Mcpherson's Limited · ASX:MCP
Mcpherson's — Shareholder Meeting (November 2018)
57 slides from Mcpherson's's shareholder meeting presentation, Nov 21, 2018
Slide 1: McPherson's Limited 2018 Annual General Meeting
For personal use only MCPHERSON’S LIMITED 2 018 A N N UA L G E N E R A L M E E T I N G 21 N ove m b e r 2 018 11am 1
Slide 2: Agenda for Today
AG E N DA FO R TO DAY For personal use only Welcome from Graham Cubbin and Chairman’s Address Laurence McAllister, Chief Executive Officer’s Address Presentation from Marketing Director - Donna Chan Presentation from Strategy, Planning & Innovation Director - David Fielding Formal business of the me
Slide 3: Graham Cubbin, Chairman
GRAHAM CUBBIN, CHAIRMAN For personal use only 2018 Annual General Meeting 3
Slide 4: A leading supplier of health, wellness, beauty brands in Australasia
For personal use only A leading supplier of health, wellness, beauty brands in Australasia 2018 Annual General Meeting 4
Slide 5: Health, Wellness and Beauty Market Drivers
H E A LT H , W E L L N E S S A N D B E AU T Y M A R K E T D R I V E R S For personal use only + + + AGING NATURAL BEAUTY HEALTHY AND CHINA WELLNESS POPULATION MATTERS ORGANIC LIVING 2018 Annual General Meeting 5
Slide 6: A Winning Team - Directors
A W I N N I N G T E A M - D I R E C TO R S For personal use only Graham Cubbin Jane McKellar Non-Executive Director Grant Peck Chairman Non-Executive Director Geoffrey Pearce Alison Mew Laurence McAllister Non-Executive Director Non-Executive Director Managing Director 2018 Annual General Meeting 6
Slide 7: A Winning Team – Senior Leadership Team
A WINNING TEAM – SENIOR LEADERSHIP TEAM For personal use only Paul Witheridge David Fielding Laurence McAllister Strategy, Planning & Donna Chan Chief Financial Managing Director Innovation Director Marketing Director Officer Sarah Tully Brett Owers Lori Pirozzi Commercial Finance Business Mark Brad
Slide 8: Laurie McAllister, Managing Director
L AU R I E M C A L L I S T E R , M A N AG I N G D I R E C TO R For personal use only 2018 Annual General Meeting 8
Slide 9: Priorities & Results in FY18 Business Highlights
P R I O R I T I E S & R E S U LT S I N F Y 1 8 B U S I N E S S H I G H L I G H T S For personal use only At the beginning of the year we set out the following At the FY18 Results we reported: business priorities: • +6% increase in sales from core six brands, with Multix now • Accelerate core 6 brand
Slide 10: Trading Environment
TRADING ENVIRONMENT For personal use only MACRO INDICES CONSUMER SENTIMENT CPI HOUSEHOLD DEBT 104.7 +1.9% 200% Not Particularly Strong Year Through to Sep ’18 HH Debt To Income 2X …last 20 Years Source: Westpac MI Consumer Sentiment Index Nov ‘18 Source: ABS, 31st Oct ‘18 Source: ABS, Jan, ‘18 TRADI
Slide 11: Macro Trends to Leverage
M AC R O T R E N D S TO L E V E R AG E For personal use only CHINA DEMAND FOR SUSTAINABLE PROACTIVE EXPORT NATURAL SOLUTIONS CARE Global Face Mask Market expected to China middle-class Global Organic Personal Care Renew | Reuse | Recycle reach $8.8B in 2021 population projected to Market projected t
Slide 12: Year Strategy
3 YEAR STRATEGY For personal use only GROW CORE 6 Explore new OWNED BRANDS product growth platforms DRIVE VALUE Move to strategic FROM GEOGRAPHIC customer and supplier FOOTPRINT partnerships S T R AT E G I C E N A B L E R S End to end capability and capacity - Strong agency partners compliment portf
Slide 13: Core Owned Brands
CORE OWNED BRANDS For personal use only #1 position in #1 position in #1 position in beauty tools hair accessories cosmeceutical skincare #1 position in Aspire to grow to top 5 #1 in cotton products Bags, Wraps and Foil in natural skincare 2018 Annual General Meeting 13
