Branded Products Strategy
Helmut Kraft, CFO
Capital Markets Day September 16, 2014 2
Changing the face of STADA
26% 27% 28% 33%
36% 39%
32% 36% 37%
46% 51% 51%
2009 2010 2011 2012 2013 1-6/2014
Share of Branded Products in adjusted operating profit1)
Share of Branded Products in sales1)
1) of the two core segments Generics and Branded Products.
Branded Products contribute 51% to adjusted operating profit1)
Capital Markets Day September 16, 2014 3
Buy-and-build: Successful acquisitions
Year Acquisitions Purchase price Region Indication
2009 Eunova € 12 million Germany Dietary supplement
2011 Cetraben € 35 million United Kingdom Derma product range
for the treatment of
skin eczema and dry
skin
2011/2012 Grünenthal Branded
Products Portfolio
€ 312 million Central Europe,
Eastern Europe and
Middle East
Pain medication such
as Tramal®, Zaldiar®,
Transtec®, Palexia®
2012 Tranexam®, Vuka Vuka®,
Vuka Drive®, Ingavirin®,
Safocid®
€ 10 million Russia, Eastern
Europe/CIS
Various Indications
2012 Branded products portfolio € 15 million Ukraine Womens‘ health
2013 Thornton & Ross Ltd. € 226 million United Kingdom Various OTC products
2013 Aqualor® € 131 million Russia, Eastern
Europe/CIS
Sprays and drops for
the treatment of
sinusitis
2014 Flexitol® € 13 million UK, Ireland Hand and foot care
Our platform
Capital Markets Day September 16, 2014 5
Branded Products Growth
Sales
(in € million)
Adj. EBITDA
(in € million)
333.6 381.6
1-6/2013 1-6/2014
+14%
110.5 120.1
1-6/2013 1-6/2014
+9%
Regional development
• Germany with higher profitability
• CIS/Eastern Europe with sales growth in
local currencies despite CIS crisis (+11.2%)
• Thornton & Ross highly dynamic
• ApoGo® on the growth path
1-6/2014 Key countries
20.9%
37.6%
38.3%
3.2% Germany € 79.8 million +9% (+9%)
Central Europe € 143.3 million +46% (+6%)
CIS/Eastern Europe € 146.2 million
-5% (+2%)
Asia & Pacific € 12.3 million
+40% (-9%)
107.9
68.4
52.5
15.4 10.9 10.8 8.3 6.8
Russia Germany UK Italy Vietnam Ukraine Serbia Spain
Sales 1-6/2014 in EUR
Capital Markets Day September 16, 2014 6
Climbing the performance ladder1)
1) Source: IMS Health MIDAS – EU28+RU+CH+NO+RS – Panel: Retail + Hospital – MAT/06/2014
OTC corporation Sales in €m
1 Novartis 1,338
2 Bayer 1,160
3 Sanofi 1,074
4 Johnson & Johnson 997
5 GlaxoSmithKline 645
6 Teva 546
7 Reckitt Benckiser 517
8 Boehringer Ingelheim 402
9 Bristol-Myers Squibb 387
10 Roche 376
11 Abbott 371
12 Pierre Fabre 344
13 STADA 325
14 Menarini 302
Total Market 19,808
OTC corporation Sales in €m
1 Novartis 1,541
2 Bayer 1,179
3 Sanofi 1,163
4 Johnson & Johnson 962
5 Teva 615
6 Reckitt Benckiser 531
7 Boehringer Ingelheim 454
8 GlaxoSmithKline 450
9 STADA 386
10 Abbott 375
11 Roche 360
12 Menarini 329
13 Braun-Melsungen 310
14 Bristol-Myers Squibb 309
Total Market 21,072
6M/2010 6M/2014
Capital Markets Day September 16, 2014 7
Market leading brands 1-6/2014
No. Branded Product Growth in % Sales in € million Indication
1. Ladival® (OTC) +57 24.1 Sun Protection
2. ApoGo® (RX) +15 23.6 Parkinson
3. Grippostad® (OTC) -23 14.7 Cough and cold
4. Aqualor®1) (OTC) 13.5 Rhinitis
5. Snup® (OTC) +9 13.2 Rhinitis
6. Vitaprost® (RX) +3 10.3 Prostate hyperplasia
7. Hirudoid® (OTC) +10 9.8 Inflammation of the veins
8. Chondroxide® (OTC) -9 9.7 Muscular and joint pain
9. Tramal® (RX) +81 9.0 Chronic pain
10. Care®2) (OTC) 8.7 Umbrella brand
All Branded Products +21 290.0
1) Sales of Aqualor®: initial consolidation as from March 1, 2014. 2) Umbrella brand for various indications such as skin care, cold medicine, gastrointestinal disease, pain medication, among others.
