PDF - Presentation for Media & Analysts - Acino

Acino – Delivering Health
Annual Results 2012
Peter Burema, CEO
Walter Saladin, CFO
Dr. Jean-Daniel Bonny, Head R&D Acino Group
Robert Schmid, Head Investor Relations
Acino Zurich, Holding March Ltd. 7, 2013
Erlenstrasse 1 | CH-4058 Basle | www.acino-pharma.com
Phone +41 61 338 60 00 | Fax +41 61 338 60 80

Performance 2012
Walter Saladin, CFO Acino Group
Zurich, March 7, 2013
Acino Holding Ltd.
Erlenstrasse 1 | CH-4058 Basle | www.acino-pharma.com
Phone +41 61 338 60 00 | Fax +41 61 338 60 80

2012 Key financials
(in EUR million) 2012 2011 Change
Revenue 257.1 134.9 +91%
EBITDA
% of revenue
EBITDA comparable (1)
% of revenue
EBIT
% of revenue
Net profit
% of revenue
36.8
14.3%
38.5
15.0%
8.9
3.5%
9.4
3.7%
25.7
19.0%
25.7
19.0%
6.7
5.0%
5.7
4.2%
+43%
+50%
+33%
+65%
EPS (undiluted) 2.76 1.81 +52%
(1) Without acquisition related one-time items
3

2012 Key financials (cont.)
(in EUR million) 2012 2011 Change
Cash flow from operations
% of revenue
Free cash flow
% of revenue
Investments in PPE
% of revenue
Investments in intangibles
% of revenue
Net working capital
% of revenue
Net debt
Net debt / EBITDA
24.4
9.5%
(3.3)
(1.3%)
15.3
6%
12.6
5%
88.1
34%
100.1
2.7
8.9
6.6%
(22.7)
(16.8%)
20.5
15%
11.2
8%
29.8
22%
8.6
0.3
Equity ratio in % as of Dec 31 55% 78%
+173%
+87%
(25%)
+13%
+196%
Headcount (FTE’s) 836 495 +69%
4

2012 EBITDA
acquisition related one-time items
EUR
million
Actual
EBITDA
14.3% of sales
Negative impact for
recognition of goods
acquired from Mepha /
Cephalon at market
value
Extraordinary
expenses
Positive contribution
of the bargain
purchase (negative
goodwill)
Comparable
EBITDA
15.0% of sales
5

Effects impacting 2012 EBITDA
Established business
Postponement product deliveries – customers destocking at end of 2012
Integration-related, completed
Inventory adjustments
Disposals of redundant stocks
Re-establishment of product brands in neglected markets
Additional field force training
Temporarily increased new staff costs
Maintenance outlays
Integration-related, ongoing
Rebranding campaigns (completion by end of 2013)
Customer retention measures supporting business transition
High effort for new product registration
6

2012 Cash flow
(EUR million) 2012 2011
Cash flow 16.2 (10.9)
Changes in working capital 8.2 19.8
Cash flow from operations 24.4 8.9
Cash flow from investing
PPE, net
Intangible assets
Acquisition
Associated companies
Cash flow from financing
Proceeds from syndicate loan and external basket
Capital increase
Repayment short term borrowing
Other
(15.1)
(12.6)
(90.2)
(1.0)
103.0
20.1
(13.0)
(2.8)
(118.9)
107.3
(20.5)
(11.2)
(31.7)
Net change in cash 13.3 (16.1)
Free cash flow (3.3) (22.7)
6.6
7

Balance sheet
(EUR million)
Cash & cash
Equivalents
Working capital
Other noncurrent
assets
Other intangible
Assets
Goodwill
Property, plant
& equipment
31.12.2012
Assets Liabilities &
Changes in 2012
Shareholders’ equity
TOTAL BALANCE SHEET
• Significantly increased by 53% to
EUR 505.8 million
ASSETS
• Ongoing high investments, Miesbach
• PPA acquisition (PPE, intangible
assets, working capital)
• Goodwill unchanged due to favorable
acquisition terms
LIABILITIES AND SHAREHOLDERS’
EQUITY
• New syndication loan
• Higher other liabilities and deferred
taxes
EQUITY RATIO
• Reduced due to acquisition but still
high 55 %
31.12.2011 31.12.2012 31.12.2011
Deferred revenues
Deferred tax
liabilities
Other liabilities
Financial liabilities
Shareholders’
equity
8

