Ipsen Sa · EURONEXT:IPN
Ipsen Sa — H1 2015 Earnings Presentation
35 slides from Ipsen Sa's earnings presentation, Jul 31, 2015
Slide 1: Ipsen Half Year 2015 Results
Ipsen Half Year 2015 Results 31 July 2015 IPSEN pour nom de la société - 07/04/2011 / page 1
Slide 2: Disclaimer
Disclaimer This presentation includes only summary information and does not purport to be comprehensive. Forward-looking statements, targets and estimates contained herein are for illustrative purposes only and are based on management’s current views and assumptions. Such statements involve known an
Slide 3: Safe Harbor
Safe Harbor The Group operates in certain geographical regions whose governmental finances, local currencies or inflation rates could be affected by the current crisis, which could in turn erode the local competitiveness of the Group’s products relative to competitors operating in local currency, an
Slide 4: Agenda
Agenda 1 Strategy update Marc de Garidel Chairman and CEO 2 H1 2015 – Operational overview Christel Bories Deputy CEO 3 H1 2015 – Financial overview Aymeric Le Chatelier CFO 4 2015 outlook Marc de Garidel Chairman and CEO 4 Ipsen – Half Year 2015 Results 4 Goldman Sachs 35th Annual Global Healthcare
Slide 5: Strategy update
Strategy update Marc de Garidel Chairman and CEO
Slide 6: 2015-2020: A refocused strategy within specialty and primary care
2015-2020: A refocused strategy within specialty and primary care Global leadership in targeted diseases Focus on GI/OTx Focus on NET/spasticity/Dysport® aesthetics Optimize the GI portfolio (Galderma) Diversify into adjacent GI pathologies Reinforce position in uro-oncology/adult endocrinol
Slide 7: 2020 outlook showing strong sales growth and profitability momentum
2020 outlook showing strong sales growth and profitability momentum Group organic sales Core Operating margin(1) >+560bps [+6% to +8%] CAGR > 26% [€1.8bn to €2bn] 20.4% €1.3bn 2014 2020 E 2014 2020 E Potential Business Development to complement €1.8bn to €2.0bn organic sales target 7 Ipsen – Half Ye
Slide 8: H1 2015 performance
H1 2015 performance Solid Operating performance driven by Specialty sales growth Accelerated Somatuline® momentum with significant US launch investment Readiness for US launch of Dysport® in AUL spasticity after July FDA approval Continued business development efforts with acquisition of Canbex/Octr
Slide 9: Turnaround of the US platform, with high potential for growth
Turnaround of the US platform, with high potential for growth US affiliate sales growth(1) Somatuline® US sales growth 91.3% 64.7% 31.2% 28.6% 18.6% 11.5% 2013 2014 H1 2015 2013 2014 H1 2015 US affiliate to reach breakeven ahead of plan and drive significant profitability increase thanks to Somatuli
Slide 10: H1 2015 – Operational overview
H1 2015 – Operational overview Christel Bories Deputy CEO
Slide 11: Increasing weight of specialty care and the US
Increasing weight of specialty care and the US H1 2015 sales by segment H1 2015 sales by geography Top 5 affiliates Primary Emerging 1 France care markets Europe ~23% G5 40% 2 China 38% ~77% 3 US Specialty care 13% 9% 4 Germany Developed US RoW 5 Italy One of the largest emerging market presence in
Slide 12: H1 2015 – Steady Specialty care growth
H1 2015 – Steady Specialty care growth Drug sales – H1 2015 in million euros – % excluding foreign exchange impact ® Somatuline ® +29.1% 188 ® Decapeptyl +0.8% 169 Specialty care Specialty care ® €549m Dysport +7.0% 141 +12.0% Nutropin ® +1.7% 32 ® Group sales Hexvix 9 +4.6% €713.9m Increlex ® 10 +8
Slide 13: 80% of H1 sales growth coming from Somatuline
