MYECO GROUP LTD — AGM Information 2013

Nov 28, 2013

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Annual General Meeting Presentation 29 November 2013

July 2012

Disclaimer

Forward

looking
statements
disclaimer

"This
presenta6on
contains
“forward-­‐looking
statements.”
Such
forward-­‐looking
statements
may
include,
without
limita6on:

• (i) es6mates
  of
  future
  earnings;

• (ii) es6mates
  of
  future
  produc6on
  and
  sales;

• (ii) es6mates
  of
  future
  cash
  costs;

• (iv) es6mates
  of
  future
  cash
  flows;

• (v) statements
  regarding
  future
  debt
  repayments;
  and (vi) es6mates
  of
  future
  capital
  expenditures.

Where
the
Company
expresses
or
implies
an
expecta6on
or
belief
as
to
future
events
or
results,
such
expecta6on
or
belief
is
expressed
in good
faith
and
believed
to
have
a
reasonable
basis.
However,
forward
looking
statements
are
subject
to
risks,
uncertain6es
and
other factors,
which
could
cause
actual
results
to
differ
materially
from
future
results
expressed,
projected
or
implied
by
such
forward-­‐looking statements.
Such
risks
include,
but
are
not
limited
to
increased
produc6on
costs,
as
well
as
poli6cal
and
opera6onal
risks
in
the
countries and
states
in
which
we
operate
or
sell
product
to,
and
governmental
regula6on
and
judicial
outcomes.

The
Company
does
not
undertake
any
obliga6on
to
release
publicly
any
revisions
to
any
“forward-­‐looking
statement”
to
reflect
events
or circumstances
aMer
the
date
of
this
presenta6on,
or
to
reflect
the
occurrence
of
unan6cipated
events,
except
as
may
be
required
under applicable
securi6es
laws.

All
financial
amounts
are
expressed
in
Australian
dollars
unless
otherwise
indicated."

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2

Agenda

1. 2013
   Highlights
   and
   Key
   Developments 2. Financial
   Results
   Overview

2. Bioplas6cs
   Industry
   and
   Outlook

3. Cardia
   Business
   and
   Opportunity

4. Investment
   Summary

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3

**Cardia Bioplastics Summary Developer

and
manufacturer
of
sustainable
resins
and
finished
products
derived from
renewable
resources
for
the
global
packaging
and
plas9c
products
industries.**

Board of Directors

Capital Structure

Richard Tegoni Non-executive Chairman Frank Glatz Managing Director Steven Bendel Non-Executive Director Gideon Meltzer Non-Executive Director Pat Volpe ( Resigned 22 Nov 2013) Jacky Chen ( Resigned 17 Oct 2013) John Scheirs ( Resigned 14 May 2013)

Share Price Performance

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Capital Structure
Australian Securities Exchange (ASX: code)	CNN
Shares on issue (ASX)	2696.09m
Share price (as at 27 November 2013)	0.3 cents
Market capitalisation	$8.09m
Listed options on issue (ASX: CNNOB) Exercisable at 1.5c any time to 30 June 2015	221.3m
Unlisted options on issue
Exercisable at 0.35 cents any time to 15 July	100m
2014
Rolling monthly turnover	60m
Top 20 shareholders	46.0%
Total number of shareholders (as at 27 November 2013)	2,727

2013 Highlights – Momentum Building

• ü Sales
  revenues
  of
  $5.05
  million
  –
  an
  increase
  of
  17%
  on
  FY2012.

• ü Strategic
  product
  development
  rela6onships
  with
  global
  brand
  owners
  and
  packaging companies
  star6ng
  to
  convert
  to
  sales
  contracts.

• ü These
  sales
  contracts
  are
  typically
  long
  term
  providing
  robust,
  recurring
  and
  more predictable
  earning
  stream.

• ü Sales
  of
  Cardia
  Bioproducts
  finished
  goods
  and
  wholesale
  trading
  goods
  to
  Asian customers
  also
  gaining
  momentum.

• ü Broad
  porbolio
  of
  products
  in
  market
  –
  primed
  for
  growth.

• ü Expansion
  of
  global
  reach
  through
  network
  of
  own
  business
  resources
  and
  distributors.

