Me Today GroupEquity Raising Presentation
8 July 2020
Disclaimer and Important Notice
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NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES.
OfferThis presentation has been prepared by Me Today Limited (Me Today) in relation to an offer of new ordinary shares in Me Today (New Shares) made under clause 19 of Schedule 1 of the Financial Markets Conduct Act 2013 (FMCA).
International selling restrictionsThis presentation does not constitute an offer of New Shares in any jurisdiction in which it would be unlawful. In particular, this presentation may not be distributed to any person, and the New Shares may not be offered or sold, outside New Zealand or Australia in any jurisdiction where distribution is restricted or prohibited by law or would constitute a breach by Me Today of any law.
This presentation and the offer of New Shares are only made available in Australia to persons to whom an offer of securities can be made without disclosure in accordance with applicable exemptions in sections 708(8) (sophisticated investors) or 708(11) (professional investors) of the Australian Corporations Act 2001 (Corporations Act). Prospective investors should not construe anything in this document as legal, business or tax advice nor as financial product advice for the purposes of Chapter 7 of the Corporations Act. Investors in Australia should be aware that the offer of New Shares for resale in Australia within 12 months of their issue may, under section 707(3) of the Corporations Act, require disclosure to investors under Part 6D.2 if none of the exemptions in section 708 of the Corporations Act apply to the re-sale.
InformationThis presentation contains summary information about Me Today which is current at the date of this presentation. The information is of a general nature and does not purport to be complete nor does it contain all information which a prospective investor may require in evaluating a possible investment in Me Today or that would be required in a product disclosure statement under the FMCA. This presentation should be read in conjunction with Me Today’s market releases and other periodic and continuous disclosure announcements.
Not financial product adviceThis presentation does not constitute financial product advice or investment advice and is not a recommendation to apply for New Shares, and has been prepared without taking into account the objectives, financial situation or needs of investors. Before making an investment decision, you should consider all relevant information having regard to your own objectives, financial situation and needs, and consult an NZX Firm or solicitor, accountant or other professional advisor if necessary.
Investment risk An investment in Me Today is subject to investment and other known and unknown risks, some of which are beyond the control of Me Today. Me Today does not guarantee any particular rate of return or the performance of Me Today.
Forward-looking statementsThis presentation includes certain “forward-looking statements” about Me Today and the environment in which Me Today operates. Forward-looking information is inherently uncertain and no assurance can be given that actual outcomes will not materially differ from forward-looking statements. You should not place undue reliance on any forward-looking statements.
DisclaimerTo the maximum extent permitted by law, Me Today and its affiliates, related bodies corporate, directors, officers, partners, employees, agents and advisers disclaim all liability and responsibility (whether in tort (including negligence) or otherwise) for any direct or indirect loss or damage which may be suffered by any person through use of or reliance on anything contained in, or omitted from, this presentation.
