Coloplast A/s Class B · OMXCOP:COLO_B
Coloplast A/s Class B — H1 2012/13 Earnings Presentation
52 slides from Coloplast A/s Class B's earnings presentation, Apr 30, 2013
Slide 1: Leading intimate healthcare – Roadshow presentation H1 2012/13
Page 1 Leading intimate healthcare Roadshow presentation – H1 2012/13 30 April 2013 Leading intimate healthcare
Slide 2: Forward-looking statements
Page 2 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 stat
Slide 3: Solid performance in H1 2012/13
Page 3 Solid performance in H1 2012/13 DKKm Sales • 6% organic sales growth (7% in DKK) +7% 5.707 • Satisfactory EBIT margin of 31%, both in DKK and fixed 5.346 currencies H1 2011/12 H1 2012/13 • EPS diluted increased by 25% to DKK 5.83 DKKm Operating profit • FCF increased by DKK 204m to DKK 872m 1
Slide 4: Ostomy Care growth of 7% in Q2 2012/13
Page 4 Ostomy Care growth of 7% in Q2 2012/13 % DKKm 10 • Organic sales growth of 7% for Q2 2012/13, 9 6% growth in H1 2012/13 4.633 8 7 4.266 6 3.949 • Growth was driven by the SenSura® range 5 3,569 3.621 4 and supported by continued strong uptake of 3 the Brava™ accessories product range 2 1 0 •
Slide 5: Q2 Continence Care was impacted by decreasing growth rates in the US
Page 5 Q2 Continence Care was impacted by decreasing growth rates in the US % DKKm • Organic growth was 6%, 2% points lower than 12 FY 2011/12 growth. Q2 growth was also 6% 3.831 10 3.456 • Growth was driven by the SpeediCath® portfolio 8 3.202 2.912 of ready-to-use intermittent catheters 2.759 6 •
Slide 6: Q2 Urology Care growth rates decreased as expected
Page 6 Q2 Urology Care growth rates decreased as expected % DKKm 16 • Organic growth of 9% for H1 2012/13. Q2 growth 14 was 7% in line with expectations as comparison 12 1.037 figures normalized 10 938 8 • Satisfactory growth in sales of penile implants in 6 787 the US. As expected growth rates decr
Slide 7: Wound Care growth of 6% in Q2 2012/13
Page 7 Wound Care growth of 6% in Q2 2012/13 driven by Germany, China, Brazil and US • Organic growth was 3% for Wound & Skin Care. % DKKm In Wound Care sales growth was 1%. Q2 16 growth was 7% and 6% respectively 1.529 14 1.522 1.512 1.500 12 1.450 • Growth in H1 was driven by China, Greece and 10
Slide 8: Satisfactory organic growth of 6%, despite slight decline in chronic care growth
Page 8 Satisfactory organic growth of 6%, despite slight decline in chronic care growth compared to FY 2011/12 level Group revenue H1 2012/13 by segment Group revenue H1 2012/13 by geography H1 2012/13 sales: DKK 5.7bn 727 1.990 14% 2.385 6% 7% 6% 1.188 4% 3.792 9% 3% 556 DKKm (organic growth) DKKm
Slide 9: Production efficiencies improved the H1 2012/13 gross margin to 67%
Page 9 Production efficiencies improved the H1 2012/13 gross margin by 1% point to 67% • Gross profit increased by 9% to DKK 3,824m. Gross margin of 67%, 1 % point up compared with last year • Increase driven mainly by improved production efficiency but also higher absolute sales • Q2 gross margin w
Slide 10: Satisfactory EBIT margin of 31% in H1 2012/13
Page 10 Satisfactory EBIT margin of 31% in H1 2012/13 • EBIT increased by 20% to DKK 1,756m. • EBIT margin was 31% against 27% in H1 last year. If adjusting last year for non- recurring items and bad debt provisions, the EBIT margin in H1 last year was 29%, hence an improvement of 2% points • Q2 EBI
Slide 11: Increased profitability brought ROIC after tax to 40%
Page 11 Increased profitability on a stable asset base brought ROIC after tax to 40% - up 7% points • ROIC after tax increased in H1 2012/13 by 7% points to 40%, with a 20% increase in EBIT on a slightly lower level of invested capital • The equity amounted to DKK 6,350m, corresponding to an equity
Slide 12: Free cash flow up by 31% to DKK 872m for H1 2012/13
Page 12 Free cash flow up by 31% to DKK 872m for H1 2012/13 • Cash flow from operations up by 32% to DKK 1,059m due to higher earnings and less losses from realised currency forward contracts and reduced by an increase in taxes paid • CAPEX increased by 27% to DKK 183m, equivalent to a CAPEX-to-sale
Slide 13: Satisfactory financial performance in H1 2012/13
