Sonova Holding Ag · SIX:SOON
Sonova — FY2009/10 Earnings Presentation
38 slides from Sonova's earnings presentation, May 18, 2010
Slide 1: Full-Year Results 2009/10
Full-Year Results 2009/10 Valentin Chapero, CEO Oliver Walker, CFO May 18, 2010
Slide 2: Media and Financial Analysts Meeting
Media and Financial Analysts Meeting Business Report Full-Year Results 2009/10 Dr. Valentin Chapero Chief Executive Officer May 18, 2010 · Slide 2
Slide 3: Highlights - Full-Year 2009/10
Highlights - Full-Year 2009/10 – New sales record of CHF 1,500 million – the Sonova Group increased its sales by 20.1% in CHF – Organic sales growth of 18.4% in local currencies significantly exceeded hearing instrument market growth – Strategic expansion into the cochlear implant business – the Son
Slide 4: Key factors for Full-Year 2009/10
Key factors for Full-Year 2009/10 Highlights FY 09/10 FY 08/09 in millions of CHF – New sales record of CHF 1,500 million – Total sales growth of +20.1% in CHF 1600 400 – Organic sales growth of +18.4% in l.c. 450 1400 1500.3 350 400 420.1 354.8 1200 350 300 1249.2 – External growth of +5.4% 1000 30
Slide 5: Trends in the hearing instrument market
Trends in the hearing instrument market Market environment – Market growth for hearing instruments estimated at approx. 4% in units – Positive trend continued in line with long-term 4-7% unit growth expectations – Down trading trend stopped – End-consumer behavior unchanged Peers – No major changes
Slide 6: Regional trends for Full-Year 2009/10
Regional trends for Full-Year 2009/10 Estimated market growth of around 4% in units UK -2.8% UK private market +3.1% UK NHS -4.0% France +7.3% Germany +5.7% China* +17% USA +9.0% Japan -0.1% USA private market +5.5% USA VA +27.2% Italy +4.5% Australia* +5.5% Source: Industry statistics *Estimated gr
Slide 7: Gaining market share across all regions
Gaining market share across all regions Sales by regions Full-Year 09/10 in millions of CHF Sales growth y-o-y 45 in % and l.c. 129 3% 9% EMEA (excl. Switzerland) 22.5% USA 29.3% 196 Americas (excl. USA) 17.6% 13% 583 Asia/Pacific 15.3% 39% Switzerland 30.2% 547 36% – Strongest growth in the US - si
Slide 8: Sustainable long-term growth trend
Sustainable long-term growth trend US market development – total market Unit 25% growth 20% 15% 10% 5% +4.0% p.q. avg. 0% -5% Units sold per quarter 2005 Q4 2006 Q2 2006 Q4 2007 Q2 2007 Q4 2004 Q4 2009 Q4 2005 Q2 2008 Q2 2003 Q2 2003 Q4 2004 Q2 2009 Q2 2008 Q4 US illustrates average 4% unit growth p
Slide 9: Hearing instruments & implants segment
Hearing instruments & implants segment Segment reporting Full-Year 2009/10 in millions of CHF Hearing implants 25 Hearing instruments: 209 2% 13% First class 378 Business class 75 25% Economy class 5% Wireless communication systems Miscellaneous 460 31% 353 24% Hearing instruments - highlights Heari
Slide 10: Sonova is the innovation leader
Sonova is the innovation leader High innovation rate of 77% 23% Launched 1 year ago Exélia, Eleva, Element, Launched 2 years ago Yuu, Savia Art Launched more than 2 years ago 36% Exélia Art, Audéo SMART & MINI, Naída IX & I, Latitude, Passport, Milo & Milo Plus 41% Audéo YES, Versáta, Certéna, Next,
Slide 11: Audiology NOW! 2010 highlights
Audiology NOW! 2010 highlights Completing the Art collection 2009 Exélia Exélia Art AAA Versáta Versáta Art NEW Certéna Certéna Art NEW Enhanced performance for top selling products reinforcing industry benchmark May 18, 2010 · Slide 11
Slide 12: Expansion of the CRT product family Audéo
Expansion of the CRT product family “Audéo” Introducing Audéo ZIP – new form factor for Phonak For mild to severe hearing loss at three price points Instant fit CIC World‘s smallest Smallest Phonak Most innovative without wireless BTE ever! and unique design! customization hearing system! – First ti
Slide 13: Sonova invests in new market segments: Sona
