summary of the q1 2019 results - neucaaverage farmacol pelion neuca * iqvia data, monitor apteczny...
TRANSCRIPT
AGENDA
1. Market and legal environment
2. Implementation of the pharmacy strategy
3. Financial results
4. Profit redistribution
5. Implementation of the customer strategy
2
Market and legal environment
51%share of independent
pharmacies
in the market in Q1
2019
• Further stabilization of the situation of independent pharmacies; market share at 51.0% in Q1 2019 vs. 50,1% in Q4 2018
• Market values of independent pharmacies in Q1 2019 at the level of 4.3 billion PLN - similar to Q1 2018
• The obligation to report from 1 April 2019 to the Integrated System for the Monitoring of Trade in Medicinal Products - implemented
as of 1 April 2019; the NEUCA group is the first to report to the ISMTMP from mid-July 2018 (reporting products from the so-called
deficit list)
The impact of the Pharmacy for the Pharmacist regulations
Pharmaceutical law amendment
• Introduction of mechanisms limiting illegal export of medicines abroad
• Preventing the plans to introduce mail order sales of prescription drugs for the disabled
Act on the profession of pharmacist
• Increasing the role of a pharmacist in the health care system
• Increased chances of implementing pharmaceutical care
Anti-counterfeit directive
• Implementation of the directive from February 9, 2019, creation of a nationwide database verifying the authenticity of medicines
• Estimates of the European Commission indicate that the value of the Polish market for counterfeit medicines is 62 million EUR
3
ISMTMP
Stable and growing pharmacy wholesale marketValue of the pharmacy wholesale market in quarters and annual dynamics (blue colour %)
in Q1 2014 - Q1 2019 (billion PLN) *
*IQVIA data
7,12
6,38 6,446,57
7,49
6,78 6,73
6,97
7,81
6,876,78
7,23
8,38
7,067,21
7,52
8,34
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2019
5,1% 5,3% 3,6%
2015 2016 2017 2018
4,1%
• The second best quarter in
the history of measurements
of the pharmacy wholesale
market
• Lower incidence in the flu
season
• Expected market dynamics in
the whole year at the level of
3-4%
4
- 0,5%
Value share of independent pharmacies in the market (%) vs. number of pharmacies
54,2
53,152,7
50,1
51,451,7 51,7
50,1
51
1Q 2017 2Q 2017 3Q 2017 4Q 2017 1Q 2018 2Q 2018 3Q 2018 4Q 2018 1Q 2019
• Continuation of the trend of
stabilizing the market position
of independent pharmacies
1486814912
14975
14847
14723
14571
14480
14331
14180
Share of independent pharmacies
(%)
Total number of pharmacies
Number of independent
pharmacies
1042610328
1021010111
99389813
97099562
9404
5
Market position of NEUCA
Quarterly shares of NEUCA broken down into market segments in the period of Q1 2016 - Q1 2019 (%)
28,327,7
28,0
29,429,1
28,828,2
29,3 29,4
27,6
28,728,3
28,9
26,2
24,0 24,1
26,6
25,6 25,6
24,3
26,4 26,5
24,0
25,6 25,426,0
29,8 30,330,8
31,732,0
31,7 31,432,1 32,1
31,031,5
31,231,7
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
In total Network pharmacies Independent pharmacies
2016 20182017
6
*IQVIA data
2019
IMPLEMENTATION OF THE PHARMACY STRATEGY
We provide a better future
to all independent Pharmacies
in Poland.
Improving customer satisfaction
4,35
4,40
4,18
4,23
4,13
4,24
4,25
4,33
Range of products
Continuity ofsupplies
Average Farmacol Pelion NEUCA
* IQVIA data, Monitor Apteczny Q1 2019
8
4,39
4,25
4,18
4,12
4,21
4,05
4,31
4,17
Commercialconditions
Promotional offer
Average Farmacol Pelion NEUCA
The NEUCA Group is a customer satisfaction leader in each of the categories analysed
Improving customer satisfaction
4,60
4,44
4,37
4,23
4,30
4,15
4,48
4,34
Transportationservices
Logistic services
Average Farmacol Pelion NEUCA
* IQVIA data, Monitor Apteczny Q1 2019
9
4,54
4,48
4,34
4,22
4,25
4,04
4,43
4,31
Telemarketingservices
Complaintsservices
Average Farmacol Pelion NEUCA
The NEUCA Group is a customer satisfaction leader in each of the categories analysed
A complete portfolio of programs strengthens and stabilizes the market position
CU
ST
OM
ER
EN
GA
GE
ME
NT
AREAS OF CUSTOMER
SUPPORT
# 3652
# 743
# 389
# 859
# number of pharmacies in the program: as on 31.03.2019
* Pharmacies participating in the most advanced programs
• As many as 60% of pharmacies in the country participate in programs and market activities, including 9% in Partner +
10
777
Q1 2018 Q1 2019
859
+82
+11%
NUMBER OF PHARMACIES IN MARKET PROGRAMS AND ACTIVITIESGROWTH OF PHARMACIES IN THE
PARTNER+ PROGRAM
5643pharmacies
in programs
and activities
at the end of Q1 2019
# 1248 (+36% yoy)
1457 pharmacies*
situation on
6/05/2019
The participation of pharmacies in market programs affects the results of NEUCA
Economic indicators grow along with the Customer engagement in cooperation
11
83%
94%
95%Partner+
IPRA
85%Zysk+
RPM
72%Outside programs Outside programs
4,2%
RPM
3,1%IPRA
Partner+
2,4%Zysk+
1,8%
2.0%
97%Partner+
30%
IPRA 84%
RPM
57%Zysk+
9%Outside programs
RETENTION Q1 2019 SYNOPTIS SHARE Q1 2019 FIRST SUPPLIER Q1 2019
