Amended Interim Release (no change to financial results)

8 April 2020

Amended Interim Release (no change to financial results)

Comvita Limited (“CVT”) has been notified by the Ministry for Primary Industries (MPI) that they feel our recent Half
Year Results release dated 27 February 2020 breached the Food Act 2014 and the Australia New Zealand Food
Standards Code as companies are not permitted to use performance claims for products classed as food.

From Comvita’s perspective, the release was never intended to be advertising, as such we are pleased to make the
following amendment to the Half Year Results release.

These changes do not have any impact on the Half Year results released.

Revised Half Year Results release and Investor Presentation enclosed with the following amendments made.

• Core products Propolis and Mānuka honey (over 90% of revenue) have known anti-viral and immunity benefits
Propolis and Olive Leaf Extract are known to support immunity. Propolis and Mānuka honey together make up
over 90% of revenue.
• Where people are shopping, we are seeing strong demand for our Propolis products, which are known to
support immunity, and Mānuka honey products which are known to support immunity. Propolis and Mānuka
honey have known anti-viral, anti-microbial and immunity benefits and represent over 90% of our revenue.
• Comvita is pleased to be part of a solution to help consumers build support immunity and have been
increasing inventory of Propolis products in-market to ensure we can capture elevated demand once shopper
habits return to normal. Historically we have seen a significant uplift in sales in the winter months as
consumers boost immunity following an outbreak of flu look to support their immunity with these products.


Ends.


For further information
Comvita CEO, David Banfield, 021 041 5630

Background information
About Comvita (www.comvita.co.nz)
Comvita (NZX:CVT) is a global natural health company committed to the development of innovative products, backed by
ongoing investment in scientific research.

---

27 February 2020

COMVITA ANNOUNCES HALF YEAR RESULT

Financial results for the six months ended
31 December
2019
unaudited
31 December
2018
unaudited
Revenue $94m $78m
NPAT* $(12.97)m $(2.68)m
Non-operating items $5.8m $(0.7)m
Underlying EBITDA** $1.34m $1.01m
Net debt $93m $104m
Net operating cashflows $0.9m $6.3m

*NPAT: Net profit after tax
**Underlying EBITDA: earnings before interest, tax, depreciation and amortisation adjusted for non-operating and one-off items. EBITDA, operating
and underlying are non-GAAP measures. We monitor these as key performance indicators and believe it assists investors in assessing the performance
of the core operations of our business.

Headlines:
• $12.97m loss including $2.3m impairment of Australian asset due to bush fires
• Underlying EBITDA +32% year on year
• $15m cost out and business transformation plan launched
• Simplification of business model to take place
• China earnings improved by 30%
• Core products Propolis and Olive Leaf Extract are known to support immunity. Propolis and
Mānuka honey together make up over 90% of revenue.
• Honey harvest encouraging
• Capital raise announced

$15m cost out and business transformation plan launched and capital raise announced as China
strategy shows early promise

Comvita (NZX:CVT) has today announced performance for the six months ending 31 December 2019,
reporting a net profit after tax (NPAT) at a loss of $12.97m. Non-operating items accounted for $5.8m
of this NPAT loss. This figure included a non-cash impairment of an asset in Australia as a result of the
Australian bush fires and the release of an acquisition fair value adjustment related to Comvita China’s
inventory. Revenue for the period increased by 20.7% as a result of the integration of our new
subsidiary in China, following the purchase of the joint venture in May 2019.

When allowing for one-off costs and non-operating costs, underlying EBITDA** increased by 32% to
$1.34m, highlighting decisions taken during the strategic review conducted last year were already
starting to benefit the company and set the business up to a return to profitability.

Brett Hewlett, Chair, commented “We are hugely disappointed by another negative result which has
seen a loss for the third reporting period in a row. We are working tirelessly to turnaround performance
and deliver the result we know the business is capable of. As we shared at the Annual Shareholders’
Meeting in October 2019, this is a year to stabilise, reset and refocus the business. We are on track to
restore underlying net earnings growth, we are generating positive cashflows, paying down debt and
now have our new CEO, David Banfield, on board. Under David’s leadership, we are setting ourselves up
for a rebound into FY21”.


