Presentation of Semi-Annual Results 2012/13 Burgdorf, 1 st November 2012
Important Notice The information contained in this document has not been independently verified and no representation or warranty, express or implied, is made to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained herein. None of Ypsomed Holding AG, its advisors or representatives, or their respective affiliates shall have any liability whatsoever for any loss whatsoever arising from any use of this document, or its content, or otherwise arising in connection with this document. This document does not constitute, or form part of, an offer to sell or a solicitation of an offer to purchase any shares and neither it nor any part of it shall form the basis of, or be relied upon in connection with, any contract or commitment whatsoever. This document contains forward-looking statements which involve risks and uncertainties. These statements may be identified by such words as may, plans, expects, believes and similar expressions, or by their context. These statements are made on the basis of current knowledge and assumptions. Various factors could cause actual future results, performance or events to differ materially from those described in these statements. No obligation is assumed to update any forward-looking statements. 2 Ypsomed Holding AG Presentation of Semi-Annual Results 2012/13
Agenda 1. Introduction 2. Finances 3. Operating activities 4. Outlook 5. Questions and answers 3 Ypsomed Holding AG Presentation of Semi-Annual Results 2012/13
The first half of the 2012/13 business year at a glance (1/2) Sales and EBIT have been dominated by the discontinuation of the OptiSet and OptiPen Pro for Sanofi. It was not possible to fully offset the year-on-year decline in sales of these products, which amounted to some CHF 14.0 million. In the Diabetes Direct business, the sales growth of over 75% enjoyed by the mylife OmniPod is very pleasing. Sales for the whole segment are up some CHF 6.0 million (16%). Ypsomed s Ypsotec subsidiary, which h manufactures mechanical precision i parts, posted an operating loss of some CHF 0.8 million, thus adversely affecting the Others segment result. Thanks to rigorous cost management, Ypsomed is turning a profit, generating EBIT of CHF 2.4 million (previous year: CHF 3.0 million). 4 Ypsomed Holding AG Presentation of Semi-Annual Results 2012/13
The first half of the 2012/13 business year at a glance (2/2) Ypsomed invested a total of CHF 8.1 million in fixed assets, with a large proportion of these investments being made in expanding pen needle production facilities in Switzerland. Overall, Ypsomed spent CHF 10.2 million on R&D. Investing in developing proprietary products has a long-term focus and lays the foundations for the future success of the Ypsomed Group. Major shareholder h Willy Michel has extended d his commitment by a further three years (until March 2017) as he firmly believes in Ypsomed s strategy and future prospects. The shareholders approved the authorized capital increase in June. Ypsomed is continuing to investigate a range of synergy-boosting investment opportunities but has yet to reach any concrete decisions. 5 Ypsomed Holding AG Presentation of Semi-Annual Results 2012/13
Key figures In million CHF 1 st HY 2012/13 1 st HY 2011/12 Delta in % Sales of goods and services 119.7 122.8-2.5% thereof Delivery Devices 69.1 77.7-11.1% thereof Diabetes Direct Business 42.7 36.8 15.9% thereof Other 7.9 8.3-4.2% Gross profit 27.4 28.5-4.0% Gross profit in % 22.8% 23.2% 2% Operating profit 2.4 3.0-18.5% Operating profit in % 2.0% 2.4% Net profit 20 2.0 76 7.6-73.1% Net profit in % 1.7% 6.2% Research and development expenditures, total 10.2 12.7-19.4% Investments in fixed assets 8.1 3.5 133.0% Equity ratio in % 63.6% 66.6% Employee headcount (per 30.09.) 1'020 1'070-4.7% 6 Ypsomed Holding AG Presentation of Semi-Annual Results 2012/13
