Coloplast A/s Class B · OMXCOP:COLO_B
Coloplast A/s Class B — Investor Day (June 2006)
147 slides from Coloplast A/s Class B's investor day presentation, Jun 12, 2006
Slide 1: Coloplast Capital Market Day
Coloplast Capital Market Day 12 June 2006
Slide 2: Participants, investors and analysts
2 Participants, investors and analysts Malene Brøndberg Kenneth Leiling Frank Hørning Andersen ABG Sundal Collier Cazenove Jyske Bank Morten Larsen Eva Fornadi James Barker ABG Sundal Collier Comgest MetLife Investments Limited Sten Gustafsson Martin Parkhøi Erik Simoni Mortensen Alfred Berg Danske
Slide 3: Participants, media and Coloplast representatives
3 Participants, media and Coloplast representatives Lene Skole Nicolai Buhl Andersen Lone Andersen Coloplast A/S, Executive Management Coloplast A/S, Ostomy Division Jyllands Posten Carsten Lønfeldt Brad Selman Lasse Friis Coloplast A/S, Executive Management Coloplast Corp, Ostomy/Continence Group,
Slide 4: Programme
4 Programme 08:30 Welcome 08:40 Strategic and financial update 09:00 Margin expansion drivers 09:45 Coffee break 10:05 Organic growth drivers 12:00 Lunch 13:00 Growth through acquisitions – Mentor 14:45 Coffee break 15:00 US market dynamics and strategy 15:45 Q&A 16:00 End meeting
Slide 5: Strategic and financial update
Strategic and financial update Lene Skole Executive Vice President, CFO
Slide 6: Strategic framework towards 2012
6 Strategic framework towards 2012 Mission Values Corporate Objectives Customers Employees Society Shareholders Corporate Strategy Global Market Innovation Double-digit Value Creation Leadership Leadership Organic Growth Above Peers Business Areas Wound & Skin Ostomy Care Continence Care Breast Care
Slide 7: Strategic objectives
7 Strategic objectives 2012 • At least a doubling of economic profit (EP) every five years towards 2012, based on the 2004/05 figures • Organic growth of Coloplast’s revenue to DKK 15 billion • A profit margin (EBIT margin) to exceed 17% • Aspiring for market leadership within all business areas • O
Slide 8: External factors - Demand outlook
8 External factors - Demand outlook Demographics + Surgical and medical trends - /+ Reimbursement reforms - Health Care reforms Group buying and tender bid process - /+ Focus on overall treatment costs + Emerging markets + Distribution & Parallel import - The demand for products and services will co
Slide 9: Long term value creation through growth and innovation
9 Long term value creation through growth and innovation Revenue growth levers • Faster market roll-out of new products • Investing in new geographical markets • Up-scaling investments in research and development • Investing in new technology and product areas • Establishing specialised sales forces
Slide 10: Income statement 1H 2005/06
10 Income statement 1H 2005/06 1H 1H mDKK 2005/06 2004/05 Index Net revenue 3,447 3,099 111 Net operating profit (EBIT) 568 409 139 Profit margin (EBIT %) 16% 13% Profit before tax 433 355 122 Tax payment -128 -117 109 Tax rate 30% 33% Group profit 305 236 129
Slide 11: Balance sheet and key ratios 1H 2005/06
11 Balance sheet and key ratios 1H 2005/06 1H 1H FY mDKK 2005/06 2004/05 2004/05 Equity 2,549 2,377 2,512 Invested capital 5,634 5,647 5,385 ROAIC, % 21 14 18 Return on equity, % 24 20 23 Equity interest, % 44 42 42 Free cash flow 54 366 919 Investments in tangible assets 185 216 399
Slide 12: Economic profit 1H 2005/06
12 Economic profit 1H 2005/06 • Coloplast reports economic profit on a quarterly basis • The improved EP is mainly due to higher earnings • Lower WACC and average NOA also had a positive impact. EP ROAIC 285 300 21 21 228 213 221 215 1H 1H 250 20 mDKK 2005/06 2004/05 200 18 19 18 mDKK 150 18 % NOPAT
Slide 13: Growth rates 1H 2005/06 in local currencies
13 Growth rates 1H 2005/06 in local currencies Estimated Growth Growth ¤ Revenue market 1H 2005/06 1H 2004/05 1H 2005/06 growth Ostomy care 9% 9% 1,391 1-3% Continence care 16% 9% 901 4-6% Wound & Skin care 7% *8% 592 #8-9% Breast care 8% (1)% 235 (3)-(1)% Coloplast total 9% 7% 3,447 4-6% Europe 8%
Slide 14: Expectations 2005/06
14 Expectations 2005/06 2005/06 • Organic sales growth of around 10% in local currencies • Profit margin of 12-13% • Investments in tangible assets of DKK 500-600M • Corporate tax rate of 29%
Slide 15: Margin expansion drivers
Margin expansion drivers Lars Rasmussen Executive Vice President, COO
Slide 16: Global Operations
Global Operations Creating a World Class manufacturing unit
Slide 17: From strategy to operations
17 From strategy to operations Strategy 2012 Project Objectives • Develop new organisational model defining which functions • Significant EBIT margin should be coordinated/ improvement centralised • Double-digit organic • Design scalable growth organisation reaping benefits from best • Geographic ex
Slide 18: Vision for Global Operations
18 Vision for Global Operations To build a World-Class Global Operations organisation in 36 months
Slide 19: Objectives
