investor presentation

Transcription

INVESTOR PRESENTATION
London Roadshow, July 2009
Kursad Duman
Investor Relations and Capital Markets Manager
Forward-Looking Statements
Some of the Some of the information in this presentation is not historical in nature and may constitute
forward-looking statements, which are made pursuant to the safe harbor provisions of Code of Capital
Markets of Turkey. These statements may be identified by the use of forward-looking terminology such as
“believes,” “expects,” “anticipates,” “may,” “will,” “should,” “seeks,” “approximately,” “intends,” “plans,”
“estimates,” or the negative of these words or other comparable terminology. The discussion of financial
trends, strategy, plans or intentions may also include forward-looking statements. These forward-looking
statements involve risks and uncertainties that could cause actual results to differ materially from those
projected, anticipated or implied by such statements. Although it is not possible to predict or identify all such
risks and uncertainties, they may include, but are not limited to, those described in the Company’s annual,
quarterly and current reports as filed and furnished with the regulations of Capital Markets Board of
Turkey (CMB). You are cautioned not to place undue reliance on any such forward-looking statements,
which speak only as of the date such statements were first made. To the degree financial information is
included in this presentation, it is in summary form only and must be considered in the
context of the full details provided in the Company’s most recent annual, quarterly or current report as
filed or furnished with the CMB. The Company’s IFRS reports are available at www.selcukecza.com.tr
under the “Investors” tab. Except to the extent required by law, the Company undertakes no obligation to
publicly release the result of any revisions to these forward-looking statements to reflect events or
circumstances after the date hereof, or to reflect the occurrence of unanticipated events.
All rights reserved by Selcuk Ecza Deposu A.S.®
2
“Pharmerging” drives the global market
growth
Top 5 Europe
Size: US$162-172bn
Growth Forecast: 3-4%
US
Size: US$292-302bn
“Pharmerging” Markets
Size: US$105-115bn
Global Market
Size: US$820-830bn
Growth Forecast: % 4.5-5.5
“Pharmerging” markets include: China, Brazil, India, S.Korea, Mexico, Turkey and Russia
Source: IMS 2009 Global Pharmaceutical Market Forecast Executive Briefing –October 30,2008
Japan
Size: US$84-88bn
Rest of World
Size: US$165-175bn
3
2009 Forecasted Global Market Shares
2009 Market Shares (%)
Rest of World
8.1%
North America
38.6%
Japan
10.4%
US
%35.9
Pharmerging
13.3%
Top 5 Europe*
%19.8
Europe
29.6%
Source: IMS 2009 Global Pharmaceutical Market Forecast Executive Briefing –October 30,2008
4
Health & Drug Expenditures in Turkey
2005 total health spending: 7.6% of GDP (OECD: 9%)
15,3
Total (Public + Private) Health Expenditure as % of GDP
OECD Countries 2005
Health expenditure per capita: US$586 lowest among OECD
countries (OECD Ave. US$2,759)
11,6
11,1 10,7
10,3 10,2 10,2 10,1
9,8
9,5
9,5
9,2
9,1
9,1
9,1
9,0
2000-05 Health spending average growth 5.8% (OECD 4.3%)
9,0
8,9
8,3
8,3
8,2
8,1
8,0
7,6
7,5
7,5
7,2
7,1
6,4
Drug expenditure per capita ise US$136 in 2008
6,2
6,0
Drug Expenditures per capita (2005)
846
Japan
Sp
ai
un n
ga
ry
Ja *
pa
n
Tu *
rk
ey
Ire
la
nd
Fi
nl
C
a
ze
n
ch d
R
Sl
ov e p.
ak
R
ep
.
M
ex
ic
o
Po
la
nd
K
or
ea
K
rg
*
bo
u
ly
U
Ita
529
France
H
xe
m
Sw
Source: OECD
Lu
itz US
er
la
nd
Fr
an
ce
G
er
m
an
y
B
el
gi
um
Po
rt
ug
al
A
us
tr
ia
G
re
ec
e
C
an
ad
a
Ic
el
a
A
us nd
tr
N
al
et
he ia**
rla
nd
s
Sw *
ed
en
N
or
w
a
D
en y
N
ew m a
r
Ze k
al
an
d
O
EC
D
U.S.
