Venture Life Group Plc · LSE:VLG
Venture Life — FY2018 Earnings Presentation
33 slides from Venture Life's earnings presentation, May 2019
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 2018 May 2019
Slide 2: Disclaimer
This document (the "Presentation") is being provided to a limited number of parties who have previously expressed an interest in acquiring an interest (the "Investor Interest") in Venture Life Group plc (the "Company"). If you are in any doubt about the investment to which the Presentation relates,
Slide 3: Our platform for sustainable growth
Our platform for sustainable growth Strategy: Our growth strategy aims to leverage the scalable platform built at Venture Life Our Brands Our Distribution Network Our Manufacturing Opportunity Capability • 58% Utilised in 2018* Earnings positive • No significant CAPEX requirements Cash positive Orga
Slide 4: 2018 highlights
2018 highlights Revenue (£m) EBITDA* (£m) Post tax profit* (£m) +17% +42% +0.4m on 2017 18.8 on 2017 On 2017 16.1 14.3 2.7 9.1 1.9 0.4 2015 2016 2017 2018 -0.4 2015 2016 2017 2018 0.8 -1.4 * Before exceptional items 2015 2016 2017 2018 -1.8 Venture Life Group plc 4 -0.6
Slide 5: 2018 highlights
2018 highlights • Group revenues increase +17% to £18.8 million (2017: £16.1 million) • Gross profit increase +12% to £7.3 million (2017: £6.5 million) • Gross margin 39% (2017: 40%) • EBITDA increased 42% to £2.7 million1 (2017: £1.9 million) • First profit after tax £0.4 million1 (2017: loss of £0
Slide 6: Significant growth potential in self-care market
Significant growth potential in self-care market • International consumer self-care group - founded 2010 Head Office and • Portfolio of marketed products, growing partner base, Commercial product pipeline (London) 18 staff • Products sold in 40+ countries, 100+ partners R&D and Manufacturing Facilit
Slide 7: Our market opportunity
Our market opportunity The population is ageing and growing rapidly¹ Self-medication market annual change 2014-15³ 3.2 3 2 2.1 Billion 1 0.9 0.5 0 1990 2015 2050 2100 Population aged 60+ Healthcare budgets are under increasing pressure² £4.3bn 66% £14.9bn Sources: 1. United Nations (2017). Net defic
Slide 8: Our fully integrated model
Our fully integrated model Research & Manufacturing Distribution Development • Innovation • Quality • Commercial control expertise • Agility Consumer • Excellent • Capital light Consumer • Technical demand expertise customer service distribution supply model • Global accreditation • Partners fund ma
Slide 9: Global distribution network
Global distribution network UK Partners International Partners Venture Life Group plc 9
Slide 10: Self-care product portfolio
Self-care product portfolio Key Self-care Categories Oral Health Proctology Dermatology Brain Function & Memory Venture Life Group plc 10
Slide 11: Expertise by therapeutic area
Expertise by therapeutic area 2018 Group revenues by main therapeutic areas Own brands • Long standing Group expertise in oral care Skincare Proctology Other Customer brands 4% 3% 1% • Wide therapeutic coverage Dentyl Oral care 9% 36% • Establishing our own brands in key areas UltraDEX 18% • Utilisi
Slide 12: Delivering growth through focus on strategic drivers
Delivering growth through focus on strategic drivers Partners M&A Operational Innovation Strategic Leverage Drivers Existing and new Accelerated profitability New products Unloved brands that can distribution partners developed in-house be leveraged through increased throughput Group revenue (£m) Gr
Slide 13: Financial Highlights
Financial Highlights
Slide 14: 2018 KPI's
2018 KPI’s £ million 2018 2017 Growth Revenues 18.8 16.1 17% Comments: Gross margin % 39% 40% -2.5% • Revenues up by 17% Adjusted EBITDA 2.7* 1.9 42% • EBITDA* up by 42% Profit before tax 0.9* 0.1 800% • Maiden profit after tax Profit/(loss) after tax 0.4* (0.4) n/a + Operating cash 2.7* 1.7 59% gen
Slide 15: 2018 profit and loss account
2018 profit and loss account £ million 2018 2017 % change Revenue 18.8 16.1 17% Comments: Gross Profit 7.3 6.5 12% • Revenue growth up Gross Margin 39% 40% - +17% Total admin expenses 6.2 6.0 3% • Gross profit +12% Adjusted EBITDA 2.7* 1.9 42% • Adjusted EBITDA* Operating Profit/(Loss) 1.2* 0.6 100%
Slide 16: Revenues 2018
Revenues 2018 • Revenues increased 17% to £18.8 million (2017: £16.1 million) £m Revenue spilt between CAGR Customer Brands and Venture Life Brands 20,000 27% 18,000 2014-2018 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 - 2014 2015 2016 2017 2018 Customer Brands Own Brands Venture Life Group
Slide 17: Revenues 2018 v 2017
Revenues 2018 v 2017 £ million 2018 2017 % change UltraDEX UK 2.7 2.8 -4% Dentyl UK 0.8 - n/a Subtotal for UK 3.5 2.8 25% UltraDEX International 0.6 0.6 - Dentyl International 0.8 - n/a Other International 1.8 1.1 64% Subtotal for International 3.2 1.7 88% Subtotal for Brands 6.7 4.5 49% Biokosmes (
