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BERENBERG AND GOLDMAN SACHS SEVENTH GERMAN CORPORATE CONFERENCE
Munich – September 25, 2018
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.
MUNICH - SEPTEMBER 25, 2018 2
AGENDA
3MUNICH - SEPTEMBER 25, 2018
1. OVERVIEW AND BUSINESS MODEL2. THE IVD MARKET3. FINANCIALS4. FUTURE GROWTH
4MUNICH - SEPTEMBER 25, 2018
OVERVIEW ANDBUSINESS MODEL
OVERVIEW AND BUSINESS MODEL
STRATEC AT A GLANCE
MUNICH - SEPTEMBER 25, 2018 5
Market leader in automation solutions for thediagnostics industry and translational research
~ 1.100 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 € 209.8 million in 2017(CAGR revenues since IPO in 1998: ~17%)
Dividend payments raised over 14 consecutive years
OVERVIEW AND BUSINESS MODEL
UNIQUE MARKET POSITION STRATEC IN THE IVD VALUE CHAIN
MUNICH - SEPTEMBER 25, 2018 6
DiagnosticCompanies
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
OVERVIEW AND BUSINESS MODEL
BUSINESS MODEL
MUNICH - SEPTEMBER 25, 2018 7
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
“Simoa HD-1” for QuanterixConsumable for “Simoa HD-1”
OVERVIEW AND BUSINESS MODEL
SECURING RETURN ON INVESTMENT
MUNICH - SEPTEMBER 25, 2018 8
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
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
“PANTHER FUSION” for Hologic
9
THE IVD MARKET
MUNICH - SEPTEMBER 25, 2018
THE IVD MARKET
IVD MARKET SEGMENTS / IVD MARKET: ~ 60 BILLION USD IN 2016
MUNICH - SEPTEMBER 25, 2018 10
High Throughput
Low Throughput
Total instrumentation~ 8.3 billion USD
Number of systems
CAGR 2016 - 2021:
IVD Market: ~ 4-6%
Molecular Diagnostic: ~ 8% Immunodiagnostics: ~ 4%Hematology: ~ 2-4%
Source: Kalorama: “The worldwide market for In Vitro Diagnostic Tests, 10th Edition”, Aug 2016MarketsandMarkets: “In Vitro Diagnostics/IVD Market - Forecast to 2021”, Dec 2016
80%
14%
4%2%
Reagents / Chemistry
Instrumentation
Services
Software
High Throughput
Market by product type
THE IVD MARKET
OUTSOURCED VS IN HOUSE INSTRUMENTATION MARKET
MUNICH - SEPTEMBER 25, 2018 11
Total instrumentation
~ 8.3 billion USD
In House64 %
Outsourced36 %
In House73 %
Outsourced27 %
2010 2015 2020
In House56 %
Outsourced44 %
Source: Own estimates based on historical market data and recent industry trends
THE IVD MARKET
A SELECTION OF STRATEC CUSTOMERS
MUNICH - SEPTEMBER 25, 2018 12
Source: IVD News / non-public companies estimated / non-reported sector revenues estimated
… AND OTHER GAME-CHANGING COMPANIES
(acquired by Bio-Rad in January 2017)
STRATEC customer
Not a STRATEC customer
GLOBAL TOP 20 IVD COMPANIES Revenues 2017 (USD billion)
1. Roche Diagnostics 10.2
2. Abbott Diagnostics 7.3
3. Danaher 5.8
4. Siemens 5.0
5. ThermoFisher 3.5
6. Sysmex 2.4
7. bioMerieux 2.1
8. Ortho Clinical Diagnostics 1.8
9. BECTON DICKINSON 1.4
10. BIO-RAD 1.4
11. Hologic 1.2
12. CH Werfen 1.0
13. Grifols 0.8
14. Agilent 0.8
15. Diagnostica Stago 0.7
16. Qiagen 0.7
17. DiaSorin 0.7
18. Perkin Elmer 0.6
19. Fujirebio 0.4
20. Immucor ~0.4
13MUNICH - SEPTEMBER 25, 2018
FINANCIALS
FINANCIALS
14MUNICH - SEPTEMBER 25, 2018
KEY FIGURES - TRACK RECORD
Sales in € millionCAGR ~12%
EBIT in € millionCAGR ~10%
1 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.
