Slide 1: FY18 Results Presentation
Mayne Pharma Group Limited FY18 Results Presentation 24 August 2018 Scott Richards, Chief Executive Officer Nick Freeman, Group Chief Financial Officer 1
Slide 2: Disclaimer
Disclaimer ● The information provided is general in nature and is in summary form only. It is not complete and should be read in conjunction with the company’s audited Financial Statements and market disclosures. This material is not intended to be relied upon as advice to investors or potential inv
Slide 3: Executive summary
Executive summary ● Reported EBITDA of A$116.8m and adjusted EBITDA of A$165.3m - Significantly stronger second half with reported EBITDA up 307% and adjusted EBITDA up 35% on 1HFY18 driven by improved underlying business performance with minimal adjustments to reported earnings Financial ● Reported
Slide 4: Key financials – Significantly stronger second half
Key financials1 – Significantly stronger second half A$million FY18 FY17 Change 2HFY18 1HFY18 Change Revenue 530.3 572.6 (7%) 287.0 243.3 18% Gross Profit 256.5 315.8 (19%) 160.6 95.9 68% Gross Profit % 48% 55% 56% 39% Adjusted EBITDA2 165.3 206.5 (20%) 94.8 70.5 35% Adjustments (48.5) 17.7 (1.0) (4
Slide 5: Half on half segment performance
Half on half segment performance Change 2HFY18 v Change 2HFY18 v A$million 2HFY18 1HFY18 2HFY17 1HFY18 2HFY17 GPD 204.8 180.9 196.1 13% 4% SBD 30.9 13.8 35.1 123% (12%) MCS 33.4 29.7 29.7 12% 12% MPI 18.0 18.8 17.0 -4% 6% Reported revenue 287.0 243.3 277.8 18% 3% GPD 113.8 63.6 92.5 78% 23% SBD 25.9
Slide 6: Adjusted earnings
Adjusted earnings1 EBITDA Net income / (loss) A$million 2HFY18 1HFY18 FY18 2HFY18 1HFY18 FY18 Reported result 93.8 23.0 116.8 40.2 (174.2) (133.9) Impairment - - - 0.72 139.8 140.5 SBD – abnormal Doryx® - 13.3 13.3 - 9.2 9.2 returns GPD – abnormal stock - 17.3 17.3 - 12.0 12.0 adjustments Restructur
Slide 7: Generic Products Division (GPD)
Generic Products Division (GPD) Generic Products Division (GPD) ● GPD revenue was US$299.0m down 5% on pcp Change A$million FY18 FY17 FY18 v FY17 ● 2HFY18 revenue and gross profit up 12% and 78% respectively on 1HFY18 benefiting from portfolio Revenue 385.7 418.7 (8%) optimisation, new product launc
Slide 8: US generic market dynamics
Generic Products Division (GPD) US generic market dynamics Pharma ● Heightened price deflation through CY17 appears to be returning to normalised levels pricing ● Product rationalisation across generic sector continues ● Competitor disruptions creating business opportunities ● Teva announced multipl
Slide 9: Low competition portfolio with market leading positions
Generic Products Division Low competition portfolio with market (GPD) leading positions FY18 GPD revenue by number of Product market share of key franchises Gx competitors (excl. Mayne # of Gx Pharma) IQVIA product competitors Product TRx Change in product market size (excl. Mayne) market share TRx
Slide 10: Specialty Brands Division (SBD)
Specialty Brands Division (SBD) Specialty Brands Division (SBD) ● SBD revenue was US$34.7m, down 26% on FY17 Change A$million FY18 FY17 impacted by US$9.7m of abnormal Doryx® returns in FY18 v FY17 1HFY18 Revenue 44.7 61.9 (28%) ● Abnormal Doryx® returns did not recur in 2HFY18 Gross Profit 37.5 58.
Slide 11: Expanded sales team driving prescription growth
Specialty Brands Division Expanded sales team driving (SBD) prescription growth Weekly prescriptions (TRx) Second 2HFY18 2HFY18 sales team Ave Weekly 5000 2HFY18 1HFY18 2HFY17 v v Launch of in the field TRx 1HFY18 2HFY17 Doryx® MPC 4500 Launch of Fabior® 4000 and Sorilux® 2,058 1,960 1,744 5% 18% 35
Slide 12: Metrics Contract Services (MCS)
Metrics Contract Services (MCS) Metrics Contract Services (MCS) ● MCS revenue was US$48.9m, up 12% on pcp Change A$million FY18 FY17 FY18 v FY17 ● Achieved 3 consecutive years of double digit growth in USD terms Revenue 63.1 57.8 9% Gross Profit 33.7 32.1 5% - Annual growth of 20% since FY15 Gross P
Slide 13: Mayne Pharma International (MPI)
Mayne Pharma International (MPI) Mayne Pharma International (MPI) ● Growth in Australia driven by aspirin, injectables, Change A$million FY18 FY17 itraconazole, oxycodone and new product launches of FY18 v FY17 Monurol® (fosfomycin trometamol) granules and Revenue 36.8 34.3 7% Urorec® (silodosin) ca
Slide 14: R&D update
R&D update ● Cash R&D spend was $44m of which 23% directed to Gross R&D spend (A$m) brand programs and the balance on generics 50 44 ● Launched 6 generic products in the US and 2 specialty 40 brands in Australia 35 30 29 ● Filed 8 products with FDA including generic NuvaRing®, 20 17 generic Ranexa®
Slide 15: Key pipeline updates - US
Key pipeline updates - US US Mkt size Formulation Product Therapeutic area (US$m)1 development Pre-clinical Phase I Phase II Phase III Filed Generic generic NuvaRing Women's health 890 generic Ranexa Cardiovascular 940 generic Fentora Pain 90 Brand SUBA-itraconazole Infectious disease 200 SUBA-itrac
