PROTEK GROUP A LEADER IN RUSSIAN PHARMACEUTICAL MARKET Moscow 2010 www.protek-group.ru
IMPORTANT NOTICE (Disclaimer) Matters discussed in this presentation may constitute forward-looking statements. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts. The words “believe”, “expect”, “anticipate”, “intends”, “plan”, “estimate”, “aim”, “forecast”, “project”, “will”, “may”, “might”, “should”, “could” and similar expressions (or their negative) identify certain of these forward-looking statements. Forward-looking statements include statements regarding: strategies, outlook and growth prospects; future plans and potential for future growth; liquidity, capital resources and capital expenditures; growth in demand for products; economic outlook and industry trends; developments of markets; the impact of regulatory initiatives; and the strength of competitors. The forward-looking statements in this presentation are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management’s examination of historical operating trends, data contained in the Company’s records and other data available from third parties. These assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond the Company’s control and it may not achieve or accomplish these expectations, beliefs or projections. In addition, important factors that,inthe view of the Company, could cause actual results to differ materially from those discussed in the forward-looking statements include the achievement of the anticipated levels of profitability, growth, cost and its recent acquisitions, the timely development of new projects, the impact of competitive pricing, the ability to obtain necessary regulatory approvals, and the impact of general business and global economic conditions. Past performance should not be taken as an indication or guarantee of future results, and no representation or warranty, express or implied, is made regarding future performance. www.protek-group.ru 2
ABOUT PROTEK PROTEK Group is one of the largest vertically integrated holding operating on the Russian pharmaceutical market. The Group has a diversified business structure embracing each of the principal industry sectors, including the production of medications, wholesale distribution of pharmaceutical and beauty products, and retail sales. In 2009, the Group’s consolidated revenue amounted to RUR 91,581 mln*, showing growth YoY by 18.1 %. The ability to provide a wide range of services, from joint production to retail sales of health and beauty products, constitutes the main competitive advantage of the Protek Group. Source: audited IFRS statements www.protek-group.ru
ORGANIZATIONAL STRUCTURE Parent company – OAO PROTEK Distribution Production Retail Sales CV PROTEK Sotex Rigla Transservice Protein Contour pharmacy chains Spargo Technologies Promofarm Protek-SVM www.protek-group.ru
KEY FINANCIALS BY SEGMENTS Distribution Retail Sales Parameters Production 2008 revenues, 69,256 10,311 2,938 RUR, million* 2009 revenues, 83,121 11,256 3,484 RUR, million* Revenue growth, 20.1 % 9.2% 18.6 % 2009 / 2008 * Source: audited IFRS statements www.protek-group.ru
HISTORY OF THE GROUP Company is established. Commissioning of one of Europe’s largest pharmaceutical warehouse Start of wholesale distribution business Establishment of an integrated management structure Launch of specialist Launch of retail business pharmaceutical distribution operations Acquisition of First distribution agreement Protein Contour, an with Gedeon Richter R&D platform Start of production of own branded Construction of GMP medications compliant plant, operated by Sotex Launch of pharmaceutical production Active M&A growth in retail Acquisition of O 3 chain Distribution Retail Production Group Group 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 www.protek-group.ru
Results of the IPO-2010 Offer stock 114,285,714 (20.2%) Offered price $ 3.50 Capitalisation $ 1.85 bln. Raised funds, total $ 400,000,000.- Offer structure split 50%/50% Underwriters: Renaissance Capital and UBS Investment Bank RTS, MICEX Exchanges: Traded since: April 27, 2010 The Group IPO proceeds Distribution, Group 20 % Retail 50 % 30 % Production Source: Company data www.protek-group.ru
