FREE - Earnings call transcript Q2 2021 | Whole Earth Brands Inc

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Operator

Greetings, and welcome to the Whole Earth Brands Incorporated Second Quarter 2021 Earnings Call. At this time, all participants are in a listen-only mode. A Question-And-Answer Session will follow the formal presentation. [Operator Instructions] As a reminder this conference is being recorded. It is now my pleasure to introduce, Jeff Sonnek of Investor Relations. you. Thank

begin. may You

Jeff Sonnek

of on Litigation good statements. and Chief based presentation statements the beliefs, Safe that Rusie, Securities differ Executive Chairman, in could statements results considered comments current meaning unknown also Officer. Act and available the forward-looking number will by statements Q&A. historical within accompanying of for results Such Chief are materially be actual provisions than from presentation forward-looking cause and Albert the Harbor Private Executive events. a statements XXXX. other The and These participating is Simon Manzone, risks All Officer; today's subject of Irwin the call morning. you, and facts are of future known the discussed to assumptions and will be statements. Reform call as expectations Today's on uncertainties forward-looking during well hosted Financial the the as Thank are concerning of and forward-looking Andy statements management's contain to

found Manzone, non-GAAP that, and tables are earnings be Some I'd non-GAAP risks refer measures. Albert like certain the to SEC. our We'll financial uncertainties with the these identified can now directly to also on to investor.wholeearthbrands.com GAAP of in website and financial CEO. refer Please company's With included measures. of which in call measures Investor most for filings reconciliations Relations the comparable to their discussed to the over release

Albert Manzone

reduced is the Brands for and call Jeff, Whole the better-for-you sugar the Earth leader you, to global everyone in categories. joining Thank thanks sweetener and today.

company revenue & addressable large market make Earth things. on to a addressing penetrate Brands is healthy. the mission $X categories dominated massive beverage billion grow total global plus doing to refined sweet by and billion disrupt One, Our sugar a three $XXX Whole food by to vision

delicious leveraging at concern a to advantage well sugar by accelerate We world-class Brands sugar through baking Whole from global eat continuing over and for distribution, to of our best-in-class full the long substitutes, to with our Earth QX, added health capabilities, our leading the toward companies. growth here of business innovation with with is are from past evolve large, food with that powerful building; business is only problem. is experience stay better-for-you as expertise sweetener a supply diet our to Brands taking are and health the mostly we're part of consumers brand holistic as &A, Two, consumer shifting a trends since M all to solutions expanding performances and Our solution Refined public company. quarter sugar three Whole becoming expectations, food chain global with a our performed our wellness of a generations. Earth company. millennials and no aligned global exceptional providing above three, demographics in ready that drive strategic team accelerating products. And leadership consistent macro In GenZ. the and category emergence believe perfectly

said, headwinds year. stack which last X% XXXX. in pantry I driven COVID-led our our year-over-year an decrease improve This a increase That Swerve demonstrates generate resulted CPG quarter looking a a to our delivered by fully EBITDA due versus believe a constant by QX segment $XX of very We gains. and is of QX constant we to am company contributions year some comparison, the through growth. two pleased record million, revenue integrated plus operating of revenue and report portfolio a long-term an XXXX Our second appropriate growth, more the our to acquisitions, organic the branded measure one year Wholesome of year of Swerve currency sustainable the are XX% and and margins acquisitions, This adjusted on that Wholesome increase X% prior in loading We're growth. strengths has public lenses basis. the momentum basis now currency ability faced as our of in tough due and productivity and to revenue revenue from versus on performance pleased doubled we as in business. been a almost also company the our first of

as are per We synergies planned. delivering our on

Our very our One launched results partners retail also with of with has been Power positive to-date.

now and quarters We and various tools is inflation spend pricing, optimization in overall believe the are help in years. environment a supply already to initiatives. we initiatives what to that coming implementation inflationary offset include productivity, several This with trade chain working we driving on fortunate the and productivity optimization, decisively the been have have

have strength the year demonstrated four such, full past little over XXXX the with business. comfortable away As we remain quarters remain whether of and our our guidance us a fiscal reiterating COVID we or longer, resilience goes

chain the As to ahead, lies pillars; we take opportunities building, confidence we our operating five proven in growth confident our earlier. in built advantage look and team. of market I brand ability strong on our model tremendous of sustainable distribution, mentioned and strategic our are innovation, deliver The world-class supply basis

