Genomma Lab Internacional SAB de CV Class B · BMV:LAB/B
Genomma Lab Internacional SAB de CV Class B — Investor Presentation (August 2023)
93 slides from Genomma Lab Internacional SAB de CV Class B's investor presentation, August 2023
Slide 1: Genomma Lab Internacional
Genomma Lab.°® Internacional
Slide 2: Investor Relations Corporate Presentation
INVESTOR RELATIONS CORPORATE PRESENTATION
Slide 3: 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 4: Content
1 Who We Are: Our Footprint 2 4-year Profit & Growth Strategy Content 3 Unleashing Shareholder Value 4 Financial Review August 2023 4
Slide 5: New High-Growth Strategy
* New High-Growth Strategy • “The ideal Partner for • Leading Latin America and the Pharmaceutical U.S. Hispanic Market” and Personal • Europe : United Pharmaceuticals Care Company • U.S. : Edgewell • Japan : Rohto • Israel : Oramed • Assessing selected high-ROIC • Consistent base growth potential p
Slide 6: Footprint: Latin America
Footprint : Latin America CHALLENGES OPPORTUNITIES • General economy • Population + 663 million (2x USA) stagnation • GDP per capita 0.2 x USA • Political inestability • Total GDP = 0.4x USA • Employment & MAPA • Median Age : 31 years Livelihood crisis • Inequality translates into ENMEDIO different
Slide 7: Genomma's Solid Base Business
Genomma’s Solid Base Business Single Digit Growth 3 out of 14 categories Double Digit Infant Formula Growth 50% of all Categories rowth impacted by Palm Oil Contingency despite macroeconomic and supply chain headwinds Anti-acne, Cosmetics & Skin Care categories impacted by lockdowns Net sales growth
Slide 8: Genomma Lab Internacional: Base Business
Genomma Lab Internacional : Base Business • Genomma develops, manufactures and markets a broad range of premium branded products, many of which are leaders in their categories SEGMENT MEGA-BRANDS GEOGRAPHY US PC OTC 9% Mexico 49% 51% LatAm 43% 48% August 2023 8
Slide 9: Over The Counter Products: 50.8% of Total Sales
Over The Counter Products (OTC): 50.8% Of Total Sales* Pain Relief Cough & Cold Gastro & Anti- Hemorrhoids Anti-mycotics & Isotonic beverages Anti-Flu Sexual Health *As of March, 2023 August 2023 9
Slide 10: Personal Care Products: 49.2% of Total Sales
Personal Care Products (PC): 49.2% Of Total Sales* Specialized Hair Care Skin Care Beauty Care *As of March, 2023 Shampoo Anti-Acne & Cosmetics August 2023 10
Slide 11: New Categories
New Categories: Antibacterial Male Care & Grooming Infant Nutrition August 2023 11
Slide 12: Proven International Business Model
Proven International Business Model US dollar: Guatemala 9.0% Honduras El Salvador Other currencies: USA Belize Costa Rica INTERNATIONAL 23.2 43.4% Panama Nicaragua 1. Brazilian Real MEXICO 52.4 2. 3. Colombian Peso Chilean Peso CARICAM 4. Peruvian Sol 5. Argentine Peso Colombia MEXICO 6. 7. Uruguay
Slide 13: Genomma Lab Internacional in Summary
Genomma Lab Internacional in Summary Power Mexico 48% Brands 18 of net sales “Strong Points of Sale performance LatAm 43% 500,000+ across all of net sales regions” 1,800+ USA 9% of employees net sales Asepxia, Cicatricure, Suerox, Tio Nacho, Tafirol, Novamil, Groomen, Goicoechea, XL-3, Alliviax, Niz
Slide 14: Content
1 Who We Are: Our Footprint 2 4-year Profit & Growth Strategy Content 3 Unleashing Shareholder Value 4 Financial Review August 2023 16
Slide 15: Strategic Goals
