Announcement PDF H1 FY24 Results Presentation 29 August 2024 Disclaimer This presentation has been prepared by Elixinol Wellness Limited (Company). It contains general background information only which is current at the date of this presentation unless otherwise specified. It contains selected summary information and does not purport to be all-inclusive, comprehensive or contain all information that may be relevant, or which a prospective investor may require in evaluating a possible investment in the Company. Prospective investors should not rely on the information contained in this presentation and must satisfy themselves as to the accuracy of all such information. This presentation has been prepared based on information available at the time of preparation and is subject to change without notice. This presentation is provided for general information purposes only. 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This Presentation is current as of 30 August 2024. 2 H1 FY24 Performance Overview H1 FY24 Scorecard Cost Efficiency Sales Growth • Impressive Revenue Growth: Group revenue of $6.8M* in H1 FY24 vs $3.5M H1 FY23 • 9% Cost Reduction in H1: Impressive sales growth and cost cuts set up H2 for profitability • Record Australian revenue : $5.8M sales (+ 174%) following successful integration of TSN • Optimised Operations: Streamlined operations with further cost out in H2. • Retail wins across Grocery, Major Retailer and Distributor channels • Strategic Investment: Managed transition costs to reset the cost base for future efficiency * $6.8M sales in H1 includes only 3 months of Ananda Food . Ops. Optimisation Market Expansion . • Retail Expansion: Extended Mt Elephant range in Coles, boosting market presence • Winning Team: Rebuilt a lean, effective team postmerger to drive growth. • New Product Launches: Successful rollout of Hemp Foods Australia functional foods range, targeting health-conscious consumers • Successful Ananda Food Integration: beginning to yield growth and cost efficiencies • Positive EBITDA in the Americas: Achieved positive EBITDA contribution in H1 FY24 Financial Highlights Revenue ($M) • Australia’s expanded House of Brands dominates with H1 sales surging to $5.8M (+174% v H1 FY23) • Promising H2 Outlook: H2 revenue target of $9.2$10M, with the US poised for renewed growth as focus transitions from efficiency to expansion • Reaffirming 2024 revenue guidance of $16M-$20M $M Revenue Growth $10.0 $9.0 $8.0 $7.0 $6.0 $5.0 $4.0 $3.0 $2.0 $1.0 $- H1 FY23 EBITDA Enhancement • • • Relentlessly driving EBITDA improvement through operational efficiencies, cost control, and margin enhancement Q2 FY24 EBITDA temporarily impacted by jump in expenses, including approximately $200K in nonrecurring costs related to dual facilities Breakeven in sight with positive EBITDA in 2024 as synergies from the TSN (Aug 2023) and Ananda Food (late March 2024) acquisitions are fully leveraged H2 Americas H1 FY24 H2 (F) Australia Adjusted EBITDA ($M) $0.4 $0.2 $-$0.2 -$0.4 -$0.6 -$0.6 -$0.8 -$1.0 -$1.4 -$1.6 -$1.8 -$0.9 -$1.0 -$1.2 -$1.4 -$1.4 -$1.6 Q1 FY23 5 Q2 Q3 Q4 Q1 FY24 Q2 Q3(F) Q4(F) Financial Snapshot (P&L) H1 FY24 $(M) 6.8 H1 FY23 $(M) 3.5 Cost of goods sold (4.4) (1.9) Gross Profit 2.4 1.6 GP Margin (%) 35% 45% Operating expenses (4.1) (4.5) Non-operating income 0.2 0.3 Adjusted EBITDA (1.5) (2.6) Depreciation (0.5) (0.3) Impairment of assets (0.1) (0.3) Share-based payments (0.2) (0.4) Non-recurring expenses (0.3) - Interest income/(cost) - 0.1 Profit/(loss) before tax (2.8) (3.4) - - (2.8) (3.4) Revenue Tax expense Profit/(loss) after tax Impressive Revenue Gains • Group revenue up 96% growth YoY driven by EXL’s expanded House of Brands following TSN and Ananda Food acquisitions, and strong at HFA Margin Dynamics- Sales Mix Effect • The average H1 margin fell from 45% to 35%, largely due to a shift in the sales