Medartis Holding Ag · SIX:MED
Medartis — H1 2022 Earnings Presentation
33 slides from Medartis's earnings presentation, Aug 16, 2022
Slide 1: 2022 Half-year Results
2022 | Half-year Results Presentation for journalists, analysts and investors Basel, 16 August 2022
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 Half-year highlights Christoph Brönnimann, CEO Financial & business review Dirk Kirsten, CFO Update on our 2022 priorities Christoph Brönnimann, CEO Outlook 2022 Christoph Brönnimann, CEO Q&A ® Medartis All rights reserved ∣ 3
Slide 4: Half-year highlights
Half-year highlights Christoph Brönnimann, CEO
Slide 5: Key facts & figures
Key facts & figures TOTAL SALES REVENUE GROWTH CHF 88.4 million 1 +20.1% CER1 vs. PY ▪ Strengthening our competitive position in most ▪ +18.0% excl. 3rd party sales from NSI markets ▪ EMEA (+21% vs. PY) contributed half of the total growth ▪ Hospital surgical capacity impacted by staff ▪ Dynamic LAT
Slide 6: 2022 Half-year highlights
2022 │Half-year highlights ▪ We are particularly pleased with our performance in EMEA and LATAM ▪ All direct markets in the EMEA region recorded strong double-digit growth, meeting or even exceeding expectations ▪ APAC region most affected by COVID in H1 ▪ OR staff shortages experience worldwide ▪ F
Slide 7: The Medartis family is getting bigger and more global
The Medartis family is getting bigger and more global 832 684 636 609 561 475 With the acquisition of Nextremity Solutions, 98 additional employees joined Medartis 734 Headcount in Switzerland 284 2017 2018 2019 2020 2021 H1 2022 Medartis Switzerland team ® Medartis All rights reserved ∣ 7
Slide 8: Financial & Business Review
Financial & Business Review Dirk Kirsten, CFO
Slide 9: Net sales rose 20% to almost CHF 90 million
Net sales rose 20% to almost CHF 90 million Net sales in million CHF +17.2% +20.1% 2.8 88.4 0.9 3.0 8.0 75.4 -1.8 73.6 21.4% 19.8% 6.0% 47.1% CER growth vs. PY H1 2021 FX H1 2021 EMEA US 1 APAC LATAM H1 2022 as restated @ CER reported 1 Includes sales from NSI’s third party manufacturing business am
Slide 10: Regional performance: EMEA & APAC
Regional performance: EMEA & APAC CHF million CER growth Highlights ▪ All direct markets in the region recorded strong double-digit growth 51% ▪ Specifically strong growth from UK and France 45.5m ▪ Germany with mild winter affected in Q1 – now growing consistently again ▪ Impressive run rate moment
Slide 11: Regional performance: LATAM & US
Regional performance: LATAM & US CHF million CER growth Highlights ▪ Very strong performance in Brazil also benefitting from easy comparison basis 10% lifting Medartis market share in the Brazilian upper extremities market (premium) 8.8m to around 30-35% 47.1% ▪ Strong Mexico where Medartis won an i
Slide 12: Strong segment growth reflects portfolio strategy focus
Strong segment growth reflects portfolio strategy focus CHF million CER growth Highlights 69% ▪ Continued market share gains in the wrist segment; shoulder products well 61.1m received ▪ Elbow potential not yet fully exploited 14.7% ▪ Strong demand for KeriMedical products support segment growth and
Slide 13: Underlying gross margin improved by 0.60 PP
Underlying gross margin improved by 0.60 PP – no impact yet from rising inflation in % of net sales +0.6 PP 1,8 -0,7 Temporary impact due to NSI -0,6 84,7 -1,0 0,4 0,1 84,1 Below average 83,6 growth in 83,7 Australia and Increase of Better capacity the US 3rd party utilization, products efficiency (
Slide 14: Balanced cost management: Underlying OPEX increased 19%
Balanced cost management: Underlying OPEX increased 19% in line with top line after normalisation of Covid-19 situation in CHF million and % of net sales 18,6% 4,9 72,6 11,1 67,7 57,6 -0,5 57,1 -0,4 76.4% 77.6% 78.0% 82.2% OPEX H1 OPEX H1 HQ expenses Regional operating Underlying OPEX NSI OPEX 2 OPE
Slide 15: Underlying EBIT and EBITDA margin improved
Underlying EBIT and EBITDA margin improved; reported EBITDA reduced mainly due to NSI and adverse currency effect in CHF million and % of net sales 10.1% 13.8 14.1 -1.0 12.8 1.3 -4.2 9.9 16.3% or 18.3% 17.3% excl. 17.4% 11.2% China1 Restated EBITDA FX EBITDA margin Change in Underyling EBITDA NSI im
Slide 16: Net margin impacted by NSI & FX result
Net margin impacted by NSI & FX result in CHF million 7.1 -3.1 CHF +0.5 million 0.8 -0.2 4.5 -4.5 4.0 0.0 Net profit H1 2021 FX impact Adjusted net Underlying EBIT Higher taxes Net profit H1 NSI 2 Reported net & FX gains profit H1 2021 improvement 2022 excl. NSI1 profit H1 2022 1 Underlying EBITDA i
Slide 17: Cash holdings mainly reduced due to M&A payments
