Revolutionize Mass Consumption: Blue Expansion Strategy Overview

Marie Macha Birte Cappenberg Patrick Pohla Simon Prinz

Blue is the new Green How you can revolutionize mass consumption

Management Summary Analysis and Alternatives Implementation Financials and Risks Conclusion Agenda 01 | 01 | Management Summary 02 | 02 | Analysis and Alternatives 03 | 03 | Implementation 04 | 04 | Financials and Risks 05 | 05 | Conclusion January 2023 Blue Expansion 3 M nster Consulting

01 01 Management Summary

Analysis and Alternatives Implementation Financials and Risks Conclusion Management Summary With our strategy, you will be able to scale up your business and make a difference in human consumption Launch products in mass retail and beauty stores Use social media social media marketing and free samples samples Customer Customer- -centric development centric development of additional products retail Impact Blue Blue Expansion Expansion Strategy 49 % Revenue growth YoY Increased competition 10 Challenges High brand loyalty in beauty sector impede switching of potential customers Increased R&D costs demand for additional funding New patents per year 34 % IRR How can Blueland ensure long-term growth in the cleaning as well as the beauty sector? Question January 2023 Blue Expansion 5 M nster Consulting

02 02 Analysis and Alternatives

Management Summary Analysis and Alternatives Implementation Financials and Risks Conclusion Both internal and external factors influencing Blueland need to be considered Strong corporate values being the foundation Threats Strengths Challenge to switch Highly competitive landscape Image of not being effective Experienced founders Sustainable corporate values Customer centric approach Strong brand loyalty for cleaning products More than 40 patents EXTERNAL FACTORS INTERNAL FACTORS S S T T Opportunities Weaknesses W W O O Trend towards sustainability, cleanliness and health care Increasing beauty industry Increased online shopping and physical retail Unclear funding Limited distribution channels January 2023 Blue Expansion 7 M nster Consulting

Management Summary Analysis and Alternatives Implementation Financials and Risks Conclusion The position of Blueland in the competitive market strengthens their current strategy Convenient Convenient Blueland Branch Basics CleanCult Affordable Affordable Expensive Expensive Truman s JAWS Force of Nature Inconvenient Inconvenient January 2023 Blue Expansion 8 M nster Consulting

Management Summary Analysis and Alternatives Implementation Financials and Risks Conclusion Based on the multi-perspective analysis, three alternatives are developed Multi- perspective analysis Leverage growth of online and physical retail Approach customers to participate Use synergies of products Focus on strengths in cleaning product line Stick to DTC Avoid high competition in beauty industry Avoid competitive landscape and leverage alliances Ensure funding License patents Combined key results Blue Expansion Blue Expansion Extend to retail stores and approach customers both online and offline Core competencies Core competencies Focus on cleaning product line and do not invest further into beauty industry Business Alliances Business Alliances Approach strategic partners to further reduce environmental footprint Alternatives January 2023 Blue Expansion 9 M nster Consulting

Management Summary Analysis and Alternatives Implementation Financials and Risks Conclusion The strategy Blue Expansion is best aligned with the corporate values of Blueland and needs to be executed Criteria Blue Expansion Core Competencies Business Alliances 1. Corporate Values 1 2 3 1 2 3 1 2 3 2. Entrepreneurial Drive 1 2 3 1 2 3 1 2 3 3. Affordability 1 2 3 1 2 3 1 2 3 4. Total Addressable market 1 2 3 1 2 3 1 2 3 Overall score: 10 6 7 January 2023 Blue Expansion 10 M nster Consulting

Management Summary Analysis and Alternatives Implementation Financials and Risks Conclusion With a combined approach, Blueland can address more customers and increase their revenues Distribution Channel DTC only Retail only Combined approach January 2023 Blue Expansion 11 M nster Consulting

Management Summary Analysis and Alternatives Implementation Financials and Risks Conclusion By focusing on Gen Z and Millennials, environmentally friendly customers are targeted Distribution Channel DTC only Retail only Combined approach Target Group Gen Z Millennials Gen X Baby Boomers January 2023 Blue Expansion 12 M nster Consulting

Management Summary Analysis and Alternatives Implementation Financials and Risks Conclusion The characteristics of Bluelands main target group match their corporate values Distribution Channel DTC only Retail only Combined approach Target Group Gen Z Millennials Gen X Baby Boomers Environmentally friendly Influenceable Digitally addressable Experiential January 2023 Blue Expansion 13 M nster Consulting

03 03 Implementation

Management Summary Analysis and Alternatives Implementation Financials and Risks Conclusion Three incremental building blocks will lead to the success of Blue Expansion 3 3 Customer-centric innovation 2 2 Combined marketing approach 1 1 Distribution channel extension January 2023 Blue Expansion 15 M nster Consulting

Management Summary Analysis and Alternatives Implementation Financials and Risks Conclusion Extending the distribution channels by adding retailers will increase the number of potential customers Add beauty and mass market retailers as distribution channel What? More than 60% of consumers shop new beauty products at retailers Products are priced competitively Limited investment required Why? Approach network Approach network of investors and founders Develop Develop launching plan Scale up Scale up supply chain and production plan How? Convince Convince retailers of products Successful Successful retail launch January 2023 Blue Expansion 16 M nster Consulting

Management Summary Analysis and Alternatives Implementation Financials and Risks Conclusion A combined marketing approach for both product lines will leverage the overlapping target customers Launch a marketing campaign 100% sustainability - 0% compromises for both product lines What? Target customers are overlapping to a large part Loyal customer base with high retention already existing Why? Use loyalty loyalty of cleaning products customer Start Influencer Influencer Campaigns Cleaning product customers Beauty product customers How? Offer free samples free samples in malls Give Give- -aways aways on social media January 2023 Blue Expansion 17 M nster Consulting

