Branded Products Strategy - STADA · Branded Products Strategy Helmut Kraft, ... 1 Novartis 1,541...

Branded Products Strategy

Helmut Kraft, CFO

Capital Markets Day September 16, 2014 2

Changing the face of STADA

26% 27% 28% 33%

36% 39%

32% 36% 37%

46% 51% 51%

2009 2010 2011 2012 2013 1-6/2014

Share of Branded Products in adjusted operating profit1)

Share of Branded Products in sales1)

1) of the two core segments Generics and Branded Products.

Branded Products contribute 51% to adjusted operating profit1)


Buy-and-build: Successful acquisitions

Year Acquisitions Purchase price Region Indication

2009 Eunova € 12 million Germany Dietary supplement

2011 Cetraben € 35 million United Kingdom Derma product range

for the treatment of

skin eczema and dry

skin

2011/2012 Grünenthal Branded

Products Portfolio

€ 312 million Central Europe,

Eastern Europe and

Middle East

Pain medication such

as Tramal®, Zaldiar®,

Transtec®, Palexia®

2012 Tranexam®, Vuka Vuka®,

Vuka Drive®, Ingavirin®,

Safocid®

€ 10 million Russia, Eastern

Europe/CIS

Various Indications

2012 Branded products portfolio € 15 million Ukraine Womens‘ health

2013 Thornton & Ross Ltd. € 226 million United Kingdom Various OTC products

2013 Aqualor® € 131 million Russia, Eastern

Europe/CIS

Sprays and drops for

the treatment of

sinusitis

2014 Flexitol® € 13 million UK, Ireland Hand and foot care

Our platform


Branded Products Growth

Sales

(in € million)

Adj. EBITDA

(in € million)

333.6 381.6

1-6/2013 1-6/2014

+14%

110.5 120.1

1-6/2013 1-6/2014

+9%

Regional development

• Germany with higher profitability

• CIS/Eastern Europe with sales growth in

local currencies despite CIS crisis (+11.2%)

• Thornton & Ross highly dynamic

• ApoGo® on the growth path

1-6/2014 Key countries

20.9%

37.6%

38.3%

3.2% Germany € 79.8 million +9% (+9%)

Central Europe € 143.3 million +46% (+6%)

CIS/Eastern Europe € 146.2 million

-5% (+2%)

Asia & Pacific € 12.3 million

+40% (-9%)

107.9

68.4

52.5

15.4 10.9 10.8 8.3 6.8

Russia Germany UK Italy Vietnam Ukraine Serbia Spain

Sales 1-6/2014 in EUR


Climbing the performance ladder1)

1) Source: IMS Health MIDAS – EU28+RU+CH+NO+RS – Panel: Retail + Hospital – MAT/06/2014

