13th German Corporate Conference - ZEISS German Corporate Conference January 21, 2014 ... Asia...

Carl Zeiss Meditec – UniCredit Kepler Cheuvreux 13th German Coporate Conference

13th German Corporate Conference

January 21, 2014 | Frankfurt/Main, Germany

Dr Christian Müller, CFO


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Key Success Factors

Financial Performance 2012/2013

Outlook

Carl Zeiss Meditec Overview

Agenda

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5 Appendix


Are you Aware of the Following Facts?

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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 at a Glance

One of the world’s leading medical technology companies in :

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

Ophthalmology Microsurgery

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%

Headquarters in Jena, Germany

More than 2,500 employees worldwide

Listed on the TecDAX

65% of the shares held by Carl Zeiss

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Offering the Most Extensive Portfolio in the Industry for Specific Customer Segments

Private

practitioners

Ophthalmic

Systems

Sales 12/13:

€ 391.0mn

Clinics

Surgical Oncology

Ambulatory

surgery

centers

Hospitals

Cataract Surgery

Visualisation & Microsurgery

Glaucoma & Retina

Diagnose & Therapy

Corneal Refractive Surgery

Customer SBU Segments Products

Microsurgery

Sales 12/13:

€ 394.2mn

Surgical

Ophthalmology

Sales 12/13:

€ 121.3mn

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640.1

676.7

758.8

861.9

906.4

76.1

86.7

103.6

122.9

133.9

Successful Track Record: Revenue and EBIT over the last 5 Years

| 14.8%

| 14.3%

Revenue in € million

EBIT | EBIT Margin in € million

In 2012/2013, we have reached the

upper end of our revenue guidance of

€ 880 - € 910mn.

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2012/2013

2011/2012

2010/2011

2009/2010

2008/2009

| 13.6%

| 12.8%

| 11.9%

2012/2013

2011/2012

2010/2011

2009/2010

2008/2009

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.


USA:

Dublin

Ontario Spain:

Madrid Japan:

Tokio

Successfully Positioned with a Worldwide Presence and a Well-Balanced Revenue Split

Germany:

Jena

Berlin

Oberkochen

Munich

France:

Le Pecq

La Rochelle

Paris

Revenues € 327.5mn

Employees 740


Employees 1,667

CZM-Company locations:

Production, Sales, Service, R&D

CZM-Sales and Service locations

Carl Zeiss-Sales and Service locations

Americas: EMEA: Asia/Pacific:


Employees 133

7

Turkey:

Ankara


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Key Success Factors


Outlook


Agenda

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5 Appendix


Focus on Key Success Factors Yields First Results

Customer Focus New Markets

Our Employees Excellent Processes

Basis for long term growth

Service is a profitable

recurring business

opportunity

Geographical expansion (into rapidly

developing countries)

New areas of business

(e.g. surgical oncology)

Make success

happen

Responsible human

resources development and

continuous professional improvement

Efficient and effective

business management

Streamlining of

supply chain processes

Innovation

Major source of competitive

differentiation

Using cutting edge technologies

to advance medical applications

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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

63.5

72.4

84.2

93.5

97.3

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2012/2013

2011/2012

2010/2011

2009/2010

2008/2009

| 10.7%

| 10.8%

| 11.1%

| 10.7%

| 9.9%

Tradition for gold standard products

Close collaboration with customers to

develop new products and solutions

leading to more efficient workflows

and better clinical outcomes

In 2012/2013, R&D expenditure

increased by 4.1% to € 97.3mn.

Approx. 16% of current total workforce

are employed in R&D.


Significant Innovations Were Introduced to the Market in Recent Quarters

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AT LISA® tri toric 939MP

CIRRUS™ HD-OCT 5000/500

MEL 90 Excimer Laser

VISALIS® 500

with APM™-Modus

CIRRUS™ photo

ZEISS Cataract Suite markerless

Carl Zeiss Meditec – UniCredit Kepler Cheuvreux 13th German Coporate Conference 12

Designed to Work Together: With FORUM, we add Value through Connecting all our Customers‘ Components

Forum Archive & Viewer 3.1

FORUM GO

FORUM Glaucoma Workplace

Our data management solutions recently

introduced into the market:


Data Management Solution

Workflow Solutions for Cataract – Enable Effective and Efficient Treatment

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IOL - Master Z CALC Opmi Lumera

AT LISA®

Diagnosis Treatment-Planning Surgery After-Treatment

VISULAS YAG III

Carl Zeiss Meditec – UniCredit Kepler Cheuvreux 13th German Coporate Conference 14

We Have Reached our Mid-term Target for Recurring Revenue Ahead of Time and now Target a 30% Share

Recurring revenue increase through acquisitions

25%

~9%

Recurring revenue increase through organic growth

2003/2004 2012/2013

30% Consumables & Service

Devices

Mid-term

target

Recurring revenue as a % of sales revenue

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.)

