aap Implantate AG · XETR:AAQ1
aap Implantate — Investor Presentation (October 2006)
37 slides from aap Implantate's investor presentation, October 2006
Slide 1: aap Implantate AG Company Presentation
Company Presentation aap Implantate AG October, 2006
Slide 2: Latest News
Latest News (September 24, 2006 Ad hoc) • Takeover talks with Dutch FAME Medical group • Forming of a leading European developer and manufacturer of orthopedic biomaterials with over €20 m sales in this segment • High complementary of product portfolios, synergy potentials in all sections • aap gain
Slide 3: News
News (August 2, 2006 Press Release ) • Q2 2006 sales up 54% on year to €4.9m from €3.2m • Acquisition-adjusted growth +47% • Guidance 2006: Sales approx. €18.5 m (2005: €13.3 m) • Guidance 2006: EBT €3.0 to 3.5 m (2005: € 1.1m) Year-on-Year Development: Q1´05: + 2% Q2´05: +15% Q3´05: +20% Q4´05: +26
Slide 4: Who is aap?
Who is aap ?
Slide 5: Die Geschäftsfelder von aap
Die Geschäftsfelder von aap 5 Oliver Bielenstein Bruke Seyoum Alemu
Slide 6: Key Figures
Key Figures in € m 2006e 2005 2004 Sales 17.3-18.6 13.4 11.5 EBITDA 2.3 1.2 EBIT 0.9 -0.3 EBT 2.7-3.9 1.1 -1.3 Net Profit 0.7 -0.1 Employees 139 109 Market Cap.* 44.3 Shares 16.9 m Management & Supervisory Board Members* 38.4% Equity ratio* 82% *Figures at June 30, 2006 6
Slide 7: aap Biomaterials
aap Biomaterials • Comprising Mebio, Coripharm, Osartis, ADC • HQs Dieburg/Elsenfeld; 57 employees (Beginning of 2005: 17) • Focus at - Bone Cements & Cementing techniques - Bone & Tissue Regeneration - Bone infection care • Growing network of international distributors • Leading OEM manufacturer in
Slide 8: aap Trauma/Joint Reconstruction
aap Trauma/Joint Reconstruction • Implants to heal fractures and replace joints • HQ Berlin • Basis J&J • Own domestic sales • Network of international distributors • High recognition rate in Germany for trauma products • Joint Reconstruction: focus on hip and shoulder • R&D 8
Slide 9: Overview of Fiscal 2004 & 2005
Overview of Fiscal 2004 & 2005 Restructuring in 2004 (Balance Sheet/Recap.): • Value adjustments totaling €18m • €9.7m capital increase, bank loans repaid, payables reduced • Stabilization, start on reconstruction (sales, development) • Material legal risks resolved • 60% new shareholders Major Deve
Slide 10: Company structure
Company structure aap Implantate AG 100 % 100 % Neue Magnetodyn aap Biomaterials aap Biomaterials 7,12 % GmbH, Munich Verwaltungs-GmbH, GmbH & Co. KG, Dieburg Dieburg 51 % 54 % AEQUOS ADC Advanced ADC Advanced Endoprothetik 7,86 % Dental Care Dental Care GmbH, Munich Verwaltungs-GmbH, GmbH & Co. KG,
Slide 11: aap Biomaterials
aap Biomaterials
Slide 12: Overview of aap Biomaterials
Overview of aap Biomaterials • Bone cement and bone regeneration activities merged into three areas of competence • Balanced expansion (development, regulatory, production, product management, sales) • Niche markets (approx. €500 m in sales) with high growth and OEM focus („solution provider“) • Hig
Slide 13: Biomaterials Product and Competence Areas
Biomaterials Product and Competence Areas Smith & Nephew Lavage ® Jason G ® Versabond ® PerOssal collagen fleece Biomet Bone Bone Cements Easymix ® Infection Care Antibiotic Cements cement CemOs ® CemOs ® aap Modular spacers antibiotic Inject Biomaterials bone cement Ostim® ® Ostim Cerabone ® Dental
Slide 14: Bone Cements
Bone Cements • Endoprosthesis fixation: Cement with antibiotics/Pulse Lavage/Vakuum mixing systems • World market approx. €250 m, thereof Europe approx. €90 m (Difference between manufactures´ and selling prices!) • Market leaders - US: Stryker/Simplex (60-70% market share) - EUR: Biomet + Heraeus (
Slide 15: Bone Cements
Bone Cements Positioning of aap Biomaterials: • World´s No. 2-3 (by manufacturer, not by sales) • Market growth in line with market for endoprosthetics (approx. 10%) or spine products (approx. 25%) • aap: strong market growth (new markets, new customers and innovations) • Outstanding know-how in all
Slide 16: Bone Regeneration/Infection Care
Bone Regeneration/Infection Care • World market volume approx. €750 m • Relevant submarkets with 15–25% growth: -Bone regeneration approx. €50 m, -Bone Infection Care approx. €50 m • Competitors in Europe: Biomet, Tutogen, Resorba • Paradigm shift from autografts and allografts (including bone banks
Slide 17: Bone Regeneration/Infection Care
Bone Regeneration/Infection Care Positioning of aap Biomaterials: • Manufacturer of medical devices (not drugs!) • Focus: synthetic materials with added value • Build up strong brands => OEM must strengthen brands (e.g. cage filling) • Central Ostim product platform (nanoparticles analogous to bone
Slide 18: aap Trauma/Joint Reconstruction
aap Trauma/Joint Reconstruction
Slide 19: Overview of aap T/O
Overview of aap T/O • Comprising traumatology and hip endoprosthetics • Focus on German domestic market (buying groups) • International via distribution partners • Approval activities in Russia, South Korea • US sales as per FDA inspection findings • Initial OEM activities • Completion of trauma/hip
