Advantage Solutions (ADV) investor relations material

Business overview and market trends

• Operates as the largest sales, marketing, and merchandising firm in North America, serving CPG, retailers, and experiential segments.

• Recent quarter exceeded consensus and guidance was reiterated despite consumer confidence uncertainty.

• Grocery deflation is seen as a positive for shoppers and clients, supporting cash flow outlook through 2027 and beyond.

• Growth initiatives and new services are driving revenue, though business mix led to softer EBITDA.

• Value-seeking behavior and health trends are shifting assortment and driving demand for private label and experiential services.

Segment performance and secular trends

• Labor-driven businesses, including merchandising and experiential services, are experiencing durable growth due to labor shortages and in-store experience needs.

• Sampling and experiential services are at all-time demand levels, supported by high execution rates and expansion across retailers.

• 18% growth in events in Q2, with double-digit growth in the first half, driven by efficient workforce operations and centralized labor models.

• Margins in labor and relationship businesses are converging, with labor side showing strong incremental margins.

• Branded services face headwinds from CPG budget pressures and innovation pullbacks, but ongoing investment in innovation supports reset and planogram work.

Technology, efficiency, and margin outlook

• Centralized labor management and AI adoption have reduced onboarding time and improved operational efficiency.

• IT transformation with SAP, Oracle, and Workday is enhancing data integrity, control, and enabling new growth initiatives.

• Improved working capital management and lower asset intensity are boosting cash generation.

• Efficiency gains from system integration are expected to drive further margin improvement and process simplification.