Corin Group plc - Preliminary Results 2008 - Presentation

May 29, 2013 | Publisher: edocr | Category: Finance |  | Collection: Migrated Docs | Views: 5 | Likes: 1

Corin Group PLC 2008 Preliminary Results Presentation Outline ƒ Overview ƒ Financial Review ƒ Operating Review ƒ Strategy Implementation ƒ Current Trading & Outlook Overview ƒ Year of transition ƒ Strategic review completed in H1 2008 ƒ growth market - demographics, more active population, younger patients ƒ Corin opportunity - broaden portfolio, innovate, expand internationally, Cormet in US ƒ Implementation well underway ƒ completed management restructure, adding industry experience ƒ invested in resources to accelerate product development ƒ launched Metafix, Zenith; evaluated MiniHip ƒ completed portfolio strategy, exceptional stock charge ƒ Early signs of progress ƒ sales growth ex US +23%* in H2 ƒ steady start to 2009 in resilient market (* Sales growth in constant currency) Financial Review Income Statement Extracts 2008 £m 2007 £m % Change CER % Change Revenue 39.8 24.9 63% 3.4 -7.1 2.9 -4.2 3.0p (9.5p) 1.38p 0.4% Gross Profit 7.6% 37.0 23.1 63% 5.6 -1.1 5.1 4.1 8.2p -3.4% Gross Margin 6.5p 7.8% Underlying Operating Profit Exceptional items Underlying Profit before Tax (Loss) / Profit before Tax Underlying Earnings per Share (Loss) / Earnings per Share 1.38p Dividend per Share Financial Review Sales – Product Category 2008 £m 2007 £m % Change CER % Change Hips Total 22.3 24.2 -8% -14% Hips – non US 14.7 13.5 8% -2% Knees Total 9.2 8.0 18% 5% Other Products 8.2 4.7 73% 67% Total 39.8 37.0 8% 0% Financial Review Sales – Geographic Market 2008 £m 2007 £m % Change CER % Change 15% 15% -10% -6% 3% -26% -7% 115% 16% 30% 0% 5% 3% 9% -23% 14% 134% 22% 45% 8% 8.9 4.9 4.1 17.9 11.0 3.3 1.9 2.9 8.1 37.0 10.2 5.1 4.2 19.5 8.5 3.8 4.5 3.5 11.8 Total 39.8 UK Germany Rest of Europe Total Europe Total USA Japan Australia Other Total Rest of World Financial Review Exceptional Items H1 £m H2 £m Total £m Cash £m Non Cash £m 0.6 - 0.1 0.2 5.2 0.3 0.2 6.0 - 0.5 - - - 1.1 0.6 0.1 0.7 5.2 0.3 0.2 7.1 - - 0.1 4.6 0.3 0.2 5.2 0.6 0.1 0.6 0.6 - - 1.9 Aborted Acquisition Costs Goodwill Impairment Redundancy and Reorganisation Provision for Obsolete Stock Investment Impairment Aborted IDE Trial Total Exceptional Charge Financial Review Cash Flow Extracts 2008 £m 2007 £m Operating (Loss) / Profit -3.7 4.5 Depreciation and Amortisation 3.0 2.4 Other Non Cash items 0.6 0.2 Decrease in Working Capital 9.3 -6.7 Share Based Payments 0.6 0.9 Cash Generated from Operations 9.8 1.3 Interest Paid (net) -0.5 -0.4 Tax -1.4 -0.8 Capital Expenditure -6.2 -4.4 Financing -0.2 1.7 Net Cash Inflow / (Outflow) 1.5 -2.6 Financial Review Banking Facilities 2008 £m 2007 £m Net Bank Debt 3.4 6.2 Finance Leases 2.1 1.8 Net Debt 5.5 8.0 ƒ New £6m bank facility signed February 2009. Three year term loan. ƒ Additional £2m invoice discounting facility, not currently utilised. ƒ £0.7m of debt denominated in Australian dollars, remainder in Sterling. Financial Review Balance Sheet Extracts 2008 £m 2007 £m Fixed Assets 10.7 7.1 Intangibles 3.7 3.8 Investments 0.1 0.2 Deferred Tax 1.6 2.0 Non Current Assets 16.2 13.1 Stock 15.2 17.4 Debtors 9.6 13.3 Creditors -6.2 -5.8 Tax Payable -0.1 -1.3 Net Current Assets 18.5 23.6 Net Borrowings 5.5 8.0 Provisions 0.4 0.4 Net Assets 28.8 28.3 Operating Review Hip Products – ex US ƒ Excluding US, hip sales -2%*, H2 at +13%* ƒ Cormet and Optimom metal-on-metal slight decline ƒ some surgeons narrowing patient indication range ƒ Broadened portfolio driving higher growth rates ƒ launch of Metafix cementless stem in UK, Germany and Australia ƒ distributed hips in UK and Australia ƒ Innovative MiniHip small stem successfully evaluated in Germany (* Sales growth in constant currency) Operating Review Hip Products - Cormet in US ƒ Initial implant rate slower than anticipated ƒ delays to surgeon training ƒ time committed by Stryker to recall of their own Trident hip ƒ competition in US hip resurfacing market ƒ Continued commitment and investment by Corin & Stryker ƒ surgeon training programme continues ƒ extensive sales force training continues ƒ advertising, clinical outcomes registry ƒ Steady progress ƒ small deliveries to Stryker in Q1 2009 ƒ orders more closely reflecting implant rate as 2009 progresses Operating Review Knee Products ƒ Knee sales growth of +5%*, H2 at +4%* ƒ Uniglide encouraging growth ƒ gaining share in UK and Germany ƒ upgraded instruments for 2009 ƒ RTK+ total knee slight growth ƒ Broadened the portfolio ƒ added distributed knee in Australia ƒ Total knees under pressure due to gaps in product range (* Sales growth in constant currency) Operating Review Other Products ƒ Other products sales growth of 67%* ƒ Innovative Zenith mobile bearing ankle launched in UK and Germany ƒ instrument technology enhances surgical repeatability ƒ Strong growth in LARS ligament augmentation ƒ distributed product that complements the hip and knee portfolio ƒ Surgical disposables growth benefited from supply issues at competitors (* Sales growth in constant currency) Corin Strategic Opportunity ƒ Large, global market with geographic variations ƒ Long term procedure growth ƒ demographics of ageing population ƒ increased expectations of activity levels at all ages ƒ product innovation addressing patients at younger ages ƒ Opportunity for