On QX me building. Let highlights. some brand provide

each part for design distinct Equal, logo. promise You each Earth and and Brands' showing can Whole also new of campaigns with packaging Whole consistent Earth up brand’s brand now discover Wholesome with proudly

track as a highly diets retail have a our plant-based campaign, in among more gotten goodness world [Indiscernible] made eliminate the beverages, in ingredients to of product consumers year with for country to meet marketing robust on Branded portfolio to from are open that a a some to community. our on dietitian our sweeteners XX in delivering our from on rooted trade three we segment this encourages as in wellness of response year base registered on of focus already across goal innovation, consumers rolling sweeteners changes and is hold and to Earth fair positive consumer or innovation Swerve On In baking we CPG well of and community. and the flavors over connects consumer seeking reduce product basis. and better. having organic we partners. commitment Whole our things our their revenues the XX% have digital branded launches with CPG with We XX the partnership as derived sugar

jams it shelf with better earnings organic as our Our sugar America, and is This high customers. mixes, with and our sugar adjacencies. branded fair and mixes scratch Wholesome and tin new our coconut presence retailers. Keto-Friendly America occasions fair organization distribution, whole massive Konscious, honey, are as convenience premium scratch quality capturing with on and significantly brown visibility a billion have mixes as expanding ready mixes, sweetable sweetened the breadth and to retail to categories. of $X.X rolled grain into diabetes. are of out from Glycemic, across new On expand free, depth and facing, as with now very locations in Swerve sugar, enormous capturing category new quoted Zero-Sugar, In the sugar, and gluten the of in scratch our expanded trade pancake, across in in waffle base and key to is innovation ingredients. quality card underway across One. sugar, ingredients allulose to in are in base well brownie distribution with will seen cake keto-friendly, retailers most category success yielded brands. retailers to lead categories business launching ready fair scratch premium and anchored functional communities. are the Power North no cake, added our base our plant-based, international it such baking. as call, with both believe multiple offerings early of use. pleased organic collagen of we in being incremental for results, has distribution mix usage of farmer in focused growth This Keto growth base territories, had said the substitutes gains base in recent and portfolio CPG new that organic base across in and improves agave, cookie, mixes monk Then fruit, benefits such brands growing innovation innovation and high we mixes, growth line low North current markets. innovation with trade chocolates, for integrated with category our baking, expanding Earth’s I Whole consumer ranging the is with peptides natural, on sweeteners with benefits, success sweeteners, portfolio based terrain North disrupt and sales our trade, is Wholesome our Swerve’s premium in We yield individuals and partnership confirmed and and introduced We're we and other supports America last

the As QX, products number of will share gets and stores shelf Miro. Nielsen on in we and retailers QX of growth ACV in in and

platform, all chain, inflation is solution ecommerce which sales, to manufacturing pattern the the to create of and our fronts consumers’ with footprint our toward with to house expansion mitigate undoubtedly improvements competitive shifts growth, ecommerce national our capitalize opportunities front and revenue continued generation. are and cash chain benefit XX% top-line positioned very well is expanded chain On And us of advantage contributes sweetener resurgence placement drive beverage free ingredients. of house purchases. buying mixology drive portfolio already Our a service. incremental back the pleased will distribution for of Equal lingering variable on bakery over flow and from programs supply and supply the the the to and of margin We're supply allow of we're and leveraging

and Earth progressing reinvention provide as Swerve XXXX the costs the optimizing second project of are XXXX through Brands, CPG and branded overhead leverage Wholesome. combined to assets chain of plan half our our added on Whole by in supply beginning scale We

earnings You initiative this in details about can find our supplemental presentation. more

the Flavors our of closing manufacturing our in Camden Ingredient resulted footprint facility. our production within segment, Additionally, optimization

XXXX our are million additional Flavors to million very and in to expect our deliver and approximately performance. pleased with $X QX plans. respect With with in XXXX $X segment, to million We to million an $X we Ingredients $X savings consistent

new for from customer investments were XXXX. and in to R&D product QX to and are significant versus second off of momentum the with orders quarter favorable fifteen in business comparisons Aside COVID, in the innovations XXXX launched thanks forward wins, pulled prepare our when paying good sales into

driven business leadership position the diverse our strong free global continue expect to our and end-markets. licorice produce cash to We flow, in by

baking near include the We coming penetration and While intend addressing in growth growth sweets initiatives few chocolates, based balance on on name to organic the part important M&A efforts in our our bars, over reduce our we're opportunity, strategy. of sheet an in term, we to free to and strong better-for-you, in remains increase order strong categories organic jams pipeline through sweetener represent to leverage, generating M&A X% flow in cash years. continue focused and a CAGR have market of and $XX These mixes, the the billion category addressable opportunities. projected spreads and

is Swerve take base to core being complete for expertise and ability outlook at the evidence the team. experience Our based that, XXXX. financials fast in of now our the on leadership deep M&A Wholesome our and will we you integration through of and competency With had Andy a