19 Objectives Global Operations Objectives • Maintain strong customer orientation • Become a world leader in supporting organic growth and acquisition integration • Secure operational efficiency and scalability • Be an agile, challenging and attractive place to work
Slide 20: Key performance indicators
20 Key performance indicators Global Operations KPI’s • Customer satisfaction measured by quality and delivery performance • Support growth by reducing time to high volume, market-, profit- and technology development • Operational efficiency step change measured by • Fully loaded unit cost • Supply
Slide 21: 3,100 employees in manufacturing
21 3,100 employees in manufacturing
Slide 22: Future manufacturing and distribution blueprint
22 Future manufacturing and distribution blueprint • Aimed to reap the benefits from closeness to customers, suppliers and creating flow on a global scale • Each manufacturing center will build on lean flow and postponement principles and aim to create maximum efficiency in terms of cost, flexibilit
Slide 23: E-VSA future State
23 E-VSA future State Order entry EU In same building Normal delivery 48 hours Postponement CP High volume in- center Sterilisation house production Express delivery 24 hours Order entry Contract Manufactures US In same building Normal delivery 48 hours Postponement CP High volume in- Sterilisation
Slide 24: Deliverables focused on reducing total unit cost
24 Deliverables focused on reducing total unit cost • Current cost base includes all manufacturing and distribution cost, DKK 2.5 billion in 2005/06 numbers • The vision implies that Global Operations from 2008 will be able to reduce total unit cost by 5 % year on year driven by: • Best practice imp
Slide 25: Global Operations organisation
25 Global Operations organisation Manufacturing Quality & New Products & Distribution Supply Chain Business Introduction Improvement DK Sites International Sites Contract Manufacturing Global Distribution Designed to deliver synergies, increased professionalism and scalability
Slide 26: Moving towards best in class
26 Moving towards “best in class” • Shifting “inspecting quality out” of a product to “building quality in” • Make versus Buy capabilities • Manufacturing / distribution aim for operational excellence • NPI leveraging professionalism, standardisation of processes and enhancing products to market abi
Slide 27: Organisational consequences
27 Organisational consequences Transfer to e.g Corp. Incl. new and open Procurement (20) positions 500 90+20 Mainly through 50 430 natural attrition 40 390 Functions in Positions Positions GO 1.3.2006 Positions GO 1.3.2008 scope affected in affected now affected in total 24 mths
Slide 28: To-be-state
28 To-be-state • As-is-state • To-be-state • Asses current • One organisation organisational structure supporting three in FR, US and UK business areas • Conduct eVSAs and • One culture RACIs • Strong customer focus • New organisational footprint by 1.9.2006 Main focus ahead is to consolidate manufa
Slide 29: Simplifying business processes
Simplifying business processes
Slide 30: Lean in Coloplast introduced 2004/05
30 Lean in Coloplast introduced 2004/05 Highlights - development and implementation of abc • Two pilot projects - production and sales abc abc • abc concept developed manage- methods abc • Management process ment and audits • Lean tools process tools • Organisation • Handbook • Global rollout abc •
Slide 31: Value Stream Analysis (VSA)
31 Value Stream Analysis (VSA) Goals at 1st VSA in 2004 Inventory - 80% Productivity + 30% Scrap - 67% Lead time - 75%
Slide 32: Future state is always a simplified process
32 ”Future state” is always a simplified process “Current state” Planned “future state”
Slide 33: Value stream transformation
33 Value stream transformation - Rapid Improvement Events (RIE) Connecting two machines… . … in 4½ days!
Slide 34: Critical success factors
34 Critical success factors Lean transformations require dedication and discipline 1. Align abc with strategy and demand action 2. All managers must participate in RIE’s 3. Learn from a sensei 4. Use same approach in all units 5. Set the pace - ”n/10” events per year 6. Follow a rhythm - monthly eve
Slide 35: VSAs and RIEs to date
35 A total of ~350 abc events carried out to date VSA’s to date RIE’s to date 300 300 250 250 200 200 VSA's RIE's 150 150 254 100 100 154 50 91 50 94 42 45 0 4 0 6 '03/04 '04/05 '05/06, 8 Total '03/04 '04/05 '05/06, 8 Total months months Supported by 34 abc specialists (22 full time, 12 part time)
Slide 36: Speed of change to increase further
36 Speed of change to increase further RIE’s per year abc Specialists / total staff(1) 800 4% 700 600 3% 500 RIE's 400 2% 700 2,0% 300 200 1% 0,6% 100 250 0 0% Today Vision Today Vision 10% productivity All staff increase involved year-on-year every year (1) Ratio measured in units where abc is impl
Slide 37: abc with several benefits
37 abc with several benefits • Lower lead time and inventory levels • Fewer pallet places • Less space needed • Better quality and delivery performance • Higher productivity ..... and an increase in the organisation’s skill level!
