Mcpherson's Limited · ASX:MCP
Mcpherson's — Shareholder Meeting (November 2019)
60 slides from Mcpherson's's shareholder meeting presentation, Nov 18, 2019
Slide 1: Mcpherson's Limited AGM 2019
For personal use only Mcpherson’s Limited AGM th 2019 18 November, 2019 CREATING BETTER IN Health Wellness & Beauty
Slide 2: Graham Cubbin, Chairman
Graham cubbin, chairman For personal use only 2 — 18 November 2019
Slide 3: Agenda
Agenda For personal use only 1 Welcome from Graham Cubbin and Chairman’s Address 2 Laurence McAllister, Managing Director’s Address 3 Sales & Marketing – Lori Pirozzi & Donna chan 4 Export – David fielding 5 R&D – Mary pearce 6 New Business – Brett owers 7 Summary – Laurie mcallister 8 Formal RESOLU
Slide 4: Our board
Our board Our board’s experience reflects our strategy For personal use only graham a. cubbin jane m. mckellar grant w. peck Independent Non-Executive Independent Non-Executive Independent Non-Executive Director Director Director geoffrey r. pearce alison j. mew laurence mcallister Independent Non-E
Slide 5: A leading supplier of health, wellness & beauty brands
For personal use only A leading supplier of health, wellness & beauty brands 18 November 2019
Slide 6: Strategy
3 year strategy For personal use only Focus on Explore new Move to strategic Drive value core 6 product growth Customer and supplier From geographic Owned brands platforms partnerships footprint End to end capability and capacity Strategic enablers Strong agency partners complement – supply chain, r
Slide 7: FY19 key financial highlights
FY19 key financial highlights For personal use only Underlying profit before tax FROM CONTINUING OPERATIONS Stat profit AFTER TAX UNDERLYING EPS FROM CONTINUING OPERATIONS +17% on FY18 +165% on FY18 +33% on FY18 NET DEBT Sales REVENUE for 6 core brands R&D INVESTMENT -24% on FY18 13% on FY18 +80% on
Slide 8: Health, Wellness & Beauty – a $17 billion market
HEALTH, WELLNESS & BEAUTY – A $17 billion market For personal use only health WELLNESS beauty ($4.9 Billion, +3.9% vs YA) ($5.7 Billion, +3.8% vs YA) ($6.5 Billion, +2.8% vs YA) 8
Slide 9: Laurie McAllister, CEO and Managing Director
LAURIE MCALLISTER, mCpherson’s Ceo and MANAGING DIRECTOR For personal use only 9 — 18 November 2019
Slide 10: Our management
Our management OUR TEAM team Ensure we have our team fit for the future with appropriate expertise, capabilities and values For personal use only s arah tul l y Paul Wi theri dge Donna Chan Dav i d Fi el di ng L ori Pi roz z i B rett Owers Mary Pearce Mark Brady L aurence McAl l i ster 11
Slide 11: Our strategic business imperatives
our strategic business imperatives For personal use only Refocus McPherson's on Health, 1 Wellness & Beauty with 6 Create a China facing business sustainability and people at the core Ensure we have our team fit for the 2 Revitalise our own McPherson’s brands 7 future with appropriate expertise, cap
Slide 12: Sales & Marketing
A’KIN Australian Tea Tree Oil Detoxifying Mask For personal use only Mcpherson’s Sales & Marketing 13
Slide 13: Leveraging macro trends
Leveraging Macro trends For personal use only CHINA EXPORT DEMAND FOR NATURAL SUSTAINABLE SOLUTIONS PROACTIVE SELF CARE HOLISTIC WELNESS – China middle-class – Global Organic Personal – Renew | Reuse | Recycle | – Global Face Mask Market – Beauty & wellness market in population projected to Care Mar
Slide 14: Owned brand pillars of growth
OWNED BRAND PILLARS OF GROWTH For personal use only INNOVATION EXECUTION PARTNERSHIPS EXPANSION • +80% increased R&D • +45% increase in • Strategic alignment • 12 New Countries in FY19 investment to fuel merchandising investment differentiation • Trading Terms optimisation • +10% increase in A&P • B
Slide 15: #1 Australian Cosmeceutical Brand
#1 Australian Cosmeceutical Brand For personal use only Facial Skincare Pharmacy Channel 125% Revenue Growth FY19 16
Slide 16: Dr. LeWinn's brand transformation in domestic market
Dr. LEWINN’S BRAND TRANSFORMATION IN DOMESTIC MARKET For personal use only TOTAL DR LEWINN’S VALUE GROWTH VS YA ▪ #6 Facial Skincare brand in Pharmacy 50.0 channel 40.0 42.6 ▪ +43% Growth vs YA - fastest growing 30.0 top 10 Pharmacy Facial Skincare brand 20.0 10.0 ▪ #1 Retail Sales Value growth cont
Slide 17: Driving consumer demand through clinically proven sub-brands
