Leading Intimate Healthcare
Lars Einar Hansen
gLars Einar HansenSVP, Corporate Finance
LEADING INTIMATE HEALTHCARE14 March 2012
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Forward-looking statements
The forward-looking statements contained in this presentation includingThe 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 p g pcurrent 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.
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Agenda
Leading in intimate healthcare
Stable intimate healthcare trends
Financial performance
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Coloplast is a leading medtech company specialising inColoplast is a leading medtech company specialising in intimate healthcare needs
C
Americas17%
Group revenue FY 2010/11 by segment Group revenue 2010/11 by geographyFull Year 2010/11 sales: DKK10.2bn
Ostomy Care42%
Continence Care34% Rest of
world10%#1 10%#1
#1
Urology Care9%
Wound & Skin Care
15%
Europe73%
15%#4
#x Global position
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Introducing Ostomy Care
• Colorectal cancer (est. 55%)• Bladder cancer (est. 10%)
Key products
Disease areas
• Inflammatory bowel disease (est. 35%)
• Nurses, mainly stoma care nurses• People with a stoma
Wh l l /di t ib ti
Customergroups
• Wholesalers/distribution• Hospital purchasers and GPOs• Surgeons
• Hospital & community nursesCall pointsAssura® 1 and 2 piece2nd generation launched 1996-2000• Hospital & community nurses
• Hospital buyers• Distributors• Dealers• Wholesalers
H i
Call points 2nd generation launched 1996 2000
• Homecare companies
Market data • Global Market size estimated at DKK ~11bn with 4-5% growth
• Market share: 35-40%
SenSura® 1 and 2 pieceLaunched in 2006-2008
SenSura® MioLaunched in 2011
Market share: 35 40%• Europe 50-60%• Americas 0-10%• Rest of the world 35-40%
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Introducing continence consumables
• Spinal Cord Injured, SCI• Spina Bifida, SB• Multiple Sclerosis, MS• Benign prostatic hyperplasia &
Disease areas Key products (management products)
• Benign prostatic hyperplasia & prostatectomy patients
• Elderly and diabetics
• Continence or home care nursesCustomer
SpeediCath® Compactintermittent catheter
SpeediCath®intermittent catheter
• People with incontinence problems• Wholesalers/distribution• Hospital purchasers and GPOs• Surgeons
groups
• Rehabilitation centers• Urology wards• Pediatric clinics• Elderly homes
Di t ib t d l & h l l
Launched in 03/04 & 10/11
Launched in 99/00Call points
• Distributors, dealers & wholesalers
Market data • Global Market size estimated at DKK 8-9bn with 4-6% growth
• Market share: 35-40%
Conveen® Optima external catheterLaunched in 05/06
Conveen® Security+ urine bagLaunched 10+ years ago
%• Europe 45-55%• Americas 30-40%• Rest of the world 10-20%
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Introducing Urology CareTreatment (surgical) of urological disordersTreatment (surgical) of urological disorders
• Urinary incontinence• Pelvic organ prolapse
E til d f ti
Disease areas Key products (implants and surgical disposables)
• Erectile dysfunction• Enlarged prostate• Kidney and urinary stones
• SurgeonsCustomer• Purchasing departments and
organizations• End customers
Aris® vaginal slingLaunched in 2005Women’s health - Surgical Urology
Virtue® male slingLaunched in 2009Men’s health - Surgical Urology
groups
• Urologists• Uro-gynaecologists• Gynaecologists• Purchasing departments and
organizations
Call points
organizations
Titan® OTR penile implantLaunched in 2008 Men’s health - Surgical Urology
JJ stentsLaunched in 1998 Disposable Surgical Urology
Market data • Global Market size estimated at DKK ~9bn with 4-6% growth
• Market share: 5-10%• Europe 15-25%• Europe 15-25%• Americas 0-10%• Rest of the world 0-10%
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Introducing Wound CareIntroducing Wound Care
Chronic wounds• Leg ulcers• Diabetic foot ulcers
Disease areasKey products (Biatain® and Comfeel® range)
• Diabetic foot ulcers• Pressure ulcers
Hospitals• Wound care committees
CustomerGroups &
Biatain® Silicone• Silicone adhesive and
foam dressing• Launched in 2010
• Specialist nurses/doctors• (Purchasers)Community• Specialist nurses/doctors • General practitioners
Biatain® Ag• Antimicrobial foam dressing• Launched in 2002
call points
General practitioners• District/general nurses • Large nursing homes
Market dataGlobal Market si e estimated at DKK• Global Market size estimated at DKK ~12-13bn with 2-4% growth
• Market share: 5-10%• Europe 5-15%• Americas 0-5%
Comfeel® Plus Transparent• Transparent hydrocolloid
dressing• Launched in 1994
Biatain®• High exudate mgt.
