Ibnsina Pharma · EGX:ISPH
Ibnsina Pharma — H1 2019 Earnings Presentation
36 slides from Ibnsina Pharma's earnings presentation, 2019
Slide 1: Investor Presentation 1H 2019 Results
Investor Presentation 1H 2019 Results Egypt’s Fastest Growing Pharmaceutical Distributor § 2nd largest pharmaceutical distributor with a market share of 19.4% § c.42k clients served annually through a network of 62 operational sites and a fleet of 683 vehicles § 5-year revenue CAGR of 32% compared t
Slide 2: Disclaimer
Disclaimer THIS DOCUMENT CONTAINS STATEMENTS THAT ARE, OR MAY BE DEEMED TO BE, “FORWARD-LOOKING STATEMENTS” WHICH ARE NOT HISTORICAL FACTS BUT RATHER ARE STATEMENTS OF FUTURE EXPECTATIONS AND PROJECTIONS BASED ON MANAGEMENT’S VIEWS AND ASSUMPTIONS REGARDING TRENDS IN THE EGYPTIAN, MIDDLE EASTERN, EU
Slide 3: Agenda
Agenda I Introduction to the Company II Key Investment Highlights III Appendix IV Contact Information 3
Slide 4: The Company in numbers
II Introduction to the Company The Company in numbers 17+ years Experience in pharmaceutical distribution #1 Growing pharmaceutical distributor in Egypt 2nd Largest pharmaceutical distributor with 19.4% market share in 2019 c.43k Retail pharmacies, hospitals & wholesalers served in 1H19 Over 350 Mul
Slide 5: Ibnsina Pharma, Egypt's fastest growing pharmaceutical distributor
II Introduction to the Company Ibnsina Pharma, Egypt’s fastest growing pharmaceutical distributor… Company Overview Market Share¹ Established in 2001, Ibnsina Pharma “ISP” is the fastest growing, and 2nd largest, pharmaceutical distributor in Egypt with a market share of 19.4% Nationwide distributio
Slide 6: Strategies Timeline
Strategies Timeline … 2015 Expansion Strategy: 2009-2012 Launch: 2001-2005 Investment to add 15 distribution Established in 2001 under the name centers & 5 offices, and enhance “Ibnsina Laborex” in partnership with efficiency through standardizing Pinault Printemps Redoute (“PPR”) operational proces
Slide 7: Optimally expanding our distribution network to unlock value
II Introduction to the Company …optimally expanding our distribution network to unlock value…. Distribution Network No. of Sites (Rev/Site – EGP mn) Revenue by Business Line 7 Platforms and main warehouse 47 Distribution Centers (DC) 174 226 104 122 3.0% 0.4% 3.8% 1 Tender DC 2 Reverse Logistics War
Slide 8: Leveraging our network to serve our c.42k customers nationwide
II Introduction to the Company …and leveraging our network to serve our c.42k customers nationwide Clients by Geography (1H2019) 14.6% 14.7% 9.8% 13.9% 30.7% 12.3% 31.5% 42.2% 17.1% 43.5% 25.1% 25.7% 35.7% 28.8% 28.8% 25.5% 42,087 39,366 824 1,897 Retail Pharmacies Wholesale Clients Hospital Clients
Slide 9: Key Investment Highlights
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Slide 10: Key Investment Highlights
III Key Investment Highlights Key Investment Highlights 1 Solid Demographic A rapidly growing population coupled with a growing middle class and increasing healthcare awareness, positions Egypt Profile as one of the most attractive consumer markets in the region 2 Attractive Industry A highly defens
Slide 11: Solid Demographic Profile
III Key Investment Highlights 1 Solid Demographic Profile Egypt’s demographic profile makes it the region’s largest consumer market Population I mn Age Pyramid Urban Population Disposable Income | EGP bn Population (mn) Growth Rate Egypt has seen a growth in health awareness on the back of a growing
Slide 12: Attractive Industry Dynamics (I/III)
II Key Investment Highlights 2 Attractive Industry Dynamics (I/III) Low healthcare and pharmaceutical expenditure with unparalleled growth potential Healthcare Sector Overview Health Expenditure per capita vs GDP per capita (USD) - 2018 Healthcare Expenditure % of GDP (2018) Egyptian Household Expen
