Straumann Holding AG · SIX:STMN
Straumann — H1 2003 Earnings Presentation
41 slides from Straumann's earnings presentation, Aug 14, 2003
Slide 1: Interim Results 2003 Analyst- & Media Conference
Interim Results 2003 Analyst- & Media Conference Zurich, 14 August 2003
Slide 2: Agenda
Agenda • Highlights • Strategy Implementation • Financial Performance & Condition • Biora portrait • Outlook 14. August 2003 2
Slide 3: Highlights
Highlights • Implementation of strategic initiatives on track (i.e. Biora acquisition and US expansion) • Product introductions on schedule (i.e. TE Implant, synOcta Prothetics and InCeram) • Market share gains continued thanks to robust growth of 21% in local currencies • 34% earning growth thanks
Slide 4: Agenda
Agenda • Highlights • Strategy Implementation • Financial Performance & Condition • Biora portrait • Outlook 14. August 2003 4
Slide 5: Main Initiatives in 2003
Main Initiatives in 2003 • Complete sourcing relationship(s) for Biologics products a • Expand US presence according to growth plan a • Execute product introductions in Implants Division a 14. August 2003 5
Slide 6: Foundation for Biologics Portfolio
Foundation for Biologics Portfolio Hydrogel Carrier Bioactive Agent Tissue regeneration Matrix Technology from Licensing and Supply Enamel Matrix Derivative Agreement with protein from 14. August 2003 6
Slide 7: Technology Platform and Positioning
Technology Platform and Positioning Tooth preservation Tooth replacement Implant prosthetics Periodontal tissue GBR/GTR regeneration Same Existing technology Implants Tooth platform 14. August 2003 7
Slide 8: Clinical Incidences in Dental Treatments
Clinical Incidences in Dental Treatments Application Potential • Approx. 2 – 2.5 million implant procedures p.a. Bone augmentation in • Estimated 20-25% of procedures involve some form of implant surgery bone augmentation/grafting. • Soft tissue is essential for an esthetic outcome Gingival regenera
Slide 9: US Presence
US Presence • Sales Force increase from 51 to 73 for 2003 concluded; sales force expansion will be continued in subsequent years. The Straumann Company, • Increased dedication of Boston resources to research and development • Evaluation of production Training Center facility and Newport Beach, Calif
Slide 10: Product Introductions
Product Introductions 2002 2003 Prosthetics synOcta 1.5 synOcta cemented In-Ceram for synOcta 2.5 Surgical WNI healing caps and ITI TE implant closure screw New Prosthetics Planning Kit Instruments Ultrasonic Cleaning Cassette New Surgical Case 14. August 2003 10
Slide 11: Agenda
Agenda • Highlights • Strategy Implementation • Financial Performance & Condition • Biora Portrait • Outlook 14. August 2003 11
Slide 12: Sales Development
Sales Development YoY growth in million CHF in % 180 163.4 30% 160 141.3 140 120 20% 100 18.4% 80 15.6% 60 10% 40 20 0 0% H1 2002 H1 2003 growth % in locals 21.5% 21.1% price effect 2.0% 3.7% volume growth 19.5% 17.4% 14. August 2003 12
Slide 13: Sales Development per Region
Sales Development per Region CHF million 1Q 02 2Q 02 3Q 02 4Q 02 Total 1Q 03 2Q 03 Europe 42.8 44.2 35.6 43.0 165.6 50.9 53.6 YoY growth 16.8% 21.0% 13.0% 18.1% 17.4% 19.1% 21.4% YoY growth locals 20.0% 25.4% 15.6% 18.2% 19.9% 20.3% 18.7% North America 17.2 20.8 17.5 19.3 74.8 19.8 20.3 YoY growth 2
Slide 14: Distribution Channels and Countries
Distribution Channels and Countries Half year 2003 Switzerland Switzerland Distributors Spain 7.6% Italy 7.6% 17.3% 8.2% 4.4% Japan North 9.0% America Others 24.6% 2.5% Subsidiaries Germany 75.2% 24.2% Rest of Europe 19.6% 14. August 2003 14
