Earnings Release • Nov 15, 2021
Earnings Release
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Disclaimer This document has been prepared by Fine Foods & Pharmaceuticals N.T.M. S.p.A. for the sole purpose described herein. The information herein is provided on a strictly confidential basis. By receiving this document the recipient undertakes with the Company to maintain the contents of the document and the document itself strictly confidential. This document may not be copied, distributed or reproduced in whole or in part, nor passed to any third party without the written consent of the Company.
The information contained herein does not purport to be comprehensive. The content of this document has a merely informative nature and is not to be construed as providing investment advice. Interested parties should conduct their own investigation and analysis of the Company and the data set forth in this document.
The statements contained herein have not been independently verified. No representation or warranty, either express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness, correctness or reliability of the information contained herein. Neither the Company nor any of its representatives shall accept any liability whatsoever (whether in negligence or otherwise) arising in any way in relation to such information or in relation to any loss arising from its use or otherwise arising in connection with this presentation.
The information contained in this document, unless otherwise specified is only current as of the date of this document. Unless otherwise stated in this document, the information contained herein is based on management information and estimates. This presentation includes certain forward looking statements, projections, objectives and estimates reflecting the current views of the management of the Company with respect to future events. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forwardlooking statements as a prediction of actual results. All forward-looking statements included herein are based on information available to the Company as of the date hereof. The Company undertakes no obligation to update publicly or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as may be required by applicable law. The information contained herein is subject to change without notice and past performance is not indicative of future results. The Company may alter, modify or otherwise
We create value
REVENUES OF FINE FOODS
STAND ALONE
| 9M-2021 | 9M-2020 | |
|---|---|---|
| € 143.4 mln |
€ 122.6 mln |
+ 17% |
| € 18.8 mln |
€ 16.3 mln |
+ 15% |
| 13.1% | 13.3% | |
| € 9.2 mln |
€ 7.8 mln |
+ 18% |
| 9M-2021 | 9M-2020 | |
€ 134.6 mln € 122.6 mln + 10%
figures reported in this presentation have been prepared in accordance with IAS/IFRS
* EBITDA AND EBIT ADJUSTED FOR NON RECURRING COSTS AMOUNTING TO 0.8 €M IN 9M-2021 AND 0.9 €M IN 9M-2020
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Fine Foods & Pharmaceuticals N.T.M. S.p.A., listed on Euronext Star Milan, is an independent Italian Contract Development & Manufacturing Organisation (CDMO). It develops and manufactures finished products for the pharmaceutical and nutraceutical industry
Fine Foods is also active in the cosmetic, biocide and medical device industries with the recent acquisition of Pharmatek-PMC
Retained key clients acquired before 2002 and added several new ones afterwards
* Sigma-Tau & Alfa Wassermann (now Alfasigma), Mylan (now Viatris), Fidifarm (now Dietpharm)
172€m Revenues in 2020 with ~11% CAGR over the last 10 years
52€m increase in revenues over the last 3 years
~74% of products sold in 2020 has been delivered abroad (1)
More than 100 customers, mainly leading Pharmaceutical and Nutraceutical players
~15% of employees dedicated to R&D and QA 162 new R&D Projects in 2020
(1) 57€m revenues invoiced in Italy, of which 12€m delivered abroad | (2) SKUs means "Stock-Keeping Units", namely single product codes
~1.300 SKUs(2), tailored to client needs
~100€m investments over last 5 years
The European Nutraceutical Market has shown high, steady growth, and is expected to maintain a positive trend in coming years
