Management Presentation November 2018 - GreenSpace Brands · Management Presentation November 2018....
Transcript of Management Presentation November 2018 - GreenSpace Brands · Management Presentation November 2018....
Management Presentation
November 2018
Certain statements in this presentation constitute forward-looking statements within the meaning of
applicable securities laws. Forward-looking statements include, but are not limited to, statements made
under the heading “Outlook” and other statements concerning the Company’s objectives, strategies to
achieve those objectives, as well as statements with respect to management’s beliefs, plans, estimates, and
intentions, and similar statements concerning anticipated future events, results, circumstances,
performance or expectations that are not historical facts. Forward-looking statements generally can be
identified by the use of forward-looking terminology such as “outlook”, “objective”, “may”, “will”, “expect”,
“intend”, “estimate”, “anticipate”, “believe”, “should”, “plans” or “continue”, or similar expressions
suggesting future outcomes or events. Such forward-looking statements reflect management’s current
beliefs and are based on information currently available to management. Forward-looking statements
involve risks and uncertainties that could cause actual results to differ materially from those contemplated
by such statements and there can be no assurance that actual results will be consistent with these forward-
looking statements. Factors that could cause such differences include the cyclical nature of the food and
agriculture industries, changes in general economic conditions and interest rates, adverse weather, cost and
availability of materials used to manufacture the Company’s products, competitive developments,
legislative and government policy changes, as well as other risk factors included in the Company’s Annual
Information Form dated August 22, 2018 under the heading “Risks and Uncertainties Related to the
Business” and as described from time to time in the reports and disclosure documents filed by the
Company with Canadian securities regulatory agencies and commissions.
This list is not exhaustive of the factors that may impact the Company’s forward-looking statements. These
and other factors should be considered carefully and readers should not place undue reliance on the
Company’s forward-looking statements. As a result of the foregoing and other factors, no assurance can
be given as to any such future results, levels of activity or achievements or levels of dividends and neither
the Company nor any other person assumes responsibility for the accuracy and completeness of these
forward-looking statements. The factors underlying current expectations are dynamic and subject to
change. Certain statements included in this presentation may be considered “financial outlook” for
purposes of applicable securities laws, and such financial outlook may not be appropriate for all purposes.
This presentation does not contain all information that a prospective investor may require. It is an overview
only and does not contain all of the information necessary for investment decisions. All forward-looking
statements in this presentation are qualified by these cautionary statements. The forward-looking
statements contained herein are made as of the date of this presentation and except as required by
applicable law, the Company undertakes no obligation to publicly update or revise any forward-looking
statement, whether as a result of new information, future events or otherwise.
Copies of the documents incorporated by reference may be obtained on request without charge from the
secretary of the issuer at 176 St. George St., Toronto, Ontario, M5R 2M7, (416) 934-5034, and are also
available electronically at www.sedar.com.
Disclaimer.
GSB TimelineLeading Canadian natural foods company, focused on internally developing, as well as acquiring, natural foods brands.
2002
LIFE CHOICES FOODS
Healthy, convenient,
responsibly raised meat products.
2014
ROLLING MEADOW DAIRY
100% Canadian, grass-fed
dairy products
2014
HOLISTIC CHOICE PET FOOD
Pet food made in Canada
from animals raised without the use
of antibiotics or added hormones.
2015
GREENSPACE BRANDS
2015
NUDGE FOODS
Bringing better food into your home.
2015
LOVE CHILD ORGANICS
100% organic foods for infants
and toddlers. Premium functional
snacking company.
2016
CENTRAL ROAST BRANDS
Premium functional snacking
company.
2017
KIJU ORGANIC
Brand leader in shelf stable organic juices.
2017
CEDAR JUICE
2018
GO VEGGIE
North American leader in alternative
cheese products..
Leader in premium organic
cold pressed juices.
.
2018
MEATBAR
100% grass-beef bars made with
top quality, lean cut meat.
