Capital Markets Day Capital Markets Day September 16 th ,2014 www.stada.com Page 1
T&R within the UK Market September 2014 Dieno George CEO, T&R Capital Markets Day September 16 th ,2014 www.stada.com Page 2
Capital Markets Day September 16 th ,2014 www.stada.com Page 3
Thornton and Ross overview • Founded in 1922 • Operates a well invested, fully integrated, highly skilled, cost- • Leading UK OTC branded effective manufacturing site business with increasing branded specialising in pharmaceutical Rx NHS presence, particularly creams, gels, liquids and dermatology suppositories • Balanced portfolio of market • Growing international presence leading brands, growing market through licensees, distributors and share through continued Stada affiliates innovation and market support • Strong and experienced • Excellent customer relationships management team capable of throughout the UK pharmacy, delivering exceptional growth grocery and other retail channels as well as NHS including GPs • A demonstrable track record of and CCGs delivering year-on-year growth in sales, margins and EBITDA Capital Markets Day September 16 th ,2014 www.stada.com Page 4
Mission statement As part of Stada AG, we will aim to: • Utilise T&R’s strategic and • Continue to invest in our facilities operational expertise to create a and people Centre of Excellence for OTC, • Ensure we remain competitive and Consumer Medicines and in control of our key processes Dermatology and activities so that we comply • To strengthen T&R in its core with all regulatory and legal markets by continuing to develop requirements and commercialise new brand • By developing the business as extensions and launch new brands indicated, it is anticipated that T&R with innovative appeal to consumers can continue to profitably grow and healthcare professionals sales ahead of key competitors • Acquire strongly branded OTC and so increase market share in products, Rx dermatologicals, and core market segments other niche Rx brands including • Operating profit and EBITDA medical devices for sale in the UK progression on an annual basis and internationally through Stada will be a key measure of success affiliates Capital Markets Day September 16 th ,2014 www.stada.com Page 5
T&R Total Sales £114m £80m £72m £66m £60m £58m £52m £45m £42m £39m £33m £33m FY05A FY06A FY07A FY08A FY09A FY10A FY11A FY12A FY13A CY13A CY14E CY14E FY = Previous Financial Year to 31 March CY = Calendar Year Capital Markets Day September 16 th ,2014 www.stada.com Page 6
T&R Sales 2014 Sales by route Sales by therapeutic area International 13% Cough/Cold Other 18% 26% OTC 47% Derma 22% Generic's Rx 12% 40% Household Topical 9% Analgesic 13% Capital Markets Day September 16 th ,2014 www.stada.com Page 7
T&R Sales 2014 Covonia Other 14% 16% 9 major brands Care Generic's 13% 12% 72% Cerumol 2% Gal Hedrin 3% 10% of sales Radian B 5% Movelat Cetraben 6% Zoflora 10% 9% Capital Markets Day September 16 th ,2014 www.stada.com Page 8
UK healthcare spectrum PROFESSIONAL CONSUMER GENERICS A&P Sales and detailing costs Advertising costs Product Biosimilar FMCG inc disinfectants Rx brands and generics OTC brands and generics Medical devices Place & person Hospital CCG Health Centre Pharmacy Grocery Convenience/Discount Consultant Medicines GP Nurse Pharmacist Retail Buyer Specialist Managem’t Disp GP Staff Capital Markets Day September 16 th ,2014 www.stada.com Page 9
UK Healthcare 20 th century: Killer disease Challenge was to address killer The burden on diseases caused by poor sanitation the NHS is and communicable infections arguably unsustainable unless there is a fundamental 21 st Century: behaviour Poor lifestyle choices change from within the NHS Facing time-bomb of poor lifestyle choices with significant health consequences. and everyone Ageing society: considerable growth in using the over 65s. NHS. Chronic disease explosion – eczema, arthritis, diabetes, coronary heart disease and dementia. Capital Markets Day September 16 th ,2014 www.stada.com Page 10