Page 13 Satisfactory financial performance in H1 2012/13 MDKK H1 H1 2012/13 2011/12 • Satisfactory gross margin of 67%, up by 1% Gross profit 3.824 3.513 point against last year Gross margin 67% 66% • SGA ratio decreased by 2% points to 33% SGA-to-sales 33% 35% • EBIT margin was 31% against 27% last
Slide 14: Guidance for 2012/13 reiterated
Page 14 Guidance for 2012/13 reiterated Guidance Guidance Long-term 12/13 12/13 (DKK) ambition Sales growth 6-7% (organic) 5-6% Market+ Deliver margins in line with EBIT margin 31-32% (fixed) 31-32% the best performing medical device companies *) CAPEX (DKKm) ~400 ~4% of sales Tax rate ~25-26% - *)
Slide 15: Introduction to Coloplast
Page 15 Leading intimate healthcare Introduction to Coloplast 30 April 2013 Leading intimate healthcare
Slide 16: Our mission, values and vision
Page 16 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 30 April 2013 Leading intimate healthc
Slide 17: Coloplast is a leading medtech company specialising in intimate healthcare needs
Page 17 Coloplast is a leading medtech company specialising in intimate healthcare needs Group revenue FY 2011/12 by segment Group revenue FY 2011/12 by geography Full Year 2011/12 sales: DKK11.0bn Emerging markets 12% Continence Care Ostomy 35% Other Care developed 42% #1 markets 21% #1 European ma
Slide 18: Stable intimate healthcare trends
Page 18 Stable intimate healthcare trends Growing elderly population increases Demographics customer base for Coloplast products Expanding healthcare coverage for Emerging markets populations in emerging markets increases addressable market Surgical and medical trends are towards Surgical and earlie
Slide 19: Introducing Ostomy Care
Page 19 Introducing Ostomy Care Key products Disease areas • Colorectal cancer (est. 55%) • Bladder cancer (est. 10%) • Inflammatory bowel disease (est. 35%) Customer • Nurses, mainly stoma care nurses groups • People with a stoma • Wholesalers/distribution • Hospital purchasers and GPOs • Surgeons
Slide 20: The market for ostomy devices
Page 20 The market for ostomy devices Estimated market value split by region • Global Market size estimated at DKK 12-13bn with 4-5% growth • Market share: 35-40% Emerging markets • European markets 40-50% • Other developed markets 10-20% European markets • Emerging markets 35-45% Other developed •
Slide 21: Introducing continence consumables
Page 21 Introducing continence consumables Disease areas • Spinal Cord Injured, SCI Key products (management products) • Spina Bifida, SB • Multiple Sclerosis, MS • Benign prostatic hyperplasia & prostatectomy patients • Elderly and diabetics Customer • Continence or home care nurses groups • People
Slide 22: The market for urinary incontinence management products
Page 22 The market for urinary incontinence management products Estimated market value split by region • Global Market size estimated at DKK 8-9bn with 4-6% growth • Market share: 40-45% Emerging markets • European markets 50-60% • Other developed markets 25-35% Other developed European • Emerging m
Slide 23: Introducing Urology Care
Page 23 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 d
Slide 24: The market for urological disorders
Page 24 The market for urological disorders Estimated market value split by region • Global Market size estimated at DKK 8-9bn with 3-5% growth • Market share: 10-15% Emerging markets • European markets 10-20% European markets • Other developed markets 5-15% • Emerging markets 10-20% • Main competit
Slide 25: Introducing Wound Care
Page 25 Introducing Wound Care Key products (Biatain® and Comfeel® range) 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 • Sili
Slide 26: The market for advanced wound care where Coloplast competes
Page 26 The market for advanced wound care where Coloplast competes Estimated market value split by region • Global Market size estimated at DKK 13bn with 2-4% growth • Market share: 5-10% Other developed markets • European markets 5-15% • Other developed markets 0-10% Emerging European • Emerging
Slide 27: We expect continued value creation driven by...
