Medartis Holding Ag · SIX:MED
Medartis — FY2023 Earnings Presentation
36 slides from Medartis's earnings presentation, Mar 12, 2024
Slide 1: 2023 Full-year Results
2023 | Full-year Results Christoph Brönnimann CEO | Dirk Kirsten CFO Basel, 12 March 2024
Slide 2: Disclaimer
Disclaimer This communication does not constitute an offer or invitation to subscribe for or purchase any securities of Medartis Holding AG. This publication may contain certain forward-looking statements and assessments or intentions concerning the company and its business. Such statements involve
Slide 3: Agenda
Agenda Agenda Full-year highlights Christoph Brönnimann, CEO Operational and financial review Dirk Kirsten, CFO Business update Christoph Brönnimann, CEO Outlook 2024 Christoph Brönnimann, CEO Upcoming corporate events ® Medartis All rights reserved ∣ 3
Slide 4: Full-year highlights
Full-year highlights Christoph Brönnimann, CEO
Slide 5: Full-year 2023 Key figures
Full-year 2023 │Key figures TOTAL NET SALES IN CHF REVENUE GROWTH CHF 212.0million +20.5% CER − EMEA key growth contributor − Internal1 sales growth (excl. NSI 3rd party custom manufacturing) − US fastest growing region reached 17.4% EBITDA MARGIN IN % GROWTH STORY CONTINUES 15.9% underlying 2023 −
Slide 6: FY 2023 Business highlights
FY 2023 │Business highlights − With strong internal growth of 17.4% we gained further market share in all regions and business segments and substantially improved profitability and cash flow − Keri Medical business doubled again in 2023 and now accounts for 20% of the share of business (SOB) in thos
Slide 7: US | Further building momentum
US | Further building momentum 3-year US sales trend (in USD) SOG − Brought on 11 new distributors across 6 states in 2023 29% (Total sales force now approx. 250) — new sales 50 SOG 12% agents contributed 29% of SOG − First nationwide T&E roadshow and bootcamp for the lower extremities organized in
Slide 8: Operational and financial review
Operational and financial review Dirk Kirsten, CFO
Slide 9: Overview of the financial results
Overview of the financial results NET SALES GROSS PROFIT MARGIN OPEX RATIO − Sales increased 20.5% to − Underlying gross profit margin − OpEx ratio improved to CHF 212 million decreased to 79.3% (2022: 81.9%) 75% (2022: 83%) − Internal sales rose by 17.4% (CER) − Gross margin reached 82.9% − Despite
Slide 10: 3 out of 4 regions growing in the range of 20%
3 out of 4 regions growing in the range of 20% Net sales in million CHF and internal growth yoy (CER) +16.0% +20.5% CER 10.8 212.0 +17.4% 3.6 201.2 7.0 1.7 17.6 182.8 -4.6 -6.8 171.4 19.8 20.5% 5.6% 19.4% Total sales NSI 3rd FX FX-adj EMEA US 1 APAC LATAM FY 2023 NSI 3rd Total sales FY 2022 party FY
Slide 11: Market share gains in all regions
Market share gains in all regions2 - US: Further acceleration in 2023 thanks to the FY 2023 revenue by region/territory Internal growth in CHF yoy @CER distribution channel expansion and new product rollouts EMEA 106.5 19.8% - EMEA: strong DACH region, supported from very strong growth from UK, Spai
Slide 12: Lower extremities with disproportionate growth
Lower extremities with disproportionate growth − Lower extremities business enjoyed an impressive H1 2023 revenue in CHF Internal growth by product category yoy @CER surge of 41% in EMEA with strong contributions from the ‘Ankle Trauma’ and the ‘CCS compression Upper extremities 137.2 15.5% screw’ p
Slide 13: Gross margin | Internal gross margin improved to almost 83%
