Venture Life Group (LSE:VLG) — Final Results

0:00 Good morning, and welcome to the VENTURE LIFE GROUP PLC investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and could be submitted at any time via the q and a tab situated on the right hand corner of your screen. Simply type in your questions and press send. The company may not be in a position to answer every question received during the meeting itself. However, the company can review all questions submitted today and publish responses where it's appropriate to do so. Before we begin, I'd like to submit the following poll, and then I'd like to hand you over to Gerry Randle, CEO. Good morning, sir.

0:31 Good morning. Thank you very much. Good morning, everybody. Thank you for joining our presentation. I know you're here today with me. Terry Randall, CEO, one of the founders of the business, Danny Wells, CFO, who joined us a number of years ago. Think you've all heard from us before. And we're gonna take you through the presentation for, results for the year ended thirty fourth December twenty twenty four. As per usual, any questions you submit along the side as we go through the presentation, we'll endeavor to answer in the time we have on this call. So really happy to present our 2024 results. You will have seen in the results announcement that we've exchanged contracts on a divestment of the business. And as we go through the results, both the presentation here and also the R and S that you will have seen and in the annual report, those discontinued operations are split out. So you'll see us referring to continued operations, divested assets, discontinued, etcetera. So just bear that in mind as we go through and, as I say, any questions at the end, happy to clarify.

1:36 If we look at the whole group to start with, including the bits that we're now divesting, total revenue, 51,500,000. Gross margin, up at 42% compared to 39% last year. Adjusted EBITDA, 11.4. Percent, and adjusted EBITDA margin of 22%, slightly down from last year. But then if we look at the continuing business as we go forward after divesting of certain operations and assets, which we'll talk about a bit more, And we look at the remaining business, which is the VENTURE LIFE brands business. That grew nearly 19%, $26,000,000 Underlying growth, about 15% there and pro form a, about 11%. And that's really through increased advertising information, increased investment in our products and our brands to grow them. Gross margin increased four percentage points, nearly 45.8% compared to 40 just under 42 last year.

2:27 What you're seeing in the remaining business that's continuing is the higher margin

2:32 VENTURE LIFE brands. They have better pricing power, better marginality. Adjusted EBITDA for that continuing part of the business for last year was $6,200,000 against just under $5,000,000 last year, so good growth and an increase in that percentage margin as well. And towards the end of the period, we acquired the Health and Her brand business, giving first revenue contributions of $800,000 in the last part. We'll talk more about the Health and Her business as we go through. Post period end, we've divested all of our CDMO operations. That transaction has exchanged, exchanged on the May 12, and we expect that to complete between the middle and the end of July. It's just subject to some foreign direct investment regulatory filings, which are progressing at the moment. We don't expect any issues with those. That's in the hands of the buyer.

3:22 We're also, as you will have seen in the announcement, actively marketing our oral care brands for sale. They're noncore for us going forward, and we'll be looking for a buyer for those brands. And we'd expect to include that by the end of this year. So after those headlines, I'll pass over to Danny to talk a little bit more detail about the financial results we've just presented. Good morning, everyone. So as Gerry said, we've split out the presentation results this year to show the continued business, our higher margin power brands, and the discontinued operations. So on the right hand side of slide, I thought it'd just be useful to start with the discontinued part of the business. And if I just talk to the top right hand number, 24,900,000 revenue, that's that's the discontinued operation. That that comprises in big ticket items, 4,000,000 from the oral care disposal that we've just announced, which includes 2,000,000 of the private label foot care products that we've had in the portfolio since 2020, around 1,000,000 of the legacy brands of Venture Life, their non marketed products. I'm talking about FONNALET, LISIO as an example in there, and proctories as well. And then the balance of around

4:30 18,000,000 is the customer brands, which is the third party customers served from our Italian business. So all in all, that business was, as as you can see, just under 25,000,000 last year, down 14% year on year. That part of the business was contracting together with all four components of that part of the business. It was lower margin. It was dilutive to the portfolio of 38% gross margin. You can see on the left hand side of the slide that gross margins on the core ongoing business were pushing 46. EBITDA margin, similarly, down at 20.9% on the discontinued business relative to 23% on the core ongoing business. So so we've extracted away the contracting part of the business that was dilutive to the portfolio. And we want to focus on our core ongoing business and the power brands within it. You can see if I just rattle through some of the key numbers. Revenue was up 19% year on year to 26,600,000.

5:24 We'll talk about the growth drivers behind that in more detail later on in the deck. But on that 19% revenue growth, we drove absolute gross profit improvements of just over 31% to 12,200,000 at better margins, 45.8% gross margin. Previously, when we reported the business altogether, we were at 39% gross margin business in 2023. We've shown the numbers like for like on this slide, so you can see that in 2023, gross margins were 41.6% on that core business. So there's a like for like improvement as well on the ongoing operation, and mainly that's driven by two key factors. One being pricing power, as Jerry mentioned, we've as the LIFE product has grown in particular and volumes have increased, we've been able to negotiate better supply prices from our manufacturers.

6:10 And also, we internalized the production of ear oil into bioplasmous pre display investment, but that also gave VENTURE LIFE a better supply price from what we had previously. Those are the two key drivers. And finally, just on the left hand side, you can see that we've called out the marketing spend as a percentage of revenue. We've highlighted this as it's an area of focus going forward for us as we want to drive forward the top line growth at higher marginality. So that 6.1% of marketing costs relative to our revenues, that's up from about three point, 9% previous year. And over the next couple of years, we've seen that netting out around 10 to 12% across our core brands. So Balance Active, LIFE, health and hair products as well, and health and hair newly launched portfolio.

