Fagron 2015 Semi-Annual Results · 2017-06-26 · Fagron 2015 Semi-Annual Results Ger van Jeveren,...
Transcript of Fagron 2015 Semi-Annual Results · 2017-06-26 · Fagron 2015 Semi-Annual Results Ger van Jeveren,...
Fine-tuning Fagron Strategy
Focus on Fagron Specialty Pharma Services
• Increased legislation and regulatory requirements
• Trend to outsource specialty pharma activities
• Decreasing number of competitors
• Increasing demand for customized medication
• Focus on acquisitions and on building our own cGMP FDA 503B facilities in the US
Focus on Fagron Trademarks
• Rapid worldwide introduction of Fagron Trademarks
• Strong investments in R&D-pipeline
Optimizations at Fagron Essentials
• Phase-out in 2015 of non-strategic, low-margin products with a low turnover ratio
• Sales impact of € 12 to € 15 million on annual basis
• Positive impact on profitability expected1
What is Specialty Pharma?
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Patient
Customized
medication
Produced in pharmacies or by GMP outsourcing facilities based on
scientific pharmaceutical knowledge
The designing, developing, producing
and marketing of customized
pharmaceutical products Alternative dosage
forms
Alternative dosage
strengths
Combination
therapy
What is Specialty Pharma?
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• The designing, developing, producing and marketing of customized
pharmaceutical products
• Produced in pharmacies or by GMP outsourcing facilities based on scientific
pharmaceutical knowledge
Compounding AdmixtureReady to
AdministerPatient
Areas of Specialty Pharma
Dermatology
Sterile injectables
Trial medication
Intensive care / ER
Medication
shortages
Hormone
replacement
Veterinary
Oncology
Antibiotics
PediatricsPain management
Biologicals
Benefits of Specialty Pharma
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Patient
Less side effects
More individualized approach
Customized medication
Enhance patient compliance
Drug shortages
Discontinued drugs
High-quality and cost effective alternative
New and unavailable therapeutic needs
Full pharmaceutical service
“Yes,
Specialty Pharma
enhances
medication
compliance
and
saves lives…
every single day!”
Fagron Specialty Pharma Business Model
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Fagron
Specialty
Pharma Services
Fagron Trademarks
Fagron Essentials
Raw materials
Excipients
Equipment
Supplies
Nuclear, Sterile and Non-
Sterile
Fagron Advanced Derma
SyrSpend® SF
Fagron Aseptic Pack
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, easypumps
22 Fagron Specialty Pharma Services Facilities Worldwide
Belgium
Bornem (sterile and non-sterile)
France
Paris (non-sterile)
Marseille (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)
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 (sterile)
St. Louis, Missouri (non-sterile)
Arlington Heights, Illinois (non-sterile)
Tamarac, Florida (non-sterile)
Tampa, Florida (nuclear, sterile and non-sterile)
Las Vegas, Nevada (sterile and non-sterile)
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Win-Win-Win Strategy
Prescriber
PharmacistPatient10
Patient
Organizations
Government
Insurance Companies
Laboratories
Financial Highlights HY1-2015
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Turnover(in € million)
243.8
Gross margin(in € million)
161.3
REBITDA(in € million)
65.6
DA(in € million)
-11.7
+16.6%
+21.3%
+17.9%
Organic turnover growth of 8.5% or 2.6% at constant
exchange rates
Gross margin increased 260bps to 66.2% of turnover
Driven by strong growth at FSPS and Trademarks and
optimization of product portfolio of Essentials
REBITDA increased 30bps to 26.9% of turnover
EBITDA increased 50bps to 25.9% of turnover
DA increased € 4.5 million to € 11.7 million
€ 2.7 million was attributable to the purchase price allocation
of acquisitions+63.0%
Financial Highlights HY1-2015
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EBIT(in € million)
51.4
Financial result(in € million)
-14.3
Taxes(in € million)
-12.1
Net profit(in € million)
25.0
+11.9%
+34.5%
+11.6%
EBIT growth of 11.9% due to higher DA compared to HY1-14
Financial result increased due to an increase in net financial
debt and higher exchange rate differences
Revaluation of financial derivatives was € 0.5 million positive
Effective tax rate as a percentage of profit was 32.6%
High tax rate in the US
Net profit grew 2.2% to € 25.0 million
+2.2%
Financial Highlights HY1-2015
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OWC(in € million)
52.2
Net financial debt
(in € million)
455.6
Capex(in € million)
11.0
+18.5%
+1.5%
4.5% of
turnover
OWC as percentage of turnover was 10.2%
Negatively impacted by USD conversion
Net financial debt/REBITDA ratio of 3.21, in compliance with
the covenant under the credit facility (max. 3.25)
Capex amounts to 4.5% of turnover
Capex includes investments in R&D and in the construction
of new compounding facilities in the US and the Netherlands