Sonova invests in new market segments: New brand Sona – a unique service concept in the industry Sona addresses untapped market potential – highly under penetrated market of mild to moderate hearing loss Sona offers benefits for hearing professionals – optimized and simplified online ordering and st
Slide 14: Sonova invests in new market segments: Lyric
Sonova invests in new market segments: Lyric – new hearing instrument concept in the premium class Lyric addresses first-time users – Lyric attracts customers who don’t want to buy a conventional hearing instrument – Addressing the market for mild to moderate hearing loss – Easy and fast fitting pro
Slide 15: Realizing synergies with Advanced Bionics
Sonova invests in new market segments: Realizing synergies with Advanced Bionics Business performance today – Good response from customers and ENTs – Increasing sales momentum within the first four months of 2010 – Continued improved performance Investing into the sales organization – Expansion of A
Slide 16: Phonak Acoustic Implants presents Ingenia
Sonova invests in new market segments: Phonak Acoustic Implants presents Ingenia Ingenia – Sonova’s first middle ear implant – For patients with moderate to severe mixed hearing loss – Clinical investigation phase progressing well sound 1 – Successful first implantations 2 – Superior sound quality t
Slide 17: Significant value creation
Significant value creation 5-years financial performance Sales in millions of CHF Gross profit margin in % of sales 1600 74.0 1400 1,500 72.0 1200 69.9 70.5 1,205 1,249 70.0 69.4 1000 1,073 68.2 69.4 68.0 66.6 68.0 69.1 800 867 68.4 600 709 66.0 66.0 596 600 400 504 64.0 391 62.0 200 0 60.0 2005/06
Slide 18: Facts & Figures Full-Year Results 2009/10
Media and Financial Analysts Meeting Facts & Figures Full-Year Results 2009/10 Oliver Walker Chief Financial Officer May 18, 2010 · Slide 18
Slide 19: Financial Highlights – Full-Year 2009/10
Financial Highlights – Full-Year 2009/10 – Negative FX impact of 370 bps on sales and 90 bps on EBITA – Increase of EBITA margin to 28.0% from 26.6% – Realization of economies of scale – Savings in purchasing and manufacturing efficiencies – Continuing strict cost management – Strategic initiatives
Slide 20: Solid financial performance
Solid financial performance Key figures in millions of CHF FY 2009/10 Change FY 2008/09 Sales 1,500.3 +20.1% 1,249.2 Gross profit 1,058.4 867.2 +22.0% Gross margin 70.5% 69.4% EBITA 420.1 331.8 +26.6% EBITA margin 28.0% 26.6% Cash-based basic EPS (in CHF) 5.602 +26.4% 4.433 Operating free cash flow
Slide 21: Organic growth of 18.4% in local currencies
Organic growth of 18.4% in local currencies Sales development in millions of CHF Sales growth Internal growth +18.4% +68 External growth 1) +5.4% +19 -46 FX impact -3.7% +210 +1.6% +5.4%1) 1,546 -3.7% Total growth +20.1% 1,500 +16.8% 1,249 +251 +20.1% +297 +23.8% Sales Volume Sales prices External S
Slide 22: Strong growth across hearing instruments product groups
Strong growth across hearing instruments product groups in millions of CHF change in l.c. FY 2009/10 H2 2009/10 H1 2009/10 FY 2008/09 y-o-y First class +21.0% 378 194 184 321 Business class +26.5% 353 185 168 288 Economy class +24.7% 460 241 219 380 Wireless comm. -5.4% 75 38 37 82 Miscellaneous (in
Slide 23: Increased Gross profit margin despite negative FX effects
Increased Gross profit margin despite negative FX effects Gross profit development in millions of CHF Gross profit margin FY 09/10 70.5% FY 09/10 const. FX 71.1% FY 08/09 69.4% +19 +50 -41 +5 1,099 1,058 +158 867 +191 +22.0% +232 +26.8% Gross Volume Sales prices Economies External Gross profit FX Gr
Slide 24: Operating expenses analysis
Operating expenses analysis FY 2009/10 FY 2008/09 Change Change Comments in CHF in l.c. Organic growth 18.4% Sales 1,500.3 1,249.2 +20.1% +23.8% External growth +5.4% FX effect -3.7% R&D 87.0 77.4 - Continued investments +12.5% +12.8% - Increase of R&D headcount by 8% in % of sales 5.8% 6.2% (54% in
Slide 25: Significantly improved EBITA margin
