Coloplast A/s Class B · OMXCOP:COLO_B
Coloplast A/s Class B — Non-Deal Roadshow (2015)
55 slides from Coloplast A/s Class B's roadshow presentation, 2015
Slide 1: Roadshow presentation – FY 2014/15
NEW! SenSura® Mio Convex Leading intimate healthcare Roadshow presentation – FY 2014/15
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: 2014/15 organic growth of 7% and 33% EBIT margin before special items
2014/15 organic growth of 7% and 33% EBIT margin before special items in a challenging year for Coloplast Highlights Performance Organic revenue growth of 7% (12% in Revenue (mDKK) DKK). Organic growth (%) Gross margin of 69% on par with last year. 9 EBIT margin before special items of 33% 25.
Slide 4: 2014/15 organic growth of 7% in line with guidance
2014/15 organic growth of 7% in line with guidance in a market growing approximately 5% FY 14/15 revenue by business area FY 14/15 revenue by geography Business Reported revenue Organic growth Geographic Reported revenue Organic growth area mDKK In percent area mDKK In percent Ostomy European 5% 5,5
Slide 5: Our Ostomy Care business grew 6% in 2014/15
Our Ostomy Care business grew 6% in 2014/15 driven by our SenSura® range and Brava® accessories Comments Performance Organic growth was 7% in Q4 and 6% for 2014/15. Satisfactory growth in China, US, Southern Europe and Nordic markets offset by negative growth rates in the Netherlands, Algeria an
Slide 6: 2014/15 Continence Care organic growth of 8%
2014/15 Continence Care organic growth of 8% despite challenges in key markets UK and US Comments Performance Q4 organic sales growth of 10%. 2014/15 organic revenue growth of 8%. Satisfactory growth in US, France and Saudi Arabia offset by negative growth in Algeria and challenges in UK homecar
Slide 7: Urology Care 2014/15 performance impacted by low growth for penile implants
Urology Care 2014/15 performance impacted by low growth for penile implants in US Comments Performance Q4 and FY organic growth of 5% Growth primarily driven by sale of Endourology products in France, Germany and Saudi Arabia US Titan® penile implants growth remains affected by decline in numb
Slide 8: Wound & Skin Care delivered a solid year with 9% organic growth
Wound & Skin Care delivered a solid year with 9% organic growth Comments Performance 2014/15 organic growth in WSC of 9% and 11% for Wound Care in isolation Growth driven by Biatain® sales, especially Biatain® Silicone in UK, Germany and France Positive momentum in China and Greece and large t
Slide 9: Strong Q4 with 34% EBIT margin before special items
Strong Q4 with 34% EBIT margin before special items Comments Performance EBIT before special items grew 9% to DKK 4,535m with a margin of 33% Gross margin of 69% on par with last year Driven by continued efficiency gains; offset by higher unit costs for new products and higher depreciations 1)
Slide 10: Free Cash Flow increased by 21%
Free Cash Flow increased by 21% driven by growth in EBITDA and sale of bonds Comments Performance Free cash flow was DKK 2,869m compared to DKK 2,372m for 2013/14 EBITDA DKK 447m higher (before special items1) NWC-to-sales of approx 24%, in line with last year Sale of bonds increased cash fl
Slide 11: Financial guidance for 2015/16 in line with long term ambition
Financial guidance for 2015/16 in line with long term ambition Guidance Guidance Long term 15/16 15/16 (DKK) ambition Sales growth 7-8% (organic) 8-9% 7-10% p.a. EBIT margin 33-34% (fixed) 33-34% +50-100 bps p.a. CAPEX (DKKm) ~700 ~4-5% of sales Tax rate ~23% - Page 11
Slide 12: Introduction to Coloplast
NEW! NEW! SenSura® Mio SenSura® Mio Convex Convex Leading intimate healthcare Introduction to Coloplast Page 12
Slide 13: 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 14: 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 15: 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 16: Coloplast has 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 17: 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 18: 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 19: 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 19
Slide 20: Key Value Driver #3: Efficiency improvements in production
20 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 *Average usage of raw material (RM) and semi finished goods (SFG) Sarlat COGS by
Slide 21: 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 22: Focus on 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 23: 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 16% Strong retention program and innovative D-t-C 8% 10% 7% activities 9% Increased focus on growing the business 04/0
