Coloplast A/s Class B · OMXCOP:COLO_B
Coloplast A/s Class B — Non-Deal Roadshow (2015)
53 slides from Coloplast A/s Class B's roadshow presentation, 2015
Slide 1: Leading intimate healthcare
Leading intimate healthcare Roadshow presentation – 9M 2014/15
Slide 2: Forward-looking statements
Forward-looking statements The forward-looking statements contained in this presentation, including forecasts of sales and earnings performance, are not guarantees of future results and are subject to risks, uncertainties and assumptions that are difficult to predict. The forward-looking statements
Slide 3: 9M 14/15 organic growth of 7% and 32% EBIT margin
9M 14/15 organic growth of 7% and 32% EBIT margin Highlights Performance Revenue (mDKK) Organic revenue growth of 7% (12% in DKK) Organic growth (%) Gross margin of 68% on par with last year 25.000 24.000 23.000 22.000 21.000 9 7 9 20.000 19.000 18.000 EBIT margin of 32%, both in DKK and fixed
Slide 4: 9M 14/15 organic growth was 7% against market growth of ~5%
9M 14/15 organic growth was 7% against a market growth of ~5% 9M 14/15 revenue by business area 9M 14/15 revenue by geography Business Reported revenue Organic growth Geographic Reported revenue Organic growth area mDKK In percent area mDKK In percent Ostomy European 4,118 6% 6,581 5% Care markets C
Slide 5: Ostomy Care grew 6% YTD driven by SenSura and Brava
Our Ostomy Care business grew 6% YTD driven by SenSura® range and Brava® accessories Comments Performance 9M organic sales growth of 6%. Satisfactory Revenues (mDKK) growth in China, Southern Europe, US, Nordic markets offset by negative growth rates in the Reported growth (%) Netherlands, Algeria
Slide 6: Continence Care growth in Q3 of 5%
Continence Care growth in Q3 of 5% primarily explained by challenges in UK and Holland Comments Performance 9M organic sales growth of 7%. Satisfactory growth in US, Saudi Arabia and Germany Revenues (mDKK) offset by negative growth in Algeria and Reported growth (%) Holland as well as continued c
Slide 7: Improved Urology Care performance in Q3
Improved Urology Care performance in Q3 driven by Endourology sales and Women’s Health Comments Performance 9M organic sales growth of 5% Revenues (mDKK) Reported growth (%) Growth primarily driven by sale of Organic growth (%) Endourology products in France, Saudi Arabia and Germany 17 11 8 12
Slide 8: Wound & Skin Care delivered solid quarter with 9% organic growth
Wound & Skin Care delivered another solid quarter with 9% organic growth Comments Performance Revenues (mDKK) 9M organic sales growth in WSC of 9% Reported growth (%) 9M organic growth in Wound Care of 12% Organic growth (%) 22 Growth driven by Biatain® sales in particular 18 Biatain® Silicone
Slide 9: Operating profit up by 8% in 9M 2014/15
Operating profit up by 8% in 9M 2014/15 affected by DKK 100m non-recurring costs in Q3 Comments Performance EBIT grew 8% to DKK 3,286m with a margin of EBIT (mDKK) 32% EBIT margin (%) Gross margin of 68% on par with last year Gross margin (%) − Driven by continued efficiency gains; 68 69 69 69 6
Slide 10: Free Cash Flow impacted by sale of bonds to fund dividend payments
Free Cash Flow impacted by sale of bonds to fund dividend payments Comments Performance Free cash flow was DKK 1,950m compared to DKK 1,611m in 9M 2013/14 FCF (mDKK) − EBITDA DKK 287m higher (before special FCF-to-Sales (%) items*) 26 − NWC-to-sales of approx 26%, 2%-points 20 19 19 higher, due to
Slide 11: Unchanged financial guidance for 2014/15
Unchanged financial guidance for 2014/15 Guidance Guidance Long term 14/15 14/15 (DKK) ambition Sales growth ~7% (organic) ~12% 7-10% p.a. EBIT margin ~32% (fixed) ~32% +50-100 bps p.a. CAPEX (DKKm) ~650 ~4-5% of sales Tax rate ~24% - Page 11
Slide 12: Introduction to Coloplast
Leading intimate healthcare Introduction to Coloplast Page 12
Slide 13: Coloplast has four business areas with global sales presence
Coloplast has four business areas all with global sales presence Group revenue FY 2013/14 by segment Group revenue FY 2013/14 by geography X = Global position Emerging markets 14% Ostomy Continence Care Care 41% 36% Other DKK developed DKK #1 12.4 bn #1 markets 12.4 bn 20% European markets Urology 6
Slide 14: Coloplast specializes in intimate healthcare needs
