 Historical Baseline Projections Quarterly Results 2019A 2020E 2021E Q1'19 Q2'19 Q1'20 Q2'20 Further Adjusted EBITDA $97 $124 $133 $20 $28 $29 $33 Trade Spend Normalization (2) 7 - - 0 0 - - Acquisition Synergies (3) 7 5 1 2 2 2 1 Public Company Cos