Fagron Sa · EURONEXT:FAGR
Fagron Sa — FY2023 Earnings Presentation
23 slides from Fagron Sa's earnings presentation, Feb 15, 2024
Slide 1: FY 2023 Results
FY 2023 Results 15 February 2024 Rafael Padilla Karin de Jong CEO CFO
Slide 2: Disclaimer
Disclaimer The contents of this document, including all statements made therein, are based on estimates, assumptions and other information currently available to the management of Fagron. Certain statements in this presentation may be deemed to be forward-looking. Such forward-looking statements are
Slide 3: Key Highlights
Key Highlights Rafael Padilla CEO
Slide 4: Strong FY 2023 performance in-line with guidance
Strong FY 2023 performance in-line with guidance FY 2023 YoY change Organic revenue growth at CER, supported by strong performance at CS in North America and EMEA, and positive performance in Latin America Total revenue €763.0m +11.6% REBITDA growth of 13.9% and margin expansion by 40bps YoY, underp
Slide 5: EMEA: Robust performance increasingly supported by diversification
EMEA: Robust performance increasingly supported by diversification +2.2% B&E reflects solid demand in most markets and benefits of our diversified footprint organic revenue growth at CER 21.5% REBITDA Margin Poland impacted by anticipated changes of reimbursement system; Strategic actions undertaken
Slide 6: Poland: Commercial agility provides competitive advantage
Poland: Commercial agility provides competitive advantage Background: Regulatory reform Fagron: Clear strategic actions Law adopted containing changes to reimbursement system Provide expert input to for overall pharmaceutical market government working group Increase Fagron Academy by engaging Proact
Slide 7: Latin America: Effective strategy execution ensures continued market leadership
Latin America: Effective strategy execution ensures continued market leadership Reaffirmed market leadership in Brazilian market; customer demand +2.3% continued upward trend while competitive pressures sustain organic revenue growth at CER 16.5% Impressive 250bps increase in revenue share of Brands
Slide 8: North America: Capitalizing through quality focus and strong demand
North America: Capitalizing through quality focus and strong demand +25.5% Improving performance at B&E; Letco integration completed successfully organic revenue growth at CER 19.4% REBITDA Margin Exceptional performance at FSS with year-end run-rate of almost $165m; Boston achieved breakeven; shipp
Slide 9: Quality focus critical in navigating evolving regulatory requirements
Quality focus critical in navigating evolving regulatory requirements 2023 Global quality KPIs Number of facilities to audit globally Regulatory bodies Audits globally Warning letters 31 75+ 12 0 Proactive engagement with Continued investments as quality St. Pauls facility decommissioning regulatory
Slide 10: Maintaining focus on key sustainability drivers
Maintaining focus on key sustainability drivers Reduce our greenhouse Positive impact on workers Ensure employee gas emissions in our supply chain awareness of corporate culture and legal & ethical behavior Science-based targets for 2025 target: 75%* suppliers sign 99% of employees completed absolut
Slide 11: Financial Review
Financial Review Karin de Jong CFO
Slide 12: FY 2023 financial highlights
FY 2023 financial highlights 850.0 0.3 825.0 800.0 763.0 Revenue growth driven by all regions, with North America showing strongest growth 775.0 750.0 0.25 725.0 700.0 683.9 0.2 675.0 650.0 625.0 600.0 0.15 Gross margin improved by 160bps driven by price increases in combination with 575.0 550.0 pro
Slide 13: FY 2023 Revenue bridge and P&L statement
FY 2023 Revenue bridge and P&L statement in €m Profit & loss account (€m) FY 2023 FY 2022 Δ Net revenue 763.0 683.9 11.6% 800.0 Gross margin 461.3 402.6 14.6% Operating expenses 309.2 270.1 14.5% 14.5 6.3 1.1 750.0 Share-based payments and LTI 3.2 1.8 78.0% 62.2 EBITDA before non-recurrent result 14
Slide 14: EMEA: Steady performance through the year
EMEA: Steady performance through the year Revenue Topline growth of 3.1% supported mainly by Compounding Services 200.0 300.0 276.4 284.9 180.0 250.0 160.0 138.7 138.8 80.6 88.8 140.0 + 0.1% 200.0 120.0 43.0 46.8 46.1 47.5 100.0 150.0 80.0 23.1 22.6 100.0 60.0 40.0 149.6 148.6 Excluding Poland impac
Slide 15: Latin America: Strategic levers working while competitive pressures sustain
Latin America: Strategic levers working while competitive pressures sustain Revenue Revenue growth of 4.2%, supported by improved customer demand, Brands, new 180.0 product launches, and FX impact, partially offset by pricing pressure 160.0 162.3 169.2 140.0 2.9 3.6 150.0 120.0 83.8 88.8 46.5 52.9 1
Slide 16: North America: M&A synergies and operational excellence drive margins
North America: M&A synergies and operational excellence drive margins Revenue 400.0 350.0 Strong revenue growth driven by exceptional performance at FSS and Anazao 350.0 308.9 300.0 300.0 250.0 245.1 221.1 250.0 200.0 152.8 163.8 200.0 150.0 150.0 132.8 86.0 120.5 100.0 Boston achieved breakeven, wh
Slide 17: Free cash flow generation remains strong
Free cash flow generation remains strong Cash flow from operating activities development (€m) Operating working capital as percentage of annualized revenue decreased 150.0 by 90bps YoY to 9.3% driven by inventory and operational improvements 140.0 globally in H2 2023 130.0 1.9 -1.3 120.0 14.6 110.0
Slide 18: Strong balance sheet and significant improvement in net debt
Strong balance sheet and significant improvement in net debt Net debt evolution €m 300.0 250.0 5.1 10.1 17.3 124.6 200.0 18.3 38.5 150.0 3.3 2.3 6.4 274.0 233.7 211.6 223.7 223.7 193.3 100.0 149.4 146.1 146.1 148.4 154.8 50.0 0.0 On 31 Dec 2022 Operational cash Capital increases Share repurchases Ac
Slide 19: Outlook
Outlook Karin de Jong CFO personalizing
Slide 20: FY 2024 outlook
FY 2024 outlook Key business drivers Guidance Strong underlying demand FY 2024 Operational excellence initiatives Organic revenue growth High single-digit Poland regulation impact Increase in profitability YoY M&A REBITDA margin Drug shortages Capex as % of 3 – 3.5% of revenue* revenue Regulatory dy
Slide 21: Conclusion
Conclusion Rafael Padilla CEO
Slide 22: Together
Global leader in the niche pharmaceutical compounding market Unique Market Positioning Defensive Business Model Strong Cash Generation Sustainability Focus Disciplined M&A Together we create the future of Operational Excellence personalized medicine 22
Slide 23: Questions
Questions ron Fag