Mayne Pharma Group Ltd. · ASX:MYX
Mayne Pharma — Mayne Group — Merger or Acquisition (October 2005)
27 slides from Mayne Pharma's merger presentation, Oct 10, 2005
Slide 1: Proposed demerger of Mayne Pharma Limited
Mayne Group Limited Proposed demerger of Mayne Pharma Limited 10 October 2005 These slides should be read in conjunction with the speech separately lodged on the ASX
Slide 2: Forward looking statements
Forward looking statements • "Certain statements in this document relate to the future, including forward looking statements relating to Mayne Pharma Limited’s and Symbion Health Limited's (Symbion Health) financial position and strategy. These forward looking statements involve known and unknown ri
Slide 3: Overview of the demerger
Overview of the demerger 3
Slide 4: The proposal
The proposal • To create two focussed companies by demerging Mayne Pharma – Mayne Pharma, an international pharmaceutical company focussed on the research, development, manufacture and distribution of injectable generic and specialty pharmaceuticals – Mayne Group, to be renamed Symbion Health, a lar
Slide 5: The process
The process • To be effected by a capital reduction and scheme of arrangement – Explanatory memorandum to be distributed to shareholders this week – Shareholder vote on 16 November 2005 – Final court hearing for approval of scheme on 18 November 2005 – Effective Date of 18 November 2005 (last day of
Slide 6: The structure
The structure Mayne Group Limited Symbion Health (57%* FY05 EBITA) Mayne Pharma 43%* FY05 EBITA Diagnostic Consumer Pharmacy Products Services Pathology Wholesale Mayne Pharma Nutriceuticals distribution Global injectable Diagnostic generic and Imaging specialty pharmaceuticals Medical Retail OTC pr
Slide 7: Relative EBITA contributions
Relative EBITA contributions Symbion Health Mayne Pharma 57%1 43%1 Consumer 15%2 Asia Pacific 29%3 Pharmacy 19%2 Pathology 49%2 EMEA 55%3 Americas Imaging 17% 2 16%3 1 Based on Mayne Group 2005 EBITA before unallocated head office costs of $17.4 million 2 Based on Symbion Health 2005 pro-forma EBITA
Slide 8: Strategic rationale and benefits
Strategic rationale and benefits • Creation of two companies focused on their core competencies – Specialist CEOs, separate management teams and boards of directors – Opportunity for better alignment of incentive and compensation arrangements • Better positioned for growth – More attractive acquisit
Slide 9: Transaction costs and incremental ongoing costs
Transaction costs and incremental ongoing costs • Demerger transaction costs estimated to be approximately $85 million Details Estimated cost Adviser, legal and accounting $12 million Stamp duty, insurance and other costs $9 million Costs of establishing Mayne Pharma as a separate entity $22 million
Slide 10: Share price movement since April 2005
Share price movement since April 2005 $6.00 54% increase 24 August 2005: Mayne announces $5.50 FY05 results $5.00 4 May 2005: Mayne announces it is assessing the merits $4.50 of a demerger 9 August 2005: Mayne 31 August 2005: announces appointment Mayne announces Dr of Mr Robert Cooke as Thierry Sou
Slide 11: Mayne Pharma
Mayne Pharma 11
Slide 12: Overview of Mayne Pharma
Overview of Mayne Pharma • FY05 pro-forma sales of $687 million; sales in more than 65 countries • Unique sales and distribution platform for injectable generic pharmaceuticals with direct presence in 23 countries and distribution arrangements in further 43 countries • Leading market positions by re
Slide 13: Key strategies
Key strategies* • First to market with key products to maximise margins and returns • Geographic expansion • Globally competitive, high quality supply chain with increased level of vertical integration • Internal development • Acquisitions and in-licensing • Broad and balanced product portfolio * Dr
Slide 14: Mayne Pharma pro-forma AGAAP financials
