Welcome and Agenda 1. Welcome / Apologies Neil Craig 2. Chairman s Review Neil Craig 3. CEO Review Brett Hewlett 4. Derma Sciences Inc Update Edward

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2 Welcome and Agenda 1. Welcome / Apologies Neil Craig 2. Chairman s Review Neil Craig 3. CEO Review Brett Hewlett 4. Derma Sciences Inc Update Edward J. Quilty 5. Resolution 1: Reports and Financial Statements 6. Resolution 2: Appointment and Remuneration of Auditors 7. Resolutions 3 6: Director s Elections 8. Resolution 7: Director s Remuneration 9. General Business 10. Director farewell 11. Afternoon Tea 2

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5 Comvita Results Financial results for the year to 31 March 2014 $M 2013 $M Change % Revenue % EBITDA * % Net profit after tax % Earnings per share (cents) (2.9%) Dividends (cents) (7.7%) Total assets % Net debt % Net debt to equity ratio 29% 31% (6.5%) Net debt to EBITDA 1.6x 1.7x (5.9%) Net interest cover 7.1x 9.4x (2.4%) *EBITDA: Earnings Before Interest, Tax, Depreciation and Amortisation 5

6 Financial Results Sales rose 11.4% to $115.3m Second half year 24% up on second half of prior year Net profit after tax of $7.6m achieved despite honey costs and the high New Zealand dollar Gross margin at 52% even with high honey cost shows strength of brand in pushing through price rises Balance Sheet remains in good shape Maintained dividend payout ratio of 50% of NPAT 6

7 Key Achievements Strategy successfully deployed for addressing honey supply shortages Investments made in building production capacity and systems infrastructure to meet growing demand Further inroads to establishing premium brand experience with opening of new tourism experience, two concept stores, Auckland Airport Kiosk and new e-commerce platform We celebrate the life and achievements of our founder, Claude Stratford on his passing at the age of 102 (and 50 weeks) : 40 years of delivering on our vision 7

8 Recent Key Appointments Joerg Kistler Professor Emeritus, The University of Auckland; Advisor to the Comvita Board, Science and Innovation Kylie Van Heerden, IoD Future Directors Programme Roy Ong Chief Marketing Officer, Leadership Team Patrick Brus Chief Corporate Services Officer, Leadership Team Mark Sadd Chief Commercial Officer, Leadership Team (Acting CFO) 8

9 Looking Ahead Integration of New Zealand Honey Limited the $12m acquisition we made in late June 2014 Additional supply should ensure we are no longer squeezed on cost and supply Actively seeking strategic acquisitions that fit with our brand We anticipate continued growth in revenue and net earnings Sales and profit will still be very lopsided in favour of second half. Evolution of product portfolio and any acquisitions expected to improve margin and year of two halves over time We anticipate a bigger loss at half-year than last year but an increase in net earnings for the full year. 9

10 Shareholder Communications NZX announcements Investor presentations Investor Newsletters Annual Report Investor App: Recognition: Winner of 2014 NXZ Emerging Leaders Best Corporate Communicator INFINZ Award. 10

11 Thank You to shareholders for your continued support 11

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13 Financial Performance Group Revenue EBITDA ** $16.4m $31m $39m $4.1m $0.4m * $4.8m $5.3m $65m * $71m $85m $82m $6.3m $11.2m $96m $103m $15.5m $14.7m $115m * 15 month period, due to change in balance date. ** EBITDA Earnings before interest, tax, depreciation and amortisation. 13

14 Sales by Region Sales by Category $47.5m ASIA $28.4m AUSTRALIA $25.0m NEW ZEALAND $7.0m UK/EUROPE $7.4m NORTH AMERICA $36.9m HEALTHCARE $64.6m FUNCTIONAL FOODS $4.6m PERSONAL CARE $8.1m MEDICAL $1.1m OTHER 14

15 Building a Premium Global Brand Bottom Standard Layout Without Frond Brand reputation in Asia allows significant price premium over nearest competitors Brand offer on focussed, differentiated ingredient platforms Brand story has great level of meaning with customers Source and efficacy of product range Growth and awareness opportunity through tapping into New Zealand tourism via brand experiences 15

16 Diversity and Reach of Direct Channels a Real Strength Asia 78% direct to consumers Bottom Standard Layout 35 dedicated Comvita branded stores and a total of 400 retail locations in China Without Frond 78 Comvita brande retail locations, 43 in Hong Kong, 13 in Taiwan, 17 in Korea, 1 in Japan, 1 in UK and 3 in NZ Web sales growing online in all Comvita markets, with total online sales nearly doubling in the last 12 months Medical products via specialist distributor, Derma Sciences 16

17 Bottom Standard Layout Without Frond Research Circa $2.9m p.a. in research and development Isolation and identification of lead bioactive compounds Clinical trials New product development Regulatory approvals for health claims Development of tests for honey quality and authenticity Plant breeding programmes Field agronomic trials 17

