corporate presentation pro-active investors · 3 buy & build - acquisitions over past 10 years...
TRANSCRIPT
John Dawson – Chief Executive
20th October 2016
Corporate Presentation
Pro-Active Investors
2
Background to Alliance
Started in 1998 as a specialty pharma company, using a Buy and Build model
Floated on AIM in 2003
Profitable, cash generative, dividend paying
Strong track record of 32 deals in 18 years building up a portfolio of over 90 products
Portfolio balanced to deliver growth and profitability
Actively managed - organic growth from prescription and consumer products
Passively managed - bedrock of sustainable cash flow from core of established niche
medicines, typically with limited competition
Sales mainly in Western Europe, but also in 90+ other countries
Infrastructure
Group activities headquartered in UK
Europe - direct presence in UK, Germany, France, Italy, Spain and Ireland
Far East – direct presence in Shanghai for China and Singapore for SE Asia
Other countries via distribution partners
Virtual operating model with manufacturing, warehousing and logistics outsourced
3
Buy & Build - acquisitions over past 10 years
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Pavacol D
£0.6m
Buccastem
Timodine
£7.5m
Cambridge
£16.4m
Quinoderm
Ceanel
£1.5m
Rizuderm +
5 Products
£2.4m
Anbesol
Ashton &
Parsons
£2.26m
Opus
£8m Lypsyl
£1.9m
Syntometrine
(excl. UK)
£7.5m
Irenat
(Germany)
Forceval
China
£1.95m
MacuShield
£5.5 - 11.5m
Antimalarials
£4.2m
32 deals in 18 years
Every year since 2006
Sinclair
£127.5m
Diclectin UK
£1.5m
Diclectin
EU
£1.0m
Sinopharm
£1.4m
4
Longevity of niche prescription brands
Product H1
Sales* Launched By
Launch
Date
Alliance
Since Description
Kelo-Cote £4.1m Advanced Bio-
Technologies 2006 2015 Prevention of hypertrophic scars
Flamma Franchise £3.6m Solvay
Pharmaceuticals 1973 2015 Prevention of infection of burns and wounds
Hydromol £3.6m Ferndale 1987 2006 Range of emollient products used in the management of
eczema and other dry skin conditions
Aloclair £2.7m Sinclair Pharma 2000 2015 Treatment for mouth ulcers
Forceval £2.4m Unigreg 1970 2004 Complete supplement of micro-nutrients
MacuShield £2.0m MacuVision 2007 2015 Eyecare supplement taken by sufferers of dry AMD
Haemopressin £1.9m BioPhausia 2001 2015 For the treatment of bleeding oesophageal varices
Optiflo £1.7m Maelor 1999 2015 Re-use of catheters as a flushing solution
Oxyplastine £1.4m Parke Davis 1936 2015 Treatment for humid eczema and nappy rash
Nu-Seals £1.2m Lilly 1978 2002 Low dose aspirin for prevention of heart attacks and
strokes
Green = Growth Brand *Sales for the 6 months to June 2016, including share of joint ventures
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Kelo-cote 9%
Flamma Franchise
8%
Hydromol 8%
Aloclair 6%
Forceval 5%
Macushield 4%
Haemo -pressin
4% Optiflo 3%
Oxyplastine 3%
Nu-Seals 2%
Other (c. 80 products)
48%
Diversified product portfolio
Managing the Portfolio
Major Product Franchises
Kelo-cote – Global
Flamma – EU
Hydromol – UK, Ireland
Aloclair – Italy & Spain
Forceval – UK & International
MacuShield – UK, Ireland (90%)
with international potential
Haemopressin – EU
Optiflo – UK
Oxyplastine – France, MEA
Nu-Seals – Ireland Green = Growth Brands; Black = Bedrock Brands
Revenue in the 6
months ended 30
June 2016,
including share of
joint ventures
6
Geographic performance
75% Western Europe UK 50%
France 10%
Ireland 5%
DACH 4%
Italy 3%
Spain 3%
25% Rest of World MEA 7%
China (inc. share of JVs) 6%
SE Asia 6%
CEE 4%
Americas 2%
UK, 50%
ROI, 5%
France, 10%
DACH, 4%
Italy, 3%
Spain, 3%
