JEFFERIES 2018 LONDON HEALTHCARE CONFERENCE. London November 14, 2018

Transcription

1 JEFFERIES 2018 LONDON HEALTHCARE CONFERENCE London November 14, 2018

2 SAFE HARBOR STATEMENT Forward-looking statements involve risks. This company presentation contains various statements concerning the future performance of STRATEC. These statements are based on both assumptions and estimates. Although we are convinced that these forward-looking statements are realistic, we can provide no guarantee of this. This is because our assumptions involve risks and uncertainties which could result in a substantial divergence between actual results and those expected. It is not planned to update these forward-looking statements. 2

3 AGENDA 1. OVERVIEW AND BUSINESS MODEL 2. THE IVD MARKET 3. FINANCIALS 4. FUTURE GROWTH 3

4 OVERVIEW AND BUSINESS MODEL 4

5 OVERVIEW AND BUSINESS MODEL STRATEC AT A GLANCE Market leader in automation solutions for the diagnostics industry and translational research ~ employees worldwide More than 13,000 systems with medium to high throughput installed globally (e.g. DiaSorin s LIAISON XL Hologic/Gen-Probe s PANTHER Siemens ADVIA Centaur biomérieux s new VIDAS) More than 25,000 low throughput systems installed globally Revenue million in 2017 (CAGR revenues since IPO in 1998: ~17%) Dividend payments raised over 14 consecutive years 5

6 OVERVIEW AND BUSINESS MODEL UNIQUE MARKET POSITION STRATEC IN THE IVD VALUE CHAIN Diagnostic Companies Blood Banks, Laboratories Patients STRATEC develops and manufactures fully automated analyzer systems and disposables focusing on the high growth segments in diagnostics Partners market systems together with reagents and consumables to laboratories, blood banks and hospitals worldwide Laboratories performing tests and offering service to doctors and patients using reagents from diagnostic companies Growth drivers: Aging population Developing healthcare systems world wide High volume of new tests 6

7 OVERVIEW AND BUSINESS MODEL BUSINESS MODEL STRATEC provides instrumentation, consumables, software and automation solutions OEM development and manufacturing More than 7,000 fully automated analyzer systems manufactured annually Wide range of intellectual property rights Extensive collaboration with partner during design phase STRATEC: Engineering / automation, software, QM Partner: System / reagent / market requirements Systems have long market lifecycles Leads to longstanding partnerships Expanding installed base of systems Product enhancement and extension drives value Consumable for Simoa HD-1 Simoa HD-1 for Quanterix 7

8 OVERVIEW AND BUSINESS MODEL SECURING RETURN ON INVESTMENT Long-term agreements with partners Milestone payments during development stage Operating sales during series production stage Continuous revenues from consumable sales Minimum volume commitment Firm purchase orders STRATEC an integral part of partners plans PANTHER FUSION for Hologic Reliable partnership Shortened development time Integration of analyzer system and reagents Agreed development budget & transfer price High commitment by both partners LIAISON XL for DiaSorin 8

9 THE IVD MARKET 9

10 THE IVD MARKET IVD MARKET SEGMENTS / IVD MARKET: ~ 60 BILLION USD IN 2016 Market by product type 80% Reagents / Chemistry Instrumentation Services Software 2% 4% 14% High Throughput CAGR : Low Throughput Number of systems Total instrumentation ~ 8.3 billion USD IVD Market: CAGR of 4-6% CAGRs submarkets: Molecular Diagnostic: ~ 8% Immunodiagnostics: ~ 4% Hematology: ~ 2-4% Source: Kalorama: The worldwide market for In Vitro Diagnostic Tests, 10 th Edition, Aug 2016 MarketsandMarkets: In Vitro Diagnostics/IVD Market - Forecast to 2021, Dec

11 THE IVD MARKET OUTSOURCED VS IN HOUSE INSTRUMENTATION MARKET Total instrumentation ~ 8.3 billion USD Outsourced 27 % Outsourced 36 % Outsourced 44 % Source: Own estimates based on historical market data and recent industry trends In House 73 % In House 64 % In House 56 % 11

