Rubicon Organics Earnings + Call Notes
#1 premium LP across all Canadian categories.
$12.1M Revs
$0.9M AEBITDA
$4.1M GP
$0.1M OI
33.5% GM
($0.5M) NI
($0.01) EPS
$1.1m opcf
$0.7m fcf
Number one premium licenced producer across all categories
2.0% national market share of flower and pre-rolls
5.7% and 6.1% national market share of premium flower and pre-rolls
Wildflower™ is the number one topical brand in Canada; 28% market share.
29.9% and 26.8% national market share of premium edibles.
Launch of full spectrum extract vapes in BC, Alberta and Ontario
"Rubicon Organics’ house of premium brands remains the #1 premium licensed producer in Canada. I expect this leadership position to grow with our entry into the vape sector where two strains were launched in Q2 2024.
I’m proud to report that we have already seen our national distribution hit 40%+ of stores in the first two months of sales to July. I expect this growth to continue as we expect to have five vape strains in market by year-end.” Margaret Brodie, CEO.
Call Notes
Historic high net revenue, +aEBITDA and OPCF+
6.5% premium share.
30% premium edibles share.
^ despite only launching Q2 ’23
^ up from 5% in Q2 ’23
28% topicals share.
Launched vape in July.
^ almost $900m market
$12.1m net revenue.
$860k aEBITDA.
May milestone, YOLO 0.00%↑ ETF inclusion.
Vape the fastest growing significant segment in Canadian market.
Vape quality dependent on input flower.
^ utilizing Rubicon best selling strains.
Vapes appear to be resonating.
^ launched in May.
^ already 40%+ national distribution despite only launching in AB BC ON.
Expect vape market to grow and reach 30% of Canadian sales.
For Simply Bare, launched new genetics.
^ specific w/ what release under SB portfolio
For 1964 brand, in addition to vape launch, launched new genetics.
^ LA Kush Cake launch has the potential to be added to core strains
Wildflower topical brand entered sports segment during the quarter.
^ also introduced CBC + CBD edibles
Returned to positive aEBITDA+
^ 7 of last 8 quarters
^ only went negative on ERP send
^ CFFO+ of 7 of last 8 quarters
More confident in stabilizing prices in the market.
Supply beginning to tighten
Invested $0.5m into ERP project, crucial for future growth.
^ depressed aEBITDA in Q1 + Q2 this year
$740k FCF
Beginning to see results from working capital investments
In process of re-financing LT debt.
Current debt at 7.5%.
^ expecting to re-fi at similar rates in 2H ‘24
Premium segment declined Q1 ’23 to Q1 ’24.
^ now witnessing a return to growth for the brand over last 3 + 6 months.
Highest net rev since ’22.
^ benefitting from pre-rolls, new genetics, and new product segments
1964 impacted by market conditions.
^ saw mixed performance in Q2
^ saw growth QoQ but decline YoY
Launched edibles + vapes in 1964 during the quarter.
Wildflower net revenue growth driven by new product launches under the brand.
^ previously unmet segments
Declining GP / GM driven by price pressure, product mix, innovation in lower margin categories
Saw large-scale success in third-party manufactured products.
^ sacrificing margin but lining up future growth.
Over $5b legal sales in ’23 ; BM over 40-50% of current market share.
Over $300m in excise taxes in arrears w/ CRA.
ROMJ #1 premium LP.
Strong premium brand house.
Strong launch strategy for new products.
Own 2 of top 3 brands recommended by budtenders
30% premium edibles market share within 12mo of launch.
40% national vape distribution within 3mo of launch.
Trusted, top supplier w/ provincial distributors.
National brand distribution across all provinces.
Seeing improved supply/demand economics from operators exiting the industry.
Other operators moving to asset-light model.
Already seeing operators exit the market this year
Expect vape launch to demonstrate leading flower input quality.
Guiding to revenue growth.
Guidance – Expect to deliver growth in net revenue, as well as aEBITDA+, OPCF+
1964 didn’t perform as expected for the quarter, but Simply Bare outperformed.
Performed well in BC ON during the quarter.
Spent $270k in Q1 and $200k in Q2 towards ERP program.
^ slightly behind expectations, decided to slow down project a bit.
^ expecting to go live in early ’25.
^ expect to spend about $1m across ’24.
^ just w/ a different phasing than originally expected
/end
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