Funko, Inc. · NASDAQ:FNKO
Funko — Investor Presentation (May 2021)
30 slides from Funko's investor presentation, May 2021
Slide 1: Funko Investor Presentation May 2021
Funki INVESTOR PRESENTATION May 2021 fy
Slide 2: Cautionary Notes
2 HOLLYWOOD UPDATE Cautionary Notes This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking s
Slide 3: Funko is built on the principle that everyone is a fan of something
3 is built on the principle that everyone is a fan of something, and has something for every fan FUNKO 2021
Slide 4: Funko At-A-Glance
4 Funko At-A-Glance $653M 75% 25% 77% 23% 2020 Net Sales(1) U.S. International Figures Other Video Mass Distributors Soft Lines Games Television Games Hard Youth Theatrical Specialty Digital Lines Collectibles Evergreen Release 25,000+ Expanding 1,000+ Retail Locations Product Categories Licensed Pr
Slide 5: Strategically Investing in the Rise of Pop Culture for more than 15 Years
5 We Have Been Strategically Investing in the Rise of Pop Culture for more than 15 Years Funko acquires 2005 2010 2015 Funko acquires 2018 Forrest-Pruzan 2021 Underground Toys Opens flagship and Loungefly store in Completes IPO Hollywood, CA Brian Mariotti & Private equity firm Partners acquire ACON
Slide 6: Fandom is Exploding
6 Fandom is Exploding AVG. TIME PER DAY THAT A U.S. GLOBAL LICENSED >350M >$120 BILLION ADULT IS ENTERTAINMENT MUSIC SPENT ON ORIGINAL CONTENT CONNECTED TO STREAMING IN 2019 MEDIA AND CHARACTER SUBSCRIPTIUONS 11hrs+ PRODUCTS MARKET IN 2019, GROWING 32% >$90 BILLION GLOBAL TOY & GAMES YEAR OVER $123b
Slide 7: Secular Trends are Fueling Growth
7 Secular Trends are Fueling Growth Content New Cultural Evolution Technology Shifts Fandom • Proliferation and • Increased accessibility • Entertainment/content • Deep fan loyalty to investment in high- to content through has become a hobby pop culture will be quality, obsession new platforms and p
Slide 8: Broad and Deeply Engaged Consumer Base
8 Broad and Deeply Engaged Consumer Base Broad Consumer Base Strong Consumer Engagement Funko has built a deeply engaged consumer base by Funko has a broad consumer base and includes connecting with them through Funko’s digital platform, men, women, boys and girls… loyalty program, social media and
Slide 9: Funko has Something for Everyone
9 Funko has Something for Everyone Movies TV Music Sports Anime Games Note: Represents a sampling of our current portfolio offerings as of March, 2021. FUNKO 2021
Slide 10: Deep and Extensive Licensing Partnerships
10 Deep and Extensive Licensing Partnerships Note: Represents a sampling of content providers whose properties were associated with products sold in 2020. FUNKO 2021
Slide 11: Global Distribution Across Multiple Channels
11 Global Distribution Across Multiple Channels Diversified Distribution Network Wholesale Strategies Mass Focused on Expanded Entered the Toy & Underpenetrated Shelf Space Game Aisle Specialty Geographies Digital Rapidly Growing Direct-To-Consumer Business .com Launched Distributors Enhanced Digita
Slide 12: Topline Growth Strategies
12 Topline Growth Strategies Extend Funko’s International Accelerate DTC Reach Growth Diversify our Revenue Streams Grow our Core Pop Culture Business FUNKO 2021
Slide 13: Expanding Beyond Figures
13 Expanding Beyond Figures We’ve grown our non-figures categories to more than 20% of the business while driving consistent momentum in our core Pop! figures platform Category Expansion $ millions $883 Other (Non-figures) 18% Figures 18% 23% 18% 18% 82% 82% 82% 81% 77% 2016 2017 2018 2019 2020* 202
Slide 14: Leveraging Evergreen Opportunities
14 Leveraging Evergreen Opportunities Funko has the unique ability to leverage evergreen or back catalog content by creating fun, whimsical and nostalgic programs at retail Evergreen Content Growth Expanding into Underpenetrated Genres $ millions Anime $430+ Exclusive partnerships with Bandai to dis
Slide 15: Product Innovation is the Heart of Funko
15 Product Innovation is the Heart of Funko FUNKO 2021
