Partnership with GO-TO and Equity Raising Presentation
Key risks
the anticipated cost of the facility being greater than expected due to unexpected delays, cost blowouts, interruptions, industrial action, inclement weather, lockouts, government mandated lockdowns, unavailability of raw materials or human capital due to the effects of the COVID-19 pandemic;
delays due to not being able to find a suitable site, construction partner or any delays in planning permits or approvals for the site;
a)
b)
c)
any unexpected site contamination or the need for remediation;
d)
e)
f)
the unavailability or delay in the commissioning of any of the equipment required for manufacturing or the lack of skills available to commission the equipment;
g)
the expected manufacturing efficiencies do not materialise and the anticipated margin improvements are not achieved;
not being able to transfer manufacturing from the current site to the new facility successfully;
the inability to successfully transfer sufficient skilled employees from the existing site to the new site or the unexpected impact of higher than budgeted redundancies;
the inability to successfully transfer the targeted US products to the new facility; and
h)
c)
the anticipated demand for products which precipitated the plan for the new facility does not materialise, impacting on the financial business case for the facility..
New product risk
.
BWX's new products may not be as successful as anticipated, which could have a material adverse effect on BWX's business, financial condition or results of operations. A failure to successfully develop and commercialise these products could lead to loss of opportunities and adversely impact BWX's operating
results and financial position. Each new product launch carries risks, as well as the possibility of unexpected consequences, including:
the advertising, promotional and marketing strategies for new products may be less effective than planned and may fail to effectively reach the targeted consumers;
product purchases by consumers may not be as high as anticipated;
the Company may experience product shortages and/or product returns exceeding expectations as a result of new product launches. In addition, retailer space reconfigurations may be impacted by retailer inventory management or changes in retailer pricing or promotional strategies;
costs may exceed expectations as a result of the continued development and launch of new products, including, for example, advertising, promotional and marketing expenses, sales return expenses or other costs related to launching new products; and
product pricing strategies for new products may not be accepted by retail customers or their consumers, which may result in sales being less than anticipated.
Growth risk
Should the Company's growth accelerate at a higher rate than anticipated, the Company may, through lack of availability of materials or packaging, inability to scale production in a timely manner, lack of manufacturing capacity, lack of suitable labour or other unforeseen circumstances, be unable to supply its
products in a timely manner to meet the demand of its customers. Should this occur the Company may risk the loss of either third party manufacturing clients or suffer a reduction in the customer base for its own products. Such events could have an adverse affect on both the reputation of the Company as well
as its financial results.
Customer credit risk
A sudden disruption in business conditions or a general economic downturn may adversely affect the financial strength of BWX's retailer customers. A general decline in economic conditions in Australia, the US or any other jurisdiction where BWX distributes its products either currently or in the future, may
negatively impact the financial position of BWX's retailer customers. The financial difficulties of a retailer customer could cause BWX to reduce or cease business with that customer. BWX may also decide to assume more credit risk relating to the receivables from that retailer customer. BWX's inability to collect
receivables from one or a group of retailer customers could have a material adverse effect on the Company's business, results of operations and financial condition. If a retailer customer were to go into liquidation, BWX could incur additional costs if the Company chooses to purchase the retailer customer's
inventory of BWX's products to protect its brand equity.
Reliance on key management
BWX, and each of its businesses, depend substantially on its key management, the loss of whose services might significantly delay or prevent the achievement of its business strategy.
The ability of BWX to retain and attract qualified individuals is also critical to its success. BWX may not be able to attract and retain suitable individuals currently or in the future on acceptable terms, or at all, and the failure to do so may adversely affect BWX's business.
STRICTLY CONFIDENTIAL
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