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Road show presentation June 2003

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Road show presentation June 2003 Powered By Docstoc
					Road show presentation
June 2003




                         1
Our Vision.




                                                           Content


                                                           1. Executive summary

                                                           2. Company profile

         We firmly believe that every individual has the   3. Market and
         right to sight.                                      competition

                                                           4. Strategy
         "At Carl Zeiss Meditec, we are committed to
         making perfect vision a possibility for           5. Financials

         everyone."                                        6. Investment case



                                                           7. Backup




                                                                                  2
Carl Zeiss Meditec –
successful in the growth market of
ophthalmology.


    !     Worldwide Number 1 in the growth market for ophthalmic systems
    !     Clearly focussed on ophthalmology
    !     Strong IP position: more than 500 patents
    !     Strong innovative power - one new product per field of application and year
    !     Global access to customers via powerful sales force
    !     Strong "Zeiss" brand
    !     Successfully and rapidly completed integration and implemented expansion
          strategy
    !     Sales and EBIT increased in the first six months of the current FY:
            -    Sales up by 36% to € 124.1m*
            -    EBIT increased by 104% to € 11.1m* and already exceeds the figure for the entire FY
                 2001/2002
            -    Cash and cash equivalents almost doubled to € 13.6m, mainly due to positive cash flow
                 from operations




*Compared to the first six months of the FY 2001/2002                          1. Executive summary      3
A highly skilled and experienced international
management team secures future strategic
development.


  Global Management Committee
  Ulrich Krauss             Bernd Hirsch           Dr. Walter Wrobel        James Taylor

  President and CEO of      CFO of Carl Zeiss      CTO of Carl Zeiss        President of Carl
  Carl Zeiss Meditec AG     Meditec AG             Meditec AG               Zeiss Meditec, Inc.


  M&S, Service, HR          Finance, IR, Law       R&D, Operations, RA

  Graduate business         Graduate business      Laser physicist          Graduate business
  administrator             administrator          More than 20 years       administrator
  Extensive experience in   Extensive experience   comprehensive            Extensive industry
  medical sales,            in the fields of       experience in the med-   experience in leading
  marketing and general     international          tech industry ,          med-tech companies,
  management positions,     accounting,            President of section     member of ADVAMED
  both in Germany and       controlling and M&A    "Ophthalmology" of       (advisor to US
  the U.S.                                         SPECTARIS (industry      government)
                                                   association)




                                                                             2. Company profile     4
Carl Zeiss Meditec – focussed on ophthalmology.




  Parts of the eye

                                                       Lens
                                                              Vitreous


                                          Cornea                                    Retina




  Field of application in
  the eye




                                          Refraction
                                                                                Retina

                                                                         Glaucoma
                                                   Cataract




                                                              2. Company profile             5
The four main ophthalmic disorders.




  Normal vision




                                      Getting older




  Ophthalmic disorder




  Refraction        Cataract          Glaucoma        Retina


                                                       2. Company profile   6
New goals in ophthalmology will change the
market – Carl Zeiss Meditec with significant
competitive advantages.


  Ophthalmic disorders   Major goal               Opportunities
  Glaucoma                                          ! Early detection
                                                    ! Data management and
                                                      outcome analysis
                         Preservation of vision   Proprietary technology (e.g.
  Retina                                          STRATUSOCT™) enables securing
                                                  and enhancing No. 1 position.



  Refractive                                      Demand for life-long "perfect"
                                                  vision requires:
                                                     ! Better diagnostics
                                                     ! Better treatment systems
                         Measurable quality of       ! Customized vision correction
  Cataract               vision                      ! IOLs
                                                  High-tech products (e.g. MEL 80™,
                                                  IOLMaster®) offer further growth,
                                                  consumables to be added to
                                                  product portfolio.


                                                               2. Company profile     7
Innovative high-tech products drive market
development.



    Field of application in the eye
    Refraction                   Cataract         Glaucoma      Retina




    MEL 80™                      IOLMaster®       HFA II-i      VISULAS™




    QuantumLight™                VISULAS™         STRATUSOCT™   Fundus camera


Total number of Carl Zeiss Meditec products: 65                  2. Company profile   8
Mission – vision – goals.




  Our Mission
  Utilizing expertise and excellence in science and optics, we provide clinical systems
  designed to preserve and enhance vision. Our products and services offer exceptional
  value for our customers and provide genuine benefits to society.


  Our Vision
  We firmly believe that every individual has the right to sight. “At Carl Zeiss Meditec,
  we are committed to making perfect vision a possibility for everyone.”


