bioMerieux SA · EURONEXT:BIM
bioMerieux SA — FY2004 Earnings Presentation
46 slides from bioMerieux SA's earnings presentation, March 2005
Slide 1: Results
BIOME|IRIEUX
Slide 2: Disclaimer
Disclaimer The present presentation contains information, assumptions and estimates that were used to determine these objectives. They are subject to change or modification due to economic, financial and competitive uncertainties in France or in other countries. Further information regarding these a
Slide 3: Outline
Outline 1. Business Review 2. Financial Review 3. Outlook for 2005 2
Slide 4: 2004: very good results, while investing in the future
2004: very good results, while investing in the future Very good results … z Organic growth: 5.2%, at constant exchange rates z Operating income up 30% z Net income up 37% z Sustained fast debt reduction: gearing lowered to 28% from 51% … while investing in the future z Extensive new product launche
Slide 5: 2004: All regions reported growth
2004: All regions reported growth Growth outside France: 6.7%* North America: 6.1%* EMEA (Europe, Middle East, Africa): 3.7%* (6.6% outside France) Latin America and India: 9.1%* Asia Pacific: 8.8%* Growth by region * At constant exchange rates 4
Slide 6: More than 80% of sales outside France
2004: More than 80% of sales outside France Net sales by region North America: 26% EMEA (Europe, Middle East, Africa): 57% o/w France: 18% Latin America and India: 7% Asia Pacific: 10% 5
Slide 7: 2004: faster growth in reagent sales
2004: faster growth in reagent sales Reagent sales up 6%* 4.3% Services 10.4% Instruments 85.3% Reagents: 10,4% (2003: 84.5% of sales) About 3,500 new instruments installed on customer premises * At constant exchange rates 6
Slide 8: Organic growth in both fields of application
2004: Organic growth in both fields of application Clinical 87.4% of sales Industrial 12.6% of sales 87.8% of sales 12.2% Organic Organic of sales growth growth Currency Currency €37.9m €9.9m Sales €(4.1)m €(27.5)m -3.7% -3.4% Sales Sales €813.2m Sales €117.4m €802.9m €111.6m +4.7% +8.9% 2003 2004 2
Slide 9: 2004: Sustained growth in clinical applications
2004: Sustained growth in clinical applications 4.7% 4.3% 3.6% 2002 2003 2004 2004 Growth in the main clinical segments*: z Bacteriology: + 6% z Immunoassays: + 6% z Molecular biology: + 11% * At constant exchange rates 8
Slide 10: Industrial applications: an attractive, but increasingly competitive market
Industrial applications: an attractive, but increasingly competitive market Agrifoods z Growth driven by changing regulation and food scares z Intensifying competition New entrants Strong price sensitivity z Trend towards more placed instruments Pharmaceuticals z Growth fairly steady z Highly qu
Slide 11: bioMérieux is the market leader in industrial applications
bioMérieux is the market leader in industrial applications bioMérieux €117m Becton-Dickinson 3M Others Oxoid Merck AES Qualicon (Dupont) Millipore Breakdown of the industrial applications market* * bioMérieux estimates 10
Slide 12: 2004: very good results, while investing in the future
2004: very good results, while investing in the future Very good results … z Organic growth: 5.2%, at constant exchange rates z Operating income up 30% z Net income up 37% z Sustained fast debt reduction: gearing lowered to 28% from 51% … while investing in the future z Extensive new product launche
Slide 13: Extensive new product launches
2004: Extensive new product launches Main products launched TEMPO TEMPO MiniMag MiniMag Vitek Vitek 22 Compact Compact (pre-launch (pre-launch )) VIGI@CT VIGI@CT Observa Observa MDA MDA Stellara Stellara Expert Expert system system Expert Expert system system Software Software Expert Expert System S
Slide 14: VITEK 2 Compact introduced
2004: VITEK®2 Compact introduced 13
Slide 15: VITEK 2 Compact: a real competitive advantage
VITEK®2 Compact: a real competitive advantage Separate identification and susceptibility testing Automated system z The most advanced on the market z The most user-friendly: one-day training z Throughput and traceability An integrated solution z Observa, database management software compatible with