501
Belgium
451
Canada
US$ (PPP)
Total (Public + Private) Health Expenditure per capita
OECD Countries, 2005
6401
419
Greece
396
Germany
385
5352
Portugal
4364
72.5% by
public sources
4177
3519 3443 3389
3374 3326 3287
3128 3108 3094
2981 2926 2918
Italy
2759 2724
2532
2358 2343 2331 2255
71.4% by
public sources
2033
1479 1337
1318
U.K.
675 586
U
.K
.
It a
ly
J
N
ew ap
an
Ze
al
an
d
Fi
nl
an
d
Sp
ai
n
Po
rt
ug
C
ze
al
ch
Re
p.
H
un
ga
ry
K
o
Sl
ov rea
ak
R
ep
Po .
la
nd
M
ex
ic
o
Tu
rk
ey
U
.S
xe
.
nb
ou
rg
N
Sw orw
ay
itz
er
la
nd
A
us
tr
ia
Ic
el
an
d
B
el
gi
um
Fr
an
ce
C
an
ad
G
a
er
m
an
A
y
us
tr
al
i
D
en a
m
N
ar
et
k
he
rla
nd
s
G
re
ec
e
Ire
la
nd
Sw
ed
en
O
EC
D
Lu
341
327
Australia
326
265
Netherlands
1137
867
Source: OECD
369
352
Spain
Poland
121
Turkey
95
(2006)
US $, Ex-m anufacturer
Source: IMS,0 World 200
Bank, IEIS
400(Ex-Manufacturer
600
800 prices)
1000
Source: Pharmaceutical Manufacturers Association of Turkey (IEIS)
Source: OECD
5
RX Drugs Market in Turkey
Amount
(Billion TL)
Boxes
(Million)
1.400
16%
16.1%
1.300
14%
1.200
1.100
10.9%
10.2%
10%
6%
5.1%
700
600
2002 2003 2004 2005 2006 2007 2008
R
a
2% t
0% e
s
4%
11
23,5%
10
17,1%
9
8
%
7
)
7.5%
31,1%
11,5%
)
8%
12
(
800
12%
G
r
o
w
t
h
35%G
30% r
o
25%
w
20% t
h
15% %
(
9.0%
1.000
900
13
18%
6
10,2%
5
9,1%
4
2002 2003 2004 2005 2006 2007 2008
10%R
a
5%
t
0% e
s
Source: İEİS, IMS
Sustainable growth...IMS estimates 15-17% growth in Turkish Market for 2009.
≈US$10 market size with 9% growth in terms of amount and 5% in terms of boxes sold in 2008
6
Brand-names vs. Generics in Turkish Market
Amount
(TL)
Boxes
80%
53%
51.5%
49.5%
67.8%
65.6%
65.3%
67.2%
66.6%
65.4%
60%
50.7%
50.5%
69.5%
51.4%
51.4%
51%
49%
70%
51.7%
50.4%
50%
49.6%
49,3%
40%
48.6%
48.5%
48.3%
48.6%
30.5%
32.2%
34.4%
34.7%
32.8%
34.6%
33.4%
30%
20%
47%
10%
0%
45%
2002
2003
2004
2005
Brand-name
2006
2007
2008
2002
2003
2004
Brand-name
Generics
2005
2006
2007
2008
Generics
Source: İEİS, IMS
7
Market Structure - Suppliers
134 Companies
ABDI IBRAHIM
97 Domestic
37 Multinationals
NOVARTIS
SANOFI-AVENTIS
84 Manufacturers
73 Domestic
11 Multinational
12 Raw Mat. Producers
38 Importers
ECZACIBASI
Others
BILIM
GSK
PFIZER
ROCHE
SANOVEL
Source: Merril Lynch, IMS
ASTRA ZENECA
Fragmented market: Largest player with a
market share of 7%
Top 10 market share: 50%
No original product development, local firms
develop their own generics, manufacture
licensed products and subcontract from
international firms
8
Market Structure - Distributors
Multinationals
National
Companies
Hedef-Alliance
Group
Selcuk
Group
Hedef, Es
Selcuk, As
Regional
Companies
Nevzat
Galenos, Sıhhat
Cooperatives
ISTKOP,
EDAK,...
