STADA Arzneimittel — Investor Presentation (November 2016)
42 slides from STADA Arzneimittel's investor presentation, November 2016
Slide 1: Corporate Presentation November 2016
CORPORATE PRESENTATION November 2016
Slide 2: STADA Strategy: Tapping Our Full Potential
STADA STRATEGY TAPPING OUR FULL POTENTIAL Ready for change Delivering growth STADA Corporate Presentation • November 2016 Page 2
Slide 3: New Corporate Culture and Structure
NEW CORPORATE CULTURE AND STRUCTURE NEW LOGO AS SYMBOL OF CHANGE AND RENEWAL New Group structure New Group-wide incentivization model Enhance culture to further boost company performance Improved networking of Greater degree of transparency individual business units STADA Corporate Presentation • No
Slide 4: Ready for Change – Delivering Growth
READY FOR CHANGE – DELIVERING GROWTH BUILDING ON EXISTING BUSINESS AND NEW INITIATIVES Generic base Biosimilars, Branded base niche areas, business special therapy business areas Grow Internationalization New corporate Focused M&A culture and of brands structure strategy Change Reorganization Stream
Slide 5: Group Mid-Term Guidance 2019
GROUP MID-TERM GUIDANCE 2019 Sales1 EBITDA2 Net income2 €m €m €m 2,600 2,115 510 389 250 166 2015 2019e 2015 2019e 2015 2019e CAGR ’15-’19 +5% CAGR ’15-’19 +7% CAGR ’15-’19 +11% 1) Adjusted for currency and portfolio effects. 2) Adjusted for special items. STADA Corporate Presentation • November 201
Slide 6: Assumptions Group Mid-Term Guidance 2019
ASSUMPTIONS GROUP MID-TERM GUIDANCE 2019 Organic growth Constant Stable tax Stable regulatory Guidance existing business exchange environment and environment for range: +/- 5% rates current interest generics business levels STADA Corporate Presentation • November 2016 Page 6
Slide 7: Refined Strategy
REFINED STRATEGY BUILD ON GENERICS, EXPAND BRANDED PRODUCT BUSINESS AND STRIVE FOR ADDITIONAL GROWTH OPPORTUNITIES INTERNATIONALIZATION Higher growth and OF BRANDS / BIOSIMILARS/ NICHE AREAS / SPECIAL higher margins Additional growth opportunities THERAPY AREAS o Niche markets, non-regulated markets
Slide 8: Focused M&A Strategy
FOCUSED M&A-STRATEGY IN-LICENSING AND SELECTIVE “BOLT-ON”-ACQUISITIONS Grow and expand o Growth markets o Out of pocket STADA o Brands niche areas/ o Rx to OTC/RxOTC special therapy areas Limited capital allocation o Support base FIREPOWER business Brands Expansion and €m existing base international
Slide 9: Generics: Clear Strategy for Continuous Growth
GENERICS CLEAR STRATEGY FOR CONTINUOUS GROWTH Continue to grow base business and defend market positions Expansion in attractive / less regulated markets Rollout of the biosimilar portfolio Ongoing efficiency initiatives to sustain attractive margin level Selective M&A activity in growing markets ST
Slide 10: Generics: Market Driven by High Volume Growth
GENERICS THE MARKET IS DRIVEN BY HIGH VOLUME GROWTH Generics continue to take an increasing share of the scripts in all markets Canada: 58% 73% Europe: 44% 56% Japan: 14% 26% US: 59% 82% Asia / Australia: 42% 48% Latin America: 55% 71% Africa / Middle East: 44% 47% Generic volume market share 2006 v
Slide 11: Generics: Future Patent Expirations
GENERICS FUTURE PATENT EXPIRATIONS Patent expiration in Germany, France, Italy, Spain and UK €bn 4,500 4,254 4,000 3,500 3,137 3,000 > € 12 bn of sales 2,461 2,356 coming off patent in 2,500 our key markets by 2019 2,000 not including 1,500 biosimilars 1,000 500 - 2016 2017 2018 2019 Source: IMS Hea
Slide 12: Generics - STADA's Top Generic Markets
GENERICS - STADA‘S TOP 5 GENERIC MARKETS Growth rates1 (ex-manufacturer sales before discounts) and market positions2 Market Growth CAGR 15-20 Germany Italy Spain Belgium Russia Germany 4.8% 1. Novartis 1. Teva 1. Cinfa 1. STADA 1. Sanofi Italy 8.4% 2. Teva 2. Mylan 2. Teva 2. Novartis 2. STADA Spai