2012 revenue and contribution
by region/segment
Group revenue well balanced by segment and by geography
BtC strongest revenue contributor (39%)
Germany largest individual country; MENA largest non-European region
BtB strongest contributor to Group earnings
All three segments BtC, BtB and TM operating in the markets contribute to earnings
Production (Prod, internal segment) supplier to the other three segments
9

Segment Business to Consumer
Focus: Brand marketing “Acino Switzerland”
Currently 80 countries in Middle East, Africa, LATAM,
Asia
Portfolio of 46 products available
Brand approach: High Swiss/EU quality
Acquisition-driven BtC sales (10.5 months):
EUR 98.5 million
Middle East region accounts for 62% of sales
Main countries: Saudi Arabia, Iraq, UAE, French West
Africa, Ecuador
Strong sales in Middle East and LATAM
Contribution margin 17.6% of sales
Includes all selling expenses
Impacted by integration efforts, rebranding activities
and re-establishment of product brands in Africa
Gradual margin increase expected from 2013 onwards
10

Segment Business to Business
Focus: Out-licensing products from own
development to leading pharmaceutical cos.
Niche products / technologically complex formulations
BtB sales -4% yoy
Postponed deliveries impacted late 2012 sales
Strong sales of key products: oxycodone (+12%),
metoprolol (+1%), hydromorphone (+11%), amlodipine
(+13%), fentanyl (+117%), buprenorphine (+40%)
Weaker sales of: alfuzosin (-23%), clopidogrel (-30%),
itraconazole (-1%), doxacosin (-22%), levodopa/carbidopa
(-15%)
Contribution margin +31% yoy to 30.0% of sales
(2011: 22.0%)
Despite price pressure, improved margin supported by
optimizations in oxycodone production processes and
reduced amortizations on development projects
No major acquisition related impacts
11

Segment Technology Marketing
Focus: Partnerships/co-developments with
leading pharmaceutical cos. based on Acino’s
strong and leading technology platforms
Drug delivery solutions for new NCE’s
Life cycle management
Contract manufacturing / customer usually owns IP
TM sales +67% yoy
Contribution margin -48% yoy to 5.9% of sales
(2011: 18.9%)
Includes fentanyl contract manufacturing (not own IP)
Negatively impacted by price pressure and betalactame
production in Liesberg (to be discontinued by end 2013)
Production for Teva/Mepha out of Aesch
Low margin, supports capacity utilization and overhead
recovery
Expected to decrease over the next years, to be
replaced by higher margin products
12

Segment Production
Supplies other segments BtC, BtB and TM
products at standard cost
mark-up for material and production overhead
Net Sales EUR 1.9 million (2011: EUR 2.7 million)
Consists of service and development activities not attributable to the other
segments
Contribution margin EUR -10.3 million (2011: EUR 0.1 million)
Includes acquisition related one-time effect due to recognition of acquired stock at
market value (EUR -8.0 million)
13

Segment results and
transfer to EBIT
Revenue Contribution margin
(in EUR million) 2012 2011 2012 2011
Business to Consumer (BtC) 100.4 1.0 17.7 0.7
Business to Business (BtB) 87.2 90.9 26.2 20.0
Technology Marketing (TM) 67.6 40.3 4.0 7.6
Production (Prod) 1.9 2.7 (10.3) (0)
Total 257.1 134.9 37.6 28.1
Less: Expense and income
items not contained in the
contribution margin per segment
28.7 21.5
Operating profit (EBIT) 8.9 6.7
14

Syndication financing terms
Facility
EUR 110 million
Maturity
5 years
amortizing minimum EUR 10 million p.a. starting 2013, remaining amount in 2017
Interest rate
EURIBOR plus margin dependent to net debt / EBITDA ratio
All in cost : 2012 average 2.53% p.a.
Net interest expenses 2012: EUR 2.4 million
Employed per December 31, 2012: EUR 100 million
Covenants
Net Debt / EBITDA ratio < 3
Equity ratio > 50%
Debit service cover ratio > 1.1 (first time on 31.12.2014)
15

R&D and development pipeline
Dr. Jean-Daniel Bonny, Head R&D Acino Group
Zurich, March 7, 2013
Acino Holding Ltd.
Erlenstrasse 1 | CH-4058 Basle | www.acino-pharma.com
Phone +41 61 338 60 00 | Fax +41 61 338 60 80

