Medartis Holding AG · SIX:MED
Medartis — FY2019 Earnings Presentation
33 slides from Medartis's earnings presentation, 2020
Slide 1: 2019 Full-Year Results
2019 | Full-Year Results Presentation for investors, analysts and the media Salome Lang | Basel athlete of the year 2017 and Medartis Trainee
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: 2019 Highlights, Financial Review, Focus & Priorities, Summary & Outlook
2019 Highlights Christoph Brönnimann, Chief Executive Officer 2019 Financial Review Dominique Leutwyler, Chief Financial Officer Focus & Priorities Christoph Brönnimann Summary & Outlook Christoph Brönnimann Q&A
Slide 4: Precision in Fixation
Precision in Fixation Medartis: Specializes in technical high-precision implant systems for surgical fixation of bone fractures and osteotomies Founded: 1997 MODUS® Headquarters: Basel, Switzerland APTUS® Shoulder Subsidiaries: Germany, Austria, APTUS® France, UK, Poland, USA, Elbow Mexico, Brazil,
Slide 5: Medartis continued to execute its strategy in 2019
Medartis continued to execute its strategy in 2019 ▪ Continued growth path above market levels and made further investments in growth ▪ Continued to build markets − US business with growth above market − Developed and launched wrist spanning plate for US market –fully focused on regional needs − Fir
Slide 6: Medartis achieved 2019 results in line with guidance
Medartis achieved 2019 results in line with guidance Sales EBITDA Employees CHFm 130.1 CHFm 20.3 609 +7% in CHF 16% EBITDA margin reported +9% +10% in local currencies 15% EBITDA margin adjusted(1) 48 new jobs created Guidance: Guidance: ☑ Sales growth of 8-10% in local currencies ☑ EBITDA margin of
Slide 7: 2019 Financial Review
medartis® PRECISION IN FIXATION 2019 | Financial Review
Slide 8: Key financial figures 2019
Key financial figures 2019 2018 2019 Change CHFm 2018 2019 adjusted(1) adjusted(2) adjusted Net sales 121.3 130.1 121.3 130.1 7% Gross profit 101.0 111.3 101.2 110.6 9% Opex (including depreciation and amortization) 95.0 103.9 91.9 103.6 13% Operating profit (EBIT) 6.1 7.4 9.3 7.0 -25% EBITDA 14.4 2
Slide 9: Regional review: Overall solid but decelerated growth compared to 2018
Regional review: Overall solid but decelerated growth compared to 2018 Sales breakdown / regions in CHFm Growth / regions 2019 vs. 2018 130,1 CHF Local currencies 121,4 14,4 LATAM 12% 16% 12,9 21,7 North America 12% 11% 19,3 23,7 APAC 4% 9% 22,8 66,4 70,3 EMEA 6% 9% 2018 2019 Overall 7% in CHF Overa
Slide 10: Regional review: EMEA
Regional review: EMEA 2019 sales CHF 70.3 million (+6% in CHF / +9% in local currencies) Highlights and observations ▪ Subsidiaries: − Overall good performance above market level − Dynamic growth in UK, France and Poland − Solid development in other subsidiaries ▪ Distributor markets: − Mixed perfor
Slide 11: Regional review: North America
Regional review: North America 2019 sales CHF 21.7 million (+12% in CHF / +11% in local currencies) Highlights and observations ▪ Strong growth above market level, but not yet in management’s target area ▪ Dynamic growth in wrist ▪ New wrist spanning plate developed specifically for US market launch
Slide 12: Regional review: APAC
Regional review: APAC 2019 sales CHF 23.7 million (+4% in CHF / +9% in local currencies) Direct Distributor Highlights and observations ▪ Strong case growth in Australia, but impacted by country-wide 7% reduction of healthcare reimbursements (another 5% due in 2020) ▪ Japan: − New subsidiary for low
Slide 13: Regional review: LATAM
Regional review: LATAM 2019 sales CHF 14.4 million (+12% in CHF / +16% in local currencies) Highlights and observations ▪ Double-digit sales increase above organic growth in 2018, but below management’s expectations ▪ Subsidiaries: − Dynamic growth in Brazil despite challenging market environment −
Slide 14: Segment review: Continued growth above market levels in all segments
Segment review: Continued growth above market levels in all segments Sales breakdown / segments in CHFm Growth / segments 2019 vs. 2018 Market CAGR 2016-2022(1) 130,1 CHF Local currencies 121,4 19,2 CMF and Others 8% 10% 6% 17,8 18,3 Lower Extremities 12% 16% 7% 16,4 92,6 Upper Extremities 6% 9% 6%
Slide 15: Gross margin development
Gross margin development: Reflects innovation and growth in higher-priced markets Gross margin and COGS (adjusted) Main drivers 101.2 110.6 Gross profit in CHFm ▪ Growth in higher-priced markets ▪ Continued higher-priced product innovation 17.6% 15.0% COGS as % of sales ▪ Lean manufacturing and auto
Slide 16: Cost development
Cost development: Higher cost-income ratio reflects ongoing controlled investments in growth Operating expenses in CHFm (adjusted) Main drivers Research and development 76% 80% As % of sales +13% ▪ Investments in MDR readiness 103.6 91.9 15.4 Research and development ▪ Enhanced education efforts wit
