Freshpet (FRPT) Piper Sandler Growth Frontiers Conference summary

Margin improvement and operational efficiency

• Achieved 36% adjusted gross margin in 2022 and set a 45% target for 2027, now expected to reach it three years early.

• Focused on input cost, logistics, and quality, with significant progress in all areas.

• Built talent across the organization, driving ongoing improvements.

• Ennis facility expected to become the highest margin site as fixed cost leverage is realized.

• Space utilization and line specialization are key learnings for future facility design.

Growth strategy and capital allocation

• Targeting 25% annual growth as the optimal balance for execution and margin improvement.

• EBITDA margin has risen from 3% in 2022 to nearly 15%, with improved CapEx pacing.

• Operating cash flow has exceeded expectations, with over $250 million in cash and no need for external capital through 2026.

• All cash flow is being reinvested in capacity and growth, with no plans for M&A, dividends, or buybacks.

Innovation and technology

• Three-pronged approach to higher ROIC: improve existing line efficiency, maximize site throughput, and develop new high-throughput technology.

• New technology for bag lines validated at pilot level, with production trials set for the second half of next year.

• Specialization of lines at Ennis will drive future efficiency and margin gains.