Demant A/s · OMXCOP:DEMANT
Demant A/s — William Demant Holding — Handelsbanken Tech Lunch (April 2004)
20 slides from Demant A/s's conference presentation, Apr 20, 2004
Slide 1: William Demant Holding A/S Handelsbanken Tech Lunch
William Demant Holding A/S Handelsbanken Tech Lunch 20 April 2004
Slide 2: Today's theme
Today’s theme Growth drivers for the hearing aid industry ….. and William Demant Holding
Slide 3: Extract from Mission Statement
Extract from Mission Statement The Group will … endeavour to increase its value through continued growth in revenues and results.
Slide 4: William Demant Holding - a history of growth (DKK)
William Demant Holding - a history of growth Revenue EBIT DKK million DKK million 9% % R: 1 : 26 CAG 3924 G R 3870 CA 810 856 3506 683 2960 583 1884 336 1999 2000 2001 2002 2003 1999 2000 2001 2002 2003
Slide 5: William Demant Holding - a history of growth (USD)
William Demant Holding - a history of growth Revenue EBIT USD million* USD million* R: 21% 587 130 CAG : 2 8% 497 G R CA 103 420 366 82 72 270 48 1999 2000 2001 2002 2003 1999 2000 2001 2002 2003 *Revenues in DKK translated at average USD/DKK rates for given year
Slide 6: Starting points for discussion
Starting points for discussion • The market: – Unreliable statistics make it difficult to verify trends and identify impact of various growth factors – Hearing aid market is measured in units - not value – Approximately 6.5 million units per year - wholesale value of USD 1.8 - 2.1 billion – 6 larges
Slide 7: Growth factors for the hearing aid industry
Growth factors for the hearing aid industry Value drivers Increase Increase in in ASPs ASPs Increased Increased demand demand Emerging Emerging markets markets Binaural Binaural fittings fittings Prevalence Prevalence ofof Volume drivers hearing hearing loss loss Demographic Demographic development
Slide 8: Growth factors: demographic development and prevalence of hearing loss
Growth factors for the hearing aid industry Demographic Demographic • Core customer group (>65 years) to development development increase by 2% p.a. until 2025 Prevalence Prevalence ofof hearing • Aging is most important cause of hearing hearing loss loss impairment - more than 85% of cases • Increa
Slide 9: Growth factors: binaural fittings and emerging markets
Growth factors for the hearing aid industry Binaural Binaural • Important contribution to growth on US fittings fittings market last 20 years - binaural fitting rate increased from 23% in 1983 to 71% in 2001 • The binaural fitting rate is significantly lower in Europe than US, probably below 50% Eme
Slide 10: Growth factors: increased demand
Growth factors for the hearing aid industry Increased Increased • Development of better products - better at demand demand meeting the demands of the hearing impaired. Examples: – only 30% are satisfied with use of hearing aids in noisy situations and 95% of users looks for an improvement when liste
Slide 11: Growth factors: increase in ASPs
Growth factors for the hearing aid industry Increase Increase in in ASPs ASPs • Increased wealth among core customer group • Up grade of cheapest products from analogue to digital still ongoing • Lack of sensitivity to price pressure: Segments User benefits Premium Knowledge Audiology Advanced Diffe
Slide 12: Growth factors: new technology platforms and ASPs
Growth factors for the hearing aid industry Increase Increase in in ASPs ASPs • New features/technology platforms allow for higher prices: Artificial Artificial Intelligence Intelligence Open Open fittings fittings Adaptive Adaptive Directionality Directionality Digital Digital Non-linear Non-linear
Slide 13: Growth factors: value chain considerations
Growth factors for the hearing aid industry Increase Increase in in ASPs ASPs • Value chain considerations: Production Production & & Retail Retail End-users End-users wholesale wholesale • 6 large manufacturers • More than 20,000 • Clear demand for • Further consolidation customers - highly better
Slide 14: William Demant Holding on growth
William Demant Holding on growth • We expect the market to grow 3-5% medium to long term • We expect to outgrow the market over the next five years and thus increase market share Research & development Marketing WDH core growth drivers Distribution
Slide 15: William Demant Holding on growth: research & development
William Demant Holding on growth • We will invest more than DKK 300 million Research & on research & development in 2004 development • High efficiency in R&D organization • Eriksholm - the only manufacturer owned research center in industry DKK million • Constant focus on addressing the needs R: 17%
Slide 16: New products since 2002
William Demant / Holding New products since 2002 ( (mag sumo [Atlas flair re bernafon® innovative Haring Sefutions
Slide 17: William Demant Holding on growth: marketing
William Demant Holding on growth • Development of marketing concepts closely integrated with product Marketing development • Specific tools developed to support sale of products by dispensers – CAPS - Client Assisted Product Selection • Customer relationships are considered partnerships - we supply
Slide 18: William Demant Holding on growth: distribution
William Demant Holding on growth • Strong focus on developing distribution power through organic growth and through Distribution strategic acquisitions • Own distribution in all major markets • Long term presence in emerging markets such as Poland, Russia and South America Most important acquisition
Slide 19: Guidance - 2004
Guidance - 2004 • Organic growth of 7-10% • Revenues of DKK 4.0 billion (at January currency rates - negative impact of 4% compared to realised rates 2003) • Core business to grow faster than other activities • Growth in EBIT despite centenary celebration costs of DKK 30 million and significant nega
Slide 20: www.demant.com
William Demant / Holding www.demant.com
William Demant Holding — Handelsbanken Tech Lunch (April 2004) on 6ix