Galenica Group
Investor Presentation
January 2021
Agenda
1 | History | 3 |
2 | Galenica at a glance | 6 |
3 | Business Sectors | 8 |
4 | Financial track record | 13 |
5 | Strategy and organisation update | 15 |
6 | Financial results H1 2020 | 23 |
7 | Market update | 35 |
8 | Regulatory projects update | 39 |
21.01.2021 © Galenica Group | 2 |
1 Building the leading Swiss healthcare platform over 90 years
Foundation of | Organic and | Creation of | Acquisition of | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition of | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amavita uniform | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Galenica as a | acquisition-led | Merfen® and | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
brand in | Bahnhof | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
wholesaler | expansion of | Vita-Merfen® | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Switzerland | Apotheke | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
pharmacies network | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition of | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expansion of | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
IPO of | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition | Sun Store | Acquisition of | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
distribution | Joint Venture | Galenica | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
of Mediservice | pharmacies | Bichsel Group | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
activities | with Coop Vitality | Santé | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1927 | 1995 | 1996 | 1999 | 2000 | 2002 / 2004 | 2005 | 2007 2008 | 2009 | 2013 | 2018 2019 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Strategy to | Partnership | Acquisition of | Opening of highly | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition | Acquisition of | Acquisition of | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
engage in the | with Alliance | Anti-Brumm® | automated | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
entire Swiss | UniChem | and Perskindol® | distribution centre in | of medifilm | care product | Hedoga Group | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
healthcare | Niederbipp | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
value chain | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition of | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pharmapool | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Corporate | Services | Retail | Products & Brands | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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1 History of resilient growth and margin improvement
2009-19
sales CAGR
2009-19
EBIT CAGR3
2009-19 EBIT
margin
improvement3
2019 cash
conversion5
Employees as of 31 December 2019
Logistics, HealthCare Information | Galenica |
& Retail1,4 | |
3.0% | 2009-19 CAGRs | 1.7% | ||||||||||
Retail market sales2 | ||||||||||||
Galenica net sales | 3.0% | |||||||||||
Galenica EBIT3 | 11.5% | |||||||||||
11.5% | 2'826 | 2'915 | 3'009 | 3'1416 | 3'165 | 3'301 | 6.0% | |||||
2'766 | ||||||||||||
2'603 | 2'661 | |||||||||||
2'467 | 2'526 | |||||||||||
+282bps | ||||||||||||
3.0% | ||||||||||||
75% | ||||||||||||
7'071 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 0.0% |
Net sales (CHFm) | EBIT margin % | ||||
Source: | Company information, Galenica Annual Reports, IQVIA (former IMS Health) | ||||
Notes: | The financial information presented with respect to the financial years ended 31 December 2008 through 2013 has been derived from the audited consolidated financial statements of Galenica AG (now renamed Vifor Pharma | ||||
AG) and represent its Logistics, Retail and Other (Healthcare Information) businesses, excluding the Pharma business. The Company, a former wholly-owned subsidiary of Galenica AG (now renamed Vifor Pharma AG), | |||||
prepared combined financial statements for the financial years ended 31 December 2014, 2015 and 2016. Accordingly, the financial information derived from the combined financial statements of the Company and from the | |||||
consolidated financials of Galenica AG (now Vifor Pharma AG) for its Logistics, Retail and Other (Healthcare Information) businesses, excluding the Pharma business, for prior periods may not be fully comparable. |
- Not including Verfora (former Vifor Consumer Health )
- Retail market sales include direct and indirect pharmaceutical sales through pharmacies, self-dispensing doctors and drugstores (IQVIA Market Prognosis 2019-2023, Switzerland; published September 2019)
- 2014-16EBIT from combined financial statements, 2017 and 2018 EBIT, excludes IAS 19 expense, 2019 excludes IAS 19 expense and effects of IFRS 16 leasing, details adjustments, Annual Report 2019, pages 95 and 96
- 2013 financials as per 2014 financial statements due to changed segment structure (Galenica Santé is reported as a separate segment since 2014). Financials not adjusted to include Products & Brands.
- Calculated as (EBITDA-capex)/EBITDA.2014-18 EBITDA excludes IAS 19 expense and 2019 EBITDA excludes IAS 19 expense and effects of IFRS 16 leasing; capex includes investments in tangible and intangible assets, details adjustments, Annual Report 2019, pages 95, 96 and 97
- Adoption of IFRS15 starting from 2017.