small orthopaedic companies to generate significant value Reconstructive Market Value $11bn Knee 50% Hip 43% Other 7% Constant Currency Growth Rates 0 2 4 6 8 10 12 14 16 '04 '05 '06 '07 '08 Year P e r c e n t a g e (Sources: Millennium Research, Financial Analysts) Corin Strategy HIP & KNEE IMPLANT SOLUTIONS addressing clinical need Broaden Hip & Knee Portfolio high growth & high volume segments Develop Innovative Solutions existing advanced bearing and new technologies in partnership with KOL surgeons Build Sales Teams existing & new international markets Drive Cormet in US through Stryker partnership Invest in product development resources Build portfolio via licences/bolt-on acquisitions Target: Sustained double digit sales growth with margin enhancement Implementation ƒ Completed senior management reorganisation ƒ new roles of Group Marketing Director and International Sales Director ƒ added experienced orthopaedics professionals ƒ Investment of annualised £2m in product development ƒ research, engineering, marketing, clinical research, regulatory ƒ Four product launches in 2008 – two NPD, two distributed ƒ Balanced manufacturing capacity to demand by closing third shift ƒ Developed five year hip and knee portfolio strategy ƒ new products and technologies identified ƒ immediate rationalisation to reflect EU reclassification ƒ phase out of some legacy products as new products launched New Product Pipeline Key Projects Q1 2009 Q2 2009 Q3 2009 Q4 2009 2010 ƒ MiniHip (Germany) ƒ MiniHip (RoW) ƒ Cormet cup enhancement ƒ Acetabular cup (evaluations) ƒ MiniHip line extensions ƒ Acetabular Cup ƒ Additional cementless stem ƒ Uniglide instruments upgrade ƒ RTK instruments upgrade ƒ Total knee (evaluations) Current Trading & Outlook ƒ Expect orthopaedic market to slow in 2009 but remain resilient ƒ Management and team energised behind revised strategy ƒ Steady start to 2009 ƒ both sales outside US and the Cormet implant rate in US ƒ Cautious on full year at this early stage ƒ confident that implementation of revised strategy progressing well ƒ The information contained in this document and made verbally to you (together the "Presentation") is confidential and is being supplied, in the United Kingdom only to persons with professional experience in matters relating to investments and/or to high net worth companies as described in Article 19(5) and 49(2) respectively of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001 (SI. 2001/No. 1335) (as amended) made pursuant to section 21(5) of the Financial Services and Markets Act 2000 and, if permitted by applicable law, is being supplied outside the United Kingdom to professionals or institutions whose ordinary business involves them in investment activities. The information contained in this document is not intended to be viewed by, or distributed or passed on (directly or indirectly) to, any other class of persons. Recipients of this Presentation should not base any behaviour in relation to the contents of this Presentation, which would amount to market abuse as defined in Section 118 of the Financial Services and Markets Act 2000) until the contents are made generally available to the public. ƒ Accordingly, information contained in the Presentation is being supplied to you solely for your information and may not be copied, reproduced or further distributed to any person or published in whole or in part, for any purpose. In particular, the distribution of this document in jurisdictions other than the United Kingdom may be restricted by law and persons into whose possession this document comes should inform themselves about, and observe, any such restrictions. Any failure to comply with these restrictions may constitute a violation of laws of any such other jurisdiction. In particular, this document is not for distribution in the United States, Australia, Canada or Japan. ƒ This Presentation includes certain statements, estimates and projections with respect to the anticipated future performance of Corin Group PLC, its products and the markets in which it operates. Such statements, estimates and projections reflect the various assumptions made by Corin Group PLC, which assumptions may or may not prove to be correct. ƒ No representation or warranty, express or implied, is given as to the accuracy, completeness or fairness of the information or opinions contained in the Presentation and no liability is accepted for any such information or opinions by Corin Group PLC (the "Company" and, together with its subsidiary undertakings, the "Group") or any of its respective directors, members, officers, employees, agents or advisers. Notwithstanding this, nothing in this paragraph shall exclude liability for any representation or warranty made fraudulently. ƒ This document and the information contained in it does not constitute a prospectus and does not form any part of an offer of, or invitation to purchase or apply for or enter into any contract or make any other commitment whatsoever in relation to, securities. In particular, details included in this Presentation are subject to updating, revision, further verification and amendment. This Presentation does not constitute a recommendation regarding the securities of the Company

Corin Group plc - Preliminary Results 2008 - Presentation.pdf

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