Fidson Healthcare_ Investment Teaser

Fidson Healthcare Plc - Information Memorandum Lead Arranger

January 2018

Overview of Fidson Healthcare Plc Strictly Private and Confidential

Company History Nationwide Presence

▪ Fidson Healthcare Plc. is engaged in the business of manufacturing Offices
and marketing of its branded pharmaceutical products Warehouse/depots
Factory
▪ The Company was incorporated in 1995 and commenced operations Medical Reps
as a local distributor of pharmaceutical products
Regions
▪ Fidson made the transition into production in 2002 and
commissioned its first manufacturing plant in the same year; the Northern Region I Eastern Region
Company subsequently increased its production capacity with the Northern Region II Western Region
acquisition of a new factory in 2007 Lagos Region

▪ In 2016, Fidson commissioned its WHO compliant, ultra-modern
facility with high-tech machinery for manufacturing pharmaceutical
products and built in compliance with global standards

▪ Fidson has continuously maintained its high standards of processing
and operations as evidenced by its long standing NIS:ISO 9001:2008
certification

Key Strengths

WORKFORCE State Of The Art
PRODUCTS Manufacturing
MANUFACTURING
Employee strength 250 NAFDAC Facility
of 600 registered brands
▪ Infusions ▪ Liquids
▪ 206 Professionals ▪ Local & Imports ▪ Capsules ▪ Creams
▪ Biggest employer of pharmacists ▪ POM & OTC ▪ Tablets ▪ Dry Powder
▪ Nutraceuticals & Herbals
outside the government

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Key Investment Highlights Strictly Private and Confidential

7 Proven Management & Sales Team Proven Attractive 1 Attractive Industry Dynamics
Management & Industry
▪ The Company is led by an experienced Dynamics ▪ Growing prevalence of diseases amongst
and committed management team Sales Team Nigeria’s large and increasingly urbanized
with world class healthcare population creates a growing domestic
management experience and relevant demand for pharmaceutical products
technical expertise
Corporate WHO 2 WHO Compliant Manufacturing Plant
6 Socially Responsible Institution Social Compliant
Manufacturing ▪ In 2016, Fidson announced the
▪ Fidson is a socially responsible company Responsibility completion of its WHO-compliant, world
which supports impact initiatives including Plant class and state-of-the-art manufacturing
treatment for Diarrhea in children; Research and facility, named as one of the largest
manufacture of products for patients in Development Increased pharmaceutical manufacturing facilities
the IHVN HIV/AIDS programs in Nigeria Support for Local in Africa and is equipped to produce six
and provision of safe drinking water to Manufacturing distinct product lines
identified rural areas
Diverse
5 Strong International Partnerships Portfolio of
▪ Fidson has international partnerships with
various overseas manufacturers which Products
support growth in manufacturing capacity,
transfer of technology and knowledge and 3 Increasing Support for Local Manufacturing
provision of research support to Fidson’s
In-House research team 4 Diverse & Growing Product Portfolio ▪ Increasing Government support for
local manufacturers which is expected
▪ The Company has a diverse and growing to drive growth in the manufacturing
portfolio of drug products and formulations industry
across different therapeutic classes and
pharmacological segments

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Historical Financial Performance Strictly Private and Confidential

Revenue, EBITDA and PAT (N ’Mn)

12,000 9,719 a 10,303
10,000
9,235
7,1578,000
8,211 7,655

6,000

Revenue 4,000 1,045 1,581 1,698 1,799 1,318 1,943
EBITDA 2,000 207 155 643 744 317 730
PAT
- FY 12 FY 13 FY 14 FY 15 FY 16 9 mYoTnDth1s7’ 2017

Profitability KPIs 57% 55% 56% 53% 53% 51%
Gross Margin 15% 17% 17% 22% 17% 19%
EBITDA Margin 12% 15% 15% 18% 14% 16%
EBIT Margin 8% 3% 9% 10% 6% 10%
PBT Margin 3% 2% 7% 9% 4% 7%
PAT Margin 4% 3% 12% 12% 5% 7%
ROE 5% 2% 6% 5% 3% 4%
ROA

▪ Fidson’s revenue has been relatively stable in recent operating periods, with a CAGR of about 2% from FY 12 – FY 16, while EBITDA and PAT
attained a CAGR of 6% and 11% respectively in the same period