Fagron Specialty Pharma Services
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Strong turnover growth of 60.7% (organic growth of 25.4%)
REBITDA increased 59.0% to € 25.7 million or 27.8% of turnover
Global market for FSPS is huge and rapidly growing driven by:
• Increasing demand for customized medication
• Increased legislation/regulation forcing hospitals to outsource compounding
New antibiotic facility in NL will be operational in October 2015
New sterile facility in US will be operational in November 2015
Positive developments to start FSPS in Germany and Czech Republic
Well-filled pipeline of acquisition candidates
(x 1,000 euro) HY1 2015 HY1 2014 Change
Turnover 92,167 57,354 +60.7%
REBITDA 25,653 16,133 +59.0%
REBITDA margin 27.8% 28.1%
Fagron Trademarks
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Strong organic turnover growth of 12.7%
REBITDA increased 28.1% to € 9.1 million or 35.6% of turnover
Global Fagron network of 300 pharmacists and 45 researchers responsible for strong and
extensive R&D pipeline
Strong increase in worldwide demand for SyrSpend®
• SyrSpend® is developed in-house, based on patented active suspension technology
• Largest independently conducted stability study showed that SyrSpend® is compatible
with almost all medicines
• SyrSpend® is validated by two big pharmaceutical companies for worldwide use in
clinical trials
• Appointment of distributor for Hong Kong and Macau
(x 1,000 euro) HY1 2015 HY1 2014 Change
Turnover 25,551 22,678 +12.7%
REBITDA 9,109 7,109 +28.1%
REBITDA margin 35.6% 31.3%
Global R&D Pipeline
FAD, phase 2PainPsoriasisObesity
Identify needs Feasibility DevelopmentEvaluation and
improvementSales
Develop
innovation to
meet the
specific market
needs and
expectations
Pharmaceutical,
technical and
commercial
feasibility
Fagron
together with
prescribers,
pharmacists
and universities
Research on
compatibility,
stability and
production
Global launch of
innovations by
Fagron
Transdermal
application
Alopecia
Fagron Essentials
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Turnover decreased 2.9%
REBITDA decreased 5.8% to 29.8 million
In the 2nd quarter of 2015, a project to optimize the product portfolio and the production
process was started
Sales were negatively impacted by change in the reimbursement system in the US
Non-strategic, low-margin products, usually with a low turnover ratio, will be phased
out in 2015
Impact on turnover for HY2-2015 will be negative
Positive impact on profitability expected
(x 1,000 euro) HY1 2015 HY1 2014 Change
Turnover 120,549 124,098 -2.9%
REBITDA 29,791 31,639 -5.8%
REBITDA margin 24.7% 25.5%
Reimbursement of CompoundedMedication in the US
Changes in reimbursement are only related to non-sterile compounding
Compounding in the US is and will remain reimbursed when:
• There is no licensed/registered alternative available
• The compound is based on a licensed/registered product
• Prior authorization has been received
Fagron’s cGMP and FDA 503B sterile and nuclear facilities in the US are not impacted
by reimbursement changes
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How will Fagron benefit in the US?
Increased focus on cash-based non-sterile compounded medication, based on
Fagron’s successful concepts and Trademarks in South America and Europe
Increased education and advice on the benefits of specialty pharma for prescribers and
patients
Focus on cGMP 503B Fagron outsourcing facilities for sterile compounding
• Increased legislation and regulatory requirements
• Trend to outsource sterile activities
• Decreasing number of competitors
• Increasing demand for customized medication
• Total available market for Fagron Specialty Pharma Market is US$ 8 billion, of which
85% is not outsourced
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Outlook 2015
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Fagron expects to realize a turnover
of at least € 500 million1 with a
REBITDA-margin2 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.
Disclaimer
This presentation may contain forward-looking statements with respect to Fagron’s
future (financial) performance and position. Such statements are based on current
expectations, estimates and projections of Fagron and information currently available to
the company. Fagron cautions readers that such statements involve certain risks and
uncertainties that are difficult to predict and therefore it should be understood that many
factors can cause actual performance and position to differ materially from these
statements. Fagron has no obligation to update the statements contained in this
presentation, unless required by law. The numbers presented are not audited numbers.
A more comprehensive discussion of the risk factors affecting Fagron business can be
found in the company’s latest Annual Report, which can be found on the company's
corporate website, www.fagron.com.
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