SNDL : 2024 Fourth Quarter Earnings

Published: 2025-03-18 07:20:05 ET SNDL

Disclaimer

Forward-looking statements

Certain statements contained in this presentation may constitute forward-looking information and statements. All statements in this presentation, other than statements of historical fact, that address events or developments concerning SNDL Inc. ("SNDL" or the "Company") that SNDL expects to occur are "forward-looking information and statements". Forward-looking information and statements are often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "predict", "propose", "potential", "targeting", "intend", "could", "might", "should", "believe", "budgeted", "scheduled" and "forecasts", and similar expressions and variations (including negative variations).

In particular, but without limiting the foregoing, this presentation contains forward-looking information and statements pertaining to the following: SNDL's ability to raise future capital through debt or equity financing transactions, and our ability to efficiently deploy the capital raised through such transactions; our ability to successfully implement our cost and asset optimization initiatives; the continued development and growth of the demand and markets for medical and adult-use cannabis; the competitive conditions of the industry and the expected number of customers using our products; the maintenance of our existing licenses and the ability to obtain additional licenses as required; our ability to establish and market our brands within our targeted markets and compete successfully; our ability to produce and market additional products as regulations permit; the number of flowering rooms and combined production capacity therefrom that we expect to have; our growth strategies, including plans to sell edibles and other forms of cannabis; the timing and the amount of capital expenditures related to the maintenance and any expansion of our facilities; the outcome of medical research by our partners and the acceptance of such findings in the medical community; our ability to attract and retain key employees; our ability to manage growth in our business; our ability to identify, successfully execute, manage and realize a return on strategic partnerships, joint ventures, strategic alliances, debt and equity investments as well as the costs and benefits associated with such initiatives, including the expected return on any investments; and the volatility in the price of our common shares. Various assumptions were used in drawing the conclusions or making the projections contained in the forward-looking statements throughout this presentation. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. Such risks and uncertainties may be discussed in the Company's materials filed with the Canadian and U.S. securities regulatory authorities from time to time. All of the forward-looking information and statements contained in this presentation are qualified by these cautionary statements. The reader of this presentation is cautioned not to place undue reliance on any forward-looking information and statements. The Company is under no obligation, and expressly disclaims any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by applicable law. For more information in respect of such forward-looking formation and statements, please refer to SNDL's annual information form for the year ended December 31, 2024 as well as SNDL's audited consolidated financial statements and the notes thereto for the years ended December 31, 2024 and December 31, 2023, and the accompanying management's discussion and analysis, including (in each case, as applicable) the sections thereof entitled "Forward-Looking Information".

Non-IFRS Measures

Certain financial measures in this presentation, including system-wide retail sales, adjusted Operating Income, adjusted EBITDA from continuing operations, free cash flow and gross margin before fair value adjustments, are non- IFRS measures. These terms are not defined by IFRS and, therefore, may not be comparable to similar measures provided by other companies. These non-IFRS financial measures should not be considered in isolation or as an alternative for measures of performance prepared in accordance with IFRS. For more information in respect of these non-IFRS financial measures, please refer to SNDL's audited consolidated financial statements and the notes thereto for the years ended December 31, 2024 and December 31, 2023, and the accompanying management's discussion and analysis, including the sections thereof entitled "Specified Financial Measures".

Important Information Concerning this Presentation

Under no circumstances should the information contained herein be considered an offer to sell or a solicitation of an offer to buy any security of the Company or any other entity in the United States or in any other jurisdiction. The contents of this presentation have not been approved or disapproved by any securities or regulatory authority in Canada, the United States or any other jurisdiction.

In addition, certain information contained in this presentation is based upon information from press releases, independent industry sources and other publications and websites. None of these sources have provided any form of consultation, advice or counsel regarding any aspect of, or is in any way whatsoever associated with, SNDL. Actual outcomes may vary materially from those forecast in such press releases, reports or publications, and the prospect for material variation can be expected to increase as the length of the forecast period increases. While SNDL believes this data and information to be reliable, such data and information is subject to variations and cannot be verified with complete certainty. SNDL has not independently verified any of the data or information from third party sources referred to in this presentation or ascertained the underlying assumptions relied upon by such sources. SNDL cannot and does not provide any assurance as to the accuracy or completeness of such information.

