Revenio acquires CenterVue 15.4.2019 CEO T Tim imo H Hild ildn - - PowerPoint PPT Presentation

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Revenio acquires CenterVue 15.4.2019 CEO T Tim imo H Hild ildn - - PowerPoint PPT Presentation

Revenio acquires CenterVue 15.4.2019 CEO T Tim imo H Hild ildn CFO Robin P Pulkki kinen 1 Disclaimer Important information This presentation has been prepared by, and the information contained herein (unless otherwise indicated) has


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Revenio acquires CenterVue

15.4.2019 CEO T Tim imo H Hild ildén CFO Robin P Pulkki kinen

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Disclaimer

Important information This presentation has been prepared by, and the information contained herein (unless otherwise indicated) has been provided by Revenio Group (“Revenio”) and InterVue SpA (“CenterVue”) in relation to Revenio buying all the shares in CenterVue (the “Acquisition”). By attending the meeting where this presentation is made, or by reading the presentation slides, you agree to be bound by the following limitations. This presentation is being furnished to you solely for your information and may not be reproduced, redistributed or passed on, in whole or in part, to any other person. Revenio has drawn up this presentation for the sole purpose of providing background information to a restricted group of professional clients, as provided in Chapter 1, Section 23 of the Finnish Act on Investment Services (14.12.20120/747, with amendments), when they are considering their interest in Revenio, and the presentation is not intended for public distribution in Finland or any other state. The distribution of this presentation may be restricted by law and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restrictions. The information contained herein is not for publication or distribution, directly or indirectly, in or into the United States, Canada, Australia, Hong Kong, South Africa, Singapore, New Zealand or Japan. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. This presentation and any materials distributed in connection with this presentation are not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would require any registration or licensing within such jurisdiction. No part of this presentation, nor the fact of its distribution, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. The information contained in this presentation has not been independently verified. No representation, warranty or undertaking, expressed or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained

  • herein. Neither Revenio nor InterVue, nor any of their respective affiliates, advisors or representatives or any other person, shall have any liability whatsoever (in negligence or otherwise) for any loss however arising from any use of this

presentation or its contents or otherwise arising in connection with the presentation. Each person must rely on their own examination and analysis of Revenio, CenterVue, their respective subsidiaries, their respective securities and the Acquisition, including the merits and risks involved. This presentation includes “forward-looking statements.” These statements may not be based on historical facts, but are statements about future expectations. When used in this presentation, the words “aims,” “anticipates,” “assumes,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “should,” “will,” “would” and similar expressions as they relate to Revenio, CenterVue, the Acquisition or the combination of the business operations of Revenio and CenterVue identify certain of these forward-looking statements. Other forward-looking statements can be identified in the context in which the statements are made. Forward-looking statements are set forth in a number of places in this presentation, including wherever this presentation include information on the future results, plans and expectations with regard to the combined company’s business, including its strategic plans and plans on growth and profitability, and the general economic

  • conditions. These forward-looking statements are based on present plans, estimates, projections and expectations and are not guarantees of future performance. They are based on certain expectations, which, even though they seem to be

reasonable at present, may turn out to be incorrect. Such forward-looking statements are based on assumptions and are subject to various risks and uncertainties. Shareholders should not rely on these forward-looking statements. Numerous factors may cause the actual results of operations or financial condition of the combined company to differ materially from those expressed or implied in the forward-looking statements. Neither Revenio nor CenterVue, nor any of their respective affiliates, advisors or representatives or any other person undertakes any obligation to review or confirm or to release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise after the date of this presentation. The combined financial information is presented for illustrative purposes only. The combined income statement information has been calculated assuming the activities had been included in one entity from the beginning of each period. The preliminary revenue, adjusted operating profit and operating profit of the combined company have been calculated as a sum of combined financial information for the twelve months ended 31 December 2018. The combined financial information is based on a hypothetical situation and should not be viewed as pro forma financial information.] This presentation includes estimates relating to the cost synergy benefits expected to arise from the Acquisition and the combination of the business operations of Revenio and CenterVue, which have been prepared by Revenio and CenterVue and are based on a number of assumptions and judgments. Such estimates present the expected future impact of the Acquisition and the combination of the business operations of Revenio and CenterVue on the combined company’s business, financial condition and results of operations. The assumptions relating to the estimated cost synergy are inherently uncertain and are subject to a wide variety of significant business, economic, and competitive risks and uncertainties that could cause the actual cost synergy benefits from the Acquisition and the combination of the business operations of Revenio and CenterVue, if any, to differ materially from the estimates in this presentation. Further, there can be no certainty that the Acquisition will be completed in the manner and timeframe described in this presentation, or at all. The securities referred to herein and on the pages that follow (the “Securities”) have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”), and may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act. No public offering of the Securities is being made in the United States.