Slide 16: VITEK 2 Compact: a real competitive advantage
VITEK®2 Compact: a real competitive advantage Same-day results: 6 hours mean time versus 12-18 for the competition More effective results: z "Advanced Colorimetry™": sensitivity and specificity z Higher accuracy in identification: 98% versus 85/90% z A broad reagent menu, with possibility of extensi
Slide 17: A single reagent for the entire VITEK2 range
A single reagent for the entire VITEK2 range Pre-inserted transfer tube Bar code • Expiration date • Card type • Lot number • Unique card number 64 wells 16
Slide 18: The most comprehensive range in the bacteriology market
The most comprehensive range in the bacteriology market Molecular biology 5% Others 1% Bacteriology Haemostasis 8% Competitive positioning 4% Hematology Manual Auto Blood Culture 7% ID/AST ID/AST Culture Becton-Dickinson X X Launch X bioMérieux X X X X Biochemistry 35 % Dade-Behring X 40 % Immunoass
Slide 19: bioMérieux: a bio-industrial company
bioMérieux: a bio-industrial company MDI (Chicago) Basingstoke (London) Lyon (Marcy, Craponne, La Balme) Boxtel Saint Louis Tokyo Durham Brisbane Rio de Janeiro: 18p Rio de Janeiro Corporate (France): 82p Florence Instruments Reagents 23/03/2005 16:07balthus\Communication\Analyst Presentation\48 Bal
Slide 20: bioMérieux: a bio-industrial company
bioMérieux: a bio-industrial company z 11 manufacturing plants z Several hundred million reagent units produced every year z Four productivity improvement drivers: Economies of scale: one product line per plant Continuous process optimization Standardized product lines Capital program 19
Slide 21: A capital expenditure program to prepare for the future
A capital expenditure program to prepare for the future 20
Slide 22: Other highlights
2004: other highlights FDA Capturing the value of the patent portfolio and licensing in: z Capturing portfolio value: Bayer, Eppendorf, Gen-Probe, etc. z Acquisition of licenses: Gen-Probe, Novel Diagnostics, Applied NeuroSolutions 21
Slide 23: Outline
Outline 1. Business Review 2. Financial Review • Consolidated statement of income • Statement of cash flows and balance sheet • IFRS 3. Outlook for 2005 22
Slide 24: Consolidated statement of income
Consolidated statement of income 2004 2003 % Change Sales €931m €915m +2% (1) (2) Operating income €132m €102m +30% As % of sales 14.2% 11.2% (3) Cash net income €80m €61m +31% As % of sales 8.6% 6.7% Net income €76m €55m +37% As % of sales 8.1% 6.0% (1) Including restructuring costs of €(0.9)m (2)
Slide 25: A sharp improvement in operating income
A sharp improvement in operating income 2004 Operating Productivity R&D / IP income €8.5m €2.1m Organic growth €12.4m 2003 Non-recurring items Operating income €7.1m €132.2m +30% €102.1m 24
Slide 26: Non-recurring items declined
Non-recurring items declined 2004 Operating Productivity R&D / IP income €8.5m €2.1m Organic growth Non-recurring €12.4m 2003 items Operating income €7.1m €132.2m 2004 Restructuring €(0.9)m + €10.8m €102.1m 2003 Restructuring €(11.7)m Currency and scope of consolidation €(3.7)m 25
Slide 27: Organic growth
Organic growth 2004 Operating Productivity R&D / IP income €8.5m €2.1m Organic growth €12.4m 2003 Non-recurring items Operating income €7.1m €132.2m 5.2% organic growth in sales (+ €48m) x €102.1m 2003 operating margin before R&D, earned royalties and restructuring costs (26%) 26
Slide 28: Productivity gains
Productivity gains 2004 Operating Productivity R&D / IP income €8.5m €2.1m Organic growth €12.4m 2003 Non-recurring items Operating income €7.1m €132.2m Gross profit: +160 bps Restructuring €102.1m Productivity gains Product mix SG&A: 26.5% of sales (vs. 25.9% of sales) 27
Slide 29: Sustained research commitment
Sustained research commitment 2004 Operating Productivity R&D / IP income €8.5m €2.1m Organic growth €12.4m 2003 Non-recurring items Operating income €7.1m €132.2m Technologies: €3.8m (vs. €11.3m) €102.1m Received royalties: €2.0m 28
Slide 30: Robust growth in net income