6:55 We see these brands have an opportunity to drive the top line, but also driving gross margin increment in the business. So as we invest in that marketing spend, it will also drive gross margin improvement and enable EBITDA margins to still push up towards 25% over the next three years. Adjusted EBITDA was 6,200,000, up from 4,900,000 the previous year on a like for like basis again. Higher margins, 23%, up 21.9% the year before. And good cash flow coming off the business, 4,300,000 of free cash flow on the ongoing operation, nearly 70 cash conversion. As we go forward, we would expect the free cash flow conversion to increase notably as if you look at the new business, it's capital light in its nature. We don't have big lease costs. We don't have big machinery and plants to maintain, so there's a high conversion of operating cash to free cash flow going forward. We will still invest in r and d, of course, but, we've got a much lighter structure than we had before.

7:54 Leverage, just briefly, crept up to 1.83 at the end of twenty twenty four. We had just done an acquisition at the end of last year, the Health and Her acquisition in November. Post period end leverage has fallen down to about 1.6 times at the end of May. And, of course, when we receive the proceeds from the divestment before end of July, we'll pay down the drawn funds on the facility completely, and we'll have around 36,000,000 to 40,000,000 of cash in bank at that point. Just a few headlines now on the revenue and where that growth is coming from and where that portfolio looks like today on an ongoing basis. You can see in the left hand side of the slide where we're showing the percentage of revenue that each therapy area comprises within the group, and energy management is now the largest segment of the group at 35% of 2024 revenues.

8:41 That continued to grow strongly last year, up 28% from the previous year. That's driven largely by LIFE on our performance through pharmacy channels, and we'll talk more about the details around that later on. The women's intimate health, including our Balanced Aptiv brand and our newly launched HERVITALITY brand for menopause within that range, that grew 15 and a half percent. In The UK, that was about 10% growth, but the international business grew more strongly, particularly through some of our blue chip partners such as Bayer who, have continued to roll out and gain increased volume in their local markets. Ear, Nose and Throat, a ear roll product, that was up 12% last year. Ear roll launched onto Amazon at the end of twenty twenty three, so we've got an annualization impact coming through on there. And, also, we launched some new products into the oral portfolio, which we'll show you later as well. Hormonal HealthNEXT, that was acquired in the November 8 or completed on eighth of November last year. It's lived around £800,000 of revenue in the post completion period. When we acquired that business, it was generating around 6,000,000 of revenue. We expect it to do over 9,000,000 in 2025, strong growth coming through that part of the business of those brands, and that will form a bigger share, much bigger share of the portfolio next year. Oncology support, lastly, as you'll have heard me talk before, it's quite lumpy in nature. It's part of the business. It's a partnered products, Homey Tea and GelClare. We don't sell it directly through retail.

10:07 So the there's some certain key customers that have fallen outside of its standard twelve month order cycle. So in 2023, we had some big orders and some stocking up from two key partners, and that's unwound during 2024. So we'll accept expect to see those orders come through in 2025. So the adverse 14% is driven by the phasing effect of those customers. Final one on me, just to give you an operational feel, what does the business look like today post divestments? You can see we've got nearly 60 employees in the group. We've lost a 120 people through the divestment of the Swedish and Italian facilities. Of those 58 people, 15 or 16 of those were acquired from health and her, the new acquisition at the end of last year. We brought in some exceptional talents to the team, bringing new skill sets to the business.

10:55 We've got around 31 to a thousand distribution points. That's up around 5,000 distribution points on the previous year. We've made a notable inroads into retail and key retailer in Holland and Barret during the last few months, and Gerry will talk more about that later. R and d capability remains a key focus for us in new product developments. You can see on the slide we're showing we've launched 17 new products since the start of 2023. And and and during 2024, that generated 58 new listings into our retail trade in The UK. We've got high retail concentration these days, and that's been strengthened on the back of the Health and Hair acquisition. We've got a much simpler portfolio of SKUs. We've around two thirty SKUs today. We used to have eight fifty because the nature of the CDMO business producing products for third party customers, you could have one or two products which have seven or eight variations of those products. So we've got much simpler portfolio today, easier to manage, and easier forecast as well, by the way. Digitalization progress is one we call out regularly. The online business has continued to grow 30 to 40% over the last couple of years as you'll have seen us talk about. But in addition, in 2024, we've had success in growing our ecommerce website.

12:06 So we've got our own LIFE PLC website, but then we've also got the ecommerce website from the Health and Herbrands that we acquired last year. So digital progress and and revenue from online has continued to grow strongly. Around 5,000,000 of our 2020 of our 26,000,000 revenue last year came from ecommerce channels, mainly through Amazon. That represents about 18% of the business today. And lastly, revenue from new products, their bottom left hand box, that's 6.1% last year. On a like for like basis, that's up from about 3% the previous year. And, this is a real key key number for us going forward. We measure this revenue as a based on the first twelve months of launch for a new product that we've developed. So, but going forward, we want to introduce a term called the fatality index, which I'm sure you'll be aware of, And that looks at three year rolling revenue from new product developments. And and over the coming years, we want to push this up towards 20% and continue investing in our r and d capability and also our marketing investment to enable that innovation to deliver commercial results.

13:12 Great. Thanks, Danny. I noticed in the chat we've had a few questions already on the financials, and Danny will pick up on those at the end of the presentation. So commensurate with the divestment that we've done and the focus now on the brands of the business, we've been working to refine our strategy and be clear what we're doing going forward. And what you see here on the left is our defined strategy as we've now set out. So, obviously, there's a difference because all of our manufacturing and development operations are now external. I'll go through the divestment of the CDMO shortly, but what's really important to understand is those businesses we've divested off will still be making the products that we're making with them currently under a long term manufacturing agreement that controls pricing and quality and supply.

