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TRANSCRIPT
KBC Healthcare Conference
Constantijn van Rietschoten
New York, 28 September 2017
Fagron at a glance
FArmaceutische GRONdstoffen was founded in
Rotterdam in 1990
2016 H1 2017
Turnover € 421.8m € 221.7m
REBITDA € 90.6m € 48.1m
Active in 34 countries on 5 continents
1,924 FTE, incl. >200 pharmacists
Leading pharmaceutical compounding company,
bringing personalized pharmaceutical care to
hospitals, pharmacies, clinics and patients
Listed on Euronext Brussels and Amsterdam
since 5 October 2007
Fagron global presence
FCS Essentials & Brands Office or repacking only facility Combination FCS / Essentials & Brands
Strategy
Pharmaceutical raw materials,
excipients, and equipment &
supplies used in compounding
Personalized ready-to-use
medication that is prepared in
compounding facilities
Innovative products and
concepts for specific segments
of the healthcare market
Our business - segments
Fagron
Essentials BrandsCompounding Services
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Our business - geographical
Europe North AmericaSouth America
59% of sales 18% of sales23% of sales
Essentials
FCS - sterile
FCS - non-sterile
Brands
Essentials
FCS - sterile
FCS - non-sterile
Brands
Essentials
FCS - non-sterile (FACO)
Brands
Fagron
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Results H1 2017
LETS GEL KIT is a topical anaesthesia convenience pack used for the prevention of pain when suturing.
The kit includes SuturaGel, pre-weighed active ingredients and topical syringes.
Headlines H1 2017
TURNOVER GROWTH
5.5%
€ 221.7morganic: 6.0%
REBITDA GROWTH
5.6%
€ 48.1m21.7% of turnover
EBIT GROWTH
13.5%
€ 38.4m17.3% of turnover
NET PROFIT GROWTH
27.0%
€ 21.1m
NET DEBT/
REBITDA RATIO
2.66
STRONG OPERATIONAL
CASH FLOW
€ 49.5m
Consolidated turnover
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(x € 1,000) H1 2017 H1 2016 Total growth Total growth
CER
Organic
growth
Organic
growth CER
Fagron 218,265 205,678 +6.1% +1.3% +6.6% +1.8%
HL Technology 3,461 4,559 -24.1% -25.4% -24.1% -25.4%
Total 221,725 210,237 +5.5% +0.7% +6.0% +1.2%
CER = constant exchange rates
Positive turnover developments in core activities in Europe, North America and
South America
Turnover developmentExcluding HL Technology (in € 1,000)
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205.678
218.2653.050 600
9.860-924
Turnover H1 2016 Europe* South America North America Currency effect Turnover H1 2017
* The Europe segment consists of the operations of Fagron in Europe, South Africa and Australia. The increase for Europe includes the negative effect of € 1m due to the sale of a small
compounding facility in Marseille (France) in 2016.
Fagron Europe
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(x € 1,000) H1 2017 H1 2016 Change
Turnover 128,886 125,346 +2.8%
REBITDA 32,724 30,920 +5.8%
REBITDA margin 25.4% 24.7%
Organic turnover growth of 3.7% (+3.3% CER)
REBITDA increases 5.8%; margin increases 70bps to 25.4%
Opening of sterile facility in the Netherlands, specializing in prefilled glass syringes
Sale of a compounding facility in France with limited profitability/growth potential
Acquisition of Kemig, a leading supplier of raw materials in Croatia and Bosnia and
Herzegovina
Fagron South America
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(x € 1,000) H1 2017 H1 2016 Change
Turnover 49,498 42,234 +17.2%
REBITDA 10,054 8,741 +15.0%
REBITDA margin 20.3% 20.7%
Organic turnover growth of 17.2% (-2.2% CER)
REBITDA increases 15.0%; margin decreases 40bps to 20.3%
Significant volume growth in H1 2017, but
• Majority of Fagron Brazil’s purchases are in US dollars
• Lower purchase prices, due to substantial strengthening of BRL/USD, fully
passed on to customers
• Decrease of prices in BRL had a negative impact on turnover growth at CER
Fagron North America
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(x € 1,000) H1 2017 H1 2016 Change
Turnover 39,880 38,098 +4.7%
REBITDA 5,452 5,045 +8.1%
REBITDA margin 13.7% 13.2%
Turnover growth of 4.7% (+1.6% CER)
REBITDA increases 8.1%; margin increases 50bps to 13.7%
Sterile activities
• Turnover growth of 22.7% (+19.1% CER)
• Wichita facility obtained 46 licenses and is performing in line with expectations
Raw materials and compounding concepts activities
• Turnover decline of 26.7% (-28.8% CER)
• Second consecutive quarter of improvement
• Introduction of new innovations like Lets Gel Kit®
Financial review H1 2017
Pigmerise® MD is a medical devise class 1 indicated as coadjuvant of the skin dyschromia treatment, especially in cases such as
hyperpigmentation caused by vitiligo.
