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STRATEC IR Company Presentation HSBC Austria Day Vienna, June 19, 2018
STRATEC
IR Company Presentation
HSBC Austria Day
Vienna, June 19, 2018
2
Forward-looking statements involve risks.
This company presentation contains various statements concerning the
future performance of STRATEC. These statements are based on both
assumptions and estimates. Although we are convinced that these forward-
looking statements are realistic, we can provide no guarantee of this.
This is because our assumptions involve risks and uncertainties which could
result in a substantial divergence between actual results and those
expected.
It is not planned to update these forward-looking statements.
SAFE HARBOUR STATEMENT
1. OVERVIEW AND BUSINESS MODEL
2. THE IVD MARKET
3. FINANCIALS
4. FUTURE GROWTH
3
4
OVERVIEW AND
BUSINESS MODEL
STRATEC AT A GLANCE
OVERVIEW AND BUSINESS MODEL
5
Market leader in automation solutions for the
diagnostics industry and translational research
~ 1.100 employees worldwide
More than 13,000 systems with medium to high
throughput installed globally (e.g. DiaSorin’s LIAISON XL |
Hologic/Gen-Probe’s PANTHER | Siemens’ ADVIA Centaur | bioMérieux’s
new VIDAS)
More than 25,000 low throughput systems installed
globally
Revenue € 209.8 million in 2017(CAGR revenues since IPO in 1998: ~17%)
Organic revenue growth in at least mid-single digit
percentage range expected for 2018
Dividend payments raised over 14 consecutive years
UNIQUE MARKET POSITION
STRATEC IN THE IVD VALUE CHAIN
OVERVIEW AND BUSINESS MODEL
6
Diagnostic
CompaniesBlood Banks,
LaboratoriesPatients
STRATEC develops
and manufactures
fully automated
analyzer systems
and disposables
focusing on the high
growth segments in
diagnostics
Partners market
systems together
with reagents and
consumables to
laboratories, blood
banks and
hospitals
worldwide
Laboratories
performing tests
and offering service
to doctors and
patients using
reagents from
diagnostic
companies
Growth drivers:
• Aging population
• Developing
healthcare systems
world wide
• High volume of
new tests
BUSINESS MODEL
OVERVIEW AND BUSINESS MODEL
7
STRATEC provides instrumentation, consumables, software and automation solutions
– OEM development and manufacturing
– Around 8,000 fully automated analyzer systems manufactured in 2017
– Wide range of intellectual property rights
Extensive collaboration with partner during design phase
– STRATEC: Engineering / automation, software, QM
– Partner: System / reagent / market requirements
Systems have long market lifecycles
– Leads to longstanding partnerships
– Expanding installed base of systems
– Product enhancement and extension drives value
“Simoa HD-1” for QuanterixConsumable for “Simoa HD-1”
SECURING RETURN ON INVESTMENT
OVERVIEW AND BUSINESS MODEL
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Long-term agreements with partners
– Milestone payments during development stage
– Operating sales during series production stage
– Continuous revenues from consumable sales
Minimum volume commitment
– Firm purchase orders
– STRATEC an integral part of partners’ plans
Reliable partnership
– Shortened development time
– Integration of analyzer system and reagents
– Agreed development budget & transfer price
– High commitment by both partners “LIAISON XL” for DiaSorin
“PANTHER FUSION” for Hologic
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THE IVD MARKET
IVD MARKET SEGMENTS / IVD Market: ~ 60 billion USD in 2016
THE IVD MARKET
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High Throughput
Low Throughput
Total instrumentation
~ 8.3 billion USD
Number of systems
CAGR 2016 - 2021:
IVD Market: ~ 4-6%
Molecular Diagnostic: ~ 8% Immunodiagnostics: ~ 4%
Hematology: ~ 2-4%
Source: Kalorama: “The worldwide market for In Vitro Diagnostic Tests, 10th Edition”, Aug 2016
MarketsandMarkets: “In Vitro Diagnostics/IVD Market - Forecast to 2021”, Dec 2016
80%
14%
4%2%
Reagents / Chemistry
Instrumentation
Services
Software
High Throughput
Market by product type
OUTSOURCED VS IN HOUSE INSTRUMENTATION MARKET
THE IVD MARKET
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Total
instrumentation
~ 8.3 billion
USD
In House
64 %
Outsourced
36 %
In House
73 %
Outsourced
27 %
2010 2015 2020
In House
56 %
Outsourced
44 %
Source: Own estimates based on
historical market data and recent
industry trends
A SELECTION OF STRATEC CUSTOMERS
THE IVD MARKET
12
Source: IVD News / figures adjusted by acquisitions in 2017 / non-public companies estimated / non-reported sector revenues estimated
… AND OTHER
GAME-CHANGING COMPANIES
(acquired by Bio-Rad in
January 2017)
STRATEC customer
Not a STRATEC customer
Global TOP 20 IVD Companies Revenues 2017 (USD billion)
1. Roche Diagnostics 10.2
2. Abbott Diagnostics 7.3
3. Danaher 5.8
4. Siemens 5.0
5. ThermoFisher 3.5
6. Sysmex 2.4
7. bioMerieux 2.1
8. Ortho Clinical Diagnostics 1.8
9. BECTON DICKINSON 1.4
10. BIO-RAD 1.4
11. Hologic 1.2
12. CH Werfen 1.0
13. Grifols 0.8
14. Agilent 0.8
15. Diagnostica Stago 0.7
16. Qiagen 0.7
17. DiaSorin 0.7
18. Perkin Elmer 0.6
19. Fujirebio 0.4
20. Immucor ~0.4
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FINANCIALS
KEY FIGURES - TRACK RECORD
FINANCIALS
14
Sales in € million
CAGR ~12%EBIT in € million
CAGR ~10%
1 Figures adjusted for comparison; adjusted for depreciation and amortization from purchase price allocation for acquisitions, related integration expenses
and other extraordinary effects. Reconciliation to IFRS figures can be found in the respective annual report.
