Genomma Lab Internacional SAB de CV Class B · BMV:LAB/B
Genomma Lab Internacional SAB de CV Class B — Investor Presentation (September 2021)
66 slides from Genomma Lab Internacional SAB de CV Class B's investor presentation, September 2021
Slide 1: Genomma Lab Internacional
Genomma Lab.® Internacional
Slide 2: Investor Relations Corporate Presentation
INVESTOR RELATIONS C O R P O R AT E P R E S E N TAT I O N
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: Agenda
1 WHO WE ARE: OUR FOOTPRINT 2 NEW GROWTH STRATEGY Agenda NEW INDUSTRIAL CLUSTER 3 4 FINANCIAL HIGHLIGHTS September 2021 4
Slide 5: Who We Are: Our Footprint
WHO WE ARE: OUR FOOTPRINT 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 leade
Slide 6: Who We Are: Our Footprint
WHO WE ARE: OUR FOOTPRINT “Innovation is part of our DNA” LatAm 49% Points of Sale of net sales 400,000+ Mexico 43% of net sales Countries 18 USA 8% of net sales Industrial Cluster 1 1,300+ Brands 50+ employees As of June, 2021 September 2021 6
Slide 7: Over the Counter Products (OTC): 50.3% of Total Sales
OVER THE COUNTER PRODUCTS (OTC): 50.3% OF TOTAL SALES Pain Relief Cough & Cold Gastro & Anti- Anti-Flu Hemorrhoids Anti-mycotics & Isotonic Antibacterial Infant Formula Sexual Health Beverages New categories September 2021 7
Slide 8: Personal Care Products (PC): 49.7% of Total Sales
PERSONAL CARE PRODUCTS (PC): 49.7% OF TOTAL SALES Shampoo Hair Care Beauty Creams Skin Care & Micellar Anti-Acne & Cosmetics Razors water New categories September 2021 8
Slide 9: Well Diversified by Region & Currencies
WELL DIVERSIFIED BY REGION & CURRENCIES 100% 100% US Dollar: 8.2% International Other currencies: 49.2% 23.2 1. Argentine Peso 2. Brazilian Real 57.1 3. Colombian Peso 4. Chilean Peso 5. Peruvian Sol 6. Uruguayan Peso Mexico 76.8 7. Paraguayan Guarani 42.9 Mexican Peso: 42.6% 2010 2Q-2021 15 1
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: 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 at • CCO Cydsa • EVP Sales P&G Laureate Education Inc. • CFO Grupo LALA • 20+ years of • CEO of P&G’s Lati
Slide 12: Agenda
1 WHO WE ARE: OUR FOOTPRINT 2 NEW GROWTH STRATEGY Agenda NEW INDUSTRIAL CLUSTER 3 4 FINANCIAL HIGHLIGHTS S e p t e m b e r 2 0 2 1 12
Slide 13: New Growth Strategy
2 NEW GROWTH STRATEGY S e p t e m b e r 2 0 2 1 13
Slide 14: New Growth Strategy
Product Innovation & Portfolio optimization Best-in-class Go-to-Market World-class Manufacturing & Supply Chain Corporate Culture NEW GROWTH STRATEGY S e p t e m b e r 2 0 2 1 14
Slide 15: Products & SKU's
Product Innovation & Portfolio optimization Sustainable New Growth Strategy Products & SKU’s S e p t e m b e r 2 0 2 1 15
Slide 16: Product Innovation
PRODUCT INNOVATION New category with growth potential for Mexico & LatAm Manufactured by Edgewell PC (Exclusivity agreement) Market Value opportunity of >100mm USD S e p t e m b e r 2 0 2 1 16
Slide 17: Product Innovation
PRODUCT INNOVATION Manufactured by UP International (Exclusivity agreement) Exclusivity in LatAm ex. Brazil Market Value opportunity of >80mm USD S e p t e m b e r 2 0 2 1 17
Slide 18: Innovation: Driver of Growth, Solid Results 2021
INNOVATION: DRIVER OF GROWTH SOLID RESULTS 2021 Cost and Strong balance Expense Control position NET SALES(1) EBITDA(1) 2Q: +6.3% 2Q: +2.9% Organization New Categories and Product Commitment Innovation NET INCOME(1) 2Q: +5.1% Optimal level of E-commerce Operations Initiatives (1) Percentaje of growt
Slide 19: New Growth Strategy
Product Innovation & Portfolio optimization Best-in-class Go-to-Market World-class Manufacturing & Supply Chain Corporate Culture NEW GROWTH STRATEGY S e p t e m b e r 2 0 2 1 19
Slide 20: Best-in-class Go-to-Market
Wellness Center Best-in-class Go-to-Market S e p t e m b e r 2 0 2 1 20
Slide 21: Best-in-class Go-to-Market
BEST-IN-CLASS GO-TO-MARKET Traditional Channel • +400,000 Points of Sale • New Commercial Agreements in Brazil • Traditional Channel Expansion for CAM & Andine Region Online Customer Approval S e p t e m b e r 2 0 2 1 21
Slide 22: New Growth Strategy