•100 Distributors (>300 in 1980s) 15
of which economically meaningful
size.
•Small distributors little room to
increase their market share, given
the financial strength and economies
of scale of the large players.
•High Barriers for New Entrants.
•Top 2 approximately 70%
9
Market Structure – Retailers: Pharmacies
• ~ 24,000 pharmacies across the Country
– 1 per 2.980 population
– 5.000 in Istanbul, 1.700 in Izmir
– ~ 500 new every year
• Owned and run by pharmacists
• Pharmacy chains NOT allowed
• OTC drugs can NOT be sold through other retail
channels
• Rely on wholesalers for financing
• Typically works with 2 or 3 distributors
• Substitution by the pharmacists allowed
10
A Short Reminder on the Regulatory Framework
Mark-ups, Pricing & Reimbursement
•
•
•
Referential Pricing Mechanism: Prices determined according to (5 to 10) EU member reference countries
determined by the Ministry of Health.
4 months notice for change.
Reference Countries for 2009: France, Spain, Italy, Portugal, Greece (Not Changed).
Producer Distributor
Distributor
Pharmacy
Pharmacy
Price
Mark-up
Price
Mark-up Price (excld.VAT)
0-10
9% Aa = A x 1.09
25% Aaa = Aa x 1.25
A =
8% Bb = B x 1.08
25% Bbb = Bb x 1.25
B = 10-50
7% Cc = C x 1.07
25% Ccc = Cc x 1.25
C = 50-100
=
100-200
4%
=
x
1.04
16% Ddd = Dd x 1.16
D
Dd
D
E = 200-X
2% Ee = E x 1.02
12% Eee = Ee x 1.12
•
•
•
•
•
•
•
Retail
Price (incld. VAT)
Aaaa = Aaa x 1.08
Aaaa = Bbb x 1.08
Aaaa = Ccc x 1.08
Aaaa = Ddd x 1.08
Aaaa = Eee x 1.08
Prices in TL terms adjusted if the €/TL exchange rate change exceeds 5% and prevails for more than 30
days (current reference exchange rate: 1€ = 1,9595 TL valid since April 2, 2009)
Price change effective after 45 days.
Prices adjusted upwards on Feb.13th; new prices effective as of Apr. 2nd.
Price ratio of Generic to Original %80 (Max)
Original Price = Reference Price x 1; Generic= Reference Price x 0.8
Reimbursable margin between the cheapest and the most expensive drug in a given bioequivalence group
is 15%
1.15 X the lowest priced brand is the ceiling for reimbursement
Patient contribution 20% (pensioner 10%)
Pharmacy directly reimbursed by the Government
11
Selcuk Ecza - Over 50 years being a milestone
in Turkish pharmaceutical market...
Selcuk Ecza celebrated its 50th anniversary - 2008
Selcuk Ecza went public by a free-floating rate of
20%. Became the first publicly-owned company in its
sector - 2006
Selcuk Ecza’s sister company AS Ecza
was established - 1987
Selcuk Ecza established its first branch in the business
center of Turkey, Istanbul - 1975
Selcuk Ecza improved its technology and network and started to
serve in many locations in the western side of Turkey - 1970
Selcuk Ecza, started to take orders by phone calls
which drives the business to even very small
locations - 1960
Selcuk Ecza was established as a small
local company for distributing
pharmaceuticals to its small
neighborhood in Konya province - 1958
12
Selcuk Ecza: A precious link to sustainable
value creation
Attractive markets
Demographics drive long-term demand
Public policy agenda supports greater access and improved efficiency
Well-positioned businesses
Solid operating profit and cash flow strength from distribution segment
Nationwide network built over mutual commercial interests
Steady track record of delivering results and a balanced
approach to capital deployment
Strong balance sheet and solid liquidity position
Experienced and tenured management team
13
Value Chain- Selcuk Ecza: A strong link...
