Strategic initiatives in a global perspective

Transcription

1 1 Strategic initiatives in a global perspective CBS 6 February Sten Scheibye, President & CEO, Coloplast

2 2 Agenda Introduction to Coloplast Facts, History, Milestones, Revenue, 2012 Global Operations Presence, Organisation, Strategy, In numbers, Outlook Costumer driven innovation as a competitive means Costumer driven Innovation, FIGARO/AIM, Case: Intermittent Catheters

3 3 Today s speaker: Sten Scheibye, President & CEO Previous employment Director of Group Sales & Marketing, LEO Pharma A/S, Management assignments with other Danish companies Novo Nordisk A/S (Chairman of the Board) Danske Bank A/S (Board Member) Born 1951 With Coloplast since 1993 Educational background Master of Science, Aarhus University, 1979 PhD, Aarhus University, 1981 BCom, Copenhagen Business School, 1983 Responsibilities in organisations or bodies Board member of the Executive Committee, Confederation of Danish Industries (DI) Member of the Danish Academy of Technical Sciences (ATV) Chairman of the Denmark-America Foundation Member of the Danish Fulbright Commission Associate professor in applied chemistry at Aarhus University

4 4 Coloplast company profile Profile Coloplast products and services help patients achieve greater independence from medical challenges in 3 areas: Ostomy care Urology & Continence care Wound & Skin care Key facts Approx employees Subsidiaries in 25 countries Distributors worldwide Manufacturing facilities in China, Denmark, France, Hungary and the U.S. Listed on the Copenhagen Stock Exchange (CSE). Market Cap 3bn. Mission & values Mission Contribute to a better quality of life Close to customers Passion for our business Act responsibly Increase value for customers, employees and shareholders Values As individuals and as an organisation we: Are customer driven Are quality conscious in all we do Have a fair and respectful management style Learn and share Have a passion for our business... and we strongly believe that the road to outstanding results is shorter when you have fun on the way

5 5 As per 30 March A functional organisation Executive Management Global R&D Global Operations Global Marketing Global Sales Corporate functions

6 6 How it all started The inventor The product The founders Nurse Elise Sorensen The first single use ostomy bag Aage and Johanne Louis-Hansen

7 7 Milestones The first subsidiaries Coloplast's share is admitted for listing on the Copenhagen Stock Exchange Several acquisitions: Amoena, Sween, SSL, HSC, Sterling Announcement of 2012 objectives Functional organisation + Amoena Divested Statutory meeting of Dansk Coloplast A/S Divisionalisation begins 3000 in 2000 Factory in Hungary begins operations Acq. of Mentor s Urology Division & Selling off Sterling + Moving of US HQ to Minneapolis

8 8 50 years of innovation Sensura launched in 2006 and introduced in 22 markets in Worlds first disposable ostomy bag launched in and many more: Innovation the Coloplast way: Listening and responding to users

9 ...has driven 50 years of growth DKK Million CAGR +24% 8.042

10 10 Expectations and long-term targets 2006/ /08 Organic sales growth of approx. 10% EBIT margin of 16-17% CAPEX of approx MDKK Corporate tax rate of 28% Long 2012term target Economic profit (EP) to double at least every five years. Long term organic sales growth of approx. 10% p.a. EBIT margin of 18-20%

11 Mission 2012 Strategy Values 11 Corporate Objectives Customers Employees Society Shareholders Global Market Leadership Ostomy Care Innovation Leadership Urology & Continence Care Home Care Corporate Strategy Business Areas Double-digit Organic Growth Wound & Skin Care Value Creation Above Peers Breast Care Divested Corporate, Strategic Priorities towards 2012 Innovation & Growth Key Player Strategy/NPD Increased Innovation Rate FIGARO RACE New & Emerging Markets Mergers, Acquisitions & Alliances Productivity Global Manufacturing LEAN/abc Corporate Procurement

12 12 The world around us is dynamic Health Care reforms Demographics + Consumer healthcare awareness Emerging markets Surgical and medical trends Reimbursement reforms Group buying and tender bid process Focus on overall treatment costs Distribution & Parallel import + + -/ + - -/ The demand for products and services will continue to grow in terms of volume, but pressure on prices and margins will continue Market growth within Coloplast s business areas are approx. 6%

