Being the partner of choice

Transcription

1 Being the partner of choice Beat Spalinger, President & CEO at the Sanford Bernstein Conference 2012, London Disclaimer This presentation contains certain forward-looking statements, which can be identified by use of terminology such as expect, expectation, intend, continue, achieve, maintain, improve, foresee, anticipate, product introductions, outlook, forecast, or similar wording. Such forward-looking statements reflect the current views of management and are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause actual results, performance or achievements of the Group to differ materially from those expressed or implied herein. Should such risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this presentation. Straumann is providing the information in this presentation as of this date and does not undertake any obligation to update any forward-looking statements contained in it as a result of new information, future events or otherwise. 2

2 A leader in the tooth replacement market worth >CHF 5bn Implant dentistry CHF 3.5bn CADCAM restauration CHF 1.7bn Global medical device market worth about CHF 320bn 1 Global dentistry market worth about CHF 20bn 2 Dental regeneration CHF 0.5bn Straumann s addressable market 1 MarketsandMarkets and Straumann estimates 2 US and EU companies only, Ernst & Young, Pulse of the industry, Medical technology report Straumann serves three dental specialty segments... CADCAM restorations on natural teeth CADCAM restorations on implants Regeneratives Dental implants & abutments 4

3 and competes against a few truly global companies Main competitors: 3M ESPE, Sirona, Dentsply, 3shape, Nobel Biocare Main competitors: Geistlich/Osteohealth, Zimmer, ACE, Dentsply, BioHorizons Main competitors: Nobel Biocare, Dentsply, Biomet 3i, Zimmer 5 What is happening in the market? Tooth replacement market more or less flat in H1 Weak economic environment constrains market momentum in Q2 Austerity measures in Europe (>45% of global market) weigh on consumer confidence and non-reimbursed dental procedures Momentum eases in US (>25% of global market) but fundamental growth drivers remain intact Robust growth continues in emerging markets (<15% of global market) 6

4 Outperformance despite #1 position in Europe Global dental implant market (Total: CHF 3.5bn in 2011) Including implants, abutments and tools. Source: MRG 20010, idata 2011, Straumann estimates 2 Total business. Source: Company and SEC reports. 7 General dentistry softened in NA in Q2 implants traditionally more volatile Corr = 0.89 R 2 = Total business. Source: Company and SEC reports. 2 Data input from Jefferies and Northcoast research. 8

5 2012 H1 strategically well positioned, but economic environment disappointing NET REVENUE KEY DRIVER NET PROFIT CHF 362m +10% CHF 44m H1 flat; slow market in Q2 Strong l.c. growth in North America JOBS EMERGING MARKETS FUTURE constrained by re-organization, regional expansion, and R&D 103 new positions #1 in Latin America Vision 2020 created in sales and products 49% stake in Neodent; clear path to leadership in Brazil & LATAM Roadmap for sustainable future; organization re-designed 9 How Straumann has performed year-on-year in CHF million H H Change Reported Preexceptionals FX adjusted Reported vs. adjusted 1 Net Revenue (0.2%) Gross profit Gross profit margin 79.0% 79.0% 78.8% 77.0% (1.8%) EBITDA EBITDA margin 26.8% 26.8% 26.2% 19.3% (6.9%) OPEX excl. D&A Operating profit (EBIT) EBIT margin 10.6% 21.6% 20.7% 14.7% (6.0%) Net profit Net profit margin 10.5% 17.8% 12.1% Basic earnings per share (EPS) Adjusted EPS 3.03 Free Cash Flow Free Cash Flow margin 12.8% 5.5% Throughout this presentation the term pre-exceptionals means that the impairment of intangible assets (CHF 40m) and the corresponding deferred tax effect (CHF 13m) in 2011 are not included Straumann 2 Lifted by a net change in provisions of CHF 5m 10 3 Basic earnings per share adjusted for acquisition-related amortization and corresponding tax effect

6 Group performance led by solid growth in N. America Net revenue growth by region Net revenue by region (rounded) -5% -8% Europe 13% 10% North America 4% 1% -2% 0% -2% -6% Asia/Pacific ROW Group 24% 15% 5% 63% 56% Europe CHF 202m North America CHF 89m Asia/Pacific CHF 54m ROW CHF 17m Total Group CHF 362m Growth in l.c. Growth in CHF 11 Building for the future

