Party City Holdco — Goldman Sachs Global Retailing Conference 2015
29 slides from Party City Holdco's conference presentation, Sep 9, 2015
Slide 1: Goldman Sachs Global Retailing Conference
Exhibit 99.1 Goldman Sachs Global Retailing Conference September 9, 2015
Slide 2: Disclaimer
Disclaimer Forward Looking Statements Certain statements herein are “forward-looking statements” made pursuant to the safe harbor provisions of the PrivateSecurities Litigation Reform Act of 1995. Statements contained herein that are not clearly historical in nature are forward-looking. In many case
Slide 3: Agenda
Agenda Business Update 3 Company Overview 7 Key Investment Highlights 10 Historical Financial Performance 25 2
Slide 4: Business Update
Business Update
Slide 5: Business Update
Business Update Solid YTD performance: 1 — Adjusted EBITDA growth of 9% 1 2 — Net wholesale revenues up 4% (10% ex currency and USB acquisition ) — YTD brand comps 3.1% Progress in strengthening our vertical model with ACIM acquisition — Gross margin expansion by turning “doubles” into “triples” Deb
Slide 6: Illustration: Power of the Vertical Model
Illustration: Power of the Vertical Model PRTY Gross Margin Breakdown of Retail Sales 1 Nickname Hypothetical example Individual Cumulative 20% "Single" $ 1.00 Retail sales price 30% 0.50 product cost 0.50 product profit 30% 0.20 occupancy $ 0.30 net gross margin 30% 30% 50% 80% 70% share "Double" $
Slide 7: Recent Developments: Acquisitions
Recent Developments: Acquisitions In October 2014, Party City acquired U.S. Balloon Manufacturing Co., Inc. (“U.S. Balloon”), a distributor of metallic balloons, for approximately $11 million U.S. Balloon Allowed Party City to capture the full manufacturing-to-retail margin on balloons that it Acqui
Slide 8: Company Overview
Company Overview
Slide 9: Company Overview: Nobody Has More Party For Less!
Company Overview: Nobody Has More Party For Less! Largest vertically integrated supplier and retailer of decorated party goods globally $2.3 billion in worldwide sales1,2 1 $372 million in Adjusted EBITDA1,3 / 16.2% Adjusted EBITDA margin Manufacturing Wholesale / Distribution Retail Canada 41 Large
Slide 10: Timeline: A History of Party City's Vertical Integration
Timeline: A History of Party City’s Vertical Integration Evolution of the Business – Key Events Amscan Acquired Acquired Acquired Acquired Gags Acquired party founded The Party Anagram M&D Party City and Games, Acquired Travis goods division of Superstore Balloons Factory Card and Designs (designs,
Slide 11: Key Investment Highlights
Key Investment Highlights
Slide 12: Investment Highlights
Investment Highlights 1 2 Unique Vertically Integrated 3 Leading Market Position Broad and Innovative Operating Model with Controlled in a Growing Category Product Offering Distribution Channels Leading party goods supplier in the Combination of wholesale and retail Unmatched product breadth with ov
Slide 13: Leading Wholesale Business
1 Leading Wholesale Business One of the largest manufacturers, designers and Wholesale Revenue by Product Category 1 distributors of decorated party supplies in the world Product sold in over 40,000 retail outlets in 100+ countries — 61% U.S. and 39% International 1 Deep assortment with over 40,000
Slide 14: Category Defining Omni-Channel Retail Concept
1 Category Defining Omni-Channel Retail Concept Retail Stores e-Commerce Third-Party Retail Largest retail We believe we are A leading Significant e-Commerce U.K. acquisition expanded network of the leading operator of platform with ~$160 million of platform into Europe decorated party integrated te
Slide 15: Category Leadership Like No Other
1 Category Leadership Like No Other Party Vitamin & Sporting Home Goods Supplements Crafts Pet Supplies Goods Improvement Industry Sales ($mm) 1,6191 $1,934 1 $4,764 $7,112 $6,941 $84,380 Leader Stores 6931 3,516 1 1,295 1,404 701 2,270 NM 2 #2 Player Sales ($mm) — $1,242 2 2 $56,949 Stores — 725 ~6
Slide 16: Unique Vertically-Integrated Operating Model
2 Unique Vertically-Integrated Operating Model Vertical model and significant scale provide unique competitive advantages Enhanced profitability by capturing the full manufacturing-to-retail margin on a significant portion of the products sold in our retail stores Maintain greater control of every s
