Opto Circuits Investor presentation 2012

7/30/2019 Opto Circuits Investor presentation 2012

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Disclaimer

Statements made in this Investor Update describing the Companys objectives,

projections, estimates, expectations may be Forward-looking Statements within themeaning of all applicable laws and regulations. Actual results could differ from thoseexpressed or implied. Important factors that could make a difference to the Companysoperations include economic conditions affecting demand, supply and price conditions inthe domestic and overseas markets in which the Company operates, changes ingovernment regulations, tax laws and other statutes and other incidental factors.

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H1 FY2013 SummaryHalf-yearly Performance

Consolidated Performance Highlights: H1FY2013 vs. H1FY2012

Commenting on the results and performance, Mr. Vinod Ramnani, Chairman and Managing Director of

Opto Circuits said:

Our revenue performance for the second quarter of FY13 has been moderate but on a half-yearlybasis, weve performed satisfactorily. Our Malaysian facilities for the non invasive business have beenrendered operational in the first half and many cost-conscious customer segments have become accessible.I am, therefore, confident of a strong second half in FY13.

o Sales increased by 22% to Rs. 1322 crore

o Non Invasive segment sales increased 21%

o Invasive segment sales increased 29%

o EBITDA increased by 19% to Rs. 354 crore; margin holds steady at 27%

o PAT increased by 7% to Rs. 254 crore

o Net Debt of Rs. 966 crore and a Net Debt to Equity ratio of 0.49 x as at September 30, 2012

o Reduction in total bank debt by 10% (Rs. 114 crore) since March 31, 2012

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Q2 FY2013 SummaryQuarter Business Highlights

Business Highlights

o Received CE mark to market and sell Revo 1100 in Europe

o Received DCGI approval to market and sell E-Magic Plus in India and successfully completed FIMin September 2012

o Won large orders and tenders in India, Israel, Romania and UK for AEDs

Strategic Initiatives

Malaysia production facility

o OEHL Malaysia : Production facility ready; awaiting completion of equipment installation tomanufacture catheters for PTA procedures

o Opto Malaysia & CSI Malaysia: Facilities operational; manufacture sensors, patient monitors and

AEDs (for OUS markets)

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Q2 & H1 FY2013 Financial Highlights

Consolidated Financials

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o Sales decline q-o-q of 15%; Causes: currency appreciation impact (3%), delayed execution

of shipments owing to technical issues of vendor-supplied components (~5%) andunfavourable macro-economic environment

o Initiation into RoHS compliance & IEC 60601-1 3rd Edition partly impacted COGSand, therefore, gross margin y-o-y

o Expensing of all product development costs (Rs. 43 crore for H113) from 1st April 2012impacted y-o-y net profitability; R&D to sales at 3% for H113

y-o-y Q1 q-o-q y-o-y

FY2013 FY2012 Growth % FY2013 Growth % FY2013 FY2012 Growth %

Sales 607 562 8% 715 -15% 1322 1083 22%

Gross Profit 266 265 0% 318 -16% 584 510 14%

Margin % 44% 47% 45% 44% 47%

EBITDA 162 150 8% 193 -16% 354 298 19%

Margin % 27% 27% 27% 27% 27%PAT 116 121 -4% 138 -16% 254 238 7%

Margin % 19% 22% 19% 19% 22%

Basic EPS 4.80 5.00 -4% 5.7 -16% 10.49 9.81 7%

H1(Rs. Cr.)

Q2


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H1 FY2013 Financial Highlights

Leverage Profile

o In H1 FY2013, net repayments of Rs. 200 crores were executed (~ 28% repayment in long term debt, the remaining is routinepayments of short term loans and/or revolving lines of credit which mature periodically)

o The long term debt resides in the books of the Companys subsidiaries domiciled in the US and is matched in currency by thesubsidiaries inflows and assets. Such long term debt has varied repayment schedules (bi-annual & quarterly) and varied tenures(between 3 to 4 years)

o Our debt servicing schedules and utilizations of lines of credit are in consonance with our Lenders and we abide by the terms andtimelines contracted with our Lenders