NEUCA with the best rate of customer loyalty in the market
*Customer loyalty rate; "How likely is it that you would recommend cooperation with wholesaler X to a different pharmacist"
3737
33
3840
3841
-15
-5
5
15
25
35
45
55
Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019
Net Promoter Score* of pharmaceutical distributors (pt)
NEUCA Pelion Farmacol Small and medium-sized wholesalers
12
Sales revenues (billion PLN)
• Revenue growth correlated with a decline
in the value of the market in Q1
• Stable market position of the Company
14
2,16 2,14
Q1 2018 Q1 2019
-1%
Operational profit
Operational profit (million PLN) Operational profit excluding one-off events (million PLN)
• Increase of gross margin on sales in Q1 2019 by 0.28 p.p. up to 9.72%
15
42,7
48,0
1Q 2018 1Q 2019
13%41,3
46,9
1Q 2018 1Q 2019
14%
Business efficiency improvement
Sales and management costs (million PLN)
• Decrease in sales and management costs by over
7 million PLN in Q1 2019 as an effect of activities
optimizing costs and increasing business efficiency
implemented in 2018
• Business efficiency increase executed with
simultaneous investments in new business areas
16
161,7
154,5
Q1 2018 Q1 2019
- 4%
Net profit
Net profit (million PLN) Net profit excluding one-off events (million PLN)
• The impact of real estate sales decreasing the net result by 0.9 million PLN in Q1 2019 and 1.4 million PLN in Q1 2018
• The decrease of financial costs by 30% to 3.15 million PLN as a result of further optimization of the debt structure
17
30,9
36,3
Q1 2018 Q1 2019
18% 32,3
37,2
Q1 2018 Q1 2019
15%
Cash flow (PLN million)
18
• Net debt PLN 380.9 million, net debt/EBITDA at 2.2
• Increase in debt due to changes in accounting standards - IFRS 16 treating lease agreements as leasing;
• Additional leasing liability due to the implementation of IFRS 16 at the level of nearly 127 million PLN; annual increase in depreciation by approx. 15 million PLN
Results in the own products segment
Value of sales to pharmacies (million PLN) and yoy dynamics Net profit (million PLN) and yoy dynamics
• Investments in portfolio medicalisation - increase in the number of Genoptim products to 100 SKUs in Q1 2019 from 86 in Q1 2018
• 65 of products on the refund lists in Q1 2019
19
37,6 38,1
Q1 2018 Q1 2019
1% 7,9 8,3
Q1 2018 Q1 2019
5%
63**
17,3 19,122,1
26,829,6
33,1
3
26,6
42,0
29,0
65,0
37,5*4,33
5,005,75 6,40
7,40
2014 2015 2016 2017 2018 2019
Value of the dividend (mln PLN)
buy-back (mln PLN)
value of the dividend per share (PLN)
2.60
• The value of the program implemented in 01-04.2019
**The value of the program adopted for the years 2019-2020
14 years of regular annual dividend payment
Distribution of profit between shareholders: dividend and buy back
• The purchase of 127.5 thousand shares for redemption in April 2019, total 136.9 thousand shares purchased in 2019
• Adoption by the General Meeting of Shareholders of the resolution on purchase of 200 K shares by the end of 2020 at the maximum price of
315,00 PLN (26 April 2019)
• 15 May 2019 designated as the “right to dividend” day
21
IMPLEMENTATION OF THE PATIENT STRATEGY
We facilitate access to health protection
to improve the quality of life
and a sense of patient safety
Increase in the scale of operations and results of patient businesses in Q1 2019
Patient business segment revenues
38.7 mln PLN 54%
18% 227% 239%
*The sales results of Ortopedio plus Apteline.pl are included in the results of the pharmacy wholesale segment
• Dynamic increase in revenues in the area of clinical trials as a result of entering the project implementation phase in 2018 by SMO PRATIA (increase
in contract value by 50% y/y without acquisitions) and inclusion of the Małopolska Medical Center purchased in 2018 into the structure of Clinical
Research Centers at Pratia SA
• Implementation of the plan to increase the scale of operation of “Świat Zdrowia” outpatient clinics by means of takeovers in selected regions
4,9 mln PLN
Outpatient clinics revenues
24.5 mln PLN
Clinical testsand telemedicine
revenues
14.2 million PLN
E-commercerevenues*
4.2 mln PLN
Patient business segment operational profit
5.1 mln PLN
2323
Clinical trials - unique values for manufacturers and the clinical trial market
24
CRO area (Contact Research Organization) - responsible
for managing and monitoring clinical trial projects for
pharmaceutical companies (sponsors)
SMO area (Site Management Organization) - a network of
clinical trial centers responsible for conducting a study on
patients for pharmaceutical companies (sponsors)
Main challenges:• Work with local sponsors (including NEUCA partners)
and scientific centres in Poland
• Acquisition of international contracts from biotechnology companies
(including through the office in London)
Main challenges:• Increased efficiency of patient recruitment to centers
• Acquiring contracts (including oncology development)
International DNA of clinical trials
