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Financial Results
1Q 2010
Market information
Company NEUCA S.A.
Number of shares 4 415 912
Market Cap
(at PLN 68.00 per share)300.3 million PLN
Free Float 43.75%
Index sWIG80, WIG
Market main
Ticker NEU
Company’s Board
Piotr Sucharski – President of the Board, General Director
Dariusz Śmiejkowski – Vice President of the Board, Director for Development
Robert Piątek – Vice President of the Board, Director of Operations
Website www.neuca.pl
IR contact
We strive after synergy
on the health market.
WHOLESALEWe are an indispensable agent in
medicines trading in Poland
RETAIL
We are the most effective
seller of selected medicines in
Poland
SERVICE
We are a main supplier of
logistic, marketing, and selling
services on Poland’s health
market
NEW
PRODUCTS
We develop innovative
medicines, recommended by
pharmacists
NEUCA – Pillars of Development
Wholesale Network of partner pharmacies Own medicines Services on the health market
a holding company – Group management
Transport and logistics
NEUCA – 1st quarter 2010
1.622 million PLN - consolidated revenues,
129 mln PLN gross profit on sales
a leader on Poland’s pharmaceutical wholesale market with a 30.8% market share
Development of new businesses in line with assumptions
implementation of a strategy connected with warehouse and logistic
restructuring and launching the Common Services Center activity
11 million PLN of EU funds obtained to support finance of the Common
Services Center project in May 2010
NEUCA in a new structure of the Group Business since March 2010
MARKET
CONDITION
1.1% yoy sales increase in 1Q 2010 in spite of weak January
consolidation on the pharmacies market – nearly 1 pharmacy out of 5 is in the network
Direct to Pharmacy, new rules
AstraZeneca UK Ltd located in London is NEUCA’s partner in Poland
A successful IT and operational change completed in February 2010
Pharmaceutical wholesale market 1Q 2010
5,72
5,55
5,66
Value of pharmaceutical market [in bil. PLN]
1Q 2009 4Q 2009 1Q 2010
Monthly market sales
1.1% yoy market growth in 1Q 2010
8% yoy decline in January 2010. January 2009, the best month in the previous period
September 2008/March 2009
Market recapture in the subsequent months
+3% yoy in February 2010 and +9.3% yoy in March 2010
[mil. PLN]
Unusual January in the 2009/2010 period
NEUCA Group’s market share
No 2
21,0%
No 3
17,0%
No 4
7,0%
No 5
6,0%
Other
18,4%
Neuca Group
30,8%
* own assessment based on IMS data for 4Q 2009; share together with DTP Astra-Zeneca’s sales
FINANCIAL
RESULTS
Consolidated results
+38%, i.e. +448 million PLN, increase of sales revenue and increase of all results in 1Q 2010 compared to the same
period in the year before
insignificantly weaker operating margin yoy du to consolidation of the less profitable Group Prosper
+56% yoy increased net profit and improved net profitability by +0.08 p.p. yoy in 1Q 2010, despite of greater
advantage value on obtained rebates booked in1Q 2009
(millions of PLN) 1Q 2010 1Q 2009change
% yoy
change
PLN yoy
revenue 1 622.3 1 173.9 38.2% 448.4
gross sales profit 128.4 97.6 32.0% 31.2
EBITDA 23.8 18.1 31.6% 5.7
EBIT 18.3 14.8 23.8% 3.5
net result 11.8 7.5 55.7% 4.2
% of sales revenue
gross sales profit 7.94% 8.31% -0.37 p.p
EBITDA 1.47% 1.54% -0.07 p.p.
EBIT 1.13% 1.26% -0.13 p.p.
net result 0.72% 0.64% +0.08 p.p.
