Jean-Luc Michel, Head of Global Commercial Development, Merial
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Transcript of Jean-Luc Michel, Head of Global Commercial Development, Merial
M E R I A L A N I M A L H E A L T H
©Merial 2016. All rights reserved. Information contained in this document is
indicative only. It is provided without liability and is subject to change
without notice
GLOBAL CHALLENGES & DRIVERS FOR ANIMAL HEALTH
Jean-Luc Michel, Head of Global
Commercial Development
Strictly Confidential – Shared upon request only for information purposes, not for re-purposing or additional dissemination
5 continents
R&D
locations 13
750+ scientists
MERIAL – A DISTINGUISHED LEGACY OF CARE AND INNOVATION
Employees worldwide
+
manufacturing sites
R&D centers
15 13
6,900
Present in
countries worldwide 150
8 countries
Manufacturing
manufacturing sites 15
2,800+ employees >2,5 billion in sales in 2015
€
Strictly Confidential – Shared upon request only for information purposes, not for re-purposing or additional dissemination
Demographic Growth
Environmental Changes
THE GLOBAL TRENDS SHAPING TOMORROW
Sources: United Nations; Grant Thornton International Business Report 2015; OCDE; Roland Berger; McKinsey; World Development Indicators
Social
Health Wellness
Economic
Increasing Urbanization
Globalization Digitization
Strictly Confidential – Shared upon request only for information purposes, not for re-purposing or additional dissemination
MAJOR DEMOGRAPHIC TRENDS BY 2050
Worldwide Population (in Billions)
Source: INED, World Population Prospects. United Nations. 2015
7,349
2015 2050
9,725 +32%
Strictly Confidential – Shared upon request only for information purposes, not for re-purposing or additional dissemination
>6 billion people
66% of global population
>80% of global GDP
41 mega cities
Contribution to GDP by Type of City (%) Contribution to GDP by Type of City (%)
3,9 billion people
54% of global population
>80% of global GDP
28 mega cities
Cities Today…
THE LARGEST WAVE OF URBANIZATION IN HISTORY HAS LED TO
RISING ECONOMIC POWER OF METROPOLITAN CENTERS
70% 3% 11%
16% Developed Economies
Emerging market megacities
Emerging market middleweight cities
Emerging market small cities & rural
Source: United Nations – World Urbanization Prospects 2014 ; McKinsey: Urban world: mapping the economic power of cities March 2011 ; the 600 cities are the top 600 cities by contribution to global GDP growth from 2007 to 2025
…and in 2050
26%
8%
37%
29%
Developed Economies
Emerging market megacities
Emerging market middleweight cities
Emerging market small cities & rural
45%
Drivers
90% upper-middle-income countries (Asia and Africa)
37% from:
India (+404 Mi)
China (+292 Mi)
Nigeria (+212 Mi)
Accelerating Migration
Net migration contributes
to population
growth in high-income
countries
80%
‘South-North’ and ‘South-South’ migration
14%
Strictly Confidential – Shared upon request only for information purposes, not for re-purposing or additional dissemination
SHIFTING WORLD TO DEVELOPING ECONOMIES:
DOMINATION OF THE TOP 3 ECONOMIES, RISE OF ASIA
Source: The Economist Intelligence Unit Limited 2015 ;1: The globalist MGI CompanyScope; McKinsey Global Institute Analysis; World Development Indicators, The World Bank
Top Ten Economies in 2050 at Market Exchange Rate
Rise of Asia Geographical Base of the Fortune 500 Global Companies
0%
20%
40%
60%
80%
100%
2001-10 2011-18 2019-30 2031-40 2041-50
Reg
ion
al S
ha
re o
f G
lob
al G
DP
Africa & Middle East
Europe
Americas
Asia-Pacific
2015 Nominal GDP (US$ Trillions) Rise of Asia…
• China’s Economy will be larger than U.S. by 2028 when measured at market exchange rates(1), but it has been larger since 2014, when adjusted for purchasing power (IMF), real growth average 7%
• India 3rd, real growth average 5%
• Indonesia and Mexico leap into top ten
Newly Emerging Economies:
• Nigeria, Vietnam, Colombia, Poland, Malaysia, Chile, Peru, Mexico, Philippines
…Collectively Rich, Not So Individually
• Looking at individual spending power, Western advanced economies are likely to continue to dominate (2015 GDP/capita USA 54 kUSD vs. China 7,6 kUSD)
US
$17.9 China
$10.8 Japan
$4.1 Germany
$3.3 UK
$2.8 France
$2.4 Brazil
$1.7 Italy
$1.8 India
$2.0 Russia
$1.3
China
$105.9 US
$70.9 India
$63.8 Indonesia
$15.4 Japan
$11.4 Germany
$11.3 Brazil
$10.3 Mexico
$9.8 UK
$9.8 France
$9.7
2050 Nominal GDP (US$ Trillions)
Developed Emerging
415
271
54
120
10
34
8
26
8
11 4
12
1 26
2010 2025
Africa and Middle East
Southeast Asia
South Asia
Eastern Europe & Central Asia
Latin America
China
Developed
Emerging countries: From 85 companies in 2010, up to 230 in 2025
Emerging
Developed
500 500
Strictly Confidential – Shared upon request only for information purposes, not for re-purposing or additional dissemination
DIGITAL IS ALSO DRIVING FUNDAMENTAL CHANGES IN OUR
INDUSTRY, ACROSS ALL VERTICALS
Source: WE Forum
Business New markets (on-line marketplace, car-hire
schemes, vacation like a local, etc.)
