Genomma Lab Internacional SAB de CV Class B · BMV:LAB/B
Genomma Lab Internacional SAB de CV Class B — Investor Presentation (September 2020)
46 slides from Genomma Lab Internacional SAB de CV Class B's investor presentation, September 2020
Slide 1: Investor Relations Corporate Presentation
INVESTOR RELATIONS CORPORATE PRESENTATION Se p t e mb e r 2 0 2 0
Slide 2: Safe Harbor Disclosure
SAFE HARBOR DISCLOSURE This presentation may contain certain forward-looking statements and information relating to the Company that reflect the current views and/or expectations of the Company and its management with respect to its performance, business and future events. Forward looking statements
Slide 3: Who We Are
WHO WE ARE Genomma Lab Internacional, S.A.B. de C.V., is one of the leading pharmaceutical (OTC) and personal care products companies in Mexico with an increasing international presence that develops, sells and markets a broad range of premium branded products, many of which are leaders in their cat
Slide 4: Our Footprint
OUR FOOTPRINT “Innovation is part LatAm 45.1% Points of Sale of our DNA” of net sales 310,000+ Mexico 41.7% of net sales Countries 18 USA 13.2% Production of net sales Facility* 1 1,100+ Brands 40+ employees As of June, 2020 *Manufacturing facility under construction September 2020 4
Slide 5: Consolidated Sales Mix by Category
CONSOLIDATED SALES MIX BY CATEGORY 46.2%(1) 53.8%(1) Total Net Sales Total net Sales Personal Care Over-the-Counter (OTC) (1) As of June, 2020 September 2020 5
Slide 6: Growth Strategy: New Categories
GROWTH STRATEGY: NEW CATEGORIES Antibacterial Categories Razors With Growth Potential Infant Formula Self-Diagnosis September 2020 6
Slide 7: Power Brands in Multiple Categories: OTC
POWER BRANDS IN MULTIPLE CATEGORIES: OTC Pain Relief Cough & Cold Gastro & Anti-Hemorrhoids Antibacterial Anti-mycotics & Isotonic Beverages Self-Diagnosis Infant Formula Sexual Health September 2020 7
Slide 8: Power Brands in Multiple Categories: Personal Care
POWER BRANDS IN MULTIPLE CATEGORIES: PERSONAL CARE Shampoo Hair Care Beauty Creams Skin Care Anti-Acne & Cosmetics Razors September 2020 8
Slide 9: Well Diversified by Region & Currencies
WELL DIVERSIFIED BY REGION & CURRENCIES 100% 100% US Dollar: 13.2% Other currencies: 45.1% International 23.2 1. Argentine Peso 2. Brazilian Real 58.3 3. Colombian Peso 4. Chilean Peso 5. Peruvian Sol 6. Uruguayan Peso 7. Paraguayan Guarani Mexico 76.8 Mexican Peso: 41.7 41.7% 2010 2Q-2020 15
Slide 10: OTC Market Share by Country
OTC MARKET SHARE BY COUNTRY Top Two Countries Highly Fragmented As a percentage of sales By category penetration Hispano OTC position 46.8% 3rd. position PLACE Total OTC 1st MEXICO PLACE 8.8% EUA 0.5% 15.4% position position 1st. 42nd. ARGENTINA PLACE PLACE BRAZIL CHILE ECUADOR PERU COLOMBIA CAM (1)
Slide 11: Corporate Platform Efficiently Supports Growth
CORPORATE PLATFORM EFFICIENTLY SUPPORTS GROWTH September 2020 11
Slide 12: Management Team
MANAGEMENT TEAM JORGE LUIS ANTONIO MARCO BRAKE ZAMORA SPARVIERI CEO CFO COO SEPTEMBER 2018 DECEMBER 2015 APRIL 2014 Prior Experience: Prior Experience: Prior Experience: • Senior Vice President • CCO Cydsa • EVP Sales P&G at Laureate Education • CFO Grupo LALA • 20+ years of Inc. • Strategic & exper
Slide 13: Successful Cost Containment Strategy
SUCESSFUL COST CONTAINMENT STRATEGY Warehouse Space (m2) Corporate Office Space (m2) 165,000 6,000 2,800 36,047 2014 2020 2014 2020 September 2020 13
Slide 14: Cash Conversion Cycle
CASH CONVERSION CYCLE (1) 205 162 158 155 145 144 103 101 101 99 102 (…) Q3'12 Q1'12 Q2'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Prior Management New Management (1) Cash Conversion Cycle = Days of accounts receivable + days of inventori
Slide 15: Financial Position: Net Debt Profile
FINANCIAL POSITION Net Debt Profile 5,724 MXN (million) 5,112 4,991 4,454 4,459 3,980 3,689 3,610 2,575 2012 2012 2013 2013 2014 2014 2015* 2015* 2016* 2016* 2017 2017 2018 2018 2019 2019 2Q-2020 2T-2020 1.9x Net Debt / 1.0x 1.2x 2.3x 2.5x 1.4x 1.4x 1.8x 2.1x EBITDA *Adjusted EBITDA for 2015 and 201
