Comvita Limited · NZX:CVT
Comvita — Shareholder Meeting (October 2021)
71 slides from Comvita's shareholder meeting presentation, Oct 20, 2021
Slide 1: Annual Shareholders' Meeting
PRESENTED BY: ANNUAL SHAREH OLDERS’ MEETING BRET T HEWLET T, CHAIR 20 OCTOBER 2021 DAVID BANFIEL D, CEO
Slide 2: Mihi Whakatau
Mihi Whakatau
Slide 3: Important Notice
Important Notice This presentation is given on behalf of Comvita Limited. Information in this presentation: • Should be read in conjunction with, and is subject to, Comvita’s Annual Reports, Interim Reports and market releases on NZX; • Is from audited financial statements for the year ended 30 June
Slide 4: Voting & asking questions
Voting & asking questions Voting Card Question box
Slide 5: Formalities
Formalities • Notice of Meeting • Quorum • Proxies • Annual Financial Statements
Slide 6: Today's Agenda
T O D AY ’ S Agenda 01. 02. 03. 04. Mihi Whakatau Welcome and Apologies Formalities Chair Address Brett Hewlett Brett Hewlett 05. 06. 07. 08. CEO Address Resolutions General Business Karakia David Banfield Q&A Whakamutunga and Close 7
Slide 7: Chair Address
4 Chair Address COMVITA,*
Slide 8: Board of Directors
INTRODUCTIONS Board of Directors Brett Hewlett Luke Bunt Sarah Kennedy Bob Major Zhu Guangping INDEPENDENT DIRECTOR INDEPENDENT DIRECTOR INDEPENDENT DIRECTOR INDEPENDENT DIRECTOR DIRECTOR CHAIR OF THE BOARD CHAIR OF AUDIT AND CHAIR OF SAFETY RISK COMMITTEE AND PERFORMANCE COMMITTEE Bridget Coates Ya
Slide 9: Our Founding Principles
OUR Founding Principles Comvita were pioneers in the honey and bee products industry since being founded in 1974/5. Our story began with an unlikely partnership; Alan Bougen and Claude Stratford – generations apart, worldly and progressive in their thinking. They were united by a belief that food is
Slide 10: Our Vision
Our Vision “Our vision is to deliver world-leading standards for our team, our consumers, our shareholders and our planet, contributing to a world where bees and people can thrive in harmony.”
Slide 11: Company Goals
OUR ENDURING LONG-TERM Company Goals HOW WE MEASURE SUCCESS 1. Carbon positive: A positive contributor to reducing the impact of global warming 2. EBITDA > 20% of Sales: Fair and sustainable operating profits 3. TSR > NZX50 50th centile: Deliver long-term shareholder value 4. ROCE > 500bp above WACC
Slide 12: Our global whānau
Our global whānau +YRS F E M A LE FULL TIME EQUIVALENT COMVITA AVERAGE ROLES IN OUR GLOBAL SERVICE GLOBALLY WHĀNAU OF THE COMVITA BOARD ARE WOMEN
Slide 13: Health & Safety
Health & Safety RELENTLESS FOCUS ON SAFETY PRIORITIES Health and Safety
Slide 14: Partnerships & Social Impact
Partnerships & Social Impact
Slide 15: Environment: Carbon positive by 2030
OUR GOAL Carbon POSITIVE BY 2030 Environment 27 % OF PAENGAROA SITE POWER FROM RENEWABLE SOLAR ENERGY 10 M CO2e 9146 TONNES OF CO 2 e M Ā NUKA TREES REMOVED DUE TO PLANTED M Ā NUKA FORESTS
Slide 16: Financial: FY Key Results
F Y 2 1 K E Y R E S U LT S Financial 30 June 30 June 2021 2020 • Constant currency revenue shows a $2.9m or 1.5% improvement YOY • Underlying revenue** growth 5.4% • Significant improvement in GP%, up 730bps. • GP improvement has enabled a 56% increase in our marketing investment. Now 12.6% of reven
Slide 17: FY21 Comvita at a glance
