Venture Life Group Plc · LSE:VLG
Venture Life — FY2017 Earnings Presentation
26 slides from Venture Life's earnings presentation, Mar 22, 2018
Slide 1: The partner of choice for self-care products
The partner of choice for self-care products Venture Life Group plc Full Year Results Presentation 2017 22 March 2018
Slide 2: 2017 highlights
2017 highlights • Revenues up 12% to £16.1m (2016: £14.3m) • Gross profit increased 18% to £6.5 million (2016: £5.5 million), giving an increased gross margin percentage of 40% (2016: 38%) Head Office and • EBITDA increased 134% to £1.9 million (2016: £0.8 million) Commercial (London) • Profit befor
Slide 3: Significant growth potential in self-care market
Significant growth potential in self-care market • International consumer self-care group Head Office and Commercial (London) • Portfolio of marketed products, growing partner base, product pipeline • Products sold in 40+ countries R&D and Manufacturing Facility (Milan) Venture Life Group plc 3
Slide 4: Our market opportunity
Our market opportunity The ageing population is growing rapidly¹ Self-medication market annual change 2014-15³ Healthcare budgets are under increasing pressure² £4.3bn 66% £14.9bn Sources: 1. United Nations (2017). Net deficit of NHS Percentage of NHS Savings the NHS World Population Prospects: the
Slide 5: Our fully integrated model
Our fully integrated model Research & Manufacturing Distribution Development • Innovation • Quality • Commercial control expertise Consumer • Agility Consumer • Excellent • Capital light demand • Technical customer distribution supply expertise service model • Global • Partners fund accreditation ma
Slide 6: Global distribution network
Global distribution network 40+ countries 90+ marketing partners Countries where products sold or partnered Countries where key deals signed/products launched in 2017 Countries where no products sold or partnered Venture Life Group plc 6
Slide 7: Self care product portfolio
Self care product portfolio Key self-care brands Fungal Nail Brain Function Cholesterol Oral Health Rosacea Haemorrhoids Infections & Memory Venture Life Group plc 7
Slide 8: Strategy of steady consolidated growth
Strategy of steady consolidated growth Ambition: To become a leading global self-care products business. With our own expertise in development, manufacturing, Profit growth through international distribution. ‘increased throughput’ Revenue growth from product acquisitions Revenue growth from develop
Slide 9: An experienced management team
An experienced management team Jerry Randall Sharon Collins Gianluca Braguti Adrian Crockett Chief Executive Officer Commercial Director Manufacturing Director Chief Financial Officer • Experienced executive • Almost 20 years experience • Pharmacist graduate • Over 15 years finance director in inter
Slide 10: Financial highlights
Financial highlights • Revenues up 12% to £16.1m (2016 : £14.3m) • Gross profit increased 18% to £6.5 million (2016: £5.5 million), giving an increased gross margin Head Office and percentage of 40% (2016: 38%) Commercial (London) • EBITDA increased 134% to £1.9 million (2016: £0.8 million) • Profit
Slide 11: Revenues 2017
Revenues 2017 Revenues 12% Revenues - 2016 and 2017 (£M) 17.0 16.0 £1.1M 15.0 £0.7M 14.0 £16.1M 13.0 £14.3M 12.0 11.0 10.0 0 2016 revenue VLG Brands Customer own brands 2017 revenue Venture Life Group plc 11
Slide 12: Operational leverage at work
Operational leverage at work Group EBITDA (£M) 134% £1.9M £0.8M -£0.4M -£0.6M 2014 2015 2016 2017 12 Venture Life Group plc
Slide 13: Administrative expenses
Administrative expenses • Administrative Expenses continue to fall as a % of Group Revenue reflecting operational efficiencies Total administrative expenses as a % of Group revenue 50% 40% 30% 50% 41% 37% 20% 10% 0% 2015 2016 2017 Venture Life Group plc 13