Strategic Goals NET SALES PURPOSE: +1.0bn USD Empower people to have amazing health and wellness EBITDA 25% VISION: A leading company in the CCC categories in which we compete 50 days August 2023 17
Slide 16: Evolution of Growth Strategy
Evolution of Growth Strategy 4-year trend : consistent Sales and Profit growth MM PS MM PS Net Revenues 3800 EBITDA INITIATIVES TO FURTHER 18000 CAGR CAGR IMPROVE PROFITABILITY 16000 9.7% 3300 10.5% • Manufacturing Plant and 14000 2800 Supply Chain synergies 12000 2300 • AI-based media investment 10
Slide 17: Growth Strategic Framework 2025
Growth Strategic Framework → 2025 Product Innovation Superior Best-In-Class Brand Value Go-To-Market & e-Commerce Our Sustainability Commitment Strategic World-Class Partnerships & Supply Chain Technology Winning Culture & Organization August 2023 19
Slide 18: Product Innovation
Product Innovation Recycled Royal Jelly Shampoo Healthy Hair, Healthy Planet Eco-friendly Recycled Conscious communication 100% 100% recycled sustainable and recyclable packaging PETE bottle Recycling meeting points High quality ingredients August 2023 20
Slide 19: Product Innovation
Product Innovation Masstige Affordable Luxury Hi-quality Performance August 2023 21
Slide 20: New High (Inorganic) Growth Strategy
New High (Inorganic) Growth Strategy M&A • Current environment : high valuations due to global apetite in OTC and PC brands, and low interest rates PARTNERSHIPS • Innovative products and services High ROIC -> • Extensive R&D capabilities Shareholder • Low capital investments value creation • Leverag
Slide 21: The ideal Partner for Latin America and the U.S. Hispanic Market
“The ideal Partner for Latin America and the U.S.Hispanic Market” Genomma Lab Internacional August 2023 23
Slide 22: Strategic Alliances
Strategic Alliances New category with growth potential for Mexico & LatAm Manufactured by Edgewell PC (Strategic Partnership) Market Value opportunity of >100mm USD August 2023 24
Slide 23: Strategic Alliances
Strategic Alliances Manufactured by UP International (Strategic Partnership) Exclusivity in Mexico and Latin America ex. Brazil Market Value opportunity of >80mm USD August 2023 25
Slide 24: Exploring expansion to other territories
Exploring expansion to other territories • Developing a franchise business to expand the presence of power brands in other territories, partnering with strong local players overseas • Low cost manufacturing, sustainable products • Full marketing/advertising and Point-of-Sale material • Cicatricure,
Slide 25: Superior Brand Communication
Superior Brand Communication SOCIAL RESPONSIBILITY Click on images to watch the latest product communication August 2023 30
Slide 26: Proprietary Process to Win the Consumer Experience
Always-on Analytics and Precision Marketing Proprietary Process to Win the Consumer Experience Always-on Analytics and Precision Marketing Understanding Online Market Design Experts Effective Research with Across all of Consumers in communication media Choices Thousands of E-Commerce vehicles platfo
Slide 27: The Largest Content Studio in the World of CPGs and Pharma
The largest Content Studio (25 years) in the world of CPGs and Pharma Companies, now including Digital Content • 25 years developing the largest multi-media content in Latin America • > 2.1 PetaBytes of media content (Over 2,140,000,000 GB of photos, videos, animation & digital content produced in-h
Slide 28: Best in Class Go-to-Market