Education Connecting neglected and underserved
communities around the world
Advanced management system New job, home-based work, connected
plant
Health Tailor medical approaches to an
individual’s lifestyle and genetic profile
Opportunities
Social Economic
Technologic
Strictly Confidential – Shared upon request only for information purposes, not for re-purposing or additional dissemination
DIGITIZATION : AN UNPRECEDENTED TRANSFORMATION!
Happening on the web in 60 seconds…
Any Time
Any Device
Any Content
Any Where
Web sites & Apps:
Responsive Design
Security system for
confidentiality
Infrastructure: cloud
Connected Objects
Referential: Master Data
Management
Exploit Data: Big data
WHO?
GAFA (Google, Amazon, Facebook, Apple), Netflix,
Spotify, Chronodrive, Dropbox…
Strictly Confidential – Shared upon request only for information purposes, not for re-purposing or additional dissemination
ASIA HAS THE LARGEST BASE OF INTERNET USERS
Strictly Confidential – Shared upon request only for information purposes, not for re-purposing or additional dissemination
…… AND THE LARGEST BASE OF SOCIAL MEDIA ACCOUNTS
Strictly Confidential – Shared upon request only for information purposes, not for re-purposing or additional dissemination
ASIA LEADS SMARTPHONE SHARE OF VISITS (2015)
Source: Adobe Digital Insights, based on aggregated and anonymous data from 200 billion visits to 10,000+ US websites, 100 billion to 3,000+ websites in Europe, and 100 billion visits to 3,000+ websites in Asia in 2015
Strictly Confidential – Shared upon request only for information purposes, not for re-purposing or additional dissemination
HOW MUCH ONLINE SHOPPERS AROUND THE WORLD ARE SPENDING
Over the past few years, online shopping has become increasingly popular around the world.
In markets such as the United Kingdom, Japan and Germany, e-commerce penetration has already climbed past 70% of
the adult population, and emerging markets such as Brazil and China are seeing rapid growth in online shopping
adoption.
Source: Statista Digital Market Outlook, Estimated average e-commerce revenue per online shopper in 2015
Strictly Confidential – Shared upon request only for information purposes, not for re-purposing or additional dissemination
End of one-size-fits-all Safer, Faster, Less invasive,
Cost-Effective
Wellness Program, Consumer Medicines, Digitized medicine
Adapt life style, Care Delivery provided in or near the home
Biomarkers, Diagnosis Tools, Big Data
ALL THESE CHANGES AND TRENDS HAVE RESULTED IN AN EVER-GROWING
PARADIGM SHIFT IN HEALTH – PREVENTION TAKING OVER TREATMENT
Demographic Urbanization Global Warming
Cultural Change
Globalization Economic Digitization
The 4P
Predictive Personalized Preventive Participative
Direct Impact of Global Trends
Strictly Confidential – Shared upon request only for information purposes, not for re-purposing or additional dissemination
THE TOP 5 GLOBAL RISKS OF HIGHEST CONCERN:
ANIMAL HEALTH IS IMPACTED BY ALL
Source: Global Risks Perception Survey 2015, World Economic Forum
Methodology: Perceptions of almost 900 members of the World Economic Forum’s multi-stakeholder community between July and September 2014.