▪ A steep decline in oil prices and the subsequent devaluation of the Nigerian naira created a challenging operating environment which led to decline
in sales between FY 14 and FY 16 as manufacturers struggled to obtain the FX1 to import raw materials due to the dollar scarcity in Nigeria at the
time

▪ Notwithstanding, the first 9 months of 2017 (YTD 17) has seen an enormous uptick in performance on the back of a growing revenue base driven
by increased capacity from the new plant and a more favourable operating environment as Nigeria recovers from its FY 14 – FY 16 economic slump

a Represents 9 months performance from Jan –Sept 2017 4
1 – FX represents foreign currencies such as the US Dollar, Pounds Sterling and Euro

Historical Financial Performance Strictly Private and Confidential

Statement of Profit or Loss

NGN in Millions 2012 2013 2014 2015 2016 2017 CAGR
Revenue 12m A 12m A 12m A 12m A 12m A 9m M 12 – 16
Cost of Sales 7,169 9,247 9,719 8,211 7,655 10,303
Gross profit (3,095) (4,133) (4,286) (3,859) (3,600) (5,079) 2%
Other Income 4,074 5,114 5,434 4,352 4,055 5,223 4%
OPEX (0.1%)
EBITDA 55 42 87 94 105 14 18%
Dep. & Amort. (3,085) (3,575) (3,822) (2,648) (2,843) (3,294) (2%)
EBIT 1,044 1,581 1,698 1,799 1,318 6%
Finance Costs (267) (227) 1,943 5%
Finance Income (189) (213) 1,432 (282) 1,090 (297) 6%
Loss on Associate 854 1,368 (554) 1,516 (691) 1,646 21%
PBT (318) (408) (717) (624) 93%
Tax 5 44 21 -
PAT 3 5 - 39 - (5%)
- (716) 882 - 444 1,044 (21%)
540 250 (239) 838 (127) (313) 11%
(333) (95) 643 (94) 317 730
207 155 744

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Historical Financial Performance Strictly Private and Confidential

Statement of Financial Position

NGN in Millions 2012 2013 2014 2015 2016 2017 CAGR
Assets 12m A 12m A 12m A 12m A 12m A 9m M 12-17
Property plant and equipment
Investment property 4,679 7,043 10,791 11,501 12,206 12,294 21%
Intangible assets 39 39 38 37 36 36 (2%)
Investment in associate 2 3 22 11 92 106 117%
Investment in financial assets - 253 - - - -
Inventory 134 267 509 373 575 -
Trade and other receivables 1,289 698 (15)
Prepayments 1,090 1,497 1,146 1,086 1,593 8%
Cash and bank 1,986 2,344 3,187 3,780 2,420 2,630 6%
Total assets 1,451 791 117 12 118 (54%)
Liabilities 243 137 204 122 334 30 (3%)
Bank overdraft 10,780 12,243 15,772 16,667 206 10%
Trade and other payables 16,670 17,470
Income tax payable 497 608 434 365 11%
Unclaimed dividend 1,196 1,693 3,780 442 4,229 842 30%
Loans and Borrowings 308 177 220 4,212 301 4,373 5%
Retirement benefit obligations 441 385 nm
Government grant - - - 62 6%
Deferred revenue 2,516 3,372 4,410 47 4,022 62 (9%)
Deferred tax liability 516 583 392 4,203 343 3,401 nm
Total liabilities 319 378 327 323 (59%)
Equity - - 273 327 18%
Ordinary share capital 298 255 - 5 13%
Share premium 221 310 453 7 418 3
Retained earnings 5,553 6,998 10,007 343 10,074 504 -
Available for sale reserves 10,346 10,221 -
Total equity 750 750 750 750 19%
2,973 2,973 2,973 750 2,973 750 84%
1,505 1,521 2,043 2,973 2,872 2,973 7%
2,602 3,527
(0) 1 (1) (2) (2) 6
5,228 5,245 5,765 (2) 6,593 7,249
6,324

Contact Details Strictly Private and Confidential

▪ All communications or inquiries relating to this investment opportunity should be directed to the following:

ADDRESS

CardinalStone Partners
5 Okotie Eboh | South West Ikoyi
Lagos | Nigeria
Tel: + 234 1 7100 433
Fax: + 234 1 7100 434

NAME EMAIL TELEPHONE
Taiwo Omoregie [email protected] +234 809 047 9267
Onyebuchim Obiyemi [email protected] +234 809 020 2277

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