Drug
Manufacturers
Abdi Ibrahim
Novartis
Pharma
Wholesalers
Pharmacies
Selcuk Ecza (36.2% as of 1Q09 ) •>App. 24,000 pharmacies nation-wide owned
and run by pharmacists
Hedef Alliance
Sanofi-Aventis
Co-operatives
Eczacibasi
Nevzat
Bilim
…
…
•Pharmacy chains not allowed
•OTC drugs can not be sold through other retail
channels
•Rely on wholesalers for financing
…
…
Top 2 wholesalers control approximately 70% of the distribution market. (Top 3 > 80%)
Top 10 drug manufacturers approximately 50% of the market.
App. 24,000 pharmacies throughout Turkey.
A pharmacy typically works with 2 or 3 distributors (Differentiation: quality and speed of service, close follow-up,
payment terms and product campaigns)
Over 20,000 clients countrywide (as of 20091Q)
103 (27 central + 76 regional) warehouses with a total storage area over 120,000 m2.
Can reach 75% of customers within 30 minutes, and 95% within 90 minutes.
14
...that paves the way for strengthening the
market leader position
Permanently gaining a market share that has reached 36.20% in monetary terms in
the domestic market according to IMS Figures in 1Q09
Strengthening the leadership position by efficiency in costs, ways of distribution and
storage
Seizing opportunities of entering new businesses under the core business of whosale
pharmaceutical distriubution
Serving over 20.000 pharmacies all around Turkey and hence support them as an ever
lasting business partner
Formed a big family consists of employees, pharmacies and the producers under the
vision of its founder
15
Solid results in fiscal year 2009
(TL in millions except EPS)
As of March 31,
2009
1,260.56
2008
972.57
Chg
29.61%
Gross Margin
8.84%
6.65%
37.19%
EBITDA Margin
5.19%
2.78%
2.41 pts
Net Income
57.64
46.42
24.17%
Net Income Margin
4.57%
4.77%
-0.20 pts
EPS
0.111
0.090
23.33%
Revenues
16
We have a track record of strong revenue
growth...
TL billions
2.76
FY05
3.15
FY06
3.63
FY07
4.05
FY08
17
...That We Have Leveraged into higher
Income
TL billions
93,97
97,29
FY05
FY06
164,41
160,67
FY07
FY08
18
Stable growth to Market Leader Position...
Market Share (%)
32,90%
33,80%
33,40%
34,40%
36,19%
2005
2006
2007
2008
20091Q
19
Working Capital Developments
FY05
FY06
FY07
FY08
1Q09
1,064
1,209
1,303
1,502
1,656
INVENTORIES
300
346
387
469
367
A/P
876
929
1,043
1,234
1,273
WC
488
626
647
737
749
17.70%
19.88%
17.83%
18.21%
17.29%
A/R
WC/REVENUE
20
Op-Ex Improvement
Revenue
# of WHs
# of Employees
Op-ex / Sales
Personnel / Sales
Employee per WH
Revenue per Employee (TL)
FY05
2,756
91
4,926
4.85%
2.76%
54
FY06
3,151
98
4,694
4.84%
2.86%
48
FY07
3,628
100
4,554
4.49%
2.69%
46
559,539
671,241
796,743
FY08
4,047
100
4,600
4.57%
2.64%
46
1Q09
1,261
100
4,656
3.73%
2.28%
47
879,676 930,949*
21
Nationwide network that covers all regions
across Turkey by over 100 branches
KONYA
• ALAADDİN
KARAMAN
Main Warehouses Regional Warehouses
Selçuk Ecza
As Ecza
Group Total
18
9
27
58
18
76
Total
76
27
103
22
23
2009
2008
2007
2006
2005
2004
2003
2002
2001
53
715
895
1,,074
1,282
1,483
41
2,030
2,037
98
100
100
1,970
1,948
91
103
2000
198
240
315
462
511
1
2
3
4
5
6
7
10
15
17
21
22
23
Number of Warehouses
1999
1998
1997
1996
1995
1958
