Coloplast A/S A/S Coloplast Investor presentation Investor - PowerPoint PPT Presentation

Coloplast A/S A/S Coloplast Investor presentation Investor presentation Q1 2005/06 Q1 2005/06

2 3 Forward-looking statements Changes in accounting principles (IFRS 2) • Share-based compensation is measured at fair value. The forward-looking statements contained in this presentation, including • For cashsettled, sharebased payment arrangements, the fair forecasts of sales and earnings performance, are not guarantees of future value of options earned during the period is recognised as a staff results and are subject to risks, uncertainties and assumptions that are difficult to predict. The forward-looking statements are based on Coloplast’s cost, while the adjustment for fair value of options earned in current expectations, estimates and assumptions and upon the information previous periods is recognised as a financial item. available to Coloplast at this time. • For equitysettled, sharebased payment arrangements, the fair value of options is determined at the time of allocation. The option Heavy fluctuations in the exchange rates of important currencies, significant value is then recognised over the earnings period as a staff cost. changes in the healthcare sector or major changes in the world economy • Option schemes allocated before 30 September 2005 are may impact Coloplast's possibilities for achieving the long-term objectives set as well as for fulfilling expectations and may affect the company’s considered cashsettled arrangements. financial outcomes. 4 5 Coloplast Key figures Q1 2005/06 Sales by business area Q1 2005/06 6% 41% Coloplast products and services Ostomy care Q1 Q1 17% help patients achieve greater mDKK 2005/06 2004/05 Index Continence care independence from medical Wound & Skin care Net revenue 1,728 1,565 110 challenges in 4 areas: Breast care Operating profit (EBIT) 275 180 153 26% Profit margin (EBIT %) 16% 12% Ostomy care, continence care, wound & skin care and breast Profit before tax 236 146 162 care. Group profit 164 94 174 Sales by geography Q1 2005/06 Tax rate 31% 35% 7% Market leader in Europe within Europe 14% CAPEX 97 107 91 ostomy care, continence care and The Americas breast care. NOA (ultimo period) 5.621 5.449 103 Rest of the world Free cash flow -1 163 79%

6 7 Expectations and long-term targets Group Management Corporate Functions 2005/06 2005/06 Matrix Global Breast Ostomy Continence Wound & • Organic sales growth of around 10% in local currencies Operations care care care Skin care • Profit margin of just above 16% • CAPEX DKK 400mn Northern • Corporate tax rate of 28% Europe Central Europe 2012 2012 Southern • At least a doubling of economic profit (EP) every five Europe years, based on the 2004/05 figures • Organic growth of Coloplast’s revenue to DKK 13bn Americas • A profit margin (EBIT margin) to exceed 18% Asia Pacific 8 9 Ostomy care Growth rates Q1 2005/06 in local currencies Global ostomy care market • For people who have lost their Gross Estimated 9½bn DKK normal bowel- or bladder function Growth Growth revenue market 10% 27% Q1 2005/06 Q1 2004/05 Q1 200506 growth • Almost 80% related to cancer Ostomy care 7% 9% 704 4-7% • Introduction of Easiflex range care Continence care 15% 8% 454 4-6% products on European markets Wound & Skin care 8% *7% 295 9-11% • German market stabilised. HSC still 26% Breast care 6% (3)% 108 (3)-(1)% under pressure. 37% Coloplast total 8% 5% **1,728 5-7% • European market more than half of Europe 7% 4% 1,368 Coloplast global market Americas 8% 8% 244 ConvaTec • Ambition to become global market ROW 15% 18% 116 Hollister leader and to reach two-digit market Other share in the US within 2-4 years * Approximate growth rate of the combined business area * * Net revenue; includes sales through homecare activities of non-Coloplast products