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1 History of share price since IPO
75 | ||||
70 | CHF 59.45 | |||
Initial trade price | ||||
| ||||
7 April 2017 | ||||
CHF 43.00 | ||||
IPO offer price | ||||
CHF 39.00 | ||||
50 | ||||
45 | ||||
40 | ||||
35 | 15.01.21 | |||
30 | ||||
12/2019 | 12/2020 | |||
7.4.2017 | 12/2017 | 12/2018 | ||
Galenica | SPI |
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2 Galenica is the leading healthcare provider in Switzerland
2019 net sales CHF3'301 million | |||||||||||||||
2019 EBIT1 | CHF167 million | ||||||||||||||
Health & Beauty | Services | ||||||||||||||
Retail | Products & Brands | ||||||||||||||
Market position2 | #1 | Consumer Health market position2 | #1 | Market position2 | #1 |
2019 net sales | 2019 EBIT |
(pre eliminations of intercompany positions)
CHF1'621m CHF124m
2019 net sales | 2019 EBIT |
(pre eliminations of intercompany positions)
CHF2'441m CHF45m
- Leading domestic network of own, joint venture and independent partner pharmacies
- Provision of health and beauty products, patient advice and new services through our pharmacy network as well as via different online offerings
- Broad range of own, exclusive and partner products for consumer health, beauty and well-being
- Strong sales and marketing force in Switzerland
- Leading provider of specialised pre-wholesale and wholesale distribution services
- Specialised databases and solutions for clinical decision support
- Excludes IAS 19 and IFRS 16 effects, Details adjustments, Annual Report 2019, page 95
- Services based on sales reported at ex-manufacturer price level as of MAT December 2019. Source: IQVIA Market Prognosis 2019-2023, Switzerland; Retail based on number of pharmacies. Source: IQVIA Market Prognosis 2019-2023, Switzerland, pharmaSuisse 2019 and company websites; Products & Brands based on IQVIA MAT December 2019 sales value for OTC, Patient Care, Personal Care and Nutritionals products
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Operating in a stable and attractive Swiss healthcare market
2 with favourable long-term fundamentals
5
4
3
2
1
0
Resilient, stable Swiss healthcare retail sector2 | Pharmaceutical market in Switzerland (2019)1 |
CHF bn (based on ex-manufacturer price) | 2019-23 CAGR 1.5%3 | By value−CHF6.1bn | By volume−187 million packs | |||||||||||||||
2009-19 CAGR 1.7%3 | ||||||||||||||||||
1.0% | 3.4% | |||||||||||||||||
9.0% | ||||||||||||||||||
25.4% | 48.3% | 22.7% | ||||||||||||||||
4.3 | 4.4 | 4.5 | 4.5 | 4.6 | 4.6 | 4.7 | 4.8 | 25.3% | 64.9% | |||||||||
3.8 | 3.8 | 3.8 | 3.9 | 3.9 | 3.9 | 4.1 | ||||||||||||
Pharmacies | Physicians | Hospitals | Drugstores | |||||||||||||||
2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | E2020 E2021 E2022 E2023 |
Financial crisis | Mandatory price cuts | |
Unpegging of Swiss Franc by SNB
- Underlying healthcare sector growth drivers, including demographics, lifestyle and innovation
- One of the highest life expectancy rates in the world
- Non-discretionarynature of products and services
Pharmacists play a crucial role in the provision of medicines
- Indispensable role in one of the world's highest quality health care systems, providing drugs, advice and services
- Continued efforts by government and health insurers to make pharmacists the first point of contact
- Growing importance to meet consumer trends towards more personalized healthcare and self-medication
Source: | IQVIA, Pharmamarkt Schweiz, YTD December 2019, IQVIA Market Prognosis 2019-2023, Switzerland; published September 2019 |
- Medicines Swissmedic list A, B, C, D sold from suppliers and wholesalers to hospitals, physicians, pharmacies and drugstores
- Total market without hospitals
- IQVIA Market Prognosis 2019-2023, Switzerland; published September 2019
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3 The largest pharmacy retailer in Switzerland | Retail |
Network of chains (# of pharmacies as of 31 December 2020) Webshop Competitive positioning-#1 market position4 |
− | Largest branded pharmacy network by | | By number of pharmacies5 | Total # of pharmacies as of 2018 | |||
1831 | number of pharmacies in Switzerland | 156 | 1'806 | ||||
− | The first Swiss pharmacy chain2 | | 9% | ~5.8x more pharmacies | |||
94 | |||||||
than next competitor | |||||||
− | Joint venture (49:51) with Coop, the 2nd largest | ||||||
| 366 | ||||||
87 | retail group in Switzerland | 20% | 89 | ||||
65 | |||||||
− Service provider for independent pharmacies | |||||||
1563 | under Feelgood's brand | No. 2 | No. 3 | ||||
− Specialty pharmacy focused on home healthcare | |||||||
Own | Independent | ||||||
1 | for patients with chronic illnesses |
− | Specialty pharmacy with manufacture of individual | Net sales performance (CHFm) |
1 | medicines & medical devices and home care services |
Highlights
CAGR 3.9%
- Largest pharmacy network, including online presence
- Offers broad product range, including well-known own brands, as well as health services and tests
- Built organically and through targeted acquisitions since 2000
- Including attractive, high customer traffic locations across Switzerland
- Average sales per pharmacy of CHF4.3m > 1.4x Swiss market average6
- Amavita figures include 4 majority holdings in other pharmacies
- Based on 1976 Federal Court law permitting non-pharmacists to own a pharmacy for the first time
- Includes 5 Amavita partnerships
- Based on number of pharmacies. Source: pharmaSuisse 2020, IQVIA Market Prognosis 2019-2023, Switzerland; published September 2019 and company websites
21.01.2021 © Galenica Group
1'251 | 1'308 | 1'349 | 1'3878 | 1'431 | 1'516 | ||||
2014 | 2015 | 2016 | 2017 | 2018 | 2019 | ||||
Health & Beauty7 | 1'437 | 1'479 8 | |||||||
Sales | 1'335 | 1'393 | 1'525 | 1'621 | |||||
EBIT margin 6.0% | 6.4% | 6.5% | 6.7% | 7.2% | 7.6%9 |
- Own includes 84 pharmacies through joint venture with Coop; independent includes 7 Amavita partners
- Retail pharmacy sales for Galenicare on a like-for-like basis, including Amavita and Sun Store pharmacies only. Swiss market average based on pharmaSuisse 2020, Roka 2018 (financial year 2017)
- H&B post-inter-segmental eliminations
- Restatement of IFRS15 starting from 2017.
