Slide 1: Roadshow presentation – Q1 2015/16
NEW! SenSura® Mio Convex Leading intimate healthcare Roadshow presentation – Q1 2015/16
Slide 2: Forward-looking statements
Forward-looking statements The forward-looking statements contained in this presentation, including forecasts of sales and earnings performance, are not guarantees of future results and are subject to risks, uncertainties and assumptions that are difficult to predict. The forward-looking statements
Slide 3: Q1 organic growth of 7% and 33% EBIT margin in line with expectations
Q1 organic growth of 7% and 33% EBIT margin in line with expectations in a market growing approximately 5% Highlights Performance Organic revenue growth of 7% (11% in Revenue (mDKK) DKK) Organic growth (%) Gross margin of 69% on par with last year EBIT margin of 33% on par with last year 7,000
Slide 4: Q1 performance supported by a return to growth for UK homecare company Charter
Q1 performance supported by a return to growth for UK homecare company Charter Q1 15/16 revenue by business area Q1 15/16 revenue by geography Business Reported revenue Organic growth Geographic Reported revenue Organic growth area mDKK In percent area mDKK In percent Ostomy European 5% 1,469 8% 2,3
Slide 5: Q1 organic growth of 8% for Ostomy Care
Q1 organic growth of 8% for Ostomy Care driven by the SenSura® range and Brava® accessories Comments Performance Organic growth of 8% (9% in DKK) Revenues (mDKK) Satisfactory growth in UK, Russia and US Reported growth (%) offset by negative growth in Germany Organic growth (%) Strong quarter
Slide 6: Q1 growth of 6% for Continence Care impacted by US buying patterns
Q1 growth of 6% for Continence Care impacted by US buying patterns Comments Performance Q1 organic sales growth of 6% (10% in DKK) Revenues (mDKK) Growth driven by the SpeediCath® portfolio Reported growth (%) of ready-to-use intermittent catheters and in particular the compact versions Organic
Slide 7: Strong Q1 for Urology Care driven by Men's Health and Women's Health in US
Strong Q1 for Urology Care driven by Men’s Health and Women’s Health in US Comments Performance Q1 organic growth of 7%. Growth in DKK Revenues (mDKK) was 15% Reported growth (%) Titan® penile implants and Women’s Health Organic growth (%) the main drivers of growth 17 Satisfying growth in US
Slide 8: Wound & Skin Care delivered solid 10% organic growth in Q1
Wound & Skin Care delivered solid 10% organic growth in Q1 Comments Performance Q1 organic sales growth in WSC of 10% Revenues (mDKK) (15% in DKK) and 9% for Wound Care in isolation Reported growth (%) Organic growth (%) Growth driven by Biatain® sales, especially Biatain® Silicone in UK and Ger
Slide 9: Operating margin of 33% impacted by efficiency gains and higher costs
Operating margin of 33% impacted by efficiency gains, higher Emerging markets costs and increased R&D activity Comments Performance EBIT grew 11% to DKK 1,194m with a margin EBIT (mDKK) of 33% EBIT margin (%) Gross margin of 69% on par with last year Gross margin (%) Driven by continued effici
Slide 10: Free Cash Flow decreased by 9% reflecting escrow payments for Mesh litigation
Free Cash Flow decreased by 9% reflecting payments into escrow account in connection with Mesh litigation Comments Performance Free cash flow was DKK 831m compared to DKK 915m for Q1 2014/15 FCF (mDKK) EBITDA DKK 131m higher FCF-to-Sales (%) NWC-to-sales of ~24%, in line with FY 2014/15 26 20
Slide 11: Revised financial guidance in DKK for 2015/16
Revised financial guidance in DKK for 2015/16 Guidance Guidance Long term 15/16 15/16 (DKK) ambition Sales growth 7-8% (organic) ~7% 7-10% p.a. EBIT margin 33-34% (fixed) ~33% +50-100 bps p.a. CAPEX (DKKm) ~700 ~4-5% of sales Tax rate ~23% - Page 11
