“Since our beginning in 1995, our mission has been to deliver premium quality products that are accessible to and convenient for consumers.”
Marc Anthony Venere
Founder & CEO
Our mission is to always meet and exceed our consumers’ expectations by delivering premium-quality products that are accessible and convenient. That simple mission has been at the core of our success. With the acquisitions of Renpure and Cake Beauty, we have broadened and enhanced our core offerings to better serve both our retail partners’ and consumers’ needs. MAV Beauty Brands is now the largest independent collection of personal care brands in Canada and one of the top 10 haircare companies in North America.
Select North American Retail Partners
CVS, Rite-Aid,
Shoppers Drug Mart,
Walgreens, Target,
Walmart, HEB, Kroger,
Loblaws, Costco,
Ulta Beauty
Dollar General, Family Dollar
Burlington,
Ross, Boots UK, TJX
Leading International Distributors
COUNTRIES
100+
RETAILERS
60K+
DOORS
Product
Ideas
Integrated Product
Development
Consumer and
Retailer Feedback
and Validation
Flexible
Supply Chain
Revenue
(in US$ millions)
17.5%CAGR
Adjusted Gross Profit
(in US$ millions)
12.9%CAGR
Adjusted EBITDA
(in US$ millions)
8%CAGR
Source: Euromonitor International, Beauty and Personal Care 2019 Edition.
1) As per Euromonitor International’s Baby and Child Specific definitions.
2) As per Euromonitor International’s Skin Care and Bath & Shower definitions.
Strong consumer demand for higher quality products that are convenient
SHIFTING AWAY FROM SALON PROFESSIONAL & TRADING UP FROM TRADITIONAL MASS
Increasing popularity of authentic, independently-founded brands
+9%
2-YEAR CAGR OF INDEPENDENTLY FOUNDED BRANDS1
Growing demand for natural personal care products
+10%
4-YEAR CAGR OF THE GLOBAL NATURAL AND ORGANIC PERSONAL CARE PRODUCTS MARKET2
Millennials spend disproportionally high amounts on beauty & personal care
+30%
ANTICIPATED INCREASE IN MILLENNIALS’ SHARE OF THE TOTAL U.S. RETAIL EXPENDITURE BY 2020P
3
1) Includes Hask, Marc Anthony, Maui Moisture, Not Your Mother’s, OGX, Renpure and Shea Moisture; U.S. retail sales data per Nielsen (2-year CAGR from Q1 2017 - Q1 2019).
2) Source: Persistence Market Research – Global natural & organic personal care market, 2018 report purchased in April 2018.
3) Source: U.S. Census Bureau and Fung Global Retail & Technology.
FELLOW SHAREHOLDERS
I’m pleased to address our shareholders in our first year-end report as a public company. Fiscal 2018 was a transformative year for MAV Beauty Brands. We completed the acquisitions of two high-growth brands, followed by an initial public offering (IPO) – key corporate milestones that accelerated our path to building a global personal care company.
When we went public, we were confident our portfolio of on-trend brands would continue to win shelf space and deliver sales growth well above the industry average (U.S. growth rate of 2.4% in 2018). Our confidence reflects a highly positive industry backdrop, supported by the overall growth in masstige products and increasing demand for authentic, independently founded brands. Our portfolio also gives us exposure to the growth in naturals and millennial spending – two important trends in personal care.
Throughout 2018, we proved that our brands, combined with our global operating platform, can deliver exceptional organic growth. We reported $103 million in pro forma revenue, a 36% increase over 2017 and ahead of our previously raised revenue target of $95 to $100 million. In addition to top-line growth, we achieved our full-year pro-forma adjusted EBITDA target of approximately $29 million. While our pro forma gross profit increased 27% year over year, our gross profit margin was lower than we expected; however, we are executing a plan to improve margins in 2019 through efficiencies in manufacturing, procurement, and distribution, as well as through new innovations.
Our success since the IPO is the result of our delivery against our core growth strategies, beginning with incremental sales of our brands at existing retailers. This organic growth led to MAV Beauty Brands entering the top ten hair care manufacturers in the U.S. FDM market and becoming the fastest-growing among the top ten brands.
We also continue to make meaningful progress with our core strategy to cross-sell the brands to existing retailers, which offers the most compelling evidence of the power of our platform. Cake Beauty launched nationally with two U.S. retailers in the second half of 2018 and Renpure has expanded into Canada.
MAV Beauty will continue significant expansion internationally as the core brand growth remains strong and we have invested in a global sales structure. In 2018, we significantly expanded our international footprint, entering 10 new markets, bringing the total international reach to 29 countries outside of North America at the end of the year. Today our products can be found in over 30 countries around the world, in over 100 major retailers and through more than 60,000 doors.
On top of these core growth strategies, we were pleased with the early results of the category expansion of Renpure and Cake Beauty, as both brands introduced new body wash and lotion offerings in recent quarters. These newly developed categories are expected to be an additional growth driver in the coming years.
Emboldened by the progress and lessons learned from our 2018 acquisitions, over time our vision is to acquire other high-growth, profitable iconic brands that – while they are valuable as stand-alone brands – can grow faster by partnering with MAV Beauty Brands. While there are certainly lessons learned from these first acquisitions, we have proven our ability to integrate other businesses, increase their brand distribution, and accelerate their product innovation.
In summary, it was a highly eventful and successful 2018 for the company and I want to thank the entire team for their efforts. I would also like to thank you, our shareholders, for your support and investment. We look forward to continuing to profitably scale the company to establish a truly iconic portfolio of brands. In doing so, we expect to create significant value for our shareholders over the long term.
Sincerely,
Marc Anthony Venere
Founder & Chief Executive Officer
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