Roadshow Zürich - Carl Zeiss Meditec AG

Carl Zeiss Meditec
Company Presentation
April 09, 2014
Sebastian Frericks, Director Investor Relations
Carl Zeiss Meditec
Agenda
1
Carl Zeiss Meditec Overview
2
Key Success Factors
3
First 3 Month 2013/2014 at a Glance
4
Outlook
5
Appendix
Carl Zeiss Meditec
2
Are you Aware of the Following Facts?
40% of the people will have Cataract, 5% Glaucoma
and 10% AMD.
Every second, somebody goes blind due to AMD or
glaucoma.
Cataract is one of the leading cause of visual impairment
worldwide. There are more
than 21 millions of cataract
surgeries a year.
Carl Zeiss Meditec
3
Carl Zeiss Meditec at a Glance
One of the world’s leading medical technology companies in :
Ophthalmology
Microsurgery
Comprehensive systems to
diagnose and treat eye
diseases right from an early
stage – helping to prevent
blindness
Complete product range of
microscopes for
microsurgical procedures,
e.g. spinal, neuro/ENT,
ophthalmic and dental
Our goal is to drive progress in medicine, enabling doctors to achieve best possible
outcomes for their patients.
Results 2012/2013:
 Revenue: € 906.4mn; Growth: 5.2%
 EBIT: € 133.9mn; EBIT margin: 14.8%
Carl Zeiss Meditec




Headquarters in Jena, Germany
More than 2,500 employees worldwide
Listed on the TecDAX
65% of the shares held by Carl Zeiss
4
Offering the Most Extensive Portfolio in the Industry
for Specific Customer Segments
Customer
Private
practitioners
SBU
Ophthalmic
Systems
Sales 12/13:
€ 391.0mn
Surgical
Ophthalmology
Hospitals
Sales 12/13:
€ 121.3mn
Segments
Products
Glaucoma & Retina
Diagnose & Therapy
Corneal Refractive Surgery
Cataract Surgery
Clinics
Microsurgery
Ambulatory
surgery
centers
Sales 12/13:
€ 394.2mn
Visualisation & Microsurgery
Surgical Oncology
Carl Zeiss Meditec
5
Successful Track Record:
Revenue and EBIT over the last 5 Years
Revenue
EBIT | EBIT Margin
in € million
in € million
2012/2013
2012/2013
906.4
2011/2012
133.9 | 14.8%
2011/2012
861.9
2010/2011
122.9 | 14.3%
2010/2011
758.8
2009/2010
103.6 | 13.6%
2009/2010
676.7
2008/2009
2008/2009
640.1
 In 2012/2013, we have reached the
upper end of our revenue guidance of
€ 880 - € 910mn.
Carl Zeiss Meditec
86.7 | 12.8%
76.1 | 11.9%
 EBIT margin gained 0.5 % pts. to 14.8%.
 We confirm our target of reaching a 15% EBIT
margin by 2015 on a sustainable basis.
