Sigma Healthcare Ltd · ASX:SIG
Sigma Healthcare — H1 2023 Earnings Presentation
26 slides from Sigma Healthcare's earnings presentation, Sep 26, 2022
Slide 1: 1H23 Results Announcement
For personal use only 1H23 Results Announcement 26 September 2022
Slide 2: 1H23 Results Announcement
1H23 Results Announcement For personal use only Vikesh Ramsunder CEO and Managing Director Sigma Healthcare Limited - 1H23 Results Presentation 2
Slide 3: Overview
Overview For personal use only • Review of the half year • Financial performance • Business performance • Strategy • Outlook Sigma Healthcare Limited - 1H23 Results Presentation
Slide 4: Review of the Half Year
Review of the Half Year For personal use only ❖ ERP stabilised and functioning as designed ❖ Operating Performance enhanced o Picked, packed and dispatched 115 million units in 1H23 o Delivery in Full (DIF) at 97%* o Despatch on Time (DOT) at 99%* o Stock availability average 87%* ❖ Renewal of Leade
Slide 5: Financial Performance
Financial Performance For personal use only Nigel Simonsz CFO Sigma Healthcare Limited - 1H23 Results Presentation 5
Slide 6: Financial Performance
Financial Performance For personal use only Sales Revenue up 6.0% to $1.84bn Statutory Results ($’m) % Change 1H23 1H22 o High volume sales of Rapid Antigen Tests (RATs) Net Sales 6.0% 1,836.1 1,732.6 o Partly offset by lower pharmacy sales and CSO income Gross Profit 12.0% 126.7 113.1 Other Revenue
Slide 7: Total Operating Expenses – up 5.9%
Total Operating Expenses – up 5.9% For personal use only Employment Costs: Up 13.2% to $83.2m o $6.3m higher logistics costs due to current complex business processes, shortage of skilled staff as well as transition from Rowville DC to Truganina DC. o $3.3m increase in ongoing IT and support costs.
Slide 8: Cash Management and Debt
Cash Management and Debt For personal use only Net Debt $'000 $149,230 $85,669 o Down 43% from FY22 to $85.6m o $91 million improvement in working capital o $70m debt facility repaid in July and is in the process of being cancelled Cash Conversion Cycle (CCC) o CCC near best level for a decade o CCC
Slide 9: Capital Expenditure and ROIC
Capital Expenditure and ROIC For personal use only Capex o Infrastructure upgrade program near completion. o 1H23 Capex of $15m – largely Truganina expansion Hobart DC build and Head office relocation. o 2H23 Capex expected to be $25m, then return to normal capex of circa $5m - $10m from FY24. ROIC
Slide 10: Business Performance
Business Performance For personal use only Vikesh Ramsunder CEO and Managing Director Sigma Healthcare Limited - 1H23 Results Presentation 10
Slide 11: ERP Implementation
ERP Implementation For personal use only ❖ Go-live had a significant adverse impact on the business ❖ ERP implementation issues were a major contributor to stock write-off ❖ ERP Platform has been stabilised and is now operating as designed ❖ Post implementation review completed - focus shifted to op
Slide 12: Wholesale
Wholesale For personal use only ❖ Community pharmacies sales down 7% ❖ Hospital sales up 7.0% ❖ Other category up 167%, benefitting from strong RATs sales ❖ Market share 18% of community pharmacy market ❖ Significant available capacity in existing infrastructure to absorb growth ambitions – 30% to 4
Slide 13: Sigma franchise brands performance
Sigma franchise brands performance For personal use only ❖ Over 520 franchise brand members ❖ Sales growth of 5.0% achieved across our franchise brands ❖ Over 560,000 flu and Covid-19 vaccinations administered across our network in 1H23, a fourfold increase on 1H22 ❖ Award winning brands – ❖ Amcal w
Slide 14: Contract Logistics
Contract Logistics For personal use only ❖ Revenue growth of 15.9% ❖ Currently managing 33,000 pallets of medicines for customers (nationally) ❖ Servicing 12 clients ❖ Additional 20,000 pallet spaces being added in Truganina from December 2022 Sigma Healthcare Limited - 1H23 Results Presentation 14
Slide 15: MPS CONNECT
MPS CONNECT For personal use only ❖ Patients packed increased by 20.8% ❖ MPS continues to achieve world class standard medication packaging accuracy rates – 1 error in 1 million medication dose packaging*. ❖ MediSphere eNRMC software has over 3,000 residents subscribed to the solution since launch i
Slide 16: Strategy
Strategy For personal use only Vikesh Ramsunder CEO and Managing Director Sigma Healthcare Limited - 1H23 Results Presentation 16
Slide 17: Group Strategy
Group Strategy For personal use only Create long term shareholder value, through a diversified health, beauty and wellness offering. Sigma Healthcare Limited - 1H23 Results Presentation 17
Slide 18: Strategic Objectives - Overview
Strategic Objectives - Overview For personal use only 1. Grow profitable wholesale market share 2. Consolidate and build our franchise brand network 3. Diversify our streams of income through expanded product offerings via health, beauty and wellness categories 4. Divest non-core assets and continue
Slide 19: Grow profitable wholesale market share
1 - Grow profitable wholesale market share For personal use only ❖ Rebuild customer confidence and trust ❖ Process improvements to enhance service levels ❖ Target profitable sales volume – capture greater market share: ❖ Wholesale Pharmacy - $15.5 billion market* ❖ Wholesale Hospital Pharmacy - $3.2
Slide 20: Consolidate and build our franchise brand network
2 – Consolidate and build our franchise brand network For personal use only ❖ Consolidate our brand portfolio into Amcal and DDS and expand our footprint ❖ Execute an assortment strategy that focuses on preventative and curative healthcare ❖ Build a private label and exclusive portfolio to 20% of sa
Slide 21: Diversify streams of income
3 – Diversify streams of income For personal use only ❖Expand our medical consumables product category and broaden the sales channel ❖Build and develop pipeline of exclusive products in the health, beauty and wellness categories ❖Evaluate opportunities to expand into the A$4+ billion beauty retail c
Slide 22: Divest non-core assets and simplify the business
4 – Divest non-core assets and simplify the business For personal use only ❖Evaluation of non-core assets o Cura – impairment executed in 1H23 o Divest other non-core financial investments ❖Simplifying the business – we are making Sigma easier to do business with ❖Business integration to drive colla
Slide 23: Outlook
Outlook For personal use only Vikesh Ramsunder CEO and Managing Director Sigma Healthcare Limited - 1H23 Results Presentation 23
Slide 24: Outlook
Outlook For personal use only ❖ Restore customer confidence and trust, particularly in Victoria ❖ Continue business simplification and cost reduction ❖ Implement franchise brand strategy ❖ Finalise Truganina DC expansion and Hobart DC build ❖ No formal guidance but confident of continuous improvemen
Slide 25: Important Notice
Important Notice For personal use only The information contained in this presentation about Sigma Healthcare Limited and its subsidiaries (Sigma) is designed to provide: • an overview of the financial and operational highlights for Sigma for the half year period ending 31 July 2022; and • a high lev
Slide 26: Thank You
For personal use only Thank You