December 2016
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December 2016 1 DISCLAIMER This presentation has been prepared, - - PowerPoint PPT Presentation
December 2016 1 DISCLAIMER This presentation has been prepared, issued and disclosed to you for the sole purpose of introducing Premier Veterinary Group plc (the "Company") and its group (together, the "Group"). For the
December 2016
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DISCLAIMER
This presentation has been prepared, issued and disclosed to you for the sole purpose of introducing Premier Veterinary Group plc (the "Company") and its group (together, the "Group"). For the purposes of this notice, "presentation" means this document, its contents or any part of it, any oral presentation, any question or answer session and any written or oral material discussed or distributed during the presentation. This presentation does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities in the Company, nor shall any part of it nor the fact of its distribution form part of or be relied on in connection with any contract or investment decision relating thereto, nor does it constitute a recommendation regarding the securities of the Company. This presentation has not been independently verified, does not purport to contain all information that a prospective investor may require and is subject to updating, revision and amending. The information and opinions contained in this presentation are provided as at the date of this presentation and are subject to change without notice. In furnishing this presentation, the Company does not undertake or agree to any obligation to provide you with access to any additional information or to update this presentation or to correct any inaccuracies in, or omissions from, this presentation that may become apparent. You should make your
No reliance may be placed for any purposes whatsoever on the information or opinions contained in this presentation or on its completeness. No representation or warranty, express or implied, is given by or on behalf of the Company its directors, officers or employees or any other person as to the accuracy or completeness of the information or opinions contained in this presentation and no liability whatsoever is accepted by the Company or any of its members, directors, officers or employees nor any other person for any loss howsoever arising, directly or indirectly, from any use of such information or opinions or otherwise arising in connection therewith. The presentation may not be recorded, reproduced, stored in a retrieval system, or transmitted, in any form or by any means to any other person (whether within or
reproduced, redistributed or passed on, directly or indirectly, to any other person or published, in whole or in part, for any purpose. In member states of the European Economic Area ("EEA") this presentation is only addressed to and directed at persons who are qualified investors within the meaning of Article 2(1)(e) of the Prospectus Directive (Directive 2003/71/EC), as amended ("Qualified Investors"). In addition, in the United Kingdom, this presentation is addressed and directed only at Qualified Investors who (i) are persons who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"), (ii) are persons who are high net worth entities falling within Article 49(2)(a) to (d) of the Order, and (iii) to persons to whom it may otherwise be lawful to communicate it to (all such persons being referred to as "Relevant Persons"). Nothing in this presentation constitutes investment advice.
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DISCLAIMER (cont’d)
The Company's securities have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the "Securities Act"), or qualified for sale under the law of any state or jurisdiction of the United States of America and may not be offered or sold in the United States of America except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. Neither the United States Securities and Exchange Commission nor any securities regulatory body of any state or other jurisdiction of the Unites States of America, nor any securities regulatory body of any other country or political subdivision thereof, has approved or disapproved of this presentation or the securities discussed herein or passed on the accuracy or adequacy of the contents of this presentation. Any representation to the contrary is unlawful. Certain statements, beliefs and opinions in this presentation are "forward-looking statements". These statements, which may be preceded by, followed by or include forward-looking terminology such as the words "targets", "believes", "estimates", "expects", "aims", "intends", "will", "can", "may", "anticipates", "would", "should", "could" or similar expressions or the negative thereof reflect the Company's, or as appropriate, the Company's directors' current expectations and projections about future events. Such forward-looking statements involve inherent known and unknown risks, uncertainties and other important factors beyond the Group’s control that could cause the actual results, performance or achievements of the Group to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Group’s present and future business strategies and the environment in which the Group will operate in the future. Forward-looking statements contained in this presentation regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. These forward-looking statements speak
supplement, amend, update or revise any of the forward-looking statements contained in this presentation to reflect any change in the Group’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based, except where it would be required to do so under applicable law. As a result of these factors, you are cautioned not to place undue reliance on such forward-looking statements. By attending the presentation to which this presentation relates, you agree to be bound by the foregoing limitations and conditions and, in particular, will be deemed to have represented, warranted and undertaken that (i) if you are in the United Kingdom, you are a Relevant Person, (ii) if you are in any member state of the EEA other than the United Kingdom, you are a Qualified Investor, (iii) you have read and agree to comply with the contents of this notice, including, without limitation, the obligation to keep this presentation and its contents confidential, and (iv) you will not at any time have any discussion, correspondence or contact concerning the information in this presentation with any director, officer, employee or agent of the Company nor with any of its suppliers, nor any governmental or regulatory body, without the prior written consent of the Company. The contents of this presentation should not be construed as legal, tax, regulatory, financial or accounting advice and you are urged to consult your own advisers in respect of such matters.
