STADA Arzneimittel — 9M 2014 Earnings Presentation
46 slides from STADA Arzneimittel's earnings presentation, November 2014
Slide 1: STADA
STADA
Slide 2: General information
General information By making use of this document the reader acknowledges and agrees to the following: We accept no liability arising from the use of this document. STADA Arzneimittel AG, Bad Vilbel (in the following “STADA”), has made every effort to make sure that this document contains correct a
Slide 3: Forward-looking-statements
Forward-looking-statements This STADA Arzneimittel AG presentation (hereinafter "STADA") contains certain statements regarding future events that are based on the current expectations, estimates and forecasts on the part of the company management of STADA as well as other currently available informa
Slide 4: Strategy and Outlook
y Strategy and Outlook
Slide 5: Focus on strategy
Focus on strategy • Development/internationalization of brands • Shifting the branded product/generics mix from the current 51% to Consumer focus 2/3 of adjusted operating profit in the core segments from branded products • Focus on growth markets with high share of self-pay patients, e.g. Spreading
Slide 6: Sales split 2013
Sales split 2013 Sales of core segments 36% 64% Branded Products Generics (OTC and RX Specialty Pharmaceuticals) (RX and OTC) EBITDA margin adj.: 31.8 % EBITDA margin adj.: 17.3% Company Presentation November 2014 www.stada.com Page 6
Slide 7: Branded Products contribute 51% to adjusted operating profit
Branded Products contribute 51% to adjusted operating profit1) 51% 51% 46% 39% 36% 37% 36% 32% 33% 26% 27% 28% 2009 2010 2011 2012 2013 1-9/2014 Share of Branded Products in sales1) Share of Branded Products in adjusted operating profit1) 1) of the two core segments Generics and Branded Products.. C
Slide 8: Innovations
Innovations Center of Excellence for branded products Expansion of biosimilar activities • Interdisciplinary team: market research, • Since 2008: own development Silapo (epoetin zeta) marketing, R&D, production and corporate • 2014: introduction Grastofil (Filgrastim) through development cooperation
Slide 9: Outlook for 2014
Outlook for 2014 Group: • Slight growth in sales, adjusted EBITDA and adjusted net income Segments: • Generics: slight growth in sales, adjusted EBITDA slightly above previous year • Branded Products: substantial growth in sales and adjusted EBITDA New: Adjustment for special effects in connection w
Slide 10: Market region assumptions for 2014
Market region assumptions for 2014 Operational factors • Stabilization of income from Generics with decrease in sales Germany • Growth in highly profitable Branded Products • Less regulatory impediments than in previous year • Positive development of the top markets of UK, Belgium, Italy and Spain C
Slide 11: Further assumptions
Further assumptions Non-operational growth drivers Improved • Decreased tax rate corporate structure Cost efficiency • Individual efficiency improving projects, such as the founding of an IT Culture of continuous shared service center in Serbia for the whole Group, withdrawal of cost optimization ST
Slide 12: Responsibility and sustainability
Responsibility and sustainability Code of Conduct Markets and products Society • STADA mission statement: care for people’s • Strengthening of employee well-being through fitness health and well-being. and health care • Generics contribute to efficient and affordable • High share of women in managem
Slide 13: Market Regions
y Market Regions
Slide 14: Sales 1-9/2014
Sales 1-9/2014 By market region Total group € 1,482.7 million +4% (-1%) • Germany: Decrease in Generics, Germany Branded Products stable, increase in Asia & Pacific € 66.0 million € 341.6 million export business +59% (-9%) +1% (+1%) 4.5% • Central Europe: continued positive trend 23.0% 25.9% • CIS/E
Slide 15: Market region Germany
Market region Germany Generics sales Branded product sales Optimization of the German sales activities (in € million) (in € million) Total 1-9/2014: € 341.6 million (+1%) -2% +10% - STADAvita wins world footballer of the century 230.4 225.1 Pelé as new brand ambassador 105.8 116.5 - Withdrawal of ST
Slide 16: Market region Central Europe
Market region Central Europe Generics sales Branded product sales Most important countries (in € million) (in € million) (Sales in € million) Total 1-9/2014: € 690.9 million (+14%, adjusted1) +3%) Generics Branded products +3% +43% 433.0 447.8 111.0 105.6 217.4 83.3 76.3 152.5 53.2 21.5 9.8 9.7 6.4
