Genomma Lab Internacional SAB de CV Class B · BMV:LAB/B
Genomma Lab Internacional SAB de CV Class B — Investor Presentation (May 2021)
60 slides from Genomma Lab Internacional SAB de CV Class B's investor presentation, May 2021
Slide 1: Investor Relations Corporate Presentation
INVESTOR RELATIONS CORPORATE PRESENTATION Ma y 2 0 2 1
Slide 2: Safe Harbor Disclosure
SAFE HARBOR DISCLOSURE 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
Slide 3: Who We Are
WHO WE ARE Genomma Lab Internacional, S.A.B. de C.V., is one of the leading pharmaceutical (OTC) and Personal Care products companies in Mexico with an increasing international presence that develops, sells and markets a broad range of premium branded products, many of which are leaders in their cat
Slide 4: Our Footprint
OUR FOOTPRINT “Innovation is part of our DNA” LatAm 47.6% Points of Sale of net sales 400,000+ Mexico 42.9% of net sales Countries 18 USA 9.5% of net sales Industrial Cluster 1 1,300+ Brands 50+ employees As of March, 2021 May 2021 4
Slide 5: Over the Counter Products (OTC): 49.9% of Total Sales
OVER THE COUNTER PRODUCTS (OTC): 49.9% OF TOTAL SALES Pain Relief Cough & Cold Gastro & Anti-Hemorrhoids Anti-Flu Anti-mycotics & Isotonic Beverages Sexual Health Antibacterial Infant Formula New categories May 2021 5
Slide 6: Personal Care Products (PC): 50.1% of Total Sales
PERSONAL CARE PRODUCTS (PC): 50.1% OF TOTAL SALES Shampoo Hair Care Beauty Creams Skin Care & Micellar water Anti-Acne & Cosmetics Razors New categories May 2021 6
Slide 7: Well Diversified by Region & Currencies
WELL DIVERSIFIED BY REGION & CURRENCIES 100% 100% US Dollar: 9.5% International Other currencies: 47.6% 23.2 1. Argentine Peso 2. Brazilian Real 57.1 3. Colombian Peso 4. Chilean Peso 5. Peruvian Sol 6. Uruguayan Peso 7. Paraguayan Guarani Mexico 76.8 42.9 Mexican Peso: 42.9% 2010 1Q-2021 15 1
Slide 8: OTC Market Share by Country
OTC MARKET SHARE BY COUNTRY Top Two Countries Highly Fragmented As a percentage of sales By category penetration Hispano OTC position 46.8% 3rd. position PLACE Total OTC 1st MEXICO PLACE 8.8% EUA 0.5% 15.4% position position 1st. 42nd. ARGENTINA PLACE PLACE BRAZIL CHILE ECUADOR PERU COLOMBIA CAM (1)
Slide 9: Management Team
MANAGEMENT TEAM JORGE LUIS ANTONIO MARCO BRAKE ZAMORA SPARVIERI CEO CFO COO SEPTEMBER 2018 DECEMBER 2015 APRIL 2014 Prior Experience: Prior Experience: Prior Experience: • Senior Vice President • CCO Cydsa • EVP Sales P&G at Laureate Education • CFO Grupo LALA • 20+ years of Inc. • Strategic & exper
Slide 10: New Growth Strategy
NEW GROWTH STRATEGY 1 3 Product Innovation World-class & Portfolio Manufacturing & Optimization Supply Chain 2 4 Best-in-class Corporate Go-to-Market Culture May 2021 10
Slide 11: Solid Results 2021
COVID-19 RESPONSE SOLID RESULTS 2021 Cost and Strong balance Expense Control position NET SALES(1) EBITDA(1) 1Q: +6.8% New Categories 1Q: +6.4% Organization and Product 1Q21’LTM: +9.1% 1Q21’LTM: +17.6% Commitment Innovation NET INCOME(1) Optimal level of E-commerce Operations Initiatives 1Q: (14.5%)
Slide 12: COVID-19 Social Responsibility Actions 2021