Slide 13: Full Generic Pipeline and Expand Biosimilars Portfolio
BUILD ON FULL GENERIC PIPELINE AND EXPAND BIOSIMILARS PORTFOLIO Generic base business Volume growth and product launches in Generic base business SALES More than 2,000 product launches (SKU‘s) by GROWTH1 2019 > € 240 m Biosimilars until 2019e Portfolio expansion from currently 2 to 7 products 1) Adj
Slide 14: Branded Products Strategy
BRANDED PRODUCTS STRATEGY Capitalize on strong platforms (e.g. T&R in UK) and internationalize successful brands Stretch existing brands (e.g. Fultium, Lactoflora) in existing markets Switch Rx generics to OTC / Upgrade generic OTCs to full brands (e.g. Care) In-license innovative formulations or de
Slide 15: Branded Products: International Scope
BRANDED PRODUCTS INTERNATIONAL SCOPE o Demographics, Urbanization and increasing income level o Greater health awareness and desire for self-care o New communication and distribution channels o Rx-to-OTC/Otx-to-OTC switches and vice versa o World growth trend: 2015: $ 80.6 billion/2019: $ 98.5 billi
Slide 16: Branded Products: STADA's Key Markets
BRANDED PRODUCTS STADA‘S KEY MARKETS 2015 OTC growth in selected markets1 STADA sales In LCD billion Sales 2015 in €m Growth vs. 2014 2019 2015 Russian Fed. GERMANY 5.9 CAGR ’15-’19 +5.3% 4.8 UK 212.2 4.5 -12.6% ITALY CAGR ’15-’19 +3.7% 304.7 3.9 Germany +8.8% Total sales: € 854 m RUSSIA 4.9 CAGR ’1
Slide 17: STADA Is Represented in Key Categories
STADA IS REPRESENTED IN KEY CATEGORIES OPPORTUNITY TO WIDEN SCOPE IN KEY AFFILIATES Germany UK Russia o Topical Pain o Topical Pain o Topical pain o Cough & Cold o Cough o Rhinitis o Sleeping Aid o Headlice o Urology o Suncare o Dermatology o Lifestyle & mens health o Vitamins & Minerals o Vitamins
Slide 18: Internationalization of Brands: Selected Case Studies
INTERNATIONALIZATION OF BRANDS SELECTED CASE STUDIES STADA Corporate Presentation • November 2016 Page 18
Slide 19: Selected Case Studies: Fultium
SELECTED CASE STUDIES: FULTIUM – HUGE POTENTIAL IN STADA KEY MARKETS Massive potential in EU We all need extra D3 80 Optimal 4 to 10 €80m 11 to 18 60 19 to 64 Slovakia Adequate €70m over 65 Poland 40 €60m Portugal 20 €50m Ireland 0 Czech Jan - Mar Apr - July July - Sep Oct - Dec €40m Republic Belgiu
Slide 20: Selected Case Studies: Hedrin – Growth Through Innovation
SELECTED CASE STUDIES: HEDRIN – GROWTH THROUGH INNOVATION Launched in 2006 Today o First licensed non- pesticide head lice No.1 in treatment in UK Europe o Top OTC launch in UK 2006 – Brand leadership by June More potential for growth in o Revolutionized the new markets market STADA Corporate Presen
Slide 21: Selected Case Studies: Lactoflora
BRANDED PRODUCTS SELECTED CASE STUDIES: LACTOFLORA Probiotics – the friendly micro-warriors Probiotic range from STADA, with a complete formula and the best strains, that offers one solution for every “OUR BODY IS A PLANET” situation with the objective to solve health problems oThe intestinal microb
Slide 22: New Product Launches and Internationalization of Products
NEW PRODUCT LAUNCHES AND INTERNATIONALIZATION OF PRODUCTS Branded base business Volume growth and product launches in Branded base business SALES GROWTH1 > € 350 m Internationalization of brands until 2019e Focus on most attractive brands 1) Adjusted for portfolio and currency effects. STADA Corpora
Slide 23: Our Path to 2019 Sales Growth
OUR PATH TO 2019 SALES GROWTH Sales1 €m 2,600 2,115 BRANDED + € 350 m 1,180 ~+ € 325 m CAGR ’15-’19 +8% PRODUCTS 854 Volume growth/launches/ ~45% ~40% internationalization of brands ./. € 25 m Price cuts 1,261 + € 240 m 1,420 GENERICS² Volume growth/ ~+ € 160 m CAGR ’15-’19 +3% ~60% ~55% launches/bi
