Wellnex Life Ltd · ASX:WNX
Wellnex Life — Investor Presentation (November 2023)
48 slides from Wellnex Life's investor presentation, Nov 17, 2023
Slide 1: Entitlement Offer and Pain Away Acquisition
For personal use only Not for release or distribution in the United States Entitlement Offer and Pain Away Acquisition Wellnex Life Limited ASX: WNX November 2023 STRICTLY PRIVATE & CONFIDENTIAL
Slide 2: Important Notice & Disclaimer
Important Notice & Disclaimer Important Notice and Disclaimer The following notice and disclaimer applies to this investor presentation (Presentation or document) and you are therefore advised to read this carefully before reading or making any other use of this Presentation or any information conta
Slide 3: Important Notice & Disclaimer (cont’d)
Important Notice & Disclaimer (cont’d) Disclaimer The information in this Presentation has been obtained from or based on sources believed by WNX to be reliable. For personal use only To the maximum extent permitted by law, WNX, its representatives, advisors and each of their respective affiliates,
Slide 4: Executive Summary
For personal use only 1 Executive Summary STRICTLY PRIVATE & CONFIDENTIAL STRICTLY PRIVATE & CONFIDENTIAL
Slide 5: Rationale & Reasons To Support The Offer
Rationale & Reasons To Support The Offer 1 ▪ Wellnex is transforming into a leading owner and developer of some of Australia’s leading health brands ▪ Post completion of the Pain Away acquisition, Wellnex will have a: For personal use only – Portfolio of 100% owned brands (Wakey Wakey, Nighty Night,
Slide 6: Executive Summary
Executive Summary Item Description ▪ Wellnex Life Limited (ASX: WNX) (Wellnex) has executed a Sale Agreement (Sale Agreement) to acquire certain assets of Pain Away (Pain Away) on For personal use only a cash-free and debt-free basis (the Acquisition) ▪ Pain Away is second largest player in terms of
Slide 7: Executive Summary (cont’d)
Executive Summary (cont’d) Item Description ▪ Acquisition of Pain Away aligned with Wellnex’s strategy of owning brands and intellectual property (IP) in defensive healthcare segments For personal use only ▪ Operational and cost savings and efficiencies to be realised upon completion leveraging Well
Slide 8: Wellnex Going Forward
For personal use only 2 Wellnex Going Forward STRICTLY PRIVATE & CONFIDENTIAL STRICTLY PRIVATE & CONFIDENTIAL
Slide 9: Wellnex Going Forward: Business Segments
Wellnex Going Forward Business Segments Strategy to grow portfolio of owned brands and IP in regulated segments of consumer healthcare, leveraging established For personal use only sales & distribution channels 100% Owned IP-licensing Joint Venture The Iron Haleon / Wagner Brand Wakey Wakey Nighty N
Slide 10: Owned Brands, IP and Joint Ventures
Wellnex Going Forward Owned Brands, IP and Joint Ventures Wellnex has developed and launched innovative brands that are sold to major pharmaceutical and grocery retailers For personal use only 100% Owned Brands Pain Away Wakey Wakey Nighty Night The Iron Mr Bright Pharmacy Own Company Australia’s se
Slide 11: Owned Brands, IP and Joint Ventures (cont’d)
Wellnex Going Forward Owned Brands, IP and Joint Ventures (cont’d) Two joint ventures with Chemist Warehouse leverage Wellnex’s IP and brand commercialisation expertise For personal use only Joint Ventures Wagner Health Liquigesic Medical Cannabis ▪ Joint Venture with OneLife Botanical and Chemist ▪
Slide 12: IP Licensing and Supply Agreements
Wellnex Going Forward Owned Brands, IP and Joint Ventures (cont’d) Wellnex owns the TGA registration of assorted liquid soft gel analgesics, which is licensed and/or supplied to major For personal use only pharmaceutical brands in Australia and offshore IP Licensing and Supply Agreements ▪ Haleon wa
Slide 13: Sales Channels
Wellnex Going Forward Sales Channels Wellnex has developed strong relationships with all key distribution points in the Australian pharmaceutical segment For personal use only Pharmacy and Grocery Wholesalers and Retailers International Distributors IP Licensing 1 3 STRICTLY PRIVATE & CONFIDENTIAL 1
Slide 14: FY24 Growth Levers
Wellnex Going Forward FY24 Growth Levers Momentum in expansion of recently launched brands during 2H FY23 is expected to accelerate during FY24 and lead to For personal use only improved gross margins and profitability FY24 Growth Opportunities Product Sales & Marketing 100% Owned Brands Wakey Wakey
Slide 15: Wellnex Management Team
Wellnex Going Forward Wellnex Management Team Wellnex’s management team, with decades of collective experience, aspire to build the best team, innovate and produce the For personal use only highest quality products to our consumers and drive the best value for our shareholders. Zack Bozinovski – Man
Slide 16: Wellnex Board of Directors & Governance
