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Investor Presentation October 2016
ASX: BDA
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Investment Summary
Focused on delivering natural, Australian made, evidence based
solutions for the body – Inside & Out
Brands positioned across skin care, baby skin care, brain health,
superfoods, antioxidants & immune support segments
Develops, manufactures, markets, imports & exports products
across Australia & Asia
Led by ex-Bellamy’s Organic sales executives
IPO raised $6m at a pre-money valuation of $3.2m
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Capital Structure & Use of Funds
Indicative IPO capital structure Shares %
Shares Bod Australia 10,000,000 21.7%
Pre-IPO convertible 6,032,000 13.1%
IPO shares (A$6m @ $0.20) 30,000,000 65.2%
Total 46,032,000 100.0%
Issue price $0.20
Market capitalisation $9,206,400
Pre-money valuation $3,206,400
Raised $6m through an Initial Public Offering (IPO)
Funds will be used for marketing, expansion of the sales team, launching new skin & natural
remedies in line with the company’s ‘Inside & Out’ strategy, acquisition of like minded brands &
the expansion into new regions such as China
Approximately 7m options issued as part of IPO
Use of funds Amount ($m)
Marketing 1.5
Investment in stock expansion 1.0
New product development 0.4
Working capital 2.3
Debt repayment 0.15
Expenses of offer 0.65
Total 6.0
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Key Management
JO PATTERSON – CEO
A strategic marketing & business executive & winner of key awards with more than 20 years’ experience including international exposure
Demonstrated business acumen evidenced by success of own start-up as well as driving established organisations towards growth
Winner – Sydney Business Review Business Woman of Year
Finalist – Telstra Business Woman of Year
Multiple CEO & Managing Director roles over her career
CRAIG WELLER – COO
20 years in the nutritional & pharmaceutical sectors working in general management, senior sales & marketing roles
Five years in evidence based natural medicines – particular focus on mainstream medical market
Extensive Asian experience with Greenfield roles for China, Korea, Indonesia & other countries in Southeast Asia
JOHN GILDER – Head of Sales
Sales manager for Bellamy’s Organic for eight years, overseeing rapid expansion
27 years experience in FMCG & pharmacy sales
Oversaw hugely successful expansion into Chinese market
18 years of sales management experience spread over numerous organisations
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Industry Overview
Bod is focused on natural skincare products while pursuing
additional verticals in complementary medicines & natural health
1 WHO Traditional Medicine Strategy – 2014-2023 2 2014 Complementary Medicines Industry Survey 3 2014 Complementary Medicines Industry Survey 4 Nicholas Hall’s OTC Insight Asia-Pacific – April 2016
SKIN CARE IN AUSTRALIA Euromonitor International June 2016
SKIN CARE IN AUSTRALIA Euromonitor International June 2016
IRI-Aztec MAT 27/3/16
OTHER VERTICALS
In the last decade there has been a significant increase in
self-health care globally, as consumers choose to be more
proactive about their health1
Revenue of complementary medicines & natural health
products reached $3.5 billion in Australia during 2014 –
expected to grow to $4.6 billion in 2017-20182
Baby care & natural health generate highest sales in
pharmacies outside of products regulated under the PBS
The OTC market across vitamins, minerals & supplements
turned over more than US$11 billion in 2015 across China,
Japan, South Korea & Australia alone
SKIN CARE
The Australian skin care market
achieved sales of almost $1.85
billion in 2015
Small, premium brands rapidly
gaining market share
Pharmacy remains the largest
channel to market with 26% of
all sales, closely followed by
grocery & department stores
82% of the skin care market is
comprised of facial treatments
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Skin Care Market Outlook
Niche brands expected to continue to gain momentum as consumers
become particular about the beauty & personal care products they
consume
Consumers are more willing to pay a premium on products if they are
seen as effective
Consumers actively follow social media & are strongly influenced by
celebrities & user reviews
Demand for natural skin care will continue as consumers take greater
notice of chemicals in the products they consume
These trends will benefit manufacturers with a natural/organic
positioning & a sustainable approach to beauty & personal care
SKIN CARE IN AUSTRALIA Euromonitor International June 2016
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Bod Australia Overview
Baby skincare
Bacopa Monnieri (natural remedy)
Natural remedies
for treatment of menopause
Natural remedy
for sinusitis
EXISTING IN DEVELOPMENT
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Market Positioning
Bod’s positioning is to offer the consumer ‘real’ natural remedies & solutions for Inside & Out. Skincare, natural supplements & remedies
A whole health positioning with a focus on evidence based natural solutions
A number of companies claim a ‘natural positioning’, none couple this with evidence based & clinically trialed products
Reinforced by Bod’s continued investment in research
The positioning for Inside & Out allows a larger platform of solutions to be brought to market
Bod’s positioning will ensure customer loyalty across a wide portfolio of solutions
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Minimum ingredients. Maximum results.
