Galenica Ag · SIX:GALE
Galenica — Investor Presentation (March 2018)
35 slides from Galenica's investor presentation, March 2018
Slide 1: Galenica Group Investor Presentation
Galenica Group Investor Presentation March 2018
Slide 2: Agenda
Agenda Page 1 History 3 2 Galenica at a glance 6 3 Business Sectors 11 4 Financial track record 16 5 Business Update 2017 18 6 Regulatory projects 30 7 Outlook 33 March 2018 − © Galenica 2
Slide 3: Building the leading Swiss healthcare platform over 90 years
1 Building the leading Swiss healthcare platform over 90 years Foundation of Creation of Acquisition of Amavita uniform Acquisition of Galenica as a Merfen® and brand in Bahnhof wholesaler Vita-Merfen® Organic and Switzerland Apotheke acquisition-led expansion of Acquisition of Expansion of IPO of p
Slide 4: History of resilient growth and margin improvement
1 History of resilient growth and margin improvement Logistics, HealthCare Information & Retail1,4 Galenica 2007–17 CAGRs 2007-17 4.2% Retail market sales2 2.1% sales CAGR Galenica net sales 4.2% Galenica EBIT3 14.3% 2007-17 3'214 EBIT CAGR3 14.3% 5.0% 2'915 3'009 2'766 2'826 2'526 2'603 2'661 2007-
Slide 5: April 2017: Outstanding IPO of Galenica Santé
1 7 April 2017: Outstanding IPO of Galenica Santé Largest IPO in Europe in H1 2017 and first sizeable 100% subsidiary IPO since years Multiple oversubscription with pricing at the top end of the price range at CHF 39.00 HF 13% RoW 15% PB Broadly diversified 30% US 48.75m 12% 48.75m allocation
Slide 6: Galenica is the leading healthcare provider in Switzerland
2 Galenica is the leading healthcare provider in Switzerland 2017 net sales CHF3’214m 2017 EBIT1 CHF148m Health & Beauty Services Retail Products & Brands Market position2 #1 Consumer Health market position2 #2 Market position2 #1 2017 net sales 2017 EBIT 2017 net sales 2017 EBIT (pre eliminations o
Slide 7: Operating in a stable and attractive Swiss healthcare market
Operating in a stable and attractive Swiss healthcare market 2 with favourable long-term fundamentals Resilient, stable Swiss healthcare retail sector2 Pharmaceutical market in Switzerland (2017)1 CHF bn (based on ex-manufacturer price) 2017-21 CAGR 2.1%3 By value−CHF5.8bn By volume−185 million pack
Slide 8: Experienced management team with proven track record
2 Experienced management team with proven track record Jean-Claude Clémençon − CEO since IPO CEO − Head of Business Sector Retail since 2015, 29 years industry experience of which 23 years at Galenica Group − Joined Galenica Group in 1995 − Previously, Head of Logistics and HCI at Galenica Group, He
Slide 9: Galenica: The first choice for health, beauty and wellbeing
2 Our ambition and self-perception Galenica: The first choice for health, beauty and wellbeing. March 2018 − © Galenica 9
Slide 10: Our Strategy - the power of Leverage drives sustained value creation
2 Our Strategy - the power of 3 drives sustained value creation Products & Brands − Leverage leading positions to promote higher margin and exclusive products − Develop and launch own and partner brands and products for pharmacies Leverage − Further expand and optimise retail Retail 2015 2016 networ
Slide 11: The largest pharmacy retailer in Switzerland
3 The largest pharmacy retailer in Switzerland Retail Network of chains (# of pharmacies as of 31 December 2017) Webshop Competitive positioning—#1 market position4 − Largest branded pharmacy network by By number of pharmacies5 Total # of pharmacies as of 2016 number of pharmacies in Switzerland 1
Slide 12: Ongoing pharmacy network consolidation and optimisation
3 Ongoing pharmacy network consolidation and optimisation Retail Proven track record of delivering synergies Widely spread pharmacy network covers every through streamlining of business processes and Region in Switzerland creating value through acquisitions and network optimisation Marketing IT