Wellnex Going Forward Wellnex Board of Directors & Governance Wellnex’s Board, a collective group of experts in their respective fields, are committed to propelling Wellnex Life Limited to For personal use only become the number one Health & Wellness Brand and Distribution company in Australia. Eric
Slide 17: Overview of Pain Away Acquisition
For personal use only 3 Overview of Pain Away Acquisition STRICTLY PRIVATE & CONFIDENTIAL STRICTLY PRIVATE & CONFIDENTIAL
Slide 18: Overview of Pain Away: Company Snapshot
Overview of Pain Away Company Snapshot Pain Away is Australia’s second largest1 topical pain relief brand, with a broad range of creams and sprays distributed via an For personal use only extensive network of pharmacy retailers About Pain Away Products ▪ Pain Away was established in 1999 and has sin
Slide 19: Overview of Pain Away: Distribution Overview
Overview of Pain Away Distribution Overview Pain Away has broad distribution across Australia primarily into the pharmacy and grocery channels, managed by third-party sales reps. For personal use only Distribution Channels Pharmacy Wholesalers & Retailers Grocery ▪ The business has a long-standing m
Slide 20: Strategic Rationale & Growth Opportunities
Overview of Pain Away Strategic Rationale & Growth Opportunities Acquisition of Pain Away aligned with Wellnex’s strategy of owning brands and IP in defensive healthcare segments For personal use only Highlight Explanation ▪ Established brand in the defensive topical pain relief category of consumer
Slide 21: Acquisition Funding
For personal use only 4 Acquisition Funding STRICTLY PRIVATE & CONFIDENTIAL STRICTLY PRIVATE & CONFIDENTIAL
Slide 22: Acquisition Funding
Acquisition Funding Acquisition of Pain Away will be funded by a combination of equity, debt and vendor share issue For personal use only Key Commercial Terms Source and Use of Funds Sources of funds $m Uses of funds $m Total Cash Consideration $22.0 million Upfront consideration for Equity raise $1
Slide 23: Overview of the Offer
Overview of the Offer Offer Description For personal use only ▪ 1 for 1 traditional pro-rata non-renounceable entitlement offer to raise approximately $13.6 million ▪ Approximately 487.3 million new fully paid ordinary shares in the Company (New Shares) to be issued under the Entitlement Offer Size
Slide 24: Overview of the Offer (Cont’d)
Overview of the Offer (Cont’d) Offer Description For personal use only ▪ Eligible Shareholders who exercise their full Entitlement will be able to apply for additional Shares under the Shortfall Offer at the Offer Price to the extent permitted by law Oversubscription Facility ▪ To the extent demand
Slide 25: Offer Timetable
Offer Timetable Event Date (2023) For personal use only Company announces Entitlement Offer under Listing Rule 3.10.3 Monday, 13 November Lodgement of prospectus with ASIC Monday, 13 November Lodgement of prospectus and Appendix 3B with ASX Monday, 13 November “Ex” Date (date from which shares comme
Slide 26: Financial Impact
For personal use only 5 Financial Impact STRICTLY PRIVATE & CONFIDENTIAL STRICTLY PRIVATE & CONFIDENTIAL
Slide 27: FY23 Pro Forma Balance Sheet (1 of 2)
Financial Impacts FY23 Pro Forma Balance Sheet (1 of 2) Balance Sheet ($’000) Balance Sheet Commentary For personal use only 30 June 2023 Subsequent Pro Forma Pro Forma 30 Subsequent events: On 18 July 2023 Wellnex issued 9,313,120 shares at A$, m Audited events Adjustments June 2023 $0.05 as part o
Slide 28: FY23 Pro Forma Balance Sheet (2 of 2)
Financial Impacts FY23 Pro Forma Balance Sheet (2 of 2) Balance Sheet ($’000) Balance Sheet Commentary Continued For personal use only 30 June 2023 Subsequent Pro Forma Pro Forma 30 Pro forma adjustments continued: A$, m Audited events Adjustments June 2023 • the impact of the Pain Away Transaction,
Slide 29: Conclusion
For personal use only 6 Conclusion STRICTLY PRIVATE & CONFIDENTIAL STRICTLY PRIVATE & CONFIDENTIAL
Slide 30: Conclusion
Conclusion A transformative acquisition that provides Wellnex with product, customer and geographic growth opportunities For personal use only Highlights Brands ✓ Pain Away is a privately-owned business that was established in 1999 and has grown to be the second largest brand in terms of market shar
Slide 31: Summary of Key Risks
For personal use only 7 Summary of Key Risks STRICTLY PRIVATE & CONFIDENTIAL STRICTLY PRIVATE & CONFIDENTIAL
Slide 32: Risks: Offer Specific Risks
Risks Offer Specific Risks Risk Description Shareholders who do not take up their Entitlement will have their holding in the Company diluted. For personal use only Dilution The Company may issue new equity securities in the future to finance acquisitions or reduce debt which may, under certain circu
Slide 33: Risks: Pain Away Acquisition Specific Risks
Risks Pain Away Acquisition Specific Risks Risk Description Completion of the Pain Away Transaction is not subject to a financing condition precedent, and accordingly there is a risk that the acquisition will not proceed and the Sale For personal use only Agreement will be terminated if the Company