(Rs. Cr)30th Sep

201231st Mar

2012 Change

Gross Debt 1084 1172 (8%)

Long Term(Acquisition Finance)

35% 25%

Short Term(Working Capital)

65% 75%

Cash & CashEquivalents

118 174 (32%)

Net Debt 966 998 (3%)

Equity 1990 1699 17%

Gross Debt / Equity (x) 0.54 0.69

Net Debt / Equity (x) 0.49 0.59

Notes:1. The long term debt repayment schedule presented above is on the Debt balance as at March 31, 2012

Long Term Debt Schedule1

6

100%

73%

44%

19%

0%

FY2012 FY2013 FY2014 FY2015 FY2016


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Working Capital Cycle

o No material change in working capitalcycle from FY12

o Improvement in Payables days from 32days in FY12 to 39 days in H1FY13

o Increase in operating cycle from 178days in FY12 to 199 days in H1FY13 dueto increase in Debtor days

o Unfavorable macro-economicenvironment in certain markets led to anincrease in Debtor days from 131 days inFY12 to 160 days in H1FY13

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215214

199

199

78 79

160

131

16

27

53

69

39

32

H1FY13 FY12

NWC OPCInventory Debtors

Cash Loans & Advances

Payables


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Other Key Financial Metrics

o The tax expense reflects the total of all tax provided and paid during this period acrossour various entities as per the laws prevailing in their respective countries of domicile

o The movement in ETR q-o-q is due to increased share of revenues & profitability fromthose locations which enjoy tax exemptions. Additionally, the quarter tax expense

represents an estimate on our tax computations at our various Indian & Foreign entities(and is a combination of both federal and state taxes). Such variations generally even outby the fiscal year end when such tax computations become reasonably determinate

o Rs. 63 crore (incurred as capex in H1FY13) was, hitherto, lying as Advances paid toSuppliers of Capital Goods in Other Non Current Assets as at March 31, 2012

(Rs. Cr.) Q2 FY2013 Q1FY2013 HIFY2013

Capex-

63

% of Sales 5%

Consolidated Tax 6.3 14.9 21.3

Effective Tax

Rate (ETR)5% 10% 8%

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Other Revenue Highlights

Consolidated Sales by Segment

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82% 78% 77% 81% 80%

17% 21% 22% 18% 19%

1% 1% 1% 1% 1%

Q2FY12 Q3FY12 Q4FY12 Q1FY13 Q2FY13

Mecical Equipment Interventional Devices Non Medical


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Consolidated Sales by Currency

H1 FY13 y-o-y Growth excluding Currency Impact:

o Consolidated Net Sales: 12%

o Medical Equipment (Non Invasive)segment: ~ 10%

o Interventional Devices (Invasive) segment:~ 23%

Sales Share by Currency (H1 FY13)

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80.40%

18.07%

1.53%

USD Euro Others

y-o-y Q1 q-o-qFY2013 FY2012 Growth % FY2013 Growth %

USD/ INR 51.93 46.79 11% 53.73 -3%

EURO/ INR 68.24 64.94 5% 69.62 -2%

USD/ INR 52.70 48.93 8% 56.31 -6%

EURO/ INR 68.15 66.65 2% 70.91 -4%

Q2Forex Rates

Avg. Rates

Closing Rates


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Entity Financials

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Consolidated Sales Share of Subsidiaries

(Rs. Cr.) Q2 y-o-y Q1 q-o-q H1 y-o-yFY2013 FY2012 Growth % FY2013 Growth % FY2013 FY2012 Growth %

OCI 201 163 24% 189 6% 390 315 24%

OCCL 255 263 -3% 333 -23% 588 489 20%

OEHL 114 94 22% 124 -8% 238 186 28%

AMDL 13 13 2% 17 -23% 30 24 25%

Others 24 29 -17% 52 -54% 76 69 10%

Total 607 562 8% 715 -15% 1322 1083 22%

33%

42%

19%

2% 4%

29%

47%

17%

2%

5%

Q2FY12Q2FY13

OCI OCCL OEHL AMDL Others


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Segment Highlights

Medical Equipment (Non Invasive Segment)

o Unetixs received CE mark to market andsell Revo 1100 in Europe

o Cardiac Science won large orders andtenders in Israel, Romania and UK forAEDs; AMDL bagged and executed aprestigious AED tender from the IndiaArmys Northern Command

o Streamlined government tender verticalin India

Sales Share by Product Utility

Notes:

1. Monitoring and measurement products include cardiac, vital signs and anaesthesia monitoring technologies2. The Treatment business refers to the hospital and public access revenues from the sale of all defibrillator products3. Vascular Diagnostics include revenues generated from sale of PAD diagnostic equipment and its accessories

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53%61% 66%

45% 37%33%

2% 2% 1%

Q2FY12 Q1FY13 Q2FY13

Monitoring & Measurement Treatment Vascular Diagnostics



Monitoring & Measurement 320 245 31% 358 -11% 678 481 41%

Treatment 159 210 -24% 216 -26% 375 390 -4%

Vascular Diagnostic 7 8 -20% 10 -32% 17 15 12%

Total 486 463 5% 584 -17% 1069 885 21%

(Rs. Cr.)Q2 H1


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Segment Highlights

Interventional Devices (Invasive Segment)

o Received DCGI approval to market andsell E-Magic Plus in India andsuccessfully completed FIM inSeptember 2012

o Appointed new distributor inScandinavia and Switzerland

o

Restructured sales channels anddistribution network in Asia

o Registered 2 products in Australia and 1in South Korea

Sales Share by Product Applicability

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Vascular 114 93 23% 124 -8% 238 185 29%

Orthopedics 1 1 -13% 1 -11% 2 2 -5%

Urology, Gastroenterology and Gynaecology 2 1 34% 1 15% 3 2 34%

Total 117 95 22% 126 -8% 243 189 29%

(Rs. Cr.)

Q2 H1

97%98% 98%

1%

1%1%

1% 1% 1%

Q2FY12 Q1FY13 Q2FY13

Vascular Orthopedics Urology & Others


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H1 FY2013 Industry Trends & Policy Changes

Recent Developments

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o Environmental Regulations adding to Costs:

o Began compliance with IEC 60601-1 3rd Edition

o Medical technology companies with global sourcing and distribution have initiated processes to complywith the RoHS Regime across all electrical and electronic medical equipment products

o US Department of Health and Human Services released eleven new changes to the Meaningful Use Ruling forPhysicians and Hospital organizations. The Ruling defines health care organizations use of electronic healthrecords and related technology in their organization

o In Macedonia, it is now mandatory for all organizations with over 100 employees to install AEDs and inItaly, it has become mandatory for all sports associations to install AEDs

o Economic slowdown in some mature markets has resulted in budget constraints for purchase of new medicalequipment and supplies in care delivery centres


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Opto Circuits: At a Glance

A fast growing multinational medical device company

Market

Leadership

Revenue and PAT CAGR of more than 50% over the last 5 years with strong margins

Average 38% dividend pay out in last 3 years

Conservative balance sheet with low leverage

FY2012 ROCE of 20% and ROE of 34%StrongFinancial

Performance

Best-in-Class

Operations

World class manufacturing facilities across North America, Europe and Asia

6 global R&D centres with highly skilled and integrated teams

193 global patents across product lines as at March 31, 2012

Global sales offices and relationship with marquee distributors

Leader in cardiac and vital signs monitoring, emergency cardiac care, vascular treatmentsand sensing technologies

USFDA listed and CE marked products which are sold in over 150 countries

Partnerships with leading OEMs and medical institutions across the value chain

Well-known brands include Cardiac Science, Criticare Systems, Eurocor and Mediaid

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Revised organization structure to focus on the two main business segments

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Opto Circuits (India) Ltd.(OCI)

Unetixs Vascular

Inc.

Criticare SystemsInc.

Opto CardiacCare Ltd.

(OCCL)

Opto EurocorHealthcare Ltd.

(OEHL)

Advanced MicronicDevices Ltd.

