Sigma Healthcare Ltd · ASX:SIG
Sigma Healthcare — FY2024 Earnings Presentation
28 slides from Sigma Healthcare's earnings presentation, Mar 21, 2024
Slide 1: FY24 results announcement
FY24 results announcement 21 March 2024
Slide 2: Vikesh Ramsunder, CEO and Managing Director
Vikesh Ramsunder CEO and Managing Director We acknowledge the Wurundjeri people of the Kulin Nation and acknowledge them as the Traditional Custodians of the land on which we meet today. We pay our respects to their Elders past, present and emerging. Sigma Healthcare Limited | FY24 results announcem
Slide 3: Agenda
Agenda 1. Review of the year 2. Financial performance 3. Operational update 4. Strategy and Merger proposal update 5. Outlook 6. Chemist Warehouse 1HFY24 Update Sigma Healthcare Limited | FY24 results announcement 3
Slide 4: Review of the year – strong foundations delivering results
Review of the year – strong foundations delivering results • Stronger core with expanded growth opportunities • Achieved ISO9001 accreditation – recognition of world class processes and training Sales Revenue Increase in Like-for-like down 9.2% Sales Revenue • Maintained strong customer metrics – De
Slide 5: Mark Conway
Mark Conway Chief Financial Officer Sigma Healthcare Limited | FY24 results announcement 5
Slide 6: Sustained improvement in statutory financial performance
Sustained improvement in statutory financial performance Statutory P&L summary ($m) • Sales revenue: down $338m or 9.2% driven by: FY24 FY23 Change – Non-recurring RAT sales of ($205.5m) $m $m % – Non-recurring revenue from the hospitals business of ($266.2m) Sales Revenue 3,322.1 3,660.2 (9.2%) – W
Slide 7: Costs down 10.7% driven by simplification and productivity
Costs down 10.7% driven by simplification and productivity Warehouse and Delivery: Down $27.0m from FY23 Warehouse Productivity – output / hours (Index 100) • $15.7m reduction following sale of business 131 • $6.4m reduction in labour costs as productivity improved 31% productivity improvement • War
Slide 8: Strong balance sheet to support strategic growth
Strong balance sheet to support strategic growth Statutory Balance Sheet summary ($m) FY24 FY23 Change • Sound financial position provides Sigma with financial $m $m % flexibility and opportunities to invest in growth Cash and cash equivalents 356.5 16.7 2,041% Trade and other receivables 324.7 333.
Slide 9: Net cash at year end – net debt down 43% prior to equity raise
Net cash at year end – net debt down 43% prior to equity raise Net debt movement, $m FY23 – FY24 Inflow 356.5 Outflow 394.4 10.7 (24.8) 8.8 51.5 (4.7) (10.8) (1.6) (37.9) (67.0) Jan 23 EBITDA Changes Asset Sale Net Capex Dividend Paid Other Net Debt excl. Equity raise Jan 24 Net Debt in WC Proceeds
Slide 10: Cash flow – improved cash conversion
Cash flow – improved cash conversion Statutory cash flow summary • Operating cash flow down driven by high margin RAT sales in FY23 with stock pre-purchased in FY22 FY24 FY23 Change $m $m % • Operating cash flow driven by business performance improvements, lower inventory holdings Receipts from cust
Slide 11: Capex profile – major program complete
Capex profile – major program complete Capex Profile • FY24 spend relates to: 140 Business Projects Distribution centres Acq. Of Subsidiaries • Berrinba (Brisbane) automation expansion in preparation for the CW contract 120 109 • MPS equipment upgrades in NSW 100 95 • The major capex program is comp
Slide 12: Vikesh Ramsunder
Vikesh Ramsunder CEO and Managing Director Sigma Healthcare Limited | FY24 results announcement 12
Slide 13: Wholesale sales – world class infrastructure supporting community pharmacy
Wholesale sales – world class infrastructure supporting community pharmacy Total wholesale Units distributed sales during the year Sales revenue Volume Up 4.3% excluding hospital distribution Distributed over 230 million units to community business and non-repeating RAT sales. Like pharmacy during t
Slide 14: Chemist Warehouse supply contract – execution on track
