Recommended
Recommended
More Related Content
What's hot
What's hot (20)
Similar to Ppt inst short 2806 eng
Similar to Ppt inst short 2806 eng (20)
Recently uploaded
Recently uploaded (20)
Ppt inst short 2806 eng
- 2. Disclaimer This release contains forward-looking statements that are exclusively related to the prospects of the business, its operating and financial results, and prospects for growth. These data are merely projections and, as such, based exclusively on our management's expectations for the future of the business and its continued access to capital to fund its business plan. These forward-looking statements substantially depend on the market conditions, government regulations, competitive pressures, the performance of the Brazilian economy and the industry, among other factors, as well as the risks shown in our filed disclosure documents, and are therefore subject to change without prior notice. In addition, unaudited information herein reflects management's interpretation of information taken from its financial statements and their respective adjustments, which were prepared in accordance with market practices and for the sole purpose of a more detailed and specific analysis of our results. Therefore, these additional considerations and data must also be analyzed and interpreted independently by shareholders and market agents, who should carry out their own analysis and draw their own conclusions from the information reported herein. No data or interpretative analysis provided by our management should be treated as a guarantee of future performance or results and are merely illustrative of our directors' vision of our results. Our management is not responsible for compliance or accuracy of the data from this report, which must be considered as for informational purposes only, and should not override the analysis of our audited consolidated financial statements for purposes of a decision to invest in our stock, or for any other purpose. 2
- 3. 3 Brazilian Market Overview Hypera Pharma at a Glance Strategy and Opportunities Financials
- 4. 4 Brazilian Market Overview Hypera Pharma at a Glance Strategy and Opportunities Financials
- 5. Brazil 22.4 bn 44% Mexico 10.0 bn 19% Argentina 5.0 bn 13% Colombia 4.7 bn 9% Chile 2.8 bn 5% Other 6.5 bn 13% -3.6% 1.9% 3.7% 3.9% 5.1% The largest market in Latam, with the highest real growth Source: IQVIA World Review Conference (Jun/2019); LATAM Market LTM 1Q195 Latin American Market (USD) Real Growth 2018-2019
- 6. Fast-growing market, above Emerging Markets average Source: IQVIA Market Prognosis, Sep/2018; IQVIA Institute, Dec/20186 5% 5% 6% 6% 7% 7% 8% 10% 11% RoW UK Global China USA EM Brazil Russia India Forecasted 2019-23 CAGR
- 7. Local players have been gaining market share Source: IMS Health 2019 (Retail market); LTM Mai/20197 Multinationals Value (R$) Volume (Units) 71% 72% 74% 75% 75% 29% 28% 26% 25% 25% 2015 2016 2017 2018 2019 LTM 62% 63% 64% 64% 65% 38% 37% 36% 36% 35% 2015 2016 2017 2018 2019 LTM
- 8. Retail market with relevant growth perspectives Source: IQVIA World Review Conference (Jun/2019); LTM Apr/20198 Retail 64.3 bn 67% Non Retail 31.2 bn 33% Retail Growth CAGR 2019-2023 8% Non-Retail Growth CAGR 2019-2023 7% Brazilian Market (BRL)
- 9. RX1 41.9 bn 66% Generics 9.1 bn 14% OTC2 12.5 bn 20% In BRL RX1 1.7 bn 39% Generics 1.5 bn 34% OTC2 1.1 bn 26% In #Units Brazilian Retail Pharma Market Note: 1RX, OTX, Dermocosmetics and Branded Generics; ²OTC and Sweeteners Source: IQVIA World Review Conference (Jun/2019); LTM Apr/2019, Market Size PPP and Units 9
- 10. • Stability in the mature products sales • Growth from recent products launched 16.2 21.6 -0.2 5.6 2014 MATURE LAUNCHES 2018 Sell Out PPP Real¹; R$ bn Main Brazilian pharmaceutical companies growth Note: ¹Deflated; ²LTM (Sep/18); ³Mature: Products launched before the last 5 years; 4Launches: Products launched in the last 5 years Source: IMS Health - PMB Retail (Sep/18) 10 2 3 4 2 CAGR -0.3% 7.8% 7.5%
