Creating Miracles in Life China Biologic Products Holdings, Inc. - PowerPoint PPT Presentation

Creating Miracles in Life China Biologic Products Holdings, Inc. November 2019 (NASDAQ: CBPO)

01 CBPO 3Q19 Financial Highlights  Revenue: $136.1 mm, up 17.5% in RMB terms (1) or 14.3% in USD terms y-o-y  Gross Profit: $88.6 mm, up 9.1% y-o-y; Gross Margin: 65.1%  Income from Operations: $53.0 mm, up 84.7% y-o-y; Operating Margin: 38.9%  Non-GAAP Adjusted Income from Operations (2) : $61.5 mm, up 64.1% in RMB terms (1) or 59.7% in USD terms y-o-y  Net Income: $47.0 mm, up 42.9% y-o-y  Non-GAAP Adjusted Net Income (2) : $54.4 mm, up 66.0% in RMB terms (1) or 61.4% in USD terms y-o-y  Fully diluted EPS: $1.21; Non-GAAP EPS (2) : $1.40 1. We believe providing local currency information on certain key items of our financial results enhances the understanding of our financial results and evaluation of performance in comparison to prior periods. We calculate changes in local currency percentages by comparing financial results denominated in RMB from period to period. 2. Refer to Appendix for reconciliation of Non-GAAP income from operations, Non-GAAP net income attributable to equity holders and Non-GAAP EPS.

02 CBPO 3Q19 Sales Breakdown Year-over-year Comparison Sales Breakdown by Product for Sales of Major Products ( 3Q19 Sales % ) 3Q19 3Q19 Other YOY comparison IVIG (in RMB) (in USD) immunoglobulins 26.3% +24.6% +21.1% 17.1% Albumin +51.9% +47.9% IVIG Other plasma +34.5% +30.9% Other Immunoglobulins products 10.1% Other plasma products +85.4% +80.3% P. Polypeptide -75.9% -76.6% Placenta Polypeptide Albumin 3.3% 34.6% Dura Mater +12.7% +9.6% Dura Mater Others 0.6% 8.0% Total sales +17.5% +14.3%

03 Experienced Management  CEO since August 5, 2019, acting CEO between May 2019 and August 2019, Chairman of the Board of Directors since February 2019 and member of the Board since November 2014.  Over 20 years of experience in corporate finance, financial advisory and management and has held senior executive or managerial positions in various public and private companies including Moelis, Goldman Sachs, China Netcom, Bombardier Capital etc.  Bachelor Degree of political science from Nanjing Institute of International Relations and an MBA certificate from the University of Maryland at College Park Mr. Joseph Chow Chairman / CEO  CFO since August 2012 and VP-Finance & Compliance and Treasurer between March 2012 and August 2012  6 years in financial management and 11 years of audit experience in accounting firms, including serving as an audit senior manager at KPMG  C.P.A. in China Mr. Ming Yang, Chief Financial Officer

04 Income Statement and Balance Sheet Highlights 2014 2015 2016 2017 2018 9M’18 9M’19 2014 2015 2016 2017 2018 9M’19 $ MM Total Cash (1) ($ MM) Total sales 243.3 296.5 341.2 370.4 466.9 351.9 401.6 184.7 182.9 183.8 242.2 952.4 841.3 Cost of sales 80.1 106.5 124.0 125.5 146.8 109.2 136.5 Cash & Cash Equivalents 80.8 144.9 183.8 219.3 338.9 220.8 ($ MM) Gross profit 163.2 190.0 217.2 244.9 320.1 242.7 265.1 Restricted Cash and 103.9 - - - - - Deposit ($ MM) Operating expenses Selling expenses 10.7 10.0 11.7 34.8 95.6 72.4 62.0 Time Deposits ($ MM) - 38.0 - 22.9 537.5 465.5 G&A expenses 32.1 41.4 54.5 67.7 68.8 60.2 50.5 Short term investments($ - - - - 76.0 155.0 MM) R&D expenses 4.2 6.0 7.0 6.5 9.5 6.6 7.5 Short-term and Long-term Income from operations 111.2 132.6 144.0 135.9 146.2 103.5 145.1 97.9 - - - - - Bank Loans ($ MM) Income before income 122.8 135.1 153.9 146.4 166.1 119.1 170.5 Accounts Receivable Days 28 27 32 51 75 89 taxes Net income 96.1 114.1 128.8 82.2 148.0 109.3 146.8 Inventory Days 433 390 416 508 569 482 Net income attributable to 70.9 89.0 104.8 67.9 128.1 93.1 126.4 CBPO 1. Calculated as the sum of cash & cash equivalents, restricted cash and deposits, time deposits and financial instruments. Non-GAAP income from 116.6 144.7 168.3 171.6 177.7 137.8 170.4 operations (1) Non-GAAP net income attributable to equity 75.6 100.1 126.8 141.2 145.9 115.3 147.6 holders (1) 1. Non-GAAP income from operations and non-GAAP net income attributable to equity holders excludes non-cash employee stock compensation and some non-recurring items. Refer to Appendix I for reconciliations. 2. 2018 includes the impact of TianXinFu.

