Fagron Sa · EURONEXT:FAGR
Fagron Sa — Non-Deal Roadshow (March 2015)
47 slides from Fagron Sa's roadshow presentation, Mar 10, 2015
Slide 1: Roadshow Paris 10 March 2015
Jan Peeters, CFO Marieke Palstra, IR Roadshow Paris 10 March 2015
Slide 2: 25 years of innovating and optimising compounding
25 years of innovating and optimising compounding for tailor-made pharmaceutical care.
Slide 3: Global presence
Global presence 2
Slide 4: Global presence
Global presence USA 7 sites – GMP, FDA Europe 9 sites – GMP, FDA, ISO9001 South Africa 3 sites Colombia 4 sites Brazil 4 sites – GMP, FDA, ISO9001 China Purchase & quality office Fagron Group 28 sites 5,000 pharmaceutical raw materials 3
Slide 5: Fagron
Fagron Global market leader in pharmaceutical compounding 2,239 employees, incl. >300 pharmacists, in 30 countries 19 compounding facilities, 6 facilities under development, 5 conditioning sites, 3 purchase and audit offices 10% of annual turnover comes from innovations that were introduced in the p
Slide 6: Innovating and Optimising Pharmaceutical Compounding
Innovating and Optimising Pharmaceutical Compounding Fagron is an R&D scientific pharmaceutical compounding company. We innovate and optimise compounding and thereby broaden the therapeutic scope of the prescriber to enable __ tailor-made pharmaceutical care. By doing so, we are supporting the uniqu
Slide 7: Our values
Our values Speed of ( #) execution Result driven market leader Behave as a global Customer is ——— Entrepreneurial Innovative number one
Slide 8: Business model
Business model Sterile, Aseptic and Non sterile compounding FCS Fagron Advanced Derma Fagron Trademarks SyrSpend® SF Fagron Aseptic Pack Raw materials Excipients Fagron Compounding Essentials Equipment Supplies 7
Slide 9: Major achievements in 2014
Major achievements in 2014 • Organic turnover • Gross margin of 64.5% • Divestment of Arseus Dental and growth at constant • EBITDA-margin of Arseus Medical rates of 11.5% 25.4%, an increase of • US private placement of US$ 185 • Total turnover growth of 340bps million 30.4% • Refinancing of € 220 m
Slide 10: What is pharmaceutical compounding?
What is pharmaceutical compounding? Formulations developed by Fagron Tailor-made and/or compounding pharmacists medication based on APIs which are out of patent Alternative dosage forms Alternative dosage strengths Combination therapy Compounded in community and hospital pharmacies or by Fagron Comp
Slide 11: Key drivers of pharmaceutical compounding
Key drivers of pharmaceutical compounding Unique selling points Prescriber/Pharmacist Drug shortages Discontinued drugs High-quality and cost effective alternative Less side effects More individualised approach Tailor-made “Yes, compounding Enhance patient compliance pharmacists enhance medication c
Slide 12: Win-win-win strategy
Win-win-win strategy Prescriber Patient Pharmacist 11
Slide 13: Process from prescription to patient – Europe
Process from prescription to patient – Europe REIMBURSEMENT Pharmacy Prescriber Patient Hospital pharmacy 12
Slide 14: Process from prescription to patient – US
Process from prescription to patient – US NON STERILE: REIMBURSED/CASH Non-sterile FCS facility Prescriber Patient Hospital/ FDA registered clinic 503B sterile FCS STERILE: CASH facility 13
Slide 15: Process from prescription to patient – Brazil
Process from prescription to patient – Brazil 100% CASH MARKET Pharmacy Prescriber Patient 14
Slide 16: Win-win-win strategy
Win-win-win strategy Patient Prescriber organisations Patient Government Insurance companies Pharmacist 15
