ÖSSUR INVESTORS AND ANALYSTS EVENT JÓN SIGURDSSON

Transcription

1 1 ÖSSUR INVESTORS AND ANALYSTS EVENT JÓN SIGURDSSON 16 APRIL 2010

2 2 AGENDA 10:30-10:40 Welcome Jón Sigurdsson, President & CEO 10:40-11:20 Sales & Marketing Össur Americas Mahesh Mansukhani, President of Sales and Marketing Americas and Lou Ruggiero VP of Sales & Business Development Americas 11:40-12:10 Reimbursement and Reforms David McGill, VP of Legal Affairs 12:10-12:40 Lunch 12:40-13:20 R&D Hilmar B. Janusson, VP of R&D 13:20-14:10 Facility Tour William Brown, VP of Operations Americas 14:10-14:30 Closing Remarks and Q&A

3 3 ÖSSUR TODAY EMEA 48% SALES BY GEOGRAPHY Asia 4% Americas 48% SALES BY PRODUCT SEGMENTS Compression therapy 5% Other 1% Bracing & Supports 49% Prosthetics 45% Based on sales 2009

4 4 GLOBAL OPERATIONS AMERICAS EMEA ASIA Headquarters Reykjavik, Iceland Össur EMEA Eindhoven, Netherlands Össur Americas California, USA Össur Asia Shanghai,China 1540 EMPLOYEES IN 13 LOCATIONS

5 LOCAL GLOBAL 5 FUNCTIONAL STRUCTURE EMEA ~320 employees Ólafur Gylfason SALES & MARKETING ~ 600 employees AMERICAS ~240 employees Mahesh Mansukhani ASIA ~40 employees Árni A. Arason M&O ~790 employees Egill Jónsson R&D ~120 employees Hilmar B. Janusson CORPORATE FINANCE ~60 employees Hjörleifur Pálsson

6 6 ÖSSUR IN AMERICA Össur Americas has grown from a USD 46 million in 2002 to USD 159 million in Restructuring of S&M Prosthetic feet Bracing and supports Foundation of subsidiary in the US OA bracing Sales office in Baltimore established Prosthetic Knees. Knee ligament bracing. ~600 employees in 5 locations accounting for 48% of Össur s sales

7 7 AMERICAS LOCATIONS AND HEADCOUNT 607 employees in five locations across all functions Vancouver, Canada Sales Office, Operations 40 employees Albion, Michigan Manufacturing & Operations 28 employees Camarillo, California West Coast Distribution 53 employees Paulsboro, New Jersey Manufacturing, East Coast Distribution. 117 employees Foothill Ranch, California US Head Quarters, BIS, HR, Finance B&S Inside Sales, Customer Service, Operations, Marketing, R&D, Global Product Management B&S 369 employees

8 8 S&M AMERICAS MAHESH MANSUKHANI LOU RUGGIERO 16 APRIL 2010

9 9 AGENDA MARKET ENVIRONMENT AMERICAS S&M

10 10 MARKET ENVIRONMENT

11 11 THE US MARKET THE MARKET THAT ÖSSUR COMPETES IN: BRACING & SUPPORTS Market size: USD 1,500 m* Market growth: ~3% PROSTHETICS Market size: USD 350 m Market growth: ~3% Products for therapeutic and preventive purposes focused mainly on ankle, knee and spine Replacement of missing limbs focused on lower extremities * Excluding USD 200 million retail market Market information based on industry analysis and management s estimates

12 12 INDUSTRY DYNAMICS D R I V E R S Aging population Obesity causing increse in vascular diseases P B&S Health care reforms Improved invasive procedures P B&S Active lifestyles Economic downturn Technological Innovation Reimbursement Focus on less invasive procedures R E S T R A I N T S Reimbursement Pain medications Major Impact Minimal Impact

13 13 FAVOURABLE DEMOGRAPHICS Reasons for amputation Trauma, 6% Aging population In 2030 number of people +65 will almost double (38 million to 72 million) in the US 1 Approx. 1.2 million or 80% of all amputees are over 65 years of age. Cancer, 20% Vascular diseases and diabetes, 74% Diabetes is becoming more common in the United States. From 1980 through 2007, the number of Americans with diabetes tripled (from 5.6 million to 17.4 million) Aging population (North America) 25% 20% 15% 10% 5% Obesity Nearly 34% of adults are obese, more than double the percentage 30 years ago. 2 Obesity is a major risk factor for cardiovascular disease, certain types of cancer, and type 2 diabetes % Population 65 years and older % of population 65 years and older Source: industry analysis and management estimates Source: 1. aoa.gov, 2. Nytimes.com 3. cdc.gov Obesity Trends* Among U.S. Adults (*BMI 30, or about 30 lbs. overweight for 5 4 person) Source: cdc.gov

