COMVITA LIMITED INVESTOR PRESENTATION 2013 Neil Craig, Chairman, - PowerPoint PPT Presentation

COMVITA LIMITED INVESTOR PRESENTATION 2013 Neil Craig, Chairman, Ph. 021 731 509 Brett Hewlett, Chief Executive O ffl cer, Ph. 021 740 160

2014 Half Year Update NZD $000’S 6 MONTHS ENDED 6 MONTHS ENDED 30 SEPT 2013 30 SEPT 2012 Sales 43,362 45,434 EBITDA * 1,893 5,314 Net (loss)/profit after tax - (790) 2,386 NPAT Earnings per share NPAT (2.70) 8.39 (NZ Cents) Dividend per share (NZ Cents) 4.00 4.00 *EBITDA: Earnings Before Interest, Tax, Depreciation and Amortisation 2

Achievements – 2014 Half Year • Rebuilding inventory of Manuka honey • Expansion of 100% owned apiary operations • New acquisition in Gisborne - Tawari Apiaries • Olive Leaf planting programme at our new farm • Derma Sciences invests $8.9m • Opening of Auckland Concept store and Comvita tourism venture, Experience Comvita • System projects initiated – POS, Demand Planning, Apiary Management, E-Commerce • Factory expansion and Paengaroa site development Outlook • Second half year sales expected to be >60% of total • Strong growth in key Asian markets • Medihoney TM TM wound care sales growth • Net earnings and Sales expected to exceed 2013 3

The following pages are from the May 2013 Investor Presentation 4

Comvita Results at Upper End of Guidance Financial results for 2013 2012 Change the year to 31 March $M $M % Revenue 103.5 96.0 7.8% EBITDA * 14.7 15.5 (5.2%) Net profit after tax 7.4 8.2 (9.8%) Earnings per share (cents) 25.7 29.1 (11.7%) Dividends (cents) 13.0 14.0 (7.1%) *EBITDA: Earnings Before Interest, Tax, Depreciation and Amortisation 5

Balance Sheet • Very strong position, significant borrowing headroom for possible acquisitions and for capital expenditure. • Any such acquisitions would need to be demonstrably earnings positive per share in the short-term. Key Ratios Key Ratios 31-03-2013 31-03-2013 Shareholder equity ratio 60% Net debt 25m Net debt to EBITDA 1.7 x Net interest cover 9.4 x Net debt to equity ratio 31% 6

Financial Performance EBITDA ** Group Revenue $103m $15.5m $14.7m $96m $85m $82m $11.2m $71m $65m * $6.3m $5.3m $39m $4.8m $31m $4.1m $0.4m * 2013 2005 2006 2008 2009 2010 2011 2012 2013 2005 2006 2008 2009 2010 2011 2012 * 15 month period, due to change in balance date. ** EBITDA – Earnings before interest, tax, depreciation, amortisation, impairments and fair value movements of financial instruments. 7

Achievements • Group sales grew by 8% • Strong growth in Hong Kong, China, Korea • Assertive pricing and continued strong demand underpins premium brand position in Asian markets • Increased share of Manuka honey supply under direct ownership, through Apiary acquisition • Investment in Fresh Olive Leaf Extract R&D pays-o ff with positive results • Continued strong growth in the medical honey category SUPPLY CHAIN MARKET DEVELOPMENT SCIENCE AND RESEARCH • • • Acquisition of Whanganui-based apiary Strong growth in Hong Kong and China confirms Clinical trial results for fresh Olive Leaf business lifts share of honey source premium position of Comvita brand Extract shows benefit for those at risk • under ownership to >30% Korea retail presence bolstered with a total of 12 of diabetes • • Acquisition of additional property for retail outlets in major department stores New health claim and product o ff ering • Olive Leaf production >25% of sales now made direct to consumers for fresh Olive Leaf Extract opens new • Paengaroa HQ site future-proof via retail and internet market opportunities • • development project underway Premium branding helps insulate impact of International research papers provide Manuka honey shortages and cost increases further support for wound healing technologies • China propolis Blue Hat registration 8

Sales by Region $45.3m ASIA $24.5m AUSTRALIA $21.2m NEW ZEALAND $6.4m UK/EUROPE $6.1m NORTH AMERICA 9

Sales by Category 42% HEALTHCARE 48% FUNCTIONAL FOODS 5% PERSONAL CARE 4% MEDICAL 1% OTHER 10