Slide 12: Coloplast Capital Markets Day 2016
Coloplast Capital Markets Day 2016 22 June 2016 in Minneapolis, USA – SAVE THE DATE! With this event we would like to provide institutional investors and financial analysts with a deep dive into our US operations as well as a general strategy update for our business areas. Further, we would like to
Slide 13: Leading intimate healthcare
Leading intimate healthcare Introduction to Coloplast Page 13
Slide 14: Coloplast has four business areas all with global sales presence
Coloplast has four business areas all with global sales presence Group revenue FY 2014/15 by segment Group revenue FY 2014/15 by geography X = Coloplast’s global market position Emerging markets 15% Continence Ostomy Care Care 36% 40% DKK Other DKK #1 13.9bn #1 developed 13.9bn markets 21% European
Slide 15: Coloplast specializes in intimate healthcare needs
Coloplast specializes in intimate healthcare needs Who are our typical users How do we help them? Ostomy People who have had their intestine SenSura® Mio Care redirected to an opening in the Ostomy bag abdominal wall Continence People in need of bladder or bowel SpeediCath® management Compact male C
Slide 16: Intimate health care is characterized by stable trends
Intimate health care is characterized by stable trends Growing elderly population increases Demographics customer base for Coloplast products Expanding healthcare coverage for Emerging markets populations in emerging markets increases addressable market Earlier detection and cure, eventually reduces
Slide 17: Strong market positions in Europe and great commercial potential outside Europe
Coloplast has strong market positions in Europe and great commercial potential outside Europe Europe Developed Ostomy Continence Urology Wound Care Emerging Addressable 13 -14 billion DKK ~9 billion DKK 9 -10 billion DKK ~14 billion DKK market 4 - 5% growth 4 - 6% growth 3 - 5% growth 2 - 4% growth
Slide 18: Our strategy remains centred on value creation through profitable organic growth
Our strategy remains centred on value creation through profitable organic growth How we compete… …Where we compete 1 Develop and market the world’s best 5 Untapped potential in Europe products 6 Increased momentum in Other 2 Interact and build consumers relations Developed Markets – incl. breakthrou
Slide 19: Key Value Driver #1: Many global growth opportunities
Key Value Driver #1: Many global growth opportunities with significant longer term potential Untapped pockets of growth in Europe e.g. in • UK • Germany Increase • Italy market share in • USA • Canada • Japan Build on and • Australia accelerate growth platform e.g. in • China • Brazil • Russia • Arg
Slide 20: Key Value Driver #2: Investing in Consumer Care activities
Key Value Driver #2: We continue to invest in Consumer Care activities to increase our interactions with the users of our products Hospital H General CARE practitioner Coloplast Distributors Pharmacies Consumer Bandagists Home Health Care DtC Page 20
Slide 21: Key Value Driver #3: Efficiency improvements in production
21 Key Value Driver #3: We see more potential for efficiency improvements in our production Production by country* 5% 10% Thisted Hungary Minneapolis Mørdrup China Mankato Denmark 25% 60% US/ France Nyirbátor Tatabánya *Produced quantity of finished goods Sarlat COGS by cost type* 9% 20% Salary - Di
Slide 22: Key Value Driver #4: Economies of scale in cost functions
Key Value Driver #4: And we believe we can continue to drive economies of scale in our cost functions Cost item Development Outlook Outlook As reported Percentage of revenue Scalability potential Investments requirements COGS 50 38.7 31.5 High Medium 0 09/10 14/15 Distribution 29.5 28.5 Medium High