$15m business transformation plan launched

CEO David Banfield, today launched the Comvita business transformation plan which aims to improve
gross margin by 5.0 percentage points (500bps) and decrease fixed costs by at least $5m per annum
over the next three years. We expect to see fixed cost savings benefit the business in FY21 with the full
benefit seen in FY22/23. Margin improvement is also expected to flow through in FY22/23. Banfield said
“It’s evident from our performance that our current cost base is too high and incapable of supporting
delivery of our long-term earnings growth targets. Our transformation plan is designed to bring the
focus back to the business, simplify operations and ensure we have sustainable profitable returns from
all of our investments”.


Business simplification

David Banfield shared his initial findings having started with Comvita in January 2020. His review
highlighted how the overall business has become overly complex, cumbersome and slow to react to
external factors, both positive and negative. The key to delivering longer-term opportunities will be to
simplify the Comvita operating structure. Banfield said “I see this as phase two of the work the Board
and Executive Director, Brett Hewlett, started during the first half of 2020. Our ability to free up cash by
simplifying and integrating processes will enable us to spend our time focusing on places where we win,
in-market in front of customers and consumers. Here in Paengaroa, New Zealand, we have renamed our
head office as our Market Support Centre to emphasise our role to help markets win”.


China market shows early promise

Comvita completed the acquisition of 100% of its China joint venture in May 2019, having formed a joint
venture with its long-term distributor in July 2017. Winning in China is crucial to enable long-term
profitable growth and as such, we were delighted to see revenue on a like-for-like basis increased by
15%. China’s net contribution increased by 30% year-on-year, despite an increase in marketing
investment of over $1m during this period designed to further grow the Comvita market leadership in
China.

From a commercial perspective, we are seeing sales impacted in the short-term by dramatically reduced
shopper traffic (footfall) as a result of travel bans and people remaining at home following Chinese New
Year. Where people are shopping, we are seeing strong demand for our Propolis products, which are
known to support immunity, and Mānuka honey. Propolis and Mānuka honey represent over 90% of our
revenue.

Comvita is pleased to be part of a solution to help consumers support immunity and have been
increasing inventory of Propolis products in-market to ensure we can capture elevated demand once
shopper habits return to normal. Historically we have seen a significant uplift in sales in the winter
months as consumers look to support their immunity with these products.


Honey harvest encouraging

Comvita is 50% of the way through the extraction of the current 2020 harvest and 25% through testing
the quality. Initial signs are encouraging with volumes well ahead of both 2019 and 2020 budgeted
harvests. All extraction plants are operating at full capacity. A full assessment of quality (Mānuka UMF
grade) will be completed by the end of April at which time Comvita will update the market.


Capital raise

With the announcement of a broad reset of the business with a new Chair, new CEO and a new strategy,
Comvita announced its intention to undertake a capital raise, including a renounceable rights issue to
existing shareholders, enabling it to deleverage the business and build resilience for the company during
this phase. Craigs Investment Partners and Forsyth Barr have been appointed as joint lead managers for
the raise. Details of the rights issue are expected to be announced in mid-March. Hewlett said “While
various industry analysts have expressed their concern over the Comvita gearing, the Board was
comfortable that elevated debt was covered by inventory that increases in value whilst in-stock. The
Board now feels that given the reset mentioned above, the time is right to address the concerns raised
and in the process, de-risk the business”.

Hewlett continued, “Prior to the strategic review, the Comvita business model had become too
inflexible and the business had become too slow or unable to adapt to changes in market conditions.
This meant it was very difficult to mitigate the external impacts of poor honey harvests, daigou channel
or regulatory changes that have negatively impacted our performance and share price over recent
years. Solving these issues has been a real area of focus and we are pleased to have moved to a new
supply model that effectively mitigates downside risk during poor harvests, whilst still giving upside
opportunity. With the purchase of 100% of our China joint venture, we are also able to manage the
daigou channels holistically. This will mean that these short-term trading challenges are largely behind
us.”

