Mindray Medical International Limited Corporate Presentation

Transcription

1 Mindray Medical International Limited Corporate Presentation May 2012

2 Disclaimer This material contains "forward looking statements" within the meaning of the safe harbor provisions of the U. S. Private Securities Litigation Reform Act of Statements contained herein and in our first quarter 2012 earnings press release that are not historical facts, including, without limitation, statements about Mindray's anticipated net revenues, non GAAP net income and capital expenditure for 2012, the potential tax benefits that we may receive in 2012 for the calendar year 2011, our assumption of a corporate income tax rate of 15% applicable to the Shenzhen subsidiary, our expectation that the results of the first quarter 2012 will support us to execute our plans for the reminder of the year, our expectation to continue to invest in building a stronger global brand of Mindray as well as establishing a more systematic R&D approach and to continue to actively seek opportunities to further increase our market penetration worldwide, our anticipation that the overall growth prospects of our key markets remain positive for the rest of 2012, that we expect China and emerging markets to lead growth for the organization based on our strong competitive position and our ability to grasp opportunities arising from the favorable private and public healthcare spending environment, the economic uncertainty in Europe and the political instability and other policy movements in certain regions in the emerging markets and our remaining cautious on those regions, our expectation to continue to invest in R&D andimprove our overall operational efficiency to achieve long term sustainable growth, our confidence in Mindray's global position, our expectation to continue to adapt and formulate the best strategies in the markets that we operate in, our anticipation that the Medical Product Innovation (MPI) project will build a more systematic R&D approach, which will further improve efficiency and streamline the process between different R&D centers worldwide, our expectation that the acquisition of a controlling stake of Hangzhou Optcla Medical Instrument Co., Ltd. will strengthen our capabilities to provide operating room total solutions and help generate more consumable revenues, our expectation to continue to execute the key account team strategy, our expectation to invest and expand the direct servicing platform in order to build relationships with hospital clients and foster customer loyalty l in the long run, our expectation to monitor the hospital capex situation i closely l and invest opportunistically i to gain shares in Western Europe, our company priorities for 2012, and new products pipeline in 2012, are forward looking statements. Forward looking statements represent only the company's beliefs and predictions regarding future events, many of which, by their nature, are inherently uncertain and outside of the company's control. Our actual results and financial condition and other circumstances may differ materially from the anticipated results and financial condition indicated in these forward looking statements due to a variety of risk, uncertainties and factors, including, without limitation, the expected growth of the medical device market in China and internationally; relevant government policies and regulations relating to the medical device industry; market acceptance of our products; our expectations regarding demand for our products; our ability to expand our production, our sales and distribution network and other aspects of our operations; our ability to stay abreast of market trends and technological advances; our ability to effectively protect our intellectual property rights and not infringe on the intellectual property rights of others; competition in the medical device industry in China and internationally; and general economic and business conditions in the countries in which we operate. For a discussion of other important factors that could adversely affect our business, financial condition, results of operations and prospects, p see "Risk Factors" beginning gon pg page 5 of our annual report on Form 20 F which was filed with the Securities and Exchange Commission on April 30, Our results of operations for the first quarter of 2012 are not necessarily indicative of our operating results for any future periods. The financial information contained in this release and presentation should be read in conjunction with the consolidated financial statements and notes thereto included in our public filings with the Securities and Exchange Commission. Any projections in this release and presentation are based on limited information currently available to us, which is subject to change. Although such projections and the factors influencing them will likely change, we will not necessarily update the information. Such information speaks only as of the date of this release and presentation. Mindray disclaims any intention or obligation to update or revise any forward looking statements, whether as a result of new information, future events or otherwise, exceptasrequiredbylaw law. 1

3 Who We Are Mindray is a leading developer, manufacturer and marketer of medical devices worldwide, creating value and driving growth through: Meeting the needs of hospitals and health systems in various geographies around the world Constant innovation driven by a vertically integrated business model and a world class R&D operation A global player, with established leadership position in the fast growing China market 2

4 Our Vision We will make better healthcare solutions more accessible to humanity. Our Mission Improve healthcare by optimizing and sharing medical technologies with the world. 3

5 A Global Player in Medical Technologies 2003 Total Revenues 2011 Total Revenues Emerging Markets 12% Developed Markets 8% Others 5% US$ 59mm Emerging g Markets 33% US$ 881mm 704mm China 43% Developed China Markets 75% 24% 4

