2009: year of the turn around · 2019. 2. 1. · february 2009 philipp haas – chairman veysi...

FEBRUARY 2009PHILIPP HAAS – CHAIRMAN

VEYSI NURBAKI – CFO

2009: YEAR OF THE TURN AROUND

� Business Overview - History

� Company Vision and Mission

� Strategy

� Contract Manufacturing as Strategic Initiative

Agenda

22

� Contract Manufacturing as Strategic Initiative

� January 2009 Sales Performance

� Restructuring

� Outlook 09

� EastPharma NAV

Business Overview - History

1958

Establishment of Deva by 27 founding shareholders

1986 2006

IPO of Deva shares on the Istanbul Stock Exchange

Takeover of Deva by GEM Global Equities Management S.A. Establishment of EastPharma Ltd

33

2006 – 2008TRANSFORMATION PROCESS

New Headquarters at Halkalı district of Istanbul

IPO of EastPharma shares on the London Stock Exchange

Successful Acquisition of Saba Pharmaceuticals

Investments started: 4 new factories in Cerkezkoy and Kosekoy

Disposal of non-core assets and cash injection


44

2007

New Headquarters at Halkalı district of Istanbul

Business Overview – Construction of New Plants

Penicillin Building in Çerkezköy

New state of the art facilities target to have

FDA and EMEA approvals

55

Penicillin Building in Çerkezköy


66


Cephalosporin Building in Çerkezköy

77

Cephalosporin and Main Production Buildings in Çerkezköy


88


Main Production Building and Training Center in Çerkezköy

99


Injectables Building in Köseköy

1010

2008

APA and in-licensing agreement with Hoffmann La Roche for 16 products

Appointment of new management team: GM, COO, CFO


1111

Restructuring in sales and marketing department

Production started in: - Penicilin Plant in Cerkezkoy- Cephalosporin Plant in Cerkezkoy- Injectables Plant in Kosekoy

New production capacity: over 300mn boxes p/a

Company Vision and Mission

Vision:

To become the leading pharmaceutical company in Turkey and to develop export business to selected markets world wide.

A leading branded pharmaceutical company in Turkey

1212

world wide.

Mission:

To provide the local and international markets with high quality, low-cost and modern generic pharmaceutical drugs.

Strategy - in Sales and Profit

PHASE I:PHASE I:PHASE I:PHASE I:

Growth in the Growth in the Growth in the Growth in the

PHASE II: PHASE II: PHASE II: PHASE II:

Contract Contract Contract Contract

PHASE III:PHASE III:PHASE III:PHASE III:

Exports to Exports to Exports to Exports to

regulated markets regulated markets regulated markets regulated markets

1313

Growth in the Growth in the Growth in the Growth in the Turkish marketTurkish marketTurkish marketTurkish market

and move to higher and move to higher and move to higher and move to higher

margin productsmargin productsmargin productsmargin products

Contract Contract Contract Contract manufacturing manufacturing manufacturing manufacturing

as strategic as strategic as strategic as strategic initiativeinitiativeinitiativeinitiative

regulated markets regulated markets regulated markets regulated markets

with higher marginswith higher marginswith higher marginswith higher margins

and stronger and stronger and stronger and stronger currencycurrencycurrencycurrency

Cost of transition*:

- Moving of machinery, installation, validation: ~ $ 20 mn

- Delay in opening of new factories: ~ $ 16 mn

- De-stocking activity at the wholesalers: ~ $ 50 mn

Heavily Distorted 08 Figures

1414

- Lost sales due to stock-outs, planned and unplanned: ~ $ 4 mn

- Total severance payments: ~ $ 10 mn

Total: ~ $ 100 mn

* Preliminary estimates of the effects including the opportunity costs of our extraordinary items for 2008

Historical IMS Sales Performance

Unit Sales (Thousand):

68.778

70.775

76.602

FY 2006 FY 2007 FY 2008

1515Source: IMS (FY ‘08 figure includes Roche products sales, which were in the market as of July 2008 under Deva portfolio)

TL Sales (Thousand):

FY 2006 FY 2007 FY 2008

293.201

368.580

461.734

FY 2006 FY 2007 FY 2008

January 2009 - IMS Sales Performance

� Turkish pharma market grew 3.5% on a monthly basis in TRY terms

� EastPharma grew 15.8% on a monthly basis in TRY terms

1616Note: IMS figures measure the total effective gross sales from wholesalers to pharmacies and include free goods. Net sales are

approx. half of gross sales.

