Slide 1: Investor roadshow post FY2017
Investor roadshow post FY2017 Samantha Cheetham CEO John Slaviero CFO / COO
Slide 2: Agenda
Agenda •Company overview •FY17 highlights •Product categories •Key geographies •Financial performance •Strategy and outlook 2 2
Slide 3: SDI – Your Smile. Our Vision.
SDI – Your Smile. Our Vision. • Long successful operating history – founded in 1972 and listed on ASX in 1985 and Australia’s largest dental manufacturer • SDI conducts research and development of specialist dentist materials undertaking the development, manufacturing and marketing of dental restora
Slide 4: Positioned in key dental markets
Positioned in key dental markets Australia - Melbourne Brazil – Sao Paolo Manufacturing Packaging plant R&D Sales, warehouse and Corporate, sales and distribution to Brazil and marketing South America Local Distribution and FTEE: 25 Direct Exports FTEE: 183 Germany - Cologne USA – Chicago Sales, war
Slide 5: Financial highlights
(Riva Light Cure HV) Financial highlights Aviso +tt+ tt44% (Riva Light Cure) (Riva Light Cure HV) ) ionglass
Slide 6: FY17 Highlights
FY17 Highlights Sales v EBITDA • NPAT of $5.6m within guidance 80.00 74.08 74.07 18.00 68.66 16.00 70.00 • Aesthetic sales up 12% in local currency (9% in AUD) 63.33 15.40 14.00 60.00 56.63 • Whitening sales up 7% in local currency (4% in AUD) 12.00 50.00 12.30 12.50 • Australian direct export sales
Slide 7: Financial overview
Financial overview 20.8 • Long term earnings trend is positive 17.9 16.5 16.9 • FY2017 profit and margin unfavorably impacted by currency 16.3 15.4 • FY2017 saw stronger sales growth in emerging markets, 12.3 12.5 which are generally lower margin regions, partially offset 10.8 9.2 by supportive mix
Slide 8: Dividends growth and no net debt
Dividends growth and no net debt • Net cash position with strong free cashflow • Increased dividend and payout ratio reflective of balance sheet strength and the board’s confidence 6.4 6.4 5.5 5.2 4.7 4.7 4.0 4.4 4.0 3.1 2.3 2.0 2.6 2.1 1.4 1.7 0.7 0.5 ‐0.3 2013 2014 2015 2016 2017 EPS (cents) DPS (
Slide 9: Product categories
Product categories 9
Slide 10: Product sales mix
Product sales mix Product Category Sales Growth in Local Currency Growth in AUD Total AUD Sales Aesthetics 12% 9% 33% • Aesthetics and whitening categories now account for Equipment (4%) (3%) 9% Whitening 7% 4% 27% 60% of sales (CAGR 16.4% p.a. 2013 to 2017) Amalgam (7%) (9%) 31% • Growth in Glass I
Slide 11: Competitive landscape
Competitive landscape whitening aesthetics equipment amalgam 11
Slide 12: Product portfolio
Product portfolio whitening aesthetics equipment amalgam 12
Slide 13: Aesthetics “the white fillings”
Aesthetics “the white fillings” • $2.6bn market – SDI has 1% of market • Composites – competitive market and the largest market within Aesthetics • Glass Ionomers – fewer competitors with 3M and GC the main players • SDI is continually innovating in this segment Composites: 2014, 2015, 2016 Glass io
Slide 14: Whitening
Whitening • $550m market (via dentists) - SDI has 4% market share (45% share in Australia) • Ultradent and Philips are the main competitors • SDI’s leading brand is Pola • New branding rollout planned • Continual innovation required 14
Slide 15: Small equipment
Small equipment • $140m market – SDI has 8% market share • Many competitors, especially from China • SDI’s original Radii was a market leader in 2004. SDI is known for high quality curing lights with the Radii brand very strong • New product, Radii Xpert, first shipment is in September 2017 15 • USP
Slide 16: Research, innovation, results
Research, innovation, results • FY17 product releases • Aura Easy - composite • Pola Luminate - tooth whitening - December 2016 • Riva Cem - a paste/paste cement - March 2017 • Industry trade show product launches (Germany) – March 2017 • Radii Xpert – small equipment - April 2017 • 1 – 2 new produc
Slide 17: Key geographies
Key geographies permite “abs
Slide 18: Geographical business units
