Gateway Investor Conference September 2019
Disclaimer FORWARD LOOKING STATEMENTS This presentation contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements may generally be identified by the use of words such as "anticipate," "believe," "expect," "intend," "plan" and "will" or, in each case, their negative, or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. As a result, actual events may differ materially from those expressed in or suggested by the forward-looking statements. Factors that could cause these differences include, but are not limited to, the factors set forth in “Risk Factors” included in TPB’s annual report on Form 10-K and other reports filed with the Securities and Exchange Commission from time to time. Any forward-looking statement made by TPB in this presentation speaks only as of the date hereof. New risks and uncertainties come up from time to time, and it is impossible for TPB to predict these events or how they may affect it. TPB has no obligation, and does not intend, to update any forward-looking statements after the date hereof, except as required by federal securities laws. This presentation includes industry and market data derived from internal analyses based upon publicly available data or proprietary research and analysis, surveys or studies conducted by third parties and industry and general publications, including those by the Management Science Associates, Inc. (“ MSAi ”) and Nielsen Holdings, N.V. (“Nielsen”) . Third-party industry and general publications, research, surveys and studies generally state that the information contained therein has been obtained from sources believed to be reliable. Although there can be no assurance as to the accuracy or completeness of the included information, we believe that this information is reliable. While we believe our internal analyses are reliable, they have not been verified by any independent sources. Any such data and analysis involve risks and uncertainties and are subject to change based on various factors, including those set forth in “Risk Factors” included in TPB’s annual report on Form 10-K and other reports filed with the Securities and Exchange Commission from time to time. NON-GAAP RECONCILIATION This presentation includes certain non-U.S. generally accepted accounting principles (“GAAP") financial measures, including EBITDA, Adjusted EBITDA and Net Debt. Such non-GAAP financial measures are not in accordance with, or an alternative to, financial measures prepared in accordance with GAAP. Please refer to the Appendix of this presentation for a reconciliation of EBITDA and Adjusted EBITDA to net income and Net Debt to Debt. To supplement our financial information presented in accordance with generally accepted accounting principles in the United States, or U.S. GAAP, we use non-U.S. GAAP financial measures, including EBITDA, Adjusted EBITDA and Net Debt. We believe EBITDA and Adjusted EBITDA provide useful information to management and investors regarding certain financial and business trends relating to financial condition and results of operations. Adjusted EBITDA and Net Debt are used by management to compare performance to that of prior periods for trend analyses and planning purposes and is presented to our board of directors. We believe that EBITDA and Adjusted EBITDA are appropriate measures of operating performance because they eliminate the impact of expenses that do not relate to business performance. Non-U.S. GAAP measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with U.S. GAAP. EBITDA and Adjusted EBITDA exclude significant expenses that are required by U.S. GAAP to be recorded in our financial statements and is subject to inherent limitations. In addition, other companies in our industry may calculate these non-U.S. GAAP measure differently than we do or may not calculate it at all, limiting its usefulness as a comparative measure.
Experienced Leadership Team Lawrence Wexler Graham Purdy President & CEO President, New Ventures Division MANAGEMENT HAS COMBINED 100+ YEARS OF EXPERIENCE NAVIGATING FEDERAL, STATE AND LOCAL REGULATIONS • TPB does not sell cigarettes • Organizer of small / mid-sized company lobbying teams • Regulatory changes likely to cause significant disruption among smaller companies Management team of QA, R&D, legal and scientific professionals applicable to CBD and other adult consumption alternative markets • 3
Leading Provider of Other Tobacco Products (“OTP”) & Alternatives KEY PRODUCT CATEGORIES SMOKELESS PRODUCTS Loose Leaf Chewing Tobacco (#2 Brand) and Moist Snuff (MST) SMOKING PRODUCTS Premium Rolling Papers (#1 in the U.S. and Canada (1) ) and MYO Cigar Wraps (75% Market Share) NEWGEN CBD Wellness Products, E-Cigarettes, E-Liquids, Proprietary Pod-Based Vapor System ROBUST GROWTH TRAJECTORY IN NEWGEN MARKETS SALES BY SEGMENT (5) ($ in billions) E-Vapor Market CBD Market 1H 2018 Sales of 1H 2019 Sales of Opportunity Opportunity (4) $155.0 million $185.0 million Growth Growth 136% 374% $23.7 (3) $20.5 26.3% 29.1% 34.5% 46.2% (2) $8.7 $5.0 27.5% 36.3% 2019 2025 2019 2023 Smokeless Smoking NewGen Smokeless Smoking NewGen (1) Based on management estimates. (2) Source: Cowen research. Estimated market size for the U.S. in 2019. (3) Source: Grand View Research. Estimated market size for North America in 2025. (4) Source: Brightfield 2019 U.S. CBD Market Report. Estimated market size for the U.S. in 2019 and 2023. 4 (5) Percentages may not add up to 100% due to rounding.
