Fagron investor presentation York Septe… · Fagron investor presentation Hans Stols, CEO Karin de...
Transcript of Fagron investor presentation York Septe… · Fagron investor presentation Hans Stols, CEO Karin de...
Fagron investor presentation
Hans Stols, CEO
Karin de Jong, CFO
Rita Hoke, President Fagron NA
New York, 20 & 21 September 2016
Fagron at a glance
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FArmaceutische GRONdstoffen was founded in
Rotterdam in 1990
• 2015 Turnover € 473.0 million
• 2015 REBITDA1 € 106.5 million
Active in 32 countries on 5 continents
>2,000 FTE, incl. >200 pharmacists
Leading pharmaceutical compounding company,
bringing customized pharmaceutical care to
hospitals, pharmacies, clinics and patients
Listed on Euronext Brussels and Amsterdam since
5 October 2007Europe52.9%
North America 29.2%
South America17.3%
RoW0.6% FSPS
39.7%
Trademarks 10.6%
Essentials47.6%
HL Techn.2.0%
Turnover 2015
1. REBITDA is EBITDA before non-recurring items and after corporate costs.
High added value products,
concepts and solutions
Fagron strategy
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Global presence
Innovation and own brands
Operational excellence
Buy and build
Strengthening customer
relationships through
education
Fagron strategy for bringing customized care to our customers
Fagron business model
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Fagron
Specialty
Pharma Services
Fagron Trademarks
Fagron Essentials
Fagron Specialty Pharma Services
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Nuclear
Sterile
Non-SterileTablets, capsules, liquids,
crèmes/ointments
Radioactive capsules,
radioactive injections,
radioactive seeds
IV-bags, ampoules, vials,
TPN, cytostatics, syringes,
cassettes, easy pumps
Our unique position worldwide
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Global market leader
Optimizing and innovating pharmaceutical
compounding
Dedicated team of 900 pharmaceutically
educated employees, incl. 200 pharmacists
and 20 researchers
Extensive R&D pipeline
Unique business model
Strong brand names and Trademarks
Global footprint
Our unique position worldwide
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Group strengths
In-depth pharmaceutical compounding
knowledge
Use best practices
Speed of execution
Extensive global network
Local market expertise
Acquiring and integrating expertise
Our unique position worldwide
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Operational strengths
Global scalability
Compliant with highest quality standards
Product portfolio optimization
Centralized purchasing
Production efficiency
Consolidation of activities
Fagron Specialty Pharma Services
Fagron Specialty Pharma Services facilities worldwide
Belgium
Bornem (sterile and non-sterile)
France
Paris (non-sterile)
South Africa
Johannesburg (non-sterile)
Cape Town (sterile and non-sterile)
George (sterile and non-sterile)
Greece
Trikala (non-sterile)
Colombia
Bogotá (non-sterile)
Cali (non-sterile)
Medellin (non-sterile)
Netherlands
Oud Beijerland (sterile and non-sterile)
Helmond (sterile and non-sterile)
Hoogeveen (sterile and non-sterile)
Oldenzaal (sterile and non-sterile)
Goes (sterile and non-sterile)
North America
Wichita, Kansas (FDA section 503B)
Wichita, Kansas (FDA section 503B)
Tampa, Florida (FDA section 503A)
Las Vegas, Nevada (FDA section 503B)
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Fagron Specialty Pharma Services
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Fagron Specialty Pharma Services
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Elastomeric pump Morphine cassettes
Fagron aseptic pack Prefilled syringes
