Venture Life Group Plc · LSE:VLG
Venture Life — FY2016 Earnings Presentation
34 slides from Venture Life's earnings presentation, March 2017
Slide 1: 2016 Highlights
2016 Highlights • Revenues up 57% to £14.3m (2015 : £9.1m) • Gross profit increased 83% to £5.5 million (2015: £3.0 million), giving a gross margin of 38% (2015: 33%) • Adjusted EBITDA profit of £0.8 million (2015: loss of £0.6 million) – first reported positive EBITDA contribution in a year. • Acqu
Slide 2: About Venture Life
About Venture Life Venture Life Group plc • International consumer self care group, marketed products, growing partner base and strong product pipeline • Addressing the needs of the ageing UK Italy population • March 2014 - Listed on AIM • Brand development • Manufacturing • March 2014 – Acquired It
Slide 3: Venture Life management team
Venture Life management team Jerry Randall • Experienced executive director in international healthcare for over 15 years Chief Executive Officer • Extensive experience in licensing, M&A, fund raising and capital markets • Co-founder of Sinclair Pharma which grew from £1m to £30m revenues • Co-found
Slide 4: The market opportunity
The market opportunity A number of growth drivers The world’s population is ageing World population of persons 60+ ('000)1 3,000,000 Growing Difficult to ageing change 2,500,000 population diet 2,000,000 GROWTH 1,500,000 DRIVERS 1,000,000 Increasing Healthcare focus on self- 500,000 budgets medicati
Slide 5: Our product focus
Our product focus Eyes Pain Cholesterol Cognitive Joints & function muscles Skin & Sleep Ageing hair Women’s Oral health health Immune GI system Diabetes & Current obesity Future Recently acquired -4-
Slide 6: Strategy for growth
Strategy for growth • Record revenue for 2016 - £14.3 million, 57% increase on previous year • Maiden EBITDA profit - £0.8 million • Driven by organic growth and Periproducts acquisition -6-
Slide 7: Delivering on the UltraDex acquisition
Delivering on the UltraDex acquisition Leveraging Venture Life’s existing: • Business development infrastructure and relationships • Manufacturing oral care experience, capability and capacity • QA, regulatory, development and administrative resource To deliver: • UK and international revenue growth
Slide 8: Operational leverage
Operational leverage • Investment made in manufacturing business in anticipation of growing volumes • Platform in place to accommodate organic and acquisitive growth • Acquisition of UltraDEX – exemplifying the benefits of leverage • Significant growth opportunities remain -8-
Slide 9: 2016 Financial highlights
2016 Financial highlights • Revenues up 57% to £14.3m (2015 : £9.1m) • Gross profit increased 83% to £5.5 million (2015: £3.0 million), giving a gross margin of 38% (2015: 33%) • Adjusted EBITDA profit of £0.8 million (2015: loss of £0.6 million) – first reported positive EBITDA contribution in a ye
Slide 10: Revenues 2016
Revenues 2016 • Revenues up 57% to £14.3m (2015 : £9.1m) • Like for like revenue growth 23% (on a proforma basis assuming 12 months of Periproducts) Revenues - 2015 and 2016 (£m) VLG - 2016 revenue split 15.0 2.4 14.3 14.0 13.0 2.5 12.0 17% 9% 11.0 0.3 10.0 9.1 9.0 74% International 8.0 7.0 Brands 6
Slide 11: Gross profit and overheads
Gross profit and overheads • Gross profit increased 83% from £3.0m in 2015 to £5.5m in 2016 • Gross margin achieved of 38% (FY 2015: 33%, H1 2015: 35%) • Margin improvement due to contribution of Periproducts and increased turnover at Biokosmes • Administrative costs increased by £1.3m (29%), driven
Slide 12: Financial results – cash flow
Financial results – cash flow • Cash and cash equivalents at 31 December 2016 totalled £2.0 million (31 December 2015: £2.9 million) • Net cash outflow during 2016 of £0.9 million: 2016 cash flow (£m) 3.2 7.0 6.0 0.2 0.2 5.0 0.6 4.0 0.4 2.9 3.0 1.1 2.0 2.0 0.3 1.0 4.3 0.0 Opening balance Operating c
Slide 13: Reported Group income statement
Reported Group income statement All amounts expressed as £’000 under IFRS Year ended Year ended 31 December 2016 31 December 2015 Revenue 14,280 9,077 Cost of sales (8,789) (6,073) Gross profit 5,491 3,004 Gross margin 38% 33% Administrative expenses (4,979) (3,853) Amortisation of intangibles (862)
Slide 14: Reported Group balance sheet
Reported Group balance sheet £’000 31 December 2016 31 December 2015 Fixed assets Intangibles 16,272 12,527 Property, plant & equipment 1,279 1,120 Fixed assets - total 17,551 13,647 Current assets Inventories 3,141 2,235 Trade and other receivables 4,656 3,173 Other debtors - 5 Cash and cash equiva
Slide 15: Cash/debt position