Slide 17: Highly Efficient Manufacturing, Sourcing And Distribution Capabilities
2 Highly Efficient Manufacturing, Sourcing And Distribution Capabilities on a Global Footprint In-house manufacturing focused on high-volume Sourcing Manufacturing Distribution party essentials that can be manufactured through Manchester UK Distribution highly automated processes Brooklyn (NY) Distr
Slide 18: Best-In-Class Innovation Capabilities And Broad Product Offering
3 Best-In-Class Innovation Capabilities And Broad Product Offering Innovation License Portfolio 110 person in-house design team — Creative staff is constantly in the market identifying trends and new product concepts Vertical integration allows development team to test new products and rapidly respo
Slide 19: Differentiated and Fun Retail Experience
3 Differentiated and Fun Retail Experience One stop shop for all party needs Party Goods SKU Count Comparison 1 — Powerful combination of physical and online stores Broad assortment of merchandise — Greater assortment of products than our national competitors, including mass merchants Deep merchandi
Slide 20: Strong Financial Performance and Free Cash Flow Generation
4 Strong Financial Performance and Free Cash Flow Generation Sales of party goods have been resilient in all economic cycles Rolling LTM Gross Wholesale Sales ($ in millions) 19
Slide 21: Strong Financial Performance and Free Cash Flow Generation
4 Strong Financial Performance and Free Cash Flow Generation 3 1 Adj. EBITDA ($mm) Free Cash Flow ($mm) $362 $372 $321 $295 $284 $292 $260 $275 $247 $231 $231 $181 2010A 2011A 2012A 2013A 2014A LTM 6/30/15A 2010A 2011A 2012A 2013A 2014A LTM 6/30/15A 2 Adj. EBITDA Margin FCF Conversion 16.1% 84.0% 84
Slide 22: Multiple Levers for Disciplined Growth
5 Multiple Levers for Disciplined Growth Plan to open ~30 stores per year representing ~4% annual square footage growth Expand Our Retail Store Base New stores generate a ~3 year payback and 50% ROIC in year 3 Drive Additional Continue to improve brand image and awareness Growth and Pursue merchandi
Slide 23: Expand Our Retail Store Base
5 Expand Our Retail Store Base Current retail network includes approximately 900 party Consistent Company-Owned Store Growth superstores, including: Approximately 650 company-owned stores in the 1,000+ U.S. and approximately 40 stores in Canada Approximately 200 franchised locations 1 693 674 600 Ac
Slide 24: Drive Additional Growth And Productivity From Existing Stores
5 Drive Additional Growth And Productivity From Existing Stores Pursue merchandising initiatives to Continue to improve brand image and awareness drive increased units per transaction Strong emphasis on price- Broadening products within value proposition – “Nobody existing license Has More Party For
Slide 25: Grow Wholesale Business
5 Grow Wholesale Business Wholesale growth driven by our leading scale, vertical Wholesale Share of Shelf 1 operating model and strong innovation ~75-80% Product portfolio initiatives include: ~70% 30% — Building out wearable / costume business to 50% capitalize on recent acquisitions ~25% 50% 20% —
Slide 26: Historical Financial Performance
Historical Financial Performance
Slide 27: Superior Financial Performance
Superior Financial Performance Total Revenues ($mm) $2,271 $2,304 $2,045 $1,872 $1,914 $1,560 $1,487 $1,599 $1,247 $1,015 2006A 2007A 2008A 2009A 2010A 2011A 2012A 2013A 2014A LTM 06/30/15 1 Same Store Sales Growth New Store Openings Brand Comp 9.5% Sales affected 27 by Superstorm 24 25 23 Sandy and
Slide 28: Strong Balance Sheet and Liquidity
Strong Balance Sheet and Liquidity Majority of primary proceeds from IPO used to reduce existing indebtedness Solid free cash flow generation with ability to self-fund organic growth and opportunistic acquisitions 1 Ample liquidity going forward supported by new revolver of $640 million Target gross
Slide 29: Recent Results: Second Quarter 2015
Recent Results: Second Quarter 2015 Q2 2015 Summary Results Three Months Ended, Y-o-Y ($ in millions) 6/30/2014 6/30/2015 $ % Total Revenues $492 $496 $4 0.8% 1 SSS 4.7% 1.2% Gross Profit $183 $188 $5 2.7% % margin 37.5% 38.3% Adj. EBITDA $69 $75 $6 8.7% % margin 14.1% 15.1% Capital Expenditures $19
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