14:01 And also, joining them joining Vigor Group, we'll have access to further CDMO expertise, particularly in areas of food supplements, which will enable us to perhaps transfer more business there and improve our marginality. But what are we focused on going forward? Well, acquiring and transforming core brands that have a clear runway to profitable growth. That's really important. We've done it before. We've done it recently, and that's a part of our growth strategy. But as well as investing in some new products and new assets that we want to buy, we are going to be investing in our brands that we have concurrently. And Danny's mentioned that already about the increase in the amount of marketing spend as a percentage of revenue. So that's really important. And we're going to make sure we go forward with the number one brand mindset.

14:47 That's really important because that enables you to grow the market, grow market penetration, gives you pricing power. And that's what retailers look for, is brands that have a real presence in their niche and their category. Having an omnichannel strategy is really important to us. What that means is that you're going to be where the shopper shops because we have two people who are effectively buying or using the products. We often talk about the consumer, the user, the person using the products, and that's the person that we need to influence the market to to drive demand. But most importantly is where does the shopper shop? So who buys those? And you'll see later on in the presentation that mom is the one of the biggest buyers of the product, so it's important. Our products are in all of the channels so that wherever that shopper is shopping, they can buy the products. And then it might be themselves as the user.

15:34 It might be family member or someone they're caring for a child that's using it. So important to be with the shop in shops. An increasing use of integrated digital capabilities. You will have seen that we're implementing a new ERP system. That's ongoing at the moment. The team is working very hard on that. That will be complete by the end of twenty twenty five. It's a big investment for us, but it will bring us huge improvements in reporting, processing data on the internal side of the business. But also, it'll enable us to aggregate and look more closely at lots of the market data, ePOS data, sales data, to enable us to look for those sweet spots where our product should be where we can gain penetration and growth and making use of advanced AI. And we are in the process of recruiting a digital officer into the business as well as we see that's a very important competency to have. And finally, to all of that, retaining our core entrepreneurial competency is what's helped us to grow and adapt so far, and we want to retain and keep those. And that's about giving our team and our people the responsibility and the accountability to deliver what they're good at and give them an entrepreneurial mindset and to make sure they drive value, growth, and margin.

16:47 Looking at corporate development, we've done a few things. Some of those I've mentioned already. We acquired the health and health business the end of October and completed early November twenty twenty four. I'm gonna talk more about that business shortly to tell you a bit more about what it is and and why it's so interesting for us. We're simplifying the business structure and streamlining certain entities in the business. Through acquisitions in the past, we've accumulated a number of entities that we no longer use because we move the assets around. So that will help us reduce our reporting burden and simplify reporting. The new ERP system we've mentioned already. We divested off the CDMO business. As I said, that's exchanged in May and complete towards the end of July.

17:33 That's With that, we sold some small brands as well, so some of the noncore brands, as Danny has mentioned. And that allows us to focus on growing the business as a brands business. Pure brands, consumer health platform, that will ultimately attract high valuations because of high margins, pricing power, etcetera. So we think that's a good thing for the business and shareholders. And we are working to divest our oral care products. They're noncore for us going forward. You know, they're not within our core categories. We're in the areas of women's health, men's health, maybe sexual wellness over the last time, diabetes. We're obviously in ENT with EROL. And oral care is a non core area for us. We're not looking to invest further in the oral care space, so we'll be divesting of those brands this year. As part of our growth going forward for M and A, we've appointed a new M and A head. They will start in the middle of this month. Experienced, energetic person with a lot of transactional experience of both buy side and sell side M and A. Looking forward to them joining because, for example, the health and their acquisition, that was Danny and I. We didn't have a dedicated resource at that time.

18:36 And we have retained our RCF revolving credit facility. We entered into that a year ago. When we complete on the divestment of the CDMO owned businesses, we will pay down all of the existing RCF debts, but the facility will still remain available to us for another, I think, two plus one years going forward. So we'll be looking to use a modest amount of debt with our M and A strategy to make the money we have go a bit further.

19:05 So I'm now going to talk a little bit about the Health and Her business. I'd say we acquired this towards the end of last year, a very exciting business that fits well into our portfolio. So we acquired the business. We pay an overall consideration of £10,000,000, but 2,500,000 of that 10,000,000 is deferred and contingent upon the performance of the business at the end of October twenty twenty five. So that will be paid up. And revenues for their financial year to May 2024 was 6,200,000. I think, as Danny said earlier, they'll already do much more than that this year and probably near £9,000,000 It's the number one menopause brand in Royal and Barron, and it's a food supplement brand that helps support the effects of hormonal change initially within women, now moving into men as well, and I'll explain that in a few more slides.

19:53 There's a deep NPD pipeline, lots of new products coming along behind that. It fits very well with our women's insulin health range, which is topical range, the balance active range, covering bacterial vaginosis, thrush, etcetera. And we've now just launched our

20:07 own topical menopause range, Vitality, which, again, I'll talk about later. This business is launching to The US, launching with CVS, one of the big five retailers in The US with 6,000 stores, first three products for the first half of this year and then more products in the second half. And we're very excited about this acquisition. Simply, the mission of that business is to improve the lives of millions suffering with the impact of hormonal change. And that's where hormonal changes deplete nutrients in the body, and the supplements are there to replace the nutrients that are depleted through that. A brief timeline of the business was founded in 2019 by two entrepreneurs, Kay Beish and Jubes Fernandez. They founded it with a vision to support hormonal health, spent a lot of time in early doors investing in data and research to make sure they understood the target market, developed some products, began to launch into 2021, 2022, moving on into the online space in The US and across certain territories in Europe, also into China. And then in 2024, struck a deal to enter the retail space

21:16 in The US, and those products are now launching out there. And they're now developing their new product development and expanding into lots of retailers. One of the real attractions of this business is it has a very strong relationship with Holland and Barron. That's a retailer we did not have a relationship with before this transaction. And already, the team have managed to get a number of the VENTURE LIFE products into Holland and Barron, including EROL, including ValidActive, and showing the strength of that relationship and the synergistic action that we've got. Really talented and strong team of people with that business too, particular expertise in digital marketing, digital activation. And, again, as we integrate the teams with VENTURE LIFE over the next rest of this year, we'll look to exploit those skills across all of our business.