Gross margin | Internal gross margin improved to almost 83% in % of net sales +0.5PP 0.6% -0.7% 0.6% 82.9 -3.6% 1.2% 82.4 81.8 -0.7% Higher volume 0.1% More trading of low-margin goods manufacturing business -0.3% 79.0 Reported FX One-off Dilution NSI (Internal) Mix & price KeriMedical Manufacturing
Slide 14: OPEX | Improved cost efficiency following the NSI integration
OPEX | Improved cost efficiency following the NSI integration OPEX in CHF million (bar) and OPEX ratio in % of sales (line) 00 90 OPEX in − Almost the entire improvement in the OPEX ratio 83 CHF m 80 78 compared to the previous year was achieved at the 80 74 75 150 HQ; the markets have continued to
Slide 15: EBITDA | Underlying margin increased 3.6 PP
EBITDA | Underlying margin increased 3.6 PP reaching upper end of guidance in % of net sales +3.6 PP 15.9 -0.9 15.0 3.9 12.3 5.6 -2.0 8.9 -0.5 Reported FX One-offs1 Underlying Gross margin OpEx Underlying One-off 1 Reported EBITDA margin (NSI, China) EBITDA margin impact improvements EBITDA FY (IT a
Slide 16: Operating leverage partially negated by CHF strength
OPERATING LEVERAGE | partially negated by CHF strength 3-year aggregated growth (post-COVID) approx. 60% FX adj. EBITDA Margin 2023 +5 PP vs. 2019 Net Sales Underlying1 EBITDA (in ( in CHF million) % of sales) EBITDA CAGR 19-23 CAGR 19-23 239.0 CER 25% CER +16% 27.0 CHF 12% CHF +13% 199.0 20.2 16.2
Slide 17: Net result affected by unfavorable exchange rate development
NET RESULT | affected by unfavorable exchange rate development in CHF million ~2x 5.4 31.9 -22.8 10.3 − CHF 4.5m from (mostly) unrealised FX losses 16.2 − Contingent consideration of CHF 1.4 million (NSI acquisition) 9.1 -7.3 EBIT improved by CHF 11m y-o-y -1.2 0.6 EBITDA 2022 Improvements Differenc
Slide 18: Employed capital | Improved capital efficiency
EMPLOYED CAPITAL | Improved capital efficiency despite double-digit growth in CHF million Trade accounts receivables Consignment sets Inventory 200 200 200 150 150 150 100 100 100 50 50 50 Inventory 0 0 0 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 - Stricter payment t
Slide 19: Cash | Improved operating cash flow despite investments
CASH | Improved operating cash flow despite investments in growth in CHF million CHF +4.6m 20.0 -18.2 Investments in… − surgical sets − new IBRA LAB − IT infrastructure & security 23.2 25.9 -0.7 25.2 22.4 -19.6 20.6 Increase in KeriMedical to Improved working 47.0% capital compared to 2022 Proceeds
Slide 20: Business update
Business update Christoph Brönnimann, CEO
Slide 21: Success factors
Success factors 1 Innovation Partnerships (surgeons and 2 technology companies) Expansion (become the first address 3 for surgeons across all indications) SOUND STRATEGY & STRONG CULTURE 4 Medical training & education 5 Clinical research & feedback 6 Reliability (service & fulfillment) © Medartis Al
Slide 22: Upcoming launches in 2024
Upcoming launches in 2024 Product launches in 2024 − Replicate the success in the Q1 Q2 Q2 hand & wrist segment to the entire upper extremity and become a provider of choice in upper extremities − Increase market share in trauma accounts (1) New Foot (2) CMX Orthognathic (3) Scaphoid − Expanding our
Slide 23: NSI: Participating in the dynamic bunion jig market
NSI: Participating in the dynamic bunion jig market − Lapidus bunionectomy procedure1 market is worth approx. USD 400 million (~80K surgeries) Annual treatment volume (in 1’000) − 4 out of 5 patients are treated with alternative ~500 surgical treatment 400-450 − Trend towards smart instrumentation (