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Revenio acquires CenterVue

Acquired c company

  • CenterVue is a global company, based in Italy, that develops,

manufactures and sells high-technological diagnostic systems for the early detection and the management of sight-threatening pathologies such as Glaucoma, Diabetic Retinopathy and Macular Degeneration

Rat ational ale

  • Creating a “one stop shop” for patient driven screening and diagnostics

devices of ophthalmic disorders

  • Strengthen Revenio’s position as one of the leading players in eye diagnostic

and ophthalmic products worldwide

  • Strong value creation potential from best practice and synergies

Transaction m metrics

  • Enterprise value of €59 million + €1 million potential earn-out
  • Transaction is fully financed
  • Acquisition expected to close on H1/ 2019
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Several ophthalmic disorders are age related

CEO Timo Hildén

OVERVIEW

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500 1 000 1 500 2 000 2 500 2015 2020 2025 2030 2035 2040 2045 2050 60-69 years 70-79 years 80+ years

906 1051 1221 1406 1582 1733 1896 2080

Highly attractive underlying market

Global elderly population expected to grow substantially

Million people

+500 million elderly people in the next 15 years

Source: United Nations, Department of Economic and Social Affairs, Population Division (2017). World Population Prospects: The 2017 Revision, DVD Edition

+ 1bn elderly people in the next 30 years

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Glaucoma is the second largest cause of blindness

  • Damages the optic nerve
  • The "silent thief of sight" as the loss of vision usually occurs

slowly over a long period of time, without noticing

  • Average glaucoma prevalence in population over 65 is around

4% (3,5%-5%)

  • During 2020-2050 this population will over double to 2.1B (

965M in 2018)*)

  • This will result in 45 million new glaucoma patients during this

period, i.e. every 10 years there will be 15 million new glaucoma patients in this age group

  • Today there are around 75 million people with a glaucoma

diagnosis and the same amount of people that have glaucoma but have not been diagnosed. Glaucoma shows no symptoms in its early stages

Source: British Journal of Ophthalmology *) United Nations statistics

Age (years) Prevalence (%)

Ophthalmic disorders are age related

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Year

2015

All people with diabetes are at risk of developing Diabetic Retinopathy

Source: IAPB Vision Atlas: Diabetic Retinopathy – silently blinding millions of people world-wide

  • The most common cause of

vision loss among diabetics and working-age adults

  • Damages the tiny blood vessels

inside the retina

  • Around 35% of diabetics will

develop diabetic retinopathy

  • The global prevalence of

diabetes among adults over 18 years of age has risen from 4.7% in 1980 to 8.5% in 2014 Year

2040

415m

ADULTS LIVING WITH DIABETES

145m (35%)

HAVE SOME FORM OF DR

45m (11%)

HAVE VISION- THREATENING DR

642m

ADULTS LIVING WITH DIABETES (35%) 224m HAVE SOME FORM OF DR HAVE VISION- THREATENING DR (11%) 70m

Global prevalence of people with diabetes and Diabetic Retinopathy

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Macular Degeneration (AMD) is the most common cause of visual impairment of individuals over the age of 60

  • Irreversible deterioration of the macula (the part of the eye that allows

you to see fine detail)

  • Blurs the sharp, central vision needed for reading, sewing, and driving
  • As many as 11 million Americans have AMD1)
  • This number is expected to double to nearly 22 million by 20501)
  • From a global perspective, it is estmated that in 2020 people with AMD is

expected to reach 196 million and increase to 288 million by 20402)