SE Asia, 6%
China (inc. share of JVs), 6%
CEE, 4%
Americas, 2% MEA, 7% Other, 1%
Split of H1 sales
Revenue in the 6
months ended 30
June 2016,
including share of
joint ventures
7
Managing the Portfolio
– where territory meets therapy area
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GLOBAL** REGIONAL NATIONAL
Dermatology
Mother & Child
Ophthalmology
Other
Kelo-cote**
MacuShield**
Hydromol**
Lypsyl
Ashton & Parsons
Anbesol
Naseptin
Oxyplastine
Oxyplastine
Fazol Tridesonit
Nu-Seals
Optiflo Gelclair
ImmuCyst
Diclectin**
Flamma Range
Haemopressin
Aloclair
Strategic global brands,
driven centrally,
Ex-UK
Regional (Europe) brands
driven centrally / locally Important local brands
driven locally
INTERNATIONAL
DISTRIBUTOR
Forceval
Syntometrine
Atopiclair
Papulex Sebclair
International Distributors
- driven Ex-Paris
**approx 60% of promotional Budget
Kelo-cote**
8
H1 2016 Results
9
H1 2016 Highlights
Buy & Build is our history.
Largest acquisition ever in December 2012
Acquired Sinclair Pharma’s Healthcare Products business for £127.5m
Doubled our sales, profitability and market cap
Greater internationalisation (sales from 20% ex-UK to 50% ex-UK)
Delivered direct presence across EU-5
Intense focus on business integration Registering Alliance companies in several countries
Team building: 39 transferees; ca 30 recruited
Setting up offices
Setting up computer systems
Re-registering products under the Alliance name
Changing pack liveries
No deflection to financial performance - delivered as expected
Sales £46.4m
PBT £11.7m
Major contribution from the ex-Sinclair products
Original Alliance products also performed well.
10 10
2016 Half Year Results – Summary
Revenue £46.4m (H1 2015: £22.8m)
Ex-Sinclair products have made an immediate contribution to our results, in line with
our expectations and enabling revenues to more than double
Gross margin rate of 56.0% (H1 2015: 60.5%)
Operating profit £12.9m (H1 2015: £6.1m)
Pre-tax profit £11.7m (H1 2015: £5.5m)
Diluted EPS 2.02p (H1 2015: 1.64p)
Free Cash flow £2.1m (H1 2015: £2.0m)
Includes the build up in working capital following the Sinclair acquisition
Net bank debt £79.0m (31 Dec 2015: £71.5m), with gearing at 2.8 times
EBITDA
Interim dividend up 10% to 0.403p (H1 2015: 0.366p)
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2 Year Performance
£22.8m
£46.4m
-
10.0
20.0
30.0
40.0
50.0
H1 2015 H1 2016
£m
Sales
1.65p
2.04p
1.64p
2.02p
-
0.50
1.00
1.50
2.00
2.50
H1 2015 H1 2016
Pen
ce
Basic & Adjusted Diluted EPS
Basic EPS
Diluted EPS
£5.5m
£11.7m
-
2.0
4.0
6.0
8.0
10.0
12.0
14.0
H1 2015 H1 2016
£m
PBT
0.366p
0.403p
0.34
0.35
0.36
0.37
0.38
0.39
0.40
0.41
H1 2015 H1 2016
Pen
ce
DPS
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H1 2016 Sales Movements
H1 2016
£m
H1 2015
£m
Change
£m
Sinclair Products December 2015 acquisition 20.6 - +20.6
- Kelo-cote 4.1
- Flamma range 3.6
- Aloclair 2.7
Hydromol Growth of 10% 3.5 3.2 +0.3
MacuShield February 2015 acquisition 2.0 1.4 +0.6
Forceval UK Recover from stock-out 1.3 1.0 +0.3
Ashton & Parsons Increased distribution 1.1 0.7 +0.4
Sinopharm products September 2015 acquisition 0.4 - +0.4
ImmuCyst Return to supply 0.3 - +0.3
Other 17.2 16.5 +0.7
Group Revenue 46.4 22.8 +23.6
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Income Statement
£’m H1 2016 H1 2015
Revenue 46.4 22.8
Gross Profit 26.0 13.8
Gross margin % 56.0% 60.5%
Operating costs (13.1) (7.5)
Share of joint venture profits 0.3 -
EBITDA 13.2 6.3
Depreciation & Amortisation (0.3) (0.2)
Operating Profit 12.9 6.1
Financing costs (1.6) (0.7)
Foreign exchange gain 0.4 0.1
