Medartis Holding Ag · SIX:MED
Medartis — H1 2021 Earnings Presentation
32 slides from Medartis's earnings presentation, Aug 17, 2021
Slide 1: 2021 First-half year Results
2021 | First-half year Results Presentation for investors, analysts and the media Basel, 17 August 2021
Slide 2: Disclaimer
Disclaimer This presentation is not an offer to sell or a solicitation of offers to purchase or subscribe for shares of Medartis Holding AG, nor shall it or any part of it nor the fact of its distribution form the basis of, or be relied on in connection with, any contract or investment decision. Thi
Slide 3: Agenda
Agenda Half-year highlights Christoph Brönnimann, CEO Financial & business review Dirk Kirsten, CFO Strategic update Christoph Brönnimann, CEO Outlook 2021 Christoph Brönnimann, CEO Q&A CEO & CFO ® Medartis All rights reserved ∣ 3
Slide 4: Half-year highlights
Half-year highlights REVENUE REVENUE GROWTH CHF 73.6 million +29.2% CER1 vs. PY • Accelerated growth trend in H1 • +20.6% CER2 vs. 2019 • Benefiting from lower baseline (lock-down) • Dynamic growth in all regions US fastest growing territory (+46% vs. PY) EBITDA MARGIN HEADCOUNT 19.2% 649 (+5% vs. P
Slide 5: Strong H1 performance provides confidence for rest of the year
Strong H1 performance provides confidence for rest of the year ▪ Strong sales growth in all regions led by the US, where investments into distribution starting to pay off ▪ Headwind from COVID-19 pandemic easing but still noticeable in H1 - uncertainty persists ▪ Profitability increased strongly on
Slide 6: Momentum driven by customer gains, new products and an increase in surgical procedures
Momentum driven by customer gains, new products and an increase in surgical procedures Net sales in CHF million Currency adjusted sales growth (year-on-year) 130.1 121.3 124.7 29,2% 105.0 65.7 60.3 67.7 21,2% H2 55.4 73.6 12,0% 10,9% 8,1% 8,5% 61.0 64.5 57.0 H1 49.6 2017 2018 2019 2020 2021 -6,9% 20
Slide 7: Financial & Business Review
Financial & Business Review Dirk Kirsten, CFO
Slide 8: All regions grew >20%
All regions grew >20% Net sales in million CHF +29.1% +29.2% 4.0 1.4 73.6 4.1 7.2 57.0 -0.1 56.9 22% 46% 35% 32% CER growth vs. PY CER growth vs. 17% 31% 34% (2%) 2019 H1 2020 as FX H1 2020 EMEA U.S. APAC LATAM H1 2021 as reported @ CER reported ® Medartis All rights reserved ∣ 8
Slide 9: Regional performance: EMEA & US
Regional performance: EMEA & US CHF million CER growth Highlights ▪ Growth in H1 still affected by Covid-19 uncertainties despite increase of surgical 54% interventions 39.6m ▪ Most countries showed very strong performance, specifically in France, Germany & Austria 22.3% ▪ UK growth lower, mostly dr
Slide 10: Regional performance: APAC & LATAM
Regional performance: APAC & LATAM CHF million CER growth Highlights 21% ▪ Australia: Very strong performance due to customer conversions; team further strengthened 15.4m ▪ Japan: performance expansion plan lagging by one quarter mainly due to Covid-19 pandemic 34.9% ▪ China: footprint established;
Slide 11: Strong segment growth reflects portfolio strategy focus
Strong segment growth reflects portfolio strategy focus CHF million CER growth Highlights 72% ▪ Dynamic growth in all regions, mostly driven by wrist segment, elbow, shoulder and 52.8m newly launched clavicle ▪ Above average growth from extended CCS (cannulated compression screw) portfolio 28.4% ▪ K
Slide 12: Gross profit margin increased by 1.6%-points
Gross profit margin increased by 1.6%-points in % of net sales +1,6 PP 0,1 83,6 1,1 0,4 82,0 • Increased production efficiency / Better capacity utilization • Strong growth • No one-off costs from from US & MDR & Covid Australia (higher ASPs) Gross profit Positive country mix Production efficiency F
Slide 13: Operational improvements and cost discipline on OPEX level
Operational improvements and cost discipline on OPEX level Net sales in CHF million and % of sales 75.3% 80.1% ▪ Selling & distribution expenses 84.9% increased, but still lower than 12.0 10.4 16.4% planned due to the corona 16.2% 11.0 pandemic 19.3% 7.5 14.3% 10.5 11.7% ▪ Continued investment into
Slide 14: EBITDA margin reaches 19%
EBITDA margin reaches 19% in % of net sales +10.0 PP 9.6 -1.4 0.0 0.3 19.2 • Continued investments into sets & instruments • Step-up in R&D 1.6 investments 9.2 • Lower than planned market expenses • Volume leverage combined with cost discipline EBITDA margin GM improvement Opex efficiency D&A in ope
Slide 15: Net margin close to 10% mark
Net margin close to 10% mark in CHF million 6.7 -1.7 • Investment into growth (set 7.1 investments) • Step-up in R&D investments • Higher taxable 8.9 -1.0 income • European hub 9.6% implementation • Favourable CCY moves (10.2%) • Launch of FX de-risking program -5.8 Net profit H1 2020 EBITDA Increas
Slide 16: High cash reserves further strengthened
High cash reserves further strengthened in CHF million 9.0 -5.6 -2.8 0.8 84.1 82.7 • Set investments • R&D capitalization • Higher Sales • Improved Profitability • Maintained NWC IFRS 16 repayment discipline lease liabilities Cash position Operating Cashflow Investing activities Financing activities