2018
RIOT EATS
Plant-based dairy with high quality
ingredients, unique certifications,
and great taste.
Financial Trends.
We offer premium quality products made with
100% Canadian Grass Fed Milk. We allow our
cows to graze on pasture as long as our Canadian
weather will allow and ensure their quality of life is
something to be proud of. Our healthy cows graze
and eat grasses year round which produces great
tasting, nutritious milk!
Central Roast believes in feeling good and proud
about snacking. Our diverse range of convenient
premium functional snacks are made using high
quality ingredients, and no artificial colours or
flavours, so you can feel satisfied without feeling
guilty. Whatever the occasion, activity, time of
day, or craving…we have a snack for that!
In a world of health conscious parents and
confusing ingredient labels, Love Child Organics
was created on the promise of delivering truly
healthy, organic baby and children’s food
products. All of our products are made with clean
and nutrient rich ingredients and free from added
sugars, preservatives and fillers.
Our products contain only meat that is grass fed
and/or pasture raised without the use of added
hormones and antibiotics. Treating animals with
dignity and respect is what we do, and the result
is meat that you can feel good about eating and
feeding your family!
Meet our brands
Kiju is all about ‘Simple Organic Goodness’. We
make great tasting beverage products using only
certified pure organic ingredients - without
adding any sugar, preservatives or artificial
colours!
GO VEGGIE® is The Healthier Way to Love
Cheese. Whether you’re seeking healthier options
for your favorite recipe or making choices due to
health or diet restrictions, GO VEGGIE provides a
variety of products and flavors to satisfy every
cheese-lover’s craving. Our mission is to deliver
cheesy goodness consumers know and love,
without the downside.
Cedar helps you discover superfood nutrition for
your physical and mental wellbeing. We believe
that health is your real wealth. From cold-pressed
juices to Probiotic Hydrators and Kombuchas, we
provide with wide approachable range of nutrition
dense products.
We don’t mean to brag, but why over complicated
things? Meatbar is the real deal, friends. Grass-fed,
slow cooked, slow smoked, perfectly seasoned beef.
We prefer to keep it real– it tastes much better that
way.
Meet our brands
A new and exciting plant-based dairy brand that
promises to flip the script on plant-based eating
being a sacrifice and position it as an exciting
gain. With high quality ingredients, unique
category certifications, and great taste and
performance, our products are perfect for anyone
looking to defy category “norms” and try
something new!
PREMIUM
o #2 brand in Organic baby food.
(ACN L52wks March 31st, 2018)
o Quickly Accretive – Extensive expansion
of listing base (6 to 29 skus) and
distribution (approx. 200 to 700 stores)
within first quarter of ownership which
more than doubled expected revenue
with Loblaw Companies in year one.
o SG&A optimization realized within first
quarter post acquisition through
leveraging of internal shared service
platform (sales/marketing/operations)
and headcount reduction from 9 to 2.
o Acquired a money losing Organic brand
and doubled topline while driving
bottom line profitable results within 5
months of acquisition.
Brand Acquisition
ACQUISITION DATE October 19, 2015
PURCHASE PRICE $5.0M
ANNUAL REVENUE AT
ACQUISITION$5.5M
CURRENT ANNUAL REVENUE $20M+
CAGR 81%7
Love Child Organics
Future Opportunities.
Substantial opportunities exist with proper capital support
GEOGRAPHIC EXPANSIONo Significant opportunity exist to leverage the brand equity and learnings
from the Canadian market into the additional geographies
CATEGORY EXPANSIONo Current LCO consumer can be transitioned over to adjacent product
categories with higher margin profiles and extended use case (Health and
Beauty Products, Soft Goods)
PRODUCT INNOVATIONo Continue to build upon key point of difference for LCO by understanding
and then creating products that are meaningfully innovative to the core
parenting demographic
o Leverage ingredient opportunities while investing in packaging innovation
to stay relevant for future consumers
INFLUENCER/PARTNERSHIPSo Love Child Organics is uniquely positioned through its strong brand equity
and trust to partner with key social and celebrity influencers
PREMIUM
o Acquired in late February 2016
o Redefining how people look at snacking
by providing a solution based options
for both retailer merchandising and
consumer need states.
