Comvita Limited · NZX:CVT
Comvita — FY2022 Earnings Presentation
44 slides from Comvita's earnings presentation, Aug 25, 2022
Slide 1: Investor Presentation Full Year Result FY22
PRESENTED BY: INVESTOR PRESENTATION David Banfield, CEO FULL YEAR RESULT FY22 Nigel Greenwood, CFO 25 AUGUST 2022
Slide 2: Important Notice
I M P O R TA N T Notice This presentation is given on behalf used in substitution for, or isolation of, Comvita’s • Includes statements relating to past performance, of Comvita Limited. Information in audited financial statements. We monitor these which should not be regarded as a reliable indicator
Slide 3: FY22 strong performance
FY22 strong performance Number one Five Revenue $209M +9% Gross profit (GP) 60.3% +640 bps Gaining market share in key markets and Consecutive period delivering Record revenue +$17M 60% GP in line with our 2025 Extending our global leadership double digit earnings growth in vs PCP or +9% plan and +6
Slide 4: Our 2025 focused strategic plan on track
SECTION 1 Our 2025 focused strategic plan on track 4
Slide 5: Our Purpose
OUR Purpose “ Working in harmony with bees and nature in New Zealand to heal and protect the world. ” 5
Slide 6: Clarity of focus and progress to 2025
FOCUSSED Clarity of focus and progress TO 2025 6
Slide 7: Targeting $50M EBITDA 2025
Targeting SSOM EBITDA 2025 3. Long-term resilience 1. Stabilise performance 2. Transform organisation ae Py is 15% 20% N Targeting Minimum marketing EBITDA 50% < $50M ; é 60% gross investment Leverage digitalsales | 5 EBITDA sr r ° 2 by 2025 profit to sales ratio target ° ratio 1-1.5 8 KPI'S FY25 AL
Slide 8: Delivering on our Plan (Numbers)
DELIVERING ON OUR Plan (NUMBERS) HEADLINES • Reported EBITDA $30.1M +18% vs PCP, at top end of 30.1M 12.8M 18.2 guidance • Second highest earnings of all time in the history of $ $ EPS Comvita REPORTED NPAT EPS +34% vs PCP • $12.8M NPAT +35% vs PCP REPORTED EBITDA +$4.6M +18% vs PCP +35% vs PCP • Re
Slide 9: Delivering on our Plan (Ratios)
DELIVERING ON OUR Plan ( R AT I O S ) HEADLINES • Strong margin improvement +640 bps vs PCP to 60.3% 60.3% 13.4% 14.4% • 13.4% marketing investment +80 bps vs PCP • 14.4% EDITDA +110 bps vs PCP • 16% adjusted EBITDA when removing transformation and GROSS PROFIT MARKETING TO EBITDA % OF SALES one off
Slide 10: Delivering environmental and social impact
SECTION 2 Delivering environmental and social impact 10
Slide 11: Nature
Comvita Harmony Plan impact is aligned to material IN OUR ESG topics from FY22 materiality assessment Nature 1 Climate Action 2 Bee Welfare & Advocacy • Global GHG inventory completed • More than 12 million bees rescued and rehomed through muliple campaigns globally • Carbon positive S1 & S2 in NZ,
Slide 12: ESG at Comvita
E S G AT Comvita ENVIRONMENTAL SOCIAL GOVERNANCE Key Focus Areas: Key Focus Areas: Key Focus Areas: ● GHG emissions ● Product quality and food safety ● Board composition ● Air and water pollution (diversity and independence) ● Customer satisfaction ● Biodiversity ● Ethical procurement ● Compliance w
Slide 13: Global Whānau
GLOBAL Whānau 552 FU L L T I M E E QU I V AL E NT 5 + AV E R AG E E M P L O Y E E 75 OF COMVITA EXECUTIVES % R O L E S I N O U R G L O B AL Y E AR S O F SE R VI C E HAVE I NT E R NAT I O N A L W H ĀNAU G L O B AL L Y E X P E R I E NC E 68 % O F O U R G L O B AL T E AM 36 % O F G L O B AL E XE C U T
Slide 14: Safety and wellbeing
PERFORMANCE VS PCP Safety and 3.2 1.5 wellbeing TRIFR -40% VS. FY21 (5.3) LTIFR -37% VS. FY21 (2.4) 1 J U LY 2 0 2 1 – 3 0 J U N E 2 0 2 2 +4 % 41 - % 0.9 320 NEAR MISS REPORTABLE INJURIES MVIFR INDIVIDUAL WELLBEING CHECKS REPORTING CHINA & NZ FY22 TARGET : +10% FY22 TARGET : -10% -64% VS. FY21 (5.3
Slide 15: Carbon
P R O U D LY H E A D I N G T O W A R D S O U R Carbon POSITIVE GOAL 2030 NZ Operations Global Footprint (S1, S2) Carbon Emissions 961 tCO2e (FY21: 1,004 tCO2e) 4% - (S1, S2, S3) Carbon Position 32,591 tCO2e Baseline (new) Comvita Mānuka Forests Comvita Mānuka Forests Carbon Removals* 5,971 tCO2 (FY2