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£1.07m)
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agreements (Zoetis, MVS, VPI)
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cost, non-insurable items exclusive to veterinary practices
footfall and loyalty from clients
fee plus manufacturer support fees Typically included in the plan would be:
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Guaranteed monthly revenue Improved client retentions Attract new clients Improved cash flow Costs spread evenly over 12 months Gold standard health plan
Manufacturer/ Distributor/ Wholesaler
Practice The Client
Loyalty discounts on additional purchases Value for money on premium products
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compliance 12)
plan
wholesalers and manufacturers as well as ensuring best care for pets
180,000 585,000 600,000 1,800,000 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 1,800,000 2,000,000 Worming products Flea products
products
Annual Product Sales (based on 150,000 pets on plan)
Normal PCP (full compliance) 10
architecture
interfaces with multiple payment processing methodologies
class” off-the-shelf processing systems
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Global PCP Web Portal
GoToBilling Credit Card Gateway
WorldPay
Payment Processing Systems
Customer interface & Data capture BACS Active
FundTech
BACS Clearing SEPA Clearing
Denmark Clearing
Citizen Bank
3rd party platforms
2016 (equivalent to 1.60m annual transactions)
in Q3 2016 (equivalent to £23.2 annualised spend)
for PVG
plan in last financial year
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£0 £1,000,000 £2,000,000 £3,000,000 £4,000,000 £5,000,000 £6,000,000 £7,000,000 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016
100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000
Value of payments processed Number of payments processed
Gross cash value £ Transaction processed
Pets on plan # of fee generating pets on plan Live pets 000s Sept - 15 Dec - 15 Mar - 15 Jun-16 Sep-16 25 Nov 16 UK 79 99 107 115 121 132 Europe 3 5 10 14 18 20 US
Total 82 104 117 119 139 153
Calendar Quarters
13 1076 291 378 901 701
400 600 800 1,000 1,200 PVG IVC (UK) CVS (UK) Banfield (US) VCA (US)
Global Clinic Relationships (30 September 2016)
with clinics held by PVG greater than other significant industry players
negotiating with pharmaceutical manufacturers and wholesalers/distributors
Diverse customer base
practices in the UK and Europe*
to large corporate veterinary practices – reducing risk of revenue fluctuation from corporate acquisition activity
largest customer practice, has over 10,000 pets on plan
have less than 1,000 pets on plan
147 56 35 11 6 2 1 20 40 60 80 100 120 140 160 Less than 250 Between 250 and 500 Between 500 and 1000 Between 1000 and 2000 Between 2000 and 5000 Between 5000 and 10000 Greater than 10000
Number of practices Number of Pets on plan
14 *Practices represent the contractual relationship. One practice may have multiple clinics
(each with multiple clinics), only 8 practices have left (excluding consolidation activity)
term access to increase the number of Pets on plan for that practice
(detail in Appendix)
15 Customer retention analysis Leavers since PPCP start up * 2011 2012 2013 2014 2015 2016 Number of practices left in the year
2 3 % of total practices N/A N/A N/A 2.7% 1.4% 1.8% * Excludes practices leaving following acquisition
16 Market data UK Neth Germany France Denmark USA Population 64m 17m 81m 66m 5.5m 319m Households 26m 7.4m 41m 26m 2.6m 123m Dog population 8.5m 1.6m 5.3m 7.4m 0.6 70m Dog ownership households 24% 19% 13% 21% 21% 36% Cat population 8.5m 2.6m 8.2m 11.4m 0.5m 74m Cat owner households 19% 26% 16% 27% 18% 30%
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5% 7% 1% 7% 1% 3% 7% 69%
UK Market Share/Opportunity IVC CVS Goddards Vets4Pets Best Friends Medivet Pet Care Plan PVA Pet Care Plan Market Opportunity
better established than in US and Europe
serve independent sector - Medivet and Best Friends both use PPCP
which may facilitate growth
addressed quickly
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12% 88%
Netherlands Market Share/Opportunity PVA Pet Care Plan Market Opportunity
14% 86%
Germany Market Opportunity Pet Care Plan primary targets Remaining market opportunity
18% 82%
France Market Opportunity Pet Care Plan primary targets Remaining market opportunity
46% 54%
Denmark Market Opportunity Pet Care Plan primary targets Remaining market opportunity
launched.
