Demant A/s · OMXCOP:DEMANT

Demant A/s — William Demant Holding — H1 2004 Earnings Presentation

19 slides from Demant A/s's earnings presentation, Aug 18, 2004

  1. Slide 1: First Half 2004 Investor Presentation

    First Half 2004 William Demant Holding A/S Investor Presentation August 2004

  2. Slide 2: Headlines first half 2004

    First Half 2004 Headlines first half 2004 • Upgrade of expectations for 2004 • Organic growth of 11.3% • Revenues of DKK 2,067 million - headwind of 2.4% from currencies • High profit margin maintained at 21.8% • EBIT of DKK 451 million – up from DKK 423 million last year – approx. 10% headwind from

  3. Slide 3: Profit and loss account

    First Half 2004 Profit and loss account % change in local Full Year DKK million 1H04 1H03 % change currency 2003 Net revenue 2,067 1,903 9% 11% 3,870 Gross profit 1,368 1,255 9% 2,522 Gross profit ratio 66.2% 65.9% 65.2% R&D costs -150 -143 5% 6% -294 Distribution costs -631 -563 12% 15% -1,130 Admi

  4. Slide 4: Organic growth

    First Half 2004 Organic growth 21% 16% 13% 12-15% 11% 1H04: 11% 8% 1999 2000 2001 2002 2003 F2004

  5. Slide 5: Net revenue by business area

    First Half 2004 Net revenue by business area 6% 6% 88% % change in DKK million 1H04* 1H03* local currency 1H03 Hearing Aids 1,832 1,660 10% 1,698 Diagnostic Instruments 117 102 15% 104 Personal Communication 118 95 24% 101 Total 2,067 1,857 11% 1,903 * Computed at 1H04 exchange rates

  6. Slide 6: Net revenue by region

    First Half 2004 Net revenue by region 7% 3% 6% 48% 36% % change in DKK million 1H04* 1H03* local currency Europe 993 880 13% North America 731 623 17% Asia 131 123 6% Pacific Rim 143 176 -19% Other countries 69 55 25% Total 2,067 1,857 11% * Computed at 1H04 exchange rates

  7. Slide 7: Operating profit (EBIT)

    First Half 2004 Operating profit (EBIT) DKK million 950-1,025 856 810 683 583 336 251 196 1H04: 134 117 139 451 87 31 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 F2004

  8. Slide 8: Currency impact on revenue

    First Half 2004 Currency impact on revenue Development in currencies • Negative impact 1.400 1H03 to 1H04 on revenues of 2.4% or 1.200 DKK 46 million 1196 1168 • Expected impact for 1085 1105 1.000 1065 full year – based on July rates – of 2.0% • USD weakened 27% 800 829 749 since 1H02 639 674 644 6

  9. Slide 9: Currency impact on earnings

    First Half 2004 Currency impact on earnings • Impact on earnings delayed due to hedging of transaction-related effect of DKK million -85 currency development - major trading currencies hedged 6-24 months -120 (comp. to • Annualized effect on earnings in 2004 -35 2002) relative to 2002 expected to be

  10. Slide 10: Earnings per share

    First Half 2004 Earnings per share DKK % R: 16 +15- G CA 20% 8,8 7,9 6,5 5,8 1H04: 4.7 2000 2001 2002 2003 F2004

  11. Slide 11: Balance sheet

    First Half 2004 Balance sheet DKK million 30/6/04 31/12/03 30/6/03 30/6/04 31/12/03 30/6/03 Assets Liabilities Intangible 27 14 15 Shareholders' equity 473 522 419 Tangible 436 439 428 Provisions 60 65 39 Financial 111 98 81 Long-term creditors 545 541 628 Total fixed assets 574 551 524 Short-term c

  12. Slide 12: Cash flow - cash conversion

    First Half 2004 Cash flow - cash conversion • CFFO before financials and tax of 800 DKK 371 million 618 700 579 • Free cash flow 1H04 affected by: 600 481 – Increase in inventories of DKK 426 500 100 million due to launch of 1H04: 400 319 Syncro 300 – Increase in debtors of DKK 88 200 million due to

  13. Slide 13: Hearing aids

    First Half 2004 Hearing aids • Business area accounted for 88% of revenues • Growth of 10% in local currencies • 12% unit growth in sales of own manufactured hearing aids • Market conditions: – Sound market development on most markets except Germany – US market grew well above expected long-term gro

  14. Slide 14: Hearing aids

    First Half 2004 Hearing aids • Successful introduction of Oticon Syncro, which was launched at AAA in April and released for sale in May • Introduced on all major markets during first 6 weeks after release for sale with steep ramp-up in production • Additional campaigns to be rolled out following su

  15. Slide 15: New products since 2002

    First Half 2004 New products since 2002

  16. Slide 16: Other business areas

    First Half 2004 Other business areas • Diagnostic Instruments – Business area accounted for 6% of revenues – Satisfactory growth in first half after slow start in January – Growth carried by new products and a positive market recovery • Personal Communications – Business area accounted for 6% of rev

  17. Slide 17: Shareholder information

    First Half 2004 Shareholder information • Dividends through share buy-back - net flow of DKK 1.4 billion to shareholders since listing in 1995 • At AGM in March 2004, the company cancelled 4% of issued shares – the share capital is now DKK 67.5 million • Holding of own shares on 18 August 2004 amoun

  18. Slide 18: Guidance 2004

    First Half 2004 Guidance 2004 March 2004 August 2004 • Organic growth of 7-10% Organic growth of 12-15% • Revenues of DKK 4.0 billion - Revenues of DKK 4.25–4.35 headwind from currencies of billion - headwind from 4% currencies of 2% • EBIT of DKK 875 million - higher EBIT of DKK 950–1,025 million –

  19. Slide 19: www.demant.com

    First Half 2004 www.demant.com

William Demant Holding — H1 2004 Earnings Presentation on 6ix