InnovaDerma PLC

AGM Presentation 2019

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1

Contents

• Key Messages FY19 p. 3

• Robust Financial Performance p. 4

• Delivering on our objectives p. 5

• Focused Strategy p. 6

• Growing Retail footprint p. 7

• DTC p. 8

• Self Tanning p. 9

• Haircare p. 10

• Skincare p. 11

• Life sciences p. 12

• New category p. 14

• Sustainability p. 15

• Outlook p. 16

• Appendix p. 172

Key Messages FY 2019

• FY organic growth of 21%

• Strong growth led by Skinny Tan; increased retail distribution to more than 2,000 stores, up from 800 in the

UK

• Investment in DTC channel delivered record orders

• New product innovation contributed to higher sales basket size and bottom line growth

• Gross margin increase of 600bps supported by stronger DTC channel revenue mix against retail sales in

Skinny Tan

• Multiple new international retail and distribution channels secured across stable of brands

3

Robust Financial Performance

FY 2018 FY 2019FY 2018 FY 2019FY 2018 FY 2019

……………………………………………………………

……………………………………………………………

……………………………………………………………

£10.7m

£12.9m

57%

63%

3p

7p

Total Revenue Gross Profit Margin Adjusted EPSAdjusted EBITDA

FY 2018 FY 2019

£0.8m

£1.4m

Free Cashflow

……………………………………………………………

FY 2018 FY 2019

-£2.0m£0.2m

+21%+600

bps+90% +134% +£1.8m

4

Delivering on our objectives

Clear Strategic Focus

• Focus on growing core brand assets

• Continued product innovation for existing brands; launch new brands to disrupt high-

growth categories

Strong Organic Growth• Organic growth of 21%; retail footprint tripled and DTC platform expanded

• UK performance robust with Skinny Tan and Roots delivering strong growth

Improving Operating

Margin

• Operating margin of 11%, up 470bps

• Coconut Water Mist and Wonder Serum spray generated higher than average unit pricing

Improving Returns

• Adjusted EBITDA growth of 90% with margins rising by 420bps

• Material improvement in ROCE to 13.7% whilst £3.7m invested across marketing

initiatives and DTC customer acquisition

Brand and Social Value• Improving brand profiles and high customer ratings of topical brands

• Increasing sustainability drives

5

Focused Strategy to Deliver on FY2020 and Beyond

Expanded retail footprint and

DTC channel

• FY contribution from Boots in

FY2020

• Stronger DTC channel• Revenue

£12.9m

• PBT

£1.4m

Skinny Tan

• Exclusive lines to be launched in the

UK to mirror Wonder Serum success

• DTC launches in the USA and

Australia

Roots

• Increased investment and store

presence in Boots

• New product development and

international markets

Charles & Lee

• To be launched in the US and UK

markets through DTC

• Continued range expansion with

innovative new products

Life Sciences

• Two distribution agreements with

minimum-order quantities in excess of

6,000 for the first contractual year

• Regulatory approvals expected in

multiple markets

New category launch

• Innovative new topical product

• Intended to disrupt large category

• Revenue

£15.8m

• PBT

£2m

* FinnCap forecast

Supply chain consolidation to ensure

inventory management has the capability

to support expected growth

FY2019 Stronger customer reach Disrupting new markets Growing our portfolio FY2020

6

Our Growing Retail Footprint

0

500

1000

1500

2000

2500

2018 2019

Skinny Tan store numbers

0

400

800

1200

1600

2000

2018 2019

Roots store numbers

0

200

400

600

2018 2019

Charles + Lee store numbers

800

2,300

3X 4.5X

400

1,800

46

496

11X

7

Growing DTC Platform

DTC Customer Base

+48%

8

• New multiplatform DTC strategy including Instagram, Google, Ad Roll

and Taboola

• DTC customer base grew strongly, delivering record numbers of

orders in H2 2019

• Realising our investment through creative campaigns

Our engine for growth

Revenue

+22%

Self-Tanning

• Skinny Tan revenues up 16% to £11m

• Number of SKUs increased from 45 to

58 in FY 2019

• Brand secured the number two or

three self-tanning brand in Boots

(depending on the period)

