Sebastien Lemonnier of INOCAP Gestion presented his in-depth investment thesis on Dermapharm (Germany: DMP) at European Investing Summit 2018.

Thesis Summary:

Dermapharm is a family-owned leading specialty pharma player in Germany. It focuses on branded products, offering a mix of originator and patent-free medicals in growing niche markets with low competition and high margins. Run by a strong management team for the past two decades, the high-single-digit expansion strategy is driven by a rich in-house development pipeline of new products, along with a proven “buy and build” track record and international expansion of its OTC hyperthermia medical device business. Combined with operational excellence and margin improvement, top-line growth should result in disproportionate operating profit growth, improving EBIT margin to more than 20%. Publicly traded since February 2018, Dermapharm remains a neglected stock while providing high-quality fundamentals, including strong results in the past two quarters. Management recently confirmed guidance for top-line growth of 20-25+% and EBITDA of 22-27+%. The shares recently traded at ~13x 2019E EBIT.

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About the instructor:

Sebastien Lemonnier started his carreer in 2003 as financial analyst at Tocqueville Finance. He was promoted as european fund manager in 2006 running the UCIT fund Tocqueville Value Europe and pursued his carreer for Mansartis, a Paris based multi family-office in 2012. He joined INOCAP Gestion in 2017, managing Quadrige Europe Midcaps. Sebastien holds a Masters Degree in Financial Management from Panthéon-Sorbonne Paris. As a hobby, he played tennis in competition, but now enjoys playing rugby and english boxing.