Slide 17: Fagron markets – Europe
Fagron markets – Europe 400,000 pharmacists 155,000 pharmacies 10,000 compounding pharmacies US$ 2 billion market (est.) Compounding: Not embedded Less important at University and pharmacy education Regulatory: not-standardised and not implemented Traditional Growing market Estimated market share of
Slide 18: Fagron markets – United States
Fagron markets – United States 274,000 pharmacists 67,000 pharmacies 4,500 compounding pharmacies US$ 8 billion market (est.) Compounding: Embedded in society and culture Pharmaceutical specialisation at University level Regulatory: standardised and implemented, but in transition Innovative (vehicle
Slide 19: Fagron markets – Brazil
Fagron markets – Brazil 120,000 pharmacists 32,000 pharmacies 7,200 compounding pharmacies US$ 4 billion market (est.) Compounding: Way of life, part of Brazilian culture Pharmaceutical specialisation at University level Regulatory: standardised and implemented Innovative (transdermal application) G
Slide 20: Financial highlights
Financial highlights
Slide 21: Consolidated turnover S2 2014 and FY 2014
Consolidated turnover S2 2014 and FY 2014 Org. Total Tot. growth Org. X 1,000 euros 2014 2013 growth growth CER growth CER Fagron 438,479 334,985 30.9% 33.0% 9.7% 11.5% HL Technology 8,577 7,726 11.0% 9.5% 11.0% 9.5% Total 447,056 342,711 30.4% 32.5% 9.7% 11.5% Org. Total Tot. growth Org. X 1,000 eu
Slide 22: Consolidated - Gross Margin
Consolidated - Gross Margin 48.1% 300 • Increased by 770bps to 64.5% of 288.2 turnover 250 64.5% • Focus on high margin products, FCS 200 and Fagron™ 194.7 150 49.2%• Continuous savings in procurement 56.8% • Phased-out industry sales 100 50 0 2013 2014 21
Slide 23: Consolidated - REBITDA
Consolidated - REBITDA 49.8% • Increase of 340bps to 26.5% of 120 turnover 118.5 100 26.5% • Continuous focus on OPEX 80 • Growing expenses in R&D 79.1 49.2% 60 23.1% • In 2014 total amount of R&D is € 30 million 40 • Fagron does not activate R&D costs 20 0 2013 2014 2
Slide 24: Consolidated - Depreciation & Amortisation
Consolidated - Depreciation & Amortisation 113.4% 20 • Increase in D&A of € 10.1 million: 18 19.0 € 4.7 million PPA 16 € 2.6 million PPE 14 € 2.8 million write down of 12 inventory and receivables (phase 49.2% out of non profitable distributions 10 and industry sales) 8 8.9 6 4 2 0 2013 2014 2
Slide 25: Consolidated – EBIT
Consolidated – EBIT 42.2% 100 • Increase of 42.2% to € 94.3 million 90 (170bps to 21.1% of turnover) 94.3 80 • EBIT lift (EBIT growth/sales growth)= 70 1.39 60 66.3 49.2% 50 40 30 20 10 0 2013 2014 2
Slide 26: Consolidated – Taxes
Consolidated – Taxes 30 • Increase of € 19.7 million, mainly due to high corporate tax rate in the US 25 26.7 • Effective tax rate amounted to 38.2% 20 • Cash tax rate is 16.3% and below our 49.2% guidance of 20% 15 10 05 7.0 00 2013 2014 2
Slide 27: Consolidated – Adjusted net profit
Consolidated – Adjusted net profit 40.0% 70 • Increase of 5.4% from € 44.3 million to € 46.7 million 60 62.0 5.4% • Negatively impacted by high tax rate 50 46.7 • Net profit corrected for paid taxes 40 44.3 49.2% would be € 62 million (increase of 30 40.0%) 20 10 00 2013 2014 2014 adjusted 2
Slide 28: Net financial debt – S1 and S2
Net financial debt – S1 and S2 500 • Negatively impacted by USD 450 conversion (effect is € 22.2 million) 449 400 411 • Covenant = 3.18 compliant with maximum ratio of 3.25 350 300 327 289 250 200 150 100 50 0 2013 S1 S2 2014 27