Conclusion

Comvita are in the middle of a reset with a new CEO, new Board structure, an absolute focus on
simplifying the business and the product categories where they aim to extend their leadership. The
Board is confident that the business will start to show tangible improvements to underlying
performance as a company and demonstrate the true potential of the Comvita premium global brand
which in turn will be reflected in the market and restore intrinsic value to the share price.


For a more detailed analysis regarding the first half of FY20, please refer to the Financial Statements
and Investor Presentation respectively, loaded onto the Comvita website, (www.comvita.co.nz) and
the NZX (www.nzx.com).

Ends.


For further information:
Comvita Chair, Brett Hewlett, 021 740 160
Comvita CEO, David Banfield, 027 720 9082

Background information
About Comvita (www.comvita.co.nz)
Comvita (NZX:CVT) is a global natural health company committed to the development of innovative products, backed
by ongoing investment in scientific research.

---

INVESTOR PRESENTATION
HALF YEAR RESULT FY20 | 27 FEBRUARY 2020
Presented by:David Banfield, CEO | Brett Hewlett, Chair
1

Thispresentationis givenonbehalfofComvitaLimited.
Informationinthispresentation:
•Shouldbereadinconjunctionwith,andis subjectto,ComvitaAnnualReports,InterimReportsandmarket
releasesonNZX;
•Is fromunauditedinterimreportsforthesixmonthsended31December2019;
•Includesnon-GAAPfinancialmeasuressuchasOperating(Loss)/ProfitandOperatingEBITDA. These
measuresdonothavea standardisedmeaningprescribedbyGAAPandthereforemaynotbecomparableto
similarfinancialinformationpresentedbyotherentities. Theyshouldnotbeusedinsubstitutionf o r,or
isolationo f,Comvita'sauditedfinancialstatements. Wemonitorthesenon-GAAPmeasuresaskey
performanceindicatorsandwebelieveitassistsinvestorsinassessingtheperformanceofthecore
operationsofourbusiness.
•Maycontainprojectionsorforward-lookingstatementsaboutComvita. Suchforward-lookingstatementsare
basedoncurrentexpectationsandinvolverisksanduncertainties. Comvita’sactualresultsorperformance
maydiffermateriallyfromthesestatements;
•Includesstatementsrelatingtopastperformance,whichshouldnotberegardedasa reliableindicatorof
futureperformance;
•Is forgeneralinformationpurposesonly,anddoesnotconstituteinvestmentadvice;and
•Is currentatthedateofthispresentation,unlessotherwisestated.
Whileallreasonablecarehasbeentakenincompilingthispresentation,Comvitaacceptsnoresponsibilityforany
errorsoromissions.
AllcurrencyamountsareinNewZealanddollars,unlessotherwisestated.
IMPORTANT NOTICE

AGENDA
1.Introductions
2.Interim Results FY20
3.Cashflow, Inventory and Net Debt
4.Honey Harvest Update
5.Market Segment Performance
6.Key Findings & Turnaround Plan
7.Q&A

INTRODUCTIONS
4

CORONAVIRUS
We are closely monitoring the evolving situation with the Coronavirus in China and
around the world. Our first thought is for our Comvita team and all those that have
been affected.
We have instigated a dedicated team to monitor best practice and ensure we are doing
everything possible to support the team. Foremost, this includes regular contact with
our employees and business partners, to ensure all practicable precautions continue to
be taken from a safety and wellbeing perspective.

INTERIM RESULTS
FY20
6

*Underlying EBITDA is a non-GAAP measure. We monitor this as a key performance indicator and believe it
assists investors in assessing the performance of the core operations of our business.
HEADLINES
•Reported NPAT -$(12.97)m
•Non-operating items - $5.8m including $2.3m impairment of
Australian joint venture due to bush fires
•Underlying EBITDA* +$1.3m +32.5%
•Revenue +20.7% primarily due to China market integration
•China and North America show opportunities for profitable growth
•China earnings +30%on a like-for-like basis
•$15m business transformation plan targeting
•500 basis points (bps) improvement in gross margin per annum
•$5m cost reduction per annum
•Business simplification underway
•Capital raise to deleverage balance sheet including rights offer
•Directors declared that no interim dividend will be paid
7

