Slide 1: Interim results presentation
Venture Life Group plc Interim results presentation Six months to 30 June 2016 September 2016
Slide 2: Agenda
Agenda • H1 2016 highlights • Global progress • Operational leverage • Update on Periproducts acquisition • Commercial update • Financial review • H1 2016 Summary • H2 2016/H1 2017 Outlook • Appendices -1-
Slide 3: H1 2016 Highlights
H1 2016 Highlights Financial highlights • Revenues up 40% to £6.1m (H1 2015: £4.4m) • Gross profit increased 47% to £2.3 million (H1 2015: £1.5 million), giving a gross margin of 37% (H1 2015: 35%) • Adjusted EBITDA profit of £0.1 million (H1 2015: loss of £0.4 million) – first reported positive EBI
Slide 4: H1 2016 Highlights (cont'd)
H1 2016 Highlights (cont’d) Commercial highlights • Acquisition of the UltraDEX oral care products brand with Periproducts Limited in March 2016 • Nine new long term exclusive distribution agreements signed, including: – UltraDEX in Spain, Malaysia and China – Benecol once-a-day liquid sachet in Tur
Slide 5: Global Progress
Global Progress Venture Life’s reach now extends to over 40 countries and 80 customers globally - significant opportunities remain Benecol – Turkey UltraDEX - UK UltraDEX - Spain UltraDEX - China UltraDEX - Malaysia Benecol – Jordan Countries where products sold or partnered Countries where no produ
Slide 6: 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 -5-
Slide 7: March 2016 – Acquisition of Periproducts Limited
March 2016 – Acquisition of Periproducts Limited • Established UK oral care business (20+ years old) – Periproducts Limited – UltraDEX mouthwash and toothpaste products – International trade mark portfolio – Supporting clinical data evidencing efficacy – Patent protected IP and licensed IP – Long-st
Slide 8: Strategic Rationale
Strategic Rationale • Product range complementary to existing portfolio • Opportunity to exploit our international distribution relationships to generate revenue growth • Extensive in-house experience in oral care sector: manufacturing and commercial • Brings existing relationships with Boots and ot
Slide 9: Anticipated Synergies
Anticipated Synergies 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 • Target year 1
Slide 10: Commercial Update
Commercial Update Sharon Collins
Slide 11: Commercial Progress
Commercial Progress • Signed nine new, long-term distribution agreements in H1 2016 – Two new deals for Benecol ‘once a day’ liquid sachets under registration in Turkey and Jordan • Five product launches in H1 2016 with nine products still in registration • India - registration completed, launch sch
Slide 12: Commercial Progress - UK
Commercial Progress - UK Sales update Marketing update • Re-engaged with all key accounts in UK • Revitalise brand – new ‘fresh’ identity, market – positively received clearer messages on pack/adverts • Increasing product penetration • Focus on brand awareness – investment in new Autumn campaign – n
Slide 13: ATL Marketing Collateral
ATL Marketing Collateral - 12 -
Slide 14: Commercial Progress - International
Commercial Progress - International • Signed x3 international deals so far – Spain, Malaysia & China • Malaysia – registration complete • Spain launch scheduled for Q4 2016 – Full marketing plan – Consumer, Pharmacist, Dentist – TV, POS, Congresses • £300k of international sales expected in 2016 vs.
Slide 15: Commercial Progress - China
Commercial Progress - China • Roll out underway across mainland China (1,300 stores) • 14 products now registered – Part launch - January 2016 – Full product launch – July 2016 – Marketing collateral finalised – July 2016 – Intensive training conducted – August 2016 – Commission introduced - Septemb
Slide 16: Commercial Progress - Benecol
Commercial Progress - Benecol • First deals done on Benecol ‘once a day’ liquid sachet – under registration in Turkey and Jordan – expected launch H1 2017 • Benecol capsules to launch in Jordan - Q4 2016 • New flavours in progress – 4/5 new flavours being developed/tested • Additional commercial dis
Slide 17: Financial review
Financial review James Hunter
Slide 18: Income Statement - revenue
Income Statement - revenue • Reported revenues increased 40% to £6.1m (H1 2015: £4.4m) • Growth in Brands and Development & Manufacturing, plus Periproducts acquisition contributed £0.9m of revenue • Like-for-like revenues increased 19% to £5.2m (H1 2015: £4.4m) • Order book ahead of September 2015
Slide 19: Income Statement – gross profit and overheads
Income Statement – gross profit and overheads • Gross profit increased 47% from £1.5m in H1 2015 to £2.3m in H1 2016 • Gross margin achieved of 37% (FY 2015: 33%, H1 2015: 35%) • Margin improvement due to contribution of Periproducts • Administrative costs increased by £0.3m (11%), driven by additio
Slide 20: Financial results – Cash flow
Financial results – Cash flow • Cash and cash equivalents at 30 June 2016 totalled £1.6 million (31 December 2015: £2.9 million) • Net cash outflow during H1 2016 of £1.3 million: – Operating cash flow before movements in working capital - outflow of £0.1m – Movement in working capital - outflow of
Slide 21: Cash/debt position
Cash/debt position £’000 30 June 2016 31 December 2015 Change Cash at bank and in hand 1,600 2,900 (1,300) RiBa (invoice financing) (600) - (600) Unsecured bank loans > 1 year (2,000) (1,800) (200)* Vendor loan notes (1,600) (1,400) (200)* Issue of convertible bond (1,900) - (1,900) Deferred conside
Slide 22: H1 2016 Summary
H1 2016 Summary • Acquisition and integration of Periproducts Limited • First partnering deals on UltraDEX • First partnering deals on Benecol once-a-day sachet • Lubatti launched in China • Revenues up 40% over H1 2015 • EBITDA positive for the first time - 21 -
Slide 23: H2 2016/H1 2017 Outlook
H2 2016/H1 2017 Outlook • UltraDEX advertising campaign in London and South East • New UK Sales Director appointed – focus on broader and deeper penetration of UltraDEX range and other own brand ranges • R&D / product development to drive organic revenue growth: – Fungal infections – Skin inflammati
Slide 24: Appendices
Appendices
Slide 25: Reported Group Income Statement
Reported Group Income Statement All amounts expressed as £’000 Six months ended Six months ended Year ended under IFRS 30 June 2016 30 June 2015 31 December 2015 Revenue 6,121 4,372 9,077 Cost of sales (3,868) (2,841) (6,073) Gross profit 2,253 1,531 3,004 Gross margin 37% 35% 33% Administrative exp
Slide 26: Reported Group balance sheet
Reported Group balance sheet £’000 30 June 2016 31 December 2015 30 June 2015 Fixed assets Intangibles 16,500 12,527 12,689 Property, plant & equipment 1,229 1,120 979 Fixed assets - total 17,729 13,647 13,668 Current assets Inventories 3,352 2,235 2,043 Trade and other receivables 4,448 3,173 3,357
Slide 27: Shareholder register
Shareholder register Mr Gianluca Braguti 19.2% J O Hambro 11.6% Mr Jerry Randall and associated holdings 10.7% Aviva plc 9.9% Dr Michael Flynn and associated holdings 7.9% Mr Andrew Sinclair and associated holdings 5.8% Quilter Cheviot Limited 5.7% Mr Anthony Ahearne and associated holdings 4.6% Ms
Slide 28: Disclaimer
Disclaimer This presentation has been prepared by Venture Life Group plc (the “Company”) and is general background information about the Company’s activities at the date of this presentation. The information in this presentation is provided in summary form only and does not purport to be complete. T