Slide 15: Operating Profit (EBIT)
Operating Profit (EBIT) margin in CHF million in % 50 45.7 50% 40.2 40 40% 30 30% 28.4 27.9 20 20% 10 10% 0 0% H1 2002 H1 2003 growth in % 23.3% 13.8% 14. August 2003 15
Slide 16: Income Statement
Income Statement In % of In % of In % of 2002 sales H1 2002 sales H1 2003 sales Net Sales 274.9 141.3 163.4 Cost of goods sold 54.4 19.8 26.7 18.9 30.7 18.7 Gross profit 220.8 80.2 114.8 81.1 133.2 81.3 Selling costs 97.3 35.4 47.7 33.8 55.0 33.7 General admin. 17.1 6.2 10.3 7.3 15.7 9.6 Costs 31.4
Slide 17: Headcount and Productivity
Headcount and Productivity • Personnel costs increased by 11% to amount of CHF 45 million (28% of sales) • Number of Straumann employees increased by 80 to 830 at end of June 2003 • Sales per employee just over CHF 0.4 million and sales per sales representative at CHF 1.9 million • An additional 74
Slide 18: Net Income
Net Income margin in CHF million in % 45 40% 38.2 40 35 30% 28.5 30 25 20% 20 23.3% 20.2% 15 10 10% 5 0 0% H1 2002 H1 2003 growth in % 23.7% 33.8% 14. August 2003 18
Slide 19: Working Capital
Working Capital In % In % Change of of 2002 H1 2003 in % sales sales 38.0 13.8 40.1 11.9 +5.5 Inventory 33.6 12.2 48.5 12.1 +44.3 Acc. Receivables 7.2 2.6 10.5 2.8 +45.8 Other current assets Current liabilities -37.7 13.7 -63.0 38.6 +67.1 41.1 14.9 36.0 11.0 -12.4 14. August 2003 19
Slide 20: Cash Flow
Cash Flow Cash flow from operating activities in million CHF Cash flow from investing activities 90 75 Cash flow from financing activities 60 Free Cash Flow 44.1 45 34.5 30 16.3 14.1 15 0 -15 -11.3 -30 -18.2 -18.2 -45 -60 -75 -62.3 -90 H1 2002 H1 2003 14. August 2003 20
Slide 21: Capital Expenditure
Capital Expenditure Investment details, CHF million 70 0.4 Financial assets 0.5 60 Land and buildings 8.5 Tangible assets 50 Intangible assets 40 Investment in Int. Assets H1 2003 30 Acquisition Biora CHF 64.5 million 0.3 52.9 §Goodwill CHF 44.2 million 20 0.1 5.3 Purchase Minorities STE: 10 §Goodwi
Slide 22: Equity Ratio
Equity Ratio in million CHF in % of assets 240 100% 212.4 188.9 200 80% 64.0% 160 75.3% 60% 120 40% 80 20% 40 0 0% 2002 H1 2003 14. August 2003 22
Slide 23: Key Performance Ratios
Key Performance Ratios 2002 H1 2003 Return on Equity (ROE) 33.3% 38.1% Return on Capital 41.1% 39.8% Employed (ROCE) Return on Assets (ROA) 24.2% 26.2% Economic Profit 38.7 27.8 (in CHF million) 14. August 2003 23
Slide 24: Agenda
Agenda • Highlights • Strategy Implementation • Financial Performance & Condition • Biora Portrait • Outlook 14. August 2003 24
Slide 25: BIORA
BIORA • Technology platform based on Enamel Matrix Derivative (EMD) • Pioneer in the field of biology based treatment of dental tissue defects • Founded in 1986 • Headquarters in Malmö, Sweden • Subsidiaries in Germany and the U.S.A. • 78 employees worldwide 14. August 2003 25
Slide 26: Periodontal Disease
Periodontal Disease • Caused by bacterial infection • Results in a gradual destruction of the tooth supporting structures • If left untreated may lead to tooth loss 14. August 2003 26
Slide 27: Incidence of Periodontitis
Incidence of Periodontitis • Periodontitis affects 1/3 of the worldwide population > 55 • 4 - 5 million surgical procedures performed annually to treat periodontal defects • 15 – 20% of these procedures currently treated with a regenerative technique 14. August 2003 27
Slide 28: Emdogain Gel