  Our goals
       ! Master plan supports doubling of sales within the next five years
       ! EBIT margin to grow from 8% in 2003 (e) to double-digit value




                                                                        2. Company profile   9
Successfully and rapidly completed integration as
basis for future expansion – major milestones.



  Milestones                                                         Achieved
  " Merger of Carl Zeiss Ophthalmic Systems and Asclepion            4 July 2002
  " Integration completed                                            31 December 2002
  " Strategic focussing
       " Optimized subsidiary structure                              Per 1 April 2003
       "Spin-out of non-core business (Aesthetic and Dental units)   Per 1 May 2003


  " Increase number of direct sales people by 40                     1 October 2002

  " Implementation of Corporate Governance Code                      December 2002

  " Market launch of new innovative products: MEL 80™,               1st – 3rd quarter current FY,
    Humphrey® Matrix, enhanced STRATUSOCT™                           to be continued
  " Adjustment of cost structure to open up synergies (e.g.          1st – 3rd quarter current FY,
    optimised sourcing, bundling of R&D activities)                  to be continued
  " Increased reimbursements for treatments with top product         1st and 2nd quarter current FY
    IOL Master® in the U.S., approval of IOL Master® in Japan


                                                                              2. Company profile     10
Global presence – clear structure.




  Subsidiaries in the three most important markets of the world –
  strong sales network of Zeiss Group in all other countries: about 40 sales
  companies and 100+ foreign agencies




   Full scope subsidiary
   Sales FY 01/02: € 150m,
   Employees 2002: ~460


       Headquarters
       Subsidiaries
       Zeiss Group's sales
       network




                                                                 2. Company profile   11
Four trends secure sustainable market growth.




    Demographics                Decrease in                 Advancements in           Growing expendi-
                                illiteracy                  med. technology           ture on health care
    ! World population to       ! Eye glasses and           ! New devices allow       ! Developing
      grow to 13bn until          contact lenses as           for and support new       countries: increasing
      2050                        "necessary evils"           treatments                number of patients
    ! Aging of population       ! Growing number of         ! New treatments for      ! Developed
                                  people suffering            known diseases            countries: demand
                                  from near-                                            for advanced health
                                  sightedness                                           care (new
                                  (myopics)                                             treatments)
                                                                                      ! Wellness/ Lifestyle:
                                                                                        trends toward
                                                                                        privately funded
                                                                                        invasive correction


                       CAGR 2002-2008 for ophthalmic systems market: 7%



Sources: UN World Population Trends 2002, US National Eye Institute 2002, Theta   3. Market and competition    12
Reports 2002, Millenium Research Group 2002, MarketScope Reports 2002 et al.
Ophthalmic systems market to grow with an
average of 7% p.a. – some regions show a
significantly higher increase.


   Market volume           ~ 1,600           ~ 2,000        ~ 3,100            Market share CZ Meditec*


                                                               222

                                             7   %
                                          R:
                                    C   AG                     659




                                                     92

                                                     400                                 7%
       RoW (+15%)              82
                                                              1,335
                               328
       Asia (+10%)
                                                     885                                 15%
       Americas (+7%)          738


       Europe (w/o                                             712
       Germany, +6%)                                 492                               8%
                               409
       Germany (+6%)                                                                                 20%
                               82                    98        142

                              1999                   2002     2008(e)                         2002




Market volumes in €m; see p. 29 for sources and further details; *basis:            3. Market and competition   13
consolidated pro forma sales for the FY 2001/2002 excl. Aesthetic and Dental
Sub-segments of the ophthalmic systems market
offer an above-average growth.



    Market volume*          ~ 1,600            ~ 2,000       ~ 3,100           Market share CZ Meditec*



                                           7   %              686
                                        R:
                                 C    AG
                                                              277


                                                   409                               11%
                                                              944
       Retina (+9%)            310                 165                                                  43%
                               132
       Glaucoma (+9%)
                                                   791                             7%
                               724
       Cataract (+3%)
                                                             1,186

       Refraction (+12%)       473                 601                              8%


                               1999                2002       2008                           2002




Market volumes in €m; see p. 30 for sources and further details; *basis:            3. Market and competition   14
consolidated pro forma sales for the FY 2001/2002 excl. Aesthetic and Dental
Carl Zeiss Meditec – positioned to exceed market
growth.



