2019 Annual Meeting May 1, 2019
FORWARD LOOKING STATEMENTS This presentation contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements may generally be identified by the use of words such as "anticipate," "believe," "expect," "intend," "plan" and "will" or, in each case, their negative, or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. As a result, actual events may differ materially from those expressed in or suggested by the forward- looking statements. Factors that could cause these differences include, but are not limited to, the factors set forth in “Risk Factors” included in TPB’s annual report on Form 10-K and other reports filed with the Securities and Exchange Commission from time to time. Any forward- looking statement made by TPB in this presentation speaks only as of the date hereof. New risks and uncertainties come up from time to time, and it is impossible for TPB to predict these events or how they may affect it. TPB has no obligation, and does not intend, to update any forward-looking statements after the date hereof, except as required by federal securities laws. This presentation includes industry and market data derived from internal analyses based upon publicly available data or proprietary research and analysis, surveys or studies conducted by third parties and industry and general publications, including those by the Management Science Associates, Inc. (“ MSAi ”) and Nielsen Holdings, N.V. (“Nielsen”) . Third-party industry and general publications, research, surveys and studies generally state that the information contained therein has been obtained from sources believed to be reliable. DISCLAIMER Although there can be no assurance as to the accuracy or completeness of the included information, we believe that this information is reliable. While we believe our internal analyses are reliable, they have not been verified by any independent sources. Any such data and analysis involve risks and uncertainties and are subject to change based on various factors, including those set forth in “Risk Factors” included in TPB’s annual report on Form 10-K and other reports filed with the Securities and Exchange Commission from time to time. NON-GAAP RECONCILIATION This presentation includes certain non-U.S. generally accepted accounting principles (“GAAP") financial measures, including EBITDA, Adjusted EBITDA and Net Debt. Such non-GAAP financial measures are not in accordance with, or an alternative to, financial measures prepared in accordance with GAAP. Please refer to the Appendix of this presentation for a reconciliation of EBITDA and Adjusted EBITDA to net income and Net Debt to Debt. To supplement our financial information presented in accordance with generally accepted accounting principles in the United States, or U.S. GAAP, we use non-U.S. GAAP financial measures, including EBITDA, Adjusted EBITDA and Net Debt. We believe EBITDA and Adjusted EBITDA provide useful information to management and investors regarding certain financial and business trends relating to financial condition and results of operations. Adjusted EBITDA and Net Debt are used by management to compare performance to that of prior periods for trend analyses and planning purposes and is presented to our board of directors. We believe that EBITDA and Adjusted EBITDA are appropriate measures of operating performance because they eliminate the impact of expenses that do not relate to business performance. Non-U.S. GAAP measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with U.S. GAAP. EBITDA and Adjusted EBITDA exclude significant expenses that are required by U.S. GAAP to be recorded in our financial statements and is subject to inherent limitations. In addition, other companies in our industry may calculate these non-U.S. GAAP measure differently than we do or may not calculate it at all, limiting its usefulness as a comparative measure. Slide / 01
WE ARE A BRAND COMPANY Leading Other Tobacco Products (OTP) provider (not cigarettes) DEDICATED TO DEVELOPING Broad portfolio of compelling brands in higher margin tobacco products ICONIC BRANDS THAT SATISFY Well positioned for growing vapor and evolving alternatives products through NewGen sales engine ADULT CONSUMERS Leverage as an active consolidator through management, regulatory, purchasing and systems (we will continue to deploy capital towards accretive acquisitions) Slide / 02
Net Sales ($MM) $425 $392.5 $390 $355 $332.7 STRONG YOUR $320 TITLE HERE GROWTH $285.8 $285 TRAJECTORY $250 $215 $206.2 $197.3 $180 2015 2016 2017 2018 2019* Slide / 03 *Mid-point of 2019 Guidance
SMOKELESS: Iconic Brand Stoker’s Chew = Cash Cow Moist = Growing brand in $4bn mfg rev market LONG-TERM ORGANIC GROWTH Slide / 04
SMOKING: Zig-Zag is leading brand in smoking and alternatives market ZIG-ZAG: ICONIC BRAND WITH Significant product launches in 2019 TAILWINDS Slide / 05
NEWGEN: SALES ENGINE TO THE FUTURE Spent ~$56mm over past two years acquiring infrastructure to expeditiously drive go to market strategy on NewGen products Primary business today is ~$160mm of third party product sales through B2B, B2C and Retail channels Nu-X Ventures, a subsidiary of the NewGen segment is the focus and will utilize the assets of vapor sales engines Slide / 06
TPB Advantage: Sales Channel Funnel for Proprietary Products Owned/ Led by Graham Purdy. 16 years at TPB. Franchise Vape Shops (83 shops) Prior Philip Morris. Built and managed TPB sales team. Led double digit Vapor Beast B2B growth in NewGen since 2016 (~4,000 shops) Nu-X has developed go to market strategies with products, starting in IVG B2C Business (1,500,000 unique customers) the NewGen Sales Engine and the best products will move to the ZigZag/Stokers sales force TPB Sales Force: Independent Stores (80,000 stores) TPB National Chains (75,000 stores) Slide / 07
By sourcing pure, natural ingredients, Nu-X aims to provide a suite of cross- functional products utilizing innovative delivery methods that promote a holistic approach to wellness Slide / 08
RIPTIDE – NEXT GENERATION NICOTINE TECHNOLOGY Slide / 11
MANAGEMENT OF REGULATED ENVIRONMENTS TPB Today Regulatory Oversight TPB does not sell cigarettes, which are the primary Management team of QA, R&D, legal and scientific target of the FDA professionals FDA “continuum of risk” guiding principle Organizer of small/mid-sized company lobbying approach, reaffirmed in 2018 teams Working with FDA drives expected pathway for Regulatory changes likely to cause significant future innovation disruption among smaller companies Management has combined 100+ years of experience navigating federal, state and local regulations Slide / 12
BRINGING IT ALL TOGETHER HANDS ON DISTRIBUTION SYSTEM MANAGEMENT Management team is WORLD CLASS Consolidated distribution hands on with product into Kentucky with GO TO MARKET integrated systems. 1-2 development and go to STRATEGY days across the US at low market strategies rates REGULATORY STRENGTH SALES FORCE & ROBUST Significant experience ECOMMERCE ENGINE navigating federal, state and local regulations. Tobacco Trusted relationships with expertise translates into independent retail world and alternatives markets. Key eCommerce engine gets advantage to startup products into consumers CBD/alternative companies hands SOURCING TEAM FINANCIAL STRENGTH Our sourcing teams in China Strong balance sheet with and across North American capital flexibility for farm networks gives us best in acquisitions and working class products capital investments Slide / 01 Slide / 13
THANK YOU
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