Slide 1: Amplifon FY 2014
Amplifon FY 2014 Emilia Trudu Investor Relations & Corporate Communication Director STAR Conference Plenary Presentation Milan, March 24th , 2015
Slide 2: Disclaimer
Disclaimer ̶ The information contained herein and other material discussed during the analysts’ presentation, particularly the ones regarding any possible or assumed future performance of the Amplifon Group, are or may be forward looking statements and in this respect they involve some risks and unc
Slide 3: FY 2014 Financial Results
Ei]amotion FY 2014 Financial Results
Slide 4: Global leader outperforming the steady growth hearing solutions market
Global leader outperforming the steady growth hearing solutions market EMEA Europe: +8.7% YoY (+8.3% at constant FX) ME & A: +198.8% YoY (+211.8% at constant FX) Americas APAC +1.9% in LC YoY +7.9% in LC YoY Hearing aid users growing steadily, but represent only ca. 20% of hearing impaired Amplifon
Slide 5: FY-2014 Financial Results: strong sales & profitability recovery
FY-2014 Financial Results: strong sales & profitability recovery FY 2014 FY 2013* Restated %on Non- % on %on Non- % on ∆ % on € millions Recurring Total Recurring Total Recurring Recurring Total Recurring Recurring Total Recurring SALES by Region REVENUE 890.9 100.0% - 890.9 100.0% 827.4 100.0% - 82
Slide 6: EMEA: robust organic growth supporting ongoing margin recovery
EMEA: robust organic growth supporting ongoing margin recovery € millions FY 2014 FY 2013* ∆% € millions Q4 2014 Q4 2013* ∆% REVENUE 617.7 100.0% 560.8 100.0% 10.2% REVENUE 193.1 100.0% 175.4 100.0% 10.1% EBITDA 73.0 11.8% 58.0 10.3% 26.0% EBITDA 35.1 18.2% 32.0 18.2% 9.6% * 2013 restated according
Slide 7: AMERICAS: business performance remains solid & profitable
AMERICAS: business performance remains solid & profitable € millions FY 2014 FY 2013 ∆% € millions Q4 2014 Q4 2013 ∆% REVENUE 140.9 100.0% 138.7 100.0% 1.6% REVENUE 39.5 100.0% 33.3 100.0% 18.6% EBITDA 26.8 19.0% 25.6 18.5% 4.7% EBITDA 8.6 21.7% 4.8 14.4% 79.0% EBIT 23.1 16.4% 21.1 15.2% 9.1% EBIT 7
Slide 8: APAC: continuing to outperform the market growth and deliver top level profitability
APAC: continuing to outperform the market growth and deliver top level profitability € millions FY 2014 FY 2013 ∆% € millions Q4 2014 Q4 2013 ∆% REVENUE 132.3 100.0% 128.0 100.0% 3.4% REVENUE 35.0 100.0% 32.3 100.0% 8.2% EBITDA 37.8 28.6% 33.5 26.2% 13.0% EBITDA 10.8 30.9% 10.0 30.9% 8.3% EBIT 26.5
Slide 9: Solid balance sheet & cash flow continue to sustain our growth strategy
Solid balance sheet & cash flow continue to sustain our growth strategy ̶ Accelerating international and footprint expansion - over 300 shops: ̶ Entrance in the Israeli market by acquiring 60% of Medtechnica Orthophone Ltd. ̶ Market leader with 30% share ̶ Acquisition of the retail chain Audika Ital
Slide 10: Strong operational cash flow & renewed focus on external growth
Strong operational cash flow & renewed focus on external growth € thousands FY 2014 FY 2013 Restated* FY 2013 Reported EBIT 90,616 68,349 68,518 D&A 47,052 48,694 48,896 Other non cash adjustments and gains/losses on sale 18,887 16,346 16,348 1. TAX refund of € 8.0 mln in Australia; Net financials -
Slide 11: Solid capital structure sustains steady profitable growth
Solid capital structure sustains steady profitable growth Net Debt to Equity Net Debt € millions € millions 442,5 248,4 248,4 ̶ €211 mln, a war chest Net Debt 17,1 ready to support strong 443,2 M&A activity Total Equity -211,1 ̶ As at 31/12/2014 the 31/12/2014 Cash Short-term Long-term Net debt Comp
Slide 12: Amplifon Group's strategy advances its business' performance profile
Amplifon Group’s strategy advances its business’ performance profile LEADER ET USA NZ ITA ME Cluster 1 IND CH Maintain/Consolidate AUS leadership & Generate Emerging Markets IS HU cash Cluster NL ~ 50 % of Group revenue Develop the Market/ BE Network expansion CO-LEADER LEADER FR < 1 % of Group reve
Slide 13: Annexes
Annexes
Slide 14: FY-2014 Amplifon Revenue Breakdown
FY-2014 Amplifon Revenue Breakdown Amplifon Revenue Breakdown € millions FY 2014 FY 2013 ∆% ∆ FX OG% Q4 2014 Q4 2013 ∆% ∆ FX OG% Italy 229.0 25.7% 225.5 27.3% 1.5% -0.1% 76.5 75.2 1.7% 0.1% France 105.9 11.9% 98.3 11.9% 7.7% 4.4% 32.3 29.2 10.6% 5.5% The Netherlands* 73.4 8.2% 65.5 7.9% 12.0% 12.0%
Slide 15: FY-2014 Income Statement
FY-2014 Income Statement FY 2014 FY 2013* Restated 1. Including € 6.8 mln financial € millions Recurring Non Total % on Recurring Non Total % on ∆ % on expenses due to the recurring Recurring recurring Recurring Recurring commissions and REVENUE 890.9 - 890.9 100.0% 827.4 - 827.4 100.0% 7.7% Operati