6
Successfully Positioned with a Worldwide
Presence and a Well-Balanced Revenue Split
CZM-Company locations:
Production, Sales, Service, R&D
CZM-Sales and Service locations
Carl Zeiss-Sales and Service locations
Germany:
France:
Le Pecq
La Rochelle
Paris
USA:
Dublin
Ontario
€ 327.5mn
Employees2)
Carl Zeiss Meditec
740
2)
Revenues1)
Employees2)
Japan:
Tokio
Asia/Pacific:
EMEA:
Revenues1)
FY 2012/2013
Turkey:
Ankara
Spain:
Madrid
Americas:
1)
Jena
Berlin
Oberkochen
Munich
€ 307.6mn
1,667
Revenues1)
Employees2)
€ 271.4mn
133
Sep 30, 2013
7
Agenda
1
Carl Zeiss Meditec Overview
2
Key Success Factors
3
First 3 Month 2013/2014 at a Glance
4
Outlook
5
Appendix
Carl Zeiss Meditec
8
Focus on Key Success Factors Yields First Results
Customer Focus
New Markets
 Basis for long term growth
 Geographical expansion (into rapidly
developing countries)
 New areas of business
 Service is a profitable
recurring business
opportunity
(e.g. surgical oncology)
Innovation
 Major source of competitive
 Make success
happen
differentiation
 Using cutting edge technologies
to advance medical applications
 Efficient and effective
business management
 Responsible human
resources development and
continuous professional improvement
Our Employees
Carl Zeiss Meditec
 Streamlining of
supply chain processes
Excellent Processes
9
Our Dedication to R&D Strengthens our Technological
Leadership and Continues to be a Major Success Factor
R&D expenses | R&D ratio to revenue
in € million
 Tradition for gold standard products
2012/2013
97.3 | 10.7%
 Close collaboration with customers to
develop new products and solutions
2011/2012
93.5 | 10.8%
leading to more efficient workflows
and better clinical outcomes
2010/2011
84.2 | 11.1%
 In 2012/2013, R&D expenditure
2009/2010
72.4 | 10.7%
2008/2009
63.5 | 9.9%
increased by 4.1% to € 97.3mn.
 Approx. 16% of current total workforce
are employed in R&D.
Carl Zeiss Meditec
10
Significant Innovations Were Introduced to the
Market in Recent Quarters
CIRRUS™ photo
MEL 90 Excimer Laser
AT LISA® tri toric 939MP
ZEISS Cataract Suite markerless
CIRRUS™
HD-OCT 5000/500
VISALIS® 500
with APM™-Modus
Carl Zeiss Meditec
11
Designed to Work Together: With FORUM, we add Value
through Connecting all our Customers‘ Components
Our data management solutions recently
introduced into the market:
FORUM Glaucoma Workplace
FORUM GO
Forum Archive & Viewer 3.1
Carl Zeiss Meditec
12
Workflow Solutions for Cataract – Enable Effective
and Efficient Treatment
IOL - Master
Z CALC
Treatment-Planning
Diagnosis
Data
Carl Zeiss Meditec
Opmi Lumera
AT LISA®
Management
VISULAS YAG III
After-Treatment
Surgery
Solution
13
We Have Reached our Mid-term Target for Recurring
Revenue Ahead of Time and now Target a 30% Share
Recurring revenue
Consumables & Service
as a % of sales revenue
25%
30%
 We have reached our mid-term
(2015) target of 25% in
recurring revenue and expect
further progress of up to 30%.
 IOLs and various
consumables are sources
of recurring revenue
(e.g. viscoelastics, phaco
cassettes, refractive laser
treatment packs, drapes, etc.)
Mid-term
target
~9%
 We steadily broaden our
2003/2004
2012/2013
Devices
Recurring revenue increase through acquisitions
Recurring revenue increase through organic growth
Carl Zeiss Meditec
service offering to enhance the
share of recurring revenue.
 More recurring revenue has
allowed for profitable growth
and less cyclicality
14
Customer Focus is the Basis for Long-Term Growth
and a Business Opportunity in Itself
Strengthening of Global Service &
Customer Care
Early Involvement of Customers in
Research and Development
 Our service complements our product
 Customers are routinely involved in all
offering and improves customer
satisfaction.
 Improved customer service level through
training and certification of service
technicians
 Focus on service has increased revenue
continuously.
Carl Zeiss Meditec
phases of product development
(e.g. Forum® 3.0).
 R&D centers in Europe, America and
Asia support understanding specific
market needs.
 We help our customers to be more
successful.
15
Our Focus on New Markets Has Materialized in
Significant Contribution to the Overall Growth of CZM
Total Revenue China, India and SEA
 R&D center in China
in € million
+ 9%
2012/2013
+
2011/2012
+
2010/2011
 R&D center in India develops
products tailored to suit
individual market needs.
