Charlotte's Web Holdings, Inc. · TSX:CWEB
Charlotte's Web — Canaccord Genuity Presentation (October 2019)
26 slides from Charlotte's Web's conference presentation, Oct 2, 2019
Slide 1: Building a Global CPG Company
BUILDING A GLOBAL CPG COMPANY TSX: CWEB | OTCQX: CWBHF October 2019
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: The Stanley Brothers
Founded in 2013 The Stanley Brothers Boulder, Colorado CHARLOT TE’S WEB WAS NOT Our dedication to creating the best hemp extracts makes us an STARTED AS A COMPANY, industry leader for product quality, safety and consistency. We believe our high-quality hemp extract harnesses powerful IT WAS STARTED
Slide 4: Strong Fundamentals, Premier Brand, Scaling to Accelerate
ST RO N G PREMIER S C A L I N G TO F U N DA M E N TA L S BRAND AC C E L E R AT E 4
Slide 5: #1 Brand in the Total Hemp-Derived CBD Market
#1 BRAND IN THE TOTAL HEMP - DERIVED CHARLOTTE’S WEB CBD MARKET 1 ANNUAL REVENUE ($MM) 69.5 OUTPACING THE INDUSTRY WITH 2018 REVENUE GROWTH OF 40.0 74% year-over-year2 14.7 3 2016 2017 2018 (1) By market share Company estimates 5 (2) Represents 2018 growth over 2017 (3) Charlotte’s Web Holdings Inc.
Slide 6: Vertically Integrated Supply Chain Advantage
VERTICALLY INTEGRATED SUPPLY CHAIN ADVANTAGE PROPRIETARY GENETICS • Quality, consistency and trust LONG-TERM CULTIVATION PARTNERSHIPS • Traceability of ingredient streams HARVEST & PROCESS BIOMASS • Transparency of the manufacturing process IN-HOUSE EXTRACTION • Grown in the U. S. A. PRODUCTION • Pr
Slide 7: Tested. Certified. Researched.
TESTED. CERTIFIED. RESEARCHED. 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 Safe. Certified. Trusted. • FDA approved cGMP certified fa
Slide 8: Expanded Product Portfolio
EXPANDED PRODUCT PORTFOLIO 12 Liquid Products 4 Capsule Products 4 Topical Products 12 Canine Products – 11 New! 3 Gummies – NEW! Note: Product offering as of August 1, 2019 8
Slide 9: Strong Financial Performance
STRO NG FINANCIAL PERFO RMANCE Revenue and Growth Gross Profit and Margin Adjusted EBITDA and Margin2 69.5 75% 75% 65% 35% 30% 52.3 14% 21.1 29.9 40.0 14.1 14.7 1 9.6 2.0 2016 2017 2018 2016 2017 2018 2016 2017 2018 All figures in USD $MM 9 (1) Charlotte’s Web Holdings Inc. revenue (2) Adjusted EBIT
Slide 10: Quarterly Performance
QUARTERLY PERFO RMANCE 30 Revenue Growth ($MM) 25 Q2 - 2019 Financial Highlights 25 21.7 21.3 20 17.7 ➢ $25M revenue: +45% vs Q2-2018; +15% vs Q1-2019 17.2 ➢ 75% gross margin 15 ➢ 16% adjusted EBITDA of $3.9 million 13.1 12.5 11.3 ➢ 47% revenue from e-commerce 10 9.1 ➢ 53% revenue from retail outlet
Slide 11: Category Growth - FDA and FDM are the Catalysts
CATEGO RY GROWTH - FDA and FDM are the Catalysts US Hemp Market $25b (2018 - 2022F) Aggressive Scenario $21.9b ► US Hemp market is estimated to be $21.9b in 2022 from $0.6b in 2018 $20b ► Broad consumer acceptance across all segments ► FDA sets a regulatory environment for ingestibles $17.0b ► FDM c
Slide 12: Competitive Expansion
CO MPETITIVE EXPANSIO N CBD Category – Competitive Landscape 2500 90% 81% 80% 2000 2000 70% 60% 60% 1500 50% 40% 1000 30% 30% 650 500 20% 200 10% 0 0% 2017 2018 2019 Brands Top 20 2017 2018 2019 Q1 200 Brands 650+ Brands 2000+ Brands 12 12 Source: Brightfield Group, Q1 2019
