SNDL (SNDL) Corporate Presentation summary

Operating segments and financial performance

• Liquor retail generated $140.6M in net revenue, maintaining the largest private sector footprint in Canada and achieving a record gross margin of 25.4% in Q2 2024 through private label and procurement optimizations.

• Cannabis retail posted $76.1M in net revenue, with 2.3% same-store sales growth and margin expansion driven by new store openings, private label innovation, and regulatory improvements.

• Cannabis operations delivered $25.0M in net revenue, a 19% year-over-year increase, with gross margin up 18.5pp to 12.7% and positive gross profit for the second consecutive quarter.

• Investments segment reported $3.2M in income, with a $600.5M book value in cannabis industry investments, including significant US credit exposure and recent restructuring activities.

• Total Q2 2024 net revenue was $228.1M, with gross profit of $58.2M and free cash flow of $12.9M, reflecting improved operating income and profitability across all segments.

Strategic initiatives and operational highlights

• Vertical integration in cannabis and a strong balance sheet with $183M in unrestricted cash support growth and M&A optionality.

• Proprietary data licensing programs in both liquor and cannabis retail contributed to margin expansion and operational efficiency.

• Expansion of retail footprint with 355 total stores (liquor and cannabis), including new Value Buds locations and Wine and Beyond experiential stores.

• International expansion efforts underway, with EU-GMP certification at Atholville facility expected in Q4 2024 to enable global cannabis exports.

• Investments in US cannabis operators through SunStream provide exposure to large multi-state operators and potential equitization opportunities.

Brand and operational portfolio

• Liquor retail banners include Wine and Beyond, Liquor Depot, and Ace Liquor Discounter, offering a wide range of products and customer experiences.

• Cannabis retail banners include Value Buds, Spiritleaf, Superette, and Firesale, targeting value, premium, and sustainability-focused consumers.

• Cannabis operations feature a diverse brand portfolio (Top Leaf, Contraband, Palmetto, Bon Jak, Versus, Value Buds, Vacay) and nationwide manufacturing and cultivation facilities.

• Extraction, processing, edibles, and beverage production facilities in BC and Ontario support innovation and scale, with significant annual production capacities.

• 21 B2B partners and 110,000 ft² of cultivation space at Atholville, NB, with an average yield of 104g/sq ft and 48,000kg annual capacity.