mix and weaker performance from high-margin US sales • Supply chain pressures also impacted margins but should ease in H2 as rebates and raw material substitutes come into play • Completion of US transition to an e-commerce business model will boost high-margin US sales in H2 Operating Expenses • Down 9% YoY, reduced significantly to 60% of H1 FY24 revenue from 128% a year ago, showcasing a 53% improvement Adjusted EBITDA • Losses improved by $1.1M 6 Segment Performance A$M Revenue Gross profit GP% Operating expenses Other income Adjusted EBITDA* Australia H1 H1 FY24 FY23 5.8 2.1 1.7 0.7 30% 31% (2.4) (1.1) (0.7) (0.4) Americas H1 H1 FY24 FY23 1.0 1.3 0.6 0.8 64% 63% (0.7) (2.1) 0.2 0.3 0.1 (1.0) Corporate H1 H1 FY24 FY23 (0.9) (1.4) (0.9) (1.4) * Adjusted to exclude non-cash impairments, share-based payments and non-recurring expenditure Strong Sales in Australia • Revenue surged from $2.1M to $5.8M, driven by robust sales performance, expanded operations, and the successful launch of new products • Gross profit increased by $1M with stable gross profit margin of 30%-31% • Operating expenses temporarily doubled including approximately $0.2M in non-recurring costs related to dual facilities • TSN and Ananda acquisitions position the Company for sustained growth. Efficient Corporate Management • Corporate expenses down by $0.5M in H1 FY24 Strategic Focus in H2 • • • Optimise operating costs in Australia Revitalise Sales in the America Targeting margin enhancement (38% - 39%) Positive EBITDA in the Americas • Temporary challenges maintaining sales momentum during transition to e-commerce model • Stable gross profit margin reflects effective cost control with operating expenses down significantly by $1.4M • 7 a Positive Adjusted EBITDA of $0.1M compared to loss of $1.0M in H1 FY23 Financial Position Current assets Cash and cash equivalents Trade & other receivables Inventories Assets held for sale Other Total current assets Non-current assets Property, plant and equipment Investments Intangible assets Other Total non-current assets Total assets Liabilities Trade and other payables Other current liabilities Non-current liabilities Total liabilities Net assets Current Asset Stability 30 Jun 2024 ($M) 31 Dec 2023 ($M) 1.6 2.0 4.1 0.6 8.2 0.7 1.7 3.7 1.5 0.6 8.2 Increase in Cash Reserves 1.4 2.5 0.1 4.0 12.2 0.9 2.3 0.3 3.5 11.7 • 2.1 2.4 0.3 4.8 7.4 2.1 2.8 0.3 5.2 6.5 • • Demonstrating effective management of short-term resources focused on inventory Proceeds from divestment of non-core investment ($2.3M) and better cash flow management Reduced Liabilities Reduction in short-term financial obligations and more efficient debt management ($1.8M facility to support working capital) Enhanced Net Asset Position • Improvement in overall financial health with net assets up $0.97M Poised for Stability and Growth • Asset trend (stable current and rising non-current assets) reflects EXL’s strategic investments to deliver sustainable long-term growth 8 H1 FY24 Cash Flow H1 FY24 $(M) H1 FY23 $(M) Operating Cash Flow Cashflow from operating activities (2.1) (0.6) • Cashflow from investing activities 0.4 (1.0) Cashflow from financing activities 2.6 1.7 Increase in operating cash burn due to inventory build and higher operating expenses as part of TSN and Ananda integration Net increase/(decrease) in cash 0.9 0.1 • Normalised operating cash burn 61% lower than a year ago Opening cash and cash equivalents 0.7 2.9 • Streamlined operations to yield significant cost savings in H2, positioning the Group for operating profit FX impact - - Closing cash on hand 1.6 3.0 Positive Net Cashflow • Positive cash flows from investing and financing activities compensated for higher operating expenses during H1 FY24 • H2 focus on strategic cash management and operational efficiency for long term growth 9 House of Brands House of Brands H1 Sales Performance H1 