Significantly improved EBITA margin EBITA development in millions of CHF EBITA margin Cost of Sales OPEX FY 09/10 28.0% -117 FY 09/10 const. FX 28.9% +232 -27 FY 08/09 26.6% 447 420 FX impact Gross Profit -41 332 Opex +13 FX effect -28 +115 +88 +34.9% +26.6% EBITA Variance in Increase of EBITA FX ef
Slide 26: Cash continues to be king
Cash continues to be king in millions of CHF FY 09/10 FY 08/09 Cash flow before changes in net working capital 488 374 Changes in net working capital -60 -92 Operating cash flow 428 282 in % of sales 28.5% 22.6% Cash flow from investing activities -103 -105 Operating free cash flow 325 176 in % of s
Slide 27: Solid balance sheet
Solid balance sheet Development in millions of CHF FY 2009/10 FY 2008/09 Cash and cash equivalents 335.9 473.7 Financial liabilities Financial Cash and cash 3.7 Financial liabilities assets 11.8 equivalents 216.7 Financial 14.7 Equity assets 1,042.6 Capital (Equity ratio) 382.3 Equity 1,026.6 Employ
Slide 28: Solid balance sheet key figures
Solid balance sheet key figures in millions of CHF FY 2009/10 H1 2009/10 FY 2008/09 Net working capital 177.0 144.7 152.4 Days sales outstanding (DSO) 75 71 70 Days inventory outstanding (DIO) 155 122 126 Operating capital employed 491.7 470.0 416.7 in % of sales 32.8% 33.4% 33.4% (excluding acquisi
Slide 29: Shareholder information
Shareholder information Information per share FY 2009/10 FY 2008/09 Change Basic EPS 5.412 4.348 +24.5% Diluted EPS 5.356 4.330 +23.7% Cash-based basic EPS 1) 5.602 4.433 +26.4% Dividend 2) 1.20 1.00 +20.0% 1) Excluding the amortization of acquisition-related intangibles and unwinding effect of the
Slide 30: Development of FX rates
Development of FX rates Average rates Spot rates Variance vs. Avg. rates Variance vs. as FY 08/09 FY 09/10 FY 08/09 ytd. FY09/10 of May 14 AUD 0.8652 0.9029 +4.4% 0.9904 +9.4% 1.0042 BRL 0.5685 0.5699 +0.2% 0.6117 +7.3% 0.6290 CAD 0.9826 0.9751 -0.8% 1.0636 +9.1% 1.0950 CNY 0.1605 0.1557 -3.0% 0.156
Slide 31: Normalized sales and EBITA FY 2009/10
Normalized sales and EBITA FY 2009/10 Adjusted sales in millions of CHF Adjusted EBITA margin in % Annualization Annualization +6 +114 1,620 1,500 +0.1% -2.9% +0.4% 28.0% 25.6% Sales FX effect Sales from Sales EBITA margin FX effect Impact from Other EBITA margin FY 09/10 acquisitions FY 09/10 FY 09
Slide 32: Outlook
Media and Financial Analysts Meeting Outlook Dr. Valentin Chapero Chief Executive Officer May 18, 2010 · Slide 32
Slide 33: Sonova's successful strategy
Sonova’s successful strategy Growing above the market Addressing a growing market – Long-term average unit growth of 4-7% p.a. for hearing instruments – Hearing implants expected to grow 10-15% p.a. Innovation – Platform concept ensures fast introduction of new products and R&D efficiency – Offer co
Slide 34: The strongest brand portfolio in the industry
The strongest brand portfolio in the industry Hearing instruments Hearing implants Distribution partners Sonova – The leading provider of hearing healthcare solutions May 18, 2010 · Slide 34
Slide 35: Sales outlook Full-Year 2010/11
Sales outlook Full-Year 2010/11 – Expected market growth of > 4% in units – Sonova has a strong competitive position to exceed market growth – Most competitive product portfolio in the industry – Audéo ZIP, MINI and SMART will boost Phonak sales – The most comprehensive CRT portfolio in the industry
Slide 36: EBITA outlook Full-Year 2010/11
EBITA outlook Full-Year 2010/11 – Stable pricing environment – Economies of scale through higher volumes – Investments in new market segments – Investments for acquired companies as planned – Further efficiency gains and cost savings – Continuing investments in R&D and Sales & Marketing EBITA margin
Slide 37: Questions & Answers
SOnOoVa Questions & Answers THE HEARING HEALTHCARE COMPANY
Slide 38: Disclaimer
Disclaimer This presentation may contain forward-looking statements including, but not limited to, projections of future performance of products, financial conditions, results of operations and cash flows. The statements are made on the basis of management’s views and assumptions regarding future ev