foam dressing• Launched in 1998
• Rest of the world 5-15%
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Stable intimate healthcare trends
Growing elderly populationGrowing elderly population increases customer base for Coloplast products
Demographics
Healthcare reforms
Surgical and di l t dmedical trends
Emerging markets
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Underlying demographic development supports future growthUnderlying demographic development supports future growth
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Stable intimate healthcare trends
Demographics
Economic restraints push for reimbursement reforms, introduction of tenders, and lower
Healthcare reformstreatment cost
Surgical and di l t dmedical trends
Emerging markets
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Current global reform landscape… France-Reimbursement reform for OC and CC, expected final recommendation late 2015expected final recommendation late 2015
UK- Restructure of NHS and efficiency savings
Germany- No immediate med dev reforms foreseen, but continued savings measures. - 2010 Pharma review could have a negative spillover on MD
SpainSpain- Reimbursement process frozen but under revision (law of margins)- Price categories discussed
GreeceE i it ti till t bl ld- Economic situation still unstable could
potentially lead to further price cut - Merger of sickness funds
United States-2010-14: Healthcare reform -- 2013 -> ”Supercommittee”
China-Building new reimbursement mechanisms, improving access
Reforms under way
Intensifying reform pressure
Stable reform environment
Russia-2010: Increasing tender business + 15% preferential discounts vs. local manufacturers
LEADING INTIMATE HEALTHCARE14 March 2012
Stable intimate healthcare trends
Demographics
Healthcare reforms
Surgical and medical trends aretowards earlier detection and cure, eventually reducing
Surgical and di l t d , y g
addressable market for Coloplast treatment products
medical trends
Emerging markets
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Stable intimate healthcare trends
Demographics
Healthcare reforms
Surgical and di l t d
Expanding healthcare coveragefor populations in emerging
medical trends
for populations in emergingmarkets increases addressablemarket
Emerging markets
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Supported by increasing Emerging Market exposure, tl 8% f l b l lcurrently 8% of global sales
Global sales
04/05 05/06 06/07 07/08 08/09 09/10 10/11
BrazilGlobal sales
Russia04/05 05/06 06/07 07/08 08/09 09/10 10/11
India
ChinaEmerging Market sales
04/05 05/06 06/07 07/08 08/09 09/10 10/11
ChinaBRIC (45%)
Other countries (55%)04/05 05/06 06/07 07/08 08/09 09/10 10/11
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Improving financial performance driven by…25,4 26,1 30 3.000
%DKKm
• Stable chronic care sales driven by high investments in professionalizing sales activities further
88
00
9 94
1.39
5 1.99
5
2.58
1
16,3 16,013,1 12,8 11,7
15,8
20,9
10
15
20
25
1.000
1.500
2.000
2.500
• Focusing on realising additional improvements in manufacturing by leveraging on new global operations footprint
98
1.00 87
9
749 9 9
693
0
5
0
500
EBIT EBIT margin
• Efficiency gains throughout the organization
• Lower capex to sales from higher capacity 23%
30% 32%
30%
40%
• Lower capex-to-sales from higher capacityutilization and leaner factory footprint
4%
15%9%
5% 8%
16%
16%18%
6%11%
12%10%
6%10%
15%
23%
0%
10%
20%
…..Resulting in strong free cash flow generation and high return on invested capital..... FCF to sales ROIC
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Guidance in fixed currencies unchanged, revised in DKKGuidance in fixed currencies unchanged, revised in DKK
Guidance11/12
Guidance11/12 (DKK)
Long-termambition
Sales growth ~6 % (organic) ~8% Market+
Deliver margins in line with EBIT margin ~27% ~28%
gthe best performing medical
device companies *)
CAPEX (DKKm) ~300 ~4% of salesCAPEX (DKKm) 300 4% of sales
Tax rate ~25-26% -
*) The peer group includes the following listed companies: Medtronic Inc., Baxter International Inc., Covidien PLC, Stryker Corp., St. Jude Medical Inc., Boston Scientific Corp., Sonova Holding AG, Smith & Nephew PLC, CR Bard Inc., Getinge AB, WDH A/S, Shandon Weigao Group Medical
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Coloplast value proposition
Close relationships with nurses and end-Close relationships with nurses and end-users provide leading market positions within Ostomy & Continence Care
Stable long-term growthpotential
US and Emerging Markets hold highpotential as well as the Surgical Urologyand Wound Care businesses
Growth and expansionpotential
Strong customer driven i ti biliti
Focus on providing more value for moneyfor end users and public payersinnovation capabilities for end users and public payers
Solid financial performance High return on invested capitalStrong free cash flow generation
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