Investor presentation June 2015 June 2015.pdfTrikala Tulsa Uitgeest Waregem Wichita IJsselstein...
Transcript of Investor presentation June 2015 June 2015.pdfTrikala Tulsa Uitgeest Waregem Wichita IJsselstein...
Investor presentation
June 2015
Founded in 1990 by CEO Ger
van Jeveren
Fagron at a glance
1
Global market leader active in
32 countries on 6 continents,
2,200 FTE, >300 pharmacists
Share price increased from
€ 10.25 in 2007 to € 41.50 in
2015
Listed on Euronext Brussels/
Amsterdam
Market cap. of € 1.3 billion
2014: € 447 million of turnover,
with REBITDA margin of 26.5%
Proven buy and build strategy,
generating margin expansive
growth
Global market leader in pharmaceutical compounding
Global presence
2
Tampa
Trikala
Tulsa
Uitgeest
Waregem
Wichita
IJsselstein
Zeist
Kraków
Las Vegas
Marseille
Maryland Heights
Medellin
Miami
Minneapolis
Modlniczka
Newcastle
Oldenzaal
Olomouc
Anápolis
Arlington Heights
Aurora
Barcelona
Bogotá
Bologna
Bornem
Boom
Broken Arrow
Cali
Campinas
Cape Town
Capelle a/d IJssel
Charleroi
Copenhagen
George
Goes
Hamburg
Helmond
Hoogeveen
Johannesburg
Jundiai
Oud Beijerland
Paris
Piracicaba
Rotterdam
Saint-Denis
São Paulo
Shanghai
Somerset West
St. Louis
Sydney
Tamarac
What is pharmaceutical compounding?
3
Patient
Tailor-made
medication
Compounded in community and hospital pharmacies or by Fagron
Compounding Services, always based on a pharmaceutical formulation
Formulations developed by Fagron
and/or compounding pharmacists
based on APIs which are out of patent Alternative dosage
forms
Alternative dosage
strengths
Combination
therapy
Key drivers of pharmaceutical compounding
Unique selling points
Prescriber/Pharmacist
“Yes, compounding
pharmacists enhance
medication compliance
and save lives… every
single day!”
4
Drug shortages
Discontinued drugs
High-quality and cost effective alternative
Less side effects
More individualised approach
Tailor-made
Enhance patient compliance
New and unavailable therapeutic needs
Increased awareness through internet
Business model
FCS
Fagron Trademarks
Fagron Compounding Essentials
Raw materials
Excipients
Equipment
Supplies
Nuclear, Sterile, Aseptic and
Non-Sterile compounding
Fagron Advanced Derma
SyrSpend® SF
Fagron Aseptic Pack
7
Fagron compouding
advisors
(EU: 300, NA: 100, SA: 100)
Discuss patient case
with prescribers
Tailor-made medication
prepared in a
compounding pharmacy or
by Fagron Compounding
Services
Formulary based on
Fagron APIs and Fagron
Trademarks
Encapsulating the compounding market
Win-win-win strategy
Prescriber
Pharmacist
Patient
9
Patient
organisations
Government
Insurance companies
Our unique position in global compounding
10
Global market leadership
Optimising and innovating compounding
Extensive R&D pipeline
Unique business model
Strong brand names
Global footprint
Global buy-and-build strategy
Our unique position in global compounding
11
Group strengths
In-depth compounding knowledge
Use best practices
Speed of execution
Extensive global network
Local market expertise
Acquiring and integrating expertise
Solid financial position
Our unique position in global compounding
12
Operational strengths
Global scale benefits
Compliant with highest quality standards
Product portfolio optimisation
Centralised purchasing
Production efficiency
Consolidation of activities
Proven buy-and-build strategy, generating sustainable value
13
Tamda (Czech Republic)
Unikem (Denmark)
Gallipot (USA)
DEG (Brazil)
Florien (Brazil)
Three compounding pharmacies (Colombia)
Orbus Pharma (Colombia)
Galfarm (Poland)
Apodan Nordic Pharma Packaging (Denmark)
B&B Pharmaceuticals (USA)
Freedom Pharmaceuticals (USA)
Alternate Technologies (Brazil)
2012 20132008 2009 2010 2011 2014 2015
JCB Laboratories (USA)
Pharmacy Services (USA)
Kertus (Greece)
Fagron Australia