80% of H1 sales growth coming from Somatuline® FY sales in million euros Group sales growth: +7.9% (€52.5m) at constant currency Other Specialty International Decapeptyl® Dysport® French PC PC FX Somatuline® care FX 42.4 9.1 6.1 (3.5) (2.9) 22.7 1.4 Specialty care Primary care 638.7 713.9 H1 2014 H1
Slide 14: Somatuline growth acceleration thanks to successful NET launch
Somatuline® growth acceleration thanks to successful NET launch Business update Geographic distribution (H1 2015) US: Ipsen present in 40% of NET centers, including all 25 major reference centers 44% 23% 19% 14% Europe: GEP NET approval granted by 21 European countries G5(1) Developed RoW Incr
Slide 15: Somatuline accelerated NET penetration in the US and Europe
Somatuline® accelerated NET penetration in the US and Europe Somatuline® US quarterly data, all indications Somatuline® Europe G5(1) quarterly data, all indications sales (€m) market share (%) sales (€m) market share (%) 17 8 45 7 37 14 40 6 11 35 5 27 4 8 30 3 17 5 25 2 2 1 7 20 Q2 2013 Q4 2013 Q2
Slide 16: Dysport driven by solid market growth
Dysport® driven by solid market growth Business update Geographic distribution (H1 2015) US launch of Dysport® in AUL spasticity expected in September 2015 Build-up of US spasticity sales force 18% 13% 23% 46% Staffing of European Business unit G5(1) Emerging markets(2) European launch of ad
Slide 17: Decapeptyl facing slowdown in China and price pressure in Europe and Algeria
Decapeptyl® facing slowdown in China and price pressure in Europe and Algeria Business update Geographic distribution (H1 2015) Progress on potential combination in breast cancer 48% 8% 44% Launch of 3-month subcutaneous formulation in Europe from July 2015 G5(1) Developed RoW Emerging markets(2
Slide 18: Primary care impacted by Smecta and Tanakan slowdown
Primary care impacted by Smecta® and Tanakan® slowdown Business update Geographic distribution (H1 2015) Start of Tanakan® local production in Russia Expected launch of Smecta® ready-to-use 30% 3% 67% (liquid) and Strawberry taste in Q4 2015 in France Accelerated switch of China primary care G
Slide 19: H1 performance supporting 2015 growth expectations
H1 performance supporting 2015 growth expectations Somatuline® to continue delivering growth in NET, both in US and Europe Dysport® to benefit from market growth and US launch in AUL spasticity Decapeptyl® to benefit from market rebound and new commercial model in China Primary Care growth to recove
Slide 20: H1 2015 – Financial overview
H1 2015 – Financial overview Aymeric Le Chatelier EVP CFO
Slide 21: P&L - From sales to Core Operating Income
P&L - From sales to Core Operating Income % Change at In million euros H1 2015 H1 2014 Change Change constant FX Group sales 713.9 638.7 +75.2 +11.8% +7.9% Other revenues 38.0 30.1 +7.9 +26.4% Revenue 751.9 668.8 +83.1 +12.4% Cost of goods sold (168.3) (155.8) -12.5 +8.0% Selling expenses (259.9) (2
Slide 22: Ipsen exposure to foreign currencies
Ipsen exposure to foreign currencies H1 2015 sales exposure by currency Evolution of major currencies vs. EUR(2) €713.9 million Average rates change (H1 2015 vs. H2 2014) Closing rates change (Jun 2015 vs. Dec 2014) Other(1) … +15.5% +9.3% +14.3% 17% +9.0% +8.1% +10.8% +9.9% GBP 5% -6.2% -6.6% CNY 1
Slide 23: Other revenues evolution
Other revenues evolution +26.4% In million euros €38.0m €30.1m 14.9 9.9 23.1 20.2 H1 2014 H1 2015 Other Royalties received Increased Adenuric® royalty stream Upfront payment received from sale of Ginkor Fort® rights Decreasing co-promotion revenues in France & milestones received 23 Ipsen – Half Yea