Financial review
Turnover
(in € million)
221.7
+5.5%
Gross margin
(in € million)
138.6
+3.8%
Operating costs
(in € million)
-90.5
+2.9%
Turnover increase of 5.5% or 0.7% at CER
Organic increase of 6.0% or 1.2% at CER
Gross margin as percentage of turnover decreases by 100bps to
62.5% compared to H1 2016
Gross margin increases 30bps compared to H2 2016
Operating costs as percentage of turnover decrease by 100bps to
40.8% compared to H1 2016
Operating costs decrease by 20bps compared to H2 2016
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Financial review
REBITDA*
(in € million)
48.1
+5.6%
Non-recurring
(in € million)
-0.9
-44.6%
EBITDA
(in € million)
47.2
+7.5%
REBITDA increases 5.6% to € 48.1m or 21.7% of turnover
REBITDA growth driven by core activities in Europe, North and
South America
Non-recurring result decreases by 44.6% compared to
-€ 1.7m in H1 2016
EBITDA increases 7.5% to € 47.2m or 21.3% of turnover
* REBITDA is EBITDA before non-recurring result.15
Financial review
DA
(in € million)
-8.7
-12.8%
EBIT
(in € million)
38.4
+13.5%
Fin. result*
(in € million)
-13.3
-13.9%
D&A decreases 12.8% to € 8.7m
The decline was mainly due to the accelerated depreciation of
assets in 2016 (in US and Switzerland)
EBIT increases 13.5% to € 38.4m
EBIT as percentage of turnover increases 120bps to 17.3%
Financial result amounts to -€ 13.3m, a decrease of 13.9%
Financial costs decrease € 7.6m due to lower interest
expenses and non-recurring costs related to refinancing
Financial income decreases by € 9.2m. The decrease was
due to the non-recurring recognition of an income item in H1
2016 as a result of the received waivers* Financial result excl. revaluation financial derivatives.16
Financial review
Taxes
(in € million)
-4.8
-30.5%
Net profit
(in € million)
21.1
+27.0%
Effective tax rate is 18.6% (29.4% in 1H 2016)
Net profit increases 27.0% to € 21.1m
Net profit per share decreases 34.1% to € 0.29
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Consolidated – Net financial debt
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285.408
245.168
3.511 49.50112.669 103
31 December 2016 Net interest paid Investment activities Exchange ratedifferences
Operating cash fllow 30 June 2017
Net debt decreases € 40.2m to € 245.2m
Net debt/REBITDA-ratio of 2.66, significantly below
the level of 3.25 as agreed in the RCF and Note
Purchase agreement
Summary
Solid results with positive turnover
developments in core activities
Operating costs well under control
Profitability increasing faster than
turnover
Financial position significantly
strengthened
Portfolio:
• Facility in Wichita licensed in 46 states
• Opening of a sterile facility in NL
• Acquisition of Kemig (Croatia)
• Sale of non-sterile facility in France
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FagronLab® LF-800UV - Laminar flow cabinet, designed for
compounding pharmacies.
Q&A
Disclaimer
Important information about forward-looking statements
Certain statements in this presentation may be considered “forward-looking”. Such
forward-looking statements are based on current expectations, and, accordingly, entail
and are influenced by various risks and uncertainties. The Company therefore cannot
provide any assurance that such forward-looking statements will materialize and does
not assume an obligation to update or revise any forward-looking statement, whether as
a result of new information, future events or any other reason.
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