Driving consumer demand through clinically proven sub-brands For personal use only ESSENTIAL HYDRATION ADVANCED ANTI-AGEING CORRECTING IMPERFECTIONS PRIVATE FORMULA LINE SMOOTHING COMPLEX ULTRA R4 REVERSADERM +24% +95% +100% +53% Domestic retail sales growth vs LY Domestic retail sales growth vs LY
Slide 18: Innovation success delivered 57% brand growth in FY19
Innovation success delivered 57% brand growth in fy19 For personal use only The most successful Anti-aging mask The #1 NPD Launched October 2019 launch Facial Skincare Launch High demand across 6 Masks sold every minute since launch One sold every 4 minutes Australia & China 19 —
Slide 19: Virtuous cycle accelerating success
Virtuous cycle accelerating success LINE SMOOTHING AUSTRALIA For personal use only COMPLEX 澳大利亚 Dr. LeWinn’s Domestic vs Export Domestic Export #1 range for FY17 FY18 FY19 Dr.LeWinn’s driven by China demand CHINA 排名#1 莱文医生系列 中国 20 —
Slide 20: Domestic revenue growth by category
For personal use only HAIR CARE SKIN CARE PERSONAL CARE 11% Domestic Revenue Growth FY19 22 — 22
Slide 21: Growth through innovation & proven clinical trials
Growth through innovation & proven clinical trials For personal use only Core Rejuvenation Category Expansion High Growth Mask Category Clinically proven Age Defy range Clinically proven Natural Deodorant 100% Natural Eucalyptus Fibres +177% vs YA +241% vs YA 1 in 4 customers new to Natural category
Slide 22: New brand philosophy
New brand philosophy For personal use only Plant Based A-Beauty Clinical Proof A sense of simplicity. Australian Made and Pure, Natural and of the highest Quality High levels of active botanical ingredients, Australian sourced natural ingredients. botanical ingredients. backed by clinical studies an
Slide 23: Driving category growth with smart beauty innovation
DRIVING CATEGORY GROWTH WITH “SMART BEAUTY” INNOVATION For personal use only #1 BEAUTY ACCESSORIES #2 BEAUTY ACCESSORIES #1 HAIR ACCESSORIES +$3.1M retail sales growth Glam Magnetising EyeLiner #1 Lash NPD Extending Pharmacy leadership to 48% Extending market leadership to 25.5% +$1.3M incremental r
Slide 24: Connecting with the community by enriching children's lives
CONNECTING WITH THE COMMUNITY BY ENRICHING CHILDREN’S LIVES For personal use only 27 —
Slide 25: Leading sustainability growth
LEADING SUSTAINABILITY GROWTH THROUGH CONSUMER, MARKET AND ENVIRONMENTAL INSIGHTS For personal use only MULTIX SUSTAINABILITY SWISSPERS #1 COTTON Remove | Renew | Reuse | Renew 58% Market Share 73% market share; +13M MAT value growth vs YA +9% growth in latest quarter 29 —
Slide 26: Amplifying major launches across digital
Amplifying major launches across digital For personal use only web Digital Advertising Video SOCIAL +81% increase in visits to 44.7 Million 2.2M video views 18M social reach our sites vs LY Ad Impressions +317% Increase vs LY 3M+ SOCIAL Reach via influencers 30 —
Slide 27: Channel landscape overview
Channel LANDSCAPE Overview For personal use only Market &Retailer RETAILER SHARE SHIFTS PRICING AND PROMOTIONS RANGE RATIONALISATION Dynamics DIFFERENTIATION SUSTAINABILITY RETAILTAINMEMT Channel PHARMACY GROCERY P&C Performance 31
Slide 28: MCP in positive growth despite range rationalisation pressure
MCP IN positive growth despite pressure on range rationalisation For personal use only National Dollars Growth % YA Total Grocery excl. Tobacco Mcphersons Cons Prod 9.0 8.0 7.1 8.2 7.9 7.0 6.0 5.0 4.0 3.0 2.2 2.0 1.2 1.4 1.0 0.0 Qtr to 04/11/18 Qtr to 03/02/19 Qtr to 05/05/19 32
Slide 29: MCP driving Pharmacy growth with strong retailer partnerships
MCP driving Pharmacy growth with Strong retailer partnerships For personal use only Australia Pharmacy Dollars Growth % YA Total Defined Pharmacy Total McP Core brands 14.0 11.9 12.0 10.9 9.7 10.0 8.9 8.0 6.0 4.0 3.2 2.9 2.0 1.5 0.8 0.0 Qtr to 16/09/18 Qtr to 16/12/18 Qtr to 17/03/19 Qtr to 16/06/19
Slide 30: Strategic partnerships driving value
Strategic Partnerships Driving Value Strategic customer partnership key elements For personal use only 1 Top to top meetings 2 Joint Business Planning 3 Optimised Trading Terms 4 First to Market Launches 5 Exclusive Offers 6 Integrated Promotional Programs 34
Slide 31: Retailer activations driving share gains
Retailer ACTIVATIONS DRIVING share gains For personal use only GLAM Application Bars CWH Beauty Break Priceline Tactical 120 Applications in 4 HRS Most successful Dr. LeWinn’s promotion ever Customer spending +27% more per basket 129% growth +469% growth 569% growth 46.2% Share +18% share points 15.
