Partnership with GO-TO and Equity Raising Presentation
Key risks
expand margins through sales growth, the development of higher margin products and supply chain integration and efficiency initiatives;
successfully execute on joint business plans with key customers to grow sales with select business partners;
extend its brands into the other segments of the beauty and personal care market in which BWX competes; and
effectively manage capital investments and working capital to improve the generation of cash flow.
There can be no assurance that BWX can successfully achieve any or all of the above initiatives or anticipated time frames. The failure by BWX to successfully execute its business strategy could have a material adverse effect on the Company's business, financial condition and results of operations.
Competition risk
The beauty and personal care market is highly competitive, and if BWX's customers and partners are unable to compete effectively, the Company's results may suffer. BWX faces competition from companies throughout the world, including large multinational consumer product companies. Some of these
competitors have greater resources than BWX and may be able to respond more effectively to changing business and economic conditions. BWX's products compete with other widely advertised brands. Competition in the beauty and personal care market is based on pricing of products, quality of products and
packaging, perceived value and quality of brands, innovation, in-store presence and visibility, promotional activities, advertising, editorials, e-commerce and other activities. BWX cannot predict the timing and scale of its competitors' actions in these areas or whether new competitors will emerge in the beauty
and personal care market, including competitors who offer comparable products at more attractive prices. In addition, further technological breakthroughs, new product offerings by competitors, and the strength and success of competitors' marketing programs may impede BWX's growth and the
implementation of its business strategy. BWX's ability to compete also depends on the following factors:
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the continued strength of its products and brands;
ongoing growth and innovation in the skin care and hair care segments;
the success of BWX's branding, execution and integration strategies;
the successful management of new products;
successfully entering new markets and increasing penetration in existing geographies;
the success of business acquisitions; and
its ability to protect the Company's intellectual property.
Partnership risk
The proposed Partnership poses a number of additional risks to BWX and its businesses, including a risk that BWX and Go To management may not be able to maintain and grow the Partnership in an efficient, effective and timely manner without disruption to their respective businesses. There is also a risk that
the Partnership structure is unsuccessfully implemented and the ongoing governance of the Partnership by BWX management and Go To management is disrupted or does not operate in the manner envisaged by BWX which adversely affects the Partnership's financial performance which in turn affects the
value and performance of BWX's investment in this business.
There are risks associated with:
the shareholders agreement to be entered into between BWX and Go To, that governs the Partnership and operations of the Go To business; and
the licence deed between the Go To business and its founder and brand ambassador for certain intellectual property integral to the Go To business.
The operation of certain provisions, termination or breach of any of the above agreements for any reason could have an adverse affect on the Partnership and BWX's investment in the Go To business.
Synergies Risk
On completion of the acquisition of a majority stake in the Go To business, there is a risk that the expected synergies for both BWX and Go To products may not be realised to their full extent or at all. Furthermore, the expected synergies may be realised over a longer period or involve greater costs to achieve
than anticipated.
The ability to realise the expected synergies will be dependent on, among other things, the success of management in maintaining and growing the Partnership in an efficient, effective and timely manner without disruption to the respective businesses.
There is a risk that any issues arising from the Partnership not being implemented in the desired or effective manner will result in key personnel, distributors and/or customers departing the business and increased expenses.
STRICTLY CONFIDENTIAL
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