Hydration Pharmaceuticals Company Limited · ASX:HPC
Hydration Pharmaceuticals — The Hydration Pharmaceuticals Company — Investor Presentation (May 2023)
20 slides from Hydration Pharmaceuticals's investor presentation, May 2, 2023
Slide 1: For personal use only
1 For personal use only Low Sugar More Electrolytes Our purpose To make better hydration solutions and Hydration make a difference doing it Acceleration Formula Our ambition To own hydration Doctor Approved, in the family home Rapid Rehydration
Slide 2: Corporate overview
2 Corporate overview Corporate snapshot Major shareholders (as at 3 February 2023): For personal use only ASX code: HPC Woobinda Nominees Pty Ltd (Mr Dan O’Brian) 9.16% Shares on issue: 163.8m HSBC Custody Nominees (Australia) Limited 8.73% Market capitalisation (at $0.062 per share): ~A$10.2m Super
Slide 3: A North American focused company with Australian heritage
3 A North American focused company with Australian heritage For personal use only Founded in Australia 2001 with liquid products HYDRALYTE GLOBAL TERRITORIES Powder products launched 2006 Tablet format products launched Hydralyte North America 2010 (ASX: HPC) 2012 Launch in Canada 2014 Formation of
Slide 4: Overview and investment highlights
4 Overview and investment highlights Established market presence, significant cash burn reduction, still growing +30% For personal use only Established operations Significant Sales Growth Proven Canadian business • Strong sales growth across all • Trailing 12 months revenue hits • #2 Hydration brand
Slide 5: Canada alone presents a major market opportunity with huge US upside potential
5 Canada alone presents a major market opportunity with huge US upside potential Canadian category has doubled in size – led by Pedialyte (m arket leader) and H ydralyte Canadian m arket is undersized and will grow organically – providing significant opportunity For personal use only US Hydration ca
Slide 6: Functional beverage companies command high multiples
6 Functional beverage companies command high multiples Extensive M & A in recent years highlights the growing dem and for established com panies sim ilar to For personal use only Liquid IV Nuun License for Hydralyte Australia/NZ Pure Boost • US-based health science, nutrition • US-based consumer goo
Slide 7: Recent Financial Highlights
7 Recent Financial Highlights For personal use only Trailing 12 month revenue: Q1 FY2022 revenue (record): Q1 FY23 marketing expenditure US$9.7m US$2.55m US$0.9m é é é é +36% on PCP é +34% on PCP with largest quarterly Down US$0.8m from Q4 FY22 (unaudited) sales delivered in off peak period Amazon U
Slide 8: Q1 FY2023: 44% decrease in cash used with 34% revenue growth
8 Q1 FY2023: 44% decrease in cash used with 34% revenue growth For personal use only • Q1 FY2023 highlighted a 44% reduction in net cash used in Net expenditure Q4 FY2022 vs Q1 Net sales vs net cash expenditure Q1 operating activities compared to last quarter FY2023 (US$m) FY23 vs Q1 FY22 (US$m) $2.
Slide 9: Revenue growth continues despite reduction in marketing expenditure
9 Revenue growth continues despite reduction in marketing expenditure Trailing 12 month net sales For personal use only • Trailing 12 month revenue of US$9.7m up 36% on same period last year 12 ,000 • Q1 FY2023 revenue growth driven by: 10 ,000 • Sales to Canadian retailers: up 63% on PCP to US$1m •
Slide 10: Amazon marketing spend reduced, advertising efficiency up
10 Amazon marketing spend reduced, advertising efficiency up Proportion of subscriptions to total revenue have increased, driving higher net margins and maintaining sales growth For personal use only Amazon US Monthly Performance Amazon Subscription Revenue Trailing 6 Months Trailing 15 Months $170,
Slide 11: Bricks & Mortar highlights: Growth with Canada's leading pharmacy chain
11 Bricks & Mortar highlights: Growth with Canada’s leading pharmacy chain Shoppers Drug Mart retail sales last 4 years ($CAD) For personal use only • Shoppers Drug Mart is Canada’s number one pharmacy chain • YTD sales grew 135% with the group on the prior quarter • March 2023 saw peak summer sales
Slide 12: International expansion opportunities and UK sales upside
12 International expansion opportunities and UK sales upside Amazon UK sales growth For personal use only • Sales opportunities outside North America being pursued • Products now being sold in leading retailers Wholefoods and Chemist Warehouse across expanding USA stores • Amazon UK showing extreme
Slide 13: Gross margin remains strong
13 Gross margin remains strong For personal use only Gross margin • Gross margin of 48% in Q1 FY2023 • Slightly decreased on last quarter (Q4 FY2022: 49%) due to air freight costs and increased inventory reserves prior to peak sales period in North American summer Include updated graph • Product pro
Slide 14: Partnership with brand ambassador and co-owner, Shay Mitchell
14 Partnership with brand ambassador and co-owner, Shay Mitchell • Ms Mitchell is a Canadian Actress and entrepreneur with ~35.4m Instagram followers For personal use only • Co-branded product launched in December 2022 through HPC ecommerce channels and Amazon USA – with Canadian launch pending • Pr
Slide 15: Major product launches planned for Q2 FY2023 expected to deliver additional sales
15 Major product launches planned for Q2 FY2023 expected to deliver additional sales #1 SKU launch of 2022 was Hydralyte Liver Detox which delivered ~US$300,000 of incremental sales, For personal use only now sells $3k per day Best selling stick pack Shay Mitchell Lemon Launching imminently in bulk
Slide 16: Thank You
Thank You For personal use only Stay Hydrated Contact: Oliver Baker Chief Executive Officer Oliver.baker@ hydraly te.com H enry Jordan Six Degrees Investor Relations H enry.jordan@ sdir.com.au +61 (0) 431 271 538
Slide 17: Appendix 1: An experienced Board, management and advisory team
17 Appendix 1: An experienced Board, management and advisory team D isciplined governance and extensive expertise in growing consum er products com panies For personal use only Oliver Baker George Livery Adem Karafili Gretta Van Riel CEO Chairman NED NED Former General Manager of Former Director of
Slide 18: Appendix 2: Product health benefits
Appendix 2: Product health benefits For personal use only Hydralyte is the most advanced rapid rehydration Rapid Rehydration Requires Sugar. We Only Use What solution in the market designed for the whole family. is Needed. Nothing More. With more electrolytes and less sugar, Hydralyte can be used da
Slide 19: Appendix 3: Product Range
Appendix 3: Product Range HydraLyte is now leading industry innovation. Intersection of daily rehydration and drinkable vitamins For personal use only ORIGINAL RAPID REHYDRATION HYDRATION PLUS Ready to Liver Support Portable, Stick-style drink compact packets tablets Product Hydralyte Original Hydra
Slide 20: Appendix 4: Customer demographic
20 Appendix 4: Customer demographic For personal use only Our Shopper is aligned with the primary MULO grocery Buyer. Complements Market leader’s shopper 50% of Shay Mitchell is 25-34 Active, working professionals, aged 30-45 years old. Mom as focus, buying for family 239 But the category is younger
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