Venture Life Group Plc · LSE:VLG
Venture Life — FY2021 Earnings Presentation
36 slides from Venture Life's earnings presentation, Mar 1, 2022
Slide 1: The partner of choice for self-care products
The partner [ of choice for self-care products Full Year Results Presentation 2021 The partner of choice or May self-care 2022 products enture Life Group plc [ nterim Results 2021 and update on Acquisitions ptember 2021
Slide 2: Venture Life Group plc
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: 2021 Highlights
2021 Highlights • Continued to deliver on strategic objectives through growth of high margin VLG own brands, through both organic and M&A strategy • Revenue & profit growth, despite global challenges: • COVID – overstocking and reduced consumer demand • Supply chain – cost, availability, lead times
Slide 4: Years of Revenue Growth
5 Years of Revenue Growth Reported Revenue – Split between VLG Brands and Customer Brands 40.0 CAGR 35.0 CAGR 32.8 20% 23% 30.1 2017-2021 30.0 2017-2020 25.0 LTM GR £ million 20.2 9% 20.0 18.8 16.1 15.0 2020-2021 10.0 54% 49% 5.0 VLG Brands 35% 33% - 28% 2017 2018 2019 2020 2021 54% 2021 VLG Brands
Slide 5: Years of Underlying Revenue Growth
5 Years of Underlying Revenue Growth Pro-forma Revenue - Split between VLG Brands and Customer Brands 40.0 • Pro-forma 2020 revenue excludes 37.8 £3.4m HSG sales 35.0 CAGR LTM GR 24% 42% • Pro-forma 2021 revenue includes the full year sales contribution from 2021 30.0 acquisitions (BBI and Helsinn)
Slide 6: Years of Revenue Growth: organic sales growth
5 Years of Revenue Growth Pro-forma Revenue - Showing underlying organic sales growth 40.0 37.8 35.0 • Pro-forma 2020 revenue excludes £3.4m HSG sales 30.0 • Pro-forma 2021 revenue includes the full year sales contribution from 2021 acquisitions (BBI 26.7 and Helsinn) 25.0 Organic CAGR 12% £ million
Slide 7: Growth of acquired businesses
Growth of acquired businesses Pharmasource Revenue 2019 - 2021 BBI Proforma Revenue 2020-2021 Helsinn Proforma Revenue 2020 2021 Acquired January 2020 Acquired June 2021 Acquired August 2021 2.7 2.7 10.3 2.9 £ million 2.2 £ million £ million 9.4 2.5 2.6 2019 2020 2021 2020 2021 2020 2021 • Good grow
Slide 8: Growth of acquired businesses
Growth of acquired businesses UltraDEX Net Revenue 2012 - 2021 (After A&P expenditure) COVID-19 • Acquired March 2016 Acquired 2.9 2.9 3.0 • Initial growth good, seen through 2.8 2.7 2.6 2.6 increased listings, NPD and international 2.5 2.4 2.4 2.3 expansion £ million • Covid impacted in 2020 & 2021
Slide 9: Expanded global distribution network
Expanded global distribution network 215 +90 Partners Markets worldwide worldwide 113* +40* 4 145 Operational Employees locations 119* 3* *As at 01 January 2021 Retail Partners International Partners UK Head and Commercial Office Netherlands Office UK Netherlands Italian Development and Manufacturin
Slide 10: VLG therapy areas – products and category focus
VLG therapy areas – products and category focus, significant ‘build-out’ opportunity Registered Medical Devices, Cosmetics and Food Supplements Oral Care Dermatology Foot Care Halitosis, Anti-Plaque, Anti-Bacterial, Haemorrhoids, Rosacea Fungal Nail, Wart & Verruca, Mouth Ulcers Athlete’s Foot Women
Slide 11: VLG's Manufacturing Scalability
VLG’s Manufacturing Scalability 120 Item Group 100 Units produced in 2021 27m units Units produced (million) 80 Existing capacity 65m units 100 60 Utilisation (% of capacity) 41.5% 75 40 55 Capacity with £4.0m capex 91m units investment 20 25 16 16 Capacity with further £8.0m capex 2 10 116m units -
