BERENBERGAND GOLDMAN SACHS SEVENTH ...ir.stratec.com/stratec/pdf/pdf_id/487315.pdfMarket leader in...

BERENBERG AND GOLDMAN SACHS SEVENTH GERMAN CORPORATE CONFERENCE

Munich – September 25, 2018

SAFE HARBOR STATEMENT

Forward-looking statements involve risks.This company presentation contains various statements concerning the future performance of STRATEC. These statements are based on both assumptions and estimates. Although we are convinced that these forward-looking statements are realistic, we can provide no guarantee of this. This is because our assumptions involve risks and uncertainties which could result in a substantial divergence between actual results and those expected. It is not planned to update these forward-looking statements.

MUNICH - SEPTEMBER 25, 2018 2

AGENDA

3MUNICH - SEPTEMBER 25, 2018

1. OVERVIEW AND BUSINESS MODEL2. THE IVD MARKET3. FINANCIALS4. FUTURE GROWTH


OVERVIEW ANDBUSINESS MODEL

OVERVIEW AND BUSINESS MODEL

STRATEC AT A GLANCE


Market leader in automation solutions for thediagnostics industry and translational research

~ 1.100 employees worldwide

More than 13,000 systems with medium to high throughput installed globally (e.g. DiaSorin’s LIAISON XL | Hologic/Gen-Probe’s PANTHER | Siemens’ ADVIA Centaur | bioMérieux’s new VIDAS)

More than 25,000 low throughput systems installed globally

Revenue € 209.8 million in 2017(CAGR revenues since IPO in 1998: ~17%)

Dividend payments raised over 14 consecutive years


UNIQUE MARKET POSITION STRATEC IN THE IVD VALUE CHAIN


DiagnosticCompanies

Blood Banks,Laboratories

Patients

STRATEC develops and manufactures fully automated analyzer systems and disposables focusing on the high growth segments in diagnostics

Partners market systems together with reagents and consumables to laboratories, blood banks and hospitals worldwide

Laboratories performing tests and offering service to doctors and patients using reagents from diagnostic companies

Growth drivers:

• Aging population

• Developing healthcare systems world wide

• High volume of new tests


BUSINESS MODEL


STRATEC provides instrumentation, consumables, software and automation solutions– OEM development and manufacturing– More than 7,000 fully automated analyzer systems manufactured annually– Wide range of intellectual property rights

Extensive collaboration with partner during design phase– STRATEC: Engineering / automation, software, QM– Partner: System / reagent / market requirements

Systems have long market lifecycles– Leads to longstanding partnerships – Expanding installed base of systems– Product enhancement and extension drives value

“Simoa HD-1” for QuanterixConsumable for “Simoa HD-1”


SECURING RETURN ON INVESTMENT


Long-term agreements with partners– Milestone payments during development stage– Operating sales during series production stage– Continuous revenues from consumable sales

Minimum volume commitment– Firm purchase orders– STRATEC an integral part of partners’ plans

Reliable partnership– Shortened development time– Integration of analyzer system and reagents– Agreed development budget & transfer price– High commitment by both partners “LIAISON XL” for DiaSorin

“PANTHER FUSION” for Hologic

9

THE IVD MARKET

MUNICH - SEPTEMBER 25, 2018

THE IVD MARKET

IVD MARKET SEGMENTS / IVD MARKET: ~ 60 BILLION USD IN 2016


High Throughput

Low Throughput

Total instrumentation~ 8.3 billion USD

Number of systems

CAGR 2016 - 2021:

IVD Market: ~ 4-6%

Molecular Diagnostic: ~ 8% Immunodiagnostics: ~ 4%Hematology: ~ 2-4%

Source: Kalorama: “The worldwide market for In Vitro Diagnostic Tests, 10th Edition”, Aug 2016MarketsandMarkets: “In Vitro Diagnostics/IVD Market - Forecast to 2021”, Dec 2016

80%

14%

4%2%

Reagents / Chemistry

Instrumentation

Services

Software

High Throughput

Market by product type

THE IVD MARKET

OUTSOURCED VS IN HOUSE INSTRUMENTATION MARKET


Total instrumentation

~ 8.3 billion USD

In House64 %

Outsourced36 %

In House73 %

Outsourced27 %

2010 2015 2020

In House56 %

Outsourced44 %

Source: Own estimates based on historical market data and recent industry trends

THE IVD MARKET

A SELECTION OF STRATEC CUSTOMERS


Source: IVD News / non-public companies estimated / non-reported sector revenues estimated

… AND OTHER GAME-CHANGING COMPANIES

(acquired by Bio-Rad in January 2017)