25%
35%
+ 28%
2009/2010
addresses the fastest growing
market for mid-range products
 Customer training program in
China enhances customer
loyalty.
 Increase of sales coverage in
China
2008/2009
 Leverage of economic growth
20
40
60
80
100
in Latin America by expanding
our sales organization
 High growth momentum (FX-adj.) from China (+22%) and SEA (+25%)
 India with a decline in revenue – mainly due to currency devaluation of
approx. 24% and price pressure
 Strong growth also from Latin America (+21% Fx-adj.)
Carl Zeiss Meditec
16
Agenda
1
Carl Zeiss Meditec Overview
2
Key Success Factors
3
First 3 Month 2013/2014 at a Glance
4
Outlook
5
Appendix
Carl Zeiss Meditec
17
Slight Organic Growth is Offset By Currency
Headwinds - Reported Revenues Decline by 3%
Revenue
in € million
219.0
- 3.1%
Net Income
212.3
23.3
in € million
- 13.8%
20.1
 FX-adj. revenue growth of +1.7%
 Significant negative currency
effects and a decline in MCS1)
vs. a challenging base
Q1 2012/2013
EBIT
in € million
31.3
Q1 2012/2013
Carl Zeiss Meditec
Q1 2013/2014
- 15.4%
Q1 2012/2013
Earnings
per Share
0.29
26.5
Q1 2013/2014
Q1 2012/2013
Q1 2013/2014
- 13.8%
0.25
Q1 2013/2014
 EBIT margin decline partly due to
currency losses, a lower
contribution from Japan and a
lower share of MCS sales
 Strong growth in SUR2) and
improvements in OPH3) cannot
fully compensate for weaker
MCS sales
1)
Microsurgery
2)
Surgical Ophthalmology
3)
Ophthalmic Systems
18
Microsurgery: Revenue Declines from a Challenging
Previous Year’s Base
 FX-adj. revenue decline of -6.3%
 Sales development slowes compared
to a strong prior-year quarter
 Currency effects (particularly JPY) have a
significant impact on reported revenue.
 Q1 order intake slightly improved
MCS Revenue | Revenue split
in € million
Q1 2013/2014
92.1
Q1 2012/2013
105.1
Carl Zeiss Meditec
- 12.4%
43.3 %
of revenue
19
Ophthalmic Systems: Robust Organic Growth in the
Face of Persistently Difficult Market Conditions
 FX-adj. revenue growth of +7.1%
 OPH grows slightly despite persistently high
competitive pressure and negative currency effects.
 Refractive laser business and innovations in
diagnostic equipment key contributors to growth
OPH Revenue | Revenue split
in € million
Q1 2013/2014
86.7
Q1 2012/2013
84.4
Carl Zeiss Meditec
+ 2.7%
40.9 %
of revenue
20
Surgical Ophthalmology: Another Quarter of DoubleDigit Revenue Growth Driven by Premium IOLs
 FX-adj. revenue growth of +13.7%
 Benefiting in particular from ongoing high demand for
IOLs for minimally invasive cataract surgery in the
premium segment
 Successful market launch of the AT Lisa® tri toric with
additional astigmatism correction
SUR Revenue | Revenue split
in € million
Q1 2013/2014
33.4
Q1 2012/2013
29.5
Carl Zeiss Meditec
+ 13.5%
15.8 %
of revenue
21
Positive Organic Revenue Development in the Americas
and APAC offsets a decline in EMEA
Revenue by region
in € million
Americas
+ 6.3% (+10.7% FX-adj.)
36.5 %
Q1 2013/2014
of revenue
77.6
 Both, the U.S. and Latin America
showed a recovery in revenues.
Q1 2012/2013
73.0
EMEA
33.2 %
-
7.5%
(-7.4% FX-adj.)
Q1 2013/2014
70.5
of revenue
investment programs in Russia
contributes to EMEA decline
 Growth in the European core
Q1 2012/2013
76.2
APAC
- 8.1% (+2.9% FX-adj.)