Slide 12: Global challenges and mitigation strategies
Global challenges and mitigation strategies Supply Chain Ukraine/Russia Crisis • Raw material shortages - higher competing demand/ • VLG customer exposure – 2022 current maximum lower production due to energy prices, meaning longer lead €0.4m revenue due to decision not to supply to times, pressure
Slide 13: Regulatory challenges and mitigation strategies
Regulatory challenges and mitigation strategies Medical device regulations • Changes in regulation • Europe - currently in the transition phase for medical devices in Europe, moving from Medical Device Directive (MDD) to Medical Device Regulations (MDR) • United Kingdom - lack of information and cla
Slide 14: Sustainable Life – to be a Trusted, Responsible and Sustainable Business
Sustainable Life – to be a Trusted, Responsible and Sustainable Business Sustainable Development Goals (SDGs) • The 2030 Agenda for Sustainable Development, was adopted by all United Nations Member States in 2015, and provides a shared blueprint for peace and prosperity for people and the planet, no
Slide 15: 2021 Acquisitions
Conclusions 2021 Acquisitions
Slide 16: Acquisitions – growth driver strategy
Acquisitions – growth driver strategy • 2 immediately earnings enhancing acquisitions • Deployed equity funds raised in 2020 • New therapeutic footholds, broadening portfolio • New partners - UK & International • Additional manufacturing capacity • Strong synergistic opportunities – immediate & futu
Slide 17: BBI Healthcare Limited – portfolio
BBI Healthcare Limited – portfolio • Acquired 7th June 2021 – consideration paid £35 • Strong synergistic opportunities – cost savings, million plus £1m deferred manufacturing capacity and cross selling • 3 key brands in 2 new therapeutic areas - women’s • Identified opportunities health and diabete
Slide 18: Helsinn Integrative Care Portfolio
Helsinn Integrative Care Portfolio • Acquired 4th August 2021 – consideration £4.8 • Products only acquired, no infrastructure million total (£2.4m on completion, £2.4m in 2022, • Sales all through partners no earn out) • 2020 - 2021 sales supressed through Covid, reduced • Profitable with on market
Slide 19: Financial highlights
Conclusions Financial highlights Financial Highlights
Slide 20: 2021 financial highlights
2021 financial highlights 37.8 Full Year 30.1 32.8 • Revenues increased +9% to £32.8 million (2020: £30.1 million) • Gross profit increased +0.9% to £13.0 million (2020: £12.8 million) • Gross margin percentage 39.6% (2020: 42.7%) Revenue £m • Adjusted EBITDA1 increased +8% to £6.6 million (2020: £6
Slide 21: Product portfolio - VLG brands increasing
Product portfolio - VLG brands increasing 2021 Pro-forma Revenue - split by VLG and Customer Brands Customer VLG Brands Brands 41% 59% Reported Revenue Total: 59% 2021 2020 • Long standing Group expertise in oral care and skincare • Key VLG brands added in women’s health, diabetes and oncology suppo
Slide 22: 2021 Gross margin %
2021 Gross margin % Comments: Gross Margin 2020 – 2022 1. Overall gross margin Margin Protection Strategy reduction of 3.1% between 2020 and 2021 2. Adverse impact of 6.1% from supply chain challenges and product mix 3. Partial mitigation of 3.0% FY20 FY21 FY22E from margin accretive M&A activity 4.