Slide 18: Balance sheet
Balance sheet £ million December December 2018 2017 Fixed assets 24.9 21.2 Cash 9.6 1.4 Comments: Other current assets 11.2 8.7 • Stronger balance sheet Total assets 45.7 31.3 • Cash balance more than £8 million higher than Total debt (excluding finance 3.8 7.7 prior year leases) • Reduction of debt
Slide 19: Commercial Highlights
Commercial Highlights
Slide 20: Commercial Highlights 2018 - Venture Life brands
Commercial Highlights 2018 - Venture Life brands • Increased UK distribution – existing and new Performance • 16 new international distribution agreements completed • 5 new product launches • 3 in-house line extensions developed growth in Innovation • Innovation on UltraDEX for 2019 brands • Innovat
Slide 21: Brand highlights 2018 - UltraDEX
Brand highlights 2018 - UltraDEX UltraDEX - UK • Increased distribution in UK +39% Dec-18 vs. Year Ago Period • New business – Lloyds, Day Lewis Pharmacy • Better in-store positioning • Innovation UltraDEX UK Distribution Better positioning • Headwinds in the UK market UltraDEX - international • Par
Slide 22: Brand highlights 2018 - Dentyl
Brand highlights 2018 - Dentyl UK - Dentyl • Strong performance of Dentyl • New listings in UK for Dentyl • Dentyl BB Mints – Morrisons, WH Smith Travel, +34%* Amazon, Ocado 2018: £3.9m vs. • Marketing commenced 2017: £2.9m • Legacy delists – Waitrose, Wilko, discounters Net sales Dentyl UK expansio
Slide 23: Customer brands highlights 2018
Customer brands highlights 2018 +5% 2018 vs. 2017 +17 Key development +11 net sales £ New agreements projects started excluding intercompany signed Revenue growth R&D New business 2026 23m New manufacturing 10% growth Agreement vs. LY Formulation in-house Key partnerships Units manufactured Venture
Slide 24: Customer brands
Customer brands Revenue growth - customer brands Main customers* € 16,000,000 € 14,000,000 € 12,000,000 € 10,000,000 € 8,000,000 € 6,000,000 € 4,000,000 € 2,000,000 €- 2015 2016 2017 2018 • 25% revenue growth since 2015 • 5 key strategic partners accounting for two thirds of business in 2018 • Solid
Slide 25: Our Manufacturing Scalability
Our Manufacturing Scalability Capacity 80 Units per year (million) 60 40 70 20 40 21 23 0 Actual 2017 Actual 2018 £1m £4m Additional Capex (£million) 2018 Group revenue £18.8m Utilisation (as % of 40m units per year 58% capacity) No. of products produced in 2018 23m Anticipated capacity with £1m add
Slide 26: Near term priorities
Near term priorities • Acquisition of small to medium sized assets Acquisition • Earnings enhancing • In-house development of Dentyl asset Innovation • UltraDEX line extensions • Continued development of R&D projects Development • Continued development of manufacturing projects • Continued organic g
Slide 27: Conclusion – full year results 2018
Conclusion – full year results 2018 • Record performance in 2018 • Underlying organic and acquired growth • Growth in EBITDA and PBT • Maiden profit after tax* • Acquisitive strategy to continue to accelerate profitability • Successful equity raise in 2018 • Strong balance sheet, with cash for furth
Slide 28: Summary and 2019 Outlook
Summary Summary 2019 Outlook • Self-care market growing • Dentyl – manage, integrate, China • VLG platform for sustainable growth opportunity • Circa £8m free cash available, plus debt • Full year impact of Dentyl facilities for further acquisitions • Cash generative going forward • Impact of furthe
Slide 29: Appendices
Appendices
Slide 30: An experienced management team
An experienced management team Jerry Randall Sharon Collins Gianluca Braguti Andrew Waters Chief Executive Officer Chief Commercial Officer Chief Manufacturing Jerry Randall Chief Financial Officer Officer • Experienced executive • Over 20 years experience • Chartered Accountant director in internat
Slide 31: Net Debt/(Net Cash) position
Net Debt/(Net Cash) position £’M December December Comments 2018 2017 Convertible Bond - 1.8 Bond repaid Sept 2018 Vendor Loan notes - 1.8 Loan note repaid Sept 2018 Italian term loans 2.6 2.7 €3.1m principal Deferred consideration - 0.4 Consideration repaid Sept 2018 + Invoice financing 1.2 1.0 On-
Slide 32: Italian loan position December 2018
Italian loan position 31 December 2018 €’000 Planned Full Interest rate Repayment 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 Euribor RIBA 1,390 On demand £<1% + Venture Life Group plc 32
Slide 33: Shareholder register
Shareholder register Major Shareholders The percentage of shares that are not in public hands is 26.1%. Shareholder Number of shares held % issued share capital JO Hambro Capital Management Limited 9,037,892 10.8% BGF Investment Management Limited 7,880,000 9.4% Mr Gianluca Braguti* and associated h