9 | 2019 excludes effects of IFRS 16 leasing, details adjustments, Annual Report 2019, page 95 | 8 |
3 Ongoing pharmacy network consolidation and optimisation | Retail |
- Proven track record of delivering synergies through streamlining of business processes and creating value through acquisitions and network optimisation
Marketing
IT and
Processes Purchasing
- Widely spread pharmacy network covers every Region in Switzerland
- Demonstrated M&A track record with an average of 10 pharmacies acquired and 8 net pharmacies added per
year over the last 8 years
2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | ||
Pharmacies acquired | 10 | 20 | 5 | 2 | 13 | 6 | 10 | 11 | 12 | |
Net pharmacies added1 | 11 | 12 | 6 | 0 | 11 | 8 | 8 | 11 | 10 | |
Total own Pharmacies | 300 | 312 | 318 | 318 | 329 | 337 | 345 | 356 | 366 | |
1 Includes the impact of acquisitions with concurrent mergers, new openings and closings
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3 Diversified product portfolio for health, beauty and wellbeing | Retail |
Galenicare's
retail product offering in % of sales1
12%
18%37%
17%
53%
4% 12%
Beauty | Nutrition, Personal | OTC medicines | ||
and Patient Care |
1 Sales YTD December 2019, includes Amavita and Sun Store pharmacies, without Mediservice, Winconcept and Coop Vitality
Prescription medicines of which originals of which generics of which service fees
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Leading role in Consumer Health | |
3 with broad and innovative product portfolio | Products & Brands |
Portfolio
Consumer Health & Skincare brands
Exclusive partner brands Health & beauty
OTC retail own brands
Competitive position: #1 Consumer Healthcare1 market position
ORAL PAIN | ||||||
2 (%) | REMEDIES5 | |||||
No. 1 | ||||||
5.9 | 35% market share2 | |||||
share | 5.3 | 5.2 | REMEDIES5 | |||
TOPICAL PAIN | ||||||
Market | 3.3 | 2.7 | No. 3 | |||
14% market share2 | ||||||
COUGH & COLD | ||||||
REMEDIES5 | ||||||
No.2 | No.3 | No.4 | No.5 | No. 2 | ||
16% market share2 |
Highlights
- Preferred Consumer Healthcare partner for Swiss Pharmacies & Drugstores
- Broad Consumer Healthcare Sales & Training force -> Distribution partner of choice
- Expanding portfolio of own and exclusive brands & products
- Ability to leverage Galenicare Retail platform to distribute VERFORA brands
Net sales performance (CHFm)3
CAGR 5.0%
804 | 844 | 89 | 89 | 92 | 6 | 102 | ||
1 Includes OTC, Patient Care, Personal Care and Nutritionals products
2014
2015 | 2016 | 2017 | 2018 | 2019 |
2 Based on IQVIA Sell Out MAT Dec 2019 streetprice - net sales incl. VAT, price actually paid by final customer
3 2014-16 net sales on a comparable basis including 12 month Verfora (former Vifor Consumer Health) sales and G-Pharma adjustment
4 Adjusted for disposal of Equazen® in November 2015
5 Market shares in categories are shown for Verfora (former Vifor Consumer Health), not including OTC retail own brands
6 Adoption of IFRS15 starting from 2017.
Growth on a comparable basis
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Leader in pre-wholesale and wholesale distribution, supported | |
3 by an innovative healthcare information business | Services |
Services
- Pre-wholesaleoutsourced storage and distribution
- Logistics services to pharmaceutical and various healthcare clients
- Wholesale distribution with three modern sites; main site at Niederbipp operates at c.70% automation
- Supplies to pharmacies, self-dispensing doctors' practices, drugstores, nursing homes and hospitals
- One-stopshop
- Prepared medication in blisters
- Product master data and scientific databases
- IT platforms relating to electronic medication process
- Software solutions and services for pharmacies
Highlights
− | 75 customers | − | Temperature zones: |
− | >10,000 products | − | (i) -80⁰C, (ii) 2-8⁰C, (iii) 15-25⁰C |
− | >9,000 customers | − | Access to nearly all dispensers |
− | 100,000 products (c.11,000 Rx2) − | Present in all three language regions | |
− | >1,100 suppliers | − | GDP3-compliant services |
− Systemically relevant information and databases
− Solutions for safe and cost-effective provision and application of medicines
- Based on market share. Source: IQVIA Market Prognosis 2019-2023,
- Prescription products
- Good Distribution Practice
- Restatement of IFRS15 starting from 2017.