22:06 So just talking about the hormonal changes that women see through their life cycle. You see that here, the higher levels of estrogen, the lower levels of estrogen, and this can include exogenous estrogen as well. So through all these times, women need support to help replace those nutrients depleted by those hormonal changes. And in particular, what you see here on this next slide is just an initial look at the range of the different products and how they support at different times. And you'll see in September this year that we'll be launching a maternal journey that's going to go the key retailers

22:42 and supporting a broader and broader range. Very exciting business, very well put together and in a high growth category. As men, we don't have the same variability as women do with their levels of hormone. But over the life of of the of the man, you see depletion in the levels of hormones. And, again, there's a range of supplements to support. You'll see particularly there in the paternal time a dip in at the levels of testosterone. I think those of us have been dads. And, again, we have a specific product to support. What I'd also draw your attention to, on the right hand side of the page, again, an example of the synergies from acquiring this business, There's a product called Prostagard that we'll be launching in Holland and Barrett in September of this year. That is essentially our POMI T product. So POMI T, which is for support of men with early stage prostate cancer, we sell that through the oncology channel in a number of places, UK and a number of other territories.

23:39 And we imported that product, improved it with some various other ingredients, and that's now a prostate product in the Health and HIMRAGE, which is launching through the retail channels. One of the other strong attributes of the Health and Nerve business is the app. This was developed by the business to support women through their perimenopausal menopausal journey,

24:04 give them support ideas. It's not an app used to keep flagging up to buy the products, but it is an app that helps with all the symptoms and all the support necessary going through those phases. A really good clinical study that the business undertook, you see on the right hand side there, and it proves through that study using the app that if you use the app to track the symptoms for eight weeks, you actually see a reduction in those symptoms, and that's independent of taking the supplements as well. Really valuable. There's 150,000 women using this app regularly on a daily basis and many more than that who've been to the app over recent years. And, again, that's an asset we can use to introduce some of our topical products into that group of people who are using the app and also to use the app technology and begin to spread it across a lot of the VENTURE LIFE products. So really good synergistic activity there.

24:58 So where is where is Health and Air today? You can see the the retailers where they are, in The UK, in The US, and a little bit outside in Europe. And there's the key target. Molly is the shopper. She shops for herself, the family, elderly parents, has the spending power. And so that's a common theme across all of our brands in terms of making sure we are where the shopper shops. A few highlights from this year. Sorry, from 2024 within the business. So you can see there the active products and customers, and you can see on the right hand side the new products that were launched just during that time, the customers they launched. So launches in US retail. As well as CVS, the business always also sells through the Vitamin Shoppe. That's a smaller retailer. I think there's about 700 stores in The U. But they tend to sit in the strip malls in America as opposed to the main malls where you'll see CVS and the others.

25:54 Again, good coverage there. Extending products in The UK, launching new products, getting the products online in China, and using disruptive NPD to expand the range of the distribution. More of the same in 2025, more new products being launched into more retailers. In terms of marketing, we've had some great wins already. We advertised during an opera menopause documentary that's going on in The U. S. For a really good pickup in interest and sales. Lots of new products, the maternal maternal ranges coming out this year, vaginal probiotic as well. UK retail, good range extensions on the NPD. US retail expansion. Again, we're talking to other retailers in The US. And again, as I've already mentioned, the synergistic activities of starting to sell the VENTURE LIFE brands across some of the portfolio and estates of Health and Hurt and similarly the other way. So really happy with the way that's progressing.

26:54 Moving on to the divestment. I'll give you a few more details. So we divested of the CDMO business. That's our Italian business based in Como via Kosmos and also the Swedish manufacturing facility in Leicester, South Of Stockholm. We had a total enterprise value for selling to those two businesses of €62,000,000. That represents about a 10x run rate, but it represents 11x of the historic profits from that business last year. We signed a we'll be signing a long term manufacturing agreement that will be signed on completion to continue to manufacture with those facilities that we sold, controlling pricing both up and down, quality, regulatory, and all the support we'd have with normal CPBOs. So we'll be working with that same team and those same people and that same business delivering the same high quality products that they've always delivered and but it'd be at at an arm's length situation. So we'll be sad that the team from BioCosmos and Nesta are no longer in our business, but we're

27:58 really happy that they're gonna be working with us in the future as we go forward to continue to deliver great quality products. And what this means is going forward, we'll have a less capital intensive operation here at VENTURE LIFE. We won't be investing in supporting the manufacturing business, but obviously we'll be buying products at arm's length from them. That means we give away a bit of profit, obviously, to CDMO. But as you've seen earlier, we're already seeing an increase in our overall profitability and marginality.

28:29 Just to be clear, the brands that are being disposed of, that we will no longer be with VENTURE LIFE, these smaller brands, they are also being sold to the same purchaser going forward, partnerships relating to them. I think just to add here, just as it's not on the slides, the foot care portfolio as well is the other key elements of the peripheral brands. So you've got these legacy brands on the screen, and also the foot care portfolio is around 2,000,000. So where does that leave us? So we've got a good injection of cash, and the company's focus now is really to push on more into, as we said right at the start, this area of proactive, healthy longevity or supporting people's health span. So lifespan is the length of time you live. It's from when you're born to when you die. Health span is the amount of time you live an active, healthy life.