o Offering all-natural, functional snacks
including a wide assortment of mixed
raw and roasted nuts, functional mixes
and indulgent favourites.
o Established at shelf with key National
retail partners with industry leading
shelf real estate
o Multiple major distribution wins since
acquisition including the Gas and
Convenience channel
Brand Acquisition
ACQUISITION DATE February 25, 2016
PURCHASE PRICE $16.1M
ANNUAL REVENUE AT
ACQUISITION$12.7M
CURRENT ANNUAL REVENUE $20M+
CAGR 26%9
Brand is uniquely positioned with market leading shelf
real-estate and strong visual mind-share at retail.
PACKAGING INNOVATION & REFRESHo Iconic visual recognition can be leveraged with updated colour pallet
and design esthetics. Along with a strong positioning towards
sustainable packaging and reduced environmental impact
CHANNEL EXPANSIONo Significant opportunity exists to push the boundaries of the current
distribution network to expose the brand to new and emerging
channels (gas/convenience, Ecomm and Foodservice)
LEVERAGING SHELF REAL ESTATEo Market leading shelf space and distribution to be leveraged into
increased velocities through strategic and targeted consumer marketing
initiatives that speak to the every changing demographic for snacking
CATEGORY INNOVATIONo How consumers snack and eat continues to evolve as “four square
meals” is becoming increasingly less relevant. Opportunity to activate
innovation through efficient consumer engagement in product quality
and breadth of assortment
Central Roast Brands
Future Opportunities.
PREMIUM
o #1 shelf stable Organic Juices brand in
Canada.
(ACN L52wks March 31st, 2018)
o Profitable at time of acquisition with
positive cash-flow and no debt on
balance sheet
o Revenue expansion opportunities
existed across multiple distribution
channels.
o EBITDA profitable with opportunities
for further leveraging of shared service
SG&A model
o Operating expense opportunities
realized through expanded focus on co-
packer management in addition to
warehouse and distribution efficiencies.
Brand Acquisition
ACQUISITION DATE January 18, 2017
PURCHASE PRICE $8.88M
ANNUAL REVENUE AT
ACQUISITION$8.0M
CURRENT ANNUAL REVENUE $10M+
CAGR 14%11
Kiju Organic
Future Opportunities.
Substantial opportunities exist with proper capital support.
CHANNEL DEVELOPMENTo Multiple channel opportunities exist to diversify the Kiju customer base.
Through the development of alternative distribution networks, Kiju will
further strengthen its position as a market leader in organic juice
USE CASE/OCCASION EXPANSIONo Further investment to encourage consumer use expansion through retailer
partnerships and demo activations that will result in increased product sales
velocities and distribution points
PRODUCT INNOVATIONo Seasonality within the juice category is critical to remain relevant regarding
both ingredient trends and format innovation. Seasonal promotional
periods are key drivers of both volume and brand relevance, while allowing
access to high volume promotional display opportunities
GEOGRAPHIC EXPANSIONo Development opportunities exists with both the EU, Middle East and Asian.
Geographic specific launch tactics and packaging required to ensure success
PREMIUM
ACQUISITION DATE August 23, 2017
PURCHASE PRICE $5.1M
ANNUAL REVENUE AT
ACQUISITION$5.1M
CURRENT ANNUAL REVENUE $5.5M+
CAGR 8%
• Canadian leader in cold pressed juice
based products, probiotic enriched
juices and kombucha
o Revenue expansion opportunities by
growing CEDAR into new channels and
through our core grocery channels
o Cold Pressed Juice market expected to
expand close to 10% per year through
2023, and kombucha by 14%
• Profitable and cash-flow positive
operation
• New co-packer arrangement in 2018
expected to further improve margins
• SG&A reductions expected through
shared marketing campaigns and
improving freight and storage efficiency
Brand Acquisition
13
Cedar Juice
Future Opportunities.
