branded products strategy - stada · branded products strategy helmut kraft, ... 1 novartis 1,541...
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Branded Products Strategy
Helmut Kraft, CFO
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Capital Markets Day September 16, 2014 2
Changing the face of STADA
26% 27% 28% 33%
36% 39%
32% 36% 37%
46% 51% 51%
2009 2010 2011 2012 2013 1-6/2014
Share of Branded Products in adjusted operating profit1)
Share of Branded Products in sales1)
1) of the two core segments Generics and Branded Products.
Branded Products contribute 51% to adjusted operating profit1)
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Capital Markets Day September 16, 2014 3
Buy-and-build: Successful acquisitions
Year Acquisitions Purchase price Region Indication
2009 Eunova € 12 million Germany Dietary supplement
2011 Cetraben € 35 million United Kingdom Derma product range
for the treatment of
skin eczema and dry
skin
2011/2012 Grünenthal Branded
Products Portfolio
€ 312 million Central Europe,
Eastern Europe and
Middle East
Pain medication such
as Tramal®, Zaldiar®,
Transtec®, Palexia®
2012 Tranexam®, Vuka Vuka®,
Vuka Drive®, Ingavirin®,
Safocid®
€ 10 million Russia, Eastern
Europe/CIS
Various Indications
2012 Branded products portfolio € 15 million Ukraine Womens‘ health
2013 Thornton & Ross Ltd. € 226 million United Kingdom Various OTC products
2013 Aqualor® € 131 million Russia, Eastern
Europe/CIS
Sprays and drops for
the treatment of
sinusitis
2014 Flexitol® € 13 million UK, Ireland Hand and foot care
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Our platform
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Capital Markets Day September 16, 2014 5
Branded Products Growth
Sales
(in € million)
Adj. EBITDA
(in € million)
333.6 381.6
1-6/2013 1-6/2014
+14%
110.5 120.1
1-6/2013 1-6/2014
+9%
Regional development
• Germany with higher profitability
• CIS/Eastern Europe with sales growth in
local currencies despite CIS crisis (+11.2%)
• Thornton & Ross highly dynamic
• ApoGo® on the growth path
1-6/2014 Key countries
20.9%
37.6%
38.3%
3.2% Germany € 79.8 million +9% (+9%)
Central Europe € 143.3 million +46% (+6%)
CIS/Eastern Europe € 146.2 million
-5% (+2%)
Asia & Pacific € 12.3 million
+40% (-9%)
107.9
68.4
52.5
15.4 10.9 10.8 8.3 6.8
Russia Germany UK Italy Vietnam Ukraine Serbia Spain
Sales 1-6/2014 in EUR
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Capital Markets Day September 16, 2014 6
Climbing the performance ladder1)
1) Source: IMS Health MIDAS – EU28+RU+CH+NO+RS – Panel: Retail + Hospital – MAT/06/2014
OTC corporation Sales in €m
1 Novartis 1,338
2 Bayer 1,160
3 Sanofi 1,074
4 Johnson & Johnson 997
5 GlaxoSmithKline 645
6 Teva 546
7 Reckitt Benckiser 517
8 Boehringer Ingelheim 402
9 Bristol-Myers Squibb 387
10 Roche 376
11 Abbott 371
12 Pierre Fabre 344
13 STADA 325
14 Menarini 302
Total Market 19,808
OTC corporation Sales in €m
1 Novartis 1,541
2 Bayer 1,179
3 Sanofi 1,163
4 Johnson & Johnson 962
5 Teva 615
6 Reckitt Benckiser 531
7 Boehringer Ingelheim 454
8 GlaxoSmithKline 450
9 STADA 386
10 Abbott 375
11 Roche 360
12 Menarini 329
13 Braun-Melsungen 310
14 Bristol-Myers Squibb 309
Total Market 21,072
6M/2010 6M/2014
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Capital Markets Day September 16, 2014 7
Market leading brands 1-6/2014
No. Branded Product Growth in % Sales in € million Indication
1. Ladival® (OTC) +57 24.1 Sun Protection
2. ApoGo® (RX) +15 23.6 Parkinson
3. Grippostad® (OTC) -23 14.7 Cough and cold
4. Aqualor®1) (OTC) 13.5 Rhinitis
5. Snup® (OTC) +9 13.2 Rhinitis
6. Vitaprost® (RX) +3 10.3 Prostate hyperplasia
7. Hirudoid® (OTC) +10 9.8 Inflammation of the veins
8. Chondroxide® (OTC) -9 9.7 Muscular and joint pain
9. Tramal® (RX) +81 9.0 Chronic pain
10. Care®2) (OTC) 8.7 Umbrella brand
All Branded Products +21 290.0
1) Sales of Aqualor®: initial consolidation as from March 1, 2014. 2) Umbrella brand for various indications such as skin care, cold medicine, gastrointestinal disease, pain medication, among others.