  • FDA is starting to require pharma industry to show effectiveness of

treatments which will result in higher requirements for related devices

  • AMD limits significantly quality of life

Note: 1) US National Library of Medicine, 2) National Institutes of Health

50 100 150 200 250 300 350 2020 2040

+92 million 196 288 Millions of people with AMD

Source: National Institutes of Health

Normal vision Age-related Macular Degeneration

AMD (Age-Related Macula Degeneration)

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143 000 206 000

Source: Market Scope, ”2017 Fundus Imaging Report: A Global Market Analysis for 2016 to 2022” Note: (1) Net of retirements

2018

Fundus imaging devices represent one of the largest segments of the total ophthalmic diagnostic devices market

Equipment growth 2022E

Fundus imaging devices market

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CenterVue – overview

Key facts (as of 12/2018)

Sales in over 70

70 countries worldwide

7,3 10,6 13,8 15 18,6 3500 4300 5200 6200 7300 1000 2000 3000 4000 5000 6000 7000 8000 5 10 15 20 25 30 35 40

2014 2015 2016 2017 2018

Revenue (€m) Installed base

Revenues and installed base development – last 5 years

>7,000 000 devices installed 18. 18.6 € €m

m in sales with 22%

22% EBITDA margin 59 59 employees

Source: CenterVue Note: All the historical financial information is based on or derived from the audited statutory accounts of CenterVue, which are prepared in accordance with the Italian GAAP.

Strong core business

20 20 patents and another 16 16 patents pending

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Acquisition rationale

CEO Timo Hildén

OVERVIEW

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Rationale – significantly increases the underlying market size

Glaucoma patients >150,000,000 Diabetic retinopathy patients >150,000,000 Cataract patients >500,000,000 AMD patients >170,000,000 Sources: 1) Ophthalmology, volume 121, Nov-14. 2) Pennington K. & DeAngelis M. (2016) Epidemiology of age-related macular degeneration (AMD): associations with cardiovascular disease phenotypes and lipid factors. 3) IAPB Vision Atlas: Diabetic Retinopathy – silently blinding millions of people world-wide. 4) Acuity of less than 6/18; The World Health Report: Vision 2020: The Cataract Challenge

4) 3) 2) 1)

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Rationale – stronger product offering to age related eye diseases

Glaucoma Cataract Macular Degeneration (AMD) Diabetic retinopathy

DRS EIDON AF COMPASS EIDON EIDON MAIA MAIA

Icare ic100 Icare ic200

Icare HOME

Several patent families Extensive coverage of

  • reg. approvals

10% spent on R&D > 80,000 equipment sold Over 20 patents Extensive coverage of

  • reg. approvals

10% spent on R&D > 7,000 equipment sold

DRS

Sources: Revenio, CenterVue Note: All the historical financial information of Revenio is based on or derived from the audited IFRS accounts of Revenio. All the historical financial information of CenterVue is based on or derived from the audited statutory accounts of CenterVue, which are prepared in accordance with the Italian GAAP.

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Patient driven screening Diagnosis Disease management

COMPASS EIDON DRS EIDON AF MAIA Icare ic100 Icare HOME Icare ic200

Sources: Revenio, CenterVue

Rationale – full involvement in the eye diagnostics value chain

Icare ic200

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Rationale – wider combined global footprint and presence

Worldwide sales in more than 100 countries

Centervue and Revenio Revenio only CenterVue only

Revenio HQ and R&D center CenterVue HQ and R&D center

  • HQ in Finland
  • 2 R&D centers of

excellence (Finland, Italy)

  • Highly

complementary sales channels in the US

Sources: Revenio, CenterVue

Revenio Sales office CenterVue Sales office

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Rationale – potential for production cost reductions of 2-5%

  • ver time

29% 26% 25%

0% 5% 10% 15% 20% 25% 30% 35% 40%

2016 2017 2018

39% 38%

0% 5% 10% 15% 20% 25% 30% 35% 40%

2016 2017 2018 Note: 1) 2016 COGS = Material costs 1)

Material costs (COGS) as % of sales

Sources: Revenio, CenterVue Note: All the historical financial information of Revenio is based on or derived from the audited IFRS accounts of Revenio. All the historical financial information of CenterVue is based on or derived from the audited statutory accounts of CenterVue, which are prepared in accordance with the Italian GAAP.