Source: Euromonitor International, Consumer Health 2022 Edition/Health and Wellness 2021 Edition, Retail Value RSP, EUR Fixed Ex Rates, Current Prices
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| CAGR '18-'20 |
CAGR '20-'23 |
|
|---|---|---|
| Vitamins & Dietary Supplements |
7.4% | 4.4% |
| Fine Foods reference market |
||
| Functional Beverages |
7.5% | 6.4% |
| Functional Foods |
2.9% | 2.0% |
* Source: Euromonitor International, Industrial, Pharmaceuticals, 2021 Edition, Production MSP, EUR Fixed Ex Rates, Current Prices
** Source: Prometeia
– Farmindustria 2020
The European Pharmaceutical production is expected to continue its sound growth in coming years
Note: Doppel, Biopharma, Nutrilinea, Mipharm, Procemsa and OFI are controlled by Private Equity investors
Source: Management elaboration on publicly retrievable selected information
2020 REVENUES (€M)
Fine Foods has substantially outgrown its panel of Competitors in the last 3 years
Sources: Management elaboration on publicly retrievable selected information
Methodology: the three variables' time series are divided by their respective value used as basis and multiplied by a factor of 100; the considered variables are Fine Foods and Competitors revenues
12
Sources: Euromonitor International, Industrial, Pharmaceuticals, 2021 Edition Production MSP, EUR Fixed Ex Rates, Current Prices. Consumer Health, 2022 Edition, Retail Value RSP, EUR Fixed Ex Rates, Current Prices
Methodology: the three variables' time series are divided by their respective 2010 value (the basis) and multiplied by a factor of 100; the considered variables are Fine Foods revenues, European Nutraceuticals – Vitamins & Dietary Supplements segment size and European Pharmaceuticals production size
Fine Foods has substantially outgrown its reference end-markets in the last decade, with 2020 sales at 2.7X the 2010 level
R&D has been an integrating part of the Company's Business Model since foundation
projects in 2020
new products in production in 2020
employees dedicated to scientific, technical, quality & control activities representing ~15% of total workforce
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COMPETENCE
expertise at the service of Customer's new developments
R&D 17
to support the most demanding
Areas of competence
Cross-functional R&D TAILOR-MADE SOLUTIONS
customers Pharma Technology Lab to support Food Supplement innovative products
FORMULAE DATABANK Huge assortment of finished product formulations set to go
DIGESTIVE TRACT HEALTH JOINT HEALTH WOMAN, MAN & CHILDREN HEALTH BRAIN & MEMORY WEIGHT CONTROL MULTIVITAMINS & MINERALS FIBERS CHOLESTEROL CONTROL SPORT FORMULATIONS IMMUNE DEFENCE ORAL REHYDRATION ANTIOXIDANTS EYE HEALTH PROBIOTICS BONE HEALTH TONICS & ENERGETICS
Implemented actions
Installation of 2 Co-generators Programs for reduction of water consumption
Programs for reduction of environmental impact of waste
Installation of Solar panels
ESG 21
Focus on Human Resources
High Potentials
Employee engagement
WOMEN ~ 43% of total employees, ~ 64% of white collar employees, ~ 40% of managers
TRAINING HOURS ~ 11,000 in 2020
NATIONALITIES 17 different nationalities
SATISFACTION annual survey scoring ~ 85%
AGE OF EMPLOYEES (ave.) ~ 41 years old
RETENTION
average employee retention rate in the last three years ~ 97%
Certified health & safety
Fine Foods has successfully been audited for the SMETA 4 Pillars, thus proving to be a reliable, sustainable and ethical company for all the stakeholders
SMETA (Sedex Members Ethical Trade Audit) is the world's leading social audit which aims at assessing a company based on its organization's standards of labour, health and safety, environment and business ethics.
Sedex Member since 2016
AUDITING COMPANY EY
2021 with a governance structure committed to creating value and taking action on environmental and social issues.
* Independent Director under article 148 paragraph 3 of the CFA, and article 2 of the Corporate Governance Code
**Non-Executive Director
Laura Soifer Chairman / Mario Tagliaferri Statutory auditor / Luca Manzoni Statutory auditor
Fine Foods Governance is already compliant with the best practices expected by the STAR market and the Corporate Governance Code.
