Candy Club — Corporate Update (November 2020)
34 slides from Candy Club's corporate update, Nov 9, 2020
Slide 1: Business Update
For personal use only BUSINESS UPDATE November 2020 1
Slide 2: Disclaimer
Disclaimer For personal use only Candy Club Holdings Limited (‘the Company’, ‘CLB’) advises that these presentation slides may contain forward looking statements which may be subject to significant uncertainties outside of CLB’s control. No representation is made as to the accuracy or reliability of
Slide 3: About Us
ABOUT US For personal use only Candy Club is an ASX listed, US-based confectionery company that is focused on its fast-growing B2B wholesale business, which has grown out of a long-running B2C subscription business. Candy Club operates through two main distribution channels – traditional brick-and-m
Slide 4: Company Overview
For personal use only COMPANY OVERVIEW
Slide 5: Company Background
COMPANY BACKGROUND For personal use only Founded in 2015, Candy Club started as a pureplay business-to-consumer (B2C) subscription-only business. Candy Club re-calibrated its strategy in September 2019, pivoting its business to focus on selling its products to brick and mortar retailers and eCommerc
Slide 6: B2B Market Opportunity
B2B MARKET OPPORTUNITY For personal use only Annual sales in the US confectionery market is US$40bn. Candy Club has identified a massive untapped opportunity in this sector. Key benefits of the candy category to retailers; Reliable gross Long shelf life Defensive margins product US$40 billion Annual
Slide 7: White Space Strategy
WHITE SPACE STRATEGY In September 2019 the Company identified under-utilised counter For personal use only space at premium retailers across the US as a growth opportunity and an untapped sales and distribution channel for Candy Club products. Today the “white space” opportunity is comprised of 3.2+
Slide 8: Product Differentiation
PRODUCT DIFFERENTIATION For personal use only MASS MARKET PRODUCTS M&M’s Hershey’s Snickers Confetti Drops Gummy Dinos Sour Pink Cadillacs Sour Patch Kids Haribo Gummy Bears Skittles Rainbow Sour Belts Chocolate Pretzels Blue Razz Laces 8
Slide 9: Jan – Oct 2020 At a Glance
JAN – OCT 2020 AT A GLANCE For personal use only 2020 has been a transformational year for Candy Club as the business will record a remarkable 5x – 6x increase in B2B revenue on a YoY basis despite operating in an extremely challenging environment in the US The Company is beyond the ‘proof of concep
Slide 10: Jan – Oct 2020 At a Glance
JAN – OCT 2020 AT A GLANCE For personal use only Candy Club’s B2B growth rate is accelerating on a YoY basis from 100% in the months preceding the COVID- pandemic to an average of almost 800% during the last 3 months as the Company found new digital markets to sell its B2B products during the pandem
Slide 11: Highlights – Sales
HIGHLIGHTS – SALES For personal use only Candy Club has secured distribution through 12+ prominent national retailers including Bloomingdales, Macy’s, Nordstrom Rack, Kohl’s, Caribou Coffee, Fresh Markets, Hallmark Stores and Winco The Company has also built a strong, loyal and fast growing followin
Slide 12: Highlights – Sales
HIGHLIGHTS – SALES For personal use only The Company has no client concentration with any one retailer or in any one vertical Candy Club has enormous upside potential with its current customers, where store penetration is at ~33% of all locations and growing Returning national and regional New natio
Slide 13: Highlights – Corporate
HIGHLIGHTS - CORPORATE For personal use only Candy Club has a strong management team with an outstanding track-record of business building with deep experience in the confectionery sector The Company has built a robust B2B customer acquisition strategy with multiple revenue streams including: Dedica
Slide 14: KPIs - Total Retail Doors, Customers & Re-order Rates
KPI’S - TOTAL RETAIL DOORS, CUSTOMERS & RE-ORDER RATES For personal use only Total Retail Doors & Customers Candy Club’s total number of retail doors continued to 15,000 increase from 4500 as at 31 December 2019 to more than 13,000 as at 31 October 2020. 10,000 The number of customers has grown near
Slide 15: Why We Are Winning – Retailers and Consumers Love Our Products
WHY WE ARE WINNING – RETAILERS AND CONSUMERS LOVE OUR PRODUCTS For personal use only Faire and Tundra are two of the most prominent online wholesale platforms that carry Candy Club’s products. Candy Club’s retailer satisfaction ratings are outstanding as Faire averages at 4.8 out of 5 while on Tundr
Slide 16: What Our Retail Customers Are Saying
WHAT OUR RETAIL CUSTOMERS ARE SAYING For personal use only Meredith S., Category Manager /Lead Buyer – National Grocery Chain “The displays look great in stores and sales-wise, the items are performing very well! We’ve sold almost 6000 units so far which I think puts us around a 35% sell through to
Slide 17: Vision
VISION For personal use only The Company believes that it has the opportunity to become the largest specialty market confectionery brand in the US over the next several years Candy Club is focused on continuing to build on sales and marketing initiatives and expand its distribution footprint as it h
Slide 18: Vision (cont.)
