Straumann Holding Ag · SIX:STMN
Straumann — FY2016 Earnings Presentation
55 slides from Straumann's earnings presentation, Feb 16, 2017
Slide 1: 2016 Full-year results
2016 Full-year results Conference presentation for investors, analysts & media Basel, 16 February 2017
Slide 2: Disclaimer
Disclaimer This presentation contains certain forward-looking statements that reflect the current views of management. Such statements are subject to known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of the Straumann Group to differ m
Slide 3: Full-year highlights
Full-year highlights Marco Gadola, CEO
Slide 4: Highlights in 2016
Highlights in 2016 Strongest performance in 8 years in terms of revenue growth and operating profit Acceleration from last year, widening gap to main competitors #1 position in premium underpinned; 3rd largest producer of non- premium implants Additional markets and segments entered New pr
Slide 5: Excellent all-round performance in 2016
Excellent all-round performance in 2016 REVENUE GROWTH BUSINESS STRONGEST REGIONS North America & +13% organic1 Double-digit growth APAC +15% in CHF across all businesses; North America (+16%1) main growth Instradent achieves triple-digit increase contributor; Asia/Pacific fastest growing (+20%1) PR
Slide 6: Operating margin expands further
Operating margin expands further Revenue growth EBIT margin (%) Earnings per share excl. acquisition excl. exceptionals excl. exceptionals and and FX effect and FX effect one-time effects +13.1% +120bps +30% organic 24.8 917.5 23.6 11.94 811.0 9.19 2015 2016 2015 2016 2015 2016 1 6 1 2016 EPS benefi
Slide 7: Positive trend continues in Q4
Positive trend continues in Q4 North America EMEA 28% of Group 45% of Group 16.0 15.6 APAC 8.0 9.1 16% of Group 20.5 19.7 Q4 12M Q4 12M LATAM Straumann Group 11% of Group Q4 12M 13.0 13.1 15.0 14.6 Q4 12M Q4 12M 7
Slide 8: Growth strategy pays off
Growth strategy pays off Organic revenue growth 2012-16 Operating profit and margin 2012-16 18% 250 24.8% 30% 23.3% 200 20.9% 13% 18.2% 20% 150 14.9% 8% 100 10% 3% 50 0 0% 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 -2% Straumann Group Premium market Operating income Exceptionals Underlying EB
Slide 9: Bolstered leading position in an attractive market
Bolstered leading position in an attractive market Global dentistry market Global market for implant dentistry worth CHF 24bn in 20161 worth CHF 3.5bn in 20162 Dental specialties General (implants/endo/ortho) Others (400+) dentistry Henry Schein Danaher (Nobel Biocare, (Camlog, BioHorizons) Alpha-Bi
Slide 10: Business and regional review
Business and regional review Peter Hackel, CFO
Slide 11: Strong expansion across all regions
Strong expansion across all regions Revenue development (CHFm, rounded) Regional share of 14.9% organic growth in CHF 13.1% organic 12% LATAM 12.6 917.5 25.1 34.6 24% 34.2 APAC 6.7 5.7 811.0 798.6 32% North Change in organic growth America 9.1% 15.6% 19.7% 14.6% 32% EMEA Revenue FX effect M&A effect
Slide 12: EMEA robust – North America impressive
EMEA robust – North America impressive EMEA Revenue change (organic) Robust Q4 with generally positive results 56% Strong results in the UK, Russia, Italy, 11.1% France and Scandinavia – Germany solid 9.4% Positive uptake of botiss products 45% of Group 8.5% 8.3% 7.7% 8.0% continues – biomater
Slide 13: Double-digit growth in Asia and Latin America
Double-digit growth in Asia and Latin America APAC Revenue change (organic) Growth increased sequentially; all 20.0% 21.0% 20.2% 56% 20.5% subsidiaries posted 2-digit growth 17.0% >50% of growth was generated in China; 13.2% Anthogyr addition well received 16% of Group Strong growth in Japan d
Slide 14: Double-digit growth in all businesses
Double-digit growth in all businesses; Implants contribute two thirds of overall growth Implants Restorative Biomaterials 14
