Sigma Healthcare Ltd · ASX:SIG
Sigma Healthcare — H1 2025 Earnings Presentation
28 slides from Sigma Healthcare's earnings presentation, Sep 25, 2024
Slide 1: 1H25 Results Announcement
1H25 Results Announcement 25 September 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 - 1H25 Results Announcem
Slide 3: Agenda
Agenda 1. Review of the year 2. Financial performance 3. Operational update 4. Merger proposal update 5. Outlook 6. Chemist Warehouse update 7. Sigma Q&A Sigma Healthcare Limited - 1H25 Results Announcement 3
Slide 4: 1H25 at a glance – strategic execution delivers returns
1H25 at a glance – strategic execution delivers returns • Growth – Normalised revenue grew 17.3%, including the onboarding of the Chemist Warehouse Group (CWG) supply contract from 1 July 2024 and 13.0% like for like revenue growth across Amcal and DDS brands 17.3% # • Operating Leverage – Seamlessl
Slide 5: Mark Conway, Chief Financial Officer
Mark Conway Chief Financial Officer Sigma Healthcare Limited - 1H25 Results Announcement 5
Slide 6: Sustained improvement in financial performance
Sustained improvement in financial performance Statutory P&L summary • Sales revenue: up $158m or 9.4% reflecting: 1H25 1H24 – CWG new supply contract commenced in July $m 31 Jul 24 31 Jul 23 Change – Like for like sales from Amcal and DDS together up 13.0% Sales Revenue 1,840.3 1,681.8 9.4% – Non
Slide 7: Gross Profit – margin compression driven by PBS mix
Gross Profit – margin compression driven by PBS mix Higher Gross Profit growth driven by: Revenue by half versus Gross Margin • Volume growth in wholesale 7.2% 2,000 6.7% 6.6% 6.6% 6.5% • Lost contribution from the hospital business 1,500 Lower Gross Margin percentage impacted by: • A higher proport
Slide 8: Operating costs – disciplined cost management
Operating costs – disciplined cost management Warehouse and Delivery: Down $0.1m (-0.1%)* Warehouse Productivity – unit output / hours (Index 100) 131 • $2.3m reduction following divestment of hospitals business 126 122 • Freight savings driven by vehicle, route optimisation and 119 117 cartons cons
Slide 9: Balance sheet – headroom to support strategic growth
Balance sheet – headroom to support strategic growth Balance Sheet summary ($m) 1H25 FY24 1H24 • Balance sheet provides Sigma with financial flexibility and $m 31 Jul 24 31 Jan 24 31 Jul 23 opportunities to invest in growth Cash and cash equivalents 234.2 356.5 11.3 Trade and other receivables 599.8
Slide 10: Cash flow – increased investment in inventory
Cash flow – increased investment in inventory Operating cash flow down against pcp driven by: Statutory cash flow summary ▪ Operating cash flow during the period reflects the investment 1H25 1H24 in inventory for the new CWG Supply Contract $m 31 Jul 24 31 Jul 23 Change ▪ Timing of upfront costs in
Slide 11: Vikesh Ramsunder, CEO and Managing Director
Vikesh Ramsunder CEO and Managing Director Sigma Healthcare Limited - 1H25 Results Announcement 11
Slide 12: Successful onboarding of the CWG supply contract
Successful onboarding of the CWG supply contract • Successful commencement of the 5-year CWG supply contract from 1 July 2024 (approximately $2.0 billion new to Sigma) • Onboarded 299 new team members and invested in over 15,000 hours training, including safety training • Volume up 57% however kilom
Slide 13: Wholesale – enhanced execution capability
Wholesale – enhanced execution capability • Total wholesale volume up 9% for 1H25 Wholesale Wholesale ▪ Absorbed 57% volume growth in July capacity Volume ▪ Anticipate annualised volume growth of around 40% 35% 123m • Retain approximately 35% available wholesale Approximately 35% available Distribut
Slide 14: Retail strategy – trusted brands resonate with consumers
Retail strategy – trusted brands resonate with consumers • Like-for-like sales in our Amcal and Discount Drug Stores brands is together up 13% supported by improvement in brand standards • Strong brand recognition, with Amcal awarded Canstar Blue’s 2024 Most Satisfied Customer Award (Pharmacies), an