Slide 23: Organic value creation provides high cash returns and share buy-backs
Focus on organic value creation provides for high cash returns and continued share buy-backs Comments Performance Coloplast returns excess liquidity to shareholders in the form of dividends and share buy-backs Dividend is paid twice a year – after the half-year and full-year financial reporting
Slide 24: Coloplast can continue to deliver stable shareholder returns
Therefore we believe Coloplast can continue to deliver stable shareholder returns through.... Organic growth 33% Stable market trends in our Chronic Care EBIT Margin* business 13% 12% Strong retention program and innovative D-t-C 7% activities 8% 7% Increased focus on growing the business 05/0
Slide 25: Appendices
NEW! SenSura® Mio Convex Appendices Ostomy Care Urology & Continence Care Wound & Skin Care Coloplast qi)
Slide 26: The Coloplast share (COLO'B-KO)
The Coloplast share (COLO’B-KO) Share Capital Ownership Coloplast share listed on Nasdaq Copenhagen since 1983 5% 10% ~121 billion DKK (~18 billion USD) market cap @ ~560 DKK per share (incl. A 4% shares) 45% Two share classes: 29% 18m A shares carry 10 votes (family) 7% 198m B shares carry 1 vo
Slide 27: Capital structure
Capital structure Comments Performance Overall policy is that excess liquidity is returned to shareholders through a * combination of dividends and share buy- backs Interest bearing debt will be raised in connection with a major acquisition or to support dividends Share buy-backs of DKK 500m p
Slide 28: Key Value Ratios
Key Value Ratios Profitability drivers Free Cash Flow drivers * Before special items. Special items Q2 2013/14 includes DKK 1bn net provision. Special items Q4 2014/15 includes DKK 3bn provision Page 28
Slide 29: Coloplast revenue development by business area
Coloplast revenue development by business area Ostomy Care Continence Care 12,000 13 12000 9 10 9 9 11 7 8 8 8 10,000 10 10 10000 5 6 6 9 6 5 8,000 8 7 8 8000 4 2 7 6000 5,091 5,567 0 6,000 5,019 6 4,633 4,849 4,438 3,831 4,081 -2 4,000 4000 -4 2000 1,469 -6 2,000 1,308 -8 0 -10 0 3 11/12 12/13 13/1
Slide 30: Coloplast revenue development by geography and total
Coloplast revenue development by geography and total Europe Other developed 8 8 19 6 5 6 15 15 5 6 5 5 9 10 4 8,843 7 6 6 7,388 7,749 8,221 5 4 2,288 2,395 2,479 2,945 2,313 763 11/12 12/13 13/14 14/15 YTD 11/12 12/13 13/14 14/15 YTD Emerging Markets Coloplast total 9 12 8 7 11 24 23 7 6 7 7 14 14 1
Slide 31: Segment operating profit
Segment operating profit Chronic Care: Ostomy and Continence Care Wound & Skin Care 500 2500 60 60 61 61 60 60 450 50 400 2000 50 40 1,622 1,703 1,667 350 37 40 37 1,519 1,552 36 40 300 32 1500 30 250 30 195 184 198 184 200 1000 140 20 20 150 500 100 10 10 50 0 0 0 0 Q1 14/15 Q2 14/15 Q3 14/15 Q4 14
Slide 32: Growing Emerging Markets business through focused execution
We aim to grow our Emerging Markets business through focused execution in selected markets We have selected core growth markets We have a clear EM value creation strategy Core China Argentina 1 Expand China growth Brazil Greece markets Russia Poland 2 Expand Brazil New MENA South A
Slide 33: US Mesh litigation – Overview of current financial impact
US Mesh litigation – Overview of current financial impact TBD Summary Financial Impact A total of DKK 4.5bn has been provisioned which is currently Q1 15/16 FY 14/15 FY 13/14 considered sufficient (DKK 4bn provision net of insurance coverage) EBIT 1,194 1,535 3,147 P&L 14/15 – DKK 3bn in special
Slide 34: Mesh litigation timeline