We Are a Brand Company Dedicated to Developing Iconic Brands That Satisfy Adult Consumers BROAD PORTFOLIO OF COMPELLING OTP AND ALTERNATIVES BRANDS ™ 5
History of Successful Acquisition and Strategic Investment TARGET DATE DEAL VALUE DETAILS Jul. 2019 $3.0 million Strategic investment in Canadian cannabis and accessories distributor Jul. 2019 $15.3 million Acquisition of leading alternatives brand company. Opens Nu-X HQ in Los Angeles Nov. 2018 $2.0 million Strategic investment focused on hemp processing and high-end markets Sept. 2018 $24.0 million Operates large B2C e-commerce platform with approximately 1.4 million customers April 2018 $4.8 million Leader of the Oklahoma vape shop market June 2017 $4.1 million Manufacturer and marketer of proprietary vaping liquids in stores and online Nov. 2016 $27.0 million Top B2B e-Commerce site servicing 4,000+ vape shops Nov. 2016 $2.5 million Portfolio of four chewing tobacco brands with 2% market share 6
Smokeless: Market Leader with Long-Term Organic Growth MST TUBS MST CANS CHEW Market leader in tub format 35% year-over-year increase in #2 chew brand with over 50% share volume in 2Q 2019 Significant chain launches 7
Stoker’s Cans: Significant Momentum Through Distribution Network Expansion Substantial growth driven by National Sales Team headcount increases STOKER’S MST STORES SELLING SPEEDWAY STOKER’S CAN WEEKLY VOLUME 77k 78k 78k 81k 83k 33k 30k 29k 29k 27k 57k 58k 58k 61k 62k 61k 22k 22k 22k 24k 24k 25k 24k 52k 20k 48k 17k 18k 41k 43k 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3/23/19 4/6/19 4/20/19 5/4/19 5/18/19 6/1/19 6/15/19 6/29/19 '15 '16 '16 '16 '16 '17 '17 '17 '17 '18 '18 '18 '18 '19 '19 8
Smoking: Iconic Brand with Significant Market Share PAPERS WRAPS NEW PRODUCT LAUNCHES #1 premium paper in Market leader in MYO cigar wraps Robust new product pipeline going the U.S. and Canada with ~75% share into 2019 and 2020 particularly with cones 9
NewGen: Evolving Alternative Products Appeal to Established Vapor Customer Base • Nu-X Ventures launched in 2018 – Strives to quickly tap into existing markets for JUUL and CBD with better science and Active quality Ingredients – Develops an exciting portfolio of next generation products for the evolving adult consumer • Nu-X product development roadmap – Active Ingredients: Physical and / or psychoactive experience Functional Delivery Ingredients System – Functional Ingredients: Generate a wellness benefit – Delivery System: Vehicle used to move active(s) and / or functional(s) into the body Tremendous optionality with combinations and delivery systems • 10
Nu-X Ventures: Year-to-Date Market Entries ™ CBD – DISTILLATE / ISOLATE / TERPENES NICTECH – NEW TOBACCO FREE NICOTINE TECHNOLOGY Explores rapidly emerging alternatives markets and to Proprietary pod-based vapor system deliver products that promote holistic wellness 11
Robust Nu-X Product Portfolio Pipeline ANTICIPATED 2019 ANTICIPATED 2020 3Q 4Q 1Q 2Q Therapene – Terpene-based RipTide Aromatherapy G2 Battery Vape Compatible Nootropics & Wellness Nu-X CBD Disposable Support Tinctures Energy Caffeine / B12 & Retail Concepts for Nu-X MultiVitamin Disposables Pod Systems CBD Liquid MG Expansion AÑA Premium CBD Bud Nu-X 510 Battery & (No THC) Flower, Pre-Rolls & Cartridge Hemparettes 12
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