Full year results presentation Year ended 30 September 2017 C
Dis isclaim imer For the purposes of this notice, "presentation" means this document, its contents or any part of it, any oral presentation, any question or answer session and any written or oral material discussed or distributed during the presentation. This presentation does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities in the Company, nor shall any part of it nor the fact of its distribution form part of or be relied on in connection with any contract or investment decision relating thereto, nor does it constitute a recommendation regarding the securities of the Company. The information and opinions contained in this presentation are provided as at the date of this presentation and are subject to change without notice. In furnishing this presentation, the Company does not undertake or agree to any obligation to provide you with access to any additional information or to update this presentation or to correct any inaccuracies in, or omissions from, this presentation that may become apparent. You should make your own independent evaluation of the Company and should make such other investigations as you deem necessary. No representation or warranty, express or implied, is given by or on behalf of the Company its directors, officers or employees or any other person as to the accuracy or completeness of the information or opinions contained in this presentation and no liability whatsoever is accepted by the Company or any of its members, directors, officers or employees nor any other person for any loss howsoever arising, directly or indirectly, from any use of such information or opinions or otherwise arising in connection therewith. Certain statements, beliefs and opinions in this presentation are "forward-looking statements". These statements reflect the Company's, or as appropriate, the Company's directors' current expectations and projections about future events. Such forward-looking statements involve 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 materi ally 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 futur e. Forward-looking statements contained in this presentation regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. These forward- looking statements speak only as of their date and the Group and its directors, officers, employees, agents, affiliates and advisers expressly disclaims any obligation or undertaking to supplement, amend, update or revise any of the forward-looking statements contained in this presentation to refle ct 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, except where it would be required to do so under applicable law. As a result of these factors, you are cautioned not to place undue reliance on such forward-looking statements. 1
Hig ighli lights • 35% increase in global pets on plan to 188,000 (2016: 139,000) • 36% increase in Group continuing revenues to £2.53m (2016: £1.87m) • 50% increase in contracted clinics now totalling 1,084 in UK, Europe and US • 29% increase in the number of pets on plan in the UK to 156,000 (2016: 121,000) • £5.9m net cash proceeds after transaction costs from sale of the Premier Buying Group • £3.2m of cash at 30 September 2017 (2016: net cash of £0.4m) • US challenges being addressed Post Balance sheet highlight • £1.5m committed funding facility agreed - provides security of funding and flexibility to consider alternative sources of funding. 2
Busin iness Fundamentals ls • Sticky and diverse customer base • Recurring revenue stream with compound growth • Bespoke scalable IT platform underpinning international operations • No bad debt exposure • Growth opportunity underpinned by cooperation agreements (Mid- West, Zoetis, MVS, VPI, PSI, TVC, MSD France) 3
Premie ier Pet Care Pla lan 4
What are Preventative Healt lth Pla lans? Revenue streams come from: • transaction fee per pet per month (Direct Debit, SEPA, Credit card), plus • set up fee per new pet plus • practice set up fee plus • manufacturer support fees • Our service includes: • Plan pricing • Plan design • Training and process integration • Marketing • Ongoing support and training • Global IT platform and transaction processing 5
Benefits of the Pla lan All parties stand to benefit: • Veterinary Clinics • Distribution • Pet Owners • Manufacturers 6
Strategy 7
Glo lobal IT IT Pla latform • Continued investment in Global IT platform - £196k capex in FY 2017 Customer interface & Global PCP Web Portal Data capture • FY 2017 achievements: • Rollout of portal throughout UK and Europe improving customer experience • Additional functionality to WorldPay Finastra support US GoToBilling BACS Credit Card Active Gateway • Ongoing investment • Ongoing improvements in resilience and security Payment Processing Systems • Enhanced collection methods • Client reporting Citizen NETS SEPA BACS Bank Clearing Clearing Clearing 8
UK UK UK Market Share/Opportunity • UK market continues to present opportunities for growth Independent PVA Pet Care Plan Clinics • 29% annual increase in pets on plan to 8% 156,000 at September 2017 Current PVA PPCP - Market Medivet Opportunity PPCP 3% 57% • 18% growth in clinics operating PPCP Vetpartners 4% • PPCP serves both independent and corporate customers Vets4Pets 9% Linnaeus CVS 1% 9% IVC 9% Total small animal clinics in UK – c4,800 Source: independent market research, company investor presentations 9
Europe - Netherla lands • 190 contracted clinics at 30 September 2017 Rayons • Represents approximately 19% market aantal EGG's North (46) share Middle (37) South (46) Netherlands Market Share/Opportunity • 46% annual growth in pets on plan to 24,000 at September 2017 19% • Acquired customer base of competitor in Netherlands • Customer base being transitioned over 81% coming months • Expected to become profitable during PVA Pet Care Plan FY2018 Market Opportunity Estimated small animal clinics – c1,000 Source: KNMvD: Koninklijke Nederlandse Maatschappijvoor Diergeneeskunde (Royal Veterinary Association of the Netherlands) 10
Europe - France • 50 clinics signed up to PPCP during this year (see map) France Market Opportunity • 33 clinics launched at 30 September 2017 1% • Over 1,000 pets on plan 17% • Initial sign up rates are encouraging • Cooperation agreement with MSD Animal 82% Health producing leads Pet Care Plan primary targets • Cooperation agreement with Clubvet, one Remaining market opportunity of France’s largest buying groups Contracted clinics • Territory showing early promise Estimated small animal clinics Location of contracted clinics – c6,000 Source: l’Ordre national des veterinaires ” ( National Register of Veterinarians) 11
USA • Registered in 22 states (highlighted) • Business focussed in South-Eastern and Mid-West States • Recent cooperation agreements signed with: • Purchases Services Holdings (“PSI”) – Group purchasing organisation with over 4,000 members • The Veterinary Cooperative (“TVC”) – Group purchasing organisation with over 3,000 members • 198 clinics signed contracts to launch PPCP at 30 September 2017 • 92 clinics launched at 30 September 2017 • 4,000 pets on plan • US challenges being addressed. Focussed on: • Improving sign up rates Total small animal • Reducing cancellations clinics – c26,500 • Increasing average clinic size (UK c4,800) • Leveraging partnership agreements 12
Key y Performance In Indicators 13
Glo lobal quarterly colle llection statistic ics • 553,000 transactions in Q3 2017 (equivalent to 2.2m annual transactions) – 38% increase on same quarter last year • Customer spend of £8.25m in Q3 2017 (equivalent to £33.0m annualised spend) • Generates sticky revenues for PVG • 35% increase in pets on plan in last twelve months • 188,000 fee generating pets in September 2017 with growth in all regions # fee generating pets on plan 000's Sep - 16 Dec - 16 Mar - 17 Jun - 17 Sep - 17 UK 121 132 137 145 156 Europe 18 21 22 25 28 US - 1 2 3 4 Total 139 154 161 173 188 14
Glo lobal clin linic ic rela lationships Global Clinic Relationships at 30 September 2017 • In total PVG now has 1,084 clinics UK USA EU 1200 contracted to PPCP 1,084 • Important influence when 1000 negotiating with pharmaceutical 311 manufacturers and 800 wholesalers/distributors NO. OF CLINICS 198 600 1000 400 750 575 440 438 432 200 0 P VG I VC ( UK ) C VS ( UK ) P ETS AT HO ME ( UK ) BANF I ELD ( US ) VC A ( US ) 15
Div iverse Customer Base • Total of 455 contracts with practices throughout UK, EU & US. • Only Medivet, the group’s largest customer practice has over 10,000 pets on plan. • 95% of practices have less than 1,000 pets on plan. 16
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