Venture Life : 2020 Annual Report

Strategic Review

We explain who we are, where we operate,

our business and a summary of how we performed against our key performance indicators.

1. Highlights 2019
2. 2020: A pivotal year

1. At a Glance

1. Chair's Statement

1. Our Business Model and Strategy

1. Our Investment Case
2. Key Performance Indicators
3. Development and Manufacturing

1. Chief Executive Officer's Statement

1. A Responsible Business
2. Principal Risks and Uncertainties

1. Our Section 172 (1) Statement

1. Financial Review

Corporate Governance

We introduce our Board, explain our approach to corporate governance and give details of the Group's remuneration principles and policies.

28 Board of Directors

1. Statement of Corporate Governance

1. Directors' Report

1. Remuneration Report

1. Statement of Directors' Responsibilities

Financial Statements

This section contains the Financial Statements,

the Auditor's Report, the accounting policies and the notes to the accounts.

1. Independent Auditor's Report

1. Consolidated Statement of Comprehensive Income
2. Consolidated Statement of Financial Position
3. Consolidated Statement of Changes in Equity
4. Consolidated Statement of Cash Flows
5. Notes to the Consolidated Statements

1. Parent Company Balance Sheet
2. Parent Company Statement of Changes in Equity
3. Notes to the Parent Company Balance Sheet
   IBC Shareholder Information

Our Mission

We are committed to providing innovative and efficacious products for the global self-care market, for people who want to lead a healthier life.

Our Vision

To become a key trusted global leader in self-care products through our knowledge, expertise and capability.

Through sustainable organic growth and strategic acquisitions, we will continue to access the significant long-term potential of the self-care market.

* Before exceptional items & share based payments

Profit after tax (£m)

Report Strategic

Governance Corporate

Financial

• Revenue increased 49% to £30.1 million (2019: £20.2 million)
• Gross profit increased 61% to £12.8 million (2019: £8.0 million)
• Adjusted EBITDA* increased 105% to £6.1 million (2019: £3.0 million)
• Profit before tax increased 141% to £3.3m (2019: £1.3 million)
• Earnings per share increased 154% to 2.74 pence (2019: 1.08 pence)
• Operating cash flow (before working capital) up 127% to £6.7 million (2019: £3.0 million)
• Gross margin percentage increase to 42.7% (2019: 39.6%)
• Successful Placing & Open Offer raised £34.1million net of expenses

Commercial

• 17 new distribution agreements signed on key brands, including four new markets for the Dentyl brand
• 12 new in-market product launches
• New Dentyl launches in Boots, Superdrug and Savers
• UltraDEX now market leader within UK Halitosis mouthwash market, overtaking its nearest rival - CB12*
• Five-yearagreement with UK partner for Fungal Nail Brush & Verruca Pen, worth €2.3m over the five-year term
• Appointment as second manufacturer of Alliance Pharmaceuticals Kelo-Cote products

Statements Financial

Amidst the unprecedented global impact caused by the pandemic, Venture Life demonstrated strong leadership, resilience, tenacity and a robust business model.

The safety of its employees was at the forefront, as well as continuing a first-class customer service and delivering outstanding growth.

This is a remarkable achievement and a testament to the huge efforts of each employee, demonstrating our ability to quickly adapt to new working environments.

• The Company fully implemented COVID-19 safe Health & Safety procedures across the Development & Manufacturing Facility, the UK Head Office and the office in The Netherlands
• The Development and Manufacturing facility located in North Lombardy, Italy stayed operational throughout 2020 and continues to do so in 2021
• A new brand DISINPLUSTM was created in March 2020, in response to the demand for sanitising hand-gels that arose due to the pandemic. It was initially supplied free of charge to local hospitals in the North Lombardy region and then as a new revenue stream

With the strong sales growth that came through in 2020, Venture Life invested significant capital during the year to materially increase the manufacturing capacity at Biokosmes, our Development and Manufacturing facility.

Investment totalled £1.2 million during the year, and has increased approximate capacity for production from

33 million to 55 million units per annum by the end of 2020.

The utilisation in 2020 still left over 40% of this capacity available, allowing for incoming opportunities and organic growth to be manufactured in-house.

• This investment included filling machinery as well as associated infrastructure
• Filling lines increased from 10 in 2019 to 13 in 2020
• Approximate daily production capacity has risen from 130,000 to 250,000 units per day

Report Strategic

The acquisition of PharmaSource BV, a Netherlands- based development and distribution business, completed on 24 January 2020. This innovative and profitable business sells proven medical devices in the areas of fungal nail infections, wart removal, oral care and women's health. The products are sold direct through retail and grocery chains in The Netherlands, the UK and also through some key European distributors.

Strategically, this acquisition enables Venture Life to broaden its product range and extend global distribution, as well as benefit from the operational leverage Venture Life brings with its manufacturing facility. Already, the synergies arising from the acquisition have resulted in increased revenues and we plan for the operations to remain in The Netherlands as we grow the business there.

• Revenue for the full year 2020 was €3.2m (£2.80m) representing a growth of 20% over the previous year before the business was acquired. The acquisition of PharmaSource BV completed on 24 January 2020, therefore just over 11 months of trading is consolidated into the Group results for 2020
• A five-year distribution agreement was signed with a new partner in the UK for Fungal Nail Brush and Wart & Verruca Pen - deal worth €2.3m over the term
• PharmaSource BV Gel launched in the Dutch retail chain, DA, which operates approximately 200 outlets
  in The Netherlands

In December, the Group undertook an institutional placing and open offer that raised proceeds of

£36 million (£34.1 million after expenses), at a price of 90 pence per share. Participants in the placing included both existing and new institutional shareholders.

Since Venture Life was founded in 2010, the company has made four successful acquisitions - the Italian development and manufacturing business in 2014, the acquisition of Periproducts Ltd, including the UltaDEX brand in 2016, the Dentyl brand in 2018 and PharmaSource BV in 2020.

The money raised in the placing will be used to make selective earnings enhancing acquisitions that:

• Are in the consumer healthcare space
• Leverage the Group's now enhanced operating capacity
• Broaden the Group's portfolio of brands and products
• Complement the Group's proven ability and success in acquiring and integrating businesses into the Group and reinvigorating brands

Governance Corporate

Statements Financial