05 Robust Cash Flow Generation Operating Cash Flow Capital Expenditures ($ MM) ($ MM) 156.4 60.0 160 52.3 51.0 50.0 123.3 120 109.4 103.9 102.2 38.3 40.0 36.7 93.5 30.0 71.0 80 21.3 20.2 20.0 40 10.0 0.0 0 2014 2015 2016 2017 2018 9M'18 9M'19 2014 2015 2016 2017 2018 9M'19 Mainly for Shandong Taibang ‘s new fractionation facility

06 Full Year Outlook The Company adjusts its full year 2019 forecast:  For the full year of 2019, the Company is raising its full year forecast of growth of non-GAAP adjusted income from operations to 11-13% from 4-6% and non-GAAP adjusted net income growth to 16-18% from 4-6% in RMB terms over the Company’s full year 2018 financial results.  The raising of guidance was primarily due to the combined effect of stronger than expected albumin sales for the first nine months of the year, a rebound in IVIG sales in the third quarter, and higher than anticipated interest income for the full year. Note: This guidance does not factor in any potential foreign currency translation impact. Having previously adopted an exchange rate of approximately RMB6.59 = $1.00 based on weighted average quarterly exchange rates in 2018 in translating 2018 financial results, the Company expects that the total sales and non-GAAP adjusted net income in USD terms in 2019 could be affected by the foreign currency translation impact.

07 Appendix: Reconciliation of Non-GAAP Income from operations 2014 2015 2016 2017 2018 9M’18 9M’19 ($ MM) Income from operations 111.2 132.6 143.9 135.9 146.2 103.5 145.1 Non-cash employee stock compensation 5.4 12.1 24.4 33.9 23.1 27.7 19.3 Amortization of acquired intangible assets - - - - 8.4 6.6 6.0 Expenses related to change of domicile and acquisition - - - 1.9 - - - of TianXinFu Adjusted Income from operations-Non GAAP 116.6 144.7 168.3 171.6 177.7 137.8 170.4

08 Appendix: Reconciliation of Non-GAAP Net Income Attributable to Equity holders 2014 2015 2016 2017 2018 9M’18 9M’19 (in $ MM except EPS, number of shares in MM) Net Income Attributable to Equity holders 70.9 89.0 104.8 67.9 128.1 93.1 126.4 Non-cash employee stock compensation 4.7 11.1 22.0 31.1 19.7 25.2 16.9 Expenses related to change of domicile and - - - 1.9 - - - acquisition of TianXinFu Amortization of acquired intangible assets - - - - 5.6 4.5 4.3 Income tax expense due to U.S. Tax Reform - - - 40.3 (7.5) (7.5) - Adjusted Net Income Attributable to Equity 75.6 100.1 126.8 141.2 145.9 115.3 147.6 holders - Non GAAP Diluted EPS - Non GAAP 2.89 3.68 4.52 4.95 4.02 3.29 3.75 Weighted average number of shares used in 25.7 26.6 27.2 27.6 35.4 34.1 38.8 computation of Non GAAP diluted EPS