Slide 1: Health, Wellness & Beauty
HEALTH, WELLNESS & BEAUTY 19TH May 2021
Slide 2: Disclaimer
DISCLAIMER The following provisions apply to this presentation. Please consider its contents carefully. Currency of information The information contained in this presentation is current as at the date of this presentation or such earlier date as specified in this presentation. Summary information Th
Slide 3: Agenda
AGENDA 1. MCPHERSON'S TODAY Grant 2. STRATEGY & OPERATIONAL REVIEW UPDATE Grant 3. STRATEGIC GROWTH PLATFORMS i. Core 6 brands, Key Channels Donna & Lori ii. Health Dawn iii. International Expansion David, Jade & TCG 4. OUR UNIQUE CAPABILITIES i. Customer & Shopper education Lori ii. R&D / Innovatio
Slide 4: 1. McPherson's Today
1. MCPHERSON’S TODAY 4
Slide 5: McPherson's – At a Glance
MCPHERSON’S – AT A GLANCE FY21 Forecast Revenue 340+ Staff 1,625 SKU’s2 $200 - 205M 40% Customer facing 5 No.1 Brands 13 Categories3 +50%1 of Australian households 1.2M 14 11,000+ purchased an MCP Points of Distribution brand in the last 12 Countries Customer months Globally Stores 1 IRI Shopper Pan
Slide 6: Health, Wellness & Beauty – A Strong Future
HEALTH, WELLNESS & BEAUTY – A STRONG FUTURE W E ’RE O P ERATING I N A $ 1 5.2 BILLION M ARKET HEALTH & WELLNESS 1 BEAUT Y 1 ($7.5 Billion, +5.7% vs Year Ago) ($7.7 Billion, +4.6% vs Year Ago) NATURAL HEALTH HEALTHY SKIN & BEAUT Y Immunity & Protection Cosmeceutical Sleep & Mood Australian Natural Jo
Slide 7: Health, Wellness & Beauty – A Strong Future
HEALTH, WELLNESS & BEAUTY – A STRONG FUTURE HEALTH & WELLNESS BEAUT Y 78% MARKET MCP No. 2 BROAD AUSTRALIAN’S PURCHASE POSITION4 AUSTRALIAN BEAUTY PENETRATION1 COMPLEMENTARY MEDICINE SUPPLIER TO PHARMACY Past 12 months AGEING 15% to 22% CONSISTENT +4.8% POPULATION2 Over 65 YRS 2017 Vs 2057 CATEGORY
Slide 8: MCP - Winning in Large HW&B Categories
MCP - WINNING IN LARGE HW&B CATEGORIES MCP CATE G ORIE S: $SIZE & G ROW TH & AVG RE TAIL P RICE CATEGORY Size MCP 20% Share Hair Accessories, 16%, $56M Vitamins Mineral Supplements $2B <1% 15% Bags Wraps Foils, Skincare $1.3B 2% 6%, $447M Beauty 10% Accessories, 4%, $ GROWTH MAT 2/8/20 $189M Haircar
Slide 9: 2. Strategy and Operational Review
2. STRATEGY AND OPERATIONAL REVIEW 9
Slide 10: Strategic Intent
STRATEGIC INTENT Health, Wellness and Beauty Growth potential through greater remains our core focus collaboration, alignment and simplification of purpose, including a simplification of the JV strategy Our near-term focus will be on Brand acquisitions consistent with this the growth potential in ex
Slide 11: Operational Review Outcomes
OPERATIONAL REVIEW OUTCOMES TARGET $300M SALES & $50M EBIT IN FY26 6 CORE OWNED HEALTH & WELLNESS SELECTIVELY EXPAND COST BRANDS & KEY A NEW GROWTH INTERNATIONAL CHANNELS OPTIMISATION PLATFORM FOOTPRINT • Laser focus on realizing and • The unique” ancient • De-risking reliance on one Amend overheads
Slide 12: Strategic & Operational Review
STRATEGIC & OPERATIONAL REVIEW A. Major Focus Items of the Operational Review drive changes in approach and expectations in 4 key areas: Greater opportunity in the domestic market than previously appreciated: • Brand positions, executional resources and relationships are strongest. • Opportunity to
