Ipsen Sa · EURONEXT:IPN
Ipsen Sa — H1 2012 Earnings Presentation
38 slides from Ipsen Sa's earnings presentation, Aug 28, 2012
Slide 1: First half 2012 financial results
Ipsen First half 2012 financial results August 28, 2012 IPSEN pour nom de la société - 07/04/2011 / page 1
Slide 2: Disclaimer
Disclaimer This presentation includes only summary information and does not purport to be comprehensive. Forward-looking statements, targets and estimates contained herein are for illustrative purposes only and are based on management’s current views and assumptions. Such statements involve known an
Slide 3: Safe Harbor
Safe Harbor The Group operates in certain geographical regions whose governmental finances, local currencies or inflation rates could be affected by the current crisis, which could in turn erode the local competitiveness of the Group’s products relative to competitors operating in local currency, an
Slide 4: Objectives for today
Objectives for today 1 Introduction and H1 2012 sales snapshot 2 H1 2012 Results 3 Business and Strategy update 4 Concluding remarks and 2012 Outlook 4 Ipsen H1 Results – August 28, 2012
Slide 5: H1 2012: a strong performance
H1 2012: a strong performance Solid operational performance with drug sales up 6.3%1 Strong specialty care, up 13.5% Headwinds in primary care, down 8.5% Reported operating income up 4.1% y-o-y, 20.0%2 of sales Recurring adjusted3 operating income, down 8.6% - mainly due to R&D, 20.9%2 of sales Recu
Slide 6: Specialty care
Strong specialty care now represents 72% of drug sales Drug Sales - H1 2012 in million euros - % excluding foreign exchange impacts ® Decapeptyl +10.2% 156.1 ® Dysport +16.2% 123.1 Specialty care €439.8m Specialty care ® Somatuline +17.3% 113.3 +13.5% ® Nutropin +1.2% 26.5 Increlex ® +6.4% 14.6 Drug
Slide 7: Group’s sales growth driven by all regions
Group’s sales growth driven by all regions… G5 growth hampered by French primary care decline GROUP SALES growth : +8.0% (incl. Drug related sales) In million euros At constant currency : +6.3% ROW 629.8 Strong performance throughout, boosted 583.1 by one-offs in Australia and Vietnam +22.3% 161.3
Slide 8: … with performance driven by strong volume growth
… with performance driven by strong volume growth GROUP SALES growth : +8.0% (incl. Drug related sales) At constant currency : +6.3% Ex-French primary care Other € 629.8m €55.8m French € 583.1m €9.4m €(6.8)m primary care Price €(12.9)m FX Volume c. +1.6% c. (1.1)% c. (2.2)% c. +9.6% n/a H1 2011 H1 2
Slide 9: 2012 Half Year Results
2012 Half Year Results Susheel Surpal EVP CFO
Slide 10: Summary of H1 2012 P&L and evolution
Summary of H1 2012 P&L and evolution In million euros H1 2012 H1 2011 Growth (%) Sales 629.8 583.1 +8.0% Total Revenues 675.0 619.4 +9.0% Operating Income 125.7 120.8 +4.1% Margin1 20.0% 20.7% Recurring adjusted2 operating income 131.5 143.9 (8.6)% Margin1 20.9% 24.7% Consolidated Net Profit (attrib
Slide 11: Other Revenues
Other Revenues In million euros Other Revenues Evolution: : +24.6% or +11.2% excluding Inspiration €45.2m Royalties Received 5.9 Increased royalties from Medicis, €36.3m Galderma and Menarini +40.0% 4.2 13.6 Milestones (3.3)% Stable year-on-year, stemming from the Group’s main partnerships (Medi
Slide 12: Main P&L items: Above operating income
Main P&L items : Above operating income COGS (€m) Research & Development (€m) +6.7% +24.3% as reported; + 17.9% w/o OBI-1 costs 131.5 Industrial 31.5 development 105.8 129.0 +17.2% (including 120.9 invoice to 26.9 Inspiration inc.) 76.2 +26.2% 96.1 Drug-related 20.7%(1) 20.5%(1) R&D H1 2011 H1 2012
Slide 13: Focus: Sales & Marketing expenses
Focus : Sales & Marketing expenses Evolution of SMM1 to sales ratio (in %) H1 2011 – H1 2012 + 9.3 % Flat % points Increase in SMM expense mainly related to stable selling cost in French primary care (during JV negotiations) in a context of declining sales In % Ex French primary care , stable SM