HALF YEAR IN REVIEW
•NET PROFIT AFTER TAX
$(12.97)m
•NON-OPERATING EBITDA ITEMS
$(6.7)m vs $0.7m in PCP*
•ONE-OFF EBITDA ITEMS
$3.4m vs $0.4m in PCP
•UNDERLYING EBITDA**
+$1.3mvs +$1.0m+32.5% vs PCP
•GROUP REVENUE
$94m + 20.7% vs PCP
•CHINA MARKET –EARNINGS GROWTH
+30%
•INVENTORY
-$2.9m vs PCP
-$16.0m vs June close
•NET DEBT
$93.2m -11.4% vs PCP
•POSITIVE OPERATING CASHFLOW
+$887k
* Previous comparable period.
**Underlying EBITDA is a non-GAAP measure. We monitor this as a key performance indicator and believe it assists investors
in assessing the performance of the core operations of our business.

UNDERLYING RESULT
RECONCILIATION
Note
31 Dec
2019
NPAT
$’000
31 Dec
2019
EBITDA
$’000
31 Dec
2018
NPAT
$’000
31 Dec
2018
EBITDA
$’000
Per financial statements​(12,970)(8,829)​(2,678)1,325
Add back non-operating items:​
Comvita China- release ofinventory fair valueA2,6743,567
Impairment of equity accounted investment2,3102,310
Equity accounted investees on wind up and loan
write off
B669669
Fair valuemovements-SeaDragon​C154154(724)(724)
Fair value movements –biological assets​​D5272
Other(20)(20)
Total adjustments5,8396,752(724)(724)
Operating result(7,131)​(2,077)(3,402)601
One off costs incurred vs PCP:
Inventory write downs1,3001,806
Divestment of Nelson site360500
Restructuring related costs700970295410
Savings from restructure505700
Other increases(395)(560)
Total adjustments2,4703,416295410
Underlying result(4,661)1,339(3,107)1,011
EBITDA: earnings before interest, tax, depreciation and amortisation and EBITDA operating is adjusted for non-operating
items. EBITDA, operating and underlying are non-GAAP measures. We monitor these as a key performance indicators
and believe it assists investors in assessing the performance of the core operations of our business.

CASHFLOW, INVENTORY
& NET DEBT
10

CASHFLOW
Cash flow movements
31 Dec 2019
unaudited
31 Dec 2018
unauditedMovement
Operating cash inflow8876,337(5,450)
Investing activities(3,030)(17,911)14,881
Financing activities2,24314,632(12,389)
Cash and cash equivalents10,1998,0262,173
•Operating cash inflow $887k
•Operating cashflow consistent with operating
loss for 6 months to 31 December 2019 less
working capital improvements including
inventory reduction of $16m
•Prior period operating cashflow had one-off
timing inflow of debtors overdue at prior
period end
•Investing cashflow is lower than prior period
from minimal capital expenditure

INVENTORY & NET DEBT
•Inventory reduced by $2.9m vs 31 December 2018
and $16.0m vs 30 June 2019
•Finished goods reduction across all major markets
•Net debt decrease of $10.6m vs 31 December 2018
due to working capital movements and an increase
of $4.2m vs 30 June 2019 due to net cash outflow
primarily from investing activities
•Banking facility extended to 2021
Key Balance Sheet Ratiosas at
31 Dec
2019
unaudited
$’000
31 Dec
2018
unaudited
$’000
30 June
2019
audited
$'000
Total assets303,970326,971310,043
Total inventory116,139119,040132,192
Trade receivables28,91340,77130,878
Working capital142,944164,576155,161
Net debt93,151103,76488,936
Total equity160,624187,006173,355
Net debt to equity ratio58%55%51%
Weighted average shares on
issue49,55245,33746,302

