Mayne Pharma Group Ltd. · ASX:MYX
Mayne Pharma — Mayne Group — H1 FY2004 Earnings Presentation
29 slides from Mayne Pharma's earnings presentation, February 2004
Slide 1: Half year results presentation July to December 2003
Half year results presentation July to December 2003 February 2004 Sydney, Australia
Slide 2: Mr Stuart James, Group Managing Director and CEO
Mr Stuart James Group Managing Director and Chief Executive Officer
Slide 3: Goals from 2003 half year results
Goals from 2003 half year results • Grow Pharmaceuticals ü • Maintain growth in Diagnostic Services WIP and leverage acquisitions • Rebuild Consumer Products ü • Continue Hospitals improvement ü • Continue earnings stream from Pharmacy ü • Focus on capital management and improve ü ROCE
Slide 4: EBIT performance from continuing businesses
EBIT performance from continuing businesses 72 10 71 9.5 70 9 8.5 Cents/Share 69 $M EBIT 8 68 7.5 67 7 66 6.5 65 6 64 5.5 63 5 1H03 2H03 1H04 Continuing EBIT Continuing EPS
Slide 5: Pharmaceuticals – integrated global growth
Pharmaceuticals – integrated global growth • Leveraging our established competencies across all regions via: – enterprise acquisition – geographic expansion – product development and acquisition
Slide 6: Pharmaceuticals – methods for growth
Pharmaceuticals – methods for growth Enterprise acquisition Product Geographic development expansion Paclitaxel maximises use of our resources
Slide 7: Paclitaxel – integrated growth
Paclitaxel – integrated growth Sales API processing Manufacturing Australia US (Abbott) Colorado Mulgrave (NaPro assets) Europe (Ivax)
Slide 8: Pharmaceuticals – integrated global growth
Pharmaceuticals – integrated global growth • Long term manufacturing program being implemented, including $A60 million investment at Mulgrave and Aguadilla • Development of products internally is complemented by acquisition and in- licensing in key categories: – oncology – pain management – anti-inf
Slide 9: Half year financial result
Half year financial result ($m) 1H03 2H03 1H04 Reported Revenue 2,850 2,344 2,332 Reported EBIT 92.8 83.7 108.6 Significant items – after tax (90.8) (422.2) (6.0) Reported NPAT (57.7) (398.4) 48.7 Normalised NPAT1 77.6 69.0 92.0 Normalised EPS1 9.6 8.7 12.0 1 Before amortisation and significant item
Slide 10: Half year financial result – Continuing Businesses
Half year financial result ($m) 1H03 2H03 1H04 Continuing Businesses Revenue 1,587 1,605 1,773 EBIT 67.1 65.7 70.9 NPAT before significant items 27.4 19.4 32.8 NPAT – Normalised1 62.2 58.5 69.1 Normalised EPS (cents)1 7.7 7.4 9.1 ROIC 2 4.8% 5.0% 4.8% RONTA 2 8.1% 9.4% 9.4% 1 Before amortisation, si
Slide 11: Dividend payment
Dividend payment • Interim dividend of 4.5 cents per share to be paid on 31 March 2004
Slide 12: EBIT – Continuing businesses
EBIT – Continuing businesses (A$ millions) 1H03 2H03 1H04 Pharma1 33.4 26.4 27.9 Diagnostic Services2 25.0 31.3 33.4 Pharmacy Services 14.3 15.6 15.7 Continuing businesses 72.7 73.3 77.0 Unallocated (5.6) (7.6) (6.1) Underlying EBIT 67.1 65.7 70.9 1 Pharmaceuticals and Consumer Products 2 Pathology,
Slide 13: Business unit performance
Business unit performance
Slide 14: Pharmaceuticals – Revenue growth
Pharmaceuticals – Revenue growth Revenue $m • 1H04 on 1H03 total revenue 250 240 growth of 9.2% 230 220 • Excluding impact of Forex 210 200 245.1 total revenue growth was 190 235.8 180 224.2 224.4 20% 170 160 • Strong sequential EMEA 150 2H02 1H03 2H03 1H04 growth with expansion in Europe – 21% (32%
Slide 15: Pharmaceuticals – EBITA as expected
Pharmaceuticals – EBITA as expected EBITA $m • As expected, EBITA margin 60 20.2% 21% 21% declined to 18.3% in 1H04 50 18.3% 40 • Price erosion across portfolio, 30 especially in US market 45.2 47.0 49.3 44.8 20 10 • EBIT would have been $4.1M 0 higher in 1H04 excluding Forex* 2H02 1H03 2H03 1H04 EB
Slide 16: Pharmaceuticals pipeline
Pharmaceuticals pipeline # of Local regional # of Market product country Value Product pipeline approvals approvals ($USm) • Approx. $US 7.8 Internal development billion local market Americas (1) 18 27 4257 value of drugs in EMEA 12 133 1822 Asia Pacific 8 10 56.5 pipeline to 2010 38 170 6,135 In-li
