Fagron H1-2018 Results Rafael Padilla, CEO Karin de Jong, CFO 3 August 2018
Everyone is Unique
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Pharmaceutical Art 7 H1-2018 Results – 3 August 2018
FSBA Hoogeveen, NL
FCS Belgium Bornem, BE
Pharmaline Oldenzaal, NL
Fagron Greece Trikala, GR
Infinity Pharma Campinas, BR
Analysts are invited to visit the Wichita facility in October Fagron Sterile Services Wichita, US
Fagron Fagron South Africa Johannesburg - South Africa 14 H1-2018 Results – 3 August 2018
Fagron: Global Leader in Personalized Medicine
Fagron Family Rules 17 H1-2018 Results – 3 August 2018
Fagron Values 18 H1-2018 Results – 3 August 2018
Fagron Strategy 19 H1-2018 Results – 3 August 2018
Fagron Strategy 20 H1-2018 Results – 3 August 2018
Fagron Strategy 21 H1-2018 Results – 3 August 2018
Fagron Strategy 22 H1-2018 Results – 3 August 2018
Fagron Strategy 23 H1-2018 Results – 3 August 2018
Fagron Strategy 24 H1-2018 Results – 3 August 2018
Fagron Leadership Team Rafael Padilla Chief Executive Officer Karin de Jong Ellen van Constantijn van Chief Financial Sprundel Rietschoten Marcello Bergamini Officer General Manager Chief Area General Manager The Netherlands Communications Europe (excl. BeNeLux) Officer Johan Verlinden Daan Vermeulen Global Legal General Manager Affairs Director Ivan Maróstica Belgium Tomasz Kania Area General Manager Chief Operations South America Officer Céline Caveye Max Belanger Global HR Global Business Savvas Koulouridas Director Development Global Innovations Rafael Padilla Manager Director President North America Jason McGuire Global Quality Director 25 H1-2018 Results – 3 August 2018
Market Size and Position Fagron Hellas Trikala - Greece 26 H1-2018 Results – 3 August 2018
Market Size Global Market Size* Personalized medicine ~$ 12b Essentials & Brands ~10% * All estimates on market size and market position in this presentation are company estimates
Market Position FCS-sterile ~7% Market Position E&B Market Size Personalized medicine ~$ 4.5b Essentials & Brands ~10% ~12%
Market Size Personalized medicine ~$ 3.0b Market Position FCS NL Essentials & Brands ~10% ~50% Market Position E&B ~45%
Market Position E&B ~50% Market Size Personalized medicine ~$ 1.8b Essentials & Brands ~10%
H1-2018 Results Fagron US Minneapolis - US 33 H1-2018 Results – 3 August 2018
H1-2018 Headlines Turnover Financial • Turnover increased 5.0% (12.1% CER) to € 230.9m 22.0% • REBITDA increased 1.1% (6.9% CER) to € 48.7m 56.8% 21.2% • Recurrent net profit increased 6.6% to € 22.3m • Operational cash flow of € 34.4m REBITDA • Net financial debt/REBITDA ratio of 2.72 11.5% 19.9% 68.6% Europe* South America North America * Including HL Technology and Rest of the World. 34 H1-2018 Results – 3 August 2018
Operational Review H1-2018 Florien Piracicaba – Brazil 35 H1-2018 Results – 3 August 2018
Consolidated Turnover Total growth Organic growth Organic growth (x € 1,000) H1-2018 H1-2017 Total growth CER CER 227,285 216,551 +5.0% +12.1% +1.7% +8.4% Fagron 3,638 3,461 +5.1% +14.2% +5.1% +14.2% HL Technology Total 230,923 220,012 +5.0% +12.1% +1.7% +8.5% CER = constant exchange rates • Organic turnover growth CER of 8.5% • Organic turnover growth CER in all regions • Growth acceleration in North- and South America in Q2 36 H1-2018 Results – 3 August 2018
Turnover Development 240 8.9 14.2 230 12.3 5.1 227.3 220 6.6 2.3 216.5 210 200 190 180 170 160 150 Turnover H1-17 Europe South-America North-America Currency effect Acquisitions Disposals Turnover H1-18 37 H1-2018 Results – 3 August 2018
Fagron Europe (x € 1,000) Δ H1-2018 H1-2017 127,536 127,220 +0.2% Turnover 32,667 32,724 -0.2% REBITDA 25.6% 25.7% REBITDA margin CER = constant exchange rates • Organic turnover growth CER of 1.9% • REBITDA decreases 0.2%; margin decreases 10bps to 25.6% • Focus on innovative products resulted in strong growth of Brands • Temporarily reduction of capacity in one of the Dutch compounding facilities to be able to invest in further increasing the quality of the facility and processes 38 H1-2018 Results – 3 August 2018