Dynaceuticals and Rausa-Kem (SA)
Pharma Nostra (Brazil)
Pharma-Cosmetic (Poland)
Pharma Assist (NL)
AnazaoHealth
(USA)
Accelerate buy-and-build strategy with focus on FCS and Trademarks
FCS
Fagron Trademarks
Fagron Compounding Essentials
14
In % of total turnover
Q1 2015 Target 2016
37% 50%
10% 25%
53% 25%
Fagron Compounding Services
Business model: FCS
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Tablets, capsules, liquids,
crèmes/ointments
IV-Bags, ampoules, vials
TPN, cytostatics, syringes,
cassettes, easypumps
Radioactive capsules,
radioactive injections,
radioactive seeds
Aseptic
Sterile
Non-sterile
Nuclear
Fagron Compounding Services facilities worldwide
Belgium
Bornem (non-sterile and aseptic)
France
Paris (non-sterile)
Marseille (non-sterile)
South Africa
Johannesburg (non-sterile)
Cape Town (non-sterile and sterile)
George (non-sterile and sterile)
Greece
Trikala (non-sterile)
Colombia
Bogotá (non-sterile)
Bogotá (non-sterile)
Cali (non-sterile)
Medellin (non-sterile)
Netherlands
Oud Beijerland (non-sterile and aseptic)
Helmond (non-sterile and sterile)
Hoogeveen (non-sterile and aseptic)
Oldenzaal (non-sterile and aseptic)
Goes (non-sterile, sterile and aseptic)
North America
Wichita, Kansas (sterile and aseptic)
St. Louis, Missouri (non-sterile)
Arlington Heights, Illinois (non-sterile)
Tamarac, Florida (non-sterile)
Tampa, Florida (non-sterile)
Las Vegas, Nevada (sterile and aseptic)
17
Fagron Compounding Services
18
Warehouse incoming goods Clean utilities Transfer into clean room
Clean utilities in clean room Batch record administrationTransfer to aseptic area
Fagron Compounding Services
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Prepare for compounding Compounding Visual analyses
Packaging Microbiology analyses Complete batch record
Fagron Compounding Services
20
Growth driven by increasing demand
for sterile compounding
Compliant with the highest, most
stringent quality standards
New antibiotic facility in NL will open
in June 2015
New sterile facility in USA will open in
November 2015
More hospitals are ready to outsource
compounding
Actively looking into potential
acquisition targets
Estimated market share <5% in the
US and Europe
21
In 2014, Fagron prepared over
2 million prescriptions
Fagron Compounding Services
Acquisition of AnazaoHealth
Leading nuclear, pain and
intrathecal compounding facility
in the United States
2015E Sales of US$ 30 million
with an EBITDA margin equal to
Fagron
Acquisition multiple 6x EBITDA
Headquartered in Florida and a
FDA 503B facility in Nevada
22
Nuclear compounding
Nuclear compounding is a specialty area of pharmacy
practice dedicated to radioactive materials for use in
nuclear medicine procedures, which includes cancer
treatments and diagnostics
Radiopharmaceuticals are radioactive. Radiation protection
during compounding and administration forms an integral
part of the job
Anazao’s radiopharmaceuticals are tailor-made
compounded as capsules, seeds or injections
Radiopharmaceuticals administered as injections are
compounded under aseptic conditions
23
Investment rationale
Specialty pharmacy compounding presents huge growth
opportunities
Growth drivers for Fagron:
• Ongoing trend to outsource compounding
• Increasing demand for compounded medication
• Decreasing number of competitors due to new regulatory
requirements
Acquisition candidates in South America, North America and
Europe
24
Fagron Trademarks
Fagron Trademarks
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Growth driven by the global launch of
Fagron Advanced Derma and
SyrSpend® SF
Global Fagron R&D network of >300
pharmacists and 45 researchers
Global presence boosts cross selling
and innovation
Increasing interest for Fagron
Trademarks by pharmaceutical industry