(AMDL)

Cardiac ScienceCorp.

Eurocor GmbH

Eurocor Singapore

Pte Ltd.

Eurocor Asia SdnBhd.

N.S. Remedies Pvt.Ltd.

Opto Circuits(Malaysia) Sdn Bhd.

Opto InfrastructureLtd.

Ormed MedicalTechnologies Ltd.

Non InvasiveSegment

InvasiveSegment

Non MedicalSegment

Organization Structure

96.85% 59.71%

Devon InnovationsPvt. Ltd.

Maxcor LifescienceInc.

Others

87.2%

Note: 100% stake held by the Parent Company unless specifically mentioned

Mediaid Inc.


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Monitoring Treatment Diagnostics

Cardiac Monitoring

Defibrillation Products Vascular Diagnostic Systems

Vital Signs Monitoring

Anesthesia Monitoring

Thermometers

Consumables, Accessories and Services

Global market opportunity: ~ $14 billion dollars

Automated and semi-automatedExternal Defibrillators

Portable Multi-ParameterMonitor

Cardiac MonitoringQ-Stress System

Product Portfolio

Medical Equipment (Non Invasive Segment)

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Vascular OrthopedicsUrology,

Gastroenterologyand Gynaecology

Cardiac Stents Hip Implants Catheters

Drug Coated Balloons Suction Devices Stents

Angioplasty PeripheralsSurgical Tools

Physiotherapy ProductsGuidewires

Dilator Sets, Needles, Baskets,Injectors

Global market opportunity: ~ $8

10 billion dollars

Hip Implants & SurgicalConsumables

Catheters & DisposablesCardiac Stents andDrug coated Balloons

Product Portfolio

Interventional Devices (Invasive Segment)

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Glossary & Definitions

o AED: Automated External Defibrillator

o OUS: Countries outside the US

o CE: Conformit Europenne

o DCGI: Drug Controller General of India

o FIM: First in Man

o OEM: Original Equipment Manufacturer

o USFDA: United States Food and Drug Administration

o IEC: International Electrotechnical Commission

o RoHS: Restriction of the Use of Certain Hazardous Substances in Electrical and Electronic Equipment

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o Net Current Assets / Net Working Capital (NWC): (All Current Assets) minus (All Current Liabilities excluding shortterm borrowings and current maturities of long term debt)

o Net Debt: (Long term borrowings) plus (Short term borrowings) plus (Current maturities of long term debt) minus

(Cash & Bank Balances)

o Per Day Sales: Sales / period under consideration

o Working Capital Cycle: (Component / Per day Sales)

o Operating Cycle: (Days Inventory Outstanding) plus (Days Receivables Outstanding) minus (Days PayableOutstanding)

o EBITDA (Operating Profit): (Core Operating Profit) plus (Total Other Income)


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# 83, Phase I - Electronic City, Bengaluru - 560 100, INDIA

Phone : +91 80 2852 1040/ 41/ 42 Fax: +91 80 2852 1094Web: www.optoindia.com

Investor Relations: [email protected]

Investor Services: [email protected]

Subsidiary Websiteswww.amdlcorp.com|www.optoeurocor.com

www.devoncath.com|www.cardiacscience.com|www.csiusa.comwww.unetixs.com|www.eurocor.de|www.nsremedies.com|www.mediaidinc.com
http://www.optocircuits.com/mailto:[email protected]:[email protected]://www.amdlcorp.com%7Cwww.optoeurocor.com/http://www.devoncath.com/http://www.cardiacscience.com/http://www.csiusa.com/http://www.unetixs.com/http://www.eurocor.de/http://www.nsremedies.com/http://www.mediaidinc.com/http://www.mediaidinc.com/http://www.nsremedies.com/http://www.eurocor.de/http://www.unetixs.com/http://www.csiusa.com/http://www.cardiacscience.com/http://www.devoncath.com/http://www.amdlcorp.com%7Cwww.optoeurocor.com/mailto:[email protected]:[email protected]:[email protected]://www.optocircuits.com/

Opto Circuits Investor presentation 2012

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