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J.P. MORGAN EUROPEAN HEALTHCARE CONFERENCE 24 june 2013
Leading Intimate Healthcare Lars Einar Hansen, Senior Vice President
Page 1
J.P.Morgan European Healthcare Conference
24 June 2013
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 are based on Coloplast’s current
expectations, estimates and assumptions and based on the information available
to Coloplast at this time.
Heavy fluctuations in the exchange rates of important currencies, significant
changes in the healthcare sector or major changes in the world economy may
impact Coloplast's possibilities of achieving the long-term objectives set as well
as for fulfilling expectations and may affect the company’s financial outcomes.
Page 2
J.P.Morgan European Healthcare Conference
24 June 2013
Agenda
Page 3
• Introduction to Coloplast
• Accelerating our global growth
• Margin expansion potential
• Q&A
J.P.Morgan European Healthcare Conference
24 June 2013
Ostomy Care 42%
Continence Care 35%
Urology Care 9%
Wound & Skin Care
14%
European markets
67%
Other developed markets
21%
Emerging markets
12%
Coloplast is a leading medtech company
Page 4
Group revenue FY 2011/12 by segment Group revenue FY 2011/12 by geography
#1
#4
#1
#x Global position
Full Year 2011/12 sales: DKK11.0bn
J.P.Morgan European Healthcare Conference
24 June 2013
Specialising in intimate healthcare needs
Page 5
Ch
ron
ic C
are
N
on
-Ch
ron
ic C
are
Ostomy
Care
Continence
Care
Urology
Care
Wound
Care
People who have had their intestine redirected to an opening in the abdominal wall
People in need of bladder or bowel management
People with dysfunctional urinary and reproductive systems
People with difficult-to-heal wounds
Who are our typical users How do we help them?
SenSura® Mio Ostomy bag
SpeediCath® Compact male urinary catheter
Titan® Penile implant
Biatain® Silicone Foam wound dressing
J.P.Morgan European Healthcare Conference
24 June 2013
Stable intimate healthcare trends
Growing elderly population increases
customer base for Coloplast products
Expanding healthcare coverage for
populations in emerging markets increases
addressable market
Surgical and medical trends are towards
earlier detection and cure, eventually
reducing addressable market
Economic restraints push for
reimbursement reforms, introduction of
tenders, and lower treatment cost
Demographics
Emerging markets
Surgical and
medical trends
Healthcare reforms
Page 6
J.P.Morgan European Healthcare Conference
24 June 2013
Agenda
Page 7
• Introduction to Coloplast
• Accelerating our global growth
• Margin expansion potential
• Q&A
J.P.Morgan European Healthcare Conference
24 June 2013
Since 2008 we have had a strong focus on profitability which has driven significant value creation
Page 8
9%
5% 8%
16% 16% 18%
21%
10% 6%
10%
15%
23%
30%
38%
0%
5%
10%
15%
20%
25%
30%
35%
40%
2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12
FCF to sales ROIC after tax
879
749
994
1.3
95
1.9
95
2.5
81
3.2
55
8%
10% 7%
6% 7%
6% 6%
13%
9%
12%
16%
21%
25%
30%
0%
5%
10%
15%
20%
25%
30%
35%
2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 E2012/13
EBIT Organic growth
EBIT Margin EBIT Margin guidance
Organic growth guidance
31-32%
6-7%
J.P.Morgan European Healthcare Conference
24 June 2013
In March 2012 we updated our strategy with the aim of increasing revenue growth
Page 9
• Continued growth in the core developed markets in
Europe
• Increased growth in the developed markets
outside Europe
• Further expansion and growth in Emerging Markets
• Stabilization of the European Wound Care business
• Globalization of Urology Care
• A strong new product pipeline
• Continued cost discipline and operational
excellence in manufacturing
Value creation will come from increased growth
based on a strong new product pipeline
combined with continued cost discipline and
operational excellence in manufacturing
J.P.Morgan European Healthcare Conference
24 June 2013
In Europe we are stepping up to the challenge and leveraging our market leader position
Page 10
Key priority Our situation
of our net revenues 67%
40-50% market share*
* Chronic Care market share
Capture
profitable growth
based on high
market share
J.P.Morgan European Healthcare Conference
24 June 2013
Driven by a pipeline of new products with a clear commercial focus…
Page 11
J.P.Morgan European Healthcare Conference
24 June 2013
…and a new sales channel that gets us even closer to our customers
Page 12
Through Coloplast Care we…
Connect to end users and form
lifetime bond
Advise with the right information
at the right time
Respond with frequent phone
calls, emotional support and
monthly newsletters
Enable our end users by
making their lives easier
Market to the
individual’s need
Information tailored
to the individual
Cu
sto
mis
ed
me
ssa
ge
an
d d
ialo
gu
e
Sp
ecific
pro
du
cts
an
d s
erv
ice
s
DtC* is direct individualized marketing…
*DtC is ”Direct to Consumer”
J.P.Morgan European Healthcare Conference
24 June 2013
The developed markets outside Europe hold high potential for taking market shares
Page 13
