STADA Arzneimittel — H1 2016 Earnings Presentation
37 slides from STADA Arzneimittel's earnings presentation, August 2016
Slide 1: Investor Update August 2016
eo STADA ee Investor Update August 2016
Slide 2: General Information
General Information By making use of this document the reader acknowledges and agrees to the following: We accept no liability arising from the use of this document. STADA Arzneimittel AG, Bad Vilbel (hereinafter “STADA”), has made every effort to make sure that this document contains correct and up
Slide 3: Forward-Looking Statements
Forward-Looking Statements This STADA Arzneimittel AG (hereinafter "STADA") presentation contains certain statements regarding future events that are based on the current expectations, estimates and forecasts on the part of the company management of STADA as well as other currently available informa
Slide 4: STADA at a Glance
STADA at a Glance STADA is present in more than Sales (in €m) Sales Split by Business (2015) 30 30 countries CAGR ’13-’15 Commercial Business/Other +2.7% 2% 2% 49% adj. EBITDA contribution 49% from Branded Products in Generics 2,004 2,062 2,115 2015 Branded 40% 58% 58% Products 40% 74% 74% Branded P
Slide 5: Moving Forward
Moving Forward STADA Corporate Presentation Investor Relations · August 2016 Page 5
Slide 6: Ambitious Mid-Term Guidance 2019
Ambitious Mid-Term Guidance 2019 Sales (adjusted)1 €2,600m CAGR 2015 - 2019: 5% EBITDA (adjusted) 2 €510m CAGR 2015 – 2019: 7% Net Income (adjusted) 2 €250m CAGR 2015 - 2019: 11% Assumptions • Constant exchange rates • Organic • Stable tax environment and current interest levels in STADA‘s markets •
Slide 7: STADA's Program to Improve Performance
STADA’s Program to Improve Performance Linked initiatives Committed Targets 2019 Overhaul Organization • Strong Gx and Branded Products Business Units Untapped • Change incentive model Growth Drive Organic Growth Sales Potential • Funds for Branded Products internationalization • Focused set-up for
Slide 8: STADA Today
STADA Today STADA Corporate Presentation Investor Relations · August 2016 Page 8
Slide 9: STADA – Clear Strategy for Continuous Growth
STADA – Clear Strategy for Continuous Growth • Long-term growth • High-growth differentiated products and selected opportunities specialty areas (e.g. Apo-go, Biosimilars, Aesthetics) Growth Options • Innovative sales and marketing concepts Branded • Sales growth above • Strong platforms in UK, Russ
Slide 10: Generics is our Bread-and-Butter Business Poised for Growth
Generics is our “Bread-and-Butter“ Business Poised for Growth Expected Generics Market Growth in Selected Ageing Population Countries 2015 2030 CAGR 2015-2020 (Based on IMS Before Discounts) 65+ 65+ (8%) (12%) World 7.9% 0 to 14 0 to 14 40-64 (26%) 40-64 (24%) (27%) (28%) Germany 4.8% 15 to 39 15 to
Slide 11: Our International Generics Business is Positioned in Highly Attractive Markets
Our International Generics Business is Positioned in Highly Attractive Markets Generics Penetration Sales by Region Market Position Industry Growth3 (Based on 2015 Volumes) (Based on IMS Before Discounts) €1,218m • Leading market #3 +5% 76% positions in key Germany Western and Eastern (25%)¹ Europea
Slide 12: STADA with Excellent Cost Basis
STADA with Excellent Cost Basis Geographic Footprint of Key Production Facilities Active Production Portfolio Management Germany # Facilities: 2 75% of production volume manufactured in 75% Production share: 13% low-cost countries (vs. 66% in 2009) 50% increase in in-house production volumes 50% sin
Slide 13: We Have Stabilized our Generics Business at a High Profitability Level
We Have Stabilized our Generics Business at a High Profitability Level Despite Headwinds Historical Sales Performance (in €m) Comments Adjusted1 CAGR: +1% • Volume development compensates Reported for price declines CAGR: +0% 1,213 1,228 1,218 1,218 • Currency effects negatively impacted growth in C