6 Expanding Product Offerings Patient Monitoring & Life Support Products Launch Time Launch Time In Vitro Diagnostic Products Launch Time Medical Imaging Systems Immunoassay & reagent: 10.5B 2011 Ventilator: 2M 2011 Microbiology Analysis: 2.25B 2011 Infusion Pump & Syringe Pump: 1B 2011 Urine Sediment Analysis: 1B 2010 Magnetic Resonance Imaging : 3B 2009 Defibrillator & Surgical Beds and Lights:1.5B Part Hematology Analyzer & reagents 1.1B1B 2008 Digital Radiography: 11B 1.1B 2006 Anesthesia Machine: 0.8B 2001 Biochemistry Analyzer & reagents: 5.7B 2006 Color Ultrasound: 3.3B 1992 Patient Monitoring Devices: 2.7B Part Hematology Analyzer & reagents: 1.5B 2000 B/W Ultrasound: 1.2B Addressable Market Size (us$) Addressable Market Size (us$) Addressable Market Size (us$) 50+ models currently Total addressable market size worldwide : ~ 6B 25+ models currently 45+ hematology reagents and 80+ biochemistry reagents Total addressable market size worldwide: ~22.1B 25+ models currently Total addressable market size worldwide: > 8.6B 5

7 Investment Highlights g A world class organization rooted in the world s fastest growing market China s first domestic brand in three product areas, today backed by international research centers in U.S. andeurope China s most comprehensive sales and service infrastructure, covering all major cities from local sales offices with distributors covering vast rural and remote areas High growth track record in emerging markets A high quality, value brand appealing to value seeking customers Highest sales and marketing investment trate within the group Long term focus on growth, profitability and cash generation US$ mm Revenue Net income* Cash and cash equivalents and short term/restricted investments * non-gaap figures which exclude share-based compensation expense and acquired intangible assets amortization expense, in-progress research and development expenses, realignment costs - post acquisition, as well as income from early termination of contract, all net of related tax impact. 6

8 1Q12 Highlights 7 Net revenues were $219 million, an increase of 21.1% year over year China revenues grew 26.8%, primarily due to our strong performance in the mid end market segment International sales increased 17.3%. Emerging markets were the key growth drivers with 23.2% sales growth Excluding l tax benefits, non GAAP net income increased d16.5% to $40.3 million Net operating cash inflow strengthened significantly to $60.1 million with over 80% year over year growth Initiated the Medical Product Innovation (MPI) project to build a more systematic R&D approach, which will further improve efficiency and streamline the process between different R&D centers worldwide Acquired a controlling stake of Hangzhou Optcla Medical Instrument Co., Ltd. to strengthen our capabilities to provide operating room total solutions and help generate more consumable revenues

9 1Q12 Domestic Market Highlights 1Q12China sales continued its strong growth, up % year over year The key account team strategy worked well and we expect to continue to execute Continued favorable private and government healthcare spending resulted in infrastructure upgrade and device purchases in county level hospitals, where we have strong presence In the long run, we will invest and expand the direct servicing platform in order to build relationships with hospital clients and foster customer loyalty l 8

10 1Q12 Emerging Markets Highlights Emerging i markets kt had hdsolid performance, achieving i 23.2% 2% year over year growth Thanks to the growing demand and opportunities in the public sector, CIS region delivered more than doubled year over year growth Africa and the Middle East recorded strong double digit growth despite political unrests Our strategies of expanding the key account coverage in top emerging countries and enhancing our capabilities in public sector participation continued to pay off 9

11 1Q12 Developed Markets Highlights Developed markets combined had high single digit growth year over year y North America achieved seven consecutive quarters of double digit increases We had been selected by HealthTrust Purchasing Group as a provider of anesthesia equipment. The agreement is not only a strong endorsement of our products, but also confirms Mindray as a strong player in the US U.S. anesthesia market Western Europe recorded mid single digit growth. We will monitor the hospital capex situation closely and invest opportunistically to gain shares 10