29:19 And in today's environment, obviously, we see a lot of chronic conditions which impair the quality of life towards the end of people's lives. You have this tail off of living with a chronic condition quite often for a long time. That has a high health care cost, and it also impacts on the quality of life of that person. So where we're focused now is in this area of preventative opportunities, and you'll see Health and Her is a very strong preventative set of products. We're looking to help people live a healthier, longer life. There are about eight causations of over eighty percent of the chronic illnesses that we we see today. So by chronic illnesses, obviously, we mean things like dementia, heart disease, cancer, obesity, etcetera. And those eight causations are things like lack of sleep, stress, alcohol, diet, exercise, etcetera. And by moderating and modulating those eight key areas, you can significantly reduce your risk of these chronic illnesses.

30:19 And within those areas, there's a lot of opportunity for preventative products and supportive products. So we're going to use this cash that we receive from divesting of these CDM operations to both invest in our existing brands to increase our A and P in profitable way to have good returns on A and P to acquire more interesting brands that are complementary to the portfolio and increase the good architecture of our P and L with increasing gross margins and increasing net margins and develop and become a stronger player in women's health, men's health, sexual health, and some of those other areas. So it's a great opportunity for us to significantly grow and develop the business. So in summary, we want to be the partner of choice for proactive, healthy longevity, improving the health span. And this simplification of our business, the divestments, the simplification we've been doing, the investment in technology will allow us to evolve into a pure brand consumer health care platform, invest in our power brands, innovate with data driven insight and grow in key markets, which is going to be U.

31:24 K, U. S. And EU. So just looking at, you know, how we're gonna do that. So we're gonna focus on our key targets to empower and enable self care, to extend people's health spans, and making sure in what we acquire that each of the assets and the products have a strong runway for profitable growth and have the capability to be successful. As I mentioned earlier, we're divesting some certain assets. So just to be clear, these are the key brands, power brands, that are gonna remain within our portfolio at VENTURE LIFE. And we're gonna be talking a little bit more about those brands, particularly the power brands, and what we've been doing with those in 2024. So at least VENTURE LIFE with a simplified business model for growth, capital like structure, we're not investing heavily in development manufacturing facilities.

32:15 Brand focus, high margins, number one mindset. Data driven insight, omnichannel approach, integrated digital technologies, entrepreneurial, pure play consumer health care with core geographic focus. So just to finish up, I'd like to then talk a little bit more about some of the activities that have been delivering the growth that Danny talked about earlier within our core brands, our power brands. And I'll start with Balance Active. So there's quite a lot on this page, but, essentially, what's been happening here is we've grown Balance Active by 10% in 2024, and that outpaces the overall women's health category, which is actually was in decline by 1% last year. It's been driven by annualization in the grocery channel of our BA, balance active launch in 2023 and the introduction of the thrush cream within Tesco. So the thrush cream is a new product we developed. It was launched at the back end of 2023, has been growing in 2024.

33:09 We've had pharmacy growth driving listings through wholesalers and pharmacy and plugging the gap in our women's health range in this channel. So if you look at The UK market for women's insulin health, about twothree of it is dominated by thrush, that's obviously Caniston, which is a big player there. That's a drug product, but we've now launched a medical device product which can be used for the long term. So the thrush clean has been launched everywhere in pharmacy and super drug in Tesco's and Morrisons, and it's growing very well. The percentage growth number is very high because, obviously, it starts from a low base, and it's nearly 300% for the first five months of this year compared to the first five months of twenty twenty four. But it is the only product in growth in the Thrust segment. And whilst Callistin is in decline, Callistin was down nine percent first five months of this year compared to the first five months of last year, whereas the Thrust screen represents now 18% of the overall revenues for Valens Active.

34:03 And then secondly, thin displays, aisle displays, floor mats, etcetera, in creating creating awareness. We launched our HER Vitality range this year. That's a topical menopause range, so it sits very nicely alongside the Health and Her range. Five products there. That's already been launched in a number of retailers, and we've been running the revolution digital marketing campaign. And we've had over 1,200,000 symptom checker completions through that, lots of downloads of the data and reports that we've done. So really good progress there. And looking into 2025, as we talked about, Her Vitality is now in Boots. That's launched, and that's that's moving. We've got more field salespeople now out on the ground in The UK. At the moment, Balazactiv only has 5% distribution in pharmacies. So a key target for 2025 is to drive that and make make more of it as a GSL opportunity in open sale in the pharmacies.

35:00 Balance Active has been agreed to be launched in both Boots and Horden Barra excuse me, WH Smith and Horden Barra end of this year. WH Smith were in their largest stores, which give the majority of their revenues. We've also implemented price increases on balanced active gel, and that's across most of the accounts already because we see opportunity for price increase there and and marginality improvement. So really good activity on women's health and also some good international increases as well. Looking at LIFE. It's been a great year for LIFE. 32% growth overall year on year, and that includes the Gluten Gel brand as well, which is a more concentrated gel used for applications of the gums. In 2024, we've had 23 new listings. This is primarily driven by pharmacy, contributing about 61% to the overall growth in in in this category for us. New value terms, about 1,400,000.

35:54 It's due to where we had a CPI annualization, cost price increase for customers. Across it, we've had a sales push which has got new listings. And all of this has been supported by supported by strong activity with the order forms and paperwork we've put into pharmacies. We've launched some new flavors of shots, and shots contribute 26% to the overall growth in this area for us. We've got NPD listings. Sainsbury's introduced some products in 2024. Wholesalers introduced the new flavors that we had. And the overall marketing campaign has done really well with overall brand awareness of 44% and then increasing to 53% compared to last year. 2025, as I say, new pharmacy sales reps are gonna be pushing that. Then we're gonna increase, we hope, deliver prescriptions to the products and push more into this area and inform you more into the type type one diabetes market.

