Total Face Group Limited

Transcription

1 Total Face Group Limited 2017 Half Year Results Presentation

2 Contents Results Highlights Highlights Half Year Results Revenue Bridge Revenue Breakdown Clinic Profitability Profit & Loss Financial Position Cash Flow Performance Update Allergan & Zeltiq Summary and Outlook Our Market Segment TFG Partnerships Our Growth Strategy Our TFG Brand 2

3 H1 FY17 Results Highlights Revenue of $9.95 million up 233% on pcp (H1 FY16 $2.99 million) Clinic profit of $2.78 million up 360% on pcp (H1 FY16 $0.6 million) Net assets of $22.3m Balance sheet in good position with the ability to refinance up to $3.0 million of CoolSculpting machines to increase cash reserves Clinic operating profit margin up 40% to 28% on pcp (H1 FY16 20%) Achieved an operational EBITDA of $1.0 million (Margin of 10%) before acquisition and one off costs Positive cash flows from operations of $0.4 million against pcp negative cash flows from operations of $0.9 million Cash balance of $1.7m as at 31 December

4 H1 FY17 Highlights Successfully completed capital raising of $10.0 million (Jul 2016) Successfully completed the acquisitions of 5 clinics: (Jul 2016) COZmedics (3 clinics in QLD) Endless Solutions (Port Melbourne Vic) Facial Artistry (ACT) Signed three way supply agreement between TFG, Zeltiq & Lumenis for CoolSculpting equipment, consumables and co-op marketing support (Jul 2016) Acquire and successfully brought online an additional 17 CoolSculpting machines taking TFG s install base to 28 machines across all 4 regions (Aug Dec 2016) Opened our first Sydney greenfield site in Chatswood Chase shopping complex (Oct 2016) Opened skin solutions retail store in Prahran Victoria (Nov 2016) Successfully re-located peninsula clinic to larger purpose built clinic in Mornington (Aug 2016) Successfully launched our brand for good looks (Sep 2016) Signed strategic partnership with Business Chicks Australia opening up marketing opportunities to their 42,000+ female members 4

5 Millions Half Year Results Revenue Bridge $10 $9 $8 $7 $6 $5 $4 $3 $2 $1 $0 1H FY17 Revenue Contribution Revenue grew to $9.95 million up from pcp $2.99 million Heber Davis (Broadway Clinic NSW) remains TFG s largest clinic contributing $1.9 million for 1H FY17 COZmedics (3 QLD clinics) have integrated extremely well contributing $2.8 million 1H FY17 Organic growth of $0.5 million (~20%) reflects steady growth in CoolSculpting treatments across 1H FY17 5

6 Half Year Results Revenue Breakdown Dermal 27% H1 FY17 Revenue by Modality 1,000, , , ,000 1H FY17 Body Fat Reduction Revenue Growth Coolsculpting 10% Injectables 63% 200,000 0 Jul Aug Sep Oct Nov Dec 1H Cosmetic injectables and Skin Solutions combined contributed just under $9.0 million in revenue for 1H FY17 which was ahead of internal forecasts Coolscuplting contributed ~$1.0 million in revenue which was behind internal forecasts due to: Timing of bringing machines online Training of clinicians 6

7 Half Year Results Clinic Profitability HY17 HY16 Sales Revenue $ 9,952,200 $ 2,988,554 COGS $ 2,641,949 $ 630,380 Gross Profit $ 7,310,251 $ 2,358,174 Gross Profit Margin 73% Labour $ 3,592,520 $ 1,476,303 Facilities $ 935,415 $ 278,072 $ 4,527,935 $ 1,754,375 Clinic Profit $ 2,782,316 $ 603,799 Clinic Profit Margin 28% 20% Strong Clinic profitability margin of 28% against internal forecast margin of 25% reflects: Strong supply agreements across all consumables Stable facilities costs Stable clinic labour costs Expect clinic profit margins to stabilise around 25% Gross Profit margin of 73% within internal forecast range of 70-75% again reflecting our strong supply relationships 7