40%

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53 59 112

Revenio Centervue Pro forma

18,6 30,7 49,3

Revenio Centervue Pro forma

10,2 3,9 14,1

Revenio Centervue Pro forma Sales i in 2018 20181)

1) (€’m)

Oper erating ing profit it 2 20181)

1) (€’m)

Note: 1) Estimated financials for CenterVue 2018

+61% +39%

Sources: Revenio, CenterVue Note: All the historical financial information of Revenio is based on or derived from the audited IFRS accounts of Revenio. All the historical financial information of CenterVue is based on or derived from the audited statutory accounts of CenterVue, which are prepared in accordance with the Italian GAAP.

Financial Operational

Employees ( (12/ 2/2018 2018)

Rationale – a jump into a larger size category

+113%

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Brand visibility

Significant synergy potential

Cross-selling new equipment Sales and marketing Manufacturing Distribution and procurement

  • Best practices in serving different customer groups, cross-selling of

services and client interaction to existing and new clientele

  • Competitive offering to optical chains
  • Utilizing existing strong brands to create a new larger size player
  • Icare’s strong digital marketing focus will create benefits
  • Optimisation of manufacturing processes and locations
  • Synergies in COGS, equipment maintenance, and work supplies,

capex synergies

  • Efficient use of distribution and purchasing networks to increase

margins

  • Utilize experience in procurement from Asia

Admin

  • IT and central cost savings with one central administration

Costs

Same values and societal vision for the future of ophthalmic products

Sales Sales channels

  • Highly complementary sales channels
  • Able to approach common customer segments with an enlarged

portfolio (bundling) and optimized channel

Investments

  • Strong and complementary investments in eye diagnosis R&D (both

companies invest approx. 10% of revenue to R&D)

  • Stronger stance as a one-stop-shop for ophthalmic solutions in

customer events, exhibitions and, especially, in all of our operating geographies

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Timetable and integration plan

CEO Timo Hildén

NEXT STEPS

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Simple integration plan

Back-office / Central management R&D Production Sales & marketing

  • Efficient centralized operations
  • Unified IT systems and reporting
  • Two strong centers of excellence with strong

investment in R&D

  • Synergies in R&D going forward (mechanics,

electronics, optics)

  • Aim to rationalize production to achieve

centralized scale and cost savings -

  • pportunities in procurement, subcontracting,

etc

  • Strong product management
  • Centervue sales personnel can effectively sell

Icare products too

  • Combination of sales locations and channels
  • Unified presence in sector congresses

Outsourced Outsourced

The transaction is not expected to cause significant one-time integration costs or investments

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Financing of acquisition

CFO Robin Pulkkinen

OVERVIEW

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Acquisition financing consists at maximum of:

€30 million Term Loan

3 year maturity from the closing of the acquisition. Amortising, EUR 1.05 million repayment per quarter with the outstanding amount payable at termination. Maximum maturity of 12 months from the closing of the acquisition, while fully repayable after 3 months of the closing of the acquisition at the borrower’s full discretion. Bullet loan.

€30 million Bridge Term Loan Equity financing

In addition, Revenio may at a later stage, subject to market conditions, explore the option of equity financing to optimize its capital structure. Carnegie Investment Bank AB, Finland Branch, and Danske Bank A/S, Finland Branch have been mandated to assist the company in evaluating the equity financing alternatives.

€10 million Term Loan

6 month maturity from the closing of the acquisition. Amortising, EUR 6 million repayment within 1 month from the closing and the outstanding amount payable at termination.

Implied financing cost for 2019 estimated to be 0,87%

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Highl hly c compl plem emen entary a acqu quisition – expands e existing Reveni enio busi sine ness ss mea eani ning ngfully t to n new ew a age r e related t ed to ey eye segmen ents Strong s strategic f fit – produ ducts, s, d distribut bution scale, e, sales&marketing ng and p people Boost sts Reve veni nio’s gr growth th - expec pected t d to b be earnings p s posi sitive t e to s shareho eholder ders Fully f fina nanced ed transa saction w n with l h limited i ed integration risk sk Significant s sales es and o nd oper erationa nal syner nergies es 1

Rationale summary - strong value creation to shareholders

2 3 4 5

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Financial guidance for 2019

Due to the acquisition, Revenio will refine its financial guidance published on February 14, 2019 after the transaction is closed.

