VITROLIFE AB (PUBL) Pareto Securities Health Care Conference 2018-09-06 1
2 10 15 % OF ALL COUPLES IN FERTILE AGE SUFFER FROM FERTILITY PROBLEMS
LEADING COMPANY IN MEDICAL DEVICES FOR ASSISTED REPRODUCTION A Swedish company Founded in 1994 Approx 370 employees Sales 1 064 MSEK* 97% on export Listed on NASDAQ Stockholm Mid Cap 3 * Rolling 12 months
AN INCREASING TREND OF DELAYING FIRST BIRTH 32 Age 30 28 26 Spain Sweden United Kingdom Poland United States 24 22 1980 1990 2000 2010 2014 Source: UNECE Statistical Database. Data collected from Eurostat and UNICEF TransMONEE official sources 4
AGE IS A CRITICAL FACTOR FOR SUCCESS Day 3 and Day 5 embryo transfers that resulted in live births by age Percentages of ART cycles that resulted in miscarriage by age 5 2015 Assisted Reproductive Technology, National Center for Chronic Disease Prevention and Health Promotion, Divison of Reproductive Health
SUCCESS RATE STEP BY STEP Outcomes of ART Cycles Using Fresh Nondonor Eggs or Embryos Percentages of ART Cycles Using Fresh Nondonor Eggs or Embryos That Resulted in Pregnancies, Live Births, and Single-Infant Live Births, by Age of Woman* 6 2015 Assisted Reproductive Technology, National Center for Chronic Disease Prevention and Health Promotion, Divison of Reproductive Health
THE IVF-PROCESS VITROLIFE PRODUCTS HORMONE TREATMENT Hormone stimulation to increase the number of retrievable eggs 7
COST STRUCTURE FOR AN IVF CLINIC 26% 45% EBITA 25-30% Salaries 45% Purchase 8-12% Depreciation 1-3% Other operating costs 15-25% (currently reconstruction cost or high financial cost to owner structure) Comments Salaries are the major cost Sales & marketing is in other operating costs Clinic chains have higher financial costs than non clinic chains 10% 2% 17% 8
WITH FOCUS ON SUPPORTING CLINICS IN BECOMING SUCCESSFUL Ensure staff are well trained Secure access to the latest know-how and technologies Maximise clinic efficiency and reliability Improve the financial results 9
LARGE REGIONAL DIFFERENCES ON NUMBER OF IVF CHILDREN BORN ART INFANTS (EXCL. IUI) PER NATIONAL BIRTH % 10 Source: Data from 2013-2016
MARKET TRENDS Increased regulatory demands (higher barriers to enter) Patients are more informed and involved as decision-makers Cooper has strengthened its position by acquisitions Emergence of local players with domestic production in China and Japan Kitazato emerging competitor in new areas COMPETITION PATIENTS Growing middle class Parents mean age is increasing Social freezing is growing Time-lapse is increasing Pre-implantation genetic testing is increasing Cryo-preservation is increasing TREATMENT IVF CLINICS Consolidation of IVF clinics Private equity owned clinic chains Increased demand for easy-to-use products and workflow efficiency Mild stimulation is increasing Mid-single digit growth in oocyte pickup cycles Higher revenue growth due to upselling 11
STRATEGIC OPPORTUNITIES Opportunities in all markets sell more of existing portfolio time-lapse expansion product line expansion Technology changes selection / decision support Medtech diagnostics and pharma integration / cooperation 12
SUMMARY Q2 Sales of 283 MSEK (285) equals -1% in SEK Sales decreased by 5% in local currencies EBITDA of 116 MSEK (41% margin) Market approval for EmbryoScope+ in the US Share split 5:1 Collaboration agreement with GE Healthcare 13
SALES AND GROWTH PER BUSINESS UNIT SEK millions, rolling 12m 1200 1000 800 600 56 39 20 3 146 148 160 178 78 80 65 80 78 209 233 254 271 267 134 136 139 142 148 150 148 151 149 ART EQUIPMENT TIME-LAPSE DISPOSABLE DEVICES -61% -9% -10% 400 200 469 482 500 519 536 543 545 543 562 MEDIA +9% 0 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2016 2017 2018 Quarterly growth Local currencies 14
SALES AND GROWTH PER MARKET REGION SHARE OF VITROLIFE S SALES ROLLING 12-MONTHS 14% 45% 25% 16% Q2 GROWTH RATE COMPARED TO LAST YEAR IN LOCAL CURRENCIES +3% +7% -26% +6% Total -5% 15 * Whereof organic growth -1 percent
KEY FINANCIALS GROUP Q2 Fluctuations in exchange rates positively impacted EBITDA by SEK 8 million. Dividend paid of SEK 81 million (SEK 3.70 per share before share split) 2018 Q2 2017 Q2 2018 Q1-Q2 2017 Q1-Q2 2017 FY Sales, MSEK 283 285 547 529 1 046 Gross Margin % 66% 65% 66% 65% 65% Adj. Gross Margin %* 70% 69% 69% 69% 69% EBITDA, MSEK 116 112 222 207 408 EBITDA Margin % 41% 39% 41% 39% 39% Earnings per share, SEK** 0.73 0.66 1.39 1.20 2.43 Net Debt / EBITDA rolling 12m -1.0-0.5-1.0-0.5-1.0 16 * Gross margin excluding amortisation of acquisition-related intangible assets ** Recalculated with regard to the 5:1 share split carried out in May 2018.
THE SHARE SEK / SHARE Listed on NASDAQ Stockholm Mid Cap Market value: ~13 billion SEK Share split on May 17 (5:1) Stockholm LARGEST OWNERS 31 July 2018 1. William Demant Invest A/S 22.2% 2. Bure Equity AB 20.8% 3. SSB CLIENT OMNIBUS AC OM07 7.1% 4. Lannebo Småbolag 2.9% 5. Eccenovo AB 2.1% 6. CBNY-NORGES BANK 1.9% 17
OUTLOOK Long-term market growth 5-10% in monetary terms Expansion of sales Broadening the product offering 18
Contact: Thomas Axelsson, CEO, taxelsson@vitrolife.com, +46 31 721 80 01 Mikael Engblom, CFO, mengblom@vitrolife.com, +46 31 721 80 14
DISCLAIMER This presentation contains estimates and forward-looking statements, which reflect the Management s current views with respect to the market, certain future events and financial performance. Although the statements are based upon estimates the Management believes to be reasonable, there is no assurance that these statements are correct or will be achieved. The most important strategic and operative risks regarding Vitrolife s business and field are described in the Management report, in the Annual Report. These are primarily constituted by macro-economic risks, operational risks and financial risks.