Charlotte's Web Holdings, Inc. · TSX:CWEB
Charlotte's Web — Investor Presentation (June 2020)
25 slides from Charlotte's Web's investor presentation, Jun 22, 2020
Slide 1: Brands – Science – Leadership
BRANDS – SCIENCE - LEADERSHIP Charlotte’s Web, Inc. - Confidential TSX: CWEB | OTCQX: CWBHF Information Q2 2020
Slide 2: Disclaimers
DISCLAIMERS Forward-Looking Information Certain statements contained in this presentation constitute forward-looking statements and forward-looking information (collectively, “forward-looking statements”). Such forward-looking statements relate to possible events, conditions or financial performance
Slide 3: Founded in 2013, Boulder, Colorado
Founded in 2013 Boulder, Colorado C H A R L OT T E ’ S W E B WA S N OT S TA R T E D Charlotte is our true north driving our passion and dedication to the best hemp A S A C O M PA N Y, extracts for product quality, safety and consistency. I T WA S S TA R T E D A S A M I S S I O N What began as her st
Slide 4: #1 Brand in the Total Hemp-Derived CBD Market
#1 BRAND I N T H E CHARLOTTE’S WEB TOTA L H E M P - D E R I V E D ANNUAL REVENUE ($MM) CBD MARKET 1 94.6 OUTPACING PEERS WITH 69.5 2019 REVENUE GROWTH OF 36% year-over-year2 40.0 14.7 3 2016 2017 2018 2019 (1) By market share Company estimates (2) Represents 2019 growth over 2018 (3) Charlotte’s Web
Slide 5: Quarterly Performance – Q1-2020
Quarterly Performance – Q1-2020 30 Q1- 2020 Financial Highlights 4-Yr Quarterly Revenue Growth ($MM) 25 25.1 ➢ Organic consolidated revenue of $21.5 25 22.8 ➢ 70% gross margin 21.7 21.5 21.5 ➢ Adjusted EBITDA loss of $5.7M 20 ➢ $53.0M cash, $114.9M working cap 17.2 17.7 15 Q1- 2020 Business Highligh
Slide 6: Charlotte's Web Advantage
C H A R LOT T E ’ S W E B A DVA N TAG E 1 . B R A N D ST R E N G T H 2 . V E RT I C A L LY I N T EG R AT E D S U P P LY C H A I N 3 . I N N OVAT I O N , S C I E N C E , SA F E T Y 4 . M A N AG E M E N T T EA M 6
Slide 7: Advantage - Brand Strength
A DVA N TAG E - B R A N D ST R E N G T H CHARLOTTE’S WEB IS #1 IN MARKET SHARE AWARENESS Charlotte’s Web is #1 in awareness Charlotte’s Web is #1 in converting awareness to loyalty SATISFACTION Charlotte’s Web is #1 in satisfaction Charlotte’s Web is #1 in intent to repurchase Charlotte’s Web is #1
Slide 8: Advantage - Vertically Integrated Supply Chain
A DVA N TAG E - V E RT I C A L LY I N T EG R AT E D S U P P LY C H A I N PROPRIETARY GENETICS • Quality, consistency and trust LONG-TERM CULTIVATION • Traceability of ingredient streams PARTNERSHIPS HARVEST & PROCESS • Transparency of the manufacturing process BIOMASS • Grown in the U. S. A. IN-HOUS
Slide 9: Advantage - Innovation
ADVANTAGE - INNOVATION Original Portfolio 3 Gummies – NEW 2019 12 Canine Products – NEW 2019 Note: Product offering as of Q1, 2020 9
Slide 10: Advantage - Tested. Certified. Safe.
