Live Verdure : LV1 June 2022 Quarterly Business Review & Appendix 4C

ASX Release 29 July 2022

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LV1 June 2022 Quarterly Review & Appendix 4C

Live Verdure Ltd (ASX: LV1) ("LV1", "Live Verdure" or the "Company") is pleased to release our quarterly activities report and Appendix 4C for the three months ended 30 June 2022.

June Quarter Highlights

• Record revenue of $1,912,000 for FY2022 (unaudited) an increase of 215% over FY2021.
• Cash Receipts from customers of ~$511,000 for the quarter.
• Sales through the Amazon US channel continue to scale - increasing ~81% relative to the March 2022 quarter.
• Company-widefocus on efficient marketing spend to drive profitable customer acquisition - with cash burn for the quarter reduced by ~23% from the previous quarter.
• Subsequent to period end, the Company has seen return on advertising spend (ROAS) increase by ~60%
• Acceleration of inorganic growth pathway driven by strong inbound partnership & acquisition enquiries.

Online Sales and Cash Receipts

The Company is pleased to advise that we have delivered unaudited sales for the quarter of ~$503,000, representing an increase of 182% from the corresponding quarter in 2021.

Live Verdure also advises that we have recorded cash receipts of ~$511,000 during the quarter, excluding government grants.

Live Verdure Ltd ACN: 614 347 269
Level 21, 459 Collins Street, Melbourne, Victoria 3000
W: liveverdure.com.au | T: [phone] | E: [e-mail]	1

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In line with Live Verdure's DtoC business strategy, online sales of ~$499,000 made up ~99% of total sales for the quarter.

LV1 continued implementing the profitable customer acquisition strategies outlined in the March 2022 quarterly review. These strategies resulted in only a 2% decrease in the number of orders but delivered significant cost reductions.

Since quarter end, Live Verdure has continued to optimise our online advertising strategy, reducing spend even further. These steps have significantly improved the cost of acquisition (CAC) and resulted in a profitable ROAS.

Graph 1: Summary of Online Sales by Quarter

Marketing Optimisations Successfully Implemented

Live Verdure continues to optimise our cost base and implement the strategic initiatives outlined in the March 2022 quarterly review, such as:

• Completed works to bring the media buying function in-house to ensure reduced agency and headcount costs, whilst also achieving an improved quality of content.
• Integrating content creation within the media buying function to achieve a more cohesive and streamlined workflow.
• Identifying synergies within the marketing team to improve efficiency and further reduce costs in future quarters.

The above initiatives have positively impacted Live Verdure's operations and performance. Some examples of these improvements include:

• Optimising continued revenue growth across all channels - including Amazon.

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• Optimised media buying activity to deliver a significantly improved return on advertising spend in June and July, with ROAS improving by ~15% in June and ~60% in July.
• Online Marketing spend reduced by 11% (compared to the previous quarter).
• Initial staff and agency headcount reductions delivered a 59% saving (compared to the previous quarter).

We expect to see further positive impacts of these initiatives reflected in subsequent quarters.

Inventory Management

Company management remains cognisant of global supply chain issues impacting all aspects of business, including but not limited to shortages of raw ingredients and packaging availability. We are pleased to report that so far, LV1 has successfully navigated these supply chain disruptions to ensure we have sufficient inventory to meet future customer demand.

We currently have in excess of ~$579,000 of inventory on hand.

Key Direct to Consumer Metrics

In addition to increasing online sales, LV1 committed to driving improvement across several additional key categories - with particular emphasis on Repeat Customer Rate to drive improved ROAS. These improvements are outlined in the table and discussed in further detail below.

		For the 3 months ended:
	June 2021	Sept 2021	Dec 2021		Mar 2022	June 2022
Online Sales	~$164,000	~$323,000	~$509,000		~553,000	~499,000
First Time Customer Average	~$79	~$94	~$95		~$97	~$84
Order Value ("AOV")
Repeat Customer Average	~$93	~$114	~$116		~$117	~$111
Order Value ("AOV")
Repeat Customer Rate	40.1%	28.4%	23.7%		27.2%	32.13%

First-Time vs Returning Customers

During the June 2022 quarter, Live Verdure continued to attract a significant number of new customers. Relative to the previous quarter, we also increased the number of repeat customers, now representing ~32% of total customers. We find this particularly positive as existing customers maintain a higher AOV (~$111) than new customers, which drives a higher, and more profitable ROAS.

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Graph 2: First-Time and Returning Customers - June 2021 to June 2022

AOV for First-Time and Repeat Customers

At $84, the AOV for first-time customers has consolidated relative to the same quarter in the prior year. AOV for repeat customers also improved compared to June 2021 quarter. LV1's conscious steps to achieve these improvements include marketing higher-value items and bundles of products sold together to improve average order value.

Graph 3: AOV for First Time Customers and AOV for Repeat Customers

During this quarter, the AOV for repeat customers was ~$111, which remains exceptional.

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Strong Inbound Partnership & Acquisition Enquiries

During the quarter, the Company fielded a significant number of inbound inquiries regarding companies looking to partner with or be acquired by LV1.

In light of this interest, the Board has resolved to explore all opportunities further and, therefore, has engaged a specialist M&A corporate adviser. This strategy aligns with LV1's long-term strategic objectives, as well as significantly enhancing our medium-term goals of growth and becoming EBITDA positive.

The initial M&A focus is on profitable, small to midsize companies with an established product suite in the Health and Wellness, and Skincare sectors. Our target companies will be founder-led and have established and engaged audiences, ensuring future scalability and continuous growth. Live Verdure will naturally explore any potential synergies.

The Board is confident that we are well-positioned to take advantage of any consolidation in the sector - especially during the current broader market downturn - and leverage our DtoC capabilities and valuable relationships.

Live Verdure will keep the market updated in accordance with our continuous disclosure obligations.

Management of Cash Position

Live Verdure continues to monitor our cash and liabilities position. We are actively taking steps to improve our cash position and reduce our cost base without negatively impacting revenue or the success and growth of our brands.

During the quarter, LV1 significantly reduced online spend and improved ROAS. Further initiatives to be implemented in future quarters will include savings related to; software subscriptions, 3PL and shipping.

During the June 2022 quarter, Live Verdure's expenditure included ~$98,000 on employee benefits, ~$779,000 on advertising and marketing expenses, ~$85,000 on research and development expenses, and ~$154,000 on product manufacturing and operating costs. This expenditure is in line with budget expectations.

Additional Information

The table below illustrates the expenditure comparison against the Company's 'Use of Funds' table in the Prospectus dated 26 October 2020:

Use of Funds	Amounted Budgeted in Prospectus	Actual Amount Spent to Date
Expenses of the Offer	$483,000	$514,000
Sales and marketing	$1,280,000	$3,314,000
Raw materials and packaging supplies	$1,175,000	$1,443,000
Administration costs	$1,857,000	$1,932,000
Research and development	$700,000	$403,000
Total	$5,495,000	$7,606,000

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