Cold pressed juice continues to offer significant growth
opportunities across major distribution channels .
DISTRIBUTION EXPANSIONo Significant opportunities exist to build upon current distribution
momentum by engaging additional major retail partners across
expanded channels (discount, convenience) and leveraging brand
equity already in place
KEY PARTNER ENGAGEMENTo Leverage current partnership opportunities with in-store programs,
specifically engaging on-shelf and customer loyalty programs
PRODUCT INNOVATIONo Relevancy in the category is predicated on discovery and experiential
qualities. Ensuring the brand continues to build upon its lineage of
innovation is critical to future success
CONSUMER ENGAGEMENTo Opportunities to engage and establish the brand as the leader in
accessible, relevant and innovative products that fulfill the ever
changing tastes of desiring consumers
PREMIUM Fb Tw In
Growing company in the fastest
growing niche of the most stable
industry in the world (food). Natural
food which is the fastest growing
vertical (9%) one of the most stable,
and largest, industries in the world
($5.35tn US).
Proven track record of generating
organic growth and finding accretive
acquisitions – GSB has built one of the
best teams in the industry which has
consistently delivered organic growth
and consistently found accretive
acquisitions and grown them.
Massive industry Consolidation by 30+
big CPG’s – Big CPG is shelving their
R&D programs and moving that $ to
M&A- buying ‘authentic’ brands in
order to appeal to the evolving
Western consumer more focused on
mission, health and purpose that ever
before.
Large Multiple Gap that’s poised to
close - GSB trades at a significant
discount to private and public multiples
but with an expanding US presence,
shrinking inventory for big CPG’s to buy
and consistent successful execution of
plan, we believe that gap is poised to
close.
01 02 03 04
The BIG Idea.
GROWTH FOCUSED PROVEN TRACK RECORD AUTHENTICITY UNDERVALUED
PREMIUM Fb Tw In
Macro Trends
Fastest Growing Segment
in Grocery Channel
Organic products revenue growth is 11% in the
US vs 2% for conventional (OTA state of
industry report for 2015).
Hard to Replicate
Large CPG companies are unable to internally
launch brands, so they are acquiring them
instead.
Growing Opportunity
Nearly 5% of all food sold in the U.S. is Organic
(up from 3% in 2012) and estimated to be 20%
by 2025.
In The Right Categories
Some of the highest growth areas in Organic
are eggs (32%), snacks (14%), meat (14%) and
dairy (13%). We have product offerings in all
these categories.
PREMIUM Fb Tw In
Successful Track Record
o CEO has profitably grown three other
businesses since 1996.
o COO has run the largest retail buying desk in
the Canadian natural foods industry.
o CFO has extensive experience in Operations,
M&A and financing arrangements.
Strong Operating Model
o Largely outsourced production, highly
variable costs.
o ‘Best-of-the-best’ team – More than 30 years
of industry leadership.
Significant Potential for
Future Growth
o Internal ‘organic’ growth launching new brands
– achieved 39% YOY revenue growth on
internally launched brands (FY17 v. FY16).
o Numerous acquisition opportunities
o Channel development (Export, Gas/
Convenience/Ecomm).
GSB Value Proposition
Management Aligned with
Shareholders
o 10% management and employee ownership.
EXECUTIVE LEADERSHIP
GO VEGGIE RIOTLOVE CHILD MEATBARKIJU
OPERATIONS
SALES
FINANCE
SHARED SERVICES
PRODUCT
DEVELOPMENT
Responsible for ensuring all customers are serviced with the right product, at the right time. The Operations team
is focused on all aspects of planning, sourcing, making and delivering the wide variety of GSB products.