areas of the US.
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3% 2% 95%
USA Market Opportunity
Banfield VCA Market opportunity
Total small animal clinics – c26,500 (UK c4,800)
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business
The Buying Group has been successful because:
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Year ended 30 September Revenues £000s 2016 2015 % change PPCP – UK 1,606 1,034 55% PPCP – overseas 263 36 631% PPCP - total 1,869 1,070 75% Buying Group 1,120 1,184 (5%) Total 2,989 2,254 33%
late September generate revenues at start of 2017
activity
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12 month extrapolated run rate September £000s 2016 PPCP – UK 1,800 PPCP – overseas 402 PPCP - total 2,202
latest month’s revenue
annualising September 2016 –18% up on the full year to September 2016
expected US growth is not reflected in run rate numbers at all at this stage
further profit improvement in PPCP UK
markets
debt after veterinary business disposal
pre-disposal trading and £4,091k profit on disposal
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Year ended 30 September Profits £000s 2016 2015 % change PPCP – UK 409 349 17% PPCP – overseas (1,488) (518) (187%) PPCP - total (1,079) (169) Buying Group 766 931 (18%) Total segment operating profit (313) 762 Central unallocated costs (1,908) (1,493) Operating profit (2,221) (731) Finance expense (208) (861) Loss before and after tax from continuing operations (2,429) (1,592) Profit on discontinued operations 4,253 595 Profit/(loss) attributable to equity holders 1,824 (997) EBITDA before central costs (221) 856 EBITDA after central costs (2,129) (637)
sale of veterinary businesses in December 2015
investment in ongoing team
strategy
in December 2016 and 2nd tranche of loan note issue in January 2017
to remove historic Ark losses
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Year ended 30 September £000s 2016 2015 Non-current assets 446 330 Trade and other receivables 1,719 578 Trade and other payables (871) (896) Net working capital 848 (318) Cash 1,254 421 Debt (900) (2,870) Net cash/(debt) 354 (2,449) Net assets held for resale
Deferred tax (10) (10) Net assets 1,638 (297)
IT capabilities impacting EBITDA
£250k per annum
following repayment of debt after disposal
reduced by £0.3m cash remaining in the disposed entities and £1m withheld in escrow.
2016
26 Year ended 30 September £000s 2016 2015 £'000 £'000 EBITDA after central costs (2,129) (637) Net working capital movement (151) 843 Investment in IT and equipment (286) (248) Interest on loans and finance leases (208) (865) Free cash flow (2,774) (907) Net disposal proceeds 5,197 17 Discontinued activities 41 (190) Issue of share capital 97 1,197 Movement in net cash/(debt) 2,561 117 Opening net debt (2,207) (2,324) Closing net debt 354 (2,207) Net debt made up of; Cash 1,254 663 Debt (900) (2,870) 354 (2,207)
agreements (Zoetis, MVS, VPI)
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0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2% 1.4% 1.6% 1.8% 2.0% Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 May-14 Aug-14 Nov-14 Feb-15 May-15 Aug-15 Nov-15 Feb-16
Average monthly atrrition (%) Month pet first came on plan
Attrition - monthly contract cancellation percentage
pets that came on plan in that month
reflects a significant number of “Put to Sleep” animals
three months, churn is higher due to “cooling off” period. This is not shown as distorts long term analysis.
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