Introductions
Grant Baker
Chairman
Grant has a range of experience across both private and public companies, including involvement in a number of successful start-ups. Positions held include:
• Current Chairman of Turners Automotive
• Former Chairman of 42-below and Trilogy International, sold to Bacardi and CITIC Group, respectively
• Co-founder of The Business Bakery
Stephen Sinclair
CFO, Director
Stephen is a Chartered Accountant, spending his early career at PwC. He has subsequently been involved in numerous successful businesses with Grant Baker, including:
• 42 Below
• Ecoya and Trilogy International
• Recapitalisation of Dorchester Pacific (now Turners Automotive)
Michael Kerr
CEO, Director
Michael has held a variety of roles across sales and marketing for several local and multinational businesses. His experience in the health and wellness space includes:
• General Manager of Trilogy
• Responsible for establishing supplement brand, Swisse, in New Zealand across multiple retail channels
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Summary of equity raising
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Maximum offer size • If the retail offer and share purchase plan are fully subscribed (including oversubscriptions) up to $4.5 million will be raised
Retail Offer
• A retail offer of up to $3 million to selected investors, with potential to accept up to $1 million of oversubscriptions
• The retail offer price of 9.5 cents per share represents a 26.4% discount to the last closing price of $0.129 on 7 July 2020, and a 28.1% discount to the 10-day VWAP of $0.132 prior to announcement
Share Purchase Plan
• Share Purchase Plan to raise up to $250,000 with potential to accept up to $250,000 of oversubscriptions
• Open to eligible existing shareholders at 5.00 pm on 7 July 2020
Use of proceeds
• The proceeds from the equity raise will be used to fund the following initiatives:
• Additional investment in above the line marketing campaigns to grow brand presence in the New Zealand market
• Increased investment in digital and social marketing by contracting with more brand influencers to expand the reach and profile of the brand in New Zealand and internationally
• Investment in additional head count to fast track international expansion
• Additional investment in marketing activities to launch the brand on Tmall prior to 11/11 (China’s “Singles’ Day”)
• Additional investment in international markets to assist expansion including product registration costs in Australia and USA
• Further investment in new product development and category expansion
• Investment in working capital to support top line growth
• If the capital raise is fully subscribed (but before oversubscriptions), it is anticipated Me Today will have ~$6.45m of cash on hand with no debt
Company overview
Overview of Me Today GroupThe Group is comprised of The Good Brand Company Limited and Me Today New Zealand Limited
MTL Securities Limited(owned by entities associated
with the founders1)
Other shareholders
Me Today LimitedNZX Ticker “MEE”
Listed entity, formerly CSM Group Limited, used as the vehicle for the reverse listing in March 2020
• A premium skin care and supplements brand with a specific focus on the health and wellness space
• Where possible produces vegetarian / vegan friendly products using predominantly natural inputs
• Founded by Grant Baker, Stephen Sinclair, and Michael Kerr in 2019
• Formed to launch, sell and market both Me Today branded products, and third party brands with similar brand alignment in the health and wellness space
• Network of sales employees to service the pharmacy and health store retail channels in New Zealand
• Currently distributes three brands in addition to Me Today, Life-space (Australian probiotics), Artemis (NZ traditional plant medicine), and SleepDrops (NZ supplements and herbal product to support sleep and stress levels)
60.8%2 39.2%2
1. Founders are Grant Baker, Michael Kerr, and Stephen Sinclair
2. Existing shareholdings pre capital raising5
The Me Today brand
Assists general health and wellbeing
Supports immune function
Rich in botanicals, antioxidants & vitamins
Performance & efficacy
New Zealand owned and operated
Top: Me Today campaign
Left: Me Today global ambassador, Beauden Barrett
Cross-category focus
Premium products
Environmentally aware
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Overview of current Me Today product rangeSupplements Skin care
Women’s Daily Energise Goodnight Beauty
Protect
Magnesium 875
MoveBecalmMen’s Daily
Vitamin C 800 Vitamin D3 1000
Cream Cleanser Micellar Gel Mist Toner Serum
Mist Hand Sanitiser
Eye CreamFace Mask
Moisturiser
Night Cream
Hand Lotion Hand Wash Hand Cream
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Protect – balance and comfort range
Women’s daily – enrich and hydrate range
Grape Seed 30000 Lip Balm
Me Today business model
Sourcing MarketingManufacturing & distribution Channels
• Me Today’s contract manufacturers are responsible for sourcing ingredients in accordance with Me Today’s formulations
• Me Today is responsible for the development of its formulations and these remain the property of Me Today
• Me Today is responsible for sourcing all packaging
• All Me Today products are contract manufactured in New Zealand by reputable contract manufacturers
• Me Today operates a 4PL distribution model, with HCL, a subsidiary of EBOS Group, providing all back-end and customer facing logistics including customer invoicing
• This asset light model where manufacturing and distribution is outsourced to third parties allows for scalability and limits capex requirements
Retail
• Me Today has exclusive supply agreements with Green Cross brands, Life Pharmacies and Unichem
• Me Today products are currently in over 200 pharmacies
Online Global brand ambassador
• Me Today recently announced its partnership with New Zealand rugby star BeaudenBarrett
• Me Today sells direct to consumers through its own online store, and via other online and daigou channels such as Unichem’s Tmall in China
• Building awareness and trust in the brand is a key focus for Me Today given the categories the brand exists in
• Marketing is used to communicate what the Me Today brand stands for and its key product propositions
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Skin care, $135b
Supplements, $128b
• Globally the skin care and supplement market is worth ~US$263b3,4 p.a.
