q3 fy2013 investor update - opto circuits circuits investor update q3_fy1… · actual results...
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Q3 FY2013
Investor Update
February 13, 2013
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Disclaimer
Statements made in this Investor Update describing the Company’s objectives, projections, estimates, expectations may be “Forward-looking Statements” within the meaning of all applicable laws and regulations. Actual results could differ from those expressed or implied. Important factors that could make a difference to the Company’s operations include economic conditions affecting demand, supply and price conditions in the domestic and overseas markets in which the Company operates, changes in government regulations, tax laws, other statutes and other incidental factors.
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Q3 FY2013 Summary Quarterly Performance
Consolidated Performance Highlights: YTD FY2013 Vs. YTD FY2012
o Sales increased by 14.6% to Rs. 1,941 crore
o Medical equipment and consumables grew by 14.5% yoy
o Interventional devices and tools grew by 16.0% yoy
o EBITDA increased by 11.2% to Rs. 517 crore; margins hold steady at 27%
o PAT increased by 1.4% to Rs. 368 crore; margins decline by 2.5%
o Net Debt of Rs. 973 Crore and a Net Debt to Equity ratio of 0.45 x as at December 31, 2012
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Q3 FY2013 Summary Quarterly Performance
Corporate & Business Highlights
o Appointed Mr. Srinatha A N as the new Company Secretary and Compliance Officer
o Received a BBB+ rating from Brickwork Ratings for the parent Company’s fund based working capital facilities. The rating indicates a stable outlook
o Tie up with a medtech company to enhance penetration in Asian markets for the Dior® and Freeway® , drug-eluting balloons product line
o Launched Powerheart® G5 AED in Italy and Norway and Burdick® 4250 Vision Holter in US
Strategic Initiatives
OEHL Malaysia production facility
o Value Addition is currently being performed.
o 80% equipment received and is being installed. Remaining 20% to be installed in the coming quarter. Initiated CE audit and ISO certification process.
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Q3 FY2013 Summary Quarterly Performance
New Client Wins
Medical Equipment and Consumables (Non Invasive Segment)
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o US: Chicago Metra, Entergy, Wisconsin Department of Corrections for AEDs
o Canada: Heart and Stroke Foundation of British Columbia for AEDs
o UK: Red Cross tender for AEDs
o Italy: Chosen official AED supplier of Football National Teams (10 teams) for the next 4 years
o Germany: AEDs for Ministry of Interiors, Government tender deal and for J&J German headquarters
o Philippines: Philippine Airlines AED order through our alliance with Airbus/Innovint
o India : GVK EMRI for AEDs
o France: Tender for the 506 Series monitors from France’s first public GPO UNIHA
Interventional Devices and Tools (Invasive Segment)
o Tenders / large order wins in Poland, Venezuela, Korea and India
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Q3 FY2013 Industry Trends & Policy Changes Quarterly Performance
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Recent Developments
o US implements 2.5% medical device tax on all medical devices sold in the country.
o The European Society of Cardiology (ESC), the American College of Cardiology (ACC) and the American Heart Association (AHA) convened, together with the World Heart Federation (WHF) and released a new universal definition for myocardial infarction (MI) or Heart Attacks. This new definition clarifies the controversial area of procedural related MI and will be the gold standard for diagnosis and clinical trial endpoints. A new ECG STEMI criterion was released and going forward all ECG systems must comply with the newly set criterion.
o Leading medical groups have requested the Department of Health and Human Services, USA to delay the implementation of Stage 3 of meaningful use of electronic health records (EHRs) as providers are still trying to implement stages 1 and 2.
o AED manufacturers, advocates and related industry in the US continue to urge the FDA to reconsider its proposed reclassification of automated external defibrillators; from Class III 510 (K) to Class III PMA devices.