14 14 EXAMPLE ADDRESSING THE OA MARKET Aging population Obesity Technological Innovation Active Lifestyles Increase value through innovation Increase volume through market penetration Price Approx. 4 million Americans suffer from knee osteoarthritis. About 100,000 braces are sold annually. D Innovation Osteoarthritis braces are one of the fastest growing segments of the US B&S market, CAGR >8% ( ) Source: Frost & Sullivan Osteoarthitis knee brace: Unloader One

15 STRONG POSITION IN TARGET MARKETS BRACING & SUPPORTS ($1.5B) PROSTHETICS ($0.35B) Fourth largest player Fragmented market Second largest player Consolidated market DJO 20% Others 29% Otto Bock, 27% Others 53% DeRoyal 11% Breg (Orthofix) 6% Össur, 6% Bledsoe, 4% Freedom, 6% Endolite, 8% OWW 9% Össur 21% Össur is the only player with significant share in both markets * Excluding USD 200 million retail market Market information based on industry analysis and management s estimates Össur

16 16 S&M AMERICAS

17 17 SALES PERFORMANCE Össur Americas has grown from a USD 46 million Prosthetics-focused business in 2002 to an USD 159 million Prosthetics and Bracing Supports business in 2009 Sales Prosthetic Company B&S Entrance Integration Growth Innovation Sports Royce GII

18 18 B&S INTEGRATION SIGNIFICANT PROGRESS MADE Strong leadership, new sales structure, a promising product pipeline and enhanced sales platform will support Americas in achieving its objectives in 2010 MANAGEMENT STRUCTURE IN PLACE SALES STRUCTURE IN PLACE PROMISING PRODUCT PIPELINE ENHANCED SALES ACCESS Mix of industry Region specific 5 new product launches Sales force strengthened leaders and non-industry functional expertise Fully integrated leadership team strategy Simplified structure Increase sales coverage in H Access to GPO channel Specific channel access strengthened through regional partnership (post acquisitions)

19 19 AMERICAS COMMERCIAL ORGANIZATION Americas Sales Americas Marketing Global Product Management / R&D Sales execution and new business development to gain market share Strategic priorities and product pipeline Filling and delivering the pipeline across regions

20 BRACING & SUPPORTS HIGHLIGHTS Completed Restructure of Americas Marketing and Sales Functions Hired 24 new people into B&S Sales and Marketing Created new National Accounts group focused on managing major accounts and GPO contracts Consolidated Inside Sales and Customer Service into one location Moving commercial organization into one location Completed Strategic Investments in 2 Independent Representative (IR) Groups in Q4 In addition, brought on major IR groups from competition Signed on 8 other IR groups to increase sales coverage Significant pipeline of new opportunities Won Three Hospital GPO Contracts Novation, Premier and HPG contracts secured Successful Product Launches Cold Therapy & Rigid Lumbar

21 21 SALES STRUCTURE TARGET CUSTOMER SEGMENTS PRIMARY SALES CHANNELS KEY ENABLERS Hospitals National Distribution GPO Contracts Direct Orthopedic Clinics Direct/O&P/DME Reimbursement Services Podiatry Clinics Direct Inside Sales O&P Workshops Direct Cross Selling

22 22 TARGET CUSTOMER SEGMENTS B&S Market Split 8000 Orthopedic Clinics 42% 5200 Hospitals 29% Prosthetics are sold to O&P workshops while Bracing and Supports are sold through various channels Podiatry clinics 7% 2200 O&P 22%

23 23 SALES CHANNELS & SALES REGIONS Resources aligned with market opportunities Bracing and Supports market size ($1.5billion)* National Accounts group focused on managing key national partners and GPO contracts ~100 Direct Sales Representatives and 28 Independent Rep Groups (120 IR reps) *Size of the bubble is the market size in the state

24 24 SALES ENABLERS Group Purchasing Organization (GPO) Contracts Targeting Hospitals GPO contracts are critical to grow market share in hospitals. Össur contracts: Novation Sports Bracing Contract active June 2009, awarded to Össur, DJO, and Breg ($18 Million) - Mayo Clinic IDN contract Premier Soft Goods contract active December 2009, awarded to Össur, DJO and DeRoyal ($40 Million) HPG contract won in December 2009 active April 2010, awarded to Össur and DJO ($ 4 Million) Reimbursement Services Targeting Orthopedic Clinics Launch of the Empower Management Services in The vision is to become the leading reimbursement partner in the physician setting through the delivery of protocol and software support and tangible coding and billing knowledge. Inside Sales Targeting Orthopedic and Podiatry Clinics Largest soft goods focused inside sales group in the industry targeting smaller Orthopedic and Podiatry clinics with Cross Selling Targeting O&P Workshops Leverage strong Prosthetics sales penetration and established relationships to grow Bracing sales