Slide 13: Strategic & Operational Review
STRATEGIC & OPERATIONAL REVIEW A. Major Focus Items of the Operational Review drive changes in approach and expectations in 4 key areas The acquisition process and the recent review of Global Therapeutics has driven a sound understanding of the opportunities in this space • The unique “ancient wisdo
Slide 14: Strategic & Operational Review
STRATEGIC & OPERATIONAL REVIEW A. Major Focus Items of the Operational Review drive changes in approach and expectations in 4 key areas Build on the established success of Dr LeWinn's in China - de-risking reliance on one brand, one channel, one geography in international • Continue to leverage and
Slide 15: Strategic & Operational Review
STRATEGIC & OPERATIONAL REVIEW A. Major Focus Items of the Operational Review drive changes in approach and expectations in 4 key areas We will amend overheads to reflect the “reset” level of profitability in FY21 • Efficiencies will be gained in Supply Chain and Distribution, as we consolidate busi
Slide 16: Strategic & Operational Review Targets
STRATEGIC & OPERATIONAL REVIEW TARGETS COST EFFICIENCY AND COST BASE AMENDMENTS PROGRAM Full Year EBIT impact rises from ~$3M in FY22 to ~$6M in FY23 1. Warehouse Efficiencies – programmed efficiencies evolving to ~$0.8M in FY23 with immediate capture of Annualised Cost $0.4M in FY22 ($M) FY22 FY23
Slide 17: Strategic & Operational Review Targets
STRATEGIC & OPERATIONAL REVIEW TARGETS Confidence in growth Clear building Enhanced Better performance blocks capability expectation We anticipate FY26 Sequenced deliverables Preservation of core Leading to a better sales of $300M and to illustrate the pathway value drivers, but in performance EBIT
Slide 18: 3. Strategic Growth Platforms
3. STRATEGIC GROWTH PLATFORMS OUR UNIQUE CAPABILITIES 18
Slide 19: 6 Core Owned Brands & Key Channels
ST R ATEGIC P RIORIT Y 1 6 CORE OWNED BRANDS & KEY CHANNELS 19
Slide 20: Market Leading Brands with Healthy Brand Metrics
MARKET LEADING BRANDS WITH HEALTHY BRAND METRICS S TR ATEGI C P R I O R I T Y 1 #1 A u st r al i an C o sm e ce u t ical #2 N at u r al H ai r car e #1 B e au t y To o l s B r an d i n P h ar m acy & A cce sso r i e s T O P 10 FA C I A L S K I NC AR E +1. 6 S H A R E P O I N T S +2.2 SHA R E POIN T
Slide 21: Core Brands: 5 Year Vision
CORE BRANDS: 5 YEAR VISION S TR ATEGI C P R I O R I T Y 1 D r i v e m ar k e t sh ar e g ai n s i n B u i l d scal e t h r o u g h ch an n e l L e ad cat e g o r y g r o w t h t h r o u gh p h ar m acy t h r o u gh i n n e r an d e x p an si o n an d e f f i caci o us r e al e st at e & sal o n at h
Slide 22: Innovative Skincare Resonating with Consumers
INNOVATIVE SKINCARE RESONATING WITH CONSUMERS S TRATEG I C P RI O RI TY 1 DR. LEWINN’S • Strong track record for successful new product launches to drive share gains • New Marine Collagen Liquid Shots ranked within Top 5 Facial Skincare NPD in the latest Quarter • Within Chemist Warehouse Marine Col