From the Bottom-of-the-Pyramid to the top Best in Cass Go-to-Market Multi- Channel Traditional Channel Superior POS visibility • +308,000 • Modern Trade Points of Sale • Pharma Wholesalers • Pharma Chain • E-Commerce (B2C) • Amazon & other e-Retailers • Direct Sales Distribution (DSD) • Independent
Slide 29: Corporate Culture & Organization
Corporate Culture & Organization Genomma Way Breaking Down Barriers • GenBook, new corporate How are we doing it? philosophy • Upskilling • Competitive Compensation • Career Development • Connected Organization Equal opportunity August 2023 34
Slide 30: 2025 Sustainability Strategy
2025 Sustainability Strategy Click here to read our 2025 Sustainability Strategy +10 Years Being Recognized As One Of The Leading Companies In ESG Practices. August 2023 35
Slide 31: Capital Allocation, Ratings & Long-term Financing
Capital Allocation, Ratings & Long-term Financing • CASH DIVIDEND • SHARE BUY-BUCKS • OPTIMIZE FINANCIAL LEVERAGE • STRATEGIC PARTNERSHIPS / M&A Short-Term: Short-Term: F1+(mex) HR+1 Long-Term: Long-Term: AA+(mex) HR AA+ Outlook: Outlook: Stable Stable August 2023 36
Slide 32: World-class Manufacturing & Supply Chain
World-class Manufacturing & Supply Chain Enhanced Value Equation Higher Gross Margin US$ 100 MM Superior Product Quality 8 years term Reliable Product Supply loan 1 2 3 August 2023 37
Slide 33: PC Manufacturing Facility Update
PC Manufacturing Facility Update Suerox® Manufacturing Line +8,000,000 bottles produced in June-23 August 2023 38
Slide 34: PC Manufacturing Facility Update
PC Manufacturing Facility Update Isotonic Beverage Line
Slide 35: Central Warehouse, PC and OTC Manufacturing Facility
Central Warehouse, PC and OTC Manufacturing Facility August 2023 40
Slide 36: OTC Manufacturing Facility Update
OTC Manufacturing Facility Update Tube filling equipment for semi- Water chiller system for OTC Plant solid production line Tanks system for liquid OTC production Semi-solid production line State-of-the-art equipment August 2023 41
Slide 37: Content
1 Who We Are: Our Footprint 2 4-year Profit & Growth Strategy Content 3 Unleashing Shareholder Value 4 Financial Review August 2023 42
Slide 38: Genomma Lab Internacional
Genomma Lab Internacional August 2023 43
Slide 39: Genomma Lab Internacional
Genomma Lab Internacional August 2023 44
Slide 40: Genomma Lab Internacional
Genomma Lab Internacional August 2023 45
Slide 41: Genomma Lab Internacional
Genomma Lab Internacional August 2023 46
Slide 42: Genomma Lab Internacional
Genomma Lab Internacional August 2023 47
Slide 43: Genomma Lab Internacional
Genomma Lab Internacional August 2023 48
Slide 44: Genomma Lab Internacional
Genomma Lab Internacional August 2023 49
Slide 45: Tio Nacho net sales and market share
1 ; Sie, Category size: “8 NACHO>z: 5) Bn USD 3%) Leads the natural products industry trend 100% sustainably sourced packaging Successful launch’ of “anti-canas” Introduction of the 950ml size Net Sales and share of market evolution CAGR +8% 1,646 _— 1,552 [ 1,485 " 1,292 "y 1,120 ~ ; j - j 1 I I I
Slide 46: Suerox isotonic beverages net sales and share
Category size: = GOR »Mexico record high sell out of + 44% »Chile all time high market share of 18.8 pts »US + 67% YoY Growth » Argentina, Central America,Brazil and Peru all ahead of budget Net Sales and share of market evolution ' T CAGR +48% uz50 1 I I 1,307 : 1 810 1 654 ; 365 I | al 2018 2019 2
Slide 47: Chile isotonic beverages share
