ACETO Corporation Jefferies 2015 Global Healthcare Conference · This presentation contains...
Transcript of ACETO Corporation Jefferies 2015 Global Healthcare Conference · This presentation contains...
NASDAQ:ACET
ACETO Corporation
Jefferies 2015 Global Healthcare Conference
“Sourcing & Supplying Quality Products Worldwide”
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This presentation contains “forward-looking statements,” as defined by the Private Securities Litigation Reform Act of 1995, that can be identified by words such as “believes”, “expects”, “anticipates”, “plans”, “projects”, “seeks” and similar expressions and involve numerous risks and uncertainties. The Company’s actual results could differ materially from those anticipated or implied in such forward-looking statements as a result of certain factors, as set forth in the Company’s filings with the Securities and Exchange Commission.
Disclosure
Company Overview
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Human Health
• Finished Dosage
Form Generics • Nutritionals: supply
app. 250 popular dietary supplements
Pharma Ingredients • Pharmaceutical
Intermediates • Active
Pharmaceutical Ingredients
Performance Chem. • Specialty
Chemicals • Agricultural
Protection Products
Value Added Distributor Transforming Towards Pharmaceuticals
SOURCING
REGULATORY SUPPORT
QUALITY ASSURANCE
o Focus on niche products
o Consultative selling
o Highly skilled, technically trained sales force
o Partnership model
o Distribute >1,110 chemical compounds
o Global reach
o Int’l technical network
o Regional managers in US, Europe & Asia
Mix Shifting Toward Human Health Oriented Businesses
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14%
39%
47%
FY 2010
31%
35%
34%
FY 2014
14%
41%
45%
FY 2010
42%
32%
26%
FY 2014
o 10% revenue CAGR
o Human Health growth boosted by acquisition of Pack Pharmaceuticals in April 2014.
o Blended gross margin expanded 280 bps from 19.7% to 22.5%
$510.2 Million
Net Sales
Gross Profit
$114.7 Million
$346.6 Million
$54.2 Million
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Investment Highlights
Strategically positioned for growth through geographic expansion, new product offerings and bolt-on acquisitions
• Primary focus on pharmaceuticals and human health products
Rising Pharmaceuticals is a platform for higher margin finished dosage form generics
Scalable business model, SG&A leverage and improving product mix drives margin expansion
Asset-light business model generates strong free cash flow
Strong financial position supports growth initiatives
Experienced executive management team
Track record of 48 consecutive years of dividend payments, providing return to shareholders
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Human Health
Product Groups • Finished dosage form generic drugs (Rising Pharmaceuticals)
• 60+ commercial products • 90+ pipeline products
• Nutritionals • Nutraceutical ingredients • Packaged dietary supplements
Growth Strategy • Expand pipeline of high margin finished dosage form generic
products
• Globalize and expand nutraceutical ingredients
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Rising Pharmaceuticals
Platform for growth as developer and marketer with established generics brand
Strong brand recognition of “Rising” label among pharmacists and
pharmaceutical product buyers Long-standing commitment to quality, service, supply and integrity Strategically utilizes partnership model
Product development programs ANDA acquisitions Paragraph IV product partnerships Authorized generic marketer Licensing opportunities on late stage product assets
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Rising – Drug Development Pipeline
92 Portfolio Projects
Approved / Pending Launch
24 Products
Product Development
Biostudies Underway
Filed with FDA
14 Products
52 ANDAs
2 ANDAs
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Aging of Filed ANDAs
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Value* of Filed ANDAs
*Value is based on total market, including brand & generic where applicable, using recent IMS sales data
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Broad Based Nutritional Products Offered on Global Basis
Supply approximately 250 popular dietary supplements: • Fish Oil/Omega 3
• Glucosamine
• Chondroitin Sulfate
• Probiotics
• Vitamins
• Amino Acids
• Minerals
• Coenzyme Q10
52% 44%
4%
Fiscal 2014 Sales
United States EU
Asia
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Human Health Customers (representative)
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Pharmaceutical Ingredients
Product Groups • Pharmaceutical intermediates - chemicals used to make API’s • Active Pharmaceutical Ingredients (API’s) - bulk ingredients which
impart therapeutic value to the drug
Growth Strategy • Focus on niche, small/mid-size products with a limited number of
competitors • Serve as second source for branded drugs and generics