Comprised of the best in the industry, the Sales group is dedicated to ensuring that all brands are executed
through the many channels of trade. Utilizing long standing industry relationships, GSB is often regarded as one
of the best sales organizations in the industry
The Finance group is focused on driving improved EBITDA margins while fostering an environment for
substantial revenue growth.
Responsible for ensuring that GSB continues to drive product innovation by maintaining awareness
of new trends, emerging platforms and stays relevant regarding packaging and product delivery
methods.
Each brand operates independently and is supported by a dedicated brand leader creating an
environment of entrepreneurial spirit and accountability
CEDARCENTRAL ROASTLIFE
CHOICESROLLING
MEADOW
Strong Operating Model.
Complete
North
American
Oversight
Canada
USA
Focus
2015 2016 2017 2018 Q1 Q2
GROSS SALES $4.0M $12.3M $42.0M $65.1M $21.0M $21.7M
ADJ. EBITDA ($1.3)M ($1.1)M $1.4M 1.2M ($0.4)M ($1.0)M
EMPLOYEES 11 35 50 92 93 92
SALES PER EMPLOYEES (000) $364 $351 $840 $832 $929 $943
SHARE PRICE $1.30 (2) $0.82 $1.55 $1.32 $1.04 $0.64
MARKET CAPITALIZATION $20.2M $29.4M $84.9M $95.7M $75.6M $47.8M
MARKET CAP. / GROSS SALES 5.1X 2.4X 2.0X 1.5X 0.9X 0.6X
Company Profile.
Building Better Brands…
(1) Certain sales data from acquisitions have been annualized for comparability.
(2) Share price at close on April 30, 2015.
(3) Q1/Q2 multiple based on annualized quarterly sales
CURRENT CAPITAL STRUCTURE
(AT Q2’ 19)
SYMBOL TSX.V-JTR
SHARES OUTSTANDING 74.8M
FULLY DILUTED 1 74.8M
WARRANTS 1 5.9M
OPTIONS 1 0.8M
MARKET CAPITALIZATION $47.8M
Corporate Data.
Join the Revolution…
1. Includes only exercisable/vested options and warrants.
10%Management, Board &
Employee Ownership
Precedent Transactions
DATE TARGET ACQUIROR TEVTEV /
REVENUE
23 – Feb - 18 Blue Buffalo General Mills 8,000 6.2X
Q1 - 2018 Atrium Innovations Nestle 2,944 3.3X
Dec - 17 Field Roast Grain Meat Co. Maple Leaf Foods 154 3.2X
31 – Oct - 17 Columbus Manufacturing Hormel Foods Corporation 1,088 2.8X
06 – Jul - 17 Pacific Foods Campbell Soup Co. 700 3.5X
21 – Feb - 17 Lightlife Foods Maple Leaf Foods 189 3.5X
07 – Jul - 16 The WhiteWave Foods Co. Danone 10,400 2.6X
15 – Jan - 16 Boulder Bands Pinnacle Foods 1,240 2.5X
06 – Jan - 16 Epic General Mills 100 5.0X
08 – Sep - 15 Annie’s Inc. General Mills 823 3.9X
13 – Jul - 15 Applegate Farms Hormel Foods Corporation 775 2.3X
09 – Jun - 15 Sequel Natural (Vega) The WhiteWave Foods Co. 550 5.5X
29 – Jan - 15 Krave Pure Foods The Hershey Company 225 6.4X
14 – Nov - 14 Gardein Pinnacle Foods 130 2.7X
Average 3.8XSOURCE: BLOOMBERG, PUBLIC FILINGS.
o M&A activity in the
natural food industry is
robust.
o Companies in the natural
food industry have
transacted at significant
multiples of revenue.
High Functioning Team.
