Introduction to Canback & Company

PREDICTIVE ANALYTICS

INTEGRATORS

CANBACK & COMPANYCambridge, Massachusetts

42.365869,-71.093471canback.com

+1-617-399-1300

INTRODUCTION TO CANBACK & COMPANY

October 2014

2

Canback & Co was founded in 2004 with the goal of applying predictive analytics techniques to

management problems. Today we have 29 consultants located all over the world and are

growing revenue at more than 90% per year

Dr. Canback has spent 26 years as a

management consultant to senior

management. Between 1984 and 1994, he

was a consultant at McKinsey & Co, where

he was elected partner in 1989. He was a

partner at Monitor Company 1994-2003

and global leader of their financial services

practice.

His doctoral research on diseconomies of

scale in large corporations from Brunel

University won the EDAMBA award for best

European dissertation in 2003. He holds an

MBA from Harvard Business School which

he attended as a Fulbright Scholar and an

MSc from the Royal Institute of

Technology.

Dr. Canback has lived in Sweden, India,

the United States, Mexico, England and

Denmark and his consulting work spans

the world.

He is married to Charlotte and has three

sons.

Jesse Logan

Mr. Logan is a Vice President at Canback & Co

and leads our Consumer Goods and

Retail Practice. He has led many of our largest

projects and worked on the ground in countries

ranging from Brazil, to the Philippines, to South

Africa. He has worked on a dozen M&A due

diligence and market entry efforts.

Before joining Canback & Co, he worked as a

microbiology scientist. He holds an MBA from

Boston College.

Staffan Canback and son

Cambridge office

CANBACK & COMPANY

Canback & Co was founded in 2004 by Staffan Canback and

Justin Dangel to bring newly developed, scientific

approaches to management practices.

We serve leading consumer-facing companies in consumer

goods, retail, financial services and telecom sectors with a

focus on strategic opportunities in emerging countries.

We use predictive analytics to help clients draw reliable, fact-

based conclusions about the future based on sophisticated

analyses of internal and external data.

Our uniqueness is based on integrative consulting

capabilities, empirically derived market and consumer

models, proprietary databases and global presence.

We speak the language of senior management.

We work on the same types of issues as McKinsey & Co, the

Boston Consulting Group, and Bain & Co.

The smallest client since our founding has $3 billion in

revenue; the largest has $83 billion.

3

Pe

rfo

rma

nce

Time1900 1960 1990

Traditional

management

consulting

Predictive

analytics

2014

A new paradigm

with higher

performance

Few, if any, break-

throughs since the

early 1990s

- Conceptually based

problem-solving

- Experience preferred

over hard analysis

- Datasets at the

center of problem-

solving

- Repeatability and

scalability for

efficiency

Canback & Co prefers fundamental analysis of primary data over conceptual frameworks,

achieving greater accuracy in problem solving at a lower cost

“The future is already here, it is just unevenly distributed”

MANAGEMENT CONSULTING INDUSTRY S-CURVE

4

Mapping the Path to Future Prosperity - Emerging Markets Inclusive Growth Index (2014)

African Cities Growth Index 2013 (2013)

The Shifting Urban Economic Landscape: What Does it Mean for Cities? (2013)

Abuja +12: Shaping the Future of Health in Africa (2013)

Hot spots - Benchmarking Global City Competitive (2012)

Nigeria - A Nation Divided (2011)

Quarterly Divisional Seminar Series — South Africa (2014)

Quarterly Divisional Seminar Series — Asia-Pacific (2013)

Africans Open Fuller Wallets to the Future (2014)

The War for Nigeria (2013)

Annual Results Presentation (2013)

Entering the African Beer Market: Uncovering the Strategies to Enable Success (2013)

NYC Jobs Blueprint (2013)

The Future of Retailer Brands (2010)

Canback & Company is often cited in the press, research reports, annual reports, and investor

presentations by some of the largest companies and organizations in the world

5

We initially worked on business development projects for “consumer-facing” clients. 10 years

later, this is still an important part of our activities, but we are now fairly diversified. M&A due

diligence is today our largest practice because of our fast, fact-based and practical approach

Canback & Co

Management consulting

>65%

M&A due diligence

>35%

Strategydevelopment

30%

Predictive modeling

15%

Commercial databases

15%

Market/industry research

<5%

We have a special expertise in quick

delivery of M&A due diligence,

working with up to 30 team members

to evaluate acquisition opportunities

from a market and functional

perspective

This used to be our core activity and

is still the #1 priority. We work on

market entry, brand development,

consumer segmentation and other

market/marketing efforts in emerging

countries

Boston Johannesburg Beijing Jakarta Lagos Mexico City Nairobi Pune Sao Paulo

Predictive models are almost always

part of our management consulting

work. We also build them on a

standalone basis

We pioneered, and are still the

world’s only supplier of GDP and

income data at the subdivision and

city level: C-GIDD

We occasionally conduct standalone

market research for existing clients

where we know the topic

6

Canback & Co works mainly in four consumer-facing sectors where we have distinct competitive