Page 27 We expect continued value creation driven by... • Stable market trends in our Chronic Care 30% 29,5% 25,4% business 25% 20,9% 20% 16,3% 16,0% 15,8% • Increased focus on growing the business 15% 13,1% 9,3% 11,7% outside Europe 10% 10% 10% 5% 8% 8% 7% 6% 7% 6% 6% 0% • Additional improvements i
Slide 28: Coloplast value proposition
Page 28 Coloplast value proposition Close relationships with nurses and end- Stable long-term growth users provide leading market positions potential within Ostomy & Continence Care US and Emerging Markets hold high Growth and expansion potential as well as the Surgical Urology potential and Wound C
Slide 29: Appendices
Page 29 Appendices 30 April 2013 Leading intimate healthcare
Slide 30: The Coloplast share (COLO'B-KO)
Page 30 The Coloplast share (COLO’B-KO) Share Capital Ownership The Coloplast share listed on NASDAQ OMX Copenhagen since 1983 8% 1% 7% Market cap. DKK ~66bn (USD ~12.0bn) 44% @ DKK 300 per share (incl. A shares) 32% Two share classes: • 18.0 million A shares carry 10 votes 8% (family) Holders of A-
Slide 31: Extraordinary dividend of DKK 3.00 per share
Page 31 Extraordinary dividend of DKK 3.00 per share DKKm Ratio • Extraordinary dividend of DKK 3.00 per 1.200 50% share (Ex dividend 6 May 2013) • Share buy-back programme of DKK 1bn: 1.000 40% • First part of DKK 500m completed in June 800 2012 30% • Second part started in February. As per 31 600
Slide 32: Debt policy and capital markets exposure
Page 32 Debt policy and capital markets exposure • New debt raised in case of a major acquisition • Interest bearing assets and bank & cash NIBD/EBITDA Interest cover ratio ratio exceeded interest bearing debt by DKK 687m 2,5 90 Debt • All committed credit facilities expire in Q3 2012/13 • Majority
Slide 33: Coloplast updated its strategy in March 2012 aiming for higher growth and returns
Page 33 Coloplast updated its strategy in March 2012 aiming for higher growth and returns Our value creation will come from increased growth Aiming for continued higher total shareholder based on a strong new product pipeline combined with returns through continued cost discipline • Continued growth
Slide 34: Our growth in Emerging Markets will be driven by Ostomy Care and Wound Care
Page 34 Our growth in Emerging Markets will be driven by Ostomy Care and Wound Care Emerging Markets breakdown per business area Comments Percent of CP sales Ostomy Ostomy • Assura® line is the main brand ~60 Care Care but SenSura® is growing rapidly Wound Wound • Mature products like Comfeel® ~20 a
Slide 35: Geographical expansion holds significant longer term potential
Page 35 Geographical expansion holds significant longer term potential Build on and accelerate growth platform e.g. in • China • Brazil • Russia Develop growth • Argentina platform e.g. in • MENA • Mexico • India • South Africa • South East Asia • Selected ROLA markets Selected markets 30 April 2013
Slide 36: Underlying demographic development supports future growth
Page 36 Underlying demographic development supports future growth 30 April 2013 Leading intimate healthcare
Slide 37: Current global reform landscape
France Page 37 - Announced planned savings of 350mEUR total implemented over 5 years. It’s been proposed that Current global reform landscape reimbursements prices for Ostomy and Continence products could be lowered by up to 5% with implementation from September 2013. - French health care authoritie
Slide 38: Global operations footprint and cost structure
30 April 2013 38 Page 38 Global operations footprint and cost structure Design principles Production by country* • Consolidate on fewer sites 5% to reduce overheads 10% Thisted Hungary • Leverage international Mørdrup platform in Global China Operations Denmark 25% • Improve efficiency in labour 60%
Slide 39: Operational Excellence focus areas in our production
