Nuchev Pty Ltd · ASX:NUC
Nuchev Pty — Merger or Acquisition (May 2024)
36 slides from Nuchev Pty's merger presentation, May 20, 2024
Slide 1: Investor Presentation: Acquisition of bWellness and Equity Raise
Investor Presentation Acquisition of bWellness and Equity Raise 20 May 2024
Slide 2: Agenda
Agenda 1. Acquisition of bWellness and Equity Raising 2. Overview of bWellness 3. Strategic Rationale 4. Financial Impact 5. Nuchev Financial Results Update 6. Equity Raising Details Mick Myers Chief Executive Officer & Chief Financial Officer 2
Slide 3: Acquisition of bWellness and Equity Raising
Acquisition of bWellness and Equity Raising 3
Slide 4: Executive Summary
Executive Summary Offer overview ▪ Nuchev has entered into an agreement to acquire 100% of the shares in bWellness Pty Limited (“bWellness”) on a cash-free, debt-free basis for total consideration of $7.0 million ▪ Implied acquisition multiple of 4.3x FY23 normalised EBITDA of $1.6 million 1 , 3.3x,
Slide 5: Executive Summary
Executive Summary Offer overview ▪ The cash component of the acquisition is funded by an entitlement offer (“Entitlement Offer”) for 1 fully paid ordinary share (New Share) for every 2.75 Shares held by eligible Nuchev shareholders to raise up to approximately $5.1 million ▪ Funds to be applied: (i)
Slide 6: Acquisition aligned to our growth strategy
Acquisition aligned to our growth strategy Leading premium digestion, immunity and wellness nutritionals in Expanding Our Purpose 1 multiple categories Functional foods for a better life 2 International growth (China, SE Asia) and stable ANZ business Leading in premium digestion and immunity nutriti
Slide 7: Strategic Rationale
Strategic Rationale 7
Slide 8: Acquisition strategic rationale
Acquisition strategic rationale 1. Fundamentally aligned to Nuchev’s purpose & growth strategy of providing “Functional Foods for a Better Life”: a) bWellness products are designed to help end consumers with better health and a better life b) Product range is centred on functional health (nutritiona
Slide 9: Nuchev Group overview, post acquisition
Nuchev Group overview, post acquisition PF FY23A Revenue Brands ~$18.0m Goat Infant Formula, Digestion & Immunity Nutritionals Other Health & Nutritional PF 1H24A Revenue ~$11.5m Australia & Distribution Cross Border E-Commerce New Zealand Wholesale PF Net Cash1 ~$7.5m PF Gross End Market Margin Pha
Slide 10: Aligned with high growth, significant global markets
Aligned with high growth, significant global markets Infant Formula Nutritional & Immunity Health & Wellbeing • Well established in market • Immunity+ launched and • bWellness European and own with Oli6® as foundation expanding brand will facilitate growth product into an expanding market • In growt
Slide 11: Overview of bWellness
Overview of bWellness 11
Slide 12: bWellness Overview
bWellness Overview Overview of bWellness Financial snapshot1 • bWellness began its operations in 2001, specializing in prescription-only, high-efficacy, premium health products targeting practitioners • Since its founding, bWellness has developed a selection of natural health products. The company o
Slide 13: bWellness business model
bWellness business model 1. Suppliers & Brands 2. Third Party Logistics (3PL) 1. Nutraceutical brands 1. Homeopathic brands 1. Medical device brands 3. Distributors 4. Practitioners and Retail Australia (Ariya only) 2. 3PL New Zealand (both) 5. Patient (End User) 3. Australian Distributors 3. New Ze
Slide 14: bWellness sales growth strategy
bWellness sales growth strategy Item Description 1. Develop new exclusive brand • Establish new high quality brand relationships relationships • bWellness is actively pursuing other brands for exclusivity to further grow sales in the near-term • Development and manufacture of new products for sale u
Slide 15: Complementary medicines – market overview
Complementary medicines – market overview Sales channels for complementary medicines Approximately 75% of people in Australia regularly use complementary medicines Direct Selling Health Food 4.9% Stores 3.0% Nuchev and bWellness have Sales in vitamin and dietary supplemental and herbal medicines Onl
Slide 16: Financial Impact
Financial Impact 16
Slide 17: Pro forma Profit and Loss
Pro forma Profit and Loss A$m Nuchev bWellness Pro Forma Group Commentary & assumptions: 1 FY23A 1H 24 FY23A 1H 24 FY23A 1H 24 Revenue 8.8 6.6 9.0 4.9 17.8 11.5 • Nuchev delivers combined revenues of $11.5m 1HFY24; Revenue growth % $17.8 million for FY23 Less: Cost of sales (6.9) (4.7) (4.4) (2.6) (
Slide 18: Nuchev building financial scale
