STADA Arzneimittel — FY2016 Earnings Presentation
35 slides from STADA Arzneimittel's earnings presentation, Mar 29, 2017
Slide 1: Corporate Presentation: Analyst Meeting Q4 and Full-Year 2016 Results
CORPORATE PRESENTATION Analyst Meeting Q4 and Full-Year 2016 Results / Strategic Outlook 2019 March 29, 2017
Slide 2: FY/2016: Strong Performance
FY/2016: STRONG PERFORMANCE Generics Cash flow o Ongoing strong sales momentum: o Operating Cash flow improved Russia with continued high demand/ o Significant increase in Free Cash flow Recovery in Belgium o Segment margin significantly improved Branded Products Net Income o Sales and margin impact
Slide 3: Generics Key Highlights
GENERICS KEY HIGHLIGHTS Reorganization in Germany and Netherlands has been initiated Belgium: early exit of contract with Omega to further strengthen our leading market position and improve profitability Stronger focus on profitability going Revitalization of the UK Generics business in process forw
Slide 4: Branded Products Key Highlights
BRANDED PRODUCTS KEY HIGHLIGHTS Successful product launches and internationalization in 2016, e.g. Flexitol, Grippostad, Lactoflora, Hedrin, Mobiflex Solid growth of established Brands e.g. e.g. APO-Go, Grippostad, Hoggar Internationalization of Branded Products well Ongoing positive development of
Slide 5: Financial Overview
FINANCIAL OVERVIEW Group Results €m Q4/2016 Q4/2015 Δ FY/2016 FY/2015 Δ Sales 598 582 3% 2,139 2,115 1% Sales (adj.)1 599 578 4% 2,167 2,100 3% EBITDA 72 96 -25% 362 377 -4% EBITDA (adj.)2 97 96 2% 398 389 2% Financial result -13 -16 19% -51 -66 23% Income taxes -4 -6 30% -32 -41 21% Net Income2 -14
Slide 6: Generics Segment Results
GENERICS Segment Results €m Q4/2016 Q4/2015 Δ FY/2016 FY/2015 Δ Sales 349 333 5% 1,281 1,261 2% Sales (adj.)1 343 331 4% 1,287 1,253 3% EBITDA (adj.)2 71 71 0% 265 232 14% Margin (adj.)2 20.4% 21.4% 20.7% 18.4% 1) Adjusted for currency and portfolio effects. 2) Adjusted for special items STADA Corpo
Slide 7: Generics FY Segment Results
GENERICS FY Segment Results Sales by country FY 2016 in €m Stable Generics sales in Germany Germany Positive volume effects in Italy and Spain 320 308 Italy (6%) (0%) Ongoing strong demand for generics in Russia Spain Successful tender business in Vietnam Generics Russia 56 1,281 €m Belgium (-24%) 1
Slide 8: Generics Q4 Segment Results
GENERICS Q4 Segment Results Sales by country Q4/2016 in €m Germany: solid growth despite selected approach in tenders and stronger focus on profitability Germany 85 Italy Belgium: recovery continued in Q4 88 (5%) (7%) Belgium Italy: growth supported by higher volumes Serbia Generics Russia: decrease
Slide 9: Branded Products Segment Results
BRANDED PRODUCTS Segment Results €m Q4/2016 Q4/2015 Δ 1-12/2016 1-12/2015 Δ Sales 249 248 0% 858 854 1% Sales (adj.)1 256 247 4% 880 847 4% EBITDA (adj.)2 40 39 2% 201 220 -9% Margin (adj.)2 15.9% 15.6% 23.4% 25.8% 1) Adjusted for currency and portfolio effects. 2) Adjusted for special items STADA C
Slide 10: Branded Products FY Segment Results
BRANDED PRODUCTS FY Segment Results Sales by country FY 2016 in €m Germany: strong sales growth supported by brands like Grippostad, Ladival, Mobilat 177 UK: organic sales increase of 7% in constant currency (38%) Germany 275 due to strong growth of top brands (0%) UK Russia: ongoing challenging env
Slide 11: Branded Products Q4 Segment Results
BRANDED PRODUCTS Q4 Segment Results Sales by country Q4/2016 in €m UK: negative currency effects Russia: consolidation on demand side, 57 UK higher discount burdens (4%) 85 Russia (15%) Germany: ongoing strong sales momentum Branded Germany Increased marketing spend in Q4 Products Italy 249 €m 48 Vi
Slide 12: Cash Flow Development
CASH FLOW DEVELOPMENT Q4/2016 Q4/2015 Δ FY/2016 FY/2015 Δ Operating Cash flow 136 174 -22% 334 312 7% Capex (maintenance and other minor -25 -30 16% -91 -99 9% investments net of disposals) Free cash flow (adj.)1 110 144 -23% 243 212 14% (before dividends) Acquisitions net of disposals -28 -21 34% -
Slide 13: Leverage Net Debt/EBITDA (adj.)