Coloplast specializes in intimate healthcare needs Who are our typical users How do we help them? Ostomy People who have had their intestine SenSura® Mio Care redirected to an opening in the Ostomy bag abdominal wall Continence People in need of bladder or bowel SpeediCath® management Compact male C
Slide 15: Intimate health care is characterized by stable trends
Intimate health care is characterized by stable trends Growing elderly population increases Demographics customer base for Coloplast products Expanding healthcare coverage for Emerging markets populations in emerging markets increases addressable market Earlier detection and cure, eventually reduces
Slide 16: Strong market positions in Europe and potential outside Europe
Coloplast has strong market positions in Europe and great commercial potential outside Europe Europe Developed Ostomy Continence Urology Wound Care Emerging Addressable 13 -14 billion DKK ~9 billion DKK 9 -10 billion DKK ~14 billion DKK market 4 - 5% growth 4 - 6% growth 3 - 5% growth 2 - 4% growth
Slide 17: Strategy centred on value creation through profitable organic growth
Our strategy remains centred on value creation through profitable organic growth How we compete… …Where we compete 1 Develop and market the world’s best 5 Untapped potential in Europe products 6 Increased momentum in Other 2 Interact and build consumers relations Developed Markets – incl. breakthrou
Slide 18: Key Value Driver #1: Many global growth opportunities
Key Value Driver #1: Many global growth opportunities with significant longer term potential Untapped pockets of growth in Europe e.g. in • UK • Germany Increase • Italy market share in • USA • Canada • Japan Build on and • Australia accelerate growth platform e.g. in • China • Brazil • Argentina De
Slide 19: Key Value Driver #2: Investing in Consumer Care activities
Key Value Driver #2: We continue to invest in Consumer Care activities to increase our interactions with the users of our products Hospital H General CARE practitioner Coloplast Distributors Pharmacies Consumer Bandagists Home Health Care DtC Page 19
Slide 20: Key Value Driver #3: Efficiency improvements in production
20 Key Value Driver #3: We see more potential for efficiency improvements in our production Production by country* 5% 10% Thisted Hungary Minneapolis Mørdrup China Mankato Denmark 25% 60% US/ France Nyirbátor Sarlat Tatabánya *Average usage of raw material (RM) and semi finished goods (SFG) COGS by
Slide 21: Key Value Driver #4: Economies of scale in cost functions
Key Value Driver #4: And we believe we can continue to drive economies of scale in our cost functions Cost item Development Outlook Outlook As reported Percentage of revenue Scalability potential Investments requirements COGS 50 38,7 31,3 High Medium 0 09/10 13/14 Distribution 29,5 28,3 Medium High
Slide 22: High cash returns and continued share buy-backs
Focus on organic value creation provides for high cash returns and continued share buy-backs Comments Performance Coloplast returns excess liquidity to Share buy-back (mDKK) shareholders in the form of dividends and Dividends (mDKK) share buy-backs Total payouts/FCF (%) Dividend is paid twice a
Slide 23: Delivering stable shareholder returns
Therefore we believe Coloplast can continue to deliver stable shareholder returns through.. Organic growth Stable market trends in our Chronic Care EBIT Margin * 32% business 16% 10% Strong retention program and innovative D-t-C activities 10% 9% 7% Increased focus on growing the business 03/0
Slide 24: Appendices
Appendices Page 24
Slide 25: The Coloplast share (COLO'B-KO)
The Coloplast share (COLO’B-KO) Share Capital Ownership Coloplast share listed on NASDAQ Copenhagen since 1983 2% 9% ~ 108 billion DKK (~ 16 billion USD) market 4% cap @ ~490 DKK per share (incl. A shares) 45% Two share classes: 33% 18m A shares carry 10 votes (family) 7% 202m B shares carry 1 v
Slide 26: Capital structure
Capital structure Comments Performance NIBD (mDKK) No interest bearing debt – will only be raised in connection with a major acquisition NIBD/EBITDA * Excess liquidity is returned to shareholders in 1,2x a combination of dividend and share buy- backs 0,6x 2.297 0,2x Share buy-backs of DKK 500m
Slide 27: Key Value Ratios
Key Value Ratios Profitability drivers Free Cash Flow drivers 45.0 42.1 36.8 40.0 35.8 35.5 38.7 34.1 35.4 35.0 30.6 33.4 32.4 31.8 23.7 27.1 30.4 31.3 25.6 29.5 29.4 30.0 28.8 28.5 23.1 22.2 22.5 23.9 28.3 28.5 23.1 25.0 22.0 20.0 6.5 7.0 15.0 5.8 5.9 4.3 4.3 5.6 3.8 4.6 4.6 3.2 3.1 4.4 4.3 4.1 4.0
