Jefferies Healthcare Conference Jean-Marc BOTHY - CSO June 8, 2017 2017 IBA SA
Disclaimer This presentation may contain forward-looking statements concerning industry outlook, including growth drivers; the company s future orders, revenues, backlog, or earnings growth; future financial results; market acceptance of or transition to new products or technology and any statements using the terms could, believe, outlook, or similar statements are forward-looking statements that involve risks and uncertainties that could cause the company s actual results to differ materially from those anticipated. The company assumes no obligation to update or revise the forward-looking statements in this release because of new information, future events, or otherwise. 2
IBA at a glance A world leading innovator in cancer diagnostics and treatment Number one provider of proton therapy solutions Global leader in dosimetry and particle accelerators 1,500 employees worldwide and growing 329M Most advanced PT offering Single and multi room systems equipped with cutting edge technology *Proteus ONE and Proteus PLUS are brand names of Proteus 235 3
IBA a global leader in proton therapy Share of installed base - rooms Total accumulated: 250 rooms IBA market share is 56% in US, 54% in APAC ex. Japan and 56% in EUR & ROW Including commercial PT rooms at end 2016 4
IBA Group 2016 key figures 5
Proton therapy market drivers today s capacity gap Source : IBA internal modeling based on Model Based Approach developed in The Netherlands (https://www.gezondheidsraad.nl/sites/default/files/proton%20radiotherapy200917e_0.pdf) 6
Proton therapy capacity gap - 2035 Estimation of RT and PT rooms needed by 2035 - Radiotherapy rooms needed by 2035 estimated by Lancet Oncology - www.thelancet.com/oncology - Proton therapy rooms needed by 2035 extrapolated worldwide from the Horizon Scanning : Proton Therapy in the Netherlands www.gezondheidsraad.nl/sites/default/files/proton%20radiother apy200917e_0.pdf 7
IBA strategy 8
Why proton therapy? (The dose deposition) The therapeutic index Tumor control probability (TCP) Normal tissue complication probability (NTCP) Define the maximal dose deliverable as a function of acceptable tolerance Courtesy of El Naqa et al 2006a Int. J. Radiat. Oncol. Biol. Phys. 64 1275 86 Courtesy of Prof Lagendijk 11
Proton therapy vs conventional radiotherapy Highest dose is near the point of beam entry. Highest dose is at the depth of the tumor target. Tumor dose is less than the entry dose. Dose is also delivered beyond the tumor target. Zero or almost no dose beyond Minimal radiation exposure of healthy organs Potential to reduce the risk of secondary cancers Potential to improve the quality of life for patients during and after treatment Possibility of retreatment 12
Updated PT global market dynamics Number of patients treated with PT rose 21% between 2012 and 2015 to 131 240 (cumulated) Number of patients treated with PT in 2015: 13 195 This still represents less than 1% of the ~4 000 000 cancer patients treated every year with radiotherapy 140000 120000 100000 300 250 200 80000 60000 150 40000 100 20000 50 0 0 1957 1967 1977 1987 1997 2007 2017 Patients treated Total rooms sold Room in operations Source: MEDraysintell 2016, IBA model, PTCog 2016, and others 11
Increasing relevance of proton therapy 108 trials open and recruiting Publications statistics per year End December 2016 Number of publications up to end of 2016 Data from https://clinicaltrials.gov 1212
Rate of sales increasing 55% vs previous years PT market number of rooms sold per year Wider acceptance of PT Competitive dynamics Lower entry barriers to PT Technology evolving More centres opening Average p.a. 13
IBA s unique proton therapy solutions 360 m² Proteus ONE Proton therapy made easy Proteus PLUS Excellence in proton therapy 1800 m² Compact single-room IMPT solution Proteus ONE and Proteus PLUS are the brand names of the Proteus 235 Tailor-made IMPT solution 16
Size matters ProteusONE Other 360 gantry one room system Footprint 100 200 Volume 100 300 15
Rational for compact one room system Budget for one room system Up to 35% more affordable 3 months longer to instal 3 times larger building ProteusONE Other 360 gantry one room system Proton therapy system OIS/TPS Building development costs financial cost Start-up expenses System 3 times heavier 16
No compromises PROVEN PENCIL BEAM SCANNING For highly conformal IMPT INSTANT 3D & CONE- BEAM CT* For Image-Guided PT PATIENT AND STAFF FRIENDLY Open environment Protect, Enhance and Save Lives 17
Proton therapy centers equipped by IBA (end 2016) Systems 21 Systems Treating Patients & 17 Systems in Construction & 8 Systems in Installation Total: 46 Systems Rooms 67 Rooms Treating Patients & 24 Rooms in Construction & 20 Rooms in Installation Total: 111 Rooms 2016: 8 systems sold (5 Proteus One) in US, UK, China, India, UAE and Belgium 2017: 2 Proteus One sold (Spain and Egypt) and selection for another Proteus One in Belgium. Proteus ONE Proteus PLUS 18
Our strategy is to create a virtuous circle in PT Enhance market penetration Develop regionalization Leverage partnership Strengthen market leadership Invest in clinical affairs initiatives Focus on product roadmap Accelerate PT adoption PARTNERSHIPS Build clinical & cost advantage Increase clinical relevance Reduce cost of modality 19
Expansion strategy new factory Assembly, integration and test of accelerators for Proteus ONE CAPEX: EUR 16 million investment program over 2 years Digital factory Green and sustainable Lean total combined capacity of 20 to 30 accelerators per year (from 8 to 10 today) Opening in Q1 2018 2018 20
Image-guided proton therapy courtesy of Roberts Proton Therapy Center CBCT Penn Medicine, USA CT-on-rails, Trento, Italy 21
Excellence in proton therapy: integration TPS/OIS: open vendor strategy (freedom to choose according to your need) Treatment planning Oncology information system Proton treatment delivery system Xio (Elekta) : 12 centers Eclipse (Varian) : 7 centers RayStation (Raysearch) : 17 centers Mosaiq (Elekta) : 20 centers Aria (Varian) : 3 centers RayCare (Raysearch): In development IBA Pinnacle*(Philips) : 4 sites 22 30
2017 Q1 update Group revenues of EUR 73,2 million, up 13,5% compared to first quarter 2016 Proton Therapy and Other accelerators backlog amounts to EUR 316 million Proton Therapy revenues continue to grow with 8 projects now under installation simultaneously Other Accelerators show a drop from last year. Last year was boosted by the installation of two large high energy cyclotrons Dosimetry returns to growth up 19% to EUR 14.5 million Q1 2017 (EUR 000) Q1 2016 (EUR 000) Variance (EUR 000) Variance % Proton therapy 51.316 41.434 9.882 23,8% Other Accelerators 7.402 10.988-3.586-32,6% Dosimetry 14.555 12.208 2.347 19,2% Total Net Sales 73.273 64.630 8.643 13,4% 23
Guidance IBA expects to achieve revenue growth between 15% to 20% in 2017 and double digit thereafter The Company expects its operating margin to be 10% to 12% in 2017, increasing to around 13% by 2018 and stabilizing at around 15% by 2020. 30% dividend pay-out ratio target maintained for 2017 This guidance is not only based upon the continued expected growth of the proton therapy market but also the balance between the economies of scale that we can achieve at a higher production rate. In addition, the growing importance of service revenue versus the increased demand driven by the equipment price tag reduction in the proton therapy market and our continued investment in R&D and software capabilities are anticipated to be contributing factors. 24
Thank you Protect, Enhance and Save Lives 25