Mgp Ingredients, Inc. · NASDAQ:MGPI
Mgp Ingredients — Investor Presentation (May 2023)
38 slides from Mgp Ingredients's investor presentation, May 2023
Slide 1: Investor Presentation First Quarter 2023
INVESTOR PRESENTATION First Quarter 2023 1
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS The forward-looking statements contained herein include, but are not limited to, statements about the expected effects on MGP Ingredients, Inc. (the “Company,” or “MGP”) of continuing consumer trends and our announced expansionary projects. Forward looking statements are u
Slide 3: Mission Statement
MISSION STATEMENT Secure our future by consistently delivering superior financial results by more fully participating in all levels of the alcohol, spirits and food ingredients segments for the betterment of our shareholders, employees, partners, consumers and communities. 3
Slide 4: MGP Overview
MGP OVERVIEW Total sales were $782MM for the year ended December 31, 2022 DISTILLING BRANDED INGREDIENT SOLUTIONS SPIRITS SOLUTIONS Sales: $428MM Sales: $238MM Sales: $116MM (55% of Total) (30% of Total) (15% of Total) GP Margin: 29.5% GP Margin : 40.1% GP Margin: 27.2% ■ Leading supplier of distill
Slide 5: Distilling Solutions
DISTILLING SOLUTIONS A LEADING SUPPLIER OF DISTILLED SPIRITS TO THIRD PARTIES 2022 Total Revenue of $428MM Products consist of the following: $23 $40 • Brown Goods: Premium bourbon, rye and other whiskeys $14 sold as aged whiskey or unaged new distillate, which is then aged by customers from two to
Slide 6: Distilling Solutions
DISTILLING SOLUTIONS UNIQUE EXPERTISE POSITIONS US AS THE PREFERRED PARTNER TO OUR CUSTOMERS Lawrenceburg, IN Operations • Distillery • Top-5 American Whiskey producer • One of the largest U.S. suppliers of rye whiskey Scale provides competitive pricing • Bourbon • American Single Malt Whiskey Capac
Slide 7: Distilling Solutions
DISTILLING SOLUTIONS WELL POSITIONED TO CONTINUE BENEFITTING FROM GROWTH IN U.S. SPIRITS – PRIMARILY AMERICAN WHISKEY U.S. Spirits Continue To Gain Share Of Total Beverage Alcohol Growth of American Whiskey Continues To Outperform Beverage Alcohol Market Share - Revenue 5-year U.S. American Whiskey
Slide 8: Distilling Solutions
DISTILLING SOLUTIONS FOUR STRATEGIES TO CONTINUE DELIVERING LONG-TERM GROWTH WITHIN THE DISTILLING SOLUTIONS SEGMENT Distilling Solutions Growth Strategy Distilling Solutions Gross Profit Ladder 1. Focus on Strategic and Targeted Craft Customers For New Distillate and Aged Whiskey Sales 2. Further D
Slide 9: Branded Spirits
BRANDED SPIRITS AN ESTABLISHED PORTFOLIO WITH A FOCUS ON GROWING HIGH POTENTIAL, HIGH MARGIN BRANDS 2022 Total Revenue of $238MM Brand Examples By Price Tier: • Ultra Premium: Yellowstone Bourbon, Remus Gatsby $23 Bourbon, Penelope Private Select Whiskey, Remus Repeal $48 Bourbon, Blood Oath Bourbon
Slide 10: Penelope Bourbon Acquisition
PENELOPE BOURBON ACQUISITION Transaction Overview Rationale • Acquire 100% of Penelope Bourbon • Enhances presence in growing American Whiskey category payable as follows: • Expands portfolio of premium-plus price point • Upfront: $105.0M upon closing brands • Earnout: additional potential earn-out
Slide 11: Penelope Bourbon Overview