Cash/debt position £’000 31 December 2016 31 December 2015 Change Cash at bank and in hand 1,998 2,857 (859) RiBa (invoice financing) (629) - (629) Unsecured bank loans < 1 year (58) (38) (20) Unsecured bank loans > 1 year (2,586) (1,806) (780) Vendor loan notes (1,754) (1,416) (338) Issue of conver
Slide 16: Commercial Update
Commercial Update XK
Slide 17: Commercial update
Commercial update • Signed four new, long term distribution agreements in H2 2016 (13 in total) • Four new product launches in H2 2016 (10 in total) • China – good sales growth seen in H2 2016 and trend continuing into 2017, re-orders received Q1 2017 • UltraDEX marketing campaign in UK was successf
Slide 18: Positive Autumn campaign
Positive Autumn campaign ü 4,000 tube cards and 91 posters on London Underground ü 40,000 mouthwash samples ü Digital & PR campaign ü Radio advertising – 30 second advert on Heart FM 2016 ATL campaign delivered +29.5% retail sales vs. prior period Mouthwash 49.0% 43.4% Value % YoY 29.5% 52 w/e 4 w/e
Slide 19: Distribution
Distribution New Listings ü Re-engage the trade – renewed collaboration ü 250ml Mouthwash Mint ü 244 x points of distribution ü Distribution – new listings in Sainsbury’s, Superdrug and Waitrose ü 9ml Mouth Spray ü 780 x points of distribution ü Marketing – driving trial, awareness and sales ü Wire
Slide 20: 2017 plans
2017 plans Range Marketing Packaging re-design and new pack sizes Driving visibility and putting UltraDEX at the heart of a halitosis segment Recruit new “loyalists” Business development BTL marketing and targeted media to attract new shoppers Developing new business in strategic channels; Pharmacy
Slide 21: China update
China update • Full range launched in H2 2016 • Sales in growth, with ambitious plans for 2017 • New orders received post period end, with clear visibility for 2017 • Training continuing • 1,566 stores in 2016 – approx. 1,000 to be opened in 2017 Sales out H2 2016 & post-period end Jul-16 Aug-16 Sep
Slide 22: Benecol
Benecol • Malta – launched Benecol capsules, re-ordered in H2 2016; sales small but demand growing • Jordan – partner launched Benecol capsules in H2 2016. Post period end Benecol sachet approved for sale. • Turkey – registration is expected to complete in H1 2017, launch will follow manufacturing •
Slide 23: New Product Development
New Product Development Creating Real Value
Slide 24: Venture Life NPD - market orientated
Venture Life NPD - market orientated Drivers: • Markets • Competitors • Science • Technologies • Speciality chemicals • Packaging Goals: • Innovation • Science • Market orientated Page 24
Slide 25: Onychomicosis – new for 2017
Onychomicosis – new for 2017 • A growing demand and increasing problem • Related to an increase of: § Ageing population § Immunodeficiency disorders a b § Immunomodulating drugs § immusosuppressing drug § Sports, SPA, Swimming c d Figure 3: Onychomycoses Page 25
Slide 26: Topical preparations for Onychomycosis – market opportunity
Topical preparations for Onychomycosis – market opportunity Page 26
Slide 27: Onychomycosis: market needs, added value by VLG
Onychomycosis: market needs, added value by VLG USP • Treats the condition • Rapidly improves the appearance Patient compliance: • Quick reduction of nail discromic appearance • Easily applied and absorbed • Once-a-day application Added value of VL NPD • Medical device • Based on innovative actives
Slide 28: Photoallergy – new for 2017
Photoallergy – new for 2017 Page 28
Slide 29: Photoallergy: background and market opportunity
Photoallergy: background and market opportunity Many well-know drugs on the market can cause Photoallergy Page 29
Slide 30: PhotoAll: mechanism of action
PhotoAll: mechanism of action • UVA filtering • Anti free radicals molecules • Cell protective molecules • Immuno-Modulating Molecules Newly granted patent Page 30
Slide 31: Rosacalma range
Rosacalma range • Indicated to alleviate the symptoms of Rosacea • Rosacea affects 10% general population between 30-50 years – skin condition that affects the face • Symptoms include redness, pustules, flaking and sensitivity • No cure for rosacea – long term compliance, avoidance of trigger factor
Slide 32: Summary and outlook
Summary and outlook • International self care business, targeting ageing population • Own development and manufacturing, with low cost international distribution model, direct to retail in UK • Significant operational leverage beginning to drive operating margin • Revenue and margin growth targeted
Slide 33: Appendices
Appendices
Slide 34: Shareholder register
Shareholder register Mr Gianluca Braguti (Director) 19.2% J O Hambro 12.0% Mr Jerry Randall (Director) and associated holdings 10.7% Aviva plc 9.6% Dr Michael Flynn and associated holdings 8.0% Quilter Cheviot Limited 7.0% Mrs Sharon Collins (Director) 4.3% Mr Anthony Ahearne and associated holdings