bioMerieux SA · EURONEXT:BIM
bioMerieux SA — FY2005 Earnings Presentation
45 slides from bioMerieux SA's earnings presentation, March 2006
Slide 1: 2005 Results
— 2005 Results — March 2006 BIOMEIRIEUX
Slide 2: Disclaimer
Disclaimer This presentation contains forecasts or estimates on trends and/or objectives. They are subject to various uncertainties and risks such as, but not limited to, the commercial success of products, fluctuations in currency exchange rates, reforms of health insurances or changes of governmen
Slide 3: Outline
Outline Introduction Another Year of Growth Financial Review Outlook for 2006 2
Slide 4: Outline
Outline Introduction Another Year of Growth Z Business review Launches Other events Financial Review Outlook for 2006 3
Slide 5: Another year of growth
Another year of growth ` Sales up 5.7%* ` Successful launch of new platforms: Z VITEK®2 Compact Z easyMAGTM Z TEMPO® ` New improvement in earnings: Z Operating income before non recurring items up 3.4% Z Operating income up 7.3% Z Net income up 13% ` Ongoing investment programs *At constant exchange
Slide 6: A changing environment
A changing environment ` Increasingly important role for IVD in meeting public health challenges ` Heightened competition ` Problems confronting the food industry ` Stricter regulatory requirements ` Raw material costs ` Rapid growth in China and India 5
Slide 7: Solid performance by the main product ranges
Solid performance by the main product ranges Strategic ranges: up 7.7% €866m ` Clinical applications: €866m up 5.3% 48% Z Bacteriology: €476m up 10% Z Immunoassays (VIDAS): €235m up 2.6% 24% Z Molecular biology: €27m up 10.8% 3% 13% 13% ` Industrial applications: €128m up 8.3% €128m Other ranges: do
Slide 8: Sharp growth in Europe and Asia-Pacific
Sharp growth in Europe and Asia-Pacific North America: up 4.3% EMEA*: up 5.8% Latin America: up 3.8% Asia-Pacific: up 10% *Europe, Middle East, Africa Growth rates calculated at constant exchange rates 7
Slide 9: Sales in Europe up 5.8%
Sales in Europe up 5.8% Europe: 57% of sales ` Growth outside France up 6.7% France: 18% ` Clinical bacteriology up 10.5% Z Success of the VITEK®2 Compact Z Success of the BacT/ALERT® range ` Stable immunoassays: Z Fiercer competition in the VIDAS® range (routine tests) ` Molecular biology up 19% `
Slide 10: Installation of DRG: Germany
Installation of DRG: Germany Sales - Germany ` Introduction of Diagnosis Related Groups Up 7% 48 (DRG) in 2003 in €m Up 8% ` Obligation to deliver results within 48 down 3% 45 hours to be reimbursed 43 ` Bacteriological tests administered when 42 patients admitted to hospital ` As a result, growth i
Slide 11: Sales in North America up 4.3%
Sales in North America up 4.3% North America: 26% of sales ` Clinical bacteriology up 8% Z BacT/ALERT® Z Second-half launch of VITEK®2 Compact ` Fast 13% growth in the VIDAS® range Z Emergency Rooms and Physician Office Labs (POL) ` Industrial applications up 7.3%, excluding the impact of prior-year
Slide 12: Sales in Asia-Pacific up 10%
Sales in Asia-Pacific up 10% Asia-Pacific: 11% of sales ` Clinical bacteriology up 11% Z VITEK® ranges Z BacT/ALERT® ` Industrial applications up 19% ` China, South Korea, India and Thailand: Z Sales increases of more than 20% ` Hong Kong-based subsidiary transferred to Shanghai Growth rates calcula
Slide 13: Sales in Latin America up 3.8%
Sales in Latin America up 3.8% Latin America: 6% of sales ` Brazil flat Z Non-renewal of the molecular biology tender for monitoring HIV viral load ` Mexico up 4% Z Social security budgets reduced ` Argentina up 13% Growth rates calculated at constant exchange rates 12
Slide 14: New increase in the installed base
New increase in the installed base Installed base - Number of instruments 42,000 Breakdown of sales 38,500 4.4% 35,000 11.8% 83.8% 2003 2004 2005 Reagents Instruments Services ` Approximately 3,500 new instruments installed ` No change in the instruments sold/instruments placed mix 13
Slide 15: Outline