Slide 23: High Performance Natural Skincare and Haircare
HIGH PERFORMANCE NATURAL SKINCARE AND HAIRCARE S TRATEG I C P RI O RI TY 1 A’KIN • Boosting clinical claims to build scale in pharmacy and grocery • 31 clinically proven products within A’kin range • Clinically proven A’kin Hair Mask contributing 10% to A’kin Haircare range • Clinically proven A’kin
Slide 24: Leveraging Macro Trends to Drive Category Growth
LEVERAGING MACRO TRENDS TO DRIVE CATEGORY GROWTH S TRATEG I C P RI O RI TY 1 MANICARE • $68M1 masterbrand connecting through beauty at home macro trend • Continued investment in merchandising real estate and on-line to engage consumers across all path to purchase touch points • Focus on skincare bea
Slide 25: Consumer Led Innovation Driving Double Digit Growth
CONSUMER LED INNOVATION DRIVING DOUBLE DIGIT GROWTH S TRATEG I C P RI O RI TY 1 LADY JAYNE • Increasing leadership through accessible styling across channels • Covid accelerating category growth (+16%) with Lady Jayne leading the charge (+23%) through innovation and high social reach (6.7M) • Expans
Slide 26: Strengthening Our Commitment to Sustainability
STRENGTHENING OUR COMMITMENT TO SUSTAINABILIT Y S TRATEG I C P RI O RI TY 1 MULTIX • Transforming the category with sustainable products • Continue to drive Multix as the consumer brand of choice to expand distribution: • 50.2% household penetration for Multix brand • 79% of sustainable buyers buy M
Slide 27: Increasing Sustainable Footprint Through Partnerships
INCREASING SUSTAINABLE FOOTPRINT THROUGH PARTNERSHIPS S TRATEG I C P RI O RI TY 1 SWISSPERS • Trust, quality and care for the planet • Covid shift towards trusted brands saw Swisspers achieve 61% share high in the cotton category • Swisspers expanded sustainable range with 5 cotton tip paper stem pr
Slide 28: Targeted Adjacencies to Win and Expand Our Equity
TARGETED ADJACENCIES TO WIN AND EXPAND OUR EQUITY S TRATEG I C P RI O RI TY 1 • Manicare expansion into • Swisspers equity expansion • Transformation of Stratton • Sugarbaby refresh targets $42M1 Power Beauty Tools targeting into high growth Baby category from a small, bottom shelf pharmacy tanning
Slide 29: Positioned for Growth
POSITIONED FOR GROWTH S TRATEG I C PRI ORI TY 1 TOTAL DISTRIBUTION POINTS IN ANZ BEAUTY # 2 AUS Beauty supplier to pharmacy 21% share of categories MCP FY26 play in Grocery FY22 target #16 Total Pharmacy suppliers (OTC)* target +1.5M and Pharmacy FY21 1.2M +0.4% vs YA forecast #65 Supplier to Grocer
Slide 30: Responding to Shopper Behaviour Shifts FY21
RESPONDING TO SHOPPER BEHAVIOUR SHIFTS FY21 Pi vot to onl i ne IN CREMENTAL R AN GING IN VESTMENT + 1,355 + 30% INVESTMENT IN MAJOR INCREMENTAL ONLINE CUSTOMER ONLINE PLATFORMS v DISTRIBUTION POINTS FY20 In store e ngageme nt OF F LOCATIONS E D U C AT I O N & R E C O M M E N DAT I O N 53% 1 + 39% IN
Slide 31: Investment in Shopper FY22
INVESTMENT IN SHOPPER FY22 S TRATEG I C PRI ORI TY 1 INVESTMENT +22% investment online & social vehicles Engaging shoppers in POINT OF PURCHASE their path to +23% spend in off locations v FY21 Continued investment in category solutions purchase Online EDUCATION & RECOMMENDATION 38 education based ac
