Elekta Ab Class B · OMXSTO:EKTA_B
Elekta Ab Class B — Investor Day (December 2011)
53 slides from Elekta Ab Class B's investor day presentation, Dec 12, 2011
Slide 1: Elekta Capital Markets Day: Emerging Markets
Elekta Capital Markets Day Emerging Markets 12 December 2011, Stockholm
Slide 2: Emerging markets - accelerating the growth
Emerging markets - accelerating the growth Emerging markets Tomas Puusepp 13.00 – accelerating the growth President and CEO 13.20 Latin America & Brazil Antonio Ponce VP Latin America Eastern Europe & Middle Nabil Elias Romanos 13.40 East VP Eastern Europe & Middle East Q&A and coffee 14.10 Asia Pac
Slide 3: Strong historical financial performance in emerging markets
Strong historical financial performance in emerging markets Net sales, SEK bn Success factors CAGR: 30% • Early establishment, 2,2 (e.g. in China since 1982) 1,9 • Local and experienced management 1,3 • Established network with the leading clinics • Adaption to local customer needs – including train
Slide 4: Aging population in emerging markets
Aging population in emerging markets Age 100+ 95-99 1950 90-94 Total population: 1.7 bn 85-89 80-84 Share +60 years: 6% 75-79 70-74 65-69 60-64 55-59 50-54 45-49 40-44 35-39 30-34 25-29 20-24 15-19 10-14 5-9 0-4 Male Female Sources: Population Division of the Department of Economic and Social Affair
Slide 5: Aging population; solid underlying growth drivers
Aging population in emerging markets Age 100+ 95-99 2050 90-94 Total population: 8.0 bn 85-89 80-84 Share +60 years: 20% 75-79 70-74 65-69 60-64 55-59 50-54 45-49 40-44 35-39 30-34 25-29 20-24 15-19 10-14 5-9 0-4 Male Female Sources: Population Division of the Department of Economic and Social Affai
Slide 6: We are just at the beginning of the curve
We are just at the beginning of the curve Health care spend per capita and installed linacs per million inhabitants USD and units installed USA Linacs per million people Ireland Denmark Sweden1 Norway Japan Australia Switzerland Taiwan Germany Netherlands Belgium Austria UK France Italy Canada Spain
Slide 7: Strong market position in emerging markets
Strong market position in emerging markets Market share new orders, linacs 45-50% 40% 40-45% 45-50% Elekta’s overall market share in emerging markets is >40% 11 Making it accessible Training & education Awareness & Infrastructure • Elekta Academy • Cancer registry software • Partner hospitals (based
Slide 8: Adapt to local needs - cancer incidence
Adapt to local needs - cancer incidence Number of new cancer cases per year, Emerging markets, (thousands, 2008) Male Female Source: Globocan 2008 13 Recent acquisition of Nucletron add growth opportunities Nucletron: • No 1. in brachytherapy globally with ~60% market share • Affordable entry into r
Slide 9: Emerging markets growing in importance
Emerging markets growing in importance 2014/15E 2010/11 2004/05 20% 30% 40% 60% 70% 80% Emerging markets Mature markets *Net sales, rounded figures 15 High sustainable growth in emerging markets Emerging markets • Government-sponsored cancer programs as Sustainable main driver for expansion growth:
Slide 10: Elekta positioned to capture accelerated growth
Elekta positioned to capture accelerated growth 2011 – Focus on delivering value with solutions - 2010 ”From machine 1st priority Accelerate growth to systems” – from systems to solutions - 2005 • Grow share in established markets with leading extended ”Perfecting the • Full system portfolio solutio
Slide 11: Elekta in Latin America
Elekta in Latin America Strong growth set to continue Antonio Ponce Vice President, Latin America 19 Elekta - fast growing provider of radiation therapy solutions in Latin America Order bookings, Latin America • Present with own subsidiary since 2008, CAGR: 19% previously distributors only • Total o
Slide 12: Market leader with Leksell Gamma Knife
Market leader with Leksell Gamma Knife® • Elekta is the market leader within stereotactic radio surgery (SRS) in Latin America • 6 Leksell Gamma Knife® systems installed • Large unmet need will drive expansion • Additional hospitals decided to invest in Leksell Gamma Knife − Hospital das Clinicas Sã
Slide 13: Brazil's radiation therapy capacity as of today
Brazil’s radiation therapy capacity as of today • Total installed base of ~250 machines in the market – Around 30 old cobalt-based machines need replacement – Government estimate a need for at least ~200 additional RT machines to meet the demand • New centers are being built in public and private se