36:49 And finally, picking up on e roll. So e roll grew by 10%, achieving 10 new listings last year. We had this great accolade as well. So last year, won it won the most valuable products through the pharmacy magazine, being nominated again this year, so a great achievement there. Retailers consistently consider ear roll as the top brand of choice in ear care, and the product now represents 13% sorry, baby ear roll that we've launched represents 13% of our overall ear roll revenues. Songray NPD launched in '25. You'll see on the page there, we've launched the almond, ear roll product now. For some people, olive oil, isn't such a good, remedy for them. It may be cause irritation, and almond oil is much softer. We launched that product plus an aftercare product, which helps if you had your ears cleaned or, or wax removed to help soothe the ear afterwards. So, again, really good activity, in the retailers. We've got good shelf positions, as you can see, on that bottom right hand side of the slide. And we're currently working to deploy more training into pharmacies, and EROL's enjoying great expansion, as I've said, going into WH Smith, going into Holland and Barrett, and being shortlisted for a fantastic award.

38:00 So a few highlights of our current power brands, but we're very interested for the growth and the synergistic effect of those two, Herf and Her and Balance Active women's health brands together. So just to finish on our side, and then we'll get to the questions. So as I said before, simplified capital light structure, focusing on higher margin, higher multiple consumer health care landscape. I mean, exit multiples in this space historically, know, look back the last four or five years, you know, averaging sort of between 1315%, 14.6 we say there. So we believe that having this more pure play branded business will deliver higher value for the business ultimately. Good net cash position after the completion of the deal to sell the CDMO.

38:49 That, obviously, doesn't include any proceeds for selling your WellCare business, but that leaves in a strong position by the end of July. RCF is still available, clear focus, investing in organic growth, and selected complementary acquisitions. So that finishes our presentation. And now I'm quite happy to move over, and we'll try and go through as many as the questions as we've we've had already. So if we start at the top, there's a couple I mean, this one, I'll kick off straight away. One of the first questions was when will the company pay dividends? Just to say, it's not our intention at this exact moment in time to pay dividends because we're obviously in a growth phase and investing growth. But as the company becomes more and more meaningfully profitable, we would look to have a progressive dividend policy, and we'll talk more about them when we've reached that point in the not too distant future.

39:44 Danny, can I do it? Yeah. I'll take the second one. So pro form a growth of Palphomer. So 2023, that business did about 6,000,000 of revenues. It's done 5.9 in 2024 on a like for like basis. I think the previous owners, required had made a lot of investments in order to establish the brands, develop the apps, build the team, and really require more financing capability in order to deliver the growth opportunity in front of them. And I think I said earlier, we expect that those brands to deliver over 9,000,000 of revenue in 2025. So we feel we require that business an optimal time as it turned the corner for growth again. And I think important to note, sir, so I don't think we said it earlier, these brands are significantly more accretive to the gross marginality of the group. So we're about 46% blended today, but these brands, they generate margins of over 60%.

40:36 So as we go forward and drive the growth from those health and home brands, we expect that to clearly push up the gross margin on the p and l. Next one's for me as well, inventory. So so you will have already seen in the in the results that the inventory is excludes the inventory associated with the CDMO business, so that's transferred to assets held for sale as part of the discontinued operations. So in 2023, inventory would have been at 10,300,000. On the balance sheet, it's about 5,100,000 at the end of twenty twenty four. But I think important to note there is that the the the way the the non the non current assets held for sale accounted for, the CDMO operations, the share purchase deal, everything's removed from the balance sheet for 2024, all put into the non current assets held for sale line. But on the oral care brands, as, these are an assets based deal, still potential to be a share purchase deal subject to completion of that transaction in 2025, but it's accounted for as an asset based deal on the balance sheet. So you'll see the inventory associated with oral care is actually still in our 2024 inventory line. So where we've got 5,100,000 of inventory, there'd be about three quarters of a million of inventory associated with the oral care brands in that. So so really, it's moving from a 10.3 at last year on a combined basis to about 4,500,000, 4,300,000 in, on a on an ongoing basis. So inventory as a percentage of revenue for, you know, pro form a for 2025 would be around 13%.

42:08 Previously, the group operated around 20% inventory to revenue ratio. But, of course, we had all the raw materials and packaging as well on the balance sheet then as a CV mail, which we no longer have. Thanks, Daniel. Thank Greg. We've got quite a long question. It's coming from, somebody else here. Sorry. Just on the phone. So the question is, how do you ensure in, pursuing noncompetitive deals, especially in accelerated time frames facilitated by new cash resources, that you are conducting sufficiently robust due diligence to uncover all the material risks, financial, operational, legal, and especially cultural, and are not inadvertently overpaying or acquiring hidden liabilities that a competitive process might have brought to light.

42:56 Yeah. Think, Ben, if you've followed the business since its inception, you'll see we have a reasonable track record of making acquisitions, not overpaying and delivering growth out of those. We have a very thorough due diligence process. Our preference is always not to enter a competitive process because we have very clear objectives on the price we're prepared to pay for businesses. And the competitive process is done for exactly the reason of increasing the price and maximizing the price to the seller. So our preference is to look for those assets that sit complementary to what we're doing. They sit in the categories of what we want, and they sit in the places that we want. So that's all about broadening out, filling out spaces in our existing portfolio. Now that could be filling out spaces in terms of therapy, in terms of broadening the category, in terms of distribution, in terms of geography. So there's lots of complementarities that can be considered and adjacencies that can be considered.