UK Healthcare Environment PPRS Lifestyle Self-care Ageing Severe population cost Widening Consumer OTC NHS distribution information Free NICE Rx Deregulation from GP P > GSL > Medical Device consultations Capital Markets Day September 16 th ,2014 www.stada.com Page 11
OTC vs. Rx Performance GPs ARE STILL PRESCRIBING MORE… Annual unit sales & growth rate 913m packs 873m packs POM packs dispensed on +4.6% prescription 1 -3.6% OTC packs dispensed on 196m packs 189m packs prescription 1 OTC packs sold OTC 2 -0.9% 1. IMS Xponent 2. IRI Infoscan 951m packs 942m packs 2012 2013 Capital Markets Day September 16 th ,2014 www.stada.com Page 12
Minor ailments • Minor ailments take up 20% of a GP’s workload • Costs NHS £2bn per annum • Bulk of costs due to – Consultation time – Rx cost • 90% of minor ailment consultations receive Rx • 75% of GP’s time on minor ailments spent on just 10 indications • Coughs • Headaches • Indigestion Examples of minor ailments: • Colds • Eczema Capital Markets Day September 16 th ,2014 www.stada.com Page 13
Minor ailments Minor ailment Number of Average Total cost consultations Rx cost Back pain 8.4m £8.23 £64.0m Heartburn and indigestion 6.8m £8.07 £54.0m Dermatitis 6.8m £5.30 £35.3m Nasal congestion 5.3m £3.36 £17.4m Constipation 4.3m £5.31 £22.2m Migraine 2.7m £19.58 £51.9m Cough 2.6m £4.18 £9.0m Acne 2.4m £10.96 £25.7m Sprains and strains 2.2m £6.86 £12.1m Headache 1.8m £8.03 £11.7m Capital Markets Day September 16 th ,2014 www.stada.com Page 14
UK OTC Market Other 18% Pain Relief 22% £2.4bn Vitamins & Minerals MARKET SIZE (2013) 14% Source: IRI Infoscan Skin 17% GI 11% Cough/Cold /Sore Throat 18% Capital Markets Day September 16 th ,2014 www.stada.com Page 15
Top 12 OTC companies in pharmacy SALES AT RSP McNeil £177,4m Reckitt £131,8m GSK £130,4m Thornton+Ross £58.9m Omega £56,0m Bayer £46,2m Sanofi £21,0m P+G H/care £14,5m Forest £14,2m Dendron £13,9m Alliance £12,3m Source: IMS NATOT data – Pro Bono Bio £9,1m MAT to June 2014 + Care sales at rsp value Capital Markets Day September 16 th ,2014 www.stada.com Page 16
UK OTC market £2,38bn £2,33bn £2,30bn £2,28bn £2,28bn £2,27bn £2,27bn £2,17bn +2.2% £2,13bn +2.9% £2,07bn +0.5% -0.3% -0.6% +5.0% +0.3% +1.7% +3.4% +0.7% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 All % change numbers are like-for-like comparisons. Source: IRI Infoscan. STABLE MARKET Capital Markets Day September 16 th ,2014 www.stada.com Page 17
Sales & Marketing Review September 2014 Barry Draude UK Sales & Marketing Director, T&R Capital Markets Day September 16 th ,2014 www.stada.com Page 18
Routes to UK market Significant coverage of wholesale UK sales by channel and retail markets and the NHS through dedicated teams. Pharmacy 9% Discounters Pharmacy Pharmacy Grocery 12% Wholesale Retail Retail 28 strong experienced team focused on OTC commercial Pharmacy wholesalers Grocery 56% 16% CCG GP Nurse Hospital Grocery 48 establish team focused on wholesalers Others 5% driving NHS Prescriptions 2% Capital Markets Day September 16 th ,2014 www.stada.com Page 19
UK Commercial Deliver double digit growth by: • Continually being better than our competition • Focus on key activities that make a difference • Help our customers sell more products through educational training and promotions. • Communicate and educate consumers in the new media landscape. • Significant educational & detailing programs to Healthcare professionals (GP’s, CCG’s) driving our Rx Brands. • Innovate with products consumers wish to buy and the NHS wish to prescribe T&R OTC Market OTC Market vs. T&R growth +24% +18% +17% +15% +14% +13% +9% +6% +5% +3% +2% +2% +1% +0,3% -0,3% -1% 2006 2007 2008 2009 2010 2011 2012 2013 Capital Markets Day September 16 th ,2014 www.stada.com Page 20
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