Slide 24: Portfolio Optimization
PORTFOLIO OPTIMIZATION STREAMLINE ORGANIZATIONAL SET UP AND INTERNAL PROCESSES Organization Processes o Consolidate: Consolidation of German entities to o Harmonize: Harmonize Group end-to-end gain synergies and improve market positioning processes such as record to report, purchase to + o Simplify:
Slide 25: Reduction of COGS
REDUCTION OF COGS P – Prices o Continuous renegotiation of APIs o Continuous renegotiation of finished goods U – Utilization COGS o Reduce set-up times REDUCTION o Optimize batch sizes o Reduce small volume products S – Suppliers ~ € 65 m o Reduce number of suppliers until 2019e o Transfers from own
Slide 26: Our Path to 2019 Adjusted EBITDA Growth
OUR PATH TO 2019 ADJUSTED EBITDA GROWTH + € 120 m o Volume growth and product launches in Generic base business & brands EBITDA adj.1 €m ~510 o Internationalization of brands Group EBITDA Margin o Biosimilars ~20% € 105 m Margin Branded Products + o Savings from reorganization/ efficiency gains & CO
Slide 27: Q3/2016 Update
Q3/2016 UPDATE STADA Corporate Presentation • November 2016 Page 27
Slide 28: Q3: A High Performance Despite Challenging Environment
Q3: A HIGH PERFORMANCE DESPITE CHALLENGING ENVIRONMENT AND A STRONG PRIOR-YEAR QUARTER Generics Cashflow o Ongoing strong sales momentum: o Sequential improvement in Operating Cashflow Russia with continued double-digit sales o Significant increase in Free Cashflow growth / Belgium recovering o Segm
Slide 29: Financial Overview
FINANCIAL OVERVIEW Group Results €m Q3/2016 Q3/2015 Δ 9M/2016 9M/2015 Δ Sales 507 508 0% 1,542 1,534 1% Sales (adj.)1 507 504 1% 1,568 1,522 3% EBITDA 88 100 -11% 289 281 3% EBITDA (adj.)2 98 105 -6% 301 294 2% Financial result -13 -16 17% -38 -50 25% Income taxes -3 -14 80% -28 -34 20% Net Income 1
Slide 30: Generics: Q3 Segment Results
GENERICS Q3 Segment Results €m Q3/2016 Q3/2015 Δ 9M/2016 9M/2015 Δ Sales 305 292 4% 932 928 0% Sales (adj.)1 304 290 5% 944 922 2% EBITDA (adj.)2 64 49 30% 194 161 20% Margin (adj.)2 21.0% 16.8% 20.8% 17.3% 1) Adjusted for currency and portfolio effects. 2) Adjusted for special items STADA Corporate
Slide 31: Generics: Q3 Segment Results by Country
GENERICS Q3 Segment Results Sales by country Q3/2016 in €m • Germany: Following expired tenders more selected approach in renewals with stronger focus on Germany profitability 73 77 Italy (9%) (-12%) • Russia: Ongoing sales momentum despite Spain challenging environment Russia Generics • Belgium: St
Slide 32: Branded Products: Segment Results
BRANDED PRODUCTS Segment Results €m Q3/2016 Q3/2015 Δ 9M/2016 9M/2015 Δ Sales 203 216 -6% 610 605 1% Sales (adj.)1 204 214 -5% 624 600 4% EBITDA (adj.)2 53 72 -27% 161 181 -11% Margin (adj.)2 25.9% 33.2% 26.4% 30.0% 1) Adjusted for currency and portfolio effects. 2) Adjusted for special items STADA
Slide 33: Branded Products: Q3 Segment Results by Country
BRANDED PRODUCTS Q3 Segment Results Sales by country Q3/2016 in €m • Germany: Portfolio optimization / strong performance supported by early supply ahead of flu season / Ladival line extensions / Hoggar 43 Germany benefiting from successful marketing activities (+48%) 65 (-7%) Russia • Russia: Chall
Slide 34: Cashflow Development
CASHFLOW DEVELOPMENT Q3/2016 Q3/2015 Δ 9M/2016 9M/2015 Δ Operating Cashflow 85 97 -13% 198 138 44% Free Cashflow 64 55 16% 79 11 644% (before dividends) Free Cashflow (adj.)1 90 74 22% 133 69 94% (before dividends) 1) Adjusted for significant investments, acquisitions and disposals STADA Corporate P
Slide 35: Leverage Net Debt/EBITDA (adj.)