Outline Introduction Another year of growth Business review Z Launches Other events Financial Review Outlook for 2006 14
Slide 16: Pursuing the launch program
Pursuing the launch program easyMAGTM VITEK®2 Compact VIDIATM TEMPO® 15
Slide 17: VITEK 2 Compact
VITEK®2 Compact ` Bacteriology ` Customers: small and medium-sized laboratories, clinical or industrial applications ` Launch: Z France: late 2004 Z Rest of Europe: 1st half 2005 Z United States, Japan and rest of the world: 2nd half 2005 ` Same reagents as the VITEK®2 ` Full menu already available
Slide 18: easyMAG
easyMAGTM ` Molecular biology: Z Extraction of genetic material using bioMérieux’s proprietary BOOM® technology ` Customers: commercial molecular biology laboratories, hospitals or research laboratories ` Launch: Z June 2005 Z 6 pilot countries, then global deployment ` A broad, highly automated off
Slide 19: VIDIA
VIDIATM ` Immunoassays ` Customers: medium-sized laboratories and large hospital infectiology laboratories ` Pre-launch: late 2005 ` Launch: Z Europe and Latin America: 2006 ` Combined with the VIDAS® range ` Highly competitive environment ` Mainly placed instruments ` Menu being developed 18
Slide 20: TEMPO
TEMPO® ` Industrial applications: Z Enumeration of quality indicators in a food matrix ` Customers: quality control laboratories ` Launch: Z Europe and Asia ` Validation in a large number of food matrices ` Validation underway in the United States ` Gradual development of the installed based and men
Slide 21: Broadening the menus
Broadening the menus Reagents VIDIA VIDIA MRSA ID Sabouraud Media Rub IgM Toxo IgM VIDAS Media ATB easyQ RSV tubes & vials Genevrier GVPC O157H7 ID Fungus 2 TEMPO VIDIA VIDIA MiniMag TEMPO Microplates TVC easyQ hMPV Rub IgG Toxo IgG Lysis Buffer TC HBs Ag Ultra TEMPO EC Media EPT Chromogenic Broth V
Slide 22: Outline
Outline Introduction Another Year of Growth Business review Launches Z Other events Financial Review Outlook for 2006 21
Slide 23: Investments and quality management
Investments and quality management ` Ongoing capital spending projects: €44m Z Grenoble: Molecular biology and micro-system R&D center Z Craponne (near Lyon): to expand Petri dish production unit Z Florence: to increase instrument production capacity Z Durham (North Carolina): to strengthen quality
Slide 24: New business development agreements
New business development agreements ` Acquisition of bio-markers: Z BRAHMS - Procalcitonin (PCT): severe bacterial infections (sepsis) Z Roche - proBNP: congestive heart failure and acute coronary syndrome Z Gen-Probe: ribosomal RNA markers for bacterial targets ` Partnerships: Z Chinese Academy of
Slide 25: Outline
Outline Introduction Another Year of Growth Financial Review Z Update on IFRS Consolidated statement of income Statement of cash flows and balance sheet Outlook for 2006 24
Slide 26: Impact of IFRS on financial statements
Impact of IFRS on financial statements ` 2004: adjustments to opening balance sheet and to income Z Elimination of goodwill amortization D €4.4m increase in net income Z Reclassification of certain expenses D €2.7m reduction in operating income Z IDC logistics center in Plaine de l’Ain: Restatement
Slide 27: Outline
Outline Introduction Another Year of Growth Financial Review Update on IFRS Z Consolidated statement of income Statement of cash flows and balance sheet Outlook for 2006 26
Slide 28: Consolidated statement of income
Consolidated statement of income in €m 2005 2004 % change Net sales 994 929 + 7%* Operating income 139 129 + 7% as % of sales 14.0% 13.9% Net income 90 80 + 13% as % of sales 9.1% 8.6% *Up 5.7% at constant exchange rates 27
Slide 29: Improvement in operating income
Improvement in operating income Gross profit SG&A - €14.2m R&D / IP + €23.4m - €4.5m Restructuring/IPO + €4.7m + €9.4m + €4.7m + €4.7m Op. Inc. Op. Inc. €138.9m €129.5m Up 7% 14% of sales 13.9% of sales 2004 2005 28
Slide 30: Gross profit: higher production costs
