Straumann Holding AG · SIX:STMN
Straumann — FY2003 Earnings Presentation
31 slides from Straumann's earnings presentation, Feb 19, 2004
Slide 1: Full Year Results 2003
Full Year Results 2003 Analyst- & Media Conference Zurich, 19 February 2004
Slide 2: Disclaimer
Disclaimer While Straumann is making great efforts to include accurate and up-to-date information, we make no representations or warranties, expressed or implied, as to the accuracy or completeness of the information provided in this handout and disclaim any liability for the use of it. The statemen
Slide 3: Table of contents
Table of contents • Highlights 2003 • Financial Results 2003 • Outlook 2004 19 February 2004 3
Slide 4: Highlights 2003
Highlights 2003 • Continued strong, above-market sales growth of 28% in local currency resulting in further market share gain (especially in US) • Further growth of customer base by 20% to approx. 72‘000 customers worldwide • Increase of net profit and operating cash flow by 44% and 69% respectively
Slide 5: Continued attractive industry growth
Continued attractive industry growth Global implant dentistry market in USD million CAGR >15% 1’850 CAGR 15-17% 1’030 870 Straumann 730 CAGR 2000-03 640 22% 2000 2001 2002 2003 2007 19 February 2004 Source: Straumann estimates 5
Slide 6: Europe and North America accounting for more than 80% of industry
Europe and North America accounting for more than 80% of industry Regional implant dentistry markets in 2003 (100% = USD 1’030 million) Rest of World Asia Pacific 2-4% 9-11% 50-55% 35-40% Europe North America 19 February 2004 Source: Straumann estimates 6
Slide 7: Strengthening of overall market position
Strengthening of overall market position Global implant dentistry market shares in 2003 (100% = USD 1’030 million) Others 15% Nobel Biocare 29% Dentsply 8% Zimmer 9% Straumann gained approx. 1% market share in 2003 14% 25% Biomet 3i Straumann 19 February 2004 Source: Straumann estimates (based on en
Slide 8: Improved market ranking in North America
Improved market ranking in North America Straumann market position and share in 2003 Market position Market share Region 1 2 3 4 Europe ~ 30% North America ~ 20% Asia/Pacific ~ 30% RoW Straumann reached no. 3 position in the US in 2003 19 February 2004 Source: Straumann estimates 8
Slide 9: Broadening of customer base and acceleration of education efforts
Broadening of customer base and acceleration of education efforts Customers Customers Courses Courses conducted conducted Course Course participants participants 20% 24% 25% 72’000 2’100 50’000 60’000 1’700 40’000 2002 2003 2002 2003 2002 2003 19 February 2004 9
Slide 10: Foundation for biologics portfolio in place
Foundation for biologics portfolio in place Hydrogel Carrier Bioactive Agent Tissue regeneration Matrix Licensing and Supply Enamel Matrix Derivative Agreement with protein through acquisition of 19 February 2004 10
Slide 11: Table of contents
Table of contents • Highlights 2003 • Financial Results 2003 • Outlook 2004 19 February 2004 11
Slide 12: Growth acceleration and higher profitability
Growth acceleration and higher profitability CHF million 2002 2003 H1 2003 * H2 2003 Net sales 274.9 343.9 163.4 180.4 growth in % CHF 18.7 25.1 15.6 35.1 growth in % locals 22.6 28.1 21.1 35.2 Cost of goods sold 54.4 69.1 31.8 37.3 in % of net sales 19.8 20.0 19.5 20.7 Gross profit 220.8 275.6 132.