Slide 32: Strategic Partnerships
STRATEGIC PARTNERSHIPS S TRATEG I C PRI ORI TY 1 LONG TERM NEW BRAND GROWTH PARTNERSHIPS TARGETS TARGET PREFERRED +$200M RSV 1 SUPPLIER TOP 3 ARRANGEMENTS CUSTOMERS BY 2026 Win with CATEGORY Partnerships PARTNERING IN PARTNERSHIPS SUSTAINABLE 32 1. RSV = Retail Sales Value
Slide 33: ANZ 5 Year Growth Drivers
ANZ 5 YEAR GROWTH DRIVERS S TRATEG I C PRI ORI TY 1 CORE CUSTOMER and C AT EGORY CHANNEL & I N N OVATION GEOGRAPHY • Baby • Costco • Brand & Core • Beauty • Online range penetration Supplements • Petrol & • Category • Tanning Convenience leadership • Men’s • Chemist • Share gains Grooming Warehouse
Slide 34: Total ANZ: Key Deliverables & Targets
TOTAL ANZ: KEY DELIVERABLES & TARGETS SALES: BASE AUSTRALIA & NZ BUSINESS* $230m $182m FY21 FORECAST CORE GROWTH CUSTOMER & CHANNEL CATEGORY EXPANSION INNOVATION FY26 TARGET EXPANSION •Base ANZ Business includes Singapore & excludes the Health Division 34 SALES FY21 - FY26 Target
Slide 35: Health and Wellness a New Growth Platform
ST R ATEGIC P RIORIT Y 2 HEALTH AND WELLNESS A NEW GROWTH PLATFORM 35
Slide 36: Health & Wellness: A New Growth Platform
HEALTH & WELLNESS: A NEW GROWTH PLATFORM S TRATEG I C PRI ORI TY 2 STRATEGIC RATIONALE DELIVERABLES Enter in to the health and • Acquired Global Therapeutics to form McPherson’s Health Division wellness category and • 71% of the Health team have a Health qualification provide a new platform for • Re
Slide 37: MCP Health Brands a Key Growth Pillar
MCP HEALTH BRANDS A KEY GROWTH PILLAR S TRATEG I C PRI ORI TY 2 Momentum building… • Inventory and in-stock position strongest since February 2019 • April '21 strongest sales month since September '19 (Excluding March '20 COVID-19 impact) • Focused retailer and consumer campaigns • Operational revie
Slide 38: Transition to McPherson's Health
TRANSITION TO MCPHERSON’S HEALTH S TRATEG I C PRI ORI TY 2 Successfully transitioned into McPherson’s warehousing and IT systems in March • April 2021 go live, McPherson’s Health full transition • Products currently manufactured by Blackmores moving to an Australian contract manufacturer as per acqu
Slide 39: Herbal & Traditional Products a High Growth Sub Segment
HERBAL & TRADITIONAL PRODUCTS A HIGH GROWTH SUB SEGMENT S TRATEG I C PRI ORI TY 2 $3.9B VITAMINS / NATURAL HEALTH CATEGORY1 Herbal / 78%1 of Australians 83%1 of Traditional Products, Australian women have purchased at $800M have purchased at least one form of least one form of Vitamins & complementa
Slide 40: Consumer Insights Validate Fusion's Unique & Strong Brand Positioning
CONSUMER INSIGHTS VALIDATE FUSION’S UNIQUE & STRONG BRAND POSITIONING S TRATEG I C PRI ORI TY 2 On initial exposure the Fusion Health brand appears modern and credible with clear cues to nature, eastern philosophies and current scientific approaches Red palette Yin and Yang Strong cues to Chinese me
Slide 41: Four Core Pillars – Targeting $30M in Sales by 2026
