Straumann Holding Ag · SIX:STMN
Straumann — H1 2006 Earnings Presentation
33 slides from Straumann's earnings presentation, Aug 11, 2006
Slide 1: First-Half Results 2006
First-Half Results 2006 Analyst & Media Conference Basel, 11 August 2006
Slide 2: Disclaimer
Disclaimer This presentation contains certain “forward-looking statements”, which can be identified by use of terminology such as “expect”, “expectation”, “intend”, “continue”, “achieve”, “maintain”, “improve”, “foresee”, “anticipate”, “product introductions”, “outlook”, “forecast”, or similar wordi
Slide 3: Agenda
Agenda 1. Overview 2. Financials 3. Product update 4. Outlook 5. Q&A STRAUMANN 3 11 August 2006
Slide 4: Overview – Financials
Overview – Financials • Net revenue rises 17%, with growth in the mid to high teens across all regions • Operating profit increases 14% as Straumann continues to absorb costs of production build-up (Andover) and new production technology • Net profit grows 4%, constrained by expiry of tax arrangemen
Slide 5: Overview - Markets
Overview - Markets • Europe - Developments driven by exceptionally strong Q1 in Germany - Double-digit H1 growth in all countries • North America - Sales growth disappointing - Management team strengthened; operational issues being addressed • Asia/Pacific - Solid overall first-half growth with stro
Slide 6: Overview – Products and initiatives
Overview – Products and initiatives • New products rolled-out / launched - SLActive - Straumann BoneCeramic - Straumann Emdogain PLUS • Production built-up - Andover production on track, with 400 000 components produced in first 12 months of operation • Share of voice increased - Further peer-review
Slide 7: Agenda
Agenda 1. Overview 2. Financials 3. Product update 4. Outlook 5. Q&A STRAUMANN 7 11 August 2006
Slide 8: Earnings grow despite build-up costs and higher taxes
Earnings grow despite build-up costs and higher taxes CHF million FY 2005* H1 2005* H1 2006 Net revenue 509.6 256.0 305.4 Cost of goods sold 92.9 45.6 59.6 in % of net revenue 18.2 17.8 19.5 Gross profit 416.6 210.4 245.8 Gross margin in % 81.8 82.2 80.5 Other income 3.1 0.7 1.1 Operating costs 263.
Slide 9: Revenue growth driven by organic expansion
Revenue growth driven by organic expansion Contribution to H1 2006 net revenue growth, in % +2.7 19.3 +1.3 16.6 15.3 Organic Acquisition Growth Currency Growth effect in l.c. effect in CHF STRAUMANN 9 11 August 2006
Slide 10: Mid-to-high teen revenue growth across all regions
Mid-to-high teen revenue growth across all regions H1 2006 revenue growth by region H1 2006 revenue by region Group: 17% (l.c.), 19% (CHF) (Total: CHF 305 million) RoW 23% (CHF 7m) Asia / Pacific (CHF 30m) 19% 18% 18% 2% 17% 10% 15% North America Europe (CHF 74m) 24% (CHF 195m) 64% Europe North Asia
Slide 11: Strong Q1 followed by expected soft Q2
Strong Q1 followed by expected soft Q2 CHF million Q1 2005 Q2 2005 Q1 2006 Q2 2006 Europe 79.6 84.7 99.9 94.7 growth in % CHF 12.9 25.4 25.5 11.8 growth in % l.c. 14.0 25.0 24.6 10.6 North America 28.9 31.6 36.9 37.3 growth in % CHF 11.4 12.7 27.8 17.7 growth in % l.c. 18.5 15.7 14.6 14.6 Asia / Pac
Slide 12: COGS impacted by build-up of production and new production technology
COGS impacted by build-up of production and new production technology in CHF million +5.6 +1.6 59.6 +6.8 48.7 45.6 -3.1 CHF 14.0 m, thereof CHF 2.2 m depreciation Reported Outbound Restated Volume Start-up New COGS COGS freight COGS and costs production H1 ‘06 H1 ‘05 reallocation H1 ‘05 other Andove
Slide 13: Gross profit margin development
Gross profit margin development in % of net revenue 81.0% +1.2% 82.2% +0.6% 80.5% -1.8% -0.5% -1.7% Reported Outbound Restated Start-up New FX Gross profit gross profit freight gross profit costs production and margin margin reallocation margin Andover technology other H1 ‘06 H1 ‘05 H1 ‘05 STRAUMANN
Slide 14: Reduced operating costs as a % of net revenue
Reduced operating costs as a % of net revenue in CHF million +5.1 155.5 +17.9 +1.8 127.6 +3.1 130.7 CHF 24.8 m, thereof CHF 3.2 m 51.1% depreciation & amortization 50.9% of net of net revenue revenue Reported Outbound Restated Selling R&D G&A Operating operating freight operating costs costs costs c
Slide 15: Operating profit (EBIT) margin development
Operating profit (EBIT) margin development in % of net revenue 31.4% +0.2% 29.9% -1.7% EBIT Gross Operating EBIT margin profit costs margin H1 ‘05 margin H1 ‘06 STRAUMANN 15 11 August 2006
Slide 16: Net profit constrained by expiry of tax agreement
Net profit constrained by expiry of tax agreement in CHF million +35.5 +0.3 68.1 70.9 -24.8 -2.1 -6.0 CHF 11.0 m contribution to EBIT Net profit Gross Operating Other Financial Taxes Net profit H1 ‘05 profit costs income result H1 ‘06 STRAUMANN 16 11 August 2006