>100 New Opportunities in Pipeline
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Pharmaceutical Ingredients Customers (representative)
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Performance Chemicals
Product Groups • Specialty Chemicals - for coatings, inks, plastics, food, electronics,
agricultural intermediates & other industrial applications
• Agricultural Protection Products - fungicides, insecticides and sprout inhibitors
Growth Strategy • Specialty Chemicals
o Globalization of product offering
o New suppliers create new product opportunities
o New products for existing customers
• Agricultural Protection Products o Generic products subject to regulation & registration
o Partner with suppliers, customers or act as sole principal
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Performance Chemicals Customers (representative)
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Value Proposition to Customers
Core business competencies serve as sales and marketing drivers: • Sourcing • Regulatory Support • Quality Assurance
Highly skilled, technically trained sales force: • >280 employees worldwide; >1/2 technically trained • Well versed in science, regulations and in discussing chemistry
and/or performance characteristics to address customer needs
Function as virtual manufacturing company • Match customers with fully vetted suppliers
Relieves customer of logistical concerns; ensures that products meet regulatory requirements
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Worldwide Presence
USA Corporate HQ New York
NETHERLANDS
FRANCE
GERMANY
CHINA
SINGAPORE
INDIA
JAPAN
UNITED KINGDOM
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Global Sourcing
China: • Predominately source specialty
chemicals, agricultural protection products and intermediates
• 24 local professionals
India: • Predominately source active
ingredients and nutritionals
• 12 local professionals
North America: • Predominately source finished
dosage form generics
64%
14%
16%
6%
Fiscal 2014
Other
North America
Europe
Asia
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Support: Technical & Regulatory with emphasis on Quality Assurance
KEY differentiator between Aceto and commodity distribution companies International Technical Network with regional managers in U.S., Europe
and Asia
International Regulatory Support o Provides substantial global assistance as required
o Enables manufacturers to bring products to market in conformance with regulations that they might not otherwise be able to bring on their own
Worldwide Quality Assurance ensures that product quality meets both the customers’ specifications and intended use
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Strong Financial Position Provides Financial Flexibility
Financial position at March 31, 2015: • Cash, cash equivalents and short-term investments of $35.5 million
• Bank debt of $107 million
• Working capital of $167 million
• Shareholders’ equity of $240 million
Strong cash flow affords an expected $0.24 per share annual dividend rate
Strong Track Record of Growth
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$346.6
$412.4 $444.4
$499.7 $510.2
$0
$100
$200
$300
$400
$500
FY '10 FY '11 FY '12 FY '13 FY '14
CAGR 10%
Net Sales
$0.39 $0.47
$0.65
$0.89
$1.07
$0.00
$0.10
$0.20
$0.30
$0.40
$0.50
$0.60
$0.70
$0.80
$0.90
$1.00
$1.10
FY '10 FY '11 FY '12 FY '13 FY '14
CAGR 29%
EPS (non-GAAP) ($ in millions)
Expanding EBITDA & EBITDA Margin (non-GAAP)
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0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
$0
$10
$20
$30
$40
$50
$60
$70
FY '10 FY '11 FY '12 FY '13 FY '14
EBITDA EBITDA Margins
EBITDA ($ in millions)
EBITDA Margin
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Investment Highlights
Strategically positioned for growth through geographic expansion, new product offerings and bolt-on acquisitions*
• Primary focus on pharmaceuticals and human health products
Rising Pharmaceuticals is a platform for higher margin finished dosage form generics
Scalable business model, SG&A leverage and improving product mix drives margin expansion
Asset-light business model generates strong free cash flow
Strong financial position supports growth initiatives
Experienced executive management team
Track record of 48 consecutive years of dividend payments, providing return to shareholders
*PACK Pharmaceuticals, LLC acquisition closed April 30, 2014
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For additional information please contact: Jody Burfening LHA Investor Relations 800 3rd Avenue, 17th Fl. New York, NY 10022 Tel: 212-838-3777 [email protected]
NASDAQ:ACET
“Sourcing & Supplying Quality Products Worldwide”
Global Leader in the Marketing and Distribution of Pharmaceutical Intermediates & Active Ingredients, Finished Dosage Form Generics, Nutraceutical Products, Agricultural
Protection Products, and Specialty Chemicals