- 2017 including one-off effect, ROS without one-off effect 1.8%
- 2019 excludes effects of IFRS 16 leasing, details adjustments, Annual report 2019, page 95
Competitive positioning - #1 market position1
Pre-wholesale market share % | Wholesale market share % | ||||||||||||||
(pharmacy) | |||||||||||||||
2.5x larger | |||||||||||||||
than next | 2.0x larger | ||||||||||||||
than next | |||||||||||||||
competitor | |||||||||||||||
competitor | |||||||||||||||
No. 2 No. 3 No. 2 No. 3
Net sales performance (CHFm)
CAGR 2.4% | |||||||||
2'171 | 2'245 | 2'329 | 2'362 4 | 2'372 | 2'441 | ||||
2.15 | 1.9 | 1.8 6 | |||||||
1.7 | 1.6 | 1.7 | |||||||
2014 | 2015 | 2016 | 2017 | 2018 | 2019 | ||||
EBIT margin (%) | |||||||||
21.01.2021 © Galenica Group | 12 |
Long-term track record of sustainable growth and
4 attractive cash generation …
Logistics, HCI & Retail1,4 | Galenica |
2009-19 CAGRs | 1.7% | ||||||||||
Retail market sales2 | |||||||||||
(CHFm)salesNet | Galenica net sales | 3.0% | 3'1416 | 3'165 | 3'301 | ||||||
Galenica EBIT3 | 11.5% | 2'661 | 2'766 | 2'826 | 2'915 | 3'009 | |||||
2'467 | 2'526 | 2'603 | |||||||||
2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | ||
(CHFm)3 | 63% | 70% | 70% | 78% | 78% | 74% | 74% | 80% | 70%7 | 74% | 75% | |
% Cash conversion5 | 148 | 8 | 154 | 167 | 6.0% | |||||||
126 | 134 | |||||||||||
EBIT margin (%)3 | 117 | |||||||||||
EBIT | 93 | 99 | ||||||||||
73 | 73 | 3.0% | ||||||||||
56 | ||||||||||||
Reported | ||||||||||||
2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 0.0% | |
- Above market growth
- History of margin improvement
- Attractive cash flow generation
- Well-investedinfrastructure
Source: | Company information, Galenica Annual Reports, IQVIA (former IMS Health) |
Notes: | The financial information presented with respect to the financial years ended 31 December 2008 through 2013 has been derived from the audited consolidated financial statements of Galenica AG and represent its Logistics, Retail and |
Other (Healthcare Information) businesses, excluding the Pharma business (please refer to the footnote on page 4) |
- Not including Verfora (former Vifor Consumer Health)
- Retail market includes direct and indirect pharmaceutical sales through retail pharmacies, self-dispensing doctors and mail-order services (IQVIA Market Prognosis 2019-2023, Switzerland; published September 2019)
- 2014-16EBIT from combined financial statements, 2017 and 2018 EBIT, excludes IAS 19 expense, 2019 excludes IAS 19 expense and effects of IFRS 16 leasing, details adjustments, Annual report 2019, pages 95 and 96
- 2013 financials as per 2014 financial statements due to changed segment structure (Galenica Santé is reported as a separate segment since 2014). Financials not adjusted to include Products & Brands
- Calculated as (EBITDA-capex)/EBITDA.2014-19 EBITDA excludes IAS 19 and IFRS 16 adjustment; capex includes investments in tangible and intangible assets, details adjustments, Annual report 2019, pages 95, 96 and 97
- Adoption of IFRS15 starting from 2017.
- 2017 cash conversion without acquisition trademark Merfen 78%
- 2017 EBIT including one-off effect (CHFm 7.0), comparable EBIT CHFm 141.3
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4 … demonstrating strong performance in both segments
Health & Beauty | Services | |||
Retail | Health & Beauty | Logistics and HCI | Services |
(CHFm) | 10.4% | 4.0% | 0.6% | 2.4% | ||||||||||||||||||||
2'105 | 2'158 | 2'171 | 2'245 | 2'329 | 2'362 1 | 2'372 | 2'441 | |||||||||||||||||
sales | 1'621 | |||||||||||||||||||||||
1'246 | 1'335 | 1'393 | 1'437 | 1'479 1 | 1'525 | |||||||||||||||||||
Net | 838 | |||||||||||||||||||||||
2009A | … | 2013A | Health & Beauty | 2017A | 2018A | 2019A | 2009A | … | Health & Beauty | |||||||||||||||
2014A | 2015A | 2016A | 2013A 2014A 2015A 2016A 2017A 2018A 2019A | |||||||||||||||||||||
(CHFm) | 10.8% | 9.2% | 124 | 10% | 28.7% | 4.4% | 10% | |||||||||||||||||
110 | ||||||||||||||||||||||||
100 | ||||||||||||||||||||||||
93 | ||||||||||||||||||||||||
89 | ||||||||||||||||||||||||
80 | ||||||||||||||||||||||||
adjusted3 | 63 | 7.6% | ||||||||||||||||||||||
5% | 5% | |||||||||||||||||||||||
42 | 35 | 36 | 36 | 40 | 512 | 44 | 45 | |||||||||||||||||
13 | ||||||||||||||||||||||||
EBIT | 1.8% | |||||||||||||||||||||||
2009A | … | 0% | 0% | |||||||||||||||||||||
2013A 2014A 2015A 2016A 2017A 2018A 2019A | 2009A | … 2013A 2014A 2015A 2016A 2017A 2018A 2019A | ||||||||||||||||||||||
… |
Source: | EBIT margin (%) | CAGRs |
Company information, Galenica Annual Reports | ||
Note: | The financial information presented with respect to the financial years ended 31 December 2008 through 2013 has been derived from the audited consolidated financial statements of Galenica AG and represent its Logistics, | |
Retail and Other (Healthcare Information) businesses, excluding the Pharma business (please refer to the footnote on page 4) |
- Adoption of IFRS15 starting from 2017.
