Creating opportunities. Fabian Hildbrand, Investor Relations & Market Research VP Bad Ragaz, 12 January 2017

Transcription

1 Creating opportunities Fabian Hildbrand, Investor Relations & Market Research VP Bad Ragaz, 12 January 2017

2 Disclaimer This presentation contains certain forward-looking statements that reflect the current views of management. Such statements are subject to known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of the Straumann Group to differ materially from those expressed or implied in this presentation. The Group is providing the information in this presentation as of this date and does not undertake any obligation to update any statements contained in it as a result of new information, future events or otherwise. The availability and indications/claims of the products illustrated and mentioned in this presentation may vary according to country. 2

3 The Straumann Group

4 Straumann in brief The global leader in (implant-borne) tooth replacement with more than CHF 1bn annual sales Founded by the Straumann family as a research institute in 1954 Approximately 5,000 employees from 50 nations Listed at the Swiss stock exchange since 1998 with a market cap of approx. CHF 11bn Global presence in >100 countries through 41 subsidiaries and a broad distributor network Direct-to-dentists and dental laboratories distribution (>90% of business is conducted directly) with approx. 10,000 customer contacts per day 4

5 Recent strategic acquisitions and alliances Major M&A transactions in recent years Brazilian market leader; entry into nonpremium implants (49%) Provider of attractivelypriced 3 rd party prosthetics and proprietary implant systems (51%) Full acquisition of Neodent 3 years earlier than foreseen (100%) Leader in the fastgrowing value segment in India (100%) Partnership agreement to invest in French implant maker Anthogyr and to address the non-premium segment in China (35%) 3D printing technology in dental labs and practices (35%) Entry in the attractive field of orthodontics (100%) Leading developer/ provider of CADCAM software and scanning technology (100%) 5 Footnote

6 Our tooth replacement solutions Main other players by segment: CAD/CAM prosthetics incl. digital equipment Abutment / bars & bridges (titanium/cobalt chrome/ceramic) Bone and tissue regeneration (Human/Animal/synthetic bone substitutes & membranes) Implant (Titanium/titanium alloy/ceramic) 7

7 Winning share and covering the entire tooth replacement market T o o t h r e p l a c e m e n t m a r k e t CHF m CHF 3.5 bn Imaging & Biomaterials Biomaterials Imaging & Planing Implants Abutments CADCAMplanning prosthetics Prosthetics CADCAM- Equipment equipment Scanners Scanners Clear aligners Clear Aligner 8 Source: Based on 2015 data Straumann Group market share Growth potential in respective segment

8 Geographical expansion reflected in an increasingly diverse team Employees by region (in % of total 1 ) Headcount development (pro forma 1 ) NAM 19% APAC 10% CH (incl. HQ) 20% 3'471 3' '290 2'217 2' LATAM 25% Rest of EMEA 26% M 2017 Number of employees Medentika & Equinox Dental Wings & ClearCorrect 9 1 Incl. Dental Wings and ClearCorrect, which were consolidated as of

9 Financial performance

10 Momentum sustained in Q3 with accelerations in APAC and LATAM Growth year-on-year (in %) North America 28% of Group EMEA 44% of Group APAC 17% of Group Q3 9M LATAM 11% of Group Q3 9M Q3 9M Straumann Group Q3 9M Q3 9M

11 Winning share in all segments Organic revenue growth since % 14.8% >3x market growth (mid-single digits) Average 8.9% 6.4% 9.1% Double-digit growth over the first 9 months supported across all segments 1.2% M Biomaterials ++ Implants ++ Restorative 12

12 Operational gearing more than offset currency headwind Gross profit and margin H Operating profit and margin H % 78.7% 78.6% 78.3% 77.2% H Gross profit b. exceptionals Underlying margin 80.0% 79.0% 78.0% 77.0% 76.0% 75.0% 74.0% 73.0% 72.0% 71.0% 70.0% % 25.7% 23.3% 20.9% 18.2% H EBIT b. exceptionals Underlying margin 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% Since 2013, we have grown our revenue base organically by 10% and EPS by 21% on average ROCE reached 56% in FY 2016 With an equity ratio of 58% we remain solidly financed to invest in further growth opportunities 13

13 Organic revenue growth Above-market growth driven by new products and entry into new geographies & segments 16% BLT implant 11% Roxolid implant material 6% Roxolid for all ProAch edentulous solution Lab & chairside CADCAM offering Clear Aligner 1% -4% -9% PURE ceramic implant Variobase abutments GBR biomaterials Premium Non-premium 14

