Amplifon Spa · MIL:AMP
Amplifon Spa — Investor Day (March 2016)
67 slides from Amplifon Spa's investor day presentation, Mar 17, 2016
Slide 1: Shaping a New Exciting Growth Journey
SHAPING A NEW EXCITING GROWTH JOURNEY Analyst & Investor Day Milan – March 17th, 2016
Slide 2: Disclaimer
Disclaimer This presentation contains management preliminary estimates and forward-looking statements, including information related to Amplifon’s future financial performance and the expected development of the hearing aids industry. These statements are based on estimates and assumptions made by m
Slide 3: What you can expect from today
What you can expect from today ▪ Get to know our Management Team ▪ Explore our view on the key global industry trends ▪ Get a better sense of our unique business model and distinctive value proposition ▪ Understand our aspiration and strategic guidelines ▪ Receive guidance on our 3-year ambitions (n
Slide 4: Our Management Team
Our Management Team New ENRICO VITA UGO JOHN IACOPO PAZZI HEINZ RUCH Chief Executive GIORCELLI PAPPALARDO Executive Vice Executive Vice Officer Chief Financial Executive Vice President, EMEA President, Officer President, APAC Americas GIULIO PIZZINI ANDREA GIOVANNI CRISTIAN MASSIMILIANO Chief Strate
Slide 5: Today's agenda
Today’s agenda Timing Topic Speakers 11.00-11.30 Shaping a new exciting growth journey: Enrico Vita, Chief Executive Officer aspiration and guidelines 11.30-11.50 Leading an attractive industry: global trends Giulio Pizzini, Chief Strategic Development Officer 11.50-12.10 Pursuing marketing excellen
Slide 6: 2015 Record results
2015 Record results Highlights ▪ Revenues: €1bln+, +16% vs. 2014 – Outpacing global retail market All-time high revenues ▫ ~8% organic growth vs. ~4% market ▫ Contribution from acquisitions (~3%) – Strong momentum across all Regions Continued profitability ▪ EBITDA1: €167m, +22% vs. 2014 (16.2% marg
Slide 7: Key global industry trends
Key global industry trends Long-term sustained growth supported by secular trends (demographics, penetration) Retail market value concentrated in developed countries, with emerging countries limited in value Fragmented retail market with few international chains Customer choice driven by service and
Slide 8: Amplifon competitive advantage
Amplifon competitive advantage #1 global retailer Clear global leader ~9% global retail market share 2-3x closest retail competitors Best-in-class medical and retail expertise 5,500+ hearing care professionals Unique business model serving 3+ million customers Global coverage with ~9,000 PoS Strong
Slide 9: Amplifon 2018 aspiration
Amplifon 2018 aspiration “Further strengthen our global leadership position and deliver sustainable sales growth and margin expansion, leveraging our unique business model” 8
Slide 10: Amplifon 2018 ambitions
Amplifon 2018 ambitions 2018 vs. 2015, not including major acquisitions Sales growth Profitability increase Network expansion Mid-to-high single digit >150bps +600 CAGR 2015-2018 EBITDA margin Stores 9
Slide 11: Amplifon strategic pillars
Amplifon strategic pillars 1 Strengthen market leadership Clear and differentiated growth strategy, focused on top countries representing 70%+ of the global retail market 2 Marketing excellence 3 Innovative service model New brand identity, Unique knowledge, new advanced digital/CRM service technolo
Slide 12: 1. Strengthen market leadership
1. Strengthen market leadership Core countries for Amplifon growth Share of hearing aids global retail Country prioritization market1 (2015, value, %) Strategic priorities Strengthen leadership through accelerated organic growth US 42% across all business lines Germany 9% Gain market share Increase
Slide 13: 2. Marketing excellence
2. Marketing excellence Key elements Strategic initiatives ▪ Evolve the global brand identity Brand strategy ▪ Continue to invest in customer intelligence to enhance value proposition Marketing ▪ Improve marketing performance effectiveness ▪ Optimize marketing mix ▪ Build synergies across countries
Slide 14: 3. Innovative service model
3. Innovative service model Leading innovation in Proprietary service hearing care technology ▪ Lifecycle customer care, through ▪ New state-of-the-art 360° hearing upgraded in-store experience and experience – going beyond the basic innovative digital touch-points audiometric hearing test to fit a