Mayne Pharma pro-forma AGAAP financials Revenue EBITA ($m) 700 ($m) 600 120 500 326.3 100 107.7 400 203.4 80 176.1 81.1 300 60 82.7 156.0 128.4 114.7 200 40 100 161.6 192.4 205.1 20 0 0 FY03 FY04 FY05 FY03 FY04 FY05 Asia Pacific Americas EMEA 2 year CAGR: 21.4% 2 year CAGR: 15.2% 14
Slide 15: Mayne Pharma pro-forma AGAAP financials
Mayne Pharma pro-forma AGAAP financials • FY05 revenue growth of 35% and EBITA growth of 30% • 94% increase in net operating cash flow in FY05 • Growth oriented business • Historical accounts adjusted for corporate costs based on standalone estimates and actual costs incurred • Sound balance sheet w
Slide 16: Mayne Pharma pro-forma AGAAP financials
Mayne Pharma pro-forma AGAAP financials Profit and loss ($‘000) 2003 2004 2005 CAGR Sales Revenue Europe, Middle East and Africa 176,072 203,378 326,270 36.1% Asia Pacific 161,624 192,426 205,112 12.7% Americas 128,355 114,700 155,961 10.2% Total Mayne Pharma sales revenue 466,051 510,504 687,343 21
Slide 17: Mayne Pharma Capital structure and dividend policy
Mayne Pharma Capital structure and dividend policy Capital structure Dividend policy • Expected to be demerged with net cash of • Payout up to maximum of 20% of NPAT approximately $25 million(1) (calculated under AIFRS) • Banking facility • No dividend for 6 months ended 31 – New 3 year $225 million
Slide 18: Symbion Health
Symbion Health 18
Slide 19: Overview of Symbion Health
Overview of Symbion Health • Market leading Australian healthcare businesses – #2 provider of pathology services* – #3 provider of diagnostic imaging services* – Leading provider of nutraceuticals* – A leading pharmacy wholesaler and retail services provider • Strong cash flows and stable earnings u
Slide 20: Key strategies
Key strategies* • Driving margin improvement across the business • Effective capital management • Pursuing growth opportunities complementary to existing activities • Engaging with customers to build closer, more valuable relationships * Mr Robert Cooke will become CEO of Symbion Health if the demer
Slide 21: Symbion Health pro-forma AGAAP financials
Symbion Health pro-forma AGAAP financials Revenue EBITA ($m) ($m) 3,500 160 3,000 140 120 153.4 2,500 2731.6 3019.3 3175.8 139.3 100 112.3 2,000 80 1,500 60 1,000 40 500 20 0 0 FY03 FY04 FY05 FY03 FY04 FY05 2 year CAGR: 7.8% 2 year CAGR: 16.9% 21
Slide 22: Symbion Health pro-forma AGAAP financials
Symbion Health pro-forma AGAAP financials • Steady revenue growth – Approximately 85% of revenues supported to varying degrees by the Federal Government • Strong EBITA growth driven by revenue and margin expansion • Historical accounts adjusted for corporate costs based on standalone estimates – In
Slide 23: Symbion Health pro-forma AGAAP financials
Symbion Health pro-forma AGAAP financials Profit and loss ($‘000) 2003 2004 2005 CAGR Sales Revenue Pathology 427,418 526,527 569,102 15.4% Diagnostic Imaging 199,156 276,237 287,171 20.1% Consumer Products 156,432 145,835 171,001 4.6% Pharmacy 1,943,381 2,068,612 2,147,892 5.1% Unallocated 5,218 2,
Slide 24: Capital structure and dividend policy
Capital structure and dividend policy Capital structure Dividend policy • Net debt of approximately $450 million at • Payout around 50% to 60% of NPAT Effective Date(1) (calculated under AIFRS) • Expected credit rating improvement • Expects to pay dividend of 3.5 cents for 6 months ending 31 Decembe
Slide 25: Timetable
Timetable Last time and date for General Meeting Proxy Form and Scheme Meeting 10.00am on Monday 14 November Proxy Form can be lodged 2005 Time and date for determining eligibility to vote at the General and Scheme 7.00pm on Monday 14 November Meetings 2005 10.00am on Wednesday 16 General Meeting an
Slide 26: Summary
Summary • Demerging Mayne Pharma from Mayne Group to create two focused companies – Better able to pursue their strategic and operational objectives – Improved likelihood of achieving appropriate market valuations • New Boards and CEOs in place for each business • Shareholder meetings to vote to app
Slide 27: Mayne Group Limited
Mayne Group Limited Proposed demerger of Mayne Pharma 10 October 2005