14 Capacity expansion to meet growing demand Facility Output increase 1 Villeret (CH) New production building (brownfield) +70% Andover (US) +60% Curitiba (BR) +35% +50% space New production area in Curitiba Impression of new production building in Villeret 15 1 Expected capacity increase from H Q New building/ modification Additional machine capacity or working hours

15 Industry trends

16 Increasing patient demands for less complex treatment solutions Less complex treatment Minimum discomfort and disruption Fast solution (immediate temporization) Esthetics Attractive, natural-looking teeth Quality of Life Reliable, fixed solution Restored confidence Improve social life Fully enjoy food 17

17 Face of the customer changes More women in dentistry Traditional customer base GPs Specialists Group practices & DSOs Young professionals 19

18 Strategic progress

19 3 Strategic priorities of the Straumann Group Drive our high performance STMN Group culture and organization Target unexploited growth markets & segments Expand scope to become a Total Solution Provider for esthetic dentistry 21

20 Strategy in action culture and execution are key to success > People to make it happen 59 Must-win initiatives (MWI) 10 Must-win battles (MWB) 3 Strategic priorities 22

21 Strategic actions to exploit underlying potential North America Balanced education offering for starters in implantology Instradent Canada launched ClearCorrect acquistion LATAM Hubs distributing Straumann & Neodent established in Colombia, Argentina and Mexico UK Instradent opened EU Instradent EU hub Medentika launches new implants Brazil Straumann & Neodent integrated CADCAM service established Russia New subsidiary; entry into value segment Turkey & Iran New subsidiaries South Africa New subsidiary to broaden market presence India Equinox acquisition build premium footing China Entry into value segment with Anthogyr Japan CADCAM milling service 23

22 Addressable market 2018 vs Milestones: Variobase abutment BLT implant Neodent consolidation Lab- and chairside CAD/CAM systems Clear Aligners Fully-tapered implant expected Nonpremium 2012 Biomaterials (grafts & membranes) Premium: parallel walled Premium: apically tapered Premium: fully tapered Traditional implant & abutment market Premium: fully tapered Clear aligners & Lab- and chairside CAD/CAM equipment 24 1 Straumann Group incl. Neodent, Medentika and Anthogyr China 2 Implant dentistry market segment includes implant fixtures, abutments and related instruments; information based on DRG 2015 and Straumann estimates Addressable market Areas not covered by Straumann

23 Our present implant portfolio Tissue Level Bone Level Bone Level Bone Level Bone Level Tissue Level parallel-walled parallel-walled apically tapered fully tap./external fixation fully tap./internal fixation Ceramic / Monotype Straumann Straumann Straumann Straumann Neodent Neodent Neodent Neodent

24 Parallel walled Apically tapered Fully tapered Substantial growth potential in the tapered implant segment in 2018 and beyond Combined implant market in our 2 largest subsidiaries US & Germany (market size 3.7m implants) in implants Tissue Level Bone Level LMR Q42018 Growth of tapered implants driven by trend towards immediacy Tissue Level Bone Level Low teens premium segment share 2015 Tissue Level 2007 Bone Level 1986 STMN share Potential to grow Lower priced implants Date of launch 27

25 Taking the innovation leadership in ceramic implantology Straumann PURE 2-piece ceramic implant (Cutting manufacturing process) Neodent 2-piece ceramic implant (Ceramic injection molding) 28

26 Growth potential in premium and non-premium implants Market value Market volumes Premium ~1/3 CHF 3.7bn >20 million implant fixtures Non- Premium ~2/3 Premium implants Non-premium implants 29 Implant dentistry market segment includes implant fixtures, abutments and related instruments; information based on DRG 2016 and Straumann survey in the largest 50 countries.