ADVANTAGE - TESTED. CERTIFIED. SAFE. All Products Tested up to 20 Times • Testing through entire cultivation, extraction and manufacturing to final packaged product • Includes 60-panel toxins test • Batch test results available for every item sold Certified • FDA approved cGMP certified facilities •
Slide 11: Navigating a Dynamic CBD Landscape
N AV I G AT I N G A DY N A M I C C B D L A N D S C A P E 1 . BA L A N C I N G R EG U L ATO RY F R A M E WO R K D E V E LO P M E N T 2 . C W CO M P E T I T I V E D I F F E R E N T I AT I O N 3 . FO O D / D R U G / M A S S C H A N N E L D E V E LO P M E N T 11 11
Slide 12: Expanding the Portfolio Advantage
E X PA N D I N G T H E P O RT FO L I O A DVA N TAG E Topical Segment Underdeveloped Expand Consumer Segment CBD consumer segmentation Charlotte’s Web Future Category Segment Portfolio Mix Mix Topicals 12% 30% Strongest Anchor to traditional healthcare Weakest Tinctures 49% 25% Weakest Strongest Caps
Slide 13: Abacus: Acquisition of Leading Topical Brands
A BAC U S : ACQ U I S I T I O N O F L EA D I N G TO P I C A L B R A N D S Consumer Offering Health Care Practitioner Offering ADVANCED RELIEF Powered by Nature™
Slide 14: OTC Pedigree
OTC P E D I G R E E Proprietary Formulations Manufacturing & Quality Patent-pending formulations based on OTC pharmaceutical-grade products 15+ years of R&D by Aidance Scientific (former parent) Produced in cGMP compliant facility by contract manufacturer Utilizing active pharmaceutical ingredients,
Slide 15: 1+1 = 3 Scale Across Channels
1 +1 = 3 S C A L E AC RO S S C H A N N E L S 11,675 ~21,000 17,548 Unique Doors Doors Doors Limited Overlap 15 15
Slide 16: Expanding Category Leadership
E X PA N D I N G C AT EG O RY L EA D E RS H I P 1 . L E V E R P O RT FO L I O D I F F E R E N T I AT I O N 2 . S C A L E AC RO S S C H A N N E L L EA D E RS H I P 3 . E X PA N D L EA D I N G ECO M M E R C E O F F E R 4 . L EA D W I T H S C I E N C E 5 . E X PA N D & AU TO M AT E D I ST R I B U T I O
Slide 17: Advantage: Portfolio Differentiation
ADVANTAGE: PO RTFO LIO DIFFERENTIATIO N PORTFOLIO FOOTPRINT CREDIBILITY TECHNICAL ECOSYSTEM Segments Ingestibles Topicals Data Content Bath & Beauty 16K Health Care Practitioners Pet Channels FDM Ecommerce Experiences Natural Ecommerce Health Care Practitioners Education & Science 17
Slide 18: Advantage: Channel Scale
A DVA N TAG E : C H A N N E L S C A L E Market Share Position - By Channel Channel Distribution COMBINED SHARE* INDEX VS NEXT COMPETITOR CHANNEL DISTRIBUTION FOOD #1 137 BRAND FOOD DRUG NATURAL eCOMM CHARLOTTE’S WEB DRUG #1 316 TOTAL FDM #1 207 CBD MEDIC NATURAL #2 79 HARMONY HEMP eCOMMERCE #1 N/A 1
Slide 19: Expanding: eCommerce Cross-Selling
E X PA N D I N G : e CO M M E RC E C RO S S - S E L L I N G EXPANDING CAPABILITIES • Superior Analytics • Breakthrough Insights • Advantaged Segmentation • Personalized Communication • Rapid Test & Learn IMPROVING KPI’s • Traffic • Conversion • Average Order Value 750,000 Active List • Retention Jul
Slide 20: Advantage: Build the Science Credentials
A DVA N TAG E : B U I L D T H E S C I E N C E C R E D E N T I A L S Launched CW Labs - March 2020 • Co-located in the Hauptman Woodward Medical Research Institute in Buffalo, NY and Charlotte’s Web labs in Boulder, CO • Taps into the SUNY System – 64 Connected Campuses across New York • Product deve
Slide 21: Expanding: Scale & Automate
E X PA N D I N G : S C A L E & AU TO M AT E In-House Production • New 137,000 sq ft cGMP grade manufacturing and R&D facility • Extraction, production, distribution and R&D expansion • CPG & Ecommerce shipping and distribution • Staged build-out thru 2020 –– Shipping end of Q2; Production end of Q3
Slide 22: Advantage Management Team
Deanie Elsner Russ Hammer David Panter Jared Stanley Tony True Perry Antelman CEO CFO COO CHIEF CULTIVATION CHIEF CUSTOMER PRESIDENT, TOPICALS • Kellogg’s • Caleres Brands • Estée Lauder OFFICER OFFICER • Abacus Health CEO • P&G • ORBITZ INC • Luxottica Retail • PHARMAVITE • Acquired June 2020 • Kra
Slide 23: Balance Sheet & Capitalization
BALANCE SHEET & CAPITALIZATION BALANCE SHEET MARCH 31, 2020 CAPITALIZATION June 22, 2020 All figures shown in millions, US$ Cash $53.0 Basic Common Shares Outstanding 101,787,521 $114.9 Proportional Voting Shares (400:1) 92,455.5775 Working Capital (400:1 = 36,982,230) Total Assets $190.2 Effective
Slide 24: Summary
S U M M A RY • MARKET SHARE LEADER • EXPERIENCED CPG LEADERSHIP TEAM • E V O LV I N G T H E P O R T F O L I O , I N F R A S T R U C T U R E A N D C A PA B I L I T I E S • B A C K E D B Y S C I E N C E A N D D ATA • B E S T P O S I T I O N E D T O N A V I G AT E T H E O P E R AT I N G L A N D S C A P
Slide 25: Charlotte's Web Holdings, Inc.
TSX:CWEB | OTCQX:CWBHF Charlotte’s Web Holdings, Inc. 1600 Pearl Street Boulder, Colorado USA www.charlottesweb.com Cory Pala Director of Investor Relations (720) 484-8930 25 IR@CharlottesWeb.com
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