Slide 14: Brazil's aging population is set to increase
Brazil’s aging population is set to increase Driving demand of cancer care 2010 2050E Age Age Male Female Male Female Total population: 195 m Total population: 223 m Number of +60 years old: 20 m Number of +60 years old: 65 m Share of +60 years old: 10% Share of +60 years old: 29% 25 Government-spon
Slide 15: Incentives to build new RT departments
New direction Ministry of Health program Incentives to build new RT departments To be qualified as a cancer care provider and be reimbursed by the state - both public hospitals and private clinics - it is mandatory that the hospital supply chemo, radiotherapy and surgery • New generation of equipmen
Slide 16: Elekta is growing in Brazil
Elekta is growing in Brazil Market share, Brazil Market share, Brazil New orders, linacs 2010/11 Installed base, linacs Siemens 6% Other 2% Elekta Cobalt 14% 13% Varian 42% 52% Elekta Siemens 16% 55% Varian 29 Public hospital ICESP 5 Synergy® platforms and 1 Axesse™ 30
Slide 17: The future is focused on growth
Private clinic CLINIRAD 1 Synergy® and 1 Precise™ 31 The future is focused on growth • Drive expansion of radiotherapy usage and capacity build out • Increase Elekta’s installed base significantly - long-term plan to become market leader also in terms of installed base • Gradual expansion of afterma
Slide 18: Additional markets will add to the growth
Additional markets will add to the growth Colombia Population 45 M Growth both in public and private sector Chile Population 16 M Peru Growth both in public and Population 29 M private sector Ministry of Health has decided to invest in oncology: 3 – 5 new machines per year 33 Eastern Europe and Midd
Slide 19: Eastern Europe and Middle East
Eastern Europe and Middle East Eastern Europe and Russia • Population ~300 M • Large national programs for cancer care expansion • Russia is the largest single market Middle East • Population ~350 M • Large unmet need – low penetration of linacs • Economic conditions vary across countries • Dependen
Slide 20: Russia – market driven by government capacity build-out
Russia – market driven by government capacity build-out Demography • Population: 143 M, Moscow 12 M • Population growth: -0% • Life expectancy: 63 years (male), 75 (female) Economic development • Driven by natural resources • Current GDP growth: ~5% Health care spending • Per capita: USD ~800 – Main
Slide 21: Russian government sponsored healthcare plan
Russian government sponsored healthcare plan • Five-year National Oncology program, started in 2009. Some 10-15 radiation therapy clinics are equipped every year • In addition, regional authorities are funding 2-4 new radiation therapy centers per year • Private sector is small, but beginning to inv
Slide 22: Russian cancer centers with Elekta linacs
St. Petersburg - Russian Scientific Center for Radiology and Surgical Technologies 5 Elekta linacs (2 Axesse™) P. A. Herzen Moscow Cancer Research Institute in Moscow, Russia 42
Slide 23: Leksell Gamma Knife Center in Moscow - Burdenko
Leksell Gamma Knife® Center in Moscow - Burdenko The first Leksell Gamma Knife® Perfexion™ in Moscow Elekta is supporting training and education Moscow training center for medical physicists The organizers: • Moscow State University (MSU) • Gertsen Moscow Research Oncological Institute (MROI) Elekta
Slide 24: Example of markets in the region; activities in Iraq
Example of markets in the region Eastern Europe and Middle East Belarus • Population: 10 M Turkey Iraq • Population: 77 M Population: 30 M Egypt • Population: 81 M Jordan Population: 6 M 45 Case study Activities in Iraq • Significant need for replacing old capacity and building new cancer clinics •
Slide 25: Asia Pacific – High-growth markets
Asia Pacific – High-growth markets Gilbert Wai Executive Vice President, Asia Pacific 47 Market area - region Asia Pacific • Elekta Asia Pacific has around 500 employees (including Nucletron) and serves 15 major markets across the region • Seven direct operations plus a network of distributors in ot
Slide 26: Strong financial performance in Asia Pacific
Strong financial performance in Asia Pacific USD M Success factors 350 • Early establishment e.g. in CAGR = 26% China since 1982 300 • Build up strong local organization with 250 Neuro local talent – China, India, Australia 200 Software • Strategic investment in – R&D, manufacturing and sourcing – 1
Slide 27: Beginning of the curve; solid growth drivers