Slide 38: ...a must-win battle towards 2012
38 ...a must-win battle towards 2012
Slide 39: Coffee break
COFFEE BREAK Convene at 10:05
Slide 40: Organic growth drivers
Organic growth drivers ~ aoe aoe _ : =
Slide 41: Product launch strategies - FIGARO
Product launch strategies - FIGARO Lars Rasmussen Executive Vice President, COO
Slide 42: Strategy towards 2012 - Investing in growth
42 Strategy towards 2012 - Investing in growth Double digit Creating values organic growth Global Innovation market leader leadership
Slide 43: Milestones in Coloplast's innovation
43 Milestones in Coloplast’s innovation • Customer driven innovation • Structured innovation process Front End Innovation New Product Development Global Roll-Out • Innovation culture in Coloplast
Slide 44: Coloplast Innovation objectives towards 2012
44 Coloplast Innovation objectives towards 2012 Front End Innovation New Product Development Global Roll-Out Ambitious goals • Innovation rate: 20% of revenues from products less than 4 years old • Value of new product portfolio: 50% higher growth rate than revenue growth
Slide 45: Coloplast Innovation objectives towards 2012
45 Coloplast Innovation objectives towards 2012 Front End Innovation New Product Development Global Roll -Out 2007: 2007: 2007: 10 substantial new Time to market of a Within first year of product ideas enter new product: 25 a product launch to New Product months reach 70% of global Development marke
Slide 46: Coloplast Innovation Process
46 Coloplast Innovation Process Front End Innovation Global Roll-Out Idea E SS O R G R O M E E O R D P New Product Development Idea CIC Idea Generation and AIM Enrichment Idea Idea Selection Opportunity Analysis ENGINE P LV S VLTR A Concept Definition Opportunity Identification Gate 2 - AIM Idea Ide
Slide 47: Innovation Portfolio Management
47 Innovation Breakthrough, platform and incremental new products Innovation high ? Time Breakthrough Platform Incremental • Unpredictable • Building on core • Line extension competences/capabilities Portfolio Management
Slide 48: Front End Innovation - Tools
48 Front End Innovation - Tools Coloplast Innovation Process Front End Innovation New Product Development Global Rollout Coloplast Innovation Cycle Scenario A Scenario B Scenario C Idea TSG TSG TSG Genera tion Idea Selection Opportunity ENGINE Coloplast Market Attack Team Analysis Concept Definition
Slide 49: Product development in Coloplast
49 Product development in Coloplast The AIM process Stage 1 Stage 2 Stage 3 Stage 4 Stage 5 Idea Idea Concept Product Test International generation formulation formulation development marketing marketing ? Gate 1 Gate 2 Gate 3 Gate 4 Gate 5
Slide 50: Global roll-out
50 Global roll-out Objectives To achieve To increase the To increase faster global penetration rate efficiency in roll-out marketing Activities C: A: B: New Products: Management of Coloplast *Conveen Optima Global roll-out Global roll out *SenSura plans culture *Biatain - Ibu
Slide 51: Breakthrough Innovation: Biatain - Ibu
51 Breakthrough Innovation: Biatain - Ibu
Slide 52: Platform Innovation: SenSura
52 Platform Innovation: SenSura
Slide 53: Incremental Innovation: Conveen Optima
53 Incremental Innovation: Conveen Optima
Slide 54: FIGARO: From Innovation to Accelerated Global Roll-Out
54 FIGARO From Innovation to Accelerated Global Roll-Out Front End Innovation New Product Development Global Roll-Out
Slide 55: Emerging markets
Emerging markets Christian Jørgensen Executive Vice President, Global Sales
Slide 56: Emerging markets contain opportunities
56 Emerging markets contain opportunities • High economic growth in emerging markets • Increased medical spending • Ageing population • Introduction of reimbursement • Increase in penetration of advanced products, e.g. MWH • Increased diabetes incidence rate
Slide 57: Critical assumptions
57 Critical assumptions • Reimbursement more or less unchanged in the markets already offering this to the end-users • Drastically reduced reimbursement or co-payment will affect market potential as most customers cannot afford to pay on their own • Prioritisation of markets is important due the the
Slide 58: Estimated market potential
58 Estimated market potential Ostomy Continence Wound & Skin care care care DKK mn 05/06 11/12 05/06 11/12 05/06 11/12 Latin America 130 190 60 90 240 350 Eastern & Central Europe 600 1.100 140 250 120 220 Middle East 150 200 160 220 300 520 Other (Greece, Israel, Portugal, Cyprus) 160 230 50 100 16
Slide 59: Russia - an investment case