67.561
76
102116.6 122.7 128
144.9 146.9
184.9
209.8
0
50
100
150
200
250
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
14.3
11.2
14.7
17.6
21.8
15.6
19.5
24.1
26.9
32.3
35.5
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
1
1
FINANCIALS
15
KEY FIGURES - TRACK RECORD
Net income in € million
CAGR ~11%Dividend per share in €
CAGR ~14%
10.0
8.2
11.713.0
15.3
12.4
15.5
19.8
22.1
25.4
27.9
0.0
5.0
10.0
15.0
20.0
25.0
30.0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
0.22
0.35
0.450.50
0.55 0.560.60
0.700.75 0.77
0.80
0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
0.80
0.90
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
1
1
1 Figures adjusted for comparison; adjusted for depreciation and amortization from purchase price allocation for acquisitions, related integration expenses
and other extraordinary effects. Reconciliation to IFRS figures can be found in the respective annual report.
SALES BY OPERATING DIVISIONS
FINANCIALS
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56% 55% 49%
26% 29%33%
18% 15% 18%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2015 2016 2017
Systems Service parts & consumables
Developement & services Others
• Continued growth in Service parts &
consumables sales
- Growth driven by increased
installed base, higher system
complexity and acquisitions
- Now at 33% of total sales versus
26% in 2015
In % of total sales
Annual sales by operating division as of Dec 31
HIGHLIGHTS Q1/2018
FINANCIALS
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• Subdued start to the year:
- Sales decline by 11.8% at CER1 to € 41.6 million (Q1/2017: € 49.5 million)
- Adjusted EBIT margin down by 360bp yoy to 10.3% from 13.9% due to missing scale effects
• Full year 2018 guidance confirmed
• Further contract wins and several promising negotiations in advanced stage
• Preparation of upcoming product launches progressing according to plan
• Number of employees up by 10.9% to 1,110 in the light of full project pipeline
1CER = Constant Exchange Rates
FINANCIALS AT A GLANCE Q1/2018(1),(2)
FINANCIALS
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bps = basis points
(1) For comparison purposes, adjusted figures exclude amortizations resulting from purchase price allocations in the context of
acquisitions, associated integration expenses, as well as other one-off items
(2) Excluding potential effects of first-time adoption of IFRS 15
ADJUSTMENTS Q1/2018
FINANCIALS
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Consolidated net incomeEBIT
SALES Q1/2018
FINANCIALS
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• Q1/2018 sales decline by 11.8%
at CER to € 41.6 million
- Tough Q1/2017 comparison base
- Timing of the recognition of
milestone payments
- Lower instruments sales due to
internal factors at key customers
In € million
As of March 31
29.2
34.4 34.531.2
49.5
41.6
0
10
20
30
40
50
60
Q1/13 Q1/14 Q1/15 Q1/16 Q1/17 Q1/18
ADJUSTED EBIT AND EBIT MARGIN Q1/2018
FINANCIALS
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Q1/2018 adjusted EBIT margin at 10.3%
• Adjusted EBIT down 37.5% yoy
• Margin decline of 360 bps yoy
- Negative scale effects
- Growth investments related to strong
project pipeline
Q1 EBIT EBIT margin
EBIT in € million EBIT margin in %
4.4
5.35.8
4.5
6.9
4.3
0%
5%
10%
15%
20%
0
2
4
6
8
Q1/13 Q1/14 Q1/15 Q1/16 Q1/17 Q1/18
As of March 31
ADJUSTED NET INCOME Q1/2018
FINANCIALS
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3.6
4.44.7
3.4
5.4
3.5
0
1
2
3
4
5
6
Q1/13 Q1/14 Q1/15 Q1/16 Q1/17 Q1/18
In € million• Q1/2018 adjusted net income
decreased by 34.2% to € 3.5 million
- Adjusted EPS of 0.30 versus 0.45 in
Q1/2017
• Adjusted tax rate of 17.8% in
Q1/2018 (21.2% in Q1/2017)
As of March 31
CASH FLOW AND NET DEBT Q1/2018
FINANCIALS
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IFRS (€ million) Q1/2018 Q1/2017 yoy
Cash flow – operating
activities12.0 13.8 -13.0%
Cash flow – investment
activities-4.0 -3.0 33.3%
Cash flow – financing
activities-1.1 -8.3 -86.8%