Profit before Tax 11.7 5.5
Tax (2.1) (1.2)
Profit after Tax 9.6 4.4
Basic EPS (p) 2.04 1.65
Diluted EPS (p) 2.02 1.64
14
Focus on Three Key
Growth Brands
15
Kelo-cote: scar treatment
Available as: Kelo-cote gel
Kelo-cote UV gel (for exposed
skin)
Kelo-cote spray (for large or
difficult to reach areas)
Works on hypertrophic
and keloid scars
Prevents excessive
collagen production by
reducing water loss
through the healing scar
Extensive literature base
H2O H2O Silicone gel treatment results in normal scar
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0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
China Brazil Korea France Saudi Arabia Israel Germany Algeria Hong Kong Rest of theWorld
Kelo-cote - widespread global sales base
Internal data
Un
its
17
Diclectin: nausea & vomiting in pregnancy (nvp)
First pan-European opportunity following
recent expansion
3.4m pregnancies across Europe
70% of pregnant women suffer nvp
35% need time off work
Will be the only authorised treatment for nvp
Special delayed release tablet
Doxylamine and pyridoxine (Vit B6)
UK approval expected mid 2017
European approval mid 2018
Well established in Canada over 30 yrs
Approved in US in 2013
Now 10% market penetration / $160m pa sales
18
MacuShield: eye supplement for AMD
Acquired in Feb 2015 - a significant growth brand: £2.0m sales in H1 2016
Macula is region at back of eye (retina) for central vision
Three carotenoid (macular) pigments found there
Meso-zeaxanthine
Zeaxanthine
Lutein
Macular pigments filter out high energy blue light
Reduce glare (eg night-time driving)
Improve contrast sensitivity (eg sport)
Anti-oxidant and reduce oxidative stress (damage to photo-receptors)
Stabilise or reverse age-related macular degeneration (AMD)
Risk factors: poor diet, smoking, genetics
Largest cause of blindness in the elderly
500,000 registered cases in UK alone
MacuShield supplements dietary macular pigments
Only product containing lutein, zeaxanthine and meso-zeaxanthine
Promoted scientifically to optometrists / supplied commercially via consumer channels
Territories available – Europe, Russia, NZ, Australia, SA (currently 80% sales UK & Ireland)
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Summary
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Summary
Alliance transformed by the Sinclair acquisition
An enhanced European footprint (75% of sales)
A larger international business (25% of sales)
The strategic imperative endorsed by European
Diclectin deal
Good delivery of sales and profits
Sinclair sales and contribution have come through
Original Alliance business continued to perform well
Integration proceeding to plan
Stronger teams created
Better systems being implemented
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Appendices
21
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Top 20 investors: 10 October 2016
Holder / Fund Manager No. of Shares % Holding
Director & Related 57,134,436 12.12%
MVM Life Science Partners 55,561,900 11.79%
Aviva Investors Global Services 44,223,443 9.39%
Fidelity Management & Research 41,923,622 8.90%
Nigel Wray 36,385,905 7.72%
Artemis Fund Managers Ltd 36,298,719 7.70%
Slater Investments 35,176,578 7.47%
River & Mercantile Asset Management 24,837,500 5.29%
Brown Shipley Asset Management 11,999,486 2.55%
Franklin Templeton Investments 10,750,000 2.28%
LGT Capital Management 10,171,071 2.16%
BlackRock Investment Management (UK) 8,086,201 1.72%
Cavendish Asset Management 6,369,000 1.35%
Coutts & Co Inv, Mgt 5,826,531 1.24%
Smith & Williamson Investment 5,609,698 1.19%
