Genomma Lab Internacional SAB de CV Class B · BMV:LAB/B
Genomma Lab Internacional SAB de CV Class B — Investor Day (November 2016)
55 slides from Genomma Lab Internacional SAB de CV Class B's investor day presentation, Nov 3, 2016
Slide 1: Genomma Lab Investor Day
@ Genomma Lab‘ Internacional GENOMMA LAB INVESTOR DAY NOVEMBER 3, 2016
Slide 2: Safe Harbor
Safe Harbor This presentation may contain certain forward-looking statements and information relating to the Company that reflect the current views and/or expectations of the Company and its management with respect to its performance, business and future events. Forward looking statements include, w
Slide 3: Today's Presenters
Today’s Presenters GL. PRESIDENT OF BRANDS - 14 years at LABB - Joined Dec 2015 - Joined April 2014 - Recently joined Prior Experience: Prior Experience: Prior Experience: Prior Experience: • COO, Head of • CCO Cydsa • EVP Sales P&G • Global President J&J International • CFO Grupo LALA • +20 years o
Slide 4: Genomma Lab's Key Imperatives
Genomma Lab’s Key Imperatives Balanced geographic Shareholder reach / value International creation expansion Sustainable business model & enduring brands 4
Slide 5: Core Competencies
Core Competencies Before Today Future Demand Demand generation Demand generation generation Developing online Win online Talent Talent + Continue attracting global talent ++ POS execution Better POS execution Best POS execution Mexico: sell-in Sell-out, EBITDA, FCF EBITDA, FCF and ROIC International
Slide 6: Agenda
Agenda 1 LAB Highlights: Then and Now 2 Mexico: The Turnaround Brand Equity 3 Sustainability Commercial Strategy Innovation 4 Financial Results and Outlook 6
Slide 7: Growth Achieved in OTC and PC Since 2010
Growth Achieved in OTC and PC Since 2010 Sales by Category (Million MXN) CAGR 11,287 + 10.8% 6,264 PC PC OTC OTC Generics 2010 3Q16 YTD 7
Slide 8: Significant Geographic Diversification
Significant Geographic Diversification Revenue Mix by Region 100% 100% International Mexico 15 countries 20 countries 8
Slide 9: Rightsizing the Organization
Rightsizing the Organization Employees 514 XXX 9
Slide 10: Growth Fueled by Organic Brands and Strategic Acquisitions
Growth Fueled by Organic Brands and Strategic Acquisitions (Million MXN) Examples of Acquired Brands CAGR: +10.8% 11,287 12,000 + 14.6% 21% 10,000 8,000 6,264 Examples of Organic Brands 6,000 17% Acquired 79% + 9.9% Brands 4,000 83% Organic 2,000 Brands - 2010 3Q16 LTM 10
Slide 11: New Management Focused on Generating Cashflow
New Management Focused on Generating Cashflow Consolidated Cash Conversion Cycle in Days New Management 11
Slide 12: Agenda: Mexico: The Turnaround
Agenda 1 LAB Highlights: Then and Now 2 Mexico: The Turnaround Brand Equity 3 Sustainability Commercial Strategy Innovation 4 Financial Results and Outlook 12
Slide 13: Sell-in Converging with Sell-out: Successful Destocking Process
Sell-in Converging with Sell-out: Successful Destocking Process Sell-in & 1300 sell-out Destocking converging 1200 completed Sell-out 1100 1000 900 Sell-in 800 700 600 500 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 13
Slide 14: True Demand Supported by the Strength of our Brands
True Demand Supported by the Strength of our Brands Actions taken to offset significant media inflation: • Reduction of 60% in GRP’s vs YAGO • Budget reallocated to optimize advertising expense Index Sell-out* 100 GRPs 0 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2014 2015 2016 *Real terms: adjusted by inflation