FY21 Comvita at a glance No. 1 552 Seven 34% Global brand leader Team members in Seven subsidiaries Digital share of in Mānuka Honey the Comvita in countries around total revenue and Propolis whānau the world FY21 $24.2M $25.5M $4.6M 35.3% +56% Comvita TSR EBITDA result Net debt FY21 Investment in F
Slide 18: Leadership Team
INTRODUCTIONS Leadership Team Saada McNAMEE INTERIM CHIEF CUSTOMER OFFICER CHIEF OPERATIONS OFFICER
Slide 19: FY21 in Summary
FY21 in Summary As forecast at our ASM in October 2020, this was a year where the rubber needed to hit the road. We returned to profitability, reduced our debt and extended our leadership in key markets around the world. Our new operating model is working, focused on being closer to customer and con
Slide 20: CEO Address
5 CEO Address COMVITA,*
Slide 21: 22
22
Slide 22: Covid 19
The global Comvita whānau • Our primary focus remains on the health and wellness of our team around the globe • The team are all safe and well, though some family members have been affected • I am concerned about the impact of lockdown on mental health and Covid 19 have increased support on offer an
Slide 23: Act your way to a new way of thinking
“Better to act your way to a new way of thinking, than think your way to a new way of acting”
Slide 24: CEO Address
CEO Address 1. Our Cause 2. Our Three Point Plan – progress and update 3. Our Harmony Plan CEO 4. FY21 Financial Results Address • Company • Products - David • Markets Banfield 5. Trading Update Q1
Slide 25: Arotahi: Our Focus
Arotahi R I GHT P R O D U CT S OUR FOCUS V ER T ICAL R I GHT I N T EGR AT ION M A R KET I M P R OVED S U B S IDIARIES Q U A LIT Y CO N S U M ER LONG TERM P R O F I TA B L E G R O W T H I N V ES T MEN T I N ROUTE TO B R A N D, M A R KET I P & S CI EN CE 26
Slide 26: Leveraging our Unique Business Model
LEVERAGING OUR Unique BUSINESS MODEL 27
Slide 27: Our Three Point Plan
STABILISE THE ● Winning in Australia and New Zealand ORGANISATION ● Focus on fundamentals ● Relentless simplification ● Positive cashflow paying down debt ● Inventory management ● Underperforming assets OUR THREE POINT TRANSFORMED ● Customer focus ORGANISATION ● World class digital experience and te
Slide 28: Our Three Point Plan: Stabilise
OUR THREE POINT PLAN Stabilise What we have achieved Results at the top end of guidance Proven new harvest model Completed JV review Generating cash and paying down debt Key milestones Half-year earnings reflecting true business seasonality Full-year earnings at $25.5M Q4 performance in ANZ +17% and
Slide 29: Our Three Point Plan: Transform
OUR THREE POINT PLAN Transform What we have achieved Double digit growth in focus growth markets Double digit growth in Mānuka Double digit growth in digital channels 730 basis point improvement in gross margin Inventory reduced by $11.7M Net debt reduced to $4.6M Key milestones Double-digit top and
Slide 30: Build long-term resilience and growth
OUR THREE POINT PLAN Build long-term resilience and growth What we have achieved Defined and shared our long term 60:15:20 model FY21 EBITDA ratio 13.3% Carbon footprint measurement TRIFR-9% Launched our 2030 Harmony plan Key milestones 730 bps increase in GP $8.7M (56%) increase in brand investment
Slide 31: The Comvita Harmony Plan
THE COMVITA HARMONY PLAN Our 2030 Harmony Plan : 1. Is built on our belief that this is our way of leaving the world in a better place 2. Is a living document 3. Is a way of providing clarity on how we can become a positive force for good – i.e. The plan addresses all our stakeholders and shares som