Slide 24: Keri Medical is a pivotal growth driver in the EMEA region
Keri Medical is a pivotal growth driver in the EMEA region Share of business (SOB) in EMEA SOB in active countries (Austria, Germany & UK) Keri Medical ~2x ~2x Keri Medical SOB 20% Total EMEA Active countries 2021 2022 2023 2021 2022 2023 1 SOG = Share of growth, SOB = Share of business (share of th
Slide 25: Keri Medical: Implant arthroplasty in the thumb is a clear trend
Keri Medical: Implant arthroplasty in the thumb is a clear trend − Implant arthroplasty for thumb CMC joint has proven over time its reliability as an alternative procedure to the treatment standard of trapeziectomy1 − Strength, mobility, and thumb function are more Double mobility prosthesis rapidl
Slide 26: Keri Medical: CMC-1 arthroplasty is a severely underserved market
Keri Medical: CMC-1 arthroplasty is a severely underserved market − Most implants were developed in France/ Belgium, Penetration of CMC-1 arthroplasty (in % of total elucidating the significant variance in adaptation surgical treatments) rates2 − In France and Belgium, implant arthroplasty has 100 a
Slide 27: The IBRA Institute in Basel successfully put into operation
The IBRA Institute in Basel successfully put into operation A total of 32 IBRA education events providing training to over 500 surgeons since its inception in August © Medartis All rights reserved │ 27
Slide 28: Focus areas in 2024
Focus areas in 2024 − Continue to expand sales − Keri Medical products channel − Hand, elbow & shoulder − Hand & wrist segment − Lower extremities − Lower extremities − Australia o Go-to-market model adapted o Upper and lower extremities − New product registration o Keri Medical launch in H2 and lau
Slide 29: Outlook 2024
Outlook 2024 Christoph Brönnimann, CEO
Slide 30: We warmly welcome our new CHRO Inge Maes
We warmly welcome our new CHRO Inge Maes − Inge Maes named Chief Human Resources Officer at Medartis − She worked previously as Global Head of People & Organization at Sandoz and was part of the EC of Sandoz − Worked over the past 20 years in the pharmaceutical industry (Sandoz, Novartis) − Trained
Slide 31: Two new board members proposed
Two new board members proposed Nadia Tarolli Schmidt Dr. h.c. Thomas Straumann Marco Gadola Dr. med. Daniel Herren ESG lead Vice Chairman Chairman Not standing for re-election Martha Shadan (new) Vacant Ciro Roemer Damien Tappy Willi Miesch Jennifer Dean (new) © Medartis All rights reserved │ 31
Slide 32: Outlook 2024
Outlook 2024 (barring any unforeseen circumstances) % INTERNAL1 SALES UNDERLYING EBITDA GROWTH MARGIN (at CER) 15%-17% +1 PP Favorable market environment Operating leverage and (estimated at 4-6%) cost discipline 1 "Internal growth" denotes the increase in sales at constant exchange rates (CER), exc
Slide 33: medartis
(J&A medartis
Slide 34: Upcoming corporate events
Upcoming corporate events Date Event Broker Destination 2024 12 March 2023 full-year results publication Webcast 13 March Investor meetings (virtual) Stifel US / UK 14 March Investor meetings Octavian Zurich, CH 17 April Annual General Meeting 2024 HQ Basel, CH 14 May Investor meetings ZKB London, U
Slide 35: Analyst coverage
Analyst coverage: For independent research opinions Broker Analyst Email Telephone Bryan Garnier & Co Maria Vara mvara@bryangarnier.com +33 785 986 503 Octavian Sandra Dietschy sandra.dietschy@octavian.ch +41 44 518 08 27 Research Partners AG Alexander Burgansky alexander.burgansky@researchpartners.
Slide 36: Restoring quality of life
“Restoring quality of life” medartis