Slide 15: Agenda
Agenda 1 LAB Highlights: Then and Now 2 Mexico: The Turnaround Brand Equity 3 Sustainability Commercial Strategy Innovation 4 Financial Results and Outlook 15
Slide 16: LAB Participates in Attractive and Growing Business Segments
LAB Participates in Attractive and Growing Business Segments • Sizable markets BUSINESS SEGMENTS • Growth potential • Latin America • U.S. Hispanic market OTC PC • Well-recognized leading brands 16
Slide 17: Genomma is a Leading OTC Player within its Markets
Genomma is a Leading OTC Player within its Markets Top Two Countries Highly Fragmented Mexico Argentina USA Brazil Total OTC Hispanic OTC 0.45% 1er trim. 2º trim. 3er trim. 4º trim. Position: Position: Position: Position: Significant Growth Opportunity Chile Ecuador Peru Central America Colombia Pos
Slide 18: Increased Penetration of Core Brands
Increased Penetration of Core Brands Revenue Mix in Mexico 100.0% 11.0% 7.3% Non-Core Brands 90.0% 31.8% 80.0% 70.0% • Better product rotation in the POS 60.0% 50.0% 89.0% 92.7% • Higher profitability 40.0% 68.2% than non-core brands Core Brands 30.0% 20.0% 10.0% 0.0% 3Q14 YTD 3Q15 YTD 3Q16 YTD ~ 95
Slide 19: Agenda
Agenda 1 LAB Highlights: Then and Now 2 Mexico: The Turnaround Brand Equity 3 Sustainability Commercial Strategy Innovation 4 Financial Results and Outlook 19
Slide 20: Our Path to Developing Megabrands
Our Path to Developing Megabrands Two Megabrands > US $100 million Product Line Extensions Caps Gel Neutral soap Makeup Anti-acne soap BB cream Asepxia Powder makeup Gel Body cream Caps Liquid makeup Anti-scar Eye cream BB cream Stretch mark Facial cleansing wipes Anti-aging Anti-acne wipes SPF Mexi
Slide 21: Our Focus on Power Brands Drives Category Growth
Our Focus on Power Brands Drives Category Growth Antimycotics 21
Slide 22: Genomma's DNA: Disruptive Marketing Strategies to Grow Brands
Genomma’s DNA: Disruptive Marketing Strategies to Grow Brands “100 Secrets” Home-made “recipes” of Pomada de la Campana Mix with natural ingredients to obtain different skin benefits (exfoliation, hydration, etc.). 22 22
Slide 23: Teatrical: Developing a Power Brand
Teatrical: Developing a Power Brand Sustainably Successful Launch Model Winning Strategy: • Relevant Concept • Value Offering & Innovation 4.6x $164 • POS Execution Sales $35 2013 2014 2015 2016 • 90 years of tradition • Launch into mass • Expansion into body • Design relaunch • Quality & heritage f
Slide 24: Acquired Brand Transformed into a Local Power Brand
Acquired Brand Transformed into a Local Power Brand 57.4 Acquired in 2012 from Andrómaco Market 43.1 Share in 43.1 Units (%) 53 43 14.5 31 Sales in Million 11 AR Pesos 6 Cream, spray, powder, lotion & gel ‘12 ‘13 ‘14 ‘15 Aug’16 Source: Cid Latina – CT D01A OTC. 24
Slide 25: Acquired Brand Transformed into a Local Power Brand
Acquired Brand Transformed into a Local Power Brand 39.07 Acquired in 2012 25.74 from Sidus Market Share in 17.8 Units 20.69 (%) 285 133 Sales in Million 77 AR Pesos 37 23 OTC and Rx product portfolio ‘12 ‘13 ‘14 ‘15 Aug’16 Source: Cid Latina – N02B + M01A. 25
Slide 26: Strengthening our Product Portfolio Category Mix in the U.S.
Strengthening our Product Portfolio Category Mix in the U.S. Supplements OTC Personal Care *Percentage points. 26
Slide 27: Top Brands Showing Strong Growth in the U.S.