* the net result published for 1Q2009 was adjusted when changes of rules of recognition of rebates obtained from suppliers were introduced
Gross sales margins 1Q 2009-1Q 2010
Improved gross sales margin since the acquisition of GK Prosper in 2Q 2009
Focus on increased profitability after GK Prosper’s consolidation, even at the cost of decreased sales
+0.31 p.p. Q/Q increase of gross sales margin
-88 million PLN, i.e. by -5% yoy sales decrease in the conditions comparable to those for Q 2010 – resignation
from unprofitable customers in the network trade and the pre-wholesale (-53 mln PLN yoy)
in 1Q 2009 the majority of rebate advantages from the warehouse at the end of 2008 were included
* The data after 2009 GK NEUCA (without GK Prosper) and GK NEUCA (pro forma) took into account new rules of accounting advantages from additional rebates in stocks,
introduced in the consolidated periodical report for 4Q 2009 and the presentational correction introduced ion the consolidated annual report for 2009
8.31%
7.33%7.54% 7.63%
7.94%
6.13%
5.59%
7.13%
1Q 2009 2Q 2009 3Q 2009 4Q 2009 1Q 2010
GK NEUCA (w/o GKP)
GK NEUCA
GK Prosper
Adjustments to the gross revenue from sales /1
[ths. of PLN] 1Q2009 2Q2009 3Q2009 4Q2009
Before adjustments
Revenue from sales 1 173 877 1 383 941 1 526 964 1 602 562
Manufacturing costs of products and services 3 148 11 783 11 983 14 839
Costs of sales of trade goods and materials 1 083 242 1 276 960 1 402 964 1 472 890
Self-cost of disposal 1 086 390 1 288 743 1 414 947 1 487 729
Gross profit on sales 87 487 95 198 112 017 114 833
Adjustments
Manufacturing costs of products and services -1 386 -7 811 -5 652 -7 512
Costs of sales of trade goods and materials -8 731 1 497 2 591 0
Self-cost of disposal -10 117 -6 314 -3 061 -7 512
After adjustments
Revenue from sales 1 173 877 1 383 941 1 526 964 1 602 562
Manufacturing costs of products and services 1 762 3 972 6 331 7 327
Costs of sales of trade goods and materials 1 074 511 1 278 457 1 405 555 1 472 890
Self-cost of disposal 1 076 273 1 282 429 1 411 886 1 480 217
Gross profit on sales 97 604 101 512 115 078 122 345
Gross return on sales
- Before adjustments 7.45% 6.88% 7.34% 7.17%
- After adjustments 8.31% 7.33% 7.54% 7.63%
Change due to adjustments 0.86% 0.46% 0.20% 0.47%
* an adjustment to the new rules of accounting of additional benefits from producers in 4Q 2009
** an adjustment to the presentation consisting in the shift of the self-cost of service sales to the enterprise overheads
Explanation
CHANGE OF ACCOUNTING RULES
adjustments included in the self-cost of goods and materials sales in correspondence with the value of inventory
an adjustment to the value of inventory of inventory and self-cost of sales by data activated for budgetary purposes in the
“Warehouse of benefits".
an adjustment to the value of inventory of inventory and self-cost of sales by the value benefits transferred to the Group
Business companies in proportion to the value of the stock of goods in the companies at each balance sheet date
elimination of the margin on stocks purchased by the Group Business companies which were not sold at the balance
sheet date
CHANGES IN PRTESENTATIONS
transfer of self-cost of sales in the part concerning transactions between companies in the Group Business to enterprise
overheads -> increase in gross profit from sales, increase in the enterprise overheads
transfer of part of enterprise overheads to sales costs -> with no effect to the results
Adjustments to the gross revenue from sales /2
Net profit 1Q’09 - difference
in 2009 a change of recognition of discounts obtained from suppliers was introduced in order to reflect
better the economic content of the transactions carried out
instead of general estimates, a detailed identification of allocations of estimated rebates to
individual inventory items was introduced
effect of increase in net profit for 1Q 2009 by 7 073 thousand PLN in comparison with the data
published in 2009
Net profit 1Q 2009 [ths. PLN]
„old” rules „new” rules
Indebtedness and assets turn.
Financial liabilities [ths. of PLN] 1.03.2010 31.12.2009 30.09.2009
> long term 102 063 96 410 77 757
> short term 325 254 281 560 160 592
TOTAL 427 317 377 970 238 349
leasing 65 693 55 186 43 683
share in Leasing 15,4% 14,6% 18,3%
+49.3 million PLN Q/Q increase of financial debt
Q/Q increase of percentage share of leasing in the
debt structure
planned increase of credit limits in subsequent
quarters in 2010
Current assets turnover [days] 1Q 2010 4Q 2009 3Q 2009
1. stock turnover cycle 46 50 48
2. Collection cycle 41 42 45
3. operating cycle (1.+2.) 87 92 93
4. liabilities turnover cycle 76 82 80
5. cash conversion cycle (3.-4.) 11 11 13
Change of status Q/Q [ths. of PLN] 1Q 2010 4Q 2009 3Q 2009
1. stock level 284 477 -171 830 58 903
2. trade obligations -264 636 133 241 -5 777
3. total (1.+2.) 19 841 -38 589 53 126
4. financial liabilities 49 347 -23 440 -15 878