Sales Performance H1 Sales Performance • 44% growth year-on-year • Hemp Ingredients • Protein products, • Functional Seed Mixes (Grocery ) • 68%* growth year-on-year • New SKUs • Expanded distribution, • Increased customer loyalty • 25% lower year-on-year • Out of stock SKUs • Transitional website issues H2 Growth Strategy H2 Growth Strategy H2 Growth Strategy • Leverage FODMAP certification and • Boost Brand Awareness "Making • H1 system and website enhancements education campaigns to expand mainstream hemp usage Magic Moments" campaign • Targeted NPD to improve margins *Proforma data to drive H2 growth and profitability • Already EBITDA positive . House of Brands H1 Sales Performance H1 Sales Performance H1 Sales Performance • Integrating into EXL portfolio • 16%* growth year-on-year • 19% growth year–on-year • Strong national grocery distribution • Market demand increasing: • Major pet retailers engaged for with consistent sales H2 Growth Strategy • Leverage grocery shelf presence to break into the healthy snacking category future expansion • New opportunities for Equine and Cat Litter products in H2 H2 Growth Strategy • Scale through retail partnerships. *Proforma data • Bulk ingredients bolstered by Ananda acquisition H2 Growth Strategy • Collaborative NPD initiatives with key partners to accelerate hemp consumption H2 FY24 Growth Strategy H2 FY24 Scorecard Operational Excellence Sustained Expansion Streamlined Processes & Greater Efficiency Expand Market Presence • Increase Grocery in proven product categories • Pharmacy through strategic partnerships • Capitalise on Australian e-commerce growth (H1 22% YoY) to bolster Group margin • Increase operational efficiency with increased post-merger volume through EXL facilities • Optimise supply chain (HFA Protein and Mt Elephant) for margin improvement • NPD focus on existing SKU’s quality & appeal Ops. Optimisation Market Expansion Leverage Established Brands • • Expand hemp dominance across mainstream grocery and niche health segments. Targeted NPD aimed at the healthy snacking market projected to reach US$98bn (globally), 5.8% CAGR (2020-25)* * Euromonitor Global Health and Wellness Snacks market (2021) . Focus on High-Growth Segments • NPD aligned with high-growth healthy snacking and high-protein trends • Capture share of global healthy snack market with innovative, nutrient-rich products 2025 and Beyond 2024 Sales Mix Bulk Ingredient Mount Elephant Expansion • Capture share of $734M baking mix market • Expand Mt Elephant's range with 2-4 new SKUs • Capitalise on "conscious indulgence" movement Soul Seeds Repositioning • Expand brand footprint into $2.2BN healthy snacking market • 6-8 new savory, high protein SKUs • Into mainstream Grocery Field Day Growth • Target $85M Australian Pet Supplement market • Launch 6 new SKUs • Expansion in specialist pet, online pet Elixinol Scaling • Strengthen Elixinol in US$7.7BN CBD market • Leverage wholesale growth • Enhance SEO strategies using brand heritage Hemp Foods Australia Growth • Drive mainstream uptake of hemp (FODMAP) • Hemp protein innovation • Expand successful functional seed mixes in major retail • Leverage growth in Nut, Seed, Trail Mix Category Hemp Foods Australia 13% Mt Elephant 39% 16% Field Day Ananda / Soul Seeds 1% 10% Elixinol USA 21% 9% 13% 2027 Sales Mix 36% 4% 20% 18% Australia Baking Mixes (Bakery and Cereals) Market Size, Growth and Forecast Analytics to 2028 Health Snack Food Production in Australia - Market Size, Industry Analysis, Trends and Forecasts (2024-2029) PET NUTRITION IN AUSTRALIA ANNABELLE BLUE | AUSPAC MARKET RESEARCH | AUGUST 2023 Cannabidiol Market Size, Share & Trends Analysis Report By Source Type (Hemp, Marijuana), By Sales Type (B2B, B2C), By End-use (Medical, Personal Use), By Region, And Segment Forecasts, 2024 – 2030 Glanbia Maturals -Healthy Snacking Trends in Europe Thank you!