SCA to Acquire BSN Medical, A Leading Medical Solutions Company - PowerPoint PPT Presentation

SCA to Acquire BSN Medical, A Leading Medical Solutions Company December 19, 2016

This presentation may contain forward-looking statements. Such statements are based on our current expectations and are subject to certain risks and uncertainties that could negatively affect our business. Please read our most recent annual report for a better understanding of these risks and uncertainties. December 19, 2016 2

Magnus Groth President and CEO Fredrik Rystedt Executive Vice President and CFO December 19, 2016 3

SCA to Acquire BSN Medical, A Leading Medical Solutions Company Excellent strategic fit supporting SCA’s vision to improve well -being through leading hygiene and health solutions BSN medical develops, manufactures, markets and sells products within wound care, compression therapy and orthopedics with well-known brands Purchase price of EUR 2,740m* on a debt- and cash-free basis The acquisition will be fully debt funded BSN medical reported net sales 2015 amounted to EUR 861m, adjusted EBITDA** of EUR 201m and adjusted operating profit*** of EUR 137m Acquisition expected to be accretive to SCA’s earnings per share from year one Expected annual synergies of at least EUR 30m with full effect three years after closing. Restructuring costs expected to amount to approximately EUR 10m The completion of the transaction is subject to customary regulatory approvals. Closing is expected to take place during the second quarter 2017 *Based on an estimated net debt as per December 31, 2016, of EUR 1,340m **Excluding items affecting comparability ***Excluding items affecting comparability and including BSN medical’s purchase price allocation amortization December 19, 2016 4

SCA’s Transformation Journey SCA plans to split the Group into two listed companies; Hygiene and Forest Products 2007-2016 Acquisitions: Divestments: • Wausau, AfH tissue, NA • Packaging business • Vinda, tissue, China • Two publication paper mills • P&G, tissue, EU • GP, tissue, EU 100% 1975-2006 Acquisitions: • Mölnlycke, personal care, Sweden • PWA, tissue, Germany • GP, parts of AfH tissue business in US 1929 SCA founded as a Swedish forest products company December 19, 2016 5

SCA Strategic Framework December 19, 2016 6

Favorable Market Trends Growing and aging global population Increased prevalence of chronic conditions, such as obesity and diabetes General Market Trends Rapid growth in emerging markets Consumerization trend is transforming parts of the market Specific Trend towards proactive treatment driving Market growth in advanced wound care and compression Trends December 19, 2016 7

BSN Medical A leading global medical solutions company which develops, manufactures, markets and sells products for wound care, compression therapy and orthopedics Innovative company, well-known brands such as Leukoplast, Cutimed, JOBST, Delta Cast, Delta Lite and Actimove - long established brand leaders in their key markets Sales in more than 140 countries. Top three countries based on sales 2015: Germany, US and France Production in 11 countries High cash conversion and an asset light business model 2015 Facts Net sales EUR 861m Adjusted EBITDA* EUR 201m Adjusted EBITDA margin* 23.3% Adjusted operating profit** EUR 137m Adjusted operating margin** 15.9% Number of employees 6,000 Sales in number of countries more than 140 * Excluding items affecting comparability ** Excluding items affecting comparability and including BSN medical’s purchase price allocation amortization December 19, 2016 8

BSN Medical – A Strong Market Offering Excellent go-to-market with large sales force. Enabling a range of commercial excellence models depending on region and reimbursement structure combined with commercial balance with distributors Direct interaction with key influencers and prescribers like nurses and physicians to ensure promoters of the products as well as input to product developments Leading brand positions in key markets. Well positioned to meet future customer and consumer trends Strong R&D capabilities and pipe line in the fast growing market segments High level know how in technology and operations with focused competence centers December 19, 2016 9

BSN Medical Product Overview Wound Care Compression Therapy Orthopedics 26% 34% 36% Acute Wound Care Phlebology Fracture Management 27% 19% 19% Key products: cast tape, splinting, Key products: surgical tapes, retention Key products: compression stockings, casting accessories bandages, surgical/post-operation medical compression garments dressings, adhesive bandages/plaster #1 globally #4 globally #2 globally, #1 in Europe Market share of ~25% Market share of ~10% Market share of ~12% Physiotherapy 10% Products for support bandages and Advanced Wound Care Lymphology 9% 7% tapes #1 globally Products for treatment of difficult and Key products: compression bandages, Market share of ~22% complex wounds wraps, garments and pneumatic compression pumps Recent expansion into pump technology Orthopedics Soft Goods #1 globally and Braces 5% Market share of ~2% Market share of ~6% Key products: support bandages and tapes Market share of ~1% = % of 2015 sales 4% of Sales 2015 is Other and relates mainly to contract manufacturing for third parties (B2B) December 19, 2016 10