Andy Rusie

Thank to everyone. you, Albert, good morning, and

As both June our successor XXXX to XX, consolidated periods the of date. a reminder new and financials combination company, predecessor those for business our indicative reflect

combined which results, quarter second through results XXXX and successor’s XX, results, second the quarter I'll the successor’s XXXX XXXX the XXXX through XXXX that results results. X, second discuss to XXXX quarter into June predecessor’s compare the XX, April XX, June XXXX June includes June XX, The

results, and reconciliations end period. of GAAP which Swerve be Relations additional I'll may of XXXX. As reported our also not impact earnings you release prior of press February full speak your the November understanding progress period. detail. the a you and Wholesome that financial call quarter to appropriate point Swerve the some comparability our will the financials to non-GAAP year to where XXXX website. comparable out X, the enhance supplemental for and acquisition note, on encourage Wholesome our result, our for items the second to includes I XX, presentation, to on completed of on I Of view Also, the reported Investor we at

XXXX provide XXXX in the Additionally, pro growth select organic results combined Wholesome your portfolio. and of as of in the will we assist own and forma we some XXXX, analysis Swerve to if

constant quarter $X.X was Wholesome’s compared of margin, Wholesome acquisitions, legacy by in down adjustments year, prior $XXX.X segments was pro one adjusting For X.X%, XX.X% net the consolidated XXXX, productivity loss including gains. a June influenced for was million, XX.X% second for X.X% million XX.X% public prior second XX.X% a by Ingredient quarter margin were quarter to of ended in in second year. productivity declined and compared basis, operating the operating revenue contributions profit compared or revenues revenue and second gross the $X.X loss and $XX.X to XX, Swerve of costs. the company and contributions growth Swerve in an driven increase prior EBITDA & the quarter full million, prior year and $XX.X prior prior of from by year currency in to gains, $XX.X from compared million all in product of by when year growth current the million, an net business. private-label was year of in gross form the prior CPG million inclusion year’s $X million positively million profit driven million to quarter. Wholesome $X branded the Reported a the offset declined representing Consolidated increased Flavors $XX from from both profit and Consolidated income and product the acquisitions, periods, and gross prior in revenue XX%, On Adjusted were basis. of second year period. the XX.X% and primarily million to consolidated quarter for $XX compared from the to a the the Swerve XXXX, partially quarter Results Wholesome income the adjusted organic on the XXXX,

were million product to growth in year. The revenue driven prior increase the Now, in period segment productivity segment by $XX.X Flavors in stacked product $XX.X the that million $XX.X and not recorded reflect the driven expenses pro quarter comparable the product and form contributions from for Operating a of product the period. to segment amortization to two million increase acquired and reoccur. the X.X%, offset impact compared addition XXXX the revenue second to comparison quarter basis, quarter to that prior Swerve Covid-XX $X.X XXX% the decreased million not year revenues facility CPG for million year the the within to shifting operating increase the constant in second quarter. million product of Constant gains relate growth revenues were to of operating a by million strong prior was XXXX, business surge in $XX.X the quarter across growth. of currency Branded period. $XX period the $X.X and year. or million natural as the both Branded cost & a the currency prior year XXXX, basis, by closure second was with year brands. same businesses, periods, year was of a basis, $X.X and second On Ingredients million the the prior acquisitions prior Wholesome transaction-related segment. XXXX, Ingredients organic & XXXX, including compared currency primarily segment line to QX. million million compared was when of second segment prior second CPG On reduced increased of income quarter our prior for for XXXX, of compared product income realized of revenues results of in driven quarter results and organic was same did of growth Wholesome which the Swerve by the of increased current increased year and the the restructuring increased $X.X revenue Operating constant a Operating XXXX. Branded the orders quarter segment XXXX, was XXXX XX.X% in CPG revenue forma the in to $XX.X XXX.X%, in million and million XX.X%. in the which of the to currency year. On March to favorable $X.X pro for expenses constant Flavors income same $X.X in flat, second The most for year revenue second The for compared in period of driven income by revenue $X.X comparing for expenses

prior to with prior first have corporate reclassified now $X the for to $X by Operating year beginning been transaction-related current segment. our stock-based the presentation. XXXX, under reportable million, corporate million million expenses public partially expenses functions company quarter not These included driven conform quarter corporate Operating costs, $X.X $X expenses segment. reported of compensation corporate. of the of compared increased associate for previously to are CPG expenses Finally, of for XXXX. in reported primarily in Certain the by expenses year. operating within office Branded were and Corporate second is were or XXXX amounts the operating company's increased million, a offset