12 Financials 1Q12Results Highlights USD (in millions) except EPS, A/R, A/P, Inventory days 1Q12 1Q11 4Q11 YoY Net Revenues % Operating Income 36.7 Non GAAP OI % 7.9% EBITDA % Net Income % Non GAAP NI 1 Non GAAP NI 1,2 (excluding tax benefits) % 16.5% Diluted EPS 0.31 Non GAAP Diluted EPS % 5.2% Accounts Receivable Days Inventory Days Accounts Payable Days Note: 1. Non GAAP figures excludes share based compensation expense, acquired intangible assets amortization expense, realignment costs post acquisition, as well as income from early termination of contract, all net of related tax impact. 2. Mindray recognized $7.6 million tax benefits in the first quarter of 2011 for the calendar year 2010 in relation to the National Key Software Enterprise status. Mindray has applied for such status for the calendar year 2011, which is being reviewed by the relevant government authorities. 11

13 Patient Monitoring and Life Support Products USD (in millions) 1Q12 1Q11 4Q11 YoY% $ 95.7 $78.1 $ % The patient monitoring and life support segment contributed 43.7% to total net revenues in 1Q12 Mid to highend patient monitors,defibrillators, anesthesia machines,surgical surgical equipments, led the overall growth to this segment ICU/OR IT Solution Anesthesia Machine 12

14 In Vitro Diagnostic Products USD (in millions) 1Q12 1Q11 4Q11 YoY% $ $46.3 $ % The in vitro diagnostics segment contributed 25.8% to total net revenues in 1Q12 Reagent business maintained its robust growth and made up 31.5% of total segment sales Reagents, 5 part hematology analyzer contributed to the overall IVD sales growth New Products in 2011 Hematology Analyzer BS 480 Biochemistry Analyzer Urine Sediment Analyzer 13

15 Medical Imaging Systems USD (in millions) 1Q12 1Q11 4Q11 YoY% $52.8 $47.6 $ % The medical imaging systems segment contributed 24.1% to total net revenues in 1Q12 Black and white ultrasound products were the key growth contributors, contributed by our new launches in the past two years Hand carried Color Ultrasound Cart Based Color Ultrasound Digital Radiography 14

16 Company Priorities for 2012 To capture growth opportunities in the domestic market, Mindrayplans to: Continue to optimize our sales, marketing and service platforms Strengthen S h our position ii in the areas where private and public healthcare h spending take place To enhance our presence in emerging markets, Mindray intends to: Continue to expand our key account coverage in the top emerging countries Enhance our capabilities in public sector participation To increase our market share in developed markets, Mindray intends to: Enhance brand awareness and focus on introducing new products Further build up direct sales channels and service capabilities Focus R&D investment in technology and product development, as well as improving efficiency Launch 7 to 10 new products and broaden product offerings across different market segments Speed up the integration of newly acquired companies and actively seek further M&A opportunities 15

17 2012 New Products Pipeline Patient Monitoring & Life Support Products In Vitro Diagnostic Products Medical Imaging Systems Hematology Analyzer Hand carried Color Ultrasound ICU/OR IT Solution BS 480 Biochemistry Analyzer Cart Based Color Ultrasound Anesthesia Machine Urine Sediment Analyzer Digital Radiography 16

18 2012 Guidance Net revenue Non GAAP Net income Capital expenditure 13% YoY 18% YoY 13% YoY ~$90 million Note: 1. Forecast financials as publicly provided on May 7, This guidance excludes the tax benefits related to the key software enterprise status ($7.6 million recognized in the first quarter of 2011 for the calendar year 2010 and the potential tax benefit that we may receive in 2012 for the calendar year 2011) and assumes a corporate income tax rate of 15% applicable to the Shenzhen subsidiary. 3. Non GAAP figure excludes share based compensation expense, acquired intangible assets amortization expense, realignment costs post acquisition, as well as income from early termination of contract, all net of related tax impact. 17

19 18 Appendix

20 Growth Catalysts in China Macro Environment Total national spending on healthcare (2000 to 2011) Government spending on healthcare (2000 to 2011) RMB bn RMB bn % CAGR ( ) % CAGR ( ) E 2011E E Source: CEIC; Deutsche Bank Research; MOH; CICC 19 19

21 Market Presence in China Patient Monitoring Devices & Anesthesia Machine Mindray 27.9% Biochemistry Analyzers Mindray 16.2% Others 72.1% Others 83.8% Hematology Analyzers Mindray 20.4% Ultrasound Systems Mindray 10.9% Others 79.6% Others 89.1% Source: Frost & Sullivan research, market data as of