Unique & effective 30 year old family formula
Natural & active ingredients, evidence based & Australian made
16+ different products with more to be released in 2017
Product range includes anti-ageing, face, exfoliators, baby care, body, cleanse tone & lips
No parabens, BPA’s or other harsh chemicals
Channels to market - Department stores inc 20+ David Jones stores - Pharmacy - Online - Speciality retailers
Gross margin - Department stores – 45% - Pharmacies – 54%
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Clinical Results
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BIOEFFECT
BIOEFFECT is a premium, innovative skin care brand born in Iceland
Based on ten years research & developed by bio-scientists it offers a unique efficacy & purity
The world’s first skincare brand to contain cellular activators made from plants
Results clinically proven in independent clinical trials
Launch professional range Q4 2016 for the professional spa market, adding another 7 new stock keeping units (SKU’s) to the range
Channels to market - Department stores inc 9 David Jones stores - Online - Speciality retailers - Professional spa market
Gross margin - Sephora – 30% - Department stores – 45%
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BIOEFFECT
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Own brand –
Baby Skincare
Developing an all natural, gentle, clinically trialed baby
skincare solution using Australian olive butter & bush
flowers
Launching with 6+ SKU’s covering body wash, nappy rash,
massage serum, shampoo, conditioner & creams
Significant resources allocated for research &
development of this new range
Expected channels to market include department stores,
pharmacies, online & specialty retailers
55% gross margin
Launching 2017
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Own brand -
Natural remedy – Bacopa Monnieri
Developing a natural remedy for memory & improved concentration based on the extract Bacopa Monnieri
The extract offers enhanced concentration in times of particularly stressful situations such as exams
The active ingredient, an aruvedic herb, has significant data to support the products efficacy & indications
The product is being formulated & manufactured in Australia
Launching in Q2 2017 with 1 SKU
Targeting pharmacy & online channels to market
70% gross margin (pharmacy)
Bacopa Monnieri
Standardised Extract
Finished product
manufactured in Australia
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Distribution Strategy
Leveraging existing relationships of ex Bellamy’s sales team
Focus on ‘direct to store’ pharmacy distribution in effort to establish a foothold & gain credibility
Currently selling products direct to store via department stores, pharmacies & the professional spa market
Highly efficient sales team across the eastern seaboard of Australia
The sales team operates with tablet technology to activate & process orders that can be uploaded to the financial systems in real time, allowing delivery in 48 hours
Expanding Dr Roebuck’s ‘Everyday Range’ through pharmacies with an expectation of 700 doors by June 2017
22%
26%
19%
5%
14%
6%
8%
Grocery Pharmacy Department Stores Mass Merch Direct Selling Internet Health & Beauty
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International Growth Strategy
Dedicated business unit to exploit offshore growth opportunities
Strong demand for all-natural, evidence based products throughout Asia,
especially China
Leveraging strategic relationships to expedite market penetration across
numerous channels:
Direct relationship with retailers
Daigou channel
Online
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Market Comparables
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FY16 FY16 FY17 FY17 FY17
Company Code Market Cap
($m) EV ($m) Revenue
($m) EBITDA
($m) F-Revenue
($m) F-EBITDA
($m) EV/EBITDA