• Me Today is favorably positioned to capitalise on this market opportunity given the positive perception of New Zealand as a manufacturer of premium consumer goods and the global trend towards natural and environmentally conscious products
• Beyond the New Zealand and daigou markets, the Australian pharmacy channel presents a significant opportunity, with annual supplement and skin care sales totaling A$1.6b and A$818m5, respectively
• Additionally, Me Today has received a number of inbound enquiries from other international markets, and as a result has recently shipped a ~$40k order to a distributor in the United Kingdom
Market opportunity
New Zealand International
• The New Zealand skin care and supplement market presents a compelling opportunity for Me Today, with the segment generating NZ$316m1 in retail sales in 2019, of which ~45% relates to the pharmacy channel
• The New Zealand pharmacy channel includes the 360 Unichem and Life branded pharmacies which Me Today’s products are ranged for, along with a further 650 independent pharmacies, 31 countdown pharmacies, 13 Chemist Warehouse and 5 Bargain Chemist stores
Pharmacy - Skin care, $17m
Pharmacy -Supplements, $125m
Grocery - Skin care, $94m
Grocery - Supplements, $80m
New Zealand skin care and supplement market1 Global skin care3 and supplement4 market
Me Today’s addressable market
($142m)2
1. IRI NZ Pharmacy & grocery Data MAT 17/11/192. Subject to Me Today’s exclusive supply agreement with Green Cross brands, Life Pharmacies and Unichem3. Treffs 20184. Nutrition Business Journal 20175. IRI AU Pharmacy Data MAT 17/11/19
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Strategy – Me Today
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Strategy Key initiatives
Branding & marketing
• Focus on building brand awareness and trust through communicating what the brand stands for and key product propositions
• Invest in activating the brand through extensive marketing campaigns promoting the brand’s ethos, and the benefits of Me Today products, initially locally, and in offshore markets as they are entered
• Establish Me Today as a premium brand and raise awareness across supplements and skin care categories via marketing campaigns
Market penetration
• Expand Me Today’s presence in the New Zealand market and launch the Me Today brand into overseas markets such as China and Australia in the near-medium term
• Leverage The Good Brand Company’s sales network to increase the brand’s distribution across the Green Cross network from ~200 to ~280 stores
• Access Chinese market through locally based daigou traders and via the Tmall online platform
Innovation and category
expansion
• Understand global trends and innovation in the health and wellness space to drive new product developments in existing and adjacent categories
• Launched 4 new supplement products in June, with a further 5 to be launched over the July to August period
• Planning to launch a new range of serums in September and 2 new natural sunscreen products in October
Manufacturing and product
sourcing
• Achieve cost reductions by contracting larger volumes and working with contract manufacturers’ raw material providers to access high quality materials and lower costs as Me Today scales
• Increase product volumes to drive improved pricing and margins
People and knowledge
• Establish a world class team within Me Today to drive financial performance
• Recently contracted a senior creative and hired a brand activation manager
• Maintain right-sized workforce, in particular in sales and marketing functions as the business grows
Strategy – The Good Brand Company & Group
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Strategy Key initiatives
Channel development
• Grow sales network in the key pharmacy and health store channels
• Focused on increasing distribution of Me Today and its third party products
Grow agency brands
• Leverage existing capacity to grow number of brands represented
• The Good Brand Company is currently in discussions with additional brands, and will consider utilising its networks across the pharmacy and health store channels to drive sales of these products, where there is a strong fit with its existing portfolio
Strategy Key initiatives
Targeted acquisitions
• Consider targeted acquisitions to accelerate growth
• Evaluate acquisition opportunities of brands in existing or adjacent categories where there is strong strategic and brand alignment
The Good Brand Company
Me Today Group
1. Cash position as at 7 July 2020 2. Level 3 required all workers to remain at home where possible, with certain businesses (including pharmacies) allowed to operate under strict guidelines and was in effect from 27 April 2020 to 13 May 20203. Level 4 severely limited travel, with only essential businesses (including pharmacies) allowed to operate under strict guidelines, and was in effect from 25 March 2020 to 27 April 20204. In response to COVID-19 the New Zealand Government provided significantly impacted businesses with $7,000 per full time employee for a 12 week period