LEVERAGE NET DEBT/EBITDA (ADJ.) 4,0 2017 TARGET Net debt improved by almost €100 m ~3.0 3,5 3.2 3.2 3.1 3.1 3.1 2.8 3,0 2.7 2.7 2,5 2,0 2009 2010 2011 2012 2013 2014 2015 2016 STADA Corporate Presentation • March 2017 Page 13
Slide 14: Dividend Proposal
DIVIDEND PROPOSAL Dividend per share in € Dividend policy 0.70 0.72 2.9% dividend increase Dividend proposal based on strong underlying business and strong cash flows 2015 2016 STADA Corporate Presentation • March 2017 Page 14
Slide 15: Group Guidance 2017
GROUP GUIDANCE 2017 Target Sales adj.1 € 2,280 - 2,350m EBITDA adj.2 € 430 - 450m Net income adj.2 € 195 - 205m 1) Adjusted for currency and portfolio effects. 2) Adjusted for special items. STADA Corporate Presentation • March 2017 Page 15
Slide 16: Strategic Outlook 2019
STRATEGIC OUTLOOK 2019
Slide 17: STADA Plus – Efficiency Gains Already Becoming Visible
“STADA PLUS” – EFFICIENCY GAINS ALREADY BECOMING VISIBLE – SOME EXAMPLES Organization & Processes COGS Reduction o Consolidation: o Packaging harmonization: • Consolidation of German entities underway • e.g. new packaging center (Serbia) will consolidate solid o Complexity reduction: dose packaging
Slide 18: New Strategic Outlook 2019 – In a Nutshell
NEW STRATEGIC OUTLOOK 2019 – IN A NUTSHELL “STADA-Plus” launched in summer 2016 already bearing fruit Execution timelines shorter and more efficient than originally anticipated STADA raises medium- term growth targets! Stronger base business expected particularly in Generics Segment STADA well on tr
Slide 19: Basic Underlying Assumptions for Strategic Outlook 2019 Unchanged
BASIC UNDERLYING ASSUMPTIONS FOR STRATEGIC OUTLOOK 2019 UNCHANGED Organic growth Constant Stable tax Stable regulatory existing business exchange environment and environment for rates current interest generics business levels STADA Corporate Presentation • March 2017 Page 19
Slide 20: New Strategic Outlook 2019 – Sales Growth (adj.)
NEW STRATEGIC OUTLOOK 2019 – SALES GROWTH (ADJ.) Guidance 2019 old New Strategic Outlook 2019 Group Sales between 2,650 – 2,700 €m Branded Products: 1,175 - 1,205 m€ Generics: 1,475 - 1,495 m€ STADA Corporate Presentation • March 2017 Page 20
Slide 21: New Strategic Outlook 2019 – Sales Growth (adj.)
NEW STRATEGIC OUTLOOK 2019 – SALES GROWTH (ADJ.) Additional sales growth ~ 2,650 – 2,700 potential identified ~100 Assumed segment split 2019 unchanged: particularly in generics approx. 55% Generics & 45% Brands base business, but also in branded base business ~215 - 245 Major growth regions Generic
Slide 22: New Strategic Outlook 2019 – EBITDA Growth (adj.)
NEW STRATEGIC OUTLOOK 2019 – EBITDA GROWTH (ADJ.) Guidance 2019 old New Strategic Outlook 2019 Group adj. EBITDA between 570-590 €m Add. profit drivers vs. old 2019 guidance: • Stronger base business particularly in the generics business • Additional improvements in procurement/production/portfolio
Slide 23: New Strategic Outlook 2019 – EBITDA Growth (adj.)