Chile TOTAL SHARE ISOTONIC BEVERAGES 51,0% —GATORADE POWERADE —SUEROX OTRAS MARCAS. YTD 22 YTD 23 ene-22 feb-22 mar-22 abr-22 may-22 jun-22 jub22 ago-22 sept-22 oct-22 nov-22 dic-22 ene-23 feb-23
Slide 48: Suerox country expansion
SUSey< COUNTRY EXPANSION 2022 COUNTRY FOOTPRINT. 2023 PLAN *RAIA DROGASIL,
Slide 49: Genomma Lab Internacional
Genomma Lab Internacional August 2023 54
Slide 50: Genomma Lab Internacional
Genomma Lab Internacional August 2023 55
Slide 51: Genomma Lab Internacional
Genomma Lab Internacional August 2023 56
Slide 52: Analgesics net sales and share
Analgesics 2BnUSD 6% Arg.) #1 OTC brand )#3 Analgesic Brand #3 Analgesic Brand KEY HIGHLIGHTS: » X Ray Colombia record high Market share of 8.7% (#3 player) » X Ray Chile + Ecuador 224% and 120% YoY growth » Alliviax Mexico 39% YoY growth Net Sales and share of market evolution 2,944 } +89 CAGR +8%
Slide 53: X Ray Colombia share evolution
7 +66.7% XRay (Col.) #3 Analgesic Brand om SOM Evolution ea XRay Colombia 2019 2020 2021 2022 2Q 2023 *Source: CLOSE UP
Slide 54: Genomma Lab Internacional
Genomma Lab Internacional August 2023 59
Slide 55: Cough & Cold net sales and share
Category size: SOM: | Cough & Cold 18 BnusD avrviat ) Xi) ”y S&C Brand Ripa 10 | ( C&C Brand — C&C Brand waren bane Net Sales and share of market evolution 2,056 CAGR +34% Meéxico* Argentina* Colombia* . 1,351 4,289 Pera 7 1,073 | E | | 2018 2019 2020 2021 2022 2023 PS. MILLION *Tukol Record High Sh
Slide 56: Novamil infant formula share growth
All Novamil variants growing share TO FEED, TO CARE, TO MANAGE A range of superior science based infant formulas to manage different baby’s needs and improve their quality of life... and that of their families! SEGMENT MARKET "Var vs 2022 Constipation (AE) A8% 29 pts Cow Milk Allergy (Rice) 23.2% 65
Slide 57: Genomma Lab Internacional
Genomma Lab Internacional August 2023 62
Slide 58: Genomma Lab Internacional
Genomma Lab Internacional August 2023 63
Slide 59: Productivity Examples
Productivity Examples LABELS COST OPTIMIZATION PROJECT From 16 suppliers to 2 suppliers TOTAL SAVINGS 22MM
Slide 60: Genomma Lab Internacional
Genomma Lab Internacional August 2023 65
Slide 61: Genomma Lab Internacional
Genomma Lab Internacional August 2023 66
Slide 62: Genomma Lab Internacional
Genomma Lab Internacional August 2023 67
Slide 63: Content
1 Who We Are: Our Footprint 2 4-year Profit & Growth Strategy Content 3 Unleashing Shareholder Value 4 Financial Review August 2023 68
Slide 64: Financial Highlights
4 Financial Highlights August 2023 69
Slide 65: Income Statement
Income Statement Thousands of Mexican pesos SECOND QUARTER ACCUMULATED 2023 % Sales 2022 % Sales 2023 % Sales 2022 % Sales Net Sales 4,370,506 100.0% 4,323,637 100.0% 8,548,734 100.0% 8,338,446 100.0% Cost of goods sold 1,705,706 39.0% 1,710,618 39.6% 3,320,202 38.8% 3,212,273 38.5% Gross Profit 2,6
Slide 66: Financial Position
Financial Position As of As of Thousands of Mexican pesos June 30, December 31, 2023 2022 2022 ASSETS Current assets Cash and equivalents and restricted fund 1,369,610 1,299,392 1,503,871 Clients - Net 4,538,830 4,654,087 4,270,528 Recoverable Taxes 1,564,023 1,431,546 1,625,167 Other accounts recei
Slide 67: Financial Position
Financial Position As of As of Thousands of Mexican pesos June 30, December 31, 2023 2022 2022 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Short-term debt and Current portion of long-term debt 2,542,792 1,859,786 4,826,146 Suppliers 1,876,672 1,977,589 1,790,380 Other current liabilitie