Slide 16: Science based reductions
PERFORMANCE VS PCP Science based 961 CO2e - 5,010 CO2e reductions DIRECT GHG EMISSIONS NZ OPERATIONS (S1, S2) CARBON NET POSITIVE NZ OPERATIONS (S1, S2) 1 J U LY 2 0 2 1 – 3 0 J U N E 2 0 2 2 -4% VS FY21 -62% VS FY21 90.8 NZ WASTE DIVERTED FROM T 1.13 NATIVE TREES M 2.0 - T SHRINK WRAP REMOVED FROM
Slide 17: Further investment in Science and IP
FURTHER INVESTMENT IN Science and IP C O M V I TA L A B O R AT O R I E S E s t . 1 9 7 4 Industry Leading in Industry Leading Clinical Trials Mānuka honey for Digestive Health $ 1.3M Lab Testing Standards 392,469 Lab Results in FY22 + 59% (HVN National Science Challenge grant awarded: $875K) (FY21:
Slide 18: How Comvita creates value for all stakeholders
H O W C O M V I TA C R E AT E S Value F O R A L L S TA K E H O L D E R S 18
Slide 19: Full year results FY22
SECTION 3 Full year results FY22 19
Slide 20: Financial Key Results: Income Statement
K E Y R E S U LT S Financial I N C O M E S TAT E M E N T For the Year Ended 30 June 30 June NZD 000s 2022 2021 Variance $ Variance % • Record revenue of $209M +9% vs PCP Revenue 208,909 191,734 17,175 9.0% • Record gross profit 60.3% +640 bps +21.8% vs PCP • Record brand investment $28.1M with marke
Slide 21: Gross Profit
Gross profit improved $22.6M from focus growth markets, Mānuka honey, digital channel and productivity gains • Focus growth markets: Strong performance in China and North America • Strong growth in monofloral Mānuka honey • Digital channel share growth +15% to 39% of total sales from 34% last year a
Slide 22: Financial Key Results: Balance Sheet
K E Y R E S U LT S Financial BALANCE SHEET As at • Net debt increased by $21.0M 30 June 30 June NZD 000s 2022 2021 − Investment in JV of $5.1M Audited Audited Variance $ − Capital expenditure of $10.3M Net Debt 25,544 4,583 20,961 − Purchase of treasury stock of $3.0M − Dividend payments of $4.7M Op
Slide 23: Inventory Profile
Inventory PROFILE As at 30 June 30 June • Inventory increased by $31.1M vs 30 June 2021 NZD 000s 2022 2021 Variance $ • Raw materials increased by $19.8M to enable us to Audited Audited meet forecasted market demand in FY23 Raw materials 76,611 56,828 19,783 • Increased finished goods to mitigate ag
Slide 24: Capital Expenditure
Capital EXPENDITURE 30 June 30 June • Continued investment in our Mānuka forest strategy For the year ended NZD 000s 2022 2021 − The substantive benefits of our investments in forests are expected to deliver from FY27 onwards Mānuka forest development 2,069 3,849 • Further investment into manufactur
Slide 25: Fully imputed final dividend
F U L LY I M P U T E D F I N A L • Fully imputed final dividend of 3.0 cps Dividend − Record date of 30 September 2022 and payment date of 7 October 2022 • 5.5 cps dividends FY22 compared to 4.0 cps last year • An overall increase of 37% 25
Slide 26: Honey harvest & forests
SECTION 5 Honey harvest & forests 26
Slide 27: Honey: Apiary operations performance
APIARY OPERATIONS PERFORMANCE ▪ Comvita’s new harvest model has proven successful again in FY22 for the third Honey consecutive year ▪ The total Mānuka harvest was 499K tonnes ▪ Yield +41% vs PCP HARVEST 2022 ▪ Quality of yield +8% vs PCP ▪ Harvest contribution to group profits $2.9M included within
Slide 28: Continued investment in forest strategy
CONTINUED INVESTMENT IN FOREST STRATEGY • Longer term Mānuka forest hypothesis, targeting: − 40% improvement in yields − 60% improvement in quality of yields Forests 2022 − 20% reduction in costs • Now have circa 7,500 hectares of forests • NZ’s largest private native forest owner/manager • Targetin
Slide 29: Market segments: Growing share in focus markets
SECTION 6 Market segments: Growing share in focus markets 29
Slide 30: Market Headlines