59 Russia - an investment case • Population: 144M people • Market potential: • Ostomy care: 110M DKK • Continence care: 85M DKK • Wound care (MWH): 5M DKK • High market growth expected the coming years • Reimbursement on ostomy and continence care products nationally • Improved economy due to the hi
Slide 60: Mexico - a bubbling market
60 Mexico - a ’bubbling’ market • Population: 105M people • Market potential: • Ostomy care: 50M DKK • Continence care: n.a. • Wound care (MWH): 25M DKK • High market growth expected the coming years • Increased medical spending • Partly reimbursement on ostomy care products • Product price level ap
Slide 61: Estimated market potential in South East Asia
61 Estimated market potential in South East Asia (Excluding China, Japan) Ostomy Continence Wound & Skin care care care DKK mn 05/06 11/12 05/06 11/12 05/06 11/12 India, Sri-Lanka, Pakistan 90 160 100 290 140 290 Korea, Taiwan & Hong Kong 110 150 120 220 240 350 Singapore, Philippines, Malaysia, 100
Slide 62: Emerging markets in Asia
62 Emerging markets in Asia Population: 49M Health expenditure South Korea per capita: USD 532 Health expenditure 6% of GDP Population: 23M Health expenditure Taiwan per capita: USD743 Health expenditure 6% of GDP
Slide 63: Market assumptions
63 Market assumptions 1. Well organised healthcare systems and high quality healthcare services in these countries 2. Government reimbursement changes in Korea November 2005, with both ostomy and wound care products 90% reimbursed, but at lower prices 3. Korea healthcare expenditure grows at an annu
Slide 64: Coloplast in South Korea
64 Coloplast in South Korea 1. Sales volume expected to increase due to the reimbursement policy changes 2. Co-operate with distributor to expand sales force manpower and marketing investment 3. Speed up the introduction of new and high quality Coloplast products, especially wound care products 4. I
Slide 65: Coloplast in Taiwan
65 Coloplast in Taiwan 1. Took over distributor’s sales & marketing operation in 2005 2. Expand sales force manpower and marketing investment 3. Contribute in training Enterostomal Therapists and wound care specialists 4. Speed up the introduction of new and high quality Coloplast products 5. Listin
Slide 66: Coloplast in emerging markets
66 Coloplast in emerging markets • High economic growth • Lower reimbursement • Increased medical level spending • Political and financial + - • Demographics instability • Introduction of • Long-term investments reimbursement • Weak intellectual • Increase in penetration of property protection advan
Slide 67: Ostomy market dynamics
Ostomy market dynamics Nicolai Buhl Andersen, Senior Vice President, Ostomy Division
Slide 68: Global ostomy market
68 Global ostomy market Market value 9.0-9.5 billion DKK Rest of world - 20% USA - 19% UK - 15% Rest of Europe - 22%* France - 5% Germany - 14% Japan - 5%
Slide 69: Ostomy growth driver model
69 Ostomy growth driver model Market size New end-user Average value base (FTEs) per end-user 6 7 Product usage Price End-user base Inflow Outflow (FTEs) (FTEs) (FTEs) Starting point 5 New permanent New temporary Permanent end- Life expectancy users (FTEs) users (FTEs) users (FTEs) (years) 1 2 3 4 A
Slide 70: Market driver trends
70 Market driver trends Increase of CRC and Increase of CRC and bladder cancer incidence due to bladder Cancer increasing, aging population and higher risk factors (e.g. obesity) Better screening Diseases detected at earlier stage due to Medical methods - Increasing sensitivity of colonoscopies - In
Slide 71: Market driver impact
71 Market driver impact Driver Trend Market Growth Impact 1 NPD Increase due to cancer incidence 2 Temporary share Increase due to earlier detection 3 Reversion time Decrease due to better procedures 4 Non-reversal rate More severe perm. ostomies offset by better procedures 5 Life expectancy Increas
Slide 72: Growth outlook towards 2012
72 Growth outlook towards 2012 • Overall growth outlook remains moderate with an annual 1-3% towards 2012 • Driven by price pressure in Germany & UK accounting for 30% of total market size • Flat consumption and price development in the US • Shift from permanent to temporary ostomies • However, grow
Slide 73: Coloplast market share
73 Coloplast market share Europe RoW Americas market 100 share (%) 80 Competitors 60 Coloplast 40 28% 20 0 0 1 2 3 4 5 6 7 8 9 Market value (BDKK)
Slide 74: Opportunity
74 OPPORTUNITY! Coloplast market share 28% Competitor market share 72%
Slide 75: The Strategic Vision is clear
75 The Strategic Vision is clear Coloplast wants to become the world’s leading ostomy care provider and partner
Slide 76: New product launches are key growth drivers
76 New product launches are key growth drivers Easiflex Hide-away Assura
Slide 77: Need for new products within ostomy care?