Cash holdings mainly reduced due to M&A payments in CHF million 82.6 -4.5 -43.2 ▪ Operating result ▪ Increased NWC (Inventory, sets & • Repayment of lease receivables) liability -2.3 0.4 33.0 ▪ NSI acquisition ▪ Increase in KeriMedical stake ▪ Capex and Set investment Cash position Operating Cashflo
Slide 18: Update on our 2022 priorities
Update on our 2022 priorities Christoph Brönnimann, CEO
Slide 19: Our strategy and key priorities 2022 remain unchanged
Our strategy and key priorities 2022 remain unchanged Favorable demographics Enhance sales focus Become innovation leader in 1 INNOVATION Accelerate and broaden R&D platform key indications GROWTH STRATEGY 2 Exploit the US market potential by taking our US business to the next level Addressing Targe
Slide 20: Selected H1 highlights and H2 priorities
1 Selected H1 highlights and H2 priorities Successful first clinical cases of ONE-Medartis US product: Disposable Lapidus Cut Guide receives excellent feedback from first clinical cases regarding accuracy & efficiency Focus on growing market share of recently launched products (e.g.: clavicle, ankle
Slide 21: New lower extremity pipeline for the US market
New exciting lower extremity pipeline for the US market with 1 the first products in Q4 CalcShift™ Lapidus Cut Guide StealthFix System LapiPrep System (Calcaneal Osteotomy) Launched in Q3 after first Beta Launch in Q4 Beta Launch in Q4 FDA 510(k) Clearance in June clinical use in June Beta launch in
Slide 22: Two organisations merged to form one strong US extremity business
Two organisations merged to form one strong US 2 extremity business Warsaw, Indiana Field sales force Exton, Pennsylvania ® Medartis All rights reserved ∣ 22
Slide 23: Combining and further enhancing our U.S. organization
2 Combining and further enhancing our U.S. organization 2022 2023 Organizational ▪ Building “ONE-Medartis” culture mainly driven by pace and ▪ Significantly improve cost efficiency development entrepreneurial spirit of former NSI ▪ Further improve sales execution and ▪ Onboarding of new management a
Slide 24: Addressing the USD 5bn US market opportunity
2 Adressing the USD 5bn US market opportunity Breakdown of the ~USD 3.7 billion Worldwide market segment Breakdown of the ~USD 2.2 billion US upper limb market2 worth USD 11 bn USD1 US foot and ankle market Elbow Ankle osteoarthritis Flat foot or PCFD Hand & wrist Hammertoe Others 6.2 3.7 Hallux val
Slide 25: Confidence in acceleration in H2
2 Confidence in acceleration in H2 New US leadership team has assessed and defined roles & responsibilities addressing underperformance and strengthening commercial capabilities Clear focus on sales execution − Independent sales agent network has been reviewed based on its performance and partially
Slide 26: Everyone counts / Make it happen / Eager to learn
3 Everyone counts We embrace a collaborative and inclusive environment, where everyone speaks up and contributes actively. Make it happen Eager to learn We live a “can-do attitude”, We grow and develop by learning are empowered to make decisions from experience and each other. and keep our commitmen
Slide 27: Next stops on our (culture) journey
3 Next stops on our (culture) journey All groups Level 1 Level 2 Level 3 Level 4 are key I understand it I have learned it I live it I help to make it (the why & what of our CJ) (tools, models, self-awareneChange happens in (commitment) 360- sustainable stepsss) degree feedback EMB 360-degree feedba
Slide 28: Outlook 2022
Outlook 2022 ® Medartis All rights reserved │ 28
Slide 29: Outlook
Outlook (barring any unforeseen circumstances) 2022 Medium to long term ▪ FY sales growth (at CER and incl. ▪ Long-term growth and profitability NSI) in the high-teens range objectives remain unchanged ▪ Plan to optimise the cost structure is in the implementation phase ▪ The lower sales level will
Slide 30: medartis® Precision in Fixation
medartis® PRECISION IN FIXATION (J&A
Slide 31: Upcoming investor events
Upcoming investor events 2022 Event Broker Destination 16 August 2022 half-year results publication 17 August Roadshow meetings Credit Suisse Geneva 18 August Roadshow meetings Octavian Frankfurt 27 September Roadshow meetings Credit Suisse New York 28 September Roadshow meetings Credit Suisse Bosto
Slide 32: Healthy growth despite steep comparison in the prior year
Healthy growth despite steep comparison in the prior year Net sales in CHF million Year-on-year growth at CER 2019 and 2020 restated 159.9 +21,0% 132.8 29,6% 127.6 84.5 H2 67.0 20,8% 20,1% 69.2 88.4 2,1% 8,6% 18,0% H1 75.4 65.8 58.4 Covid-19 2019 2020 2021 H1 2022 -6,4% 2020 H1 2020 H2 2021 H1 2021
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