Developments in the Diabetes Care segment The mylife OmniPod enjoyed sales growth of over 75% in the period under review. The second generation of the product will be launched in the UK, the Netherlands, Germany, Switzerland and Austria by the end of 2012. Sales also commenced in Norway and Sweden following a long licensing process. The new mylife Unio blood glucose monitoring system was presented at the leading European Diabetes Congress (EASD) in Berlin and will be launched in early 2013. The market launch for mylife DailyDose has begun. This unique supplementary product for diabetics taking insulin is proving very popular. Production of mylife Orbit infusion sets was transferred as planned in the first half of the 2012/13 business year. The sets are now produced in the OmniGroup s factories in Queretaro, Mexico. Work to develop Ypsomed s own insulin pump remains on track, with the launch planned for 2014. 7 Ypsomed Holding AG Presentation of Semi-Annual Results 2012/13
Developments in the Delivery Systems segment The award-winning winning ServoPen is turning into a real star of the YDS Custom Products range. Two new customers in Asia have been acquired for this highquality reusable insulin pen. Ypsomed has a number of finjection system projects in the pipeline and dis very confident that they will come to fruition thanks to the company s own excellent platforms. 8 Ypsomed Holding AG Presentation of Semi-Annual Results 2012/13
Agenda 1. Introduction 2. Finances 3. Operating activities 4. Outlook 5. Questions and answers 9 Ypsomed Holding AG Presentation of Semi-Annual Results 2012/13
The fall in sales is primarily due to OptiSet manufacturing being discontinued In million CHF 2012/13 2011/12 Δ in % Delivery Devices 69.1 77.7-11.1% Diabetes Direct Business 42.7 36.8 15.9% Other 79 7.9 83 8.3-4.2% 42% Sales of goods and services 119.7 122.8-2.5% The Delivery Devices segment comprises the product groups pen systems, pen needles and other injection moulds produced by Ypsomed. The Diabetes Direct Business segment covers the direct trade in a range of diabetes products, including sales of mylife Pura blood glucose monitoring systems, mylife Roto infusion sets and mylife OmniPod insulin patch pumps. Other contains the precision-turned parts business segment and currently unused real estate for operational purposes. 10 Ypsomed Holding AG Presentation of Semi-Annual Results 2012/13
Rigorous cost management safeguards profitability In million CHF 2012/13 in % 2011/12 in % Sales of goods and services 119.7 100.0% 122.8 100.0% Cost of goods and services sold -92.4-77.2% -94.4-76.8% Gross profit 27.4 22.8% 28.5 23.2% 2% Marketing and sales expenses -19.4-16.2% -19.9-16.2% Administration expenses -6.4-5.3% -6.5-5.3% Other operating income 2.0 1.6% 1.7 1.4% Other operating expenses -1.1-0.9% -0.9-0.7% Operating profit 2.4 2.0% 3.0 2.4% The move to discontinue production of the successful OptiSet and OptiPen Pro has affected the gross profit margin. New products have not yet managed to fully offset the difference. Continued rigorous cost management, new products and projects will help improve the gross profit margin in the second half of the year. 11 Ypsomed Holding AG Presentation of Semi-Annual Results 2012/13
Overview of EBIT by segment In million CHF 2012/13 2011/12 Δ in % Delivery Devices 5.7 8.7-34.4% Diabetes Direct Business -2.5-5.8 56.9% Other -0.8 01 0.1 - Operating profit 2.4 3.0-18.5% With sales growth in excess of 75%, the mylife OmniPod made a key contribution to offsetting losses in the Diabetes Direct business. Ypsotec, which manufactures mechanical precision parts, faced significant pressure on its margins in the period under review and posted a loss of CHF 0.8 million. 12 Ypsomed Holding AG Presentation of Semi-Annual Results 2012/13
EBITDA margin slightly below previous year s figure In million CHF 2012/13 in % 2011/12 in % Δ in % Operating profit 2.4 2.0% 3.0 2.4% -0.4% Depreciation of fixed assets 9.7 8.1% 9.5 7.8% 0.3% Amortisation of intangible assets 2.6 2.1% 3.4 2.8% -0.7% EBITDA 14.7 12.3% 15.9 12.9% -0.6% 13 Ypsomed Holding AG Presentation of Semi-Annual Results 2012/13
Neutral financial result in the first half of the 2012/13 business year In million CHF 2012/13 in % 2011/12 in % Δ in % Operating profit 2.4 2.0% 3.0 2.4% -0.4% Financial income 1.0 0.8% 7.7 6.2% -5.4% Financial expenses -1.0-0.8% -2.1-1.7% 0.9% Profit before income taxes 2.4 2.0% 8.6 7.0% -5.0% Income taxes -0.4-0.3% -1.0-0.8% 0.5% Net profit 2.0 1.7% 7.6 6.2% -4.5% Earnings per share (basic and diluted) in CHF 0.16 0.60 Financial income in the previous year included CHF 5.1 million in profits from the sale of non-current financial assets. 14 Ypsomed Holding AG Presentation of Semi-Annual Results 2012/13