We are just at the beginning of the curve Health care spend per capita and installed linacs per million inhabitants USD and units installed USA Linacs per million people Ireland Denmark Sweden1 Norway Japan Australia Switzerland Taiwan Germany Netherlands Belgium Austria UK France Italy Canada Spain
Slide 28: Asia Pacific health expenditure and cancer incidence
Asia Pacific Health expenditure per capita (USD) • High spending in the top markets …but lower than USA and Germany • Spending is set to grow significantly in low spending markets Source: Medical markets fact book, 2008 53 Adapt to local needs - cancer incidence Most frequent cancers, Asia Number of
Slide 29: Accessibility - education and training
Accessibility- education and training overview Elekta training facilities Elekta classrooms Sydney, Australia Beijing, China Shanghai, China Chennai, India (Nucletron) Tokyo, Japan Elekta linac facilities EBMEI, Beijing, China Zhouzhou Hospital, China TMSC Nasu facility, Japan (Toshiba) Customer tra
Slide 30: Making it available - Elekta initiatives
Making it available - Elekta initiatives • Elekta investment in BMEI – Strong presence in R&D, engineering, manufacturing and sourcing in China • Product development – Elekta CompactTM - single energy – Software – treatment planning systems (TPS) and oncology information systems (OIS) enable sharing
Slide 31: Market comments – Far East; Elekta Japan
Market comments – Far East Market Share 2010 / 11 New Orders Other 6% • Market leader in linac new order Siemens 2010/11 6% Elekta • Established a direct subsidiary in Korea 48% in 2009 • Develop Singapore office as a regional Varian 40% support hub, partner with Singapore National University Hospit
Slide 32: Elekta in Japan
Elekta in Japan Sapporo • Presence in Japan since the late 1980s • CMS operations integrated in 2010 • Installed base of 55 Leksell Gamma Knife® and 80 linacs Takasaki Sendai Kanazawa • 2010/11 Net sales: SEK ~950m. Currently employs 114 people Tokyo Fukuoka • 2010: Signed a sales and marketing Nago
Slide 33: Market trends and reimbursement
Market trends and reimbursement • Implementation of 2007 Cancer Control Act – Collaboration between local & national governments in Japan – Primary & secondary detection and prevention – Funding for the equalization of medical treatment – Funding to help drive innovation in cancer research • Improvi
Slide 34: Low usage of radiation therapy in Japan
Low usage of radiation therapy in Japan • 25–30 percent of cancer patients receive radiation therapy in Japan • In Europe corresponding share is >50 percent • Marketing not allowed from manufacturers to patient advocacy groups • Shortage of radiation oncologists & medical physicists • Physical const
Slide 35: Elekta's market position in radiation oncology
Elekta’s market position in radiation oncology FY10/11 Market share Market size New orders Installed base Chiyoda 2% HMC 1% Toshiba 3% Brainlab 2% NEC 1% HMC 5% Tomo 2% Siemens 7% Siemens 5% Brainlab 7% 27% Elekta Elekta 7% 32% Varian Mitsubishi 21% 49% 29% Varian Toshiba 67 Historical growth and de
Slide 36: Installed base profile - future opportunities
Installed base profile - future opportunities >10 years before Apr. 2001 10 years after Apr. 2001 Varian 47 271 • Mitsubishi linacs offer a clear Mitsubishi 82 51 opportunity Toshiba 70 164 • TMSC’s installed base offers quite Siemens 52 a few replacement opportunities over the coming years Elekta 7
Slide 37: Effects of the earthquake; competitive advantage and strategy
Effects of the great eastern Japan earthquake Impact on the medical device industry • Immediate impact was the postponement/ delay in projects until the facts were known, resulting in – Some projects have been delayed until next year – Some projects have had their funding reduced • Announcement made
Slide 38: Elekta India - High-growth market
Elekta India High-growth market Percy Shroff Managing Director, Elekta India Incredible India • 1.2 billion population • 29 States, 5 Union Territories • GDP USD 1.3 trillion • 4th largest economy (PPP) • Economic growth rate 7.5% to 8% • 18 official languages but 325 languages spoken and 1,652 dial
Slide 39: Elekta in India since 1994
Elekta in India since 1994 1994 Elekta Instrument, India Liaison Office - 1st Leksell Stereotactic System® (1994) 1997 Elekta Instrument India Pvt., Ltd. - 1st Leksell Gamma Knife ® (1997) - 1st PreciseTM Linac (2000) 2005 Elekta Medical Systems India Pvt.,Ltd. 2009 Responsibility for Bangladesh, Sr