- 2017 including one-off effects (CHFm 7.0), comparable EBIT CHFm 43.6 and ROS 1.8%
21.01.2021 © Galenica Group | 3 | 2014-16 EBIT from combined financial statements, 2017 and 2018 EBIT, excludes IAS 19 expense, 2019 excludes IAS 19 expense and effects of IFRS 16 leasing, details adjustments, Annual report 2019, pages 95 and 96 | 14 |
5 Our ambition and self-perception
Galenica:
The first choice for health,
beauty and wellbeing.
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5 Our Strategy - the power of 3 drives sustained value creation
Products & Brands
- Leverage leading positions to promote higher margin and exclusive products
- Further expand and optimise retail network on- and offline (omni-channel)
- Drive efficiency through one single process for all three pharmacy formats
Click & Collect | Loyalty cards | |
Retail | Leverage |
Support
Services
Develop and launch own and partner brands and products for pharmacies
20172018
/
20192020
- Leverage scale advantages to develop new, value-added services
- Continue to drive synergies across the entire organisation
medifilm | GDP-qualified fleet | e-health | ||
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5 Strategic frame and business model
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Strategic Programmes
5 Implement strategy with focus and speed
Focus
Strategic programmes
Omni-Channel
Care | Market | |
Professionals | ||
Inside | ||
Efficiency | ||
Transformation
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5 Focus of the strategic programmes
Omni-Channel:
Offer customers the best experience on all channels, anytime, anywhere.
Care:
Strengthen the role of pharmacies with healthcare offers and partnerships.
Professionals:
Strong partner for all stakeholders in the healthcare sector.
Efficiency:
Secure earnings, release funds for investments.
Transformation:
Implement strategy powerfully, effectively, quickly and successfully.
Market
Inside
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5 Management structure Galenica Group
- Executive Committee
- extended Executive Comittee
1) Joint venture with Coop | Status: january 2021 |
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52 Executive Committee
Marc Werner | − | CEO since 2020 |
CEO | − | 24 years industry experience |
− Joined Galenica in 2020 | ||
− Previously, Head Marketing & Sales division and Member of the Group Executive Board at Swisscom | ||
Felix Burkhard | − | CFO since 2017 |
CFO | − | 30 years industry experience of which 26 years at Galenica |
− Joined Galenica in 1995 | ||
− Previously, Head of Strategic Projects of Galenica Group and Head of Retail Business Sector | ||
Virginie Pache Jeschka | − | Chief Pharmacies Officer from 1st January 2021 and CEO Coop Vitality |
Pharmacies | − | 17 years Marketing and Sales Manager experience of which 3 years at Galenica |
− | Joined Galenica 2018 | |
− Previously, CEO Coop Vitality, Management of Caudalie Suisse and then Caudalie D-A-CH in Düsseldorf | ||
Daniele Madonna | − | Chief Healthcare Officer from 1st January 2021 |
Healthcare | − | 18 years industry experience of which 17 years at Galenica |
− | Joined Galenica 2004 | |
− Previously Store Manager, Regional Sales Manager, CEO of the joint venture Coop Vitality and Head of Retail Business Sector | ||
Thomas Szuran | − | Chief Products & Marketing Officer from 1st January 2021 |
Products & Marketing | − | 24 years industry experience of which 2 years at Galenica |
− | Joined Galenica 2019 | |
− Previously, CEO at Biomed AG, President at ASSGP | ||
Andreas Koch | − | Head of Wholesale Logistics from 1st January 2021 |
Wholesale Logistics | − | Degree in business administration |
− 21 years industry experience of which 12 years at Galenica | ||
− Previously, Head Supply Chain Management at Galexis and Alloga, CEO Alloga, CEO Galexis | ||
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52 Extended Executive Committee
Lukas Ackermann | − Since 2021 Member of the Extended Executive Committee |
IT & Digital Services | − 22 years health care experience |
− Joined Galenica in 2020 as Managing Director of HCI Solutions | |
− Previously, General Manager of amétiq Ltd. | |
Marianne Ellenberger | − Since 2021 Member of the Extended Executive Committee |
Human Resources | − 35 years Human Resources experience of which 20 years at Galenica |
− Joined Galenica in 2001 as Head Human Resources Retail | |
− Previously, Various Human Resource functions (Ascom, CSL Behring, Swisscom) | |
Christina Hertig | − Since 2021 Member of the Extended Executive Committee |
Corporate Communications | − 36 years Communication experience of which 15 years at Galenica |
− Joined Galenica in 2006 | |
− Previously, Federal Office of Public Health (FOPH) | |
Barbara Wälchli | − Since 2021 Member of the Extended Executive Committee |
Legal & Board Services | − 10 years attorney at law experience |
− Joined Galenica in 2019 General Counsel of the Galenica Group | |