- 11. Fast ageing of population driving sustainable growth Source: IBGE (2010), revised in 201811 Population 60+ (MM people) 14 21 30 42 54 66 73 8% 11% 14% 19% 24% 28% 32% 0% 5% 10% 15% 20% 25% 30% 35% 0 10 20 30 40 50 60 70 80 90 2000 2010 2020 2030 2040 2050 2060 CAGR 2.8% 1mm per year
- 12. 230.7 222.8 150.7 112.1 82.2 67.4 52.2 70+ 60-69 50-59 40-49 30-39 20-29 10-19 Population ageing increases the “out of pocket” drug expenditure Source: IBGE (2010); Values updated by inflation (IPCA)12 4.4x Prescription Drugs Expenditure (R$ per month / family) Age
- 13. 13 Brazilian Market Overview Hypera Pharma at a Glance Strategy and Opportunities Financials
- 14. Our history 14 2007 - 2011 2012 - 2016 2017 - 2021 Industry Consolidation Business Restructuring Pharma Focus Acquisitions of brands and companies at attractive valuations: Development of the go- to-market platform: • Largest and most productive Brazilian manufacturing site • Highest production volume • Lowest cost producer • Most productive sales force at physicians • Lowest cost media buying • Largest field force at store level (>70% direct access) • Focus on the retail pharma market • Higher resilience • Underpenetrated markets • Untapped demand • Diversified portfolio • Higher Returns (ROIC/ROE) Focus on most attractive pharma sector: ~4x Total Return* in 10 years since IPO 123% 376% IBOV HYPE3 * Total return considers dividends
- 15. Consumer Health 36% RX/OTX2 43% Generics 12% 9% 2018 Portfolio: Strong relevance of branded products Note: 1OTC products and sweeteners; ²Branded Prescription Products and Branded Generics Source: Company financials 15 Net Revenues: R$3.7bn Gross Margin: 71.6% Dermo Branded Products 88% Consumer Health1 36%
- 16. 2018 Revenue breakdown per brand 16 7.1% 4.7% 4.3% 4.1% 3.6% 3.3% 3.2% 2.7% 2.6% 2.4% 62.0% RX RX Dermo RX Consumer Health RX Consumer Health Consumer Health Top 10 Brands: ~38% of sales Consumer Health RX Source: Company financials
- 17. 2018 Revenue Breakdown by area Pain & Fever 22% 23% Dermo 17% Resp3 10% 9% 4% GI5 2% Other 3% Orthopedics GP2 & Pediatrics RX1 and Dermo Women/Men’s Health 4% CNS4 2% Endocrinology 4% Cardiology Note: 1Branded Prescription and Branded Generics; ²General Practice; ³Respiratory System; 4Central Nervous System; 5Gastrointestinal Source: Company financials 17
- 18. 2018 Revenue Breakdown by area Source: Company financials18 Vitamins General Practice Nutritionals 31% 23% 18% 12% 12% 4% Other Pain & Fever Flu & ColdGI Orthopedics Nutritionals & Nutraceuticals Consumer Health
- 19. 3 Business Units with growth, profitability and innovation targets 19 Hypera Pharma is internally divided into 3 Business Units according to demand generation (POS, Doctors and Media) Consumer/MediaDoctorsTrade/POS
- 20. 2018 Revenue and Market Position per Business Unit Note: 1OTC products and sweeteners; ²Ex-patents products promoted to physicians; ³Pure and Branded Generics promoted in the POS Source: Company financials; IMS Health Dec/17 20 Branded Prescription² 40% 30% 30% #1 Hypera Aché NC Farma #2 Sanofi Eurofarma Hypera #3 GSK Sanofi Cimed #4 Takeda Novartis Sanofi #5 Pfizer Hypera Eurofarma Ranking 2018 Revenue Breakdown Branded Prescription Generics and Similars Consumer Health Consumer Health1 Generics and Similars³
- 21. R$100mi+ Power Brands 21 49 years 57 years 10 years 18 years 24 years 15 years 57 years 104 years 34 years 19 years 18 years 11 Power Brands (Brand history)
- 22. How we sell: Diversified distribution 22 Transfer Order 30% • Continental country (27 states; ~200mm people) • 28 larger chains • ~230 distributors Fragmented distribution 36% Direct Channel Indirect Channel 34% DistributorRetailer Warehouse Distributor invoices&delivers Hypera takestheorders 75,300 Stores Hypera reaches 100% of POS in Brazil