Slide 20: Trauma Market Trends
Trauma Market Trends • World trauma market € 2.3 bn, approx. 70% USA • European market (approx. €230 m, Germany approx. € 90 m) • Market leader Synthes (>50%, monopoly position in some areas) • Other competitors include Big 5 (Zimmer, Stryker, J&J, S&N, Biomet), niche providers • Largely standardize
Slide 21: Trauma - aap
Trauma - aap • Approx. 2,500 articles • Approx. 350 customers in Germany, exports to 25 countries • Good position in Germany, high recognition rate • „Follow the Leader“, selective innovations • aap strength: plates & screws • aap weakness: nail program • Market share in Germany approx. 3%, in niche
Slide 22: Endoprosthetics Market Trends
Endoprosthetics Market Trends • Big 5 dominate world market along with Aesculap and Link in Germany • World market approx. €6 bn, Germany approx. €500 m • Approx. 5-10% annual growth • „Pay on consumption“, capital-intensive up-front investments in sets and implants • Association of Orthopedic and T
Slide 23: Endoprosthetics - aap
Endoprosthetics - aap • Innovative product lines hip and shoulder supplemented by a standard knee • aap focused on Germany and mainly on trauma surgeons • Differentiation: cost-effective complete systems with innovative features • Product highlights: VarioFit® family and TSS - Target hip: complete p
Slide 24: Financials
Financials
Slide 25: Financials 2005
Financials 2005 Income Statement Group according to IFRS 2005 2004 Change Sales 13,367 €k 11,530 €k 16 % Total output 15,634 €k 12,571 €k 24 % EBITDA 2,326 €k 1,203 €k 93 % EBIT 855 €k -316 €k n. a. Financial result -18 €k -833 €k n. a. Extraordinary result 0 €k 2,544 €k n. a. EBT 1,076 €k -1,260 €k
Slide 26: Financials 2005
Financials 2005 Revenue distribution by business areas and regions 26 26
Slide 27: First Half 2006
First Half 2006 • Total sales €9.2 Mio. (+ 47%) – International €4.7 m (+ 218%) – National €4.5 m (- 6%) (later effectivity of large orders than in the previous year) • Acquisition-adjusted growth + 41% • Ratio of purchased materials costs plummeting (- 16% to 18%) – Improved product mix • Ratio of
Slide 28: Financials H1/2006
Financials H1/2006 Income Statement Group according to IFRS H1/2006 H1/2005 Change Sales 9,243 €k 6,297 €k 47% National sales 4,527 €k 4,813 €k -6% International sales 4,716 €k 1,484 €k 218% Total output 10,650 €k 7,689 €k 39% Other operating income 173 €k 318 €k -% EBITDA 2,461 €k 771 €k 219% EBIT
Slide 29: Financials H1/2006
Financials H1/2006 Balance Sheet according to IFRS Change 06.30.2006 12.31.2005 12.31.2004 H1/2006 Non current assets 13,810 €k 14,134 €k 10,761 €k -2 % thereof deferred tax assets 1,872 €k 2,376 €k 2,285 €k -21 % Current assets 11,802 €k 10.947 €k 9,686 €k 8% Intangible assets 6,295 €k 7,585 €k 4,6
Slide 30: Financials H1/2006
Financials H1/2006 Cash-flow Statement 06.30.2006 12.31.2005 12.31.2004 Net cash from operating activities 203 €k 718 €k -2,133 €k Net cash from investing activities -975 €k -2,466 €k -1,230 €k Net cash from financing activities -384 €k 1,950 €k 4,460 €k Cash & cash equivalents at beginning of perio
Slide 31: Share price
Share price € 3.00 3,00 2.75 2,75 2.50 2,50 2.25 2,25 2.00 2,00 1.75 1,75 1.50 1,50 1.25 1,25 1.00 1,00 10/05 12/05 02/06 04/06 06/06 08/06 10/06 M.C. 09.30.2005: €27.6 m M.C. 09.30.2006: €45.6 m Ø daily trade volume 9 k Ø daily trade volume 13 k 31
Slide 32: Outlook 2006
Outlook 2006
Slide 33: Targets for 2006
Targets for 2006 (September 30, 2006) • Establishment of divisional structure 9 • Prepare acquisition capabilities in both divisions 9 • Utilization of sales and administration synergies 9 • “operational excellence” (production, approvals, sales) 9 • Approval and launch of pipeline products: 9 – aap
Slide 34: Targets for 2006 Financial Objectives
Targets for 2006 Financial Objectives 9 • Year-on-year sales growth of between 30% and 40% (€17.3 m to €18.6 m) • Earnings before taxes between 16% and 21% of sales revenues (€2.7 m to €3.9 m) 34
Slide 35: Risks in 2006
Risks in 2006 • Dependence on OEM customers long-term contracts, customer satisfaction aap know-how base reciprocal dependence • Negative assessment of new products complex approval processes animal testing, clinical user observation • Technological leaps by third parties market and competition scre
Slide 36: Opportunities in 2006
Opportunities in 2006 • Growth in Biomaterials with and via existing and new OEM customers • Smaller-scale acquisitions in both divisions (equity capital base, growing confidence in (capital) market) • Successful launch of new and innovative products in both divisions • Intensified scientific base i
Slide 37: Contact
Contact aap Implantate AG Lorenzweg 5 12099 Berlin www.aap.de Investor & Public Relations Nanette Hüdepohl Tel.: +49 30 750 19 – 133 Fax: +49 30 750 19 – 290 E-Mail: n.huedepohl@aap.de
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