Slide 68: Exchange Rate: MXN / USD
Exchange Rate: MXN / USD Q2-22: Q2-22 vs Q2-23: $20.02 $21.0 (11.7)% $20.0 $19.0 $18.0 Q2-23: $17.68 $17.0 1Q23 $16.0 2Q 22 3Q 22 4Q 22 1Q 23 2Q 23
Slide 69: Interest Rate differential between MX & USA
Interest Rate differential between MX & USA % 12 TIIE 10 8 > 7,500 bps! 6 4 2 T-Bill 0 06/20 06/21 06/22 August 2023 74
Slide 70: 18-year Evolution of Interest Rate differential
18-year Evolution of Interest Rate differential (MX vs USA) Interest Rate Differential +6 months 8.0 1 month 1 month 7.0 6.0 5.0 4.0 3.0 2.0 1.0 - 01/01/2005 01/01/2010 01/01/2015 01/01/2020 SEXENIO 2006-12 SEXENIO 2012-18 SEXENIO 2018-
Slide 71: LatAm FX Depreciation
LatAm FX Depreciation 0.17 ARS / MXN** Local Currency 1 ARS = 0.1604 MXN expressed in MXN* 0.15 COP (21.7%) 0.13 PYG (16.1%) 0.11 BRL (12.3%) PEN (10.8%) 0.09 ARS (58.4)% UYU (7.4%) 0.07 1 ARS = 0.0667 MXN CLP (7.1%) 0.05 jun-22 jun-23 *Average Exchange rate Q2-2022 vs. Q2-2023. **Exchange rate for
Slide 72: Net Sales Breakdown by Size of FX Fluctuation
Net Sales Breakdown by Size of FX Fluctuation Consolidated Sales classifed by relative FX depreciation vs MXN, year-on-year Negative Negative Negative Mexican Positive Hyperinflation Double Single Peso Digit Digit 16.1% 29.8% 5.5% 47.6% 1.0% 51.4% # of countries 1 9 2 1 5 August 2023 77
Slide 73: LABB Share buyback
LABB Share buyback Million shares 35 30.1 30 25 20 15 10 4.9 4.5 5 2.5 0 Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 August 2023 78
Slide 74: Canceling Shares
Canceling Shares • 28 million shares to be cancelled in April 28 • New total number of shares outstanding 1,020,000,000 • Please update EPS calculation August 2023 79
Slide 75: Fourth Dividend Payment
Fourth Dividend Payment Of total amount of 200 MXN paid on June 07, 2023 Intention to make dividend payments on a Quarterly basis* *Subject to the terms and conditions established by the Annual General Shareholders Meeting August 2023 80
Slide 76: MSCI ESG Rating Upgrade
MSCI ESG Rating Upgrade Improved two notches in a 3 year period
Slide 77: Annexes
Genomma Lab.° Internacional August 2023 82
Slide 78: Economies of Scale and Scope Driving Higher Gross Margins
Economies Of Scale And Scope Driving Higher Gross Margins Opportunity Outsourcing Producing areas Direct control in all Buying finished Raw Materials products COGS and components Fragmented raw Packaging material Economies of scale procurement Low scale, labor State-of-the-art fully Labor Cost inten
Slide 79: 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- Suppliers co-packers profit packers profit margin margin Suppliers scattered Integration of throughout the suppliers to country industrial park Logistics Leverage freigh
Slide 80: OTC Market Share By Country
OTC Market Share By Country Top Two Countries Growth Potential Leadership CAM (1) ECUADOR position position position 4th. 4th. 3rd. MEXICO PLACE CHILE > 70% share PERÚ position in the Region position 5th. 6th. position ARGENTINA 1st. COLOMBIA PLACE position 7th. > 30% share Source: IMS Health. Ranki
Slide 81: Profitability Through COGs Reduction
Profitability Through COGs Reduction 38 39 Acquired in 2012 32 34 from Sidus Market 25.4 Share in 24.2 23. 21 21. units (%) 20.3 Competitor ‘13 ‘14 ‘15 ‘16 ‘17 ’18 51 33.91 25.39 Net Sales 20.69 in USD 9.87 13.67 million Portfolio of products ‘13 ‘14 ‘15 ‘16 ’17 ’18 Source: Cid Latina – N02B + M01A.
