Gerresheimer Ag · XETR:GXI
Gerresheimer — Investor Day (October 2014)
55 slides from Gerresheimer's investor day presentation, Oct 8, 2014
Slide 1: Capital Markets Day 2014
Capital Markets Day 2014 Uwe Röhrhoff, Chief Executive Officer Rainer Beaujean, Chief Financial Officer October 8, 2014
Slide 2: Disclaimer
Disclaimer This presentation may contain certain forward-looking statements, including assumptions, opinions and views of the Company or cited from third party sources. Various known and unknown risks, uncertainties and other factors could cause the actual results, financial position, development
Slide 3: Capital Markets Day 2014 Agenda
Capital Markets Day 2014 Our company Market dynamics Strategy Outlook Summary 3
Slide 4: Our vision
Our vision Gerresheimer will become the leading global partner for enabling solutions that improve health and well-being. Our success is driven by the passion of our people. 4
Slide 5: Our Mission
Our Mission We will achieve our vision by: • understanding our customers and providing them with solutions to both their present and future needs • living our commitment to excellent quality and continuous innovation • leveraging our competence and technological leadership by acting as one global te
Slide 6: Customer-focused organization with three divisions
Customer-focused organization with three divisions Group revenues in FY 2013: EUR 1,266m Adjusted EBITDA in FY 2013 EUR 242.1m1, adjusted EBITDA margin 19.1%1 Plastics & Devices Primary Packaging Glass Life Science Andreas Schütte Uwe Röhrhoff Research Rainer Beaujean Revenues: EUR 561.6m Revenues:
Slide 7: Our business are high volume products
Our business are high volume products Syringes Plastic bottles Pharma Cosmetics & caps glass bottles ~ 400m pcs ~ 4bn pcs ~ 2.5bn pcs ~ 1bn pcs Injection vials Ampoules Inhalers Cartridges ~ 3bn pcs ~ 2bn pcs ~ 100m pcs ~ 1bn pcs 7
Slide 8: Global player with strong regional footprint
Global player with strong regional footprint Europe USA 22% Revenues 2013: 58% EUR 1,266m Latin 3% Asia America 17% Regional footprint: More than 40 sites worldwide Established markets Pharmerging markets (IMS definition) Others 8
Slide 9: Clear focus on pharma and healthcare
Clear focus on pharma and healthcare 83% Pharma and healthcare 11% Revenues 2013 Cosmetics EUR 1,266m 6% Other 9
Slide 10: Well-diversified blue-chip customer base
Well-diversified blue-chip customer base Pharma and healthcare Other Revenues generated with TOP 50 customers (FY 2013) in EUR m Cumulative share Gerresheimer has close long-term relationships with leading global accounts… …with limited dependence on individual customers 10
Slide 11: Our product portfolio for pharma and healthcare
Our product portfolio for pharma and healthcare Leading international manufacturer for the global pharma and healthcare industry Pharmaceutical packaging solutions made of glass and plastic Primary packaging products as well as medical devices for storage, dosage and administration of drugs 11
Slide 12: Capital Markets Day 2014 Agenda
Capital Markets Day 2014 Our company Market dynamics Strategy Outlook Summary 12
Slide 13: We address megatrends in pharma and healthcare
We address megatrends in pharma and healthcare – life expectancy and worldwide population on the rise Patent loss and rise of generics 1 Proven Developing healthcare systems in 2 industry expertise pharmerging markets 3 Increasing regulatory requirements 4 New drug development, especially in biotech
Slide 14: Generics – major driver of pharma growth
Generics – major driver of pharma growth Trend 1) Rise of generics Global pharma spending by segments (USD bn) ~1,250 ~5% 12% ~980 Other 12% +~5% 36% Generics 27% +~11% Original 52% 61% +~2% brands 2013 CAGR 2018 Source: Company estimates with reference to IMS, March 2014 and November 2013 14
Slide 15: Pharmerging markets drive pharma growth
Pharmerging markets drive pharma growth Trend 2) Developing healthcare systems Global pharma spending by region (USD bn) ~1,250 ~ 5% 7% ~980 ~ +3% 31% Other 8% 24% ~ +10% Pharmerging1 Developed ~ +3% 62% 68% markets 2013 CAGR 2018 1 IMS definition Pharmerging: Tier 1: China; Tier 2: Brazil, India, R
Slide 16: Pharmerging markets estimated to outperform developed markets
