Wellnex Life Ltd · ASX:WNX
Wellnex Life — Investor Presentation (May 2023)
29 slides from Wellnex Life's investor presentation, May 25, 2023
Slide 1: Transformative Acquisition & Capital Raising
Transformative Acquisition & Capital Raising Wellnex Life Limited ASX: WNX May 2023 Wellnex Life Limited ASX: WNX STRICTLY PRIVATE & CONFIDENTIAL
Slide 2: Executive Summary
1 Executive Summary Wellnex Life Limited ASX: WNX STRICTLY PRIVATE & CONFIDENTIAL
Slide 3: Key Highlights of Acquisition
Executive Summary Key Highlights of Acquisition Item Description • Wellnex Life Limited (ASX: WNX) (“Wellnex”) has executed a binding Business Sale Agreement (BSA) to acquire 100% the business and assets of Pain Away (“Pain Away”) on a cash-free and debt-free basis • Pain Away is the number 2 player
Slide 4: Key Terms of Acquisition
Executive Summary Key Terms of Acquisition Item Description • Capital raising of c. $25.0m (c. $20.0m conditional placement and c. $5.0m entitlement offer) to fund the acquisition of the Pain Away and provide working capital for the business Funding of • A deposit of $2.2m has been paid to the Vendo
Slide 5: Investment Highlights
Executive Summary Investment Highlights Transformational acquisition of a leading healthcare brand strengthens Wellnex’s position as an owner and developer of health-focussed brands and IP, and results in the material strengthening of the financial position of the consolidated group with forecast FY
Slide 6: Wellnex
2 Wellnex Wellnex Life Limited ASX: WNX STRICTLY PRIVATE & CONFIDENTIAL
Slide 7: Wellnex Mission Statement and Business Model
Wellnex Mission Statement We are an owner and developer of innovative healthcare brands and IP that improve the health of people in Australia & overseas Business Model: Select Marketing & Receive Identify target Conduct R&D manufacturer distribution End consumer TGA (or market using internal to prod
Slide 8: Key Recent History
Wellnex Key Recent History Significant commercial activity has focussed on developing and strengthening Wellnex’s own healthcare brands and IP across numerous health segments Launched Wakey Wakey and The Iron Company Announced Started acquisition trading of Pain Away on ASX Signed Pharmacy Licensing
Slide 9: Target Markets
Wellnex Target Markets Wellnex is focussed on developing and commercialising its own healthcare brands and IP that have high barriers to entry (i.e. TGA-approved) and defensive characteristics OWNED BRANDS SAS-B Cannabis (Prescription Only) S3 Cannabis (OTC) IP LICENSING Formerly GSK Unlisted AUST-L
Slide 10: Customer Analysis
Wellnex Customer Analysis Wellnex has an extensive distribution network across Australia in all major sales channels, and has identified distribution partners for launch of selected products into priority international markets Sales Channels and Key Customers Pharmacy Wholesalers & Retailers Superma
Slide 11: Business Segments
Wellnex Business Segments Strategy to grow portfolio of owned brands and IP in regulated segments of consumer healthcare, leveraging established sales & distribution channels 100% Owned IP-licensing Joint Venture Distribution Brand Wakey Wakey Pharmacy Own The Iron Company Mr Bright Haleon / Arrotex
Slide 12: FY24 Growth Levers
Wellnex FY24 Growth Levers Momentum in expansion of recently launched brands during the 2nd half of FY23 is expected to accelerate during FY24 and lead to much improved gross margins and overall net profit Brand FY24 Growth Product Sales & Marketing 100% Owned Brands Wakey Wakey • Expansion of produ
Slide 13: Financial Performance
Wellnex Financial Performance Strong revenue growth expected to continue, with shift in revenue mix towards owned brands (away from distribution revenue) which will improve gross margins and is expected to drive Wellnex to profitability during FY24 P&L A$, m FY22A FY23B FY24F Revenue mix by source R
Slide 14: Pain Away
3 Pain Away Wellnex Life Limited ASX: WNX STRICTLY PRIVATE & CONFIDENTIAL
Slide 15: Company Snapshot
Pain Away Company Snapshot Pain Away is Australia’s number 2 topical pain relief brand, delivering a broad range of creams and sprays to consumers that are distributed across an extensive network of pharmacy retailers and grocery channels. The business has experienced strong revenue growth and is no
Slide 16: Customer Analysis
Pain Away Customer Analysis Pain Away has broad distribution across Australia primarily into the pharmacy and grocery channels, managed by third-party sales reps. Sales Channels and Key Customers Pharmacy Wholesalers & Retailers Supermarkets Contract Manufacturers Direct/Online N/A N/A Wellnex Life
Slide 17: Financials
Pain Away Financials Pain Away is expected to generate revenue of $13.7m and EBITDA of $5.1m during FY23B on a Pro Forma basis, with gross margins of c. 51%. Revenue ($m) Post-Acquisition Synergies 1 Wellnex has identified approximately $1.9m of synergies as a result of acquiring the assets of 1 15.
