Sigma Healthcare Ltd · ASX:SIG
Sigma Healthcare — H1 2024 Earnings Presentation
24 slides from Sigma Healthcare's earnings presentation, Sep 20, 2023
Slide 1: 1H24 Results Announcement
1H24 Results For personal use only Announcement 20 September 2023
Slide 2: CEO and Managing Director introduction
For personal use only 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. 2 Sigma Healthcare Limited
Slide 3: Agenda
Agenda For personal use only 1. Review of the Year 2. Financial Performance 3. Business Update 4. Strategy Update 5. Outlook 3 Sigma Healthcare Limited – 1H24 Results Announcement
Slide 4: Overview - Accelerated improvement in operating performance
Overview - Accelerated improvement in operating performance For personal use only ▪ IT systems stable and starting to deliver efficiencies ▪ Significant improvement in operational performance ▪ New Chemist Warehouse contract commencing 1 July 2024 Net Sales down 8.4% on 1H23 EBITDA up 77.6% ▪ Operat
Slide 5: Gary Woodford, Head of Corporate Affairs and Interim CFO
For personal use only Gary Woodford Head of Corporate Affairs and Interim CFO 5 Sigma Healthcare Limited – 1H24 Results Announcement
Slide 6: Financial Performance
Financial Performance P&L summary ($’m) Comments For personal use only 1H24 1H23 • Overall sales revenue down 8.4% to $1.7bn, mainly due to elevated sales $m $m % change of Rapid Antigen Tests (RATs) in pcp and impact of lower sales due to the disposal of the Hospitals business Net Sales 1,681.8 1,8
Slide 7: Total Operating Costs - down 21.3%
Total Operating Costs - down 21.3% For personal use only Warehousing and Logistics costs - $70.4m, down 12.7% • People costs down $10.0m, due to increase in operational efficiencies in the DCs, and prior Operating expenses by category period includes $4.4m cost relating to the Cura business • Wareho
Slide 8: Balance Sheet
Balance Sheet For personal use only Statutory Balance Sheet extract ($’m) Comment 1H24 FY23 Change $m $m % • Reduction in inventory in 1H24 mainly relates to CHS Hospitals business Cash and cash equivalents 11.3 16.7 (32.3%) disposal, and stock holding reduction due to improved inventory Trade and o
Slide 9: Cash Flow
Cash Flow Statutory Cash Flow statement extract ($’m) Comment For personal use only • Operating cash flow - 1H23 reflects strong cash inflow from RAT sales at the 1H24 1H23 peak of the Omicron variant, and timing of supplier payments related to SAP Change Change implementation issues $m $m $ % Recei
Slide 10: Net Debt significantly reduced over the last months
Net Debt significantly reduced over the last 18 months For personal use only Net Debt movement, $m Jan22 – Jul23 Inflow Outflow (149.2) (85.7) (82.2) (2.0) (1.2) (67.0) (3.5) (5.8) (5.9) (8.4) 36.7 (25.1) Jan-22 Jul-22 Jan-23 EBITDA Changes Repayment Net Interest Dividend Other Income Tax Capex Jul-
Slide 11: Capital Expenditure
Capital Expenditure For personal use only Capital Expenditure $’m Capex 140 • Now largely ex-Capex Business Projects Distribution centres Acq. Of Subsidiaries 120 • Minimal capex spend in the first half 109 • Go forward maintenance capex levels c. $5m - $10m pa 100 95 80 69 60 46 40 30 20 17 10 0 Ja
Slide 12: Business Update
For personal use only Vikesh Ramsunder Business Update 12 Sigma Healthcare Limited – 1H24 Results Announcement
Slide 13: Information Technology – a key business improvement enabler
Information Technology – a key business improvement enabler ▪ Continuous improvement of our IT systems has taken place For personal use only over 1H24 ▪ ERP has been 100% stable and is standardising many of our processes, helping implement the ISO 9001 quality standards accreditation, which we expec
Slide 14: Core business streams
Core business streams For personal use only Wholesale operations Retail Third Party Logistics (3PL) 14 Sigma Healthcare Limited – 1H24 Results Announcement
Slide 15: Wholesale operational performance
Wholesale operational performance ▪ 113m units delivered in 1H24 For personal use only ▪ Over 99% Delivery in Full (DIF) every month ▪ Improved inventory management ▪ 12.7% reduction in logistics costs versus 1H23 ▪ 1.7m fewer kilometres travelled on an annualised basis through route optimisation ▪
Slide 16: Retail
Retail For personal use only ▪ Focused on supporting and growing brand membership of Amcal and Discount Drug Stores (DDS) ▪ DDS awarded 2nd overall for customer satisfaction among Australian pharmacies by Canstar Blue ▪ Implementing foundational best in class retail management practices: ❑ Embedding
Slide 17: Private and Exclusive Label
Private and Exclusive Label For personal use only ▪ We have built a team of product specialists ▪ Significantly increased the pipeline of new product ▪ Packaging and design work underway ▪ Supplier partnerships strengthened ▪ Expect to launch over 250 products in FY25, with development across major
Slide 18: Third Party Logistics (3PL)
Third Party Logistics (3PL) For personal use only ▪ Increase in number of 3PL customers serviced ▪ 3PL profit contribution growth of 27% driven by capacity utilisation ▪ More than 33,000 pallets under management ▪ 60m units shipped in 1H24 ▪ Utilising increased capacity to support 3PL customers in s
Slide 19: Chemist Warehouse supply agreement
Chemist Warehouse supply agreement For personal use only ▪ Announced in June and long form agreements signed and announced to ASX on 31 August 2023 ▪ Supply contract commences 1 July 2024 – for supply of PBS medicines and FMCG ▪ $3 billion revenue in the first full year of the contract ▪ Secures sig
Slide 20: Strategy execution on track
Strategy execution on track only STRATEGY Diversify our streams of income Grow scale and profitable Divest non-core assets through expanded product market share in the and continue to simplify Build our retail network offerings via health, beauty and wholesale business the business use wellness cate
Slide 21: FY24 Outlook
FY24 Outlook For personal use only 1. Confident our strong operational performance will continue 2. Focused on delivering value to our Amcal and DDS brand members through improved retail and product offers 3. 60-day dispensing implemented 1 September 2023, and we are engaged with Government through
Slide 22: Thank you
For personal use only Thank you
Slide 23: Appendix – Reconciliation of Reported to Like for Like
Appendix 1 – Reconciliation of Reported to Like for Like ($’m) 1H24 1H23 $m $m Reported EBIT 22.4 5.4 Add back: For personal use only Contribution loss from discontinued business (Cura/Wholelife and 0.8 10.7 Hospital) Stock adjustments 1.5 22.8 Rowville and Mulgrave assets write-off - 4.9 Less: Gain
Slide 24: Important Notice
Important Notice For personal use only 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 2023; and a high level ov