Slide 17: EBITDA development
EBITDA development: Unchanged margin vs 2018 as growth strategy was further executed EBITDA in CHFm (adjusted) Main drivers 15% 15% As % of sales ▪ Double digit growth in local currencies +14% ▪ OPEX and investments reflecting growth strategy ▪ Positive effect of CHF 3.6 million due to first-time ap
Slide 18: Focus & Priorities
medartis® PRECISION IN FIXATION Focus & Priorities
Slide 19: We keep executing our strategy
We keep executing our strategy Attractive market Clear priorities Ambitious goals Growing market with new Enhance sales focus Top priority to build-up Accelerate clinical needs requiring addressing regional needs US business sales and margin growth innovation Well positioned to fill Accelerate innov
Slide 20: Medartis operates in a growing market with new clinical needs
Medartis operates in a growing market with new clinical needs Growing and ageing population, example US(1) Main drivers 421 m >65 ▪ Growing, ageing and more active population leading 18-64 to increase in trauma incidents 360 m 24% <18 320m − e.g. US >65 increase from 19% in 2005 to 31% in 21% 2015(2
Slide 21: Growing demand for innovation presents additional opportunities for Medartis
Growing demand for innovation presents additional opportunities for Medartis Decline in new product launches by leading competitors (1) Opportunities Competitor 1 Competitor 3 Competitor 5 ▪ Fill the prevailing innovation gap Competitor 2 Competitor 4 ▪ Provide surgeons around the world with solutio
Slide 22: Innovation track record fills the prevailing innovation gap
TriLock® HexaDrive® SpeedTip® With its innovation track record, Medartis is well positioned to fill the prevailing innovation gap 2001 2004 2005 2006 2008 2009 2010 2011 2012 2013 2014 2016 2018 2019 2020 ▪ 1st bi- ▪ 1st and only ▪ 1st compact ▪ 1st hole ▪ 1st self ▪ 1st specific ▪ 1st polyaxial ▪ 1
Slide 23: Enhance sales focus addressing regional needs
Enhance sales focus addressing regional needs Ongoing initiatives Ambition: significantly strengthened market position ▪ Better address regional market requirements by ▪ Transfer successful market development strategies to anchoring the EMEA, North America and other markets and product segments LATA
Slide 24: Accelerate build-up and expansion of US business
Accelerate build-up and expansion of US business Ongoing initiatives Ambition: significant growth until 2024 ▪ Recruitment of new leadership team ▪ Analysis of and focus on US specific needs X4 ▪ Expansion of sales force (direct and via distributors) ▪ Building of US-focused product development capa
Slide 25: Accelerate expansion of innovation pipeline and time to market
Accelerate expansion of innovation pipeline and time to market Innovation Focus Envisaged acceleration Proof of concept ▪ Medartis in-house ▪ Plates & screws, staples ▪ Launch of product extensions ▪ CCS screws developed in 5 months within 4-6 months (launch expected in June 2020) ▪ Launch of new sy
Slide 26: Envisaged acceleration of mid-term sales growth with continuous EBITDA margin increase
Envisaged acceleration of mid-term sales growth with continuous EBITDA margin increase Growth investments >15%2 ▪ Build-up US business ▪ New subsidiaries China & Japan ▪ Launch of portfolio extensions >2x market 10%2 ▪ Potential M&A +12.1% CAGR 130.1 82.3 Investment criteria EBITDA ▪ Focus on additi
Slide 27: Establish Medartis as a global extremities company
Establish Medartis as a global extremities company leading in technology and innovation Key launches 2020 Full launch Limited release Forearm fracture system June - Clavicula system - June CCS compression screw extension June - Mid-hindfoot correction system July Ongoing Distal ankle fracture system
Slide 28: Summary & Outlook
medartis® PRECISION IN FIXATION Summary & Outlook
Slide 29: Summary & Outlook
Summary & Outlook Summary 2020 outlook ▪ Continued to execute growth strategy with ▪ Full-year sales growth expected of 10% in local further investments to build business currencies, considering the mild winter with lower ▪ In 2019, achieved solid 10% sales growth in case numbers local currencies, a
Slide 30: Q&A
PRECISION IN FIXATION Q&A
Slide 31: Appendix
medartis® Appendix
Slide 32: Consolidated financial statement
Consolidated financial statement 2018 2019 Consolidated Consolidated CHF CHF Net Sales 121’324’703 130’143’937 Costs of goods sold -20’312’871 -18’877’007 Gross profit 101’011’832 111’266’930 Gross Profit Margin 83.3% 85.5% Selling and Distribution -60’294’262 -65’906’239 Administration -21’432’993
Slide 33: Consolidated balance sheet
Consolidated balance sheet (CHF) 31 December 2019 31 December 2018 (CHF) 31 December 2019 31 December 2018 Assets Liabilities and equity Current assets: Current liabilities: Cash & Cash equivalents 99’571’993 116’262’594 Accounts payable trade 10’735’393 6’631’406 Accounts receivable trade 26’385’41