Slide 13: Attractive Industry Dynamics (II/III)
II Key Investment Highlights 2 Attractive Industry Dynamics (II/III) A highly defensive sector with significant room for continued growth Total Market Size | EGP bn Market Segmentation Egypt’s healthcare market is the fastest growing in the region driven by significant growth in the pharmaceuticals
Slide 14: Attractive Industry Dynamics (III/III)
III Key Investment Highlights 2 Attractive Industry Dynamics (III/III) A highly defensive sector with significant room for continued growth Pharma Total Market Share Market Segmentation I Market Share FY2018 Public Sector 5% Novartis 8% Pharco 6% ISP 20% Ezaby 2% GSK 5% Seif 1% Roushdy 2% Sanofi 5%
Slide 15: Strong Market Share
III Key Investment Highlights 3 Strong Market Share Exceptional profitable growth on the back of a solid value-based differentiation strategy ISP is the fastest growing distributor in the Egyptian market 25% 24% ( +1%) ISP Market Share Progression 20.0% 2013 12% 2018 18.0% 20% 16.4% 39 Bn (+ 8%) 92
Slide 16: Efficient Business Model (I/II)
III Key Investment Highlights 4 Efficient Business Model (I/II) Operational efficiency driven by best-in-class supply chain processes Distribution Value Chain Overview Sourcing Processing Distribution Commercial team sources orders from 350+ suppliers Over 200 platform operations employees handle an
Slide 17: Efficient Business Model (II/II)
4 Efficient Business Model (II/II) Innovative Technology Solutions Map Innovative B2B Loyalty Program enhance business relationship with all the customers and applies to all digital solutions SM ERPSM CRM Business Financial & Operational Marketing ,Sales ,& Excellence Service Excellence Intelligence
Slide 18: Resilient Supply Chain
III Key Investment Highlights 5 Resilient Supply Chain Highly diversified supplier/client base significantly mitigating supply chain risks Diversified Geographical Presence Minimal Supplier Concentration Expansive SKUs Coverage Sanofi Distributed Alexandria Aventis 7% Amoun 5% by ISP 14.6% Cairo & C
Slide 19: Robust Financial Performance
6 Robust Financial Performance Robust financial performance with double digit top line and bottom line growth 1H19 1H19 1H19 1H19 Net Revenues Gross Profit EBITDA Net Profit EGP 7.6 BN EGP 608.3 MN EGP 299.1 MN EGP 103.2 MN ▲ 26.8% y-o-y ▲31.0% y-o-y ▲ 41.5% y-o-y ▲ 34.8% y-o-y (1) Normalized Net Pr
Slide 20: Robust Financial Performance
III Key Investment Highlights 6 Robust Financial Performance Robust financial performance with double digit top line and bottom line growth Gross Revenue1 | EGP mn Gross Profit | EGP mn, % EBITDA & Margin | EGP mn, % CAGR 33% CAGR 38% 1 0 . % CAGR 45% 13,678 9 .0 % 8.6% 8.4% 4.2% 4.3% 7.9% 8.1% 8 .0
Slide 21: Robust Financial Performance
III Key Investment Highlights 6 Robust Financial Performance Effective working capital management has been a key success factor to ISP’s performance DOH 2016 2017 2018 1H 2018 1H 2019 29 33 Inventory days 34 34 35 days days days days 83 82 days 83 83 94 Receivables days days days days 114 124 days 1
Slide 22: New Revenue Streams
III Key Investment Highlights 7 New Revenue Streams Expansion into high-margin diversified revenue streams to further enhance profitability Warehousing Transportation Warehousing services for suppliers which allows them to save significant CAPEX. ISP Capitalizing on a growing need for specialized tr
Slide 23: Experienced Management Team
III Key Investment Highlights 8 Experienced Management Team Highly experienced management team with strong track record 28 years of pharmaceutical industry experience with focus on commercial operations, IT, quality assurance and administration. Mahmoud Abdel Gawad Prior to Ibnsina, Mahmoud held sev