BSN Medical Sales Split 2015 Per Business Area Per Geography Per Sales Channel 4% 6% 4% 23% 14% 36% 38% 34% 53% 16% 23% 26% 23% Wound Care Orthopedics Europe North America Hospitals/Specialist Pharmacies Compression Therapy Other Asia Pacific Latin America Middle East, Africa Sanitary Shops Other* *Other includes wholesalers, distributors, homecare, etc December 19, 2016 11

The Global Med Tech Market Complexity Low High Incontinence Products, Medical Complexity Complexity Supplies and Disposables Equipment Devices Devices Pumps for drug delivery Incontinence Hearing aids Fracture management Diagnostic equipment Products Ophthalmic instruments Sterilization Compression garments Minimal invasive surgery (MIS) Pacemakers Wet wipes Injection Devices Anesthesia & respiratory Lasers Artificial joints Skin care Wound Care Dialysis equipment MRI Infusion pump Ostomy supplies Stents (Cardiov.) Vein catheters & ports Wound closures Dental devices Urinary catheters Collection devices December 19, 2016 12

BSN Medical Addressable Market Wound Care Orthopedics* Compression Market Size: Therapy Market Size: EUR 5.3bn EUR 3.9bn Market Size: Advanced Wound Care  ~4%  ~4% EUR 2.4bn Traditional Wound Care  ~2%  ~5% Global Market Size 2015: EUR 11.6bn Market Growth CAGR** 2015-2020: ~4% Bubble size: Market size  CAGR** 2015 - 2020 * Only includes non-invasive orthopedics ** Expected CAGR (Compound Annual Growth Rate) Data is based on market data and company estimates. December 19, 2016 13

Wound Care Market Overview Global addressable wound care market 2015 (EUR bn): Advanced Traditional Wound Care Wound Care 5.3 1.1 0.7 3.5 Total Dressings Fixation Products Advanced Dressings 4% 1% 2% 5% Dressings Fixation Products Advanced Dressings  Dry dressings and first aid  Mostly fixation bandages and  Wet dressings including foams bandages tapes and antimicrobials and alginates/hydro fibres  Used mostly for chronic wounds, substituting traditional wound care products = Expected CAGR 2015-2020 (Compound Annual Growth Rate) Data is based on market data and company estimates. December 19, 2016 14

Orthopedics Market Overview Global addressable orthopedics market 2015 (EUR bn): 3.9 0.6 3.0 0.3 Total Fracture Orthopedics Soft Physiotherapy Management Goods and Braces 4% 3% 4% 1% Orthopedics Soft Goods Physiotherapy Fracture Management and Braces    Moving into higher-value Increasing due to trend of Growth driven by prevalence synthetic casts reduced immobilization and of obesity and fractures as prevalence of obesity as well well as increasing demand for as sport injuries sports and lifestyle related products = Expected CAGR 2015-2020 (Compound Annual Growth Rate) Data is based on market data and company estimates. December 19, 2016 15

Compression Therapy Market Overview Global addressable compression market 2015 (EUR bn): Phlebology* / Lymphology* Mostly Lymphology* 2.4 1.0 0.9 0.5 Total Bandages Garments Pumps 5% 5% 5% 8% Bandages Garments Pumps  Primarily to reduce swelling  To reduce swelling/  To reduce lymphedema* lymphedema*, treat/prevent varicose veins, and prevent thrombosis = Expected CAGR 2015-2020 (Compound Annual Growth Rate) Data is based on market data and company estimates. *Phlebology products focus on the prevention and treatment of diseases of the veins. Lymphology provides full therapy solutions for patients suffering from Lymphedema, a condition of localized fluid retention and tissue swelling December 19, 2016 16

BSN Medical Addressable Market North America Europe, Asia Pacific Middle East Market Size: Market Size: and Africa EUR 4.8bn EUR 2.1bn Market Size:  ~5%  ~4% EUR 3.9bn  ~3% Latin America Market Size: EUR 0.8bn  ~7% Global Market Size 2015: EUR 11.6bn Bubble size: Market size  CAGR* 2015 - 2020 Market Growth CAGR* 2015-2020: ~4% * Expected CAGR (Compound Annual Growth Rate) Data is based on market data and company estimates. December 19, 2016 17