Slide 40: Healthcare scenario in India
Healthcare scenario in India • Lack of healthcare: – Less than 10% of population are covered under medical insurance (only 2% covered by private insurance) – 40 million Indians are pushed to poverty every year because of ill health – Tertiary level healthcare facilities concentrated in metro cities
Slide 41: Investments are urgently needed in cancer infrastructure
Investments are urgently needed in Cancer infrastructure • Cancer burden – 2.5 to 3.0 million cancer patients at any given time – Oral & Lung cancers to dominate in males and Cervix & Breast cancer in females – 0.9 million new cases every year, expected to rise to 1.2M in 5 years – 0.4 million death
Slide 42: Elekta's installed base in India
Elekta’s installed base in India 7 installed Leksell Gamma Knife® 54 installed linacs 81 Competitive market share analysis - Oncology Market share Market share Installed units + Orders New orders, units 2010/11 Refurbished 1% Refurbished 5% Cyberknife 1% Siemens Tomotherapy 1% 7% Siemens 26% 26% Ele
Slide 43: Customer segmentation
Customer segmentation Regional cancer centers • Under National Cancer Control Program, MOH • 27 Centres, large Cobalt installed base Corporate hospitals • Private ownership, oncology as part of Superspeciality service • Apollo (46 Hospitals), Fortis (46), Max (8), Wockhardt (10), Narayana Hrudayalay
Slide 44: China - Elekta in China - great success
China Long-term growth is set to continue Gilbert Wai Executive Vice President, Asia Pacific 85 Elekta in China - great success Now 3rd largest country in Elekta Net sales Market share – New orders 2010/11 CAGR 21% Other 2% Elekta Domestic 550 18% 478 Siemens 374 15% 40% 25% Varian 86
Slide 45: Elekta China - milestones
Elekta China - milestones 1982 - Start up of sales activities 1994 - Representative office in Beijing 2000 - JV SEOS* in Shanghai with NPSS 2002 - 100% ownership of SEOS* 2005 - Start of global sourcing 2006 - JV EBMEI started in Beijing 2008 - Elekta CompactTM received CE Mark Start of TPS R&D acti
Slide 46: Installed base of linacs in China 2011
Installed base of linacs in China 2011 Cobalt & 29% 33% Elekta local Others 1% 18% 19% Siemens Varian Elekta market share treatment planning software New sales Other 5% Eclipse 29% 42% Elekta 24% Pinnacle
Slide 47: Market dynamics - China
Market dynamics - China • Continued strong growth in linac new orders (15-20% annually) as country strives to deliver improved healthcare • Total installed base of ~1,300 linacs • Availability of skilled staff and cancer center licensing remains a limiting factor. In 2010/11 Elekta delivered >2,400
Slide 48: Hospital structure in China
Hospital structure in China Hospitals (~1,300) Class III >500 beds Class II hospitals (~6,000) >100 beds Class I and other small hospitals (~13,000) <100 beds 93 China Total annual healthcare expenditure 2006 - 2015E USD bn 800 700 600 500 400 300 200 100 0 -06 -07 -08 -09 -10 -11E -12E -13E -14E -1
Slide 49: Five highlights of the China Health Reform
Five highlights of the China Health Reform Market drivers: Large investments in healthcare • Increase of medical insurance coverage to all citizens – Provide a basic safety net to all citizens • Establishing a national system for basic drugs – Will lower drug prices • Improving the community-level m
Slide 50: Affordability - China: BMEI
Affordability - China: BMEI • Incorporated in 2000, having existed as a research and production institute since the late 1970s • Strong R&D focus and team of highly-skilled engineers, developed Elekta CompactTM with CE mark in 2 years • Located in a modern purpose-built linac facility in Chang Ping,
Slide 51: Strategic focus – training and education
Strategic focus – training and education 99 Education and collaboration support to key universities 100
Slide 52: Partnership with key radiation therapy centers
Partnership with key radiation therapy centers 101 Elekta’s future focus in China Best practice cancer care model • Create platforms and initiatives for leading hospitals to develop “Best Practice” • Use Elekta global best practice for workflow and benchmark Continuous investment in: • Expanding R&D
Slide 53: Conclusions
Conclusions Tomas Puusepp President and CEO 103 High sustainable growth in emerging markets Emerging markets • Government-sponsored cancer programs as Sustainable main driver for expansion growth: • Mainly greenfield 10-20% projects • Private initiatives will grow over the long-term 104