Slide 17: Tax rate development
Tax rate development in % of profit before taxes +1.8% 22.2% +3.1% +0.1% 20.4% 17.2% Reported Expired Other Tax rate One-time Reported tax rate agreement H1 ’06 charges tax rate H1 ‘05 (under ongoing H1 ‘06 negotiation) STRAUMANN * Mainly due to activation of net operating losses 17 11 August 2006
Slide 18: Net profit margin development
Net profit margin development in % of net revenue 26.6% 23.2% -1.1% -0.8% -1.5% Net profit Taxes* Financial EBIT Net profit margin result margin margin H1 ‘05 H1 ‘06 STRAUMANN * Tax rate H1 2005: 17.2% vs. H1 2006: 22.2% 18 11 August 2006
Slide 19: Net working capital development
Net working capital development CHF million H1 2005 H1 2006 Net working capital 41.6 65.9 Net working capital, avg. 29.3 50.7 in % of net revenue* 5.7 8.3 Inventory 44.4 55.9 in % of net revenue* 7.8 8.5 Inventory days** 158 157 Trade receivables 73.3 87.2 in % of net revenue* 11.9 12.9 Trade receiv
Slide 20: Capital expenditure (capex) returns to “normal” level
Capital expenditure (capex) returns to “normal” level Cash-flow development H1 2006 in CHF million +57.7 Capex Acquisitions -26.0 94.2 94.9 thereof -30.2 -0.9 -34.6 NWC change Cash Operating Investing Financing Rest Cash 1 Jan 06 activities activities activities 30 Jun 06 STRAUMANN 20 11 August 2006
Slide 21: Agenda
Agenda 1. Overview 2. Financials 3. Product update 4. Outlook 5. Q&A STRAUMANN 21 11 August 2006
Slide 22: SLActive – A growing success story
SLActive – A growing success story • Multicenter study update: - 414 implants placed in 273 patients at 19 clinics - 98% survival rate despite aggressive immediate and early loading protocols • Third-generation surface well received; higher contribution to overall sales than expected • Customers pre
Slide 23: Further peer-reviewed evidence substantiating the superiority of SLActive
Further peer-reviewed evidence substantiating the superiority of SLActive • Highly significant difference in stability pattern between SLActive and SLA Oates T et al. Int J Oral Maxillofac Implants New bone 2006 (accepted) • The first implant with peer-reviewed Implant histological proof of immediat
Slide 24: SLActive – a unique scientific record
SLActive – a unique scientific record Topic Study # Area of investigation Authors 1 Superhydrophilic properties of implants M. de Wild Surface 2 Concept of hydrophilicity F. Rupp / J. Geis-Gerstorfer et al. properties in vitro 3 Enhanced protein adsorption on SLActive L. Scheideler / F. Rupp et al.
Slide 25: Straumann Regenerative System – Bone Ceramic
Straumann Regenerative System – Bone Ceramic • Fully-synthetic bone substitute with excellent handling properties • Attractive alternative to human- or animal- derived bone • Roll-out completed in North America, introduction well advanced in Europe STRAUMANN 25 11 August 2006
Slide 26: Straumann Regenerative System – Emdogain PLUS
Straumann Regenerative System – Emdogain PLUS • Convenient combination of Emdogain and Straumann Bone Ceramic for periodontal rescue • Launched in Europe; introduction in North America in 2007 (pending regulatory approval) NEW Recession 3-Wall 2-Wall 1-Wall Furcation Wide intrabony defect, extract.
Slide 27: Straumann Regenerative System – Membrane
Straumann Regenerative System – Membrane • Fully-synthetic PEG-hydrogel membrane • Planned introduction in North America towards end 2006 / early 2007 (pending clinical results and regulatory clearance). Other regions to follow later in 2007. Bone defect Augmentation Membrane application Membrane ha
Slide 28: Agenda
Agenda 1. Overview 2. Financials 3. Product update 4. Outlook 5. Q&A STRAUMANN 28 11 August 2006
Slide 29: A highly attractive market driven by substitution potential
A highly attractive market driven by substitution potential Global dental implant market • Market penetration is currently estimated below Theoretical market potential 10% based on prevalence • Addressable market Market size potentially more than CHF 20 billion Adjustment for medical Addressable mar
Slide 30: Full-year guidance
Full-year guidance On the basis of the first-half developments the Group expects full-year net revenue to grow around 15% in local currencies. Full-year operating margin is currently estimated to be around 29%, while the net profit margin is expected to be around 23%. STRAUMANN 30 11 August 2006
Slide 31: Agenda
Agenda 1. Overview 2. Financials 3. Product update 4. Outlook 5. Q&A STRAUMANN 31 11 August 2006
Slide 32: Q&A
Q&A STRAUMANN 32 11 August 2006
Slide 33: Reporting dates
Reporting dates 2006 October 25 Q3 and 9M sales 2006 2007 February 7 FY results 2006 May 3 Q1 sales 2007 August 9 Interim results 2007 November 2 Q3 and 9M sales 2007 STRAUMANN 33 11 August 2006