Venture Life Group Plc · LSE:VLG
Venture Life — FY2019 Earnings Presentation
30 slides from Venture Life's earnings presentation, April 2020
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 2019 April 2020
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: 2019 summary
2019 summary • Group revenues increase +7% to £20.2 million (2018: £18.8 million) • Gross profit increase +10% to £8.0 million (2018: £7.3 million) • Continued organic growth supported by new product launches • 10 new international partnering agreements completed • 14 long-term development and manuf
Slide 4: Covid-19
Covid-19 • Instigated precautions and procedures to protect employees, customers and stakeholders • Development & Manufacturing • Facility located in Bosisio Parini, north of Lombardy • Implemented full safety precautions • Production facility remains open – considered essential supplier • High stoc
Slide 5: 2019 financial highlights
2019 financial highlights • Group revenues increased +7% to £20.2 million (2018: £18.8 million) • Gross profit increased +10% to £8.0 million (2018: £7.3 million) • Gross margin percentage increased to 40% (2018: 39%) • Adjusted EBITDA increased 11% to £3.0 million1 (2018: £2.7 million) • Profit aft
Slide 6: PharmaSource acquisition
PharmaSource acquisition • PharmaSource BV acquired 24th January 2020 – consideration €6.5 million total • Initial consideration of €5.23 million paid, deferred contingent consideration of up to €1.27 million payable in cash H1 2020 • 2011 founded in The Netherlands • Medical device portfolio – derm
Slide 7: PharmaSource acquisition
PharmaSource acquisition Opportunity • To grow revenue and profitability with existing structure: • Expansion of PharmaSource products into UK • Expansion of Venture Life products into NL • Internationalisation • Product innovation • Utilise operational leverage and facilities Venture Life Group plc
Slide 8: Our platform for sustainable growth
Our platform for sustainable growth Strategy: Our growth strategy aims to leverage the scalable platform built at Venture Life Venture Life Group plc 8
Slide 9: Our market opportunity
Our market opportunity Over-the-counter (OTC) Global Market³ 2018 ³ 2025 $127 CAGR (2019-25): 5.8% >$185 billion billion Sources: 1. United Nations (2017). Venture Life Group plc World Population Prospects: the 2017 Revision 9 2. National Audit Office – Financial sustainability of the NHS 3. Global
Slide 10: Global distribution network
Global distribution network Retail Partners UK Netherlands International Partners Venture Life Group plc 10
Slide 11: Self-care product portfolio
Self-care product portfolio Key Self-care Categories Oral Health Proctology Nail Fungus Brain Function & Memory Venture Life Group plc 11
Slide 12: Expertise by therapeutic area
Expertise by therapeutic area 2019 Group revenues by main therapeutic areas • Long standing Group expertise in oral Vonalei Proctology Other care NeuroAge 1% 1% 2% 1% Myco clear 1% Oral care Dentyl 36% • Wide therapeutic coverage 11% • Establishing our own brands in key UltraDEX areas 16% • Utilisin
Slide 13: 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 14: Financial Highlights
Financial Highlights
Slide 15: 2019 profit and loss account
2019 profit and loss account £ million 2019 2018 % change Revenue 20.2 18.8 +7% Gross Profit 8.0 7.3 +10% Comments: Gross Margin 39.6% 38.8% • Revenue growth up Total admin expenses 6.7 6.2 +8% +7% Adjusted EBITDA * 3.0 2.7 +11% • Gross profit +10% Operating Profit 1.3 1.1 • Adjusted EBITDA* Profit
Slide 16: Revenues 2019
Revenues 2019 • Revenues increased 7% to £20.2 million (2018: £18.8 million) £000s Revenue split between VLG Brand and Customer Brands CAGR 25000 23% 2014-2019 20000 15000 10000 5000 0 2014 2015 2016 2017 2018 2019 Customer Brands Own Brands Venture Life Group plc 16
Slide 17: Balance sheet at 31 December 2019
Balance sheet at 31 December 2019 £ million December December 2019 2018 Fixed assets 24.9 25.1 Comments: Cash 10.7 9.6 • €6.5m of cash Other current assets 11.4 10.9 committed for PharmaSource Total assets 47.0 45.7 acquisition (Jan 2020) Interest bearing debt 4.4 3.8 • Additional €1m debt Finance L
Slide 18: Commercial Highlights
Commercial Highlights
Slide 19: Brand highlights 2019 - Dentyl
Brand highlights 2019 - Dentyl UK - Dentyl • New business - Lloyds pharmacy • Existing business – increased distribution in Superdrug • Legacy delists/one-offs annualised • Social media campaign - #spititout International markets - Dentyl • Quality issues in China but strong start to 2020 • New mark
Slide 20: Brand highlights 2019 - UltraDEX
Brand highlights 2019 - UltraDEX #SMELLEPHANTINTHEROOM Elevator Pitch UK - UltraDEX • Performed well against a declining mouthwash market • New business – launched in ASDA & Well Pharmacy • Existing business – expansion in Superdrug UK marketing - UltraDEX • Focus on brand awareness - #youneverknow
Slide 21: International Highlights 2019
International Highlights 2019 Venture Life brands • Performance 10 new long term distribution agreements signed • Myco Clear in France • Dentyl line extensions in China • 14 new product launches in 2019 PostInnovation period end • 6 new long term distribution agreements signed Customer brands Intern
Slide 22: Our Manufacturing Scalability
Our Manufacturing Scalability Capacity 80 Units per year (million) 60 40 70 20 40 23 26 0 Actual 2018 Actual 2019 £1m £4m Additional Capex (£million) 2019 Group revenue £20.2m Utilisation (as % of 40m units per year 65% capacity) No. of products produced in 2019 26m Anticipated capacity with £1m add
Slide 23: 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 24: Conclusion – full year results 2019
Conclusion – full year results 2019 Summary 2020 Outlook • Strong performance in 2019 • Group order book currently at 2.5 times • Underlying organic growth the value at the same time last year, • Growth in EBITDA and PBT excluding PharmaSource BV • Strong balance sheet, with cash for further • Pharm
Slide 25: Appendices
Appendices
Slide 26: 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 27: Significant growth potential in self-care market
Significant growth potential in self-care market • International consumer self-care group - founded 2010 Netherlands Office (Amsterdam) Head Office 7 staff and • Portfolio of marketed products, growing partner base, Commercial product pipeline (London) 13 staff • Products sold in 44+ countries, 110+
Slide 28: Net Cash position remains strong
Net Cash position remains strong £’M December December Comments 2019 2018 Convertible Bond - - Bond repaid Sept 2018 Vendor Loan notes - - Loan note repaid Sept 2018 Italian term loans 3.2 2.6 €3.7m principal Deferred consideration - - Consideration repaid Sept 2018 Invoice financing 1.2 1.2 On-goin
Slide 29: Italian loan position 31 December 2019
Italian loan position 31 December 2019 Loan Balance Planned Full Interest rate €’000 €’000 Repayment BNL SPA 300 50 30/09/20 1% +3m Euribor Intesa SPA 2,000 1,967 30/11/24 0.90% +6m Euribor Unicredit SPA 800 720 31/05/23 1.05% + 6m Euribor BPM 1,000 1,000 28/06/2024 1.40% RIBA 1,387 On demand £<1% +
Slide 30: 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 8,370,717 10.0% BGF Investment Management Limited 7,880,000 9.4% Mr Gianluca Braguti* and associated h