Financial information and outlook
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Financial information and outlook
• Me Today delivered gross revenue of $639k and net revenue of $566k in the 5 months post the Me Today brand launch in November2019 and full year of The Good Brand Company
• The Me Today brand currently generates a gross margin in excess of 50% across both its supplement and skin care ranges
• Me Today currently has a net cash position of $3.4m1 with no debt. If the equity raise is fully subscribed (but before oversubscriptions), it is expected to have a cash position of ~$6.45m, which will enable investment in the business and accelerate Me Today’s growth
• Target run rate gross revenue by the end of FY21 in excess of $2.0m, and growth in store presence from ~200 to ~280
• Further benefits of increased brand investment and marketing from the capital raise will be realised in FY22 and beyond
COVID-19
• Whilst pharmacies remained open during COVID-19 alert levels 32 and 43, their priority was the supply of over the counter prescriptions, which paired with restrictive safety precautions made for a challenging operating environment in this channel
• In response, management took steps to preserve cash including applying for the wage subsidy4, removing directors fees and salary increases for 2 months, and delaying the hiring of new staff
• Management believe as a result of COVID-19 the delivery of Me Today’s roll-out plan for New Zealand has been delayed ~2 months, while the entry into international markets could be impacted until restrictions have been lifted
• As restrictions have eased domestically, the prioritisation of health and wellbeing amongst consumers has presented a strong opportunity for Me Today to drive growth
Board of Directors
Hannah Barrett - Director
Hannah is Chartered Accountant with experience advising global clients gained while at accounting firm PwC in its Financial Advisory division. She currently owns her own business focused on digital consulting and marketing
Grant Baker - Chairman
Dr. Antony Vriens - Director
Antony is a qualified medical doctor and specialist with a career spanning the health and financial sectors, which includes practicing as a medical doctor. He is currently a Director of Turners Automotive Group, and is the Chairman of DPL Insurance
Roger Gower - Director
Roger has wide experience as an executive in both public and private companies. He is currently Chairman of PrimePort Timaru Limited and New Zealand Food Innovation Auckland, and CEO of New Zealand’s Best Food & Beverage Limited
Michael Kerr – CEO, Director Stephen Sinclair – CFO, Director
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Equity raising details
Equity raising details
Offer size and structure
• Up to $4.5m equity raising, comprising:
‒ Retail offer of up to $3m to selected new and existing investors, with potential to accept up to $1m of oversubscriptions
‒ Share Purchase Plan of up to $250k to eligible existing shareholders, with potential to accept up to $250k of oversubscriptions
• Up to 47,368,420 million new ordinary Me Today shares will be issued under the offer (if fully subscribed), representing 12.98% of Me Today’s total shares on issue prior to launching the offer
Offer price
• 9.5 cents per new share, representing:
‒ 26.4% discount to the last closing price of 12.9 cents on 7 July 2020
‒ 28.1% discount to the 10-day VWAP of 13.21 cents up to 7 July 2020
Retail Offer• Selected investors will be invited to participate in the retail offer from 8-9 July 2020
• New shares issued under the retail offer are expected to be allotted and start trading on 10 July 2020
Share Purchase Plan
• Eligible existing shareholders as at 5pm on 7 July 2020 will be sent further information outlining the terms of the share purchase plan, which is expected to open on 13 July 2020 and close on 24 July 2020
• New shares issued under the share purchase plan are expected to be allotted and start trading on 31 July 2020
Ranking • All new shares will rank equally with existing fully paid ordinary shares from date of issue
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TimetableEvent Date
Announcement of equity raising 8 July
Retail Offer
Conduct retail offer under trading halt 8-9 July
Announce completion of retail offer and resume trading 10 July
Settlement of retail offer, shares allotted and start trading on NZX 10 July
Share Purchase Plan
Share Purchase Plan opens 13 July
Share Purchase Plan closes 24 July
Announcement of results of Share Purchase Plan 27 July
Settlement of Share Purchase Plan, shares allotted and start trading on NZX 31 July
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Key risks
Key risksDependence on key personnel
The Me Today Group’s operations are heavily reliant on certain key personnel, in particular Grant Baker, Stephen Sinclair, and Michael Kerr. If any of those key personnel were to leave the Me Today Group, its operations and financial performance could be adversely affected.
