Sigma Healthcare Ltd · ASX:SIG
Sigma Healthcare — Sigma Pharmaceuticals — H1 2014 Earnings Presentation
21 slides from Sigma Healthcare's earnings presentation, Sep 12, 2013
Slide 1: Experience Strategy Potential
EXPERIENCE STRATEGY POTENTIAL
Slide 2: Results Presentation for the Half Year ended 31 July 2013
For personal use only Results Presentation for the Half Year ended 31 July 2013 Mark Hooper – CEO & Managing Director Jeff Sells – Chief Financial Officer 12 September 2013 – Sydney
Slide 3: Important notice
Important notice For personal use only The material that follows is a presentation of general information about Sigma's activities current at the date of the presentation. It is information given in summary form and does not purport to be complete. No representation or warranty is made as to its com
Slide 4: Overview
Overview For personal use only Overview – Mark Hooper Financial Summary – Jeff Sells Closing remarks – Mark Hooper 4
Slide 5: Overview
For personal use only Overview Presented by Mark Hooper CEO & Managing Director Sigma Pharmaceuticals Limited
Slide 6: First half at a glance
First half at a glance For personal use only • Strong sales and gross profit from growing market share. • Reported EBIT of $24.9 million versus $35.1 million (pcp) after Vifor settlement ($3.7m) and increased doubtful debt provisioning for Harrisons ($4.1m). • Balance sheet remains strong – net cash
Slide 7: Results overview
Results overview For personal use only • Sales revenue up 3% against a flat PBS (6% adjusted for PBS reform). • Sigma continues to offset the impact of PBS reform via adjustments to trading terms and Service Level Initiatives (SLIs). • Operational costs impacted by: ˗ higher Warehouse and Logistics
Slide 8: Key deliverables for Operations in 2013/14
Key deliverables for Operations in 2013/14 For personal use only As detailed in strategy presentation in January 2013 Consolidation of market share gains in wholesaling and further development of Pharmacy Advance offer Growth in Retail brand membership Market leading Multi Channel (e-Commerce) platf
Slide 9: Ongoing investment in growth strategy
Ongoing investment in growth strategy For personal use only Market facing: • Launch of Amcal and Guardian eCommerce sites in July 2013 (investment circa $3m) • Expansion of Private & Exclusive Label platform (investment circa $2m): ˗ Private Label pipeline includes more than 600 products ˗ Exclusive
Slide 10: Financial Summary
For personal use only Financial Summary Presented by Jeff Sells Chief Financial Officer Sigma Pharmaceuticals Limited
Slide 11: H1 2014 income statement
H1 2014 income statement For personal use only Revenue headline % • Grew by 3% despite accelerated PBS $m H1 2014 H1 2013 Variance Change price reform • Like for like growth of 6% adjusted Sales revenues 1,463.8 1,419.8 44.0 3.1% for PBS reform Gross Profit 106.4 103.4 3.0 2.9% • Sales growth from c
Slide 12: Warehouse & Delivery costs
Warehouse & Delivery costs For personal use only • Total Warehouse & Delivery up 3.3% on last year impacted by higher volumes and EBA wage increases. • Number of units shipped increased by 3.8% or 4.1 million units compared to H1 2013. • This has resulted in total labour hours volume increase of 2.3
Slide 13: Sigma's approach to credit risk
Sigma’s approach to credit risk For personal use only • Sigma has continued to reduce extended credit terms, with another round of wind-back currently being implemented. • Significant resources have been added to credit review and monitoring. • New credit legislation allowing the registration of a s
Slide 14: Significant cash return benefits shareholders
Significant cash return benefits shareholders For personal use only $120,000 $100,000 $80,000 Figures in $000 $60,000 $40,000 $20,000 $0 Net Cash at 31 Jan 2013 Cash inflow from Litigation settlement Tax Payment Dividend Payment Shares bought back Others Net Cash at 31 July operating activities (inc
Slide 15: Working capital
Working capital For personal use only As at As at As at As at Working Capital $m 31 Jan 2012 31 Jul 2012 31 Jan 2013 31 Jul 2013 Trade Receivables 593 581 557 549 Inventories 214 224 255 250 Trade Creditors -312 -345 -376 -353 495 460 436 446 Days Sales Outstanding 76 73 69 67 Days Inventory Outstan
Slide 16: Cash conversion cycle still has upside
Cash conversion cycle still has upside For personal use only Cash Conversion Cycle Days 80 70 60 50 40 Jan'11 July'11 Jan'12 July'12 Jan'13 July'13 16
Slide 17: Closing remarks
For personal use only Closing remarks Presented by Mark Hooper CEO & Managing Director Sigma Pharmaceuticals Limited
Slide 18: Pharmacy operating in a challenging environment
Pharmacy operating in a challenging environment For personal use only • PBS growth outlook remains flat and is in danger of moving into negative territory. • Proposal to shorten price disclosure window to six months from October 2014 will accelerate this. • Wholesalers and pharmacies need to be more
Slide 19: Outlook for Sigma
Outlook for Sigma For personal use only • Full year EBIT still expected to be higher than last year (excluding Vifor and Harrisons). • General industry conditions for the second half likely to be similar to first half with flat PBS. • Sigma performance driven by: ˗ improved market share ˗ benefits s
Slide 20: For personal use only
For personal use only
Slide 21: Appendix: ROIC performance
Appendix 1 ROIC performance For personal use only As at As at As at As at $m 31 Jan 2012 31 Jul 2012 31 Jan 2013 31 Jul 2013 Net assets 682.5 669.0 610.8 572.9 Less: Cash and cash equivalents -148.6 -145.8 -112.7 -151.9 Add: Interest bearing liabilities 35.0 20.0 30.0 125.0 Capital employed 568.9 54
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