5. total (3.+4.) 69 188 -62 029 37 248
decrease of trade liabilities together with the
reduced inventories in 1Q 2010
19.8 million PLN of cash from operations released
in 1Q of 2010 used to finance the increase of
liabilities
increase in financial liabilities, mainly short-term
ones 43.7 million PLN Q/Q
a faster inventories turnover as a result of
continuous improvement in logistics
operating cycle is shortened after the takeover of
GK Prosper
cash conversion cycle of 11 days
Consolidated CF for 1Q 2010
22 719
22 013
(60 183) (1 932)
6 236
32 096
20 949
OBS monetary
resources
Operating CF
excl.current asets
current assets tax paid investment CF Financial CF CBS monetary
resources
[ths. PLN]
Operating CF and Financial CF 1Q 2010 used to finance the increase of receivables
a significant reduction in inventories (284 million PLN), and trade liabilities (269 million
PLN) with respect to the end of 2009
NEUCA GROUP
COMPANIES
„ŚWIAT ZDROWIA” CHAIN
1Q 2010 nearly 1.7 thousand pharmacies, including 412 contract pharmacies
25.6% of Group revenue from sales originated by Świat Zdrowia (World of Health) pharmacies
54% higher purchases of pharmacies associated with the partnership program compared with any other
pharmacies/customers of NEUCA Group
change of terms of cooperation - offering additional business benefits to pharmacies
NURSEA recommendations implemented in 100% of Świat Zdrowia pharmacies - 100% of staff
AIMS 2010 achieve BEP (break even point)
constant improvement of revenue-cost ratio
completed development of a model of cooperation with partner pharmacies ("franchise")
signing at least 200 "Partner" contracts which assume the realization of 80% of pharmacy’s turnover in the Group
enforcing the implementation of the provisions of the contract with the Świat Zdrowia pharmacies - 65% of
turnover with the Group companies
implementation of AMAX, a IT program, in the Świat Zdrowia pharmacies
ensuring the attainment of Nursea’s aims in the Świat Zdrowia pharmacies
300.000 entries/month
into the website
www.swiat-zdrowia.pl
SYNOPTIS PHARMA
1Q 2010NOVELTIES
Omincardia
on sale from March 20
Nursea Urextra
on sale from May 12
(launched May 17))
REVENUE
1.85 million PLN, +37% increase yoy
AIMS 2010 12 million PLN sales
10 million PLN sales under the NURSEA brand
effective marketing of more lines of NURSEA sub-brands
further increase of synergies with the NEUCA Group to maximize a return to scale
Revenue form sales
2009/2010
[mil. PLN]
NEKK
ORDERS OUTSIDE NEUCA
GROUP tenders awarded: Cinema City, City Office of Poznań, Harper
Hygienics
orders made independently: Sokal, Twoje Apteki
(Your Pharmacies) strategies
continuous building of own history/portfolio
AIMS 2010 strong commitment to work for an internal customer - to
optimize the working time
building a "story" of external orders - strengthening of
additional Accounts with the sales profile
offer addressed to customers outside the pharmaceutical
sector
CINEMA CITY design,
mechanism and realization of
contest website
CITY OFFICE
OF POZNAŃ design and
realization of catalogue for
sector B2B
HARPER HYGIENICS market
research and strategic analyses
ILC
1Q 2010 work for companies outside the NEUCA Group, including Polbita, EMPIK, Ruch
INternet
March 23 – presentation of the new AMAX program to 120 pharmacists
AMAX – ca 500 implementations
in 2010 effective management of purchasing and inventory
promotions analyzer – an innovative and unique feature in the market
hint function - it helps the pharmacist when purchasing a medicine, presents the
stock level and the prices of similar medications in the whole therapeutic category
a patient may obtain, from the pharmacist, an SMS text on mobile phone, among
other things about the delivery of an ordered finished drug or information about the
need to implement another prescription
UPCOMING
QUARTERS 2010
NEUCA Group - warehouses
38
3432
28
20
17
12
78,2 76,674,6
87,6
73,1
68,0
61,1
0
5
10
15
20
25
30
35
40
45
1Q 2010 2Q 2010 3Q 2010 4Q 2010 2011 2012 2013
Nu
mb
er
of
wa
reh
ou
ses
0
10
20
30
40
50
60
70
80
90
Su
rfa
ce
are
a [
tho
usa
nd
s o
f m
2]
number of warehouses
storage surface area
Dividend policy 2006-2010
69% dividend payout ratio* in 2010, 12.9 million PLN unit net profit for the year 2009
maintained a high average annual growth of dividend payout rate
Value of dividend [ths. PLN]
Value of dividend per share [PLN]
* Management Board recommendation
Result forecast 2010
2009* 2010 P 2009 2010 P
2009** 2010 P***2009 2010 P
Net revenue from sales [mil. PLN] EBITDA [mil. PLN]
EBIT [mil. PLN] Net profit [mil.PLN]
* 6 388 million PLN revenue 2009 assuming consolidation of GK Prosper from 01.01.2009 r.** net profit 2009 r. without one-off transactions; 32.2 million PLN consolidated net profit for 2009
*** net profit forecast 2009 r. without one-off transactions; additional 2,5 mln zł million PLN of consolidated net profit from one-off transaction
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