Slide 13: Diversified product portfolio for health, beauty and wellbeing
3 Diversified product portfolio for health, beauty and wellbeing Retail GaleniCare’s retail product offering in % of sales1 12% 38% 19% 52% 17% 4% 10% Beauty Nutrition, Personal OTC medicines Prescription medicines and Patient Care of which originals of which generics 1 Sales YTD December 2017, incl
Slide 14: Leading role in Consumer Health with broad and innovative product portfolio
Leading role in Consumer Health 3 with broad and innovative product portfolio Products & Brands Portfolio Competitive position: #2 Consumer Health1 market position OTC consumer health brands ORAL PAIN REMEDIES5 Market share2 (%) No. 1 30% market share2 5.7 5.5 5.4 TOPICAL PAIN Exclusive partner heal
Slide 15: Leader in pre-wholesale and wholesale distribution
Leader in pre-wholesale and wholesale distribution, supported 3 by an innovative healthcare information business Services Services Competitive positioning - #1 market position1 − Pre-wholesale outsourced storage and distribution Pre-wholesale market share % Wholesale market share % − Logistics servi
Slide 16: Long-term track record of sustainable growth and attractive cash generation
Long-term track record of sustainable growth and 4 attractive cash generation … Logistics, HealthCare Information & Retail1 Galenica 2007–17 CAGRs Retail market sales2 2.1% Galenica net sales 4.2% Net sales (CHFm) 3'214 Galenica EBIT3 14.3% 3'009 2'661 2'766 2'826 2'915 Above market growth 2'467 2
Slide 17: … demonstrating strong performance in both segments
4 … demonstrating strong performance in both segments Health & Beauty Services Retail Health & Beauty Logistics and HCI Services Net sales (CHFm) 19.5% 3.6% 1.2% 4.8% 2'502 2'329 2'011 2'158 2'171 2'245 1'335 1'393 1'437 1'483 1'246 429 2007A … 2013AHealth & Beauty2015A 2014A 2016A 2017A 2007A … 201
Slide 18: 2017 in figures - Pleasing performance thanks to all Business sectors
5 2017 in figures - Pleasing performance thanks to all Business sectors Galenica Group: in million CHF Sales: 3,214.2 + 6.8% EBIT1): 148.2 + 10.5% Net profit1): 124.4 Dividend2): CHF 1.65 per share 1) Excluding the effects of IAS 19 2) Proposal to the Annual General Meeting on 9 May 2018 March 2018
Slide 19: EXPANSION 2017: expansion in all Business sectors
EXPANSION 5 2017: expansion in all Business sectors Retail Products & Brands Services 8 new locations New products Acquisitions and partnerships − Own pharmacies: 337 − Merfen® and Vita-Merfen® − Pharmapool − Total network: ~ 500 − Beauty brands: Lierac, − New exclusive Phyto partnerships − Partner
Slide 20: INNOVATION 2017: new services for clients and partners
INNOVATION 5 2017: new services for clients and partners Retail - online Services Aprioris b Uninterrupted cold chain New products Documedis (Deep freeze) cold chain (down to -80°C) March 2018 − © Galenica 20
Slide 21: EFFICIENCY 2017: synergies developed and consistently utilised
EFFICIENCY 5 2017: synergies developed and consistently utilised 1. New ERP project (pre-wholesale and wholesale) 2. Triapharm® introduced throughout the Group (incl. direct invoicing) Synergies 3. Back-office functions in Retail centralised Healthcare and further process adjustments Information Mar
Slide 22: Swiss Pharmaceutical market - continuous value growth (YTD Dec 2017)
5 Swiss Pharmaceutical market − continuous value growth (YTD Dec 2017) Market1 Value CHFm Share Change Market1 Value CHFm Share Change Total: 5’824.6 100% -1.3% Retail2: 4’442.3 100% -1.0% 4.2% 3.0% -4.0% -0.2% Hospitals: 1’382.3 23.7% RX3: 3’705.0 83.4% 8.1% 3.7% -0.5% -1.8% Physicians: 1’446.7 24.
