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Africa Day Conference

Wirtschaftskammer Osterreich

Wien, Vienna

Wednesday 6 November, 2019

Doing Business in Africa – A Case Study On HealthPlus Limited

Keynote Speaker: O. A. (Bukky) George – Founder & CEO, HealthPlus Limited

Greetings from HealthPlus Lagos, Nigeria

Outline

Misconceptions about Africa

Quick Facts About Africa

Business Opportunities in Africa

Challenges with Doing Business in Africa

The HealthPlus Story

Misconceptions About Africa

Africa is a country

Africa is a jungle

All Africans are dark-skinned

Africa is a continent full of corruption,

poverty and war

Quick Facts About Africa

Africa is the second largest continent in the world, both in size and population with 54 countriesThe land area exceeds China, USA and Europe combinedThe continent is home to 1.2 billion people, who speak over 1000 different languagesThere is a huge diversity in income levels, resource endowment, infrastructure development, educational attainment and business sophisticationAfrica is the second most attractive investment destination in the world behind AsiaThe continent is one of the most integrated regions in the world, ranking behind only Europe and Southeast Asia for economic integration (reducing/eliminating trade barriers)400+ companies in Africa earn annual revenues of $1 billion or more20 years from now, Africa’s GDP is projected to be among the fastest growing in the worldAfrica is one of the world’s best kept secrets

Business Opportunities in AfricaThe instinct of most business people is to underestimate Africa’s size or potential as a market and overestimate the challenges of doing business in Africa

Global leaders who misunderstand Africa run the risk of missing out on one of 21st century’s great growth opportunities

If you are a business or an entrepreneur looking for growth and frontier markets, then Africa has what you are looking for

Across the continent, national and regional economies are accelerating their growth and attracting the attention of foreign investors. This change is driven by a number of factors:

• More democratic and accountable government• Economic policies that facilitates international trade• Innovative information and communication technologies• A growing middle-class with a taste for modern consumer goods

With the backing of international communities, more African Governments are embracing the right reforms, building the right institutions & the right policy choices. These include diversifying their economies away from oil & gas and mining to Agriculture, retail and other small/medium-sized ventures which create significant jobs

The ease of doing business in Africa is improving. Nigeria for example moved up 15 places from 146th position to 131st in the latest “World Bank’s Doing Business 2020 Index”

Business Opportunities in Africa – Priority Areas

Infrastructure

Agriculture

Education

Healthcare

IT services

Fintech

Consumer goods and services

Retail

Fashion

Entertainment & media

Challenges with Doing Business in Africa

It is worth mentioning that as much as there are untapped opportunities in

Africa to be harnessed by discerning foreign businesses, there are certain

challenges also confronting the continent’s business climate. Here are a few

of them:

• Political instability

• Economic volatility

• Corruption

• Business risks

• Infrastructural gap

• Inconsistent policies of government

• Insecurity

The HealthPlus Story

Bukky George - Early Years

9th child of 33

A product of my• childhood and upbringing• passion for learning• quest for excellence

Inquisitive with a general competitive streak

Determination not to accept the status quo which sowed the earlyseeds for the audacious vision of HealthPlus

Bukky George - Education

1992 – Bachelor of Pharmacy, University of Lagos• Graduated with the best result across six disciplines: Pharmacy,

Medicine, Dentistry, Pharmacology, Physiology and Physiotherapy

2000 – MBA (Marketing), University of Lagos

2005 – Owner Management Program (OMP), Lagos BusinessSchool

2017 – Owner President Management (OPM) Program,Harvard Business School

2018 – Women on Boards, IE Business School Madrid

Bukky George - Work Experience

1992 – 1993: Intern Pharmacist, Lagos University Teaching Hospital

1992 – 1993: Locum, Onyx Pharmacy, GRA Ikeja, Lagos

1993 – 1994: National Youth Service Corp, Smithkline Beecham PLC, Nigeria(Experience in production, quality control and sales & marketing)

1995 – 1996: Medical Representative, May & Baker PLC, Nigeria

1996 – 1999: Assistant Manager Sales, Smithkline Beecham PLC, Nigeria

2002 – 2003: Pre-registration Trainee, John Bell & Croyden Pharmacy, UK

2003 – 2004: Pharmacist Manager, Lloyds Pharmacy, UK

1999 – till date: Founder & CEO, HealthPlus Limited Nigeria

Bukky George – Professional Memberships & Awards

Memberships• Fellow, Pharmaceutical Society of Nigeria • Member, Royal Pharmaceutical Society UK• Endeavor Entrepreneur • Member, Young Presidents’ Organization (YPO)• Chairman, Sanofi Pharmacy Advisory Board• Executive Council Member, Women In Management, Business and Public

