Comvita Limited · NZX:CVT
Comvita — H1 FY2018 Earnings Presentation
25 slides from Comvita's earnings presentation, February 2018
Slide 1: Investor Presentation HY18 and Outlook FY18
Investor Presentation HY February 2018 INVESTOR PRESENTATION HY18 AND OUTLOOK FY18 FEBRUARY 2018 CHIEF EXECUTIVE OFFICER, SCOTT COULTER, 021 386 988 CHIEF COMMERCIAL OFFICER, MARK SADD, 027 707 9698
Slide 2: Important Notice
Investor Presentation HY February 2018 IMPORTANT NOTICE This presentation is given on behalf of Comvita Limited. Information in this presentation: • should be read in conjunction with, and is subject to, Comvita’s Annual Reports, Interim Reports and market releases on NZX; • is from unaudited interi
Slide 3: Strong half year result supporting our long-term strategy
“STRONG HALF YEAR RESULT SUPPORTING OUR LONG-TERM STRATEGY” ed)
Slide 4: Overview
Investor Presentation HY February 2018 OVERVIEW 1. HY18 results 2. Update on markets and business opportunities 3. FY18 Outlook 4
Slide 5: Half Year in Review
Investor Presentation HY February 2018 HALF YEAR IN REVIEW • Sales up 45% compared with the prior period SALES • • Return to profitability in the first half year Grey channel sales up 45% on prior year $83.6m albeit slower than anticipated at this stage NET PROFIT AFTER TAX $3.7m of the year • China
Slide 6: Key Financial Results
Investor Presentation HY February 2018 KEY FINANCIAL RESULTS • NPAT of $3.7m on sales of $83.6m Six months Six months Six months to 31 to 31 to 30 compared to $7.1m loss for the prior December December September Financial results for comparable period the period ended 2017 2016 2015 Unaudited Unaudi
Slide 7: Sales for the 6 months to 31 December 2017
Investor Presentation HY February 2018 SALES FOR THE 6 MONTHS TO 31 DECEMBER 2017 CHINA EUROPE $4m*(2016 : $4m) NORTH AMERICA $5m $23m** (2016 : $0m) REST OF ASIA $20m (2016 : $4m) $17m (2016 : $16m) (2016 : $2m) AUSTRALIA $17m NEW ZEALAND (2016 : $12m) $15m (2016 : $12m) Figures are based on 6 mont
Slide 8: Australasian UMF Sales
Investor Presentation HY February 2018 $ AUSTRALASIAN UMF® SALES • Grey channel sales continued to improve up 45% on prior year, albeit at a slower rate than anticipated • This compares to our internal forecast for a partial recovery of the FY16 peak of just over 50% growth on the prior year • Inven
Slide 9: North America
Investor Presentation HY February 2018 N O RT H A M E R I C A RESULTS • Positive execution of strategy to diversify markets between East and West • Market sales growth from $2m to $20m on comparative period • Strategic investment in both working capital and consumer marketing to support market growt
Slide 10: China Joint Venture
Investor Presentation HY February 2018 CHINA JOINT VENTURE RESULTS • Sales meeting expectations and profit ahead of internal targets - Sales $23.4m - Share of earnings $1.5m • Good expansion in e-commerce business • Focus on core • Launch new • Transform Bee products products from honey • Strategy t
Slide 11: Product Segments of Total Revenue
Investor Presentation HY February 2018 PRODUCT SEGMENTS OF TOTAL REVENUE $ 2m $ 4m MEDICAL PERSONAL CARE (2016:$7m (2016:$2m) including $58m royalties) FUNCTIONAL FOODS (2016: $30m) $20m HEALTHCARE (2016:$19m) Figures are based on 6 months unaudited results to 31 December 2017. 11
Slide 12: Comvita - The Leading Brand
Investor Presentation HY February 2018 COMVITA - THE LEADING BRAND • Comvita’s Net Brand Adoration 59%; 3x higher than our nearest competitor • Appointment of new management team and Marketing Director for China is improving brand awareness • Extensive promotions for key trading periods have driven