Slide 14: Cashflow waterfall
Cashflow waterfall • Closing cash at normal operating levels, post working capital adjustments at 2016 year end 2017 cash flow (£M) £0.3M £0.6M £0.3M £2.0M £1.4M 2016 Cash balance Operating cash flow Working capital Investment 2017 Cash balance Venture Life Group plc 14
Slide 15: Continued commercial progress
Continued commercial progress Venture Life Group Brands 2017 International Markets UK Market - UltraDEX Post-period end Highlights ▪ 10 new long term ▪ Successful acquisition ▪ Further gains for UltraDEX distribution agreements in the UK signed ▪ Increased distribution – new listings and ▪ New deals
Slide 16: UltraDEX performance
UltraDEX performance Boots Value Sales % Change YoY • UltraDEX growth – 24% revenue increase in 2017 vs. 2016; greater 8.9% profitability - £1.1m 0.0% -0.3% • Brand awareness – 3 marketing -6.6% -8.0%-6.5% -8.0% campaigns and in-store focus -6.9% -17.6% -17.7% 52 w/e Jul-Sep '17 • Online – traffic i
Slide 17: UltraDEX partnered in 12 markets
UltraDEX partnered in 12 markets • UltraDEX is now partnered in 12 territories – all with strong partners and the right strategic fit for the brand • Presence in the EU – 4 key EU markets covered • Launch scheduled in Q1 2018 for France, Italy and Scandinavia Countries where Countries where UltraDEX
Slide 18: 2018 brand plans UltraDEX
2018 brand plans UltraDEX Marketing • 3 marketing campaigns in 2018 • London & South East • Advertising, TV, sampling, social media Sales • Increased distribution, new partners • New convenience channel partners • More than 15,000 points of distribution Innovation • 2018 new product development • Ul
Slide 19: Step change in China 2017 sales
Ult raDEX Step change in China 2017 sales • Increased distribution to 2,200 stores across mainland China • China case st udy Sales in-store reached record levels in H2 2017 • Strong orders in Q1 2018 • Partnership for growth Lubatti Sales Trend 3,000,000 • 2,500,000 • 2,000,000 1,500,000 • 1,000,000
Slide 20: What to look out for in 2018
What to look out for in 2018 • Launch of UltraDEX in France, Italy, Scandanavia • More licensing deals in EU, USA, Far East and MENA • New business with existing customers • Growth in revenues through the year • Positive PBT, PAT and EPS (market expectations) • New products launched in the UltraDEX
Slide 21: What is the scale of the opportunity
What is the scale of the opportunity • Self-care market growing, demographics favourable • Big players identifying consumer self care as a key market (Reckitt Benkiser) • European self care market is worth over £20bn* • There is a flow of smaller assets to be divested • VLG has the fully integrated
Slide 22: Appendices
Appendices
Slide 23: 2017 Results
2017 Results £’M 2016 2017 % Growth Revenue 14.3 16.1 12% Gross Profit 5.5 6.5 18% Gross Margin 38% 40% 2% Total admin expenses 4.7 4.6 (2%) EBITDA 0.8 1.9 >100% Operating Profit/(Loss) (0.5) 0.6 >100% Profit/(Loss) before Tax (1.1) 0.1 >100% + Loss after Tax (1.4) (0.4) 73% Venture Life Group plc 2
Slide 24: Net Debt position 31 December 2017
Net Debt position 31 December 2017 £’M 2017 Comments Convertible Bond 1.8 £1.9m convertible bond payable March 2019 (9%) Vendor Loan notes 1.8 €2m Euro loan note payable July 2020 (4%) Italian term loans 2.7 €3.1m initial principal Deferred consideration 0.4 £400k payable March 2019 (10%) Invoice fi
Slide 25: Italian loan position 31 December 2017
Italian loan position 31 December 2017 €’000 Repayment Interest rate Complete BNL SPA 300 30/09/20 1% +3m Euribor Intesa SPA 2,000 30/11/24 0.90% +6m Euribor Unicredit SPA 800 31/05/23 1.05% + 6m Eurobor RIBA 770 On demand £<1% + Venture Life Group plc 25
Slide 26: 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