Slide 14: From reported to Recurring adjusted Operating Income
From reported to Recurring adjusted1 Operating Income H1 2011 1.6 (17.2) In € million 38.7 Proceeds from litigation (Mylan) Mainly Barcelona R&D site & US 120.8 restructuring 143.8 R e po rt e d E B IT E xpe ns e s link e d PPA O t he rs R e c urring wit h t he s t ra t e gy A djus t e d E B IT a nn
Slide 15: Main P&L items: Below operating income
Main P&L items : Below operating income Financial Result (€m) Effective tax rate Reported Adjusted Reported Adjusted 15.5 21.5% 22.9% 25.9% 23.9% 12.1 Preglem Spirogen 1.2 H1 2011 H1 2012 H1 2011 H1 2012 Share of loss from associates (€m) Consolidated result (€m) (1.5)% H1 2011 H1 2012 EPS2: €1.27 (
Slide 16: Balance sheet evolution
Balance sheet evolution In € million Assets Liabilities 2011 H1 2012 2011 H1 2012 Goodwill 299.5 304.0 Equity 1 012.8 1 053.2 Investment in associated 0.0 0.0 Minority interests 2.6 1.9 companies Property, Plant & equipment 271.7 291.7 Total Equity 1 015.4 1 055.1 Intangible assets 135.6 142.0 Long-
Slide 17: Partnership related deferred revenues
Partnership related deferred revenues Total Milestones cashed-in and not yet Main evolutions over the period recognized as revenues (6.9)% 206.1 191.9 H1 2011 The Group recorded €3.7m from its partnerships In € million 167.6 154.0 H1 2012 The Group recorded no new differed revenues from its partners
Slide 18: Cash flow evolution
Cash flow evolution In million euros H1 2011 H1 2012 Consolidated net profit 91.9 90.5 Share of loss 4.1 14.2 Net profit from continuing operations from associates 95.8 104.7 Non cash and non-operating items : 28.0 (9.4) O/W amortization on intangible and tangible assets 21.8 22,7 O/W Impairment los
Slide 19: H1 2012 summary: a strong performance
H1 2012 summary : a strong performance Solid operational performance with drug sales up 6.3%1 Strong specialty care, up 13.5% Headwinds in primary care, down 8.5% Reported operating income up 4.1% y-o-y, 20.0%2 of sales Recurring adjusted3 operating income, down 8.6% - mainly due to R&D, 20.9%2 of s
Slide 20: Business and strategy Update
Business and strategy Update Marc de Garidel CEO
Slide 21: Business and Strategy update on 2012 milestones
Business and Strategy update on 2012 milestones Partner primary care France as Maintain high single digit profitability deteriorates specialty care growth and double digit emerging markets growth A B 2012 Progress rich late E milestones C Relaunch US operations stage pipeline to increase profitabili
Slide 22: A: Reminder of strategic intent for French primary care
A: Reminder of strategic intent for French primary care Leverage with a new structure existing strengths vs. Sales force Optimization June 2011 strategy and A growth OTX leverage associated long term target potential to Adenuric®, with assumed cost optimization materialize and established of French
Slide 23: A: Negotiations terminated with preferred partner
A: Negotiations terminated with preferred partner Loss of strategic alignment with partner… … in a context of strong top line decline Initial alignment on strategic intent French primary care sales down 21.7% in H1 2012 (21.7)% Advanced negotiations and general € 90.1m Price agreement on terms
Slide 24: A: Optimization project to start now
A: Optimization project to start now Today, announcement of French Primary care sales organization restructuring Social consultation process to be initiated in Q4 2012 Target of c.100 positions in French Primary care sales organization Estimated implementation in H1 2013 24 Ipsen H1 Results – August
Slide 25: B: H1 2012, specialty care growth of 13.5%