Slide 16: New Growth Strategy
NEW GROWTH STRATEGY 1 Product 3 World-class Innovation Manufacturing & Portfolio & Optimization Supply Chain GROWTH STRATEGY 2 Best In Class Corporate 4 Go-to-market Culture September 2020 16
Slide 17: New Growth Strategy: Product Innovation and Portfolio Optimization
NEW GROWTH STRATEGY 1) Product Innovation and Portfolio Optimization Product line extensions and innovation YTD’20 Net Sales LatAm: +6.9%(1) Solid top-line growth with new brands and categories Meaningful growth and successful execution YTD’20 Net Sales Mexico: +7.2%(1) YTD’20 Net Sales U.S.: +22.2%
Slide 18: New Growth Strategy: Best in Class Go-to-Market
NEW GROWTH STRATEGY 2) Best in class go-to-market Agreement with Top Retailers Reinforcing advertising and visibility Strong strategies to improve visibility among local pharmacies Direct Distribution Partnership Initial launch of +200,000 POS served Suerox® in the U.S. September 2020 18
Slide 19: New Growth Strategy: New Social Media Strategy
NEW GROWTH STRATEGY New Social Media Strategy Innovative social media strategy with 40 of the top influencers gathering in one place… Instagram More than +2,300,000 followers …To Improve and protect the health and welfare of families September 2020 19
Slide 20: New Growth Strategy: World-Class Manufacturing and Supply Chain
NEW GROWTH STRATEGY 3) World-class manufacturing and supply chain capabilities Sales and Operations Planning (S&OP) Manufacturing IT investments Capabilities New Operational Structure September 2020 20
Slide 21: New Growth Strategy: Corporate Culture Social Responsibility
NEW GROWTH STRATEGY 4) Corporate Culture Social Responsibility Gen-Book LAB included in the New Sustainable Index: New Corporate Philosophy “S&P/BMV Total Mexico Index” September 2020 21
Slide 22: COVID-19 Response: Solid Results 2020
COVID-19 RESPONSE SOLID RESULTS 2020 Cost and Strong balance Expense Control position NET SALES(1) EBITDA(1) 2Q: +10.9% 2Q: +13.1% Organization New Categories and Product YTD: +8.7% YTD: +11.0% Commitment Innovation NET INCOME(1) Optimal level of E-commerce Operations Initiatives 2Q: +48.4% YTD: +48
Slide 23: Growth & Profitability in Mexico
GROWTH & PROFITABILITY IN MEXICO GDP Net Sales EBITDA Period Growth(1) Mexico(2) Mexico(2) 2Q' 2019 (1.1)% +12.1% +51.6% 3Q' 2019 (0.4)% +14.1% +35.5% 4Q' 2019 (0.7)% +11.6% +50.3% 1Q' 2020 (1.4)% +9.7% +76.0% 2Q' 2020 (18.9)% +5.0% +7.7% (1) Source: INEGI. (2) YoY percentage of growth. September 20
Slide 24: COVID-19 Response
COVID-19 RESPONSE Donation of +950,000 Hygiene and Personal Care products Donation of 10,000 meals to healthcare institutions September 2020 24
Slide 25: New Production Facility
NEW PRODUCTION FACILITY September 2020 25
Slide 26: Manufactory Investment Rationale
MANUFACTORY INVESTMENT RATIONALE Enhanced Value Equation Higher Gross Margin Superior Product Quality Reliable Product Supply September 2020 26
Slide 27: Manufacturing Investment Profile
MANUFACTURING INVESTMENT PROFILE Benefit from economies of scale and efficient production capabilities EBITDA Synergies ~ 700 bps(1) Market Expansion: Genomma Lab will reinvest between 350 - 300 bps for growth (1) Genomma Lab estimation. September 2020 27
Slide 28: Economies of Scale and Scope Driving Higher Gross Margins
ECONOMIES OF SCALE AND SCOPE DRIVING HIGHER GROSS MARGINS Opportunity Outsourcing Producing areas Buying finished Direct control in all Raw products COGS components Materials and Packaging Fragmented raw Economies of scale material procurement Low scale, labor State-of-the-art fully Labor Cost inten
Slide 29: Economies of Scale and Scope Driving Higher Gross Margins
ECONOMIES OF SCALE AND SCOPE DRIVING HIGHER GROSS MARGINS Opportunity Outsourcing Producing areas Higher COGS due to Eliminate co-packers Suppliers co-packers profit profit margin margin Suppliers scattered Integration of throughout the suppliers to country industrial park Logistics Leverage freight