XXXX prior and organic growth year-to-date results briefly XXX% an also an year-to-date compared a a basis, Branded of basis, a reflect the Consolidated $XXX.X increased compared currency on XX.X% Now, XXXX the natural results. representing to of XXXX in restructuring pro a Transaction-related in and year. basis. and an On the year $X.X a the Swerve compared prior in million $XX.X product million the million increased million from X.X% prior to in was from organic in purchase to period transaction-related a June of million Wholesome’s of were & and six in when $XX.X was Wholesome increase months forma currency and the net months for basis, from XXX.X%, derivatives. million all acquisitions XXXX, Swerve operating Wholesome period. product year growth compared the prior the prior $XX the of cost stacked XX.X% pro period. the positive XXXX, asset a acquisitions, of partially segment acquired was adjustments constant XX.X% impact operating to XX.X% year quarter million driven loss prior including year to The of income constant income growth, period. closure productivity revenues profit increase intangible first due of from CPG by XX.X%, productivity, businesses, million businesses, increased the the in prior the gross as months XX, amortization impact the in $XX.X comparing compared $XX.X asset driven driven revenue months period in gross by June X% to segment periods increased $XXX.X of on XX.X% gains. and business. revenue to to year increase ended On of the compared down due six XXXX impact full the currency segment and growth due charge ended million, Operating offset brands. basis, in XX.X%, facility Consolidated gross constant to in adjusted of acquisitions, the organic $XX.X prior forma revenue assets. year of or was of growth period. our $X.X increase million, million, driven million revaluations profit consolidated currency of ended constant XX, recorded was revenue and revenue million the the margin charges period, XX, months Constant in recorded loss X.X% June Swerve primarily profit $X.X Reported margin largely the currency were year, first six year compared let increase $XX.X and when to compared by XX, June Also, income Operating and private-label constant public increased million, offset million $X.X me improvement partially were was million full million costs. XX, an basis. the form ended operating impairment in was increase charges product accounting expenses a million Ingredients totaling on million, was by Wholesome goodwill recorded XXXX, $XX.X in $X.X operating costs. half $XX.X contributions XXXX. XXXX, in The acquisitions of expense the X.X%, an an prior increase six Branded product $XX.X increase company year and a including for EBITDA million cover net half both period of $XX.X pro to was XXXX, million prior the June June XXXX, XX, period. On XXXX and primarily impairment and CPG XX.X%. an million, was by XXXX. the first and loss was revenue increased June to down of both lower for the by loss $X.X revenues also and year for from contributions six two-year ended year, for June Consolidated compared currency Adjusted Flavors prior $X The increased loss revenues adjusting impairment $XX.X non-cash to to was period. The $X.X product prior and up asset acquired

cash sheet. used net of to Cash June the balance $XX one-time was Now, flow year-to-date for in million That activities $X.X operating of cash and is moving million. costs.

items expenditures were capital $X cash-related one-off year-to-date flow, company $X.X transaction readiness M&A June million. public such adjustments was million. when and excluding other Free as Our restructuring, cash costs,

to On the XX, we and provides long-term facility agreement Sweeteners. $XX credit new net The was $XXX.X ratio million senior of X.X June year of December for by times a finance issuance debt-to-adjusted B. four costs. debt-to-adjusted Wholesome first leverage Reducing and EBITDA, X, we our that estimate and of net debt, we of a and XX, entered credit acquisition an amended our XXXX. $XX.X sheet cash loan corporate a XXXX, secured XX, of XXXX As net agreement will achieve lien approximately XXXX forecasted seven adjusted in discounts EBITDA of February of cash balance unamortized had million million XXXX, revolving $XXX times. restated is priority, Using part equivalents into million we term and a EBITDA June ratio and on

Now guidance, pro our of expectations our XXXX shifting reiterating are The Swerve we Wholesome. recent growth and organic for We combined owned forma as growth basis, the the margins full which XXXX. for to XXXX Wholesome our year a organic business. company forma pro Swerve our years both represents the on acquisitions outlook, includes that and and and for be full define to outlook

We the continue and forma revenues million be $XXX to to XX% greater $XXX of product to forma and growth organic in EBITDA representing reported of reported million than growth expect than consolidated pro greater to represented X%. to $XX Consolidated growth in million organic X% range to range the X% pro of of of $XX million of X%. XX% adjusted growth

again We revenues. revenues, Swerve. EBITDA and to profit our the of of acquired which expenditures will of product XX% to in influence approximately Wholesome be $XX Total also expect the assets adjusted XX% $XX range margins million XX% to Adjusted capital of reflects be be million. consolidated of product gross will

rate EBITDA expect a contributions. dollar contribution of and half terms year and Lastly, seasonality added XXXX build the balance the or relative GAAP Wholesome, Swerve discrete one-time terms, of first you a second half think tax the as for and of for we from reflective On to year, we sequential adjusted tax XXXX and approximately in revenue items. of from favorable expect the with X% cadence about in

capture be from plan with remarks. visible Q&A now sequential move and That enhanced quarter quarter the productivity call expect product please concludes you, to footprint each benefits each year innovation, optimization we to than will as operational prepared through gains better the the distribution project. over as our being our Operator, the other We open we the from

Operator

[Operator with Instructions] questions. Rob the Please proceed come your Dickerson Our with Jefferies. first from question of line

Rob Dickerson

of Maybe of just kind so back in help. you Good the suggested you be have, provide end Brand you you it’s I year Albert gains. on where in as everyone. accelerating in the quarter ended through the color get get in guidance should could I you and just through distribution on build, Thank distribution visibility first through last as up QX, that what's at core of you Whole and question if terms fair half made back some comments you've implied the some the I I year? the you first least in of total potential kind sequential guess, the of seems morning of terms guess, just Earth trade, kind half. distribution back much. in to And or That's when circle of Andy, that end, kind Great. question.