Building a Better Team…
President & CEO
o Founder of Life Choices Natural Foods Corp.
and 13+ years as CEO
o Former President of JobShark Corporation
o Board member of Childhood Cancer Canada
Foundation
COO
o Former Sr. Director of Merchandising –
Loblaw Companies
o Lead the development of retail concepts at
LCL as Chief Merchandising Officer
o Significant experience with category analysis,
product development and sales planning
CFO
o Former SVP Finance at KingSett Capital, and
VP Finance of Sears Canada
o Extensive experience in corporate
governance, strategic planning, financing
and M&A
o Operations and process improvement
expertise
Matthew von Teichman Aaron Skelton Greg Guyatt CPA, CA
Blair Tamblyn
Board of Directors.
Building a Better Team…
o Chairman of the Board
o Founder of Life Choices
Natural Foods Corp and
14+ years as CEO
o Former President of
JobShark Corporation
o Board member of
Childhood Cancer Canada
Foundation
o President & CEO at
Brilliant Ideas Group
Canada
o Former General Manager
at Coles Brands in
Australia and SVP at
Loblaw
o Over 35 years of retail
experience specializing in
grocery, natural foods,
drugstore and health and
wellness
o Co-Founder, Managing
Director and CEO of
Timbercreek Asset
Management
o Has led the origination,
structuring and
capitalization of all
Timbercreek funds
(approximately C$4.4
billion in assets)
Matthew von
TeichmanMichael Lovsin
o Current President & CEO
of The SIM Group
o Former CEO of Shop.ca
o Former VP Finance for
Rogers Media and EVP
Rogers Broadcasting
o Board member and Chair
of the audit committee of
publicly listed Klondex
Mines Ltd.
o CPA, CA
o Owner of 7 Pharmasave
Franchises
o Board Member of
Pharmasave Ontario
o Sits on several private and
public boards
o Senior VP at Pender Fund
o Over 16 years of investing
experience in emerging
companies
o Member of the board of
advisors for Reach Social
Inc. and an observer on
the board of
Microdermics Inc
o CFA and past President of
CFA Society Vancouver
James Haggerty Roger Daher Maria Pacella
RETAIL/GROCERY
CUSTOMERS
RETAILER RETAILER GROSS REVENUE RETAIL OVERALL STORE COUNT BRANDS CARRIED BY RETAILER
$46.7B(2017)
1,100+Life Choices, Holistic Choice, Rolling Meadow,
Love Child, Nudge, Central Roast, Cedar.
$2.6B(2014)
1,250+ Love Child, Central Roast, Cedar.
$13.2B(FY2017)
1,000 Central Roast, Rolling Meadow.
$23.8B(2017)
1,500+Life Choices, Rolling Meadow, Love Child,
Nudge, Central Roast, Cedar.
$15.7B(2016)
456(13 in Canada)
Life Choices, Rolling Meadow, Love Child,
Nudge, Central Roast.
N/A 32(Ontario)
Life Choices, Rolling Meadow, Love Child,
Nudge, Central Roast, Cedar.
25B 410 Kiju, Love Child, Meatbar
1. Loblaw Companies Ltd. 2017 Annual Report. Shoppers Drug Mart 2017 Retail Gross Revenue results included in Loblaw (not separately disclosed).
2. Metro and Sobeys results as per their respective 2017 Annual Reports.
3. Whole Foods 2016 Annual Report. In August 2017, Whole Foods was acquired by Amazon.
4. Longo’s Company Website.
Key Canadian Retail Customers.
Strong customers across the grocery trade…
RETAIL/GROCERY
CUSTOMERS
RETAILER RETAILER GROSS REVENUE RETAIL OVERALL STORE COUNT BRANDS CARRIED BY RETAILER
$496B(FY2018)
4,700+ Go Veggie, RiOT Presented – Q2 FY20
$123B(2017)
2,900+ Go Veggie, RiOT Presented - Q4 FY19
$60B(FY2018)
2,300+ Go Veggie
$43B(2018)
2,100+ Go Veggie, RiOT Presented – Q1 FY20
$72B(FY2018)
1,800+ Go Veggie
$34.6B
(2017)1,200+ Go Veggie, RiOT Presented - Q4 FY19
Key US Retail Customers.
Strong customers across the grocery trade…