Our situation
of our net revenues 21%
20-30% market share*
* Chronic Care market share
Key priority
Capture
market share
in developed
markets
J.P.Morgan European Healthcare Conference
24 June 2013
Through investments in identified growth opportunities
Page 14
Canada
Australia
Japan
• Accelerate growth by leveraging strong
market position
• Accelerate new patient discharge,
• improve retention and drive conversion
• Accelerate growth in intermittent catheters • Strong focus on NPD and increase
investments in the market
• Understand and explore large potential • Leverage market leader position
USA • Defend and grow through NPD capture
and new product introductions
• Breakthrough via NPE and end user
retention
Ostomy Care Continence Care
J.P.Morgan European Healthcare Conference
24 June 2013
“Back to Basics” - Strategic themes
Breakthrough in OC through NPD capture and end
user retention
Defend and grow CC through NPD capture and new
product introductions
Re-commit to Skin Care growth and stabilise Wound
Care
Clearly link commercial push and pull efforts
Selectively invest to grow
Page 15
Out of the four markets US holds the highest potential
US Chronic Care growth ambition
13/14 Ambition10/11 Actual
“mid-single
digit growth”
“double digit
growth”
J.P.Morgan European Healthcare Conference
24 June 2013
Great potential to build markets and capture market shares in Emerging Markets
Page 16
Our situation
of our net revenues 12%
25-35% market share*
Key priority
* Chronic Care market share
Educate,
create and grow
selected markets
J.P.Morgan European Healthcare Conference
24 June 2013
With Ostomy Care and Wound Care as the main growth drivers
Page 17
~60
~5
Emerging
markets 100
Continence
Care ~15
~20
• Assura® line is the main brand
but SenSura® is growing rapidly
• Mature products like Comfeel®
account for majority of business
while Biatain® is gaining traction
• EasiCath® and SpeediCath® are
main brands
• Primarily disposable urology
products
Emerging Markets breakdown per business area Comments
Percent of CP sales
Ostomy
Care
Wound
Care
Continence
Care
Urology
Care
Emerging
Markets
J.P.Morgan European Healthcare Conference
24 June 2013
Geographical expansion holds significant longer term potential
Page 18
Build on and
accelerate growth
platform e.g. in
• China
• Brazil
• Russia
• Argentina
Develop growth
platform e.g. in
• MENA
• Mexico
• India
• South Africa
• South East Asia
• Selected ROLA
markets Selected markets
J.P.Morgan European Healthcare Conference
24 June 2013
Agenda
Page 19
• Introduction to Coloplast
• Accelerating our global growth
• Margin expansion potential
• Q&A
J.P.Morgan European Healthcare Conference
24 June 2013
Transfer of production to low cost countries has created a very cost efficient production
Page 20
60% 25%
10% 5%
Hungary
China
Denmark
US/ France
9%
11%
48%
10%
22% Salary - Direct
Salary - Indirect
Materials (RM & SFG)
Design principles
• Consolidate on fewer sites to reduce
overheads
• Leverage international platform in
Global Operations
• Improve efficiency in labour and
material
Innovation &
Competency Centre
High Volume Production
Specialised Production
*FY 2011/12 Cost of goods sold, DKK 3,678 million
Minneapolis
Mankato
Tatabánya
Nyirbátor Sarlat
Zhuhai
Mørdrup & Thisted
J.P.Morgan European Healthcare Conference
24 June 2013
But we expect to do more with our current Global Operations plan
Page 21
Lean in volume production
Re-design for manufacturing
Global sourcing and supplier relations
management
Focus on fixed costs and environment
Cost effective distribution
Design for manufacturing & fast ramp-up
Will contribute 50 –
100 bps to gross
margin annually with
the current outlook on
pricing, currencies
and raw materials
J.P.Morgan European Healthcare Conference
24 June 2013
Operating leverage will generate funds for investments in growth
Page 22
High value growth in Europe
Continued cost discipline
Generates funds for investments in growth
and leaves potential for improving cost
ratios
454
451
520
570
613
575
651 742
693
770 9
01
891
897
859
19,8
19,9
21,2
22,6
24,1 23,3 25,1
28,9 26,1
28,6
31,9 31,3 31,3 30,2
0
5
10
15
20
25
30
35
0
100
200
300
400
500
600
700
800
900
1.000
% DKKm
EBIT EBIT margin
29,2 29,8 28,9 30,3 29,9 30,4
29,1 28,2 29,5 28,6 27,6
29,4 28,3 28,2
6,0 6,4 6,2 4,8 5,4 6,0 6,1 6,2 6,1 5,9 5,8 4,8 4,8 4,8
4,0 4,8 4,3 4,1 4,4 4,5 4,0 3,4 3,6 3,1 2,8 3,0 3,2 3,6 0
5
10
15
20
25
30
35
DKKm Cost-to-sales ratios (%)
Dist.
Adm.
R&D
J.P.Morgan European Healthcare Conference
24 June 2013
We expect continued value creation driven by...
• Stable market trends in our Chronic Care
business
• Increased focus on growing the business
outside Europe
• Additional improvements in manufacturing
• European leverage will provide funds for
further investments in sales
• Strong cash flow leaves potential for
increasing cash returns
Page 23
J.P.Morgan European Healthcare Conference
24 June 2013
Offering a unique potential of stable
growth, further margin expansion
and increasing dividend yield
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