Gross profit: higher production costs Sales QA/QC Other Gross profit - €9.4m + €28.3m + €4.5m Gross profit ` Mix and new products effect + 5.7% of sales ` Higher shipping costs and raw material prices €520.4m ` Productivity gains / Restructuring €497.0m 52.4% of sales 53.5% of sales up €23.4m 2004 2
Slide 31: Tight control of operating costs
Tight control of operating costs Gross profit SG&A - €14.2m R&D / IP + €23.4m - €4.5m Restructuring / IPO + €4.7m 26.1% of sales (26.4% in 2004) Op. Inc. Op. Inc. €138.9m €129.5m 14% of sales 13.9% of sales 2004 2005 30
Slide 32: Ongoing R&D projects
Ongoing R&D projects Gross profit SG&A - €14.2m R&D / IP + €23.4m - €4.5m Restructuring / IPO + €4.7m 13.1% of sales Op. Inc. ` R&D spending: + 2.3%* ` Business development: Op. Inc. €8.2m €138.9m €129.5m 14% of sales 13.9% of sales 2004 2005 *At constant exchange rates 31
Slide 33: Net income up 13%
Net income up 13% Net financial expense Income tax Operating + €10.1m - €9.1m Net income income Net income + €9.4m €90.1m Up 13% €79.7m 9.1% of sales 8.6% of sales 2004 2005 32
Slide 34: Lower financial expense
Lower financial expense Net financial expense Income tax Operating + €10.1m - €9.1m Net income income Net income + €9.4m ` Lower debt and reduction in average interest rates ` Favorable impact of non- €90.1m recurring financial items €79.7m 9.1% of sales 8.6% of sales 2004 2005 33
Slide 35: 35% average tax rate
35% average tax rate Net financial expense Income tax Operating + €10.1m - €9.1m Net income income Net income + €9.4m ` Reduction in tax credits €90.1m €79.7m 9.1% of sales 8.6% of sales 2004 2005 34
Slide 36: Earnings per share
Earnings per share Up 45% up 12% Dividend recommended up 30% at the Annual €2.28 Meeting €2.04 €0.46 per share €1.57 (€18m payout) 2003 * 2004 2005 35 *Net income (calculated according to French GAAP) before amortization of goodwill
Slide 37: Outline
Outline Introduction Another Year of Growth Financial Review Update on IFRS Consolidated statement of income Z Statement of cash flows and balance sheet Outlook for 2006 36
Slide 38: 21% increase in free cash flow
21% increase in free cash flow in €m 2005 2004 Change EBITDA 209 (1) 205 (1) +4 Other income and expense 5 1 +4 Operating working capital requirement 1 (9) + 10 Income tax and financial expense (48) (43) -5 Capital expenditure (2) (82) (83) +1 Other 4 2 +2 Free cash flow 89 73 (3) + 16 Dividends/Gro
Slide 39: Continued implementation of the capital expenditure program
Continued implementation of the capital expenditure program 2005 2004 €38m €36m Instruments Other capital €45m €43m expenditure Total €83m 8,4 % of sales €79m 8,5 % of sales Change in payables to PPE suppliers - €1m + €4m Net cash flow €82m €83m 38
Slide 40: A stronger balance sheet
A stronger balance sheet Assets Liabilities Goodwill €70m Instruments €65m €499m Equity Other non-current assets €293m Gearing 9% WCR €114m €43m Net debt Op. WCR: 22% of sales Syndicated loan in stand-by ` €260m ` Due in 2013 39
Slide 41: Outline
Outline Introduction Another Year of Growth Financial Review Outlook for 2006 40
Slide 42: Outlook for 2006
Outlook for 2006 ` Sales growth of 5 to 6%* Z Worldwide deployment of new platforms Z Launch of new parameters Z Ongoing geographical expansion Z Strengthening our strategic product ranges ` Target: 2006 operating margin on a par with 2005* Z Heightened competition in immunoassays and industrial app
Slide 43: Appendices
— 2005 Results — Appendices BIOMEIRIEUX
Slide 44: Transition to IFRS: reclassifications in 2004 income statement
Appendix ` Transition to IFRS: Reclassifications in the 2004 consolidated statement of income 43
Slide 45: Impact of IFRS on 2004 financial statements
Impact of IFRS on 2004 financial statements ` Classification changes impacting operating income but not net income Reclassifications Original caption New caption (Dec. 31, 2004) French GAAP in €m IFRS in €m Customer discounts Financial expense 1.0 Sales (1.0 ) IPO costs 5.2 (5.2) Other Capital gains