8 Half Year Results Profit & Loss Corporate Costs HY17 HY16 Labour $ 742,700 $ 388,209 Marketing $ 759,634 $ 127,486 Marketing Rebate ($ 375,000) - IT & Communications $ 168,978 $ 96,028 Consultants $ 134,464 $ 71,798 Insurance $ 102,968 $ 13,472 Occupancy $ 35,178 $ 48,507 Other $ 197,309 $ 123,035 Total Corporate Costs $ 1,766,231 $ 868,535 Operational EBITDA $ 1,016,085 ($ 264,736) EBITDA Margin 10% -9% Acquisition Costs $ 267,326 - Other one offs $ 101,475 - Statutory EBITDA $ 647,284 ($ 264,736) Margin 7% -9% Depreciation $ 675,308 $ 224,738 Interest $ 62,113 $ 73,196 Net Loss ($ 90,137) ($ 562,670) Increased labour includes state based clinic operations managers, new HR/Payroll manager, Directors fees ($65k) and increase in payroll tax ($137k) Marketing campaigns during 1H FY17 was supplemented by co-op marketing rebate received from Zeltiq IT & Communications correlates to increase in clinics and user numbers Acquisition costs relate to QLD state Govt. stamp duty on COZmedics acquisition & associated legal expenses Other one-offs relate to increased audit fees due subsequent events surrounding post 30 Jun business combinations Increase in Depreciation relates to increased investment in CoolSculpting machines 8

9 Half Year Results Financial Position 31 Dec 2016 $ June 2016 $ 000 Movement $ 000 Cash and cash equivalents 1,744 2,601 (857) Receivables Inventories 1, Prepayments and Deposits Current tax receivable Plant & Equipment 5,588 2,608 2,980 Intangible assets 21,311 8,460 12,851 Total Assets 31,138 15,303 15,835 Creditors and accruals 2,114 1, Deferred Consideration 1 5, ,359 Borrowings 1,219 1, Provisions Other liabilities Total Liabilities 8,867 3,976 4,891 Net Assets 22,271 11,327 10,944 Note 1 50% cash and 50% TFG Script Receivables of $373k includes $174k of marketing rebate from Zeltiq (received Feb 2017) Increase of inventories correlates to increase in number of clinics and expansion of CoolSculpting machines Plant and equipment up by $2.9m includes addition of 17 CoolSculpting machines Intangible assets includes $20m of Goodwill on acquisitions and $1m invested in development of TESSA Deferred consideration includes COZmedics ($3m), Facial Artistry ($1.2m) and Face Today & Rejuven8 ($0.8m) - All are payable as 50% cash and 50% shares in TFG Borrowings relates to finance lease liability on equipment 9

10 Half Year Results Cash Flow Performance Significant improvement in cash flow from operations over 1H FY17 H1 FY17 $ 000 H1 FY16 $ 000 Movement $ 000 Opening cash balance 2, ,229 Cash from operations 411 (920) 1,331 Cash used in investing (10,235) (34) (10,201) Cash provided by financing activities 8,966 4,424 4,542 Closing cash balance 1, ,167 Positive cash flow from operations at 64% of EBITDA and expected to continue to strengthen in line with revenue growth Investing cash outflows reflects significant acquisition activity and investment in leasehold improvements and TESSA: ~$7.0 million acquiring COZMedics, Endless Solutions, Facial Artistry $2.9 million on clinic equipment including an additional 17 CoolSculpting machines $300k on further development of our proprietary application TESSA $250k on clinic leasehold improvements and computer equipment 10

11 Operations Update Financial performance for 1H FY17 reflects a strong contribution from both the Cosmetic Injectables and Skin Solutions modalities CoolSculpting remains a key focus area with 40+ CoolEvents scheduled across calendar 2017 Strengthened the executive team through the appointment of Kerstin Grant (Head of Operations) and Kathryn Bran (Group Manager Facial Aesthetics) to position TFG for further organic and acquisitive growth Implemented TESSA in our Broadway (Heber Davis) clinic in Jan 2017 completing the rollout to all NSW clinics TFG now has 17 Treating Doctors, 1 Nurse Practitioner, 21 Registered nurses and 17 dermal clinicians Continue to invest in developing a strong and reputable industry-leading brand 11

12 Update Allergan & Zeltiq On 14 th February 2017 Dublin-based Allergan Plc (Allergan), led by its Chief Executive Brent Saunders, agreed to pay $2.48 billion in cash for Zeltiq Aesthetics Inc. TFG views this acquisition as a positive reinforcement of our strategic decision to invest in the body fat reduction market and we feel strongly that it validates our decision to do so using the CoolSculpting technology TFG has a very strong relationship with both Allergan and Zeltiq which should help minimise any disruption as both parties work through completion activities Based on our knowledge of how Allergan grows market penetration across their other product and service lines, we see medium to long-term benefits in the Australian market and anticipate an even greater focus on increasing market awareness of the worlds leading non-invasive body fat reduction technology 12