Slide 18: Strategic Rationale & Growth Opportunities
Pain Away Strategic Rationale & Growth Opportunities The acquisition of Pain Away 1) strengthens Wellnex’s strategy to be an owner of brands and IP in the healthcare segment and 2) is transformative to its financial performance with consolidated FY24F-PF Revenue of $62.9m and EBITDA of $9.0m Highlig
Slide 19: Risks
5 Risks Wellnex Life Limited ASX: WNX STRICTLY PRIVATE & CONFIDENTIAL
Slide 20: General Risks
Risks General Risks Risks Description The market price of WNX’s shares will fluctuate due to various factors, many of which are non-specific to WNX, including the number of potential buyers or sellers of WNX shares on the ASX at any given time, recommendations by brokers and analysts, Australian and
Slide 21: Specific Risks
Risks Specific Risks Risks Description Completion of the acquisition is not subject to a financing condition precedent, and accordingly there is a risk that the acquisition will not proceed and the BSA will be terminated if WNX is unable to successfully complete its capital raising. There is also a
Slide 22: Specific Risks
Risks Specific Risks Risks Description WNX’s new products may not be as successful as anticipated, which could have a material adverse effect on WNX’s business, financial condition or results of operations. A failure to successfully develop and commercialise these products could lead to loss of oppo
Slide 23: Specific Risks
Risks Specific Risks Risks Description If for any reason the acquisition does not proceed, including because of a failure to satisfy conditions precedent or other breach of the business sale agreement between WNX Failure to Acquire and the seller, WNX will need to redirect the use of the majority of
Slide 24: Appendices
6 Appendices Wellnex Life Limited ASX: WNX STRICTLY PRIVATE & CONFIDENTIAL
Slide 25: Glossary of Key Terms
Glossary of Key Terms Item Detail ASX Australian Securities Exchange BSA Business Sale Agreement CAGR Cumulative Annual Growth Rate Dec-22 LTM Actual financials for the 12 months ending 31 December 2022 EBITDA Earnings Before Interest Tax Depreciation & Amortisation EV Enterprise Value FY22A Actual
Slide 26: Important Notice and Disclaimer
Notice & Disclaimer Important Notice and Disclaimer The following notice and disclaimer applies to this investor presentation (Presentation or document) and you are therefore advised to read this carefully before reading or making any other use of this Presentation or any information contained in th
Slide 27: Notice & Disclaimer: Future Performance
Notice & Disclaimer Future Performance This Presentation contains certain "forward-looking statements" that are based on management's beliefs, assumptions and expectations and on information currently available to management. The words "expect", "anticipate", "estimate", "intend", "believe", "guidan
Slide 28: Notice & Disclaimer: Investment Risk
Notice & Disclaimer Investment Risk An investment in the New Shares is subject to investment and other known and unknown risks, some of which are beyond the control of WNX including loss of income and principal invested. The Company does not guarantee any particular rate of return or performance or
Slide 29: Company and Joint Lead Managers Contacts
COMPANY: JOINT LEAD MANAGERS: George Karafotias Ryan Legudi Ben Callanan Managing Director Director Executive Director & CEO ryan.legudi@salterbrothers.com.au ben@jbadvisory.com.au george.k@wellnexlife.com.au Zack Bozinovski Chris Sarpa Michael Pegum Senior Associate Director Managing Director chris