july 2, 2014 e-cig speaker seriesdocs.hedgeye.com › he_ecig_vmr_jul2014.pdfhealthy pipeline of...
TRANSCRIPT
E-CIG SPEAKER SERIES
Jan Andries Verleur CEO, VMR PRODUCTS
JULY 2, 2014
Consumer Staples Team
ARE VAPORIZERS TAKING SHARE FROM BIG TOBACCO’S E-CIGS?
1
DISCLAIMER Hedgeye Risk Management is a registered investment advisor, registered with the State of Connecticut. Hedgeye Risk Management is not a broker dealer and does not provide investment advice for individuals. This research does not constitute an offer to sell, or a solicitation of an offer to buy any security. This research is presented without regard to individual investment preferences or risk parameters; it is general information and does not constitute specific investment advice. This presentation is based on information from sources believed to be reliable. Hedgeye Risk Management is not responsible for errors, inaccuracies or omissions of information. For more information about Hedgeye Risk Management, including Terms of Use of our information, please go to www.hedgeye.com. The presentation is the work of Jan Andries Verleur of VMR Products and is protected intellectual property. Views and opinions expressed herein do not necessarily reflect the opinions of Hedgeye Risk Management. This presentation is for information purposes and is not intended as investment recommendations, Hedgeye Risk Management has no investment opinion on this Company and currently has no plans to provide research coverage. TERMS OF USE This report is intended solely for the use of its recipient. Re-distribution or republication of this report and its contents are prohibited. For more detail please refer to the appropriate sections of the Hedgeye Services Agreement and the Terms of Use at www.hedgeye.com.
LEGAL
2
The Vertically Integrated Electronic Cigarette
Company
June 2014
4
VMR Basics VMR Products (V2®) is the largest vertically integrated electronic cigarette company in the world. • Founded: Summer 2009 (Incorporated April 2010)
• World’s largest online retailer of electronic cigarette products
• Current Recurring Customers: 350,000+ (Total Customers = 1.2M+)
• Over 20,000 new/recurring customers added monthly
• Employees: 225+ worldwide (150+ Miami, USA)
• Engineering Staff of 50+ (China and USA)
• Dedicated Manufacturing Staff: 3,000+ (Manufacturing Partners) • The company added 100,000+ square feet of dedicated factory
operations in 2013
• 30+ Patents Filed Both Domestically and Abroad
5
VMR Basics VMR Products is an industry leader in the following categories:
VMR is always paving the way with revolutionary and
disruptive technology and offerings in the electronic
cigarette space. VMR boasts a healthy pipeline of R&D
initiatives, ensuring years of new product launches.
The VMR QC Process is unparalleled in the electronic cigarette industry. Proprietary
testing equipment and methodologies enable us to have
the lowest defect ratios in the category. Most notably, VMR is
the only major electronic cigarette company to publish e- liquid batch reports directly to
consumers.
VMR is the only vertically integrated company in the
electronic cigarette space. From sub-component sourcing to
consumer marketing, VMR is a completely soup-to-nuts
operation.
V2 is a globally recognized brand and is sold in over 30 countries. With over 1M+ customers in our database, VMR owns the largest database of confirmed electronic cigarette consumers in the world.
INNOVATION QUALITY VERTICAL
INTEGRATION OUR
BRANDS
6
VMR Basics: Global Presence
China • Regional HQ (Futian)
• Shenzhen, China • 1 Dedicated Factory
• Shenzhen, China • 3,000+ Dedicated
Workers • Sub-Component
Warehousing & QC Center
• Shenzhen, China
Europe • EU Regional Office
• Hamburg, Germany • EU Distribution Center
• Prague, Czech Republic • Mall Kiosk @ Palladium Mall
• Prague, Czech Republic The Americas • Corporate Office
• Miami, Florida • U.S. Distribution Center/QC
Center • Under Construction • Miami, Florida
• E-Liquid MFG Facility • Under Construction • Miami, Florida
VMR Franchise Offices • UK Regional HQ
• Peterborough, England • CIS Regional HQ
• Moscow, Russia • Ecuador Regional HQ
• Quito, Ecuador • Costa Rica Regional HQ
• San Jose, Costa Rica
7
VMR Brands
8
VMR Brands
V2® is America’s No. 1 online brand of electronic cigarettes. The company’s flagship web-site, v2cigs.com is currently ranked in the top 1500 web-sites in the U.S., and receives more than six million monthly unique visitors, as tracked by online web-metrics provider Alexa.com. V2 Cigs has distinguished itself as a leader in the industry for its powerful vapor production and great taste.