30.3 %
Q1 2013/2014
64.2
of revenue
 Expiration of government
markets largely stable overall
 Decline in Sales partly caused by
softer JPY and weaker organic
performance in Japan
Q1 2012/2013
69.8
Carl Zeiss Meditec
22
EBIT Declines Partly Due to Currency Losses as Well as
Lower Share of MCS Sales
in € million
in %
of revenue
114.0
53.7
117.4
53.6
53.7
25.3
53.4
24.4
General & admin.
expenses
10.0
4.7
9.6
4.4
R&D expenses
23.8
11.2
23.1
10.6
26.5
12.5
31.3
14.3
Income statement
Gross profit
Selling & marketing
expenses
EBIT
Q1 2013/2014
Carl Zeiss Meditec
Q1 2012/2013
23
Continued Strong Liquidity Situation
Cash Flow Statement
in € million
Cash flow from operating activities
Cash flow from operating activities:
 Cash outflow resulting primarily from
-6,030
higher tax payments for the reporting
7,013
period as well as a higher reduction of
Cash flow from investing activities
trade payables
13,758
Cash flow from investing activities:
-3,421
 Higher cash outflow due to the
Cash flow from financing activities
acquisition of Optronics A.S. in
21,155
-861
Turkey
Cash flow from financing activities:
 Difference resulted primarily from a
Cash and cash equivalents
7,284
decrease of treasury receivables
11,462
Q1 2013/2014
Carl Zeiss Meditec
Q1 2012/2013
24
Financial Set-up Again very Sound
Dec 31, 2013
Change to
Sep 30, 2013
75.6 %
+2.8%-pts
Net cash and cash
equivalents
Cash-in-hand and bank balances
+ Treasury receivables from Group
treasury of Carl Zeiss AG
./. Treasury payables to Group
treasury of Carl Zeiss AG
+ Financial Investments
€ 326.5 mn
- 7.2%
Working capital
Current assets
./. Current liabilities
€ 537.5 mn
+ 1.8%
Days of sales outstanding
(DSO)
Trade receivables at the end of
the reporting period (gross)
Rolling monthly sales
59.3 days
+16.8%
Rate of inventory turnover
(ITO)
Cost of goods sold (annualized)
Average inventories
2.5
- 11.9%
Key ratio
Definition
Equity ratio
Equity
Total Asset
Carl Zeiss Meditec
25
Acquisition of Optronik: Establishing Direct Sales
Presence in a Key Growth Market
 CZM has acquired its long-standing, exclusive
distribution partner in Turkey, Optronik A.S., based in
Ankara – with around 60 employees.
 Supported by strong growth in demand, Optronik’s
local business has reached critical size to justify
local sales presence.
 Seamless integration into ZEISS’ global sales,
service and support network
 Direct sales approach will help tap full cross-selling
opportunity across SBU’s.
Carl Zeiss Meditec
26
Acquisition of Aaren Scientific: Teaming up for a
Successful Future in IOLs
 CZM has acquired Aaren Scientific Inc., a US-based
manufacturer of IOLs.
 Purchase price: US $70mn
 In 2012, Aaren Scientific Inc. generated revenues of
around US $20mn with 235 employees in its Ontario,
California headquarters and manufacturing facility.
 Aaren Scientific provides capacities and competencies
for developing and manufacturing - amongst others –
fully preloaded hydrophobic IOLs.
CZM plans to further accelerate the development of its IOL and consumables business by
broadening its product portfolio and gaining market share in mid-segment IOLs.
Hydrophobic
Hydrophilic
Leading innovation in IOL technology
Portfolio expansion in mid-segment, addressing new markets
Carl Zeiss Meditec
27
Positive Development also Reflected in Dividend
Dividend | Total dividend distributed
in € | in € million
2012/2013
0.45 | 36.6
proposed to the Annual General
2011/2012
0.40 | 32.5
0.30 | 24.4
 The payout ratio amounts to 39%
2009/20101)
0.22
0.33
44.7
(prev. year: 45%) – future payout
strategy of ~1/3 of net income
2008/2009
0.18 | 14.6
2)
Meeting for FY 2012/2013 (+12.5%
vs. previous year).