7 1. Re-organization: Completed in less than a year to master complexity and drive growth Corporate organization EMB strengthened; new Corporate structure CEO Business Unit organization 2 main BUs Finance BU Prosthetics BU Surgical Beat Spalinger Sales I EMEA/LATAM Sales II NAM Sales III APAC Country organization 3 sales regions Local Sales Channel 4 focused sales forces Thomas Dressendörfer Sandro Matter René Willi Frank Hemm Andy Molnar Straumann s Executive Board combines over 70 years of Medtech experience Alexander Ochsner Focused investment in people in key areas 103 new positions in H1 (total 2 555) Products Administration, Finance, IT APAC Marketing, Education & Sales Quality, Production, Logistics North America RoW Europe US sales force expanded 4 dedicated sales forces build One-time build-up - mainly in M&S - to support new organizational footprint 14

8 3. Investing into high growth LATAM market Expanded reach into large and fast-growing Brazilian market Platform for expansion into other LATAM markets Cross-selling of Straumann s regenerative and digital portfolio Platform to drive second brand strategy in selected non-premium markets in the future 15 Not all markets are premium, which means we are limited with our current offering Latin America Asia Pacific Europe North America 0% 20% 40% 60% 80% 100% Premium Value Discount Source: idata 2011, MRG Each Implant manufacturer was classified in a single segment according to the mid-price of their portfolio. Most value/discount companies operate locally or 16 regionally.

9 Brazil has an attractive growth profile 1 Bubble size indicates implant market size in value in 2010 and e2020 (Source MRG). 2 Sources: Brazil FGV; Russia: Ernst & Young, 2011; India: McKinsey Global Institute 2010; China: BCG 2010; USA: U.S. Census Bureau, Expansion in world s 2nd largest implant market Net revenue CAGR Profitability / margins BRL167m 21% >40% adj. EBITDA >25% net profit Second brand provides platform to roll out regional strategy in selected non-premium markets in LATAM and beyond 49% stake purchased in cash; option to increase to 100% over next 6y Full consolidation in Total revenues from all segments incl. international businesses 18

10 Outlook 2012 and beyond Outlook adapted to macro trends Market Challenging developments in parts of Europe and Asia expected Outlook for North America and emerging markets more optimistic Global market for tooth replacement may remain flat, at best, over the full year Straumann Strategically well positioned to deliver above-market performance Full-year revenues (excluding currency effects) at least in line with 2011 Cost optimization measures in H2 to cushion impact of slower growth and costs related to reorganization, acquisition and sales force expansion Full-year reported 2 EBIT margin to be similar to the H1 level 1 Barring unforeseen circumstances. Abridged version; for full version please refer to the official media release 2 Including CHF 5 million one-time costs related to Straumann s reorganization project and the Neodent transaction 20

11 Questions & Answers 21 Appendix

12 Calendar of upcoming events 17 September Investor meetings Paris (F) 18 September Investor meetings London (UK) 19 September Sanford C. Bernstein Conference London (UK) 20 September UBS Best of Switzerland Conference Ermatingen (CH) 26 September Investor meetings Toronto (CDN) 27 September Investor meetings Boston (US) 28 September Investor meetings New York (US) 11 October Investor meetings Copenhagen (DK) 30 October Third Quarter 2012 results Conference Call Detailed calendar on 23 Appendix

13 General trends in our field PATIENTS Dental health will improve No substitution for dental care in 10y More patients with co-morbidities Patients will be better informed DENTAL PRACTICE Group practices increasing Higher productivity, shorter chair-time Increase in female dentists Treatments driven by prosthetics DENTAL LABS Reduction of independent labs Many labs integrated in practices Technicians young, computer savvy Restorations Simple: chairside Complex: centrally milled TECHNOLOGY Digital dental & medical dossiers integrated Complete 3D-scan of oral situation Insurance coverage for implants Implant surgery minimally invasive 25 Business fundamentals are still highly attractive Market growth Demographics Dental awareness & esthetics Access to treatment Long-term cost efficiency Simplify procedures Penetration More dentists trained to place implants Over a quarter of a billion people in the industrialized world are missing one or more teeth Penetration levels are still very low; only 15-20% of people seeking treatment for tooth loss get implant solutions, despite clear advantages Huge patient populations in emerging economies where implant and CADCAM dentistry are not established yet Regenerative solutions have only started to make inroads in many countries No reason to suggest that our markets should not expand in the mid to long term 26