STRATEC customer

Not a STRATEC customer

GLOBAL TOP 20 IVD COMPANIES Revenues 2017 (USD billion)

1. Roche Diagnostics 10.2

2. Abbott Diagnostics 7.3

3. Danaher 5.8

4. Siemens 5.0

5. ThermoFisher 3.5

6. Sysmex 2.4

7. bioMerieux 2.1

8. Ortho Clinical Diagnostics 1.8

9. BECTON DICKINSON 1.4

10. BIO-RAD 1.4

11. Hologic 1.2

12. CH Werfen 1.0

13. Grifols 0.8

14. Agilent 0.8

15. Diagnostica Stago 0.7

16. Qiagen 0.7

17. DiaSorin 0.7

18. Perkin Elmer 0.6

19. Fujirebio 0.4

20. Immucor ~0.4


FINANCIALS

FINANCIALS


KEY FIGURES - TRACK RECORD

Sales in € millionCAGR ~12%

EBIT in € millionCAGR ~10%

1 Figures adjusted for comparison; adjusted for depreciation and amortization from purchase price allocation for acquisitions, related integration expenses and other extraordinary effects. Reconciliation to IFRS figures can be found in the respective annual report.

67.5 6176

102116.6 122.7 128

144.9 146.9

184.9

209.8

0

50

100

150

200

250

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

14.311.2

14.717.6

21.8

15.6

19.5

24.126.9

32.335.5

0

5

10

15

20

25

30

35

40

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

11

FINANCIALS


KEY FIGURES - TRACK RECORD

Net income in € millionCAGR ~11%

Dividend per share in € CAGR ~14%

10.08.2

11.713.0

15.3

12.4

15.5

19.8

22.1

25.4

27.9

0.0

5.0

10.0

15.0

20.0

25.0

30.0

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

0.22

0.35

0.450.50

0.55 0.560.60

0.700.75 0.77

0.80

0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

0.80

0.90

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

1

1

1 Figures adjusted for comparison; adjusted for depreciation and amortization from purchase price allocation for acquisitions, related integration expenses and other extraordinary effects. Reconciliation to IFRS figures can be found in the respective annual report.

FINANCIALS


SALES BY OPERATING DIVISIONS

56% 55% 49%

26% 29%33%

18% 15% 18%

0%10%20%30%40%50%60%70%80%90%

100%

2015 2016 2017

Systems Service parts & consumables

Developement & services Others

Continued growth in service parts & consumables sales

- Growth driven by increased installed base, higher system complexity and acquisitions

- At 33% of total sales in 2017 versus 26% in 2015

In % of total sales

Annual sales by operating division as of Dec 31

FINANCIALS


• Organic sales decline of 3.9% to € 90.2 million (H1/2017: € 100.7 million):

- Sales of € 93.5 million before adoption of IFRS 15- Weak Q1 but again positive organic growth in Q2

• Adjusted EBIT margin down by 290 bps yoy to 9.8% due to missing economies of scale and negative effect from the first-time adoption of IFRS 15

• Further contract wins and several promising negotiations in advanced stage

• First components of new molecular diagnostic platform and new cartridge-based hematology device presented at this year’s AACC

• Number of employees up by 13.0% to 1,148 in the light of full project pipeline

17

SUMMARY FIRST SIX MONTHS OF 2018

H1 2018 - FINANCIALS AT A GLANCE1, 2

FINANCIALS


bps = basis points

(1) For comparison purposes, adjusted figures exclude amortizations resulting from purchase price allocations in the context of acquisitions, associated integration expenses, as well as other one-off items.

(2) Figures for H1 2018 in line with IFRS 9 and 15. The 2017 figures were not retroactively adjusted (modified retrospective method). Refer to the H1|2018 six-month report for the impact of the first-time adoption of IFRS 9 and IFRS 15.

18

FINANCIALS


Consolidated net incomeEBIT

As of June 30

H1 2018 - ADJUSTMENTS

19

FINANCIALS


H1 2018 - SALES

H1/2018 sales decline of 10.5% to € 90.2 million

- Negative effects from foreign exchange and IFRS 15 adoption organic sales decline of 3.9%

- Lower instruments sales due to internal factors at key customers; improvements in Q2 but most recent overall volume forecasts below initial expectations

