Sigma Healthcare Ltd · ASX:SIG
Sigma Healthcare — FY2021 Earnings Presentation
24 slides from Sigma Healthcare's earnings presentation, Mar 23, 2021
Slide 1: Positioned for sustainable growth
Positioned for sustainable growth FY21 Results Announcement 23 March 2021
Slide 2: Important Notice
Important Notice This presentation for Sigma Healthcare Limited and its subsidiaries (Sigma Group) is designed to provide: • an overview of the financial and operational highlights for the Sigma Group for the full year period ending 31 January 2021; and • a high level overview of aspects of the oper
Slide 3: Mark Hooper, CEO & Managing Director
Mark Hooper CEO & Managing Director 1. Highlights and Strategy 2. Financial performance 3. Operational Performance 4. Outlook Sigma Healthcare Limited – FY21 Results Presentation 3
Slide 4: Highlights
Highlights Sigma has delivered a strong financial performance and renewed its infrastructure and technology, supported by an engaged team 39.2% increase Strong organic growth Efficient platform Dividend of 1cps Positive engagement Financial Operational Business Capital ESG Performance Performance Tr
Slide 5: Clear and consistent Strategy to drive growth
Clear and consistent Strategy to drive growth A diversified healthcare company that leverages operational capability to drive better outcomes Optimise an leverage our Drive organic efficient investment Execute strategic growth operating cost in automated DC opportunities from existing core base netw
Slide 6: Jackie Pearson CFO
Jackie Pearson CFO Sigma Healthcare Limited – FY21 Results Presentation 6
Slide 7: Financial Performance – Organic growth from an efficient base
Financial Performance – Organic growth from an efficient base 1) Sales Revenue o Strong wholesale pharmacy growth: REPORTED UNDERLYING* • Non-CW sales up 11.4% on LY and well ahead of the market • CW sales down 11.9% on LY which included 5 months of PBS $m FY2021 FY2021 FY2020 Change o Retail brands
Slide 8: Financial Performance – expectations underpinning FY22 EBITDA growth
Financial Performance – expectations underpinning FY22 EBITDA growth 1) Sales Revenue o Organic growth to continue despite potential weakness in OTC o Full Year run rate of CW FMCG sales of $800 million o Expansion businesses normalising post COVID-19 impact 2) Other Revenue o Recovery of merchandis
Slide 9: Capital Management
Capital Management Dividends Share Buy-Back Capex • Fully Franked Dividend of 1.0 cents • Remains an option but not currently • Expect $55m capital expenditure per share: actively buying during FY22 to finalise infrastructure › Ex-Dividend Date – 6 April 2021 • Focus of Board and Management is and I
Slide 10: Capital Management - continued
Capital Management - continued Return on Invested Capital Cash flow and Cash Net Debt (ROIC) Conversion Cycle (CCC) • Underlying ROIC rebounded • Net Debt $50.3m at 31 January • CCC increased to 31 days quicker than previously outlined – 2021 • Reflects increased inventory 10.1% up from 7.1% at 31 J
Slide 11: Project Pivot – $100+ million target achieved
Project Pivot – $100+ million target achieved o Implemented actions to achieve $100+ million efficiency gains – will incrementally benefit results in FY22 and ongoing $100+m efficiency gains achieved in line • 60% - efficient removal of costs to serve CW under original contract with project outlined
Slide 12: Digital Transformation well advanced
Digital Transformation well advanced o Progressing our Digital Transformation and creating efficiency in how we do business across the group o Salesforce CRM was fully implemented in 2020 o SAP S/4HANA ERP implementation will conclude in Q4 CY21 • On track & on budget despite COVID-19 restrictions o
Slide 13: Mark Hooper CEO & Managing Director
Mark Hooper CEO & Managing Director Sigma Healthcare Limited – FY21 Results Presentation 13
Slide 14: Organic growth in Pharmacy well above market
Organic growth in Pharmacy well above market Wholesale Sales Pharmacy Brands: o Like-for-like sales up 9.0% after delivering 11.7% in o Sales (ex-CW) up 11.4% - average market growth of 3.1%# FY20 (ex-Hepatitis C medicines) o Ethical sales (ex-CW) up 12.4% - average market growth of 5.5%# o Pipeline
Slide 15: Leveraging an efficient DC network with capacity
Leveraging an efficient DC network with capacity o Investment in an efficient DC network is delivering significant Operational Efficiency improvement 135% and ongoing productivity improvements: 130% • +30% from FY20 to FY24 125% o Competitive advantage from leveraging infrastructure 120% 115% invest
Slide 16: Expansion businesses – capturing opportunities
Expansion businesses – capturing opportunities o CHS / MIA saw strong sales of PPE in FY21. • High service levels has created opportunities to accelerate our business expansion o CHS 3PL/4PL – continues to show good growth o Hospitals and MPS were the most impacted by COVID-19 • Hospital sales up 15
Slide 17: Proactive COVID-19 Response and Support
Proactive COVID-19 Response and Support Team Members Hospital Pharmacy and Aged Care o Cross-functional COVID-19 Working o Access to essential medicines during shortage Group quickly set up to monitor and advise periods o Identified potential risks and implemented o High level customer service suppo
Slide 18: Sustainability focus – inaugural standalone report released
Sustainability focus – inaugural standalone report released o In FY21 we completed a materiality review to formalise our sustainability framework, building on our community foundations o We released our inaugural Sustainability Report, which is aligned to the Global Reporting Initiative (GRI) o The
Slide 19: Our investment proposition
Our investment proposition We have built a stronger and more sustainable business which is driving improved shareholder returns Profitable Technology Growth Infrastructure Cost to serve Generational upgrade is Core organic growth Market leading DC well advanced - includes Operating cost base has Bal
Slide 20: EBITDA Target – How do we get there?
EBITDA Target – How do we get there? FY23 - EBITDA target of approx. $100m post - AASB16 Pursuing M&A FY22 Targeting 10% FY23 opportunities to • Organic sales growth CAGR for next two • Organic sales growth further years, delivered accelerate • Full year of CW FMCG sales • Ongoing benefit from lever
Slide 21: Outlook
Outlook Entering FY22 positioned for sustained growth and reward for shareholders CAGR> 10% Targeting Underlying EBITDA CAGR* of 10% for the next two years ~$100m On target to meet $100m Underlying EBITDA by FY23 ROIC > 10% Underlying ROIC to remain above 10% DPR > 70% Targeting a Dividend Payout Ra
Slide 22: Thank you
Thank you Contact: Gary Woodford Corporate Affairs Manager Gary.Woodford@sigmahealthcare.com.au +61 03 9215 9215
Slide 23: Appendix 1 – Reconciliation of reported to Underlying
Appendix 1 – Reconciliation of reported to Underlying 31 January 2021 31 January 2020 Reconciliation of reported (IFRS) vs underlying EBIT and EBITDA $000 $000 Reported EBIT 63,211 (3,058) Add: Reported depreciation and amortisation 30,988 27,258 Reported EBITDA 94,198 24,200 Add back: Restructuring
Slide 24: Appendix 2 – Cash flow
Appendix 2 – Cash flow 0 (50,000) (100,000) $' 0 0 0 (150,000) (200,000) OPERATIONS / WORKING INVESTING (250,000) Net Debt EBITDA Change in Income Tax Capex Proceeds from Investments Repayment of Net Interest Other Net Debt 31 Jan 2020 Working Refund Payment Sale of Assets Principal on 31 Jan 2021 C