Ibnsina Pharma · EGX:ISPH
Ibnsina Pharma — 9M 2020 Earnings Presentation
36 slides from Ibnsina Pharma's earnings presentation, 2020
Slide 1: Investor Presentation 9M 2020 Results
Investor Presentation 9M 2020 Results Egypt’s Fastest Growing Pharmaceutical Distributor § 2nd largest pharmaceutical distributor with a market share of 22.8% § c.46k clients served annually through a network of 63 operational sites and a fleet of 752 vehicles § 5-year revenue CAGR of 31% compared t
Slide 2: Disclaimer
Disclaimer THIS DOCUMENT CONTAINS STATEMENTS THAT ARE, OR MAY BE DEEMED TO BE, “FORWARD-LOOKING STATEMENTS” WHICH ARE NOT HISTORICAL FACTS BUT RATHER ARE STATEMENTS OF FUTURE EXPECTATIONS AND PROJECTIONS BASED ON MANAGEMENT’S VIEWS AND ASSUMPTIONS REGARDING TRENDS IN THE EGYPTIAN, MIDDLE EASTERN, EU
Slide 3: Agenda
Agenda I Introduction to the Company II Key Investment Highlights III Appendix IV Contact Information 3
Slide 4: The Company in numbers
II Introduction to the Company The Company in numbers 17+ years Experience in pharmaceutical distribution #1 Growing pharmaceutical distributor in Egypt 2nd Largest pharmaceutical distributor with 22.8% market share in 9M20 c.46 k Retail pharmacies, hospitals & wholesalers served in 9M20 Over 360 Mu
Slide 5: Egypt's fastest growing pharmaceutical distributor
II Introduction to the Company Ibnsina Pharma, Egypt’s fastest growing pharmaceutical distributor… Company Overview Market Share¹ Established in 2001, Ibnsina Pharma “ISP” is the fastest growing, and 2nd largest, pharmaceutical distributor in Egypt with a market share of 22.8% Nationwide distributio
Slide 6: Strategies Timeline
Strategies Timeline … 2015 Expansion Strategy: 2009-2012 Launch: 2001-2005 Investment to add 15 distribution Established in 2001 under the name centers & 5 offices, and enhance “Ibnsina Laborex” in partnership with efficiency through standardizing Pinault Printemps Redoute (“PPR”) operational proces
Slide 7: Optimally expanding our distribution network to unlock value
II Introduction to the Company …optimally expanding our distribution network to unlock value…. Distribution Network No. of Sites (Rev/Site – EGP mn) Revenue by Business Line 7 Platforms and main warehouse 47 Distribution Centers (DC) 218 226 268 192 3.2%0.4% 1 Tender DC 2 Reverse Logistics Warehouse
Slide 8: Leveraging our network to serve c.46k customers nationwide
II Introduction to the Company …and leveraging our network to serve our c.46k customers nationwide Clients by Geography (1Q2020) 14.6% 14.8% 11.9% 13.4% 30.6% 31.5% 12.3% 43.0% 19.0% 39.9% 24.9% 25.7% 28.9% 28.9% 32.8% 27.7% 46,256 41,884 863 3,509 Retail Pharmacies Wholesale Clients Hospital Client
Slide 9: Key Investment Highlights
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Slide 10: Key Investment Highlights
III Key Investment Highlights Key Investment Highlights 1 Solid Demographic A rapidly growing population coupled with a growing middle class and increasing healthcare awareness, positions Egypt Profile as one of the most attractive consumer markets in the region 2 Attractive Industry A highly defens
Slide 11: Solid Demographic Profile
III Key Investment Highlights 1 Solid Demographic Profile Egypt’s demographic profile makes it the region’s largest consumer market Population I mn Age Pyramid Urban Population Disposable Income | EGP bn Population (mn) Growth Rate Egypt has seen a growth in health awareness on the back of a growing
Slide 12: Attractive Industry Dynamics (I/III)
II Key Investment Highlights 2 Attractive Industry Dynamics (I/III) Low healthcare and pharmaceutical expenditure with unparalleled growth potential Healthcare Sector Overview Health Expenditure per capita vs GDP per capita (USD) - 2018 Healthcare Expenditure % of GDP (2018) Egyptian Household Expen