100% BUDGET REALISATION IN JANUARY 2009

Sales Capabilities and Regional Sales Office Coverage

GeorgiaGeorgiaGeorgiaGeorgia

AzerbaijanAzerbaijanAzerbaijanAzerbaijan

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� 17 Regions in Turkey with 23 offices

� 819 Medical Representatives

Broad Sales Force Across Turkey:

“CHANGE” STARTED WITH RESTRUCTURING

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New Management Team

New COO: Dr Carlo Durer

Extensive experience in the manufacturing function of Roche and Sandoz in many countries, lead the establishment of several manufacturing plants

1919

New CFO: Veysi Nurbaki

Strong experience in finance, control and budgeting in all aspectsof the pharmaceutical industry and SAP. Joined from Sandoz Turkey (a subsidiary of Novartis).

Restructuring in Sales and Marketing Department

Principles of Reorganisation:

� Flatter organisation, fast decision making process

� No middle management level:

� Business Unit Directors (BUD) report directly to the General Manager

2020

Manager

� Consolidated business units

� Business structures based on different business principles

� Differences on customer base

� Differences on prescription generating models


HEAD OF EXECUTIVE COMMITEE

2121

Business Unit Director 1

Pharmacy


Acute Diseases


Chronical Diseases

� Recruitment of senior directors with industry experience:

� New Business Support Director

� New Commercial Director


2222

� New Marketing and Sales Support Director

Outlook 09 - Increase Quality of Business Performance

� In Production Processes:

� Regular supply of products

� Gradually lowering production costs

� Developing contract manufacturing as new business

2323

� In Management Processes:

� Developing management information tools

� SAP

� Open culture

� Team work


� Model of selling:

� No consignment

� Gradually lowering sales discounts, free goods

� More cost effective use of marketing mix resources

2424

� Field Force “A Selling Machine”

� Activity planning and control tools – SFE

� Field force manager model

� New bonus scheme

� Intensive training and development


� Extending customer base:

� Hospital doctors

� Specialists (Cardiologist, Gastroenterologist, Psychiatrist etc)

� More widespread coverage

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� Cost efficiency:

� Secondary API sourcing project

� Cost cutting incentive and culture

� Looking under every stone

Outlook 09 – Products to be launched in 09

� 10 new products to be launched in 09

� Agressive In-licensing and registration activity:

� In-licencing negotiations ongoing for over 20 products

� Registration activities ongoing for over 7 products

2626

Outlook 09

� Net sales of TRY 500 mn

(approx. $ 300 mn at the budget exchange rate of 1.6970)

� Ebitda of TRY 100 mn

2727

(approx. $ 60 mn at the budget exchange rate)

EastPharma – Deep Value

EASTPHARMA’S MARKET VALUE IS ONLY 34% OF ITS NAV!

EastPharma Ltd.

CASH & CASH QUIVALENTSUS$70mn

-US$12mn pledged to Deva Holding-US$50mn advanced payment for Deva Holding’s capital increase

DEVA HOLDINGUS$234mn

SABA PHARMAUS$45mn

(DCF based valuation)

ROCHE LICENSINGAGREEMENT

Transaction price: US$47mn

International portion:

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NAV: US$382mn (US$5.64/share)MCAP: US$129 @$1.90/share Discount= 66%

Deva Holding’s capital increase-US$7mn free cash

US$234mn (DCF based valuation) International portion:

US$32.5mn

C SHARESUS$183mn

(Market value of the

shares held by EP)

A & B SHARESUS$51mn

(Calculated based on swap

ratios in terms of C share price)

