Its a Beverage Company!

DRAFT PRIVATE & CONFIDENTIAL

Disclaimer
This presentation is for educational purposes only. Nothing in this document or any information herein should be construed as an offer, invitation, marketing of services or products, advertisement, inducement, or representation of any kind, nor as investment advice or a recommendation to buy or sell any investment products or to make any type of investment, or as an opinion on the merits or otherwise of any particular investment or investment strategy. Any examples of strategies or trade ideas are intended for illustrative purposes only and are not indicative of the historical or future strategy or performance or the chances of success of any particular strategy. This presentation and any statements made in connection with the presentation are the presenters opinions, which have been based upon publicly available facts, information, and analysis, and are not statements of fact.

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Outline
At heart SODA is a beverage company USD 1Bn revenue target is easily achievable Major beverage company tie up is highly likely and could propel the stock by more than 300% Management should be focused on getting a major tie up via SodaCaps ASAP

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Everything You Need to Control Your Soda Experience

Soda Makers

The CO2

The Flavors

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Youre buying a soda, just deconstructed

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Investor Update on May 13: Two big takeaways

Revenues to hit 1Bn USD in 2016! (2012= 436mm) US adoption increasing Canister volumes accelerating In 4Q12, grew 89% In 1Q13 grew 101%! What does this mean? More users with greater frequency and higher canister turnover, higher gross margins

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Despite the move, its STILL UNDERVALUED!

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What does 1Bn in sales really mean?

US household penetration on only 5% 25% Revenue CAGR (this is slower than they have averaged) At LEAST 170mm USD in Net Income

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The $100 Price Target

We think this is fully achievable Puts the company on roughly 10x 2016 P/E, not expensive Short interest at 38% of the float

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How do they get there?!

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How to get to 1Bn?

Greater penetration of canister distribution points

Makes sense to buy your soda where you buy your soda!

400 Kroger stores in 2Q, potentially nationwide by year end

CVS by 2014

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How to get to $1Bn

Greater brand recognition Super Bowl Ad Went Viral

4.9mm views!

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How to get to $1Bn

Entering refrigerator market

Restaurant edition

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Restaurant Adoption
Chef-led innovation

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Riding Two Global Themes

Customization Environmentally friendly consumption

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Customization
At first I was just putting in half apple juice and half water, said Sara Williams, a mother of three in Boulder, Colo., who owns two SodaStream machines: one for water and one for everything else. Then I started throwing in cherry juice, and grape, and we went a little nuts. -NY Times

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Plastic Bottles Target of Consumer Awareness and Green Initiatives

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Enviro-Friendly Around the World

Israel Germany

Yankee Stadium

US University Campuses

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The Plastic Bottle as a Political Issue

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The Game Changer

Syrup direct to consumer Preserves brand equity Allows major beverage companies to access the platform Higher margins for all

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Soda Caps
What is a Soda Cap? Allows portion control Cap is added to the bottle and mixing proportions are controlled Consistent taste every time Control over taste is EXTREMELY important to the beverage companies. Coca Cola controls the syrup to water ratio at every soda fountain. Even at McDonalds.

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Soda Brands Care About Brand Perception

as our industry faces new opportunities and social challenges, we continued to strengthen our strategies, plans and commitments to a sustainable environment and promoting active healthy lifestyles within each of the local communities in which we operate. -Coca Cola Annual Report

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Coca-Coal Responds

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We Expect Social Pressure to Push Coca Cola on to the SodaStream Platform

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Why It Makes Sense For Coke

Currently Coca-Cola Bottlers make a 40 % Gross Margin Why is Coke Leaving so much money on the table?

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Distribution Costs!

BOTTLERS SPEND MOST OF THEIR GROSS PROFIT MOVING SODA FROM POINT A TO POINT B!

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Its Really This Simple

When this: Makes this:

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You need less of these:

And less of this:

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Economics of a Major Tie Up

Tie-Ups to drive SodaMaker sales Increased consumption of branded drinks to drive accelerated canister consumption As sales mix tilts towards canisters, significant margin expansion Could increase KO EBITDA margin by 3-4% - a Win-Win!

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Match Made in Heaven

We believe the question is not if but when will you see a machine like this available

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Tie up example: SBUX and GMCR

Starbucks tied up with the Keurig in March 2011 Since then, SBUX has sold 850mm K-Cups GMCR revenue increased more than 250% over the following 24 months

Rev in $MMs

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Revenue Forecasts
At 5% of the US home soda market, and flat penetration in Europe, revenues could reach $2Bn in 2016, which is double company forecasts

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Margin Improvement
A shift to greater canister usage can drive net margins in excess of 20% Net Income potential in 2016 with a major beverage company tie up? 20% * $2Bn = $400mm

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Valuation
What do you call a company that sells you everything you need to make a beverage? A beverage company! Where are 2016 P/Es for beverage companies?

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Tie Up Valuation 2016 P/Es

Bev Companies Coca-Cola 15x Pepsi 15x Dr Pepper 11x Monster 16x Average 14.25x

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2016 Potential Price Target

2016 Net Income: 400mm 2016 P/E: 14.25x 2016 Market Cap: $5.7Bn 2016 Share price: $283 Upside: 340%

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The Message to Management

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Disclaimer This presentation is for educational purposes only. Nothing in this document or any information herein should be construed as an offer, invitation, marketing of services or products, advertisement, inducement, or representation of any kind, nor as investment advice or a recommendation to buy or sell any investment products or to make any type of investment, or as an opinion on the merits or otherwise of any particular investment or investment strategy. Any examples of strategies or trade ideas are intended for illustrative purposes only and are not indicative of the historical or future strategy or performance or the chances of success of any particular strategy. This presentation and any statements made in connection with the presentation are the presenters opinions, which have been based upon publicly available facts, information, and analysis, and are not statements of fact. To the best of the presenters ability and belief, all information contained herein is accurate and reliable and does not omit to state material facts necessary to make the statements herein not misleading, and has been obtained from public sources that the presenter believes to be accurate and reliable, and who are not insiders or connected persons of any public company referenced herein. With respect to any public company referred to herein, there may be nonpublic information in the possession of the public companies or insiders thereof that has not been publicly disclosed by those companies. Therefore, all information contained herein is presented as is, without warranty of any kind whether express or implied, and the presenter makes no representations, express or implied, as to the accuracy, timeliness, or completeness of any such information or with regard to the results to be obtained from its use. Any investment involves substantial risks, including complete loss of capital. Any forecasts or estimates are for illustrative purpose only and should not be taken as limitations of the maximum possible loss or gain. Information contained in this presentation may include forward looking statements, expectations, and projections. You should assume these types of statements, expectations, and projections may turn out to be incorrect for reasons beyond the presenters control. Any information or written materials presented herein has been prepared by, and is solely the responsibility of, the presenter. It has not been prepared or approved by the Conference organizers, the Karen Leung Memorial Foundation (USA) or its sister organization, The Karen Leung Memorial Foundation (Hong Kong) Limited, or any director, officer, organizer, or supporter thereof. The Foundations do not purport to have conducted any due diligence on the information or materials presented by any speaker, nor to have taken any steps to verify its accuracy or completeness. The opinions expressed herein are solely those of the presenter, and are not the opinions or views of any other person or entity, including the Foundations, Conference sponsors, Conference media partners, other Conference speakers, or the FCC.
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