Robust and streamlined balance-sheet structure In million CHF 30.09.201209 in % 31.03.2012 in % Assets Cash and cash equivalents 13.3 3.9% 9.7 3.0% Trade receivables 30.6 89% 8.9% 24.5 75% 7.5% Other current assets 4.2 1.2% 6.1 1.9% Prepayments and accrued income 4.0 1.2% 3.7 1.1% Current income taxes 0.1 0.0% 0.1 0.0% Inventories 55.6 16.3% 50.1 15.3% Customer machinery 0.6 0.2% 0.2 0.1% Total current assets 108.5 31.7% 94.6 28.9% Financial i assets 94 9.4 27% 2.7% 91 9.1 28% 2.8% Deferred income tax assets 7.5 2.2% 7.1 2.2% Fixed assets 164.3 48.0% 166.4 50.8% Intangible assets 52.4 15.3% 50.2 15.3% Total non-current assets 233.6 68.3% 232.7 71.1% Total assets 342.1 100.0% 327.3 100.0% 15 Ypsomed Holding AG Presentation of Semi-Annual Results 2012/13
Equity ratio at 63.6% In million CHF 30.09.201209 in % 31.03.2012 in % Liabilities and equity Financial liabilities 61.0 17.8% 46.5 14.2% Current financial liabilities to major shareholder 50 5.0 15% 1.5% 10.0 3.1% Trade payables 18.6 5.4% 13.5 4.1% Prepayments from customers 1.1 0.3% 2.3 0.7% Current income tax payable 2.0 0.6% 2.2 0.7% Other payables 24 2.4 07% 0.7% 25 2.5 08% 0.8% Accrued liabilities and deferred income 14.8 4.3% 12.7 3.9% Provisions 0.7 0.2% 1.3 0.4% Total current liabilities 105.7 30.9% 90.9 27.8% Non-current liabilities to major shareholder 15.0 4.4% 14.5 4.4% Other non-current financial liabilities 2.0 0.6% 2.3 0.7% Provisions 1.2 0.3% 1.0 0.3% Deferred income tax liabilities 05 0.5 02% 0.2% 06 0.6 02% 0.2% Total non-current liabilities 18.7 5.5% 18.4 5.6% Total equity 217.7 63.6% 218.0 66.6% Total liabilities and equity 342.1 100.0% 327.3 100.0% 16 Ypsomed Holding AG Presentation of Semi-Annual Results 2012/13
Ypsomed investing in Switzerland In million CHF 2012/13 2011/12 Cashflow from operating activities 8.8 20.0 Purchases of financial assets -0.3-0.6 Disposal of financial assets - 11.1 Purchases of fixed assets -8.1-3.5 Disposal of fixed assets 0.3 0.1 Purchases of intangible assets -4.7-4.5 Final payment acquisition - -0.4 04 Cashflow from investing activities -12.8 2.3 Repayment of financial liabilities to major shareholder -4.5-10.0 Proceeds from borrowings 14.5 5.0 Cost due to approved increase in share capital -0.0 - Distribution of capital reserves -2.5-2.5 Purchase of treasury shares - -0.4 Cashflow from financing activities 7.5-7.9 Effect of foreign currency translation 0.1-0.1 Total Cashflow 3.5 14.2 17 Ypsomed Holding AG Presentation of Semi-Annual Results 2012/13
Agenda 1. Introduction 2. Finances 3. Operating activities 4. Outlook 5. Questions and answers 18 Ypsomed Holding AG Presentation of Semi-Annual Results 2012/13
The YDS Delivery Systems umbrella brand creates clarity and has been well received by the industry 19 Ypsomed Holding AG Presentation of Semi-Annual Results 2012/13
More confidence. More success. With Ypsomed Delivery Systems. Custom products Contract development Contract manufacturing Drug & device assembly More information on www.ypsomed.com/yds Ypsomed AG // Brunnmattstrasse 6 // 3401 Burgdorf T +41 34 424 41 11 // F +41 34 424 41 22 // www.ypsomed.com/yds
Big Pharma sees strong growth, particularly in Asia and Latin America 21 Ypsomed Holding AG Presentation of Semi-Annual Results 2012/13
Large number of biosimilars in developing countries 1 many of which will require a pen Source: Datamonitor, October 2012 1 Developing countries = not the EU, not the US, not Japan 22 Ypsomed Holding AG Presentation of Semi-Annual Results 2012/13
ServoPen more customers using the same platform 23 Ypsomed Holding AG Presentation of Semi-Annual Results 2012/13
YpsoPen Twist in industrialization phase - the first deliveries planned for the second quarter of 2013 24 Ypsomed Holding AG Presentation of Semi-Annual Results 2012/13
Sanofi pens OptiSet, OptiPen Pro and components for Solostar 25 Ypsomed Holding AG Presentation of Semi-Annual Results 2012/13
First three autoinjector projects secured thanks to YpsoMate additional autoinjector versions now available 26 Ypsomed Holding AG Presentation of Semi-Annual Results 2012/13
Diabetes Care our direct business 27 Ypsomed Holding AG Presentation of Semi-Annual Results 2012/13