Slide 17: Proposed product launches by country
Proposed product launches by country Pipeline Analysis Country approvals and current Local Market Value (LMV) at launch 2500 70 • Strong 62 FY05/FY06 60 2000 54 pipeline 50 • Paclitaxel # of approvals 1500 40 $US M 28 • Carboplatin 30 1000 2251 • Propofol 1558 20 500 739 • Fluconazole 10 • Ondansetr
Slide 18: Consumer – Rebuilding revenue
Consumer – Rebuilding revenue $m Revenue • Pan recall impacted on 125 revenue and margin 100 26.4 22.4 • 90%+ of product portfolio 22.5 75 1.7 now back on shelves 50 85.4 86.3 • Re-established #1 market 70.1 67.9 share in combined retail 25 markets 0 2H02 1H03 2H03 1H04 • Increased manufacturing at
Slide 19: Consumer – Earnings rebound
Consumer – Earnings rebound EBITA $m (continuing business only) 8.8% 9.0 • Strong result given impact of 7.0 6.6% 7.2% Pan recall on 1st quarter of FY04. 5.0 3.0 5.6 7.6 • Proactive restructuring 4.9 activities have paid 1.0 -1.1 dividends in 1H04 -1.0 2H02 1H03 2H03 1H04 -3.0 -1.6% • Manufacturing
Slide 20: Pathology – Continued growth
Pathology – Continued growth Revenue • Organic revenue growth of $m 6.6% on pcp versus industry growth 4.7% on pcp 200 • Gaining market share in all 235.5 states 100 218.7 171.1 126.3 • NSW (Laverty) recorded 3rd consecutive half of EBITA 0 growth 2H02 1H03 2H03 1H04 • QML and GPS acquisitions excee
Slide 21: Pathology – Seasonal growth
Pathology – Seasonal growth EBITA • EBITA growth 40% on pcp $m 35 • EBITA margins declined in 30 1H04 due to: 14.8% 25 20 12.3% 13.4% 11.7% • Re-weighting of functional 15 29.4 costs 27.5 10 21.0 18.7 • Higher operating costs inc. 5 0 medical malpractice and 2H02 1H03 2H03 1H04 consumables EBITA EBI
Slide 22: Diagnostic Imaging – Revenue growth
Diagnostic Imaging – Revenue growth $m Revenue • Revenue up 55% over pcp 150 due to FY03 acquisitions 125 • Organic revenue growth 100 6.1% over pcp - exceeding 75 139.7 market growth of 3.8% 50 109.1 90.1 83.1 • Increasing proportion of 25 revenue from higher 0 modilities – MRI, CT and 2H02 1H03 2H
Slide 23: Diagnostic Imaging – Steady performance
Diagnostic Imaging – Steady performance EBITA • EBITA growth – $m 20 contributions from QDI and Pacific Healthcare for full 15 13.8% 13.2% period 11.5% 11.6% 10 • Margins stabilised but 16.3 11.5 11.9 12.5 remain disappointing 5 • Productivity and cost 0 management focus will 2H02 1H03 2H03 1H04 con
Slide 24: Pharmacy Services – Revenue growth
Pharmacy Services – Revenue growth $m Revenue • Revenue growth 6.9% on 1,100 pcp 1,050 • Intense competition and 1,000 opportunistic pricing 950 1063.7 900 995.4 • Brand and banner 918.6 948.0 memberships: 850 800 • Terry White – strong 2H02 1H03 2H03 1H04 growth • Chemmart – progress on master memb
Slide 25: Pharmacy Services – Weaker earnings
Pharmacy Services – Weaker earnings $m EBITA • Margin decline 25 21.4 20.8 • Sale process 19.4 19.5 20 • Aggressive competition 15 10 • Initiatives being implemented to improve 5 2.10% 2.15% 2.19% 1.84% earnings margins and 0 productivity 2H02 1H03 2H03 1H04 EBITA ($M) EBITA margin (% )
Slide 26: Balance sheet
Balance sheet 1H03 2H03 1H04 Net debt (cash) 510 373 (177) Equity 3,510 2,988 2,895 Gearing 12.7% 11.1% -6.5% • Strong balance sheet • Active and responsible capital management program • Announced $250 to $350 million off-market buy-back tender in March 2004 • Flexibility to invest for growth/reduce
Slide 27: Near-term focus
Near-term focus • Pharmaceuticals growth (internal development, geographic expansion, product and enterprise acquisition) • Maintaining growth in Pathology and Imaging and focus on operating margins • Continue improvement in Consumer Products • Improve Pharmacy earnings
Slide 28: Outlook
Outlook Divisional • Pharma – steady growth in Europe and Asia Pacific, but possible further currency impact • Consumer – progressive improvement but still early days • Pathology –stronger second half • Imaging – seasonally weaker second half • Pharmacy – re-invigorate business Overall • Excluding h
Slide 29: Half year results presentation July to December 2003
Half year results presentation July to December 2003 February 2004 Sydney, Australia