COVID-19 SOCIAL REPONSIBILITY ACTIONS 2021 • +50,000 products donated to DIF Oaxaca • +4,000 products donated to medical staff • 15th anniversary of ESR Distinction May 2021 12
Slide 13: 1) Product Innovation: Product Development
1) PRODUCT INNOVATION Product Development Charcoal Detox line Kills 99.99% of germs Clean Boost of Vitamin c M a y 2 0 2 1 13
Slide 14: 1) Product Innovation: Brand Improvements
1) PRODUCT INNOVATION Brand Improvements Qualified Herbalist medication No 100% sweeteners organic M a y 2 0 2 1 14
Slide 15: 1) Product Innovation: Mom & Pops Expansion
1) PRODUCT INNOVATION Mom & Pops expansion 97% less irritation 90 ml (0.02 gal) presentation Sachet presentation M a y 2 0 2 1 15
Slide 16: New Category: Groomen
NEW CATEGORY: GROOMEN® New category with growth potential for Mexico & LatAm Manufactured by Edgewell PC (Exclusivity agreement) Market Value opportunity of >100mm USD M a y 2 0 2 1 16
Slide 17: New Category: Novamil
NEW CATEGORY: NOVAMIL® Manufactured by UP International (Exclusivity agreement) Exclusivity in LatAm ex. Brazil Market Value opportunity of >80mm USD M a y 2 0 2 1 17
Slide 18: 2) Best-in-Class Go-to-Market
2) BEST-IN-CLASS GO-TO-MARKET In-store Media & Visibility at POS Traditional Channel • +400,000 POS reached • +2,000 person sales team • Brazil new commercial agreements • Traditional Channel presence in Central America and Andean Region May 2021 18
Slide 19: 2) Best-in-Class Go-to-Market
2) BEST-IN-CLASS GO-TO-MARKET E-COMMERCE GEN ORDER • Reinforce presence in Amazon • Supporting strong relationships with salesforce and local businesses • Strong Positioning in Mercado Libre • Platform development 2020 (App) • Marketing & Brand Visibility. • Official launch in 2021. May 2021 19
Slide 20: 3) World-Class Manufacturing and Supply Chain
3) WORLD-CLASS MANUFACTURING AND SUPPLY CHAIN • 2 out of 3 components started operations (PC & Warehouse) • Successful relocation of the Finished Products Warehouse • Isotonic Beverage Line started operations. 1 2 3 May 2021 20
Slide 21: Manufacturing Facility Update
MANUFACTURING FACILITY UPDATE Manufacturing Plant NEW Manufacturing (May 2021) Facility video May 2021 21
Slide 22: PC Manufacturing Facility Update
PC MANUFACTURING FACILITY UPDATE Q1-2021 PC Plant Execution • 2.4mm bottles of Suerox® (for sale) • 14 k bottles of shampoo (testing) • +2,800 hours of operation • 36% capacity utilization of the isotonic beverage line. May 2021 22
Slide 23: Central Warehouse Update
CENTRAL WAREHOUSE UPDATE New Warehouse • Increased Warehouse capacity • Speed & Accuracy in case picking • Ensures product rotation. Q1-2021 Execution • +31,000 active storage positions • 6.2mm moved cases (+19% vs. 2020) • Shipping +55 trucks per day May 2021 25
Slide 24: New Warehouse Location in Brazil
NEW WAREHOUSE LOCATION IN BRAZIL Extrema - Minas Gerais • One of the main logistics hubs in Brazil 8 days • Improved level of costumer 9 days service 7 days • Reduced transit time in +5 days Extrema-MG Region 6 days • Logistics cost reduction • + 6,000 pallets positions • +50% increase of capacity.