Outlook • Restored earnings growth • Continued strong growth in key Asian markets • Online and retail sales developments • Continued e ff orts for security of supply for Manuka Honey • Opening of Comvita Tourism Experience, Bay of Plenty • Growing greater capacity for fresh Olive Leaf Extract • Further diversification of ingredient platform leading to exciting new business development opportunities 11

Evolving Our Business 2013 2005 Sales $103m $31m Gross Margin% 56% 34% EBITDA $14.7m $4.1m Assets $137m $50m Employees 395 140 % Sales Export 80% 60% % Sales via Distributors 16% 85% % Sales Honey 47% 65% % Sales B2C 26% 3% 12

Market Segments Manufactures, markets and distributes natural health and beauty products across four key broad market segments 42% 48% 5% 4% MEDICAL HEALTHCARE FUNCTIONAL FOODS PERSONAL CARE Variety of healthcare Worlds largest Comprises home-based Medical-grade products designed to manufacturer and woundcare, therapeutic leptospermum (Manuka) compete with traditional marketer of Manuka honey skincare and oral care honey for treatment of over-the-counter (OTC) products chronic wounds pharmaceutical products Invest in ongoing research and development to Key Products: Global licensing deal for Key Products: maintain premium brand -Manuka Honey skincare Medihoney with Derma - Olive Leaf Extract skincare - Olive Leaf Extract positioning Sciences - Propolis toothpaste and - Propolis - Winter Wellness Key Products: Propolis tooth gel Key Products: - Bee Pollen -UMF Manuka Honey -Medihoney medical - Apple Cider Vinegar - Royal Jelly products - Honeygar * Does not total to 100% as it excludes ‘Other’ business unit which accounts for remainder for the 12 months to 31 March 2013 13

Value Added Generic Comvita branded health honey Medical Skincare $104 $330 $500 $5 * $14 * Retail selling price per 250g equivalent of raw Manuka honey 14

Bottom Standard Layout Without Frond Without Frond 15

Manuka Honey • The worlds largest processor of Manuka honey • 16,000 hives specialist Manuka honey producer • Bottom Standard Layout Circa 35,000 hives under contracted supply • >30% of Comvita’s honey supply under ownership Without Frond Without Frond • High-tech medical honey extraction facility • Manuka planting and land development programmes • Plant breeding programme and agronomics 16

Fresh Olive Leaf • 580,000 olive trees on 157 ha plantation • Plant variety selection and screening programme • Bottom Standard Layout Acquisition of second olive grove, with 7,000 existing organic olive trees on 85 ha - Plans to plant 400,000 trees in next two years Without Frond Without Frond • Only totally integrated manufacturer - ‘Fresh picked, fresh processed’ 17

Specialist Manufacturing • World first honey testing capability • UPLC based, in-house laboratory Bottom Standard Layout • Ethanol and water extraction for bio-actives • Honey processing, liquid formulations and Without Frond Without Frond packing • Exclusive third-party relationships 18

Natural Health Innovators • FDA approved and CE marked medical devices • A total of 61 patents or patents pending covering 13 di fi erent unique innovations in wound care Bottom Standard Layout applications • Without Frond Without Frond Global distribution via licensing agreement with specialty US wound care company Derma Sciences Inc. • Fresh Olive Leaf Extract: patent position taken around Fresh Olive Leaf Extract for blood sugar control in at-risk adult males 19

Research • Circa $2.7m p.a. in research and development • Isolation and identification of lead bioactive compounds • Clinical trials • New product development Bottom Standard Layout • Regulatory approvals for health claims • Development of tests for honey quality and Without Frond Without Frond authenticity • Plant breeding programmes • Field agronomic trials • Processing methodologies and optimisation • Partnership with The University of Auckland and part of global science network 20

Building a Premium Global Brand • Brand reputation in Asia allows significant price premium over nearest competitors • Brand o fi er on focussed, di fi erentiated ingredient Bottom Standard Layout platforms • Brand story has great level of meaning with customers Without Frond Without Frond • Source and e ffl cacy of product range • Growth and awareness opportunity through tapping into New Zealand tourism via brand experiences 21

Consumer Needs Focus Design • Large scope to further broaden product o fi ering - Foods, healthcare, personal care, medical • Very large global natural products sector Bottom Standard Layout - Asian focus • Global trends support growth Without Frond Without Frond - Ageing populations - Growing preference to self-medicate - Increased incidence of degenerative diseases - Tightening regulations eliminating less scrupulous competition 22