77 Need for new products within ostomy care? >30% switch product >40% of users within the first 6 months experience skin issues after operation due to in the peristomal area product related issues …. still a strong need for product improvements
Slide 78: q) (@)
q) (@)
Slide 79: The Launch of A New Standard Within Ostomy Care
79 The Launch of A New Standard Within Ostomy Care
Slide 80: ...but a new level in Stoma Care
80 Building on our history... 1957 1972 1978 1992 2006 ...but a new level in Stoma Care
Slide 81: User-driven innovation
81 User-driven innovation • Developed through extensive interaction with more than 400 nurses across the world through our COF setup • Based on feedback and focus group work with end-users across the world • Extensive clinical program behind development process • Extensive user test program behind d
Slide 82: Today's adhesive dilemma within ostomy care
82 Today’s adhesive dilemma within ostomy care ’ease of ’tack & removal’ adhesion’ ’erosion resistance’ ’flexibility’ ’absorption’
Slide 83: SenSura Double Layer Adhesive solves the adhesive dilemma
83 SenSura Double Layer Adhesive solves the adhesive dilemma ’ease of ’tack & removal’ adhesion’ ’erosion resistance’ ’flexibility’ ’absorption’
Slide 84: SenSura - Innovation on all features
84 SenSura - Innovation on all features • Revolutionary Double Layer Adhesive • New and better performing wave filter • Improvement on the Hide-away outlet - still the best outlet on the market • Design, ease of use and cloth material
Slide 85: Launch objectives
85 Launch objectives • Establish SenSura as the new standard in stoma care • Launch according to FIGARO principles • Fast and cost-effective roll-out • Production capacity established for fast-roll out • Evidence based approach • Largest clinical program supporting a new Ostomy product • Health-econ
Slide 86: Key conclusions
86 Key conclusions • Overall market growth outlook adjusted, mainly due to expected outcome of price reforms in the EU • Significant growth opportunities remain with 70% of world-wide market still to be captured • SenSura represents a new standard in ostomy care, which is aimed at boosting Coloplast
Slide 87: Lunch
6 & ¥ Bacto lh rag ~ Convene at 13:00 ~ = Coloplast
Slide 88: Growth through acquisitions
Growth through acquisitions Mentor - ’almost the perfect fit’
Slide 89: Post Merger Integration
Post Merger Integration Carsten Lønfeldt, Executive Vice President
Slide 90: Status of the acquisition
90 Status of the acquisition • Closing took place on 2 June 2006 • Integration work off to a good start • Joint teams established in all countries and in all functions • Teams work towards well defined milestones and results • Integration objectives • Strong customer and growth focus in the process
Slide 91: Integration process in short
91 Integration process in short Now Next 18 months Build growth Stabilise the Market push, optimise products, engine business and strengthen R&D Structured Establish joint Implement while tracking synergy integration teams, detail realisation process plans Create one Retain Understand differences co
Slide 92: Key integration tasks
92 Key integration tasks • Establish a new headquarter in the US • Integrate sales organisations in all countries • Optimise procurement • Combine and expand R&D • Reach one IT platform and reporting system • Create one company and one culture
Slide 93: New US headquarter
93 New US headquarter • New headquarter in Minneapolis • Will become operational in Nov/Dec 2006 • Coloplast Atlanta headquarter will be relocated during next ~15 months affecting 120 employees • Mentor Santa Barbara headquarter will be relocated during next ~12 months affecting Minneapolis, Minneso
Slide 94: Rationale is to secure long-term growth
94 Rationale is to secure long-term growth 600 500 1. Highest concentration of 400 300 Coloplast employees in US 200 100 0 OK City S. Barbara Atlanta Minnesota 2. Co-locate Operations, Commercial Development and Sales & Marketing Minneapolis-St. Paul is home to • > 50 medical device companies • > 50
Slide 95: Key risks in the integration process
95 Key risks in the integration process Risk Action • US relocation reduce • Well defined plan short term growth • Incentives for relocating or staying with Coloplast during transition • Senior management presence in the US • Use Mentor infrastructure in Minneapolis • Loss of Mentor • Sales force re