Slide 14: Number 1 Australian Cosmeceutical Brand
NO. 1 AUSTRALIAN COSMECEUTICAL BRAND For personal use only BUILDING CORE CHINA EXPORT INNOVATION BRAND EQUITY REJUVENATION DEMAND ACCELERATING BRAND REVERSADERM COLLAGEN MASKS LINE SMOOTHING COMPLEX GROWTH Sales 8X vs prior relaunch 1 x Mask sold every 60 12,000 2X Brand Investment seconds Triple Ac
Slide 15: Innovating in Large Growth Segments
INNOVATING IN LARGE GROW TH SEGMENTS For personal use only 2016 CAGR To 2021 Global Face Mask Market $5.7B +9.1% China Face Mask Market $2.7B +11.7% Source: Coresight Research; Euromonitor International 2018 Annual General Meeting 15
Slide 16: Fast Growing Natural Skincare and Haircare
FAST GROWING NATURAL SKINCARE AND HAIRCARE For personal use only INNOVATION & DISTRIBUTION EXPANSION INTERNATIONAL EXPANSION INTO NEW MARKETS DOMESTIC GROWTH INTERNATIONAL GROWTH Skincare: +40% MAT growth Export: +117% CAGR ex. factory growth (2016 – 2018) Haircare: +15% MAT growth 9 International M
Slide 17: Leaders in Hair & Beauty Accessories
LEADERS IN HAIR & BEAUT Y ACCESSORIES For personal use only LADY JAYNE GLAM BY MANICARE CORE INNOVATION INNOVATION GLAMOUR Extending Market Leadership to 29.4% 15 incremental products Detangling Innovation & ATL support Brand Ambassador Star Power with 2M followers Source: IRI Market Measurement – S
Slide 18: Leading Innovation in Pharmacy
LEADING INNOVATION IN PHARMACY For personal use only SMART TECHNOLOGY MANICARE SONIC MINI #1 Contributor to Category Value growth #13 Top Seller (out of 1130 products) #1 Product within the Cleansing Segment Source: IRI Market Measurement – Scan, Data to week ending 30/09/18, Priceline (8 weeks in m
Slide 19: Leading Sustainable Innovations
LEADING SUSTAINABLE INNOVATIONS For personal use only 2018 Annual General Meeting 19
Slide 20: Return to Growth & Driving Category Growth
RETURN TO GROW TH & DRIVING CATEGORY GROW TH For personal use only FIRST TO MARKET BRAND INCREMENTAL NEW PRODUCTS INVESTMENT RANGING • 15 incremental products ranged • Share gains Feb – Sep 2018 30.8% to 33.6% • Multix growing: +166% for Greener +47% in Kitchen Tidy +9% in Baking Paper +8% in Foil S
Slide 21: Investing in Brand Equity & Growth
INVESTING IN BRAND EQUIT Y & GROW TH For personal use only 2018 Annual General Meeting 21
Slide 22: Digital Content Amplification
DIGITAL CONTENT AMPLIFICATION For personal use only • 2M digital advertising impressions for Glam • Over 750k consumers reached each month on social platforms • A MCP video is viewed 6500 times every day • Influencer campaigns reaching over 500,000 consumers • 850 SKU product library Digital Trackin
Slide 23: Strategic Customer/Supplier Partnerships
STRATEGIC CUSTOMER/SUPPLIER PARTNERSHIPS For personal use only INNOVATION STRATEGIC CUSTOMER PARTNERSHIPS PARTNERS • Top to top meetings • Joint Business Planning • New Trading Terms to increase customer participation • Strategic investment plans 2018 Annual General Meeting 23
Slide 24: Winning With Our Customers
WINNING WITH OUR CUSTOMERS For personal use only #1 AUSTRALIAN BEAUTY SUPPLIER IN PHARMACY >600 consumer entries +25% Sub-range Growth +74% Sales Uplift +118% Brand Growth Source: IRI Market Measurement – Scan, Data to: MAT Value To 14/10/18 Pharmacy 2018 Annual General Meeting 24
Slide 25: Driving Customers In-Store & Online
DRIVING CUSTOMERS IN -STORE & ONLINE For personal use only 2018 Annual General Meeting 25
Slide 26: Winning In-Store