Slide 13: Implants key but Biologics starting to contribute
Implants key but Biologics starting to contribute CHF million Q1 Q2 Q3 Q4 2003 2003 2003 2003 2003 Implants Division 79.6 83.8 79.7 91.0 334.1 growth in % CHF 17.5 13.9 29.4 26.4 21.5 growth in % locals 24.6 18.1 29.1 27.0 24.4 Biologics Division 4.9 4.9 9.8 growth in % CHF 9.6 -0.6 4.3 growth in %
Slide 14: All regions contributing to growth
All regions contributing to growth CHF million Q1 Q2 Q3 Q4 2003 2003 2003 2003 2003 Europe 50.9 53.6 49.4 59.8 213.7 growth in % CHF 19.0 21.4 38.6 38.9 29.0 growth in % locals 20.3 18.7 33.5 34.1 26.3 North America 19.8 20.3 25.5 24.4 90.1 growth in % CHF 15.3 -2.0 46.3 25.6 20.4 growth in % locals
Slide 15: Direct sales model prevalent and reliance on Europe
Direct sales model prevalent and reliance on Europe Straumann total net sales in 2003 (100% = CHF 344 million) Sales Sales by by distribution distribution channels channels Sales Sales by by region region Rest of Asia World Distributors Pacific 17% 10% 2% North America 26% 62% 83% Subsidiaries Europ
Slide 16: Strong net profit increase partly due to reduced tax rate
Strong net profit increase partly due to reduced tax rate CHF million 2002 2003 Change in % Operating profit (EBIT) 75.1 96.9 29.1 margin in % 27.3 28.1 Financial and -0.5 2.0 non-operating result Tax expense and 18.6 18.6 minority interests tax rate in % 24.2 18.9 Net profit 56.0 80.3 43.5 margin i
Slide 17: Improvements in net working capital
Improvements in net working capital CHF million 2002 2003 Change in % Inventory 38.0 34.7 -8.9 in % of net sales 14.1 10.6 Inventory Days 256 189 -26.2 Receivables 33.6 42.4 26.2 in % of net sales 11.4 11.1 Receivables Days 41 40 -2.9 Other current assets 7.2 8.7 22.4 in % of net sales 2.6 2.3 Curre
Slide 18: Strong growth in operating cash flow and investing activities
Strong growth in operating cash flow and investing activities Net Net cash cash flow flow from from operating operating activities activities Cash Cash flow flow from from investing investing activities activities 69% 272% 118.0 -84.8 69.7 -22.8 2002 2003 2002 2003 Cash Cash flow flow from from fina
Slide 19: Solid returns and value generation
Solid returns and value generation 2002 2003 Return on Equity (ROE) 33.3% 36.3% Return on Capital Employed (ROCE) 41.1% 41.1% Economic profit 38.7 59.2 Change in economic profit 4.7 20.5 in % of net sales 14.1 17.2 19 February 2004 19
Slide 20: Additional jobs created with focus on sales force
Additional jobs created with focus on sales force Total Total employees employees(heads) (heads) Sales Sales representatives representatives (heads) (heads) 20% 903 750 26% 161 203 2002 2003 2002 2003 Change in employee 7% -1% productivity * 19 February 2004 * Calculated based on average full time e
Slide 21: Disclosure beyond good corporate governance
Disclosure beyond good corporate governance • Separation of responsibilities between Board of Directors and Executive Management • Incentivation and shareholder alignment with equity and option plans at all levels • Total compensation 2003 – Board of Directors CHF 1’099 thousand – Executive Manageme
Slide 22: Extraordinary dividend proposal due to anniversary year
Extraordinary dividend proposal due to anniversary year • Proposal for appropriation of retained earnings: – Ordinary dividend of CHF 24 million or CHF 1.55 per share – Anniversary dividend of CHF 24 million or CHF 1.55 per share • Resulting payout ratio of 60% of net profit • Annual General Meeting
Slide 23: Sustainability taken seriously
Sustainability taken seriously • Support of research on socio-economic advantages of dental implant treatment • Commitment to Fasmed Code of Business Conducts established in 2003 • Implementation of TÜV certified Integrated Management System – IMS • ISO 14001 environmental certification process comp
Slide 24: Table of contents
Table of contents • Highlights 2003 • Financial Results 2003 • Outlook 2004 19 February 2004 24
Slide 25: Focus in 2004
Focus in 2004 • Launch products in Implants and Biologics Division as planned and prepare product introductions for 2005 • Expand US market position and prepare migration to integrated US organization • Implement new positioning campaign and branding strategy • Finalize Biora integration and exploit
Slide 26: Continuous stream of product initiatives
Continuous stream of product initiatives 2003 2003 2004 2004 2005 2005 Implants Ceramics and Extension of prosthetics • Prosthetics prosthetics planning portfolio for esthetics procedures Extension of Edentulous range Portfolio improvements prosthetics portfolio upgrade / completion in all indicatio
Slide 27: US expansion on track
US expansion on track • Selection of site for new US headquarter, research, training and production facility: – Located in Boston medical technology cluster (Andover, MA) – Proximity to current headquarter location avoiding loss of critical human capital – Combination of research, training, customer
Slide 28: Leveraging brand equity and sharpening image
Leveraging brand equity and sharpening image • Start of new company positioning campaign based on the slogan “Simply doing more”, at AO Congress 2004: – Clear communication of company values – Stronger differentiation of company appearance • Introduction of simplified brand structure with Straumann
Slide 29: 50th anniversary of Straumann
50th anniversary of Straumann • Celebrate with partners and friends: - AO Congress, San Francisco - EAO Congress, Paris • Preserve and build on strong Straumann values • Approach future with confidence 19 February 2004 29
Slide 30: Outlook 2004
Outlook 2004 • We expect the overall implant dentistry market to continue to grow above 15% annually in the coming years • Provided this market growth, we expect our sales to grow at approx. 23–24% in local currencies for the full year 2004 • The operating margin is expected to further improve to 29
Slide 31: Important dates 2004
Important dates 2004 Key Keyreporting reportingdates dates • April 22 Press Release Sales Q1 • April 23 Annual General Meeting • August 12 Analyst and Media Conference H1 • October 21 Press Release Sales Q3 Selected Selected congresses congresses • March 18 – 20 AO, San Francisco • April 22 – 24 Ost