Mesh litigation timeline Sept. 9, 2014: Verdict vs July 23, 2012: May 2, 2014: Sept. 5, 2014: BSC Mar. 5, 2015: Verdict vs Bard Feb. 28, 2013: Feb. 2014: Coloplast provision Verdict vs Ethicon TX State Verdict vs Ethicon CA State Court: Verdict vs Ethicon Verdict for DKK 1.5bn (DKK Ethicon MDL: Cour
Slide 35: Healthcare reform landscape
Healthcare reform landscape Intensifying reform pressure U.S.: Healthcare reform implementation Stable reform environment ongoing Brazil: Macroeconomic and political challenges Russia: Macroeconomic and political France: Reimbursement challenges review of OC and CC in FY 15/16 UK: Efficiency savings
Slide 36: Coloplast Care is a retention program with more than 300,000 consumers
Coloplast Care is a retention program with more than 300,000 consumers enrolled Objective Through Coloplast Care we… Key benefits C Connect to consumers and form lifetime bond An online support programme Enrollment through all relevant consumer touch points NPD gain and retention of new users when A
Slide 37: Direct-to-Consumer activities is a new marketing channel
Direct-to-Consumer activities is a new marketing channel Objective Objective DtC is direct, individualized marketing… Examples of DtC investments New website Expertise Market to the individual’s need Conversion, Customized message up-selling and Specific products cross-selling to and dialogue and se
Slide 38: The generic model for distribution and reimbursement of our products
The generic model for distribution and reimbursement of our products Prescription & Insurance Product Payer Reimbursement price Distribution Prescription & Insurance Consumer $ Product DtC Marketing • Campaigns • Community • Relationships • Information Coloplast Page 38
Slide 39: Introducing Ostomy Care
Introducing Ostomy Care Key products • Colorectal cancer (est. 45%) Disease areas • Bladder cancer (est. 10%) • Diverticulitis (est. 15%) • Inflammatory bowel disease (est. 10%) • Other (est. 20%) Customer • Nurses, mainly stoma care nurses groups • People with a stoma • Wholesalers/distribution • H
Slide 40: Introducing Ostomy Care Accessories
Introducing Ostomy Care Accessories Brava® is a range of ostomy accessories designed to reduce leakage Market or care for skin, to make our end-users feel secure. Brava® was fundamentals • Market size of DKK 2bn launched in April 2012 and the range includes 10 different products. • Market growth of
Slide 41: Introducing Continence Care
Introducing Continence Care Key products Disease • Spinal Cord Injured, SCI areas • Spina Bifida, SB • Multiple Sclerosis, MS • Benign prostatic hyperplasia, BPH & prostatectomy patients • Elderly Customer groups • Continence or home care nurses • Wholesalers/distributors • Hospital purchasers and G
Slide 42: Introducing Bowel Management
Introducing Bowel Management Disease areas Faecal incontinence (management Key products products only) Customer Customer groups groups & • Spinal Cord Injured, SCI call points • Spina Bifida, SB • Multiple Sclerosis, MS Call points • Rehab centers • Pediatric clinics Peristeen® Anal Irrigation Anal
Slide 43: Introducing Urology Care
Introducing Urology Care Treatment (surgical) of urological disorders Key products (implantable and single use devices) Disease areas • Urinary incontinence • Pelvic organ prolapse • Erectile dysfunction • Enlarged prostate • Kidney and urinary stones Customer • Surgeons groups • Purchasing departme
Slide 44: Introducing Wound Care
Introducing Wound Care Key products Disease areas Chronic wounds • Leg ulcers • Diabetic foot ulcers • Pressure ulcers Customer Hospitals Groups & • Wound care committees call points • Specialist nurses/doctors • (Purchasers) Biatain® Silicone Biatain® Ag • foam dressing with • Antimicrobial foam dr
Slide 45: Introducing Skin Care