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Capital Markets Day September 16, 2014 8
Positive impact on Group sales and margins
• Expansion of self-pay portfolio
• Shift to high margin product/country mix
• Economies of scale effects (volume gains)
1) Adjusted for one-time special effects (2009-2014) and non-operational effects from currency influences (2009/2010)
Adjusted1) EBITDA
margin in %
Sales in € million 18.3
19.4 19.7 20.0
20.6 20.8
16
17
18
19
20
21
22
23
0
500
1,000
1,500
2,000
2,500
2009 2010 2011 2012 2013 1-6/2014
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Capital Markets Day September 16, 2014 9
Operating excellence
1) Adj. operating profit H1/2014 2) Adj. op. profit H1/2014 (Health, Hygiene, Home & Portfolio) 3) EBIT H1/2014 4) Op. Income, FY 2014 (August 14) 5) EBIT H1/2014 6) Core op. profit H1/2014 7) Core op. income H1/2014 Source: Financial reports, CH = Consumer Health Care
25% 23%
20%
17% 17%
14%
6%
0
5
10
15
20
25
30
STADA1) Reckitt2) Merck CH3) Perrigo4) Bayer CH5) GSK CH6) Novartis CH7)
Operating profit margins in consumer health 1-6/2014
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Our approach
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Capital Markets Day September 16, 2014 11
STADA today
Positioning
• Organic and acquired growth
• Complex portfolio
• As yet predominantly local heroes
• Different customer groups
Strengths
• Close to market and customer
• High personal responsibility
• Quick and flexible decision making
• Highly motivated and efficient
Risks
• Desynchronized marketing activities
• Low synergy potential
• Higher costs and organisational effort
Decentralised
approach
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Capital Markets Day September 16, 2014 12
Measures
• Combination of
consistent, centralized
brand guidance with close
to market, decentralized
navigation
• Centralised branded
products portfolio
management
• Introduce appropriate guidelines and structures
• Select and travel a limited number of strategic
brands based on their growth potential („country-
by-country view“), e.g. Ladival, Snup
• Maintain leading local heroes
• Strengthen innovation potential, category
management
• Selectively add expertise to regional set-up
Blend of decentralised &
centralised approach
Acquisition of Thornton & Ross as a catalyst to optimize corporate structure and performance
STADA tomorrow
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Capital Markets Day September 16, 2014 13
Expertise across all channels
Wholesale
Pharmacy/Hospital
STADA
Retail chains (UK) Pharmacy/Hospital
Customer/Patient
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Capital Markets Day September 16, 2014 14
Our approach Where we want to go
• Consistent brand
guidance and close to
market navigation
• Consistent portfolio
development
• Realizing opportunities
on organic side is first
priority
• Best in class innovation
and customer service
• Optimize operational
leverage
• Disciplined and smart
bolt-on acquisitions
• Create true beacon brands
for aspirational consumers
• Trigger high level of
dynamism to become a
leader in brand
management
• International footprint and
mind-set
• Passing 1 bn € revenue
level in Branded Products
• Diversify Branded
Products / generic mix
from ~ 50% to ~ 2/3 Group
operating profit
contribution
Building brand equity
Large and growing
markets:
• Higher life
expectancy, aging
population
• Greater health
awareness
promotes
increasing out-of-
pocket spending
• Cost pressure in
health care forces
personal
responsibility =
market of self-
paying patients
OTC-Market