Slide 16: Q4-2014 Income Statement
Q4-2014 Income Statement Q4 2014 Q4 2013* Restated 1. Including € 3,8 million € millions Recurring Non Total % on Recurring Non Total % on ∆ % on related to brand recurring Recurring recurring Recurring Recurring simplification, REVENUE 267.6 - 267.6 100.0% 241.0 241.0 100.0% 11.0% Operating costs (
Slide 17: Balance Sheet: perimeter growth and favorable currency evolution
Balance Sheet: perimeter growth and favorable currency evolution 31/12/2013 31/12/2013 31/12/2013 31/12/2013 € thousands 31/12/2014 € thousands 31/12/2014 restated* reported restated* restated* Trade payables -101,788 -96,241 -96,297 Goodwill 534,822 500,680 500,680 Other payables -124,418 -117,111
Slide 18: Amplifon: Seizing the Global Hearing Solutions Opportunity
Amplifon: Seizing the Global Hearing Solutions Opportunity
Slide 19: A leadership position and right-sized for profitable growth
A leadership position and right-sized for profitable growth ̶ The only global player in a highly fragmented market ̶ 9% of worldwide market share ̶ 22 countries ̶ 2,100 corporate shops ̶ 3,200 shop-in-shop & corners ̶ 1,200 Miracle Ear franchised shops ̶ 2,000 Elite Hearing Network affiliate shops i
Slide 20: EMEA: regional growth from our Italian roots
EMEA: regional growth from our Italian roots Corporate Shop-In- Franchises Network Shops Shops Affiliates Italy 553 2,695 - - Iberia 114 39 15 - France 333 70 - - Switzerland 78 - - - UK & Ireland 139 58 - - BeLux 68 65 17 - Poland 24 1 - - Hungary 44 11 - - Germany 201 - - - Egypt 19 - - - Europe:
Slide 21: US leadership: incisive approach to a high potential market
US leadership: incisive approach to a high potential market US: Largest branded franchise network in highly fragmented market Brazil: Platform for further expansion in South America US penetration rate: ca. 25% Brazil penetration rate: <5% Corporate Shop-In- Network Franchises Shops Shops Affiliates
Slide 22: Disciplined global expansion: seizing the best opportunities
Disciplined global expansion: seizing the best opportunities Australia: 25% market share in relatively young business with in-built growth New Zealand: Undisputed leader with over 50% market share India: Established early leadership Corporate Shop-In- Network Shops Shops Franchises Affiliates and de
Slide 23: Solid balance sheet and cash flow bolster growth strategy
Solid balance sheet and cash flow bolster growth strategy Accelerating international and footprint expansion : ̶ Over 300 shops opened/acquired in 2014 ̶ Entrance in the Israeli market by acquiring 60% of Medtechnica Orthophone Ltd. ̶ Market leader with 30% share ̶ Acquisition of the retail chain Au
Slide 24: Amplifon's strategy: create shareholder value from its optimal position
Amplifon’s strategy: create shareholder value from its optimal position on the manufacturer-to-consumer value chain Creating value… ̶ Long-term profitable growth, outperforming the global hearing solutions market …Implementing a successful strategy ̶ Seize opportunities leveraging Amplifon’s complem
Slide 25: Seize opportunities leveraging complementary Best Practice medtech/retail skill sets
Seize opportunities leveraging Amplifon’s complementary Best Practice medtech/retail skill sets
Slide 26: Uniquely positioned with proven medtech and retail skills
Uniquely positioned with proven medtech and retail skills Medtech: Retail: Medical expertise Specialty skills Doctor referrals Brand, advert and with prescriptions Medical Retail marketing driven Business Market resilience penetration Amplifon 26 Seize opportunities leveraging Amplifon’s complementa
Slide 27: Best outcomes in customer hearing solutions depend on professional expertise
Best outcomes in customer hearing solutions depend on professional expertise and personalization Specialized & comprehensive audiological assessment The hearing solution life-cycle REPURCHASE Avg life-cycle: 4 years Education & counseling Fitting and personalized adaptation Free life-time hearing ca
Slide 28: Investing in our Expertise and Best Practice
Investing in our Expertise and Best Practice Building on our service leadership to establish long-lasting professional relationships with customers Ongoing priorities: ̶ Learning & development as business performance enhancer, deploy the Amplifon Expertise Model (NEXT) ̶ Highlight distinctions versu
Slide 29: Broaden and deepen "Routes to hearing solutions"
Broaden and deepen “Routes to hearing solutions” leveraging Amplifon’s regional business models and complementary Best Practice medtech/retail skill sets
Slide 30: Outperforming in a sizeable, untapped and growing market