Introducing Skin Care Key products Disease areas • Moisture associated skin damage • Incontinence • Skin folds & obesity • Prevention of skin impairments Customer Hospitals groups & • Clinical Specialists call points • Supply Chain • Value Analysis Committee Sween® EasiCleanse Bath® Community • Broa
Slide 46: Product market for US Skin Care
Product market for US Skin Care • US market size estimated at DKK 7-8bn with ~ 5% growth • Market share: ~5% • Main competitors include • Medline Industries • Sage Products • ConvaTec Market drivers Market limiters Market trends Aging and obese population Consolidation of Providers Increase si
Slide 47: The Coloplast organisation
The Coloplast organisation Coloplast Group Chronic Care Strategic Business Units Ostomy Care Continence Care Wound Care Skin Care Urology Care Marketing Marketing ID SD Global Marketing Sales Sales Marketing Marketing R&D (incl. R&D Sales Sales Consumer R&D R&D Sales Regions Products) Chronic Care R
Slide 48: Coloplast Executive Management
Coloplast Executive Management Lars Rasmussen President, CEO • Born 1959 • With Coloplast since 1988 Anders L.-Skovgaard Allan Rasmussen Kristian Villumsen EVP, CFO EVP, Global Operations EVP Chronic Care • Born 1972 • Born 1967 • Born 1970 • With Coloplast since 2006 • With Coloplast since 1992 • W
Slide 49: Corporate responsibility – external recognitions
Corporate responsibility – external recognitions Page 49
Slide 50: Income statement
Income statement DKKm Q1 2014/15 Q1 2015/16 Change Revenue 3,301 3,656 11% Gross profit 2,263 2,506 11% SG&A costs -1,081 -1,176 -9% R&D costs -110 -126 -15% Other operating income/expenses 4 -10 -350% Operating profit (EBIT) 1,076 1,194 11% Net financial items -28 -123 nm Net profit 797 825 4% Key
Slide 51: Balance sheet
Balance sheet DKKm 31 Dec 2014 31 Dec 2015 Change Balance, total 9,663 10,810 12% Assets Non-current assets 4,412 5,077 15% Current assets 5,251 5,733 9% of which: Inventories 1,384 1,505 9% Trade receivables 2,285 2,510 10% Restricted cash 556 563 1% Marketable securities, cash, and cash equivalent
Slide 52: Cash flow
Cash flow DKKm Q1 2014/15 Q1 2015/16 Change EBITDA 1,194 1,325 11% Change in working capital 276 509 nm Net interest payments -5 -124 nm Paid tax -471 -19 96% Other -348 -1,062 nm Cash flow from operations 646 629 -3% CAPEX -153 -124 19% Securities 419 317 nm Other 3 9 nm Cash flow from investments
Slide 53: Production sites
Production sites TCC Mørdrup • Adhesives • Wound care products DK • Continence care products • Coloplast Consumer Products • Number of employees in production: ~400 TCC Thisted • Machine development • Ostomy care products DK • Number of employees in production: ~250 Sarlat • Disposable surgical urol
Slide 54: Production sites
Production sites Tatabánya • Ostomy care products • Adhesives HU • Continence care products • Number of employees in production: ~1,300 • Postponement & packaging Tata • Cross docking • Warehousing HU • Distribution & shipping • Number of employees: ~300 Nyírbátor • Catheter care products • Wound ca
Slide 55: Contact Investor Relations
Contact Investor Relations Holtedam 1 DK-3050 Humlebæk Denmark Ian Christensen Ellen Bjurgert Vice President Manager Investor Relations Investor Relations Tel. direct: +45 4911 1301 Tel. direct: +45 4911 3376 Office: +45 4911 1800 Office: +45 4911 1800 Fax: +45 4911 1555 Fax: +45 4911 1555 dkisec@co
Slide 56: Our mission, values and vision
Our mission Making life easier for people with intimate healthcare needs Our values Closeness… to better understand Passion… to make a difference Respect and responsibility… to guide us Our vision Setting the global standard for listening and responding Page 56