Product Innovation & Portfolio optimization Best-in-class Go-to-Market World-class Manufacturing & Supply Chain Corporate Culture NEW GROWTH STRATEGY S e p t e m b e r 2 0 2 1 22
Slide 23: World-class Manufacturing & Supply Chain
1 2 3 World-class 2 out of 3 components Manufacturing & Supply started operations (PC & Chain Warehouse) • Successful relocation of the Finished Products Warehouse • Isotonic Beverage Line started operations. • Commissioning of four additional lines (Shampoo, Ointments, Skin Care Line & Medical Devi
Slide 24: World-class Manufacturing & Supply Chain
WORLD-CLASS MANUFACTURING & SUPPLY CHAIN New Manufacturing Facility video S e p t e m b e r 2 0 2 1 24
Slide 25: New Warehouse
WORLD-CLASS MANUFACTURING & SUPPLY CHAIN New Warehouse • Increased Warehouse capacity • Speed & Accuracy in case picking • Ensures product rotation. S e p t e m b e r 2 0 2 1 25
Slide 26: World-class Manufacturing & Supply Chain: Extrema
WORLD-CLASS MANUFACTURING & SUPPLY CHAIN Extrema - Minas Gerais • One of the main logistics hubs in Brazil 8 days • Improved level of costumer 9 days service 7 days • Reduced transit time in +5 days Extrema-MG Region 6 days • Logistics cost reduction • + 6,000 pallets positions • +50% increase of ca
Slide 27: New Growth Strategy
Product Innovation & Portfolio optimization Best-in-class Go-to-Market World-class Manufacturing & Supply Chain Corporate Culture NEW GROWTH STRATEGY S e p t e m b e r 2 0 2 1 28
Slide 28: Corporate Culture
Corporate Culture S e p t e m b e r 2 0 2 1 29
Slide 29: Corporate Culture
CORPORATE CULTURE Social Responsibility Breaking Down Barriers Equal opportunity S e p t e m b e r 2 0 2 1 30
Slide 30: Sustainability Agenda 2025
SUSTANTIBILITY AGENDA 2025 See our 2025 Sustainability Strategy S e p t e m b e r 2 0 2 1 31
Slide 31: Sustainability Agenda 2025
SUSTANTIBILITY AGENDA 2025 Part of the S&P/BMV Total Mexico ESG Index for 2nd consecutive year. Recognized as one of the leading companies in ESG practices. S e p t e m b e r 2 0 2 1 32
Slide 32: Agenda
1 WHO WE ARE: OUR FOOTPRINT 2 NEW GROWTH STRATEGY Agenda NEW INDUSTRIAL CLUSTER 3 4 FINANCIAL HIGHLIGHTS
Slide 33: New Industrial Cluster
Genorfima Lab.* Internacional ©) NEW INDUSTRIAL CLUSTER
Slide 34: Industrial Cluster
INDUSTRIAL CLUSTER SNeopvt e m b e r 2 0 2 0 1 35 35
Slide 35: Investment Rationale
INVESTMENT RATIONALE Enhanced Value Equation Higher Gross Margin Superior Product Quality Reliable Product Supply September 2021 36
Slide 36: Long-term Financing & Ratings
LONG-TERM FINANCING & 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 Positive September 2021 37
Slide 37: Investment Profile
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 2021 38
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 2021 39
Slide 39: PC Manufacturing Facility Update
PC MANUFACTURING FACILITY UPDATE +5,000,000 bottles produced in June-21 September 2021 40
Slide 40: PC Manufacturing Facility Update
PC MANUFACTURING FACILITY UPDATE Personal Care Plant at San Cayetano State of Mexico (Isotonic Beverage Line) September 2021 41
Slide 41: PC Manufacturing Facility Update
PC MANUFACTURING FACILITY UPDATE Personal Care Plant at San Cayetano State of Mexico (Isotonic Beverage Line) September 2021 42
Slide 42: PC Manufacturing Facility Update
PC MANUFACTURING FACILITY UPDATE Personal Care Plant at San Cayetano State of Mexico (Isotonic Beverage Line) September 2021 43
Slide 43: PC Manufacturing Facility Update
PC MANUFACTURING FACILITY UPDATE Personal Care Plant at San Cayetano State of Mexico (Shampoo Line) September 2021 44
Slide 44: PC Manufacturing Facility Update
PC MANUFACTURING FACILITY UPDATE Personal Care Plant at San Cayetano State of Mexico (Skin Care Line) September 2021 45
Slide 45: PC Manufacturing Facility Update
PC MANUFACTURING FACILITY UPDATE Personal Care Plant at San Cayetano State of Mexico (Skin Care Line) September 2021 46
Slide 46: PC Manufacturing Facility Update
PC MANUFACTURING FACILITY UPDATE Personal Care Plant at San Cayetano State of Mexico (Skin Care Line) September 2021 47
Slide 47: OTC Manufacturing Facility Update