Slide 15: 4. Effective execution capability
4. Effective execution capability Top talent attraction Global best practices Integrated IT platform Attract and develop Systematically roll-out Group-wide best hearing care group-wide commercial implementation of professionals and and operational best integrated IT platforms industry executives, pr
Slide 16: Today's agenda
Today’s agenda Timing Topic Speakers 11.00-11.30 Shaping a new exciting growth journey: Enrico Vita, Chief Executive Officer aspiration and guidelines 11.30-11.50 Leading an attractive industry: global trends Giulio Pizzini, Chief Strategic Development Officer 11.50-12.10 Pursuing marketing excellen
Slide 17: Key global industry trends
Key global industry trends Long-term sustained growth supported by secular 1 trends (demographics, penetration) Retail market value concentrated in developed 2 countries, with emerging countries limited in value Fragmented retail market with few international 3 chains Customer choice driven by servi
Slide 18: 1. Long-term sustained growth
1. Long-term sustained growth CAGR Demographics Hearing aids global retail market1 ▪ Aging population € bln especially in developed ~4% ~4% countries ~15 ▪ Increasing noise ~12 pollution ~10 Penetration ▪ Increasing awareness ▪ Improving technology ▪ Growing wellness relevance 2010 2015 2020 1 Priva
Slide 19: 1. Key role of penetration
1. Key role of penetration Penetration rate1 ▪ Market still 50% significantly under- 40% penetrated 30% ▪ Penetration growing 20% consistently and contributing to 10% about half of total market growth 0% ▪ Communication UK Australia US Emerging Denmark Germany France Italy markets and marketing key
Slide 20: 2. Global retail market concentrated in developed countries
2. Global retail market concentrated in developed countries Hearing aids global retail market1 Share of market value, 2015 Developed countries: ▪ US alone represents ~40% of global retail market value ▪ Following 5 countries (Germany, Emerging France, Japan, Canada, Italy) countries account for addi
Slide 21: 3. Fragmented global retail market
3. Fragmented global retail market Independents ▪ Players with <10 PoS still accounting for ~50% of Still very the global retail market, albeit under pressure relevant ▪ Very few international retail players (only ~20% of the global retail market, of which almost half is Few Specialty represented by
Slide 22: 4. Customer choice driven by service and trust in the brand
4. Customer choice driven by service and trust in the brand Purchasing drivers, sorted by relevance1 Store “The store has a brand that I fully trust” brand Top “Store personnel are knowledgeable Service priority and professional” Product “The store provides good quality hearing quality products” Med
Slide 23: 4. Marketing and service key along the customer journey
4. Marketing and service key to succeed along the customer journey Customer journey Education/ Preference/ Customer care/ Consideration Purchase Repurchase Set Do Support/ Symptoms Accept Try Purchase Use appointment visit Repurchase Brand/marketing Service/audiologist Key driver of store selection
Slide 24: 4. Digital influences consideration and repurchase
4. Digital influences mostly consideration and repurchase Highest Lowest Level of digital Customer journey influence First time buyers searching for information online Education/ Consideration Influencers searching for information online Preference/ E-commerce Purchase Customer care/ Repeat customer
Slide 25: 5. Typical healthcare sector
5. Typical healthcare sector ▪ Demand mostly driven by aging and by hearing loss prevalence Resilient (rather than economic cycle) demand ▪ Increasing expectations of well-being and quality of life ▪ Customers choose service providers and trust them for product Centrality of selection service ▪ Rela
Slide 26: Today's agenda
Today’s agenda Timing Topic Speakers 11.00-11.30 Shaping a new exciting growth journey: Enrico Vita, Chief Executive Officer aspiration and guidelines 11.30-11.50 Leading an attractive industry: global trends Giulio Pizzini, Chief Strategic Development Officer 11.50-12.10 Pursuing marketing excellen
