Galenica AG · SIX:GALE
Galenica — Investor Presentation (January 2019)
41 slides from Galenica's investor presentation, January 2019
Slide 1: Galenica Group Investor Presentation
Galenica Group Investor Presentation January 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 H1 2018 18 6 Regulatory projects 36 7 Outlook 39 August 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. August 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 30 June 2018) 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 1’792
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: 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: First half year 2018 result and profitability significantly improved
First half year 2018 5 Result and profitability significantly improved 1. Solid sales growth +0.9% affected by price reduction measures 2. EBIT increased +7.5% on a comparable basis 3. Net profit increased +8.2% on a comparable basis 4. ROS improved 4.8% (PY: 4.5%) on a comparable basis Augu
Slide 19: Further progress on our development axes
Retrospect 1st HY 2018 5 Further progress on our 3 development axes Expansion Innovation Efficiency August 2018 − © Galenica Group 19
Slide 20: Expansion: new locations and expansion of offerings
Expansion 5 New locations – expansion of offerings − 500 pharmacies Since July: “Bahnhof Apotheke” pharmacy in Zurich main station − Click & Collect: 16,000 items Target by end of 2018: 40,000 items − Careproduct Strengthening of online market position & offering August 2018 − © Galenica Group
Slide 21: Retail innovations
Retail innovations 5 Contribution to reducing healthcare cost evolution - new services Generics Check Distance healthcare August 2018 − © Galenica Group 21
Slide 22: Services innovations
Services innovations 5 Drug and patient safety - sustainability Galexis new refrigerated box: Alloga solar roof: Cold chain guaranteed for up to 30 Energy generation on 10,000m2 hours! August 2018 − © Galenica Group 22
Slide 23: Products & Brands innovation
Products & Brands innovation 5 New name – expanded product range August 2018 − © Galenica Group 23
Slide 24: Efficiency: processes, IT, blistering capacity
Efficiency 5 Processes – IT – blistering capacity Retail: − Process management Services: − Modulo − New blistering machines August 2018 − © Galenica Group 24
Slide 25: Focus 2018/2019
5 Focus 2018/2019 1. Strengthening of 2. Expansion 3. Efficiency projects online platforms August 2018 − © Galenica Group 25
Slide 26: Swiss pharmaceutical market - stable growth
5 Swiss pharmaceutical market − stable growth (YTD June 2018) Value in Value in Market1 million CHF Share Change Market1 million CHF Share Change Total: 2,949.7 100% 1.4% Retail2: 2,233.6 100% 1.7% 3.6% 2.7% Hospitals: 716.1 24.3% -1.5% Rx3: 1,864.0 83.5% 2.7% 6.5% 3.0% 2.3% OTC4: 369.6 16.5% 0.6% P
Slide 27: Galenica Group - result and profitability improved
5 Galenica Group − result and profitability improved Net sales1 (in million CHF) EBIT adjusted2 (in million CHF) +7.5% +0.9% -2.3% 49.4% 49.3% 4.5% 4.5% 4.8% H1 2017 H1 2018 H1 2017 H1 2018 EBIT w/o one-off effects one-off effects EBIT margin (ROS)3 Highlights: 7.5% EBIT growth without one-off eff
Slide 28: Health & Beauty segment - EBIT margin increased
5 Health & Beauty segment − EBIT margin increased Net sales1 (in million CHF) EBIT (in million CHF) +2.5% +9.5% 49.2% 49.7% 6.7% 6.8% 7.3% H1 2017 H1 2018 H1 2017 H1 2018 EBIT margin (ROS) Highlights: Pleasing EBIT margin increase by 50 basis points up to 7.3% Solid sales growth despite price cu
Slide 29: Health & Beauty segment - net sales
5 Health & Beauty segment − net sales Retail1 (in million CHF) Products & Brands1 (in million CHF) +2.6% +0.0% 48.9% 54.5% H1 2017 H1 2018 H1 2017 H1 2018 Highlights: 1% Retail sales growth thanks to the expansion of the pharmacy network Specialty pharmacy Mediservice (mail-order Rx) grew around
Slide 30: Services segment - solid development
5 Services segment − solid development Net sales1 (in million CHF) EBIT (in million CHF) +2.8% +0.9% -22.1% 49.4% 49.9% 1.8% 1.9% 1.9% H1 2017 H1 2018 H1 2017 H1 2018 EBIT w/o one-off effects one-off effects EBIT margin (ROS)2 Highlights: EBIT margin stable at a high level of 1.9% Sales to self-
Slide 31: Galenica Group - stable financial and tax costs
5 Galenica Group − stable financial and tax costs Financial result (in million CHF) Tax rate 18.0% 18.0% 15.0% H1 2017 H1 2018 2017 H1 2017 H1 2018 Highlights: Like in H1 2017, tax rate includes positive one-off effects of around 1% (revision of taxation by tax authority) August 2018 − © Galenica
Slide 32: Galenica Group - robust net profit evolution
5 Galenica Group − robust net profit evolution Net profit (in million CHF) +8.2% -2.4% One-off effects Net profit adj. w/o one-off effect 49.0% IAS19 effect H1 2017 H1 2018 Highlights: Like-for-like net profit growth at +8.2% without one-off effects August 2018 − © Galenica Group 32
Slide 33: Galenica Group - investments
5 Galenica Group − investments Investments in million CHF % of sales 1.8% 2.2% 1.4% Cash conversion1 70% 65% 77% Investments in intangible assets Investments in tangible assets H1 2017 H1 2018 Highlights: H1 2017 (FY 2017) without the acquisition of Merfen® and Vita-Merfen®: - Capex 1.2% (FY 2017:
Slide 34: Galenica Group - Free Cash Flow
5 Galenica Group − Free Cash Flow Free Cash Flow (in million CHF) Divestment of assets and disposal of subsidiaries Cash flow from operating activities Investments in tangible, intangible and financial assets and associated companies Purchase of subsidiaries (net cash flow) H1 2017 H1 2018 Highlight
Slide 35: Galenica Group - strong balance sheet
5 Galenica Group − strong balance sheet Net debt / Equity in million CHF Debt coverage1 1.6x 1.7x 1.9x 48% 46% 43% Equity Net debt 19% 17% 17% H1 2017 H1 2018 % of total liabilities and shareholders' equity Highlights: Net debt at 1,9 x EBITDA, even after dividend payment 2017 without dividend p
Slide 36: Swiss Pharmaceutical market: authorities' measures and projects
Swiss Pharmaceutical market 6 Authorities: measures and 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 August 2018 − © Galenica Group 36
Slide 37: 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 38: 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 39: Galenica Group - outlook 2018
7 Galenica Group − outlook 2018 Sales growth < 2% due to the higher than announced price cuts EBIT (excluding effects of IAS 19) at least at prior-year level thanks to improved profitability 2018 dividend at least at prior-year level 07.01.2019 − © Galenica Group 39
Slide 40: Contact information
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 August 2018 − © Galenica 40
Slide 41: 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
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