2013 Interim Financial Results Water-based, clean technology 8 - - PowerPoint PPT Presentation

2013 interim financial results
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2013 Interim Financial Results Water-based, clean technology 8 - - PowerPoint PPT Presentation

Products, Services, and Technologies for a Safer, Healthier World Products, Services, and Technologies for a Safer, Healthier World 2013 Interim Financial Results Water-based, clean technology 8 August 2013 solutions for a safer, healthier


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SLIDE 1

Water-based, clean technology solutions for a safer, healthier world

Products, Services, and Technologies for a Safer, Healthier World Products, Services, and Technologies for a Safer, Healthier World

2013 Interim Financial Results 8 August 2013

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SLIDE 2

Disclaimer

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This presentation is personal to the recipient and has been prepared by and is the sole responsibility of PuriCore plc (the "Company"). It is solely for use at a presentation to analysts and potential investors in relation to the proposed placing and open offer of ordinary shares of the Company ("Ordinary Shares"). Some of the information in this document is still in draft form and will only be finalised in the prospectus to be published by the Company in due course (the "Prospectus"). This document is an advertisement and not a prospectus and investors should not subscribe for or purchase any Ordinary Shares except on the basis of information in the Prospectus. The information contained in this document and communicated verbally to you including the speeches of the presenter(s), the question and answer session and any materials distributed at or in connection with it (together the "Presentation") is confidential and is being supplied in the United Kingdom only to persons with professional experience in matters relating to investments and/or to high net worth companies as described in Articles 19(5) and 49(2) respectively of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (SI. 2005/No. 1529) (as amended) made pursuant to section 21(5) of the Financial Services and Markets Act 2000 and, if permitted by applicable law, is being supplied outside the United Kingdom to professionals or institutions whose ordinary business involves them in investment activities. The information contained in this document is not intended to be viewed by, or distributed or passed on (directly or indirectly) to, any other class of persons. No representation or warranty, express or implied, is made as to and no reliance should be placed on the fairness, accuracy, completeness or correctness of the information or

  • pinions contained in the Presentation. The information in this presentation may be subject to verification, completion and change. No liability is accepted for any such

information or opinions by the Company or Nomura Code Securities Limited or any of their respective directors, members,

  • fficers, employees, agents or advisers.

The Company is under no obligation to update or keep current the information contained in this presentation or to correct any inaccuracies which may become apparent, and any

  • pinions expressed in it are subject to change without notice.

None of the Company nor Nomura Code Securities Limited nor any of their respective members, directors,

  • fficers or employees nor any other person accepts any liability whatsoever for any loss howsoever arising from any use of this presentation or its contents or otherwise arising

in connection therewith. You should not base any behaviour in relation to any securities or investments on this information until after it is made publicly available by the Company or its advisers. Any dealing or encouraging others to deal on the basis of such information may amount to insider dealing under the Criminal Justice Act 1993 and market abuse under the Financial Services and Markets Act 2000. This Presentation includes "forward-looking statements" which include all statements other than statements of historical facts, including, without limitation, those regarding the Company and its subsidiary undertakings’ (the “Group”) financial position, business strategy, plans and objectives of management for future operations (including development plans and objectives relating to the Group's products and services), the benefits of and opportunities that may arise as a result of the proposed transactions described in this presentation, timing of regulatory approvals, market opportunities and costs associated with programmes and studies, and any statements preceded by, followed by or that include forward-looking terminology such as the words "targets", "believes", "estimates", "expects", "aims", "intends", "will", "can", "may", "anticipates", "would", "should", "could"

  • r similar expressions or the negative thereof.

Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the Group's control that could cause the actual results, performance or achievements of the Group to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Group's present and future business strategies and the environment in which the Group will operate in the future. Numerous factors, including those detailed from time-to-time in the Company’s filings with the UK Listing Authority, and in any filings, if applicable, with the Securities and Exchange Commission, may cause results to differ materially from those anticipated in the forward-looking statements. These forward-looking statements speak only as at the date of this Presentation. The Group expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained in the Presentation to reflect any change in the Group's expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based. As a result of these factors, prospective investors are cautioned not to rely on any forward-looking statement. By attending this presentation and/or accepting a copy of this document, you agree to be bound by the foregoing limitations and conditions and, in particular, will be taken to have represented, warranted and undertaken that: (i) you have read and agree to comply with the contents of this notice including, without limitation, the obligation to keep this document and its contents confidential; and (ii) you will not at any time have any discussion, correspondence or contact concerning the information in this document or the offer

  • f Ordinary Shares with any of the Company's suppliers, customers, subcontractors or any governmental or regulatory body without the prior written consent of the Company.

