Sustainable Nutrition : Investor Update

onlyuse

personalINVESTOR UPDATE

10 MARCH 2022

r

r personal use only

SNAPSHOT

Premium hemp & plant-based health and wellness products

Evolution to a branded, value-added health company

Vertically integrated business - producer, manufacturer & distributor

Strong retail relationships; important new contract announced with Woolworths on 9 March 2022

Operates in high-growth market verticals: plant-based food, pet supplements & sustainable ingredients

Plant-based products are a rapidly
growing and evolving market segment
only			TSN is positioned
• Cleaner lifestyles, changes to eating habits, sustainable living	to leverage the
	choices, rising agricultural costs - macro trends fuelling growth	mainstream shift
			towards plant
• Significant technological advances and innovation in segment	based,
sustainable
use			nutrition
• Strong investment support for sector both offshore and in Australia
personalr	32%	46%	2x
of Australians are	increase in	plant-based
now "flexitarian"	Australian plant-	products in
	or "meat	based grocery sales	Australian
	reducers"1	in FY20 (vs FY19) 2	supermarkets 2

Notes:

1 Food Frontier: Hungry for plant based: Australian Consumer Insights, Colmar Brunton, October 2019

2 Food Frontier 2020 State of the Industry: Australian Plant Based Meat Sector

Dedicated

Category

Focused

Brands

useonly

TM

TM

	TSN business mix
(1H FY22 - revenue)
personalr	45%	55%

Branded product sales

Ingredients sales

4

•	Launched in	•	Launched in	•	Acquisition settled
	September 2020		June 2021		28 Jan 2022
•	Plant based	•	Innovative pet	•	Market leader in
	challenger		supplements brand		native & indigenous
	food brand	•	Gained strong		ingredients
			Sourced directly
•	Quickly gaining		distribution in	•
	distribution,		Australian retailers		from indigenous
	revenue and online		Direct to consumer		communities across
	sales growth	•		Australia
			channel growing		Growing and
•	Distribution		strongly	•
	agreements with		Feasibility		production is
	Coles and	•		sustainable and
	Woolworths		completed for		traceable
			launch into the US		Exports into the US
			market	•
					and South Korea

• The traditional hemp ingredients business
• Continues to grow with innovative new products and upgraded production processes
• Long term supply contracts with 17 farming suppliers

1H FY22 financial summary

	$M	1H FY22A	2H FY21A	1H FY21A
	Total revenue	1.6	1.1	0.8
		0.7	0.5	0.3
	Gross profit
only	(0.8)	(0.4)	(0.1)
	Marketing expense
	Other operating expenses	(2.7)	(3.4)	(1.3)
use	(2.6)	(3.1)	(0.9)
	EBITDA
	NPAT	(2.8)	(3.3)	(1.1)
	Gross margin (%)	43.0%	44.9%	38.8%
	Cash	5.4	0.9	4.1
	Borrowings	1.1	1.2	1.2
personalr	(2.9)	(2.7)	(1.2)
	Operating cash flow

• Strong revenue growth: up 103.6% vs 1H FY21 with strong growth in the branded products portfolio despite COVID-19 related supply disruptions (which reduced branded product sales by ~20% in Q2 FY22)
• Gross profit uplift due to changing business mix: branded product portfolio generates higher gross margins
• Marketing expense increase: given significant investment in brand awareness in-line with Company transformation strategy over past 12-months
• Other operating expenses: reduction in operating expenses % sales in 1H FY22. Management maintain strong focus on efficiency of operations