R&D highlights 2012
Development for oral and TDS development projects well on track
Rivastigmine TDS
- Completion of DCP (Day 210) expected in March and first launch in Europe planned
in Q2/2013
- ANDA formally accepted by FDA in November 2012
- Higher dosage strength in development
Oxycodone matrix filed in August 2012, approval expected Q4/2013
Major milestones achieved in the development of unique products
with own intellectual property and specific USPs with potential in EU &
US
Low-loaded fentanyl patch with attractive small patch size and highly efficient use
of drug (very low residual load after usage to minimize drug abuse)
Innovative 7-day patch as life cycle management for a major CNS indication
17

R&D highlights 2012
Pipeline including former Mepha projects further streamlined to also
fulfill BtC needs
Several projects for micro tablets and stick packs
Sildenafil pellets in stick packs
4 food supplements (micro tablets in capsules) to be submitted in 2013
18

R&D highlights 2012
Technology base and expertise for special formulations and drug
delivery systems further broadened
Further strengthening of implant platform
US-FDA agreement regarding harmonized clinical study design for US and EU
Leuprorelin: Identification of potential partners progressing well
Goserelin 1M: Study ongoing
Goserelin 3M: Study start only after completion of 1M study
19

R&D: conclusions and outlook
Approval of 2 major compounds expected in 2013
Acino’s large pipeline is well balanced by indication, development stage and
technology platform to serve the BtB as well as BtC business
More products for US filing to follow in near future and further product
developments for Japan in discussion
Submissions in BtC continuing to expand portfolio to further markets
20

Acino makes use of synergies in
various niches
-Ferrous sulfate
-Food supplements
-Sildenafil stick packs
-In-licensed
products
Technology
-FC Patch Bayer
-Fentanyl
low load EU&US
-Leuprorelin
1M & 3M
-Rivastigmine TDS
EU&US
-Goserelin 1M & 3M
-Oxycodone matrix
-Alfuzosine
-Doxazosine
-Itraconazole
BtC Opportunities Niche BtB / BtC
21

Acino’s development pipeline
Status February 2013
28
Number of Acino own
projects by stage
22

Acino’s estimated approval dates
Status February 2013
23

Business strategies and outlook
Peter Burema, CEO Acino Group
Zurich, March 7, 2013
Acino Holding Ltd.
Erlenstrasse 1 | CH-4058 Basle | www.acino-pharma.com
Phone +41 61 338 60 00 | Fax +41 61 338 60 80

Acino’s growth drivers
Fully exploit product
potential
Expand global reach
Broaden the product
portfolio
Customer base
expansion
Acquisitory growth
BtC BtB TM
Roll out BtB products in
the existing BtC markets
Access new markets
(e.g. CIS)
Strong development pipeline
(tailored to both BtC and BtB markets)
Inlicensing products
Targeted M&A activities
Exploit potential of BtC
products in BtB markets
Access new markets
(e.g. USA, Japan)
Start co-developments
projects (non-exclusive)
Broaden customer base,
new acquisition
Lead project (Bayer)
nearing market readiness
Other customer projects
under way (exclusive)
New customer acquisition
based on technological
strengths
25

Acino Switzerland – launching
products from own development
Mepha/Cephalon acquisition facilitates access to new markets in MENA,
Africa, Latin America & Asia and paved the way for launch of own product
portfolio under the brand “Acino Switzerland”
Status product launches:
Launches of Clopacin® (clopidogrel besilate), Fentavera® (fentanyl patch),
Metracin® (metoprolol succinate MUPS), Fuzocim® (alfuzosine-HCl); Doxacin®
(doxazosin mesilate) and others are scheduled in several MENA & African markets
First Asian launch of Clopacin® in H2-2012
Latin America filings are under way; Clopacin® under fast track registration in
Ecuador
In addition a high number of product submissions in BtC markets
38 already approved, additional 66 in registration
Marketing and sales teams operate under the “Acino Switzerland” label
Successful market new and re-entries
26

Acino Switzerland Brands ®
27

Swissness profile: merging Mepha
into Acino Switzerland
28

Acino Switzerland – rolling out
portfolio in new territories
Agreement signed with Medial D&P Ltd. to cover countries in the CISregion
(excl. Russia and Ukraine)
Use synergies of local organizations to further promote/launch Acino
portfolio products in already established markets
MENA: Iraq, UAE, Kuwait, Jordan, Lebanon
Sub Sahara Africa
Actively push pending and new registrations in high potential markets
already established via the former Mepha/Cephalon
MENA: KSA, FWA, Algeria etc.
Africa: Kenya, Uganda, Tanzania, Sudan, RSA, etc.
LATAM: CAC, Ecuador
Find opportunities and register in new markets
Asia: Vietnam, Thailand, Philippines, Indonesia, Cambodia
CIS: Ukraine, Kazakhstan, etc.
LATAM: Peru, Bolivia, Colombia, etc.
29