43:55 Second point really is how do we make sure we've done our due diligence properly well. We have a very thorough due diligence process. We do a lot of due diligence ourselves internally, but we also rely on external due diligence people, particularly for the material areas of risk. As you said, financial and legal, we always use external providers to understand external financial and legal due diligence. Cultural, that's important for us. You know, we get in and understand the people, the business mentality, and the fit. But also when you look at the market, the marketing, the distribution, the customers, what we think, we do a lot of that ourselves with our team because the important thing is when we do an acquisition is our team has to deliver the upside and the integrated business afterwards. So it's really important they're all involved in the process of undertaking the due diligence, the assessment of the business. And we have a number of stages, initial stage, early stage, helicopter view, first look, second look, detailed DD. So when it comes to commercial, regulatory, manufacturing, we have a lot of that done ourselves internally or with our CDMO partners because they are the people who have to deliver that business integrated on the fast side. So, yeah. And, you know, be assured there's never, in our mind, a risk a risk of trying to do a deal quickly and therefore missing something. We do the diligence as needed. We do it well. We do it thoroughly.

45:22 And if a process wants to run ahead of that, then we're either out of the process or that has to wait because we won't undertake an acquisition risk. Next question, which I'll pass over to Danny, if that's alright. Yeah. Sure. So this is how extensively are you using AI in the business? So we have big ambitions to drive AI in the business going forward, and we are part of our five play new strategy that Jerry relayed earlier as we are working towards that and start that is implementing the new ERP system, Microsoft Dynamics three six five, which has the finance and supply chain modules within it. Key to getting our AI to be effective for us is to have our data in the business right to begin with. And to do that, we want all of our systems talking to one another. So our plan is to reinvest some of the proceeds from the divestment to grow out the number of modules we implement on d three six five, so the commercial modules, HR, marketing, ecommerce, so that we can get insight from the data and put this all into a data lake that enables us to train the I r AI to give us quick insights that we can give to our field sales teams and our commercial teams to go and generate, generate leads and execute on those and also help us identify trends in the in innovation and opportunities in the market. So we are on that path.

46:45 It's going to take us bit of time to get full benefits of that, but we will go live on the ERP, the beginning of next year, end of this year, and and roll out those additional modules. And in tandem with that, we've been bringing in new skill sets and capability into the business in the areas of data analytics and digital capability to ensure that we've got the know how and the expertise to drive the results and also ensure that our data has the integrity to rely rely upon it and and deliver clear objectives to our teams. Right. Okay. Do you wanna cover the next ones and watch what it means? Motes. What does motes what motes does Health and Her have? I presume that means mission objectives. I'm not sure. No. No. Or or it could be what motes are protecting.

47:35 Was saying. I was watching. Yeah. So it's a question which says, what mode does Health and Her have? So if if the question is around what protection does Health and Her have around the business, it's the significant protection it has is the the high level of clinical data and support it has behind its products, the clinical research that's undertaken, the studies that's undertaken, the building of the products, matching them with the research, not only in our own studies but in other studies that are available to us, and making sure they properly react to the right conditions for the customer. Secondly, the app and engagement with the app. So there's a lot of work and scientific evidence behind the products and how they build and how they develop, along with a strong marketing message and targeting the right customers in the right way. I hope that answers your question, but if that's not clear, ask another one.

48:28 I'll hand over to Danny for the next question on the impact of the sale on cost. So the question is, what impact does the sale of the manufacturing operation have on cost of goods and sold and gross margins? Well, just to answer the latter part of that question first, I think you can see at the start of the deck on the financial highlights that we separated out the marginality of the discontinued and continued business. The discontinued operation generated 38% gross margin. The ongoing business generates 46%, and we expect that to increment quickly over the next three years through growth of high margin products. But I think what's important to note here is that the supply price in our long term manufacturing agreements with BioDue is based on the existing prices we already had on an intercompany basis from our facilities in Sweden and Italy. That was a key part of the deal, and and those prices form the basis of the EBITDA multiple that the Riverside paid for the business. So we've already got stability on that pricing, protection over the next ten years under that long term agreement.

49:34 And the agreement allows for a mechanism on an annual basis for if prices were to move up or down 3%. Each party would meet in good faith to review those prices and review whether there's an opportunity to reduce them or if there's fair justification for those prices to be increased if there were certain key inputs costs going up, for example, so that we would have enough time to pass through those any cost increases to our retailers as well, of course, and pass on the pricing. But with the brands we've got left in the portfolio and the pricing power we have on those brands and the marginality improvement we've been able to generate over the last few years, we're confident in our ability to execute CPI if we need to. And we've shown that on balance that to LIFE over the last couple of years. Great. Do you want to take, I think you've covered the top 10. Exactly. Do you want to take the the next one on corporate costs? Yeah. So the next question is, are all of the corporate costs included in the 6,200,000 EBITDA of the ongoing business? So the short answer is yes. As a point of clarity to that, the only corporate cost that is not in the 6,200,000 would be the cost of our chief manufacturing officer. That sat sits with the divested operations, and as you would have seen us announce that Gianluca will sadly be standing down from VENTURE LIFE on completion of the deal.

50:50 So but within the 6,200,000, think what is important to note is that with any divestment we do, we you know, we pre the divestment, we would have shared costs across our group. So we would have done recharges of management, finance, operational functions, some of the corporate costs as well would have been recharged out. And, when we account for the divested operations, you can because you do not lose those costs incrementally from the business, they're retained in the ongoing p and l. So the 6,200,000 already suffers or absorbs the cost of all of that overhead in the ongoing business. So we lose temporary leverage benefit from the sharing of costs. So as we move forward, we'll expect that we'll regain that leverage benefit from those corporate costs that are in the ongoing business as we continue to grow organically and do more m and a.