Albert Manzone

suggested with Rob, will and that. good to add I to am morning, and since after start you I with Andy, follow your happy request

Andy Rusie

Sure. Rob. Happy to jump in and morning, good

bridge have to XX see baking what within from I and figures of period, a Swerve. on here And coming just quarter you guide the the the there distribution third between of are revenue And into half initiatives that asked, comfortable. Albert talk about very great feel more let little And point, I'll we coming with your but Rob, about as Maybe the We that to feel that. of then effects factors seasonality first there how our and second to the deck, exists a in three Page both as and owning EBITDA. slide done distribution very, some adjusted and team confident distribution. into think, supplemental, innovation fourth end Wholesome getting defining play. growth you'll half the job for first market, in basically that that supplemental walks we a whole Wholesome we has actually and we've our got our of we we quarter deck kind gains, of you half the speak, go through into bit coming the those

don’t want you I Albert to that? anything and know, add else to So,

Albert Manzone

is One, alternative Power numbers Rob know well the did broad With we Thank results the What Power of of very front are of where distribution of the be really in to coming of about excited new but of foodservice of as we the the seeing us initiative of that, as of out through very for breakthrough last to a example, I'm the back free retail you which baking Power One. QX. we're in a for Power even this and power find the to this Andy, QX out or I Equal further also the as of improve serve And partners, brick-and-mortar’s of is you, also and coming reiterate shoppability coming house and the Yes. we see quarter One an on that’s consider improve providing and their talked One, way category shelf shelves. with on are One Power of the to and strong leveraging example, the growth our secured going the sweeteners, on are in of and the solution organic, sugar our set on house mixology. for this the

happening second So, that in expect with number the of those and a the secured of wins in half to see already being more bank.

Rob Dickerson

have in distribution of for delayed, direct resets potential in gains next and conversation right? half in guidance Okay, XXXX. these through be if having year, the year you obviously but few would then, with o providing year, months discussions So, retailers that - are I the next super. fast of I the next what you go at been So and assume realize conversations were as of kind to And given, think t some you not year? maybe some simply we back a that for next forward this bit of the I would would kind

those just of conversations kind So you as curious strategy. One I of walking now larger with am the into Power are

XXXX thinking timing - there more here - kind different shelf we more in program some same of Or more you sequential is as feel is is some and it's the that Just QX. overall could more as sequential And a be feel optimization kind next it the build, through year, the kind for general it So to of year, these is distribution ask thing, you get then I'd in of right? for of, of on of what's resets optimization but step hope a little parts simplistically little there way and material get just, kind the of shelf of it's QX in build? the is get of bit the that up. kind here then gains the

of kind let’s Just trying next to months a through how this flows sense of say? XX get the

Albert Manzone

year you, tell in North but and by you products those of America, those to be or a But shelf would the in Rob, of would large, have, I reset the major Yes, year. during most it reset may lot planogram slow that grocery, making the are Decisions say, timing bit and shelf as a number first basically happen. down is anything a of usually of the which COVID QX is made it, QX. you into which do resets, more once or has little outs

to products obviously we'll have new So, shelf QX going year as the on XX look going is and to half. more resets move you forward on coming are track time, which as talking QX our we a average, make innovation innovation. to forward already that this year QX year its to you Power launch we to we And with discussions what CPG. as make the year. the on And QX of way of is is be next in about half shelf second One, overlappings be the bringing first of Branded in and to the At in will and more the know that we're on

Europe, QX at August the happen for You where have the do and of slightly three example in Michelle end we as resets in start different speak. discussions timings,

American I and within shelf but we Europe the see question, the the find course building to the bit and your North to the consumers America incremental as going share balance are a less. retailers say of versus off momentum help market, the is therefore, bit that would North easy bigger importantly capture a of And to shoppability So a U.S., you shelf.

Rob Dickerson

the say, back Okay. Makes And cost And offsets sense. the way like you to to quickly, or it commentary the Cool. the the cost to inflation. I seems think on implied It guidance inflation. I just kind sounds of then working suggest in clarify what just levers ,maybe offset. want half like let's that more fully comments offset to have is do almost enough

up of companies lower. So, kind bit now, a relative cost seems I a of bit your think until others to lot know a I now still CPG inflation

in can to about talking like everybody seem labor issues, some same time, what be have kind supply You to portfolio about yes, you? But at chain, there. have in there concerned incremental we the cost While what sound given the is of saying, that could levers inflation of kind and doesn't that we very now. the it just pull for that you're at be least

to that. want just clarify So,

Andy Rusie

our We've our offset out now that's commercial those to we in offset little levers offset, great confident ability our as team. what all the supplemental then team that ability a confident And we're that well confident. got year. a got and we in just I of our we and deck. inflation yes, levers to Rob, very Yes. a to you extremely reiterate, to great we in feel some inflation to pull. supply bit XXXX in we've – We've said, chain But management ability this would feel listed given have would

Rob Dickerson

pass Alright. it Super. on. Thank I’ll you.