Slide 17: Market region CIS/Eastern Europe
Market region CIS/Eastern Europe Generics sales Branded product sales Most important countries (in € million) (in € million) (Sales in € million) Total 1-9/2014: € 384.2 million (-13%, adjusted1) -8%) Generics Branded products -19% -7% 210.3 228.6 212.5 171.0 159.1 76.9 55.5 12.4 14.7 8.9 4.4 1.2 1-
Slide 18: Development of Russia
Development of Russia Generics sales Branded product sales Development of the pharmaceutical market2) (in € million) (in € million) (in bn USD in CER) Total 1-9/2014: € 236.1 million (-19%, adjusted1) -17%) 25 12% -35% -9% 10% 20 174.2 117.9 159.1 8% 15 76.9 6% 10 4% 5 2% 0 0% 1-9/2013 1-9/2014 1-9/
Slide 19: Sales development in Russia, in billion ruble
Sales development in Russia, in billion ruble 16% 17% 11% 12% 10% 10% 11,00 9,38 8,10 STADA Sales Growth Retail Market Growth STADA 1-9/2012 1-9/2013 1-9/2014 Source: IMS Health, DSM Group Company Presentation November 2014 www.stada.com Page 19
Slide 20: Market region Asia & Pacific
Market region Asia & Pacific Generics sales Branded product sales Development Vietnam (in € million) (in € million) (in bn USD in CER) Total 1-9/2014: € 66.0 million (+59%, adjusted1) -9%) 5.000 20% +83% +54% 4.000 40.4 15% 3.000 10% 22.1 19.5 2.000 12.6 5% 1.000 0 0% 1-9/2013 1-9/2014 1-9/2013 1-9/
Slide 21: Generics
y Generics
Slide 22: Leading position in key markets
STADA Leading position in key markets Belgium: #1 Eurogenerics Serbia: #1 Hemofarm Russia: #21) Nizhpharm, MAKIZ Germany: #3 ALIUD, STADApharm Spain: #4 Laboratorio STADA Italy: #5 EuroGenerici 1) Local suppliers/producers Company Presentation November 2014 www.stada.com Page 22
Slide 23: Generics
Generics Sales Adj. EBITDA Regional Development (in € million) (in € million) Asia & Pacific -1% +8% € 40.4 million +82.7% (-12.7%) 4.6% Germany 895.8 884.2 € 225.1 million -2.3% (-2.3%) CIS/Eastern Europe € 170.9 million 19.3% 25.5% 157.0 169.1 -18.7% (-11.1%) Central Europe 50.6% € 447.8 million 1
Slide 24: Environment analysis
Environment analysis Growth markets health care & pharma Growth opportunities for generics • Global population growth • Progressive generics penetration • Aging society in industrialized countries • Continuous patent expirations, especially in • Medical progress biologicals with high sales potential
Slide 25: Still low penetration rates
Still low penetration rates Country Generics penetration (sales) Belgium 35% Italy 45% Switzerland 49% Spain 58% By comparison Germany 73% Source: STADA estimate at ex-factory prices based on market data provided by various international market research institutes for 2013 Company Presentation Nov
Slide 26: Growth driver patent expiry
Growth driver patent expiry New sales potential becoming available for generics competition (in € billion) Central Europe1) Small chemical entities only – excluding biologics 2.9 1.9 1.7 1.8 1.6 2014 2015 2016 2017 2018 Small chemical entities only – Germany2) excluding biologics 0.9 0.9 0.7 0.7 0.6
Slide 27: Branded Products
y Branded Products
Slide 28: Strategic focus on OTC
Strategic focus on OTC 6M/20101) 6M/20141) OTC corporation Sales in €m OTC corporation Sales in €m 1 Novartis 1,338 1 Novartis 1,541 2 Bayer 1,160 2 Bayer 1,179 3 Sanofi 1,074 3 Sanofi 1,163 4 Johnson & Johnson 997 4 Johnson & Johnson 962 5 GlaxoSmithKline 645 5 Teva 615 6 Teva 546 6 Reckitt Benckis
Slide 29: Branded Products
Branded Products Sales Adj. EBITDA Regional Development (in € million) (in € million) Asia & Pacific +5% € 19.4 million +13% Germany +54.5% (-2.0%) 3.4% € 116.5 million 565.8 +10.1% (+10.1%) 499.5 CIS/Eastern Europe € 212.5 million 20.6% -7.1% (+5.1%) 37.6% 163.5 171.7 Central Europe 38.4% € 217.4 m
Slide 30: Strong brands in 1-9/2014
Strong brands in 1-9/2014 No. Branded Product Growth in % Sales in € million Indication 1. ApoGo® (RX) +12 35.8 Parkinson 2. Ladival® (OTC) +50 25.7 Sun Protection 3. Aqualor®1) (OTC) 25.1 Rhinitis 4. Grippostad® (OTC) -24 23.8 Cough and cold 5. Snup® (OTC) +19 21.9 Rhinitis 6. Hirudoid® (OTC) +5 13
Slide 31: Financials
y Financials
Slide 32: Development of sales 1-9/2014
Development of sales 1-9/2014 Group sales in € • Sales increase 1-9/2014 of 4.0% • Organic1) sales development -1.2% +8.2% -3.0% 1,482.7 • Portfolio effects: 1,426.2 -1.2% +8.2 percentage points, among others, due to the consolidation of STADA Vietnam and STADA Beijing, Spirig HealthCare AG (wholesa