• ü Cost
  reduc6on
  program
  delivered
  during

Significant
progress
in
technical
development,
sales
and
commercialisa5on

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5

Sales Contracts with Market Leaders Key Developments:

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**Exclusive

annual
supply
contract
for
Shanghai-­‐Pudong**

Exclusive
supply
of
an
es1mated
$1.2
million
per
annum
of
Cardia
Biohybrid™ renewable
kitchen
waste
bags
to
approximately
20%
of
households
in
this
region.

**Breville

goes
green
with
Cardia
compostable
Juicer
bags**

Breville
Group,
a
global
designer
and
manufacturer
of
small
kitchen
appliances will
purchase
and
market
Cardia’s
compostable
“juicer
bags”
as
part
of
its
Juicer accessory
offering
to
consumers.

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Cardia
wins
$500K
hygiene
products
contract
for
American market

Annual
supply
deal
with
Mabesa,
a
leading
American
diaper
products
company. Using
the
hygiene
films
made
from
Biohybrid™
technology,
the
American
diaper products
company
now
offers
an
environmentally
sensi1ve
diaper
that
is
less dependent
on
finite
resources.

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6

Key Developments: Partnerships and Product Launches

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Custom Bioplas9cs
(USA)

Highland Plas9cs
(USA)

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ECOCARE™
(AUS)

Selected
Australian
retailers commenced
retailing
of Cardia
Bioplas9cs
waste management
products

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Alto
Packaging (ANZ)

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Pancake
Parlour Restaurants
(AUS)

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7

Key Developments: Contracts under negotiation

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**Brazilian

Retailers**

Carrier
bag
sales
to
Brazilian
retailers
commenced
with
annual supply
agreements
under
nego1a1on.
Several
Brazilian
States
are currently
formalising
legisla1on
on
carrier
bags
and
packaging. Significant
growth
poten1al.

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**Compostable

Waste
Management
Products**

Compostable
waste
management
products
sales
strengthen
in Australia,
Europe
and
North
America
due
to
upcoming
regulatory changes.
Significant
growth
poten1al.

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**Organic

Waste
Diversion
in
Malaysia**

Malaysia
organic
waste
management
trials
approved
by Government
Authori1es
with
purchase
orders
awai1ng
release. Significant
growth
poten1al.

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8

In-market validation Key Developments:

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**Global

consumer
goods
company**

Validates
Cardia’s
product
and
market
poten1al.
Cri1cal
step towards
global
commercialisa1on.
Significant
growth
poten1al.

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Ci9es
of
Nanjing,
Hangzhou,
Yuhang

Biohybrid™
kitchen
waste
bags.
Trials
successfully
completed. Annual
supply
agreements
under
nego1a1on.
Significant
growth poten1al.

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Biohybrid™
container
for
nutri9onal
supplement
and cosme9cs
market

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9

Key Developments: Advances in patented technology

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Cardia
Bioplas6cs
receives
Halal
cer6fica6on Opens
up
supply
to
1.6
billion-­‐strong
Muslim
community.

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Cardia
Biohybrid™
films
tailored
for
water
distribu6on industry

Cardia
developed
proprietary
Biohybrid™
packaging
films
for
the water
distribu1on
industry
with
sales
commenced
in
Australia, Canada
and
Europe.

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10

Financial Results Overview	Financial Results Overview	Financial Results Overview	Financial Results Overview
	FY2013	FY2012	Commentary
Sales Revenue	$5,050,075	$4,301,143	17% growth. Secured long-term sales contracts for finished goods. Growth in tradedgoods to Asian customers.
Gross Profit	$545,654	$560,660	Gross profit margin reduced to 11% due to lower traded goods margins and partially outsourced production of Chinese Council business. Margin uplift expected with increasing sales from higher margin finished goods and long-term resin contracts.
EBIT from operating business	($1,621,095)	($3,909,406)	Cost reduction program implemented, higher other income, lower depreciation.
NPAT	($3,060,140)	($4,659,660)	Impacted by $1.4M impairment of intangible assets

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11

Bioplastics Industry and Outlook

• Ø Global
  plas6cs
  packaging
  market
  worth
  $200B
  in
  2011
  and con6nuing
  to
  grow