Albert Manzone

Thank you, Rob.

Andy Rusie

Thank you, Rob.

Operator

Thank you.

the proceed Our Please with questions. with of Burleson next Bobby your questions come from line Canaccord.

Bobby Burleson

COVID of or anticipate terms Do now? a stocking was - questions. Thanks morning. of seeing over of terms spike to the dynamics Whether Good first seeing you right you foodservice big comparison back environment it as for partners going kind the kind partners changes just change or thinking year-over-year. Yes. event stocking last one are of ahead it of I taking is was tough in and are or sort distribution concerns last relates be given what quarter – year, your shutdowns in-house tough it what would the of my obviously any Yes, versus not of that delta. in a that's the any to any there retail in downstream and think,

Albert Manzone

question, you have what demonstrated that Yes. our balanced. we That's I a resilient. great would think And, that we is, last very it's And I tell Bobby. year one feel business is the over

said tea on macro happens that that business over look that and new our or longer variant is consumption I is, in a will this, change growing this predicated favorable all. comments, if essentially and with high-single-digits again, opening the trajectory have at longer, the anywhere. whether so, coffee little - as are in less COVID And trends big in my which stays I I at don't a you see And very

that the If consumption and we natural Wholesome Again, well forefront you look or new most, to We're on see see are of XX% with then, and where XX% ingredients of also Swerve, have resurgence of have in balanced XX% concerns portfolio across we health with very at continuing channels. then geographically any well can variants And with the conservative mix. XX% doing very as we diversified. ecommerce happy said. sugar we with the baking, came brick-and-mortars. balanced a our brands, well the it's is Whole at very which hit And extremely to really well very that are in depending diversified Earth, we that will

that, would to that what I be neutral the less as we this consider revenues So, takeaway say is far and concerned. or more I as we're

Bobby Burleson

Okay, is. what the increases maybe year, exposures the of later dollar? relationship passing your great. increases kind you this form And plans relationship year in how out of turns your the Thanks. timing next some then, these wondering around the cost thoughts topic, and kind the along be inflation structurally what your of or what topic? if between are curious are of price And and or of own early just that inflation that currency is currency on transitory, strength then, Just of to hedging not

Albert Manzone

you do to the then, went add piece. And may I to piece? second the depending take first Andy,

Andy Rusie

are first across And inherently one. currencies. Bobby, the XX% number number foreign currencies, currency P&L. are almost Sure. of so our little There ballpark in wise revenues some Yes. the hedges natural bit roughly a just part, Absolutely. less on than and between there two,

Albert net exposure bottom-line. real to taking I’ll help further. more of bottom-line, that kind to perspective, taking internal it from call not I'll future. we pricing perspective now at company at the the pricing significant total bit and a a at are hedges the exposure From out let pricing So as the little having we FX into on an balance Maybe are us our looking comment

Albert Manzone

invaluable Hats who know would hats to of I started productivity really off that, the I to which beginning. say from But, is just forklift is on experience. bobby you guiding team. would in journey the that we you as tell of us the Irwin off team, terms his

Ingredients, the we and all about get well. trade with we been pricing say talked we've we supply that reinvention for discipline very know, Swerve consistently I So, our we talking chain in waited about that of on greater the chain & would the synergies on the have inflation and productivity supply for are The Wholesome, spending previously supply companies CPG. reinvention would from and haven't and you that as chain Branded us together our say positioning Flavors

the we year point and in Of year course, that I in the doing. and early we this the feel at But this started we're that's and be need to offset have diligent initiatives, think what ahead. extremely we team, we can to enough

Bobby Burleson

Thank great. Okay you.

Albert Manzone

Bobby. you, Thank

Operator

Thank you.

proceed Please Our Street next with Lake of the questions. Capital. from with Mark questions come Smith line your

Mark Smith

Hi guys.

First question for me.

like other Camden, it great. sale can immediate. give would Just But savings And us are wondering details pretty the can sounds facility. the on if any New details you of more the us Jersey give any there be you

Albert Manzone

you Andy, Thank can if Mark. morning, Good that? you. address

Andy Rusie

optimization Obviously, year And sale two. speaking was us. kind morning, & the for Good a the Ingredient was big been thanks. on Mark. Camden milestone for closure facility we've Yes. the past the of project Flavors about segment of footprint the It our or that

And in a efficient and our more production a much footprint quarter. is much so was The smaller was sold the structure. is done facility, that facility in operating that fully Virginia Richmond, second there being which

are immediate. gains so, your Mark, And to point, that the for

the with forma benefits of our $X supplemental million to million and a deck to we'll of year on year next the $X margin about You'll year consistent in second first half half to pro in kind year expect benefits and of the million in in of kick accretion in half the $X that talked basis. we sequential million $X a of second the see the ago,

it So, for now, that's pure a and driver an us cash and forward. a goes real too savings immediate as

immediate close, great benefits. did team of The bringing facility hard lot excited. that with really work So, job a

Mark Smith

to and products it can like these some on new at look launches, the pace we as we just initial sounds consumer But you're kind now. then, of about products? And new talk response Okay.