Robust growth in net income Financial expenses €30.1m €(2.9)m IPO & exceptional expenses €(3.4)m Operating Income tax Goodwill income & others €(4.9)m €1.7m €20.6m 2003 net 2004 net income +37% Income €55.1m €75.7m 6.0% 8.1% of sales of sales 29
Slide 31: Earnings per share
Earnings per share After amortization of goodwill Before amortization of goodwill +30% +37% €1.93 €2.04 €1.57 €1.41 2003 2004 2003 2004 30
Slide 32: Significant free cash-flow
Significant free cash-flow 2004 2003 Growth Net income €76m €55m +37% Non-cash P&L items €87m €83m +3% Change in operating WC €(4)m €11m Capital expenditure €(79)m €(81)m -2% Other €(7)m €(7)m Free cash flow €73m €63m +16% 31
Slide 33: Continued reduction in debt
Continued reduction in debt 2004 2003 Growth Net income €76m €55m +37% Non-cash P&L items €87m €83m +3% Change in operating WC €(4)m €11m Capital expenditure €(79)m €(81)m -2% Other €(7)m €(7)m Free cash flow (3) €73m €63m +16% (1) (2) Dividends / Group 0 €(8)m Currency effect €(3)m €3m Decrease in
Slide 34: Continued implementation of the capital expenditure program
Continued implementation of the capital expenditure program €81m €79m 8,9 %* 8,5 %* €40m Instruments €36m €43m Industrial €41m capital expenditure 2003 2004 *As % of sales 33
Slide 35: A strong balance sheet
A strong balance sheet Balance sheet at Dec. 31, 2004 Assets Liabilities Goodwill €61m Instruments €62m €390m Shareholders’ equity Other assets €251m WCR €125m €109m Debt 34
Slide 36: Continued deleveraging
Continued deleveraging Net debt Shareholders Equity 81% Gearing ratio 67% 51% 28% €390m €338m €353m €349m €275m €237m €179m €109m 2001 2002 2003 2004 35
Slide 37: Impact of the transition to IFRS
Impact of the transition to IFRS 2004 consolidated financial statements: z Under French GAAP z Impacts on the opening shareholders’ equity and the 2004 net income disclosed in the notes All standards having a material impact on shareholders’ equity or net income have been reviewed z Limited impact:
Slide 38: Outline
Outline 1. Business Review 2. Financial Review 3. Outlook for 2005 37
Slide 39: Outlook for 2005: Business environment and IVD market
Outlook for 2005: Business environment and IVD market The IVD market remains attractive z Growing public healthcare needs z In vitro diagnostics help to monitor healthcare costs z New technologies D new opportunities A changing competitive environment z Increased competition in certain lines z New e
Slide 40: 2005: a year of growth and investments
2005: a year of growth and investments 2004: z Sales growth in line with targets z Faster than expected productivity gains z Some non-recurring received royalties 2005: z Steady growth in sales in line with 2004 z Sustained new product launch program: TEMPO®, VIDIA®, etc. Enhanced resources: sales
Slide 41: B
B
Slide 42: Appendices
Appendices 1. 2004: Breakdown of sales by technology 2. IFRS: Additional information 41
Slide 43: Sales by technology
2004: Sales by technology Industrial applications €117m Other clinical lines €84m Bacterio- Clinical applications Molecular biology €24m €814m logy Haemostasis €50m 429m €208 M€ Immunoassays €227m 42
Slide 44: IFRS
IFRS 2004 net Equity Impact of the transition to IFRS income Jan. 1, 2004 IFRS 1 Options Goodwills prior to Jan 1, 2004 not restated (NBV= €67m) Accumulated translation reserves reset to 0 (€40.9m) Fixed assets not revalued Application of IAS 32/39 from Jan. 1, 2004 No material change in the balance
Slide 45: IFRS
IFRS Equity 2004 net Impact of the transition to IFRS Jan. 1, income 2004 IAS 17 Capitalization of IDC Increase in financial debt (€9.5m at Jan. 1, 2004) Recognition of IDC as an asset (€8.6m at Jan. 1, 2004) Slight decrease in shareholders’ equity €(0.6)m Impact on income not material €(0.1)m IAS 1
Slide 46: IFRS
IFRS Equity 2004 net Impact of the transition to IFRS Jan. 1, income 2004 IAS 32/39 Foreign currency and interest rate hedges Time value = financial result Remainder recognized in equity if cash flow hedge In operating income if hedge accounting In financial result (accrued interests if hedge accoun