Neither this document nor any accompanying document is an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration under the US Securities Act of 1933, as amended (the ‘‘US Securities Act’’) or an exemption from registration. Neither the existing Ordinary Shares, nor the New Ordinary Shares nor the Open Offer Entitlements have been or will be registered under the US Securities Act or under the securities laws of any state of the United States, or under the applicable securities laws of Australia, Canada or Japan. Subject to certain exceptions, the New Ordinary Shares made available under the Placing and Open Offer and the Open Offer Entitlements may not be offered, sold, taken up, delivered or transferred in or into the United States, Australia, Canada or Japan, and, subject to certain exceptions, white Application Forms are not being posted to and no Open Offer Entitlements will be credited to a stock account of any person with a registered address in the United States, Australia, Canada or Japan. Outside the United States, the New Ordinary Shares and Open Offer Entitlements may not be offered, sold, taken up, delivered or transferred except in an ‘‘offshore transaction’’ (as defined in Rule 902(k) under the US Securities Act) in accordance with Rule 903 or Rule 904 of Regulation S under the US Securities Act.

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SLIDE 3

H1 Highlights

3

  • EBITDA profitability maintained in all business divisions
  • Group revenue decreased 4.9% (4.1% at constant currency) to $24.1m (H1 2012: $25.3m)

Endoscopy revenue up 1.7% (3.9% at constant currency) to $11.8m (H1 2012: $11.6m) Supermarket Retail revenue down 19.0% to $10.6m (H1 2012: $13.0m) Wound Care revenue up 148.0% to $1.7m (H1 2012: $0.7m) Q2 revenue increased 19.4% (20.5% at constant currency) to $13.2m (Q2 2012: $11.1m)

  • Gross profit margin strengthened to 33.7% (H1 2012: 33.0%)
  • Operating expenses decreased 2.9% to $9.0m (H1 2012: $9.2m)
  • Loss per share (after deduction for extraordinary item) of $0.03 (H1 2013: $0.06)
  • $13.5m ProduceFresh agreement with a top-3 US retailer (revenue starting late H2 2013)
  • $14.0m Sterilox Fresh agreement with a top-5 US retailer (revenue starting in Q2 2013)
  • Marketing partnership with Onset Dermatologics for new Vashe-based dermatologic products
  • Marketing partnership with SteadMed Medical for Vashe Wound Therapy in the US, Canada,

and Mexico

  • US FDA clearance for Vashe Skin and Wound Hydrogel: itch related to atopic dermatitis
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SLIDE 4

Investment Overview

Executing a new strategy for growth

Profitable, diversified recurring revenue business model

  • Core proprietary technology protects against the spread of infectious

disease

Scientifically proven, strong IP, and validated by customers and partners Targeted R&D investment to drive long-term growth

  • Market leadership position in core markets

Supermarket Retail (US): increase shelf life of perishable goods Endoscopy (UK): endoscope decontamination, NHS focus

  • Significant partnering opportunities across multiple market segments in

multiple geographies (e.g. Wound Care)

  • New strategy focused on increasing recurring revenue streams and margin

improvement

  • Expanded product offerings (e.g. ProduceFresh)

Validated by recent contract wins

4

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SLIDE 5

Strategy for Growth

5

Increase recurring revenues Increase recurring revenues Expand market share and touchpoints in existing markets Expand market share and touchpoints in existing markets Expand range of product formats Expand range of product formats Pursue business development partnerships to leverage core technologies Pursue business development partnerships to leverage core technologies Expand into new markets and geographies Expand into new markets and geographies

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SLIDE 6

Divisional Overview

6

Proprietary technology and expertise in pathogen control + Proven track record of building successful businesses in key markets Proprietary technology and expertise in pathogen control + Proven track record of building successful businesses in key markets

Food & Agriculture Food & Agriculture

Supermarket Retail: Food & Floral

H1 2013 Revs: $10.6m EBITDA: $0.3m

Supermarket Retail: Food & Floral

H1 2013 Revs: $10.6m EBITDA: $0.3m

Agriculture Agriculture Food Processing Food Processing Foodservice Foodservice Water Treatment Water Treatment Wound Care

H1 2013 Revs:$1.7m EBITDA: $0.1m

Wound Care

H1 2013 Revs:$1.7m EBITDA: $0.1m

Dental Dental Dermatology Dermatology Animal Health Animal Health

Health Sciences Health Sciences

Endoscopy

  • H1 2013 Revs:$11.8m

EBITDA: $1.6m

Endoscopy

  • H1 2013 Revs:$11.8m

EBITDA: $1.6m

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SLIDE 7

Core Technology

Water Salt Electricity

+

Chlorine Cl2 Hypochlorous HOCl Hypochlorite OCl- (Bleach)