Slide 15: Key financials at a glance
Key financials at a glance in CHF million (rounded) FY 2016 FY 2015 Δ % / bps Reported Exceptionals excl. Reported excl. excl. exceptionals excl. FX and Exceptionals exceptionals and FX exceptionals Revenue 917.5 798.6 805.3 Organic growth in % 13.1% 9.1% Gross profit 718.5 614.9 (13.1) 634.4 13% ma
Slide 16: Investments in production and third-party products constrain gross margin
Investments in production and higher share of third- party products constrain gross margin Change in % (30 bps) (50 bps) -2.5 1.6 0.4 1.6 0.2 78.8 77.0 78.3 Gross profit Business FX effect Adj. gross Higher Plant Material Reported margin 2015 combination profit margin volume/price utilization & labo
Slide 17: EBIT margin expands by another 120 base points
EBIT margin expands by another 120 base points In % +160bps +120bps 3.0 0.0 0.4 -0.5 1.6 -1.3 24.8 23.6 21.6 Reported Business FX effect Adjusted Change in Expansion of R&D, Other income Reported 2015 EBIT combination 2015 EBIT gross margin distribution Marketing & 1 2016 EBIT margin exceptional mar
Slide 18: Net profit jumps 29%
Net profit jumps 29% In CHF m +42.1m +29.1% 42.8 10.7 -23.0 12.9 41.5 73.2 144.7 229.6 186.8 Net profit Net profit margin margin 71.5 18.1% 20.4% Reported Business Adjusted EBIT Financial Associate Income Underlying One-time Reported 2015 net combination 2015 net improvement result result taxes 2016
Slide 19: Investments constrain free cash flow
Investments in production, portfolio and geographic expansion constrain free cash flow In CHF m 38.5 -11.6 -14.4 -24.9 CHF 20m inventory increase due CHF 16m thereof 151.1 to extension of product breath related to various pre- 138.7 (incl. digital equipment) and the payment as well as opening of new
Slide 20: Dividend raised
Dividend raised Based on the results and positive developments in 2016, the Board proposes a dividend increase to CHF 4.25 per share (2015: CHF 4.00) Dividend is payable on 13 April 2017 (ex-dividend date: 11 April 2017) Going forward, the Board’s intention is to increase the dividend per shar
Slide 21: Update on strategic progress
Update on strategic progress Marco Gadola, CEO
Slide 22: New branding concept
New branding concept Germany (100%) Switzerland (44%) Canada (55%) Brazil (100%) Germany (51%) Spain (30%) Canada (30%) USA (12%) France (30%) Turkey (50%) (joint vent.) Germany South Korea South Korea India (100%) Taiwan (49%) Germany Austria (49% joint venture) Premium Technology & manufacturing p
Slide 23: Straumann Group united presence at Latin America's biggest congress
Straumann Group united presence at Latin America’s biggest congress Straumann & Neodent double- branded booth at CIOSP (São Paulo) in February attract thousands of visitors Both brands exceed sales targets Between stands, digital solutions team presents digital workflow, Straumann C-series cha
Slide 24: Our three strategic priorities
Our three strategic priorities Drive a high performance culture and organization Become THE Total Solution Provider for Tooth Replacement Target unexploited growth markets & segments 24
Slide 25: Strategy in action – evidence of cultural change
Strategy in action – evidence of cultural change Culture targets set in 2014, program to drive a high performance culture A quarter of our staff around the world have participated; goal to include all employees by the end of 2018 Clear indications of cultural change: − Global staff survey: ~90
Slide 26: Investment in people to support and drive growth
Investment in people to support and drive growth Employees by region (in %)2 Global staff increased by 326 to 37971 − New jobs in growth markets/projects − Production expansion to meet demand − R&D to drive strong development pipeline − Incorporation of new businesses 70 new jobs created in Swit
Slide 27: Our three strategic priorities