• Brand yet to benefit from a full year in

Boots

• Successful campaigns in Boots and

Superdrug

• Exclusive lines to be launched in the

UK to mirror Wonder Serum success

• Skinny tan the top 3 brand in category

by revenue

Boots and Wonder Serum

• Highly innovative

• Exclusively in Boots

• Regularly the No.1 SKU across the total

category during tanning season

• Increased average basket size in DTC

Superdrug and Moisture Mousse

• Exclusive in Superdrug

• New limited-edition products agreed for

listing

• Plans to introduce more exclusive SKUs

for next tanning season

9

Haircare

• Revenue up 36% to £1.3m

• Expanded retail footprint to 1,800

from 400 stores (Boots, Superdrug,

Tesco, Asda)

• 14 SKUs (5 at launch)

• Doubled shelve presence in Boots

(July 2019) to be supported by

marketing campaign

• First retail distribution secured in

Canada

10

Skincare

• Revenue up c.106% to £0.2m

• Expanded retail footprint to 496

stores (30 in FY 2018)

• 14 SKUs (8 at launch)

• Entry into New Zealand and South

Africa

• To be launched in the US and UK

markets through DTC

• Range to be expanded with

innovative new products

11

Prolong

Prolong

• Revenue up 195% to £0.3m

• Generated high gross margins – in

excess of 65%

• Prolong to benefit from FY

contribution from US and Australia

• Two new distribution agreements

agreed with orders in excess of

6,000 for first year

• Regulatory approvals in multiple

countries in process

12

Growlase

Growlase

• Expected launch in FY 2020

• Finalised branding and formulation

of wet products

• Proven results

• Well-positioned for DTC platform

13

New Category

New topical brand

• New category to be launched

exclusively across all Superdrug

stores in H2 FY 2020

• Revenue contribution to be more

keenly felt in FY2021

• Innovative skincare related products

with initial nine SKUs

• Significant opportunity for product

line extensions

• Major cross-selling opportunity to

the Skinny Tan DTC consumer base

• Lack of innovation in the category

presents opportunity for disruption

??

??

??

Innovative new brand

in a large category

14

? ? ?

Sustainability Drives

Working towards a sustainable future

• All skin and haircare brands are cruelty free

and 100% vegan friendly

• Majority of packaging is recyclable and

minimal by design

• Specifications amended to eliminate excess

packaging

• Recycled plastic to be introduced

progressively

• New category utilises sugar cane tubes -

100% biodegradable and sustainable

15

Outlook

• Trading is in line with market expectations; these remain unchanged for the full year

• For the four months ended 31 October 2019, revenue is up 38% versus the prior year

• Skinny Tan to benefit from full year contribution from Boots

• New retail and DTC channels added in the UK, US and Australia. Multiple distributors appointed globally

• Continued investment in DTC through the addition of AI

• Prolong to benefit from full year of sales

• Launch of innovative new brand expected to disrupt a large category

16

17

Appendix

Strong Track Record of Growth

2013 - 2015 2016 2017 2018 2019

• Founded in 2013

by Haris

Chaudhry

• In 2015

InnovaDerma

acquires Skinny

Tan for

AUS$50,000

• InnovaDerma

lists on the

London Stock

Exchange

• Skinny Tan

revenue grows

10-fold in

revenue. Group

revenue grows to

c.£4.3m and

op.profit of £0.2m

• Raises c.£1.3m

• Acquisition of

Charles + Lee,

Stevie K and

Prolong

• Launch of Roots

into Superdrug

• Revenue grows

to c.£8.9m and

op.profit of £1m

• Raises £4.4m

• Roots secures

ranging in Tesco

• Skinny Tan

secures ranging

in Boots

• Revenue grows

to £10.7m,

op.profit of £0.7m

• Skinny Tan

launches in

Boots

• Prolong secures

distribution

agreements

• DTC delivers

record orders

• Revenue grows

to £12.9m and op

profit of £1.4m

18