our mission -...
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Our mission
SodaStream seeks to revolutionize the beverageindustry by providing a better alternative andenvironmentally friendly way for consumers toenjoy their own refreshing carbonated drinks.
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Experienced, entrepreneurial management
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Vast global market opportunity
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Source: Datamonitor (2009)1 Defined as off-premise beverage consumption
Sparkling water$34 billion1
Carbonatedsoft drinks
$216 billion1
Carbonatedbeverages$250 billion
Flavors:Full range of regularand diet soft drinkflavors, mixers andenergy drinksLess sugar and carbsthan leading brands;no high-fructose cornsyrupHealthy & “functional”
CO2 cylinders:Up to 130 literscarbonated waterper refillConsumersexchange emptycylinders for fullones at retaillocations or homedelivery viainternet/phone
Carbonating bottles:Transparent,high-pressureresistantReusableHermetically-sealing capBPA-freeGlass or plasticvarieties
Soda makers:Large variety ofdesigns and pricepointsDurable and easyto use
A complete carbonation system
+ + +
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Compelling consumer benefits
ConvenientNo heavy bottles to carry from the store; saves space; no return of “empties”
Cost effectiveSaves up to 70% for sparkling water and up to 30% for carbonated soft drinks; “fizz-preserving” cap means less wasted flat soda
Promotes health and wellnessFlavors contain no high-fructose corn syrup, fewer carbohydrates, fewer calories andless caffeine compared to popular soft drink brands; diet flavors contain Splenda®;All-Natural flavors; promotes greater water consumption
CustomizablePrepare beverages the way you like them
Environmentally friendlyAvoids the pollution caused by the production, packaging and transport of bottledbeverages; 1 SodaStream bottle replaces thousands of conventional ones
Fun and easy to use
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730877
1,057
1,922
297592
0
500
1,000
1,500
2,000
2007 2008 2009 2010 Q1-10 Q1-11
Razor/razor blade business model
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Soda makers sold (in thousands)
% growth 20.1% 20.5%
Illustrative annual consumable purchases
81.9%
Market development case study:France unit sales volume
Market development case study:US unit sales volume
1 Based on average estimated consumable purchases per active user99.2%
4 units3 units 1 unit
Consumables generate sustainable,long-term revenue for SodaStream
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Soda maker
Attractive business model driven by recurringpurchases of high-margin consumables
$50 $76 $16
$139
Consumables Revenue (4 years)
$47
+ + =
Note: Based on average estimated 4-year value from consumer; assumes USD/EUR exchange rate of 1.4183 as of 03/31/11
ExchangeableCO2 cylinders
Carbonationbottles Flavors
Product mix drives profitability
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Market comparison: From start-up to established market (sales € volume by product)
2010 sales (€ volume) by product
Starter Kits64%
Consumables36%
Starter Kits20%Consumables
80%
United States (2010) – Early Stages Switzerland (2010) – More Developed
Soda makersales
Highermargins
Increaseinstalled base
Increasedconsumables
Highlights
Soda maker sales are profitable
Product mix shift to consumablestranslates into higher-margin financialprofile as markets mature
Starter Kits46%Consumables
50%
Other4%
Strategy
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Accessibility of consumables
Reaching mass market & multi-channel coverage
Loyalty marketingReferrals, membership programs &incentives, user ambassadors
Innovative product offeringsContinual introduction of new andon-trend flavors andnatural CO2
Upgrade programs & products
Product development
Enhanced features anddesigns
Consumer awareness & demand
Brand-building activities –PR, advertising, in-storedemonstrations
Expand market
Focus on U.S. opportunity
Add new countries
Penetrate new channels
Grow installed base Cultivate users for life
Growth via product development
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Natural CO2; Glass, limited edition bottles, dishwasher safe
Natural, functional & local flavors, MyWater Essence
Fizz ChipTM, Penguin, ECO, Karim Rashid & others
Soda Makers
CO2 &Bottles
Flavors
Office, Under-Sink, SodaStream Inside, Aluminum Bottle
FutureProducts
Growth via consumer demand and brand heat
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Build brand awareness & “heat”
Celebrity endorsement
Controlled distribution
Internet & affiliates
Drive trial in-store
In-store demonstrations, POS video
Increased distribution, flavor variety
Feature & Display
Brand Education
PR & social media
Word of mouth
Referral programs
Brand Education: Point of sale in-store video
Brand Education: Support from key retailers