Slide 13: Attractive Industry Dynamics (II/III)
II Key Investment Highlights 2 Attractive Industry Dynamics (II/III) A highly defensive sector with significant room for continued growth Total Market Size1 | EGP bn Market Segmentation Egypt’s healthcare market is the fastest growing in the region driven by significant growth in the pharmaceuticals
Slide 14: Attractive Industry Dynamics (III/III)
III Key Investment Highlights 2 Attractive Industry Dynamics (III/III) A highly defensive sector with significant room for continued growth Pharma Total Market Share Market Segmentation I Market Share FY2019 Public Sector 3% Novartis 8% Pharco 5% ISP 20% GSK 5% Ezaby 2% Seif 1% Sanofi 5% Roushdy 2%
Slide 15: Strong Market Share
III Key Investment Highlights 3 Strong Market Share Exceptional profitable growth on the back of a solid value-based differentiation strategy ISP is the fastest growing distributor in the Egyptian market 1 34.6% 32.7% ( +1.9%) ISP Market Share Progression 21.3% 20.5% 19.2% 2011 9.9% 2019 16.8% 19 Bn
Slide 16: Efficient Business Model (I/III)
III Key Investment Highlights 4 Efficient Business Model (I/III) Operational efficiency driven by best-in-class supply chain processes Distribution Value Chain Overview Sourcing Processing Distribution Commercial team sources orders from 350+ suppliers Over 200 platform operations employees handle a
Slide 17: Efficient Business Model (II/III)
4 Efficient Business Model (II/III) Digital strategy leverages unique B2B/B2C platforms to fuel data-driven growth B2B Stream Ibnsina Pharma’s digital strategy envisions the continuous introduction of products that serve each link in the pharmaceutical industry supply chain, digitizing everyday oper
Slide 18: Resilient Supply Chain
III Key Investment Highlights 5 Resilient Supply Chain Highly diversified supplier/client base significantly mitigating supply chain risks Diversified Geographical Presence Minimal Supplier Concentration Expansive SKUs Coverage Sanofi Distributed Alexandria Aventis 7% Amoun 5% by ISP 14.6% Cairo & C
Slide 19: Robust Financial Performance
6 Robust Financial Performance Robust financial performance with double digit top line and bottom-line growth 9M20 9M20 9M20 9M20 Net Revenues Gross Profit EBITDA Net Profit EGP 13.7 BN EGP 1.1 BN EGP 575.8 MN EGP 200.6 MN ▲ 14.9% y-o-y ▲ 9.4% y-o-y ▲ 3.4% y-o-y ▼ 18.3% y-o-y Source: Company Managem
Slide 20: Robust Financial Performance
III Key Investment Highlights 6 Robust Financial Performance Robust financial performance with double digit top line and bottom-line growth Gross Revenue1 | EGP mn Gross Profit | EGP mn, % EBITDA & Margin | EGP mn, % CAGR 26% CAGR 30% +15% y-o-y CAGR 35% 16,941 9 .1 % 8.6% 8.7% 8.8% 4.7% 8.4% 8.3% 4
Slide 21: Robust Financial Performance
III Key Investment Highlights 6 Robust Financial Performance Effective working capital management has been a key success factor to ISP’s performance DOH 2017 2018 2019 9M 2019 9M 2020 34 36 34 days 36 38 Inventory days days days days 83 89 83 days 91 days days 92 days Receivables days 125 124 128 da
Slide 22: New Revenue Streams
III Key Investment Highlights 7 New Revenue Streams Expansion into high-margin diversified revenue streams to further enhance profitability Warehousing Transportation Warehousing services for suppliers which allows them to save significant CAPEX. ISP Capitalizing on a growing need for specialized tr
Slide 23: Experienced Management Team
III Key Investment Highlights 8 Experienced Management Team Highly experienced management team with strong track record 28 years of pharmaceutical industry experience with focus on commercial operations, IT, quality assurance and administration. Mahmoud Abdel Gawad Prior to Ibnsina, Mahmoud held sev