Slide 32: Winning in store with category-led solutions
WINNING IN STORE WITH CATEGORY LED Solutions For personal use only AWARD WINNING NEW PRODUCT LAUNCHES REAL ESTATE OPTIMISATION CATEGORY SOLUTIONS High impact in high traffic areas Education and Navigation Assist shopper navigation 36
Slide 33: Aligning the retailer instore and online experience
ALIGNING THE RETAILER INSTORE AND and online experience For personal use only 37
Slide 34: Mcpherson's Export
For personal use only Mcpherson’s export Dr lewinn’s Line Smoothing Complex S8 38
Slide 35: Expanding across Asia
EXPANDING ACROSS ASIA strategy Continue to expand our presence geographically with a focus on Asia For personal use only Capabilities people Global coverage innovation 30 Dedicated Headcount for MCP npd Driven by Asian Southeast Asian expansion Strong partnerships beautY trends Execution distributio
Slide 36: Virtuous Cycle
Virtuous Cycle 良性循环 For personal use only Trusted Partnerships AUSTRALIA Speed To Market 与合作伙伴的高度互信 澳大利亚 快速响应市场 Agreed Business Model Flexibility To React To Change 相互认可的生意模式 灵活应对变化 Appropriate Pricing Corridors Rigorous Processes 合理的价格体系 严格的过程控制 China Continuity Of Supply 中国 Adaptable To Market Dyn
Slide 37: Dr. LeWinn's – driving a virtuous cycle
DR. LEWINN’S – DRIVING A VIRTUOUS CYCLE For personal use only Australia Pharmacy DR. LEWINN'S EXFACTORY SALES Dr. LeWinn’s Line Smoothing DOMESTIC VS EXPORT Complex Value Growth % vs YA 94.7% 29.3% -9.5% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 MAT 10/17 MAT 10/18 MAT 10/19 FY 2017 FY 2018 FY 2019 Total
Slide 38: Access China – Livia Wang
Livia Wang For personal use only Chief Executive Office Access China 44
Slide 39: ABM & Dr. LeWinn's joint venture
ABM & dr. lewinn’s Joint Venture For personal use only 1 HK based jv representing greater china (PRC) 2 Abm target: AUD$35 Mill annual purchases, AUD$82.5 over 3 yrs 3 Secures earnings from the china market 4 Significant upside opportunity for dr. lewinn’s 5 ABM & MCP exploring future potential acqu
Slide 40: ABM's accelerating growth journey
ABM’s Accelerating Growth Journey For personal use only + AUSTRALIA 澳大利亚 Rapid Growth 800+ Employees Reach: 20+ Countries Executed 500+ Events in 2019 2020 Revenue: On track for China AUD $1 Bill 中国 2.7 Million ABM’ers 46
Slide 41: Celebrating Success
For personal use only Celebrating Success
Slide 42: ABM Dr. LeWinn's 11.11 sales update
ABM Dr. LeWinn’s 11.11 Sales Update 单创 11.11澳新超品节 For personal use only 疯抢日开抢1秒钟 超40,000人同 Over 40,000+ online users shopping for Dr. LeWinn’s products within 1 second of 时抢单 Brand Day starts 43,657 Triple 20,961 Trinity 40,544 LSC Mask Collagen Surge Three LSC NPD SKUs (Toner, Action Day Packs were
Slide 43: New Business Development
For personal use only Mcpherson’s New Business development 49
Slide 44: M&A growth remains a strategic priority
MERGERS & ACQUISITIONS Strategic Investments For personal use only M&A growth remains a strategic priority M&A Growth Health, Wellness & Beauty focused Organic Growth Strong balance sheet to fund acquisitions Mcpherson’s Rigorous process and criteria base Have been actively approaching targets ABM,
Slide 45: Building long term growth via joint ventures
BUILDING LONG TERM GROWTH VIA joint ventures For personal use only • Anti-Aging Skincare • NZ Deer Milk Hero Ingredient • China & European potential • Tanning and Skincare • Targeting fast growing, high-spending Millennial consumers • Recruiting young consumers to MCP portfolio • E-Commerce beauty •
Slide 46: Mcpherson's R&D
For personal use only Mcpherson’s R&D Manicare Sonic Mini – Facial Cleansing Brush 52
Slide 47: R&D investment fuelling growth
R&D INVESTMENT FUELLING GROWTH IN Sales and Marketing For personal use only capability Efficiency Rigour R A C I Design – Based Role Portfolio Thinking Clarity balance Stage-gate NPD Process How do we do it? 53