WINNING IN -STORE For personal use only • Incremental ranging and channel expansion in over 1,000 doors across both Grocery and Pharmacy • 45,000 incremental distribution points • Chemist Warehouse: 55 new SKU’s, 22.6k incremental distribution points Vs YA • 11 Extra Displays in 282 Stores • What’s
Slide 27: +45% Investment in Real Estate, ROI in Months
+45% INVESTMENT IN REAL ESTATE, ROI IN 12 MONTHS For personal use only CATEGORY LEADERSHIP MERCHANDISING • Implemented in 120 high performance Chemist Warehouse stores in 2018 • High impact within front of store high traffic areas • Ease of shopper shelf navigation • Fuelling the path to purchase wi
Slide 28: Chemist Warehouse Update
C H E M I S T WA R E H O U S E U P D AT E For personal use only 2018 Annual General Meeting 28
Slide 29: Year Strategy
3 Y E A R S T R AT E GY For personal use only Explore new GROW CORE 6 product growth OWNED BRANDS platforms Move to strategic DRIVE VALUE customer and supplier FROM GEOGRAPHIC FOOTPRINT partnerships S T R AT E G I C E N A B L E R S End to end capability and capacity - Strong agency partners complime
Slide 30: Health, Wellness & Beauty: A $ Billion Market
H E A LT H , W E L N E S S & B E AU T Y: A $ 1 3 B I L L I O N M A R K E T For personal use only Wellness Beauty ($4.6 Billion, 0.2% vs YA) ($5.7 Billion, +3.8% vs YA) ($3.0 Billion +1.3% vs YA) The intent of enhancing and restoring Maintain the state of good health by pro- The subjective enhancemen
Slide 31: Wellness Trends Relevant to MCP
5 W E L L N E S S T R E N D S R E L E VA N T TO M C P For personal use only • Boutique to Mass • Focus = Gut microbiome • Targets: skin care, anti- • Estimated $1 trillion of • Mitochondria are “power aging, repairing the gut, buying power plants” in the cells • Ingredient transparency = • Exciting
Slide 32: Health & Beauty Categories Are Winning
H E A LT H & B E AU T Y C AT E G O R I E S A R E W I N N I N G For personal use only Skincare 2nd largest GROCERY growth category in both PHARMACY Grocery and Pharmacy $M Growth Actual vs YA $M Growth Actual vs YA Infant Formula 16 Infant Formula Dietary Supps 45 Vitamins Health & Beauty 4 24 Skinca
Slide 33: Skincare Export to China Accelerating
S K I N C A R E E X P O R T TO C H I N A … . AC C E L E R AT I N G For personal use only Source: IRI Future of Pharmacy Presentation August 2018 Qtr Growth (MAT= Moving Annual Total; Qtr= Quarter; YA= Year Ago) 2018 Annual General Meeting 33
Slide 34: MCP: Solid Assessment Process & Evaluation Criteria
M C P : S O L I D A S S E S S M E N T P R O C E S S & E VA L U AT I O N C R I T E R I A For personal use only DETAILED FORMAL GUIDING RESEARCH OFFER INITIAL EVALUATION PROJECT MODELLING DRAFT VALUATION PRINCIPLES Assess Key Elements High Level Principles Method Initial Proposal of Consumer Agreement
Slide 35: Entering Fast Growing H, W & B via De-Risked Opportunities
E N T E R I N G FA S T G R O W I N G H , W & B … V I A D E - R I S K E D O P P O R T U N I T I E S For personal use only Day 1: Trusted Partner Unique Majority Owned Win Domestically New Venture Co. Pre-Agreed Buyout Export (China) Facing 2018 Annual General Meeting 35
Slide 36: For personal use only
For personal use only 2018 Annual General Meeting 36
Slide 37: Why We Found It an Attractive Venture
W H Y W E F O U N D I T A N AT T R AC T I V E V E N T U R E For personal use only 1. A World First delivering first mover advantage 2. Unique proposition, hard to replicate & strong barriers to entry 3. China attraction 4. Discovery & Provenance story – authentic 5. Trusted partners 2018 Annual Gene
Slide 38: Video … Who is Kotia?
For personal use only Video … Who is Kotia ? 2018 Annual General Meeting 38
Slide 39: What Makes Kotia So Unique?