Acino’s in-licensing portfolio
Status February 2013
Under evaluation Under Signature Rights obtained
Agreement signed
Levofloxacine I.V.
Antibiotic
Moxilloxacine I.V.
Antibiotic
Dexibuprofen Oral
Pain
Tramadol/Paracetamol
Combi Oral Pain
Diclolenac Potassium
Oral / Pain
.
7
Pregabalin Oral
Pain
Telmisartan /
Telmisartan HCL
Oral / Pain
Rosuvastatine Oral
Statin
1 3
Esomeprazole I.V.
Gastrointestinal
Teicoplanin I.V.
Antibiotic
Anastrazole Oral
Cancer
Under registration
EU / CH
Paracetamol I.V.
Pain
Pantoprazole I.V.
Gastrointestinal
Zoledronic Acid I.V.
Osteoperosis
Levofloxacine Oral
Antibiotic
Legend:
Celecoxib Oral
Pain
Total 18 projects Oral I.V.
Ready for local
submission
5 2
Zoledronic Acid I.V.
Cancer
Iron Sucrose I.V.
Iron deficiency
30

Optimizing BtB concept
Price Pressure – What we are doing to optimize earnings:
Identify Unique Selling Points and address them during development to
create more value added products using advanced drug delivery systems
New formulation, easier to apply (e.g. small implant instead of bulky emulsion)
Prolonged release formulation (e.g. once-a-day dosing instead of three times daily)
Selection of business partners
Looking for partners with marketing concepts other than lowest price strategies such
as local specialists, e.g. pain companies with branded product strategies suitable to
Acino’s pain portfolio
Looking for co-development partners interested in specialist products
Looking for specialist partners for institutional business
Differentiated country-specific pricing with one partner
Dedicated selling prices for low price countries and high price countries
31

Technology marketing opportunities
Differentiating features
Focus on niche technologies with distinct USPs
Expertise for difficult-to-develop and -make products
Strong know-how to support customers
Lead project Bayer fertility control patch
Miesbach manufacturing facility approved by authorities – ready for production
Strive for co-developments
Broaden and upgrade existing sites and equipment park
E.g. stick pack line
Update production sites to US standards
Swiss high quality standards
32

The “new” Acino: broad customer base
and activities in >130 countries
33

Promising potential areas of
synergies through integration
2013 2014
Basle HQ and R&D activities moved to Aesch by end 2012
Mepha main warehouse activities transferred to Acino premises by
January 2013
Combined technical operations structures
New R&D structure (including regulatory) established
Engineering (rollout internal engineering, reduction
external services)
Finance, HR and IT systems
Cont.
Potential
synergies p.a. in
EUR million
Synchronisation of market intelligence 0.5
1.0
0.8
2.6
1.0
0.6
3.5
Total 10.0
34

Outlook 2013 and
mid-term expectations
2013
Sales to exceed EUR 300 million
EBITDA margin to improve markedly vs. 2012
BtC: growth of sales and profitability
BtB: launch rivastigmine
TM: first product deliveries Bayer FC patch
Synergies start to materialize
One-offs come to an end
Shipments postponed to 2013 (timing effect)
CAPEX for PPE slightly below 2012
Mid-term
Continued strong sales growth 2015 onwards
Confirming 25% EBITDA margin 2016 onwards
CAPEX requirements for PPE clearly below 2012 level
BtB: sustained price pressure; fierce
competition and price erosion following
oxycodone patent expiry in Nov 2012
IAS 19 Employeee Benefits, adoption of
new standard
TM: ongoing low margin sales to Teva
BtC: ongoing rebranding activities
35

Acquisitory growth
Board of Directors proposes to AGM waiver of dividend distribution in order
to reduce debt levels
Board of directors proposes to AGM creation of new authorized capital
- 800 000 new shares with nominal value CHF 0.40 each
- Expiration date April 4, 2015
Enhancement of financial flexibility
Ongoing evaluation of potential targets
36

Acino – Delivering Health
Thank you for
your attention
37