1975
1977
1988
1993
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Fundamental Operational Statistics -1Number of Vehicles
1,941
10
12.6
14.7
24
2009
2008
2007
2006
2005
2004
2003
29.8
31.7
32
31.7
31.2
32.9
33.8
33.4
34.4
36.19
Amount (TL)
2002
25.9
Number of Employees
2001
2000
1999
1998
1997
1996
1995
5
19.5
4,656
2009
2008
2007
2006
4,926
4,694
4,554
4,600
2,825
825
3,043
3
3,432
3,917
857
1,020
1,224
1,738
1,836
2,584
584
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
Fundamental Operational Statistics -2Market Share(%)
Shareholding Structure
Ahmet
Kelesoglu
39.20%
Ahmet &
Nezahat
Kelesoglu
Foundation
51%
Nezahat
Kelesoglu
9.80%
0.0980x0.7732
= 7.58%
Selcuk Ecza Holding A.S.
0.3920x0.7732
= 30.31%
77.32%
Free Float
Gurgen Family
20.01%
2.67%
0.51x0.7732
= 39.43%
Selcuk Ecza Deposu Ticaret
ve Sanayi A.S.
99.99%
As Ecza
25
Entering A New Segment: Toiletry Products
Selcuk Ecza has started to sell/distribute toiletry products (personal care
products, cosmetics etc.) by June 1, 2009 in 9 of its 27 main warehouses
The market size in Turkey for toiletry products is approximately as of US$2
bn.
Selcuk Ecza estimates an additional turnover of 3-4% for 2010 for this
segment amounting to 150-200 mn. TL and almost 75 mn. TL for the remaining
half of 2009
Using the same distribution network while using the same regional staff and
warehouses, no extra costs
Higher gross margin around 10% with respect to 8-9% from pharma segment
Strategy to expand business all around Turkey until the end of the year.
26
Prospects for Year-end 2009
Net Sales figure FY09
5 bn. TL
Gross Margin FY09
9-9.5%
EBITDA margin FY09
5-5.5%
Net Margin FY09
4-4.5%
Net Income FY09
200 mn. TL
Working Capital/Sales
17-17.5%
27
Selcuk Ecza: A precious link to sustainable
value creation
Attractive markets
Demographics drive long-term demand
Public policy agenda supports greater access and improved efficiency
Well-positioned businesses
Solid operating profit and cash flow strength from distribution segment
Nationwide network built over mutual commercial interests
Steady track record of delivering results and a balanced
approach to capital deployment
Strong balance sheet and solid liquidity position
Experienced and tenured management team
28
Appendix-1: Reimbursement Schedule
REIMBURSEMENT to PHARMACIES by THE SSI
First Day
of Month
Dispensing
Application
to SSI
Reimbursement
Average
15 Days
15
Days
Max
60 Days
Last Day
of Month
15th of the
Following
Month
29
Appendix-2: Reference Pricing Scheme
Reference
Countries
Spain
Italy
Portugal
France
Greece
REIMBURSEMENT
100% = Original
Price
80% = Generic Price
Drugs in the Same
Bioequivalence Group
p
n
t
j
15% higher
than the
cheapest price*
y
z
q
*The goverment has just changed the maximum reimbursement limit applied
for the previous 5 years as of 22% higher than the cheapest drug price in the
market to 15% by a decree in Jun. 20, 2009 that will be valid from Aug. 1, 2009
x
1.00
p & n NOT reimbursed
30
INVESTOR PRESENTATION
London Roadshow, July 2009
Kursad Duman
Investor Relations and Capital Markets Manager

investor presentation

Transcription

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