  ! Ophthalmic market is expected to grow continuously


  ! Carl Zeiss Meditec is the global No. 1 in the ophthalmic systems
    and devices market and will increase sales and profitability by


       - Leveraging our strong technology base
       - Development clinical solutions
       - Increasing our market penetration
       - Closing existing product line gaps




                                                                3. Market and competition   15
Strong R&D and IP position help to secure future
success.



    New products
    2002                          2003                          2004                         2005


    STRATUSOCT™                   Humphrey® Matrix              Innovations in:              New laser technology
    VISULAS ™ 532s                Extension to                                               for refractive surgery
    VISUCAM™ lite                 STRATUSOCT™                   Cataract diagnosis and
    MEL 80™                       New products in:              treatment
                                  glaucoma and retina           Refractive surgery
                                  diagnosis, cataract
                                  treatment, refract.
                                  surgery
    Key data
    !   R&D ratio: 9.4% of sales*
    !   Employees in R&D: ~18% of total workforce (31 March 2003: 842)
    !   Number of patents: about 500, 50 new registrations p.a.
    !   Extensive network of clinical partners and reference doctors (this includes - among others: Vision
        20/20, universities of Jena and Munich/Germany, Wilmer Eye Institute/USA, Moorfields Eye Hospital, Institute of
        Ophthalmology, London, Manchester Royal Eye Infirmary/ all UK, Fjodorow clinics/RUS, universities of Gunma
        and Kitazato/Japan)


*First six months of the FY 2001/2002                                                                   5. Strategy       16
Key success factors.




                                                      Status   Projects
   Technology innovation                                       Innovation pipeline, software

   Medical industry knowledge and efficiency                   Structuring and channelling

   Global distribution effectiveness and efficiency            Marketing, support, specialized
                                                               sales force
   Clinical applications access and knowledge                  Clinical studies, application
                                                               specialists
   Ability to design & manufacture for cost                    Platform strategies, target
                                                               costing, global sourcing /
                                                               purchasing
   IP Management                                               IP strategy / patent portfolio

   Employee commitment, motivation and                         Bonus / incentive systems,
   excellence                                                  „exchange people“



  Growth lever       Strength                                                       4. Strategy   17
Second-level management in Germany, USA and
Japan consists of numerous experts with far-
reaching industry know-how.


  Selected members of the staff
  Joseph Donahoe                                   Dr. Martin Wiechmann

  Executive Vice President                         Vice President
  Sales Americas                                   Research & Development
  Carl Zeiss Meditec, Inc (USA)                    Carl Zeiss Meditec AG

  Executive positions in sales and marketing       Laser physicist, more than ten years of
  management for more than twenty years for Carl   experience in R&D of medical systems for Carl
  Zeiss Meditec                                    Zeiss Meditec

  Michael Crompton                                 Rolf Beyersdoerfer

  Vice President                                   Director of
  Regulatory Affairs                               Carl Zeiss Meditec Co. Ltd. (Japan)
  Carl Zeiss Meditec, Inc (USA)

  Over than 10 years of experience in regulatory   More than ten years executive positions in
  affairs management (FDA)                         sales management in Asia (Thailand, Hong
                                                   Kong, Japan)


                                                                                   4. Strategy   18
Sales and EBIT increased significantly despite
adverse economic climate.



     First six months of FY 2002/2003 compared to previous FY
     Development of sales                                           Development of EBIT




                          +36%                                                      +104%
                                               124.1
                                                                                                        11.1


                        82.4
                                                                                 5.5



                    6 months FY 2001/2002   6 months FY 2002/2003           6 months FY 2001/2002   6 months FY 2002/2003




All figures in €m                                                                                         5. Financials     19
Sustained high earnings growth by innovative
products and cost cuts in the first 6 months
of FY 2002/2003.


     Consolidated statement of income (US GAAP)
                                   6 months/           6 months/
                             (QII) 2001/2002     (QII) 2002/2003
    Sales                               91.5               124.1 Growth in the laser and
                                        (45.3)              (61.7) diagnosis segments

    Gross result                        33.0                51.9 Savings in costs of goods sold,
                                        (16.7)             (26.8) change in product mix

    Gross margin                        36%                42%
                                       (37%)               (43%)
    EBIT                                  5.5              11.1 Improved operating profitability
                                         (4.2)              (5.3)

    EBT                                   3.8              10.0 Decreased interest expense
                                         (3.4)              (4.8)

    Net income                            2.4                3.0 Balance-sheet tax expense
                                         (2.2)              (0.5)
    Earnings per share (€)              0.12               0.12 Number of shares increase
                                        (0.11)             (0.02)



All figures in € million                                                         5. Financials   20
Excellent financial situation secures future
growth.