Capital Markets Day September 16, 2014 8
Positive impact on Group sales and margins
• Expansion of self-pay portfolio
• Shift to high margin product/country mix
• Economies of scale effects (volume gains)
1) Adjusted for one-time special effects (2009-2014) and non-operational effects from currency influences (2009/2010)
Adjusted1) EBITDA
margin in %
Sales in € million 18.3
19.4 19.7 20.0
20.6 20.8
16
17
18
19
20
21
22
23
0
500
1,000
1,500
2,000
2,500
2009 2010 2011 2012 2013 1-6/2014
Capital Markets Day September 16, 2014 9
Operating excellence
1) Adj. operating profit H1/2014 2) Adj. op. profit H1/2014 (Health, Hygiene, Home & Portfolio) 3) EBIT H1/2014 4) Op. Income, FY 2014 (August 14) 5) EBIT H1/2014 6) Core op. profit H1/2014 7) Core op. income H1/2014 Source: Financial reports, CH = Consumer Health Care
25% 23%
20%
17% 17%
14%
6%
0
5
10
15
20
25
30
STADA1) Reckitt2) Merck CH3) Perrigo4) Bayer CH5) GSK CH6) Novartis CH7)
Operating profit margins in consumer health 1-6/2014
Our approach
Capital Markets Day September 16, 2014 11
STADA today
Positioning
• Organic and acquired growth
• Complex portfolio
• As yet predominantly local heroes
• Different customer groups
Strengths
• Close to market and customer
• High personal responsibility
• Quick and flexible decision making
• Highly motivated and efficient
Risks
• Desynchronized marketing activities
• Low synergy potential
• Higher costs and organisational effort
Decentralised
approach
Capital Markets Day September 16, 2014 12
Measures
• Combination of
consistent, centralized
brand guidance with close
to market, decentralized
navigation
• Centralised branded
products portfolio
management
• Introduce appropriate guidelines and structures
• Select and travel a limited number of strategic
brands based on their growth potential („country-
by-country view“), e.g. Ladival, Snup
• Maintain leading local heroes
• Strengthen innovation potential, category
management
• Selectively add expertise to regional set-up
Blend of decentralised &
centralised approach
Acquisition of Thornton & Ross as a catalyst to optimize corporate structure and performance
STADA tomorrow
Capital Markets Day September 16, 2014 13
Expertise across all channels
Wholesale
Pharmacy/Hospital
STADA
Retail chains (UK) Pharmacy/Hospital
Customer/Patient
Capital Markets Day September 16, 2014 14
Our approach Where we want to go
• Consistent brand
guidance and close to
market navigation
• Consistent portfolio
development
• Realizing opportunities
on organic side is first
priority
• Best in class innovation
and customer service
• Optimize operational
leverage
• Disciplined and smart
bolt-on acquisitions
• Create true beacon brands
for aspirational consumers
• Trigger high level of
dynamism to become a
leader in brand
management
• International footprint and
mind-set
• Passing 1 bn € revenue
level in Branded Products
• Diversify Branded
Products / generic mix
from ~ 50% to ~ 2/3 Group
operating profit
contribution
Building brand equity
Large and growing
markets:
• Higher life
expectancy, aging
population
• Greater health
awareness
promotes
increasing out-of-
pocket spending
• Cost pressure in
health care forces
personal
responsibility =
market of self-
paying patients
OTC-Market