We steadily broaden our

service offering to enhance the

share of recurring revenue.

More recurring revenue has

allowed for profitable growth

and less cyclicality


Customer Focus is the Basis for Long-Term Growth and a Business Opportunity in Itself

Strengthening of Global Service &

Customer Care

Our service complements our product

offering and improves customer

satisfaction.

Improved customer service level through

training and certification of service

technicians

Focus on service has increased revenue

continuously.

Early Involvement of Customers in

Research and Development

Customers are routinely involved in all

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.

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20 40 60 80 100

2008/2009

2009/2010

2010/2011

2011/2012

2012/2013

Our Focus on New Markets Has Materialized in Significant Contribution to the Overall Growth of CZM

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.)

Total Revenue China, India and SEA in € million

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+ 9%

+ 25%

+ 35%

+ 28%

R&D center in China

addresses the fastest growing

market for mid-range products

R&D center in India develops

products tailored to suit

individual market needs.

Customer training program in

China enhances customer

loyalty.

Increase of sales coverage in

China

Leverage of economic growth

in Latin America by expanding

our sales organization


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Key Success Factors


Outlook


Agenda

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5 Appendix


FX-adj. revenue growth 8% with

contributions from all SBU’s and regions

Positive margin trend in MCS and SUR

helped to more than offset the decline in

OPH and FX pressure

Net income additionally boosted by (largely

unrealised) hedging gains

14.8%

€ 1.15

Revenue

133.9

93.5

+30% EPS

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Comments

+8.9% EBIT

906.4 +5.2%

FY 2012/2013 in € million

+0.5%-pts. EBIT margin

+30% Net income

Change (y-o-y)

Strong Revenue Growth of 5.2% Under Increasingly Challenging Market Conditions

MCS (Microsurgery); SUR (Surgical Ophthalmology); OPH (Ophthalmic Systems)

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861.9 906.4

122.9 133.9

Another Successful Year with Growth in Revenue and Margin Expansion

Revenue in € million

EBIT in € million

We have reached the upper

end of our revenue guidance

of € 880 - € 910mn.

FX-adj. revenue growth of

8.0%

EBIT margin gained 0.5 %

pts. to 14.8%.

Net income additionally

boosted by (largely

unrecognized) hedging gains

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2012/2013 2011/2012

2011/2012 2012/2013

71.9

93.5

Net Income in € million

2012/2013 2011/2012

0.88

1.15

Earnings

per Share

2011/2012 2012/2013

+ 30% + 5.2%

+ 30% + 8.9%


Microsurgery: Revenue Growth Has Slowed Down to a Mid-Single-Digit Percentage during 2012/13

Revenue | Revenue split in € million

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378.2

394.2 2012/2013

2011/2012

+ 4.2% Growth in MCS resulted in

revenue of € 394.2 mn (+4.2%

yoy; FX-adj.: +7.7%).

Compared with the extraordinary

growth of the previous year,

market dynamics have slowed

down over the course of the year.

MCS continued to benefit from a

favourable product mix with

strong demand for high-end

surgical microscopes in

neurosurgery and ophthalmology

and favourable regional split,

leading to record segment

profitability.

43.5 %

of revenue


Ophthalmic Systems: Top Line Recovery towards Year End, but Structural Challenges Remain


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375.9

391.0 2012/2013

2011/2012

+ 4.0%

43.1 %

of revenue

Revenue in OPH amounted to

€ 391.0mn.

After a weak start to the year,

OPH recovered in H2 to reach

overall satisfactory growth of

+4.0% yoy (FX-adj.: +6.8%).

Competitive situation remains

challenging with persistent price

pressure in some key products.

Segment profitability declined

from previous years.


Surgical Ophthalmology: Another Year of Double-Digit Growth in Revenue


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107.7

121.3 2012/2013

2011/2012

+ 12.6%

13.4 %

of revenue

SUR once again achieved

double-digit growth of +12.6%

(FX-adj.: +12.7%), resulting in

revenue of € 121.3mn.

Benefiting in particular from

ongoing high demand for IOLs

for minimally invasive cataract

surgery in the premium segment

Segment profitability continues to

advance.