All prices are as of February 10th, 2009

This presentation has been prepared by EastPharma Ltd (the “Company”) solely for its use at the presentation to investors to be made in September 2007. By attending the meeting where this presentation is made, or by reading the presentation slides, you agree to be bound by the following limitations.This document is not a prospectus. This document does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities of the Company, nor shall any part of it nor the fact of its distribution form part of or be relied on in connection with any contract or investment decision relating thereto, nor does it constitute a recommendation regarding the securities of the Company.This presentation is being supplied to you solely for your information. This presentation and its contents are confidential and may not be further copied, distributed or passed on to any other person or published or reproduced directly or indirectly, in whole or in part, by any medium or in any form for any purpose. The information contained in this presentation must be kept confidential and must not be used for any other purpose. Neither this presentation nor any copy of it nor the information contained in it may be taken or transmitted in or into the United States, Canada, Japan or Australia, or distributed, directly or indirectly, in or into the United States, Canada or Australia, or distributed or redistributed in Japan or to any resident thereof. Any failure to comply with these restrictions may constitute a violation of United States, Canadian, Japanese or Australian securities laws. The distribution of this presentation in other jurisdictions may be restricted by law, and persons into whose possessions this presentation comes should inform themselves about, and observe, any such restrictions.This document and its contents are confidential and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published, in whole or in part, for any purpose, and it is intended for distribution in the United Kingdom only to and is directed only at: (i) persons who have professional experience in matters relating to investments falling within the definition of “investment professionals” in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”); or (ii) persons falling within Article 49(2)(a) to (d) of the Order; or (iii) to those persons to whom it can otherwise lawfully be distributed (all such persons together being referred to as “relevant persons”). This document must not be acted upon by persons who are not relevant persons. Any investment or investment activity to which this communication relates is available only to relevant persons and will be engaged in only with relevant persons.The information in this presentation is given in confidence and the recipients of this presentation should not base any behaviour in relation to qualifying investments or relevant

Important Notice - Disclaimer

IR Contact Details:

Philipp Haas – Chairman ([email protected])

Veysi Nurbaki– CFO ([email protected])

Idil Bora – IR Manager ([email protected])

THANK YOU FOR YOUR INTERESTTHANK YOU FOR YOUR INTEREST

2

The information in this presentation is given in confidence and the recipients of this presentation should not base any behaviour in relation to qualifying investments or relevant products (as defined in Financial Services and Markets Act 2000 (as amended) (“FSMA”) and the Code of Market Conduct (made pursuant to FSMA) which would amount to market abuse for the purposes of FSMA on the information in this presentation until after the information has been made generally available. Nor should the recipient use the information in this presentation in any way which would constitute “market abuse”.This presentation has been prepared by, and is the sole responsibility of, the Company. The information set out herein has not been verified by the Company or any other person. No representation or warranty, express or implied, is or will be made by the Company or any of its affiliates, directors, officers or employees, or any other person as to the accuracy, completeness or fairness of the information or opinions contained in this presentation and any reliance you place on them will be at your sole risk. Without prejudice to the foregoing, the Company, their advisors and their respective affiliates, directors, officers or employees do not and will not accept any liability whatsoever for any loss howsoever arising, directly or indirectly, from use of this presentation or its contents or otherwise arising in connection therewith. The Company’s securities have not been nor will they be registered under the United States Securities Act of 1933, as amended (the “Securities Act”) and may not be offered or sold in the United States except to qualified institutional buyers (as defined in Rule 144A) in reliance on Rule 144A or another exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. The Company’s securities have not been nor will they be registered under the applicable securities laws of any state or jurisdiction of Australia, Canada or Japan and, subject to certain exceptions, may not be offered or sold within Australia, Canada or Japan or to or for the benefit of any national, resident or citizen of Australia, Canada or Japan.Certain statements in this presentation constitute “forward-looking statements”. These statements, which contain the words “anticipate”, “believe”, “intend”, “estimate”, “expect” and words of similar meaning, reflect the Directors’ beliefs and expectations and are subject to risks and uncertainties that may cause actual results to differ materially. These risks and uncertainties include, among other factors, changing business or other market conditions and the prospects for growth anticipated by the management of the Company. These and other factors could adversely affect the outcome and financial effects of the plans and events described herein. As a result, you are cautioned not to place undue reliance on such forward-looking statements. The Company and their advisors and each of their respective members, directors, officers and employees disclaim any obligation to update the Company’s view of such risks and uncertainties or to publicly announce the result of any revision to the forward-looking statements made herein, except where it would be required to do so under applicable law.

Idil Bora – IR Manager ([email protected])

Email : [email protected]

D. Phone : +90 212 6929326

This presentation has been prepared by EastPharma Ltd (the “Company”) solely for its use at the presentation to investors to be made in 2009. By attending the meeting where this presentation is

made, or by reading the presentation slides, you agree to be bound by the following limitations.