W H AT M A K E S KOT I A S O U N I Q U E ? For personal use only Pioneering a new frontier between natural actives and scientifically proven cosmetics the Kotia range is the world’s first cosmetic range formulated with NZ deer milk to: • Improve skin health • Provide nourishing hydration • Protect a
Slide 40: Kotia Deer Milk … A Natural Winner
KOT I A D E E R M I L K … A N AT U R A L W I N N E R For personal use only 2018 Annual General Meeting 40
Slide 41: Dermatologically Tested & Endorsed
D E R M ATO LO G I C A L LY T E S T E D & E N D O R S E D For personal use only Fragrance allergy Patch tested/ tested Dermatologically tested Stability tested SP15 Certified Claim: “The creams provide rapid and intensive hydration to the skin” Dr Sonya Scott 2018 Annual General Meeting 41
Slide 42: The World's First Deer Milk Skincare Range
THE WORLD’S FIRST DEER MILK SKINCARE RANGE For personal use only Premium products Premium performance Nourishing Regenerating Rejuvenating Gentle Tonic Lotion Hydration Mask Night Cream Serum Hydrating Day Brightening Eye Gentle cleansing Brightening Cream SPF 15 Cream milk Hydration Mask 2018 Annua
Slide 43: Kotia … In Summary
KOT I A … I N S U M M A R Y For personal use only • The World’s first to market Deer Milk Skincare range • Premium quality, targeting prestige segment • Harnessing the power of natural deer milk with high efficacy science • Dermatologically tested and certified range • Clinically proven performance
Slide 44: New Business / M&A
NEW BUSINESS / M&A For personal use only Organically Build New Brand(s) GREENFIELD • Capability to enter new fast growing categories – Internally led DEVELOPMENT Small Bolt - On Acquisitions • Unique IP, smaller uncomplicated deals Explore new EXTEND product growth • Add value through our relationsh
Slide 45: Year Strategy
3 Y E A R S T R AT E GY For personal use only Explore new GROW CORE 6 product growth OWNED BRANDS platforms Move to strategic DRIVE VALUE customer and supplier FROM GEOGRAPHIC FOOTPRINT partnerships S T R AT E G I C E N A B L E R S End to end capability and capacity - Strong agency partners complime
Slide 46: McPherson's Export Broader Than China
McPHERSON’S EXPORT BROADER THAN CHINA For personal use only China Nth Asia Sth Asia UK Middle East % Chg vs YA FY18 3X 100% Incremental 100% Incremental 25% Flat Establish cross border e-comm. Capture new Export Mkts Utilise Singapore hub to capture new High Penetration High Penetration trading mode
Slide 47: Continued Growth of Daigou Demand
CONTINUED GROW TH OF DAIGOU DEMAND For personal use only China’s current population is 1.4 Billion Estimated that between 2009 and 2030, China will have 850 million more people in it’s middle class. 850M More Chinese Middle Class = Size of Prize $10 Trillion Source: IRI Future of Pharmacy Presentati
Slide 48: McPherson's Business Models in China
McPHERSON’S BUSINESS MODELS IN CHINA MCP Outcomes For personal use only Approach Trusted Speed to partnerships DOMESTIC market Agreed Flexibility to business react to model change Virtuous Continuity of supply Cycle Rigorous processes Appropriate Adaptability pricing in business corridors EXPORT mod
Slide 49: China Sales Fuel the Domestic/Export Virtuous Cycle
C H I N A S A L E S F U E L T H E D O M E S T I C / E X P O R T V I R T U O U S C YC L E For personal use only Total Pharmacy Dr. LeWinn's Line Smoothing Complex Growth % vs YA 50.4% 32.8% 12.9% -9.7% Quarter To 22/10/17 Quarter To 21/01/18 Quarter To 22/04/18 Quarter To 22/07/18 CHINA EXPORT DEMAND
Slide 50: McPherson's China Business Models
McPHERSON’S CHINA BUSINESS MODELS For personal use only Fewer partners leading to bigger results! Chemist Warehouse Tmall Flagship • Key Brands: A’kin & • Key Brands: A’kin • Key Brands: Dr • Key Brands: • Key Brands: A’kin & Karen Murrell • Business Focus: Lewinn’s Revitanail, Trilogy Karen Murrell
Slide 51: Current Trading and Outlook
CURRENT TRADING AND OUTLOOK For personal use only HEADWINDS PROGRESSIING THE PLAN FX & Commodity Pressures on Margins Growth in Domestic Owned Brands • AUD / USD Depreciation • Accelerating Share Growth • Relatively higher Resin and Metal costs • Strategic Partnerships & Joint Business Planning acro
Slide 52: From Personal Care to Solutions to grow in health, wellness and beauty
For personal use only FO MRCM P HA E RL S OR N’E ST O S S R A LU T E G YTIISO N S to grow in health, wellness and beauty 2018 Annual General Meeting 52
Slide 53: Re-election of a Director - Jane McKellar
RE-ELECTION OF A DIRECTOR - JANE McKELLAR For personal use only 2018 2018Annual General Annual Meeting General Meeting 53 53
Slide 54: Election of a Director - Grant Peck
ELECTION OF A DIRECTOR - GRANT PECK For personal use only 2018 Annual General Meeting 54 54
Slide 55: Election of a Director - Geoffrey Pearce
ELECTION OF A DIRECTOR - GEOFFREY PEARCE For personal use only 2018 2018Annual Annual General General Meeting Meeting 55 55
Slide 56: Election of a Director – Alison Mew
ELECTION OF A DIRECTOR – ALISON MEW For personal use only 2018 Annual 2018 General Annual Meeting General Meeting 56 56
Slide 57: Thank You
For personal use only THANK YOU 2018 Annual General Meeting 57