PREVIOUSLY (on 14.2.2019): “Net sales is expected to show strong growth compared to the previous year and profitability is expected to remain at a strong level.”

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Appendix

REVENIO ACQUIRES CENTERVUE

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2018 (€’m) 2017 (€’m) Net sales (MEUR) 30.7 26.8 EBIT (MEUR) 10.2 8.1 EBIT-% 33.3% 30.3% Net assets (MEUR) 2018 (€’m) 2017 (€’m) Net sales 18.6 15.0 EBIT 3.9 2.0 EBIT-% 21.2% 13.5% Net assets (MEUR) 7.2 4.1

Comparison of key historical financials

Sources: Revenio, CenterVue Note: All the historical financial information of Revenio is based on or derived from the audited IFRS accounts of Revenio. All the historical financial information of CenterVue is based on or derived from the audited statutory accounts of CenterVue, which are prepared in accordance with the Italian GAAP.

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Key Figures

MEUR / %

2018 2017

Net sales 18.6 15.0 Operating profit 3.9 2.0 Operating profit-% 21.2 % 13.5 % Fixed assets 0.5 0.5 Current assets 12.5 8.1 Total assets 13.0 8.6 Equity 7.2 4.1 Liabilities 5.9 4.5 Total equity and liabilities 13.0 8.6

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CenterVue – summary

Key ey f facts ( s (as o

  • f 12/201

018) 8)

Sales in over 70

70 countries worldwide

7,3 10,6 13,8 15,0 18,6 3500 4300 5200 6200 7300 1000 2000 3000 4000 5000 6000 7000 8000 5 10 15 20 25 30 35 40

2014 2015 2016 2017 2018

Revenue (€m) Installed base

Rev even enues ues a and i nd installed b led base d e dev evelo elopmen ent – last 5 5 years rs

>7,000 000 devices installed 18. 18.6 € €m

m in sales with 22%

22% EBITDA margin 59 59 employees

Cent nterVue ue at attrac actions

Strong core business

  • Solid growing market share in the niche market segment
  • f ophthalmic devices for diagnosis and screening
  • State-of-the art, user-friendly and high performing

equipment

Solid international exposure Strong R&D Impressive financial track record Lean and flexible business model

  • 2014-2018 sales CAGR of 26%
  • Debt-free company, with steady EBIT margin of over 10%
  • Core functions in-house: R&D, engineering, quality control

and regulatory approvals

  • Production is fully outsourced
  • Present in 70 countries with complementary US presence

and Asia foothold

  • Solid historical track of product launches, including EIDON

and COMPASS (‘14), EIDON AF (´16) and EIDON FA (´18)

  • More than 20 patents and 16 pending
  • Proven ability to innovate and launch products

Source: CenterVue Note: All the historical financial information is based on or derived from the audited statutory accounts of CenterVue, which are prepared in accordance with the Italian GAAP.

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16,0 20,3 23,4 26,8 30,7

0,0 5,0 10,0 15,0 20,0 25,0 30,0 35,0

M€, IFRS M€, IFRS M€, IFRS M€, IFRS M€, IFRS 2014 2015 2016 2017 2018 Revenue

Revenio overview

Key ey f facts ( s (as o

  • f 12/201

018) 8)

Sales in over 100

100 countries worldwide >80, 0,000 000 tonometers sold 30. 30.7 € €m

m in sales with 35%

35% EBITDA margin 53 53 employees

Source: Revenio Note: All the historical financial information is based on or derived from the audited IFRS accounts of Revenio.

Market value 12.4.2019

  • approx. 410 MEUR, over 9 300 shareholders

Growth focus screening and monitoring devices for early detection of glaucoma The goal to be the global market leader in patient driven screening technologies Helsinki Stock Exchange since 2001