Free cash flow 8.0 10.8 -25.9%
Cash and cash equivalents
at end of period30.6 24.1 27.0%
Net debt 40.4 48.8 -17.2%
• Q1/2018 operating cash flow
down by 13.0% yoy due to lower
earnings levels
• Increased investments due to
filled development pipeline and
new group-wide ERP system
• Further reduction in net debt
As of March 31
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FUTURE GROWTH
FINANCIAL GUIDANCE
FUTURE GROWTH
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Outlook for 20181)
• Organic sales growth at least in the mid-single digit percentage range2)
– Growth is expected to be realized mostly in the second half of the year
• Adjusted EBIT margin of around 17%
Medium-term expectations
• Average annual organic sales growth (CAGR) in the high single-digit or
low double-digit percentage range2)
• Broadly consistent EBIT margin development
– Positive scale effects partly offset by growth activities related to full development pipeline
1) Excluding potential effects of the first time implementation of IFRS 152) Excluding currency effects and potential acquisitions
FOCUS IN 2018 AND BEYOND
FUTURE GROWTH
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• Drive top-line growth and reduce earnings volatility across business units
• Further realize synergies through development activities across STRATEC businesses
• Leverage expanded platform offering
• Achieve milestones & market launches within foreseen timeframe
- expected launches within the next 12-18 months among others include instruments for DiaSorin, Becton
Dickinson, Quotient and the KleeYa Analyzer platform
• Implementation of a group-wide ERP system to further drive process efficiency
• Expand development capacities including significant extension of buildings in Birkenfeld
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APPENDIX
KEY FIGURES AT A GLANCE
APPENDIX
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IFRS (€ million) 2013 2014 2015 2016 2017
Sales 128.0 144.9 146.9 184.9 209.8
Adjusted EBIT 19.5 24.1 26.9 32.2 35.5
Adjusted EBIT margin (%) 15.2 16.6 18.3 17.4 16.9
Adjusted Consolidated net income 15.5 19.8 22.1 25.3 27.9
Adjusted Earnings per share (€) 1.32 1.68 1.87 2.14 2.35
Dividend per share (€) 0.60 0.70 0.75 0.77 0.80
No. of employees 546 544 583 976 1,086
Total assets 117.8 137.8 158.9 258 264
Equity ratio (%) 82.5 81.3 82.0 55.7 59.8
Free cash flow 13.5 32.9 17.3 -70.4 14.4
Figures adjusted for comparison; adjusted for depreciation and amortization from purchase price allocation for acquisitions, related integration expenses
and other extraordinary effects. Reconciliation to IFRS figures can be found in the respective annual report.
SHAREHOLDER STRUCTURE(as of: May 2018)
APPENDIX
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SHARE
IPO Aug. 1998
Number of shares 11,920,945
Share price (04/18/2018) € 72.00
Market capitalization € 858 million
Fixed and family ownership
(incl. investment companies)
Treasury shares
Retail investors incl. not
identified institutional investors
Institutional investors
Institutional investors > 3%:
OppenheimerFunds
Columbia Threadneedle Investments
Allianz
BNP Paribas Investment Partners
41.2%
0.1%
37.0%
21.7%
ANALYST COVERAGE
APPENDIX
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Berenberg Bank
Scott Bardo
Phone: +44 20 3207 7869
Kepler Cheuvreux
Oliver Reinberg
Phone : +49 69 75696140
METZLER Capital Markets
Alexander Neuberger
Phone: +49 69 2104 4366
Warburg Research
Michael Heider
Phone: +49 40 309537280
Deutsche Bank
Falko Friedrichs
Phone : +49 69 91036270
Landesbank Baden-Württemberg
Volker Stoll
Phone : +49 711 12770568
Oddo BHF Corporates & Markets
Igor Kim
Phone: +49 69 7183643
STRATEC Biomedical AG
Gewerbestr. 37
75217 Birkenfeld
Germany
CONTACT
Jan Keppeler, CFA
Head of Investor Relations & Corporate
Communications
Tel: +49 7082 7916-6515
Fax: +49 7082 7916-9190
www.stratec.com
THANK YOU
FOR YOUR
ATTENTION
CONTACT
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