B: H1 2012, specialty care growth of 13.5% H1 2011 – H1 2012 : franchise y-o-y growth o/w Dysport® o/w Somatuline® +16.2% +17.3% +14.5% +12.9% +13.1% o/w Decapeptyl® +10.2% Neurology Endocrinology Uro-oncology Excluding foreign exchange impacts All franchises up double digit All figures exclude fore
Slide 26: B: Historical strong growth beyond Europe G5
B: Historical strong growth beyond Europe G51, representing now more than half of Group sales 15.5% CAGR ~ €357m 56.7% of Group sales ~ €238 m Europe 45.6% of Group ex-G5 sales ~ €130m Europe 30.9% of Group ex-G5 Asia sales Europe Asia North. Am. ex-G5 North. Am. Asia RoW RoW RoW H1 2005 H1 2009 H1
Slide 27: B: Selected examples of growth in emerging markets
B: Selected examples of growth in emerging markets Growth • Very successful OTC campaign, almost compensating for French situation Russia c.+45% • Very strong performance of Dysport®, market leader • General activity on tenders Brazil • Very strong performance of Dysport® both in c.+25% therapeutic
Slide 28: B: Group growth also fuelled by strong performance in Europe
B: Group growth also fuelled by strong performance in Europe, up 9.4% excluding Primary care France Examples Cumulated growth in Growth : +22.6% Nordics countries: +17.6% Supported by very strong Supported by strong performance of performance of Decapeptyl® Decapeptyl® and and Somatuline® Somatuline
Slide 29: C: The US on the path to profitability
C: The US on the path to profitability New Organization operational … … and improving profitability… • New HQ, opened in New Jersey in April 2012, • For the first time in H1 2012: operational – North American platform profitability • All positions hired with only normal turnover improving now occurr
Slide 30: D: Inspiration, a new chapter in the partnership
D: Inspiration, a new chapter in the partnership… Recent IB1001 clinical hold Classic licensing type has put pressure on agreement based on Inspiration’s financing sharing of territory and cross royalty streams Address Inspiration’s financing needs New commercial rights while protecting Upfront paym
Slide 31: E: A rich late stage pipeline
E: A rich late stage pipeline Phase 1 Phase 2 Phase 3 Filing Dysport® - Spasticity PUL Pending FDA Dysport® - Spasticity PLL Dysport® - Spasticity AUL Dysport® Dysport® - Spasticity ALL Neurology Glabellar Lines Dysport® - Next Generation Cervical Dystonia Dysport® - NDO BN82451B Huntington disease
Slide 32: E: Pipeline update
E: Pipeline update Recruitment on target Top line results Tasquinimod (total of 1200 patients) expected end 2013 Dysport® Adult Upper Limb On track for key indication Filing 2014 (AUL) Somatuline® Recruitment back on track Filing 2014 NET US and on target New Phase 1 compound BN82451B - Huntington d
Slide 33: Concluding remarks and outlook
Concluding remarks and outlook Marc de Garidel CEO
Slide 34: Transformation continues with new orientation in French primary care
Transformation continues with new a orientation in French primary care 2011 2012 2013 2014 2015 Define strategy R&D « PoC » machine Somatuline® New TASQ filed in Inspiration option Merge R&D implemented device rolled out globally Europe assessment Reinforce oncology Uro- Barcelona R&D Dysp
Slide 35: 2012 raised objectives
2012 raised objectives Specialty Care - Drug sales In the upper range of +8.0% to +10.0%, year- on-year Primary Care - Drug sales Decrease of approximately 15.0%, year-on-year approximately 15.0% of sales Recurring Adjusted* operating This objective includes declining profitability of primary care i
Slide 36: Thank You
Thank You Marc de Garidel CEO L.
Slide 37: Appendices
Appendices
Slide 38: Full P&L: from reported to Recurring adjusted
Full P&L : from reported to Recurring adjusted Effects of 30 June 2012 restated Impairment Other non- 30 June 2012 acquisitions in Losses (2) recurring items(3) North America(1) (in million euros) % Sales % Sales Revenue 675.0 107.2% 675.0 107.2% Cost of goods sold (129.0) (20.5)% (129.0) (20.5)% Re