Pharmerging markets are estimated to outperform growth rates of the developed markets Trend 2) Developing healthcare systems Growth rates global pharma market 2013-18 (CAGR) 14% 13% 12% 12% 8% 4% 2% 2% China Brazil India Russia Tier 3 North Europe Japan (Tier 1) America Tier 2 Market size in bn USD
Slide 17: Increased FDA scrutiny has led to higher quality requirements
Increased FDA scrutiny has led to higher quality requirements for pharma suppliers Trend 3) Increasing regulatory requirements Regulatory scrutiny for our customers Increased quality requirements for suppliers Manufacturers of sterile injectable From “accepted quality limit” to “parts drugs subj
Slide 18: 60% of drugs in pipeline are pharma specialties
60% of drugs in pipeline are pharma specialties Trend 4) New drug development Developed market by type of medicine (USD bn) Definition pharma specialties* 690 Based on biotech +2-3% 600 Parenteral application +6% 30% Specialist treatment Pharma specialties 25% Treatment of chronic diseases
Slide 19: Strong growth prospects for devices
Strong growth prospects for devices Trend 4) New drug development Characteristics of specialty pharma Opportunities for Gerresheimer Parenteral administration High-quality syringes, vials and Biotech origin / high price / cartridges made of glass or cyclic high volume olefin polymers Often p
Slide 20: Prevalence of acute and chronic diseases: diabetes
Prevalence of acute and chronic diseases Example: our products help treat diabetes Trend 5) Growth of chronic diseases Products for safe drug dosage & Market growth diabetes administration Medical devices for treatment: insulin pens lancets lancing devices Today: 350m people affected Main caus
Slide 21: Acute and chronic diseases grow: COPD
Acute and chronic diseases grow Example: our products help treat COPD* Trend 5) Growth of chronic diseases Products for safe drug dosage & Market growth asthma administration Medical devices for treatment: inhalation device Main causes: rising pollution Today: 300m people affected unhealthy li
Slide 22: Self-medication presents attractive growth opportunities
Self-medication presents attractive growth opportunities Trend 6) Growth of self-medication Challenge for pharma industry 30 - 50% of medication not taken as prescribed Patients need to be better supported Devices are a critical value driver Design Improved efficacy Usability Better qual
Slide 23: Capital Markets Day 2014 Agenda
Capital Markets Day 2014 Our company Market dynamics Strategy Outlook Summary 23
Slide 24: Strategy is geared towards growth and global leadership
Strategy is geared towards growth and global leadership Base growth: existing customers and regions Organic New products for existing growth customers Pharma and New regions and customers healthcare Global market Growth Extension of product leadership offerings/technology positions throu
Slide 25: Plastics and Devices: leading in Europe, growing in pharmerging
Plastics and Devices (P&D): Leading in Europe – growing foothold in pharmerging countries Products for safe drug dosage & Market positions administration Inhalers Plastic Diabetes Pens Sy- (DPI)1 Packa- Diag- ringe ging nostics2 Sys- tems Europe #1 #1 #2 #2 #2 Inhalers Insulin pens North #1 #2 A
Slide 26: P&D: Most comprehensive portfolio in the market
P&D: Most comprehensive portfolio in the market Competitive structure Strengths Inhalers Plastic Diabetes Pens Syringe Product Packaging Diagnos- Systems Market-leading tics2 positions Gerresheimer Product innovation Schott Excellent Becton Dickinson1 industrialization Nipro1
Slide 27: Innovation example: Duma OneLiner
Innovation example: Duma® OneLiner® Duma® Twist-Off Containers with unique closure solution for US and EU A unique solution for plastic packaging of solid drugs in the US and EU A single product for one customer filling line for very different markets Compliant with all relevant pharmaceutical
Slide 28: Innovation example: MultiShell vials
Innovation example: MultiShell® vials MultiShell® vials MultiShell® vials combining combining our our glass glass and and plastics plastics expertise expertise Unites best properties of plastic and glass in a new high performance packaging for liquid medications Three layers – three functions