51:40 Thanks, Fanny. The next question is how is Her Vitality differentiated from Health There's a very clear differentiation there. So Health and Her is a supplement only brand. It only has food supplements in it, and we will keep the brand that way. Hair Vitality is a topical brand, which means it's it's products applied to the skin or to the mucosal surface. So within that range, we have, for example, we have products that that deal with some of the other symptoms and effects of the menopause. For example, we have boosting face masks, collagen boosting face masks, which is to help with dryness of skin and the and the aging process that comes through menopause. We have a a cooling mist to help with, hot flushes.

52:26 We have a a vaginal dryness gel to help with getting back some dryness, which is one of the, you know, symptoms and, issues with menopause. And we have, an antiaging, face serum as well. So it's it's those sort of things that are topical products applied either to the skin or the mucosal surfaces inside the vagina and to help with some of those other issues of menopause as well as obviously being supported with the health and health products on a supplementation basis. Next question is what is the date of the next update? We'll put out a first half trading update towards the end of July, so we'll give you an update then on how the first half has gone. Next question is what makes the manufacturing assets attractive to the buyer at the price paid?

53:11 Well, I think you'd have to ask the buyer to get the the answer for them. I think the reason that they bought it is because the manufacturing businesses we have are very high quality, specialized in medical devices, really good technical team, really good production setup, well built business. And they, the buyer, is building an industrial group covering all areas of manufacturing. They have food supplements, and they have, I think, four other facilities across Italy covering food supplements and cosmetics, small bit of medical devices. But I think with the acquisition of our manufacturing businesses, they see a food step of a very high quality business in the medical device area. And, again, they're investing in that industrial group, and they'll look to grow it and develop it and build more revenue. So they're they're very keen for us to do more business with them, not just across medical devices but across others.

54:06 And obviously, as we buy products and assets, we'll look at making use of those facilities where we can. The next question is, are there any safeguards to prevent the buyer of the manufacturing assets from supplying similar products to VLG competitors? Absolutely. It's in the agreements. How is trading going to date in 2025? Well, we set out already in the release in the RNS, how we feel 2025 is going, and we'll give a trading update at the end of July. I don't know if you want to add anything to that, Tony. I I don't think it's appropriate for us to give too much detail, but, yeah, we're positive and pleased with the performance of the business, and we'll provide good detail around that later in July. Okay.

54:51 Next question is, do you foresee the founders of Health and Health staying with the business? Yes. We do. And the next question is having seen that as well as offering health and her and him products via Holland Barrow, you often direct to customers via your own subscription service. I wonder whether you'd comment on the retailer's view of this possible conflict of interest. We we don't give retailers exclusivity across our products. It's important, as we said before, shoppers we we need to be with a shopper shop. And so no retailer expects an exclusive arrangement on our products. They might have an advanced arrangement where perhaps they get to launch it first, but we always look to put all our products in all the retailers.

55:36 And that includes Amazon across our own platform. So they don't consider it at all as conflict of interest. They consider it a natural part of the retail landscape. Oh, yes. I think, yeah, someone's clarified that question earlier about moat is barriers to entry, which I think Thanks, Martin. I've answered. Final question we've got here is, will you multisource in the future to mitigate risk? Yeah. There's a couple of things to cover there. I think what the question is aimed at is our manufacturing. So whilst the BioCosmos facility and the Nest facility make a lot of our products, we have 15 other CDMOs across the business currently. That will go down a bit with some of the divested smaller products. But, yes, we do have other CDMOs. We will look to maintain that. We have an arrangement within the agreement with the buyer of the BioPhosmos and Nesta that they have a first right of offer on new manufacturing to see if they can give us equal terms in terms of price, quality, volume, all the areas. So they do have a right for that. We also had a right within the agreement to have a backup manufacturer for all of the products we make with BioCosmos and Nestle. So we won't look to overtly expand our CDMO portfolio because the more we have, the more risk to manage. But we will make sure it's balanced and risk is appropriately measured with CDMOs and appropriate backups.

57:00 Jerry, Daniel, thanks for you for answering all those questions you can from investors. And, of course, the company can review all questions submitted today. We'll publish those responses on the investor meet company platform. Just before redirecting investors to provide with their feedback, which I know is particularly important to the company, Jerry, could I please just ask you for a few closing comments? Yeah. Sure. Thank you. So, we've answered all questions that submitted, so, I hope that's been to your satisfaction. Thank you, everybody, for listening in. We really we get a lot of positive feedback from the Investor Meets platform that it gives, obviously, private investors an opportunity to hear directly from us as the management team. So always happy to answer questions, always happy to meet and talk about those. So I hope it's been informative. It's a very exciting time in the business. As I said earlier, we're sad that a number of our colleagues who've been on the journey a long time from ViaCosmos and Nestle are moving out to be owned externally, but we think that's a great thing for them and the business and for our business. We'll be working with them going forward.

57:58 So we'll continue those same discussions, relationships, working together as before. But I think going forward, VENTURE LIFE, exciting time. Lots of resources to deploy, great market segments that we're in, products, existing power brands going very well. And now we've got cash to drive them, drive market share, drive NPD and to get some nice complementary assets in. So a very exciting time for business, trading well, very happy with how the business is. And, yeah, we look forward to the future. So thank you for joining us, and we look forward to giving you an update on our next update on the interest. Jerry, Daniel, thank you for updating investors today. Can I please ask investors not to close this session? It should now be automatically redirected to provide your feedback in order that the management team could better understand your views and expectations.

58:43 This may only take a few moments to complete, and I'm sure will be greatly valued by the company. Behalf of the management team of VENTURE LIFE GROUP PLC, we'd like to thank you for attending today's presentation, and good morning to you all.