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Q3 FY2013 Financial Highlights Quarterly Performance
Consolidated Financials
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Q3 and YTD FY13 operating margins absorbed the total impact of the R&D spends, raw material prices remain stable, however general pricing pressure witnessed.
y-o-y Q2 q-o-q y-o-y
(Rs. Cr) FY2013 FY2012 Growth (%) FY2013 Growth (%) FY2013 FY2012 Growth (%)
Sales 619 611 1.2% 607 1.9% 1,941 1,694 14.6%
Gross Profit 261 295 (11.6%) 267 (2.4%) 846 805 5.1%
% of Sales 42.1% 48.2% 44.0% 43.6% 47.5%
EBITDA 163 167 (2.7%) 162 0.7% 517 465 11.2%
% of Sales 26.3% 27.4% 26.6% 26.6% 27.4%
PAT 113 125 (9.5%) 116 (2.6%) 368 363 1.4%
% of Sales 18.3% 20.5% 19.2% 18.9% 21.4%
Basic EPS (Rs.) 4.67 5.16 (9.5%) 4.80 (2.6% 15.17 14.96 1.4%
Q3 Nine Months
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Q3 FY2013 Financial Highlights Quarterly Performance
Leverage Profile
o The long term debt resides in the books of the Company’s subsidiaries domiciled in the US and is matched in currency by the subsidiaries’ 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 and timelines contracted with our Lenders]
(Rs. Cr) 31st Dec
2012 30th Mar
2012
Gross Debt 1,065 1,172
Cash & Bank Balances 91 174
Net Debt 973 998
Equity 2,138 1,699
Gross Debt / Equity (x) 0.48X 0.69x
Net Debt / Equity (x) 0.45X 0.59x
Notes: 1. The long term debt repayment schedule presented above is on the Debt balance as at March 31st, 2012
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Q3 FY2013 Financial Highlights Quarterly Performance
Operating Working Capital Cycle
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178199
209
131
160 165
79 78 78
32 39 34
Mar-12 Sep-12 Dec-12
Operating Cycle Trade Receivables
Inventory Trade Payables
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Q3 FY2013 Financial Highlights Quarterly Performance
Other Key Financial Metrics
The tax expense reflects the total of all tax provided and paid during this period across our various entities as per the laws prevailing in their respective countries of domicile
(Rs. Cr) Q3
FY2013 Q3
FY2012 YTD
FY2013
R&D 22.37 23.78 65.41
% of Sales 3.6% 3.9% 3.4%
Capex 28.94 - 91.94
% of Sales 3.9% 4.7%
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(Rs. Cr) YTD FY2013
Consolidated Tax 22.9
Effective Tax Rate (ETR) 5.8%
o Gross additions to capex for Q3FY13 was Rs. 28.94 Crore, which was hitherto, lying as Advances paid to Suppliers of Capital Goods in Other Non Current Assets as at March 31, 2012
o Capex deployed towards machinery and equipment in India and Malaysia
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Q3 FY2013 Segment Highlights Quarterly Performance
Consolidated Sales by Segment
Sales Share by Segment
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Sales Share by Currency (YTD FY13)
YTD FY2013 growth excluding currency impact:
o Consolidated Net Sales: 7%
o Medical Equipment (Non Invasive) segment: ~7%%
o Interventional Devices (Invasive) segment: ~ 10%
y-o-y Q2 q-o-q
FY2013 FY2012 Growth (%) FY2013 Growth (%)
Avg. Forex Rates
USD / INR 52.97 48.95 8.2% 51.93 2.0%
Euro / INR 70.30 66.07 6.4% 68.24 3.0%
Closing Forex Rates
USD / INR 54.78 53.26 2.9% 52.70 3.9%
Euro / INR 72.26 68.90 4.9% 68.15 6.0%
Q3
78% 77% 81% 80% 79%
21% 22% 18% 19% 20%1% 1% 1% 1% 1%
Q3 FY12 Q4 FY12 Q1 FY13 Q2 FY13 Q3 FY13
Medical Equipment Interventional Devices Non Medical
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Q3 FY2013 Segment Highlights Quarterly Performance
Medical Equipment and Consumables (Non Invasive Segment)
o Launched Powerheart® G5 AED in Italy and Norway and Burdick® 4250 Vision Holter in US
o AMDL Healthcare launched Mediaid’s Model AD Premium 910 Anaesthesia Workstation, Vent Care 410 ICU Ventilator and Model Vent Mini Portable Ventilator in India
o Signed distribution agreements with McKesson, providing access to their corporate and field programs
o Renewed Henry Schein Passport Program (preferred vendor program for key cardiology projects)
o Successfully renewed the IDN agreement with McLaren Health Care Corporation covering stress, ECG, RMS, Pyramis and supplies. CSC is the exclusive provider of these products in their 9 hospitals
o AMDL Healthcare revamped sales team in Ahmedabad, Surat, Pune and Nagpur & reinforced partner distribution presence in Bihar and Orissa
Sales Share by Product Utility