Slide 33: Key earnings figures 1-9/2014
Key earnings figures 1-9/2014 EBITDA (in € million) 1-9/2014 vs. 1-9/2013 Net income (in € million) 1-9/2014 vs. 1-9/2013 reported adjusted1) reported adjusted2) +10% +12% +36% +10% 316.2 293.6 283.5 267.0 136.1 90.2 99.1 100.3 1-9/2013 1-9/2014 1-9/2013 1-9/2014 1-9/2013 1-9/2014 1-9/2013 1-9/2014
Slide 34: Net income adjustments in 1-9/2014
Net income adjustments in 1-9/20141) in € million 15.8 1.8 1.5 136.1 10.2 10.7 99.1 Reported net Delta additional Value Translation Extraordinary Measurement of Adjusted net income depreciation/amor- adjustments expense of expenses derivative income tization and other netted of write- significant fi
Slide 35: Development of sales and margins
Development of sales and margins 2.500 23 21.3 22 2.000 20.6 Adjusted1) EBITDA 21 20.0 margin in % 1.500 19.4 19.7 20 Sales in € million 1.000 18.3 19 18 500 17 0 16 2009 2010 2011 2012 2013 1-9/2014 • Expansion of self-pay portfolio • Shift to high margin product/country mix • Economies of scale ef
Slide 36: Analysis of the tax rate
Analysis of the tax rate Historical development of the reported tax rate 67.8% 37.1% 35.8% 35.2% 28.4% 25.1% FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 1-9/2014 Significant reduction in the effective tax rate in 1-9/2014: • The improvement of the effective tax rate primarily results from a changed prof
Slide 37: Stable balance sheet structure
Stable balance sheet structure Assets in € million September 30, 2014 Dec. 31, 2013 A. Non-current assets 2,140.6 2,060.0 B. Current assets 1,317.4 1,353.2 Total assets 3,458.0 3,413.2 Equity and liabilities in € million September 30, 2014 Dec. 31, 2013 A. Shareholders’ equity 1,053.3 1,010.1 B. Non
Slide 38: Balanced and stable financing structure
Balanced and stable financing structure Remaining maturities of financial liabilities due to banks as of September 30, 2014 in € million Corporate bond Credit Promissory notes 350.0 21.0 34.6 350.0 3.7 220.0 20.9 188.0 75.7 98.0 58.2 50.5 44.0 16.1 2014 2015 2016 2017 2018 2019 > 2019 • In 1-9/2014,
Slide 39: Cash flow from operating activities and adjusted free cash flow
Cash flow from operating activities and adjusted free cash flow Cash flow from operating activities (in € million) 2009-2013 1-9/2014 vs. 1-9/2013 250.5 194.8 212.7 205.4 169.0 123.8 81.9 2009 2010 2011 2012 2013 1-9/2014 1-9/2013 Adjusted free cash flow1) (in € million) 2009-2013 1-9/2014 vs. 1-9/2
Slide 40: Expenses for capital expenditure
Expenses for capital expenditure Total expenses 2009-2013 € million 1-9/2014 vs. 1-9/2013 482.4 292.9 195.2 317.7 192.4 133.7 333.3 9.0 10.3 97.1 85.0 27.4 77.4 230.1 129.4 230.4 46.5 6.4 46.4 26.9 13.4 10.2 57.4 32.2 37.9 39.5 26.4 29.1 30.5 50.8 0.1 30.7 0.9 0.3 30.3 3.5 34.0 0.7 26.2 0.1 23.0 0.2
Slide 41: Concentration of the production processes
Concentration of the production processes Share of production Share of production volume 2009 Own production locations volume 2013 Market region Germany Bad Vilbel (Germany) 16% 34% Pfaffenhofen (Germany) Market region CIS/Eastern Europe Vrsac (Serbia) Sabac (Serbia) 64% Dubovac (Serbia) 56% Banja L
Slide 42: Notes
Notes
Slide 43: P&L details 1-9/2014
P&L details 1-9/2014 In € million 1-9/2014 in € million 1-9/2014 in % of 1-9/2013 in € million 1-9/2013 in % of Sales Sales Gross profit 702.9 47.4 691.5 48.5 Selling expenses 322.1 21.7 341.1 23.9 G&A expenses 112.1 7.6 122.3 8.6 R&D expenses 44.4 3.0 39.6 2.8 Financial Result -48.2 -43.1 Taxes on
Slide 44: Dividend
Dividend Dividend per STADA common share in € +32% 0.66 2013: € 39.8 million Dividend payout (2012: € 29.6 million 0.50 Dividend policy Appropriate share of reported net income to shareholders 2012 2013 Pay-out ratio 34% 33% 2012 2013 Company Presentation November 2014 www.stada.com Page 44
Slide 45: Share capital and shareholder structure
Share capital and shareholder structure September 30, 2014 STADA shares1)2) 60,533,360 Potential number of shares from warrants 2000/20153) 1,856,860 Amount of treasury shares 90,664 Current shareholder structure on Dec. 31, 2013 • 100% free float • Approx. 60% institutional investors • Current noti
Slide 46: Your contact
Your contact STADA Arzneimittel AG Investor Relations Vice President Investor Relations 61118 Bad Vilbel, Deutschland Dr. Markus Metzger Telefon: +49 (0) 6101 603-113 markus.metzger@stada.de Telefax: +49 (0) 6101 603-506 E-Mail: communications@stada.de www.stada.de Company Presentation November 20