READY FOR CHANGE – DELIVERING GROWTH - Stada Arzneimittel · STADA Arzneimittel AG, Bad Vilbel...

CAPITAL MARKETS DAY OCTOBER 5, 2016

READY FOR CHANGE – DELIVERING GROWTH Strategy Update Dr. Matthias Wiedenfels, CEO

Page STADA Capital Markets Day • October 5, 2016

GENERAL INFORMATION

2

By making use of this document the reader acknowledges and agrees to the following:

We accept no liability arising from the use of this document.

STADA Arzneimittel AG, Bad Vilbel (hereinafter “STADA”), has made every effort to make sure that this document contains correct and up-to-date information. STADA accepts no responsibility for and makes no guarantee whatsoever in respect of currentness, accuracy and completeness of the information and assumes no obligation to update, complete or correct this information.

The anticipated opportunities and risks to STADA’s activities have been described in detail in the Executive Board’s management reports in the annual reports. Current possible opportunities and risks are discussed in the respective interim report.

STADA’s performance indicators are partly influenced by one-time special effects and/or effects not arising from the operating business. Disclosure of key figures adjusted for these effects (so called “pro forma” key figures) by STADA is only to provide a supplement to the recorded IFRS key figures for a transparent comparison to a relevant period from the previous year.

All text, pictures, trademarks, and other information contained in this document are subject to the copyright of STADA or subject to rights acquired from third parties. Trademark protection may apply even for preparations not indicated as trademarks. This document may not be reproduced in whole or in part without the express written consent of STADA.

Any disputes arising out of or in connection with the content of this document, insofar as they are directed against STADA, shall be subject to German law, without prejudice to mandatory provisions of foreign law. The place of jurisdiction is Frankfurt am Main to the extent legally permissible.


FORWARD-LOOKING STATEMENTS

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This STADA Arzneimittel AG (hereinafter "STADA") presentation contains certain statements regarding future events that are based on the current expectations, estimates and forecasts on the part of the company management of STADA as well as other currently available information. They imply various known and unknown risks and uncertainties, which may result in actual earnings, the business, financial and earnings situation, growth or performance to be materially different from the estimates expressed or implied in the forward-looking statements. Statements with respect to the future are characterized by the use of words such as “expect”, “intend”, “plan”, “anticipate”, “believe”, “estimate” and similar terms. STADA is of the opinion that the expectations reflected in forward-looking statements are appropriate; however, it cannot guarantee that these expectations will actually materialize. Risk factors include in particular: The influence of regulation of the pharmaceutical industry; the difficulty in making predictions concerning approvals by the regulatory authorities and other supervisory agencies; the regulatory environment and changes in the health-care policy and in the health care system of various countries; acceptance of and demand for new drugs and new therapies; the results of clinical studies; the influence of competitive products and prices; the availability and costs of the active ingredients used in the production of pharmaceutical products; uncertainty concerning market acceptance when innovative products are introduced, presently being sold or under development; the effect of changes in the customer structure; dependence on strategic alliances; exchange rate and interest rate fluctuations, operating results, as well as other factors detailed in the annual reports and in other Company statements. STADA does not assume any obligation to update these forward-looking statements.

The Executive Board of STADA Arzneimittel AG: Dr. M. Wiedenfels (Chairman), H. Kraft


Strategy Update „Ready for Change – Delivering Growth“

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AGENDA

I. Dr. M. Wiedenfels, Chief Executive Officer

Strategy and Growth Opportunities in Generics

II. Luc Slegers, Executive Vice President Generics

Strategy and Growth Opportunities in Branded Products

III. Dieno George, Executive Vice President Brands

Guidance 2019

IV. Helmut Kraft, Chief Financial Officer

Page STADA Capital Markets Day • October 5, 2016 5

SUPERVISORY BOARD NEW MEMBERS WITH OUTSTANDING EXPERTISE

C. F. Oetker (43)

Chairman of the Supervisory Board

Member of the Supervisory Board since 2009

Previously Chief Representative of Bankhaus Lampe

Managing Director F.O. Holding GmbH

Dr. E. Cornut (59)

Most recently Chief Ethics, Compliance and Policy Officer at Novartis

R. Hoffmann (57)

Most recently a member of the Extended Executive Board of Amgen

Senior Vice President of U.S. Commercial Operations at Amgen

30 years in the pharmaceutical industry

Dr. B. Kudlek (49)

