Hydration Pharmaceuticals Company Limited · ASX:HPC
Hydration Pharmaceuticals — Investor Presentation (August 2023)
31 slides from Hydration Pharmaceuticals's investor presentation, Aug 3, 2023
Slide 1: August 2023 Investor Presentation – Capital Raising
International Our Purpose Low To make better hydration Sugar solutions and make a difference doing it. More Our Ambition Electrolytes To own hydration in the family home. Hydration Acceleration Formula August 2023 Investor Presentation – Capital Raising Doctor Approved, Rapid Rehydration Co-owner Sh
Slide 2: Disclaimer
2 Disclaimer This investor presentation (Presentation) has been prepared by The Hydration Pharmaceuticals Company Limited ACN 620 385 677 Past performance (Hydralyte North America or the Company) and is dated 3 August 2023. This Presentation has been prepared in relation to a 1 for 2.27 Past perform
Slide 3: A North American focused company with Australian heritage
3 A North American focused company with Australian heritage Hydralyte North America (ASX: HPC) Launch Hydralyte Plus Passed HYDRALYTE GLOBAL TERRITORIES Launch in US products & Launch in ecommerce sites US$10m Focus Canada Relocate HQ to in sales^ Formation of HydraLyte San Diego North America Succe
Slide 4: Corporate overview
4 Corporate overview Snapshot Major shareholders (as at 24 July 2023): ASX code: HPC Woobinda Nominees Pty Ltd (Mr Dan O’Brien) 9.13% Shares on issue: 164.3m HSBC Custody Nominees (Australia) Limited 8.42% Market capitalisation (at $0.06 per share): ~A$9.86m Options on issue (exercisable between $0.
Slide 5: An experienced Board, management and advisory team
5 An experienced Board, management and advisory team Disciplined governance and extensive expertise in growing consumer products companies Oliver Baker George Livery Adem Karafili Gretta Van Riel CEO Chairman NED NED Former General Manager of Former Director of Strategy & Former Managing Director an
Slide 6: Product range
Product range Solutions at the intersection of daily rehydration and drinkable vitamins, leading industry innovation Original Rapid Rehydration Our proprietary formula across multiple formats, flavors and serving sizes Ready to Drink Tablets Granule Sticks 500ml & 1L 250ml & 500ml Serves 2 in 1 Rapi
Slide 7: Investment highlights
7 Investment highlights Established market presence, significant cash burn reduction, still in strong growth Established operations Significant Sales Growth Proven Canadian business • Established supply chain, shelf • Trailing 12 months revenue of • #2 Hydration brand in Canadian presence, sales tra
Slide 8: Extensive Canadian footprint with US and international expansion
8 Extensive Canadian footprint with US and international expansion Global retail snapshot Key Market Highlights Canada retailers #1 In tablets and powders ~10,000 Retail doors #2 Rapid rehydration brand 5 SKUs in Plus range to deepen category expansion US / UK / China New Markets • Huge AUS fanbase
Slide 9: Recent financial highlights & Q2 FY2023 results
9 Recent financial highlights & Q2 FY2023 results
Slide 10: Q2 FY23 financial highlights
10 Q2 FY23 financial highlights Net sales vs marketing expenditure by quarter (USD) Trailing Trailing 12 month 12 month revenue: revenue to June Q2 Gross Margin 2023 $3,000,000 US$10.3m é ~50% $2,500,000 é ~28% é +30% on PCP on PCP é From 47% last quarter and $2,000,000 (unaudited) (unaudited) 15% i
Slide 11: Amazon Prime Day 2023: US$120k combined gross sales
Amazon Prime Day 2023: US$120k combined gross sales Hydralyte reaches #1 in the Canadian Electrolyte Category Deal Feature: Top 5 Prime Day deal on during Prime Day Wall St Journal Amazon Canada Daily Sales Amazon US Daily Sales Shown in CAD Shown in USD $36,776 $52,825 $20,296 $25,318 $9,398 $7,878
Slide 12: Revenue growth continues despite reduction in marketing expenditure
12 Revenue growth continues despite reduction in marketing expenditure • Trailing 12 month revenue of US$10.3m up ~29% on same Trailing 12 month net sales period last year • Q1 FY2023 revenue growth driven by: 12,000 • Ongoing ecommerce sales growth • Canadian bricks and mortar sales increases 10,00
Slide 13: International expansion opportunities – UK sales exceeding expectations
13 International expansion opportunities – UK sales exceeding expectations UK revenue by month January to June 2023 (USD) • Products now being sold in Wholefoods and Chemist Warehouse stores across region $70,000 • Amazon UK showing promising growth trajectory with minimal $60,000 marketing expendit
Slide 14: Gross margin remains strong after optimisation of product, supply chain and retailer go-to-market