Slide 24: Experienced Management Team: Board of Directors
III Key Investment Highlights 8 Experienced Management Team Seasoned board of directors with diverse experience across various industries Over 40 years of experience across various industries including healthcare, FMCG, and financial services with focus on all investment activities pursued by the Co
Slide 25: Experienced Management Team: Board of Directors
III Key Investment Highlights 8 Experienced Management Team Seasoned board of directors with diverse experience across various industries 42 years of experience in finance and banking. Hany Badr His experience included serving as Head of Treasury at Faisal Islamic Bank, until 2016, and Assistant Gen
Slide 26: Organizational Structure
III Key Investment Highlights 8 Experienced Management Team Organizational Structure Board Committees Executive Chairman Management Committees Mohsen Mahgoub Audit Committee Executive Committee Business Development Committee Board of Directors Business Review Committee Remuneration Committee Investm
Slide 27: Sustainability of Growth and Margin Profile
Sustainability of Growth and Margin Profile 27
Slide 28: Sustainability of Revenue Growth
III Sustainability of Growth and Margin Profile Sustainability of Revenue Growth A B C Market Volume Drives Company Specific Volume Drivers Average Selling Price Drivers þ Population Growth CAGR (19E-23E): 2.0 þ Continuously enhancing market share in both retail and non-retail market segment þ Const
Slide 29: Enhancing Profitability
III Sustainability of Growth and Margin Profile Enhancing Profitability A B Economies of Scale Efficient Business Model þ Favorable Cost Structure þ Fully Automated Supply Chain ISP’s CoGs is mainly the cost of medicine bought, all other operational costs are allocated to SG&A, with c.60% being fixe
Slide 30: Appendix
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Slide 31: A significantly complex industry with high barriers to entry
IV Appendix A significantly complex industry with high barriers to entry Barriers to Entry Operational Complexity Inventory A Variety of High Variability of Labor Intensive Geographically Management SKUs Demand Business Dispersed Client Base Highly complex inventory 9k unique drug therapies Short-no
Slide 32: Income Statement
IV Appendix Income Statement In EGP FY2017 FY2018 FY2019 9M2019 9M2020 YoY p Gross Revenue 9,818,405 13,677,881 16,941,029 12,217,669 14,086,944 15.3% Net Revenue 9,586,344 13,323,674 16,600,460 11,929,356 13,701,762 Cost Of Revenue (8,759,914) (12,199,359) (15,161,005) (10,884,248) (12,558,640) Gro
Slide 33: Balance Sheet
IV Appendix Balance Sheet In EGP FY2017 FY2018 FY2019 9M2020 Property & Equipment, net 210,264 438,420 898,220 922,374 Projects Under Construction, net 161,267 336,288 160,910 218,189 Other Assets 8,804 7,641 8,494 7,366 Leased Assets, net - - 61,477 58,140 Long Term NR - 10,998 101,035 128,227 Defe
Slide 34: Cash Flow
IV Appendix Cash Flow In EGP ‘000 FY2017 FY2018 FY2019 9M2019 9M2020 Cash flow from operating activities: Net profit before tax 227,697 355,857 420,883 319,842 261,013 Adjustments for: Depreciation of fixed assets 28,526 41,421 86,230 58,435 97,142 Amortization of leased assets 2,570 - - - - Allowan
Slide 35: Contact Information
Contents ¡1 Executive Summary ¡2 Company Overview ¡3 Key Investment Highlights ¡4 Financial Performance Review ¡5 Contact Information Contact Information 35
Slide 36: Contact Information
V Contact Information Contact Information Mohamed Mahmoud Shawky Investor Relations & Corporate Communication Manager Tel.: +2010 00852771 Email: mohamed.shawky@Ibnsina-pharma.com 36