Previously Chief Operating Officer at AENOVA

Broad experience in the generics industry (Sandoz, Ratiopharm)

T. Müller (47)

Chief Marketing Officer at Opel

One of the best- known leadership personalities in marketing and sales

Dr. G. Riemann (58)

Former President of the Global Environmental Science Division at Bayer CropScience

30 years of international experience in the life sciences industry


MDAX Stada Arzneimittel AG

6

STADA SHARES HIT NEW HIGH IN AUGUST

Share price development 2014-2016 %

NEW HIGH

€ 50.42

01/2014 01/2015 01/2016

0

20

40

60

80

100

120

140

160


ATTRACTIVE SHAREHOLDER RETURN

5 Year total return incl. dividends

MDAX

STADA 240%

159%

STADA share performance1 excluding dividends: 212%

1) September 30, 2011 – September 30, 2016.


DIVIDEND INCREASE OF 89% (2011-2015)

Dividend development

37

50

66 66 70

2011 2012 2013 2014 2015

€ Cent


DRIVING ORGANIC GROWTH BENEFITS FROM PERSISTING MEGATRENDS

More educated population / Greater health awareness and desire for self-care

Increasing income level / Growing self-payer-market

Increasing access to affordable high-quality medicines

Regulatory support

Expanding access via new channels

Aging population1, Germany 2015-2025

WOMEN

MEN

2015

0 0 300 300 600 600 in thousand

1) Source: Statistisches Bundesamt, Destatis.


STADA STRATEGY TAPPING OUR FULL POTENTIAL

Delivering growth

Ready for change


READY FOR CHANGE – DELIVERING GROWTH BUILDING ON EXISTING BUSINESS AND NEW INITIATIVES

Generic base business

Biosimilars, niche areas, special therapy areas

Branded base business

New corporate culture and structure

Internationali-zation of brands

Focused M&A strategy

Streamline portfolio/ reduce costs

Reorganization and reallocation of resources

Efficiency gains

Change

Grow

11


NEW CORPORATE CULTURE AND STRUCTURE NEW LOGO AS SYMBOL OF CHANGE AND RENEWAL

New Group-wide incentivization model

Greater degree of transparency

Improved networking of individual business units

New Group structure

Enhance culture to further

boost company performance


NEW CORPORATE STRUCTURE REPORTING LINES ALONG THE NEWLY DEFINED BUSINESS SEGMENTS

Luc Slegers Executive Vice President Generics

Dieno George Executive Vice President Brands


REFINED STRATEGY BUILD ON GENERICS, EXPAND BRANDED PRODUCT BUSINESS AND STRIVE FOR ADDITIONAL GROWTH OPPORTUNITIES

2015 2019

BRANDED PRODUCTS

Above average growth, above average margins

Solid growth, cash generating GENERICS

INTERNATIONALIZATION OF BRANDS / BIOSIMILARS / NICHE AREAS / SPECIAL THERAPY AREAS Higher growth and

higher margins

Expand branded base business

o  Prioritize attractive brands

o  Internationalize selected products

o  Make use of innovative marketing concepts

o  Further expansion in non-regulated markets

Expand generics base business o  Core business

o  Offers solid reliable growth basis

o  Cost leadership and strong market position in selected regions, benefiting from still low penetration rates

Additional growth opportunities

o  Niche markets, non-regulated markets, driven by innovative products


60%

40% 40%

60%

15

READY FOR CHANGE – DELIVERING GROWTH STRONGER FOCUS ON BRANDED PRODUCTS

Sales by business segment GENERICS

BRANDED PRODUCTS

2015 Strategic

longer-term target

Shift share Generics to Branded Products


Canada: 22% 28%

US: 13% 19%

Latin America: 42% 57% Africa / Middle East: 35% 39%

Asia / Australia: 16% 27%

Europe: 19% 25% Japan: 4% 10%

Generic penetration2

38%

61%

47%

76%

BELGIUM

SPAIN

ITALY

GERMANY

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GENERICS DELIVERING SUSTAINABLE GROWTH

Generic value market share1

Increasing generics penetration in STADA’s key markets

Leading market positions in key Western and Eastern European generics markets

1) In USD 2006 vs 2015. 2) Based on 2015 Volumes. Source: IMS, Health Midas.