HONEY HARVEST
U P DAT E
13

14
Early national crop indicators are positive
•Strong settled summer after a volatile spring
•Good flowering and nectar flow reported across the country
•Mānuka harvest underway
•Early quality results promising
Comvita crop forecasted to exceed budget and prior year
•Mānuka harvest underway - 50% harvested and 25% tested
•Expect to exceed 2019 actuals and 2020 plans
•All extraction plants operating at capacity
•Hives re-queened with improved genetics
•New queen breeding facility performing well, breeder queens
introduced to the network
HONEY CROP 2020

MARKET SEGMENT
PERFORMANCE
15

NORTH AMERICA
$8.4m
(2018 : $8.1m)
Figures are based on unaudited results to 31 December2019.Other sales of $1.7m (2018: $2.1m).
SALES FOR THE HALF YEAR ENDED 31 DECEMBER 2019
EMEA***
$3.4m
(2018 : $3.1m)
REST OF ASIA
$8.5m
(2018 : $8.9m)
CHINA*
AUSTRALIA
/ NZ (ANZ) & CBEC**
$31.2m
(2018 :$36.7m)
16
* China sales include Hong Kong.To enable comparison, the 2018 sales includes the in-market sales of the China Joint Venture (JV) which were not included in Comvita group
revenue
** Cross Border E-commerce
*** Europe, Middle East and Africa
$40.7m
(2018 : $38.1m)
16

CHINA (LIKE- FOR- LIKE PERFORMANCE)
First full six month period of China integration
•Like-for-like revenue in China +15%
•$1m incremental investment in marketing activity
•China contribution +30%
6 months6 months
Variance
Fav/(Unfav)
Variance %
NZD ($’000)
Dec-2019Dec-2018
Sales29,66925,8423,82715%
Net Contribution3,7442,88685830%
Net Contribution %12.6%11.2%
Net Contribution is a non-GAAP measure. We monitor this as a key
performance indicator and believe it assists investors in assessing the
performance of the core operations of our business
.

CHINA includingHONG KONG
•Total revenue plus 115% due to consolidation of China subsidiary
•Net contribution +160% due to consolidation of China subsidiary
•Hong Kong performance negatively impacted by unrest
•Hong Kong contribution -30%
6 months6 months
Variance
Fav/(Unfav)
Variance %
NZD ($’000)
Dec-2019Dec-2018
Sales40,66418,90821,756115%
Net Contribution4,3901,6852,704160%
Net Contribution %11%9%2%

19
IMPACT OF CORONAVIRUS ON PERFORMANCE
General
•Core products Propolis and Olive Leaf Extract are known to support immunity
•Propolis and MānukaHoney together make up over 90% of revenue
•Where footfall is unaffected by the Coronavirus, revenue +35% vs PCP
•In China, footfall is significantly reduced in offline outlets
•Once footfall recovers, sales growth is expected to perform at +30%
•Where online providers are operating normally, sales have increased by 38%
•Currently forecasting a 10% revenue impact on our second half performance in China
•In ANZ, footfall through key tourist dominant partners is materially reduced along with daigouchannels who are
unable to supply their in-market customers (outside ANZ)
•We are forecasting a second half revenue impact of up to 20% in ANZ
•Good inventory levels in-market. Boosting local inventory to meet anticipated inflated demand
•We believe any impacts to our business are short-term related and as soon as footfall returns our performance will
show material improvement
•Naturallyit is an evolving situation and we will update the market as new information emerges

REST OF ASIA
Revenue -4% due to timing of activity in Japan
•Strong double digit sales growth in Korea
•First flagship store launched in Malaysia
Contribution +15% due to emphasis on profitable growth
6 months 6 months
Variance
Fav/(Unfav)
Variance %
NZD ($’000)
Dec-2019Dec-2018
Sales8,4978,880(383)-4%
Net Contribution1,4951,30519015%
Net Contribution %18%15%3%
20

21
ANZ & CBEC
New Zealand export changes
•Changes to MPI small parcel export requirements impacted
revenue by -$2.7m on last year, however, work between the
industry and MPI has sales being exported once again though
not expected to recover the loss in this year
Australian customer overstock in PCP
•Revenue -$4.3m on last year due to a customer purchasing 10
months stock artificially inflating sales in PCP; the customer has
now cleared the stock and orders are coming back to normal
6 months 6 months
Variance
Fav/(Unfav)
Variance %
NZD ($’000)
Dec-2019Dec-2018
Sales31,18236,721(5,539)-15%
Net Contribution8,5659,937(1,372)-14%
Net Contribution %27%27%0%