Notes: 1. Monitoring and measurement products include cardiac, vital signs and anaesthesia monitoring technologies 2. The Treatment business refers to the hospital and public access revenues from the sale of all defibrillator products 3. Vascular Diagnostics include revenues generated from sale of PAD diagnostic equipment and its accessories
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y-o-y Q2 q-o-q y-o-y
(Rs. Cr) FY2013 FY2012 Growth (%) FY2013 Growth (%) FY2013 FY2012 Growth (%)
Monitoring & Measurement 352 266 32.3% 320 10.0% 1,029 748 37.6%
Treatment 129 198 (34.8%) 159 (18.9%) 504 587 (14.1%)
Vascular Diagnostics 11 13 (15.4%) 7 57.1% 28 28 0.0%
Total Sales 492 477 3.1% 320 53.8% 1,561 1,363 14.5%
Q3 Nine Months
56% 61% 56% 56%72%
42% 37% 43% 43%26%
2% 2% 2% 2% 2%
Q3 FY12 Q4 FY12 Q1 FY13 Q2 FY13 Q3 FY13
Monitoring & Measurement Treatment Vascular Diagnostics
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Vascular 98%
Orthopedics 1%
Urology1%
Q3 FY2013 Segment Highlights Quarterly Performance
Interventional Devices and Tools (Invasive Segment)
Sales Share by Product Applicability (Q3 FY13)
Notes: 1. Urology includes Gastroenterology and Gynaecology
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o E-Magic Plus which was launched in India in Q2 FY2013 received overwhelming response from Indian Cardiologists
o New distributor appointed for Minas Gerais state in Brazil
o Enhanced Indian distribution; added 11 new distributors across 10 Tier I and II cities
o Tie up with a medtech company to enhance penetration in Asian markets for Dior ® and Freeway®, drug eluting balloons product line
o Devon Innovations launched two new products in the disposable medical devices segments – central venous catheter sets and cystoscopes
y-o-y Q2 q-o-q y-o-y
(Rs. Cr) FY2013 FY2012 Growth (%) FY2013 Growth (%) FY2013 FY2012 Growth (%)
Vascular 124 126 (1.6%) 114 8.8% 362 310 16.8%
Orthopedics 1 1 0.0% 1 0.0% 3 3 0.0%
Urology 1 3 (66.7%) 2 (50.0%) 4 5 (20.0%)
Total Sales 126 130 (3.1%) 159 (20.8%) 369 318 16.0%
Q3 Nine Months
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Q3 FY2013 Segment Highlights Quarterly Performance
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Sales Share by Entities
OCI OCCL OEHL AMDL Others
Consolidated Sales by Subsidiaries
y-o-y Q2 q-o-q
(Rs. Cr) FY2013 FY2012 Growth (%) FY2013 Growth (%)
OCI 188 171 9.9% 201 (6.5%)
OCCL 257 274 (6.2%) 255 0.8%
OEHL 124 126 (1.6%) 114 8.8%
AMDL 10 10 0.0% 13 (23.1%)
Others 40 30 33.3% 24 66.7%
Total 619 611 1.3% 607 2.0%
Q3
28%
45%
20%
2% 5%
Q3 FY2012
30%
42%
20%
2% 6%
Q3 FY2013
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Opto Circuits: At a Glance Company Overview
A fast growing multinational medical device company
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Ma
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Le
ad
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Revenue and PAT CAGR of more than 50% over the last 5 years with strong margins
Conservative balance sheet with low leverage; Net Debt to Equity of 0.45X as of Dec 31, 2012
FY2012 ROCE of 20% and ROE of 34%
Str
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Best
-in
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World class manufacturing facilities across North America, Europe and Asia
Investments in R&D to maintain a healthy pipeline of innovations and product developments
6 global R&D centres with highly skilled and integrated teams
205 global patents across product lines as at December 31, 2012
Global sales offices and relationship with marquee distributors
Leader in cardiac and vital signs monitoring, emergency cardiac care, vascular treatments and 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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Distribution Network and Target Customers Company Overview
Global distribution network catering to a diversified range of end customers
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Global Distribution Network Target Customers
Primary Care & Physician Offices
Hospitals & Rehab Centers
Dental Offices
Military & Veteran Clinic
Community Centers
Surgery Centers
o OEM: Customized full service solutions
o White labelled: Consumables and accessories for group purchase organizations/distributors
o Branded Consumables
Global Offices
India USA Germany
Malaysia Singapore UK
France Denmark Japan
Poland UAE China
North America
Europe
South America
Australia
Asia
North Africa
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Revised organization structure to focus on the two main business segments
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Opto Circuits (India) Ltd. (OCIL)
Unetixs Vascular Inc.