Our three strategic priorities Drive a high performance culture and organization Become THE Total Solution Provider for Tooth Replacement Target unexploited growth markets & segments 27
Slide 28: Further steps initiated to become a 'Total Solution Provider'
Further steps initiated to become a ‘Total Solution Provider’ Tooth replacement market segments (in CHF A CHF 7bn addressable market million) 3000 Further steps initiated to become a ‘Total Solution Provider’ 2000 Digital dentistry – from CT/DVT imaging and intra-oral scanning) in 1000 Customi
Slide 29: How our partners support this ambition
…and how our partners support this ambition Implant workflow Tooth replacement workflow To ta l solution provider 29
Slide 30: Expanding into non-traditional segments – doubling addressable market
Expanding into non-traditional Straumann segments – doubling our addressable market Combined implant market US & Germany (approx. 3.2m implants1) Fully tapered Bonel Level Tissue Level Parallel walled Apcially taperd Bonel Level 1'060 2015 Tissue Level Bonel Level 2007 Tissue Level 1986 -200 300 800
Slide 31: Leading innovation in esthetic, metal-free implant solutions
Leading innovation in esthetic, metal-free implant solutions Two-piece ceramic solution expected Straumann invests CHF 8 million in near term – pending clinical and joint venture to develop ceramic regulatory outcomes components for dental implant systems that are produced by injection moulding
Slide 32: Rodo's innovative retention device comes to market
Rodo’s innovative retention device comes to market Rodo Medical receives FDA clearance for its screw- less, cement-free retention device for dental prosthetics Innovative abutment system using memory metal clip to attach restorations has received positive customer feedback Commercialization of
Slide 33: A stocked innovation pipeline
A stocked innovation pipeline Project Key benefit target Rollout Highlights from Straumann’s development pipeline. Introduction/rollout dates may be subject to positive clinical results and regulatory clearances, and 33 barring unforeseen circumstances.
Slide 34: Our three strategic priorities
Our three strategic priorities Drive a high performance culture and organization Become THE Total Solution Provider for Tooth Replacement Target unexploited growth markets & segments 34
Slide 35: Medentika fully consolidated since January
Medentika fully consolidated since January Highly successful partnership with fast-growing provider of attractively-priced 3rd party prosthetics and value implants Founding shareholders continue to have an active role Medentika consolidated as of January 2017 (update on purchase price allocati
Slide 36: Equinox transaction closed
Equinox transaction closed Acquisition completed in December Unique opportunity to become a leading provider in a region where the need for tooth-replacement solutions is huge Annual sales of CHF 3 million in 2015 – no material impact on FY 2016 figures 36
Slide 37: Ready to market a complete chairside solution in 2017
Ready to market a complete chairside solution in 2017 Centralised milling Intra-oral scanning In-lab milling / practice lab Lab scanning Chairside or 3rd party scanners milling Scan of patient case Prosthetic design Manufacturing 37
Slide 38: Outlook 2017
Outlook 2017
Slide 39: Guidance 2017
Guidance 2017 Barring unforeseen circumstances We expect the global implant market to grow at a similar rate (3-4%) in 2017 Confident that we can continue to outperform by achieving organic1 growth in the high-single-digit range Despite further investments in strategic growth initiatives and a
Slide 40: Questions & answers
Questions & answers straumanng/oup
Slide 41: Annual Report 2016
WE CREATE Annual Report 2016 “FOR PATIENTS. 2016 ANNUAL REPORT WE CREATE OPPORTUNITIES FOR Now available online. Click here
