Mindray Medical International Limited. November 2011

Transcription

1 Mindray Medical International Limited Corporate Presentation November 2011

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 third quarter 2011 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 2011, our assumption of a corporate income tax rate of 15% applicable to the Shenzhen subsidiary, our favorable hospital and government spending trends in areas where we have major presence, that we will continue to work hard to aggressively increase our market penetration worldwide, Mindray s long term growth prospects, our commitment to increasing value for our shareholders, that we continue to actively seek opportunities that could bring complementary technologies and/or products to our company, our confidence that Mindray is well positioned for future growth and expansion in the global market, the fast growing China market, our long term focus on growth, profitability and cash generation, 2011 new products pipeline for our patient monitoring and life support, in vitro diagnostics and medical imaging systems product lines, our company priorities for 2011, the investment highlights and proven product development capabilities for the year 2011 and onward, and the macro environment and growth catalysts in China, are forward looking statements. Forward looking statements represent only the company's beliefs and predictions regarding future events, manyofwhich 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. For a discussion of some of the important risks, uncertainties and factors that could adversely affect our business, financial condition, results of operations and prospects, see "Risk Factors" beginning on page 4 of our annual report on Form 20 F for the fiscal year ended December 31, The financial information contained in these materials should be read in conjunction with the consolidated financial statements and notes thereto included in our public filings with the Securities and Exchange Commission. Our past results of operations are not necessarily indicative of our operating results for any future periods. Any projections in this release are based only 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, except as required by 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 A Global Player in Medical Technologies Revenue Growth and Breakdown by Region 2003 Total TtlRevenues: US$ 59mm 2010 Total Revenues: US$ 704mm Emerging Market t12% Developed Market 8% Others 5% China 75% Emerging Market 32% Others 1% China 42% Developed Market 25% 3

5 Investment Highlights: g Proven Product Development Capabilities Patient Monitoring & Life Support Products In Vitro Diagnostic Products Medical Imaging Systems Addressable e Market Size (u us$) Other life support products Infusion Pump & Syringe Pump: 1B Defibrillator & Surgical Beds and Lights:1.5B Anesthesia Machines: 3 part 0.8B Patient Hematolog Monitoring Devices: y 2.7B Launch Time Addressable e Market Size (u us$) Urine Analysis: 1B Immunoassay & reagent: 10.5B 5 Part Hematology & reagent: 1.1B Biochemistry & reagent: 5.7B 3 Part Hematology & reagent: 1.5B Launch Time us$) Addressable e Market Size ( Magnetic Resonance Imaging : 3B Digital Radiography: 1.1B Color Ultrasound: 3.3B B/W Ultrasound: 1.2B Launch Time 40+ models currently Total addressable market size worldwide : ~ 6B 20+ models currently 35+ hematology reagents and 70+ biochemistry reagents Total addressable market size worldwide: ~19.8B 20+ models currently Total addressable market size worldwide: > 8.6B 4

6 Investment Highlights g 5 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. and Europe China s most comprehensive sales and service infrastructure, covering all major cities from local sales offices with distributors covering vast rural andremote areas High growth track record in international markets High growth track record in emerging markets A high quality, value brand appealing to value seeking customers Highest sales and marketing investment rate 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 ibl 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.

7 3Q11 Highlights 6 Net revenues were $218.4 million, an increase of 29.8% year over year Robust China sales growth of 35.4% year over year, y,primarily driven by regular sales Strong international sales of $124.9 million, a year over year increase of 25.9%. Emerging gmarkets continued to achieve significant growth Non GAAP net income increased 7.4% over the third quarter of 2010 to $42.5 million Generated $ million net operating cash during the quarter, an annual growth of 73% 7.3% Introduced the latest series of patient monitoring systems including the imec series, the new ipm series and the A3 anaesthesia machine. Launched the DP10, DP20 and DP30 black and white ultrasound systems Reagent revenues growth accelerated, contributing % 3% to the in vitro diagnosticbusiness this quarter On November 7, 2011, the Board of Directors approved a share repurchase program of up to $100 million Note: Non GAAP figures which 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.