2010/2011
1)
 Dividend of € 0.45 per share will be
remains unchanged.
In 2009/2010, a special dividend of € 0.33 was paid in addition to the regular dividend.
Ratio of dividend per share to opening price for the respective financial year
Carl Zeiss Meditec
27
Agenda
1
Carl Zeiss Meditec Overview
2
Key Success Factors
3
First 3 Month 2013/2014 at a Glance
4
Outlook
5
Appendix
Carl Zeiss Meditec
29
Future Trends and Their Potential for Carl Zeiss Meditec
Globalization
Demographic change
Technological change
Rising demand for CZM solutions:
 Prevention & Diagnosis
 Surgery
Carl Zeiss Meditec
 Follow-up treatment
 Data management
30
Outlook
We are well positioned for profitable
growth due to:
1.
Stable long-term
demographic trends
2.
Our innovative strength &
broad product portfolio
Mid-term goals:
 To grow revenues at a faster rate than
the market
 To increase the share of
3.
Our global presence both
in sales and R&D
4.
Our good position in
new markets
Carl Zeiss Meditec
recurring revenues to at least 30%
 To reach an EBIT margin level of 15% in
2015 on a sustainable basis
31
Agenda
1
Carl Zeiss Meditec Overview
2
Key Success Factors
3
First 3 Month 2013/2014 at a Glance
4
Outlook
5
Appendix
Carl Zeiss Meditec
32
Events
 09 May 2014
6 Month Report
 09 May 2014
Telephone conference on 6 month results
 14 August 2014
9 Month Report
 14 August 2014
Telephone conference on 9 month results
 10 December 2014
Annual Financial Statements 2013/2014
 10 December 2014
Analyst‘s Conference, Frankfurt am Main
Carl Zeiss Meditec
33
Contact
Sebastian Frericks
Director Investor Relations
Carl Zeiss Meditec
Phone:
+49 (0) 36 41 / 2 20 - 1 16
Fax:
+49 (0) 36 41 / 2 20 - 1 17
Email:
[email protected]
Web:
www.meditec.zeiss.com
34
Disclaimer
This presentation does not constitute or form part of, and should not be construed as, an offer or invitation to subscribe for,
underwrite or otherwise acquire, any securities of Carl Zeiss Meditec AG or any present or future member of its Group nor
should it or any part of it form the basis of, or be relied upon in connection with, any contract to purchase or subscribe for
any securities in Carl Zeiss Meditec AG or any member of its Group or commitment whatsoever.
All information contained herein has been carefully prepared. Nevertheless, we do not guarantee its accuracy or
completeness and nothing herein shall be construed to be a representation of such guarantee.
The information contained in this presentation is subject to amendment, revision and updating. Certain statements
contained in this presentation may be statements of future expectations and other forward-looking statements that are
based on the management’s current views and assumptions and involve known and unknown risks and uncertainties.
Actual results, performance or events may differ materially from those in such statements as a result of, among others,
factors changing business or other market conditions and the prospects for growth anticipated by the management of Carl
Zeiss Meditec AG. These and other factors could adversely affect the outcome and financial effects of the plans and events
described herein. Carl Zeiss Meditec AG does not undertake any obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise. You should not place undue reliance on
forward-looking statements which speak only as of the date of this presentation.
This presentation is for information purposes only and may not be further distributed or passed on to any party which is not
the addressee of this presentation. No part of this presentation must be copied, reproduced or cited by the addressees
hereof other than for the purpose for which it has been provided to the addressee.
This document is not an offer of securities for sale in the United States of America. Securities may not be offered
or sold in the United States of America absent registration or an exemption from registration under the U.S.
Securities Act of 1933, as amended.
Carl Zeiss Meditec
35

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