Sterilox

10 20 30 40 50 60 70 80 90 100 1 2 3 4 5 6 7 8 9 10 11 12 13 14 pH % Chlorine Species

Sterilox/ ProduceFresh

Sterilox/ProduceFresh Electrolytic Process

Hypochlorous

+

7

Ideal pH range: highly effective yet skin friendly

  • Safe: natural – made from salt & water, non-toxic
  • Effective: broad antimicrobial, no antibiotic resistance
  • Green: non-hazardous, environmentally friendly
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SLIDE 8

Kroger DAILY AVERAGE Shrink Tracking (Test Shrink per Store Avg vs. Control Shrink per Store Avg)

19.1 lbs. 33.5 lbs. 51.8 lbs. 38.7 lbs.

10 20 30 40 50 60 70

Week

  • f 8/11

Week

  • f 8/18

Week

  • f 8/25

Week

  • f 9/1

Week

  • f 9/8

Week

  • f 9/22

Week

  • f 9/29

Week

  • f 10/6

Week

  • f 10/13

Week

  • f 10/20

Week

  • f 10/28

Week

  • f 11/3

Week

  • f 11/10

Week

  • f 11/17

Week

  • f 11/24

Week

  • f 12/1

Week

  • f 12/8

Average Daily Shrink Weight (lbs.)

Test Stores Control Stores Test Stores Avg. Control Stores Avg.

Significant Inventory Shrink Savings

  • 44% of H1 2013 Group revenues, mix of capital sales, leases & recurring revenues
  • EBITDA positive in 2012 and H1 2013
  • Three of top-five US targeted supermarket chains use Sterilox Fresh
  • Proven ROI model and higher quality produce drive sales

Supermarket Retail

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Driving reductions in inventory shrink, increasing safety, extending product shelf life, and improving quality

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SLIDE 9

Evolving Supermarket Retail Strategy

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  • Growing portfolio of product

formats to reach more customers

  • Recent $34.5m deals driving

more predictable revenues

  • Requires investment

PAST PRESENT FUTURE

  • Capital equipment

focused

  • Lumpy earnings
  • More product formats &

applications grow market share and expand usage

  • Recurring revenues drive

long-term profitability

  • Expand geographical reach
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SLIDE 10

Supermarket Retail Growth Strategy

10

Market share growth requires investment and patience Current Near-Term Long-Term

Supported by strong

  • rder book

Increasing

  • Revenue
  • Market share

Increasing

  • Revenue
  • Margins
  • Recurring revenue
  • Customer touchpoints
  • Market share
  • Customer reach

Investment required to drive business evolution Patience delivers payoff

Increasing

  • Customer touchpoints
  • Market share
  • Recurring revenue
  • Customer reach

Investment

  • Revenue
  • Margins
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SLIDE 11

Endoscopy

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Leading full-suite UK provider for endoscope decontamination

  • 49% of H1 2013 Group revenues, 78% of sales

driven by recurring revenues

  • Cash generative; sustainably profitable

PuriCore Endoscopy

  • Targeting NHS supply chain as full-service

provider

  • Multiple decontamination chemistries available
  • New state-of-the-art drying cabinet recently

launched and AER to be launched end of year PuriCore Surgical

  • Acquired Monmouth Surgical (2012) as

complementary consumables catalogue PuriCore Scientific

  • Cutting-edge Labcaire clean air products
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SLIDE 12

Endoscopy Business Strategy

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New surgical consumables catalogue Improved productivity and reliability in product

  • ffering

Expand product

  • ffering

Expand product

  • ffering

Leverage NHS footprint Create best- in-class USPs Market Drivers Business Drivers

Expand offering to current 300 UK hospital customers

Grow UK market share Grow UK market share Expand into Europe Expand into Europe

Optimise to maximise revenues Optimise to maximise revenues Expand margins Expand margins

New Storage and Drying Cabinets New RapidAER

Long-term, sustainable profitable growth

Expand beyond current 300 NHS hospital customer base

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SLIDE 13

Prior to treatment with Vashe Prior to treatment with Vashe 6 weeks after treatment with Vashe 6 weeks after treatment with Vashe 13

Wound Care

Unlocking value through partnerships

  • Broad application to wound irrigation and

cleansing Immediate addressable market

  • pportunity of >$100m and potential

application in larger Wound Care and Dermatology markets

  • Wound Care marketing partnership in

place with SteadMed Medical for US, Canada, and Mexico

  • Dermatology partnership in place with

Onset Dermatologics

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SLIDE 14

Capitalising on Opportunities for Core Technology to Drive Business in Health Sciences