12 THE IVD MARKET A SELECTION OF STRATEC CUSTOMERS GLOBAL TOP 20 IVD COMPANIES Revenues 2017 (USD billion) 1. Roche Diagnostics Abbott Diagnostics Danaher Siemens ThermoFisher Sysmex biomerieux Ortho Clinical Diagnostics BECTON DICKINSON BIO-RAD Hologic CH Werfen Grifols Agilent Diagnostica Stago Qiagen DiaSorin Perkin Elmer Fujirebio Immucor ~0.4 STRATEC customer AND OTHER GAME-CHANGING COMPANIES Not a STRATEC customer (acquired by Bio-Rad in January 2017) Source: IVD News / non-public companies estimated / non-reported sector revenues estimated 12

13 FINANCIALS 13

14 FINANCIALS KEY FIGURES - TRACK RECORD Sales in million CAGR ~12% EBIT in million CAGR ~10% , ,6 122, ,9 146,9 184,9 209, ,3 11,2 14,7 17,6 21,8 15,6 19,5 24,1 26,9 35, , Figures adjusted for comparison; adjusted for depreciation and amortization from purchase price allocation for acquisitions, related integration expenses and other extraordinary effects. Reconciliation to IFRS figures can be found in the respective annual report. 14

15 FINANCIALS KEY FIGURES - TRACK RECORD Net income in million CAGR ~11% 30,0 25,0 20,0 15,0 10,0 5,0 10,0 8,2 11,7 13,0 15,3 12,4 15,5 19,8 22,1 1 27,9 25,4 1 Dividend per share in CAGR ~14% 0,90 0,80 0,70 0,60 0,50 0,40 0,30 0,20 0,10 0,22 0,35 0,45 0,50 0,55 0,56 0,60 0,70 0,75 0,77 0,80 0, , Figures adjusted for comparison; adjusted for depreciation and amortization from purchase price allocation for acquisitions, related integration expenses and other extraordinary effects. Reconciliation to IFRS figures can be found in the respective annual report. 15

16 FINANCIALS SALES BY OPERATING DIVISIONS In % of total sales 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 18% 15% 18% 26% 29% 56% 55% 33% 49% Continued growth in service parts & consumables sales - Growth driven by increased installed base, higher system complexity and acquisitions - At 33% of total sales in 2017 versus 26% in 2015 Systems Developement & services Service parts & consumables Others Annual sales by operating division as of Dec 31 16

17 FINANCIALS SUMMARY FIRST NINE MONTHS OF 2018 Organic sales decline of 4.8% to million; nominal: -9.9% (9M 2017: million): - Negative effects from first time adoption of IFRS 15 and foreign exchange rates - Reduced systems sales, weaker Diatron business and temporary slowdown in the demand for service parts & consumables Assumption of significant upturn in growth momentum in Q and 2019 as a whole confirmed by latest developments Adjusted EBIT margin down by 370 bps yoy to 12.7% due to missing economies of scale and increased expenses related to strong project pipeline Further contract wins and several promising negotiations in advanced stage Identified annual pre-tax cost savings potential of 2.0 million to 3.0 million from 2021 onwards Number of employees up by 12.4% to 1,208 in the light of full project pipeline 17

18 FINANCIALS FINANCIALS 9M 2018 AT A GLANCE 1 bps = basis points 1 For comparison purposes, adjusted figures exclude amortization resulting from purchase price allocations in the context of acquisitions and the associated reorganization expenses, as well as other non-recurring effects. 2 In accordance with IFRS 9 and IFRS Not retrospectively restated to reflect IFRS 9 and IFRS 15 (modified retrospective approach). Retrospectively restated to reflect the classification of the nucleic acid preparation business as a discontinued operation in accordance with IFRS 5 and correction in accordance with IAS Results from continuing operations. 18

19 FINANCIALS ADJUSTMENTS 9M 2018 EBIT Consolidated net income 19

20 FINANCIALS SALES In million , ,6 126, ,3 107, , M/13 9M/14 9M/15 9M/16 9M/17 9M/18 9M 2018 sales decline: Negative effects from foreign exchange rates (-2.2 ppts) and first-time adoption of IFRS 15 (-2.9 ppts) organic sales decline of 4.8% Lower systems and service parts & consumables sales as well as weaker Diatron business Current customer forecasts imply significant recovery for Q and beyond ppts = Percentage points As of September 30 20