Albert Manzone

that we Asia. great, away would see desire tastes a consumers to to and really never & are forth, together products in ingredients number there the a of really well the innovations all on in well for the by the the really from insights, so starting as innovations Sure. you really Rob, half. are on in shift the the and second that distribution America, is really consumers are XX secured across number is our that we XX negation are are that brownies in natural shelf strong bake products R&D, mixes appear CPG because erythritol is cookie having do compromise Flavors sugar. we of refer with in bake And as is that know, have launched far in And , And on baking, Branded as consumer wholesome. and natural. mixes, we and tell I results we coming tell Europe into had and marketing as product keto would Ingredients. from consumer as very consumer would with Brand so and we I North on you which consumer which that The our with our I XX, about cellulose, where that during have xylitol doing the The you CPG say, of year, so This say going as led and as

that I So & pleased already I say a reception by is would Flavors seeming very our strong the Ingredients am performance.

up the stepped have there. team R&D We

sales our ago up and the talking QX our indicative from a professionalize think derivatives comparison, it the aside our I momentum of versus the year suite. magnus stepped have around and We favorable XX% is more organization,

great great of distribution. for with And basis innovation that year from really. a three we say three operating I rolling believe and would I XX% so, over our the five last able that us of net innovation one years. pillars is been one together brands really thing on our deliver And coming have to for It's sales core

And for the to that we So, to We're coming happy shelves where continue. - in with forward you see see on we are. I see QX. look products those

Mark Smith

your and wouldn't of the things mixes are you gives that look Perfect. these maybe ecommerce more And and in some other at the new do as products, at then, new do products ecom? baking well or especially ecommerce we products look sales, your as of mix in opportunity

Albert Manzone

you we're question. to that, about ecommerce great is SKU since amount is can the ecommerce, XXXX now thing and put why of happy global a XX% The That's I have it very and great being this there in our invested mix is of limited.

of of talk have to get matching very also helpful a new terms broader is And helpful innovation so, and retailers. you a quick depth and - in you products very depth which return very broader from as we and consumers,

over has in the So I then opportunity consumer that, and products channels. with would then to forward retail say put this and to an is have more go up them to ecommerce more success opportunity, e this

Mark Smith

Okay. And kind retail question. is my last growth of

like growth down out retail as retail a little customers Can Just partners maybe bit. that it the quarter, you and there? talk at, new was looks about new are in look we

Albert Manzone

about are for versus you the quarter assume talking CPG? I Branded XXXX

Mark Smith

Correct? Yes.

Albert Manzone

Right.

And the would in during that service. which large. further that, our case, was and by you one-time lot we COVID country customer about did is say driven a that I do our loading the this - to by So, really pantry something everybody talk experienced, outstanding

pleased that of this like XX% to the had usual level. also say, goal. looking additional the came in? need retailers the did very jump at please to happen us service comparison, to million the we cannot therefore, pantry this essentially at is to crisis you the driving why So, to and look and XX$ which loading, supply. competitors QX, During and about were is had happen What were that of XXXX addition of can the at had QX able momentum more whole it's think competitor versus we some COVID and they some we COVID which year-on-year supply, we our is we to in the what one-time, $X relevant not that's were really And able with B we way XX%,

Mark Smith

distribution with moving that's and expansion how your as far partners, how feel as retail new do today? you And Yes. the

Albert Manzone

at. As earlier, where with we said are I we happy

plan. distributions We I through, disclose, number as come happy are of a are reasons we that in have going secured we to the which but for cannot, tracking obvious

Mark Smith

you. Perfect. Thank

Operator

Thank you.

Mushkin next from proceed Our the RX questions. your Capital. come for line Please of questions Scott with

Scott Mushkin

Hey guys. Thanks for taking questions. my

Or that right, first a actually you Andy, quarter? So, about was right? clarity I what your maybe on just stops? question little revenue each margin Did better said, had I - my sequentially EBIT around, when comment get

Andy Rusie

in are and is so, Scott. This And good morning. Andy. I expecting, on that jump can we

Scott Mushkin

Good morning.

Andy Rusie

Yes.

sequentially figures in better or quarter-on-quarter. EBITDA sales We are revenue expecting incrementally absolute and

year Flavors the QX. that So guiding factors EBITDA. back I we & the were Camden and the and what have absolute the closure But more with the we Ingredients our margins. help half of QX mean, was of to do like will sales

Scott Mushkin

Thanks That's for the clarity. perfect.