Page 39 Operational Excellence focus areas in our production Lean in volume production Re-design for manufacturing Expected to contribute Global sourcing and supplier relations with 50 – 100 bps to management gross margin annually with the current Focus on fixed costs and environment outlook on pric
Slide 40: Introducing Ostomy Care Accessories
Page 40 Introducing Ostomy Care Accessories Brava™ is a new range of ostomy accessories designed to reduce Market • Market size estimated at DKK ~1.5bn leakage or care for skin, to make our end-users feel secure. Brava™ fundamentals • Market growth estimate of 6-8% was launched in April 2012 and the
Slide 41: Introducing Skin Care
Page 41 Introducing Skin Care Key products Disease areas Moisture associated skin damage • Incontinence • Skin folds Preventative skin care Customer Hospitals groups & • Wound care committees call points • Specialist nurses/doctors • (Purchasers) Sween® • Skin care products of distinction Community
Slide 42: Product market for US Skin Care
Page 42 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 Ageing and obese population Cost containment Product and
Slide 43: Introducing Bowel Management
Page 43 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 Irrigati
Slide 44: Executive management
Page 44 Executive management Lars Rasmussen, CEO (54) With Coloplast since 1988 Educational background E*MBA, Scandinavian International Management Institute, 1995 BSc (Eng), Aalborg University, 1986 Management assignments with other Danish companies MT Højgaard A/S (BM) TDC A/S (BM) Lars Rasmussen,
Slide 45: Corporate responsibility – external recognitions
Page 45 Corporate responsibility – external recognitions 30 April 2013 Leading intimate healthcare
Slide 46: Income statement – H1 2012/13
Page 46 Income statement – H1 2012/13 H1 H1 DKK million 2012/13 2011/12 Net revenue 5.707 5.346 Gross profit 3.824 3.513 Gross margin 67,0% 65,7% SG&A costs -1.888 -1.874 R&D costs -195 -177 Other Operation Inc/exp 15 1 Operating profit (EBIT) 1.756 1.463 EBIT margin 30,8% 27,4% Net financial items
Slide 47: Balance sheet – at 31 March 2013
Page 47 Balance sheet – at 31 March 2013 H1 H1 DKK million 2012/13 2011/12 Balance sheet total 10.066 9.300 Equity 6.350 4.942 Equity ratio (%) 63% 53% Net interest bearing debt -995 377 Net debt to equity (%) -16% 8% Net debt to EBITDA -0,2 0,1 Invested capital 6.551 6.641 30 April 2013 Leading int
Slide 48: Cash flow – H1 2012/13
Page 48 Cash flow – H1 2012/13 H1 H1 DKK million 2012/13 2011/12 EBITDA 2.012 1.715 Change in working capital -226 -207 Net interest payments, etc. -32 -170 Paid tax and other -695 -537 Cash flow from operations 1.059 801 CAPEX -183 -144 Other -4 11 Cash flow from investments -187 -133 Free cash flo
Slide 49: Production sites
Page 49 Production sites TCC Mørdrup • Adhesives • Wound care products DK • Continence care products • Coloplast Consumer Products • Number of employees in production: ~350 TCC Thisted • Machine development • Ostomy care products DK • Number of employees in production: ~175 Minneapolis • Urology car
Slide 50: Production sites (Hungary, China, France)
Page 50 Tatabánya • Ostomy care products • Adhesives HU • Continence care products • Number of employees in production: ~1,100 • Postponement & packaging Tata • Cross docking • Warehousing HU • Distribution & shipping • Number of employees: ~200 Nyírbátor • Continence care products • Wound care prod
Slide 51: Contact Investor Relations
Page 51 Contact Investor Relations Holtedam 1 DK-3050 Humlebæk Denmark Ian S. E. Christensen Gunilla Jensen Vice President IR Coordinator Investor Relations Tel.: direct: +45 4911 3621 / Tel. direct: +45 4911 1301 / office: +45 4911 1800 office: +45 4911 1800 Fax: +45 4911 1555 Fax: +45 4911 1555 dk
Slide 52: Coloplast
Coloplast