67.5 6176
102116.6 122.7 128
144.9 146.9
184.9
209.8
0
50
100
150
200
250
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
14.311.2
14.717.6
21.8
15.6
19.5
24.126.9
32.335.5
0
5
10
15
20
25
30
35
40
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
11
FINANCIALS
15MUNICH - SEPTEMBER 25, 2018
KEY FIGURES - TRACK RECORD
Net income in € millionCAGR ~11%
Dividend per share in € CAGR ~14%
10.08.2
11.713.0
15.3
12.4
15.5
19.8
22.1
25.4
27.9
0.0
5.0
10.0
15.0
20.0
25.0
30.0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
0.22
0.35
0.450.50
0.55 0.560.60
0.700.75 0.77
0.80
0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
0.80
0.90
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
1
1
1 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.
FINANCIALS
16MUNICH - SEPTEMBER 25, 2018
SALES BY OPERATING DIVISIONS
56% 55% 49%
26% 29%33%
18% 15% 18%
0%10%20%30%40%50%60%70%80%90%
100%
2015 2016 2017
Systems Service parts & consumables
Developement & services Others
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
In % of total sales
Annual sales by operating division as of Dec 31
FINANCIALS
MUNICH - SEPTEMBER 25, 2018
• Organic sales decline of 3.9% to € 90.2 million (H1/2017: € 100.7 million):
- Sales of € 93.5 million before adoption of IFRS 15- Weak Q1 but again positive organic growth in Q2
• Adjusted EBIT margin down by 290 bps yoy to 9.8% due to missing economies of scale and negative effect from the first-time adoption of IFRS 15
• Further contract wins and several promising negotiations in advanced stage
• First components of new molecular diagnostic platform and new cartridge-based hematology device presented at this year’s AACC
• Number of employees up by 13.0% to 1,148 in the light of full project pipeline
17
SUMMARY FIRST SIX MONTHS OF 2018
H1 2018 - FINANCIALS AT A GLANCE1, 2
FINANCIALS
MUNICH - SEPTEMBER 25, 2018
bps = basis points
(1) For comparison purposes, adjusted figures exclude amortizations resulting from purchase price allocations in the context of acquisitions, associated integration expenses, as well as other one-off items.
(2) Figures for H1 2018 in line with IFRS 9 and 15. The 2017 figures were not retroactively adjusted (modified retrospective method). Refer to the H1|2018 six-month report for the impact of the first-time adoption of IFRS 9 and IFRS 15.
18
FINANCIALS
MUNICH - SEPTEMBER 25, 2018
Consolidated net incomeEBIT
As of June 30
H1 2018 - ADJUSTMENTS
19
FINANCIALS
MUNICH - SEPTEMBER 25, 2018
H1 2018 - SALES
H1/2018 sales decline of 10.5% to € 90.2 million
- Negative effects from foreign exchange and IFRS 15 adoption organic sales decline of 3.9%
- Lower instruments sales due to internal factors at key customers; improvements in Q2 but most recent overall volume forecasts below initial expectations
As of June 30
60.169.1 70.0
78.0
100.790.2
0
20
40
60
80
100
120
140
H1/13 H1/14 H1/15 H1/16 H1/17 H1/18
In € million
20
FINANCIALS
MUNICH - SEPTEMBER 25, 2018
H1/2018 adjusted EBIT margin at 9.8% • Adjusted EBIT down 31.0% yoy to
€ 8.8 million- Negative effect of € 1.3 million due to
first-time adoption of IFRS 15
• Margin decline of 290 bps yoy - Negative scale effects- Growth investments related to strong
project pipeline- Negative effect of 110 bps from first-
time adoption of IFRS 15
H1 EBIT EBIT margin
EBIT in € million EBIT margin in %
8.4
11.212.0
12.6 12.8
8.8
4%
6%
8%
10%
12%
14%
16%
18%
20%
0
2
4
6
8
10
12
14
H1/13 H1/14 H1/15 H1/16 H1/17 H1/18