Service (WIMBIZ)

Awards• YouWin! Award of Excellence in Entrepreneurship, 2019• Havard Business School Association of Nigeria (HBSAN) 2015 Leadership

Awards for the Entrepreneurship Category• 2015 W Entrepreneur of the Year (Access Bank)• Ernst & Young Entrepreneur of the Year (Finalist) 2015• Business Woman of the Year Category of the CNBC (Finalist) 2014 All African

Business Leaders Awards

The HealthPlus Dream

Incorporated in 1996, commenced operations as a retail pharmacy in 1999

HealthPlus was birthed to bridge the huge disconnect between the theory and practice of pharmacy in Nigeria.

The initial goal was to ethically and profitably run a single 18sqmstore in GRA Ikeja – a middle/upper class suburb in Lagos

From inception, HealthPlus distinguished itself as the pharmacyof choice through the provision of quality medicines, healthcareproducts and value adding pharmacy services by certified andwell-informed healthcare professionals in a friendly and hygienicenvironment

HealthPlus Corporate Philosophy

Excellence

• Attention to Detail

• Professionalism

• Process-Driven

• Result-Oriented

To help people achieve optimum health and vitality, while delivering superior value to stakeholders

To be Africa’s #1 for pharmacy, wellness and beauty

Customer Satisfaction

Our People Innovation PartnershipIntegrity

• CustomerFirst

• FrontlineFocus

• Talent• Teamwork• Respect• Leadership• Continuou

s Learning

• Courage• Open &

Honest• Ownership

• Agility• Creativity

• Collaboration• Community

Our Vision

Our Mission

Our Core Values

HealthPlus Products

Our Products

• OTC & prescription medicines (branded and

generics)

• Nutritional supplements

• Natural remedies

• Home medical equipment

• Mobility aids

• Mother & baby and personal care products

HealthPlus Services

Our Services• Full Prescription Dispensing Service• Pill Box Service• Minor Ailments Service• Medicines Use Review• Healthy Heart Check• Blood Pressure Check• Diabetes Screening• Cholesterol Check• Weight Management Service• Asthma Support Service• Skin & Hair Analysis Service• Stop Smoking Service• Family Planning• Sexual Health Service• Travel Health Service• Confidential Help/Advice and Lifestyle issues

CasaBella Products

• Skincare

• Hair

• Hair-care products

• Make-up and accessories

HealthPlus - Milestone Since InceptionStrictly Private and Confidential

1996 - 2003 2006 – Till date

2003

The pioneer branch moved to a bigger location still in

Ikeja

1999

Starts operations in April, 1999 as HealthPlus

Pharmacy & Health Shop at Kiddiesland Mall, Ikeja

2008

Launch of CasaBella International and obtaining of

exclusive franchise for the distribution of Revlon

products

1996

HealthPlus is incorporated

2007

Creation of the Head Office and Centralization of Operations in Lekki,

2006

Rebranded to become HealthPlus

Integrative Pharmacy, Nigeria's

1st integrative pharmacy

Commencement and Positioning Expansion and Brand Development

1999 - 2001

Emerged as the Pharmacy of Choice in GRA Ikeja through excellence in pharmacy and

customer service

2008

Added 3 new branches –Ajah, International Airport,

Ikeja and MMA2, Ikeja

2006

Launched a branch at Palms Shopping Center

2017

Engaged Mckinsey & Co. to develop a five-year

strategic plan

2010

First branch of CasaBella opens at the Palms

Shopping Mall, Lagos

2015

Further expansion into prime locations in Lagos as well as

Abuja, Enugu and Port Harcourt

Milestones achieved since inception

1

2018

Partnership with PE manager, Alta Semper.

Currently has 49 HealthPlusbranches and 29

CasaBella branches

Across 11 states and FCT

2019Launched

E-Commerce

HealthPlus Value Proposition - The ProblemSubstandard and falsified drugs proliferate retail outlets, creating a huge life-

threatening problem for consumers and medical practitioners. In Nigeria,

reliable access to safe, affordable, high-quality and effective medicines is, for

most people, simply not something that is taken for granted

Reasons for Poor Access to Safe Medicines;

• Significant fragmentation of pharmacy outlets; the landscape is

proliferated by numerous unlicensed drugstores.