BWX Limited BWX $ 406.7 $ 411.1 $ 54.0 $ 20.2 $ 75.4 $ 27.1 15.2
Bellamys Limited BAL $ 1,232.4 $ 1,199.9 $ 244.6 $ 54.6 $ 354.8 $ 78.8 15.2
Vitaco Holdings Limited1 VIT $ 285.2 $ 321.7 $ 257.3 $ 25.6 12.6
McPherson's Limited1 MCP $ 109.8 $ 202.7 $ 312.6 $ 25.7 7.9
Medlab Limited MDC $ 73.3 $ 68.3 $ 2.6 ($ 3.7)
Average 12.7
Median 13.9
Source: Bloomberg and Iress 14 Sept 2016
1. VIT and MCP is trailing FY16 EV/EBITDA as no forecast available on Bloomberg
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Board
JO PATTERSON CEO
A strategic marketing & business executive & winner of key awards with more than 20 years’ experience including international exposure
Demonstrated business acumen evidenced by success of own start-up as well as driving established organisations towards growth
Winner – Sydney Business Review Business Woman of Year
Finalist – Telstra Business Woman of Year
Multiple CEO & Managing Director roles over her career
SIMON O’LOUGHLIN
CHAIRMAN
Founder of O’Loughlins Lawyers, an Adelaide based, specialist commercial law firm
He has extensive experience in the corporate & commercial law fields while practising in Sydney & Adelaide, & also holds accounting qualifications
Extensive experience & involvement with companies in the small industrial & resources sectors
He has also been involved in the listing & back-door listing of numerous companies on the ASX, most recently the back-door listings of The Food Revolution Group Limited (formerly Crest Minerals Limited) & Xref Limited (formerly King Solomon Mines Limited)
He is a former Chairman of the Taxation Institute of Australia (SA Division) & Save the Children Fund (SA Division)
SIMON TAYLOR
NON EXECUTIVE DIRECTOR
Simon is a resource executive with over 25 years’ experience in geology, management at CEO & Board levels & in the finance sector
He has had a diversified career as a resources professional providing services to resource companies & financial corporations . This has been at both a technical & corporate level
He has also been involved in the listing & back-door listing of numerous companies on the ASX, most recently the back-door listing of Xref Limited (formerly King Solomon Mines Limited) . Whilst having experience in Australia, a majority of his projects have also been in countries such as Brazil, Turkey, Uganda, Tanzania, Mali, China, the United Kingdom & North America
Mr Taylor is currently an executive director of Oklo Resources Limited & a non-executive director of Chesser Resources Limited & TW Holdings Limited
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Contact
Management Investor Relations
Jo Patterson Matt Wright
Bod Australia NWR Communications
+61 2 9199 5018 [email protected]
+61 451 896 420
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APPENDICES
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Australian Skin Care Market Total Sales
(A$ million)
$1,450.0
$1,500.0
$1,550.0
$1,600.0
$1,650.0
$1,700.0
$1,750.0
$1,800.0
$1,850.0
$1,900.0
2010 2011 2012 2013 2014 2015
SKIN CARE IN AUSTRALIA Euromonitor International June 2016 22
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Skin Care Category Shares
9%
82%
2%
7%
Body Care Facial Care Hand Care Skin Care Kits
SKIN CARE IN AUSTRALIA Euromonitor International June 2016
The skin care segment in Australia is
skewed towards facial care, which
accounts for more than 80% of the
market
Active ingredients are driving the
market with cosmeceutical brands
gaining traction in Australia
Driven by consumer demand for
functional & advanced products that
include clinically proven ingredients
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Pharmacy – Other Category’s
Total pharmacy sales outside of those regulated under the PBS have grown
13.3%. The channels of baby care & natural health are two of the channels
that Bod will be targeting for new product development in early 2017.