27 Neodent launches innovative Grand Morse implant system in Brazil Complete new implant system for all clinical needs, developed from the inside out, starting with the prosthetic interface Fully tapered design with cutting threads Comprehensive prosthetic range, including angulated rounded abutments for full-arch restorations, ti-bases and ProPeek temporary abutments 1-year clinical evidence: 100% survival of 277 implants in 57 patients new customers attracted in first month Roll-out in other regions beginning mid 2018 Grand Morse is expected to become the preferred choice of Neodent customers and to supersede the Cone Morse in the next two years Data on file

28 New subsidiaries in Iran, Turkey & South Africa direct access to large growth markets Iran Distribution taken over Broader presence; multi-brand strategy Straumann products available in Iran since ( ) Turkey Preparations to establish subsidiary in coming months Intention to incorporate current distributor & team South Africa Straumann ranks among top 3 premium companies Preparations to open subsidiary, incorporating former distributor & team Cape Town subsidiary to act as regional hub Implants per people (implant market total) 13 (60 000) 75 ( ) 31

29 Continuously expanding our footprint in the nonpremium segment Medentika home market Premium Premium Nonpremium Nonpremium Non- Premium Neodent home market Equinox home market Non-premium offering (current) Future non-premium markets 32

30 Key steps to put stategy into action Create Digital business unit Build global DSO team Market entry Orthodontics Leverage commercial synergies Ownership 35% 100% 100% 38% >500 employees worldwide ~10% of global implant volumes growing at 20% >200 employees 33 1 DSO = Dental Service Organization

31 The ClearCorrect acquisition extends our offering in esthetic dentistry One of the leading providers of full clear-aligner toothcorrection solutions Privately-held; fast-growing; 2016 sales: USD 32m Products sold directly in North America and through distributors in Australia, the UK and other countries Approx. 200 employees; HQ in Round Rock, Texas Straumann acquires all outstanding shares in ClearCorrect Holdings Inc. and subsidiaries for total consideration of approximately USD 150m ClearCorrect acquired and consolidated as of 1 October 34

32 Attractive clear-aligner market worth USD 1.5bn Clear aligners vs. conventional braces & wires: worldwide cases per year Clear aligner adoption drivers Potential: 4-5m cases 9m Orthodontic cases annually North America: Clear-aligner penetration ~14-18% Outside N. America: Clear-aligner penetration ~5-8% More dentists trained (GPs & orthodontists) More GPs offer/promote treatment Current users expand business (utilization rate) Attention to esthetics increasing Geographic availability Teenager segment penetration Product improvement (ease-ofuse, more indications) Traditional cases Clear Aligners Digitalization simplifies workflow and drive penetration 35 Source: World Statistics; Global Industry Analysts Inc. 2016; company fillings as well as broker research reports: Robert W. Baird 2015, William Blair 2017, Stiefel 2017, Leerink 2017.

33 Huge number of potential patients for aligners & implants Dental implant vs. clear-aligner penetration in North America Implant treatment 1 Clear-aligner treatment 2 Relevant population (adults up to 75y) 270m Relevant population (teenage up to 60y) 275m People affected (50-55%) 138m +50% People affected by malocclusion or misaligned teeth (75%) 205m Annual tooth loss cases seeking treatment (8-12%) 14m Annual orthodontic cases (2%) 4m 7m People actually treated (45-55%) People actually treated (70-75%) 3m ~12% People treated with implants (20-25%) 1.6m People treated with clear aligners (14-18%) 0.5m 1/3 36 Source: 1 Straumann proprietary study based on 5000 US respondents, conducted by AFG Research. 2 World Statistics, Global Industry Analysts, Inc. 2016, company reports.

34 75% of the population have misaligned teeth Teenage & adult population 1 25% No treatment required 1 15% Purely esthetic needs Rarely addressed Primary focus on mild-tomoderate malocclusion 45% Mild to severe; may require some orthodontic correction Increasingly addressed 15% Orthodontic treatment required Fully addressed in developed countries 37 1 Source: William Blair and National health & Nutrition Examination Survey (NHANES III)

35 Creating opportunities for GPs Our tooth replacement solutions Straumann s customer base by segment (FY 2016) 12% Implant specialists GPs Corporate customers (DSO, clinics) Orthodondists 48% 22% Our tooth correction solutions 18% General practitioner Specialist Dental technician Other 38

36 Commonalities in restorative and clear-aligner workflows Doctor approval Case design Prosthetic workflow Doctor Treatment design Orthodontic workflow Doctor approval Data capturing Milling 39 Tooth-borne Implant -borne Restorations Aligner production (thermo-foiling process) Model production (3D prints)

37 Winning share and growing the market E s t h e t i c d e n t i s t r y T o o t h r e p l a c e m e n t m a r k e t CHF m CHF 3.5 bn Imaging & Biomaterials Biomaterials Imaging & Planing Implants Abutments CADCAMplanning prosthetics Prosthetics CADCAM- Equipment equipment Scanners Scanners Clear aligners Clear Aligner 40 Source: Based on 2015 data Straumann Group market share Growth potential in respective segment