Slide 82: Industrial Complex – EDGE Certification
Industrial Complex– EDGE Certification GENOMMA LAB ACHIEVES WORLD BANK / IFC’s EDGE CERTIFICATION EDGE ISA GREEN BUILDINGSTANDARD AND A GLOBAL CERTIFICATION SYSTEM FIRST PHARMACEUTICAL PLANT IN THE WESTERN HEMISPHERE TO MEET STANDARDS August 2023 87
Slide 83: Industrial Complex – EDGE Certification
Industrial Complex– EDGE Certification Plant design enables: PERSONAL CARE PLANT SAVINGS: - 31% in energy - 52% in water - 41% in embodied energy - 87 tons of CO2 PHARMA PLANT SAVINGS: - 45% in energy - 37% in water - 42% in embodied energy - 33 tons of CO2 DISTRIBUTION CENTER SAVINGS: - 26% in ener
Slide 84: OTC Manufacturing Plant Permits Update
OTC Manufacturing Plant Permits Update Granted INTERNATIONAL GMPs Pending Approval Not submitted MEXICO GMP SANITARY LICENSE Solid Semi-Solid Oral Liquid Topical Liquid Coating
Slide 85: IFC and Genomma Lab Multi-currency Long-term Loan
IFC and Genomma Lab Multi-currency Long-term Loan • IFC’s first multi-currency investment in the pharmaceutical industry anywhere in the world US$60 million loan: • CHILEAN PESOS • PERUVIAN SOLES • US DOLLARS • MEXICAN PESOS • COLOMBIAN PESOS August 2023 90
Slide 86: Enhancing our Megabrand potential
Enhancing our Megabrand potential Example of Analgesics category August 2023 91
Slide 87: M&A Transactions in Consumer Health Categories
M&A Transactions in Consumer Health Categories CHC MAJOR ACQUISITION MULTIPLES EV / Sales Multiple 9.0 BMS LatAm to Reckitt Paras to Reckitt 8.2 Merck CC to Bayer Adams RT to 6.9 Insight to Prestige 6.5 Swisse to Mead Matrixx to GSK brands Reckitt Church & to Pharma Biostime Johnson Dwight Fertin SG
Slide 88: OTC Pharma EV / LTM EBITDA Transaction Multiples
OTC Pharma EV / LTM EBITDA Transaction Multiples Average 16.3 x Source: Credit Suisse August 2023 93
Slide 89: Dynamism in M&A Pharma
Dynamism in M&A Pharma August 2023 94
Slide 90: Personal Care and Skin Care Price/Sales Transaction Multiples
PERSONAL CARE Price/Sales Transaction Multiples Source: Credit Suisse SKIN CARE Price/Sales Transaction Multiples Source: Credit Suisse August 2023 95
Slide 91: Comparables in the Beverage Industry
Comparables in the Beverage Industry BEVERAGES EV/Sales Transaction Multiple August 2023 96
Slide 92: M&A Dynamism in the Beverage Industry
M&A Dynamism in the Beverage Industry Focused on high growth / high margin brands August 2023 97
Slide 93: Genomma Lab Internacional
Genomma Lab Internacional August 2023 98
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