39.8% 36.7%
26.5% 25.2% 23.3%
Water crises Failure of climate-changemitigation and adaptation
Extremeweather events
Food crises Profoundsocial instability
Societal
Environmental
For the Next 10 Years
Strictly Confidential – Shared upon request only for information purposes, not for re-purposing or additional dissemination
Demographic Growth
Environmental Changes
THE GLOBAL TRENDS SHAPING TOMORROW
Sources: United Nations; Grant Thornton International Business Report 2015; OCDE; Roland Berger; McKinsey; World Development Indicators
Social
Health Wellness
Economic
Increasing Urbanization
Globalization Digitization
Strictly Confidential – Shared upon request only for information purposes, not for re-purposing or additional dissemination
SOME WILL HAVE GREATER IMPACT ON OUR INDUSTRY
Growing middle class globally
Increasing demand for protein
Humanization of pets
Growing cluster of animal health start-ups
Regulation and surveillance of antibiotic use
One Health
Strictly Confidential – Shared upon request only for information purposes, not for re-purposing or additional dissemination
Feed 2.5Bn additional people
Younger population
Growing Middle class
in Emerging markets
Healthier Planet
Sustainable development
Fair trade
Productivity (less waste)
Healthier Animals
Animal Welfare
Prevention rather than cure
Regulatory Excellence (ex. Ab)
Healthier People
Food safety
Transparency (social media)
Regulatory Excellence
Value added services
Globalization
Emergence of new markets
Changing World demographics
Business consolidations
Emergence of different business models (niche, local)
Emergence of new diseases
Social media
Digital Technology
Information technology
Nano-technology
Bio Technologies
Delivery
Food industry
Product transformation (convenience / lifestyle)
Customer centric
Services
Productivity enhancing Tech
Lower median income
Industry productivity driven
Price pressure
Constraints of arable land
Animal feed supply
Water shortage
Energy supply
Labor cost and resources
DESPITE CHALLENGES, OUR INDUSTRY IS ADAPTING TO GLOBAL
TRENDS THROUGH IMPROVED ANIMAL HEALTH & PRODUCTIVITY
Strictly Confidential – Shared upon request only for information purposes, not for re-purposing or additional dissemination
OUR INDUSTRY REMAINS BUOYANT – HERE ARE SOME OF THE
REASONS WE CONTINUE TO BE EXCITED ABOUT ANIMAL HEALTH
RECESSION-RESILIENT SECTOR – annual growth of 4–5% near/long term
Need for PROTEIN, growing global MIDDLE CLASS and HUMANIZATION of pets
Climate and shifting prevalence in zoonotic and trans-boundary diseases, supporting ‘ONE HEALTH’ approach
GROWING CLUSTER OF ANIMAL HEALTH START-UPS in companion animals and the food animal sector
FIRMS EXPERIENCING GOOD UNDERLYING GROWTH despite currency issues – boosted by new pet products and existing strong food animal brands
STILL LOTS OF UNMET NEEDS and areas that require next-gen treatments, e.g., mastitis, pet cancer, biologics
Antimicrobial reduction stoking INNOVATION FOR ALTERNATIVES
1
2
3
4
5
6
7
Strictly Confidential – Shared upon request only for information purposes, not for re-purposing or additional dissemination
VALUE DRIVERS AND TRENDS IMPACTING THE INDUSTRY
Value Driver Category Key Value Drivers Key Trends
Innovation • R&D for new chemical entities (NCE)
• Lifecycle strategies • Declining R&D productivity has led to highly mature
product portfolios
Portfolio Advantage & Commercial Excellence
• Growing demand
• Relative power in AH value chain
• Economies of scale in commercial (direct sales)
• Branding
• Customer loyalty
• Product-portfolio-led economies of scope (share of wallet)
• Effective channel management
• There are limited opportunities for leading players to grow through further industry consolidation
• Increased downstream consolidation in the Production Animal value chain has weakened AH’s position
• Vets are less influential in purchase decisions
• Technological innovations and growth of new adjacencies may be considered in growth plans
Competitive Forces • Industry structure and competitive intensity
• New entrants
• Branded sales could be threatened by growth of generics and OTC/private label products, driven by regulatory changes in the U.S. and E.U., plus channel shift in Companion Animal segment
Operational Effectiveness
• Manufacturing and supply chain quality and efficiency
• Profit pressure could be increasing
• Increasingly global food producers require global operating structures
Regulation • Product exclusivity regulations and regulatory
process
Source: PwC analysis
1
2
3
4
5
Strictly Confidential – Shared upon request only for information purposes, not for re-purposing or additional dissemination
A SHINING OPPORTUNITY FOR ALL TO PARTNER ON - ONE HEALTH
The world's total POPULATION CONTINUES TO CLIMB
Contact between humans and animals introduces the RISK OF ZOONOSIS
Increasing evidence and understanding of the INTERDEPENDENCY of the HEALTH OF HUMANS, ANIMALS, and the ENVIRONMENT
The HUMAN-ANIMAL BOND continues to grow throughout societies
~75% of emerging diseases are either ZOONOTIC or VECTOR-BORNE
VIGILANT PROTECTION of our FOOD AND FEED SUPPLIES is critical for human and animal health
ENVIRONMENTAL IMPACT of personal care products and pharmaceuticals