Medartis Holding Ag · SIX:MED
Medartis — H1 2018 Earnings Presentation
32 slides from Medartis's earnings presentation, Aug 22, 2018
Slide 1: 2018 First-Half Results
2018 FIRST-HALF RESULTS PRESENTATION FOR INVESTORS, ANALYSTS & MEDIA Basel, 22 August 2018
Slide 2: Disclaimer
Disclaimer This presentation is not an offer to sell or a solicitation of offers to purchase or subscribe for shares of Medartis Holding AG, nor shall it or any part of it nor the fact of its distribution form the basis of, or be relied on in connection with, any contract or investment decision. Thi
Slide 3: Conference Overview
Conference Overview Medartis 2018 First-Half Results 2018 First-Half Highlights Willi Miesch, Chief Executive Officer 2018 First-Half Financials Dominique Leutwyler, Chief Financial Officer Business Development and Priorities Willi Miesch, Chief Executive Officer 4
Slide 4: 2018 First-Half Highlights
2018 First-Half Highlights 4
Slide 5: Medartis Remains Well on Track
Medartis Remains Well on Track SALES (1) EMPLOYEES (1) EBITDA MARGIN 510 (+31%) +23% 158 (+18%) Headquarters 75 (+10%) Operations 15% (excl. IPO costs(2)) +21% in local currencies 10% (reported) 277 (+48%) Subsidiaries (1) H1 2017 vs H1 2018 2) Excl. capital market-related costs (IPO) of CHF 3.2 mil
Slide 6: 2018 First-Half Financials
2018 First-Half Financials 6
Slide 7: Consolidated Financial Statements
Consolidated Financial Statements P&L 7
Slide 8: Medartis Revenue Flows
medartis® Medartis Revenue Flows ao: ' O ap Medartis investment i ' 1 1 —or»° Customer acquisition ‘and education Set consignment USAGE = Medartis revenues ag of mil MN Refill implants Invoicing of consumption i generates revenues Trauma 7 + 7 ! ooog Set ojoocoojo] —————> AS ( p) ( oor JoVo — ojo a
Slide 9: Product Penetration Across Geographies Driving Top-Line Growth
Product Penetration Across Geographies Driving Top-Line Growth Sales breakdown / regions, in CHFm 61.0 Growth Growth CHF CHF Growth Growth LC LC 49.6 6.5 9.3 Total Total 23% 23% 21% 21% 3.5 8.5 85% 97% 11.2 LATAM 85% 97% North America 10% 10% 15% 15% 9.5 17% 18% APAC 17% 18% EMEA 21% 21% 15% 15% 34.
Slide 10: All Business Segments with Growth Significantly Above the Market
All Business Segments with Growth Significantly Above the Market Sales breakdown / business segments, in CHFm 61.0 Market CAGR Growth CHF Growth LC 2016 - 2022(2) 49.6 9.2 Total 23% 21% 7.2 8.3 5.8 CMF and Others (1) 29% 27% 7% Lower Extremities 43% 40% 7% Upper Extremities 19% 17% 6% 43.5 36.6 H1 2
Slide 11: Gross Margin Remaining Stable
Gross Margin Remaining Stable Gross margin and COGS Main drivers Ø Growth in higher priced markets Gross profit, in CHFm 40.9 50.3 Ø Continued higher priced product innovation 17.6% 17.6% Ø Lean program in manufacturing COGS as % of sales Ø Higher purchasing volume due to growth Gross profit margin
Slide 12: Significant Investments to Support Growth
Significant Investments to Support Growth Adjusted operating expenses, in CHFm Main drivers Research and development As % of sales 72% 74% Ø Reflects higher development efforts to upgrade product portfolio Ø Higher cost efforts due to new registration requirements +26% 45.2 35.7 6.7 +22% 5.5 8.9 Sel
Slide 13: Focus on OPEX alongside further Business Investments
Focus on OPEX alongside further Business Investments Adjusted EBITDA, in CHFm Main drivers Ø Double-digit sales growth across regions and business segments As % of sales 17% 15% Ø OPEX reflecting growth strategy +5% 8.6 9.0 EBITDA (1) H1 2017 H1 2018 (1) Excl. capital market-related costs (IPO) of C
Slide 14: Business Development and Priorities
Business Development and Priorities
Slide 15: Becoming a Global Top Player in Major Small Bone Markets
Becoming a Global Top 3 Player in Major Small Bone Markets A B C D Expand sales and Remain the innovation In-house manufacturing Maintain and establish marketing efforts to leader for products and of Swiss-made quality long-term relationships increase revenues new surgical approaches products priced
Slide 16: Globally Diversified Business
Globally Diversified Business North America (US) EMEA Revenue share 15% Revenue share 56% CHF 9.3m CHF 34.0m APAC LC growth 15% LC growth 15% Revenue share 18% CHF 11.2m LC growth 18% LATAM Revenue share 11% CHF 6.5m LC growth 97% Headquarters 11 subsidiaries 40 countries with distribution partners
Slide 17: EMEA: Continued Strong Growth