10 11 Continence care Wound care - global market definition Wound type Acute Chronic European continence care market • Spinal cord injured, multiple sclerosis, 6½bn DKK spina bifida Dry 25% wound • Catheters, urine bags, urisheaths, € 0.9 billion € 1.5 billion healing bowel management 35% Product technology € 1.3 billion segment, growth 9-11% • Coloplast’s market position different in the various segments 13% Moist • Market leader in Europe 5% wound 5% 11% € 0.6 billion € 1.3 billion € 1.3 billion • Growth driven by SpeediCath 6% healing intermittent catheters Active Coloplast AstraTech • Solid performance on all main markets B Braun Bard Drugs and € 0.4 billion € 0.1 billion Rüsch Mentor bio products Other VAC € 0.6 billion € 0.2 billion € 0.9 billion Compression 12 13 Wound & Skin care Breast care • Wound dressings for people with difficult to heal wounds, e.g. leg ulcers, diabetic ulcers, pressure sores • For women who have had their breast Global breast care market • Skin care products primarily for elderly people with skin problems in 1bn DKK removed, typically due to breast cancer hospitals or long-term care • Attached, lightweight and soft breast 7% • Sales growth in Q1 less than expected. Good growth in silver dressings. forms, partial breast shapers, lingerie 8% • Biatain Soft-hold well received. and swimwear 48% • Good growth in sale of skin care products in the hospitals market 15% • Sales up through new product introductions. Growth in both the European wound care market (MWH) US wound- and skin care market 6bn DKK European and US markets 4-4½bn DKK 4% 12% • Incidence of cancer in women is Coloplast 22% 15% Coloplast 9% ConvaTec increasing, but number of breast- Medline 33% 9% S&N 20% 10% Sage saving surgeries increasing as well, Coloplast Trulife/Camp Mölnlycke S&N Anita Thämert resulting in overall market decline J&J 11% 3M Others Urgo ConvaTec 13% Others Others 18% 15% 19% 13%

14 15 External factors - Demand outlook Healthcare reforms • UK Department of Health Consultation + Demographics • Suggest changes to existing system for reimbursement and - + / Surgical and medical trends remuneration - Reimbursement reforms • Proposed reduction of reimbursement prices - Health Care • Ostomy care and continence care products -15% / + Group buying and tender bid process reforms • Wound dressings -5% + Focus on overall treatment costs • Consultation process ended 23 January 2006. No news on the + Emerging markets further process - • In Germany, announcement of new reimbursement prices on continence Distribution & Parallel import care products is awaited • In France, a 5% reduction of reimbursement prices on wound dressings The demand for products and services will continue to grow in terms of was introduced 1 February 2006, a further 5% reduction expected July volume, but pressure on prices and margins will continue 2006 (included in Colplast 2005/06 estimate). Market growth within Coloplast’s business areas estimated at 5-7% 16 17 2012 - value creation through growth and innovation Establishing Global Operations Objectives • Up-scaling investments in research and development • Maintain strong customer orientation: • Faster market roll-out of new products Quality, Delivery, Innovation • Specialised sales forces • Become a world leader in supporting organic • Investing in new geographical markets, technologies and product areas growth and acquisition integration • Secure operational efficiency and scalability • Manufacturing • Be an agile, challenging and attractive place • Global Operations established to work • Relocation to Hungary and China continues • Corporate procurement established … to be able to invest in product • Productivity improvements in all parts of the organisation through abc/Lean development and the development of new markets with growth potential for Coloplast’s products.

18 19 Global Operations - Hungary Global Operations organisation • 700 headcounts in October 2005 Quality & •Negligible restructuring costs Manufacturing New Products Supply Chain Business & Distribution Introduction Improvement • DKK 2bn sales value in 2006/07 •110 jobs affected • 25 vacant positions • Estimated additional operating profit DK Sites • 20 to other functions of 150mn DKK compared to Danish • 25 not allocated International • 40 jobs to be closed manufacturing Sites during the next 24 months Contract Manufacturing •Annual total savings from Coloplast, Phase I-III, Tatabanya, Hungary terminated positions amount Global to DKK 35-45mn Distribution • Phase I - ostomy bags, urisheaths • Phase II - ostomy bags, dressings, catheters • Phase III - ostomy bags, adhesive baseplates, adhesive intermediaries 20 21 Global Operations - staff requirement by geography 2.000 1.500 DK FTEs HU 1.000 CN 500 0 4 5 6 7 8 9 0 1 0 0 0 0 0 0 1 1 / / / / / / / / 3 4 5 6 7 8 9 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 2 2 2 2 2 2 2 2 • A new factory to be established in Zhuhai, China, manufacturing products for the global market. Construction to be initiated in 2006 • Coloplast already manufactures in Zhuhai for the regional markets