FOUR CORE PILLARS – TARGETING $30M IN SALES BY 2026 S TRATEG I C PRI ORI TY 2 1 2 3 4 Pharmacy Growth / New Zealand New Product Health Food & Improve Core Range & eCommerce Development Brand Opportunities Compliance • Double pharmacy • Refresh and relaunch NZ • Ideation plan developed • Grow Health
Slide 42: Health & Wellness Division Targeting $30M by FY26
HEALTH & WELLNESS DIVISION TARGETING $30M BY FY26 S TRATEG I C PRI ORI TY 2 SALES: HEALTH DIVISION $30m IN STOCK RECOVERY $10m FY21 FORECAST FULL YR SALES PHARMACY NZ / E-COMM NPD A'KIN (HF RESET) FY26 TARGET NORMALISATION & IN- STOCK RECOVERY 42 SALES FY21 & TARGET FY26
Slide 43: Expand International Footprint
ST R ATEGIC P RIORIT Y 3 EXPAND INTERNATIONAL FOOTPRINT 43
Slide 44: Expand Our International Footprint
EXPAND OUR INTERNATIONAL FOOTPRINT S TRATEG I C PRI ORI TY 3 i. RE BALANCING INTE RNATIO NAL GRO W TH FY21 FCST FY26 TARGET NEW MARKETS, 6% CHINA, 42% NEW MARKETS, 58% CHINA, 94% ii. M CP SKIN CARE & HE ALTH PO RTFO LIO ($M ) INCREMENTAL SALES: FY21 TO FY26 TARGET SUGARBABY, HF/Soulful, $3M $3M Fusi
Slide 45: USA - Win with Dr. LeWinn's via Online
USA - WIN WITH DR. LEWINN’S VIA ONLINE S TRATEG I C PRI ORI TY 3 B y F Y 2 6 t a r ge t U S A a s 3 R D l a rgest D r L e Wi nn's m a rke t o u t s i de A u s tral ia & C h i na SIZE STRENGTH MARKET SITUATION MARKET USD$30B1 42%2 86%3 INSIGHT Skin care market (‘21) Shop online for beauty (Top 3 chan
Slide 46: UK & EU – Paced Rollout for Dr. LeWinn's
UK & EU– PACED ROLLOUT FOR DR. LEWINN’S S TRATEG I C PRI ORI TY 3 Str ategy UK GERMANY FRANCE • Top 5 online beauty platform, delivering 500 brands FY23 and 30,000 products MARKET US$3.9b US$3.9B US$4.6B US$4.0B INSIGHT Skin care market (‘21) Skin care market (‘21) Skin care market (‘21) Statista St
Slide 47: Expand Asia & MENA Skincare Brands with Existing Partners
EXPAND ASIA & MENA* SKINCARE BRANDS WITH EXISTING PARTNERS S TRATEG I C PRI ORI TY 3 Str ategy SIZE GROWTH GDP KEY GROWTH MARKETS MARKET US$3.9b $235B1 +8.5%2 ASEAN-63 Vietnam • Highest growth in skin care in Asia (ex – China & Australia) INSIGHT Skin care market ASIA/MENA MARKET (‘21) SIZE MENA Bea
Slide 48: Dr. LeWinn's – A Strong Brand in China
DR. LEWINN’S – A STRONG BRAND IN CHINA S TRATEG I C PRI ORI TY 3 THE FUTURE Despite challenging $A80M1 Exclusive partnership market conditions underlying brand value • Measurable returns from a growing channel YTD demand in China in the hands of the • Direct engagement with resellers as brand advoca
Slide 49: China Landscape Continuously Changing
CHINA LANDSCAPE CONTINUOUSLY CHANGING S TRATEG I C PRI ORI TY 3 Strong Growth in China CBEC “……it’s unlikely that all of COVID-19 accelerated an China Beauty Market worth Sales1 the…sales…that disappeared ongoing trend of consumers 600B RMB by 2023.5 as the Daigou trade to China in China shifting to
Slide 50: Fusion Health CBEC Opportunity
FUSION HEALTH CBEC OPPORTUNITY S TRATEG I C PRI ORI TY 3 Health Supplement market Australia & USA leaders in Health Supplement Traditional Supplements are size expected to rise 280B Health Supplements for the purchase intent increased most favoured.1 RMB by 20231 China market.2 among Chinese consume