Slide 24: Appendices
Appendices Page 24
Slide 25: 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% ~ 103 billion DKK (~ 15 billion USD) market cap @ ~470 DKK per share (incl. A 4% shares) 45% Two share classes: 29% 18m A shares carry 10 votes (family) 7% 202m B shares carry 1
Slide 26: 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 27: 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 27
Slide 28: Coloplast revenue development by business area
Coloplast revenue development by business area Ostomy Care Continence Care Urology Care Wound & Skin Care Revenue Reported growth Organic growth Page 28
Slide 29: Coloplast revenue development by geography and total
Coloplast revenue development by geography and total Europe Other developed Emerging Markets Coloplast total Revenue Reported growth Organic growth Page 29
Slide 30: Segment operating profit
Segment operating profit Chronic Care: Ostomy and Continence Care Wound & Skin Care Urology Care * Excludes shared/non-allocated costs Page 30
Slide 31: We aim to grow our Emerging Markets business by 25% per year
We aim to grow our Emerging Markets business by 25% per year 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
Slide 32: US Mesh litigation – Overview of current financial impact
US Mesh litigation – Overview of current financial impact TBD Summary Financial Impact FY A total of DKK 4.5bn has been provisioned and this is currently 14/15 13/14 considered sufficient EBIT 1,535 3,147 EBIT before special items 4,535 4,147 P&L 14/15 – DKK 3bn in special items. This reduces EB
Slide 33: Mesh litigation timeline
Mesh litigation timeline Nov. 13, 2014: July 23, 2012: Aug. 15, 2013: April 3, 2014: May 2, 2014: Sept. 5, 2014: Verdict vs BSC Verdict vs Bard June 2013: Verdict vs Bard Verdict vs Ethicon Coloplast provision Verdict vs Ethicon BSC MDL (FL): Sep 22, 2015: CA State Court: Verdict for Mentor Bard MDL
Slide 34: Healthcare reform landscape
Healthcare reform landscape Intensifying reform pressure France Still awaiting periodic review of OC and CC. Price cut Stable reform environment in WC implemented Oct` 2014. Germany Reimbursement level for CC under pressure. Holland Reimbursement level for OC and CC under pressure. Italy Tracking po
Slide 35: Coloplast Care is a retention program with more than 300,000 consumers enrolled
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 36: 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 37: 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 37
Slide 38: 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 39: 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 40: 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 41: 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 42: 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 43: 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 44: 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 45: 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 46: 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 47: 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 48: Corporate responsibility – external recognitions
Corporate responsibility – external recognitions Page 48
Slide 49: Income statement
Income statement DKKm FY 2013/14 FY 2014/15 Change Revenue 12,428 13,909 12% Gross profit 8,538 9,533 12% SG&A costs -4,017 -4,562 -14% R&D costs -390 -442 -13% Other operating income/expenses 16 6 -63% Operating profit (EBIT) before special items 4,147 4,535 9% Special items -1,000 -3,000 nm Operat
Slide 50: Balance sheet
Balance sheet DKKm 30 Sep 2014 30 Sep 2015 Change Balance, total 10,379 10,817 4% Assets Non-current assets 4,332 5,052 17% Current assets 6,047 5,765 -5% of which: Inventories 1,322 1,473 11% Receivables 2,717 2,820 4% Restricted cash 418 72 -83% Marketable securities, cash, and cash equivalents 1,
Slide 51: Cash flow
Cash flow DKKm FY 2013/14 FY 2014/15 Change EBITDA 3,573 2,020 -43% Change in working capital -264 393 nm Net interest payments -18 -266 nm Paid tax -1,090 -1,178 -8% Other 948 2,368 nm Cash flow from operations = 3,149 3,337 6% CAPEX -533 -617 -16% Securities -252 100 nm Other 8 49 nm Cash flow fro
Slide 52: 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 53: 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 54: 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 55: 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 55