Comvita Limited · NZX:CVT
Comvita — H1 FY2025 Earnings Presentation
28 slides from Comvita's earnings presentation, Feb 25, 2025
Slide 1: Back to basics: Half Year Results FY25
INVESTOR PRESENTATION Back PRESENTED BY: Brett Hewlett, CEO HALF YEAR RESULTS F Y 2 5 to basics Nigel Greenwood, CFO 25 February 2025
Slide 2: Important Notice
IMPORTANT Notice This presentation is given on behalf of Comvita They should not be used in substitution for, or which should not be regarded as a reliable Limited. Information in this presentation: isolation of, Comvita’s unaudited interim financial indicator of future performance; statements. We m
Slide 3: Summary: Back to basics
Summary Back to basics • Market / industry remains challenging • Back to basics – repositioning business for new reality • Culture reset – Trust and transparency, tighter controls • Stabilisation of business with focus on NC and FCF • Improving operational efficiencies • Market Outlook steadily impr
Slide 4: Performance stabilising
Performance stabilising Cash flow improving as we refine our operations Revenue Gross Profit Opex NPAT $99.7 M $50.5 M $56.0 M ($6.5 M) (5.3%) vs PCP* (20.1%) vs PCP* (8.5%) vs PCP* (164%) vs PCP* Inventory Net Debt Operating Cash Free Cash Flow Flow $120.8 M $81.6 M $9.8 M $2.0 M ($23M) vs PCP* $85
Slide 5: Accounting irregularities
Accounting irregularities Financial Restatements Prior Year Adjustments FY-2024 Sales and 30 June 30 June ▪ Information identified in late 2024 regarding reliability of some sales and accounts FOR THE YEAR ENDED Sales Inventory 2024 2024 Expenses receivable balances in FY23/24 led to internal review
Slide 6: Update on Bank Discussions
Update on Bank Discussions Discussions remain ongoing with our Bank Syndicate • Our current financial performance does not enable us to achieve our current Bank Syndicate covenants • We agreed a revised bank covenant structure for 31 December 2024 with all revised covenants being met • Without furth
Slide 7: Market and Industry
HY25 Market and Industry 7
Slide 8: Industry dynamics
Industry dynamics Honey production fell 56% between 2020 and 2023 COM VITA INVEST OR PRESE NT AT IO N HALF YEAR RESULT F Y25 8
Slide 9: Industry dynamics: A crisis for some and an opportunity for others
Industry dynamics A crisis for some and an opportunity for others • Industry regulation and oversight is proceeding with a merger of the Export Value MAT (m) - Total for all three existing industry bodies countries 600 • Unsustainable "price-dumping" taking place to move industry-wide 500 surpluses
Slide 10: Market dynamics
Market dynamics The Category continues to grow and evolve • Cautious consumer sentiment in China appears to have stabilised but remains soft • Heavy price discounting by new entrant Manuka brands continues • The Manuka Honey category is growing globally • Category is segmenting into every-day value,
Slide 11: Segment Performance
HY25 Segment Performance 11
Slide 12: Greater China
GREATER CHINA GREATER CHINA SALES - HALF YEAR 60 • Depressed consumer sentiment and aggressive competitor price 50 promotions impacting revenue 40 NZD$000 • Economic outlook remains soft – positive on long-term prospects 30 • Gross margin stable as we leverage our omni-channel capability 20 • #1 pre
Slide 13: North America
NORTH N O R T HAMERICA A ME RIC A N. AMERICA SALES HALF YEAR 25 20 • Category growing and evolving NZD$'000 15 • Continued growth in both offline & online channels • Total revenue up 12% vs PCP 10 • Regaining market share 5 12 17 21 13 15 • Confirmed return of lost territory with largest club retail