Marketing and brand cut through
The Me Today Group needs to be able to identify and react to new trends in the health and wellness products industry, and to achieve successful brand cut through against its competitors. There are a number of established competitors in the supplements and skin care categories, and if Me Today cannot successfully ‘stand out’, its financial performance may be adversely affected.
CompetitionThe health and wellness sectors, both in New Zealand and internationally, are highly competitive. One or more of the Me Today Group’s competitors could offer comparableproducts at lower prices, which might cause downward pressure on the Me Today Group’s pricing and ability to create margin and revenue. One or more competitors could also offer comparable products which are preferred by consumers, leading to reduced demand for the Me Today Group’s products.
Management of growth opportunities
As the Me Today Group quickly expands, it may not successfully manage its expected rapid growth, which could lead to adverse operational and financial performance.
Trade marks and intellectual property
If the Me Today Group is unable to obtain and enforce trade mark and intellectual property rights for its brands, the value of those brands, and by extension the financial performance of the Me Today Group, may be adversely affected. Applications for trade marks may be made by other parties directed to intellectual property relevant to the sector in which the Me Today Group operates. There can be no assurance that third parties will not independently develop similar alternative intellectual property to the Me Today Group’s. The occurrence of any of these events could have a material adverse effect on the Me Today Group’s business, financial condition and results of operations.
Offshore marketsExpansion into overseas markets is difficult, and there is a risk that Me Today Group will fail to successfully execute its strategy in overseas markets, or that its products will not resonate with consumers in foreign markets. Expansion into overseas markets introduces exposure to currency risks, different regulatory frameworks, business landscapes and competition.
Early stage companyBoth The Good Brand Company and Me Today NZ are early stage companies with limited trading history and no assurance of future revenue growth or profitability. Investment in early stage companies is high risk. There is no guarantee of any return, and any such returns may take years to materialise. Many early stage companies fail.
Regulatory riskAs a large part of the Me Today Group’s business comprises the sale of health and wellness products, it is possible that the sale, marketing and production of such products may be subject to new regulations.
Third party dependency The Me Today Group relies on third parties for the manufacture, packaging and distribution of Me Today branded products.
COVID -19A second outbreak of COVID-19 in New Zealand, and potential response measures put in place by the government could adversely affect Me Today’s operational and financial performance, while continued outbreaks in key international markets could adversely affect entry into those markets.
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Appendix
FY20 income statement$000 31 March 2020
Revenue before marketing services 639
Less marketing services provided by a customer (73)
Net revenue 566
Cost of sales (107)
Selling and marketing expenses (378)
Administrative expenses (896)
Operating loss (815)
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FY20 balance sheet$000 31 March 2020
Cash and cash equivalents 4,168
Trade and other receivables 247
Inventory 341
Taxation receivable 11
Current Assets 4,767
Property, plant and equipment 23
Intangible assets 62
Total assets 4,852
Trade payables and other labilities 529
Shareholder advances -
Total current labilities 529
Total liabilities 529
Net assets 4,323
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Thanks