NEW STRATEGIC OUTLOOK 2019 – EBITDA GROWTH (ADJ.) ~ 570 - 590 ~25 - 30 Group adj. EBITDA-margin to improve from 18.6% in 2016 to ~ 22% in 2019 mainly driven by significant savings in COGS ~60 - 70 and accelerated reorganization efforts across the Group ~ 85 - 90 Adj. EBITDA-margin 2019: 389 398 Gene
Slide 24: Strategic Outlook 2019 – Net Income Growth (adj.)
STRATEGIC OUTLOOK 2019 – NET INCOME GROWTH (ADJ.) Guidance 2019 old New Strategic Outlook 2019 Net Income (Adj.) ~ 250 – 270 m€ STADA Corporate Presentation • March 2017 Page 24
Slide 25: Strategic Outlook 2019 – Operating Cash Flow
STRATEGIC OUTLOOK 2019 – OPERATING CASH FLOW Guidance 2019 old New Strategic Outlook 2019 Operating Cash Flow ~ 560 – 580 m€ STADA Corporate Presentation • March 2017 Page 25
Slide 26: "Fit for the Future"!
“FIT FOR THE FUTURE”! STADA Corporate Presentation • March 2017 Page 26
Slide 27: Appendix
APPENDIX STADA Corporate Presentation • March 2017 Page 27
Slide 28: Generics: The Market Is Driven by High Volume Growth
GENERICS THE MARKET IS DRIVEN BY HIGH VOLUME GROWTH Generics continue to take an increasing share of the scripts in all markets Canada: 58% 73% Europe: 44% 56% Japan: 14% 26% US: 59% 82% Asia / Australia: 42% 48% Latin America: 55% 71% Africa / Middle East: 44% 47% Generic volume market share 2006 v
Slide 29: Generics Future Patent Expirations
GENERICS FUTURE PATENT EXPIRATIONS Patent expiration in Germany, France, Italy, Spain and UK €bn 4.500 , 4,254 , 4.000 , 3.500 3,137 , 3.000 > € 11.9 bn of sales 2,356 coming off patent in , 2.500 2,172 our key markets by 2020 , 2.000 not including biosimilars , 1.500 , 1.000 500 - 2017 2018 2019 20
Slide 30: Generics – STADA's Top Generic Markets
GENERICS – STADA‘S TOP 5 GENERIC MARKETS Growth rates1 (ex-manufacturer sales before discounts) and market positions2 Market Growth CAGR 16-21 Germany Italy Spain Russia Belgium Germany 4.8% 1. Novartis 1. Teva 1. Cinfa 1. STADA 1. STADA Italy 4.9% 2. Teva 2. Mylan 2. Teva 2. Sanofi 2. Novartis Spai
Slide 31: Financing Structure
FINANCING STRUCTURE Remaining terms of financial liabilities as of December 31, 2016 in €m* CORPORATE BOND PROMISSORY NOTE LOANS CREDIT 350.0 300.0 295.0 288.5 90.2 20.0 44.0 25.3 61.5 2017 2018 2019 2020 2021 > 2021 * Nominal values • Net debt/ adj.1 EBITDA : 2.8 (2015: 3.1) • Cash and cash equival
Slide 32: Reconciliation Q4 2016
RECONCILIATION Q4 2016 Impairments Measurement Portfolio Effects from purchase Currency effects 1 Q4 2016 / write-ups of derivative adjustments / Q4 2016 in € million price allocations and CIS/Eastern Other5 reported on fixed financial Restructuring adjusted product acquisitions2 Europe3 assets inst
Slide 33: Reconciliation FY 2016
RECONCILIATION FY 2016 Measurement Portfolio Impairments/ Effects from purchase Currency effects 1 FY 2016 of derivative adjustments FY 2016 in € million write-ups on price allocations and CIS/Eastern Other5 reported financial / Restructuring adjusted fixed assets product acquisitions2 Europe3 instr
Slide 34: Financial Calendar / Contact
FINANCIAL CALENDAR / CONTACT Financial Calender 2017 May 11, 2017 Publication of the first three months of 2017 results June 8, 2017 Annual General Meeting 2017 August 3, 2017 Publication of the first six months of 2017 results November 9, 2017 Publication of the first nine months of 2017 results Pl
Slide 35: Disclaimer and Notes
DISCLAIMER AND NOTES This STADA Arzneimittel AG (hereinafter "STADA") presentation is intended for information only. It is not intended as or provided in connection with an offer or solicitation for the purchase or sale of any security in any jurisdiction. STADA shall not have any liability arising