Slide 24: Experienced Management Team
III Key Investment Highlights 8 Experienced Management Team Seasoned board of directors with diverse experience across various industries Over 40 years of experience across various industries including healthcare, FMCG, and financial services with focus on all investment activities pursued by the Co
Slide 25: Experienced Management Team
III Key Investment Highlights 8 Experienced Management Team Seasoned board of directors with diverse experience across various industries 42 years of experience in finance and banking. Hany Badr His experience included serving as Head of Treasury at Faisal Islamic Bank, until 2016, and Assistant Gen
Slide 26: Organizational Structure
III Key Investment Highlights 8 Experienced Management Team Organizational Structure Board Committees Executive Chairman Management Committees Mohsen Mahgoub Audit Committee Executive Committee Business Development Committee Board of Directors Business Review Committee Remuneration Committee Investm
Slide 27: Sustainability of Growth and Margin Profile
Sustainability of Growth and Margin Profile 27
Slide 28: Sustainability of Revenue Growth
III Sustainability of Growth and Margin Profile Sustainability of Revenue Growth A B C Market Volume Drives Company Specific Volume Drivers Average Selling Price Drivers þ Population Growth CAGR (19E-23E): 2.0 þ Continuously enhancing market share in both retail and non retail market segment þ Const
Slide 29: Annual Revenue Drivers and Contribution to Top Line Growth
III Sustainability of Growth and Margin Profile Annual Revenue Drivers and Contribution to Top Line Growth Market Share Gain Contribution to Growth % EGP 3,860mn Y-o-Y Growth 39% Market Growth Contribution to Growth % Revenue(1) (EGP mn) +24% Market Growth EGP 2,446mn Y-o-Y Growth 33% +2.0% 67% Mark
Slide 30: Enhancing Profitability
III Sustainability of Growth and Margin Profile Enhancing Profitability A B Economies of Scale Efficient Business Model þ Favorable Cost Structure þ Fully Automated Supply Chain ISP’s CoGs is mainly the cost of medicine bought, all other operational costs are allocated to SG&A, with c.60% being fixe
Slide 31: Appendix
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Slide 32: A significantly complex industry with high barriers to entry
IV Appendix A significantly complex industry with high barriers to entry Barriers to Entry Operational Complexity Inventory A Variety of High Variability of Labor Intensive Geographically Management SKUs Demand Business Dispersed Client Base Highly complex inventory 9k unique drug therapies Short-no
Slide 33: Income Statement
IV Appendix Income Statement In EGP ( million ) 2Q2018 2Q2019 YoY p 1H2018 1H2019 YoY p Gross Revenue 3,149,036 3,916,623 24% 6,107,378 7,728,104 26.5% Net Revenue 3,069,762 3,819,772 5,950,861 7,546,121 Cost Of Revenue (2,821,193) (3,504,269) (5,486,558) (6,937,852) Gross Profit 248,568 315,504 27%
Slide 34: Balance Sheet
IV Appendix Balance Sheet In EGP ( million ) 1H2019 FY2018 Property & Equipment, net 457,929 431,409 Other Assets 8,137 7,641 Projects Under Construction 429,687 336,288 Leased Assets 54,586 37,475 Deferred Income Taxes 12,145 8,912 Total Long-term Assets 980,484 821,726 Inventories 1,585,053 1,407,
Slide 35: Contact Information
Contents ¡1 Executive Summary ¡2 Company Overview ¡3 Key Investment Highlights ¡4 Financial Performance Review ¡5 Contact Information Contact Information 35
Slide 36: Contact Information
V Contact Information Contact Information Mohamed Mahmoud Shawky Investor Relations Manager Tel.: +2010 00852771 Email: mohamed.shawky@Ibnsina-pharma.com 36