Management Summary Analysis and Alternatives Implementation Financials and Risks Conclusion Leveraging R&D competencies to ensure customer satisfaction resulting in further growth Extend product line with innovative products suited to customer needs and react to customer feedback What? Why? R&D is a core competency with successful track record of product releases Conduct field studies field studies Develop Develop or improve product improve Feedback loop How? Analyze Analyze and react feedback react to January 2023 Blue Expansion 18 M nster Consulting

Management Summary Analysis and Alternatives Implementation Financials and Risks Conclusion Gantt-chart provides a clear plan for the next year with relevant milestones Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 2025 2026 Distribution Channel Distribution Channel Extension Extension Approach retailers Convince retailers Develop launching plan Scale up Combined Marketing Combined Marketing Approach Approach Approach influencers social media Give-aways Free samples Customer Customer- -centric Innovation centric Innovation Product development including feedback loop January 2023 Blue Expansion 19 M nster Consulting

04 04 Financials and Risks

Management Summary Analysis and Alternatives Implementation Financials and Risks Conclusion Different KPIs can be used in order to track the successful implementation of Blue Expansion initiatives Distribution channel Distribution channel extension extension Combined marketing Combined marketing approach approach Customer Centric Customer Centric Innovation Innovation New partner stores per year New patents per year KPI Revenue Growth Target for 2027 300 49% YoY 10 Investments until 2027 USD 60 mn. USD 55 mn. USD 83 mn. The required investments need to be funded but with the following sales projection, investors can be convinced January 2023 Blue Expansion 21 M nster Consulting

Management Summary Analysis and Alternatives Implementation Financials and Risks Conclusion Revenues growth rates will stabilize to a level of 49% at a year over year perspective Forecasted revenue streams (in million USD) Forecasted revenue streams (in million USD) Important to note Important to note $600.00 Cumulated revenues Cumulated revenues until 2021 up to 50 up to 50 mn mn. USD . USD $500.00 First retail stores retail stores revenues revenues materialize $400.00 Revenue Revenue growth year of 49% 49% growth rate rate year over $300.00 $200.00 $100.00 Assumed market share Assumed market share (beauty and personal care market) of 0.48% 0.48% $0.00 2019 2020 2021 2022 2023 2024 2025 2026 2027 January 2023 Blue Expansion 22 M nster Consulting

Management Summary Analysis and Alternatives Implementation Financials and Risks Conclusion Negative free cashflows driven by required investments will set the basis for future value adding cashflow streams Projected Free Cashflows (in million USD) Projected Free Cashflows (in million USD) Important to note Important to note $35.00 Free cashflows consider various consider various investments investments in supply chain expansion, marketing and R&D IRR = 34% IRR = 34% $30.00 $25.00 $20.00 $15.00 Negative free cashflows of 17.5% in 2023 and 2024 in 2023 and 2024 need to be financed 17.5% $10.00 $5.00 $0.00 -$5.00 Positive free cashflows Positive free cashflows can be expected in 2025 in 2025 -$10.00 -$15.00 -$20.00 2023 2024 2025 2026 2027 An IRR of 34% IRR of 34% will convince venture capitalists to provide the required fundings convince venture capitalists to provide the required fundings for the proposed investment plan January 2023 Blue Expansion 23 M nster Consulting

Management Summary Analysis and Alternatives Implementation Financials and Risks Conclusion The strategy is exposed to various risks which can be mitigated by effective countermeasures Risks and how to mitigate them Risks and how to mitigate them Risk Matrix Risk Matrix Risk Risk Countermeasure Countermeasure Impact Impact Provide reliable reliable financial analyses financial analyses that emphasize long long- -term advantages advantages A A Investors do not provide capital provide capital do not A A term B B C C Customers loyalty Customers loyalty to incumbents is too high too high Stress USPs Stress USPs to convince customers to switch B Other companies copy own copy own products products Submit patents for patents for new products new products C Probability Probability January 2023 Blue Expansion 24 M nster Consulting

05 05 Conclusion

Management Summary Analysis and Alternatives Implementation Financials and Risks Conclusion With Blue Expansion, long-term growth and success is guaranteed Next steps Next steps How can Blueland ensure long-term growth in the cleaning as well as the beauty sector? Approach network of investors and funders to get into negotiations with retailers Add beauty and mass market retailers as distribution channel 1 1 Get in touch with influencers and launch collaborations Launch a marketing campaign 100% sustainability - 0% compromises for both product lines 2 2 Gather ideas of additional beauty products Rock your presentation in 10 days and Extend product line with innovative products suited to customer needs and react to customer feedback 3 3 Monday Morning Action Monday Morning Action secure the funding! January 2023 Blue Expansion 26 M nster Consulting

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Management Summary Analysis and Alternatives Implementation Financials and Risks Conclusion By leveraging financial synergies, long term value creation can be achieved NPV Calculation NPV Calculation 2023 2024 2025 2026 2027 Revenues $146.56 $286.71 $354.13 $461.10 $565.74 Operating Margin $21.98 $45.87 $60.20 $83.00 $113.15 Taxes $6.60 $13.76 $18.06 $24.90 $33.94 NOPAT $15.39 $32.11 $42.14 $58.10 $79.20 less: Capex Supply Chain Expansion $8.00 $10.00 $12.00 $14.00 $16.00 Marketing Campaign $9.00 $10.00 $11.00 $12.00 $13.00 R&D in new products $13.00 $15.00 $16.00 $19.00 $20.00 FCF -$14.61 -$2.89 $3.14 $13.10 $30.20 January 2023 Blue Expansion 28 M nster Consulting