OGO: TSX-V Building the Leading Organic Produce Company May 2016 Photo: Organic French-Bean crop field - Monjas, Jalapa, Guatemala
Disclaimer This presentation contains certain forward-looking statements which may not be based on historical fact, including without limitation, statements regarding Organto Foods Inc.’s ("Organto") expectations in respect of its business strategy, plans for future growth and expansion, access to capital, management expectations and events or developments that Organto expects to take place in the future. All statements, other than statements of historical facts, are forward-looking information and statements. The words “believe”, “expect”, “anticipate”, “contemplate”, “target”, “intends”, “continue”, “budget”, “estimate”, “may”, “will”, and similar expressions identify forward-looking information and statements. In addition to the forward-looking information and statements noted above, this presentation includes those that relate to the ability to raise additional capital and complete future financings, capital expenditures and costs, the expected growth in the organic food industry and the ability of Organto to successfully execute its growth strategy. Such growth strategy includes acquiring additional land, acquiring or building additional greenhouses, potential acquisitions of assets or companies, and increasing capacity of existing facilities, among other plans discussed in this presentation. Such forward-looking information and statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by Organto as of the date of such information and statements, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking information and statements. Such factors include, but are not limited to, the inability of Organto to generate sufficient revenues or raise sufficient funds to carry out its business plan, changes in government legislation, taxation, controls, regulations and political or economic developments in Guatemala, risks associated with farming activities generally, compliance with importation and exportation laws of various countries, significant fluctuation in food prices, including the risk of obtaining necessary licenses and permits, inability to identify, negotiate and complete a potential acquisition for any reason, ability to retain key employees, and general economic conditions. Many of these uncertainties and contingencies could affect Organto’s actual performance and could cause actual performance to differ materially from those expressed or implied in any forward-looking information and statements made by, or on behalf of, Organto. Readers are cautioned that forward-looking information and statements are not guarantees of future performance. There can be no assurance that such information and statements will prove to be accurate and actual results and future events could differ materially from those acknowledged in such information and statements. Organto disclaims any intention or obligation to update or revise any forward-looking information and statements whether as a result of new information, future events or otherwise, except to the extent required by applicable laws. 2 2016-03-17
Organto seeks to be the leading, vertically-integrated branded organic fresh produce company in the world by 2018 3
More than 85 years combined experience in the natural and Social Balanced and organic food industry. Responsible Company seeking to change the Fund expansion in produce industry fastest growing segment of consumer sector. 4
Industry Analysis Strong Industry Fundamentals - The natural and organics industry has been growing at over 15% per annum over the past 10 years - It is projected to continue to grow at over 14% per annum over the next 5 years - The organics segment is growing at over 5x the conventional segment - The organic fruit and vegetable segment has been growing at over 12-13% per annum and has reached close to US$15 billion in the United States - Industry is fragmented with many small producers producing specialty products in unorganized and unprofessional manner (source of acquisitions) 5
Industry Analysis Strong Industry Fundamentals - Sourcing of fresh organic products year round has become major issue for retailers and distributors - Consistent, stable producers are rewarded with larger market share - Difficulty of obtaining or converting conventional land to organic land has exacerbated the problem of supply - Minimum of three years - Uneconomical greenhouses built in areas that are too expensive to construct or operate 6
Current Products – Exotic Vegetables Organto strives to be the largest provider of organic, branded exotic vegetables in the world by 2018 Sugar Snaps Snow Peas Haricot Verts Baby Carrots Brussels Sprouts Romanesco Broccoli Florets Baby Broccoli Broccoli Crowns Cauliflower 7
Organto Global Locations Amsterdam, Holland Vancouver, Canada Sales, Distribution & Importing Corporate Headquarters Miami, Florida Sales, Importing & Logistics Patzún, Guatemala Plant & Greenhouses Monjas, Guatemala Organic Farm & Greenhouses General Roca, Argentina Organic Farm & Plant 8
Advancements Organto has made substantial changes to the business since the signing of the merger in May 2015 • Acquired 53 hectare farm in Monjas, Guatemala • Added additional organic farmland near Monjas • Hired Andres Pullin to oversee entire operations in Guatemala Organic • Drilled deep water well Farmland • Acquired 3.2 hectare organic greenhouse in Jalapa • Purchased additional 1.5 hectare organic greenhouse in Patzun Organic • Hired Cristian Marin to manage greenhouse operation Greenhouses • Built separate storage facility • Drilled deep water well • Added to operations and plant management team Plant • Improved reporting and accountability Improvements 9
Vertically Integrated Model Our ability to control and operate more of the chain allows us to offer a more consistent product at more competitive prices Farming & Packing & Importing & Greenhouses Processing Distribution • Organic Greenhouses • Company-Owned Plant • Organto B.V. in Patzún, Guatemala (Amsterdam) • Organic Farmland • Organic & Conventional • Organto U.S.A. • Sub-Contracted Growers Plant (Miami, FL) 10
Vertically Integrated - Strategy Farm to Table : Better quality at more competitive prices Farming Operations - Approximately 50 hectares of certified organic production - 5 Hectares of Organic Greenhouses (3.2 hectares currently certified) - Close relations with indigenous farming communities Packing & Processing Plant - Certified organic processing plant - Employing over 190 workers (all indigenous) in plant - Experienced team with over 50 years working in processing/packing plants Importing & Distribution - Organto BV – Dutch company responsible for European market - Organto USA – U.S. company responsible for U.S./North American market - Better information and additional margin for company 11
Analysis of Vertical Integration – Risk vs Reward Risk Risk (Analysis) Working Capital Rewards Farming High Main risk is loss of Moderate/High High production (8-12 week (40%-60% GM) (Company Owned) cycles) Farming Low Main risk is not Low/Moderate None delivering into sales (Sub-Contracted) contracts Packing & Processing Moderate Risk of logistics and Moderate/High Moderate product loss due to (25%-35% GM) operational inefficiencies Importing Low Not delivering into sales Low/None Low contracts because of (8%-12% GM) lack of quality product Distribution Low Very low. No risk except Low/None Low for strikes, fuel prices, (6%-8% GM) etc. 12
Management +85 years of combined experience in farming, packing, distribution and retail segments 13 Organic certification at Monjas, Jalapa, Guatemala
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