Chemist Warehouse supply contract – execution on track • 5-year supply contract commencing 1 July 2024 • Over $3.0 billion annualised sales, approx. $2.0 billion new annualised sales to Sigma • Execution of plans is on track, including: • Inventory management and replenishment • Team member recruitm
Slide 15: Executing our retail strategy
Executing our retail strategy • Employed a new category team • Consolidation of brands is well advanced • Like-for-like sales in our franchise brands up 9.0% • Some proceeds from equity raise will be used to support brand member growth • Our team are focused on achieving brand franchise targets: • O
Slide 16: Strong pipeline of private and exclusive label products
Strong pipeline of private and exclusive label (PEL) products • We have built internal capability to execute our strategy • FY24 PEL sales currently below 1% of total sales • Developed a strong pipeline of products and improved all aspects of our product sourcing, procurement, pricing and promotion
Slide 17: Third Party Logistics (3PL) a core growth area
Third Party Logistics (3PL) a core growth area • Providing 3PL services in six states • Large footprint climate-controlled facilities • ISO9001 accreditation across entire network • Truganina DC expansion enabled increased 3PL services at this site from the start of the year • Revenue up 17% • Good
Slide 18: Strategy and merger proposal update
Strategy and merger proposal update Sigma Healthcare Limited | FY24 results announcement 18
Slide 19: Strategy execution – build scale, drive efficiency, enhance margin
Strategy execution – build scale, drive efficiency, enhance margin Our Strategy Timeline for delivery 1 Grow scaletheand profitable market share in wholesale business • Secured the 5-year CW supply agreement to commence 1 July 2024 Divest non-core assets and continue to 2 simplify the business • Dis
Slide 20: Update on proposed merger with Chemist Warehouse Group
Update on proposed merger with Chemist Warehouse Group • On 11 December 2023, Sigma announced a proposed merger with Chemist Warehouse Group (CWG) to create a leading pharmaceutical wholesaler, distributor and retail pharmacy franchisor (Proposed Merger)1 — The Proposed Merger is transformational fo
Slide 21: Outlook
Outlook Effectively onboard the Chemist Warehouse supply contract Continue to drive cost efficiency and execute our retail and private and exclusive label strategies Finalise negotiations on new wholesaler funding agreements Complete Chemist Warehouse merger proposal, subject to regulatory and share
Slide 22: Mark Davis, Chemist Warehouse CFO
Mark Davis Chemist Warehouse Chief Financial Officer In compliance with Sigma's continuous disclosure obligations, this announcement contains information about Chemist Warehouse's first half financial performance. These slides have been prepared by Chemist Warehouse and not by Sigma. Sigma Healthcar
Slide 23: 1H FY24 Results Highlights
1H FY24 Results Highlights CWG performing strongly with PBT up 28.6% RETAIL NETWORK CWG 1H FY24 Commentary • CWG results benefitted from combined impacts of retail network sales growth (and corresponding demand for goods and services from CWG) with the Chemist Warehouse 1 value proposition resonatin
Slide 24: CWG Statutory Results 1H FY24
CWG Statutory Results 1H FY24 Statutory Profit And Loss – no normalisation adjustments ’000 6 months ending 6 months ending 31 December 2022 31 December 2023 Commentary Total Revenue 1,678,726 1,771,244 • Financials for CWG represent statutory results before any normalisations or Gross Profit 538,20
Slide 25: CWG Closing Remarks
Mark Davis CWG Closing Remarks Sigma Healthcare Limited | FY24 results announcement 25
Slide 26: Sigma Healthcare Limited | FY24 results announcement
Sigma Healthcare Limited | FY24 results announcement 26
Slide 27: Thank you
Thank you
Slide 28: Important Notice
Important Notice 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 full year period ending 31 January 2024; and • a high level overview of aspe