Slide 14: Branded Products Segment Delivers Profitable Growth with a Long Cash Cycle
Branded Products Segment Delivers Profitable Growth with a Long Cash Cycle Key Demand and Supply Drivers OTC Market Growth Forecasts CAGR 2015-2020 (Based on IMS) Ageing Population Urbanization World 5.2% Health Awareness Increasing Self- Russia 9.9% medication/Self-pay Regulatory Support Internet a
Slide 15: Strong Branded Products Platform as the Basis for Accelerated Internationalization
Strong Branded Products Platform as the Basis for Accelerated Internationalization Strong Platforms in the UK, Russia and Germany Internationalization of Leading Brands FY15 Sales/ Full Local Leading Local Country Growth1 Platform Brands • €212m (+14% vs. 2014) Apo-go (Parkinson’s) Hedrin (Head Li
Slide 16: Our Branded Products Business is Diversified with Leadership Positions
Our Branded Products Business is Diversified with Leadership Positions in the Markets Branded Products Sales by Brand Top 30 Branded Products by Market Position Sales in 2015: €854m Sales in 20152: €540m Apo-go (7%) Other Aqualor (5%) Position / No Grippostad (5%) Market Data Available #1 Position S
Slide 17: Our Leading Brands Target the Most Attractive Indications
Our Leading Brands Target the Most Attractive Indications Vitamins, Minerals & Skin Treatments/ Cough and Cold Nutritional Pain Others Cosmetics Supplements Selected Products Aqualor® Vitaprost® Levomecol® Sun Muscular & #1 Cough & Cold #1 #1 Vitamin D3 #1 #1 Parkinson’s Protection1 Joint Pain Selec
Slide 18: Buy-and-Build Case Study: Acquisition of Thornton & Ross
Buy-and-Build Case Study: Acquisition of Thornton & Ross (T&R) T&R at a Glance Strong Organic Growth Transaction Details Key Highlights (in €m) Aug-13: Acqui- sition by STADA • Acquired in Aug-2013 • #5 OTC Player in UK 188 107 54 Acquired/ • Purchase price: € 226m1 • Strong OTC franchise Transferre
Slide 19: We Have Significantly Expanded our Branded Products Business
We Have Significantly Expanded our Branded Products Business over the Last Few Years Historical Sales Performance (in €m) Comments Adjusted1 CAGR: +9% • Significant sales increase driven by Reported strong organic growth of approx. CAGR: +13% 9% p.a. in 2012-2015 801 854 596 704 • In addition target
Slide 20: Focus on Growth Options
Focus on Growth Options Future Innovative Selected Specialty Areas Concepts Product innovations in attractive niche markets Biosimilars Aesthetics Growth (Risk-averse strategy of (Expansion in aesthetic biosimilar in-licensing) dermatology) Options Value-added concepts Apo-go Daosin Socialites Innov
Slide 21: Growth Options: Broad Product Pipeline Biosimilars
Growth Options: Broad Product Pipeline Biosimilars Portfolio Expansion • Marketing and sales are STADA’s strengths, therefore in-licensing of biosimilars rather than own • Epoetin zeta (Silapo®) – since 2008 development (STADA/Bioceuticals) • Avoidance of high R&D costs – milestone payments • Filgra
Slide 22: Performance Update
Performance Update STADA Corporate Presentation Investor Relations · August 2016 Page 22
Slide 23: Outstanding Performance 6M 2016
Outstanding Performance 6M 2016 Group sales Operating Cash flow • € 1,035 million (+1%, adjusted1 +4%) • € 113.0 million (+180%) Adjusted2 EBITDA Reported net income Net debt € 202 million (+7%) up 53% • € 1,211 million Adjusted net income2 Net debt to adjusted1 EBITDA ratio • € 96 million (+13%) •
Slide 24: Generics: Good Margin development
Generics: Good Margin development Sales (in € million) Adj.1 EBITDA (in € million) Regional Sales Development Margin Asia/Pacific & MENA -2% 18% 21% € 41.4 million +11% (+15%) 615.3 603.8 Central Europe 6.8% € 296.3 million CIS/Eastern Europe -6% (-6%) +16% € 112.6 million 129.2 +7% (+23%) 111.4 18.