Slide 28: Revenue development by business area
Coloplast revenue development by business area Ostomy Care Continence Care 12,000 12000 9 10 12 9 11 8 8 8 10,000 10 10000 7 7 6 6 9 5 5 6 8 4 8,000 8 8000 2 7 7 6000 5,091 0 6,000 4,633 4,849 4,438 4,266 4,118 3,831 4,081 -2 3,456 3,689 4000 4,000 -4 2000 -6 2,000 -8 0 -10 0 3 10/11 11/12 12/13 13/
Slide 29: Revenue development by geography and total
Coloplast revenue development by geography and total Europe Other developed 5 6 5 6 7 18 5 15 4 4 6 5 9 10 6 7 7,388 7,749 8,221 5 7,000 6,581 5 4 4 1,987 2,288 2,395 2,479 2,151 10/11 11/12 12/13 13/14 YTD 10/11 11/12 12/13 13/14 YTD Emerging Markets Coloplast total 9 12 24 7 8 7 20 14 23 6 6 6 7 7
Slide 30: Growing Emerging Markets business by 25% per year
We aim to grow our Emerging Markets business by 25% per year through focused execution in selected markets We have selected core growth markets We have a clear EM value creation strategy Core China Argentina 1 Expand China growth Brazil Greece markets Russia Poland 2 Expand Brazil New
Slide 31: US Mesh litigation – current financial impact
US Mesh litigation – Overview of current financial impact TBD Summary Financial Impact 9M 14/15 Coloplast estimates a total of around 7,000 claims EBIT 3,286 against the company. A total DKK 1.5bn has been EBIT before special items 3,286 provisioned and this is currently considered sufficient EBIT
Slide 32: Mesh litigation status & events leading up to provision
Mesh litigation status & events leading up to 1 bDKK provision Nov. 13, 2014: July 23, 2012: June 2013: Aug. 15, 2013: April 3, 2014: May 2, 2014: Sept. 5, 2014: Verdict vs BSC Verdict vs Bard Verdict for Verdict vs Bard Verdict vs Ethicon Coloplast provision Verdict vs Ethicon BSC MDL (FL): CA Stat
Slide 33: Healthcare reform landscape
Healthcare reform landscape Intensifying reform pressure France Still awaiting periodic review of OC and CC. Price cut Stable reform environment in WC implemented Oct` 2014. Germany Reimbursement level for CC under pressure. Holland Reimbursement level for OC and CC under pressure. Italy Tracking po
Slide 34: Coloplast Care is a retention program
Coloplast Care is a retention program bringing us closer to our consumers Objective Through Coloplast Care we… Key benefits C Connect to consumers and form lifetime bond An online support programme Enrollment through all relevant consumer touch points NPD gain and retention of new users when A Advis
Slide 35: Direct-to-Consumer activities is a new marketing channel
Direct-to-Consumer activities is a new marketing channel Objective Objective DtC is direct, individualized marketing… Examples of DtC investments New website Expertise Market to the individual’s need Conversion, Customized message up-selling and Specific products cross-selling to and dialogue and se
Slide 36: Introducing Ostomy Care
Introducing Ostomy Care Key products • Colorectal cancer (est. 45%) Disease areas • Bladder cancer (est. 10%) • Diverticulitis (est. 15%) • Inflammatory bowel disease (est. 10%) • Other (est. 20%) Customer • Nurses, mainly stoma care nurses groups • People with a stoma • Wholesalers/distribution • H
Slide 37: Introducing Ostomy Care Accessories
Introducing Ostomy Care Accessories Brava® is a range of ostomy accessories designed to reduce leakage Market or care for skin, to make our end-users feel secure. Brava® was fundamentals • Market size of DKK 2bn launched in April 2012 and the range includes 10 different products. • Market growth of
Slide 38: Introducing Continence Care
Introducing Continence Care Key products Disease • Spinal Cord Injured, SCI areas • Spina Bifida, SB • Multiple Sclerosis, MS • Benign prostatic hyperplasia, BPH & prostatectomy patients • Elderly Customer groups • Continence or home care nurses • Wholesalers/distributors • Hospital purchasers and G
Slide 39: Introducing Bowel Management
Introducing Bowel Management Disease areas Faecal incontinence (management Key products products only) Customer Customer groups groups & • Spinal Cord Injured, SCI call points • Spina Bifida, SB • Multiple Sclerosis, MS Call points • Rehab centers • Pediatric clinics Peristeen® Anal Irrigation Anal
Slide 40: Introducing Urology Care