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Holiday circular cover E-mail blast
Brand Education“The Cage” – Belgium, Summer 2010
”Bottle-Saving” Calculatorfor bloggers and websites
Finland
Brand Education: Social Marketing
Brand Education – IHA, March 2011
Brand Education"The Cage" unveiled by Susan Sarandon at IHA
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30 RockBrand Heat: Television placements
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Big Bang TheoryBrand Heat: Television placements
Brand Heat: Television placements
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How I Met Your Mother
Brand Heat: Television placements
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Desperate Housewives
Represents most significant marketopportunity
Historically strong market with growthaccelerated by recent acquisition
Highly popular in 1970s and 1980s withstrong brand equity and recent relaunch
High household penetration rates (~20%)with greater proportion of high-marginconsumables
Distributor markets with substantialopportunity
Fastest growing market in CEMEA, withincreasing sales from consumables
Growth via market expansion
SodaStream products sold in 41 countries, including 26entered since 2007
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Direct subsidiary (12)Distributor, pre-2007 (3)Distributor market entered since 2007 (26)
Western Europe: 62%1
+34% Y/YCEMEA: 12%1
+42% Y/Y
Americas: 20%1
+189% Y/Y
Asia-Pacific: 6%1
+67% Y/Y
1Percentage of 2010 sales
Germany
23
Sweden
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Sweden
25
Denmark
26
Finland
27
Italy
28
Australia
29
Belgium
30
NEW ZEALAND
31Marc, Andrew
Taiwan
32
United States
33
34
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Strong momentum in U.S. rollout
Select U.S. retail relationships 2010 -2011 Retail rollout – number of doors
Q1 Q2 Q3 Q4 Q1-11 Q2-11CO2refill
Bed, Bath andBeyond — — 30 950 950 950
Macy's 125 230 450 450 450 635Sears — — — 415 415 415Kohl’s 300 300 300 300 1100 1110JCPenney — — — — — 625Williams-Sonoma 260 270 270 270 270 270 KitchenCollection 20 20 170 225 225 215
Shopko — — 135 135 135 135
Crate and Barrel 85 85 85 85 85 80 Le GourmetChef 80 80 80 80 80 60
BonTon — — — — — 260
Sur La Table 80 80 80 80 80 80
Bloomingdale’s 30 30 30 30 30 30Bartell's — — — — — 55
Independents 275 375 450 500 550 575
Other 100 255 390 505 280 425
Total Doors 1,355 1,725 2,470 4,200 4,650 5,920
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2008
2009
2010
2011
U.S. retail presence (as of May 25, 2011)
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Update on infrastructural investments
Unique operating model
Proprietary manufacturing expertise &componentry
Experience and know-how in HAZMAT
Regulatory certifications
Ability to manage reverse logistics
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Unique capabilities
Current annual soda maker capacity1
adequate to support near-term growth
New capacity to support future growth
Developing new primary site (85k m2)
Short-term expansion of existing facilities;subcontractors and acquired facility
Building for growth
Location Israel - Negev
Israel –NorthernGalilee
Israel –SouthernGalilee
Mainactivities
Main futuresite:
plastics, metal,syrups
Plastics - 25plastic injection
machines
Plasticpainting,assembly
Est. cost ofinvestment €30.0mm €4.0mm €2.0mm
Expectedexecutiondate
2013/2014 Q3 2011 Q2 2011
1 Includes existing manufacturing facility and subcontractors
Historical financial summary
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2007 2008 2009 2010 (€) 2010 ($) 1 Q1-2010 Q1-2011Reven u es 86.0 99.9 105.0 160.7 227.9 30.2 45.1
% g row th 8.5% 16.2% 5.1% 53.0% 40.4% 49.5%
Gro ss Pro f i t 46.2 54.7 58.4 86.6 122.8 16.3 24.1
% m arg in 53.8% 54.8% 55.6% 53.9% 53.9% 53.5%
Ad ju s tedEB ITDA 2 3.0 11.0 13.2 18.8 26.7 3.2 6.8
% m arg in 3.5% 11.0% 12.6% 11.7% 10.7% 15.0%Ad ju s ted NetPro f i t 2 (1.4) 1.2 7.7 13.0 18.5 2.2 5.3
% m arg in (1.6%) 1.2% 7.3% 8.1% 7.3% 11.7%
Select income statement items (€ mm)
Key 2010 growth driversRetailer and consumer buy-in of the category, the system and the SodaStream brand
Highly efficient and low-cost marketing activity, primarily in U.S., driving consumer demand
Leveraging fixed expense infrastructure to increase profitability
1 Assumes currency translation rate of €1=$1.4183 (as of March 31, 2011)2 Adjusted for management fees & share-based payments
2010 / 2011 financial review
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Revenue (€ mm) Adjusted EBITDA1 (€ mm)
€2. 3
€1. 3
€3. 7
€5. 9
€13
. 2
€3. 2
€3. 7 €5
. 7
€6. 2
€18
. 8
€6. 8
€0.0
€2.0
€4.0
€6.0
€8.0
€10.0
€12.0
€14.0
€16.0
€18.0
€20.0
Q1 Q2 Q3 Q4 FY
2009 2010 2011€2
1. 5
€24
. 3
€27
. 7
€31
. 5
€10
5. 0
€30
. 2
€38
. 5
€42
. 0
€50
. 0
€16
0. 7
€45
. 1
€0.0
€20.0
€40.0
€60.0
€80.0
€100.0
€120.0
€140.0
€160.0
€180.0
Q1 Q2 Q3 Q4 FY
2009 2010 2011
Note: December 31 fiscal year end1 Adjusted for management fees & share-based payments
42.0%40.4% 58.3%