NORTH AMERICA
•Revenue +4.5% with good performance across major customers
•Contribution margin impacted by customer set up costs
•Comvita.com shows market potential with Black Friday period sales
+51% year-on-year, in which half the sales came from new customers
•Launched new Comvita Kids line in Whole Foods nationally in
September, supported by a successful PR campaign gaining
awareness with natural food focused parents
•New listings in several hundred new independent and regional
natural health accounts
6 months 6 months
Variance
Fav/(Unfav)
Variance %
NZD ($’000)
Dec-2019Dec-2018
Sales8,4148,0533614.5%
Net Contribution9571,178(221)(18.7%)
Net Contribution %11%15%(3.3%)

EUROPE, MIDDLE EAST
AND AFRICA (EMEA)
•Revenue +10% vs PCP
•Contribution -$630K due to clearance of slow moving and obsolete stock
•New distribution to come online in second half of the year supporting
double digit growth
6 months 6 months
Variance
Fav/(Unfav)
Variance %
NZD ($’000)
Dec-2019Dec-2018
Sales3,444 3,127 31710%
Net Contribution(909)(279)(630)226%
Net Contribution %-26%-9%-17%
23

KEY FINDINGS
AND TURNAROUND PLAN
24

KEY FINDINGS
•Market leader in Mānuka and key bee products categories
•Technical leader in Mānuka
•Quality leader in honey and propolis
•Role as category guardian
•Highly relevant to current macro economic and megatrends
•Highly capable and committed team members
Arotahi

•Loss of focus, complicatedbusiness
•Organisationdisconnected from market needs and slowto react
•Unsustainable costs
•COGS
•OPEX
•Elevated gearing covered by saleable inventory but key processes
inefficient
Arotahi
KEY FINDINGS

AROTAHI (FOCUS)
•Focus on key growth markets – China and North America
•Total addressable market US$1.5 bn
•Profitable growth ANZ and all other regions
•$15mbusiness transformation
•Simplified and integrated operations
•Capital structure supporting growth

SIZE OF PRIZE –CHINA
•Total addressable market US$1.2 bn
•Imported honey 12.5% of total
•Double digit CAGR forecasted
•Mānuka / imported forecast to over index
•Key attribute – Trust and heritage
28
Comvita in China
•Comvita is the market leader in China
•Significant brand equity
•Experienced team in-market
•Focus on delivering model city performance in China - $500m
•Modelling market potential on a per capita basis
•Full integration of former JV to be completed
•Investment in brand and capability

•Total addressable market US$340m
•Current imported honey market circa 30% -US$102m
•High single figure CAGR expected over the next five years
•Strong adoption by millennials and rapidly expanding availability through
online and mass retail
Comvita in North America
•Encouraging performance across major customers
•Black Friday results show the potential to significantly grow overall business
•New distribution agreements in place
•Disruptive market leading D2C
•Geographical balance to group (Asia / North America)
Comvita in ANZ
•Our home market where we need to protect leadership
•Stabilise revenue and associated earnings
•Investment in brand equity
•Organisation simplification
SIZE OF PRIZE –NORTH AMERICA

$15m transformation programme launched
Goals
•500 bps improvement in gross margin per annum
•$5m reduction in fixed costsper annum
•Automation and integration of key internal processes to improve
efficiency, scalability and accuracy
•Simplification of operating companies and investment – Supply and
Brand side
ACTIONS –AROTAHI
(FOCUS)

•In order to reduce risk and build resilience for the company during
strategic reset and business transformation programme, Comvita
plans to recapitalise the business
•This will include a renounceable rights issue to existing shareholders
•Details will be announced in the coming weeks
•Craigs Investment Partners and Forsyth Barr have been appointed as
joint lead managers
CAPITAL RAISE

QUESTIONS AND
ANSWERS
32

33
THANK YOU