41.6
32.0
16.0 13.4
11.5 10.4 8.6 8.2 7.6 7.2
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
Baby Care NaturalHealth
Skincare Suncare Footcare Oral Care DigestiveCare
Eye & EarCare
Allergy Cough AndCold
IRI-Aztec MAT 27/3/16 24
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Baby Skin Care
Baby care is the next largest segment behind infant formula, valued over
$60m in 2016 & growing at 15%
The baby care segment consists of creams, lotions, washes & shampoo.
The fastest growing brands are those offering a natural & healthy
sensitive skin solution for baby
These brands accounted for over 42% of the baby needs category growth
in 2016. Johnson & Johnson now rank number 2, losing share to those
offering a pure & healthy proposition
IRI-Aztec MAT 27/3/16 25
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Baby Skin Care
17.3
9
-3.8
0.2
106.2
66.6
15
15.7
-1.4
58.9
-20 0 20 40 60 80 100 120
Infant Formula
Baby Needs
Baby Accessories
Nappies
Baby Food
2016 2015
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Natural Health Category Many of the segments have displayed double digit growth for the past two
years
The largest segment is nutritional oils followed by multi-vitamins – Swisse
& Blackmores the major players
32.0
92.9
61.9
20.2
-20.0 0.0 20.0 40.0 60.0 80.0 100.0
Total Natural Health
Total Cystitis Relief
Total Brain Health
Total Menopause
2016 2015
IRI-Aztec MAT 27/3/16 27
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Brain Health
This segment is currently valued over $12m
& a combined annual growth rate of 25% since 2014
Blackmores, Nature’s Own & Bio Island account for 50%
of the segment sales
DHA Omega 3 & other fish oils are the major products
driving this category & it is a very crowded market
Bod is scheduled to launch a product into this category
in first half of 2017 based on an ancient Ayurvedic herb
which provides improved memory & concentration
Bod is collaborating with Swinburne University on the
clinical data to support the efficacy of this product
IRI-Aztec MAT 27/3/16
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Women’s Health – Menopause
The segment is valued just under $12m & grew 20% on 2015
Many women want an alternative to hormone replacement
therapy (HRT) when dealing with the biological effects of
menopause (eg. hot flushes)
The growth of this segment has been driven by alternative
therapies that have minimum scientific evidence
Bod believes there is a significant opportunity for a natural
medicine with good clinical evidence to gain market share in
this segment
IRI-Aztec MAT 27/3/16 29
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Dr Roebuck’s Competitive Analysis DR ROEBUCK'S
(MADE IN AUSTRALIA)
TRILOGY
(MADE IN NZ)
SUKIN
(MADE IN AUSTRALIA)
A'KIN
(MADE IN AUSTRALIA)
PRODUCT
SIZE
(MLS) RRP PRODUCT
SIZE
(MLS) RRP PRODUCT
SIZE
(MLS) RRP PRODUCT
SIZE
(MLS) RRP
EveryDay Rash 50 $15.95 Nil Nil Nil
EveryDay Wax 50 $15.95 Nil Nil Nil
EveryDay Body 150 $19.95 Trilogy Trilogy Ultra
Hydrating Body Cream 150 $25.99
Sukin Hydrating Body
Lotion 250 $12.99
A'kin Unscented
Replenishing Body Moist 200 $26.99
EveryDay Face 50 $29.95 Trilogy Vital
Moisturising Cream 50 $39.99 Sukin Facial Moisturiser 125 $9.99
A'kin Unscented 24 Hour
Pure Moisture 50 $39.99
Cleanse 125 $23.95 Trilogy Cream Cleanser 100 $21.99 Sukin Sensitive Cleansing
Gel 125 $9.99
A'kin Sandalwood &
Neroli Facial Cleansing Gel 225 $27.99
Tone 150 $29.95 Nil Sukin Oil Balancing
Clarifying Facial Tonic 125 $12.99 Nil
Body & Handwash 250 $18.95 Trilogy Botanical Body
Wash 500 24.99 Nil Nil
Wipes 30
wipes $15.95 Nil Nil Nil
Lips 10 $9.95 Trilogy Rosehip Oil Lip
Balm 7 $18.95 Nourishing Lip Treatment 10 $7.10 Nil
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