Demant A/s · OMXCOP:DEMANT
Demant A/s — William Demant Holding — Investor Presentation (September 2002)
24 slides from Demant A/s's investor presentation, Sep 17, 2002
Slide 1: Corporate Presentation: A growth story
Corporate Presentation William Demant Holding A/S A growth story 1
Slide 2: Background information
Corporate Presentation Background information The William Demant Holding Group develops, manufactures and sells products and equipment designed to aid the hearing and communication of individuals. Its core business is hearing aids. 2
Slide 3: Background information: Group Structure
Corporate Presentation Background information Group Structure: 3
Slide 4: Extract from Mission Statement
Corporate Presentation Extract from Mission Statement The Group will … endeavour to increase its value through continued growth in revenues and results. 4
Slide 5: Sources of growth
Corporate Presentation Sources of growth Organic growth Internal Acquisitions within core businesses Acquisitions within related businesses Continued Technology shifts growth Demographic changes External Penetration New markets 5
Slide 6: Sources of growth
Corporate Presentation Sources of growth Organic growth Internal Acquisitions within core businesses Acquisitions within related businesses Continued Technology shifts growth Demographic changes External Penetration New markets 6
Slide 7: Growth history, revenues
Corporate Presentation Growth history, revenues DKK million 4.000 3.506 2.960 1.884 1.613 1.413 1997 1998 1999 2000 2001 F2002 CAGR (1997-2001) = 26% 7
Slide 8: Organic growth drivers
Corporate Presentation Organic growth drivers • Product driven industry Research and development • Ability to bring innovative and 270 DKK million 253 competitive products and concepts to market essential for 198 continued success 159 146 • Highest R&D spending in the 118 industry • Shorter and shor
Slide 9: Organic growth history
Corporate Presentation Organic growth history 21% 16% 15% 14% 11% 11% 1997 1998 1999 2000 2001 F2002 Average growth 1997-2001 = 14.6% 9
Slide 10: Organic growth history
Corporate Presentation Organic growth history 21% 16% Organic growth driven by: 15% 14% • major product launches 11% 11% 1997 1998 1999 2000 2001 F2002 Average growth 1997-2001 = 14.6% 10
Slide 11: Organic growth history
Corporate Presentation Organic growth history 21% 16% Organic growth driven by: 15% 14% • major product launches 11% 11% • increasing distribution power 1997 1998 1999 2000 2001 F2002 Average growth 1997-2001 = 14.6% 11
Slide 12: Organic growth drivers
Corporate Presentation Organic growth drivers • The right products at the right time and at the right price • Full-line supplier: > Sell more to existing customers > Always a suitable product for new customers Premium Reference Standard Basic 1998 1999 2000 2001 2002 12
Slide 13: Organic growth drivers: Eriksholm Research Centre
Corporate Presentation Organic growth drivers Eriksholm Research Centre • Only manufacturer to have its own independent research centre - since 1977 • Core research within psychophysics, audiology and technology B • Close collaboration with leading scientists and universities around the world • Conc
Slide 14: Growth through acquisitions
Corporate Presentation Growth through acquisitions Example: Acquisition of distribution • Goal to secure and enlarge distribution in markets and segments where insignificant prior presence • Acquisitions are not offensive moves to establish a position in retail • Acquisitions have ensured strong vol
Slide 15: Growth through acquisitions
Corporate Presentation Growth through acquisitions • More than 30 small and large acquisitions last 10 years - all within core or related businesses Most important acquisitions: Core Hidden Bernafon Hearing Avada AHAA Maico Phonic Danacom Inter- Related acustics Ear Time • Goal is to capitalise on o
Slide 16: Sources of growth
Corporate Presentation Sources of growth Organic growth Internal Acquisitions within core businesses Acquisitions within related businesses Continued Technology shifts growth Demographic changes External Penetration New markets 16
Slide 17: Organic growth vs. market growth
Corporate Presentation Organic growth vs. market growth 21% 16% 15% 14% 11% 11% Estimated market growth 1997 1998 1999 2000 2001 F2002 Average organic growth 1997-2001 = 14.6% Average est. market growth 1997-2001 = 4-6% 17
Slide 18: External growth drivers
Corporate Presentation External growth drivers Considerations: 15,0% • Growth fluctuates US market growth 10,0% • No correlation Demographic between changes US GDP market growth and GDP 5,0% growth growth 0,0% • Growth sensitive to one-off 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
Slide 19: External growth drivers
Corporate Presentation External growth drivers Volume drivers: • Increase in above 65 age group of 2% per year Demographic changes over the next 25 years • Current penetration in OECD countries of app. Penetration 15%. Improved performance of hearing aids could eventually increase penetration - but
Slide 20: External growth drivers
Corporate Presentation External growth drivers Value drivers: • Steep increases in average selling prices when technology shifts Technology shifts Analogue Programmable • Limited future impact Linear Non-linear • No future impact • Continued but decreasing Analogue Digital impact • Room for continue
Slide 21: The future
Corporate Presentation The future • We will be able to outgrow the market over the next five years and thus increase market share Demographic changes New markets 21
Slide 22: The future
Corporate Presentation The future • We will be able to outgrow the market over the next five years and thus increase market share • If growth does not materializeDemographic changes we will see even stronger cash conversion rates 700% Operating Cash Flow/Capex 611% 600% 500% 426% 400% 371% 312% 317%
Slide 23: The future
Corporate Presentation The future • We will be able to outgrow the market over the next five years and thus increase market share • If growth does not materializeDemographic changes we will see even stronger cash conversion rates 700% Operating Cash Flow/Capex 611% • Excess cash can be used for600%
Slide 24: William Demant Holding A/S
Corporate Presentation William Demant Holding A/S www.demant.com 24
William Demant Holding — Investor Presentation (September 2002) on 6ix