Slide 32: The Comvita Harmony Plan: 2030 targets
THE COMVITA HARMONY PLAN We have set aspirational targets to deliver by 2030, and have three key principles: 1. Treading lightly: forging a new leadership path in sustainability and circularity (net positive by 2030) 2. Embracing the science of nature: Comvita’s whakapapa (our lineage and identity f
Slide 33: Join us on our mission
P 13 JOIN WITH US ON OUR MISSION TO CONNECT WITH BEES AND NATURE TO HELP HEAL AND PROTECT THE WORLD #ONEHIVE
Slide 34: Lao Tzu quote
“ Do the difficult things while they are easy and do the great things while they are small. A journey of a thousand miles must begin with a single step.” __ LAO TZU
Slide 35: FY 2021 Headlines
• Reported NPAT $9.5M vs. ($9.7m) in PCP • Reported EBITDA* $25.5m, + $21.3m vs. June 2020 or +511% − Double-digit top and bottom-line growth in focus growth markets, China, and USA − Double digit top and bottom-line growth in Mānuka product category − Double digit top and bottom-line growth in digi
Slide 36: FY 2021 Review
FY 2021 Review ©) SOFAR — SOGOOD 130s GROSS PROFIT 4.6. NET DEBT, INVENTORY REDUCTION $11.7M, OPERATING CASH INFLOW $24.8M 9.5. REPORTED NPAT $9.5M VS. ($9.7M) IN PCP 6D. 7u MARKETING INVESTMENT +$8.7M OR +56 % 9, REDUCTION IN TRIFR REPORTED EBITDA s2D.0m + $21.3M VS. JUNE 2020 OR +511% TRANSFORMATI
Slide 37: Inventory & net debt
Inventory & net debt As at 30 June 30 June • Inventory reduced by $11.7m vs. 30 June 2020 NZD 000’s 2021 2020 Variance $ • Reduction in non-Mānuka honey inventory Audited Audited holding through bulk sales Total assets 286,609 286,423 186 • Trade receivables up primarily in our China market where we
Slide 38: Share of revenue by product category
FULL YEAR Share of revenue by product category
Slide 39: Share of revenue by market
FULL YEAR Share of revenue by market • Greater China increased to 49% of group revenue • Mainland China +31% in local currency • North America sales +23% in local currency • While US share increased to 13%, we lack scale in second focus growth market and need to accelerate faster
Slide 40: Market Headlines
• Our business model is unique with our global in market subsidiary team − Closer to customer − Closer to consumer − Faster to act MARKET − Primacy of market Headlines − Team capability enhanced • Strong growth in focused growth markets − China: Revenue in LC +31% Net Contribution (NC) +25% Ratio 20
Slide 41: Revenue performance vs PCP (reported currency)
PERFORMANCE vs. PCP Revenue 93.1 24.7 GREATER CHINA NORTH AMERICA REPORTED CURRENCY $ M $ M 2020 : $86.9m 2020 : $22.1m +7% +12% 25.3 32.4 5.1 REST OF ASIA AUSTRALIA + NZ EMEA (30 June 2021 vs 30 June 2020) $ M $ M $ M 2020 : $20.5m 2020 : $44.1m 2020 : $6.9m +23% -27% -26% Figures are in NZD on a r
Slide 42: Revenue performance vs PCP (constant currency)
PERFORMANCE vs. PCP Revenue 96.5 27.2 GREATER CHINA NORTH AMERICA C O N S TA N T C U R R E N C Y $ M $ M 2020 : $86.9m 2020 : $22.1m +11% +23% 26.7 32.1 5.2 REST OF ASIA AUSTRALIA + NZ EMEA (30 June 2021 vs 30 June 2020) $ M $ M $ M 2020 : $20.5m 2020 : $44.1m 2020 : $6.9m +30% -27% -25% Figures are
Slide 43: Segment net contribution
NET CONTRIBUTION Segment 19.9 4.7 GREATER CHINA NORTH AMERICA PERFORMANCE vs. PCP* $ M $ M 2020 : $18.2m 2020 : $4.4m +9% +7% 6.4 10.2 0.0 REST OF ASIA AUSTRALIA + NZ EMEA (30 June 2021 vs 30 June 2020) $ M $ M $ M 2020 : $4.2m 2020 : $13.9m 2020 : LOSS $0.5m Net Contribution is a non-GAAP measure.