Slide 27: Marketing excellence
Marketing excellence Key elements Strategic initiatives ▪ Evolve the global brand identity Brand strategy ▪ Continue to invest in customer intelligence to enhance value proposition Marketing ▪ Improve marketing performance effectiveness ▪ Optimize marketing mix ▪ Build synergies across countries ▪ I
Slide 28: Amplifon brand portfolio in 2015
Amplifon brand portfolio in 2015 Strong brand awareness in key geographies Amplifon brand portfolio today Brand awareness ▪ Globally relevant % Ranking ▪ Differentiated by ~90% 1st geography with unmatched local brands ~90% 1st ▪ Strong awareness in key countries ~90% 1st ▪ Synonymous with the categ
Slide 29: New brand strategy (video)
New brand strategy \\| amplifon | 28
Slide 30: Amplifon brand portfolio in 2018
Amplifon brand portfolio in 2018 Translate brand value into business results At the top everywhere Best awareness in every core market Further increase brand value to support strategic goals Accelerated Perceived as marketing distinctive and investments unique >10% CAGR Innovative 2015-2018 and emot
Slide 31: Marketing effectiveness
Marketing effectiveness Value proposition: 2015 Italy «Basta provarci» Video Website KPIs Social media 155,000 visits to the web site 1,500 video sharing / 400 registrations 250,000 complete video views 200,000 views Marketing effectiveness drives market share and increases penetration 30
Slide 32: Marketing effectiveness (video)
Marketing effectiveness VIDEO 31
Slide 33: Marketing effectiveness
Marketing effectiveness Value proposition: 2015 Italy «Basta provarci» CAGR Italy – Revenues 2011-2015 €m +8% +1% 248 226 229 221 224 Our proven strong capabilities in marketing excellence 2011 2012 2013 2014 2015 Q2 2015: Launch of «Basta Provarci» communication platform, boosted by integrated mark
Slide 34: New digital experience (video)
New digital experience VIDEO 33
Slide 35: Digital & CRM strategy
Digital & CRM strategy Digital user experience: the omnichannel customer journey Potential journey Education/ Preference/ Customer care/ Consideration Purchase Repurchase Set Do Support/ Symptoms Accept Try Purchase Use appointment visit Repurchase ▪ Transforming every touch-point in an opportunity
Slide 36: Innovative service model
Innovative service model Leading innovation in Proprietary service hearing care technology ▪ Lifecycle customer care, through ▪ New state-of-the-art 360° hearing upgraded in-store experience and experience – going beyond the basic innovative digital touch-points audiometric hearing test to fit a ▪ U
Slide 37: Amplifon 360° experience
Amplifon 360° experience Proprietary service technology Key features Innovative approach to assess Tools customer needs across multiple tests Unique, proprietary tool to counsel customer and select hyper- Training Superior Protocol personalized hearing solutions In-Store Advanced program to expand E
Slide 38: Today's agenda
Today’s agenda Timing Topic Speakers 11.00-11.30 Shaping a new exciting growth journey: Enrico Vita, Chief Executive Officer aspiration and guidelines 11.30-11.50 Leading an attractive industry: global trends Giulio Pizzini, Chief Strategic Development Officer 11.50-12.10 Pursuing marketing excellen
Slide 39: US: the largest worldwide retail market
US: the largest worldwide retail market, with high growth potential Largest worldwide retail Highly fragmented High growth potential market market % of value1, 2015 2015 >4% Other players retail market value 42% (mainly expected growth independents) (CAGR 2015-18) ~2.6 million Top 4 ~30% players cur
Slide 40: Amplifon has the ideal platform to succeed in the US
Amplifon has the ideal platform to succeed in the US Largest specialty Largest network retailer for independents ▪ ~1,200 franchising ▪ ~1,700 affiliates stores ▪ Unmatched member ▪ Sales ~$210m in 2015 ▪ Most recognized services and support (+16% vs. 2014) hearing care retail ▪ Widest product Healt
Slide 41: Amplifon strategic ambition in the US
Amplifon strategic ambition in the US: winning in the largest worldwide market Aspiration “Support franchisees’ success increasing brand equity, spreading best retail Boost growth capabilities and expanding scaling-up our retail network” unrivalled platform through accelerated “Enhance business mode