     Consolidated balance sheet (US GAAP)
                                 30.9.2002 31.3.2003
     Cash and cash equivalents        7.2         13.6 Especially operative cash flow
                                                       significantly improved

     Current assets                 121.1        128.5 Cash and cash equivalents almost
                                                       doubled within six months

     Fixed assets                    72.6         62.2 Property, plant and equipment
                                                       transferred within sales integration
                                                       process
     Goodwill                        16.1         14.9 Goodwill transferred within sales
                                                       integration process

     Liabilities                     98,3         93,7 Repayment of short-term debt,
                                                       elimination of leasing obligations,
                                                       provisions


All figures in € million                                                      5. Financials   21
Further improvement in important balance sheet
ratios.



  Consolidated balance sheet (US GAAP)
                            30.9.2002    31.03.2003
  Equity ratio                 49.2%        50.0%     Equity capital increased with slight
                                                      drop in balance sheet total




  Debt-to-net-worth ratio        1.03         0.98    Low external debt - payment of
                                                      accounts payable




  Working capital            € 60.3m       € 68.4m Cash balance increased




                                                                            5. Financials    22
Carl Zeiss Meditec – many reasons for an
investment.



  !   We have a stable and growing business with a high brand value
  !   We have significant and exciting market growth potentials
  !   Our excellent financial situation secures future growth
  !   Growth rates in sales will exceed market growth – master plan supports doubling
      of sales within the next five years, profitability is going reach double-digit value
  !   Our organisation and an highly experienced and qualified staff provides a solid
      foundation for growth
  !   Innovation will be the main growth driver – broad technology portfolio forms the
      basis
  !   Short- and long-term growth can be accelerated by selected M & A investments
  !   We have a clear vision of our company in the future
  !   The strong and experienced management team is committed to success

                          Thank you for your kind attention.


                                                                         6. Investment case   23
Backup




         24
Market development by regions 2002 – 2008(e).




                                                                                                                222


                                                                                                    190
                                                                                                                659
                                                                                      162
                                                                           141                      588
                                                               124
       RoW (+15%)                                  110                                535
                                        98                                 486
                                                               450
                                                   421
                                       393
       Asia (+10%)                                                                                              1335
                                                                                                   1171
                                                                                      1065
                                                                           995
                                                               948
       Americas (+7%)                  885         911



       Europe (w/o Germany, +6%)                                                                                712
                                                                                      586           636
                                       492         506         526         553

       Germany (+6%)                    98         101         105         111        117           127         142

                                      2002       2003(e)     2004(e)    2005(e)     2006(e)       2007(e)     2008(e)




All figures in €m; sources: own estimates based numerous reports (Theta Reports 2002, Millenium           7. Backup     25
Research Group 2002, MarketScope Reports 2002 et al.)
Market development by disease clusters
2002 – 2008(e).




                                                                                                                  686

                                                                                                   629
                                                                                                                  277
                                                                                    577
                                                                       530                         254
                                                          486
                                409          446                                    233
                                                                       214                                        944
                                             180          196
        Retina (+9%)            165
                                                                                                   917
                                                                                    890
        Glaucoma (+9%)                                    839          864
                                791          815

        Cataract (+3%)                                                                                           1186
                                                                                                   914
                                                                       662          762
                                601          607          619
        Refraction (+12%)

                                2002        2003(e)     2004(e)      2005(e)      2006(e)         2007(e)       2008(e)




All figures in €m; sources: own estimates based numerous reports (Theta Reports 2002, Millenium             7. Backup     26
Research Group 2002, MarketScope Reports 2002 et al.)
Technical data of the Carl Zeiss Meditec share.




  Basic data
  ISIN                               DE0005313704
  Ticker symbol                      AFX
  Trading segment                    Prime Standard
  Designated sponsors                Commerzbank, Sal. Oppenheim
  Share capital                      € 25,833,300
  Admitted capital                   € 25,833,300, divided in to € 1.00 shares
  Category and nominal value         No-par value bearer shares at a nominal value of € 1.00 per
                                     share

  Shareholder structure
  Carl Zeiss Group                   20,932,276 (81.03%)
  Management and Supervisory Board   7,057 (0.03%)
  of Carl Zeiss Meditec AG
  Carl Zeiss Meditec AG              13,941 (0.05%)
  Free float                         4,880,026 (18.89%)
  Share capital                      25,833,300 (100%)


                                                                                   7. Backup   27
Carl Zeiss Meditec shares gain substantially
in value.



  Carl Zeiss Meditec shares perform better than DAX and TecDAX.

    MarketCap (27/5/2003): € 222m

    1/10/2001                                            1/10/2002      27/5/2003


   200%




   150%
                                                                             +39%


   100%


                                                                             -32%
    50%                                                                      -50%



     0%

                           Carl Zeiss Meditec AG   Dax        TecDax




                                                                       7. Backup    28