Slide 44: Focus Growth Markets
FOCUS Growth Markets CHINA & NORTH AMERICA FOCUS STRUCTURED LONG-TERM INVESTMENT TO GROW T.A.M AND MARKET SHARE 45
Slide 45: Greater China
GREATER CHINA ON A REPORTED CURRENCY BASIS NZD 000’S This Year Last Year Vs. Vs. June 2021 June 2020 Last Year Last Year % Sales 93,076 86,945 6,131 7% Net Contribution 19,908 18,203 1,705 9% Net Contribution % 21% 21% 0% • Revenue growth 7% • Strong performance in mainland China offset by challengi
Slide 46: Mainland China (reported currency)
MAINLAND CHINA ON A REPORTED CURRENCY BASIS NZD 000’S This Year Last Year Vs. Vs. June 2021 June 2020 Last Year Last Year % Sales 73,151 57,610 15,541 27% Net Contribution* 15,282 12,626 2,656 21% Net Contribution % 21% 22% -1% • China is the world’s biggest honey market at 8.3bn RMB • Revenue growt
Slide 47: Mainland China (local currency)
MAINLAND CHINA ON A LOCAL CURRENCY BASIS CNY 000’S This Year Last Year Vs. Vs. June 2021 June 2020 Last Year Last Year % Sales 337,150 258,330 78,820 31% Net Contribution 70,377 56,514 13,863 25% Net Contribution % 21% 22% -1% • China is the world’s biggest honey market at 8.3bn RMB • Revenue growth
Slide 48: Greater China market highlights
• New leadership team in place and performing strongly • Record results in key festivals 11:11 and 6:18 • Number 6 and only International brand in healthy food category in Alibaba • Digital channel +41% to 57% of total G R E AT E R • Retail sector has now recovered +28% vs PCP China • UMF Mānuka +38
Slide 49: Greater China brand partnerships
G R E AT E R China B R A N D PA R T N E R S H I P S D R I V I N G AFFINITY AND ENGAGEMENT 50
Slide 50: North America (reported currency)
NORTH AMERICA ON A REPORTED CURRENCY BASIS NZD 000’S This Year Last Year Vs. Vs. June 2021 June 2020 Last Year Last Year % Sales 24,735 22,137 2,598 12% Net Contribution 4,733 4,380 353 8% Net Contribution % 19% 20% (1%) • Revenue +12% versus PCP with strong growth across all channels. • Revenue rep
Slide 51: North America (local currency)
NORTH AMERICA ON A LOCAL CURRENCY BASIS USD 000’S This Year Last Year Vs. Vs. June 2021 June 2020 Last Year Last Year % Sales 17,247 14,019 3,228 23% Net Contribution 3,237 2,744 493 18% Net Contribution % 19% 20% (1%) • Revenue +23% versus PCP with strong growth across all channels. • Revenue inclu
Slide 52: North America market highlights
• Comvita is the fastest growing Mānuka honey brand in the U.S.* • Increasing rates of sale per point of distribution with key retail customers for Mānuka • Strong growth in key product categories versus PCP, including UMF Honey +24% and Propolis +31%. • Retail Distribution increased by an estimated
Slide 53: Summary
• Focus strategy starting to deliver results – strong FY21 result • Double-digit top and bottom-line growth: ‒ Focus growth markets ‒ Digital channels ‒ Mānuka • Simplified business Summary — Product range — Operating businesses — Roles and responsibilities • Reducing inventory, generating cash, pay
Slide 54: FY 2022 Guidance
• FY22 EBITDA guidance range of $27.0m to $30.0m • Continued double digit top & bottom-line growth in Focus Growth FY 2022 MARKET Markets Guidance • Digital to at least 38% of revenue • Mid single digit revenue growth in ANZ market • Focus on further increase in GP% (H2) PERFORMANCE • Transformation
Slide 55: FY 2022 Q1 performance
FY 2022 Q1 performance • Despite Covid disruptions, underlying revenue is in line with our expectations +4.5% • Forecasting double-digit growth in our focus growth markets and focus categories • 50% increase in brand investment • Q1 EBITDA +10.6% improvement on PCP • Material opportunities being exp