Introducing Urology Care Treatment (surgical) of urological disorders Key products (implants and surgical disposables) Disease areas • Urinary incontinence • Pelvic organ prolapse • Erectile dysfunction • Enlarged prostate • Kidney and urinary stones Customer • Surgeons groups • Purchasing departmen
Slide 41: Introducing Wound Care
Introducing Wound Care Key products Disease areas Chronic wounds • Leg ulcers • Diabetic foot ulcers • Pressure ulcers Customer Hospitals Groups & • Wound care committees call points • Specialist nurses/doctors • (Purchasers) Biatain® Silicone Biatain® Ag • foam dressing with • Antimicrobial foam dr
Slide 42: Introducing Skin Care
Introducing Skin Care Key products Disease areas • Moisture associated skin damage • Incontinence • Skin folds & obesity • Prevention of skin impairments Customer Hospitals groups & • Clinical Specialists call points • Supply Chain • Value Analysis Committee Sween® EasiCleanse Bath® Community • Broa
Slide 43: Product market for US Skin Care
Product market for US Skin Care • US market size estimated at USD ~1bn with ~ 5% growth • Market share: 5-10% • Main competitors include • Medline Industries • Sage Products • ConvaTec Market drivers Market limiters Market trends Aging and obese population Consolidation of Providers Increase s
Slide 44: The Coloplast organisation
The Coloplast organisation Coloplast Group Chronic Care Strategic Business Units Ostomy Care Continence Care Wound Care Skin Care Urology Care Marketing Marketing SU Porgès Global Marketing Sales Sales Marketing Marketing R&D (incl. R&D Sales Sales Consumer R&D R&D Sales Regions Products) Chronic Ca
Slide 45: Coloplast Executive Management
Coloplast Executive Management Lars Rasmussen President, CEO • Born 1959 • With Coloplast since 1988 Anders L.-Skovgaard Allan Rasmussen Kristian Villumsen EVP, CFO EVP, Global Operations EVP Chronic Care • Born 1972 • Born 1967 • Born 1970 • With Coloplast since 2006 • With Coloplast since 1992 • W
Slide 46: Corporate responsibility – external recognitions
Corporate responsibility – external recognitions Page 46
Slide 47: Income statement
Income statement DKKm 9M 2014/15 9M 2013/14 Change Revenue 10,288 9,214 12% Gross Profit 7,020 6,304 11% Gross margin 68% 68% SG&A costs -3,414 -2,988 -14% R&D costs -328 -281 -17% Other Operating Inc/exp 8 12 -33% Operating profit (EBIT) before special items 3,286 3,047 8% EBIT margin 32% 33% * Spe
Slide 48: Balance sheet
Balance sheet DKKm 30-Jun-15 30-Jun-14 Change Balance sheet total 9,945 9,321 7% Equity 5,793 5,423 7% Equity ratio 58% 58% Invested capital 7,014 6,075 15% ROIC before tax * 60% 62% ROIC after tax * 46% 46% Net asset value per share 26 25 4% * Before special items. After special items, ROIC before
Slide 49: Cash flow
Cash flow DKKm 9M 2014/15 9M 2013/14 Change EBITDA 3,649 2,362 54% Change in working capital 227 -253 >100% Net interest payments -267 43 <-100% Paid tax -1,130 -1,076 -5% Other -521 912 <-100% Cash flow from operations 1,958 1,988 -2% CAPEX -447 -363 -23% Securities 409 -34 >100% Other 30 20 50% Ca
Slide 50: Production sites
Production sites TCC Mørdrup • Adhesives • Wound care products DK • Continence care products • Coloplast Consumer Products • Number of employees in production: ~375 TCC Thisted • Machine development • Ostomy care products DK • Number of employees in production: ~150 Sarlat • Disposable surgical urol
Slide 51: Production sites
Production sites Tatabánya • Ostomy care products • Adhesives HU • Continence care products • Number of employees in production: ~1,300 • Postponement & packaging Tata • Cross docking • Warehousing HU • Distribution & shipping • Number of employees: ~300 Nyírbátor • Catheter care products • Wound ca
Slide 52: Contact Investor Relations
Contact Investor Relations Holtedam 1 DK-3050 Humlebæk Denmark Ian Christensen Ellen Bjurgert Vice President Manager Investor Relations Investor Relations Tel. direct: +45 4911 1301 Tel. direct: +45 4911 3376 office: +45 4911 1800 office: +45 4911 1800 Fax: +45 4911 1555 Fax: +45 4911 1555 dkisec@co
Slide 53: Our mission, values and vision
Our mission Making life easier for people with intimate healthcare needs Our values Closeness… to better understand Passion… to make a difference Respect and responsibility… to guide us Our vision Setting the global standard for listening and responding Page 53