Slide 16: Attractive near term generic pipeline to drive future growth
Attractive near term generic pipeline to drive future growth US filed generic pipeline by # of generic competitors 2,500 2,000 Fentora Mkt size (US$m) 1,500 Ranexa 1,000 500 NuvaRing 0 0 1 2 3 4+ # of current generic competitors US filed pipeline targeting markets with IQVIA sales >US$2.5b 16 Source
Slide 17: Generic Nuvaring
Generic Nuvaring® ● Intra vaginal hormonal contraceptive device combining NuvaRing® MAT sales and NSP units etonogestrel and ethinyl estradiol over a 3-week period ● Accepted for filing March 2018 1000 8.0 886 900 ● Patent expired April 2018 784 7.0 800 710 6.0 ● 2 other known generic filers 700 642
Slide 18: SUBA-itraconazole - anti-fungal
SUBA®- itraconazole - anti-fungal Global market Endemic mycosis (systemic fungal infections) – geographic distribution ● Launched in Australia, Spain and Germany ● Approved in Argentina, Austria, Belgium, Mexico and Portugal ● Expected to launch in another 6 countries in FY19 US market ● Filed US ND
Slide 19: SUBA-itraconazole - Gorlin Syndrome
SUBA®- itraconazole - Gorlin Syndrome ● Partnered with HedgePath Pharmaceuticals, Inc. (market cap: US$100m+) to pursue the clinical development, registration and commercialisation of SUBA-itraconazole in anti-cancer applications ● Own 54% of HedgePath common stock (59% including warrants) - In Janu
Slide 20: Facility investments in Greenville and Salisbury now complete
Facility investments in Greenville and Salisbury now complete Greenville Salisbury 20
Slide 21: Strategic priorities aligned with creating a durable business model
Strategic priorities aligned with creating a durable business model ● Create highly efficient, focused R&D organisation with access to an array of differentiated dosage forms US Generic Products ● Addition of high value, high complexity products to portfolio via internal R&D, strategic alliances and
Slide 22: Outlook
Outlook ● More stabilised retail pricing environment expected to continue ● Generic Efudex® expected to become a top 10 product following its acquisition in July 2018 Generic ● 6+ potential new product launches in FY19 – including several potential first to market Products launches ● Extracting furt
Slide 23: FY18 financial information
¢ pharma FY18 financial information
Slide 24: Profit and Loss – attributable to members
Profit and Loss – attributable to members Year ending Change Half Year Ending Change A$million 30 Jun 18 30 Jun 17 $m 30 Jun 18 31 Dec 17 $m Revenue 530.3 572.6 (42.3) 287.0 243.3 43.7 Gross profit 256.5 315.8 (59.3) 160.6 95.9 64.7 Gross profit % 48% 55% 56% 39% EBITDA - adjusted 165.3 206.5 (41.2)
Slide 25: Operating expenses
Operating expenses Operating expenses1 (A$m) 140.0 120.0 100.0 61.5 80.0 57.6 60.0 40.0 61.0 49.3 20.0 - FY17 FY18 Marketing & distribution expenses All other administration & other expenses ● Marketing and distribution expenses have increased due to the expanded Specialty Brands sales team in the U
Slide 26: Reported to adjusted reconciliation attributable to members
Reported to adjusted reconciliation attributable to members1 Reported SBD – GPD – Attributable To Abnormal Abnormal HPPI – Sales And Profit Members Jun Doryx Stock Restructuring Asset Mayne’s US Tax Adjusted JUN (A$m) 2018 Returns (2) Adjustments (3) Expenses (4) Impairments(5) Share (6) Doj(7) Item
Slide 27: Consolidated Balance Sheet Position
Consolidated Balance Sheet Position As at As at As at A$million 30 Jun 18 31 Dec 17 30 Jun 17 Cash 87.3 56.0 63.0 Inventory 82.2 88.6 106.4 Receivables 252.7 231.5 225.8 PP&E 230.1 212.2 189.3 Intangibles & goodwill 1,054.5 1,018.6 1,235.4 Other assets 123.7 116.7 88.1 Total assets 1,830.5 1,723.5 1
Slide 28: Consolidated Cash Flow – EBITDA to Cash Reconciliation
Consolidated Cash Flow – EBITDA to Cash Reconciliation Year ending Half Year ending A$million 30 Jun 18 30 Jun 17 30 Jun 18 31 Dec 17 EBITDA (Reported) attributable to members1 116.8 224.2 93.8 23.0 Minority share of HPPI EBITDA (2.2) (2.3) (1.2) (1.1) Consolidated EBITDA (100% HPPI) 114.6 221.9 92.
Slide 29: Capital structure
Capital structure ● Dual currency debt facility - US$150m, 3 year bullet facility, matures July 2019 - US$250m 5 year revolving facility, matures July 2021 - US$20m 2 year working capital facility, matures July 2019 - A$10m, 2 year working capital facility, matures July 2019 ● Key bank covenants hav
Slide 30: Net debt profile
Net debt profile 2HFY18 Free cash flow A$33.5m (A$m) 350.0 78.4 -4.5 0.1 303.1 -73.5 300.0 15.4 1.9 286.9 277.2 -48.0 40.0 250.0 200.0 150.0 100.0 50.0 0.0 30 Jun 17 Operating Investing FX Other 31 Dec 17 Operating Investing FX Other 30 Jun 18 Net debt cash flow cashflow Net debt cash flow cashflow