This document is not a prospectus. This document does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities of

the Company, nor shall any part of it nor the fact of its distribution form part of or be relied on in connection with any contract or investment decision relating thereto, nor does it constitute a

recommendation regarding the securities of the Company.

This presentation is being supplied to you solely for your information. This presentation and its contents are confidential and may not be further copied, distributed or passed on to any other person or

published or reproduced directly or indirectly, in whole or in part, by any medium or in any form for any purpose. The information contained in this presentation must be kept confidential and must not

be used for any other purpose. Neither this presentation nor any copy of it nor the information contained in it may be taken or transmitted in or into the United States, Canada, Japan or Australia, or

distributed, directly or indirectly, in or into the United States, Canada or Australia, or distributed or redistributed in Japan or to any resident thereof. Any failure to comply with these restrictions may

constitute a violation of United States, Canadian, Japanese or Australian securities laws. The distribution of this presentation in other jurisdictions may be restricted by law, and persons into whose

possessions this presentation comes should inform themselves about, and observe, any such restrictions.

This document and its contents are confidential and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published, in whole or in part, for any purpose, and

it is intended for distribution in the United Kingdom only to and is directed only at: (i) persons who have professional experience in matters relating to investments falling within the definition of

“investment professionals” in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”); or (ii) persons falling within Article 49(2)(a) to (d) of the

Order; or (iii) to those persons to whom it can otherwise lawfully be distributed (all such persons together being referred to as “relevant persons”). This document must not be acted upon by persons

who are not relevant persons. Any investment or investment activity to which this communication relates is available only to relevant persons and will be engaged in only with relevant persons.

Disclaimer

3030

The information in this presentation is given in confidence and the recipients of this presentation should not base any behaviour in relation to qualifying investments or relevant products (as defined in

Financial Services and Markets Act 2000 (as amended) (“FSMA”) and the Code of Market Conduct (made pursuant to FSMA) which would amount to market abuse for the purposes of FSMA on the

information in this presentation until after the information has been made generally available. Nor should the recipient use the information in this presentation in any way which would constitute

“market abuse”.

This presentation has been prepared by, and is the sole responsibility of, the Company. The information set out herein has not been verified by the Company or any other person. No representation or

warranty, express or implied, is or will be made by the Company or any of its affiliates, directors, officers or employees, or any other person as to the accuracy, completeness or fairness of the

information or opinions contained in this presentation and any reliance you place on them will be at your sole risk. Without prejudice to the foregoing, the Company, their advisors and their respective

affiliates, directors, officers or employees do not and will not accept any liability whatsoever for any loss howsoever arising, directly or indirectly, from use of this presentation or its contents or

otherwise arising in connection therewith.

The Company’s securities have not been nor will they be registered under the United States Securities Act of 1933, as amended (the “Securities Act”) and may not be offered or sold in the United

States except to qualified institutional buyers (as defined in Rule 144A) in reliance on Rule 144A or another exemption from, or in a transaction not subject to, the registration requirements of the

Securities Act. The Company’s securities have not been nor will they be registered under the applicable securities laws of any state or jurisdiction of Australia, Canada or Japan and, subject to certain

exceptions, may not be offered or sold within Australia, Canada or Japan or to or for the benefit of any national, resident or citizen of Australia, Canada or Japan.

Certain statements in this presentation constitute “forward-looking statements”. These statements, which contain the words “anticipate”, “believe”, “intend”, “estimate”, “expect” and words of similar

meaning, reflect the Directors’ beliefs and expectations and are subject to risks and uncertainties that may cause actual results to differ materially. These risks and uncertainties include, among other

factors, changing business or other market conditions and the prospects for growth anticipated by the management of the Company. These and other factors could adversely affect the outcome and

financial effects of the plans and events described herein. As a result, you are cautioned not to place undue reliance on such forward-looking statements. The Company and their advisors and each of

their respective members, directors, officers and employees disclaim any obligation to update the Company’s view of such risks and uncertainties or to publicly announce the result of any revision to

the forward-looking statements made herein, except where it would be required to do so under applicable law.

2009: year of the turn around · 2019. 2. 1. · february 2009 philipp haas – chairman veysi...

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