• Wholesale/manufacturer supply channels are infiltrated by many

unlicensed charlatans and an inflow of low-quality, unregistered imports.

• Among the licensed pharma retail operators, operating standards and

service quality vary significantly and can often be both poor and

inconsistent.

HealthPlus Value Proposition - The Problem (cont’d)

170,000 children under 5 die every year in Sub-Saharan Africa because of

substandard or fake antibiotics and 120,000 from similarly low quality

antimalarial drugs (WHO, 2013).

3,426 licensed retail pharmacies in Nigeria in 2015 (2.8 per 100K people)

(Pharmacists Council of Nigeria, 2016).

11,837 licensed pharmacists in Nigeria in 2015 (6.2 per 100K people)

(Pharmacists Council of Nigeria, 2016).

200,000 unregistered drugstores in Nigeria (The Lancet, 2017).

HealthPlus Value Proposition - The Solution

We strictly protect the integrity of our supply

chain

We adopt UK pharmacy regulatory standards

internally

HealthPlus provides consumers with safe,

affordable and convenient access to medicines

and related healthcare products

HealthPlus is the largest employer of

pharmacists in Nigeria

We have become a household name in Nigeria

and beyond

HealthPlus Value Proposition - The Solution (cont’d)

HealthPlus delivers a modern, professional in-store

experience, similar to major retailers like Boots and

Clicks. Its stores are differentiated in the market in

three ways:

• First, it is an integrative healthcare retailer, selling

strictly medicines and healthcare products

• Second, HealthPlus guarantees the presence of a

qualified, knowledgeable pharmacist in-store at all

times (required by law but not commonly complied

with)

• Finally, the company provides complementary basic

health screening services and advice in each store

HealthPlus Value Proposition - The Solution (cont’d)

Operating as a complementary but distinctly

separate offering, typically located side-by-side with

HealthPlus, CasaBella offers the same convenient

access to trusted, high-quality beauty and grooming

lines without compromising HealthPlus’ brand.

Similarly, CasaBella stores are staffed by trained

beauty advisers.

HealthPlus Value Proposition - Product & Pricing

HealthPlus and CasaBella both sell a mix of local and international brands.

About 60% of the group’s products are sourced locally and 40% are

imported.

HealthPlus - Competitive Advantages

Early-mover advantage: In a massively underserved market that is also projected to grow

significantly from a combination of demographics, strengthening of the health insurance market

and stronger regulatory oversight, HealthPlus is the clear market leader and growing aggressively.

Trusted, highly-visible brands: Both concepts (HealthPlus and CasaBella) are well located in key

middle class residential and commercial sites. Customers rate trust highly as a key reason for their

patronage.

Strong partnerships with trusted suppliers: Stores offer a broad selection of leading local and

international brands. HealthPlus has longstanding relationships with key suppliers developed over

its 19-year trading history.

HealthPlus - Team Structure

Corporate OrganogramC-Suites

HODs

Managers, Officers, Assistants

Key roles to be fi l led

Vacant

Chief Adminstration Officer

Board

Chief Financial Officer

Head, Internal Audit & Risk Management

Head, Retail Operations

(Pharmacy)

Head, Pharmacy Services

Head, HRHead, Facilities & Admin. Services Head, IT

Head, Marketing %Communication

Head, BusinessDevelopment

Head, Warehouse & Logistics

Head, Purchasing & Category

Management Financial Controller

Management Accounting

Financial Reporting

Treasury Accounting

HR Business Partner

HR Operations

Performance Management

Facility Management

Corporate Services

Admin

Security

IT Projects

IT Operations

Regional Retail Operations Managers

(Pharmacy)

Area Managers

Branch Managers

Pharmacists

Regulatory & Compliance

Pharmacy Services & Health Promotions

School of Pharmacy

Brand Management & Communication

Category Marketing

Loyalty Program

Logistics

Warehouse

Transport Management

Medicines & Healthcare

Natural Health

Beauty & Personal Care

Non-Inventory

Internal Audit

Internal Control

Risk Management

Legal Strategy & Planning

Talent Management

Fleet Management

HCAs

Merchandising

Head, Sales

Sales

Head, Digital Marketing & E-

Commerce

DigitalMarketing

Technology

Operations

Mothers & Babies

Head, Retail Operations (Beauty)

