Supreme Plc · LSE:SUP
Supreme — FY2021 Earnings Presentation
28 slides from Supreme's earnings presentation, Jul 20, 2021
Slide 1: Final Results for the year ended 31 March 2021
Final Results for the year ended 31 March 2021 20 July 2021
Slide 2: Presenting team
Presenting team Sandy Chadha Suzanne Smith CEO CFO Experience Experience • Over 29 years with Supreme • 15 years in finance, with Big 4 experience • CEO and major shareholder (PwC Manchester) • Responsible for overall management and • Worked in private equity, plc, and family- strategy of the group
Slide 3: Supreme at a glance
Supreme at a glance 1975 £122.3m Founded Revenue FY2021 14% 26% LEVERAGING OUR VERTICALLY Revenue CAGR EBITDA CAGR FY2018-FY2021 FY2018-FY2021 INTEGRATED PLATFORM TO TAKE FAST MOVING CONSUMER BRANDS TO OUR ~2,000 16% Orders dispatched EBITDA margin EXTENSIVE CUSTOMER NETWORK every day FY20213 64% 5
Slide 4: Vertical integration offers excellent route to market for leading brands
Vertical integration offers excellent route to market for leading brands NEW PRODUCTS BRANDS • Own brands • Licensed brands • Distribution agreements PRODUCT Design DEVELOPMENT • NPD for own brands plus private label brand development Marketing for customers Bespoke R&D packaging MANUFACTURING • In-
Slide 5: Underlying drivers are going in the right direction
Underlying drivers are going in the right direction Retailers are growing Product range is expanding Revenue by customer is increasing Aggregated revenue of top 4 customers(1) Total number of 88Vape SKUs in selected Sales of top 5 customer cohort, split by customers(2) customer £45m 117 14% CAGR 49%
Slide 6: Financial highlights
Financial highlights Strong revenue and adjusted EBITDA performance underpins both organic and acquisitive growth opportunities FY21 FY20 % (£ million) (£ million) Change Commentary Revenue 122.3 92.3 +33% • Strong organic growth across all key categories coupled with Gross Profit 33.0 26.6 +24% enc
Slide 7: Operational highlights
Operational highlights Year-ended 31 March 2021 Post period-end & Outlook Successfully quoted on AIM in February 2021 Strong start to current financial year • All business areas performing in-line with expectations Vaping and Sports Nutrition & Wellness delivered significant • Secured two new vaping
Slide 8: Financials
Financials a og fom! 88¥EIpe, Modium Strength cir tu This proce 1] contains nicotine which Is a highly “rhs addictive tet substance = center
Slide 9: Income statement
Income statement FY21 FY20 % change Commentary £m £m Revenue 122.3 92.3 +32% Gross Profit 33.0 26.6 +24% • Revenue growth was organic (18%) and a result of recent acquisitions (14%) % 27.0% 28.8% • On balance, the impact of Covid-19 was negligible Admin expenses (13.7) (10.6) • Change in gross profi
Slide 10: Segmental breakdown
Segmental breakdown FY21 FY20 % change Commentary £m £m Revenue Batteries 34.4 30.9 +11% • 11% growth entirely organic in Batteries Lighting 25.9 25.3 +2% • Covid-19 delayed growth trajectory for Lighting Vaping 39.5 29.0 +36% Sports Nutrition & Wellness 6.9 5.0 +38% • Vaping growth includes full ye
Slide 11: Balance sheet
Balance sheet FY21 FY20 £m £m Commentary Non-current assets Tangible Assets 4.3 5.0 Intangible Assets 2.6 1.8 • A notably stronger balance sheet £18.8m net assets (FY20: 6.9 6.7 £4.1m) Current assets Stock 19.9 14.5 Trade & other debtors 16.1 16.7 Derivative financial instruments 0.2 • Reduction in
Slide 12: Cash flow statement
Cash flow statement FY21 FY20 Commentary £m £m Net cash from operations EBITDA 15.8 15.6 • Continued to be cash generative in FY21 Non-cash movements 1.0 0.2 Movement in working capital (1.6) 3.0 • Result of the increases in EBITDA and continued modest levels of capital expenditure Tax paid (3.0) (1
Slide 13: Batteries
Batteries
Slide 14: Batteries – FY21 update