Slide 29: Net debt bridge
Net debt bridge 500 22 450 25 21 19 22 1 1 449 400 350 197 300 250 289 107 200 150 100 50 00 28
Slide 30: Strongly improved cash flow generation
Strongly improved cash flow generation In million € 2014 2013 Change Operating cash flow 93.9 46.0 +104% - Interest -24.7 -19.4 +27% - CAPEX -12.5 -5.2 +140% Free cash flow 56.7 21.4 +165% EBITDA 113.4 75.2 +51% EBITDA/FCF 50% 28% +2,200bps Strongly improved cash conversion Due to increasing EBITDA,
Slide 31: Fagron Financial Highlights
Fagron FINANCIAL HIGHLIGHTS
Slide 32: Sales Fagron
Sales Fagron CAGR 20% 438 335 290 243 179 137 151 2008 2009 2010 2011 2012 2013 2014 CAGR: Compound Annual Growth Rate 31
Slide 33: Organic and total turnover growth
Organic and total turnover growth 40% Organic growth at constant rates 35.8% 35% Total growth at constant rates 33.0% 30% 24.2% 25% 21.8% 20% 18.3% 20.3% 15% 13.7% 10% 11.5% 10.5% 10.9% 9.4% 5% 7.2% 6.5% 5.9% 0% 2008 2009 2010 2011 2012 2013 2014 32
Slide 34: Sales per segment
Sales per segment 2014 2013 Total growth Organic growth Fagron Compounding 147,780 58,210 153.2% 19.8% Services Fagron Trademarks 45,652 33,630 39.8% 28.4% Fagron Compounding 245,047 243,145 3.3% 4.7% Essentials Total Turnover 438,479 334,985 33.0% 11.5% Without the disposal of € 10.9 million of Ind
Slide 35: Fagron Compounding Services
Fagron Compounding Services
Slide 36: Business model: FCS
Business model: FCS IV-Bags, ampoules, vials Sterile TPN, cytostatics, syringes, Aseptic cassettes, easypumps Tablets, capsules, liquids, Non sterile crèmes/ointments 35
Slide 37: Fagron Compounding Services facilities worldwide
Fagron Compounding Services facilities worldwide Belgium Bornem (non-sterile & aseptic) Greece Trikala (non-sterile) France Paris (non-sterile) Marseille (non-sterile) South Africa Johannesburg (non- sterile) Cape Town (non-sterile and sterile) George (non-sterile and sterile) North America Colombia
Slide 38: Fagron Compounding Services
Fagron Compounding Services Warehouse incoming goods Clean utilities Transfer into clean room Clean utilities in clean room Transfer to aseptic area Batch record administration 37
Slide 39: Fagron Compounding Services
Fagron Compounding Services Prepare for compounding Compounding Visual analyses Packaging Microbiology analyses Complete batch record 38
Slide 40: Fagron Compounding Services – products
Fagron Compounding Services – products Elastomeric pump Cassettes Fagron Aseptic Pack Prefilled syringes 39
Slide 41: Fagron Compounding Services – products
Fagron Compounding Services – products Intravitreal eye injections antibiotic prophylaxis IV bag Cytostatics 40
Slide 42: Yes, we improve the quality of life of patients, every single day
YES, WE IMPROVE THE QUALITY OF LIFE OF PATIENTS, EVERY SINGLE DAY 41
Slide 43: Global R&D pipeline
Global R&D pipeline 2015 2016 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Feb Aug Launch Global Concepts FAD phase 2 Alopecia Pain, phase 1 Global formulations App SDD Psoriasis FAD phase 3 Obese 42
Slide 44: Outlook
Outlook 43
Slide 45: Outlook 2015
Outlook 2015 Fagron expects a turnover of at least € 500 million with an REBITDA margin of 26% in 2015 44
Slide 46: Thank you
Thank you
Slide 47: Disclaimer
Disclaimer This presentation may contain forward-looking statements with respect to Fagron’s future (financial) performance and position. Such statements are based on current expectations, estimates and projections of Fagron and information currently available to the company. Fagron cautions readers