More Freedom. More Confidence. With mylife. Blood glucose monitoring systems Pen needles and safety pen needles Infusion systems Accessories and services More information at www.mylife-diabetescare.com Ypsomed AG // Brunnmattstrasse 6 // 3401 Burgdorf // Switzerland T +41 34 424 41 11 // F +41 34 424 41 22 // www.ypsomed.com
Proportion of overweight individuals in the adult population Source: UBS / Chart: FuW, si 29 Ypsomed Holding AG Presentation of Semi-Annual Results 2012/13
Standing out from the competition as a full-range supplier with an excellent knowledge of the market Diabetes is spreading rapidly (the WHO predicts there will be some 440 million diabetics by 2030) making it a market worth billions and with high potential for growth. On the other hand, healthcare costs in conjunction with diabetes are increasing, i putting pressure on suppliers costs. As a comprehensive provider of products to treat diabetes, Ypsomed has a wide range of opportunities i in this regard with various different product and price strategies. The key to success in this area of business is a knowledge of individual healthcare markets. Ypsomed has a global network of subsidiaries and distributors as well as the necessary expertise. 30 Ypsomed Holding AG Presentation of Semi-Annual Results 2012/13
Pen needles mylife Clickfine 4 mm (32G) At the EASD Congress, Ypsomed unveiled the thinnest, most precise Ypsomed needle yet: 32G corresponds to a diameter of 0.23 mm (standard pen needles have a diameter of 31G - 29G, or 0.25-0.33 mm). Ypsomed has succeeded d in winning i a major US-based customer, who will begin marketing Clickfine pen needles under its own brand in the first half of 2013. 31 Ypsomed Holding AG Presentation of Semi-Annual Results 2012/13
Blood glucose monitoring new mylife Unio The target group includes Type 1 diabetics and, generally, people who monitor their blood glucose very frequently. The next generation of blood glucose monitoring systems based on customer surveys and focus groups. The new blood glucose monitoring system appeals thanks to its userfi friendliness. New standards being set in terms of accurate measurements. 32 Ypsomed Holding AG Presentation of Semi-Annual Results 2012/13
Infusion systems the next-generation mylife OmniPod receives CE accreditation! 33 Ypsomed Holding AG Presentation of Semi-Annual Results 2012/13
Infusion systems the new mylife OmniPod is now much smaller and more lightweight 35% smaller 16% thinner 25% lighter only 25 grams! 34 Ypsomed Holding AG Presentation of Semi-Annual Results 2012/13
Infusion systems Ypsomed s Lanzi pump project is on track for market launch in the second half of 2014 Ypsomed s s insulin pump stands out thanks to its compact size, ease of operation and the use of pre-filled ampules 35 Ypsomed Holding AG Presentation of Semi-Annual Results 2012/13
Infusion systems Lanzi can be priced more competitively, which will expand its market 36 Ypsomed Holding AG Presentation of Semi-Annual Results 2012/13
Infusion systems mylife Orbit as a generic infusion set and an infusion set for Lanzi 37 Ypsomed Holding AG Presentation of Semi-Annual Results 2012/13
New mylife DailyDose micro-syringe The self-injection system in credit card format consists of three small syringes that are pre-filled with the daily insulin requirement. Ypsomed currently distributes mylife DailyDose in Switzerland, Germany, the UK, Norway, Austria and the Netherlands. 38 Ypsomed Holding AG Presentation of Semi-Annual Results 2012/13
Agenda 1. Introduction 2. Finances 3. Operating activities 4. Outlook 5. Questions and answers 39 Ypsomed Holding AG Presentation of Semi-Annual Results 2012/13
Outlook for the 2012/13 business year Despite a slight dip in sales, we are expecting to match last year s operating profit in the 2012/13 business year. 40 Ypsomed Holding AG Presentation of Semi-Annual Results 2012/13
Key dates Presentation of the annual results for 2012/13 May 28, 2013 2013 General Meeting of Shareholders June 26, 2013 41 Ypsomed Holding AG Presentation of Semi-Annual Results 2012/13
Agenda 1. Introduction 2. Finances 3. Operating activities 4. Outlook 5. Questions and answers 42 Ypsomed Holding AG Presentation of Semi-Annual Results 2012/13
Questions and answers