Victrex Plc · LSE:VCT
Victrex — Investor Day (October 2012)
42 slides from Victrex's investor day presentation, Oct 16, 2012
Slide 1: Investor Event, Tuesday 16th October 2012
Investor Event Tuesday 16th October 2012 1
Slide 2: Agenda
Agenda Overview 11.00 Welcome 11.10 Invibio Biomaterials Solutions Presentation 11.50 Victrex Polymer Solutions Presentation 12.30 Q&A 12.40 Informal Lunch and Discussion with Leadership Team 13.20 Tour of Facilities 14.40 Wrap-up & Departures 2
Slide 3: Strategy Update: Sustainable Earnings Growth
Strategy Update Sustainable Earnings Growth 3
Slide 4: Invibio Biomaterial Solutions
Invibio Biomaterial Solutions Strategy Overview David Hummel Regulatory Overview Craig Valentine Spine Business Overview Brian Roberts Developing Markets Overview John Devine Summary John Devine 4
Slide 5: Invibio Strategy
Invibio Strategy Developing Markets Core Growth Core Protect 5
Slide 6: Our Past, Our Future
Our Past, Our Future Historical success from Spine, fuels broader basis for future growth £60.0m Spine Developing Markets £50.0m £40.0m £30.0m £20.0m £10.0m £0.0m 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 6
Slide 7: Medical
Medical Invibio Biomaterials – driving innovation, superior performance and solutions in the medical device industry Our markets Industry Trends Impact Opportunity Medical Ageing Global Increasing need to Spinal treatments Population replace worn out Invibio provide body parts or to materials that P
Slide 8: Medical
Medical Invibio Biomaterials – driving innovation, superior performance and solutions in the medical device industry Our markets Industry Trends Impact Opportunity Medical Healthcare costs Healthcare Solutions providers Invibio constantly Healthcare costs worldwide have seek to provide are rising, t
Slide 9: Increasing Adoption
New Technology Adoption in Medical Devices Regulatory approval in specific geography Early surgeon / device company adopters Sales Increasing Adoption Sales Clinical benefits established Broadening surgeon / device company vs Sales uptake Global regulatory acceptance 9
Slide 10: US FDA 510k Device Clearances
US FDA 510k Device Clearances Use of PEEK-OPTIMA® in new devices continues to grow Total number of clearances % Change Total PEEK OPTIMA Spine Developing markets 120 100 100 80 80 60 60 40 40 20 20 0 FY 2010 FY 2011 FY 2012 YTD 0 -20 FY 2009 FY 2010 FY 2011 FY 2012 YTD Spine Developing Markets 10
Slide 11: Regulatory Focus – Why?
Regulatory Focus – Why? “Targeting the growing middle class in China, India and other emerging countries may be potentially less risky than creating new products for the flat U.S market” Omar Ishrak – Medtronic CEO, August 21st Analysts Call “In China and India we made about $120m in sales [over the
Slide 12: Global Regulatory Presence
Global Regulatory Presence Americas Europe Asia Pacific Medical device regulatory professionals Regional clearance process expertise Regulatory agency knowledge and collaboration 12
Slide 13: Example: China SFDA Clearance Process
Example: China SFDA Clearance Process Evaluation Clinical Trial* Clearance Testing Implantable Medical Device Clearances Preparing Q2 FY12 400 300 200 100 0 Imported Domestic *13 PEEK-OPTIMA based devices = 3% of clearances Domestic Customers 2m 14 m 28 m 40 m 13
Slide 14: Our Business – Key Markets
Our Business – Key Markets Accelerating growth outside of core spine and established geographies Geographical Segments Market Segments Asia-Pacific +10% Developing £3.6m Markets 7% +11% 2012: £50.5m £12.3m 24% +2% £14.0m Spine 28% -1% EMEA £32.9m £38.2m +0% 65% 76% Americas +1% £3.3m 7% £11.1m 23% 2
Slide 15: Spine Core US Market
Spine Core US Market Cervical growth presents opportunity 600 1.8 1.6 500 1.4 400 1.2 Value ($Bs) 1 Procedures (000s) 300 0.8 200 0.6 0.4 100 0.2 - 0 2010 2011 2012 2013 2014 2015 Lumbar Fusion Procedures Cervical Fusion Procedures Total IBF Market Value - US 15
Slide 16: Spine Industry Focus on New Markets
Spine Industry Focus on New Markets 5yr CAGR Interbody Device Market Value, Millions USD 2010 - 15 Brazil $10.00 34.5 India $12.70 Market growth 15.0 China $102.00 25.6 Japan $85.70 1.6 Market Share Europe $121.40 4.3 US $1,210.30 5.0 $- $200.00 $400.00 $600.00 $800.00 $1,000.00 $1,200.00 $1,400.00
Slide 17: Spine Right to Win
Spine Right to Win Leverage position to drive Growth Market Leader Blue Chips, start-ups, across Geographies Market Knowledge Positioned well to listen and deliver to customer needs beyond today Market Focus Focus on solving regional complexities ahead of our customers to drive shared growth 17
Slide 18: Spine Interbody Fusion
Spine Interbody Fusion Protect & extend leadership Industry Next Standard Generation High penetration within US Clinical benefits for patient /EU markets Economic advantage for Low penetration in high customer growth, emerging Differentiation and value geographies capture for Invibio 18
Slide 19: Spine Leadership
Spine Leadership More PEEK-OPTIMA per fusion New Applications in Fusion Invibio delivers: value material, manufacturing, regulatory, testing Clinical benefits for patient Economic advantage for customer Invibio value capture per procedure 19