Slide 42: Analyst and Investor breakfast at the IDS
Analyst and Investor breakfast at the IDS – get an update on our latest innovations Cologne, Date: Thursday March 23, 2017 10-14 March SAVE THE Venue: 'Dorint an der Messe' hotel (very close by the fair building) DATE Time: 08:00 – 09:00 (CET) 42
Slide 43: Calendar of upcoming events
Calendar of upcoming events 2017 Event Location 16 February Full-year results conference HQ, Basel 17 February Investor meetings & Analyst breakfast London 21 February Investor meetings Singapore 27 February Investor meetings Zurich 15 March Investor meetings Boston / New York 16 March Investor meet
Slide 44: Appendix
Appendix
Slide 45: Straumann's currency exposure
Straumann’s currency exposure Revenue breakdown FY20161 FX sensitivity CHF Average exchange rates (rounded) (+/- 10%) on full-year... Other 8% 15% 2015 2016 Trend YTD Revenue EBIT 1 EURCHF 1.07 1.09 +/- 29m +/- 18m BRL 10% 1 USDCHF 0.96 0.99 +/- 23m +/- 11m EUR 31% JPY 100 BRLCHF 29.47 28.37 +
Slide 46: Key financials H1/H2 2016
Key financials H1/H2 2016 in CHF million (rounded) FY 2016 H1 2016 H2 2016 Reported Exceptionals excl. Reported Exceptionals excl. Reported Exceptionals excl. Exceptionals exceptionals exceptionals Revenue 917.5 461.2 456.3 Organic growth in % 13.1% 13.5% 13.5% Gross profit 718.5 361.2 357.3 margin
Slide 47: 5-year development of Straumann's key financials
5-year development of Straumann’s key financials in CHF million 2012 2013 2014 2015 2016 5-year average Revenue 686.4 679.9 710.3 798.6 917.5 Organic revenue growth in % -1.0 1.2 6.4 9.1 13.1 5.8 2 Acquisiton / Divesture effect in % -0.6 -0.8 0.0 9.5 0.8 1.8 Change in l.c.% -1.6 0.4 6.4 18.6 13.9 7.
Slide 48: 3rd investor perception survey
3rd investor perception survey Main results from our perception survey in December 2016
Slide 49: Survey demographics
Survey demographics: ...by job ...by country 4% 12% 5% 23% UK Fund Manager US 13% Scandinavia Buy-side analyst Canada 49% 5% France Sell-side analyst 2% 3% Switzerland Equity sales 55% 3% Germany 25% Other 49 We conducted our 3rd annual perception survey (buy- and sellside) in December 2016 with 75
Slide 50: Shareholding and valuation methods
Shareholding and valuation methods Are you a shareholder? Most popular valuation toolbox Price to earnings multiple DCF 36% EV / EBITDA 41% CFROI PEG EVA 10% 13% HOLT FCF Yield We were invested in the past, but not now DDM Don't want to comment Historical M&A multiples We never owned STMN shares We
Slide 51: Our strategic priorities
Our strategic priorities Drive a high performance culture 100.0 and organization 71.5 % of promoters: Respondents picked 90.4 top 2 option out of 5 Become TSP ( one stop shop ) 85.7 choices Target unexploited growth markets 80.0 (India, Russia, Iran , Argentina etc.) 78.6 86.7 Target non -premium of
Slide 52: Future market growth
Future market growth Total market growth by by value in 2017-2020 I think that global implant prices (ASP) will… (in % of respondents) (in % of respondents) 1-3% 1-3% 4-6% 7-9% Low double-digits 0 10 20 30 40 50 60 70 80 Questions: What do you reckon will be the annual (value) growth of the global t
Slide 53: Capital deployment
Capital deployment What would be your preference regarding the company's Why are you not invested? capital deployment? (in % of respondents) (multiple answers possible; (in % of respondents) I like the current stable payout of CHF 4.00 Numerous small partnerships & acquisitions 10% I like share buyb
Slide 54: Your contacts
Your contacts Corporate Investor Relations Fabian Hildbrand Tel. +41 (0)61 965 13 27 investor.relations@straumann.com Corporate Communications Mark Hill Thomas Konrad Tel. +41 (0)61 965 13 21 Tel. +41 (0)61 965 15 46 mark.hill@straumann.com thomas.konrad@straumann.com 54
Slide 55: Thank you
Thank you investor.relations@straumann.com