- 23. How we manufacture: Large scale facilities in Anápolis 23 ~320,000 m2 land ~120,000 m2 constructed area ~3,700 employees Distribution Center Solids/ Raw Materials Quality Control Aerosol Efervecent Dermo Liquids Semisolids Injectables R&D PenicilinSolids Semisolids Liquids R&D Production Capacity per year: + 17 billion units of solids + 40 million units of injectable medicines + 330 million units of liquids, creams, oils and lotions Anápolis
- 24. How we innovate: Unique innovation structure in Brazil 25 • Maintenance of existing structure • Focus on improving and adapting the portfolio • Laboratories for Pharma R&D - Anápolis • Launched in 2017 • Chemists, pharmacists, and Ph.D professionals • Laboratories for Pharma, Dermo and Nutraceuticals • State-of-the-art equipment R&D - Hynova Consumer Insights Center • Lots in semi-industrial size Pilot plant • Evaluation of the performance of products and packaging based on consumer acceptance and preference Capacity 4x higher
- 25. Innovation in the pharmaceutical industry 26 Similar & Generics Specific and phytotherapeutics New associations New technologies New pharmaceutical forms New drugs Biotechnology White spaces Incremental Radical Low hanging fruits Moderate risk and development process Global competition High investment and long process
- 26. 27 How we innovate: R&D KPIs R&D Investments in 2018 4.9% of Revenues Largest Innovation Hub in Latin America 6laboratories Capacity of more than 20 pharmaceutical forms 300 people 150simultaneous Projects ~R$70 million in infrastructure Medicines Dermocosmetics And food 60 35 in R&D 29Patents Submissions pear year Note: Considers total R&D investments of the year (Expenses and Capitalization), excluding the “Lei do Bem” incentives Source: Company financials
- 27. How we innovate: Increasing the commitment to R&D Note: Considers total R&D investments of the year (Expenses and Capitalization), excluding the “Lei do Bem” incentives Source: Company financials 28 1.7% 2.8% 4.0% 4.9% 2015 2016 2017 2018 R&D / Net Revenues +3.2pp
- 28. How we innovate: Increasing importance of innovation Source: Company Financials (% of Net Revenues from products launched over the past 5 years)29 16% 19% 23% 24% 28% 30% 2013 2014 2015 2016 2017 2018 Innovation Index (% Net Revenue) Target: 35%
- 29. Senior Management Organizational Chart 30 Branded Prescription CEO Strategy & Planning CCO & Legal Consumer Health Generics & Similars CFO HR Fiscal R&D Operations VP Sales & Mkt
- 30. 31 Brazilian Market Overview Hypera Pharma at a Glance Strategy and Opportunities Financials
- 31. Strategic Plan Key objectives: 32 • Grow 2-3p.p. above the market in the medium term, boosted by innovation and excellence in execution • Maintain profitability • Finance organic growth with operating cash flow • Maintain cash distribution to shareholders • Maintain net debt close to zero
- 32. Performance drivers 33 Execution Innovation • Commercial productivity increase • Launches execution 2018 2019 2020 2021+ Growth acceleration from 2020 on • Better return of marketing investments • Better operating efficiency • Working capital efficiency • Pipeline increase • Strengthening partnerships
- 33. 34 Pipeline Evolution # of Projects #Pipeline dec-2018#Products launched New projects#Pipeline dec-2017 278 70 130 338
- 34. 35 Pipeline breakdown per Business Unit % of Gross Revenue in year 5 Consumer Health 19% Branded Prescription 60% Similars & Generics 21% 338 projects
- 35. Pipeline by type of innovation % of Gross Revenue in year 5 36 53% related to incremental innovation and 47% portfolio expansion Note: Weighted 5-Year Gross Revenue - Launch: 90%, Anvisa: 80% (R&D) and 85% (BD), Development: 65%, Contract: 75%, Waiting Queue and Negotiation 50% White Spaces 38% New Combination 26% New Technologies 28% Patented 9%