Slide 56: Resolutions
6 Resolutions 57
Slide 57: Resolutions
Resolutions Formalities • Reports and Financial Statements Agenda Ordinary Resolutions 1. Appointment and Remuneration of Auditors Brett Hewlett 2. Director’s Elections: Chair • Re-elect Mr. Luke Bunt • Elect Ms. Yawen Wu • Elect Ms. Bridget Coates • Elect Mr. David Banfield
Slide 58: Voting & asking questions
Voting & asking questions Voting Card Question box
Slide 59: Resolution 1: Auditors
Resolution 1 Appointment and Remuneration of Auditors To consider, and if thought fit to pass, the following ordinary resolution: “That the meeting record the re-appointment of KPMG as the auditors Agenda of the Company for the current financial year ending 30 June 2022 pursuant to section 207T of t
Slide 60: Resolution 2: Luke Bunt
Resolution 2 Director’s Election – Luke Bunt To consider, and if thought fit to pass, the following ordinary resolution: “That Luke Bunt, who retires by rotation and is eligible for re-election, be re-elected as a Director of the Company.”
Slide 61: Director's Election – Luke Bunt
Resolution 2 Director’s Election – Luke Bunt A professional director and consultant, Luke has over 30 years’ experience in manufacturing, wholesaling and retailing in both durable goods and FMCG and has considerable experience in financial services and property. He has held senior executive position
Slide 62: Resolution 3: Yawen Wu
Resolution 3 Director’s Election – Yawen Wu To consider, and if thought fit to pass, the following ordinary resolution: “That Yawen Wu (China Resources) be elected as a Director by shareholders.”
Slide 63: Director's Election – Yawen Wu
Resolution 3 Director’s Election – Yawen Wu Ms Wu joined China Resources in April 2012 as Business Director of Strategy Department of China Resources (Holdings) Limited, and she joined China Resources Enterprise (CRE) as head of Asset Management Division in July 2021. Ms Wu also works as CEO of Chin
Slide 64: Resolution 4: Bridget Coates
Resolution 4 Director’s Election – Bridget Coates To consider, and if thought fit to pass, the following ordinary resolution: “That Bridget Coates be elected as a Director by shareholders.”
Slide 65: Director's Election – Bridget Coates
Resolution 4 Director’s Election – Bridget Coates Bridget Coates is Chair of Toitū Tahua: Centre for Sustainable Finance, Chair of Fonterra’s Sustainability Advisory Panel to the Board and Chair of Koi Tu (a think tank, based at the University of Auckland). She is also Chairperson of the Real Estate
Slide 66: Resolution 5: David Banfield
Resolution 5 Director’s Election – David Banfield To consider, and if thought fit to pass, the following ordinary resolution: “That David Banfield be elected as a Director by shareholders.”
Slide 67: Director's Election – David Banfield
Resolution 5 Director’s Election – David Banfield David joined Comvita in January 2020 as Chief Executive Officer. An entrepreneurial International Managing Director/CEO with significant experience leading both private and public sector business with revenues up to €300 Million. First-hand experienc
Slide 68: General Business Q&A
i General Business O&A COMVITA,*
Slide 69: Karakia Whakamutunga & Close
8 Karakia Whakamutunga & Close 70
Slide 70: Karakia Whakamutunga
Karakia Whakamutunga Kia hora te marino Kia whakapapa pounamu te moana Kia tere te kārohirohi i mua i tō huarahi Hāumi e, hui e, tāiki e! May peace be widespread May the sea glisten like greenstone May the shimmer of summer light your pathway ahead United and connected as one
Slide 71: Thank You
THANK YOU COMVITA .CO.NZ