VISION (cont.) For personal use only Development of a company-owned and operated B2B selling portal and other technology-stack improvements. Doubling the Company’s operational throughput to meet its current and future revenue demand. Re-evaluate the B2C subscription business for ways to efficiently
Slide 19: The Future Looks Bright
THE FUTURE LOOKS BRIGHT For personal use only The Company’s leadership believes that if it is successful in building a business that achieves a US$50 million run-rate, an attainable goal in the next 18-24 months based on its recent growth trajectory, it will be in position to generate significant sh
Slide 20: Appendix
For personal use only APPENDIX
Slide 21: Candy Club Timeline
CANDY CLUB TIMELINE For personal use only • Focused on adding scale and validating all • Australian roadshow • B2C turns profitable on KPI metrics and pre-IPO rounds; lower scale • First US-based subscription economy • Exponential growth in investment loses momentum B2B business 2015 2016 2017 2018
Slide 22: Candy Industry Overview
CANDY INDUSTRY OVERVIEW For personal use only Annual sales exceeds 97% US A customer makes 18 US$40 billion with household purchases annually on 2% growth p.a. penetration average Candy is the primary category sold at the check-out register with 100% penetration in the mass market, including: Big-bo
Slide 23: White Space Strategy
WHITE SPACE STRATEGY For personal use only There are several reasons why this opportunity exists, including: Category leaders are more mass market-focused and their products are not a good fit for specialty market retailers due to pricing, package and lack of product differentiation Fragmented speci
Slide 24: White Space Strategy
WHITE SPACE STRATEGY For personal use only Being successful in the specialty market requires: Differentiated Premium Giftable Higher price products products packaging points … and Candy Club has it all 24
Slide 25: Income Statement
INCOME STATEMENT For personal use only in US$ million 1Q FY2020 2Q FY2020 3Q FY2020 OCT 2020* JAN – OCT 2020* Gross Revenue 1.41 2.35 2.18 1.67 7.61 Discounts & Refunds -0.18 -0.17 -0.08 -0.03 -0.46 Net Revenue 1.23 2.18 2.10 1.64 7.15 Cost of Goods Sold -0.71 -1.28 -1.19 -0.93 -4.11 Gross Margin 0.
Slide 26: Balance Sheet
BALANCE SHEET in US$ million as at 30 SEPT 2020 For personal use only Cash 0.97 Accounts Receivable 0.27 Inventory 3.73 Other current assets 0.52 TOTAL CURRENT ASSETS 5.49 Fixed assets 0.03 Other assets 0.42 TOTAL LONG TERM ASSETS 0.45 TOTAL ASSETS 5.94 Accounts Payable 1.48 Other current liabilitie
Slide 27: Statement of Cash Flow
STATEMENT OF CASH FLOW For personal use only in US$ million 1Q FY2020 2Q FY2020 3Q FY2020 Beginning Cash 0.53 0.35 0.64 Cash from provided/(used) from Operating Activities -1.19 -0.93 -1.90 Cash from provided/(used) from Investing Activities 0.00 -0.10 -0.01 Cash from provided/(used) from Financing
Slide 28: Cap Table & Top Shareholders
CAP TABLE & TOP SHAREHOLDERS For personal use only Total shares outstanding: 258,632,192 Total options outstanding: 104,095,038 Total convertible notes outstanding: 1,319,600 Total shares on a fully diluted basis: 401,844,030 Position Holder Name Holding % IC 1 49,300,514 19.06% JCKB PTY LTD 2 21,74
Slide 29: Director Holdings and Substantial Shareholders
DIRECTOR HOLDINGS AND SUBSTANTIAL SHAREHOLDERS Director Holdings For personal use only Chi Kan Tang 30,379,049 Ordinary Shares 11,214,711 Listed Options 260,000 Convertible notes with a face value of US$1, conversion price A$0.04 (4 cents), for each Share issued upon Conversion the noteholder will r
Slide 30: Executive Board
EXECUTIVE BOARD For personal use only Keith Cohn Founder, CEO & Executive Director More than 20 years of experience in the consumer industry, a 4x serial entrepreneur and startup executive. Founder & CEO, Vendare Media, a leading adtech company with 300 employees and annual sales of A$200 million. F
Slide 31: Executive Board
EXECUTIVE BOARD For personal use only James Baillieu Chairman Mr Baillieu brings a wealth of corporate experiences to Candy Club, having previously served as Non-Executive Chairman of BidEnergy Limited (ASX: BID), which was the best performing stock on ASX under his leadership. Mr Baillieu was also
Slide 32: Executive Board
EXECUTIVE BOARD For personal use only Andrew Clark Non-Executive Director Mr Clark joined Candy Club Board with a wealth of knowledge gained in executive and senior leadership positions whilst working for more than 20 years in the Consumer Goods sector. Domestic and global roles held in large multin
Slide 33: Executive Board
EXECUTIVE BOARD For personal use only Kan Tang Non-Executive Director Founding Partner of Asia Summit Capital, a private equity firm focused on consumer growth and the technology sector in Indonesia and Southeast Asia. Kan co-founded Asianlogic which was listed on UK’s AIM stock exchange in 2007 rai
Slide 34: Thank You
For personal use only Thank You. 34
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