Westrock Coffee Company (WEST) Stephens 26th Annual Investment Conference | NASH2024 summary

Company background and strategy

• Originated in Rwanda in 2009 with a dual focus on shareholder value and fair pricing for smallholder farmers.

• Achieved vertical integration by acquiring Falcon Coffees, enhancing supply chain transparency.

• Expanded into retail roasting and later acquired S&D Coffee & Tea, entering the food service and extract markets.

• Emphasizes digitally traceable supply chains to ensure transparency and impact measurement.

• Maintains a partnership-driven approach with customers to foster growth and manage risk.

Conway facility transformation

• Conway, Arkansas facility is a transformative project, with multiple production lines ramping up through 2025.

• High-speed can line and medium can line are expected to be largely full upon activation, supporting major CPG clients.

• Glass bottle line launch delayed to Q3 2025 at customer request, with full volume expected by 2026.

• Facility is expected to generate $120 million in EBITDA, surpassing the current base business.

• Focus on commercializing products in 2024 to maximize profitability in 2025.

Financial outlook and capital allocation

• CapEx for Conway is nearly complete, with remaining spend focused on medium can line and infrastructure.

• Free cash flow positivity anticipated by 2026, with debt reduction prioritized as leverage normalizes to around 3x.

• Future capital deployment will target both organic expansion and acquisitions, especially in adjacent product areas.

• Preferred stock issued during S&D acquisition has a liquidation preference and put/call features maturing in 2028.