In a short time frame, V2 has become the 3rd
most sold brand at retail in the United States, with over 40,000 retail outlets.
9
VMR Brands
V2® Pro, launching July 2014, represents VMR’s entry into the large-scale vaporizer category. These products will compete in the emerging liquid/tank area of the vapor category, as well as with loose leaf vaporizer products like the PAX. These products are open system devices, designed to vaporize multiple consumable mediums including tobacco solids, e-liquids, and alternative mediums like e-gels and waxes.
Smart cartridge technology makes these devices backwards compatible with future mediums. They are disruptive in pricing and capability. Offering a gold performance standard whether the user is vaping solid tobacco or e-liquid. Proprietary magnetic cartridge and charger coupling are core features of these devices.
The V2 Pro line includes three feature-rich models: the Value (Series 3), the Mid-Range (Series 7) and the Game Changer (Series 9).
10
VMR Brands
Vapor Couture™ is the only line of e-cigarettes and accessories designed exclusively for women. Slim, elegant and available in four distinct shades, Vapor Couture is not simply a premium product – it’s also an eye-catching accessory.
Vapor Couture combines the robust technology of V2 with chic designs and stylish accessories. Vapor Couture features an ultra-thin, jewel-tipped rechargeable battery with flavor cartridges available in four complementary colors. Each of the six distinctive Vapor Couture cartridge flavors was hand-picked to appeal to a woman’s refined palate. With bracelets, charms and a must-have clutch, Vapor Couture has everything a woman needs to show off her e- cigs in style!
In select international markets, Vapor Couture has experienced success as a unisex brand.
11
VMR is the World’s Largest Online E-Cigarette Retailer • VMR Operates 11 Online Stores (Americas, Asia, Europe & South America) • VMR ships over 3,000 online orders every day to over 30 countries • V2Cigs.com (our flagship site) is ranked in the top 1,500 websites in the U.S. (Alexa) • 6 Million+ Monthly Unique Web Visitors (Shoppers) • VMR has over 1M online customers
VMR Basics: Online
v2.com v2cigs.eu v2cigs.com/v2pro vaporcouture.com
12
VMR Basics: Key domestic retailers
13
VMR Basics: OEM
VMR is a very active OEM manufacturer • 10 OEM brands in the company portfolio
• Nearly 1,000 SKUs under management
• Extensive IP portfolio owned by VMR
14
QC & Batch Testing
V2 brings the highest standard of quality to the electronic cigarette industry. Through batch testing, we offer a feature that is unmatched by any other e-cig company.
In an effort to provide greater transparency to our e-liquid ingredients, and to ensure quality, we make batch testing reports available for our customers. By simply entering the Batch Number on a cartridge or e- liquid package, a consumer can access a report that confirms the uniformity of ingredients between batches, certifies the nicotine content, and the absence of known contaminants of each batch.
15
Corporate Transparency
Downloadable Batch Reports Published Online for all eLiquid Containing Products.
16
Vertical Integration
VMR is the industry leader in vertical integration.
R&D / MANUFACTURING
• Electrical Engineering • IC Programming • Mechanical Engineering • Product Design Team • E-Liquid and Flavor Design • Rapid Prototyping Capability • Dedicated Manufacturing • Logistics • Leading QC Infrastructure
DISTRIBUTION / SALES
• In-house Advertising/PR Agency • Ecommerce Development Team • Affiliate Marketing Team • In-house Legal Department • Accounting & Finance • Merchandising and Retail Support • In-house Call Center Operations • Fulfillment Center Services
17
Thank You!
18