Slide 25: Reinforcement in Key Positions
REINFORCEMENT IN KEY POSITIONS Carlos Carlos Felipe Quezada Amador Trujillo Personal Care Director OTC Director Quality Director OCTOBER 2020 OCTOBER 2020 OCTOBER 2020 Prior Experience: Prior Experience: Prior Experience: • P&G Manufacture • Gelpharma-Vitae • Novartis, Merck & AD Laboratories Pfizer
Slide 26: 4) Corporate Culture: New Corporate Philosophy
4) CORPORATE CULTURE New Corporate Philosophy May 2021 26
Slide 27: 4) Corporate Culture
4) CORPORATE CULTURE Social Responsibility Breaking Down Barriers Equal opportunity May 2021 27
Slide 28: Sustainability Agenda 2025
SUSTANTIBILITY AGENDA 2025 May 2021 28
Slide 29: Sustainability Agenda 2025
SUSTANTIBILITY AGENDA 2025 OUR PRODUCTS OUR VALUE CHAIN OUR WASTE MANAGEMENT By 2025, all our packages will By 2022, 100% of our global By 2022, we will prevent that be 100% recyclable, reusable supply chain will be waste generated in our or compostable. reviewed in sustainability operational sites
Slide 30: Sustainability Agenda 2025
SUSTANTIBILITY AGENDA 2025 OUR LOGISTICS OUR TEAM OUR CONTRIBUTION TO SOCIETY By 2023, we will reduce By 2025, 500,000 people By 2022, 50% of our 20% of CO2 emissions will be benefited by global team will be related to our logistics business represented by operation in Mexico, initiatives aligned to
Slide 31: Industrial Cluster Rationale
INDUSTRIAL CLUSTER RATIONALE November 2020 31
Slide 32: Investment Rationale
INVESTMENT RATIONALE Enhanced Value Equation Higher Gross Margin Superior Product Quality Reliable Product Supply May 2021 32
Slide 33: Long-Term Financing and Ratings
LONG-TERM FINANCING AND RATINGS Long-term financing provided by: ~100MM USD Loan Term: 8 years Rating Agencies Short-Term: Short-Term: F1+(mex) HR+1 Long-Term: Long-Term: AA(mex) HR AA Outlook: Outlook: Stable Positive May 2021 33
Slide 34: Investment Profile
INVESTMENT PROFILE Benefit from economies of scale and efficient production capabilities EBITDA Synergies ~ 700 bps(1) Market Expansion: Genomma Lab will reinvest between 350 - 300 bps for growth (1) Genomma Lab estimation. May 2021 34
Slide 35: Improving Efficiency in Export Logistics
IMPROVING EFFICENCY IN EXPORT LOGISTICS Strategically Located Manufacturing Plant (79 Acres) “Puerta México” (Most important train port in Mexico) Distance between Plant & Puerta México: 1.5 mi May 2021 35
Slide 36: PC Manufacturing Facility Update
PC MANUFACTURING FACILITY UPDATE Isotonic Beverage Manufacturing Product Line May 2021 36
Slide 37: PC Manufacturing Facility Update
PC MANUFACTURING FACILITY UPDATE Isotonic Beverage Manufacturing Product Line May 2021 37
Slide 38: PC Manufacturing Facility Update
PC MANUFACTURING FACILITY UPDATE First test batch of Suerox® at PC Plant May 2021 38
Slide 39: PC Manufacturing Facility Update
PC MANUFACTURING FACILITY UPDATE Shampoo Manufacturing Product Line May 2021 39
Slide 40: PC Manufacturing Facility Update
PC MANUFACTURING FACILITY UPDATE Shampoo Manufacturing Product Line May 2021 25
Slide 41: PC Manufacturing Facility Update
PC MANUFACTURING FACILITY UPDATE Shampoo Manufacturing Product Line May 2021 25
Slide 42: OTC Manufacturing Facility Update
OTC MANUFACTURING FACILITY UPDATE State-of-the-art equipment May 2021 42
Slide 43: OTC Manufacturing Facility Update
OTC MANUFACTURING FACILITY UPDATE OTC Plant Manufacturing Equipment May 2021 43
Slide 44: OTC Manufacturing Facility Update
OTC MANUFACTURING FACILITY UPDATE State-of-the-art Blister machine for OTC pills equipment May 2021 44
Slide 45: OTC Manufacturing Facility Update
OTC MANUFACTURING FACILITY UPDATE Water chiller system for OTC Plant Tube filling equipment for semi-solid production line Tanks system for liquid OTC production May 2021 45
Slide 46: OTC Manufacturing Facility Update
OTC MANUFACTURING FACILITY UPDATE Semi-solid production line State-of-the-art equipment May 2021 46
Slide 47: Economies of Scale and Scope Driving Higher Gross Margins