Fagron Specialty Pharma Services
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Intravitreal eye injections Antibiotic prophylaxis
IV-bag Cytostatics
Fagron Trademarks
Fagron Trademarks
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Growth driven by local innovations and the global
launch of Fagron Advanced Derma, SyrSpend®
SF and Pentravan®
Global presence boosts cross selling and
innovation
Increasing interest for Fagron Trademarks by
pharmaceutical industry
Global Fagron R&D network
R&D pipeline includes concepts on dermatology,
psoriasis, alopecia, transdermal applications
Fagron Essentials
Fagron Essentials
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2,500 pharmaceutical raw materials, in
addition to equipment and compounding
supplies
Fagron has sourcing offices in the
Americas, Europe and Asia
Global reach helps to efficiently audit,
qualify and source raw materials. This
results in full traceability and a high quality
standard
Indication areas are determined based on
the top 1,000 pharmaceutical raw
materials
Trademarks are being developed to
support Fagron’s prescriber concept
Operational review first semester of 2016
Headlines
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Turnover decreased by 3.1% (+2.2% at constant exchange rates) to
€ 210.2 million
REBITDA decreased by 21.4% to € 45.6 million or 21.7% of turnover
Successful completion of capital increase with proceeds of
approximately € 219 million
Net financial debt decreased to € 301.0 million after both tranches of
the capital increase
Net financial debt / REBITDA-ratio of 3.4 after both tranches of the
capital increase
2016 Outlook: Turnover of at least € 415 million and REBITDA of
between € 85 million and € 95 million
Financing – Long Term Waivers
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Long Term Waivers received on 5 May 2016
Financial covenants were adjusted to give Fagron extra latitude which will
decrease with every six-month test period
In each test period after 30 June 2018, the levels of the financial covenants
will return to the levels stipulated in the RCF and Note Purchase Agreement
Net financial debt / REBITDA-ratio of 3.4 after both tranches of the capital
increase
Test period Financial covenants
Net financial debt / REBITDA REBITDA / net interest charges
31 December 2016 Max. 5.02x Min. 1.81x
30 June 2017 Max. 4.60x Min. 1.98x
31 December 2017 Max. 4.09x Min. 2.32x
30 June 2018 Max. 3.60x Min. 2.80x
After 30 June 2018 Max. 3.25x Min. 4.00x
Consolidated turnover
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(x € 1,000) S1 2016 S1 2015 Total growth Total growth
CER
Organic
growth
Organic
growth CER
Fagron 205,678 211,497 -2.8% +2.6% -6.8% -1.6%
HL Technology 4,559 5,500 -17.1% -14.0% -17.1% -14.0%
Total 210,237 216,997 -3.1% +2.2% -7.1% -1.9%
CER = constant exchange rates
Positive turnover developments in local currency in Europe, Brazil, RoW and
for the sterile FSPS-activities in the United States
As expected, changes in the reimbursement system for non-sterile
compounding in United States continued to have a negative impact on
turnover and profitability of Fagron Essentials and Fagron Trademarks
Turnover developmentExcluding HL Technology (in € 1,000)
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211.497205.678
1.37811.501
3609.22716.868
11.417
Turnover S12015
Europe* South America North America Rest of World Currency effect Acquisitions Turnover S12016
* The sell off of a small compounding pharmacy in Marseille (France) had a negative impact of € 1 million on turnover of the Fagron activities in Europe in
the second quarter of 2016.