Board of Directors with a diversified set of competences and 40 per cent of independent directors
Full compliance with gender equality: three directors out of seven are women, as well as the President of the Board of Statutory Auditors.
Efficient internal control and risk management system
ESG Committee established to add environmental, social and governance factors to corporate strategies, generating value for shareholders and stakeholders in the medium to long term, in compliance with sustainable development principles
ESG 28
Governance anticorruption and corporate liability
In 2021, we obtained two key certifications: The Gold Sustainability Rating from Ecovadis and the Medium Risk
FINE FOODS 9M - 2021
RESULTS PRESENTATION
On October 8, 2021, Fine Foods acquired 72.9% of Euro Cosmetic S.p.A., a company listed on AIM Italia
A mandatory takeover bid will be launched for the remaining 26.1% aiming the delisting of Euro Cosmetic
The price for 72.9% of Euro Cosmetic is € 26.8 million, paid in cash
The bid consideration for the remaining 26.1% will be € 8.60 per ordinary share (mandatory takeover bid) for a maximum of € 11.1 million, to be paid in cash
Euro Cosmetic's new Board of Directors includes Marco Eigenmann (President), Giovanni Eigenmann (CEO), Giorgio Ferraris (director), Adriano Pala (director), Emanuela Ciaffi (independent director) and Massimo Petrelli (independent director)
Euro Cosmetic specialises in the formulation and manufacture of personal care products
Euro Cosmetic is oriented towards research and development of innovative solutions with high quality standards.
A full service is guaranteed from formula to packaging for National and Multinational Companies acting in:
16,500 sqm production area
5,800 sqm covered area under construction
500+ SKUs
Pharmaceutical forms: liquids, gels, creams, pastes, and solid forms
o Intimate cleansers
o Face toners
o Sun oils, creams and lotions
o No-gas spray
Selection
of products
EURO COSMETIC ACQUISITION 35
FINE FOODS 9M
Fine Foods, last 19 January 2021, acquired 100% of Pharmatek PMC S.r.l.
The price, for a maximum of € 17.2 million, was paid in cash for a fixed component of € 11.2 million; the variable component of a maximum of € 6 million (earnout) will be paid within the next three financial years.
Pharmatek new Board of Directors includes Marco Eigenmann (President), Marco Pessah (CEO), formerly Pharmatek sole shareholder and Giorgio Ferraris.
| Pharmatek is a CDMO active in the sector of cosmetics, biocides and medical devices manufactured in different Pharmaceutical Forms |
Pharmatek production includes, among the others: |
||
|---|---|---|---|
| liquids | o BODY CREAMS |
||
| o FACE CREAMS |
|||
| o TONIC LOTIONS |
|||
| gel | SCRUBS o |
||
| TOOTHPASTE o |
|||
| o MOUTHWASH |
|||
| creams | o MOISTURIZERS |
||
| ointments | o DEODORANTS |
||
| o SKIN DISINFECTANTS |
|||
| SANITIZING GEL o |
Selection of products
CROSS SELLING POTENTIALS AND REFERENCE MARKETS
guarantee expanded production capacity, enriched transversal skills and a wide range of solutions, from mass market to selective products, with high-margin special projects.