As of June 30

60.169.1 70.0

78.0

100.790.2

0

20

40

60

80

100

120

140

H1/13 H1/14 H1/15 H1/16 H1/17 H1/18

In € million

20

FINANCIALS


H1/2018 adjusted EBIT margin at 9.8% • Adjusted EBIT down 31.0% yoy to

€ 8.8 million- Negative effect of € 1.3 million due to

first-time adoption of IFRS 15

• Margin decline of 290 bps yoy - Negative scale effects- Growth investments related to strong

project pipeline- Negative effect of 110 bps from first-

time adoption of IFRS 15

H1 EBIT EBIT margin

EBIT in € million EBIT margin in %

8.4

11.212.0

12.6 12.8

8.8

4%

6%

8%

10%

12%

14%

16%

18%

20%

0

2

4

6

8

10

12

14

H1/13 H1/14 H1/15 H1/16 H1/17 H1/18

As of June 30

H1 2018 - ADJUSTED EBIT AND EBIT MARGIN

21

FINANCIALS


H1 2018 - OVERVIEW SEGMENTS

22

• Weak system sales• Negative economies

of scale• Increased R&D

activities• Negative effect from

IFRS 15

• Strong software licensing business

• Weak Q1 due to delayed product launches

• In-line with budget

FINANCIALS


H1 2018 - CASH FLOW AND NET DEBT

IFRS (€ million) H1/2018 H1/2017 yoy

Cash flow – operating activities 11.9 13.9 -14.4%

Cash flow – investment activities

1.0 -6.6 nm

Cash flow – financing activities

-9.7 -16.6 41.6%

Free cash flow 4.3 7.3 -41.1%

Cash and cash equivalentsat end of period 26.9 17.1 57.3%

Net debt 42.8 51.4 -16.7%

• H1/2018 operating cash flow down by 14.4% yoy due to lower earnings levels and higher inventories

• Investments offset by disposal of financial assets

As of June 30

23


FUTURE GROWTH

FUTURE GROWTH


FINANCIAL GUIDANCE

Outlook for 2018• Sales growth at constant exchange rates of 3-5% (including effects from IFRS 15)

– First-time adoption of IFRS 15 expected to add approximately two percentage points to growth– Implies organic growth of 1-3%

• Adjusted EBIT margin of around 16-17%

Medium-term expectations • Average annual organic sales growth (CAGR) in the high single-digit or

low double-digit percentage range • EBIT margin development at an approximately constant level of 17%

– Positive scale effects offset by growth activities related to full development pipeline

25

FUTURE GROWTH


• Reaccelerate top-line growth in second half of 2018 and reduce earnings volatility across business units

• Further realize synergies through development activities across STRATEC businesses • Leverage expanded platform offering• Achieve milestones and market launches within foreseen timeframe

- Expected launches within the next 9-15 months among others include instruments for DiaSorin, Becton Dickinson, Quotient and the KleeYa Analyzer platform

• Implementation of a group-wide ERP system to further drive process efficiency• Expand development capacities including significant extension of buildings in Birkenfeld

26

FOCUS IN 2018 AND BEYOND

27

APPENDIX


APPENDIX

28

KEY FIGURES AT A GLANCE

IFRS (€ million) 2013 2014 2015 2016 2017

Sales 128.0 144.9 146.9 184.9 209.8

Adjusted EBIT 19.5 24.1 26.9 32.2 35.5

Adjusted EBIT margin (%) 15.2 16.6 18.3 17.4 16.9

Adjusted Consolidated net income 15.5 19.8 22.1 25.3 27.9

Adjusted Earnings per share (€) 1.32 1.68 1.87 2.14 2.35

Dividend per share (€) 0.60 0.70 0.75 0.77 0.80

No. of employees 546 544 583 976 1,086

Total assets 117.8 137.8 158.9 258 264

Equity ratio (%) 82.5 81.3 82.0 55.7 59.8

Free cash flow 13.5 32.9 17.3 -70.4 14.4

Figures adjusted for comparison; adjusted for depreciation and amortization from purchase price allocation for acquisitions, related integration expenses and other extraordinary effects. Reconciliation to IFRS figures can be found in the respective annual report.


SHAREHOLDER STRUCTURE(as of: May 2018)

APPENDIX

29

SHAREIPO Aug. 1998Number of shares 11,962,495Share price (09/18/2018) € 69.20Market capitalization € 828 million

Fixed and family ownership(incl. investment companies)

Treasury shares

Retail investors incl. notidentified institutional investors

Institutional investors

Institutional investors > 3%:OppenheimerFundsColumbia Threadneedle Investments Allianz BNP Paribas Investment Partners

41.2%

0.1%

37.0%

21.7%


STRATEC Biomedical AGGewerbestr. 3775217 BirkenfeldGermany

www.stratec.com

CONTACT

THANK YOU FOR YOUR ATTENTION

CONTACT

Marcus WolfingerCEO

Jan KeppelerHead of Investor Relations & Corporate CommunicationsPhone +49 7082 7916-6515Fax +49 7082 [email protected]


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