As of June 30
H1 2018 - ADJUSTED EBIT AND EBIT MARGIN
21
FINANCIALS
MUNICH - SEPTEMBER 25, 2018
H1 2018 - OVERVIEW SEGMENTS
22
• Weak system sales• Negative economies
of scale• Increased R&D
activities• Negative effect from
IFRS 15
• Strong software licensing business
• Weak Q1 due to delayed product launches
• In-line with budget
FINANCIALS
MUNICH - SEPTEMBER 25, 2018
H1 2018 - CASH FLOW AND NET DEBT
IFRS (€ million) H1/2018 H1/2017 yoy
Cash flow – operating activities 11.9 13.9 -14.4%
Cash flow – investment activities
1.0 -6.6 nm
Cash flow – financing activities
-9.7 -16.6 41.6%
Free cash flow 4.3 7.3 -41.1%
Cash and cash equivalentsat end of period 26.9 17.1 57.3%
Net debt 42.8 51.4 -16.7%
• H1/2018 operating cash flow down by 14.4% yoy due to lower earnings levels and higher inventories
• Investments offset by disposal of financial assets
As of June 30
23
24MUNICH - SEPTEMBER 25, 2018
FUTURE GROWTH
FUTURE GROWTH
MUNICH - SEPTEMBER 25, 2018
FINANCIAL GUIDANCE
Outlook for 2018• Sales growth at constant exchange rates of 3-5% (including effects from IFRS 15)
– First-time adoption of IFRS 15 expected to add approximately two percentage points to growth– Implies organic growth of 1-3%
• Adjusted EBIT margin of around 16-17%
Medium-term expectations • Average annual organic sales growth (CAGR) in the high single-digit or
low double-digit percentage range • EBIT margin development at an approximately constant level of 17%
– Positive scale effects offset by growth activities related to full development pipeline
25
FUTURE GROWTH
MUNICH - SEPTEMBER 25, 2018
• Reaccelerate top-line growth in second half of 2018 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 9-15 months among others include instruments for DiaSorin, Becton Dickinson, Quotient and the KleeYa Analyzer platform
• Implementation of a group-wide ERP system to further drive process efficiency• Expand development capacities including significant extension of buildings in Birkenfeld
26
FOCUS IN 2018 AND BEYOND
27
APPENDIX
MUNICH - SEPTEMBER 25, 2018
APPENDIX
28
KEY FIGURES AT A GLANCE
IFRS (€ million) 2013 2014 2015 2016 2017
Sales 128.0 144.9 146.9 184.9 209.8
Adjusted EBIT 19.5 24.1 26.9 32.2 35.5
Adjusted EBIT margin (%) 15.2 16.6 18.3 17.4 16.9
Adjusted Consolidated net income 15.5 19.8 22.1 25.3 27.9
Adjusted Earnings per share (€) 1.32 1.68 1.87 2.14 2.35
Dividend per share (€) 0.60 0.70 0.75 0.77 0.80
No. of employees 546 544 583 976 1,086
Total assets 117.8 137.8 158.9 258 264
Equity ratio (%) 82.5 81.3 82.0 55.7 59.8
Free cash flow 13.5 32.9 17.3 -70.4 14.4
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.
MUNICH - SEPTEMBER 25, 2018
SHAREHOLDER STRUCTURE(as of: May 2018)
APPENDIX
29
SHAREIPO Aug. 1998Number of shares 11,962,495Share price (09/18/2018) € 69.20Market capitalization € 828 million
Fixed and family ownership(incl. investment companies)
Treasury shares
Retail investors incl. notidentified institutional investors
Institutional investors
Institutional investors > 3%:OppenheimerFundsColumbia Threadneedle Investments Allianz BNP Paribas Investment Partners
41.2%
0.1%
37.0%
21.7%
MUNICH - SEPTEMBER 25, 2018
STRATEC Biomedical AGGewerbestr. 3775217 BirkenfeldGermany
www.stratec.com
CONTACT
THANK YOU FOR YOUR ATTENTION
CONTACT
Marcus WolfingerCEO
Jan KeppelerHead of Investor Relations & Corporate CommunicationsPhone +49 7082 7916-6515Fax +49 7082 [email protected]
30MUNICH - SEPTEMBER 25, 2018