Slide 13: Innovation
Investor Presentation HY February 2018 INNOVATION • 70% of our new product innovations lever our core strength of Manuka honey. Product innovations to date include Manuka Honey sachets, Medihoney® dressings, elixirs and milk chews. • We are also continuing to launch products that meet a broader rang
Slide 14: Balance Sheet
Investor Presentation HY February 2018 BAL ANCE SHEET • Net debt similar to last year and increased to fund inventory Key 31 December 31 December 30 June Balance 2017 2016 2017 build and timing related to Sheet Unaudited Unaudited Audited North America debtors Ratios as at $’000 $’000 $’000 • Issue
Slide 15: Inventory
Investor Presentation HY February 2018 INVENTORY BUSINESS IMPROVEMENTS INVENTORY ON HAND AT 31 DECEMBER • Strong inventory position consistent with prior HY 120 - 31 December 2017, $98.6m - 31 December 2016, $97.2m 100 80 • Finished goods (FG) 60 - Consistent at $25m whilst sales grew by 45% 40 $ MI
Slide 16: Cashflow
Investor Presentation HY February 2018 CASHFLOW • Operating cash outflow of $17.4m (HY 2016: $10.2m) 31 December 31 December 2017 2016 • Inventory build to support $’000 $’000 Movement earnings forecast Cash flow movements Unaudited Unaudited $000 • Working capital funding to support Operating cash
Slide 17: Manuka Honey
Investor Presentation HY February 2018 MANUK A HONE Y 40,500 HIVES • Geographical spread vital this year to mitigate unsettled weather events • Full visibility of the crop available April/May • Unfavourable finish to the 2018 season now expected to result in below average volume • Volume anticipated
Slide 18: Myrtle Rust
Investor Presentation HY February 2018 MYRTLE RUST • Consistent with our market guidance on 27 June 2017, we believe the overall risk to the New Zealand Manuka honey industry is low. • So far, only one Manuka plant has been infected, out of 10,766 Manuka plants surveyed. This plant was in a protecte
Slide 19: Manuka Honey Definition
Investor Presentation HY February 2018 MANUK A HONEY DEFINITION There is now a legal definition for Manuka honey • Manuka honey definition is a great leap forward for the industry • Clear, legally enforceable standards for Mono and Multifloral Manuka honey • Independent testing required for export c
Slide 20: Strategy & Outlook
Investor Presentation HY February 2018 STRATEGY & OUTLOOK
Slide 21: Comvita Strategy on Track: $400M by FY21
Investor Presentation HY February 2018 COMVITA STRATEGY ON TRACK $400M BY FY21 CONSUMER-FOCUSSED BUSINESS DIRECTLY CONNECTED TO THE SOURCE INNOVATION ACQUISITIONS EARNINGS FOCUS 21
Slide 22: Leadership Team
Investor Presentation HY February 2018 LEADERSHIP TEAM Scott Coulter Mark Sadd Julianne Keast Kate Selway TBC Chief Executive Officer Chief Commercial Officer Chief Financial Chief People &Culture New Chief Digital Officer - Acting Officer - Acting Officer role Ben Shaw Simon Pothecary Sharon Hollen
Slide 23: Board of Directors
Investor Presentation HY February 2018 BOARD OF DIRECTORS Neil Craig Sarah Ottrey Luke Bunt Sarah Kennedy Non-Executive Chairman Independent Independent Independent Director Director Director Murray Denyer Paul Reid Brett Hewlett Independent Independent Independent Director Director Director 23
Slide 24: Outlook – February 2018
Investor Presentation HY February 2018 OUTLOOK – February 2018 • Slow finish to the 2018 honey harvest, now expected to be a below-average volume • Grey channel recovery up 45% on prior year however slightly below internal expectations • North American market continuing to perform • MPI regulations
Slide 25: Thank You
THANK YOU