This document is being supplied to you solely for your information and may not be reproduced or forwarded to any other person or published (in whole or in part) for any purpose.

All financial information in this press release is reported in millions of Canadian dollars unless otherwise indicated.

Corporate Presentation

FOURTH QUARTER & FULL YEAR 2024

March 2025

NASDAQ: SNDL

2024 Company Highlights

RECORD NET REVENUE

Revenue growth in Q4 and

full year 2024 driven by

Cannabis, which

consistently expanded

revenue in the last twelve

quarters

RECORD GROSS PROFIT AND GROSS MARGIN

The increase in gross margin

was largely driven by

productivity initiatives in the

Cannabis Operations

segment, which achieved positive gross profit for the fourth quarter in a row

POSITIVE FREE CASH

FLOW

SNDL showcased positive

Free Cash Flow with

continued operational

improvements and better

working capital

management, also

delivering positive free cash flow for the 2024 calendar year

Memo: Comparisons (e.g. increase, improvement,…) are from the fourth quarter of 2023

Q4 Financial Highlights

Net Revenue

$257.7MM

$9.2MM

3.7%

Increase YOY

Gross Profit

$68.8MM

$11.5MM

20%

Increase YOY

SNDL delivered solid results and is well- positioned for success in 2025 and beyond

Gross Margin

26.7%

Increase YOY

shows clear operational

3.6pp

Financial performance

improvements. Adjusted

Adj. Operating

$(33)MM

(123)%

Operating Income

$(60.5)MM

impacted by $(66) million

Income

valuation adjustment of

Decrease YOY

SunStream portfolio

Free Cash Flow2

$11.6MM

$10.2MM

+700%

Increase YOY

1Adjusted operating income (loss) is defined as operating income (loss) less restructuring costs (recovery), goodwill and intangible asset impairments and asset impairments triggered by restructuring activities.

2Free cash flow is defined as the total change in cash and cash equivalents less cash used for common share repurchases, dividends (if any), changes to debt instruments, changes to long-term investments, net cash used for acquisitions plus cash provided by dispositions (if any)

2024 Full Year Financial Highlights

Net Revenue

$920MM

$11.4MM

1.3%

Increase YOY

Gross Profit

$240MM

$49.9MM

26%

Increase YOY

SNDL delivered solid

5.2pp

results with sequential

Gross Margin

26.1%

improvement in

profitability and

Increase YOY

achieved positive free

cash flow for full year

Adj. Operating

$12.0MM

12%

$(86)MM

2024

Income1

Increase YOY

Free Cash Flow2

$8.9MM

$70MM

+115%

Increase YOY

Fourth Quarter

2024 Financial

Performance

SNDL achieved positive Free Cash Flow, with significant gross profit expansion and continued to see solid net revenue growth in both Cannabis segments, demonstrating

its consistent ability to optimize

performance and drive profitability year- over-year

These results not only reinforce SNDL's positive trajectory towards sustained profitability but also highlight the Company's progress toward achieving

sustainable positive free cash flow, and

commitment to shareholder value creation

Net Revenue ($000s)

Gross Profit ($000s)

300,000

3.7% Increase YOY

80,000

20% Increase YOY

60,000

200,000

40,000

100,000

20,000

2021

2022

2023

2024

2021

2022

2023

2024

(20,000)

Full Year 2024 Increase 1.3% YOY

Full Year 2024 Increase 26% YOY

Adj. Operating Income ($000s)

Free Cash Flow ($000s)

2021

2022

2023

2024

30,000

2021

2022

2023

2024

20,000

10,000

(20,000)

(10,000)

(40,000)

(20,000)

(30,000)

(60,000)

(40,000)

(50,000)

(80,000)

(60,000)

(70,000)

(100,000)

(80,000)