Emdogain Gel ® • Protein based technology • Regenerates new tooth supporting tissues • Enhanced wound healing, increased patient comfort • Over 100 scientific publications • Easy-to-use • Time-saving benefits 14. August 2003 28
Slide 29: Emdogain Gel TS
Emdogain Gel TS ® • Addition to the Emdogain® product family • Provides desired tissue support in wide defects Launched in Q4, 2001. Germany, Italy and Nordic Markets 14. August 2003 29
Slide 30: Emdogain Gel and PrefGel Multi/Co-Pack
Emdogain®Gel and PrefGel™ Multi/Co-Pack • Three EmdogainGel + three PrefGel • Provides additional convenience and maximizes storage space Launched in Q1, 2003 in the US and Europe 14. August 2003 30
Slide 31: Alternative Treatment Options
Alternative Treatment Options Conventional Surgery • 75 – 80% of total surgical procedures Bone Graft Materials • Human • Bovine • Synthetic Membranes (GTR) • Synthetic • Bovine 14. August 2003 31
Slide 32: Research & Development
Research & Development Additional Indications: •Recession Indication Utilization of Emdogain®Gel to improve quality of tissue attachment Approved in EU Filed in the U.S. •Furcation Treatment Use of Emdogain®Gel to regenerate tooth supporting tissues in periodontal defects between tooth roots Approve
Slide 33: Mölnlycke Health Care Agreement
Mölnlycke Health Care Agreement • Licensing agreement - exclusive rights for MHC to develop and market enamel matrix protein for use in treatment of chronic open wounds and burns worldwide excluding Japan • Down-payment - 10 MSEK • Additional milestone payments of 35 MSEK • Royalty payment based on
Slide 34: Net sales
Net sales (MSEK) CAGR = 15% 80 71 66 70 56 60 44 50 38 40 30 20 10 0 H1 1999 H1 2000 H1 2001 H1 2002 H1 2003 14. August 2003 34
Slide 35: Agenda
Agenda • Highlights • Strategy Implementation • Financial Performance & Condition • Biora Portrait • Outlook 14. August 2003 35
Slide 36: Biora Integration Approach
Biora Integration Approach • For the time being, both companies operate separately in the marketplace. Preparations for a common corporate presence are under way and will be implemented at the end of the first quarter 2004. • To realize the potential revenue synergies, Biora products will be distrib
Slide 37: Vision and Mission
Vision and Mission „Our vision is to become the world leader in the field of implant dentistry and dental tissue regeneration, and to be the provider of choice to dental professionals.“ „ Our mission is to enable dental professionals to restore their patients‘ oral function and esthetics through eff
Slide 38: Corporate Strategy
Corporate Strategy • Focus on the field of implant dentistry and tissue regeneration – develop non-core fields through partnerships and/or smaller acquisitions • Maintain leadership position in Europe and Asia • Leverage growth potential in North American market • Achieve growth organically • Introd
Slide 39: Guidance for Full Year 2003
Guidance for Full Year 2003 • Sales increase in local currencies by 23% - 24% • Margins are expected to remain in the region of the 2002 figures 14. August 2003 39
Slide 40: Important Dates
Important Dates Investor Relations October 23, 2003 Sales 3rd Quarter 2003 February 19, 2004 Results 2003 April 23, 2004 Annual Shareholder Meeting Congresses September 20 – 24, 2003 AAP, San Francisco October 9 – 11, 2003 EAO, Vienna October 31/November 1, 2003 German ITI Congress, Cologne March 18
Slide 41: Questions & Answers
Questions & Answers 14. August 2003 41