BRANDED SPIRITS PENELOPE BOURBON OVERVIEW EXPANSIVE PREMIUM+ WHISKEY FAMILY… One of the fastest growing FOUR GRAIN SERIES COOPER SERIES whiskey brands in the US … +139% CORE BRANDS LIMITED RELEASES Source: Nielsen 52 weeks Sales CY All Growth Trend by American Whiskey Spirits Category thru April 22,
Slide 12: Expansive Family of Brands
BRANDED SPIRITS 1EXPANSIVE FAMILY OF BRANDS REMUS GATSBY RESERVE Straight Bourbon REMUS REPEAL Whiskey RESERVE SRP: $199.99 Straight Bourbon Whiskey OLD EZRA SRP: $99.99 YELLOWSTONE 7-Year Straight American Single Rye Whiskey Malt Whiskey SRP: $79.99 SRP: $54.99 THE QUIET MAN 8-Year Irish Whiskey YE
Slide 13: Branded Spirits
BRANDED SPIRITS AN ESTABLISHED PORTFOLIO WITH A FOCUS ON GROWING HIGH POTENTIAL, HIGH MARGIN BRANDS National Sales Platform Operational Capabilities Diverse Portfolio of Brands • Sales / Distributor representation in every state and a dedicated international sales team • Dedicated sales and marketin
Slide 14: Branded Spirits
BRANDED SPIRITS CONTINUE TO FOCUS AND INNOVATE WITHIN U.S. SPIRITS PRICE TIERS THAT ARE GROWING – PRIMARILY HIGH-END AMERICAN WHISKEY, TEQUILA & GIN Recent Innovation Launches are Designed to Capitalize on Growth Across Spirits Categories Continues to Outperform in the High-End Fastest Growing Price
Slide 15: Five Strategies for Branded Spirits Growth
BRANDED SPIRITS FIVE STRATEGIES TO CONTINUE DELIVERING LONG-TERM GROWTH WITHIN THE BRANDED SPIRITS SEGMENT Branded Spirits Growth Strategy Focus on the Right Marketing Support 1. Focus on the Right Categories • Paid Social (Facebook, 2. Focus on the Right Brands AWARENESS Instagram) • Online/Streami
Slide 16: Ingredient Solutions
INGREDIENT SOLUTIONS A LEADING SUPPLIER OF SPECIALTY WHEAT STARCHES & PROTEINS 2022 Total Revenue of $116MM Products consist of the following: $1 • Specialty Wheat Starches: Premium wheat starches sold to food processors and distributors, a substantial portion of $14 which are modified for special a
Slide 17: Ingredient Solutions
INGREDIENT SOLUTIONS STRONGLY POSITIONED TO SERVE GROWING SPECIALTY PLANT-BASED MARKETS • Plant-based eating represent the top four most common diets/eating patterns. 1 • Consumption of plant-based meat alternatives is higher for 22% of consumers surveyed vs. a year ago1 • Global Texturized Vegetabl
Slide 18: Ingredient Solutions Growth Strategies
INGREDIENT SOLUTIONS FIVE STRATEGIES TO CONTINUE DELIVERING LONG-TERM GROWTH WITHIN THE INGREDIENT SOLUTIONS SEGMENT Ingredient Solutions Growth Strategy Top Nutrients Americans are Seeking to Consume* 59% Protein 1. Expand and Optimize Fibersym and Arise 57% Vitamin D Branded Platforms 56% Vitamin
Slide 19: Aggressively Expand Fibersym and Arise Platforms
INGREDIENT SOLUTIONS AGGRESSIVELY EXPAND FIBERSYM AND ARISE PLATFORMS Fibersym® RW Overview Strategy • Granular RS4-type resistant wheat • Maximize value of existing capacities starch • SKU rationalization • Allows formulators to boost the fiber content and to lower net carbs • Develop marketing cam
Slide 20: Expand Textured Plant Proteins
INGREDIENT SOLUTIONS EXPAND TEXTURED PLANT PROTEINS U.S. product launches and plant-based claims Strategy Region 2018 2019 2020 2021 2022 • Expand our production capabilities with new “in-house” U.S. 291 539 637 772 817 extrusion platform in Atchison • Innovate new products to include pea and other