MARKET HEADLINES • Record Revenue and Margin ▪ Revenue $209M +9% ▪ Gross Profit 60.3% +640 bps • All markets excluding Japan in growth MARKET • Greater China +4% revenue, net contribution $3.1M +15% Headlines • Mainland China sales +9%, net contribution $4.0M +26% ▪ Strong digital sales (circa 60% o
Slide 31: Revenue by market
PERFORMANCE VS PCP Revenue GREATER CHINA MAINLAND CHINA NORTH AMERICA REPORTED CURRENCY $ 96.9 2021 : $93.1M M $ 79.4 2021 : $73.2M M 31.8 $ 2021 : $24.7M M +4% +9% +29% REST OF ASIA AUSTRALIA + NZ EMEA 27.3 $ 2021 : $25.3M M 34.7 $ 2021 : $32.4M M $5.1 M 2021 : $5.1M +8% +7% 0% 31
Slide 32: Net contribution by market
PERFORMANCE VS PCP Net contribution GREATER CHINA MAINLAND CHINA NORTH AMERICA REPORTED CURRENCY 23.0 $ 2021 : $19.9M M $ 19.3 2021 : $15.3M M $8.4 M 2021 : $4.7M +15% +26% +78% REST OF ASIA AUSTRALIA + NZ EMEA 6.6 $ M 2021 : $6.4M 11.2 $ 2021 : $10.2M M $0.1 M 2021 : $0.0M Net Contribution is a non
Slide 33: Focus growth markets: China & North America
FOCUS Growth markets CHINA & NORTH AMERICA FOCUS STRUCTURED LONG-TERM INVESTMENT TO GROW TAM AND MARKET SHARE CURRENT BUSINESS MODEL: BALANCED DISTRIBUTION MODEL 33
Slide 34: Greater China
GREATER CHINA ON A REPORTED CURRENCY BASIS – FOR YEAR ENDED This Year Last Year Vs. Vs. NZD 000s Jun-22 Jun-21 Last Year Last Year % Sales 96,924 93,076 3,848 4% Net Contribution 22,958 19,908 3,050 15% Net Contribution % 24% 21% 3% • Revenue +4% despite material Covid headwinds across the region −
Slide 35: Mainland China
MAINLAND CHINA ON A REPORTED CURRENCY BASIS – FOR YEAR ENDED This Year Last Year Vs. Vs. NZD 000s Jun-22 Jun-21 Last Year Last Year % Sales 79,407 73,151 6,256 9% Net Contribution 19,320 15,282 4,038 26% Net Contribution % 24% 21% 3% • Continued strong performance with revenue +9% − Strong digital s
Slide 36: North America
NORTH AMERICA ON A REPORTED CURRENCY BASIS – FOR YEAR ENDED This Year Last Year Vs. Vs. NZD 000s Jun-22 Jun-21 Last Year Last Year % Sales 31,793 24,735 7,058 29% Net Contribution 8,414 4,733 3,681 78% Net Contribution % 26% 19% 7% • Revenue +29% in the worlds biggest Mānuka honey market • Good grow
Slide 37: Rest of Asia
REST OF ASIA ON A REPORTED CURRENCY BASIS – FOR YEAR ENDED This Year Last Year Vs. Vs. NZD 000s Jun-22 Jun-21 Last Year Last Year % Sales 27,337 25,346 1,991 8% Net Contribution 6,585 6,367 218 3% Net Contribution % 24% 25% -1% • Revenue +8% to $27.3M • Strong revenue growth in SEA and Korea offset
Slide 38: Australia & New Zealand
AUSTRALIA & NEW ZEALAND ON A REPORTED CURRENCY BASIS – FOR YEAR ENDED This Year Last Year Vs. Vs. NZD 000s Jun-22 Jun-21 Last Year Last Year % Sales 34,696 32,444 2,252 7% Net Contribution 11,211 10,218 993 10% Net Contribution % 32% 31% 1% • Revenue +7% NZ, AU and Asian health • $0.7M increased inv
Slide 39: Europe, Middle East & Africa (EMEA)
EUROPE, MIDDLE EAST & AFRICA (EMEA) ON A REPORTED CURRENCY BASIS – FOR YEAR ENDED This Year Last Year Vs. Vs. NZD 000s Jun-22 Jun-21 Last Year Last Year % Sales 5,124 5,060 64 1% Net Contribution 83 35 48 137% Net Contribution % 2% 1% 1% • Remains sub scale • Revenue +1%, strong second half +34% • P
Slide 40: FY23 guidance
SECTION 7 FY23 guidance 40
Slide 41: FY23 Guidance
FY23 • Forecasting double digit earnings growth for the year with strong weighting to H2 • Assuming sales in China normalising in Q2 Guidance • Profitable top and bottom-line growth in focus growth markets, channels and categories • Ecommerce share greater than 40% • Transformation Investment $5.5M
Slide 42: Summary
Summary Summary • Record revenue of $209M +9.0% • Record margin of 60.3% +640 bps • Second best earnings of all time (EBITDA $30.1M) +18% • NPAT $12.8M +34.5% • 34% EPS growth • Positive operating cashflow • FY22 total dividends of 5.5 cps • Strong performance across all focus areas Exciting future
Slide 43: Q&A
SECTION 8 Q&A
Slide 44: Thank you
BLOSSOMING THANK YOU COMVITA.COM