Top Brands Showing Strong Growth in the U.S. (Million USD) 14.0 10.7 10.3 8.4 6.1 4.5 5.0 0.9 1.4 0.4 2012 2013 2014 2015 YTD 2016 2012 2013 2014 2015 YTD 2016 9.1 6.2 8.2 4.5 7.0 6.1 1.2 1.8 2014 2015 YTD 2016 2012 2013 2014 2015 YTD 2016 27 27
Slide 28: Hispanic Population Expanding throughout the U.S.
Hispanic Population Expanding throughout the U.S.; Genomma is Broadening its Presence LAB’s POS Hispanic Population Expanding 75,438 Rapidly in Non-Traditional Markets 58,370 2015 2016 New Clients New E-commerce Clients 28 Source: U.S. Census Bureau county population datasets / PEW Research Center.
Slide 29: Results with Key Clients in the U.S.
Results with Key Clients in the U.S. Results in key clients in the U.S. OTC Set Beauty Set 660 stores 900 stores End-Caps Side-Kicks • Optimize Assortment 1,679 stores 2,269 stores • Integrate Signage Elements • Marketing Campaign • 23 SKUs in the Top 30 list 29
Slide 30: Agenda
Agenda 1 LAB Highlights: Then and Now 2 Mexico: The Turnaround Brand Equity 3 Sustainability Commercial Strategy Innovation 4 Financial Results and Outlook 30
Slide 31: Commercial Key Variables
Commercial Key Variables • Traditional Channel Channel & • New Customers Customer Expansion • Channel Mix • Cicatricure Visibility • Asepxia • OTC • Shelf POS Execution • Displays • Featuring • Trade Terms Reduction Go-To-Market • Payment Behind Performance 31
Slide 32: Channel and Customer Expansion (Global)
Channel and Customer Expansion (Global) +108 New +27,612 New Customers* Stores* 11% of Total Sales* Drug Stores 7% Beauty Care 8% Traditional 48% Modern Trade 37% *From March 2014 to date. 32
Slide 33: Channel and Customer Expansion (Global)
Channel and Customer Expansion (Global) Sold as an SKU 15,000 Independent Drug Stores in Mexico by YE 2016 Deployed at mom-and-pop 140,000 500 450 120,000 Botiquín Abarrotes 100,000 400 350 300 Botiquín Farmacia Supporting distribution 80,000 60,000 250 200 expansion 40,000 20,000 150 100 50 0 0 201
Slide 34: Visibility
Visibility 75% of Supermarket Stores in Mexico with Off-Shelf Visibility. Asepxia Zan Zusi Cicatricure 34
Slide 35: Visibility
Visibility 25% of Pharmacy Chains Department Stores Asepxia & Cicatricure Cicatricure Sanborns 35
Slide 36: POS Execution
ene.-16 Jan.-16 59% feb.-16 61% mar.-16 60% Apr.-16 abr.-16 % of in-store perfect execution. 62% POS Execution 36 70% may.-16 jun.-16 69% jul.-16 72% Aug.-16 ago.-16 74% sep.-16 72%
Slide 37: POS Execution
POS Execution Observatorio Cuernavaca Supercenter Arboledas San Pablo 37
Slide 38: POS Execution
POS Execution Mega Pilares Fuentes del Valle Soriana Sendero Soriana Solidaridad San Mateo 38
Slide 39: POS Execution
POS Execution Supercenter Plaza Texcoco Supercenter Tepeyac Supercenter Toreo Supercenter Supercenter Lago de Querétaro Guadalupe 39
Slide 40: Agenda
Agenda 1 LAB Highlights: Then and Now 2 Mexico: The Turnaround Brand Equity 3 Sustainability Commercial Strategy Innovation 4 Financial Results and Outlook 40
Slide 41: Asepxia: 360 Degree Relaunch and Execution
Asepxia: 360 Degree Relaunch and Execution New Makeup Product Formulation New Design Line Evolution BB in entire makeup product line 8 benefits in one Perfect balance Technology Modern image, focus on + functional benefits Cream Natural Ingredients & Powder 41
