Sigma Healthcare Ltd · ASX:SIG
Sigma Healthcare — FY2015 Earnings Presentation
27 slides from Sigma Healthcare's earnings presentation, Mar 19, 2015
Slide 1: Full Year Results
For personal use only Full Year Results For period ended 31 January 2015 19 March 2015 Mark Hooper – CEO & Managing Director Jeff Sells – Chief Financial Officer Australia’s Partner of Choice for Health, Beauty and Wellbeing
Slide 2: Important Notice
Important Notice For personal use only The material that follows is a presentation of general information about Sigma's activities current at the date of the presentation. It is information given in summary form and does not purport to be complete. No representation or warranty is made as to its com
Slide 3: 2015 Full Year Results
2015 Full Year Results For personal use only Full Year Overview Mark Hooper Financial Performance Jeff Sells Business Update Mark Hooper 3
Slide 4: Full Year Overview
For personal use only Full Year Overview Mark Hooper CEO & Managing Director
Slide 5: Delivering on our strategy
Delivering on our strategy For personal use only Growing the core – CHS and DDS acquisitions Like for like growth in Amcal and Guardian around 7% in 2H15 Sigma brands moving to fully compliant model – brand standards up 33% Reducing PBS reliance – Private and Exclusive product range exceeds
Slide 6: Achieving results
Achieving results For personal use only Growing Revenue – up 5.7% to $3.1bn, driven by organic growth and growth from acquisitions Reported EBIT – up 11.0% to $78.0m, on a broader revenue base Fully Franked Dividends – two cent Final and one cent Special Working Capital – cash conversion cyc
Slide 7: Financial Summary
For personal use only Financial Summary Jeff Sells Chief Financial Officer
Slide 8: EBIT up 11%
EBIT up 11% For personal use only % $m FY 2015* FY 2014 Change Sales revenue 3,142.1 2,973.5 5.7 BROADENING Gross Profit 234.8 216.9 8.3 THE BASE Other revenue 52.4 51.7# 1.3 Operating costs -201.3 -187.7 7.2 Increased revenue Depreciation & Amortisation -7.6 -6.3 20.0 and EBIT delivered from organi
Slide 9: Revenue & margin drivers
Revenue & margin drivers For personal use only Organic Growth Volumes up 5.3% on prior year (excluding CHS/DDS) Amcal and Guardian like for like sales up around 7% in 2H15, driven by 33% improvement in compliance to brand standards and global sourcing Improved gross margin supported by expande
Slide 10: Continued cost focus
Continued cost focus* For personal use only Warehouse & Delivery costs – remain steady at 3.6% of sales ($111.7m) • Like for like costs up 3.5% despite volumes increasing 5.3%, driven by: • Unit labour productivity improvement of 3.4% • Efficiencies achieved by improved national freight contracts •
Slide 11: Net cash remains strong
Net cash remains strong For personal use only $000 $140,000 $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $0 Net Cash at Cash inflow Acquisitions Capex Proceeds Shares buy Dividend Others Net Cash at 31 Jan 2014 from Payment from sale of back Payment 31 January operating property 2015 activities
Slide 12: Working Capital focus maintained
Working Capital focus maintained For personal use only As at As at As at As at Working Capital $m 31 Jan 31 Jan 31 Jan 31 Jan 2012 2013 2014 2015* Trade Receivables 593 557 522 578 Inventories 214 255 222 252 Trade Creditors -312 -376 -327 -374 Total Working Capital 495 436 417 456 Days Sales Outsta
Slide 13: ROIC maintained on broader earnings
ROIC maintained on broader earnings For personal use only $000 ROIC and Working Capital 650,000 15% 600,000 13% 550,000 11% 500,000 9% 450,000 7% 400,000 5% Total working capital ROIC ROIC calculation – refer to Appendix 2 13
Slide 14: Capital management update
Capital management update For personal use only • Final Dividend of 2 cents per share and Special of 1 cent per share, both fully franked Dividends • Total fully franked dividends since 2011 – 31 cents • Anticipate fully franked dividends into foreseeable future • High payout ratio expected to be ma
Slide 15: Business Update
For personal use only Business Update Mark Hooper CEO & Managing Director
Slide 16: Strategy overview
For personal use only Strategy overview 16
Slide 17: Our collective strength
Our collective strength For personal use only Increased scale Improved brand standards Better Buying Data Analytics Financial Services 17
Slide 18: Better buying and insights
Better buying and insights For personal use only Launched Sigma Generics Program to improve margins for Sigma and customers: • Leverages collective buying strength of Amcal, Guardian and Pharmacy Alliance • Benefits to commence accruing 2H16 Launched unique pharmacy dashboards and reporting tools: •
Slide 19: Sigma Financial Services launched
Sigma Financial Services launched For personal use only Payment Options Payment options for pharmacists Pharmacy Finance Financing assistance Referral Facilitating Fit out Business and fit outs – quick, low cost fit out finance Finance Sigma Rewards Enhanced Sigma Rewards Loyalty program Financial a
Slide 20: Health Services Australia launched
Health Services Australia launched For personal use only • Umbrella for Professional Services campaigns • “In pharmacy” Sleep Apnoea program launched 20
Slide 21: Private and Exclusive Label expansion
Private and Exclusive Label expansion For personal use only Portfolio now exceeds 800 SKU’s Double digit sales growth Strong margins Broadens non-PBS income stream Exclusive to pharmacy 21
Slide 22: 6CPA update
6CPA update For personal use only • Sets the funding envelope for the industry including wholesalers and pharmacists. • Sigma’s approach is co-ordinated through the NPSA as it is an industry based issue • Need to ensure adequate funding is available to support the current system into the future • Fo
Slide 23: Outlook
Outlook For personal use only Revenue and EBIT growth expected to continue from a broader base: Organic growth in existing business (Amcal/Guardian like for like growth around 7% in 2H 2015) Enhanced margins due to full year of expanded Private and Exclusive product range Cost management throu
Slide 24: Thank you
For personal use only Thank you Australia’s Partner of Choice for Health, Beauty and Wellbeing
Slide 25: Appendices
For personal use only Appendices 25
Slide 26: Non IFRS measures
Appendix 1 Non IFRS measures For personal use only ASIC Regulatory Guide 230 Disclosing non-IFRS information In December 2011, ASIC issued Regulatory Guide 230. To comply with this Guide, Sigma Pharmaceuticals Limited is required to make a clear statement about the non-IFRS information included in t
Slide 27: ROIC performance remains strong
Appendix 2 ROIC performance remains strong For personal use only As at As at As at As at As at $m 31 Jan 31 Jan 31 Jan 31 Jan 31 Jan 2011 2012 2013 2014 2015 Net assets 832.9 682.5 610.8 578.8 573.0 Less: Cash and cash (556.9) (148.6) (112.7) (67.5) (34.3) equivalents Add: Interest bearing 354.8 35.