Slide 23: Galenica Group - Pleasing development in challenging market environment
Galenica Group − 5 Pleasing development in challenging market environment Net sales (in million CHF) EBIT adjusted1 (in million CHF) +6.8% +10.5% +6.8% +6.9% +14.1% +6.8% 49% 51% 49% 51% 52% 48% 50% 50% 4.5% 4.4% 4.5% 4.8% 4.4% 4.6% 1 excluding the effects of IAS19 EBIT Margin (ROS) Highlights: St
Slide 24: Health & Beauty segment - Solid growth and margin improvement
5 Health & Beauty segment − Solid growth and margin improvement Net sales (in million CHF) EBIT (in million CHF) +3.2% s +6.7% s +2.9% +3.5% +6.5% +6.9% 49% 51% 49% 51% 50% 50% 50% 50% 6.6% 6.8% 6.7% 6.7% 6.5% 6.5% EBIT Margin (ROS) Highlights: 1.1% Retail growth thanks to the expansion of the pha
Slide 25: Net sales - Retail and Products & Brands
5 Net sales - Retail and Products & Brands Retail (in million CHF) Products & Brands (in million CHF) +3.1% s +6.0% s +2.5% +3.6% +6.8% +5.2% 49% 51% 49% 51% 54% 54% 46% 46% March 2018 − © Galenica 25
Slide 26: Services segment - Expanded offering with Pharmapool
5 Services segment − Expanded offering with Pharmapool Net sales (in million CHF) EBIT (in million CHF) +7.4% s +26.7% +7.4% +7.4% +41.9% +11.0% 49% 51% 49% 51% 57% 51% 49% 43% 2.3% 2.0% 1.8% 1.7% 1.7% 1.7% EBIT Margin (ROS) Highlights: Successful integration of Pharmapool from day one on (about +
Slide 27: Net profit exceeds expectations
5 Net profit exceeds expectations of which one-off effects 2017 (in million CHF) 2017 2016 disposals deferred tax EBIT adj.1) 148.2 134.2 7 million (Effect of IAS 19) -6.4 -10.4 EBIT 141.8 123.8 7 million Financial result -1.9 -19.5 EBT 139.9 104.3 7 million Taxes -21.0 -20.9 -0.7 million 4.3 millio
Slide 28: Pleasing free cash flow
5 Pleasing free cash flow (in million CHF) Divestment of assets and disposal of subsidiaries Cash flow from operating activities Investments in assets Purchase of subsidiaries March 2018 − © Galenica 28
Slide 29: Galenica Group - Robust balance sheet
5 Galenica Group − Robust balance sheet Investments in million CHF Net debt / Equity in million CHF % of sales 1.2% 1.7% Debt coverage2 2.0x 1.6x Cash conversion3 80% 70% 48% 45% 21% 17% 1 Investments in intangible assets Investments in tangible assets Equity Net debt % of Total liabilities and shar
Slide 30: Swiss Pharmaceutical market – regulatory projects
6 Swiss Pharmaceutical market – regulatory projects Reduction in drug prices 2018 2019 2020 Change of category of OTC products1) 2019 LOA IV LOA V 2020 Price of generics Amendment of Health from 2020 …. Insurance Act (KVG) 1) Swissmedic categories C, D March 2018 − © Galenica 30
Slide 31: Swiss Pharmaceutical market – regulatory matrix for products & channels
6 Swiss Pharmaceutical market – regulatory matrix for products & channels Upcoming distribution changes expected to be largely favourable for pharmacies Hospital Doctor Online pharmacies Pharmacy Drugstore Large retailers Changes expected Prescription Swissmedic A 1 Regulated4) Swissmedic B Soft der
Slide 32: Swiss Pharmaceutical market – composition of drug prices
6 Swiss Pharmaceutical market – composition of drug prices Fixed margin elements help to offset price reductions Composition of the price of a prescription/ reimbursable drug: c.3/4 of the retail margin secured by fixed elements ~ 8 %(1) LOA – Retail ~ 8% Per prescription / line service fees FOPH de
Slide 33: Galenica Group - Outlook
7 Galenica Group − Outlook Dividends 2017 CHF 1.65 dividend per share from capital contribution reserve1) Outlook for 2018 Sales growth of 2% to 3% EBIT (excluding effect of IAS 19) similar to that in 2017 2018 dividend at least at prior-year level 1) Proposal to the Annual General Meeting o
Slide 34: Contact information Investor Relations
Galenica Group Contact information Investor Relations Media Felix Burkhard Christina Hertig CFO Galenica Head Corporate Communication Tel.: +41 58 852 85 29 Tel.: +41 58 852 85 17 Mail: investors@galenica.com Mail: media@galenica.com March 2018 − © Galenica 34
Slide 35: Disclaimer
Disclaimer Certain statements, beliefs and opinions in this presentation are forward-looking, which reflect the Company’s or, as appropriate, the Company’s directors’ current expectations and projections about future events. By their nature, forward-looking statements involve a number of risks, unce