− Previously attorney at law in various law firms Bern and Zurich | |
Jürg Paul | − Since 2021 Member of the Extended Executive Committee |
Transformation | − 28 years Marketing and Transformation experience |
− Joined Galenica in 2020 as Head of Transformation | |
− Previously Head of Business Transformation Swisscom | |
21.01.2021 © Galenica Group | 22 |
H1 2020
6 Strong sales growth
Net sales (in CHF million)
Galenica Group | +5.6% |
Retail | +2.9% |
Products & | +1.0% |
Brands | |
Services | +7.9% |
H1 2019 | H1 2020 | |
21.01.2021 © Galenica Group | 23 |
H1 2020
6 Retail Business sector
Net sales (in million CHF)
+2.9%
48%
Elements of growth:
Expansion1): | +5.6% | +5.1% | +4.3% | thereof Bichsel Group: +3.2% |
Organic2): | +0.4% | -0.7% | -1.4% | |
thereof impact of price reductions3): | -1.8% | -1.9% | -1.9% | |
thereof one-time effect of process optimisation4): | -1.3% |
- Estimated impact of COVID-19 on sales: -1%
- Ongoing COVD-19 impact on high-frequency locations (part of around 10% of sales of Amavita and Sun Store pharmacies)
- Calculated for points of sale without a full year period comparison, Half-year Report 2020, page 28
- Consolidated net sales minus expansion effect, Half-year Report 2020, page 28
21.01.2021 © Galenica Group | 3) | Mandatory price reductions of reimbursed medications of the specialities list, calculated based on volumes of previous period, Half-year Report 2020, page 28 | 24 |
4) | As a part of a process optimisation, various intersegmental sales transactions were discontinued at the beginning of 2020. |
H1 2020
6 Products & Brands Business sector
Net sales (in million CHF)
+1.0%
+14.0% International sales
53%
-2.6%Sales in the Swiss market
- New distribution of Bucco-Tantum®,Omni-Biotic®, launch of Veractiv® and discontinuation of distribution of Ginsana ® and Equazen® with +2.6% net impact on Swiss market sales growth
21.01.2021 © Galenica Group | 25 |
H1 2020
6 Services Business sector
Net sales (in million CHF)
+7.9%
49%
impact of price reductions1): | -2.3% | -2.6% | -1.8% |
One-time effect of adapted invoicing models2): | +1.9% |
- Estimated impact of COVID-19 on sales: +3%
- Growth of 5.9% in the pharmacy wholesale market (63% of net sales) thereof 3.0% thanks to the expansion of the Retail business sector
- Growth of 10.4% in the physician wholesale market (26% of net sales)
1) | Mandatory price reductions of reimbursed medications of the specialities list, calculated based on volumes of previous period, Half-year Report 2020, page 28 | ||
21.01.2021 © Galenica Group | 2) | In the context of the new Ordinance on Integrity and Transparency in the Therapeutic Products Sector (OITTP), agreements with suppliers as well as invoicing models were adapted to the new transparency obligations, which | 26 |
influenced the sales development in the Services business sector. | |||
H1 2020
6 Solid results
EBITDA (in million CHF) | EBIT (in million CHF) |
+2.1%
-0.6%
21.01.2021 © Galenica Group | 27 |
H1 2020
6 EBITDA and EBIT adjustments1)
EBITDA (in million CHF)
H1 | H1 | |
2019 | 2020 | |
EBITDA | 126.7 | 129.3 |
Adjustment IAS 19 | -0.3 | 2.4 |
Adjustment IFRS 16 | -24.6 | -26.4 |
EBITDA adjusted | 101.8 | 105.3 |
1) Details of the adjustments in the Half-year Report 2020, pages 29 and 30
EBIT (in million CHF)
H1 | H1 | |
2019 | 2020 | |
EBIT | 82.8 | 82.3 |
Adjustment IAS 19 | -0.3 | 2.4 |
Adjustment IFRS 16 | -1.4 | -1.1 |
EBIT adjusted | 81.1 | 83.6 |
21.01.2021 © Galenica Group | 28 |
H1 2020
6 EBIT growth despite negative COVID-19 impact
EBIT and EBIT margin adjusted1)
(in million CHF / %)
Galenica Group | 4.9% | +3.0% |
5.1% | ||
Health & Beauty | 7.7% | +2.5% |
7.7% | ||
1.8%
Services-0.3% 1.9%
H1 2019 | H1 2020 | 1) | Excluding effects of IAS 19 and IFRS 16, Half-year Report 2020, | pages 29 and 30 | |||
21.01.2021 © Galenica Group | 29 | ||||||
H1 2020
6 Financial result and taxes
Financial result (in million CHF)
Financial result adjusted 1)
Effects of IAS19 and IFRS16 1)
- Details of the adjustments of IAS19 and IFRS16 effects, in the Half-year Report 2020, pages 29 and 30
- Details of one-time effects of deferred taxes, in the Annual Report 2019, pages 118 and 119
- Taxe rate would be at 17.9% excluding the effects of changes in tax rates of +0.7 million CHF
Taxes (in million CHF) | ||||
Tax rate excluding | 18.2% | 18.9% | 17.0% | 3) |
one-time effects2) |
-15.1-13.6
-29.7
-15.1-13.6
-8.4
-38.1
2019 | H1 2019 | H1 2020 |
Taxes excluding one-time effects
One-time effects of deferred taxes 2019 2)
21.01.2021 © Galenica Group | 30 |
H1 2020
6 Pleasing net profit growth
(in million CHF)
125.3
+2.2% | 66.3 | One-time effects of deferred taxes1) | |||
134.2 | 64.9 | Net profit comparable, adjusted2) and | |||
excluding one-time effects of deferred taxes1) | |||||
65.0 | 68.4 | +5.3% | Effects of IAS19 and IFRS162) | ||
-8.4 | -0.1 | -2.1 | |||
-0.5 | |||||
2019 | H1 2019 | H1 2020 |
- Details of one-time effects of deferred taxes, in the Annual Report 2019, pages 118 and 119
