Elixinol Wellness : FY2021 Results Presentation

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ASX:EXL

FY21

Results

Presentation

February 2022

Disclaimer

This presentation contains summary information about Elixinol Wellness Limited only(Elixinol Wellness) and its subsidiaries and their activities.

The i formation in this presentation does not purport to be complete. It should be read in conjunction with Elixinol Wellness' other periodic and continuous disclosure announcements lodged with the Australian Securities Exchange, which are available at www.asx.com.au.

The information contained in this presentation is not investment or financial product advice and has been prepared without taking into account the investment objectives, financial situation or particular needs of any particular person. Before making an investment decision, investors should consider the appropriateness of the information having regard to their own investment objectives, financial situation and needs and seek independent professional advice appropriate to their jurisdiction and circumstances.

useTo the maximum extent permitted by law, no responsibility for any loss arising in any way from anyone acting or refraining from acting as a result of this information is accepted by Elixinol Wellness, any of its r lat d bodies corporate or its directors, officers, employees, professional advisers and agents (Related Parties). No representation or warranty, express or implied, is made by any person, including Elixinol Wellness and its Related Parties, as to the fairness, accuracy, completeness or correctness of the information, opinions and conclusions contained in this presentation. An investment in Elixinol Wellness securities is subject to investment and other known and unknown risks, some of which are beyond the control of Elixinol Wellness or its directors. Elixinol Wellness does not guarantee any particular rate of return or the performance of Elixinol Wellness securities. Past performance information given in this presentation is given for illustrative purposes only and should not be relied upon as (and is not) an indication of future performance.

This presentation contains certain forward‐looking statements with respect to the financial condition, results of operations and business of Elixinol Wellness and associated entities of Elixinol Wellness and certain plans and objectives of the management of Elixinol Wellness. Forward‐looking statements can be identified by the use of forward‐looking terminology, including, the terms "believes", ersonal"estimates", "anticipates", "expects", "predicts", "intends", "plans", "goals", "targets", "aims", "outlook", "guidance", "forecasts", "may" or "will", and similar expressions. These forward‐looking statements

include all matters that are not historical facts. Such forward‐looking statements involve known and unknown risks, uncertainties and other factors which because of their nature may cause the actual results or performance of Elixinol Wellness to be materially different from the results or performance expressed or implied by such forward‐looking statements.

Such forward‐looking statements are based on numerous assumptions regarding Elixinol Wellness' present and future business strategies and the political, regulatory and economic environment in which Elixinol Wellness will operate in the future, which may not be reasonable, and are not guarantees or predictions of future performance. No representation or warranty is made that any of these statements or forecasts (express or implied) will come to pass or that any forecast result will be achieved. Forward‐looking statements speak only as at the date of this presentation and to the maximum extent permitted by law, Elixinol Wellness and its Related Parties disclaim any obligation or undertaking to release any updates or revisions to information to reflect any change in any of the information contained in this presentation (including, any assumptions or expectations set out in this presentation).

All figures in this presentation are A$ unless stated otherwise and all market shares are estimates only. A number of figures, amounts, percentages, estimates, calculations of value and fractions are subject to the effect of rounding. Accordingly, the actual calculations of these figures may differ from figures set out in this presentation.

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Table of Contents

Vision & Purpose

Executive Summary

Operational Highlights

Group Financial Highlights

FY21 Financial Summary

Business Unit Performance

Digital First Strategy Progress

FY21 Cash Flow

FY21 Financial Position

Outlook & Strategy

Hemp Foods & CBD Outlook

Global Strategy & Initiatives

New Product Development

Summary

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Elixinol CBD Brand (Digestible & Topical Products)

Hemp Foods Australia (Foods, Supplements & Skincare)

VISION

To create a healthier everyday

life through the power of hemp and plant-based products

AMBITION

Building a global, hemp-centric wellness consumer products company

PURPOSE

Changing lives naturally!

Quality &	True	Natural &
Efficacy	Heritage	Sustainable

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FY21 Executive Summary

Continued business optimisation efforts drive 50% improvement in Adjusted EBITDA result (FY21 vs pcp) onlydespite 38% revenue declines. Additional significant

cost reduction initiatives underway.

While revenues were down 38% from FY20, Elixinol also delivered a

39% reduction in normalised operating cash outflows to $22.5m (FY20: $37.0m), improved its profitability and reduced Adjusted EBITDA losses

useto $11.5m (FY20: $23.2m loss). ersonal

Elixinol Americas continued its transformation agenda towards a capital light and e-commerce led branded wellness products business. A more focused channel and product strategy delivered a 14 pts Gross Margin improvement to 71% (FY20: 57%) whilst operating expenses were reduced by 40% to $10.6m (FY20: $17.6m). This resulted in a 61% Adjusted EBITDA improvement to a loss of $5.5m (FY20: loss of $14.2m). Growth focus on e-commerce expansion supported by new product launches.

Hemp Foods Australia has increased its importance to the Group result accounting for 44% of total revenues at near break-even levels. After a soft start, revenues improved throughout the year quarter by quarter resulting in a stable revenue but significant profitability gains following further portfolio optimisation and enhanced channel strategy geared towards margin accretion. E-commerce grew by 36% materially contributing to an overall Gross Margin improvement of 7 pts to 34% (FY20: 27%). Adjusted EBITDA improved 33% to near break-even at a $0.2m loss. Growth focus on expanding national distribution and portfolio expansion.

Europe and UK saw a strategic shift in operations following extended COVID-19 lockdowns that severely impacted traditional retail sales and a stale-mate in the UK CBD industry following a year of regulatory uncertainty during the roll out of the Novel Foods legislation. The Group consequently disestablished its unprofitable direct operations and transitioned to a licensing model at the end of FY21. Consequently Adjusted EBITDA improved by 49% to a loss of $2.3m (FY20: loss of $4.5m).

Strategic Review to maximise shareholder value: The Board has commenced a strategic review which will include consideration of merger, sale or other options for the Company as a whole or its business units. Further significant opportunities identified to reduce corporate overhead cost.

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