Slide 17: Key financials H1 2018 – H1 2021
Key financials H1 2018 – H1 2021 Figures as reported in CHF million H1 2018 H1 2019 H1 2020 H1 2021 Net Sales 61.0 64.5 57.0 73.6 Growth vs. PY in % 23.0% 5.6% -11.6% 29.1% Growth vs. PY in CER % 18% 7.1% -6.7% 29.2% Gross Profit 50.1 54.0 46.7 61.5 Margin % 82.1% 83.8% 82.0% 83.6% Operating Expense
Slide 18: Strategy & Business Update
Strategy & Business Update Christoph Brönnimann, CEO
Slide 19: Our strategy for long-term growth
Our strategy for long-term growth Attractive market Clear priorities Our asset & vision Can we quantify market growth? Favorable demographics and Enhance sales focus Targeted investments Creating a learning organisation trend towards more mobility addressing regional needs in key growth markets with
Slide 20: Get in touch with people & foster learning culture
Get in touch with people & foster learning culture ▪ New leadership team established, and regional teams strengthened ▪ Pave the way back to ‘normality’ for customers and our employees while capitalizing on the lockdown achievements: ▪ Online T&E offerings extended our reach ▪ Hybrid workplace incre
Slide 21: Digital T&E offering expanded during the pandemic
Digital T&E offering expanded during the pandemic ▪ Virtual T&E offerings from Medartis and IBRA Institute more than tripled y-o-y in 2021 ▪ Webinar trainings and live surgery outreach increased 48% y-o-y; positive surgeon reactions in all countries with the strongest engagement levels in LATAM and
Slide 22: US market remains a key priority and we have a clearly defined game plan
US market remains a key priority and we have a clearly defined game plan Sales network Reallocation of sales territories Increase distributor network Hiring additional sales representatives Investments into surgical sets New compensation plan introduced Infrastructure & Product development Actual an
Slide 23: The next product launches are already underway
The next product launches are already underway Minimally Invasive Patient Specific Wrist Keri Fuse (Patient-specific) Distal Radius Plate Osteotomy (CMX) (Intramedullary CMX Orthognathic arthrodesis device) Aug Sept Oct Nov Ankle Trauma system CMC I Fusion Plate Not all products will be available in
Slide 24: Successfully launch of the KeriMedical distribution
Successfully launch of the KeriMedical distribution Product Product feature / advantage Touch Fast recovery time compared to the gold standard (trapez- ectomy) and attractive outcomes in terms of mobility and strength KeriFlex Next generation version of silicone implants re-designed with team of int
Slide 25: Critical MDR milestones achieved - final steps to be completed in H2 & 2022
Critical MDR milestones achieved - final steps to be completed in H2 & 2022 Regulatory changes Framework / Concept Actions Implementation Certification ▪ EU MDR ▪ Allocation of ▪ Clinical and ▪ MDR becomes ▪ Grant of MDR “entered into personnel non-clinical effective (May) certification (scheduled f
Slide 26: Nadia Tarolli Schmidt & Ciro Roemer deepen the industry, tax & compliance expertise in our BOD
Nadia Tarolli Schmidt & Ciro Roemer deepen the industry, tax & compliance expertise in our BOD ▪ Ciro Roemer and Nadia Tarolli Schmidt proposed for election at AGM 2022 ▪ Roland Hess (since 2017) and Dr. Jürg Greuter (since 1997) will retire from the Board by this date Ciro Roemer Nadia Tarolli Schm
Slide 27: Outlook 2021
Outlook 2021 Christoph Brönnimann, CEO ® Medartis All rights reserved │ 27
Slide 28: Full-year guidance 2021 adjusted
Full-year guidance 2021 adjusted (barring any unforeseen circumstances, especially due to the Covid-19 pandemic) ▪ Based on the strong performance in H1 and despite a more challenging baseline in H2, we expect full-year sales growth (CER) of at least 20%. ▪ Outlook assumes further improvement of Cor
Slide 29: ® Medartis All rights reserved │ 29
® Medartis All rights reserved │ 29
Slide 30: Upcoming investor events
Upcoming investor events 2021 19 August Virtual International Investor Roadshow 16 September UBS Best of Switzerland Conference 4 November ZKB Switzerland Conference 18 November Credit Suisse Mid Cap Conference 2022 08 March 2021 Full-year results presentation 06 April Annual General Meeting 2022 In
Slide 31: Fabian Hildbrand appointed Head of Corporate Communications
Fabian Hildbrand appointed Head of Corporate Communications ▪ Experienced communications professional with marketing, PR, investor- and media relations background in Life Science (Straumann, Clariant, Synthes) and B2C industry ▪ He holds a master degree in economics and has completed the CIIA Progra
Slide 32: 4-year development of Medartis's growth rates
4-year development of Medartis’s growth rates Reported net sales (in CHF million) Growth vs. PY (in %) Growth 2021 vs. PY (@ CER) H1 2018 H1 2019 H1 2020 H1 2021 2019/2018 2020/2019 2021/2020 2021/18 2021/2019 2021/2020 EMEA 34.0 34.7 31.9 39.6 2.1% -8.0% 24.1% 22.4% 16.9% 22.3% US 9.3 10.7 9.3 12.8