OTC corporation Sales in €m

1 Novartis 1,338

2 Bayer 1,160

3 Sanofi 1,074

4 Johnson & Johnson 997

5 GlaxoSmithKline 645

6 Teva 546

7 Reckitt Benckiser 517

8 Boehringer Ingelheim 402

9 Bristol-Myers Squibb 387

10 Roche 376

11 Abbott 371

12 Pierre Fabre 344

13 STADA 325

14 Menarini 302

Total Market 19,808

OTC corporation Sales in €m

1 Novartis 1,541

2 Bayer 1,179

3 Sanofi 1,163

4 Johnson & Johnson 962

5 Teva 615

6 Reckitt Benckiser 531

7 Boehringer Ingelheim 454

8 GlaxoSmithKline 450

9 STADA 386

10 Abbott 375

11 Roche 360

12 Menarini 329

13 Braun-Melsungen 310

14 Bristol-Myers Squibb 309

Total Market 21,072

6M/2010 6M/2014


Market leading brands 1-6/2014

No. Branded Product Growth in % Sales in € million Indication

1. Ladival® (OTC) +57 24.1 Sun Protection

2. ApoGo® (RX) +15 23.6 Parkinson

3. Grippostad® (OTC) -23 14.7 Cough and cold

4. Aqualor®1) (OTC) 13.5 Rhinitis

5. Snup® (OTC) +9 13.2 Rhinitis

6. Vitaprost® (RX) +3 10.3 Prostate hyperplasia

7. Hirudoid® (OTC) +10 9.8 Inflammation of the veins

8. Chondroxide® (OTC) -9 9.7 Muscular and joint pain

9. Tramal® (RX) +81 9.0 Chronic pain

10. Care®2) (OTC) 8.7 Umbrella brand

All Branded Products +21 290.0

1) Sales of Aqualor®: initial consolidation as from March 1, 2014. 2) Umbrella brand for various indications such as skin care, cold medicine, gastrointestinal disease, pain medication, among others.


Positive impact on Group sales and margins

• Expansion of self-pay portfolio

• Shift to high margin product/country mix

• Economies of scale effects (volume gains)

1) Adjusted for one-time special effects (2009-2014) and non-operational effects from currency influences (2009/2010)

Adjusted1) EBITDA

margin in %

Sales in € million 18.3

19.4 19.7 20.0

20.6 20.8

16

17

18

19

20

21

22

23

0

500

1,000

1,500

2,000

2,500

2009 2010 2011 2012 2013 1-6/2014


Operating excellence

1) Adj. operating profit H1/2014 2) Adj. op. profit H1/2014 (Health, Hygiene, Home & Portfolio) 3) EBIT H1/2014 4) Op. Income, FY 2014 (August 14) 5) EBIT H1/2014 6) Core op. profit H1/2014 7) Core op. income H1/2014 Source: Financial reports, CH = Consumer Health Care

25% 23%

20%

17% 17%

14%

6%

0

5

10

15

20

25

30

STADA1) Reckitt2) Merck CH3) Perrigo4) Bayer CH5) GSK CH6) Novartis CH7)

Operating profit margins in consumer health 1-6/2014

Our approach


STADA today

Positioning

• Organic and acquired growth

• Complex portfolio

• As yet predominantly local heroes

• Different customer groups

Strengths

• Close to market and customer

• High personal responsibility

• Quick and flexible decision making

• Highly motivated and efficient

Risks

• Desynchronized marketing activities

• Low synergy potential

• Higher costs and organisational effort

Decentralised

approach


Measures

• Combination of

consistent, centralized

brand guidance with close

to market, decentralized

navigation

• Centralised branded

products portfolio

management

• Introduce appropriate guidelines and structures

• Select and travel a limited number of strategic

brands based on their growth potential („country-

by-country view“), e.g. Ladival, Snup

• Maintain leading local heroes

• Strengthen innovation potential, category

management

• Selectively add expertise to regional set-up

Blend of decentralised &

centralised approach

Acquisition of Thornton & Ross as a catalyst to optimize corporate structure and performance

STADA tomorrow


Expertise across all channels

Wholesale

Pharmacy/Hospital

STADA

Retail chains (UK) Pharmacy/Hospital

Customer/Patient


Our approach Where we want to go

• Consistent brand

guidance and close to

market navigation

• Consistent portfolio

development

• Realizing opportunities

on organic side is first

priority

• Best in class innovation

and customer service

• Optimize operational

leverage

• Disciplined and smart

bolt-on acquisitions

• Create true beacon brands

for aspirational consumers

• Trigger high level of

dynamism to become a

leader in brand

management

• International footprint and

mind-set

• Passing 1 bn € revenue

level in Branded Products

• Diversify Branded

Products / generic mix

from ~ 50% to ~ 2/3 Group

operating profit

contribution

Building brand equity

Large and growing

markets:

• Higher life

expectancy, aging

population

• Greater health

awareness

promotes

increasing out-of-

pocket spending

• Cost pressure in

health care forces

personal

responsibility =

market of self-

paying patients

OTC-Market

Branded Products Strategy - STADA · Branded Products Strategy Helmut Kraft, ... 1 Novartis 1,541...

Documents

Transcript of Branded Products Strategy - STADA · Branded Products Strategy Helmut Kraft, ... 1 Novartis 1,541...