Fagron Specialty Pharma Services
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Organic turnover growth of 4.0% (+4.8% at CER)
United States
• Strong turnover growth in the sterile FSPS activities in the US
• Turnover development in Q2-16 was weaker than expected
• New sales team in US is expected to be deployed in Q4-16
• Completion of validation and reception of required licenses for 503B-facility
in Wichita expected in Q1-17
Europe
• Sell off of a small compounding facility in Marseille
• New antibiotic facility in NL opens in Q4-16
(x € 1,000) S1 2016 S1 2015 Evolution
Turnover 74,192 65,397 13.4%
REBITDA 15,752 17,960 -12.3%
REBITDA-margin 21.2% 27.5%
Fagron Trademarks
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(x € 1,000) S1 2016 S1 2015 Evolution
Turnover 25,073 25,551 -1.9%
REBITDA 7,982 9,109 -12.4%
REBITDA-margin 31.8% 35.6%
Turnover growth at constant exchange rates of 9.7%
Europe: Healthy turnover growth
Brazil: Continued strong turnover growth (in local currency)
United States: Changed reimbursement system had a negative effect on the
sale of Fagron Trademarks at Freedom Pharmaceuticals
Fagron Essentials
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(x € 1,000) S1 2016 S1 2015 Evolution
Turnover 106,413 120,549 -11.7%
REBITDA 20,972 29,791 -29.6%
REBITDA-margin 19.7% 24.7%
Turnover growth of -11.7% (-5.2% CER). Organic turnover growth of -14.1%
(-7.7% CER)
Europe: Turnover growth
Brazil: Continued strong turnover growth (in local currency)
United States: Changed reimbursement system continued to have a
negative impact on the sale of pharmaceutical raw materials, especially at
Freedom Pharmaceuticals
Financial review first semester of 2016
Financial review
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Turnover
(in € million)
210.2
-3.1%
Gross margin
(in € million)
133.5
-2.4%
Operating costs
(in € million)
-87.9
+11.5%
Turnover decrease of -3.1% or +2.2% at CER
Organic turnover decrease of -7.1% or -1.9% at CER
Gross margin as percentage of turnover increased by 50
base points to 63.5%
Increase was primarily due to:
• Acquisition of AnazaoHealth (April 2015)
• Acquisition of ABC Chemicals (July 2015)
• Start-up costs related to the new facility in Wichita (US)
Financial review
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REBITDA1
(in € million)
45.6
-21.4%
Non-recurring
(in € million)
-1.7
-33.5%
DA
(in € million)
-10.0
+27.0%
REBITDA-margin decreased to 21.7% of turnover
The result of a steeper increase in costs than in turnover
Consists of restructuring costs (-€ 0.8m), provision for a tax
assessment in Brazil (-€ 0.8m), one-off correction of stock
Switzerland (-€ 0.7m), provision for onerous contract in the
US (-€ 0.4m), release of a provision and an earn-out
payment received in relation to the sale of dental companies
(+€ 1.2m), correction to warrant plans (+€ 1.1m) and other
non-recurring items (-€ 1.3m)
The increase was mainly due to the accelerated depreciation
of assets at Freedom Pharmaceuticals and Fagron Academy
in the US (€ 1.5 million)
1. REBITDA is EBITDA before non-recurring result.
Financial review
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EBIT
(in € million)
33.9
-28.7%
Fin. result2
(in € million)
-11.7
-21.0%
Net profit
(in € million)
16.6
-26.9%
EBIT-margin decreased to 16.1% of turnover
Financial costs increased by € 7.2 million
Financial income increased by € 10.3 million
Financial costs will be substantially lower in the 2nd
semester of 2016 (compared to the 1st semester of 2016)
Net profit decreased by 26.9% to € 16.6 million
2. Financial result excluding the hedge result.
Consolidated – Net financial debt
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523.846
300.960
1.453 6.1437.070 10.362
11.723 6.14410.016 24.169
219.308
31 December2015
Subsequentpayments
acquisitions
Refinancingcosts
Investments Paymentsrelated toBellevue
Paid interest FX Provision relatedto refinancing
Operationalcashflow
Capital increase Net debt aftercapital increase
Net debt decreased to € 301 million after both
tranches of the capital increase
Net financial debt/REBITDA-ratio amounted to 3.4
Outlook1 2016
Turnover of at least € 415 million and
REBITDA of between
€ 85 million and € 95 million
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1 Based on estimated exchange rates (euro/US dollar 1.10 and euro/Brazilian real 3.83)
Disclaimer
Important information about forward-looking statements
Certain statements in this presentation may be considered “forward-looking”. Such
forward-looking statements are based on current expectations, and, accordingly, entail
and are influenced by various risks and uncertainties. The Company therefore cannot
provide any assurance that such forward-looking statements will materialize and does
not assume an obligation to update or revise any forward-looking statement, whether as
a result of new information, future events or any other reason.
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