Slide 96: Anti-trust issues
96 Anti-trust issues • Transaction approved before closing by authorities in US, Germany and Spain • Anti-trust authorities in France have made enquiries after closing • Agreement with Rochester solves anti-trust issues in the United Kingdom • Rochester Medical pays DKK 85M (USD 14.6M) for the acqui
Slide 97: Conveen Optima
97 Conveen Optima • Setting a new standard in an established product category • End-user friendly design & functionality • First double strip applicator - secure application with gloves. First urisheath to comply with hygiene guidelines • Customer segments include prostate, stroke, SCI, MS • Potenti
Slide 98: Mentor 'almost the perfect fit'
Mentor ’almost the perfect fit’ Steffen Eichner Hovard, Director, Business Development Urology & Continence Care Division
Slide 99: Content of Presentation
99 Content of Presentation • Rationale for acquisition • The Urology & Continence Care Division • Market drivers (old and new) • Competitor landscape • Customers • Treatments, pathologies, and products
Slide 100: 2005 Urological device - global market overview
100 2005 Urological device - global market overview 3.4 billion USD; 7-8% growth Benign Prostatic Prostate cancer Erectile Incontinence Stone Management Endoscopy/ Hyperplasia - BPH Dysfunction Diagnostics 250mUSD 250mUSD 125mUSD 2200mUSD* 275mUSD 300mUSD 20% yy growth 8% yy growth 8% yy growth 6-8%
Slide 101: Triangular synergies
101 Triangular synergies Urologist C) Di (I S ag no es sis gi te & tra Int ts er en ve m Coloplast nt at io e solutions Tr n Nurse Patient Training & Products
Slide 102: Coloplast's new customer segmentation
102 Coloplast’s new customer segmentation Coloplast will target all urologists across all segments Urology Department Location OUTPATIENT CLINIC DAY SURGERY OPERATING ROOM WARD REGIONAL CENTRES Customer Nurses and Urology surgeons Urological surgeons Pre- & post-op Care Highly specialised Urologists
Slide 103: Market drivers in Coloplast's markets
103 Market drivers in Coloplast’s markets Market Drivers in current Market Drivers in Surgical Urology Continence Business Reimbursement Ageing population Diagnose Related Groups (DRG) Penetration Innovative products and services Relationships to nurses Relationship to urologist (and nurses) New pat
Slide 104: Market size
104 Geographical characteristics of urology device markets 2bn USD US US Competitive environment 7.5% growth Attractive reimbursement setting 7.0% growth Market size New technology pioneers/entrepreneurship 1bn USD EU High penetration EU RoW Less concentrated competition Late adopters of new technol
Slide 105: Market Size 2005 (US & EU)
105 Revenue size & growth in Coloplast product markets 500m USD Intermittent Catheters Urine Bags 9% CAGR 4% CAGR Market Size 2005 (US & EU) 250m USD Foley Catheters Vaginal Slings Brachytherapy 3% CAGR 18% CAGR 6% CAGR Urisheaths 2% CAGR Penile Implants 8% CAGR Ureteral Stents 2% CAGR Prostatic Bul
Slide 106: The competitor landscape has changed significantly
106 The competitor landscape has changed significantly Coloplast has become the global market leader within urology devices % of global market • Leading position in urology globally • Strong position in the US market • European market leadership reinforced • Broader portfolio in terms of product off
Slide 107: Two product portfolios to be integrated
107 Two product portfolios to be integrated Coloplast Continence Care Mentor’s urology Division USD 304M + business USD 232M Clinical and Urology Consumer Specialities Health Bowel Intermittent Disposable Women’s Urine Bags Urisheaths Catheters Men’s Health Brachytherapy Management catheters Urology
Slide 108: The integration entails a much wider product portfolio
108 The integration of the two companies entails a much wider product portfolio Coloplast Urology & Continence Care Division USD 536M Continence Urological Consumables Specialties Disposable Intermittent Urisheaths Indwelling Absorbent Men’s Women’s Bowel Urine Bags Surgical Brachytherapy Catheters
Slide 109: Coloplast's new customer segmentation
109 Coloplast’s new customer segmentation Coloplast will target all urologists across all segments Location OUTPATIENT CLINIC DAY SURGERY OPERATING ROOM WARD REGIONAL CENTRES Customer Nurses and Urology surgeons Urological surgeons Pre- & post-op Care Highly specialised Urologists Primarily Primaril