- 36. Pipeline by Therapeutic area 37 Pain/Analgesics 16% Allergy/Resp/ Otorrino 15% Dermo 9% GP 21% GI 9% CNS 16% Cardio/Endocrino 13% 60% of the pipeline for treatment of chronic diseases Pipeline – Branded Prescription % of Gross Revenue in 5th year
- 37. Products launched in 2018 # of products 38 Brand Extensions New Categories White Spaces Low Complexity High Complexity Lançamentos 2018 70
- 38. Strategic Partnerships and Collaboration 39 20+ countries 50+ New partners 130+ New Products
- 39. Growth Strategy: Launching extensions of leading brands Source: IMS Health – PMB Dec/1840 Sell-out (R$ million) 150 164 159 191 190 8 23 44 42 2014 2015 2016 2017 2018 Benegrip Benegrip Multi 35 36 37 37 35 18 32 40 45 2014 2015 2016 2017 2018 Doril Doril Enxaqueca 79 80 84 88 88 17 17 27 19 12 21 40 2014 2015 2016 2017 2018 Liquid Pills Gel Caps CAGR 11.5% 183 172 235 111 97 128 9669 54 77 15035 CAGR 23.0% CAGR 9.9% 140 232 80
- 40. Growth Strategy: Improving POS distribution/execution Source: Dunhhumby Anti-flu + Decongestant - YTD Sep/16 vs. Sep/1741 Example: OTC Category Management
- 41. Growth Strategy: Launching of innovative treatments, such as Addera D3 42 Developing new treatments Sell-out (MM R$) 36 29 29 30 30 36 122 169 174 179 26 80 74 2014 2015 2016 2017 2018 Drops Pills Gel Caps Gummies CAGR 41.0% 224 151 283 72 New pharmaceutical forms/packaging: – Family 10,000 UI – Economic presentations 7,000UI 10 Pills – 10 weeks treatment 30 Pills – 30 weeks treatment • Strong efforts with Physician and Pharmacies • Exclusive gel caps 284 Source: IQVIA
- 42. 43 Brazilian Market Overview Hypera Pharma at a Glance Strategy and Opportunities Financials
- 43. Financial Highlights 44 2.8 3.0 3.2 3.5 3.7 2014 2015 2016 2017 2018 912 950 1,092 1,233 1,319 2014 2015 2016 2017 2018 Net Revenues R$ bn EBITDA R$ mm Net Income R$ mm 338 346 647 1,112 1,135 2014 2015 2016 2017 2018 CAGR 7.7% CAGR 9.6% CAGR 35.4% Source: Company Financials
- 44. 2018 Results (R$ million) Note: ¹2018 vs. 2017; ²Continuing Operations; ³in R$ per share Source: Company Financials 45 GROSS PROFIT R$2,665.3 +3.6%1| R$1,318.7 +7.0%1 EBITDA2 | NET INCOME2 R$1,135.4 +2.2%1| EPS2,3 R$1.80 +1.9%1| NET REVENUES R$3,724.3 +6.4%1| GROSS MARGIN 71.6% -190bps1| EBITDA MARGIN2 35.4% +20bps1| NET INCOME2 30.5% -130bps1|
- 45. Cash Flow and Debt Note: Financing Cash Flow net of interest from financial investments Source: Company Financials 46 1,522 1,647 1,065 1,067 (128) (91) 848 (88) (633) (582) Gross Cash 2017 Operating Cash Flow CAPEX Intangibles Free Cash Flow 2018 Financing Cash Flow Dividends Gross Cash 2018 Gross Debt Net Cash 2018 +14.4% vs 2017 +17.6% vs 2017 0,8x EBITDA
- 46. R$0.50 R$0.65 R$0.92 R$0.97 2016 2017 2018 2019 Dividends/IOC Note: It considers the dividends paid in the respective periods; Dividend Yield calculated based on the price of June 18, 201947 Dividend Yield: 1.9% 2.4% CAGR 25% 2.6% R$ per share 3.4%
- 47. 7.2% 14.0% 2016 2018 15.4% 18.9% 2016 2018 ROE – Return on Equity ROIC – Return on Invested Capital ROE & ROIC Note: ROE calculation is a result of the division of Continuing Operations Consolidated Net Income by the Consolidated Shareholders' Equity quarterly average of the year. ROIC calculation is a result of the division of Continuing Operations Consolidated NOPAT (Cash Taxes) by the quarterly invested capital average of the year, excluding assets and liabilities for sale. 48
- 48. 20% 15% 65% Founder Free Float Maiorem Ownership and listings Note: ¹2018 ²May/2019 ³June/2019 Source: B3; Company data 49 Listings • Sao Paulo Stock Exchange: - HYPE3 - BRHYPEACNOR0 • Indexes with Hypera: Ownership structure Controlling Group 35% • Trade volume¹: 2.0 MM shares/day • ADR (HYPMY)²: 8.7 MM shares outstanding • IBOVESPA Index Ranking³: 36/65 • Market Cap³: R$18.2bn (USD4.7bn)