Whole Earth Brands, Inc.

Good morning and welcome to Whole Earth Brands' fourth quarter and full year 2020 conference call. All participants will be in a listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please also note that today's events are being recorded. At this time, I would like to turn the conference over to Jeff Sonick, Investor Relations at ICR. Sir, please go ahead.

Thank you and good morning. Today's presentation will be hosted by Albert Manzoni, Chief Executive Officer, and Andy Ruzzi, Chief Financial Officer. Executive Chairman Erwin Simon is also participating on the call today and will be available for Q&A. The comments during today's call and the accompanying presentation contain forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts are considered forward-looking statements. These statements are based on management's current expectations and beliefs, as well as a number of assumptions concerning future events. Such forward-looking statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from the results discussed in the forward-looking statements. Some of these risks and uncertainties are identified and discussed in the company's filings with the SEC. or refer to certain non-GAAP financial measures, please refer to the tables included in the earnings release, which can be found on our investor relations website, investor.wholeearthbrands.com, for reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures. With that, I'd now like to turn the call over to Albert Manzoni, CEO.

Thank you, Jeff, and good morning, everyone. Reflecting on our 2020 performance, I am extremely proud of our team and the pace of execution since our business combination at the end of June 2020. We delivered a strong finish to 2020 with fourth quarter consolidated net product revenue growing 8.5% on a constant currency basis. A brand new TPG business at a particularly strong quarter growing 12% on a pro forma constant currency basis. basis with market share gains in the natural category across the world. With two significant acquisitions in our first seven months since going public, we have already reached $500 million in run rate revenue and significantly strengthened our market position. Looking ahead, we're making great strides toward our vision of enabling healthier lifestyles and providing access to high-quality plant-based sweeteners, flavor enhancers, and other foods to our diverse portfolio of trusted brands and delicious products in a $13 billion addressable market of sweeteners and natural baking mixes. We believe we are well positioned to compete in this growing market thanks to the following key drivers. First, our addressable market in the better-for-you sweetener category has sustainable, secular tailwinds that our branded CPG portfolio is distinctly able to take advantage of given our innovative products, distribution strengths, and global scale. Second, the additions of Swerve and Wholesome significantly strengthen our leadership position and integration of both is proceeding as planned. Third, with a healthy balance sheet, clear vision for our future, and an exceptional team, we believe we can achieve sustainable growth through brand building, innovation, increased market penetration in the U.S. and globally, a world-class supply chain, and an exceptional team. Starting with our addressable market, our business is aligned with powerful long-term secular forces around health and wellness. as people identify solutions that help them achieve their goals. In fact, nearly half of consumers are looking for ways to cook healthier. With our broad assortment of leading brands, coupled with innovation that allows sugar substitutes for beverage consumption and baking, the laser accounts for 50% of sugar consumption globally. We believe strong consumption growth will continue for years and decades to come. Our ability to address these powerful trends was further bolstered by our recent acquisition of Swerve and Wholesome, which have transformed our presence in the market, doubling our North American market share and enhancing our mix of natural sweeteners, which now makes up 88% of our North American branded CPG segment revenue. Each of our key North American natural sweetener brands, Holher Sweeteners, a newly acquired Swerve, and Wholesome Brands, all realized significant consumption growth in 2020. Holher and Swerve grew more than 40%, while Wholesome grew nearly 21%. all of which significantly outpaced the category average of 12%. Additionally, our equal brand outperformed its respective category average as well, with 10.9% consumption growth. We believe our advantage-branded CPG portfolio will continue to deliver high-quality growth. Our integrations of the Swerve and Wholesome acquisitions are proceeding on plan. We have brought key personnel on board from those organizations to maintain continuity and help build out our organizational capabilities. We have already actioned key commercial, supply chain, and back office initiatives, including significant wins and ACV expansions at key retailers with existing products and innovations. Moving now to our vision for the future, IBZS will have put together a deliberate portfolio of quality assets and brands in attractive categories and growth geographies to form the foundation from which we will grow to create a significantly larger enterprise. For that, we will deliver on our key growth pillar, Our first pillar is brand building. We're leveraging our world-class consumer insights and marketing team to continue to drive awareness for our brands and increase household penetration in the US and around the world. You will see several initiatives targeted at those very objectives in the months ahead. Our second pillar is innovation. We plan to continue to deliver above 15% of our product revenues from innovation on a three-year rolling basis. We have a competitive advantage with six R&D centers focused on enhancing innovation and development across the globe in natural, baking, added benefits, and adjacencies. For example, we're excited by the launch of our new baking ingredients, utilizing innovative ingredients such as a rifle tool, long fruit, and aloes. In 2021, we're planning to launch over 45 new products in our branded CPG segment. Our third pillar is growing distribution. Our expanded portfolio of brands significantly improves our shelf presence and visibility with retail customers. Today, our ACV for wholers, sweeteners, and wholesome is only in the 20s. while Swerve is at approximately 55%. We are already bringing the power of our portfolio to bear in the marketplace with our retail relationships to increase distribution. Each brand has inherent advantages in the natural channel, traditional grocery retailers, mass, club, and e-commerce. Through those inherent brand advantages, we can leverage our power of one to the benefit of our overbrands. In addition, we see opportunities for swerve and wholesome in key developed international markets, leveraging our existing organization. We also see an opportunity to enter new international markets, including India and China. We have hired top talent in each of those markets in our intent to capture a share of the 2.7 billion consumers leveraging our already well-known brands across various distribution channels. Our fourth pillar is manufacturing and distribution. Our supply chain is set to be a competitive advantage for all our brands. and will allow us to drive top-line revenue growth, margin expansion, and generate cash flow. Our priorities are to complete the flavors and ingredients manufacturing footprint optimization in 2021 and begin the reinvention of our branded CPG North America supply chain to leverage the combined assets of all our brands, Swerve and Wholesome. Our fifth And last, Pilar is our world-class team. The team has strong operational competencies, agility, and passion across all brands, all regions, and all functions. Moreover, this is a highly scalable organization with global resources in place to expand our presence in new and existing markets. Turning to our flavors and ingredients segment, Despite certain COVID-19 headwinds that impacted our flavors and ingredients segment in 2020, we expect the business to continue to produce strong operating income driven by our diverse end markets. As I mentioned last quarter, we have new leadership structure in place that is establishing a growth-oriented focus to drive the segment's future performance. We recently launched 15 new products under our MACNA funding that better address the unique needs of our customers across the diverse end markets that we serve. This includes consumer packaged goods, over-the-counter health care, as well as beauty and personal care products. We're enthusiastic about the broadening of our existing portfolio and about the customer-centric innovations that we're bringing to the market, to rejuvenate growth of the segment that commands a significant global leadership position. We also continue to make progress on the footprint optimization project that is underway. This initiative will provide us with significant operational advantages for our platform, and we look forward to delivering the planned financial benefits in 2021 and 2022. As we pursue our growth objectives to reach one billion of revenue, we intend to continue our penetration of the better-for-you sweetener category. Over time, we intend to expand into adjacencies in the sweetener and over-sweet categories, which includes verticals such as chocolates, bars, jams, and spreads. M&A remains an important component of our long-term growth strategy. but in the near term, we're focused on our organic growth efforts, integration plans, and generating free cash flow to reduce our balance sheet leverage. With that, Andy will talk you through the financial details, our outlook for 2021, and provide some additional details on our long-term growth framework.