Slide 16: Diversifying Our Revenue Streams
16 Diversifying Our Revenue Streams Leveraging ’s core platform to diversify revenue streams across product categories, channels and geographies FUNKO 2021
Slide 17: Product Expansion Driving New Revenue Streams
17 Product Expansion HOLLYWOOD Driving New Revenue Streams UPDATE First NFTs expected to drop June 2021! Soft Lines Youth Collectibles Games FUNKO 2021
Slide 18: Extending Funko's International Reach
18 Extending Funko’s International Reach International demand continues to improve – represented 25% of 2020 total net sales Focusing on underpenetrated markets through new sales and distribution strategies - APAC, Improving Latin America, Canada performance in Europe (1) FUNKO 2021 (1) Europe Q1’21
Slide 19: Growing our Direct-to-Consumer Business
19 Growing our Direct-to-Consumer Business Strengthening our Connecting with our Driving traffic and e-commerce platform customers conversion • Improved end-to-end customer • Delivering an immersive • Utilizing special promotions experience experience and showcasing the for Funko Fan Club members ma
Slide 20: Increasing Operational Efficiency
20 Increasing Operational Efficiency Optimizing Reducing Streamlining Investing in Diversifying Inventory Levels Leasing the Organization Domestic ERP Sourcing Base Commitments FUNKO 2021
Slide 21: Experienced Management Team with a Deep Bench
21 Experienced Management Team with a Deep Bench Brian Mariotti Andrew Perlmutter Jennifer Fall Jung Tracy Daw Director & CEO President Chief Financial Officer SVP, General Counsel & Secretary Joe Sansone Johanna Gepford Ben Butcher Andy Oddie Jay Wheatley Chief Global Operations Officer SVP, Direct
Slide 22: Financial Overview
22 Financial Overview $653M 38.2% 12.3% $107M 2020 Net Sales(1) 2020 Gross Margin 2020 Adjusted 2020 Cash Flow EBITDA Margin(2) from Operations 1) 2020 results reflect the impact of store closures and global lockdowns due to the COVID-19 pandemic. 2) Adjusted EBITDA Margin is a non-GAAP financial me
Slide 23: Strong Track Record of Growth
23 Strong Track Record of Growth Net Sales Gross Margin $ millions $883 $795 38.5% 37.2% 38.2% $686 $653 34.3% 35.5% $516 $427 $273 2015 2016 2017 2018 2019 2020* 2021E** 2016 2017 2018 2019 2020* Adjusted EBITDA Margin(1) Adjusted Net Income(1) 22.7% $50 $56 17.4% 16.5% $40 15.5% 14.3% $36 12.3% $1
Slide 24: Balance Sheet & Cash Flow Highlights
24 Balance Sheet & Cash Flow Highlights Cash & Cash Equivalents Total Debt $ millions $ millions $52 $247 $242 $218 $234 $191 $25 $13 $6 $8 2016 2017 2018 2019 2020* 2016 2017 2018 2019 2020* Cash Flow from Operations Capital Expenditures $ millions $ millions $42 $107 $34 $91 $27 $21 $18 $49 $50 $2
Slide 25: Long-Term Capital Allocation Strategy
25 Long-Term Capital Allocation Strategy Invest in new revenue streams to support profitable sales growth Deploy capital to infrastructure improvements to gain operational efficiency Reduce debt levels FUNKO 2021
Slide 26: Key Considerations
26 Key Considerations • Powerful pop culture platform • Strong growth across brands, products, channels and geographies • Diversification strategy driving incremental growth • Passionate management team FUNKO 2021
Slide 27: Appendix
27 Appendix FUNKO 2021
Slide 28: Reconciliation of Non-GAAP Financial Metrics Cont.
28 Reconciliation of Non-GAAP Financial Metrics Cont. 1) Represents monitoring fees paid pursuant to a management services agreement with ACON that was entered into in connection with the ACON Acquisition, which terminated upon the consummation of the IPO in November 2017. Twelve Months Ended Decemb
Slide 29: Reconciliation of Non-GAAP Financial Metrics Cont.
29 Reconciliation of Non-GAAP Financial Metrics Cont. 1) Represents the reallocation of net income attributable to non-controlling interests from the assumed exchange of common units of FAH, LLC in periods in which income was attributable to non-controlling interests. Twelve Months Ended December 31
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