Geographical business units Sales by reporting Growth in Growth in Total AUD • Double digit growth in the Australian office was primarily business unit Local AUD Sales Currency due to strong direct exports to the emerging markets Aust. Sales (incl. 11% 9% 35% Direct Exports) North America (7%) (10%)
Slide 19: Geographical sales
Geographical sales Sales by geographical location A$(m) 25.8 25.5 20.9 North America Europe 18.9 FY17 $18.9m, FY17 $25.5m, -9.6% -1.2% 13.1 12.5 Middle East/Africa 9.8 8.9 FY17 $6.8m APAC 6.8 +13.3% FY17 $13.1m, 6.0 +4.8% South America FY17 $9.8m, +10.1% APAC Middle East & North America South Americ
Slide 20: North America
North America • $1.5b market with 150,000 dentists – SDI has 1.5% market share • 39% of SDI’s FY17 Amalgam sales were to US (vs 44% FY16) • Transition with new sales management and reps through FY17 • Key success factors: • Sales force effectiveness - from field sales force to internal sales organis
Slide 21: APAC
APAC • $400m market with 205,000 dentists – SDI has 3% market share • Accounts for 17% SDI sales and is the fast growing region with Australia and New Zealand strong established markets • Higher acceptance of new technologies by dentists compared to other regions • Strategy is to expand into Asia –
Slide 22: Europe
Europe • $1.1b market with 420,000 dentists - SDI has 2% market share • Growing sales team • Successful International Dental Show in March 2017 • Key countries – UK, Spain and France • GBP weakness after Brexit reduced margins and revenues • Key Success factors: • Moving brand awareness from amalgam
Slide 23: Latin America
Latin America • $250m market with 340,000 dentists – SDI has 7% market share • Brazilian operation packs products for distribution throughout Brazil • Expanding middle class; more opportunity in the private market instead of unreliable government tenders • Very aesthetically orientated • Successful
Slide 24: Financial performance
Financial performance 24
Slide 25: Profit & Loss
Profit & Loss PROFIT & LOSS • 2.3% sales increase in local currency (#039;000) FY17 % FY16 % Change Revenue • Strong sales in Aesthetics and Sales revenue 74,066 100.0% 74,077 100.0% (0.0%) Whitening products were offset by Cost of goods sold (29,625) (40.0%) (27,988) (37.8%) 5.8% Amalgam sales (down 9
Slide 26: Balance Sheet
Balance Sheet • Focus on inventory management lead BALANCE SHEET (#039;000) FY17 FY16 Change Current assets to improved stock turns Cash & equivalents 5,754 6,001 (4.1%) Trade and receivables 15,451 15,619 (1.1%) • Receivable days have increased due Inventories 17,135 18,365 (6.7%) to proportionally hi
Slide 27: Cash Flow
Cash Flow CASH FLOW STATEMENT (#039;000) FY17 FY16 Change Receipts from customers 73,110 72,533 0.8% Payments to suppliers and • Strong free cash flow employees (60,580) (61,272) (1.1%) Other revenue 226 258 (12.4%) • Purchase of Land for $0.5m Interest and other finance costs paid (219) (323) (32.2%)
Slide 28: Strategy and outlook
Strategy and outlook 28
Slide 29: SDI is transforming
SDI is transforming • Our culture is be focused strategically and our values are embedded in the way we work. SDI is changing from within • 5 strategic priorities: 1. Operational excellence 2. Innovation and product quality 3. Dynamic brand and culture 4. High performing teams 5. Safety always • Inn
Slide 30: Outlook
Outlook The most significant product release for FY18 will be Radii Xpert (curing light) with sales expected to contribute from Sept. Increasing sales to special markets including large group practices, corporates and public institutions Growth opportunity in developing markets as demand for q
Slide 31: Disclaimer
Disclaimer This Presentation contains summary information about SDI Limited (SDI) and its subsidiaries and their activities. The information in this Presentation does not purport to be complete. It should be read in conjunction with SDI’s other periodic and continuous disclosure announcements lodged
Slide 32: Appendices
•Appendices 32
Slide 33: Average currency movements
Average currency movements Favourable / 2015 / 16 2016 / 17 (unfavourable) USD / AUD 0.73 0.75 (3%) EUR / AUD 0.66 0.69 (5%) GBP / EUR 0.75 0.86 (15%) CAD / USD 0.76 0.75 1% BRL / AUD 2.70 2.43 10% 33