Slide 110: Upper Urology Lower Urology
110 Upper Urology Lower Urology
Slide 111: Urinary System
111 Urinary System Kidney Ureter Bladder Urethra
Slide 112: Lower Urology Patients
112 Lower Urology Patients BENIGN PROSTATE HYPERPLASIA, LOWER URINARY TRACT SYMPTOMS Benign Prostate Hyperplasia (BPH) Urinary Non-cancerous swelling of the Prostate occuring in men with increasing age The Causes of BPH is unknown, but is associated to hormonal changes occuring with Increasing age B
Slide 113: Main Lower Urology Products
113 Main Lower Urology Products PRODUCT DESCRIPTION BRAND NAME Foley catheters Urethral bladder catheter for permanent urine Cystocare Folysil drainage Standard Latex Foley Prostate Catheters Catheter for bladder irrigation and urine drainage PostCath™ after TUR-P treatment of BPH Temporary Prostati
Slide 114: Upper Urology Patients
114 Upper Urology Patients URINARY TRACT STONE DISEASE, URINARY DIVERSION Urinary Tract Stone Disease (Urolithiasis) Urinary stones are hard masses developed from crystals that separate from the urine and build up inside the kidney Approx. 5% of the adult population have urinary stones and the preva
Slide 115: Main Upper Urology Products
115 Main Upper Urology Products PRODUCT DESCRIPTION BRAND NAME Stone Retrieval device Endoscopic device for removal of kidney or Dormia Basket® ureteral stones Ureteral Stents Endoscopic placement of stent to restore Vortek®, Biosoft® passage of ureter Nephrostomy Set Catheters for percutaneous kidn
Slide 116: Main Upper Urology Products
116 Main Upper Urology Products CONTINUED PRODUCT DESCRIPTION BRAND NAME Ureteral catheters Products mainly used to deliver contrast dye Ureteral catheter during a retrograde pyelogram Guidewires Instrument for guidance of endological catheters Seldinger®, Schüller® and stents Urinary Diversion Uret
Slide 117: Women's Health Patients
117 Women’s Health Patients SUI, PELVIC ORGAN PROLAPSE Stress Urinary Incontinence (SUI) Leakage of urine during abdominal straining, e.g. caughing, laughing and physical exercise Typically caused by trauma from vaginal delivery or repeated descent of the pelvic floor due to chronic caughing or stra
Slide 118: Main Women's Health Products
118 Main Women’s Health Products PRODUCT DESCRIPTION BRAND NAME Synthetic Sling For Stress Urinary Incontinence (SUI) Aris Using a vaginal incision the tape is placed horizontially beneath the mid portion of the urethra to increase the pelvic support and restore continence. The sling is placed throu
Slide 119: Obturator Foramen
@ Coloplast Obturator Foramen
Slide 120: Men's Health Patients
120 Men’s Health Patients ERECTILE DYSFUNCTION, ORCHIECTOMY Erectile Dysfunction (ED) ED is the repeated inability to achieve and sustain an erection Unlike impotence, ED relates only to the actual erection Most common cause of ED: damage to nerves, arteries, smooth muscles, and fibrous tissues (oft
Slide 121: Main Men's Health Products
121 Main Men’s Health Products PRODUCT DESCRIPTION BRAND NAME Penile Implants: Semi rigid penile implants made of Genesis flexible elastomer. The device is Malleable operated by the patient bending the penis into an erect position. Penile Implants: Consists of two inflatable cylinders and a resi- Ex
Slide 122: Prostate Cancer Patients
122 Prostate Cancer Patients BRACHYTHERAPY Prostate Cancer Prostate cancer is the area where Brachytherapy has gained most acceptance Prostate cancer is one of the most common cancer types in men Approx. 235,000 men will be diagnosed with Prostate cancer each year in the US. The incidence increases
Slide 123: Main Brachytherapy Products
123 Main Brachytherapy Products PRODUCT DESCRIPTION BRAND NAME Iodine seeds ProstaSeed is a welded titanium capsule ProstaSeeds ® containing Iodine I-125. For patients with tumors that are localised, slow growing, and exhibit low-to-moderate radio sensitivity Palladium seeds Mentor distributes (non-
Slide 124: Coloplast's new customer segmentation
124 Coloplast’s new customer segmentation Location OUTPATIENT CLINIC DAY SURGERY OPERATING ROOM WARD REGIONAL CENTRES Customer Nurses and Urology surgeons Urological surgeons Pre- & post-op Care Highly specialised Urologists Primarily Primarily open Nurses and urologists Endourology surgery urologis
Slide 125: Coffee break
COFFEE BREAK Convene at 15:00
Slide 126: US market dynamics
US market dynamics Brad Selman, Director, Post-Merger Integration Coloplast Corp.