14

Core technology Core technology

Wound Care partnership Wound Care partnership Dermatology partnership Dermatology partnership Expanding indications & product formats Expanding indications & product formats Animal Health application Animal Health application European expansion European expansion New formulations New formulations ROW partnerships ROW partnerships

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SLIDE 15

Health Sciences

Wound Care

Partnership in place with SteadMed Medical; ex-NA strategy underway

Dental

Aggressive partnering strategy underway

Dermatology

Partnership in place with Onset Dermatologics

Animal Health

Aggressive partnering strategy underway

Food & Agriculture

Floral

Aggressive ROW partnering strategy underway

Agriculture

Ongoing R&D at Oxford University

Food processing

Aggressive partnering strategy underway

Foodservice

Aggressive partnering strategy underway

Water Treatment

Ongoing R&D with Lohas for seafood production, water treatment in restaurants, and livestock husbandry

Partnering & Development

New and emerging business opportunities across multiple sectors & geographies designed to supplement both medium- & longer-term value

15

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SLIDE 16

H1 2013 Revenue

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Millions

5 10 15 20 25 30 2013 2012 Q1 Q2

  • H1 revenue decreased 4.9% (4.1% at

constant currency) to $24.1m (H1 2012: $25.3m) but does not reflect the full revenue impact of H1 Supermarket Retail contract wins – expect to show thru in H2 Endoscopy revenue up 1.7% (3.9% at constant currency) to $11.8m (H1 2012: $11.6m) Supermarket Retail revenue down 19.0% to $10.6m (H1 2012: $13.0m) Wound Care revenue up 148.0% to $1.7m (H1 2012: $0.7m)

  • Q2 revenue increased 19.4% (20.5% at

constant currency) to $13.2m (Q2 2012: $11.1m)

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SLIDE 17

H1 2013 Income Statement

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Key Highlights

  • Gross profit margin

improved to 33.7% (H1 2012: 33%)

  • Operating expenses

decreased 2.9%

  • $5.8m non-cash loss on

discount of conversion price on converted bonds

  • Loss per share excluding

extraordinary item: $0.03 Key Highlights

  • Gross profit margin

improved to 33.7% (H1 2012: 33%)

  • Operating expenses

decreased 2.9%

  • $5.8m non-cash loss on

discount of conversion price on converted bonds

  • Loss per share excluding

extraordinary item: $0.03

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SLIDE 18

H1 2013 Cash Flow

18

Key Highlights

  • Lower interest cost due to

debt reduction/conversion

  • Cash from operations of

$0.8m (June 2012: $2.9m) due primarily to timing of trade receivables

  • Placing approved in

January generated $2.5m net of expenses

  • Total cash generated

$2.0m, $1.7m after impact

  • f F/X of ($0.3)

Key Highlights

  • Lower interest cost due to

debt reduction/conversion

  • Cash from operations of

$0.8m (June 2012: $2.9m) due primarily to timing of trade receivables

  • Placing approved in

January generated $2.5m net of expenses

  • Total cash generated

$2.0m, $1.7m after impact

  • f F/X of ($0.3)
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SLIDE 19

H1 2013 Balance Sheet

19

Key Highlights

  • Working to manage

inventories to lower levels

  • Increase in receivables

due to strong June sales

  • Reduced debt by

$12.4m vs. 31 December 2012 ($13.3m)

  • Equity increased due to

conversion and placing Key Highlights

  • Working to manage

inventories to lower levels

  • Increase in receivables

due to strong June sales

  • Reduced debt by

$12.4m vs. 31 December 2012 ($13.3m)

  • Equity increased due to

conversion and placing

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SLIDE 20

Recurring Revenues of Recently Announced Fresh Contracts Underpin Future Results

20 $0 $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 H1 2013 H2 2013 FY 2014 FY 2015 FY2016 Sterilox System Warranty* FloraFresh Contract ProduceFresh Contract

Sterilox Fresh service contract: $6.4m (part

  • f $14m Fresh contract)

FloraFresh contract: $7m ProduceFresh contract: $13.5m

* From the announced $14m contract

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SLIDE 21

Summary and Outlook: Executing on our Growth Strategy

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  • New applications and products being developed to deliver growth and

profitability Long-term recurring revenue streams Increased market share and customer touchpoints New business development partnerships Expansion into new and existing markets and geographies

  • Quarterly Group revenue improvement trend expected to continue

Supermarket Retail: strong order book to drive increased market share and product usage Endoscopy: focused on increasing recurring revenue, capitalising on new

  • pportunities, and increasing share in UK and ultimately Europe with new

sales strategies and broader offerings Partnering: focused on leveraging greater marketing resources without significant investment to deliver increased licensing revenue