Hargreaves Lansdown Asset Mgmt 5,494,887 1.17%
Grandeur Peak Global Advisors 5,012,326 1.06%
Redmayne Bentley Stockbrokers 4,672,144 0.99%
Brooks Macdonald Asset Mgmt 4,204,982 0.89%
Total No of Share Owners: 1041 No of Shares in Issue: 471,113,833
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Board Members
John Dawson – Chief Executive Officer
Andrew Franklin – Chief Financial Officer Peter Butterfield – Chief Commercial Officer
Andrew Smith – Chairman
Thomas Casdagli – Non-Executive Director
Pharmacist, MSc Finance; > 40yrs’ sector
experience, founder of Alliance
Former UK Commercial Director of Cambridge
Laboratories Ltd, graduated in Pharmacology from
University of Edinburgh
Senior positions held at SmithKline Beecham
Pharmaceuticals, Diversified Health Systems Europe,
Cerebrus plc and Parexel International
Partner in MVM Life Science Partners, Chartered
Accountant, graduated from Oxford in Molecular and
Cellular Biochemistry, joined March 2009
David Cook – Non-Executive Director
Most recently CFO and Chief Business Officer at
Biotie Therapies Inc. Chartered Accountant,
graduated in Chemistry from Oxford. Joined
Alliance April 2014
Nigel Clifford – Non-Executive Director
CEO of Ordnance Survey. Previously held senior
positions at Procserve Holdings, Micro Focus Int plc,
Nokia, Symbian Software. Graduated in Geography from
the University of Cambridge
Former General Manager – European Tax and Accounting
at Panasonic. Prior to that, Finance Director of Genzyme
Therapeutics Ltd and 12 years pharmaceutical experience
in senior financial positions at Wyeth.
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Senior Team Members
Janice Timberlake – Chief Human
Resources Officer
Fellow of CIPD with over 20 years of experience
in HR roles. Previous senior roles in My Travel
plc and National Environment Research Council.
NED and Trustee of Plymouth Marine
Laboratory Ltd, BSc Hons in Geography from
Hull University. Joined in 2011.
Dan Thomas – Chief Corporate
Development Officer
Since joining in 2006, has led Alliance’s M&A
and licensing activity, completing over 14 deals.
Has worked in Canada, Germany and France.
He holds a first class honours degree in Applied
Biochemistry from Brunel University. In 2011
Dan won the PLG/Astra Zeneca BD Executive of
the Year award.
Stephen Kidner – Chief Scientific &
Operations Officer
Sarah Robinson – Company Secretary
Over 23 years’ experience in pharma
development, manufacturing and supply chain
management gained with Wyeth and
Mundipharma International. BSc in Chemistry
from University of Wales, Swansea, MSc in
Pharmaceutics from Manchester and an MBA
from The Open University. Joined in 2013.
Over 20 years’ experience in the health and
financial services sectors, including Company
Secretary at the Financial Times and Investors
Chronicle jointly for 7 years. Has worked in
Asia, the UK and the USA. A Chartered
Secretary with an MBA from Southampton
University. Joined in 2010.
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Product Portfolio
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Product Portfolio
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Product Portfolio
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Product Portfolio
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Product Portfolio
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Product Portfolio
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Product Portfolio
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Product Portfolio
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Product Portfolio