Slide 29: Innovation example: Gx RTF
Innovation example: Gx RTF® 4 New generation of Ready-to-Fill Syringes with enhanced production technology No glass-to-glass contact Lower reject rates in final vision control after filling Different assembly possibilities for higher flexibility Constant syringe functionality Enhanced over
Slide 30: Innovation example: Autoinjector
Innovation example: Autoinjector Combining our development expertise, glass and plastics know-how Increasing number of applications for self-medication with autoinjectors, e.g. autoimmune diseases, emergency medication, allergic shocks Combines a syringe system with a medical plastic system Ph
Slide 31: Technical & industrialization competence drives business success
Technical & industrialization competence drives business success TCC Germany TCC USA TCC Industrialization Production Develop- Tooling Automation Production Product Assembly / ment of parts refinement Packaging 31
Slide 32: Selected pipeline projects with new devices
Selected pipeline projects with new devices Expected launch Project Production location Customer 2014 Q3 • Lancing Pfreimd (Germany) Big pharma Q3 • Inhaler Horsovsky Tyn (Czech Republic) Big pharma Q3 • Inhaler Kuessnacht (Switzerland) Big pharma 2015 • Inhaler Pfreimd (Germany) Big pharma • Inhale
Slide 33: Complete development process out of one hand
Innovation example: competitive advantage by offering the complete development process out of one hand Small batch production in the Technical Competence Center Complete process from customer idea to small series production within the Technical Competence Center High speed and flexibility in dev
Slide 34: Innovation example: prefillable syringes made of plastics
Innovation example: prefillable syringes made of plastics COP as an alternative material for specialized applications Glass-like transparency Integrated luer lock Reduced particle load No tungsten residuals Break resistance Customization No glue residuals with needle syringes For speci
Slide 35: Innovation example: pharma bottles and caps for preservative free drugs
Innovation example: pharma bottles and caps for preservative free drugs Intelligent packaging solutions can support new drug development Today: preservatives in liquid drugs, i.e. eyedroppers, with multiple side effects Elimination of preservatives in eye drops requires new systems New dropper
Slide 36: Primary Packaging Glass: leading global market positions
Primary Packaging Glass (PPG): leading global market positions Storage and transport of liquid and Market positions solid drugs MG Pharma Ampoules, Tubing vials, cartridges Ampoules Europe #2 #3 #2 Vials Cartridges North #1 #1 #1 Pharma glass America bottles Pharmerging #2 #1 Markets (India)
Slide 37: PPG: broadest pharma glass portfolio in the industry
PPG: broadest pharma glass portfolio in the industry Competitive structure Strengths MG Pharma OTC Liquids TG Glass Leading market Product (Type I) and syrups Injectables Tubing positions (Type II & III) Proprietary Gerresheimer technologies Schott Specialized process know-how Nipr
Slide 38: PPG: key initiatives to improve cost and quality position
PPG: key initiatives to improve cost and quality position Ampoules, vials, cartridges Standardization of production processes to improve cost and quality position New greenfield production site in Kosamba (India) Innovations in strengthening and inspection Tubing Standardization of proce
Slide 39: Innovation example: scratch-free and strengthened glass packaging
Innovation example: scratch-free and strengthened primary packaging made of glass Example for suppporting increasing regulatory requirements and new drug development Scratch-free glass production Increased load force strength Reduced delamination risk Enhanced scratch resistance Much highe
Slide 40: Cosmetic glass ideal supplement to pharma
Cosmetic glass ideal supplement to pharma Products (examples) Trends 2015-2018 Cream jars Increasing annual income per capita Perfume bottles to drive cosmetics consumption Deo roll-on Per capita cosmetic spending: EUR 20 p.a. in pharmerging markets EUR 100 p.a. in established Market s
Slide 41: Innovation example: cosmetic glass
