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DIVERSIFICATION –TAKING ON MOBILITY

Diversification – Taking on Mobility

The successful inclusion of a mobility business to access an alternative income stream

M1 – The History up to now M2 – The Future from the now

Mark Woltmann (M1) Mark Boyd (M2)

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The Journey to Now

Journey began in 2012 with the advent of PBS Generic Reform

• Net result of PBS Reform - Nearly 10 fold decline in Profit

• Industry Mantra

• Dispensary Hurting – Best response - Must “ramp up the front of shop”• BUT the Big Box discounters own this space (along with Retail Chains)

Like Banging your head against a brick wall

Lots of Pain for No Real Gain

So what to Do??

A Strategic Plan

CQ Friendly Society Ltd

VISION: A healthy business building a healthy community

MISSION: Owned by the members for the wellbeing of the community

PURPOSE: Providing value and relevance for members

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Strategy No: 3 (of 6)

Diversify into other Business Areas & Towns

• To Diversify or to Not Diversify

……That was the question

• If yes then

How

Who

What

The Diversification Opportunities

Established a Board Sub-Committee

to investigate possible opportunities

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Medical Centres

Optometry Child Care Mobility

• Ballarat Friendlies

• Previous Experience

• Herding cats

• National Pharmacies

• Industry under siege-SpecSavers

• Also looking to diversify

• Like pharmacyHeavily regulated/Gov Subsidised

• Built in growth

• Inhouse experience

• Toowoomba & Maryborough Experience

• Low Barriers to entry

• Common customer base

…..and the Winner was

Mobility

Low start-up cost

Had spare floor space

Leverage of current customer base

Growth market

Aging population

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The Timeline

2013

• AFS Independent Living

Superstore

• 200sqm small Store

• $0.25M Annual Turnover

2016

• Central Queensland Mobility

• 800sqm Store

• $1.9M Annual Turnover

2017

• Daniels Surgical & Health

Equipment

• 400sqm Store

• $1.4M Annual Turnover

The Sweetener National Disability Insurance Scheme (NDIS)

Assistive Technologies

• Only 4.5% of NDIS budget

• Equates to $6M Sales/yr in

Central Qld alone

$23B (Wow)

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The Timeline & The Effect

2018-19• Mobility

40% Turnover

• 70% of EBIT

Our World View

The future for both industries -

pharmacy and mobility

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Smaller Piece of

Pie

The Digital

Chemist

The

Consulting

Pharmacist

• Increase in competition

• Reduction in our scripting numbers

• Falling profitability

• Electronic scripting

• Automation of the dispensary

• Consumer medicine support applications

• Expansion of professional service delivery model

• Broadening of scope of 7CPA

NDIS Aging Population

NDIS Restraint

Other Players

• Will continue as growth market

• Still new and not really well understood

• Baby boomers are starting to mature

• Increase in aged are packages

• Will not fund new ‘red one’ every year

• Will only fund partial replacement or second hand

• Competition will come to town at some stage

• Being corralled by Think Mobility

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We must continue to adapt

Pharmacy profession - Chimney sweeps of the future

The mobility party will not last forever

Our next step for mobility……The party will not last forever

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Adoption of the Car Industry Model –Full product life cycle

Sell New Car

Service every

10,000km

Trade in Offer

Trade in offer

Sell Used Car

Service every

10,000km

Mobility Full Life Cycle Model

Retail Sales Outlet

Service Department

Second-hand Market

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Applying the Mutuality Principle

• Seeking to have mobility income recognised as member income

• Including NDIS and My Aged Care income

• Seeking a private tax ruling on this point

• Engaged Cooper Grace and Ward to assist

The reason behind the challenge

• Based on the principles of the National Disability Insurance Scheme (NDIS)• Choice and control for participants

• If successful • Significant effect on profitability

• Advantage point when competition comes to town

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Service / Product Supplier

Service agreement Common law Contract of sale

Participant

Choice Control

NDIA

Assess Disability Determine quantum of support

Our next step for pharmacy……

No chimney sweeps here……..

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Mobility will buy us time

…… to do

• Continue to do the basics right

• Purchase smart

• Range Smart

• Staff smart

• Swing of our strong points

• Most trusted and respected professional in society

• Most accessible

• Most cost effective

• Enter headlong into the world of professional service delivery

• Owners of chronic disease management and more importantly, prevention

• Diabetes

• Obesity

• Osteoporosis

• Dementia

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And when all that fails………

Drink

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