Slide 24: Drivers for operating cost evolution
Drivers for operating cost evolution COGS (€m) R&D (€m) +8.0% +4.8% 155.8 168.3 87.6 91.8 24.4% 23.6% 13.7% 12.9% H1 2014 H1 2015 H1 2014 H1 2015 Positive mix effect and productivity efforts Tasquinimod discontinuation and lower R&D tax credit Selling expenses (€m) G&A (€m) +23.0% 259.9 +19.5% 61.3
Slide 25: Core Operating margin evolution
Core Operating margin evolution In million euros Total other FX Products(1) Somatuline® US Sales 639 714 H1 2014 H1 2015 COI Margin (as % of sales) 25.4% -1.4% -0.1% -0.4% 23.5% Somatuline® US significantly dilutive to Group margin in H1 2015 Note: COI=Core Operating Income 25 Ipsen – Half Year 2015
Slide 26: P&L - From Core Operating Income to EPS
P&L - From Core Operating Income to EPS % In million euros H1 2015 H1 2014 Change Change Group sales 713.9 638.7 +75.2 +11.8% Core Operating Income 167.6 162.0 +5.6 +3.5% Core Operating margin 23.5% 25.4% -1.0 pt Other non core (6.6) (3.0) -3.6 Restructuring costs (0.7) (12.3) +11.6 Impairment gain
Slide 27: H1 2015 cash flow generation
H1 2015 cash flow generation In million euros Free cash flow: €26m(1) Operating Change in cash working flow(1) capital(2) -94 +139 Capex Opening Dividends -19 cash Share External -70 Buyback acquisitions Closing -4 -37 Other cash 180 -7 88 31 Dec 2014 30 June 2015 Solid free cash flow generation des
Slide 28: Balance sheet evolution
Balance sheet evolution ASSETS LIABILITIES In million euros FY 2014 H1 2015 In million euros FY 2014 H1 2015 Goodwill 324.4 336.8 Capital and reserves 1,065.2 1,132.0 Other intangible assets 160.9 105.8 Non-controlling interests 2.7 2.6 Property, plant and 309.6 336.9 Total equity 1,067.9 1,134.6 eq
Slide 29: H1 2015: Key financial achievements
H1 2015: Key financial achievements Group sales up 7.9%(1) driven by specialty care growth of 12%(1), notably Somatuline® in the US and Europe Core Operating Income up 3.5%, or 23.5% margin(2), due to high investment for NET launch, notably in the US Consolidated net profit of €90.5m, impacted by ta
Slide 30: 2015 outlook
2015 outlook Marc de Garidel Chairman and CEO
Slide 31: Major R&D and regulatory milestones to come
Major R&D and regulatory milestones to come H1 2015 H2 2015 2016 Dysport® PLL PhIII topline results Telotristat etiprate (LX1032) PhIII results SOMScan® Ph3 initiation R&D Dysport® ALL PhIII topline results SOMther® Ph1 initiation Syntaxin compound Ph1 initiation DNG positive regulatory feedback
Slide 32: Financial objectives upgraded for 2015
Financial objectives upgraded for 2015 Specialty care – Drug sales Growth ≥ 14.0%, year-on-year Driven by the launch of Somatuline® in neuroendocrine tumors in the US and Europe Primary care – Drug sales Decline of -3.0% to 0.0%, year-on-year From 2015 onwards, drug-related sales (active substances
Slide 33: 2015 guidance showing strong sales and profitability momentum
2015 guidance showing strong sales and profitability momentum Group organic sales Core Operating margin(1) ≥+160bps ≥+9.5%(2) ≥ €1.40 bn(3) ≥ 22% €1.27bn 20.4% 2014 2015 E 2014 2015 E (1) In percentage of sales 33 Ipsen – Half Year 2015 Results (2) At constant currency, based on the lower range of t
Slide 34: Key takeaways
Key takeaways 1 Focused Strategy on niche disease areas with 26% minimum profitability target by 2020 2 2015 double digit organic sales growth and significant profitability enhancement thanks to Somatuline® launch 3 Continuous business development effort to leverage portfolio and geographies Ipsen c
Slide 35: Thank you
Thank you