Slide 15: Private and exclusive label (PEL) products – on track for delivery in 2H25
Private and exclusive label (PEL) products – on track for delivery in 2H25 • PEL pipeline of products has been built and our product strategy and launch schedule remains on track • 32 PEL products were launched in 1H25, with over 220 PEL products expected to launch in 2H25, providing opportunity for
Slide 16: Third Party Logistics (3PL) – key growth vector
Third Party Logistics (3PL) – key growth vector • In 1H25, Sigma despatched over 65 million units from our ISO9001 accredited DCs • Approximately 50,000 pallet storage capacity across all DCs in six States, providing a national solution for pharmaceutical manufacturers • Existing capacity available
Slide 17: Update on proposed merger with Chemist Warehouse Group
Update on proposed merger with Chemist Warehouse Group • Proposed merger announced on 11 December 2023 – truly transformational transaction to create a leading pharmaceutical wholesaler, distributor and retail pharmacy franchisor • Sigma submitted its application for clearance to the ACCC in Februar
Slide 18: Outlook
Outlook • Growth is underpinned by the new 5-year CWG supply contract that commenced 1 July 2024 • Available wholesale capacity of approximately 35% to support growth with limited capex investment • Expect to deliver FY25 Normalised EBIT of between $50m and $60m • We maintain our medium-term EBIT ma
Slide 19: Mark Davis, Chemist Warehouse Chief Financial Officer
Mark Davis Chemist Warehouse Chief Financial Officer In compliance with Sigma's continuous disclosure obligations, this announcement contains information about Chemist Warehouse’s full year financial performance. These slides have been prepared by Chemist Warehouse and not by Sigma. Sigma Healthcare
Slide 20: FY24 Results Highlights
FY24 Results Highlights Compelling value proposition resonating with more retail customers CW Group Holdings Limited (CWG) FY24 Commentary • Strong earnings growth with statutory PBT up 33.7%, driven by; $574m o retail network sales growth, +14.1% o new store openings, 35 stores added in the year: 1
Slide 21: CWG Statutory Results FY24
CWG Statutory Results FY24 Statutory Profit And Loss – no normalisation adjustments $’000 FY23 FY24 Commentary Total Revenue 3,090,669 3,294,402 • Financials for CWG represent statutory results before any normalisations or Gross Profit 917,696 1,042,952 management adjustments EBITDA 555,300 616,807
Slide 22: CWG FY25 Outlook - Ongoing Growth
CWG Statutory Results FY24 FY25 Outlook - Ongoing Growth FY25 has started positively • FY25 has started well with positive network sales momentum and additional store openings in Australia and internationally • Transition to the Sigma supply arrangement which started on 1 July 2024 has progressed sm
Slide 23: Mark Davis, CWG Closing Remarks
Mark Davis CWG Closing Remarks Sigma Healthcare Limited - 1H25 Results Announcement 23
Slide 24: Sigma Healthcare Limited - 1H25 Results Announcement
Sigma Healthcare Limited - 1H25 Results Announcement 24
Slide 25: Thank you
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Slide 26: Appendix 1 - Reconciliation of normalised result
Appendix 1 - Reconciliation of normalised result 1H25 RECONCILIATION 1H24 RECONCILIATION Key callouts: Normalised Merger costs CW Statutory Normalised CHS Hospital CHS Hospital Statutory • Non-recurring M&A related $m 1H25 onboarding 1H25 1H24 Gain on sale Discont. Ops 1H24 costs in 1H25 associated
Slide 27: Appendix 2 - Reconciliation of normalised expenses
Appendix 2 - Reconciliation of normalised expenses 1H25 RECONCILIATION 1H24 RECONCILIATION Year-on-year Normalised Merger costs CW Statutory Normalised CHS Hospital CHS Hospital Statutory Normalised Statutory $m 1H25 onboarding 1H25 1H24 Gain on sale Discont. Ops 1H24 $m % $m % Warehousing & deliver
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 half year period ending 31 July 2024; and • a high-level overview of aspects