• Ø Market
  demand
  for
  Bioplas6cs
  is
  growing
  strongly

**Growth

driven
by:**

• -­‐ Concerns
  about
  oil
  as
  finite
  resource
  with vola6le
  pricing

• -­‐ Growing
  concerns
  about
  carbon
  footprint
  and green
  house
  gas
  emissions

• -­‐ Government
  legisla6on
  and
  taxes

• -­‐ Major
  consumer
  goods
  companies,
  global brands,
  retailers
  and
  consumers
  looking
  for sustainable
  solu6ons

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Source: European Bioplastics Industry Report 2012

Well
posi5oned
to
capitalise
on
the
increasing
trend
towards
sustainable
&
‘green’
packaging

12

Cardia’s Business Development Cycle

Ø Entered
global
commercialisa6on
phase
with
global
brand
owners,
securing
commercial
supply
contracts.

• Ø Target
  leading
  FMCG
  companies
  for
  specific
  product
  applica6ons
  which
  are
  trialled
  in
  specific
  markets.

Ø Ramp
up
in
sales
volumes
driven
by
move
to
global
market
roll-­‐out
.

• Ø Various
  packaging
  products
  nearing
  full
  global
  commercialisa6on
  –
  will
  underpin
  future
  business
  growth.

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----- Start of picture text -----

Targeted Full Revenue
Development Market Trials Commercialisation
Commercialisation
Cardia Product Portfolio
$
1-5 years
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Partnering with Leading Brand Owners

Cardia
is
now
in
global
commercialisa5on
phase
and
has
executed
sales
with
some
of
the
world’s best
known
and
most
reputable
businesses

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14

Global Majors Validate our Products

Proven
produc5on
processes
with
leading
mul5na5onal
packaging
manufacturers

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15

Patents & International Accreditation

**Cardia

has
developed
and
retains
a
strong
IP
por[olio: 100
patents
submiXed
and/or
registered
for
Bioplas1c
resins
&
packaging
products Interna9onal
Accredita9on**

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• Accredited
  globally,
  in
  all
  countries
  with
  cer6fica6on
  schemes
  –
  including
  the
  USA,
  EU, China,
  Australia,
  South
  America,
  Japan
  &
  Asia

• • Food
  contact
  approval
  in
  Europe
  and
  USA

• • Halal
  Cer6fica6on

• • Cardia
  Bioplas6cs
  China
  business
  cer6fied
  to
  China
  Environmental
  Standard

• • Cardia
  Bioplas6cs
  Malaysia
  business
  awarded
  BioNexus
  Status

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16

Cardia’s Global Activities	Cardia’s Global Activities	Cardia’s Global Activities	Cardia’s Global Activities	Cardia’s Global Activities	Cardia’s Global Activities	Cardia’s Global Activities
Applications	Australia NZ	China	USA/ Canada	Brazil	Europe	Malaysia
Carrier Bags	✔	✔✔	✔	✔✔✔	✔	✔
Packaging	✔✔	✔	✔✔✔	✔	✔✔	✔
Waste management products	✔✔✔	✔✔✔	✔✔	✔✔	✔✔	✔✔✔

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17

Investment summary

• Only
  ASX-­‐listed
  stock
  focused
  on
  Bioplas6cs.

• Strong
  IP
  and
  patent
  posi6on
  on
  technology
  and
  high
  performance
  products.

• Strategic
  product
  development
  rela6onships
  with
  global
  brand
  owners
  and
  packaging companies
  star6ng
  to
  convert
  to
  sales
  contracts.

• These
  sales
  contracts
  are
  typically
  long
  term
  providing
  robust,
  recurring
  and
  more predictable
  earning
  stream.

• Global
  sales
  of
  Cardia
  waste
  management
  products
  to
  Councils
  for
  organic
  waste diversion.

• Low-­‐cost
  to
  upscale
  capacity
  &
  quick
  pay
  back
  on
  capital
  equipment
  investment.

• Rapidly
  growing
  global
  industry
  with
  suppor6ve
  regulatory
  environments
  /
  Government bodies.

• Highly
  focused
  management
  team
  with
  interna6onally
  recognised
  industry
  experts.

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18