Sustainable growth leadership - Speed Dating hosted by ABG Sundal Collier 2 October 2020 Anders Lonning-Skovgaard, EVP & CFO Ellen Bjurgert, Vice ...
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Sustainable growth leadership Speed Dating Stina hosted by ABG Sundal Collier 2 October 2020 Anders Lonning-Skovgaard, EVP & CFO Ellen Bjurgert, Vice President, Investor Relations Making life easier
Key takeaways from our CMD
LEAD20 strategy successfully accelerated growth and value creation
We are building the consumer healthcare company of the future
Our new strategy will drive value creation through Sustainable Growth
Leadership with an emphasis on innovation (Clinical Performance Programme),
US and China
We are fully committed to investing in and scaling our Interventional Urology
and Wound & Skin Care businesses
Our new strategy will be supported by key growth enablers including
Efficiency, People and Sustainability
We will actively pursue M&A opportunities to build growth options
Page 2
We are building the consumer healthcare company
of the future
Chronic Care
Macro Trends Impact Commercial model
Ageing population
Superior, clinically
differentiated
products
Healthcare consumerism
Digital transformation Consumer
preference Data and Clinical
digital tools preference
Price pressure
Payer preference
Channel consolidation
Page 3
Our new strategy will drive continued long-term value
creation through revenue and earnings growth
Chronic Care
Interventional Wound &
Urology Skin Care
7-9% more than30%
organic growth p.a. EBIT margin1
Talent,
Innovation Leadership &
Culture
Unparalleled Sustainability
efficiency
1) Constant currencies, based on FX rate as of September 29, 2020
Page 4
Innovation: We will enable growth
and deliver superior products
Deliver on the Clinical Performance
Program in Chronic Care
Continue to deliver new products
within existing technologies
Build more options into the pipeline
Page 5
All our business areas will
contribute to growth
Main strategic themes
• Innovation
Chronic Care • China – Build on Market
Leading Position
• US - Challenger to Leader
• Market development
Wound & • 3DFit Technology
Skin Care • Scale our Chinese and US
businesses
• Drive profitability
• Innovation
Interventional • Geographical expansion
Urology • Enter adjacent categories
through M&A
Page 6
Supporting sustainable development with a strong emphasis
on improving our environmental performance
Our mission
Making life easier for people
with intimate healthcare needs
Our 2025 priority Our 2025 priority
Reducing Improving
emissions products and
packaging
0 emissions from scope 1&2 80% packaging made from renewable materials
100% renewable energy 50% production waste recycled
Our on-going commitment
Responsible
operations
We will actively pursue M&A opportunities as a lever for
long-term growth
Opportunity based Systematic screening
Channel Portfolio expansion Early stage
Large plays
expansion & adjacencies technologies
Page 8Short term we have been negatively impacted by COVID-19
but we will leverage learnings going forward
Short term implications Long term opportunities
• Lower group growth due to cancellation of elective
procedures 1. Clinically differentiated products
• Largest uncertainty related to rebound in Interventional that reduce total cost for payers
Urology and UK situation 2. Leveraging digital solutions to
• Sales reps unable to connect with customers in person connect with consumers and
healthcare professionals
• Challenges in conducting clinical trials
3. Home delivery and consumer
Three key priorities: keeping our people safe, continuing to channel increasingly attractive
serve our customers and maintaining business operations
Prudent cost management
Page 92019/20 impacted by COVID-19 – Momentum is improving,
but growth in 2020/21 will be back-end loaded
2019/20 was impacted due to COVID-19 … with many moving parts impacting 2020/21
9%
8% • Interventional Urology positively impacted by comparison
period in 2019/20
Group revenue • Uncertainty around growth in new patients across Chronic
organic growth ~4% Care in UK and other markets in particular in Europe
~2%
organic growth • Uncertainty around resumption of hospital activity impacting
in 2019/20 Wound and Skin Care
• No current knowledge of significant healthcare reform vs.
-2% French reform in 2019/20
Q1 19/20 Q2 19/20 Q3 19/20 Q4 19/20E
31% 32% 31% 31-32%
• H1 margin will be impacted by lower sales
• Investments initiated again across all BA’s and we will invest
Group ~31% up to 2% of revenues in R&D and commercial investments
EBIT margin EBIT margin • Continued savings due to less travel and lower sales &
in 2019/20
marketing costs due to Covid-19
Q1 19/20 Q2 19/20 Q3 19/20 Q4 19/20E
Page 10Investments have fueled broad-based growth in the LEAD20
period which is also the ambition for the Strive25 period
Growth contribution LEAD20 period Illustrative growth contribution Strive25 period
Revenue growth contribution FY 15/16 to 19/20 (DKKm) Revenue growth contribution FY 20/21 to 24/25 (DKKm)
Above market 7-9%
High single digit organic growth
Above market growth
organic growth
Above market growth
Business growth
area
Ostomy Continence Int. Wound & M&A FY15/16- Ostomy Care Continence Care Interventional Wound & Skin Care Total growth
Care Care Urology Skin Care FY19/20 Urology FY20/21 - FY 24/25
Growth contribution LEAD20 period Illustrative growth contribution Strive25 period
Organic growth contribution FY 15/16 to 24/25 (DKKm) Revenue growth contribution FY 20/21 to 24/25 (DKKm)
+10% 7-9%
organic growth organic growth
US Chronic Care
+10% organic growth
Regions Above market
growth
European Other Emerging M&A FY15/16 - European markets Other developed markets Emerging markets Total growth
markets developed markets FY19/20 FY20/21 - FY24/25
markets
Page 11EBIT margin development continues to be a function of
growth, scalability, cost discipline and investment activity
EBIT margin (%) Future drivers of EBIT margin
ILLUSTRATIVE
EBIT will be positively impacted by:
+ Leverage effect on fixed costs e.g.
>30%
distribution, admin and R&D costs
~31% especially driven by Europe
Possible incremental investment of
up to 2% of revenue per year EBIT will be negatively impacted by:
÷ Investments in P/L (Commercial &
R&D)
Reported EBIT ∆ Gross margin Leverage Incremental EBIT margin
margin FY 19/20 effect/scale investments FY 24/251
on fixed costs
1) Constant exchange rates
Page 12Continued strong development in free cash flow during the
Strive25 strategy period
Taxation Net working capital CAPEX(2)
Reported tax rate Net working capital in % revenue Depreciation in % of revenue CAPEX DKKm
CAPEX in % of revenue
~5% 6%
4% 4%
4%
4%
3% 950
23% 23% 23% 23% ~23% 23% 23% 23% 23% 24% ~24% ~24%
616 617
15/16 16/17 17/18 18/19 19/20 Long 15/16 16/17 17/18 18/19 19/20 Long 17/18 18/19 19/20 Long
term term term
• DK statutory corporate tax rate • Net working capital expected to be • Continued investment in machines and
lowered to 22% in 2016 stable, impacted by: capacity expansion
• Coloplast tax rate expected to be • Growth in mature markets • Widen factory footprint – 2 factories
~23% going forward planned in Costa Rica
• Growth in Emerging markets which
have long credit times • GOP5 investments – focus on Automation
• Increasing inventory levels on • IT investments
strategic products and raw
• Sustainability investments
1) Impacted by provision for Mesh litigation materials
2) Gross investments in PPE
Page 13Our long-term guidance for the Strive25 strategy period is
aimed at continued long-term value creation
7-9% more than30%
organic growth p.a. EBIT margin1
1) Constant currencies, based on FX rate as of September 29, 2020
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