1
4th Quarter & Full Year 2016 Supplemental Presentation Strategic Operational and Financial Update
March 9, 2017
4 th Quarter & Full Year 2016 Supplemental Presentation - - PowerPoint PPT Presentation
4 th Quarter & Full Year 2016 Supplemental Presentation Strategic Operational and Financial Update March 9, 2017 1 Safe Harbor Forward Looking Statements forward - looking This presentation contains statements that involve
1
March 9, 2017
2
Forward Looking Statements This presentation contains “forward-looking” statements that involve risks, uncertainties and
Company’s results may differ materially from those expressed or implied by such forward-looking
including, but not limited to, the Company’s intentions, beliefs or current expectations concerning, among other things, the Company’s results of operations, financial condition, liquidity, prospects, growth, strategies and the industry in which we operate and any statements of assumptions underlying any of the foregoing. These statements are based on estimates and information available to us at the time of this presentation and are not guarantees of future performance. These forward-looking statements are based on certain assumptions and are subject to risks and uncertainties, including those described in the “Risk Factors” section and elsewhere in the preliminary prospectus for this offering. You should read the prospectus, including the Risk Factors set forth therein and the documents that the Company has filed as exhibits to the registration statement, of which the prospectus is a part, completely and with the understanding that if any such risks or uncertainties materialize or if any of the relevant assumptions prove incorrect, the Company’s actual results could differ materially from the results expressed or implied by these forward-looking statements. Except as required by law we assume no obligation to update these forward-looking statements publicly, or to update the reasons why actual results could differ materially from those anticipated in the forward- looking statements, even if new information becomes available in the future.
3
capability
growth
Consumer Appeal & Marketing Model Customer Support for Distribution Operations Capabilities & Opportunities
4
5
6
7
Distribution & Sales Growth May 2012 – Dec 2016
Total US Multi Outlet IRI (4 wk.)
10.00 15.00 20.00 25.00 30.00 35.00 40.00 45.00 50.00 55.00 $- $2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 May 20, 2012 Jul 15, 2012 Sep 9, 2012 Nov 4, 2012 Dec 30, 2012 Feb 24, 2013 Apr 21, 2013 Jun 16, 2013 Aug 11, 2013 Oct 6, 2013 Dec 1, 2013 Jan 26, 2014 Mar 23, 2014 May 18, 2014 Jul 13, 2014 Sep 7, 2014 Nov 2, 2014 Dec 28, 2014 Feb 22, 2015 Apr 19, 2015 Jun 14, 2015 Aug 9, 2015 Oct 4, 2015 Nov 29, 2015 Jan 24, 2016 Mar 20, 2016 May 15, 2016 Jul 10, 2016 Sep 4, 2016 Oct 30, 2016 Dec 25, 2016
ACV Wtd Dist Dollar Sales
8
$63 $88 $111 $128 39% 27% 15%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
$0 $20,000,000 $40,000,000 $60,000,000 $80,000,000 $100,000,000 $120,000,000 $140,000,000 $160,000,000 $180,000,000 $200,000,000
2013 2014 2015 2016
Fresh Growth vs YAG
9
58% 60% 62% 71%
2013 2014 2015 2016
10
Freshpet Rachel Ray Blue Buffalo Purina ONE Cesar
Awareness (Aided) 35% 52% 86% 82% 70% Penetration 1.4% 3.6% (dry) ~8% (est) 5.2% (dry) 3.4% (wet)
Source: 2016 Brand Tracker, IRI 2016 HH Panel