Nuchev building financial scale Pro forma Group half year sales and GM% for FY22A – 1H 24A1 Commentary & assumptions: • Half year Nuchev sales profile has remained relatively constant in recent 38.7% 37.8% times 33.2% • Material growth in Nuchev sales have Group Half-on-Half Revenue Growth: occurred
Slide 19: Nuchev Performance Update
Nuchev Performance Update 19
Slide 20: Nuchev Q3 FY24 Financial Update
Nuchev Q3 FY24 Financial Update Commentary & assumptions: Nuchev quarterly sales FY23 and YTD FY24F1 • Nuchev has had robust revenue growth, with FY24 year-to-date sales exceeding total FY23 revenue Nuchev’s sales year-to-date in FY24 has already surpassed FY23A full • There has also been a notable
Slide 21: Nuchev’s strategic agreement with H&S Group
Nuchev’s strategic agreement with H&S Group Since 2009, H&S Group has built a comprehensive distribution network (off-line and online), forging the path to become one of Australia’s largest local and export wholesalers for infant formula, vitamins and supplements, skincare and personal care into Chi
Slide 22: Equity Raising Details
Equity Raising Details 22
Slide 23: Details of the Offer
Details of the Offer Offer overview ▪ Entitlement Offer (“Entitlement Offer” or the “Offer”) of 1 fully paid ordinary share (New Share) for every 2.75 Shares held by eligible shareholders to raise up to approximately $5.1 million at a price of $0.1560 per Share Offer structure and size ▪ Approximate
Slide 24: Capital raising timetable
Capital raising timetable Key events Date Announce Entitlement Offer and bWellness acquisition Monday, 20 May 2024 Notice of Extraordinary General Meeting sent to shareholders Monday, 20 May 2024 Record Date 7:00pm Friday, 24 May 2024 Entitlement Offer opens Monday, 27 May 2024 Extraordinary General
Slide 25: Concluding highlights
Concluding highlights Increased Scale & Institutional Strong Margin Profile Diversity Relevance bWellness has FY23A standalone 1H FY24 proforma revenue $11.5m; Increased scale, diversification and gross margin of 51.2% with pro forma FY23 proforma revenue $17.8m, pro operating profitability will bri
Slide 26: Key risks
Key risks 26
Slide 27: Key risks
Key risks There are various risks that are both specific to Nuchev and its subsidiaries (“the Group”) and of a general nature, which may affect the future operating and financial performance of the Group and outcome of an investment in Nuchev. Effective risk management is central to Nuchev’s approac
Slide 28: Key risks (continued)
Key risks (continued) Increased market competition Nuchev operates in the highly competitive fast-moving consumer goods industry and is subject to existing and growing competition from domestic and international producers of infant formula and other nutritional products. Increased competition may im
Slide 29: Key risks (continued)
Key risks (continued) Nuchev’s reliance on third party suppliers and service providers exposes it to third party risks Nuchev’s business model involves outsourcing key processes (such as production, processing, blending, canning and logistics) to third party suppliers and service providers. There is
Slide 30: Key risks (continued)
Key risks (continued) Nuchev’s success is linked with its ability to attract and retain key management personnel Failure to attract and retain key management and operating personnel may adversely affect Nuchev’s ability to execute its business strategy and may result in a material increase in the co
Slide 31: Appendices
Appendices 31
Slide 32: Sale Agreement summary (1/2)
Sale Agreement summary (1/2) Sale Agreement overview Completion date The acquisition is expected to complete on 28 June 2024 The Sale Agreement contains several conditions precedent: (a) Nuchev’s shareholders approving the issue of shares to Brauer Natural Medicine Pty Ltd (Brauer) at an extraordina
Slide 33: Sale Agreement summary (2/2)
Sale Agreement summary (2/2) Sale Agreement overview The consideration payable by Nuchev is A$7.0 million (Purchase Price). It consists of a combination of cash and scrip consideration payable on completion, comprising: (a) 22,435,898 Shares in Nuchev (valued at an issue price of A$0.1560 and escrow
Slide 34: Offer Jurisdictions
Offer Jurisdictions This presentation has not been filed, lodged, registered, reviewed or approved by any regulatory authority in any jurisdiction and recipients of this presentation should keep themselves informed of, and comply with and observe, all applicable legal and regulatory requirements. Th
Slide 35: Disclaimer
Disclaimer This presentation is provided by Nuchev Limited (ACN 163 225 090) (Nuchev) to provide summary information about Nuchev and its respective subsidiaries (together, the Group) in relation to a pro-rata non-renounceable entitlement offer of fully paid ordinary shares in Nuchev (New Shares) to
Slide 36: nuchev
-_ nuchev