Regional Retail Operations Managers

(Beauty)

Area Managers

Branch Managers

Beauty Advisors

Merchandising

Retail Intelligence

Project Accounting

CEO

Head, Projects

Chief RetailOperations Officer

Customer Service

Chief OperationsOfficer

Service Delivery

Chief Commercial Officer

Acquisition & Partnership

Private Label

Non-Retail

Designs &Projects

Property Acqusition &

Leasing

Business Process

Head, CorporateTransformation Head, Custer Service

Board of Directors

Dr. Ayo SalamiChairman

Bukky GeorgeFounder & CEO

Afsane JethaNon-Executive Director

Zachary FondNon-Executive Director

Deji AkinyanjuNon-Executive Director

Management Team

Bukky GeorgeFounder & CEO

Foluke AkinniranyeChief Retail Operations Officer

Deji FaniyanCorporate Transformation

Dimeji OlajitanInternal Audit & Risk Management

Tolu OniLegal

Ernest EguasaChief Financial Officer

Tunde AkiodeChief Commercial Officer

Sylvester AdewuyiInformation Technology

Dupe AdebiyiPharmacy Services

Onomen Ayodele-OlugbogiRetail Operations

Eric AmaefuleProcurement & Category

Management

Moses MogboluMarketing & Communications

Matthew AremuWarehouse & Logistics

Dotun BabatundeDigital Marketing & E-Commerce

Babatunde AwofehaHuman Resources

Toyin ArifayanSchool of Pharmacy

Management Team (cont’d)

Pelumi TubiBusiness Development (HealthPlus)

Elizabeth EnajerohBusiness Development (CasaBella)

Kolade Hassan Projects

Martin AwogbadeFacilities & Admin. Services

Management Team (cont’d)

The Alta Semper Investment

Challenges Pre Equity Raise

• Inadequate working capital

• High interest bank loans

• Poor retail technology and infrastructure

• Subpar Distribution Centre

• Key talent vacancies (scarce retail expertise)

• Sub-optimal inventory management

The Alta Semper Fit

• Focus on Africa

• Focus on Healthcare sector

• Ability to invest patient & flexible capital

The Alta Semper Investment (cont’d)

The Alta Semper Investment

• US$18 million growth capital

• To capture the pent-up demand for high-quality yet affordable

healthcare and beauty supplies

• To enable HealthPlus continue to expand its store footprint

• To allow the company continue to invest in market leading human

talent

• To develop a central distribution centre

• Selectively explore private label and e-commerce initiatives

HealthPlus Today

90 store footprint across 11 states

850 employees

GP of 42% (one of the highest in the world)

Double digit growth annually

A household name with strong brand equity

Solid reputation for providing access to quality medicines, healthcare &

beauty products backed with value-added services

Contributing our quota to the achievement of universal healthcare

coverage and to increasing life expectancy of Nigerians

Numerous awards for excellence in entrepreneurship, healthcare and

community service

Better positioned to achieve our audacious vision of being Africa’s #1 for

pharmacy, wellness and beauty

Future Strategy

In 5 years, the HealthPlus Group will become #1 Nigerian retailer

for health and beauty, performing in line with global peers (e.g.

Clicks Pharmacy SA, Sally Beauty USA)

• Revenues > N30B

• Number of annual instore transactions: 4.25million

• Number of stores (3 different formats): 300

• A network of independent pharmacies with a banner group

(cooperative): 500

• Market share: 15 – 20% (in formal markets)

• Growth: 17% (5 year growth rates)

• EBITDA margins: 10 – 15%

• Structure: diversified retailer (products & services, instore and online,

wholesale group)

Future Strategy (cont’d)

In 10 years, the HealthPlus Group will be setup with

capabilities to expand into the rest of Africa

• Revenues > N50B

• Number of annual instore transactions: 7.5million

• Number of stores (3 different formats): >400

• A network of independent pharmacies with a banner group

(cooperative): 1000

Enhancing the security of drug supply chains in Nigeria

Increasing access to quality healthcare and job creation

Providing opportunities for women

Employee training & development

Creating Meaningful Developmental and Social Impact

McKinsey & Company Sources

References

Thank You!