Full Year 2024 Increase 12% YOY

Full Year 2024 FCF of $9MM

Consolidated Financial Results

Net Revenue and Gross Profit Contribution by Segments

Net Revenue ($Millions)

Gross Profit ($Millions)

11.0

257.7

11.2

68.8

8.0

248.5

(4.4)

(5.4)

57.3

0.4

+3.7%

(0.2)

+20%

Q4 2023

Liquor Retail

Cann. Retail

Cann. Ops

Corporate

Q4 2024

Q4 2023

Liquor Retail

Cann. Retail

Cann. Ops

Q4 2024

Net Revenue ($Millions)

Gross Profit ($Millions)

909.0

21.7

22.4

(9.0)

920.4

42.4

240.3

Year

(23.6)

5.1

190.4

2.4

Full

+1.3%

+26%

FY 2023

Liquor Retail

Cann. Retail

Cann. Ops

Corporate

FY 2024

FY 2023

Liquor Retail

Cann. Retail

Cann. Ops

FY 2024

NOTES

All numbers are for the fourth quarter of 2024, ending December 31, 2024

Corporate Net Revenue reflects elimination associated with the Cannabis Operations sales to the provincial boards that are expected to be subsequently repurchased by the Company's licensed retail subsidiaries for resale

Consolidated Financial Results

Adjusted Operating Income and Free Cash Flow Contribution by Segments

Results

Adj. Operating Income ($Millions)

12.2

6.9

2.2

(27.1)

(123)%

3.9

(60.5)

(58.5)

Q4 2023

Liquor Retail Cann. Retail

Cann. Ops

Investments

Corporate

Q4 2024

Free Cash Flow ($Millions)

20.1

1.011.6

(10.9)

+700%

1.4

Q4 2023

Earnings

Working Capital

Other

Q4 2024

Consolidated Financial

Adj. Operating Income ($Millions)

Free Cash Flow ($Millions)

Full Year

10.1

(98.2)

8.4

55.9

+12%

(61.8)

(0.7)

(86.1)

22.4

8.9

(0.1)

47.5

+115%

(60.9)

FY 2023 Liquor Retail Cann. Retail Cann. Ops Investments Corporate

FY 2024

NOTES

All numbers are for the fourth quarter of 2024, ending December 31, 2024

FY 2023

Earnings

Working Capital

Other

FY 2024

Strong Q4 2024 Free Cash Flow underpinned by inventory improvements and higher OI. Delivered full year positive FCF

Results

FCF Breakdown ($Millions)

H1'24

Q3'24

Q4'24

FY'24

Net Income

(9.6)

(19.3)

(67.2)**

(96.2)

Non-Cash add backs

24.3

28.6

89.1**

142.0

Income from Equity-Accounted Investees

10.7

Inventory Change (Inc)/Dec

(3.6)

4.8

4.7

6.0

Other WC change (Inc)/Dec

(2.5)

(3.9)

(2.7)

(9.0)

Capex & Lease payments

(20.7)

(11.7)

(12.2)

(44.6)

Total Free Cash Flow

(12.0)

9.2

11.6

8.9

NOTES

(*) Impacted by seasonality

Inventory Build by Retail

Segments*** ($Millions)

(5)

(10)

(15)

(20)

(25)

2022

2023

2024

First Quarter Financial

2024

Liquor Retail

Results

($ Millions)

Net Revenue

Gross Profit

Gross Margin

Adj. Operating Income

2024

154.1 38.2 24.8% 12.3

Change vs 2023

Abs

(5.4)

(3.4)%

(0.2)

(0.4)%

0.7pp

2.2 21.8%

Liquor Retail

NOTES

Excluding corporate cost allocation

Comparisons are from the fourth quarter and full year of 2023

Full Year

($ Millions)

Net Revenue

Gross Profit

Gross Margin

Adj. Operating Income

2024

Change vs 2023

Abs

555.3

(23.6)

(4.1)%

139.7

2.4

1.8%

25.2%

1.4pp

34.8

10.1

41.1%

Disclaimer

SNDL Inc. published this content on March 18, 2025, and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on March 18, 2025 at 11:19:09.745.