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


ANNUAL REVENUE AT

ACQUISITION$12.7M


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


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


ANNUAL REVENUE AT

ACQUISITION$8.0M


CAGR 14%11

Kiju Organic


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


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


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…

management presentation november 2018 - greenspace brands · management presentation november 2018....

Documents