Star Combo Pharma Ltd. · ASX:S66
Star Combo Pharma — H1 2019 Earnings Presentation
17 slides from Star Combo Pharma's earnings presentation, Mar 1, 2019
Slide 1: Investment Presentation and 1H19 Financial Highlights
ASX: S66 28 FEB 2019 INVESTMENT PRESENTATION AND 1H19 FINANCIAL HIGHLIGHTS
Slide 2: Disclaimer
DISCLAIMER This presentation contains information, ideas and analysis which are proprietary to Star Combo Pharma Ltd (ACN 615 728 375) (Star Combo or the Company). By agreeing to receive this information you also agree to respect the confidential nature of this entire presentation. Specifically you
Slide 3: Company Overview
COMPANY OVERVIEW Star Combo Pharma Limited is a vertically integrated brand owner, manufacturer and distributor of vitamins, health and beauty products • Founded in 2004, with 40 employees in Australia and China • 5 key brands with over 150 products • 3 established distribution channels with a focus
Slide 4: Investment Highlights
INVESTMENT HIGHLIGHTS 1H19 revenue growth of 22.9% vs previous corresponding period. EBITDA profitability expected for FY19 Vertically integrated – Can maximise margins and control supply Favourable industry dynamics – Chinese Vitamin and Dietary Supplement demand forecast >US$22 billion by 2020
Slide 5: Financial Highlights
FINANCIAL HIGHLIGHTS FY19 is a transformative year for Star Combo. The company is forecasting to be EBITDA profitable for the full year despite ~$1.5m of additional cost base to support future growth in FY20 and beyond EBITDA A$m Revenue A$m 0.5 40.0 35.0 0 30.0 1H19 -0.5 25.0 20.0 -1 15.0 10.0 1H19
Slide 6: 1H19 Revenue Breakdown
1H19 REVENUE BREAKDOWN Continuing to diversify towards higher margin own brand and online platform sales 1H19 Pro-Forma Revenue $20.3m Own Brand Sales 12.3% Contract Manufacturing 16.6% Online Platform 56.1% Retail Sales 15% 4
Slide 7: Growth Strategy
GROWTH STRATEGY Organic growth from existing business • Little Koala range in early stage of distribution, high demand infant supplements • Chinese registrations (CIQ) imminent on 5 new products • Selling existing product range on newly acquired online platform • Multiple marketing channels and even
Slide 8: Board and Management
BOARD AND MANAGEMENT FOUNDER, MANAGING DIRECTOR Blended Australian pharma experience and Jinxing (Star) Zhang BS(Biochem) Chinese market knowledge • 10 years experience at a medical research company in China • Pioneered the extraction and purification of hyaluronic acid CHAIRMAN, NON-EXECUTIVE DIREC
Slide 9: Business History
BUSINESS HISTORY 2004 2006 2009 2011 2013 2015 2017 Star Combo Relocation to Participated in Commenced Contract Contract manufacturing Increased production Purchased the Living Healthy Australia Rydalmere NSW International Manufacturing (OEM) facility for milk powders and capacity for tablet brand,
Slide 10: Product Overview: Costar
PRODUCT OVERVIEW COSTAR • COSTAR brand established in 2004 • Distributed and sold throughout Australia via Terry White pharmacies • Broad range of vitamins and health supplements 10
Slide 11: Product Overview: Amax, J&K Skin Care and Beauty Products
PRODUCT OVERVIEW Amax, J&K Skin Care and Beauty Products • Amax brand established in 2005 • Amax uses natural ingredients with skin enriching properties • J & K Beauty acquired in 2009 • J & K offers a vibrant line of skincare products for daily skin toning 10
Slide 12: Product Overview: Living Healthy
PRODUCT OVERVIEW Living Healthy • Living Healthy Brand was acquired in 2017 • Recently commenced investment in the brand and marketing expected to generate returns in FY20 and beyond • Distributed and sold throughout Australia via Terry White pharmacies • Broad range of vitamins and health supplemen
Slide 13: Manufacturing / R&D Facility
MANUFACTURING / R&D FACILITY Research and Development and Manufacture at Smithfield facility • Established in 2004 and located in Smithfield, NSW, capacity to expand production significantly • TGA Licence for Non Sterile Medicine Manufacture of Tablets, Hard Shell Capsules, Soft Gel Capsules, Powder
Slide 14: Distribution Network
DISTRIBUTION NETWORK Multiple Direct to Consumer and Wholesale Market Networks in Australia and Offshore • Multiple avenues to market; Australian retail, offshore retail, Chinese distributors and Daigou channels • Terry White provides access to over 400 pharmacies in Australia and Lepu Medical 80,00
Slide 15: China Office
CHINA OFFICE Official Star Combo Pharma office based in China (Chongqing) opened in October 2018 • Now incorporated in China as a wholly foreign-owned enterprise • This is a significant step in alignment to the group’s overall strategy targeting China as a major market contributing to the future com
Slide 16: Market Opportunity "The Fourth Meal"
MARKET OPPORTUNITY “THE FOURTH MEAL” So popular is the daily intake of dietary supplements in China that it has been coined “The Fourth Meal” • Supplements and multivitamins are now part of a trend • Additional driver for health supplements markets is the increased to include in everyday dietary rou
Slide 17: Contact
CONTACT: Su Zhang CEO suzhang@starcombo.com.au 15