14 A global market yet to unlock tremendous opportunities especially in BRIC countries Dental implants per population in Global dental implant market by region 1 82 RoW 200 Top3 193 Asia/ Pacific Europe 100 North America 0 KR IT ES CH DE SE BR FR US JP UK CN Today, in most countries, the number of implants placed annually is >50% lower than the average of the three highest-penetrated countries 1 estimates, based on Millennium Research Group Straumann 27 US example: implant penetration rising to 25-30% Adult population People affected by tooth loss: 45-55% Annual tooth loss cases seeking treatment: 5-10% Drivers Oral hygiene / maintenance / nutrition / aging population / education Level of impairment or discomfort / economics / access to treatment / reimbursement / fear / awareness People actually treated: 45-55% Financing / awareness / eligibility / treatment acceptance Implant treatment 2011: 15-20% 2020: 25-30% Conventional treatment 2011: 80-85% 2020: 70-75% Dentist preference / bone sufficiency / risk factors / financing / Time-totooth 1 Straumann definition for dental implant penetration: Number of people treated with dental implants/number of people treated for tooth loss 2 Source:Straumann proprietary study based on ~5000 respondents conducted by AFG Research 2011; Straumann estimates 28

15 Lower top line, inventory reduction and distributor price adjustments squeeze gross margin In % of sales -0.2% -0.8% -0.8% -0.2% 79.0% 78.0% 77.0% Gross profit H FX effect Production Adjusted gross related one-off profit H costs 2011 Inventory changes & Mix Pricing (Distributor) Gross profit H EBIT reflects high investments in M&S and R&D In % of net revenue CHF 40m impairment of intangible assets 2 Lifted by CHF 5m net release of provisions in H One-time project costs of CHF 5m related to Straumann s reorganization and Neodent transaction.

16 Cash flow impacted by reduced gross profit, one-time costs and tax payments In CHF million Thereof 5m related to currency changes Cash outstanding 1 Jan CHF 377 million - Investment in Neodent (1 st tranche) (CHF 218 million) - Dividends (CHF 58 million) Cash outstanding 30 June 2012 CHF 117 million - Investment in Neodent (2 nd tranche Q3) (CHF 43 million) -1.6 Thereof 5m related to one-time project costs 19.9 FCF margin 12.8% FCF margin 5.5% Free cash flow H Gross profit (Cash) OPEX Working capital CAPEX Taxes paid Others Free cash flow H Currency impact to neutralize throughout the year Average exchange rates (rounded) FY 2011 H YTD EURCHF USDCHF JPYCHF CHF 14% Net revenue breakdown CHF 42% Cost breakdown 1 Other 18% EUR 44% EUR 27% USD/CAD/AUD 24% Other 14% USD/CAD/AUD 17% 1 These distribution charts represent the total net revenues and the total COGS, SG&A costs as well as R&D expenses in the various currencies. All numbers are rounded and based on 2011 figures. 2 Average spot rates as per 20 August

17 A global business Andover (USA): Implant production Malmö (S): Regenerative products Leipzig (D): CADCAM milling Gräfelfing (D): scanner assembly Villeret (CH): Implant production Arlington (USA): CADCAM milling Straumann subsidiaries Production plants Distributors Present in >70 countries through 21 sales subsidiaries and a broad distributor network 33 Additional growth through further Bone level share gains crown abutment implant Implant dentistry % = CHF 3.5 bn abutment implant First version launched 1974 Introduced >2008 Soft tissue level The most successful single system Microgap vertically offset from bone, respecting biological width and preserving bone Preferred solution for one-stage procedures Pioneered by Straumann Bone level Most popular implant type globally (70% share in North America) Ease of use and Esthetics considered by many dentists as superior Smart Straumann design limits microgap risk ( platform switching ) 34

18 Straumann covers the entire CADCAM value chain Scanning To capture patient specific situation Designing With Open Standard Software Milling manufacturing Implant Drill guide Dental practice Dental laboratory Intra-oral Scanning (in-vivo) In-lab scanning Chairside Milling In-lab Milling Abutment Coping / bridge In/onlay Full contour Wax-up Straumann milling center Centralized Milling Dentures Mouth guards Digital process Analogue process 35 Ongoing commitment to leadership in innovation and long-term clinical excellence R&D rises to 6% of net revenue (target approx. 5%) 16 clinical studies running; 9 more in preparation Further 10-year data presented on Emdogain at Europerio 10-year survival and success rates of >500 SLA implants submitted for publication IADR/Straumann Award for Periodontal Regenerative Medicine presented 36

19 Your contacts for follow-up requests Corporate Investor Relations Fabian Hildbrand Phone +41 (0) Mobile +41 (0) Rahel Steiner (Coordinator) Phone +41 (0)