Strong and extensive R&D pipeline
R&D pipeline includes concepts on
psoriasis, alopecia, transdermal pain
and obesity
Prescribers worldwide: compounding prescriptions based on Fagron vehicles
27
Global R&D
Total spending R&D: 8-10% of turnover28
Development
Realisation
Launch of
solution
Patient, pharmacist
& prescriber
Global R&D pipeline
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Launch Global Concepts
FAD phase 2
Pain, phase 1
SDD
FAD phase 3
Obesity
Alopecia
May Jun JulJan Feb Mar Apr Aug
2015
Sep Oct Nov Dec Feb
2016
Aug
Psoriasis
Fagron Compounding Essentials
Fagron Compounding Essentials
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Central purchasing and audit office
in Shanghai, China
Complete offering of 5,000 raw
materials of pharmaceutical quality
Full overview of supply chain
resulting in 100% traceability
Unique selling points are product
availability and quality
Potential add-on acquisitions in
existing markets identified
Financial highlights
+39%
+165%
Financial highlights 2014
33
Turnover(in € million)
447
OWC(in % of turnover)
9.1
Capex(in % of turnover)
2.8%
Gross margin(in € million)
288
REBITDA(in € million)
118
Free cash flow(in € million)
57
Dividend p/s(in €)
1.00
EBIT(in € million)
94
+30.4%
+48.1%
+49.8%
+42.2%
Organic turnover growth of
11.5%
Gross margin increases to 64.5%
of turnover
REBITDA growth driven by focus
on FCS and Fagron Trademarks
and continuous focus on OPEX
Net financial debt/REBITDA ratio
of 3.18, compliant with covenant
under the credit facility
Free cash flow increases 165%
due to increasing EBITDA, good
working capital management and
decreasing taxes paid
Outlook 2015: Turnover of at
least € 500 million with a
REBITDA margin of 26%
Organic and total turnover growthFagron
9,4%
5,9%7,2% 6,5%
10,9%
13,7%11,5%
24,2%
10,5%
18,3%
35,8%
21,8%
20,3%
33,0%
0%
5%
10%
15%
20%
25%
30%
35%
40%
2008 2009 2010 2011 2012 2013 2014
Total growth at constant rates
Organic growth at constant rates
34
Q1 2015: Turnover per segment
In € 1,000 % of
total
Q1 2015 Q1 2014 Total
growth
Total
growth
CER
Organic
growth
Organic
growth
CER
FCS 37% 42,815 19,778 116.5% 101.8% 41.7% 32.1%
Trademarks 10% 11,594 10,658 8.8% 4.6% 8.8% 4.6%
Compounding Essentials 53% 60,543 57,838 4.7% -0.4% 5.3% 0.2%
Total Turnover 100% 114,952 88,274 30.2% 23.1% 16.8% 10.5%
35CER = Constant exchange rates
Excellent start of the year
Total growth of 30.2% and organic growth of 16.8%
Very strong growth at FCS, the segment with the highest margin
Continued focus in 2015 on robust organic growth, an active buy-and-build
strategy and the construction of GMP-compliant compounding facilities
Outlook for 2015 reconfirmed
2014: Turnover per segment
In € 1,000 % of
total
2014 2013 Total
growth
Total
growth
CER
Organic
growth
Organic
growth
CER
FCS 34% 147,780 58,210 153.9% 153.2% 20.1% 19.8%
Trademarks 10% 45,652 33,630 35.7% 39.8% 24.6% 28.4%
Compounding Essentials 56% 245,047 243,145 0.8% 3.3% 2.1% 4.7%
Total Turnover 100% 438,479 334,985 30.9% 33.0% 9.7% 11.5%
36
Without the disposal of € 10.9 million of Industry
Sales, organic growth of Fagron Compounding
Essentials would have been 9.7%
CER = Constant exchange rates
Outlook
37
Outlook 2015
38
Fagron expects to realise a turnover from
continuing operations of at least € 500 million1
with a REBITDA-margin2 from continuing
operations of 26%
1 Based on constant exchange rates (euro/US dollar of 1.250 and euro/Brazilian real of 3.100).2 EBITDA before non-recurrent result.
Fagron the global number 1 in pharmaceutical compounding
Shareholder structure
40
Number of shares % of effective voting
rights
Carmignac Gestion 2,463,267 7.84%
TIAA-CREF Asset Management LLC 1,635,681 5.20%
BNP Paribas Investment Partners SA 1,609,182 5.12%
Fidelity Management and Research 1,573,158 5.00%