- Details of the adjustments of IAS19 and IFRS16 effects, in the Half-year Report 2020, pages 29 and 30
21.01.2021 © Galenica Group | 31 |
H1 2020
6 Investments
(in million CHF)
% of net sales
1.6%1.5%1.6%
Investments
in intangible assets
Investments
in tangible assets
- COVID-19has delayed the strategic efficiency projects in the Services business sector:
- Replacement of the ERP system in Wholesale and Prewholesale
- Duration of the project expected until 2023 with investments to be made of ~CHF 13 million
- Renovation and modernisation distribution center Lausanne-Ecublens
- Duration of the project expected until 2022 with investments to be made of ~CHF 22 million
21.01.2021 © Galenica Group | 32 |
H1 2020
6 Solid free cash flow1)
(in million CHF) | H1 2019 | H1 2020 | Change | |
Cash flow from operating activities before working | ||||
capital changes | 116.0 | 118.7 | +2.7 | |
Payment of lease liabilities | -23.4 | -24.4 | ||
Cash flow from operating activities before working | ||||
capital changes adjusted | 92.6 | 94.3 | +1.7 | |
Working capital changes | -41.2 | -53.9 | ||
Cash flow from operating activities adjusted | 51.5 | 40.4 | -11.0 | |
Cash flow from investing activities without M&A | -24.6 | -22.1 | ||
Free cash flow before M&A | 26.8 | 18.4 | -8.5 | |
Cash flow from M&A | -54.6 | -2.4 | ||
Free cash flow | -27.8 | 16.0 | +43.8 |
1) | Details of free cash flow in the Half-year Report 2020, page 31 | 33 |
21.01.2021 © Galenica Group |
H1 2020
6 Solid balance sheet
(in million CHF) | |||
Debt coverage1) | 2.1x | 2.6x | 2.4x |
Debt coverage adjusted2) | 1.5x | 2.0x | 1.9x |
Equity adjusted3)
Effect of IFRS163)
Net debt adjusted3)
IAS19 and IFRS16 effects on equity3)
- Net debt / EBITDA, Half-year Report 2020, page 33
- Net debt adjusted / EBITDA adjusted excluding effects of IAS19 und IFRS16, Half-year Report 2020, page 33
- Detail of the adjustments in the Half-year Report 2020, page 32
21.01.2021 © Galenica Group | 34 |
7 Swiss pharmaceutical market by channel 2020
Value (ex-factory): CHF 6'331.7 million CHF +176.9 million / +2.9%
Volume (packs): 183.0 million -3.3 million / -1.8%
Hospitals 1'633.9 million +3.1%
Drugstores
67.5 million
+13.1%
Physicians 1'600.4 million +3.1%
Pharmacies 3'029.8 million +2.4%
25.8%
43.3%
1.1%
25.3%
4.5%
Stationary Mail-order 2'745.3 million 284.5 million
+2.5% +1.9%
Hospitals
16.6 million -3.2%
Drugstores
6.6 million
+8.7%
Physicians
41.2 million -3.1%
Pharmacies
118.6 million
-1.6%
9.1%
3.6%
22.5%
63.6%
1.2%
Stationary Mail-order
116.4 million 2.1 million
-1.7%-1.0%
Source: APO/SD/DRO/SPI Index, Swissmedic A, B, C, D
Medicines Swissmedic lists A, B, C, D, sold from suppliers and wholesalers to hospitals, physicians and drugstores
21.01.2021 © IQVIA Switzerland - Swiss pharmaceutical market 2020
35
7 Swiss pharmaceutical market monthly development
Value (ex-factory) 2020: CHF 6'331.7 million
CHF +176.9 million / +2.9%
Source: APO/SD/DRO/SPI Index, Swissmedic A, B, C, D
Medicines Swissmedic lists A, B, C, D, sold from suppliers and wholesalers to hospitals, physicians and drugstores
21.01.2021 © IQVIA Switzerland - Swiss pharmaceutical market 2020 | 36 |
7 Consumer healthcare market YTD June 2020
3.5%
12.8%
CHF million
1'294
20.9% +3.9%
OTC | |||
+5.7% | |||
Personal | |||
care -5.2% | |||
Patient | |||
62.8% | non-medication products +0.8% | ||
care +10.4% | |||
Nutrition +6.5%
Source: Pharma Trend for pharmacies and drugstores in Switzerland, streetprices
21.01.2021 © 2020 IQVIA | 37 |
Generics growth (in volume) in the pharmacy channel 2020
Market with | |
generics potential | 5.7% |
56.2 million | 21.2% |
-0.2% | |
26.4%
19.8%
Market with generics
35.9 million26.9% -1.5%
Substitution rate 58%3)
Pharmacies Galenica Group4) 72%
Source: Market Segmentation, reimbursable products (FOPH) in the pharmacy channel Monthly calculation basis, delineated market division, data as of December 2020
- Source: Galenica Group
21.01.2021 © Galenica Group © IQVIA Switzerland - Swiss pharmaceutical market 2020
Total Packs reimbursable | 76.9 million / +1.8% | ||||
by health insurance | |||||
Patent protected products | 4.4 million / +12.6% | ||||
Products with expired patent | 20.3 million / +2.2% | ||||
protection without generics | |||||
Generics | 20.7 million / +0.4% | ||||
Pharmacies Galenica Group4) | +1.6% | ||||
Originals1) | 15.2 million / -3.9% | ||||
Others2) | 16.3 million / +6.5% | ||||
- Products with expired patent protection and at least one generic
- 1. Natural substance (e.g. vitamins, minerals, herbal ingredients)
- Vaccines
- Biosimilars
- Reference products
- Generics 20.7 million / market with generics 35.9 million = 58%
38
8 Authorities: measures and projects
Reduction in drug
prices
Category changes of
OTC products1)
Distribution margin
SBR IV SBR V
Generics prices
"Reference price
system"
- Swissmedic categories C, D
2017 2018 2019 2020
2019
SBR IV extended until the end of 2021
from 2022?