ECONOMIES OF SCALE AND SCOPE DRIVING HIGHER GROSS MARGINS Opportunity Outsourcing Producing areas Buying finished Direct control in all Raw products COGS components Materials and Packaging Fragmented raw Economies of scale material procurement Low scale, labor State-of-the-art fully Labor Cost inten
Slide 48: Economies of Scale and Scope Driving Higher Gross Margins
ECONOMIES OF SCALE AND SCOPE DRIVING HIGHER GROSS MARGINS Opportunity Outsourcing Producing areas Higher COGS due to Eliminate co-packers Suppliers co-packers profit profit margin margin Suppliers scattered Integration of throughout the suppliers to country industrial park Logistics Leverage freight
Slide 49: Example of Removing Inefficiencies
EXAMPLE OF REMOVING INEFFICIENCIES TOLUCA CURRENT INBOUND LOGISTICS PUEBLA 195 km 4:17 hrs Filling PE Blowing PE bottles with bottles shampoo ADDITIONAL EXPENSES Shipping and Storing Cleaning Handling May 2021 49
Slide 50: Profitability Through COGS Reduction
PROFITABILITY THROUGH COGS REDUCTION 38.2 Acquired in 2012 20.8 from Sidus Market Share in units (%) 12.1 Competitor 19.7 ‘13 ‘14 ‘15 ‘16 ‘17 ’18 51 34 25 21 Net Sales 14 in USD 10 million Portfolio of products ‘13 ‘14 ‘15 ‘16 ’17 ’18 Source: Cid Latina – N02B + M01A.. May 2021 50
Slide 51: Financial Highlights
FINANCIAL HIGHLIGHTS
Slide 52: Financial Results
FINANCIAL RESULTS Ps. million Income Statement 1Q-2021 % 1Q-2020 % Var % Net Sales $3,547.7 100.0% $3,334.5 100.0% +6.4% Gross Profit $2,180.5 61.5% $ 2,061.6 61.8% +5.8% Operating Income $686.8 19.4% $640.6 19.2% +7.2% EBITDA(1) $724.7 20.4% $678.4 20.3% +6.8% Net Income $319.4 9.0% $373.6 11.2% (1
Slide 53: Financial Position
FINANCIAL POSITION Ps. million As of March 31, As of Dec 31, Financial Position 2021 2020 2020 Cash and Equivalents $1,824.3 $1,370.1 $2,103.9 Total Assets $22,654.2 $20,906.4 $22,132.6 Total Liabilities $12,793.4 $12,223.0 $12,498.4 Stockholders Equity $9,860.7 $8,683.5 $9,634.2 May 2021 53
Slide 54: Cash Conversion Cycle
CASH CONVERSION CYCLE (1) 205 162 158 155 145 144 103 101101 99 102 109 95 96 (…) Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Prior Management New Management (1) Cash Conversion Cycle = Days of accounts rec
Slide 55: Financial Position: Net Debt Profile
FINANCIAL POSITION Net Debt Profile 5,724 MXN (million) 5,112 4,454 4,459 4,320 4,506 3,980 3,689 3,610 2013 2014 2015 2016* 2017* 2018 2019 2020 LTM’1Q21 2013 2014 2015* 2016* 2017 2018 2019 2020 1Q21 1.5x Net Debt / 1.2x 2.3x 2.5x 1.4x 1.4x 1.8x 2.1x 1.5x EBITDA FCF** 1,830 918 1,075 1,803 837 133
Slide 56: Key Valuation Metrics
KEY VALUATION METRICS Historical data do not reflect potential upside from new manufacturing plant $1,048.0mm 69.8% 8.9x 16.1x Shares Outstanding Free Float EV / EBITDA P/E EV / EBITDA P/E 40 64.9x 26.6x 60 30 18.4x 17.3x 15.7x 14.8x 16.1x 40 26.0x 17.0x 20 8.9x 21.0x 15.9x Average 21.0x 11.3x 15.3x
Slide 57: Key Valuation Metrics: ROIC
KEY VALUATION METRICS ROIC including Intangibles 22.5% 16.6% 25% 16.6% 17.9% 15.4% 30.4% Average 13.1% Genomma’s 15% 5.7% ROIC excluding Intangibles 5% -5% (22.8)% -15% -25% Source: Company Information. Standardized ROIC calculations made via Bloomberg as of LTM ended October 31, 2020. Calculated RO
Slide 58: Stock Performance 2 Years
STOCK PERFORMANCE 2 YEARS LAB vs. IPC Market Cap: Ps. 21,212mm April, 2021 $20.24 100 April, 2018 $18.19 50 04/18 08/18 12/18 04/19 08/19 12/19 04/20 08/20 12/20 04/21 LABB 100 IPC 100 May 2021 58
Slide 59: Video Links
VIDEO LINKS TRUST THE SCIENCE OF HEALTHY HANDS Genomma Lab.® Internacional Fundacion Genomma Lab’ May 2021 | 59
Slide 60: Contact
CONTACT: Enrique González Head of Investor Relations Barbara Cano InspIR Group - NY [email protected] +52 (55) 5081-0000 STOCK INFORMATION: Genomma Lab has been traded under the ticker ‘LAB B’ on the Mexican Stock Exchange (BMV) since June 18, 2008. FOR MORE INFORMATION: www.genommal
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