advantages based on methods and experience

CONSUMER

GOODS

Capturing exciting but hard to understand opportunities for durable and

non-durable goods, such as assessing new category potential in Asia or

developing a market entry strategy in Africa

RETAIL

Predicting trends in retailing to inform strategic decisions, for example

choosing store formats in Latin America and forecasting the evolution of

modern trade in the Philippines

FINANCIAL

SERVICES

Optimizing credit card, retail banking and consumer finance operations,

including creating a pricing strategy for credit cards in Europe and defining

optimal mix of ATM and retail branches for bank in sub-Saharan Africa

ICT*

Assessing future demand in global markets, such as predicting new

subscriber growth in Central America and analyzing profitability prospects

for a third market entrant in China

* Information & Communications Technology

7

Over the past 9 years, we have worked in over 50 countries. In the past two years, almost 25%

of our projects were in Africa. Below is the region breakdown of our projects in the past few

years and some project highlights

US: 7%

Latin America: 33%

Africa: 24%

Asia: 10%

C. America and

Caribbean: 2%

Europe: 5%

Projects spanning different

parts of the world: 19%

In 2012, we conducted

in-country brand

assessment, including

focus groups, in Nigeria,

Kenya and Angola for a

South African

beverages company

In 2011, we worked with

a global beverages

company to conduct

strategic M&A due

diligence of a local

beer company in Brazil

In 2013, we were engaged

by a global FMCG company

to quantify and predict

demand for categories in

354 African cities, as well

as to quantify the cities'

business climate

In 2011 and 2012, we worked

on a global expansion strategy

project for a US food company

with focus on Nigeria, Brazil,

China, India and Indonesia

In 2013, we built

regional/national

demand and price

models for a global

beverages company

From 2005 to 2006, we

were engaged by a US-

branded foods

company for predictive

insights on market

prospects, consumer

preferences, and trade

development in ChinaIn 2013, we

assessed beer

health and what

drives demand

beyond income for

a global beverages

company

8

Around half of our consulting practice is strategy work for the most senior executives of our clients

Due Diligence

• $5 billion FMCG acquisition in

Brazil

• $2 billion acquisition in the

Caribbean

• $8 billion acquisition in

Mexico/Brazil

• $12 billion acquisition the United

States

• JV evaluation in 8 sub-Saharan

Africa countries

• Commercial due diligence for

acquisition in Turkey

Strategy Development

• Global competitive strategy for

beverages company

• Cheese in China: Will the

Chinese ever eat cheese?

• Sub-Saharan market strategy for

12 FMCG categories

• Entry strategy into Chinese 3G

market

• Private-label counter-strategy for

U.S. branded food producer

• European premiumization

strategy

EXAMPLES OF CANBACK & COMPANY’S CONSULTING WORK

Predictive Modeling

• 10-year demand model at

region/brand/pack level in

Colombia

• Elasticity-based demand

simulator for US beverages at

region/brand/pack level

• 20 year forecast of demand in

Peru for manufacturing

expansion decision

• Own- and cross-price demand

elasticities for the U.S.

beverages market

• Third player profitability model in

telecom

9

The Canback Global Income Distribution Database (C-GIDD) is used to quantify market size and

demand drivers. C-GIDD is the only commercial database of its kind in the world

C-GIDD

benchmark

products and

services data

Internal to

Canback & Co

C-GIDD

economic,

demographic,

social and

psychographic

data

Internal to

Canback & Co

C-GIDD

income

distribution

data

Available as a

commercial

service at

cgidd.com

The world's only database with GDP, household

income and spending data for 212 countries with

694 subdivisions and 1,028 cities

Complemented with modules containing social,

demographic and psychographic data

Data available at national, provincial, city and

rural levels

Visit http://cgidd.com for more information

C-GIDD CONTENT

Quantify number of households at specific

income or socioeconomic levels

Compare consumer market sizes across

geographies in a uniform way

Merge with actual market data to spot new

or under-developed opportunities

0 0.25 0.5 0.75 1

Airline passengers

ATM machines

Bank deposits

Electricity consumption

Insurance premiums

Internet users

McDonald's restaurants

Milk consumption

Mobile phone subsribers

Oil consumption

Personal computers

Television sets

EXPLANATORY POWER OF C-GIDD

INCOME DISTRIBUTION DATA

FOR SELECT PRODUCTS AND SERVICESDemand variance explained by income above category-specific threshold

Source: C-GIDD; Canback analysis

R2

http://cgidd.com/

http://cgidd.com/

10

Data from C-GIDD have been purchased by companies from a wide range of industry areas

since the database launched in 2008. Here we highlight some of our repeat customers

11

Millions of households with income higher than PPP$ 20,000 2005 constant values

Millions of middle-class households by location in 2014 Socioeconomic levels A, B, C+ and C