18 Supply Chain Specialist Manufacturing Centre of excellence in honey testing capability Australasia s most advanced in-house laboratory Olive Leaf Approximately one million olive trees on two plantations based in South QLD, Australia Specialised on-site extraction facility enables rapid extraction of freshly harvested olive leaf Manuka Honey 2014/15 honey season: 30,000 hives, specialist Manuka honey producer, providing >40% of Comvita s Manuka honey supply 80% of Comvita s honey supply now under full ownership or contract throughout New Zealand 18 18

19 New Zealand Honey 1 July 2014 Comvita purchased the business of NZ Honey (NZH) from the New Zealand Honey Producers Co-op. What did we actually buy? A honey packing production facility; tonnes per week A warehouse and distribution facility; 2,000 2,300 tonnes per annum A supply contract for at least 6 years from the circa 70 supplier shareholders of the Co-op Significant inventory in excess of $11 Million Why did we buy NZH? To improve the security of supply To provide greater exposure to the South Island To secure supply of clover honey to satisfy growing Asian demand To value-add a significant volume of prime NZ honey currently exported in bulk 19 19

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21 Meeting Challenges Investing in building supply base and production capacity Looking for new opportunities that are strategically aligned and leverage what is already in place Working with industry and Government to build capability and prevent value leakage Evolve product portfolio to reduce the pressure on the first half year. 21

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23 Comvita Annual Meeting Advancing Tissue Regeneration in Wound Care July 2014

24 Derma Sciences A Tissue Regeneration Company A dynamic organic form representing science, innovation and forward motion The forming of the skin matrix The interconnectivity of our portfolio working together to advance tissue regeneration in wound care A TISSUE REGENERATION COMPANY 24

25 Derma Sciences Company Overview Derma Sciences (NASDAQ: DSCI) is a tissue regeneration company developing and delivering solutions for advanced wound care management Pharmaceuticals Platform technology 7-chain amino acid peptide, DSC127, is an analog of naturally occurring peptide angiotensin 1-7. Developed at USC and licensed to Derma in 2007 Development Program Diabetic Foot Ulcers (Phase III) Scar (Pre-clinical) Radiation Dermatitis (Potential Phase II) Gross Margins: Pharma-like upon approval Advanced Wound Care Proprietary technologies for chronic wounds and burns, growing at 30 40% annually 2011 Revenues: $16 million 2012 Revenues: $24.8 million 2013 Revenues: $33.9 million Gross Margins: 48 52% Sales Reps: 84 total sales/mktng/ corp.accounts in US, 3 in Can., 7 in UK & Internat l, 1 Distributor elsewhere Traditional Wound Care Includes both branded and privatelabel/oem dressings for basic wound care, growing at 0-2% annually Sponges Wound dressings & packing strips Island & barrier border gauze Non-adherent impregnated Conforming bandages Elastic net dressings Compression bandages Laparotomy sponges 2011 Revenues: $47 million 2012 Revenues: $47.8 million 2013 Revenues: $45.8 million Gross Margins: 25 30% Sales Reps: Global OEM and distributor network A TISSUE REGENERATION COMPANY 25

26 We Are Meeting Our Sales Objectives ($ in millions) $100 $90 N ET S A LE S $80 $70 $60 $50 $40 $30 $20 $10 TOTAL TWC AWC $0 2007A 2008A 2009A 2010A 2011A 2012A 2013A 2014P % CAGR Net Sales P ( ) TOTAL $34 $50 $49 $57 $63 $73 $ % TWC % AWC $3 $4 $8 $12 $16 $25 $ % A TISSUE REGENERATION COMPANY 26

27 Advanced Wound Care AWC revenues are growing rapidly AWC ALL $(000) $2,947 $4,494 $7,617 $11,532 $15,928 $24,833 $33,900 % Growth 52.5% 69.5% 51.4% 38.1% 55.9% 36.6% A TISSUE REGENERATION COMPANY 27

28 Our Balance Sheet Is In Excellent Shape We had an estimated $92.4 million of cash and investments on hand as of March 31, 2013, excluding our investment in Comvita Receivables remain in good shape Inventory appears properly positioned to support our continued growth We do not anticipate any appreciable overall change in our other current assets and liabilities No significant change in the historical level of capital expenditures is anticipated, barring any in-licensing of additional advanced wound care products A TISSUE REGENERATION COMPANY 28

29 Strong Growth Engine for AWC Reflects 3 YR CAGR Growth through June 2014 Expanding indications Burns, Radiation Oncology, Acute Care A TISSUE REGENERATION COMPANY 29

30 Expanding Indications Burns Active use showing positive clinical outcomes Maricopa, Phoenix, AZ Western Pennsylvania Hospital, Pittsburg, PA University of Southern Alabama, Mobile, AL Hannepin County Medical Center, Minneapolis Mercy Burn, Springfield, MO Nationwide Children s Burn Center, Columbus OH Harborview, Seattle Oregon Burn Center, Portland Oncology Cancer Treatment Centers of America Princeton Medical Center A TISSUE REGENERATION COMPANY 30

31 Resolutions 1 Reports and Financial Statements 2 Appointment and remuneration of Auditors 3-6 Director s Election s: Re-elect Neil John Craig Re-elect Maurice John Prendergast Elect Edward (Ed) Joseph Quilty Elect Lucas (Luke) Nicholas Elias Bunt 7 Director s Remuneration 31

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