Partnership with GO-TO and Equity Raising Presentation
Key risks
This section includes details of the key risks attaching to an investment in shares in BWX including keys risks relevant to the proposed acquisition of a majority stake in the 'Go To' business by BWX (Partnership). These risks may affect the future operating and financial performance of BWX, the value of BWX's
investment in the Partnership and the value of BWX shares. Before deciding whether to invest in BWX shares, you should consider whether such an investment s suitable for you having regard to publicly available information (including this Presentation), your personal circumstances and following consultation
with a financial or other professional adviser. Additional risks and uncertainties that BWX is unaware of, or that it currently considers to be immaterial, may also become important factors that adversely affect BWX's operating and financial performance.
You should note that the occurrence or consequences of many of the risks described in this Section are partially or completely outside the control of BWX, its directors and senior management. Further, you should note that this section focuses on the potential key risks and does not purport to list every risk that
BWX may have now or in the future. It is also important to note that there can be no guarantee that BWX will achieve its stated objectives or that any forward looking statements or forecasts contained this Presentation will be realised or otherwise eventuate. All potential investors should satisfy themselves
that they have a sufficient understanding of these matters, including the risks described in this section, and have regard to their own investment objectives, financial circumstances and taxation position.
The risks described in this Section are categorised as follows:
(1) specific risks of an investment in BWX and risks associated with the proposed Partnership; and
(2) general risks and risks associated with the Offer.
1. SPECIFIC RISKS OF AN INVESTMENT IN BWX AND RISKS ASSOCIATED WITH THE PARTNERSHIP
COVID-19 risk
Due to the COVID-19 global pandemic, there are a number of additional risks faced by BWX and its businesses. These include the risk of:
BWX and its supply chains being interrupted due to lockdown or mandatory quarantine, impacting supply of products;
a)
retail partners of BWX being unable to operate due to lockdown or mandatory quarantine, impacting sales;
b)
key distributors or retailers of BWX or Partnership products being impacted by store closures;
c)
BWX or its manufacturing partners being unable to operate their factories due to lockdown or mandatory quarantine, impacting supply of products;
d)
e)
f)
g)
h)
BWX not being able to effectively manage its workforce during any periods of lockdown or mandatory quarantine, impacting on its ability to execute on its business strategy;
customers of BWX ceasing to operate and BWX not being able to collect outstanding receivables or customer materially adjusting trading terms, impacting BWX's net revenue;
the demand for the higher-end products of BWX ceasing due to lockdown or mandatory quarantine, impacting on the profit margins of the BWX business; and
a general downturn in the global economy due to the COVID-19 pandemic causing consumers to reduce discretionary purchases, impacting on the overall sales of BWX.
Business Strategy Execution
BWX's success will depend on its ability to successfully execute its business strategy. BWX's future growth, profitability and cash flows depend on the ability of BWX's management to successfully execute its business strategy, which is dependent on a number of factors, including its ability to:
develop its brands portfolio through new product development and market execution;
ensure the brands of BWX deliver their promise of natural beauty without reliance on synthetic products while delivering efficacious results at a reasonable price;
identify and support new and existing brands with the potential to develop into global brands;
innovate and develop new products that are appealing to consumers;
continue to expand its distribution channels within existing geographies to increase market presence, brand recognition and sales;
continue to expand its distribution into direct to consumer channels;
successfully expand into priority international markets;
continue to expand its market presence from pharmacy in Australia to grocery and mass market, from the natural channel to the mass market in the USA and to successfully expand the Sukin brand in the mass market in the USA;
STRICTLY CONFIDENTIAL
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