Income per household in Egypt in 2014Egyptian Pounds, 2014 current values

Total GDP in PPP$ trillions2005 constant values

The database allows the user to look at the world’s GDP and income distribution in many ways, from

high-level aggregates to detailed analysis of how many households there are in specific cities at a

certain income level—today, in the past and in the future

4.4

4.1

11.7

13.8

14.0

Japan

China

US

EU

2014

India 6.0

4.3

17.6

16.1

15.3

2019

5.1

3.0

2.1

1.1

2004 201920142009

Shanghai

4.0

2.8

1.6

0.7

2019201420092004

Mumbai

3.1

0.8

1.2

2.5

5.6

5.5

0.5

0.5

1.1

1.8

0.1

0.2

0.7

0.6

0.1

Mexico

Brazil

Chile

Colombia

Argentina

RuralOther UrbanMajor Cities

49,913

69,209

79,855

88,767

99,097

121,382

Rural

Other Urban

Port Said

Suez

Alexandria

Cairo

Source: C-GIDD; Canback analysis

EXAMPLES OF C-GIDD DATA CUTS

12

We offer customized web portals to our C-GIDD data as well as different types of corporate accounts

for our customers ranging from Fortune 500 companies to individuals within corporations

CUSTOMIZED WEB PORTALS FOR ENTERPRISES

We work closely with enterprises, including some of the world’s largest corporations, to create customized web portals

with seamless access to C-GIDD/customer data. We provide a dedicated support team to meet their needs. Such

customers include:

CORPORATE ACCOUNT HOLDERS

We provide subscription-based C-GIDD access and

full support to companies of various sizes to meet

their needs on an ongoing basis. Corporate account

customers include:

INDIVIDUAL CUSTOMERS

In addition to providing data to large corporations on a

subscription basis, we also work with smaller entities

who have occasional data needs.

We have over 300 active customers who have

purchased C-GIDD in the last 2 years. Such

purchases are made by credit card over the web.

Procter & Gamble – C-GIDD includes the traditional variables

provided in the public site, plus P&G specific data on

consumer profiles and category spending with a 5-year

outlook. The site matches P&G’s organizational

(pg.cgidd.com)

Mondelez - C-GIDD site covers the public variables plus

food consumption data and demographic data relevant to

Mondelez. The site has a 5 year horizon.

(mondelez.cgidd.com)

https://pg.cgidd.com/#b

https://pg.cgidd.com/#b

https://mondelez.cgidd.com/#b

https://mondelez.cgidd.com/#b

13

Canback & Company contact information

C-GIDD BRAZIL MEXICO CHINA

Canback Analytics LLC

210 Broadway, Suite 303

Cambridge MA 02139

http://cgidd.com

Bobo Shen

Tel: +1-617-399-1300 Ext. 210

Email: [email protected]

Canback do Brasil

Rua Com. Miguel Calfat 128

1101 Vila Olimpia

São Paulo - SP 04537-080

Giancarlo Spata

Tel: +55-11-3846 9668 or 8187 7801


Canback Mexico

Bosque de Ciruelos 160-7

Bosques de las Lomas

11700 México, D.F.

Francisco Maciel Morfin

Tel: +52-155-4354-9806


Canback China

Suite 903B, Rongxin Tower

S. Square, Beijing W. Station

Beijing, 100055

Dr Xingxing Liu

Tel: +86-10-8399 3522 or 3523


BOSTON HEADQUARTERS JOHANNESBURG

Canback & Company LLC

210 Broadway, Suite 303

Cambridge MA 02139-1944

42.365869,-71.093471

Tel: +1-617-399-1300

Fax: +1-617-553-4500

Web: http://canback.com

Dr Staffan Canback

Managing Director

Tel: +1-617-399-1300 Ext. 201

Cell: +1-617-818-4963


Jonathan Mayes

Engagement Manager

Tel: +1-617-399-1300 Ext. 203

Cell: +1-412-901-8213


Jesse Logan

Vice President

Tel: +1-617-399-1300 Ext. 202

Cell: +1-781-640-7458


Irina Blinova

Office Manager

Tel: +1-617-399-1300 Ext. 202

Cell:


Arshad Abba

Country Manager – South Africa

Tel: +1-617-399-1300

Cell: +27-83-786 2450


Core Offices

INDIA SOUTHEAST ASIA EAST AFRICA WEST AFRICA

Canback Research

c/o ValueNotes Database Pvt Ltd

1 Bhuvaneshwar Society

Abhimanshree Road

Pashan, Pune 411 008

Maharashtra

Aniket Pargaonkar

Tel: +91-20-5601-0423 or 24


Canback Southeast Asia

Jl. Tiang Bendera 5 no. 2A

DKI Jakarta 11230

Teddy Purnomo

Tel: +62-812-8743 7578


Canback East Africa

c/o WindGen Power East Africa

Box 69565-00400

Nairobi

Mark Wopicho

Tel: +254-710-30 51 40


STREAM Insight

7A, Ikorodu Road

Maryland

Lagos

Adewale Opawale

Tel: +234-710-30 51 40


Satellite Offices