21 FINANCIALS ADJUSTED EBIT AND EBIT MARGIN EBIT in million EBIT margin in % ,4 17,7 19,2 18,4 24,5 17,0 9M/13 9M/14 9M/15 9M/16 9M/17 9M18 20% 18% 16% 14% 12% 10% 8% 6% 4% 9M 2018 adjusted EBIT margin at 12.7% Adjusted EBIT down 30.5% yoy to 17.0 million - Negative effect of 0.9 million due to first-time adoption of IFRS 15 Margin decline of 370 bps yoy - Negative scale effects - Increased expenses related to strong project pipeline 9M EBIT EBIT margin As of September 30 21

22 FINANCIALS CASH FLOW AND NET DEBT IFRS ( million) Cash flow operating activities Cash flow investment activities Cash flow financing activities 9M M 2017 yoy % % % Free cash flow % IFRS ( million) 9M 2018 FY 2017 Change 9M 2018 operating cash flow down by 40.3% yoy due to lower earnings levels and higher inventories Higher capex spending due to significant capacity expansion in Birkenfeld partly offset by disposal of financial assets Cash and cash equivalents at end of period % Net debt % 22

23 FINANCIALS EARNINGS IMPROVEMENT INITIATIVE Operational Efficiency Increase volume of insourced subassemblies Streamlining geographical R&D and production footprint Implementation of group wide ERP-system Portfolio Optimizations Disposal of nucleic acid sample preparation business (sales of 2.5 million and EBIT-loss of 0.9 million in 2017) Selective discontinuation of some smaller/end-of-life cycle and less profitable product lines Focused Allocation of Development Resources Optimizing R&D opportunity costs Optimizing risk reward profile of development pipeline Expected annual pre-tax cost savings of 2.0 million to 3.0 million from ) onwards 1) versus 2018 cost base 23

24 FUTURE GROWTH 24

25 FUTURE GROWTH FINANCIAL GUIDANCE Outlook for 2018 Sales expected to decline organically in the low- to mid-single digit percentage range Adjusted EBIT margin of around 11% to 13% First indication for 2019 Significantly positive organic sales growth expected in Numerous upcoming product launches and ongoing ramp-up phases - Partial postponement of sales originally expected for 2018 Adjusted EBIT margin to be significantly higher than the level of Positive scale effects - First positive impact from already defined earnings improvement measures 25

26 FUTURE GROWTH FOCUS IN 2018 AND BEYOND Reaccelerate top-line growth from Q onwards and reduce earnings volatility across business units Further realize synergies through development activities across STRATEC businesses Leverage expanded platform offering Achieve milestones and market launches within foreseen timeframe - Expected launches within the next couple of months among others include instruments for DiaSorin, Becton Dickinson, Quotient and the KleeYa Analyzer platform Drive results from defined earnings improvement initiative Implementation of a group-wide ERP system to further drive process efficiency Expand development capacities including significant extension of buildings in Birkenfeld 26

27 APPENDIX 27

28 APPENDIX KEY FIGURES AT A GLANCE IFRS ( million) Sales Adjusted EBIT Adjusted EBIT margin (%) Adjusted Consolidated net income Adjusted Earnings per share ( ) Dividend per share ( ) No. of employees ,086 Total assets Equity ratio (%) Free cash flow Figures adjusted for comparison; adjusted for depreciation and amortization from purchase price allocation for acquisitions, related integration expenses and other extraordinary effects. Reconciliation to IFRS figures can be found in the respective annual report. 28

29 APPENDIX SHAREHOLDER STRUCTURE (as of: May 2018) 41.2% 0.1% 37.0% Fixed and family ownership (incl. investment companies) Treasury shares Institutional investors Retail investors incl. not identified institutional investors 21.7% SHARE IPO Aug Number of shares 11,962,495 Share price (11/07/2018) Market capitalization 708 million Institutional investors > 3%: OppenheimerFunds Columbia Threadneedle Investments Allianz BNP Paribas Investment Partners NN Group 29

30 CONTACT STRATEC Biomedical AG Gewerbestr Birkenfeld Germany THANK YOU FOR YOUR ATTENTION CONTACT Marcus Wolfinger CEO Jan Keppeler Head of Investor Relations & Corporate Communications Phone Fax