LEVERAGE NET DEBT/EBITDA (ADJ.) 4.0 2016 TARGET ~3.0 3.5 3.2 3.2 3.1 3.1 3.1 3.01) 3.0 2.7 2.7 2.5 2.0 2009 2010 2011 2012 2013 2014 2015 Sep 16 1) Linear extrapolation of the adjusted EBITDA of the reporting period on a full year basis STADA Corporate Presentation • November 2016 Page 35
Slide 36: Well on Track to Reach FY2016 Outlook
WELL ON TRACK TO REACH FY2016 OUTLOOK Sales (adj.1) EBITDA (adj.2) Net income (adj.2) €m 1,522 1,568 3% 294 301 2% 127 140 10% 1-9/2015 1-9/2016 1-9/2015 1-9/2016 1-9/2015 1-9/2016 1) Adjusted for currency and portfolio effects. 2) Adjusted for special items STADA Corporate Presentation • November 2
Slide 37: Outlook 2016
OUTLOOK 2016 Before New Sales adj.1 Slight growth EBITDA adj.2 Slight growth Net income adj.2 Slight growth Minimum of € 180m 1) Adjusted for currency and portfolio effects. 2) Adjusted for special items. STADA Corporate Presentation • November 2016 Page 37
Slide 38: Appendix
APPENDIX STADA Corporate Presentation • November 2016 Page 38
Slide 39: Financing Structure
FINANCING STRUCTURE Remaining terms of financial liabilities due to banks as of June 30, 2016 in €m CORPORATE BOND PROMISSORY NOTE LOANS CREDIT 350.0 300.0 295.0 288.5 37.6 121.5 57.3 21.5 20.0 61.5 44.0 2016 2017 2018 2019 2020 2021 > 2021 • Net debt to adjusted1 EBITDA ratio: 3.02 (1-6/2015: 3.72)
Slide 40: Sensitivity Analysis for Major Exchange Rates
SENSITIVITY ANALYSIS FOR MAJOR EXCHANGE RATES Exchange rate effects1 Share of sales according to currencies1 % / €m 15% +1/-1 Ruble / € +1/-1 Pence / € EBITDA €m ~+/- 0.9 EBITDA €m ~+/- 1.8 RUB GBP Total sales 12% OTHERS 52% 2015: € 2.1 bn EUR 21% 1) Functional currencies, translation. STADA Corpora
Slide 41: Financial Calendar / Contact
FINANCIAL CALENDAR / CONTACT Financial Calender 2017 March 23, 2017 Publication of FY 2016 results with analyst meeting May 11, 2017 Publication of the Q1 2017 results June 08, 2017 Annual General Meeting 2017 August 03, 2017 Publication of the Q2 2017 results November 09, 2017 Publication of the Q3
Slide 42: Disclaimer and Notes
DISCLAIMER AND NOTES This STADA Arzneimittel AG (hereinafter "STADA") presentation is intended for information only. It is not intended as or provided in connection with an offer or solicitation for the purchase or sale of any security in any jurisdiction. STADA shall not have any liability arising
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