Venture Life Group Plc · LSE:VLG
Venture Life — H1 2020 Earnings Presentation
34 slides from Venture Life's earnings presentation, September 2020
Slide 1: The partner of choice for self-care products
The partner of choice for self-care products Venture Life Group plc Interim Results Presentation September 2020
Slide 2: Disclaimer
This document (the "Presentation") is being provided to a limited number of parties who have previously expressed an interest in acquiring an interest (the "Investor Interest") in Venture Life Group plc (the "Company"). If you are in any doubt about the investment to which the Presentation relates,
Slide 3: H1 2020 financial highlights
H1 2020 financial highlights • Group revenues increased 80% to £16.9 million (H1 2019: £9.3 million) • Of which 65% was organic growth (15% acquired) including new product launches and deals • 53% of revenues from Venture Life Group brands (H1 2019: 30%) • Gross profit increased 97% to £6.9 million
Slide 4: H1 2020 commercial highlights
H1 2020 commercial highlights • New 15-year exclusive distribution agreement signed with the Group’s oral care partner in China, with minimum purchase obligations of €168 million • Strong orders received from Chinese partner in H1 (£2.3 million shipped H1) • 8 new international partnering agreements
Slide 5: Covid-19 response
Covid-19 response • Instigated precautions and procedures to protect employees, customers and stakeholders • Development & Manufacturing facility remained open and operational all through the COVID-19 lockdown in Italy • Created new hand gel business – 1 million units sold to ASDA in the UK • No kno
Slide 6: Our platform for sustainable growth
Our platform for sustainable growth Strategy: Our growth strategy aims to leverage the scalable platform built at Venture Life Venture Life Group plc 6
Slide 7: Global distribution network
Global distribution network Retail Partners UK Netherlands International Partners Venture Life Group plc 7
Slide 8: Self-care product portfolio
Self-care product portfolio Key Self-Care Categories Oral Health Proctology Nail Fungus Brain Function & Memory Venture Life Group plc 8
Slide 9: Expertise by therapeutic area
Expertise by therapeutic area H1 2020 Group revenues by therapeutic areas • Long-standing Group expertise in oral Venture Life Group Brands care (51% of revenues) Customer Brands Nail care • Long-standing Group expertise in 8% Oral Care medical devices (44% of revenues) 24% DISINPLUS 18% Women's Hea
Slide 10: Operational leverage
Operational leverage VLG Brands Customer Brands “Our development and manufacturing facility services both VLG and Biokosmes Customer Brands” Italy “estimated spare “primary production capacity by the end of facility for all Group 2020 over 40%” revenues*” Venture Life Group plc 10 * Excludes NeuroAg
Slide 11: Our Manufacturing KPIs
Our Manufacturing KPIs Capacity incl. new Group revenue FY 2019 £20.2m leased 120 building plus Group revenue H1 2020 £16.9m extending current building Illustrative estimated plant utilisation at the 56% 100 Units per year (million) Capacity end of 2020 incl. new No. of products produced in 2019 26m
Slide 12: Successful acquisition record
Successful acquisition record UltraDEX & Dentyl Combined Consideration £8.2m* FY Revenue at acquisition (12 months) £5.4m FY PBT at acquisition £1.2m** H1 2020 Brand revenue (6 months) £4.5m H1 2019 Brand revenue (6 months) £2.5m H1 2020 Brand PBT £1.4m (FY x2 = 2.8m) + PBT now: consideration <3x *U
Slide 13: PharmaSource acquisition
PharmaSource acquisition • PharmaSource BV acquired 24th January 2020 – consideration €6.5 million total • Initial consideration of €5.23 million paid, deferred contingent consideration of up to €1.27 million payable in cash H1 2020 • 2011 founded in The Netherlands • Medical device portfolio – derm
Slide 14: Financial Highlights
Financial Highlights
Slide 15: H1 2020 profit and loss account
H1 2020 profit and loss account £ million H1 H1 % 2020 2019 change Revenue 16.9 9.4 80% Comments: Gross Profit 6.9 3.5 97% • Revenue growth up Gross Margin 40.9% 37.3% +3.6% +80% Total admin expenses (4.6) (3.6) (28)% • Gross profit +97% Adjusted EBITDA * 3.5 0.7 368% • Adjusted EBITDA* Operating Pr
Slide 16: Revenues H1 2020
Revenues H1 2020 • Revenues increased 80% to £16.9 million (H1 2019: £9.4 million) CAGR Net Sales £millions 33% 2014-2020 (H1’s) Venture Life Group plc 16
Slide 17: Balance sheet
Balance sheet £ million June 2020 December 2019 Fixed assets 30.9 24.9 Cash 6.6 10.7 Other current assets 17.1 11.4 Comments: Total assets 54.6 47.0 • Strong balance sheet Total debt (excluding finance 5.8 4.4 • Cash balance more than leases) £6 million Other liabilities 13.6 9.8 • Additional €1.5m
Slide 18: Commercial Highlights
Commercial Highlights
Slide 19: Brand highlights H1 2020 - Dentyl