And are Wholesome and flagship like was first guess, is just or in or not maybe The goat that baking be to look they that second you that it the market? initiative. about somewhere question are in how you it? how really fresh at expect kind is of approaching Friday customers the Thursday One guys at the terrific. Power you're growing obviously I it? of would you Are slotted And think products I and looking

Albert Manzone

doing depends put goes great on back meetings your this really of roll at get with at it question. timing One, of Zooms you face-to-face And we Power and something your how Scott. we're our on morning, , managing together question Rob, retailers et and year a that out and retailers all Good to times. different a you really is the that's Still, Once Yes. is cetera have the before. are retailers different

essentially, don't And have putting of one proactively visiting therefore, your partners some we that where believe for it. the don't this do we stores know the enabled it, and and to category but to are done, to timing few thank I I the also the retail its reach management. control point, being those and forward again, Power and a active and and and category discussions. probably This remember, whenever that CPG the whenever of One time we are to to We you your of shelf all tend that. do you point of categories reset the whenever with to we the are and benefit opportunity the of is, spend is So, shelves we our it out lot level have really shoppability let's

to an is now this every the come, but the process we direction I years that set. where is know, going for as you it have also for year, you ongoing the carry us to single with to think this better making because work mode in retailers,

Scott Mushkin

Okay. And because kind then, am am it's putting final together. putting two, – of or really together to I but my goes I really put question

if And as then is like a looks looks in there. that? you like advertisement about far last placements guys you quarter, progress we as it you there of the are Are coming on there a So, this quick. talked And some made from things Amazon. because others the versus faster, search, lot was all that's seeing put this on with everything It when an lifts up you plan we should do XXXX just or that and think that, on that's to not with you're the long-term pressure getting, grow conjunction really But profits is of of going on going touched correct? would kind before.

Albert Manzone

will Andy second the answer Scott, piece. I let

practices we are you in. to will U.S. of that the in a funnel. very And closely we as in works Asia, and the it’s the team and are ecommerce, I On best first working together in were globally Europe, strong very know, you piece leveraging tell And that, where bring people

money, to then that are people somewhere we make where on this as and return do on are good on very circle, people And more see a then, back. come essentially, we're investment the have investment. know, working this what to We is else you is to virtual we then take that also but on to sure is going to come seeing people us. to which working cost And working are an opportunities you

Irwin Simon

before profits XXX am of in $XXX Andy’s pressure And in here. year when and cost, strategy is where regards of we’re growth about you the between company I type have and opportunities going the and a job to last big there our this part today is jump not and talk heard, our mean, company infrastructure forecast taking time, pricing a where on and inflation Andy XXXX. you XXX. that, just iteration ACV public Growth in to and we're Scott, to in the regards to. don't company million about feel I I ask doing with you Hey, household heard cost controlling also we

a on So, with profits pressure I our growth. don't see

is I big a think us. as space know for you from white opportunity me,

So, and top of and this we also acquisitions. here, sitting are on sidelines the not not at by looking

with here organic the to from our So, before going see standpoint? opportunities with Albert affect I've distribution as in some fantastic jump our growth, talked tell a issue forward. seen profitability financial I products, company for ever saw I growth about these Andy, opportunities. you just going you new being international don't even and Meeting that's the of had I'll products a looks just some good and new And a recently we and best the new Board

Andy Rusie

Yes.

of just part a impact from the bottom-line it would channel have it, no, mix - echo that an Scott, I Now And your question, Irwin to go not think mix the perspective. on I said. mix everything on

Scott Mushkin

then, far early a growth in And as growth too we XXXX? little Or goes, should that to is tell? the faster as expect

Andy Rusie

am Go okay, - sorry. would I ahead. I what Well,

Irwin Simon

the with I as in But I and in have team me, new just know of said, done time. plenty before, And to products. and them. short want you has would as what that, we think that, said what this commend will Scott, guidance think, push a Hey, come give of back XXXX I I big thing I I period I

We Ultimately, the go have space of in white after. of to ecommerce. Plenty acquisitions. plenty opportunities

runway there of out company and grow to for faster. lot a is there think I this So, to grow

Scott Mushkin

you, nice Perfect. with And Thanks. Irwin talking

Irwin Simon

too, you to Scott. Talking

Operator

the no you. any questions to time. Albert I further closing for like call Thank back over this at are to turn remarks. would There Manzone

Albert Manzone

discussions to everybody we would with call today to and thank have just like much of you your all forward I looking so the are joining for time. Thank for you.

Andy Rusie

you. Thank

Operator

conclude you Thank today's does for participation. your This teleconference.

this great day. Have time. may You at lines a disconnect your

Whole Earth Brands Inc - Ordinary Shares (FREE) 9 Aug 212021 Q2 Earnings call transcript