apotek hjärtat building the leading pharmacy offering in ......2015 1.361 2014 25 1.331 2013 1.303...
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Apotek Hjärtat – building the leading pharmacy offering in Sweden
Anders Nyberg
CEO Apotek Hjärtat
Source: Swedish Pharmacy Association (Sw. Sveriges Apoteksförening)
35 Bn SEK Swedish pharmacy market
ICA Gruppen CMD 2015
Rx gross profit primarily driven by volume, price is
much less important
Free pricing
Free pricing
Fixed pricing
(regulated by TLV)
Broad
Selective retail stores
(regulatory approval
needed)
Pharmacies
SEK bn
Market split 2014 Pricing model Channel presence Sample products
TG
OTC
26
3
5
Over the counter (OTC)
Prescribed (Rx)
35
Retail
Market
Traded goods (TG)
2
Stable market growth and positive gross profit mix shift
ICA Gruppen CMD 2015
Sweden pharmacy market (retail)
TG
OTC
Rx
Estimated
growth outlook(2)
Around to slightly below 5y
historical average
Slightly below 5y
historical average
In line with 5y historical
average (volume)
Estimated
industry retail
gross margins(2)
40-50%
35-45%
20-22%
Sales development (SEKbn)(1)
3%
7%
10%
(Value)
(a)
1%
4%
9%
(a)
‘09-’14 ‘00-’14
2% 2%
(Volume)
CAGR
Note: (a) Historical OTC sales includes both the pharmacy channel and the non-pharmacy channel.
Source: 1) Swedish eHealth Agency (Sw. eHälsomyndigheten) and Swedish Pharmacy Association (Sw. Sveriges Apoteksförening). (2) Management estimates.
Positive mix shift
Rx
OTC
TG
3
Main drivers
More rational market behavior
Consolidation has provided
larger players with scale
Smaller players experience lower
profitability
Fewer attractive locations remain
a
b
c
Number of new pharmacies(1)
YoY %
change +21% +11% +3% +2%
Note: Please note that the graph is not to scale. Apotek Hjärtat net openings 2012 includes 3 pharmacies opened by Vårdapoteket prior to Apotek Hjärtats acquisition.
Source: (1) Swedish Pharmacy Association (Sw.Sveriges Apoteksförening) and Apotek Hjärtat.
143
106
1526242515
50
929
2015
1.361
2014
2
1.331
2013
5
1.303
2012
7
1.274
2011
14
1.242
2010
1.122
2009
APH, net openings
Others, net openings
Number of pharmacies
+2% +2%
New pharmacy establishments are slowing down
ICA Gruppen CMD 2015 4
Apotek Hjärtat well positioned for the future
Swedish state
ICA Gruppen
Oriola-KD
Swedish state/ entrepreneurs
Celesio
Player Owner # of retail
pharmacies/
Positioning in key strategic dimensions Background
Brand
awareness(3)
#1
#3
#2
#5
n.a.
E-commerce
✓
✓
Own
distribution
✓
✓
✓
-
-
Food retail
cooperation
✓
(✓)
-
-
-
Source: (1) Retail market size
from Swedish Pharmacy
Association; # of retail
pharmacies as of year end
2014. (2) Annual reports, 2014
figures except for Lloyds
(2013). (3) Blue Carrot survey.
370
390
309
167
79 ✓
✓
✓
✓ ✓ #4
ICA Gruppen CMD 2015 5
Most respected
companies 2014:
1. Ikea
2. Apoteket
3.
4. Arla
5. Google
6. Clas Ohlsson
7. Volvo PV
8. Samsung
9.
10. Stadium
(Sources: Nordic Brand Academy / Dagens Industri)
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Sweden’s leading private pharmacy chain
• Nationwide coverage with approx. 390 pharmacies and e-commerce
• Approx. SEK 12 billion in sales
• 3,200+ employees, HQ in Stockholm
• Own product supply
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Our Vision
To be the pharmacy of the future with
Sweden’s leading health offering
Our Mission
Help our customers to better
health and well-being
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Strongest brand development
Source: BlueCarrot, 7 weeks’ moving, median value
30%
35%
40%
45%
50%
55%
60%
65%Awareness
2014 2015
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Intensifying differentiation of store format
Close to care (83 units)
Close to homes (104 units)
Close to stores (98 units)
Shopping (105 units)
E-commerce Launched September
2014
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Looking ahead
1. Secure successful integration
2. Continued growth
3. Increased investments in our e-commerce
4. TG development – expanding into new categories
5. Expanding our test of health care services
6. Becoming the most attractive employer and building a culture of engagement
ICA Gruppen CMD 2015 13
New customer club solution with joint bonus
ICA Gruppen CMD 2015
1,300 grocery stores: 390 pharmacies:
Monthly bonus statement (all channels)
ICA 2,900 points
Hjärtat 700 points
ICA Försäkring 4,100 points
Total bonus: 7,700 points
1% bonus
3% bonus
14
Club membership numbers continue to grow 2015 (thousands)
1 606 1 633
1 660 1 682
1 710 1 734
1 754 1 776
1 800
1 850
1 900
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
ICA Gruppen CMD 2015 15
Opening new pharmacies 2015/2016
97
4
2927
2321
Q1-2016 Q4-2015
15
Q3-2015 Q2-2015 Q1-2015
15
Q4-2016 Q2-2016 Q3-2016
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Sharp rise in willingness to buy
ICA Gruppen CMD 2015
42%
36%
70%
64%
Curiosity Willingness to buy
Zero measurement 2014 New concept
Source:
BlueCarrot StorePower September
and December 2014.
Base: 202 IP (Sept.) and 204 IP
(Dec.).
”Reference” refers to experience in an
”average Swedish shopping centre”.
This consists of experience from 80
different stores in two Swedish
shopping centres.
Response: What was your impression of the store today?
19
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E-commerce increasingly important channel
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E-commerce investments in five priority areas in 2016
Platforms Supplier ability Assortment Awareness
Competitor analysis Blue Carrot customer study Internal evaluation
Organisation
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Investments in the assortment 2016
• New assortment offerings
• New products important
• Focus on basic offering – category project
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Hjärtat Basic necessities, med-tech and special care
Hjärtat Everyday products
Apolosophy Skin, hair and facial care products, and cosmetics
Own label development
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ICA + Hjärtat = a stronger offering through cooperation
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Health services Private labels Rx
Expanding our customer offering
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Hjärtat #1 in Pharmacy Barometer!
ICA Gruppen CMD 2015
2015
Rank Employer % Trend
1 Apotek Hjärtat 47%
2 Apoteket AB 36%
3 Kronans Apotek 35%
4 ICA Cura Apoteket 18%
5 Apoteksgruppen 17%
6 LloydsApotek 14%
7 Apotea 8%
2014
Rank %
2 39%
1 42%
3 29%
4 17%
5 12%
6 10%
7 3%
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Building the leading pharmacy offering in Sweden
ICA Gruppen CMD 2015
Part of ICA Gruppen –
integration according to plan
Well positioned to become
market leader
Developing our value
proposition
• Health concept of the future
• New products, private label range and services
• Growing the business by both bricks and clicks –
continued investments in our multi-channel offering
• All Cura pharmacies converted by end November
• Integration process runs according to plan, loyalty
programs, IT, logistics etc
• Synergies being realized
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