Slide 34: Risks: Company and Industry Risks (1 of 5)
Risks Company and Industry Risks (1 of 5) Risk Description The Company's FY23 audited annual financial report, lodged with ASX on 2 November 2023 (Financial Report), was prepared on a going concern basis, which contemplates For personal use only continuity of normal business activities and realisati
Slide 35: Risks: Company and Industry Risks (2 of 5)
Risks Company and Industry Risks (2 of 5) Risk Description The Company's future growth and financial performance is dependent on the Company's ability to successfully execute its business strategy. This will be impacted by a For personal use only number of factors, including the Company's ability a)
Slide 36: Risks: Company and Industry Risks (3 of 5)
Risks Company and Industry Risks (3 of 5) Risk Description Should the Company’s growth accelerate at a higher rate than anticipated, the Company may, through lack of availability of materials or packaging, inability to scale For personal use only production in a timely manner, lack of manufacturing
Slide 37: Risks: Company and Industry Risks (4 of 5)
Risks Company and Industry Risks (4 of 5) Risk Description The Company is heavily reliant on its main customers, suppliers and strategic partners, including its distribution partners. For personal use only The Company is reliant on its retail partners who are responsible for a majority of the sales
Slide 38: Risks: Company and Industry Risks (5 of 5)
Risks Company and Industry Risks (5 of 5) Risk Description Wellnex has limited financial resources and will need to raise additional funds from time to time to finance the complete development and commercialisation of new and For personal use only current product lines and its other longer-term obje
Slide 39: Risks: General Risks (1 of 2)
Risks General Risks (1 of 2) Risk Description The operating and financial performance of the Company is influenced by a variety of general economic and business conditions, including levels of consumer spending, For personal use only inflation, interest rates, access to debt and capital markets, int
Slide 40: Risks: General Risks (2 of 2)
Risks General Risks (2 of 2) Risk Description On 23 November 2022, a liquidator was appointed to Little Innoscents Pty Ltd (ACN 624 126 718), a wholly owned subsidiary of the Company, in respect of a creditors’ For personal use only voluntary winding up. As at the date of the Prospectus, Little Inno
Slide 41: Appendices & Additional Information
For personal use only Appendices & Additional Information STRICTLY PRIVATE & CONFIDENTIAL STRICTLY PRIVATE & CONFIDENTIAL
Slide 42: Wellnex Business Overview
Wellnex Business Overview Mission Statement For personal use only Wellnex is an owner and developer of innovative healthcare brands and IP that improve the health of people in Australia & overseas Business Model: Select Marketing & Receive Identify target Conduct R&D manufacturer distribution End co
Slide 43: Key Recent History
Wellnex Business Overview Key Recent History Significant commercial activity has focussed on developing and strengthening Wellnex’s own healthcare brands and IP across numerous health segments For personal use only Launched Wakey Wakey and The Iron Company Announced Started acquisition trading of Pa
Slide 44: Target Markets
Wellnex Business Overview Target Markets Wellnex is focussed on developing and commercialising its own healthcare brands and IP that have high barriers to entry (i.e. TGA-approved) and defensive characteristics For personal use only OWNED BRANDS SAS-B Cannabis (Prescription Only) S3 Cannabis (OTC) I
Slide 45: Pain Away Sale Agreement Summary (1 of 2)
Summary of Sale Agreement Pain Away Sale Agreement Summary (1 of 2) Risk Description As announced in the 25 May announcement, Wellnex has entered into a transaction to acquire certain assets of Pain Away, an Australian pain relief brand. As announced to For personal use only ASX on 5 October 2023, W
Slide 46: Pain Away Sale Agreement Summary (2 of 2)
Summary of Sale Agreement Pain Away Sale Agreement Summary (2 of 2) Risk Description Under the Replacement Sale Agreement, the Company must pay the Pain Away Seller an oversight fee of $40,000 plus GST per month, commencing on 1 November 2023 Oversight fee For personal use only and ending on the dat
Slide 47: Glossary of Key Terms
Glossary of Key Terms Item Detail For personal use only ASX Australian Securities Exchange CAGR Cumulative Annual Growth Rate Consideration Offer The offer of Consideration Shares to the Pain Away Seller under the Prospectus dated 13 November 2023 EBITDA Earnings Before Interest Tax Depreciation & A
Slide 48: Thank You
Thank You For Further Information contact the following: For personal use only George Karafotias All Investor Enquiries: Executive Director & CEO george.k@wellnexlife.com.au Zack Bozinovski Managing Director Reach Markets: zack.b@wellnexlife.com.au Investor Line +61 3 8080 5975 Wellnex Life Limited