8 Financials 3Q11Results Highlights USD (in millions) except EPS, A/R, A/P, Inventory days 3Q11 3Q10 2Q11 YoY Net Revenues % Operating Income Non GAAP OI % 3.5% EBITDA % Net Income Non GAAP NI % 7.4% Diluted EPS Non GAAP Diluted EPS % 5.9% Accounts Receivable Days Inventory Days Accounts Payable Days Note: Non GAAP figures which 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. 7

9 3Q11 Domestic Market Highlights 3Q11 Chinasales continued its strong growth and grew 35.4% year over year year, primarily driven by regular sales The h enhancement of our domestic sales team structure to achieve realtime and comprehensive monitoring of hospital demand Increased patient traffic, as well as hospital and government spending in county level hospitals 8

10 3Q11 Emerging Market Highlights Emerging markets hadsolid performance, achieving more than30% year over year Eastern Europe, the CIS region and Asia Ai Pacific delivered dli dmore than 30% year over year growth The Middle East and Africa exceeded our expectations and grew over 40% during the period, thanks to the big orders in Turkey and our continuous sales efforts in South Africa and Eastern Africa Increase localization efforts and investment in sales and marketing initiatives, further build a solid and reliable service platform 9

11 3Q11 Developed Market Highlights Developed markets demonstrateddoubledouble digit growth year over year, year, including both North America and Western Europe North thamerica delivered dli ddouble digit it growth five quarters in a row Western Europe did well as a result of our direct sales effort,, as well as the improved brand recognition of our product quality 10

12 Patient Monitoring and Life Support USD (in millions) 3Q11 3Q10 2Q11 YoY% $ 96.1 $ 72.6 $ % The patient monitoring and life support segment contributed 44.0% to total net revenues in 3Q11 Mid to low end patient monitors, surgical equipments, anesthesia machines anddefibrillators defibrillators achieved strong growthin international markets The V series achieved robust order trends and the A5 has received excellent feedback from the market New Products in 2011 New ipm Patient monitors imec Patient monitors BeneHeart D3 defibrillator A5/A3 anesthesia machine 11

13 In Vitro Diagnostics USD (in millions) 3Q11 3Q10 2Q11 YoY% $55.7 $43.1 $ % The in vitro diagnostics segment contributed 25.5% to total net revenues in 3Q11 Reagent business maintained its robust growth and accounted for 31.3% of total segment sales Reagents, 5 part hematology and biochemistry analyzers led growth of the segment New Products in 2011 BC 6800 Hematology analyzer Several Reagents 12

14 Medical Imaging Systems USD (in millions) 3Q11 3Q10 2Q11 YoY% $53.2 $42.7 $ % The medical imaging systems segment contributed 24.4% to total net revenues in 3Q11 Color ultrasound demonstrated robust growth The M7 and DC 7 color ultrasound systems performed well in the North America market New Products in 2011 DP 50 black and white ultrasound Color ultrasound DP10/20/30 black and white ultrasound 13

15 2011 New Products Pipeline Patient Monitoring In Vitro Diagnostic Products Medical Imaging Systems & Life Support Products New ipm Patient monitor New ipm Patient monitor Several reagents DP 50 black and white ultrasound imec Patient monitors BC 6800 Hematology analyzer Color ultrasound BeneHeart D3 defibrillator ill A5/A3 anesthesia machine DP10/20/30 black and white ultrasound 14

16 Company Priorities for 2011 To capture growth opportunities in our domestic market, Mindray plans to: Continue its domestic sales reinforcement program Capitalize on the government s focus on upgrading county level hospitals and increasing average healthcare insurance coverage To enhance our presence in international markets, Mindray intends to: Increase investment into our marketing and sales initiatives in key international markets Continue localization efforts of our on site operations Increase direct sales effort PrioritizeR&D investment to meet new productlaunch target Focus on organic product development as well as actively explore external opportunities for technologies and products Remain focused on overall operation s profitability and maintaining control of working capital 15

17 Financials 2011 Guidance 1 Net revenue >20% YoY Non GAAP Net income 2 >10% YoY Capital expenditure $70 $80 million 1 Forecast financials as publicly provided on November 7, This guidance excludes the tax benefits related to the key software enterprise status ($8.6 million and $7.6 million recognized in the first quarter of 2010 and 2011 respectively) and assumes a corporate income tax rate of 15% applicable to the Shenzhen subsidiary. Note: Non GAAP figures which 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. 16

18 Appendix 17

19 Mission and Vision MISSION Improve health care by optimizing and sharing medical technologies with the world Accessible VISION We will make better healthcare solutions more accessible to humanity 18

20 Growth Catalysts in China Macro Environment Total national spending on healthcare (2000 to 2010) Government spending on healthcare (2000 to 2011) RMB bn RMB bn % CAGR ( ) % CAGR ( ) E E 0 Source: Morgan Stanley Research; MOH 19

21 Market Presence in China Patient Monitoring Devices & Anesthesia Machine Biochemistry Analyzers Foreign brands 50% Mindray 31% Foreign brands 58% Mindray 18% Other Domestic brands 19% Other domestic brands 24% Hematology Analyzers Ultrasound Systems Foreign brands Foreign 44% Mindray brands Mindray 14% 77% 34% Other domestic brands 22% Source: Frost & Sullivan research, market data as of 2009 Other domestic brands 9% 20