Slide 42: Miracle-Ear: accelerate growth through marketing and commercial excellence
Miracle-Ear: accelerate growth through marketing and commercial excellence Ambitious growth Supported by significant Strategic initiatives plan investments “Support Marketing investments franchisees’ Increase commercial productivity in success increasing franchising stores brand equity, spreading be
Slide 43: Elite Hearing Network: unique proposition to affiliates
Elite Hearing Network: deliver unique business proposition to our affiliates Ambitious growth Supported by significant Strategic initiatives plan investments “Enhance Number of resources business model Enhance marketing services to distinctiveness increase net member acquisition and expand affiliate
Slide 44: AHHC: winning in the under-penetrated managed care market
AHHC: winning in the still under-penetrated managed care market Ambitious growth Supported by significant Strategic initiatives plan investments “Scale-up the Marketing investments business fast” Boost coverage and acquisition of high-potential new accounts +30% Establish partnerships with supplemen
Slide 45: Amplifon 2018 ambition in the US
Amplifon 2018 ambition in the US Not including major acquisitions Sales growth1 EBITDA margin Marketing investments High-single digit +60% CAGR 2015-2018 vs. 2015 2016-18 vs. 2013-15 1 In local currency 44
Slide 46: Today's agenda
Today’s agenda Timing Topic Speakers 11.00-11.30 Shaping a new exciting growth journey: Enrico Vita, Chief Executive Officer aspiration and guidelines 11.30-11.50 Leading an attractive industry: global trends Giulio Pizzini, Chief Strategic Development Officer 11.50-12.10 Pursuing marketing excellen
Slide 47: Australia and New Zealand: consolidated and growing retail markets
Australia and New Zealand: consolidated and growing retail markets Sizeable retail markets Highly consolidated markets High growth potential % of value1, 2015 2015 5% Australia Top 3 players2 ~4% retail market value accounting expected growth for ~70% (CAGR 2015-18) New Zealand Top 2 players ~35% cu
Slide 48: Amplifon platform best positioned to win in both markets
Amplifon platform best positioned to win in both markets Australia ▪ Largest private player in the hearing care retail market ▪ Distinctive, highly productive retail model ▪ Sales ~€140m in 2015 (+10% vs. 20141) New Zealand ▪ Clear market leader ▪ Regional leader with ▪ Dual brand strategy ~30% mark
Slide 49: APAC: aspiration and strategic initiatives
APAC: aspiration and strategic initiatives Australia New Zealand “Deliver above-market “Differentiate beyond growth” leadership positioning” Marketing diversification Integrate and grow and digital leadership Dilworth brand Retail network expansion Advanced CRM Best employer of choice for audiologis
Slide 50: Amplifon 2018 ambition in APAC
Amplifon 2018 ambition in APAC Not including major acquisitions Sales growth1 EBITDA margin Marketing investments Mid-to-high single digit +25% CAGR 2015-2018 vs. 2015 2016-18 vs. 2013-15 1 At constant FX 49
Slide 51: Today's agenda
Today’s agenda Timing Topic Speakers 11.00-11.30 Shaping a new exciting growth journey: Enrico Vita, Chief Executive Officer aspiration and guidelines 11.30-11.50 Leading an attractive industry: global trends Giulio Pizzini, Chief Strategic Development Officer 11.50-12.10 Pursuing marketing excellen
Slide 52: EMEA: large and heterogeneous retail market
EMEA: large and heterogeneous retail market Large retail market Very heterogeneous across countries % of value1, 2015 Market ▪ Different level of maturity, from very Top 3 countries (Germany, structure consolidated (e.g. Spain, Netherlands) France, Italy) accounting for to fragmented (e.g. Germany,
Slide 53: EMEA: different strategic postures across countries
EMEA: different strategic postures across countries Market1 Amplifon Expected growth Size (in units) Share of ‘000 units, CAGR revenues Ranking Strategy going forward 2015 2015-18, % %, 2015 2015 Grow organically and Italy 360 4.0 ~24% 1st improve productivity Germany 1,100 3.5 ~6% 3rd Increase mark
Slide 54: EMEA: aspiration and strategic initiatives