Brand highlights H1 2020 - Dentyl UK - Dentyl • Business development – Dentyl launches in B&M Bargains & BodyCare Plus International markets - Dentyl • China – strong orders received in H1, for delivery in 2020 • New marketing campaign started in China via TikTok • 15 year exclusive agreement signed
Slide 20: Brand highlights H1 2020 - UltraDEX
Brand highlights H1 2020 - UltraDEX #SMELLEPHANTINTHEROOM Elevator Pitch UK Market UK - UltraDEX Halitosis Mouthwash – Brand Value % Share • Distribution unchanged across all products and Total Market, 12 w/e 30th June 2020 UK customers - multi-channel approach Source: Nielsen data • UltraDEX Spray
Slide 21: Pharma Source H1 2020 - progress
Pharma Source H1 2020 - progress Integration • Commercial and administrative – complete • Manufacturing transfer to Italy – on-going UK highlights • Existing business - strong H1 sales in the UK • New business - Lloyds Pharmacy to launch Wart & Verruca pen The Netherlands highlights • Existing busin
Slide 22: Other commercial highlights - H1 2020
Other commercial highlights - H1 2020 • 8 new long-term distribution agreements signed on VLG brands, including: • Procto-eze in Poland and Portugal • Myco Clear in Israel • Dentyl/UltraDEX in China • Performance Good appetite for VLG products • 4 new product launches in H1 2020 • 11 new manufacturi
Slide 23: Summary
Summary • Strong revenue growth H1 2020 +80% vs H1 2019 2020 H2 Outlook • VLG brands revenue grown to now represent 53% of revenues (30% H1 2019) • Strong group order book • Successfully reacted to COVID-19 by • Cash generative going forward introducing new products, such as hand • Involvement in cl
Slide 24: Appendices
Appendices
Slide 25: An experienced management team
An experienced management team Jerry Randall Sharon Collins Gianluca Braguti Andrew Waters Chief Executive Officer Chief Commercial Officer Chief Manufacturing Jerry Randall Chief Financial Officer Officer • Experienced executive • Over 20 years experience • Chartered Accountant director in internat
Slide 26: Significant growth potential in self-care market
Significant growth potential in self-care market • International consumer self-care group - founded 2010 Netherlands Office (Amsterdam) Head Office 6 staff and • Portfolio of marketed products, growing partner base, Commercial product pipeline (London) 12 staff • Products sold in 47+ countries, 110+
Slide 27: Our market opportunity
Our market opportunity Over-the-counter (OTC) Global Market³ 2018 ³ 2025 $127 CAGR (2019-25): 5.8% >$185 billion billion Sources: 1. United Nations (2017). Venture Life Group plc World Population Prospects: the 2017 Revision 27 2. National Audit Office – Financial sustainability of the NHS 3. Global
Slide 28: Delivering growth through focus on strategic drivers
Delivering growth through focus on strategic drivers Partners M&A Operational Innovation Strategic Leverage Drivers Existing and new Accelerated profitability New products Unloved brands that can distribution partners developed in-house be leveraged through increased throughput Group revenue (£m) Gr
Slide 29: 2019 profit and loss account
2019 profit and loss account £ million 2019 2018 % change Revenue 20.2 18.8 +7% Gross Profit 8.0 7.3 +10% Comments: Gross Margin 39.6% 38.8% • Revenue growth up Total admin expenses 6.7 6.2 +8% +7% Adjusted EBITDA * 3.0 2.7 +11% • Gross profit +10% Operating Profit 1.3 1.1 • Adjusted EBITDA* Profit
Slide 30: Revenues 2019
Revenues 2019 • Revenues increased 7% to £20.2 million (2018: £18.8 million) £000s Revenue split between VLG Brand and Customer Brands CAGR 25000 23% 2014-2019 20000 15000 10000 5000 0 2014 2015 2016 2017 2018 2019 Customer Brands Own Brands Venture Life Group plc 30
Slide 31: Balance sheet at 31 December 2019
Balance sheet at 31 December 2019 £ million December December 2019 2018 Fixed assets 24.9 25.1 Comments: Cash 10.7 9.6 • €6.5m of cash Other current assets 11.4 10.9 committed for PharmaSource Total assets 47.0 45.7 acquisition (Jan 2020) Interest bearing debt 4.4 3.8 • Additional €1m debt Finance L
Slide 32: Net Cash position at 30th June 2020
Net Cash position at 30th June 2020 £’M June December Comments 2020 2019 Italian term loans 4.4 3.2 €4.8m principal outstanding Invoice financing 1.4 1.2 On-going trading facility Finance Leases 2.4 2.6 On-going rental (repayment) Cash 6.6 10.7 Outflow of £5.5m in H1 2020 (Pharmasource acquisition)
Slide 33: Italian loan position 30th June 2020
Italian loan position 30th June 2020 Loan Balance Planned Full Interest rate €’000 €’000 Repayment BNL SPA 300 17 30/09/20 1% +3m Euribor Intesa SPA 2,000 1,803 30/11/24 0.90% +6m Euribor Unicredit SPA 800 587 31/05/23 1.05% + 6m Euribor BPM 1,000 892 28/06/2024 1.40% BPM 2020 1,500 1,500 31/03/2025
Slide 34: Shareholder register
Shareholder register Major Shareholders The percentage of shares that are not in public hands is 26.1%. Shareholder Number of shares held % issued share capital BGF Investment Management Limited 7,405,000 8.8% Mr Gianluca Braguti* and associated holdings 7,085,459** 8.5% JO Hambro Capital Management