Positive Growth Contribution from all Business Units and Regions

Revenue by region in € million

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303.9

327.5

2011/2012

2012/2013

(+8.8% FX-adj.) 7.8% +

EMEA 33.9 %

of revenue

290.5

307.6

2011/2012

2012/2013

(+5.9% FX-adj.) 5.9% +

APAC 29.9 %

of revenue

267.5

271.4

2011/2012

2012/2013

(+9.4% FX-adj.) 1.4% +

Good growth rates overall in South

America; Sales development

recovered in the US in H2

Picture in EMEA remains mixed:

Continued strong growth in Germany

and Middle East – Southern Europe

remains difficult, but with a slightly

improving trend in H2

Strong organic performance in China,

Japan, SEA and Australia. Significant

currency headwinds in Japan and

India

Americas 36.1 %

of revenue


EBIT Margin Continues to Expand on Stable Pricing and Operating Leverage

Income statement

in € million in %

of revenue

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2012/2013 2011/2012

Gross profit 487.8 53.8

461.4 53.5

Selling & marketing

expenses

214.3 23.6

204.0 23.7

General & admin.

expenses

42.3 4.7

41.0 4.8

R&D expenses 97.3 10.7

93.5 10.8

EBIT 133.9 14.8

122.9 14.3


Continued Strong Liquidity Situation

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Cash flow from operating activities

Cash flow from investing activities

Cash flow from financing activities

Change in cash and cash equivalents

Cash Flow Statement in € million

Cash flow from operating activities:

Increased working capital mainly due

to investments in inventories related

to OCT launch and higher A/R due to

stronger concentration of quarterly

sales towards end of the quarter

Cash flow from investing activities:

Fixed-term deposits increased by

€ 20 mn, while previous year included

IMEX acquisition and investment in

new building in Berlin.

Cash flow from financing activities:

Cash flow from financing activities

improved mainly due to decrease in

receivables from related parties.

-3,240

-242,870

-185,115

-34,191

-37,401

-32,198

92,100

64,624

2012/2013 2011/2012


Key ratio

Definition

Sep 30, 2013

Change to Sep 30, 2012

Equity ratio Equity

Total Asset 74.9 % +2.6%-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

€ 351.8 mn - 1.3%

Working capital Current assets

./. Current liabilities € 528.2 mn + 6.7%

Days of sales outstanding (DSO)

Trade receivables at the end of

the reporting period (gross)

Rolling monthly sales

50.8 days - 7.0%

Rate of inventory turnover (ITO)

Cost of goods sold (annualized)

Average inventories 2.9 +- 0.0%

Financial Set-up Again very Sound

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Positive Development also Reflected in Dividend

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Dividend | Total dividend distributed in € | in € million

1) In 2009/2010, a special dividend of € 0.33 was paid in addition to the regular dividend. 2) Ratio of dividend per share to opening price for the respective financial year

Dividend of € 0.45 per share will be

proposed to the Annual General

Meeting for FY 2012/2013 (+12.5%

vs. previous year).

The payout ratio amounts to 39%

(prev. year: 45%) – future payout

strategy of ~1/3 of net income

remains unchanged. 0.18

0.22

0.30

0.40

0.45

0.33

2012/2013

2011/2012

2010/2011

2009/20101)

2008/2009

| 36.6

| 32.5

| 24.4

44.7

| 14.6


Acquisition of Optronik: Establishing Direct Sales Presence in a Key Growth Market

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CZM has acquired its long-standing, exclusive

distribution partner in Turkey, Optronik AS, 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.


Acquisition of Aaren Scientific: Teaming up for a Successful Future in IOLs

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Leading innovation in IOL technology Portfolio expansion in mid-segment, addressing new markets

Hydrophilic Hydrophobic

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.

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.


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Key Success Factors


Outlook


Agenda

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5 Appendix


Future Trends and Their Potential for Carl Zeiss Meditec

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Demographic change Globalization

Technological change

Rising demand for CZM solutions:

Prevention & Diagnosis

Surgery

Follow-up treatment

Data management


Outlook

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We are well positioned for profitable

growth due to:

Stable long-term

demographic trends

Our innovative strength &

broad product portfolio

Our global presence both

in sales and R&D

Our good position in

new markets

1.

2.

3.

4.

Mid-term goals:

To grow revenues at a faster rate than

the market

To increase the share of

recurring revenues to at least 30%

(increased from 25%)

To stabilize profitability at the currently

high level and reach an EBIT margin

level of 15% in 2015 on a sustainable

basis


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2

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4

Key Success Factors


Outlook


Agenda

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5 Appendix


Events

13 February 2014 3 Month Report

13 February 2014 Telephone conference on 3 month results

4 March 2014 Annual General Meeting

13 May 2014 6 Month Report

13 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

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Contact

Sebastian Frericks

Director Investor Relations

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

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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.

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13th German Corporate Conference - ZEISS German Corporate Conference January 21, 2014 ... Asia...

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Transcript of 13th German Corporate Conference - ZEISS German Corporate Conference January 21, 2014 ... Asia...