25 25 GOING FORWARD.. Positive industry growth drivers Strong market position Complete product line and innovation Organization structure in place and employees focused on driving growth INNOVATION Increase value through innovation MARKET SHARE Increase market share through localized, well defined regional strategies

26 26 REIMBURSEMENT AND REFORMS DAVID MCGILL 16 APRIL 2010

27 27 U.S. REIMBURSEMENT: THE PLAYERS Manufacturers (Össur) Providers (Doctors, prosthetists, orthotists) Payers (Governmental & private insurance) Patients Legislature (Federal and state)

28 28 U.S. REIMBURSEMENT: THE DYNAMICS Payers Medicare (creates/assigns pay codes) Private (establish own payment policies) Legislature Federal (new health care law) State (compliance laws) Manufacturers (monitor/engage payers/legislature)

29 29 U.S. REIMBURSEMENT: ÖSSUR WINS New code for Proprio Foot Assigned existing codes for knee orthoses ID d consignment closet issue

30 30 U.S. REIMBURSEMENT: NEW HEALTH CARE LAW Biggest health care change since 1965 Highly controversial Hyperbole aside, moderate

31 31 U.S. REIMBURSEMENT: REFORM LAW TIMELINE Small increase in # of insureds Device tax No lifetime limits Increase in # of insureds External review Fee reduction?

32 32 U.S. REIMBURSEMENT: REFORM LAW No lifetime limits/ reasonable annual limits Dependent coverage until age 26 External review of denied claims required Creation of high-risk insurance pool

33 33 U.S. REIMBURSEMENT: REFORM LAW % medical device manufacturer tax

34 34 U.S. REIMBURSEMENT: REFORM LAW Individual mandate Eliminates pre-existing risk exclusions Plans must offer essential health benefits Fee schedule changes? Comparative effectiveness

35 35 ÖSSUR S NEXT ACTIONS Expansion of payer relationships Identifying/meeting with political allies Reimbursement/product development link

36 36 R&D HILMAR B. JANUSSON 16 APRIL 2010

37 37 R&D STRATEGY Innovation leadership Össur s key strategic pillar Catalyst for organic growth Significant investment 19 million USD in % of total sales Strong product pipeline 13 products released in Q1

38 38 R&D LOCATIONS Össur s R&D facilities are responsible for the Company s technical strategy, project portfolio global product management and research collaboration Reykjavik, Iceland Foothill Ranch, California, USA Shanghai, China St. Etienne, France

39 39 FOCUS PRODUCT BRANDS Functional Braces CTi Ligament Unloader One OA Innovator DLX Post Op Miami J Spine Philadelphia Spine Soft Goods and Supports Equalizer Form Fit Rebound Venactif Walkers UX, Knee & Ankle Knee & Ankle UX, Knee, Ankle and spine Compression Therapy

40 40 FOCUS PRODUCT BRANDS Mechanical Devices Flex-Foot Iceross Total Knee Mauch Knee Icelock Feet Liners Knees Knees Locks Bionic Devices

41 41 R&D FUNCTIONS 120 employees in 4 main functions Engineering Global Product Management Medical & Biomechanics Intellectual Property Management 6 technical platforms Core competencies Competitive advantage Product strategy and alignment Project management office Industrial design Clinical testing Clinical research IP portfolio strategy and management Licensing

42 42 TECHNICAL PLATFORMS 6 technical platforms representing core competences Mechatronics Mechanics Composites Silicone Injection Molding Engineering Textile

43 43 B&S PRODUCT PIPELINE RAMPING UP... 6 B&S products were released in Q Rebound Walker Innovator DLX Miami Lumbar Rigid lumbar belt Miami Lumbar TLSO ReSolve Halo Vest Miami J Advanced January January February March March March New Brand New Version Line extension Line extension New Version Line extension

44 44 PROSTHETIC PRODUCT PIPELINE REMAINS STRONG 7 Prosthetic products were released in Q Cushion liner Range Synergy, Dermo, Comfort Flex-Foot Balance Total Knee 1100 and 2100 Flex-Foot Talux w. sandal toe January February March March Line extension New Version New Versions New Version

45 45 BREAK -THROUGH BIONIC PRODUCTS New Version New Version New Version Limited launch in July 2009, full launch in September Growing market share rapidly Outstanding clinical & technical performance Excess sales demand Code issued for PROPRIO FOOT The only code issued in US for a long time, USD 14,000-19,000 New version planned for launch in 2010 World s first powered prosthesis that replaces muscle activity First generation launched in 2005 Second generation planned in 2010

46 46 Listed on NASDAQ OMX Copenhagen