35% 52% 86% 82% 70% 1.4% 3.6% 8.0% 5.2% 3.4%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Awareness Penetration
11
12
DISTRIBUTION FOOD PET MASS OPERATIONS SCALE & EFFICIENCY EDUCATION AWARENESS RESEARCH & DEVELOPMENT
13
UK Baked Refrigerated Pet Specialty ~19% Refrigerated Food/Mass/Club ~77%
% net sales breakdown by class of trade/product line as of 12/31/16
14
Drive HH Awareness & Penetration
Penetration Growth Accelerate Fridge Placements
Placements Growth Accelerates in 2018 Strengthen Gross Margin
Optimization/Efficiency
Reliability
Grows Several Percentage Pts. by 2020
15
Investment in Media Velocity Increase (+Revenue) Distribution Increase (+Revenue) Plant Leverage (Incr. Pounds Produced) SG&A Leverage
16
27.0% 25.2% 23.4% 21.6% 19.8% 18.0%
17.0% 19.0% 21.0% 23.0% 25.0% 27.0% 29.0% $150 $189 $210 $240 $270 $300 Infrastructure as Percentage of Sales*
*- Leverage adjusted for projected inflationary growth of infrastructure
17
Same Store Sales Growth & Advertising TRP’s
2017 TRPs
Same Store Sales
18
$2,300,000 $2,400,000 $2,500,000 $2,600,000 $2,700,000 $2,800,000 $2,900,000 $3,000,000 $3,100,000
IRI Multi Outlet Weekly Dollar Sales
Rolling 4wks
Q1 Has Provided Us with Insight Around Additional Testing
19
10.00 15.00 20.00 25.00 30.00 35.00 40.00 45.00 50.00 55.00 $- $2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 May 20, 2012 Jul 15, 2012 Sep 9, 2012 Nov 4, 2012 Dec 30, 2012 Feb 24, 2013 Apr 21, 2013 Jun 16, 2013 Aug 11, 2013 Oct 6, 2013 Dec 1, 2013 Jan 26, 2014 Mar 23, 2014 May 18, 2014 Jul 13, 2014 Sep 7, 2014 Nov 2, 2014 Dec 28, 2014 Feb 22, 2015 Apr 19, 2015 Jun 14, 2015 Aug 9, 2015 Oct 4, 2015 Nov 29, 2015 Jan 24, 2016 Mar 20, 2016 May 15, 2016 Jul 10, 2016 Sep 4, 2016 Oct 30, 2016 Dec 25, 2016 Feb 19, 2017
ACV Wtd Dist Dollar Sales
Latest 4 Weeks Ending Feb 19, 2017 Latest 12 Weeks Ending Feb 19, 2017 Latest 52 Weeks Ending Feb 19, 2017
Dollar Sales % Change YoY Dollar Sales % Change YoY Dollar Sales % Change YoY Total US - Food $6,611,633 25.0% $19,105,230 23.6% $76,773,072 19.2% Total US - Multi Outlet $11,884,581 23.3% $34,626,176 21.1% $139,945,312 17.0% MULO + Petco $13,297,545 20.5% $38,762,540 18.5% $157,836,080 14.8%
20
1. Better align with key retailers on their strategies using their data to make Freshpet more strategic for the category and store
2. Leverage increased media investment to drive velocity and support new fridge placements
3. Deliver exceptional service via remodeled Acosta relationship and fridge maintenance program
21
22
Strong innovation at Freshpet Kitchens provides revolutionary offerings and a broad product platform
Rolls Single Serve Treats Roasted Meals Shredded
RESEARCH & DEVELOPMENT
23 5 10 15 20 25 30 20 40 60 80 100 120 140 160 180 200
Growth Rate TRPs
TRPs Growth Rate
Q4 2017 Q3 2017 Q2 2017 Q1 2017 Q4 2016
Digital Support Plan TV Plan TV Plan
Change vs YAG
Change vs YAG
24
(1) Gross Margin adjusted for Depreciation and plant start up expense (2) SG&A adjusted for option expense, CEO transition expense, and warrant expense
25
1. Accelerates growth rate from 13% in Q4 2016 to 20% in Q4 2017
2. Improves the structural economics of the business
3. Sets the company up for significantly higher revenue and adjusted EBITDA in 2018 and beyond
26
Established & Broad Product Portfolio Impeccable Consumer Fundamentals
On Trend Brand & Company Manufacturing & Distribution Scale Installed Distribution Network Free Cash Flow Marketing Model Operating Expertise
27