Slide 51: International Expansion Targeting $40M by FY26
INTERNATIONAL EXPANSION TARGETING $40M BY FY26 S TRATEG I C PRI ORI TY 3 SALES: INTERNATIONAL EXPANSION EXISTING DISTRIBUTION $40M UK … A “BEACHHEAD” TO EUROPE DR LEWINNS ONLINE TO OFFLINE CBEC LAUNCH: FUSION HEALTH, RESET AKIN DRL CHINA NORMALISED $8M FY21 FORECAST CHINA (DRL) CHINA (EXCL DRL) USA
Slide 52: 4. Our Unique Capabilities
4. OUR UNIQUE CAPABILITIES OUR UNIQUE CAPABILITIES 52
Slide 53: Educating Our People, Customer and Shopper
EDUCATING OUR PEOPLE, CUSTOMER AND SHOPPER MCPHERSON’S QUALIFIED TRAINING SHOPPER TEAM +58 how to videos ACADEMY 6 Qualified naturopaths +200 active participants per month 2 Qualified beauty advisors 3 M Views 30 +2000 14 30 How to tutorials Education based Retail assistants Customer Internal traini
Slide 54: Innovation Success Driving Sustainable Growth
INNOVATION SUCCESS DRIVING SUSTAINABLE GROWTH MCP Owned Brands NPD Contribution % (over 2 years) Domestic Ex. Factory Statutory Sales 10.2% 8.6% 6.3% 5.6% 5.1% EXPANSION INTO BEAUTY #1 NATURAL HAIRCARE NUTRITION SHAMPOO & CONDITIONER NPD FY17 FY18 FY19 FY20 Apr YTD FY21 15 Foreign market registratio
Slide 55: Sustainability – Our Goals
SUSTAINABILITY – OUR GOALS ADDRESSING UNITED NATIONS OUR GOALS WHAT WE’LL DO SUSTAINABLE DEVELOPMENT GOALS • Reduction in Total Greenhouse Gas Emissions with an aim to achieve net zero MORE. LESS. NONE Scope 1 and 2 carbon emissions by 2030 Sustainable • Reduce the amount of non-recyclable, non-reus
Slide 56: Gain Efficiencies and Savings Across Supply Chain
GAIN EFFICIENCIES AND SAVINGS ACROSS SUPPLY CHAIN AVAILABLE CAPACITY DAILY DELIVERIES STAFF RETENTION ADAPTABLE +40% 7,600+ 80+ & FLEXIBLE Significant headroom in pick line 1,600 Australian Postcodes Tenure > 19 Years SUPPLY CHAIN COSTS COVID RESPONSE ALTERNATE SUPPLY Top 150 SKUs EFFICIENCY $7.5M h
Slide 57: 5. Financials
5. FINANCIALS 57
Slide 58: Sales & EBIT Target Summary - 5 Year Plan
SALES & EBIT TARGET SUMMARY - 5 YEAR PLAN SALES UNDERLYING ($M) EBIT ($M) FY21 FY26 FY21 FY26 All figures $M Forecast Target Forecast Target Total Australian and NZ Business1 $182 $230 $29 Health & Wellness2 $10 $30 $7 International3 $8 $40 $8 Cost optimisation $6 Total $200 $300 $10 - $13 $50 1. To
Slide 59: Strong Balance Sheet Presents Opportunity
STRONG BALANCE SHEET PRESENTS OPPORTUNITY Capital High dividend Return of high Strategic M&A management payout ratio franking credits initiatives Management will continue Capital Management Current dividend policy Franking credits to review strategic, initiatives put on hold is to pay a minimum of c
Slide 60: 6. Summary
6. SUMMARY 60
Slide 61: Strategic & Operational Review Targets
STRATEGIC & OPERATIONAL REVIEW TARGETS Confidence in growth Clear building Enhanced Better performance blocks Capability expectation We anticipate FY26 Sequenced deliverables Preservation of core Leading to a better sales of $300M and to illustrate the pathway value drivers, but in performance EBIT
Slide 62: McPherson's Q&A
MCPHERSON'S Est.1860 Q&A