Slide 42: A New Segment for SUEROX +75% Sell-out
A New Segment for SUEROX +75% SELL-OUT 42 42
Slide 43: New Global Marketing and Innovation Process
New Global Marketing and Innovation Process From: To: • Lead Markets • Federation of • Global Approach • Creative 20 countries • R&D • Category & brand strategy • Brand footprint • Communication ideas • Innovation 43
Slide 44: Two Year Innovation on Core Brands and Base Business Upgrade
Two Year Innovation on Core Brands and Base Business Upgrade Antimycotic 44 44
Slide 45: Agenda
Agenda 1 LAB Highlights: Then and Now 2 Mexico: The Turnaround Brand Equity 3 Sustainability Commercial Strategy Innovation 4 Financial Results and Outlook 45
Slide 46: 3Q YTD 2016: Growth in Top Line Profitability and FCF
3Q YTD 2016: Growth in Top Line Profitability and FCF (Million MXN) Net Sales Gross Profit 2.9% 4.7% 6,112 8,367 8,612 5,837 100.0% 6,000 6,000 90.0% 8,000 80.0% 5,000 5,000 7,000 70.0% 6,000 4,000 4,000 5,000 3,000 69.8% 71.0% 60.0% 50.0% 4,000 3,000 3,000 40.0% 2,000 2,000 2,000 30.0% 1,000 1,000
Slide 47: Stronger Policies and Disclosure
Stronger Policies and Disclosure • Strengthening of corporate policies and procedures resulted in one-off effects, primarily non-cash, in 4Q and FY 2015 results. • Tightened policies and procedures with additional oversight to support future strategy. • Smooth and incident-free SAP implementation im
Slide 48: Balance Sheet
BALANCE SHEET As of 3Q’16 (Million MXN) Total Liabilities + Total Assets 18,203 18,203 Shareholders’ Equity Cash and equivalents 1,020 Suppliers 1,592 Other current 1,431 Accounts receivable 2,304 liabilities Inventories 1,192 5,881 Bonds and banking debt Other current assets 3,540 114 Non-current l
Slide 49: Latest News: LAB Now Running on SAP S/4 HANA
Latest News: LAB Now Running on • SAP launched S/4 HANA in February 2015 (biggest technological change* in over two decades, replacing classical R/3 ERP) • 1Q’16 - First worldwide S/4 HANA implementation is announced** • 3Q’16 - LAB Mexico goes live in S/4 HANA • First implementation in Latin Americ
Slide 50: Evolution of Net Debt
Evolution of Net Debt (Million MXN) 50
Slide 51: Capital Allocation Concept
Capital Allocation Concept Higher Lower (than in 2016) * Non-Gaap measure defined as Operating Cash Flow less maintenance Capex. 51
Slide 52: M&A Strategy
M&A Strategy Accretive Inorganic Growth Non-transformational Focus on big geographies, mainly Mexico and the U.S. Mainly OTC Brand heritage and growth potential OPEX synergy opportunities Focus on ROIC 52
Slide 53: COGS Reduction
COGS Reduction New Production Capabilities Rationale Four last quarters intensive analysis Scale: filling, bottles, raw materials Quality Fill-rate Attracted GM’s talent from the best generics and PC producers in Latam Mexico has one of the lowest production costs in the world Business
Slide 54: Guidance 2017
Guidance 2017 Net Sales Growth (MXN): + 7% EBITDA Growth (MXN): + 14% FCF (billion MXN): > $1.8 ROIC Objective: ~ 30% Net Debt/EBITDA Target: < 2X 54
Slide 55: Investor Relations Contact
INVESTOR RELATIONS CONTACT: ANA MARÍA YBARRA – IRO BARBARA CANO – MBS Value Partners [email protected] Tel. (55) 5081-0000 ext. 4016 www.genommalab.com/inversionistas 55 55
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