25

35 37

42 35

30

2015 2016 2017 2018 2019 2020

17

GENERICS OUR CORE BUSINESS WITH SUSTAINABLE GROWTH

Patent expiration in developed markets ($bn)1

6.9%

6.9%

7.3%

8.4%

4.8%

7.9%

RUSSIA

BELGIUM

SPAIN

ITALY

GERMANY

WORLD

Expected generics market growth in selected countries CAGR 2015-2020 (before discounts)2

1) Source: IMS Euromonitor; incl. Biologics. 2) Source: Health Global Market Insights / IMS, Generics Forecast prepared for STADA.

Cum. 2016-20: $178bn


5.2%

5.1%

3.6%

5.2%

2.5%

9.9%

5.2%

SPAIN

POLAND

ITALY

GERMANY

UK

RUSSIA

WORLD

OTC market growth forecasts2

24 26 27 28

30

2011 2012 2013 2014 2015

18

BRANDED BUSINESS ABOVE AVERAGE GROWTH AND MARGINS

Non-Rx bound product sales in Europe (LC$bn)1 CAGR 2015-2020

CAGR ’15-’19 +5%

1) Ex-manufacturer sales in local currency dollars. 2) IMS Health OTC Review 2016, source: IMS.


ADDITIONAL GROWTH OPPORTUNITIES EXPANSION OF BIOSIMILARS PORTFOLIO AND ACCELERATED INTERNATIONALIZATION OF BRANDS

1)  Adjusted for portfolio and currency effects.

Portfolio expansion from currently 2 to 7 products

Biosimilars

Capitalize on strong brands and expand geographic footprint

Internationalization of brands

SALES1 €m

2019e

>200

o  Product innovations in attractive niche markets

o  Value-added concepts

o  Innovative go-to-markets concepts

Future innovative concepts


FOCUSED M&A-STRATEGY IN-LICENSING AND SELECTIVE “BOLT-ON”-ACQUISITIONS

FIREPOWER €m

p.a. Acquisitions only on the back of clear investment

criteria!

~300

STADA niche areas/

special therapy areas

Brands existing base business

Expansion and internationalization

of brands

Generics existing base business

Limited capital allocation

o  Support base business

o  Stabilize margins

o  Expand geographic footprint

Grow and expand o  Growth markets o  Out of pocket o  Brands o  Rx to OTC/RxOTC


INCREASE EFFICIENCY AND ENHANCE PROFITABILITY

Streamline portfolio

o  Portfolio pruning / portfolio harmonization

o Optimize allocation of resources incl. marketing activities to most promising products/projects/regions

o  Prioritize internationalization of attractive brands

o  Keep “local jewels“ with exceptionally strong and unique market position and generally long history and life-cycle

o  Reduce COGS in sourcing and production (e.g. product transfers)

o  Reduce complexity and cost in supply chain

o Optimize sourcing of API‘s and finished goods

o  Tackle G&A-Cost

Optimize costs


INCREASE EFFICIENCY AND ENHANCE PROFITABILITY

Reorganization and reallocation of resources Example Germany: STADA GmbH and STADAvita as well as STADApharm

and cell pharm to become joint entities

Streamline sales and marketing activities

Reduce redundant structures and G&A costs

Increase efficiency and enhance profitability

Expected to be finalized in 2017


WE HAVE ESTABLISHED THE BASIS FOR SUSTAINABLE VALUE CREATION AND FUTURE GROWTH!

Capitalize on our new corporate structure and culture

Increase efficiency and enhance profitability

Allocate resources to most promising products/projects/regions; products for internationalization have been prioritized

Focus on areas with superior growth which are on the brink of being harvested (e.g. biosimilars)

Invest in new business development activities and geographically increase our exposure to OTC growth markets

Follow a focused and value-adding M&A strategy


WE ARE COMMITTED TO DELIVER ON OUR TARGETS FOR 2019!

SALES € 2,600 m

CAGR 15-19e:

+5%

EBITDA (Adj.) € 510 m

CAGR 15-19e:

+7%

NET INCOME (Adj.)

€ 250 m CAGR 15-19e:

+11%


YOUR CONTACT

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STADA Arzneimittel AG

Investor Relations 61118 Bad Vilbel, Germany Telephone: +49 (0) 6101 603-113 Fax: +49 (0) 6101 603-506 E-mail: [email protected]

www.stada.com

Vice President Investor Relations Leslie Isabelle Iltgen

[email protected]

READY FOR CHANGE – DELIVERING GROWTH - Stada Arzneimittel · STADA Arzneimittel AG, Bad Vilbel...

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