38 Creating opportunities from the rise in corporate dentistry 41 1 Research by Deutsche Bank

39 Outlook 2017 and beyond

40 Full-year outlook raised in Q3 Barring unforeseen circumstances Market growth We expect the global implant market to grow at approx. 3-4% 1 in 2017 Straumann Confident that we can continue to outperform by achieving organic 2 revenue growth of 13-15% Profitability Further improvements in the underyling 2 operating profit margin despite further investments in strategic growth initiatives 43 1 Market growth assessment incl. Straumann Group 2 excl. currency and acquisition effects (ClearCorrect, Dental Wings, Medentika, and Equinox).

41 Convincing growth drivers for the upcoming years Industry Straumann Group specific Favorable sociodemographic trend Expansion of the non-premium offering Underpenetrated markets (expanding provider base through T&E, ITI network, female programs and patient campaigns) Substitution of conventional technologies (crown & bridges, wires & brackets) Reducing medical & acceptance barriers (predictability, affordability, easy to perform) Improved materials (ceramics, polymers and hybrids) New manufacturing technologies (additive manufacturing, injection molding) Develop ceramic and fully-tapered implant solutions Worldwide biomaterials offering Expand digital dentistry offering (CADCAM materials & equipment) Systematic outreach to dental chains/ DSO customers Penetrate clear aligner market worldwide 44 Market share gains in high-growth markets (NAM, Russia, Argentina, India, Turkey, Iran etc.)

42 Questions & answers &

43 Calendar of upcoming events 2018 Event Location January Baader Helvea Swiss conference Bad Ragaz (CH) 15 February Full-year 2017 results conference Straumann Group Headquarters, Basel 27 February Investor meetings London 28 February Investor meetings Frankfurt 07 March Investor meetings Boston 08 March Investor meetings Toronto 04 April AGM 2018 Messe Basel 22 April Kepler Cheuvreux Conference Zurich 26 April Q results Webcast 14 August Half-year 2018 results conference Straumann Group Headquarters, Basel 30 October Q results Webcast 46

44 Growth strategy pays off in CHF million H year average Revenue Organic revenue growth in % Acquisiton / Divesture effect in % Change in l.c.% FX effect in % Growth in CHF % H year CAGR Gross profit b. exceptionals Underlying margin 77.9% 78.8% 78.7% 78.6% 78.3% 77.3% EBIT b. exceptionals Underlying margin 14.9% 18.2% 20.9% 23.3% 24.8% 25.7% Underlying net profit Underlying margin 10.6% 15.9% 18.4% 18.1% 20.4% 21.6% Earnings per share (adjusted) H year CAGR Operating cash flow Capital expenditure (19.4) (12.6) (18.8) (35.2) (46.7) (32.8) Free cash flow Number of employees (year-end) 1 2'517 2'217 2'387 3'471 3'797 4' In March 2015 Straumann acquired the remaining 51% stake of Neodent (Brazil) which added 930 employees to the Group. In 2017, the incorporation of Equinox in India and Medentika in Germany added 160 employees. Note: 4-year CAGR = Full-year ; 5-year average = 2013 H1 2017

45 New Group set-up Implants & prosthetics Local/regional Premium Non-Premium Orthodontics Digital Biomaterials Other technology partners 48 Fully consolidated Associate (equity method) Partnership

46 Straumann s currency exposure Revenue breakdown FY CHF Other 8% 15% BRL 10% JPY 7% EUR 31% Average exchange rates (rounded) FX sensitivity (+/- 10%) on full-year... 9M M 2017 Latest trend Revenue EBIT 1 EURCHF /- 29m +/- 18m 1 USDCHF /- 23m +/- 11m 100 BRLCHF /- 9m +/- 3m 100 JPYCHF /- 6m +/- 4m USD/CAD/AUD 30% Cost breakdown FY JPY 4% BRL 9% Other 9% CHF 36% Development of Straumann s main exchange rates since USD/CAD/AUD 23% EUR 19% USDCHF EURCHF JPYCHF BRLCHF 49 1 These distribution charts represent the total net revenues and the total COGS, as well as OPEX in the various currencies. All numbers are rounded and based on FY 2016 figures.