Outperforming in a sizeable, untapped and growing market A sizeable market… …under-penetrated ̶ Over 650 million people in the world suffer with some ̶ Only 20% average penetration rate in mature markets degree of hearing impairment (source: WHO) ̶ Under-educated hearing-aid users both in mature and
Slide 31: Assessing the untapped potential
Assessing the untapped potential Current average customer age is 72 years old Baby boomers ̶ Demographic trends expand potential market ̶ BB lower first buy age: 55 years old ̶ Population growth ̶ BB new customers’ expectations: ̶ Technology savvy ̶ Longer life expectancy ̶ Expert on info data-minin
Slide 32: Leader in the largest segment of the global hearing solutions value chain
Leader in the largest segment of the global hearing solutions value chain Seizing global opportunities with Amplifon’s regional retail/wholesale business model built on best practice medtech/retail skill set RETAIL GROSS MARGIN Manufacturing Wholesale Retail WHOLESALE GROSS MARGIN MANUFACTURER RETAI
Slide 33: Broad and deep consumer coverage through our network: the Italian example
Broad and deep consumer coverage through our unrivalled & flexible network: the Italian example The Broadest and Deepest Amplifon Experience ● 2,695 shop-in-shop & corners allowing ● 553 corporate shops for more efficient geographical coverage Leveraging different store concepts depending on density
Slide 34: Incisive US approach: Franchise & Wholesale
Incisive US approach: Franchise & Wholesale Franchise Wholesale Sales Exclusive Financing Marketing Marketing Education and Territory Quality Solutions Support One-Stop Shop National Call Business Best • Broad manufacturer choices Retirement Referrals Center Workshops Practices • Competitive pricing
Slide 35: Anticipating the new end-user behaviors fosters organic growth
Anticipating the new end-user behaviors fosters organic growth - Leveraging strong know-how and deep consumer knowledge through different touch points LEAD LEADGENERATION GENERATION CONVERSION AND RETENTION - Lead generation campaigns adapted to specific country characteristics TOUCHPOINTS TOUCHPOIN
Slide 36: Continuously improve efficiency and management systems
Continuously improve efficiency and management systems
Slide 37: Group management: driving continuous improvement
Group management: driving continuous improvement 1. Realizing our competitive advantages through our HR strategy - Education & training as business performance enhancers - Capitalize on international best practices to highlight distinctions versus competitors - Attract & retain Top Performing Audiol
Slide 38: Manage capital structure and drive cash generation to support growth
Manage capital structure and drive cash generation to support growth and lead consolidation in the hearing aid industry
Slide 39: Amplifon is well positioned to lead consolidation and market growth
In a highly fragmented hearing solutions market, Amplifon is well positioned to lead consolidation and market growth Amplifon is the only global retailer MANUFACTURERS Six major players SERVICE PROVIDERS Unrivalled leadership position in terms of Thousands of small shops; volumes, revenues & geograp
Slide 40: Solid capital structure sustains steady profitable growth
Solid capital structure sustains steady profitable growth Net Debt to Equity Net Debt € millions € millions 442,5 248,4 248,4 ̶ €211 mln, a war chest Net Debt 17,1 ready to support strong 443,2 M&A activity Total Equity -211,1 ̶ As at 12/31/2014 the 31/12/2014 Cash Short-term Long-term Net debt Comp
Slide 41: Consistent cash generation supports strategic use of leverage
Consistent cash generation supports strategic use of leverage FCF margin: 2010 - 2014 Net Debt/Ebitda: 2010 - 2014 10% 3,5 8,8% 3,0 8,2% 7,9% 3,0 8% 2,4 6,1% 2,5 2,1 2,2 5,9% 6% 2,0 1,8 4% 1,5 1,0 2% 0,5 0% 0,0 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 ̶ Strong balance sheet Net Debt/Net Equ
Slide 42: Long-term profitable growth outperforming the global hearing solutions market
Amplifon: Long-term profitable growth outperforming the global hearing solutions market ̶ Strong upside potential ̶ Seizing profitable growth opportunities driven by demographics and reducing stigma ̶ Positioned at the optimal point on the hearing solutions value chain ̶ Global leadership, Best Prac
Slide 43: Investor relations contacts
Investor relations contacts Investor Relations Office Investor Relations Team Amplifon Emilia Trudu Via G. Ripamonti, 133 Investor Relations Director 20141 Milano (MI) Phone: +39 02 5747 2454 Italy Fax: +39 02 5740 9427 Phone: +39 02 5747 21 emilia.trudu@amplifon.com Fax: +39 02 5730 0033 Amanda Har