Slide 25: Branded Products: Sound Momentum
Branded Products: Sound Momentum Sales (in € million) Adj.1 EBITDA (in € million) Regional Sales Development Margin Asia/Pacific & MENA +5% € 28.0 million 28% 27% -2% (+1%) CIS/Eastern Europe 6.8% Central Europe -1% € 95.7 million € 182.5 million 389.3 407.3 +9% (+6%) 109.7 108.6 -21% (-5%) 23.5% 44
Slide 26: Improved Margins in 1-6/2016 Despite Negative Currency Effects
Improved Margins in 1-6/2016 Despite Negative Currency Effects 2011-2015 1-6/2015 vs. 1-6/2016 2.500 23 2.500,0 22 2.000 21.0 2.000,0 20.7 21 20.0 19.7 1.500 20 1.500,0 19.6 18.4 18.4 19 1.000 1.000,0 18 500 500,0 17 0 16 0,0 2011 2012 2013 2014 2015 1-6/2016 1-6/2015 Adjusted1 EBITDA margin in % Sa
Slide 27: Only Minor Adjustments
Only Minor Adjustments1 In € million 5.4 0.5 3.7 96.1 8.1 3.8 82.0 Reported net Delta additional Translation Value Measure- Various Adjusted income write-off expense of adjustments ment of extraordinary net income effects/other significant following derivative income measurement currencies of impair
Slide 28: Cash Flow at All-Time High
Cash Flow at All-Time High Cash Flow from Operating Activities (in € million) 1-6/2016 vs. 1-6/2015 311.7 223.8 113.0 212.7 203.7 169.0 40.4 2011 2012 2013 2014 2015 1-6/2016 1-6/2015 • Strong operating profit in 1-6/2016 • Reduced interest costs • Substantially improved tax rate • Optimized net wor
Slide 29: Financing Structure
Financing Structure Remaining terms of financial liabilities due to banks as of June 30, 2016 in € million Corporate bond Credit Promissory note loans 350.0 300.0 37.6 295.0 288.5 121.5 57.3 44.0 21.5 20.0 61.5 2016 2017 2018 2019 2020 2021 > 2021 • Net debt to adjusted1 EBITDA ratio: 3.02) (1-6/201
Slide 30: Dividend Increase of 6%
Dividend Increase of 6% Dividend Proposal per STADA Share in € 0.66 0.70 2015: € 43.6 million Dividend Payout (2014: € 40.0 million Dividend Policy • Appropriate share of reported net income to shareholders 2014 2015 • Attractive dividend yield • Distribution ratio above the average of comparable Pa
Slide 31: Appendix
Appendix STADA Corporate Presentation Investor Relations · August 2016 Page 31
Slide 32: P&L details 1-6/2016
P&L details 1-6/2016 in € million 1-6/2016 in 1-6/2016 in 1-6/2015 in 1-6/2015 in € million % of sales € million % of sales Gross profit 505.4 48.8 494.2 48.2 Selling expenses 232.8 22.5 235.7 23.0 General and administrative 90.7 8.8 88.4 8.6 expenses R&D expenses 31.0 3.0 33.6 3.3 Financial result
Slide 33: Disciplined capital allocation
Disciplined capital allocation Total expenses 2012-2015 € million 1-6/2016 vs. 1-6/2015 in € million 482.4 Company 317.3 274.0 acquisitions 333.3 190.0 55.1 Product 229.7 56.8 acquisitions 101.0 77.4 147.5 32.3 13.2 86.1 13.5 16.1 14.1 Other 25.1 investments 71.7 74.1 100.9 71.7 71.4 46.9 2012 2013
Slide 34: We Benefit from our Local Market Expertise to Compete in Heterogeneous Market Environments
We Benefit from our Local Market Expertise to Compete in Heterogeneous Market Environments Type of Decision Public Health Insurer Doctor Pharmacy Patient/Out-of-Pocket Maker Key • Tender scheme with • Based on INN prescription • Patients make purchasing Description price-driven tender award • Doctor
Slide 35: Looking Through FX Impacts
Looking Through FX Impacts Sales Growth (Reported vs. Currency-adjusted) Comments • Continued sales growth over the last 4 years 12% • Since 2013 sales growth negatively impacted by currency effects in the amount of 2-5% per year 10% • Negative impact of currency effects largely related to CIS/Easte
Slide 36: Cost Structure Optimizations
STADA: Continuous Focus on Cost Structure to Underpin Growth • Presence in India/China established in 2013/2014 Cost Structure Optimizations Sourcing COGS • Streamlining of group-wide API sourcing • Reduced number of manufacturing locations COGS/ Operations • Optimization of production in-housing/ou
Slide 37: Your contact
Your contact STADA Arzneimittel AG Investor Relations Vice President Investor Relations 61118 Bad Vilbel, Germany Dr. Markus Metzger Telephone: +49 (0) 6101 603-113 markus.metzger@stada.de Fax: +49 (0) 6101 603-506 E-mail: ir@stada.de www.stada.com STADA Corporate Presentation Investor Relations · A