STRONG MARKET POSITION ACROSS ALL BUSINESS SEGMENTS Distribution, 2009 Retail Sales, 2009 Production, 2009 #2 player in Russia #4 player in Russia #1 player in Russia Pharmstandard 36.6 Other CV Protek 4.1% 18.0% Stada 22.2% Rigla (Protek) 20.5% Valenta Pharmakor 2.8% Alliance Sotex (Protek) Implozia Healthcare 2.2% Veropharm Other Other 9.0% Raduga 6.0% 50.4% 49.6% 18.5% 81.5% Biotek 1.8% Stolichnye apteki 3.7% Polpharma 1.7% SIA Intl 3.1% Vita Rosta 21.9% 3.1% 1.5% Farm-centre 13.2% Doktor Stoletov 3.0% 1.2% Microgen 3.0% Katren Stary Lekar 1.1% 2.8% 15.7% Krasnogorsklek 1.1% 2.4% Pervaya Pomosch arstva 1.0% 2.0% Top 5 market share: 82.0% Top 5 market share: 12.6% Top 5 market share: 36.4% Source: DSM annual market report, 2009, by sales value Source: DSM annual market report, 2009, by sales value Source: Pharmexpert preliminary data for 2009, by sales volume Note: Rigla market share represents the total market share of the Protek Retail segment www.protek-group.ru 8
WIDE NATIONAL COVERAGE PRESENCE IN ALL 83 REGIONS OF RUSSIA DISTRIBUTION RETAIL PRODUCTION � GMP compliant facility � Aggregate warehouse � 577 pharmacies in 25 with annual production area ~ ca.168,000 sq. regions of Russia and capacity of up to 100 mln m (~70% is owned) in Ukraine 1 ampoules/ 6 mln syringes/ � Presence in all 83 35 mln packs 2 a year regions of Russia St. Petersburg MOSCOW Warehouses Rep. offices Production facilities Protek pharmacies present Source: Source: Company data, at the end of 2009, с ities with turnover above US$1mln are reflected as of 31 December 2009. 1 Incl. 56 Zhivika pharmacies, owned by LLC AS-Buro Plus, in which the Company has a 25% stake and has an option to acquire additional 26% www.protek-group.ru 9 2 Certified for GMP compliance by Nycomed (in relation to the licensed production of Actovegin)
WHOLESALE DISTRIBUTION KEY INDICATORS Revenue breakdown by principal customer groups Total revenue dynamics % 0 22% 22% 21% 21% . 0 2 28% 27% % 3 . 83,121 9 1 69,256 58,041 72% 72% 72% 72% 69% 67% 6% 7% 5% 6% 7% 4% 2007 2007 2008 2008 2009 2009 Commercial Commercial State / Budget (incl. DLO) (Protek retail) 2007 2008 2009 Total revenue, RUR mln Excellence in value added services * Source: audited IFRS statements Customs integrated clearance Distribution Logistics services Storage services and warehouse leasing Marketing Information (promotion) IT services Source: Company data, at the end of 2009 www.protek-group.ru
RETAIL PHARMACEUTICAL SALES RIGLA • Second largest pharmacy chain in Russia by revenue • 577 pharmacies* as at 31/12/2009 • 25 Russian regions covered plus a chain in Ukraine • RUR 290 - average purchase transaction • RUR 716 - average purchase by loyalty cards • Some 670,000 loyalty cards by the end of 2009 • Some 11,000 product types • About 30 % of the product range is accounted for by para-pharmaceuticals • More than 70 % of the product range is supplied internally (by CV Protek) Source: Company data, at the end of 2009 * 56 Zhivika pharmacies, owned by LLC AS-Buro Plus, in which the Company has a 25% stake and has an option to acquire additional 26% www.protek-group.ru
RETAIL SALES KEY INDICATORS Second largest pharmacy business in Russia Total revenue dynamics 9.2% 577* 534 72.1% 56 11,256 10,311 521 413 275 5,990 206 152 85 25 2 2001 2002 2003 2004 2005 2006 2007 2008 2009 2007 2008 2009 Protek retail pharmacies Zhivika pharmacies* Total revenue, RUR mln Source: Company data, at the end of 2009 * Source: audited IFRS statements * Owned by LLC AS-Buro Plus, in which the Company has a 25% stake www.protek-group.ru
PRODUCTION SEGMENT SOTEX • Certified as per Е U GMP standards* • Ampoule production with capacity of 100 mln ampoules and 6 mln syringes a year • Bio-similar product pre-filled syringes manufacturing • Strong R&D platform: LLC Protein Contour (acquired in 2008) • Product portfolio: 80 products, incl. 15 own brands • Annual technical audit of the plant by global pharmaceutical manufacturers • Own brands production: Eralfon (13.6% market share), Amelotex, Angiosil retard, Cereton Key Products Source: Company data, at the end of 2009 * Certified for GMP compliance by Nycomed (in relation to the licensed production of Actovegin) www.protek-group.ru
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