Demant A/s · OMXCOP:DEMANT
Demant A/s — William Demant Holding — FY2004 Earnings Presentation
19 slides from Demant A/s's earnings presentation, March 2005
Slide 1: William Demant Holding A/S Investor Presentation March 2005
Annual Report 2004 William Demant Holding A/S Investor Presentation March 2005 1
Slide 2: Headlines 2004
Annual Report 2004 Headlines 2004 • Profits in line with expectations • 14.1% organic growth • Another year with market share gains • Revenues of DKK 4.3 billion – 11.2% reported growth • Continued increase in gross profit ratio from 65.2% to 66.4% • EBIT of DKK 1,004 million - underlying growth exc
Slide 3: Hearing Aids
Annual Report 2004 Hearing Aids Growth in HA business • Accounted for 88% of revenues 22% 18% 14% • Growth of 14% in local currencies 9% • 13% unit growth in sales of hearing aids manufactured by Group 2001 2002 2003 2004 AVADA and AHAA acquired in Nov. 2000 and Aug. 2001, respectively • More than h
Slide 4: Hearing aid market status
Annual Report 2004 Hearing aid market status • Hearing aid market continues to grow 3-5% in units • Unit growth more evenly distributed across segments in 2004 • Overall feature upgrade in low-end segment but also less differentiation with increasing focus on price • Product differentiation now more
Slide 5: Diagnostic Instruments
Annual Report 2004 Diagnostic Instruments • Business area accounted for 6% of revenues – strong organic growth • Autometer market returned to positive growth rates in 2004 • However, still a slow-growing market • Trend expected to continue into 2005 • Launch in Q2 of Affinity, a PC-based audiometer
Slide 6: Personal Communication
Annual Report 2004 Personal Communication • Business area consists Phonic Ear and Sennheiser Communications • Accounted for 6% of revenues • 9% organic growth realised in 2004 • Phonic Ear now in a better shape following a successful restructuring in a difficult 2003 • Increasing use of Lexis, a wir
Slide 7: Profit and loss account, full-year
Annual Report 2004 Profit and loss account, full-year % change in local DKK million 2003 2004 % change currency Net revenue 3,870 4,303 11% 14% Gross profit 2,521 2,859 13% 15% Gross profit ratio 65.2% 66.4% Research and development costs -295 -324 10% 11% Distribution costs -1,130 -1,264 12% 15% Ad
Slide 8: Profit and loss account, 2nd half
Annual Report 2004 Profit and loss account, 2nd half % change in local DKK million 2003 H2 2004 H2 % change currency Net revenue 1,966 2,236 14% 17% Gross profit 1,266 1,490 18% 20% Gross profit ratio 64.4% 66.7% Research and development costs -152 -175 15% 16% Distribution costs -567 -632 11% 14% A
Slide 9: Net revenue by business area
Annual Report 2004 Net revenue by business area 6% 6% 88% % change in local DKK million 2003* 2003** 2004** currency Hearing Aids 3,424 3,334 3,817 14.5% Diagnostic Instruments 211 206 242 17.5% Personal Communication 235 223 244 9.4% Total 3,870 3,763 4,303 14.4% * Computed at 2003 exchange rates *
Slide 10: Net revenue by region
Annual Report 2004 Net revenue by region 7% 3% 6% 49% 35% % change for % change in Hearing Aids local in local DKK million 2003* 2003** 2004** currency currency Europe 1,819 1,823 2,068 13% 13% North America 1,384 1,273 1,507 18% 20% Asia 240 234 271 16% 14% Pacific Rim 302 311 309 -1% -1% Other cou
Slide 11: FX impact on revenues and earnings
Annual Report 2004 FX impact on revenues and earnings • 15% impact on revenues over 3 years - USD weakened +30% since Jan 2002 • Impact on earnings somewhat delayed due to hedging • Major trading currencies hedged 6-24m • Negative effect on EBIT since 2002 amounts to DKK 40 million in 2003 and DKK 7
Slide 12: Research & Development
Annual Report 2004 Research & Development R: 1 5% CA G 5 yrs 324 295 272 253 198 159 DKK million 1999 2000 2001 2002 2003 2004 12
Slide 13: Earnings per share
Annual Report 2004 Earnings per share 25% 10,7 R : s CAG 5 yr 8,8 7,9 6,5 5,8 DKK 3,5 1999 2000 2001 2002 2003 2004 13
Slide 14: One-time investments to facilitate future growth
Annual Report 2004 One-time investments to facilitate future growth • Current HQ outgrown as headcount has trebled • New property located at Smørum, 25 km from current head office • Acquired in Dec 2004 for DKK 171 million. Ongoing fitting and refurbishing will in 2005 amount to an additional DKK 80
Slide 15: Cash flows
Annual Report 2004 Cash flows DKK million 2001 2002 2003 2004 Net profit for the year 481 579 618 716 CFFO 317 669 754 735 CFFI, excl. acquisitions -184 -120 -138 -366* Free cash flow 133 549 616 369 Acquisitions -477 -7 0 -30 Buy-back of shares -27 -423 -541 -611 Other financing activities 524 -84
Slide 16: Balance sheet
Annual Report 2004 Balance sheet DKK million 2003 2004 2003 2004 Assets Liabilities Intangible 13 59 Shareholders' equity 522 651 Tangible 439 620 Provisions 65 41 Financial 99 143 Long-term creditors 541 458 Total fixed assets 551 822 Short-term creditors 887 1,289 Inventories 573 603 Total credito
Slide 17: Shareholder information
Annual Report 2004 Shareholder information • Dividends through share buy-back – net flow of DKK 1.7 billion to shareholders since listing in 1995 • At 7 March 2005, the Company holds 2.6% of issued shares – shares to be cancelled at AGM • Main shareholder, the Oticon Foundation, holds 60% of shares
Slide 18: Guidance – 2005
Annual Report 2004 Guidance – 2005 • 6-9% organic growth, with revenues of DKK 4.5-4.6 billion (assuming a negative 2% currency impact) • Continued market share gains for the Group • Recent years’ strong profitability enhancement expected to continue • EBIT margin of 23.5-24.5%, with reported EBIT o
Slide 19: www.demant.com
Annual Report 2004 www.demant.com 19
William Demant Holding — FY2004 Earnings Presentation on 6ix