Slide 30: Example of Removing Inefficiencies
EXAMPLE OF REMOVING INEFFICIENCIES TOLUCA CURRENT INBOUND LOGISTICS PUEBLA 195 km 4:17 hrs Filling PE Blowing PE bottles with bottles shampoo ADDITIONAL EXPENSES Shipping and Storing Cleaning Handling September 2020 30
Slide 31: Profitability Through COGS Reduction
PROFITABILITY THROUGH COGS REDUCTION 38.2 Acquired in 2012 20.8 from Sidus Market Share in units (%) 12.1 Competitor 19.7 ‘13 ‘14 ‘15 ‘16 ‘17 ’18 51 34 25 21 Net Sales 14 in USD 10 million Portfolio of products ‘13 ‘14 ‘15 ‘16 ’17 ’18 Source: Cid Latina – N02B + M01A.. September 2020 31
Slide 32: Long-Term Financing and Ratings
LONG-TERM FINANCING AND RATINGS Long-term financing provided by: ~100MM USD Loan Term: 8 years Rating Agencies Short-Term: Short-Term: F1+(mex) HR 1 Long-Term: Long-Term: AA(mex) HR AA Outlook: Outlook: Stable Stable September 2020 32
Slide 33: Manufacturing Facility Render
MANUFACTURING FACILITY RENDER OTC Plant FP Warehouse PC Plant Render of final look of plant. September 2020 33
Slide 34: Manufacturing Facility Update
MANUFACTURING FACILITY UPDATE Manufacturing Facility video Manufacturing Plant (September, 2020) September 2020 34
Slide 35: PC Manufacturing Facility Update
PC MANUFACTURING FACILITY UPDATE Personal Care Production Line for Shampoo and Beverage State-of-the-art fully automated equipment September 2020 35
Slide 36: PC Manufacturing Facility Update
PC MANUFACTURING FACILITY UPDATE Water Treatment Machinery Room, for Personal Care Plant Isotonic beverage production line for Suerox® brand September 2020 36
Slide 37: OTC Manufacturing Facility Update
OTC MANUFACTURING FACILITY UPDATE OTC Production Facility (State-of-the-art equipment) September 2020 37
Slide 38: Improving Efficiency in Export Logistics
IMPROVING EFFICENCY IN EXPORT LOGISTICS Strategically Located Manufacturing Plant (79 Acres) “Puerta México” (Most important train port in Mexico) Distance between Plant & Puerta México: 1.5 mi September 2020 38
Slide 39: Financial Highlights
FINANCIAL HIGHLIGHTS
Slide 40: Financial Results
FINANCIAL RESULTS Ps. million Income Statement 2Q-2020 % 2Q-2019 % Var % Net Sales $ 3,636.3 100.0% $ 3,277.5 100.0% +10.9% Gross Profit $ 2,178.4 59.9% $ 2,087.9 63.7% +4.3% Operating Income $ 714.9 19.7% $ 633.3 19.3% +12.9% EBITDA(1) $ 754.9 20.8% $ 667.5 20.4% +13.1% Net Income $360.8 9.9% $243.
Slide 41: Financial Position
FINANCIAL POSITION Ps. million As of June 30, As of Dec 31, Financial Position 2020 2019 2019 Cash and Equivalents $1,209.5 $1,214.2 $922.9 Total Assets $21,101.8 $19,412.3 $19,254.8 Total Liabilities $12,162.5 $11,491.1 $11,280.6 Stockholders Equity $8,939.3 $7,921.2 $7,974.1 September 2020 41
Slide 42: Key Valuation Metrics
KEY VALUATION METRICS Historical data do not reflect potential upside from new manufacturing plant $1,048.0mm 69.8% 11.4x 23.7x Shares Outstanding Free Float EV / EBITDA P/E EV / EBITDA P/E 35.9x 40 64.9x 57.4x 60 30 18.6x 23.7x 17.5x 17.3x 11.4x Average 40 26.2x 20 Average 23.5x 16.6x 11.0x 10.5x 1
Slide 43: Key Valuation Metrics: ROIC
KEY VALUATION METRICS ROIC including Intangibles 29.3% 33% 23.5% 28.7% 28% 18.2% Genomma’s 23% 15.7% 16.4% ROIC excluding 18% Intangibles 9.6% 13% Average 13.9% 4.4% 8% (6.3)% 3% -2% -7% Source: Company Information. Standardized ROIC calculations made via Bloomberg as of June 30, 2020. Calculated RO
Slide 44: Stock Performance LTM
STOCK PERFORMANCE LTM September 07, 2020 40% +21.5% (14.2)% $21.25 LABB IPC 30% 20% Market Cap: 10% Ps. 22,270mm 0% September 06, 2019 -10% $17.49 -20% -30% 09/19 12/19 03/20 06/20 09/20 September 2020 44
Slide 45: Video Links
VIDEO LINKS September 2020 45
Slide 46: Contact
CONTACT: Enrique González Head of Investor Relations Barbara Cano InspIR Group - NY Investor.relations@genommalab.com +52 (55) 5081-0000 STOCK INFORMATION: Genomma Lab has been traded under the ticker ‘LAB B’ on the Mexican Stock Exchange (BMV) since June 18, 2008. FOR MORE INFORMATION: www.genommal
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