21.01.2021 © Galenica Group | 39 |
Price reduction rounds 2017 to 2019
8 Annual savings per channel at public and ex-factory price in million CHF
225
2017
2018
2019
44.6 185
64.8
116.1
41.0
52.4
91.3
122
13.4 101
30.9 12.1
24.6
78.0 64.6
118 | Hospitals | ||
Physicians | |||
19.3 | 94 | ||
Pharmacies | |||
33.2 | 17.1 | ||
25.9 | |||
65.5 | 51.4 | ||
Public price | Ex-factory price | |
Public price | Ex-factory price | |||||
Public price | Ex-factory price | ||||
Analysis FOPH price reductions 2019 - Source: iQPharma - Input FOPH
20.01.2021 © Galenica Group | 40 |
8 Reclassification of OTC's
Category A | Category B | Category C | Category D | Category E |
prescription without | prescription | pharmacy only | pharmacy & drugstore | sale in all shops |
repetition | ||||
with a prescription | with a prescription | without prescription | without prescription | without prescribtion |
~15% | ~85% | ~85% | ~15% | |
Category A | Category B | Category D | Category E |
with a prescription | with a prescription | specialist retailer | sale in all shops |
or pharmacy advice | |||
21.01.2021 © Galenica Group | 41 |
8 Swiss Pharmaceutical market - composition of drug prices
Fixed margin elements help to offset price reductions
Composition of the price of a prescription/ reimbursable drug: c.3/4 of the retail margin secured by fixed elements
~ 8 %1 LOA - Retail | ~ 8% | Per prescription / line | |
service fees | |||
Reimbursed | |||
~ | ~24% Retail | ||
~ 28% - 30% Galenica | ~ 29% | ~ 2/3 Fixed | |
total margin; thereof | + | ~1/3 Variable | |
~ | ~ 5% Wholesale | ||
~ 4% - 6% Wholesale | |||
Ex-factory |
~70% - 72% Supplier margin ~ 71%
FOPH defines price and margin - Margin covers
wholesale and retail
Ex factory price | + price-related | + surcharge per |
(in CHF) | surcharge | pack |
0.05-4.99 | 12.0% | 4.00 |
5.00-10.99 | 12.0% | 8.00 |
11.00-14.99 | 12.0% | 12.00 |
15.00-879.99 | 12.0% | 16.00 |
880.00-2.569.99 | 7.0% | 60.00 |
From 2.570.00 | - | 240.00 |
Source: | Swissmedic and company information | LOA: Service based compensation |
Note: | FOPH stands for Federal Office of Public Health; sets prices based on basket of nine countries and quality aspects | |
1 | Based on Company internal figures. |
21.01.2021 © Galenica Group | 42 |
Disclaimer
Disclaimer Galenica
Certain statements, beliefs and opinions in this presentation are forward-looking, which reflect the Company's or, as appropriate, the Company's directors' current expectations and projections about future events. By their nature, forward-looking statements involve a number of risks, uncertainties and assumptions that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. These risks, uncertainties and assumptions could adversely affect the outcome and financial effects of the plans and events described herein. A multitude of factors including, but not limited to, changes in demand, competition and technology, can cause actual events, performance or results to differ significantly from any anticipated development. 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. As a result, the Company expressly disclaims any obligation or undertaking to release any update or revisions to any forward-looking statements in this presentation as a result of any change in expectations or any change in events, conditions, assumptions or circumstances on which these forward-looking statements are based. Neither the Company nor its advisers or representatives nor any of its of their parent or subsidiary undertakings or any such person's officers or employees guarantees that the assumptions underlying such forward-looking statements are free from errors nor does either accept any responsibility for the future accuracy of the forward-looking statements contained in this presentation or the actual occurrence of the forecasted developments. You should not place undue reliance on forward-looking statements, which speak only as of the date of this presentation.
Disclaimer IQVIA
© 2021, IQVIA Solutions GmbH
All rights reserved. The information may not be duplicated, stored, processed further, nor be made accessible in whole or in part to any third party without prior express and valid written permission of IQVIA Solutions GmbH . Terms used in connection with data/figures such as "patient", "doctor", "medical practice", "prescriber", or "pharmacy" do not designate any personal data but exclusively anonymous information (according to applicable, valid data protection laws).
IQVIA utilizes highly sophisticated technologies and methods in order to ensure that all its Information Services meet the applicable data protection requirements, regardless of the way data are combined.
21.01.2021 © Galenica Group | 43 |
Galenica Group - Contact information
Investor Relations | Media |
Felix Burkhard | Christina Hertig |
CFO Galenica | Head Corporate Communication |
Tel.: +41 58 852 85 29 | Tel.: +41 58 852 85 17 |
Mail:investors@galenica.com | Mail:media@galenica.com |
21.01.2021 © Galenica Group | 44 |
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Galenica AG published this content on 21 January 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 21 January 2021 08:15:02 UTC