Slide 21: Operational Excellence
OPERATIONAL EXCELLENCE A CULTURE OF CONTINUOUS IMPROVEMENT • “House of Zero Loss” operational excellence initiative • Improving throughput of existing assets while maintaining consistency of high-quality products • Lawrenceburg, IN operations increased capacity 28% from 2019 to 2022 to support growt
Slide 22: Our Approach to Sustainability
OUR APPROACH TO SUSTAINABILITY THE COMPANY’S ESG STRATEGY IS DISTILLED DOWN AND ORGANIZED INTO AN EASY TO DIGEST AND COMMUNICATE PLATFORM. At MGP, we are dedicated to operating in harmony with people and the environment. We are committed to a culture of continuous ESG Mission improvement, in which o
Slide 23: Financial Results
FINANCIAL RESULTS 23
Slide 24: Consolidated Financial Results
CONSOLIDATED FINANCIAL RESULTS THE COMPANY HAS DELIVERED RECORD RESULTS IN EACH BUSINESS SEGMENT Revenue ($MM) Adjusted Basic EPS1 ($) $4.94 $782 $4.26 $627 $396 $2.27 $2.51 $363 2019 2020 2021 2022 2019 2020 2021 2022 Adjusted EBITDA1 ($MM) FY 2023 Guidance Sales are projected to be in the range of
Slide 25: Strong Balance Sheet, Cash Flow and Excellent Access to Capital
STRONG BALANCE SHEET, CASH FLOW AND EXCELLENT ACCESS TO CAPITAL Adjusted EBITDA less CapEx and Conversion Adjusted EBITDA less CapEx 1 $124.0 • MGP has seen strong, consistent improvement in adjusted EBITDA Adjusted EBTIDA less CapEx as a percentage of Adjusted EBITDA less capital expenditures (“Cap
Slide 26: Capital Allocation Priorities Remain Focused on Growth Opportunities
CAPITAL ALLOCATION PRIORITIES REMAIN FOCUSED ON GROWTH OPPORTUNITIES Capital Allocation Priorities M&A • M&A will continue to be an important lever to increase our capabilities, margin up our portfolios, and accelerate growth in Branded Spirits. Whiskey Put-Away • With our inventory in balance, matc
Slide 27: Consolidated Financial Results - Q1 2023
CONSOLIDATED FINANCIAL RESULTS - Q1 2023 SECOND BEST GROSS PROFIT AND ADJUSTED EBITDA QUARTER IN COMPANY HISTORY, SECOND ONLY TO THE RECORD FIRST QUARTER 2022 • Sales increased 3% to $201.0 million. Operating Income Drivers First Quarter 2022-23 ($MM) • Gross profit decreased 3% to $69.8 million, $5
Slide 28: Consolidated Sales
CONSOLIDATED SALES SALES WERE UP 3% WITH GROWTH IN ALL BUSINESS SEGMENTS Key Drivers • Distilling Solutions growth primarily due to increased sales of premium beverage alcohol, due to higher brown Consolidated Sales Change vs Prior Year (Quarter Ended 3/31/2023) goods sales. $MM $MM % • Branded Spir
Slide 29: Distilling Solutions
DISTILLING SOLUTIONS RECORD BROWN GOODS PERFORMANCE DUE TO HIGHER PRICING AND NEW DISTILLATE VOLUME Distilling Solutions Sales Change vs Prior Year (Quarter ended 3/31/2023) $MM $MM % Brown Goods $68.3 $6.2 10% White Goods 16.0 (4.1) (21) Premium Beverage Alcohol 84.3 2.1 2 Industrial Alcohol 10.4 (
Slide 30: Branded Spirits
BRANDED SPIRITS INCREASED SALES OF BRANDS WITHIN THE VALUE AND MID PRICE TIERS DRIVEN BY THE NATIONAL DISTRIBUTOR REALIGNMENT Branded Spirits Sales Change vs Prior Year (Quarter ended 3/31/2023) $MM $MM % Ultra premium $9.1 $(3.5) (28)% Super premium 2.9 (0.1) (3) Premium 6.8 0.6 10 Premium Plus 18.