| FINE FOODS BUSINESS UNITS |
NUTRACEUTICALS | PHARMACEUTICALS | COSMETICS BIOCIDES MEDICAL DEVICES |
|
|---|---|---|---|---|
| Nutraceutical Clients |
||||
| Pharmaceutical Clients |
||||
| Cosmetic Clients |
42
CROSS SELLING POTENTIALS AND REFERENCE 43 MARKETS
The European Cosmetic and Biocide market is expected to accelerate growth in coming years
Source: Euromonitor International, Consumer Health 2022 Edition/Beauty and Personal Care 2021 Edition /Home Care Edition 2021, Retail Value RSP, EUR Fixed Ex Rates, Current Prices
Cosmetics as per aggregation of Euromonitor's Bath and Shower, Deodorants, Hair Care, Skin Care
Biocides as per aggregation of Euromonitor's Oral Care, Dermatologicals, Surface Care, Adult Mouth Care
FINE FOODS 9M - 2021 44 RESULTS PRESENTATION
Overall Revenue Growth: +16.9%
Organic Revenue Growth: +9.8% (without Pharmatek)
Figures according to IAS-IFRS principles
➝
growth
➝
Figures according
% of revenues
30/09/2020 * 30/09/2021 **
7.8 9.2 6.9 8.3 30/09/2020 * 30/09/2021 ** EBIT Growth driven by EBITDA The strong increase of Ebit Reported and Adjusted driven by the growth of EBITDA – more than compensated the increase in D&A (+1.1 €m) EBIT REPORTED Figures according to IAS-IFRS principles % of revenues 5.6% 5.8% EBIT ADJUSTED * 0.9 €m adjustment for non recurring costs ** 0.8 €m adjustment for non recurring costs 6.4% 6.4% % of revenues +21.6% +18.0%
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➝
| % of revenues | ||||
|---|---|---|---|---|
| Net income | NET INCOME REPORTED |
9.0% 11.0 |
-2.0% | |
| driven by positive |
(2.9) | |||
| performance | ||||
| Net Income Adj. increased in terms of turnover and marginality |
due to positive performance | 30/09/2020 | 30/09/2021 | |
| Net Income Reported affected fair value evaluation of warrants |
by a non-cash effect for |
|||
| Net Income 2021 mainly impacted by: |
Net Income 2020 mainly impacted by: |
NET INCOME ADJUSTED |
4.2% | % of revenues 7.3% |
| o Negative fair value o Positive fair value evaluation on warrants evaluation on warrants (-12.8 €m) (+6.5 €m) |
* -3.2 €m Adjustments: | +101.9% | ||
| 0.5 €m non recurring costs net of tax effect o o -3.7 €m negative effect of warrant fair value measurement |
10.5 | |||
| Figures according to IAS-IFRS principles |
** 13.0 €m Adjustments: 0.2 €m non recurring costs net of tax effect o |
5.2 | ||
| o 12.8 €m positive effect on warrant fair value measurement |
30/09/2020* | 30/09/2021** |
compared to 30.09.2020 also as a consequence of 2021 acquisition
17.2€m investment for Pharmatek acquisition, other ordinary capex (5.9% of revenues) to support business expansion
Figures according to IAS-IFRS principles
Trade Receivables Trade Payables
Ordinary Capex Intangibles
Pharmatek Acquisition
Ordinary Capex Tangibles
Net
from 2020 to 9M-2021
Figures according to IAS-IFRS principles
➝
FINE FOODS 9M - 2021 51 RESULTS PRESENTATION
As of 31.10.2021
As of 31.10.2021
FINE FOODS 9M - 2021 54 RESULTS PRESENTATION
Our way
N.T.M. S.p.A. Investor Relations Tel. +39 035 4821382 [email protected]
IR Advisor Paola Buratti [email protected] Media Relations
Marianna Tremolada [email protected]
FINE FOODS 9M - 2021
RESULTS PRESENTATION
Diversified Share of Wallet and Geographic Distribution of Top Customers
Zingonia
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Note: all squared-meters data have been approximated to the nearest hundreds
The operating complex covers a total area of 45,600 sqm 19.7€m in CAPEX over the 2016-2019 period The expansion increased the covered area by ~ 80% since 2016
Pre-existing covered area: 15,900 SQM Final covered area: 28,800 SQM
Brembate
The operating complex covers a total area of 26,100 sqm
15.2€m for Plant Expansion over 2016-2019 and further 3.8€m in 2020 for a new warehouse construction and the purchase of a 5,400 sqm land
The expansion increased the covered area by ~ 150% since 2016
Pre-existing covered area: 5,700 SQM
Final covered area: 14,200 SQM
Note: all squared-meters data have been approximated to the nearest hundreds
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