Slide 23: 2021 Exit run-rate (Qtr4)
2021 Exit run-rate (Qtr4) Comments: • Momentum building in second half Reported and Q4 Run-Rate - 2021 of 2021 from acquisitions and post- covid recovery – full three months of new acquisitions impact in Q4- 21. 38.9 37.8 • Including the Q4 exit run-rate 32.8 (with secured new China partner) the run
Slide 24: 2021 Administrative expenses
2021 Administrative expenses Administrative Expenses 2020 – 2021 (£ million) Administrative Expenses 2021 (£ million) Other, 0.5 Audit, 0.3 Professional Fees, Administrative 1.0 Staff, 2.3 Insurance, 0.3 R&D, 0.3 FY20 FY21 Directors Remuneration, 1.1 Amortisation, 2.3 A&P, 1.1 Depreciation, 1.4 Vent
Slide 25: 2021 profit and loss account
2021 profit and loss account Comments: £ million 2021 2020 % change • Revenue growth driven by impact of M&A £8.4m less non-repeat of HSG £3.4m and China £2.1m, Revenue 32.8 30.1 8.9% balance from customer brands Gross Profit 13.0 12.8 0.9% • Percentage gross margin adversely impacted 6.1% by supply
Slide 26: Balance sheet at 31 December 2021
Balance sheet at 31 December 2021 £ million December 2021 December 2020 Comments: Intangible non-current assets • Inclusion of £37.1m acquisition 65.1 27.0 of BBI Healthcare Ltd plus the Tangible non-current assets portfolio of assets acquired from 9.7 7.0 Helsinn ICP for £4.8m Cash 5.2 42.1 • New m
Slide 27: Commercial highlights
Conclusions Commercial highlights Commercial Financial Highlights Highlights
Slide 28: Women's Intimate Healthcare & Diabetes 2021 highlights
Women’s Intimate Healthcare & Diabetes 2021 highlights* • +9.6%/+£0.9m growth in FY21 to £10.3m (FY20: £9.4m) of best seller in ‘ex-BBI business’ intimate care on UK Market • Balance Activ +33% vs. FY20 - No.1 in Intimate Care on Amazon • Lift +29% vs. FY20 - expansion in Boots and ASDA • Glucogel +
Slide 29: Oral Care brands 2021 highlights
4pt Share Gain Oral Care brands in Bad Breath 2021 highlights Category in 2021 to 53% • -28%/-£2m decline in total oral care brands to £5.2m in FY21 (FY20: £7.2m), due to underperformance of China Value sales Share • Excluding China, growth would have been +2% (FY21: £4.9m Bad Breath (Halitosis) MAT
Slide 30: International business 2021 highlights
International business 2021 highlights Helsinn update • +16%/£400k* increase in FY21 to £2.9m (FY20: £2.5m) • Cancer treatments impacted due to COVID, but recovering • New long-term agreement on Pomi-T in Germany • Organic growth opportunities - international expansion - USA, Brazil, Canada & key EU
Slide 31: 2021 conclusions
2021 conclusions • 2021 saw a record year at £32.8m (£37.8m on a pro-forma basis) • Adjusted EBITDA at £6.6m (£7.9m on a pro-forma basis) • 2 earnings enhancing acquisitions successfully completed and integrated • RCF in place for up to £50m, giving significant firepower for further earnings accreti
Slide 32: Appendices
Conclusions Appendices Financial Highlights Appendices
Slide 33: An experienced management team
An experienced management team Jerry Randall Sharon Collins Gianluca Braguti Daniel Wells Chief Executive Officer Chief Commercial Officer Chief Manufacturing Officer Chief Financial Officer • Extensive experience in • Over 20 years experience • Pharmacist graduate • Chartered accountant internation
Slide 34: Net Cash position remains stable
Net Cash position remains stable £’million December 2021 December 2020 Comments Repaid in full during 2021 pursuant to Italian term loans the revolving credit facility - 5.7 Banking facility secured in the year with Santander and Silicon Valley Revolving Credit Facility (RCF) 8.5 - Bank Repaid in fu
Slide 35: VLG loan position 31 December 2021
VLG loan position 31 December 2021 Loan €’million Balance €’million Planned Full Repayment Interest rate RIBA 2.5 nil On demand £<1% Loan £’million Balance £’million Planned Full Repayment Interest rate RCF Santander Bank 15.0 4.25 18/06/24 SONIA + 2.5% RCF Silicon Valley Bank 15.0 4.25 18/06/24 SON
Slide 36: Shareholder register – as at 31st December 2021
Shareholder register – as at 31st December 2021 Major Shareholders The percentage of shares that are not in public hands is 21.26%. Shareholder Number of shares held % issued share capital Slater Investments 19,621,431 15.59% JO Hambro Capital Management 10,450,000 8.30% River and Mercantile Asset M