Slide 127: Content of Presentation
127 Content of Presentation • US Patient Path • US Market Dynamics • Segments • Influencers • Barriers • Coloplast Strategy • Distribution – a key success factor • Medicare Modernization Act • Overview • Status
Slide 128: Chronic care - US patient path
128 Chronic care - US patient path Medical product manufacturer GPO Direct sales, wholesalers and specialised home care dealers Distribution 2-5 Days 30-90 Days 90 Days - 20 Years Hospital Home Health Agencies Retail DME Rehab centres Patient path New patient Convalescent patient Patient at home (at
Slide 129: US Patient Path
129 US Patient Path US Market Dynamics • Segments • Influencers • Barriers • Coloplast Strategy US Sales Force Structure Distribution – a key success factor Medicare Modernization Act • Overview • Status
Slide 130: Acute Market Segment - GPO's add complexity
130 Acute Market Segment – GPO’s add complexity Key Influencers Segment Barriers / Issues Coloplast Strategy & Programs • Clinical – Nurses, Doctors • Historical familiarity with • Evaluation/Trial Product / Discharge Kits etc, existing products • Specialized Sales Force Structure • Clinical Studies
Slide 131: Transitional Segment (Rehabilitation Ctrs, LTAC)
131 Transitional Segment (Rehabilitation Ctrs, LTAC) Key Influencers Segment Barriers / Issues Coloplast Strategy & Programs • Clinical – Nurses, Doctors • Need for Clinical • Specialized Sales Force structure etc, competence and clinical • Discharge Programs (SCI, SB) studies/data data (Rehab • US/
Slide 132: Home Healthcare Market Segment
132 Home Healthcare Market Segment Key Influencers Segment Barriers / Issues Coloplast Strategy & Programs • Clinical – Home healthcare • Historical familiarity with • Coloplast Comes Home (new Home Nurses, Aides & CNA’s existing products Healthcare Ostomy Marketing Program) • Re-focused Ostomy call
Slide 133: Community (Patient-at-home) Market Segment
133 Community (Patient-at-home) Market Segment Key Influencers Segment Barriers / Issues Coloplast Strategy & Programs • Clinical – Nurses, Doctors • Historical familiarity with • Evaluation/Trial/Discharge Kits when patients are going for existing products • Specialized Sales Force Structure out-pa
Slide 134: US Patient Path
134 US Patient Path US Market Dynamics • Segments • Influencers • Barriers • Coloplast Strategy US Sales Force Structure Distribution – a key success factor Medicare Modernization Act • Overview • Status
Slide 135: US Product and Market Structure
135 US Product and Market Structure Product Franchise Market Segment Continence Care Surgical – Men’s Health Surgical – Women’s Health Ostomy Wound/Skin Care Acute/Hospital Surgeons OB/GYN Rehab Home Health LTC Wholesale Dealer Patient
Slide 136: Sales Force Set-up
136 Sales Force Set-up Continence Care and Surgical Ostomy Care Urology Sales Sales Force Force Wound and Consumer Skin Care Sales Team Sales Force (Inside/CRM)
Slide 137: Revised US Corporate Sales / Major Account Organization
137 Revised US Corporate Sales / Major Account Organization • Corporate Sales / Major Accounts “unite” the 3 Field-based Sales Organizations to bring Coloplast forward as “one company” to the contracting entities in Providers and Distribution Provider Contracting Team Distribution Alliances Team • G
Slide 138: US Product and Market Structure
138 US Product and Market Structure Product Franchise Market Segment Continence Care Surgical – Men’s Health Surgical – Women’s Health Ostomy Wound/Skin Care Acute/Hospital Surgeons OB/GYN Clinical Coverage specialized by product knowledge Rehab GPO / IDN Provider Contracting via Corporate Sales Hom
Slide 139: US Patient Path
139 US Patient Path US Market Dynamics • Segments • Influencers • Barriers • Coloplast Strategy US Sales Force Structure Distribution – a key success factor Medicare Modernization Act • Overview • Status
Slide 140: Current US Distribution Landscape
140 Current US Distribution “Landscape” Edgepark Sterling Retail / DME Shield Byram Dealers Healthcare CCS Medical Distributor type Active Invacare Independence wholesalers Medline Medical Cardinal/ Allegiance McKesson Med-Surg McKesson Cardinal “Passive” Drug Drug wholesalers Amerisource Owens & Mi
Slide 141: US Patient Path
141 US Patient Path US Market Dynamics • Segments • Influencers • Barriers • Coloplast Strategy US Sales Force Structure Distribution – a key success factor Medicare Modernization Act • Overview • Status
Slide 142: US Healthcare Market - Medicare Competitive Bidding
142 US Healthcare Market – Medicare Competitive Bidding • MMA (Medical Modernization Act) calls for this program to be phased in beginning with 10 of the largest metropolitan statistical areas (MSAs) in 2007, 80 of the largest MSAs in 2009, and then additional areas after 2009 • For this program, ce
Slide 143: Medicare Modernization Act & NCB
143 Medicare Modernization Act & NCB • 24-April-06 – CMS releases plans for implementation (205 pages) • Doesn’t include which product categories will be bid • Although, they will be based on largest potential savings and Ostomy and Continence/Urology are not within the top 20 largest categories • D
Slide 144: Medicare Modernization Act & NCB
144 Medicare Modernization Act & NCB • Industry Groups have lobbied for further legislation (Hobson-Tanner HR 3559) to challenge / modify a number of NCB provisions; • Primary focus of this additional legislation is to ensure all DME’s can participate – if they meet minimum price criteria. • Other a
Slide 145: Q&A
Q&A Moderator: Lene Skole Executive Vice President, CFO
Slide 146: Estimated effects from M&A activities
146 Estimated effects from M&A activities Mentor 2005/06 effects Sales growth DKK 450M added Integration costs DKK 30-60M negative EBIT impact US relocation costs DKK 6-12M negative EBIT impact Synergies DKK 5-10M positive EBIT impact Stock of finished goods DKK 30-40M negative EBIT impact Depreciat
Slide 147: End meeting
6 & ¥ Bacto END MEETING ~ Bus leaves 16:15 ~ = Coloplast