Slide 31: Ingredient Solutions
INGREDIENT SOLUTIONS SALES GROWTH DRIVEN BY SPECIALTY WHEAT PROTEINS, COMMODITY WHEAT PROTEINS AND STARCHES Ingredient Solutions Sales Change vs Prior Year (Quarter ended 3/31/2023) $MM $MM % Specialty wheat starches $14.7 $(0.5) (3)% Specialty wheat proteins 11.9 2.5 26 Commodity wheat starches 3.8
Slide 32: Appendix
MGP APPENDIX
Slide 33: U.S. Spirits Market
U.S. SPIRITS MARKET 9-Liter Cases (000s) 2022 Volume % Change Total Distilled Spirits (TDS) 305,004 +4.8% Total Whiskey 77,882 +1.9% American Whiskey (Bourbon/Rye/Tennessee) 31,236 +5.2% Super Premium 5,435 +15.1% Rye 1,730 +8.6% Vodka 76,897 -1.5% Super Premium 5,162 -9.0% Gin 9,831 -1.6% Super Pre
Slide 34: Reconciliation of Selected GAAP to Non-GAAP Measures
RECONCILIATION OF SELECTED GAAP TO NON-GAAP MEASURES BRANDED SPIRITS GROSS PROFIT TO ADJUSTED GROSS PROFIT Branded Spirits segment ($ in thousands) 2019 2020 2021 2022 Gross Profit $1,536 $2,187 $62,644 $95,521 Inventory Step-Up - - 2,529 - Adjusted Gross Profit1 $1,536 $2,187 $65,173 $95,521 Adjust
Slide 35: Reconciliation of Selected GAAP to Non-GAAP Measures
RECONCILIATION OF SELECTED GAAP TO NON-GAAP MEASURES EARNINGS PER COMMON SHARE TO ADJUSTED EARNINGS PER COMMON SHARE 2019 2020 2021 2022 Basic EPS $2.27 $2.37 $4.37 $4.94 Insurance recoveries - - (0.59) - Inventory Step-Up – Branded Spirits - - 0.12 - Business Acquisition Costs - 0.05 0.36 - CEO Tra
Slide 36: Reconciliation of Selected GAAP to Non-GAAP Measures
RECONCILIATION OF SELECTED GAAP TO NON-GAAP MEASURES NET INCOME TO ADJUSTED EBITDA1 AND ADJUSTED EBITDA1 LESS CAPITAL EXPENDITURES2 ($ in thousands) 2019 2020 2021 2022 Net Income $38,793 $40,345 $90,817 $108,872 Interest 1,305 2,267 4,037 5,451 Taxes 7,144 12,256 30,279 31,300 Depreciation and Amor
Slide 37: Reconciliation of Debt to Net Debt
RECONCILIATION OF DEBT TO NET DEBT ($ in thousands) 2019 2020 2021 2022 Total Debt $41,060 $39,871 $233,399 $230,335 Cash and cash equivalents 3,309 21,662 21,568 47,889 Net Debt $37,751 $18,209 $211,831 $182,446 37 Source: Company filings
Slide 38: Reconciliation of Selected GAAP to Non-GAAP Measures
RECONCILIATION OF SELECTED GAAP TO NON-GAAP MEASURES RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA – FIRST QUARTER Quarter Ended Quarter Ended ($ in thousands) 3/31/2023 3/31/2022 Net Income $31,032 $37,371 Interest 995 1,598 Income Tax Expense 9,655 11,165 Depreciation and Amortization 5,171 5,62