14 Gross margin remains strong after optimisation of product, supply chain and retailer go-to-market Gross margin $ Gross margin % Quarterly Gross Profit Quarterly Gross Margin • Gross margin of ~50% in Q2 FY23 – up 1,600,000 60.0% from 47% in the last quarter 55.0% 1,400,000 • Product profile strat
Slide 15: Marketing and growth initiatives
15 Marketing and growth initiatives
Slide 16: Marketing partnership with brand ambassador and co-owner Shay Mitchell
16 Marketing partnership with brand ambassador and co-owner Shay Mitchell • Ms Mitchell is a Canadian Actress and entrepreneur with ~36.6m Instagram followers • Co-branded product launched in December 2022 through HPC ecommerce channels and Amazon USA – with Canadian launch pending • 16 of North Ame
Slide 17: Major recent product launches driving incremental sales
17 Major recent product launches driving incremental sales #1 SKU launch of 2022 was the Liver Detox which has delivered ~US$550k of in annual sales (June ‘23) Now selling ~US$2.5-3k per day Hydralyte SPORT Hydration PLUS Liver Shay Mitchell Co- Goli is the market leader in Launched July branded SKU
Slide 18: A track record of delivering sales growth
18 A track record of delivering sales growth Major American Retail Expanded to sports section Launch all-natural stick UK Launch pack Amazon becomes Amazon sells US$140k in 4 SKUs on shelf #1 Customer 48 hours for Prime Day 14 SKUs on shelf EU Expansion 2024 and 2018 2020 2021 US$6m sales 2023 beyon
Slide 19: Opportunity to capitalise on a ~US$1.5Bn North American market and rest of world
Opportunity to capitalise on a ~US$1.5Bn North American market and rest of world Excludes traditional sports drink market segment New: UK Launched 2021. Just listed in Wholefoods. Fast growing online business. Huge local Australian fan-base. All product rated over China 4.5 stars on Amazon Just Laun
Slide 20: Offer overview
20 Offer overview
Slide 21: Transaction details
Transaction details 21 Raising up to ~$4.8m by way of a Placement of $1.5m and Entitlement Offer of up to ~$3.3m at an Offer Price of $0.045. In addition Pure Asset Management has agreed to exercise ~7.5m Warrants for proceeds of ~$0.4m. Placement • Placement to raise $1.5m via the issue of 33.3m Ne
Slide 22: Use of funds
22 Use of funds Sources of Funds Amount (AUD) Expenditure Item Amount (AUD) Marketing and Growth Initiatives $1.1m Capital Raise Funds* $4.8m Working Capital $3.7m Pure Warrant Exercise $0.4 Costs of the Offer $0.4m Total $5.2m Total $5.2m * The above figures assume the Entitlement Offer is fully su
Slide 23: Indicative timetable
23 Indicative timetable Event Date (2023) Trading Halt Monday 31 July Capital raising announced, shares resume trading Thursday 3 August Prospectus lodged with ASIC and ASX Friday 4 August Record Date for Entitlement Offer (7.00pm) Wednesday 9 August Settlement of the Placement Thursday 10 August Is
Slide 24: Risks
24 Risks
Slide 25: Risks
Risks 25 This section discusses some of the key risks associated with any investment in Hydralyte North America together with risks relating to participation in the Placement and Entitlement Offer which may affect the future operating and financial performance of Hydralyte North America and the valu
Slide 26: Risks
26 Risks Risk Description Hydralyte North America distributes a significant number of its products to end consumers through various sales channels, including bricks and mortar retailers such as Shoppers Drug Mart and Reliance on sales channels such as Walmart and online via Amazon’s Marketplace. The
Slide 27: Risks
27 Risks Risk Description Hydralyte North America’s business is dependent on its reputation with customers and consumers, and its ‘Hydralyte’ branding is of significant value to the business. The reputation and value associated with ‘Hydralyte’ branding and related intellectual property could be adv
Slide 28: Risks
28 Risks Risk Description Hydralyte North America’s performance will depend to a certain extent on a number of macro-economic factors outside its control which may impact the spending power and habits of its customers. These factors include, among other things, economic growth, unemployment rates, c
Slide 29: Summary of Underwriting Agreement
29 Summary of Underwriting Agreement
Slide 30: Offer Management and Underwriting Agreement
30 Offer Management and Underwriting Agreement The Lead Manager has agreed to lead manage the Placement and Entitlement Offer and partially underwrite the Entitlement Offer (up to a maximum of $2.5 million worth of Shares) on the terms set out in the Offer Management and Underwriting Agreement betwe
Slide 31: Thank You
Thank You Stay Hydrated Contact: Oliver Baker Chief Executive Officer Oliver.baker@hydralyte.com Henry Jordan Six Degrees Investor Relations Henry.jordan@sdir.com.au +61 (0) 431 271 538
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