13 Summary and Outlook TFG has achieved a great deal in 1H FY17: $10.0 million capital raise Added five new clinics via acquisition and now have a footprint across 4 regions on the eastern seaboard of Australia Became the second largest install base of CoolSculpting globally Achieved its maiden operational EDITDA of $1.0m Cash flows from operations turned positive Launched our brand for good looks Even though Jan-Jun is traditionally slower than Jul-Dec, we expect 2H FY17 to show growth across all levels, driven to a large extent through the expected increase in CoolSculpting revenue now that all 28 machines are operational with trained clinicians in place We continue to assess a number of further acquisitions and whilst TFG has not progressed discussions with potential acquisition targets to a point that would require TFG to make disclosure to the market in line with ASX listing rules, we do expect further acquisitions will be completed in 2H FY17 13

14 Our Market Segment TFG Targets the premium non-invasive treatment market Several important features distinguish non-invasive modalities from plastic surgery. Non-invasive treatments have lower risk of complication Less costly and are temporary in nature Treatments fade with time and require re-treatment 3-4 times per year creating reoccurring revenue streams which underwrites future business growth TFG has a strong focus on training with all clinics operating with highly qualified and trained doctors, registered nurses and dermal clinicians Our growth is anticipated to be unpinned by three strong and growing market segments. Anti-ageing Skin Solutions CoolSculpting 14

15 TFG Partnerships We have strengthened and developed our Brand which has resulted in an increased ability to negotiate and partner with significant national and international companies. Partnership with Lumenis and Zeltiq at a global level for consumables, capital equipment and co-operative marketing of CoolSculpting within Australia Business Chicks - As the Beauty Partner for Business Chicks in Australia, we have seen increased brand awareness, opportunities for event partnership and exposure to their 42,000+ female members As TFG continues to grow in size and develop a national footprint our discussions with large corporate groups continues to gain momentum with a number of discussion's underway with national organisations TFG is also in discussions with a number of key television personalities to become brand ambassadors 15

16 Our Growth Strategy Creation of an industry brand connecting to the emotion and not the treatment itself Further acquisitions with the objective to enhance our geographic presence, strengthen our clinical team further, and increase the treatments we deliver we believe in a world where compliments and acceptance can come naturally Continue to invest in our proprietary application TESSA to maintain clinical excellence, operational control and even greater insights to our clients Maintain market leadership in body fat reduction using the CoolSculpting technology to become the most successful, influential and respected organisation in the medical aesthetic market Further strengthen our relationships with industry suppliers at a global level 16

17 Our TFG Brand Total Face Group continues to invest in developing a strong and reputable, industry-leading Brand to connect with consumers on an emotional level and not the treatment(s) itself Our brand will evoke Passion Consumers refer more often to, and passionately about, a brand they know, like and trust Our brand will bring New Clients by focussing on our expertise, education, and experience accelerating awareness and enhancing our reputation Our brand will help us reach the right audience it is estimated that 19/20 people who want to participate currently do not. Our Brand helps us attract the right clients and is critical to us becoming the market leader Competitive Advantage Our Brand will help us stand out for the right reasons Brand synergies A quality Brand will assist in partnering with similar reputable Brands (eg Allergan, Zeltiq, Vogue and Business Chicks) 17

18 Disclaimer This presentation was not prepared for and should not be relied upon to provide all necessary information for investment decisions. Some of the information contained in this presentation contains forward-looking statements which may not directly or exclusively relate to historical facts. Although great care & diligence has been taken to ensure the accuracy of this presentation, Total Face Group Limited gives no warranties in relation to the statements and information contained herein and disclaims all liability arising from persons acting on the information and statements in this presentation. Due to the dynamics and changing risk profiles of investment markets, Total Face Group Limited reserves the right to change its opinion at any time. All investors are strongly advised to consult professional financial advisors whose role it is to provide professional financial advice, taking into account an individual investor s investment objectives, financial situations and particular needs 18

19 we believe in a world where compliments and acceptance can come naturally