ConsolidatedGrowth: 51.7% 58.5% 53.0%
49.5%
99.5% 116.4%AmericasGrowth: 245.4% 238.0% 188.9%152.6%
Growth: 180.6% 52.8% 4.4% 42.3%111.2%
Operating expenses
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2007 2008 2009 2010 Q1-2010 Q1-2011
Sales & marketing
Advertising and promotion 11.2 9.6 10.5 21.5 3.3 4.3
% of revenue 13.0% 9.6% 10.0% 13.4% 11.0% 9.6%
Other sales & marketing 20.2 22.6 24.2 35.6 6.5 8.9
% of revenue 23.5% 22.6% 23.1% 22.2% 21.5% 19.7%
Total sales and marketing 31.4 32.2 34.7 57.1 9.8 13.2
% of revenue 36.6% 32.2% 33.0% 35.5% 32.5% 29.3%
Adjusted G&A and other 1 13.5 11.9 12.4 15.0 3.7 4.7
% of revenue 15.7% 11.9% 11.8% 9.4% 12.3% 10.4%
Total adjusted operating expenses 1 44.9 44.1 47.1 72.1 13.5 17.9
% of revenue 52.3% 44.1% 44.9% 44.9% 44.7% 39.7%
% of revenue (Exc. A&P) 39.2% 34.5% 34.9% 31.5% 33.8% 30.2%
2007-2010 Adjusted operating expenses (€ mm)
Note: December 31 fiscal year end1 Adjusted for management fees & share-based payments
Investing to support growth while leveraging fixedcosts to drive margin improvement
Long-term financial drivers & growthtargets
Continue rapid U.S. expansion
Doubled revenue Q1’2010 / Q1’2011
Further expansion into other recentlylaunched markets
France, Italy, Czech Republic
Growing demand for consumables over time,which increases margins
Target operating margin of 25%+ inestablished markets
Leverage fixed costs while continuing toinvest in marketing
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Drivers
Long-term annualtargets:
Revenue growth of 20%+
EPS growth of 25%+
A leader in manufacturing and distribution of home carbonation systems;~4.5 million users with products sold at over 40,000 retail stores in 41countries
Capitalizes on key consumer mega-trends: environment, wellness, value
Attractive razor/razor blade business model
Distinct operational capabilities and barriers to entry
Experienced and entrepreneurial management team
2010/2011: 53% revenue growth / 69% adjusted net income growth
Summary of highlights
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Appendix
45
Non-IFRS reconciliations
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2007 2008 2009 2010 (€) 2010 ($)1
Net income (1.6) 0.5 7.1 9.7 13.8
Interest expense, net 2.2 2.7 2.0 1.5 2.1
Income tax 0.3 5.0 1.8 1.8 2.5
D&A 1.8 2.0 1.6 2.5 3.6
EBITDA2 2.7 10.2 12.6 15.5 22.0
Management fee 0.3 0.5 0.5 2.3 3.2
Share-based payments 0.0 0.2 0.2 1.0 1.4
Adjusted EBITDA3 3.0 11.0 13.2 18.8 26.7
Reconciliation of net income to EBITDA and to adjusted EBITDA (€ mm)
1 Assumes currency translation rate of €1=$1.4183 (as of March 31, 2011)2 EBITDA is a non-IFRS measure and is defined as earnings before interest expense, taxes, depreciation and amortization; EBITDA should not be considered in isolation or as asubstitute for operating income or other statement of operations items prepared in accordance with IFRS as a measure of our performance; EBITDA does not take into account ourdebt service requirements and other commitments, including capital expenditures, and, accordingly, is not necessarily indicative of amounts that may be available for discretionaryuses; EBITDA, as presented herein, may not be comparable to similarly titled measures reported by other companies due to differences in the way that these measures arecalculated3 Adjusted EBITDA is a non-IFRS measure and is defined as earnings before interest, income tax, depreciation and amortization, and further eliminates the effect of the non-cashshare-based compensation expense and for the impact of a discontinued management fee expense paid to Fortissimo Capital; we use adjusted EBITDA as a measure of operatingperformance because it assists us in comparing performance on a consistent basis, as it removes from our operating results the impact of one-time costs associated withnonrecurring events and non-cash items such as share-based compensation expense, which can vary depending upon accounting methods
Non-IFRS reconciliations (cont'd)
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2007 2008 2009 2010 (€) 2010 ($)1
Net income (1.6) 0.5 7.1 9.7 13.8
Management fee 0.3 0.5 0.5 2.3 3.2
Share-based payments 0.0 0.2 0.2 1.0 1.4
Income tax effect of theforegoing (0.0) (0.1) (0.1) — —
Adjusted netincome2 (1.4) 1.2 7.7 13.0 18.5
Reconciliation of net income to adjusted net income (€ mm)
1 Assumes currency translation rate of €1=$1.4183 (as of March 31, 2011)2 Adjusted net income is a non-IFRS measure and is defined as net income calculated in accordance with IFRS as adjusted for the impact of Share-BasedCompensation and for the impact of the Fortissimo Payments; we use adjusted net income as a measure of operating performance because it assists us incomparing performance on a consistent basis, as it removes from our operating results the impact of one-time costs associated with nonrecurring events andnon-cash items such as share-based compensation expense, which can vary depending upon accounting methods
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