Innovation example: cosmetic glass Adding value to high-end cosmetic glass 130 new products every year Full-service supplier with broad expertise Cutting edge decoration technologies: printing, acid etching, hot foil stamping, spraying and metallization 41
Slide 42: Life Science Research: strong presence in North America
Life Science Research: strong presence in North America Products (examples) Market positions and competitive structure Laboratory glassware Market leader in the US Disposable Main competitors: Corning (US), Duran Reusable (Europe) Low single digit market growth1 Business setup Strengths
Slide 43: Strategy is geared towards growth and global leadership
Strategy is geared towards growth and global leadership Base growth: existing customers and regions Organic New products for existing growth customers Pharma and New regions and customers healthcare Global market Growth Extension of product leadership offerings/technology positions throu
Slide 44: M&A: expansion of our global footprint
M&A: expansion of our global footprint set to contribute additional growth opportunities Diversification Criteria for potential acquisition targets Plastics & Regional diversification Proven Expertise in primary pharmaceutical Devices Pharmerging industry packaging countries expertise USA Expert
Slide 45: M&A track record: 11 successful acquisitions since 2005
M&A track record: 11 successful acquisitions since 2005 Year Company Country Revenues1 Division 2012 Triveni India EUR 20m Plastics & Devices 2012 Neutral Glass India EUR 15m Primary Packaging Glass 2011 Vedat Brazil EUR 45m Plastics & Devices 2008 Allplas Brazil EUR 16m Plastics & Devices EDP Spain
Slide 46: Six successful divestments to streamline and focus the business
Six successful divestments to streamline and focus the business Year Company Country Revenues1 Division 2014 Beijing Gerresheimer China EUR <15m Primary Packaging Glass Co. Ltd. (associated company, Glass holding was 45.7%) 2012 Kimble Bomex Glass China EUR <10m Life Science Research Co. Ltd. 2009 T
Slide 47: Capital Markets Day 2014 Agenda
Capital Markets Day 2014 Our company Market dynamics Strategy Outlook Summary 47
Slide 48: Strong organic growth supplemented by M&A
Strong organic growth supplemented by M&A Growth rates group 2011 - 14 CAGR 2011-14 7.7% 4.9% 4.2% ~ 4.4% Organic growth ~5% Ist Plan Vorjahr ... Vedat Neutral Triveni Beverage Glass Caps Growth through 2.9% Brazil ~2% 2.1% 1.6% M&A/Exits Ist Plan Vorjahr ... - 0.4% = 9.8% 7.8% 5.8% ~ 4% FX-neutra
Slide 49: Further specification of FY 2014 Guidance
Further specification of FY 2014 Guidance1 Revenues App.+4% at const. FX App. EUR 255m to EUR 258m Adj. EBITDA at const. FX 9% to 10% of revenues Capex at const. FX 1 Based on (budgeted) exchange rate assumption for FY 2014 of EUR 1.00 = USD 1.30 49
Slide 50: Initial indication FY 2015
Initial indication FY 2015 Key actions in FY 2015 and FY 2016 to support mid-term targets Streamlining of portfolio Standardization of technology to further optimize cost position Increase of capacity (Peachtree City (US), Horsovsky Tyn (CZ), Chicago Heights (US) and Kosamba (India)) Initi
Slide 51: Mid-term outlook (FY 2016-2018)
Mid-term outlook (FY 2016-2018) Financials Revenue growth: 4% to 6% CAGR (organic growth, at const. FX) Adjusted EBITDA margin: uplift towards 21% Capex 9% to 10% of revenues at const. FX Average net working capital approximately 18% of revenues Operating cash flow margin uplift above 10%
Slide 52: Capital Markets Day 2014 Agenda
Capital Markets Day 2014 Our company Market dynamics Strategy Outlook Summary 52
Slide 53: Summary: key takeaways
Summary: key takeaways Our mid-term strategy is based on profitable growth First indication for FY 2015: consolidation and laying the foundation FY 2016 – 2018: growth and harvest We act in growing markets We have a strong pipeline for innovative devices We invest in order to leverage ke
Slide 54: Our vision
Our vision Gerresheimer will become the leading global partner for enabling solutions that improve health and well-being. Our success is driven by the passion of our people. 54
Slide 55: Q&A
Q&A Gerresheimer will become the leading global partner for enabling solutions that improve health and well-being. Our success is driven by the passion of our people. 55