medartis® EMEA: ss Continued Strong Growth 2018 first-half results * CHF 33.97 million (+21% in CHF / +15% in local currencies) Highlights and observations * — Strong growth of subsidiaries « Strong performance in existing distributor markets and new market entries = Successful introduction of new p
Slide 18: North America: Investments Beginning to Pay Off
: medartis® North America: crane niet Investments Beginning to Pay Off 2018 first-half results Do E * CHF 9.34 million (+10% in CHF / +15% in local currency) ea) Highlights and observations = Expansion of direct and indirect sales forces in key areas * Establishment of professional relationships wit
Slide 19: APAC: Strong Performance in Established Markets
medartis® APAC: Paeersion 1m rizrion Strong Performance in Established Markets 2018 first-half results = CHF 11.16 million (+17% in CHF / +18% in local currencies) Highlights and observations = — Strong performance in Australia and other established markets = Expansion of market presence in existing
Slide 20: LATAM: Successful Distributor Integration in Brazil
medartis® LATAM: Prapcn ero Successful Distributor Integration in Brazil 2018 first-half results = CHF 6.55 million (+85% in CHF / +97% in local currencies / 32% excl. acquisition effect) Highlights and observations = Successful distributor integration in new subsidiary in Brazil = Direct cooperatio
Slide 21: Upper Extremities: Strong Results in Hand, Wrist and Elbow
Upper Extremities: Strong Results in Hand, Wrist and Elbow 2018 first-half results § CHF 43.47 million (+19% in CHF / +17% in local currencies) Highlights and observations § Hand, wrist and elbow implants all contributed to the strong result § Launch of additional wrist plates to address specific fr
Slide 22: Upper Extremities: Launch of Shoulder System
Upper Extremities: Launch of Shoulder System Highlights and observations § Advanced preparation for market entry § Optimization of screws (based on experience in lower extremities implant development with higher load bearing requirements) § Start of investments in implants sets in distribution marke
Slide 23: Lower Extremities: Dynamic Growth
Lower Extremities: Dynamic Growth 2018 first-half results § CHF 8.32 million (+43% in CHF / +40% in local currencies) Highlights and observations § Continued growth of subsidiaries with strong market position § Strong international KOL group to help build and grow the business § Ongoing developments
Slide 24: CMF and Others: CMF Growth Above the Market
CMF and Others: CMF Growth Above the Market 2018 first-half results § CHF 9.24 million (+29% in CHF / +27% in local currencies) Highlights and observations § Growth above the market in craniomaxillofacial line § Strong growth in instruments H2 2018 priorities § Develop next CMF generation, launch ex
Slide 25: Long-term Partnership
Long-term Partnership Leading position Japan LATAM US Medartis and IBRA with 5th IBRA hand and wrist 24th to 27th courses to be 16th to 19th courses to be major presence at Europe’s course, 1st foot and ankle held in H2 2018 held in H2 2018 largest Hand and Wrist course congress (FESSH) 25
Slide 26: Summary and Outlook
Summary and Outlook § 2018 first-half performance: - Double-digit sales growth across regions and business segments - Continued investments in market presence and business in key countries § 2018 full-year outlook (1) : - Sales growth in local currencies in the high teens - EBITDA margin of 15% to 1
Slide 27: Appendix
Appendix
Slide 28: Medartis Success Factors
Medartis Success Factors 1 Accelerating global roll-out and momentum 2 Disciplined capital management and strong financial profile 3 Entrepreneurial and experienced management team 4 Fully-fledged organisation under one roof 5 Intense collaboration with key medical professionals worldwide 6 Price-co
Slide 29: Interim Consolidated Balance Sheet
Interim Consolidated Balance Sheet 29
Slide 30: Interim Consolidated Balance Sheet
Interim Consolidated Balance Sheet 30
Slide 31: Medartis Board of Directors
Medartis Board of Directors Dr. h.c. Thomas Straumann Chairman of the Board of Directors, Medartis Founder + Vice Chairman, past Chairman, past CEO & largest shareholder of Straumann Holding AG + Co-Founder of the International Bone Research Association (IBRA) + Honorary doctorate of the University
Slide 32: Medartis Executive Management Board
Medartis Executive Management Board Willi Miesch Axel Maltzen • Chief Executive Officer, Member of the Board of • Chief Production Officer, Member of the Executive Directors, Medartis Co-founder Management Board • 30 years experience in orthopaedic and medical device • 20 years executive experience