EMEA: aspiration and strategic initiatives Italy Germany, France, Spain UK, Netherlands “Increase market share “Ensure through fast network sustainability in a “Grow organically and expansion to fully challenging improve productivity” leverage scale” environment” Accelerated network Enhanced busines
Slide 55: Amplifon 2018 ambition in EMEA
Amplifon 2018 ambition in EMEA Not including major acquisitions Sales growth1 EBITDA margin Network expansion Mid-to-high single digit +500 CAGR 2015-2018 vs. 2015 Stores vs. 2015 1 At constant FX 54
Slide 56: Today's agenda
Today’s agenda Timing Topic Speakers 11.00-11.30 Shaping a new exciting growth journey: Enrico Vita, Chief Executive Officer aspiration and guidelines 11.30-11.50 Leading an attractive industry: global trends Giulio Pizzini, Chief Strategic Development Officer 11.50-12.10 Pursuing marketing excellen
Slide 57: Today's agenda
Today’s agenda Timing Topic Speakers 11.00-11.30 Shaping a new exciting growth journey: Enrico Vita, Chief Executive Officer aspiration and guidelines 11.30-11.50 Leading an attractive industry: global trends Giulio Pizzini, Chief Strategic Development Officer 11.50-12.10 Pursuing marketing excellen
Slide 58: 2015 Record results
2015 Record results Highlights ▪ Revenues: €1bln+, +16% vs. 2014 – Outpacing global retail market All-time high revenues ▫ ~8% organic growth vs. ~4% market ▫ Contribution from acquisitions (~3%) – Strong momentum across all Regions Continued profitability ▪ EBITDA1: €167m, +22% vs. 2014 (16.2% marg
Slide 59: Amplifon 2018 ambition
Amplifon 2018 ambition 2018 vs. 2015, not including major acquisitions Sales growth1 Profitability increase Network expansion Mid-to-high single digit >150bps +600 CAGR 2015-2018 EBITDA margin Stores2 1 At constant FX 2 Including Corporate Stores and Shop-In-Shops 58
Slide 60: Tailored value creation strategy in each Region
Tailored value creation strategy in each Region Not including major acquisitions Sales growth1 EBITDA margin CAGR 2015-2018 2018 vs. 2015 Americas High-single digit APAC Mid-to-high- single digit EMEA Mid-to-high- single digit 1 At constant FX 59
Slide 61: Driving profitability through increased operating leverage
Driving profitability through increased operating leverage Key drivers ▪ Increase store productivity Expected margin ▪ Leverage increasing scale expansion across all cost base ▪ Increased marketing >150bps investments (>10% 2015-18 CAGR) generating more than EBITDA margin proportional revenues uplif
Slide 62: Strong cash flow generation to support cash-out for acquisitions and capex
Strong cash flow generation will support cash-out for piecemeal acquisitions and capex Cash-out for piecemeal acquisitions ▪ Network expansion Expected capex – ~60 stores p.a. in both Germany and cash-out and France Capex ▪ Network expansion and upgrade ~€300m – New openings Cumulated – Relocations
Slide 63: Today's agenda
Today’s agenda Timing Topic Speakers 11.00-11.30 Shaping a new exciting growth journey: Enrico Vita, Chief Executive Officer aspiration and guidelines 11.30-11.50 Leading an attractive industry: global trends Giulio Pizzini, Chief Strategic Development Officer 11.50-12.10 Pursuing marketing excellen
Slide 64: Closing remarks
Closing remarks Attractive retail market concentrated in developed countries, with stable and resilient growth, driven by secular trends Amplifon global leader with a clear competitive advantage, best positioned to capture market opportunities Strong 2018 aspiration aimed at strengthening growth in
Slide 65: Thank you!
Our Management Team New ENRICO VITA UGO JOHN IACOPO PAZZI HEINZ RUCH Chief Executive GIORCELLI PAPPALARDO Executive Vice Executive Vice Officer Chief Financial Executive Vice President, EMEA President, Officer President, APAC Americas GIULIO PIZZINI ANDREA GIOVANNI CRISTIAN MASSIMILIANO Chief Strate
Slide 66: Q&A Thank you
Q&A THANK YOU
Slide 67: Investor relations contacts
Investor relations contacts Investor relations AMPLIFON Via G. Ripamonti. 133 20141 Milano (MI) - Italy Phone: +39 02 5747 21 Fax: +39 02 5730 0033 ir@amplifon.com Investor relations team FRANCESCA RAMBAUDI AMANDA HART GIRALDI OLGA LEPECHKINA Investor Relations Director Investor Relations Analyst In