Criticare Systems Inc.
Opto Cardiac Care Ltd. (OCCL)
Opto Eurocor Healthcare Ltd.
(OEHL)
Advanced Micronic Devices Ltd.
(AMDL)
Cardiac Science Corp.
Eurocor GmbH
Eurocor Singapore Pte Ltd.
Eurocor Asia Sdn Bhd.
N.S. Remedies Pvt. Ltd.
Opto Circuits (Malaysia) Sdn Bhd.
Opto Infrastructure Ltd.
Ormed Medical Technologies Ltd.
Non Invasive Segment
Invasive Segment
Non Medical Segment
Organization Structure Company Overview
96.85% 59.71%
Devon Innovations Pvt. Ltd.
Maxcor Lifescience Inc.
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-automated External Defibrillators
Portable Multi-Parameter Monitor
Cardiac Monitoring Q-Stress System
Product Portfolio Company Overview
Medical Equipment and Consumables (Non Invasive Segment)
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Vascular Orthopedics Urology,
Gastroenterology and Gynaecology
Cardiac Stents Hip Implants Catheters
Drug Coated Balloons Suction Devices Stents
Angioplasty Peripherals Surgical Tools
Physiotherapy Products Guidewires
Dilator Sets, Needles, Baskets, Injectors
Global market opportunity: ~ $8 billion dollars
Hip Implants Urology - Catheter Set Cardiac Stent and Drug coated Balloon
Product Portfolio Company Overview
Interventional Devices and Tools(Invasive Segment)
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Definitions & Glossary
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o AED: Automated External Defibrillator
o CE: Conformité Européenne
o DEB: Drug Eluting Balloons
o OEM: Original Equipment Manufacturer
o Holter: A portable device for continuously monitoring the electrical activity of the heart for 24 hours or more.
o ISO: International Organization for Standardization
o Ventilator: A machine designed to mechanically move breathable air into and out of the lungs, to help a patient who is physically unable to breathe or is breathing insufficiently
o GPO: Group purchase organization
o EMRI: Emergency Management and Research Institute that handles medical, police and fire emergencies through the “1-0-8- Emergency Service’
o USFDA: US Food and Drug Administration
o OEM: Original Equipment Manufacturer
o ECG: Electronic Cardiogram
o IDN: Integrated Delivery Network
o RMS: Cardiac Rehabilitation Management System
o Net Current Assets / Net Working Capital (NWC): (All Current Assets) minus (All Current Liabilities excluding short term borrowings and current maturities of long term debt)
o Net Debt: (Long term borrowings excluding Other loans and advances) plus (Short term borrowings excluding Other loans and advances) plus (Current maturities of long term debt) minus (Cash & Bank Balances)
o Working Capital Cycle: (Component / Sales)* 365
o Operating Cycle: (Days Inventory Outstanding) plus (Days Receivables Outstanding) minus (Days Payable Outstanding)
Industry Financials
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# 83, Electronics City, Bengaluru - 560 100, INDIA
Phone : +91 80 2852 1040/ 41/ 42 Fax: +91 80 2852 1094 Web: www.optoindia.com
Subsidiary Websites: www.cardiacscience.com | www.csiusa.com | unetixs.com | www.amdlcorp.com|www.mediaidinc.com | www.optoeurocor.com|
www.eurocor.de|www.nsremedies.com|www.devoncath.com|www.ormedortho.com
Shalaka Parab, Opto Circuits [email protected]
Namita Dandekar, Opto Circuits [email protected]
Saket Somani, Churchgate Partners [email protected]