Slide 48: R&D investment fuelling growth
R&D INVESTMENT FUELLING GROWTH IN Sales and Marketing For personal use only FY18 FY19 FY20 10% Growth on Prior year Est 2x RSV on prior year $13.4M RSV 6 ~60 products 11 ~100 products 11 ~200 products 54
Slide 49: Summary
For personal use only A’Kin Natural Australian Skincare Mcpherson’s Summary 56
Slide 50: High quality of FY19 earnings
High Quality of FY19 Earnings For personal use only 1 Increase in proportion of “owned brand” sales from 69% in FY18 to 76% in FY19 2 Reduction in proportion of sales in Grocery, increase in Pharmacy 3 Absence of “significant items” in FY19 4 Very strong operating cash conversion – 117% 5 Key strate
Slide 51: Formal resolutions
For personal use only Mcpherson’s Formal resolutions 58
Slide 52: Agenda item 1: financial statements and reports
AGENDA ITEM 1: financial statements and ReportS For personal use only To consider the financial statements, the Directors’ report and the auditors’ report for the company for the year ended 30 June 2019. Note that there is no requirement for shareholders to approve these reports. An opportunity will
Slide 53: Agenda item 2: Remuneration report
AGENDA ITEM 2: REMUNERATION REPORT For personal use only To adopt the Remuneration report for the financial year ENDED 30 June 2019. In accordance with the Corporations Act 2001 ( Cth) Number of Proxies (Corporations Act), this resolution is advisory only (m) % and does not bind the Company or the d
Slide 54: Agenda item 3: Re-election of Graham Cubbin
Agenda item 3: rE-election of graham cubbin For personal use only To consider, and, if thought fit, to pass the following resolution as an ordinary resolution. Number of Proxies (m) % For 43.8 98.0 “To elect, as a director of the Company, Mr. Graham Against 0.4 0.9 Cubbin, who retires by rotation as
Slide 55: Agenda item 4: Approval of performance rights to Laurie McAllister
AGENDA ITEM 4: Approval of Performance rights to Laurie Mcallister For personal use only To consider, and, if thought fit, to pass the following resolution as an ordinary resolution. “That for the purposes of Part 2E.1 of the Number of Proxies Corporations Act and ASX Listing Rule 10.14, and for (m)
Slide 56: Agenda item 5: Approval of potential termination benefits
AGENDA ITEM 5: approval of potential termination benefits For personal use only To consider, and, if thought fit, to pass the following resolution as an ordinary resolution. “That for the purposes of sections 200B and 200E of the Number of Proxies Corporations Act, and for all other purposes, the gi
Slide 57: Agenda item 6: Benefits on transfer of undertaking or property
AGENDA ITEM 6: benefits on transfer of undertaking or property For personal use only To consider, and, if thought fit, to pass the following resolution as an ordinary resolution. “That for the purposes of sections 200C and 200E of the Number of Proxies Corporations Act, and for all other purposes, t
Slide 58: Agenda item 7: Issue of securities under performance rights plan
AGENDA ITEM 7: issue of securities under performance rights plan For personal use only To consider, and, if thought fit, to pass the following resolution as an ordinary resolution. Number of Proxies (m) % “That for the purposes of ASX Listing Rule 7.2 (Exception For 43.0 96.2 9), approval is given t
Slide 59: Agenda item 8: Approval of 10% placement capacity
AGENDA ITEM 8: approval of 10% placement capacity For personal use only To consider, and, if thought fit, to pass the following resolution as a special resolution. Number of Proxies (m) % “That for the purposes of ASX Listing Rules 7.1A, For 31.6 70.9 approval is given to the issue of equity securit
Slide 60: Thank you
For personal use only 67 — you Thank