13 13 Coloplast needs to be aware of these changes and seize the opportunities 1 New products to drive growth Increase R&D from 3% to 6% of sales Both external and internal R&D Double speed of innovation and Triple pipeline value 2 Organisation tuned to optimise time to market (March 2007) FIGARO From Innovation to Global Roll-Out of new products New processes for: -R&D - Marketing & Sales - Operations New products to deliver higher value in proven health economics model and attract higher price. 3 Customer focus Continue successful Key Player / NPD strategy at hospitals RACE: Support NPD strategy with Retention and Conversion in the community

14 14 Global Operations

15 L V V T R A M OR D 6 February Coloplast has global presence with 3 regional manufacturing and distribution centres Denmark France P.R. of China Hungary U S A Distribution sites Manufacturing sites Denmark France

16 16 Manufacturing Strategy (1/2) Marketing & R&D Technology developm. Production system development Volume production Packaging & distribution Europe Europe Product development Pilot Plant Ramp-up China China US US Focus Design for Mfg. Process establishment Focus Time to market Time to volume Optimising of total set-up (Lean) Focus Delivery perform. Costs Lean

17 17 Manufacturing Strategy (2/2) US Mineapolis (2006) Pilot Volume Ramp-up Centre of excellence DK Espergærde (1957) DK Thisted (1966) FR Sarlat (2006) DK Mørdrup (2000) Volume production HU Tatabanya (2002) HU Nyirbator (2007) Volume production CN Zhuhai (2007)

18 18 Global Operations in numbers Established March Sites world-wide 3 Regional Distribution Centres 600 million units per year 4000 employees Cost base of approx. 3,2 BDKK

19 19 More Employees at the International Sites Number of employees at the Manufacturing Sites (DVC+IVC+Funk) DK - Site total (incl CCP) International sites Sep-06 Sep-07 Sep-08 Sep-09 Sep-10 Sep-11 Sep-12

20 20 Need for more m 2 at the International Sites International Sites: m2 development (prod., adm. & other) DK sites FR/US HU CN - 05/06 06/07 07/08 08/09 09/10 10/11 11/12 Future development of manufacturing area will take place at the international Sites.

21 21 Relocation means important savings (DKK) DK HU CN Blue-collar worker Hourly wages (DKK/h) Savings pr. Blue-coller worker (DKK/year) ~ ~ Buildings (DKK/m 2 ) - Factory/Office Factory/cleanroom

22 22 Total Unit Costs TUC TUC = Total GO Cost Base (DKK) Total production volume (pieces) Changes in product mix is taken into account in calculation of the TUC development

23 23 Expected TUC development Yearly TUC reductions Main TUC drivers today: GOS transfers 40% Lean (abc) 15% Dir. Procurement 10% Main TUC drivers tomorrow: Complexity reduction Synergies Transfers/abc/Dir. Procurement 5% Target Time Avr. 5%

24 24 Global Operations provides more than just cost cuts From: Divisional production Local standards Many similar local functions Local sub-optimisation Ad hoc learning To: Scaleable production Deploying Global standards Corporate functions Global best practice Learning company A World Class Production with a culture where we: Constantly challenge ourselves to focus on continuous improvements Adapt successfully to changes Utilise and develop people s potential in the organisation

25 25 User driven innovation as a competitive means "There must be a better way..."

26 26 Nurse Elise Sørensen recognises a need Pioneers in healthcare Aage and Johanne Louis-Hansen takes on the challenge of producing and distributing Primitive ostomy bags are the standard World s 1 st disposable bag in 1954 Coloplast sets new standard

27 27 Milestones in Coloplast s Innovation 1955 Customer driven innovation 1993 Structured innovation process Innovation culture in Coloplast 2000

28 28 A global standard to facilitate efficient product development and global roll-out Adequate creativity, efforts and resources Based on strong customer inputs Opportunity identification Opportunity analysis Idea generation & enrichment Idea selection Concept definition Accelerating the actual product development At the right time, quality and price Stage/gate model with 5 phases: 1) Idea Formulation 2) Concept Formulation 3) Product development 4) Test Marketing 5) International Marketing Global roll-out of new products Efficient, competitive and customeroriented Communication platform Global visuals USPs Positioning Price strategy + local adaptation and execution