Clinical trials
CRO (Clinmed Pharma and BioScience)
• Beginning of the first meetings with clients related to international sales by the Office in London
• Synergy effect resulting from sharing structures between both companies (more effective human resources and
competencies management) - impact on margin construction
• Implementation of subsequent projects managed by CRO and carried out in the Pratia SA centres
SMO (Pratia)
• Continuation of improvement in the quality of contracting clinical trials in the SMO model - increase in the number
of contracted patients by 87%
• Improving the effectiveness of patient recruitment via online and offline channels - increasingly better method of
building relationships with the patient and the doctor translated into an increase in the number of patients included
in the conducted projects by 30%
• The merger of Małopolskie Centrum Medyczne and Pratia Kraków centres into one of the largest clinical research
centres in Poland, divided into the areas of oncological and specialist research. Increasing the value of contracts
and the number of patients in the acquired center
87%
y/y
increase of
contracted
patients
2019
30%
y/y increase in
number of patients included
into examinations
in 2019
25 25
Organization focused on "Patient experience"
69
medical
clinics
150,000patients
POZ
Leader in the implementation of effective models of care - coordination, prevention and education:
• POZ PLUS pilot program carried out jointly with the NFZ, MZ, BŚ and UE
• increased access to a wider range of services
• acquiring patients
Patient's satisfaction - "service and health effect":
• one standard of services implemented in all outpatient clinics
• personnel trained in the field of patient service
• constant process of measuring patient satisfaction
• NPS (indicator of the clinics’ recommendability) at a high level of 40
Business development:
• increasing the range and scope of e-services (patient account)
• senior care (two centres, łódzkie and mazowieckie voivodships) implementation from EU subsidies
• preventive and rehabilitation programs, including in cooperation with local authorities for people who are excluded professionally or
socially
26 26
Development of a new telemedical service - teleconsultation
20000verified
Diabtis patient
account
Acquiring Customes and creating competencies in the scope of teleconsultation:
• finalization of negotiations of contracts with insurers regarding remote patient service
• construction of a full-profile medical teleconsultation center: internists, pediatricians, specialists
• including in the teleconsultation offer other solutions of the NEUCA Group:
• e-prescriptions and drug reservations, e-referrals and e-applications
• long-term remote cardiac and diabetological care
Further development of services for diabetic patients:
• improving the e-prescriptions ordering process and their automatic extension by Diabdis patients
• full integration and automation of e-prescription filling process with an order basket integrated with
Apteline.pl
• improvement of processes related to the Diabdis patient service and education automation
Development of new services in the field of home care by Telemedycyna Polska:
• winning new projects financed by City and Commune Offices in the area of senior care
• preparation for the implementation of the first projects in the field of telecare
27 27
Dynamic increase in the range of medicine ordering platform
1250 pharmacies
cooperating
with apteline.pl
Business growth
• 4.8 million unique users in Q1 2019, a 5-fold increase vs. Q1 2018,
• A significant increase in the number of orders on Apteline.pl to nearly 40
thousand in Q4 2019 vs. 4Q 2018 (in the entire period Q1-3 2018 - 21.6
thousand)
• 3rd place among the platforms for ordering and reserving medicines on the
Polish market*
Development
• Further construction of the business scale, 3 million visits in March (vs. 400 K
in March 2018) and work on the conversion of traffic into orders
• Increasing the presence in the largest cities, currently 1250 cooperating
pharmacies, 300 new pharmacies in the process of obtaining for cooperation
• Improved website effectiveness (faster page loading, improved search engine
quality, new product recommendation mechanism)
* according to the independent portal Similarweb
28 28
A unique online solution for ordering equipment refunds
Development of the offer and the scale of business
• 50% increase in the number of users in Q1 2018 vs. Q1 2019
• Launch of the first telemedical platform in Poland, enabling the patient
to obtain an order for reh-ort equipment refund without leaving home
• Development of the assortment among others by creating an own
brand under the name "Wheelie" in the category of wheelchairs
Distribution
• To the patient's home
• 665 pharmacies with reh-ort equipment
• 200 pharmacies with NHF (NFZ) refund, the largest number of outlets
with a refund in the reh-ort area in Poland
29 29