Sigma Healthcare Ltd · ASX:SIG
Sigma Healthcare — H1 2015 Earnings Presentation
26 slides from Sigma Healthcare's earnings presentation, Sep 11, 2014
Slide 1: Half Year Results
For personal use only Half Year Results For period ended 31 July 2014 11 September 2014 Mark Hooper – CEO & Managing Director Jeff Sells – Chief Financial Officer Australia’s Partner of Choice for Health, Beauty and Wellbeing
Slide 2: Important Notice
Important Notice For personal use only The material that follows is a presentation of general information about Sigma's activities current at the date of the presentation. It is information given in summary form and does not purport to be complete. No representation or warranty is made as to its com
Slide 3: 2015 Half Year Results
2015 Half Year Results For personal use only Overview Mark Hooper Financial Summary Jeff Sells Looking Forward Mark Hooper 3
Slide 4: Overview
For personal use only Overview Mark Hooper CEO & Managing Director
Slide 5: Delivering strategic success
Delivering strategic success For personal use only CHS business transition well progressed Discount Drug Stores (DDS) acquisition announced Extended strategic supply agreement with Pharmacy Alliance to 2024 Continued investment in products and brands Brisbane DC – land acquired, business c
Slide 6: Strong first half with growing momentum
Strong first half with growing momentum For personal use only Revenue up 2.6% to $1.5bn, with volumes up 6.7% Impact of PBS reform continues to be countered EBIT up 34.5% to $33.5m ($24.9m pcp) NPAT up 37.5% to $22.4m ($16.3m pcp) Record low cash conversion cycle of 48 days Net cash of $
Slide 7: First Half Financial Summary
For personal use only First Half Financial Summary Jeff Sells Chief Financial Officer
Slide 8: First Half – Financials
First Half – Financials For personal use only • Sales Revenue up 2.6% including CHS; • Adjusting for PBS Price reform, like for like sales growth would have been 6.5%; Full year 2014 income statement % Revenue • Volumes delivered grew by 6.7%. $m 1H 2015* 1H 2014 Variance Change Sales revenue 1,502.
Slide 9: Investing for the future
Investing for the future For personal use only Warehouse & Delivery costs - Up $3.2m to $53.0m • Includes CHS for 2 months, will add $8-$10m pa • Volumes compared to the prior year grew by 6.7% • Redundancy costs from Toowoomba closure of $0.3m • Wage increases from EBA Sales and Marketing costs - D
Slide 10: Cash returned to shareholders and invested in growth
Cash returned to shareholders and invested in growth For personal use only $100,000 $80,000 $60,000 000’s $40,000 $20,000 $0 Net Cash at Cash inflow CHS Capex Dividend Shares bought Others Net Cash at 31 Jan 2014 from operating acquisition Payment Payment back 31 July 2014 activities Inclusive of ca
Slide 11: Working Capital continues to improve
Working Capital continues to improve For personal use only As at As at As at As at Working Capital $m 31 July 31 July 31 July 31 July 2011 2012 2013 2014* Trade Receivables 581 581 549 586 Inventories 275 224 250 284 Trade Creditors -334 -345 -353 -437 Total Working Capital 522 460 446 433 Days Sale
Slide 12: Cash conversion cycle at record low
Cash conversion cycle at record low For personal use only 80 70 Days 60 50 40 Jan'11 July'11 Jan'12 July'12 Jan'13 July'13 Jan'14 July'14 Working capital reduced by $182m since Jan 2011 Record low cash conversion cycle Still targeting some improvement in the coming year 12
Slide 13: Continuing to drive ROIC
Continuing to drive ROIC For personal use only Record ROIC and Working Capital Improvement 650,000 15% 600,000 13% 550,000 11% 000’s 500,000 9% 450,000 7% 400,000 5% Total working capital ROIC 13
Slide 14: Capital management update
Capital management update For personal use only • As forecast, no interim dividend due to insufficient franking credits • Cash saved to be allocated to ongoing share buy-back Dividends • Total fully franked dividends since 2011 – 28 cents • Semi-annual fully franked dividends expected to return for
Slide 15: Looking forward
For personal use only Looking forward Mark Hooper CEO & Managing Director
Slide 16: Largest Pharmacy Led Network in place
Largest Pharmacy Led Network in place For personal use only Strategy: • Pharmacy First • Strength in numbers, common goals • Leverage capability and resources • Differentiate to address PBS reform 700+ Stores and Growing 16
Slide 17: Brands that customers want
Brands that customers want For personal use only Most recognised brands Amcal and Guardian OTC sales up over 5% yoy Strong in store offers New front of store categories – Beauty High service model – Pharmacist engagement Improved membership compliance 2014 Amcal Winner Canstar 2013 Guardia
Slide 18: CHS and DDS strengthen our pharmacy network
CHS and DDS strengthen our pharmacy network For personal use only CHS and DDS combined add 300 branded pharmacy members, over $400m Revenue, and are expected to deliver $8-10m in EBITDA in the first full year. Acquisition completed 26 May 2014, with Acquisition announced 8 September integration
Slide 19: Pharmacy Alliance agreement secures long term partnership
Pharmacy Alliance agreement secures long term partnership For personal use only Announced 3 September 2014 10-year wholesale and services agreement Secures over $400m in revenue to 2024 PA supports over 460 pharmacies across Australia Provides greater opportunity to work strategically toge
Slide 20: Tailored pharmacy solutions supporting 1,200 pharmacies
Tailored pharmacy solutions supporting 1,200 pharmacies For personal use only Providing pharmacists with a choice of strong branded pharmacies Strong support for independent pharmacies 20
Slide 21: Strong growth in private and exclusive label
Strong growth in private and exclusive label For personal use only Growing pipeline of new products continues • Portfolio expected to reach 680 products over the next 12-months Double digit sales growth Strong wholesale margins Attractive to Pharmacy • Strong margins, builds customer loyalty
Slide 22: Professional Services rollout continues
Professional Services rollout continues For personal use only Sigma is providing accessible healthcare Clinical Priorities solutions to Australians suffering from the biggest diseases globally and many others that matter Diabetes Cardiovascular Builds a structured point of difference that can be
Slide 23: Improved Loyalty Platform
Improved Loyalty Platform For personal use only Improved platform to grow existing and new customers Loyalty Customers are the most profitable Improves communication capability Provides market insights for Sigma customers and suppliers Loyalty members 2.96m In store spend $24 In store spend
Slide 24: Outlook
Outlook For personal use only CHS integration well progressed Further expanding our branded network with DDS acquisition Extended strategic supply agreement with PA Continued investment in operations • Supporting our private and exclusive brands and professional services; • Acquired land for
Slide 25: Thank you
For personal use only Thank you Australia’s Partner of Choice for Health, Beauty and Wellbeing
Slide 26: Appendix - ROIC
Appendix 1 - ROIC For personal use only As at As at As at As at As at As at $m 31 Jan 31 Jul 31 Jan 31 Jul 31 Jan 31 Jul 2012 2012 2013 2013 2014 2014 Net assets 682.5 669.0 610.8 572.9 578.8 568.8 Less: Cash and cash -148.6 -145.8 -112.7 -151.9 -67.5 -34.7 equivalents Add: Interest bearing 35.0 20.