Slide 14: Rest of World
REST OF WOR LD A US TR AL IA + NE W ZE A LA N D 1H24 Vs. NZD 000s 1H25 Restated Variance pcp Rest of Asia sales +$2.9M or 14.9% Rest of Asia Sales 22,075 19,213 2,862 14.9% • Challenging environment with heavy competitor discounting Net Contribution 1,822 2,600 (778) (29.9%) • Strength in Omni-chann
Slide 15: Back to basics
HY25 Back to basics 15
Slide 16: Back to Basics: Repositioning the business for new reality
Back to Basics R e p o s i t i o n i n g t h e bu s i n e s s f o r n e w r e a l i t y • Culture reset – trust and transparency, tighter controls • Focus on growing Net Contribution and Cashflow • Radically simplified organisation; ✓ Scaled-back senior LT by 4: 2x Regional CEOs, BDM, CTO ✓ Closed U
Slide 17: Way forward
FY24 Sales Split by Segment Way forward 6% 2% Greater China O u r u n d e r l y i ng c o r e a t t r i bu t e s s e ts u s a p ar t 13% ANZ 43% Rest of Asia North America 18% Other EMEA • Strong Brand – in premium categories: 18% ✓ #1 in China, HK, Singapore and S. Korea FY24 Sales Split by Channel
Slide 18: Long-term performance
Long-term performance 50-year track record REVENUE 2020-2024 250 Rev +$5M 2015-2019 Rev +$18M 200 150 2010-2014 Rev +$30M 2005-2009 100 Rev +$50M 50 31 39 52 71 85 82 96 104 115 153 185 156 178 171 196 192 209 232 201 0 Dec'05 Dec'06 Mar'08 Mar'09 Mar'10 Mar'11 Mar'12 Mar'13 Mar'14 Mar'15 Jun'16 Jun
Slide 19: Financials
HY25 Financials 19
Slide 20: Income statement
Income statement 31 Dec • Total Revenue: $99.7m down $5.6M (-5.3%) on PCP In the last 3 31 Dec 2023 months we have seen revenue stabilizing YOY For the 6 Months ended 2024 Unaudited Variance Variance NZD 000s Unaudited Restated $ % • Gross Profit Declined: Impacted by lower direct margin, reduced ma
Slide 21: Cashflow
Cashflow The cash flow position has significantly improved compared to prior year due to disciplined financial management with: 31 Dec 31 Dec 2023 • Net Operating Cash inflow, at $9.8M an improvement of 2024 Unaudited Variance As at $16.0M on PCP primarily due to the $15M reduction in NZD 000s Unaud
Slide 22: Key Balance Sheet Items
Key Balance Sheet Items • Net debt $81.6M, a $1.9M increase on FY2024, due to initial losses incurred, deferred HoneyWorld settlement and annual site payments to landowners all occurring in Q1 creating a headwind. Net debt has 30 June 31 Dec decreased by $16.5m over Q2. 2024 2023 As at 31 Dec NZD 00
Slide 23: Inventory
Inventory Total Inventory declined $15M (-11.1%) vs June 24, reflecting 30 June 31 Dec effective inventory management and strategic stock 31 Dec 2024 2023 optimisation. As at 2024 Unaudited Variance Variance Unaudited NZD 000s Unaudited Restated $ % Restated • Finished Goods: Decreased by $12.7M (-1
Slide 24: Summary
Summary 24
Slide 25: Outlook
Outlook • Flat Sales overall through to end of FY25 • China market expected to remain soft for balance of 2025 • Steadily improving situation in Rest of Asia and North America • Margin to remain stable • Margin headwinds continue as we work through current inventory • Steadily improving cashflow pos
Slide 26: Summary: Back to basics
Summary Back to basics • Market / industry remains challenging • Back to basics – repositioning business for new reality • Culture reset – Trust and transparency, tighter controls • Stabilisation of business with focus on NC and FCF • Improving operational efficiencies • Market Outlook steadily impr
Slide 27: Q+A
Q+A 27
Slide 28: COMVITA.COM
COMVITA. CO M