Slide 20: Developing Markets Right to Win
Developing Markets Right to Win Growth potential beyond Spine Demonstrated success within Arthroscopy Increasing penetration in high procedure market Targeted application growth opportunities Accelerate growth where Surgeon acceptance and clinical benefit have been established Future application pri
Slide 21: Business Aligned with Markets
Business Aligned with Markets Market Factors Pricing linked Regulatory to Lack of Existing device barriers to clinical differentiation price pressure innovation benefits Help establish Applications benefits to Target small Optimise our Proprietary where PEEK access innovators / position in the regul
Slide 22: New Application Leadership-Today
New Application Leadership-Today High value removable dentures Proposition Targeting the 1.5m high value frames per annum market JUVORA brand established to sell a CE marked disc direct to dental labs Initial market introduction CY13 with 10 tier one labs Benefits Benefits to patients in terms of co
Slide 23: New Application Leadership-The Future
New Application Leadership-The Future Trauma Plates and Nails Initial composite trauma devices are in use and approved via the faster access 510k regulatory route in the US Key clinical benefits are fatigue and accelerated healing Femoral Components of Knees Longer term Class III device but estimate
Slide 24: Summary
Summary Initial Concept to Customer Growth Opportunity Development Product Realisation Value Creation 24
Slide 25: Victrex Polymer Solutions
Victrex Polymer Solutions 25
Slide 26: Victrex Polymer Solutions
Victrex Polymer Solutions Strategy & Business Overview Tim Cooper Capacity Investment Kenny Gilmour Summary Tim Cooper 26
Slide 27: VPS Strategy
VPS Strategy Innovation Speciality Products Core Growth Core Protect Organisation 27
Slide 28: Customer Proposition
Customer Proposition Value Beyond the Polymer Security of Supply Value Beyond the Polymer Technical Product Quality Responsiveness & Consistency 28
Slide 29: Megatrends
Megatrends Responding to the changing world Major themes Industry impacted • Clean energy initiatives Industrial Climate change • Energy efficiency to mitigate climate change Transport • New legislation and environmental control programs • Natural resources being depleted at increasing rates Oil & G
Slide 30: Transport
Transport VICTREX PEEK – a Key Enabler for Industry Trends Our markets Industry Trends Impact Opportunity • Automotive • Maximizing • Specification of Light weighting via • Aerospace -Performance materials that: metal replacement -Reliability -Safety -withstand harsh Ease of environments manufacturi
Slide 31: Electronics
Electronics VICTREX PEEK – a Key Enabler for Industry Trends Our markets Industry Trends Impact Opportunity • Mobile phones • Maximizing • Specification of Superior • Circuit boards -Performance and materials that: processability • Printers reliability providing a • LEDs -Portability -Provide greate
Slide 32: Industrial
Industrial VICTREX PEEK – a Key Enabler for Industry Trends Our markets Industry Trends Impact Opportunity • Oil & Gas • Maximizing • Specification of • Victrex high performance • Food Processing -Exploration in higher materials that: materials are chosen for • Textile temperatures & their unique co
Slide 33: Strong & Diverse Pipeline
Strong & Diverse Pipeline Development Pipeline by Industry Medical Market led, customer focused, approach to growth Industrial Automotive Leverage our application development and technical organisations Strong pipeline across multiple Aerospace industries Electronics 2,460tes MAV March 2012 33
Slide 34: Growth Scenarios v Existing Capacity
Growth Scenarios v Existing Capacity Annual growth extrapolated at 10% Annual growth extrapolated at 15% Production Capacity FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 34
Slide 35: Growth Drivers
Growth Drivers Growing market for PEEK Strong & diverse pipeline Technical Programs Capacity headroom 35
Slide 36: Capacity Investment
Capacity Investment Construction of new PEEK capacity announced October 2012 2,900tpa additional capacity £90M investment Completion early 2015 36
Slide 37: Capacity Investment
Capacity Investment Hillhouse site location Protect know-how Reduce risk time Leverage infrastructure 37
Slide 38: Growth Scenarios v Increased Capacity
Growth Scenarios v Increased Capacity Annual growth extrapolated at 10% Annual growth extrapolated at 15% Production Capacity FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 38
Slide 39: Supply Chain
Supply Chain Investment in supply chain to support growth Capacity in BDF Raw materials Downstream processing 39
Slide 40: Summary
Summary Capacity Confidence Value Sustainability Market trends Growth Market focus 40
Slide 41: Questions?
Questions? 4 AA victrex’
Slide 42: Tour of facilities
Tour of facilities 12:30 Informal lunch 13:20 Group 1 – VPS Technical Centre Group 2 – Invibio Manufacturing Facility 13:40 Group 1 – Invibio Manufacturing Facility Group 2 – VPS Technical Centre 14:00 Peek Production Facilities 14:50 Return to VTC & depart