Batteries – FY21 update 11% 10% • Category performed well, reporting 11% growth in revenue year-on-year Gross profit Revenue growth margin in FY21 • Growth reported across all major brands and retailers YoY • Category brings stability and high revenue visibility • Increased demand experienced during
Slide 15: Lighting
Lighting
Slide 16: Lighting – FY21 update
Lighting – FY21 update 2% 31% £25.9m • Maintained core revenue base and profitability within lighting category Revenue growth Gross profit FY2021 year-on-year margin in FY21 revenues • Revenue levels maintained despite a widespread technology shift to LED (LEDs carry a lower unit selling price) • Di
Slide 17: Vaping
This produce contains nicotine which is a highly addictive substance Vaping ssvape. 3xPre-fillec A clearomizer:} A> This product | contains nicotine whichis 4 highly: addictive substanc! a ee This proauct (yA BE] contains nicotine Ep] which is e highly "Cha, a} addictive 4%
Slide 18: Vaping FY 2021 update
FY 2021 update #1 ~1m Value vaping 88Vape users • £6.3 million in direct sales to our 88vape-branded website brand in the UK(1) • Expansion of core underlying manufacturing margins 36% £39.5m • Added Scottish Prison Service and McColl’s, and Sainsbury’s and Core Increase in vaping Revenues Communica
Slide 19: Continued track record of growth
Continued track record of growth +35% +41% +51% +36% +40% 50% % Group GP contribution Revenue CAGR Gross profit CAGR FY16-FY21 CAGR Revenue Gross profit FY16-FY21 FY16-FY21 of E-liquid units growth YoY growth YoY sold 60m 46m £39.5m 34m £29.3m £16.0m 25m 15m £21.4m £11.7m £18.1m 5m £9.5m £13.0m £7.5
Slide 20: Sports Nutrition & Wellness
Sports Nutrition & Wellness
Slide 21: Sports Nutrition & Wellness – FY21 update
Sports Nutrition & Wellness – FY21 update • Rapidly growing division • Revenue growth (38%) despite lockdown restrictions driven by ability to cross- sell products to existing % Group GP • Category able to pivot quickly to meal replacement powders and supplements customers contribution • Acquisition
Slide 22: Strong footprint in a vitamins market expected to grow at 7% CAGR
Strong footprint in a vitamins market that is expected to grow at 7% CAGR between 2019 and 2022 Initial orders received Quality Products One year supply Opportunity to further from improve margins many made in house £5 large customers in the UK Most Vitamins (365 tablets) Continuously Sustainable, S
Slide 23: M&A
x<LUsInsS M&A
Slide 24: Acquisition of Vendek
Acquisition of Vendek One of Ireland’s leading distributors of batteries and lighting products Expected to be immediately earnings 1 enhancing prior to resolution of any revenue / cost synergies Creates hub from which to expand 2 Supreme’s European footprint whist remaining competitive Delivers foot
Slide 25: Acquisition of brands of SCI-MX Limited
Acquisition of brands of SCI-MX Limited Leading and long-established retail brands Opportunity to leverage SCI-MX and 1 PRO2GO brands to grow existing retailer relationships Cross-sell these brands into Supreme’s 2 significant client base Secured a 52,000 sq ft manufacturing and 3 distribution facil
Slide 26: Summary
WII - — ONE MONTH SUPPLY » he | ee Millions & Millions VITAMIN D3" TABLETS | "TABLETS: CHARITY DONATION WITH EVERY PACK!
Slide 27: Key investment highlights
Key investment highlights Attractive 1 Large and fast growing markets for vaping, lighting, sports nutrition and vitamins markets Vertically UK manufacturing facilities in the UK for vaping and Sports Nutrition & Wellness products 2 enhance quality, margins and flexibility integrated Unrivalled Exte
Slide 28: Disclaimer
Disclaimer This presentation has been prepared by Supreme plc (“Supreme” or the This presentation may not be reproduced in any form or further distributed This presentation (and any subsequent discussions arising thereon) may “Company”) and the information contained herein is restricted and is not t