29 29 Coloplast Innovation Objectives for Products 2008: 10 substantial new product ideas enter New Product Development 2008: Time to market of a new product: 25 months 2008: Within first year of a product launch to reach 70% of global market potential

30 6 February Front 2008End Innovation New Product Development Global Roll-out 30 Customer Driven Innovation Professionals End-users Purchasers Professionals Boards and Fora Participation at : User Boards Camps Sport events Meetings Key Account involvement

31 Front End Innovation New Product Development Global Roll-out 6 February Fora and user boards COF (Coloplast Ostomy Forum): 20 countries / 400 Stoma care nurses WAF (Wound advisory Forum): 10 countries / 150 Wound management nurses and doctors CAB (Clinical advisory Board): 13 countries / 130 Continence Care nurses User Boards/ Sport events/ Assistants at summer camps Nurses wins Having an impact individually and as a group Peer and Business Network Creating focus on their specific area Coloplast wins Understanding local differences and agendas Understanding costumer needs New product ideas Company & Product commitment End-users: Improved quality of life

32 6 February Front 2008End Innovation New Product Development Global Roll-out 32 From invention to innovation - Accelerating Ideas to Market (AIM) Ongoing Professionals Boards Brainstorm Define need Evaluate concepts Evaluate prototypes Gate 1 Gate 2 Gate 3 Gate 4 Gate 5 Idea Generationn n Idea formulation Concept formulation Product development Test g? International marketing marketing Brainstorm Stage 1 Stage 2 Stage 3 Stage 4 Stage 5 Define Evaluate Evaluate Input Participate need concepts prototypes for on launch campaign meetings Ongoing User Boards Activities within community

33 6 February Front 2008End Innovation New Product Development Global Roll-out 33 FIGARO global roll-out elements Business strategy International Strategy, IS, e.g.: - Positioning - USPs/claims Products 0% Prefer Moderma Flex 21% Prefer SenSura 79% Clinical trials Global Product Manual Global Roll-Out SenSura SenSura Global Product Manual 2005/ /07 Q1 Q2 Q3 Q4 Q1 Q2 Q3 1-pcs. Final Gate Full TM in NL closed Concept test 4 Jan Feb. Aug. Prefer Nova 1 15% Gate IM 5 - global roll-out Sep.Oct. Prefer 1-pcs. Final Gate Reduced open Concept test 4 TM in NL Q1 Q2 Q3 SenSura DK IT US Jan./Feb. May Aug. SE BE CA 85% NO DE EXP FR CH SF UK AT ES AU PL JP Sales vs production capacity Organisation Customers

34 6 February Front 2008End Innovation New Product Development Global Roll-out 34 Key benefits of FIGARO & AIM Structuring and organising the development process Making the steps and demands visible for innovation Sorting out ideas Portfolio management Innovation high? Breakthrough Unpredictable Platform Building on core competences/capabilities Incremental Line extension Time Portfolio Management

35 35 Innovation example: Intermittent Catheters

36 36 Explosive growth for intermittent catheters presented the window of opportunity for Coloplast Historical document: Market analysis, 1991 '000 units 12 Market for coated intermittent catheters ( ) % +25%

37 37 Intermittent catheters 1991: 2 market types identified with 2 strategies Market penetration rates (1991) Market strategies Established markets 17% 25% 35% Head-on competition with monopoly competitor (AstraTech) Converting key players to Coloplast 2% 4% - 1% Concept unknown / emerging markets Education of key players Influence governments to get reimbursements

38 38 Coloplast s go-to market approach 1 Launch a me-too product to get quickly to market Challenge main competitor (Astratech) head-on via existing sales point and channels Launch development program to come up with new innovative product (Speedicath) Capture significant market through combination of solid market position and state-of-the-art product

39 39 Outcome: Coloplast s European market share within intermittent catheters has since increased almost every year 41% 31% 34% 34% 36% 26% 27% 22% Launch of EasiCath 17% 13% 9% 4% ~0% 1993/ / / / / / / / / / / / /06 Source: Coloplast market data Launch of SpeediCath

40 40 Thank you