Slide 13: Channel Growth
CHANNEL GROWT H US Hemp Market by Retail Format (2018 - 2022F) CAGR ('18-'22) 100% $0.6b $11.2b $21.9b 147% 82% Chained Retailers estimated to 90% 80% 70% n/a represent 64% of Total Hemp 60% Sales by 2022 50% 40% 30% 103% 6% % 20% 95% 10% To s u c c e e d g o i n g f o r w a r d , 97% 0% companies m
Slide 14: Category Pioneers Building a Premier Brand
CATEGORY PIONEERS BUILDING A PREMIER BRAND CNN WEED 5 Sept 29, 2019 Quality and safety are critical during CBD craze Our consumers trust the quality C h a r l o t t e ’s We b h e m p - d e r i v e d C B D 14
Slide 15: #1 Awareness and #1 Satisfaction
# 1 AWARENESS AND # 1 SATISFAC TIO N 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 in willingness to recommend. 15 Source:
Slide 16: Building a Global CPG Company to Accelerate Growth
BUILDING A GLOBAL CPG COMPANY TO ACCELERATE GROWTH BUILD OUT OF CPG LEADERSHIP TEAM and top tier sales organization DEVELOP OPERATIONAL EXCELLENCE and corporate governance STRUCTURE DATA FOR INTELLIGENCE LAUNCH AGILE MARKETING EXPAND ACROSS CHANNELS INTERNATIONAL EXPANSION 16
Slide 17: Building the CPG Leadership Team
Deanie Elsner Russ Hammer Stephen Lermer Tony True Eugenio Mendez CEO CFO COO CCO CGO BUILDING THE CPG LEAD ERSHIP T EAM Paul Lanham Jared Stanley Nathan Gerhardt Tamarah Saif Cory Pala CIO CULTIVATION REGULATORY TALENT CAPITAL MARKETS 17
Slide 18: Operational Excellence: Expand Cultivation
OPERATIONAL EXCELLENCE EXPAND CULTIVATION Hemp Production (Lbs) Cultivation Operations 2019 • Over 6 years of experience in hemp plant cultivation Harvest Projection • Company operated farms in Colorado and contract partner farms in Kentucky and Oregon • Participating in regenerative organic hemp fa
Slide 19: Operational Excellence: Expand Production & Distribution
OPERATIONAL EXCELLENCE EXPAND PRODUCTION & DISTRIBUTION In-House Production • New 137,000 sq ft cGMP grade manufacturing and R&D facility in addition to current 40,000 ft2 facility • Extraction, production, distribution and R&D expansion • CPG level shipping and distribution • Staged build-out - Onl
Slide 20: Structure Data for Intelligence
STRUCTURE DATA FOR INTELLIGENCE • Operational Efficiency • Sales Effectiveness • Personalized Marketing • Business Analytics • Rapid Test & Learn 20 20
Slide 21: Launching Agile Marketing
LAUNCH ING AG ILE M A R KET ING 21
Slide 22: Charlotte’s Web, Inc. - Confidential
Charlotte’s Web, Inc. - Confidential Information
Slide 23: Charlotte’s Web, Inc. - Confidential
Charlotte’s Web, Inc. - Confidential Information
Slide 24: Expand Across Channels
EXPAND ACROSS CHANNELS CHARLOTTE’S WEB TOTAL RETAIL DOORS (EOY) 9000 8000+ 8000 7000 6000 5000 4000 3000 2000 • Mass retailers entering the category 1000 • Regulatory uncertainty causing tempered uptake 0 2016 2017 2018 2019 YTD • Most national retailers taking topicals only • Positive FDA resolutio
Slide 25: International Expansion
INTERNATIONAL EXPANSION GLOBAL AMBITIONS FOR INTERNATIONAL LEADERSHIP 25
Slide 26: 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 26 IR@CharlottesWeb.com
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