Fagron South-America (x € 1,000) Δ H1-2018 H1-2017 48,880 49,450 -1.2% Turnover 9,691 10,054 -3.6% REBITDA 19.8% 20.3% REBITDA margin CER = constant exchange rates • Organic turnover growth CER of 13.3% • REBITDA decreases 3.6%; margin decreases 50bps to 19.8% • Strong turnover growth driven by: – Growth of underlying markets and growth in number of compounding pharmacies (+8.8% to 7,545) – Focus on the development and introduction of innovations and patented concepts • 25 new innovations introduced during Consulfarma in Brazil • All Chemistry fully integrated and rebranded to Organic Compounding 39 H1-2018 Results – 3 August 2018
Fagron North-America (x € 1,000) Δ H1-2018 H1-2017 50,869 39,880 +27.6% Turnover 5,610 5,452 +2.9% REBITDA 11.0% 13.7% REBITDA margin CER = constant exchange rates • Organic turnover growth CER of 22.3% • REBITDA increases 2.9%; margin decreases 270bps to 11.0% • REBITDA margin decreased due to the FTE increase at FSS-Wichita • FCS-sterile performing in-line with expectations – Organic growth CER of 27.5% (Q2-18: 34.6%) – FSS-Wichita CER: +76.2% (Q2-18: 90.9%) • Essentials/Brands: – Organic growth CER of 7.6%, driven by all activities – Good progress on integration of Humco 40 H1-2018 Results – 3 August 2018
Financial Review H1-2018 Pharmaline Oldenzaal – The Netherlands 41 H1-2018 Results – 3 August 2018
Gross Margin consolidated • Gross margin increased by € 5.0m 141.9 (+3.7%) 136.9 • Gross margin as percentage of turnover decreased to 61.5% due to the renewal of contracts in H2-17 and the sale of the French pharmacy • Gross margin increased 70bps compared to H2-17 H1-2017 H1-2018 42 H1-2018 Results – 3 August 2018
Operating Costs consolidated 93.3 • Operating costs as a percentage of turnover remained unchanged and 88.8 amount to 40.4% in H1-18 • Operating costs increased by 5.1%, mainly due to the acquisition and integration of Humco and the increase at FSS in Wichita H1-2017 H1-2018 43 H1-2018 Results – 3 August 2018
REBITDA consolidated • REBITDA increased by 1.1% (+6.9% CER) to € 48.7m 48.7 48.1 • REBITDA as percentage of turnover decreased by 80bps to 21.1% H1-2017 H1-2018 44 H1-2018 Results – 3 August 2018
Non-Recurrent Result consolidated • Non-recurring result amounts to - € 4.7m -4.7 and consists of: Settlement with the former owners of JCB Laboratories (US), dismissal costs and acquisition costs -0.9 H1-2017 H1-2018 45 H1-2018 Results – 3 August 2018
EBITDA consolidated • EBITDA decreased by 6.8% to € 44.0m 47.2 44.0 due to the increase in non-recurring elements (mainly JCB settlement) H1-2017 H1-2018 46 H1-2018 Results – 3 August 2018
Depreciation and Amortization consolidated • DA amounted to € 9.5m, an increase of 10 9.5 8.7 8.6% compared to H1-17, partly due to 9 amortization of the Humco brand 8 7 6 5 4 3 2 1 0 H1-2017 H1-2018 47 H1-2018 Results – 3 August 2018
Financial Result (excl. Revaluation Financial Derivatives) consolidated -13.3 • Financial result decreased by 21.2% to € 10.5m • The decrease was mainly due to the -10.5 repayment of the bond in July 2017, offset by FX-results and higher debt due to the Humco acquisition H1-2017 H1-2018 48 H1-2018 Results – 3 August 2018
Taxes consolidated • Effective tax rate amounted to 21.8% -5.2 compared to 18.6% in H1-17 -4.8 • Effective cash tax rate amounted to 15.1% H1-2017 H1-2018 49 H1-2018 Results – 3 August 2018
Net Profit consolidated • Net profit amounted to € 18.8m, a decrease of 10.8% compared to H1-17 21.1 18.8 • Recurrent net profit increased by 6.6% to € 22.3m H1-2017 H1-2018 50 H1-2018 Results – 3 August 2018
Net Financial Debt consolidated 270 261.9 6.0 250 8.4 2.8 4.2 38.8 236.2 34.4 230 210 190 170 150 Net financial debt Operating cash flow Acquisitions Investments Dividend paid Interest paid Exchange rate Net financial debt 31/12/17 differences 30/06/18 51 H1-2018 Results – 3 August 2018
Innovations Fagron Technologies Jundiai - Brazil 52 H1-2018 Results – 3 August 2018
Fagron Technologies • Digital tal soluti tion ons s for compound ounding ng pharmaci macies s • Market ket leader er in Brazil zil (>50%) 0%) • Launch ch in US schedu duled ed for 2019 Pharmacy Prescriber Customer
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