OTC MANUFACTURING FACILITY UPDATE State-of-the-art equipment September 2021 48
Slide 48: OTC Manufacturing Facility Update
OTC MANUFACTURING FACILITY UPDATE OTC Plant Manufacturing Equipment September 2021 49
Slide 49: OTC Manufacturing Facility Update
OTC MANUFACTURING FACILITY UPDATE State-of-the-art Blister machine for OTC pills equipment September 2021 50
Slide 50: OTC Manufacturing Facility Update
OTC MANUFACTURING FACILITY UPDATE Water chiller system for OTC Plant Tube filling equipment for semi- solid production line Tanks system for liquid OTC production September 2021 51
Slide 51: OTC Manufacturing Facility Update
OTC MANUFACTURING FACILITY UPDATE Semi-solid production line State-of-the-art equipment September 2021 52
Slide 52: 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 Materials products COGS components and Packaging Fragmented raw Economies of scale material procurement Low scale, labor State-of-the-art fully Labor Cost inten
Slide 53: 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 Integration of Suppliers scattered suppliers to industrial throughout the country park Logistics Leverage freight
Slide 54: 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 Handling Storing Cleaning September 2021 55
Slide 55: 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 in 14 USD million 10 Portfolio of products ‘13 ‘14 ‘15 ‘16 ’17 ’18 Source: Cid Latina – N02B + M01A.. September 2021 56
Slide 56: Agenda
1 WHO WE ARE: OUR FOOTPRINT 2 NEW GROWTH STRATEGY Agenda NEW INDUSTRIAL CLUSTER 3 4 FINANCIAL HIGHLIGHTS S e p t e m b e r 2 0 2 1 57
Slide 57: Financial Highlights
4 FINANCIAL HIGHLIGHTS S e p t e m b e r 2 0 2 1 58
Slide 58: Financial Results
FINANCIAL RESULTS Ps. million Income Statement 2Q-2021 % 2Q-2020 % Var % Net Sales $3,865.4 100.0% $3,547.7 100.0% +6.3% Gross Profit $2,351.6 60.8% $2,178.4 59.9% +8.0% Operating Income $742.0 19.2% $714.9 19.7% +3.8% EBITDA(1) $776.5 20.1% $754.9 20.8% +2.9% Net Income $379.2 9.8% $360.8 9.9% +5.1
Slide 59: Financial Position
FINANCIAL POSITION Ps. million As of June 30, As of Dec 31, Financial Position 2021 2020 2020 Cash and Equivalents $1,409.0 $1,209.5 $2,103.9 Total Assets $22,869.8 $21,101.8 $22,132.6 Total Liabilities $12,734.9 $12,162.5 $12,498.4 Stockholders Equity $10,134.9 $8,939.3 $9,634.2 September 2021 60
Slide 60: Cash Conversion Cycle
CASH CONVERSION CYCLE (1) 205 Cash Conversion Cycle remains stable despite inventory days 103 101 102 109 107 97 99 95 96 86 82 82 74 74 (…) Q4'12 Q3'19 Q1'12 Q2'12 Q3'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Prior M
Slide 61: Net Debt Profile
NET DEBT PROFILE MXN (million) 5,724 5,112 4,454 4,459 4,765 4,320 3,689 3,980 3,610 2013 2014 2015 2016* 2017* 2018 2019 2020 LTM’2Q21 2013 2014 2015* 2016* 2017 2018 2019 2020 2Q21 Net Debt / 1.2x EBITDA 2.3x 2.5x 1.4x 1.4x 1.8x 2.1x 1.5x 1.6x *Adjusted EBITDA for 2015 and 2016 due to change in Ge
Slide 62: Key Valuation Metrics
KEY VALUATION METRICS Historical data do not reflect potential upside from new manufacturing plant $1,048.0mm 69.8% 8.9x 16.1x Shares Outstanding Free Float EV / EBITDA P/E EV / EBITDA P/E 40 64.9x 26.6x 60 30 18.4x 17.3x 40 15.7x 20 14.8x Average 16.1x 26.0x 17.0x 21.0x 8.9x 15.9x 21.0x 15.4x 15.3x
Slide 63: Key Valuation Metrics
KEY VALUATION METRICS ROIC including Intangibles 22.5% 25% 16.6% 16.6% 30.4% 17.9% 15.4% Average 13.1% Genomma’s 15% ROIC excluding 5.7% Intangibles 5% -5% (22.8)% -15% -25% Source: Company Information. Standardized ROIC calculations made via Bloomberg as of LTM ended October 31, 2020. Calculated RO
Slide 64: LABB Stock & IPC YTD Performance
LABB STOCK & IPC YTD PERFORMANCE 30% Market Cap: Market Cap: Ps. 19.7bn Ps. 22.2bn Dec 31, 2020 Jul 14, 2021 $18.84 $21.23 10% dic/20 mar/21 jun/21 -10% LABB IPC IBOVESPA +12.7%* +11.8%* +7.6%* *Performance registered from Dec 31, 2020 to Jun 14, 2021 September 2021 65
Slide 65: Annexes
ANEXES Genomma Lab.°® Internacional September 2021 | 66
Slide 66: Video Links
VIDEO LINKS SOCIAL RESPONSIBILITY S e p t e m b e r 2 0 2 1 67
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