Coltene Holding Ag · SIX:CLTN
Coltene — Medisize Holding — FY2006 Earnings Presentation
22 slides from Coltene's earnings presentation, 2007
Slide 1: Medisize Holding AG Year-End Results 2006
Medisize Holding AG Year-End Results - 2006 1 Safe Harbour statement Before we may start with the presentations, we need to remind you that the information made available in this conference call may include forward-looking statements that reflect the intentions, beliefs or current expectations and p
Slide 2: Content
Content • Group Review • Dental Group • Medical Group • Group Financials • Outlook • Q&A 3 Yes, we did miss our indications! • However : – Sales reached 96% of CHFm 260 – EBIT reached 93% of CHFm 32.5 4
Slide 3: 2006 Consolidated Highlights
2006 Consolidated Highlights • +24.9% net income increase to CHFm 22.6 • +10.7% operating income gain to CHFm 30.1 • EBIT margin increases from 11% to 12% • Free cash flow of CHFm 25.5 • Debt reduced by 35% to CHFm 48.5 5 2006 Consolidated Highlights (2) • Shareholders‘ equity grows to CHFm 149.2 •
Slide 4: Successful first year for Medisize
Successful first year for Medisize • SWX listing on June 23, 2006 • New independent management team is operational • Financial reporting evolving under new CFO • Tapping group-wide synergies – Cash management – Expense management – Capital investment • Systematic planning initialized • Accounting re
Slide 5: Group Strategy
Group Strategy • Build on two healthcare business units targeting attractive healthcare market segments. • Continue to build on: – Profitable cash-generating dental unit with solid historic growth. – OEM medical segment with unrealized dynamic growth opportunities. – Capitalize on gains from our new
Slide 6: Targeting Dynamic Healthcare Markets
Targeting Dynamic Healthcare Markets Annual Growth Rate 15% OEM Medical Disposable Devices Dental USD 3.5 bn USD 14 bn 15% 5% Growth 10% Medical Pharma Dental Disposable Primary Consumables 5% Devices Packaging USD 9 bn USD 10 bn USD 7 bn 5% Growth 5% Growth 5% Growth 11 Healthcare market dynamics •
Slide 7: Dental Group Highlights
Dental Group 13 Dental Group Highlights • +4.4% sales increase to CHFm 153.6 • +25.4% in EBIT up to CHFm 24.3 • EBIT margin of 15.8% up from 13.2% • Strong performance in Europe • North America reaches prior year • Encouraged by the performance of emerging markets 14
Slide 8: What made dental successful?
What made dental successful ? • EBIT Margin Growth – Increase in sales mix of consumables vs. equipment – Improved manufacturing efficiencies – Better capacity utilization – Improving expenses controls • Sales growth – Satisfying un-met needs – Product features that can be demonstrated – Niche explo
Slide 9: Key Product Successes 2006
Key Product Successes - 2006 Synergy D6 Composite Parapost Tapper Lux Diatech & Alpen Rotary Instruments Affinis Precious Impression Material 17 Broad reach of dental products Treatment at Dentist Comprehensive Coltène/Whaledent single-source product offering for Dental Hygiene, Prophylaxis, Treatme
Slide 10: World Dental Market Baseline
World Dental Market Baseline • Dental consumables sold through traditional dental distribution have a market CAGR of 5%. – Excludes direct selling companies – Excludes implants • Top two dental manufacting companies increase direct selling focus. – Dentsply, world‘s largest dental products manufactu
Slide 11: Medical Group Financial 2006 Overview
Medical Group Financial 2006 Overview Key Financial Statistics • 3.5% sales decline to CHFm 96.3 • EBIT declines to CHFm 5.8 • EBIT margin reduced to 6% from 8.1% 21 Medical Group 2006 Overview Accumulation of negative impacts • Raw material quality issues impeded production in Q1 in Irish plant on
Slide 12: 2007 Outlook is Materially Brighter
2007 Outlook is Materially Brighter • Medical Group sales 2007 YTD are ahead of forecast and last year. – New projects are in revenue production. – Higher revenues on existing major projects – Raw material price increases are being passed to customers. • Ireland – Raw material quality issues were re
Slide 13: Medical market baseline data
Medical market baseline data Underlying market dynamics • Disposeable medical device market CAGR of 15% • Primary pharma packaging market CAGR of 5% • Outsourcing trend continues • Market consolidation continues • Fragmented market offers growth potential by acquisition 25 What is wrong about your p
Slide 14: Medical business model and production capabilities
Which of your perceptions are correct? • The bidding process to get OEM contracts is competitive. • We certainly are not awarded every contract on which we bid. • The OEM disposable medical manufacturing has moderate EBIT margins. • Gross profits will vary by product group and by project. 27 Medical
Slide 15: Broad manufacturing technology in Medisize
Broad manufacturing technology in Medisize Liquid Silicone Pharma Bag Making Injection Molding 29 Broad manufacturing technology in Medisize Injection Molding, Assembly, QC, Sterilization 30
Slide 16: Broad manufacturing technology in Medisize
Broad manufacturing technology in Medisize Blow Molding of primary pharma packaging 31 Broad manufacturing technology in Medisize Injection molded implants 32
Slide 17: Group Financials
Summary: Medisize Medical Group All problems encountered are addressed or resolved. • Quality issue in Ireland solved by Q2. • Higher raw material prices factored re-newing contracts. • New management structure is operational. • Expanded sales team is operational. • Stronger project and production p
Slide 18: Medisize Group: Income statement
Medisize Group: Income statement EBIT increase by 10.7% 1'000 CHF 2006 % 2005 % % YoY Net Sales 249'864 100.0% 246'887 100.0% 1.2% Raw materials 82'565 33.0% 83'400 33.8% -1.0% Personnel expenses 82'921 33.2% 81'046 32.8% 2.3% Other expenses 44'913 18.0% 45'388 18.4% -1.0% Depreciation 8'241 3.3% 8'
Slide 19: Medical: Income statement
Medical: Income statement Below expectation 1'000 CHF 2006 % 2005 % % YoY Net Sales 96'310 100.0% 99'780 100.0% -3.5% Raw materials 40'174 41.7% 41'792 41.9% -3.9% Personnel expenses 32'709 34.0% 32'283 32.4% 1.3% Other expenses 12'461 12.9% 12'383 12.4% 0.6% Depreciation 4'365 4.5% 4'412 4.4% -1.1%
Slide 20: Net profit development and cash flow statement
Medisize Group: Income statement (TCHF) Net profit development 2005 to 2006 25'000 Net profit 05 Net profit 06 18 124 22 637 20'000 15'000 Taxes Capitalized Forex Operational taxes & interest -1 763 722 522 5 032 10'000 Medisize Group: Cash flow statement Free cash flow of 10.2 % of net sales 1'000
Slide 21: Medisize Group: Balance sheet
Medisize Group: Balance sheet Solid, well positioned for future growth 1'000 CHF 31.12.06 31.12.05 Cash & cash equivalents 19'947 25'746 Receivables 54'248 47'823 Inventory 49'657 53'750 Property, plant & equipment 59'101 62'443 Financial, intangible & tax assets 64'445 64'208 Total assets 247'398 2
Slide 22: Outlook 2007 and Q&A
Outlook 2007 Assumptions: • Dental consumeables sales growth 5% • Medical device segment 15% • Primary pharma packaging 5% • Airway management 5% • Resulting Indications (approximately): – Dental Group Sales CHFm 170 – Dental Group EBIT CHFm 26 – Medical Group Sales CHFm 100 – Medical Group EBIT CHF