Straumann Holding Ag · SIX:STMN
Straumann — FY2019 Earnings Presentation
47 slides from Straumann's earnings presentation, February 2020
Slide 1: Beyond continuity
Beyond continuity Full-Year Roadshow, February & March 2020
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
Slide 4: Excellent growth and further margin expansion
Excellent growth and further margin expansion REVENUE ORGANIC1 GROWTH EBIT MARGIN CHF 1.6bn +17% 27.1% (core2) +17% vs. 2018 2.5% negative FX effect Core profitability further improved Q4: +17% IFRS EBIT margin: 24.3% INNOVATION BUILDING FOR GROWTH OUTLOOK3 Straumann BLX CAPEX: CHF 150m Further shar
Slide 5: Double-digit growth across all regions
Double-digit growth across all regions Revenue development (in CHF m, rounded) Regional share of 17.1% organic growth in CHF 17.1% organic 9% Latin 53.1 11.5 1’596.2 America 85.8 23% 82.2 Asia Pacific 1’363.6 -29.5 29.5 1’363.6 34% North Change in organic growth America 13.4% 19.8% 21.5% 16.8% 34% E
Slide 6: Strong fourth quarter despite high baseline
Strong fourth quarter despite high baseline Organic revenue growth EMEA NAM FY 2019 13.4% FY 2019 19.8% Q4 2019 13.4% Q4 2019 19.4% APAC FY 2019 21.5% Q4 2019 24.5% LATAM FY 2019 16.8% Q4 2019 13.4% Group FY 2019 17.1% Q4 2019 17.1% 6
Slide 7: Impressive 5-year performance
Impressive 5-year performance 5-year organic revenue growth 5-year EBIT1 in CHF m 5-year net profit1 in CHF m and margin and margin Average +15% +4%-points +3%-points 18,9% 550 17,1% 600 26,9% 27,1% 15,7% 25,7% 21,5% 24,8% 450 20,7% 21,2% 500 20,4% 13,1% 23,3% 400 350 18,1% 9,1% 300 250 Market 200 1
Slide 8: Leadership in implant dentistry extended
Leadership in implant dentistry extended 2019 Total Implantology1 dentistry Others (400+) 20% Straumann 26% Group Market CHF 27-29 bn 4.6 bn (2018: 25%) Dentium 6% 26% 5% Straumann share Zimmer Biomet 5% Straumann position #6 #1 8% 17% Osstem Henry Schein, Patterson, 8% Main players Envista, Dentspl
Slide 9: 1636 new talents
1636 new talents Headcount development 8000 7000 7590 6882 6000 5954 5000 5474 2019 49% 51% 4000 increase 3000 2000 1000 Organic 0 Acquired businesses1 2018 HY 2018 FY 2019 HY 2019 FY 1 mainly Anthogyr, Digital Planning Service, Yller Biomaterials, Bay Materials 9
Slide 10: CADCAM & clear-aligner sales lift gross margin
CADCAM & clear-aligner sales lift gross margin In %, rounded +20bps +60bps 0.1 0.0 -0.4 0.5 0.7 -0.4 Dental Wings Fire 75.6 75.2 74.7 75.0 IFRS gross Non core FX effect Core gross Price, Digital HW Inventory Core gross Non core IFRS gross profit items profit Volume, Mix Change profit items profit ma
Slide 11: Further improvement in core EBIT
Further improvement in core EBIT In %, rounded +20bps +80bps 0.5 -0.6 1.8 -0.6 0.6 0.3 -2.8 27.1 26.3 25.1 24.3 IFRS EBIT Non core FX effect Core EBIT Gross profit Distribution Administration IFRS16 Core EBIT Non core IFRS EBIT margin 2018 items margin 2018 improvement expense expenses margin 2019 i
Slide 12: Further improvement of the free cash flow margin
Further improvement of the free cash flow margin In CHF m +35,6% 23.0 -41.2 62.6 6.8 -2.5 229.6 11.5 169.4 Production expansion in various Group sites; CHF 15 million related to Anthogyr acquisition FCF margin FCF margin 12.4% 14.4% Free cash EBITDA IFRS 16 effect Change in CAPEX Change in NWC Chang
Slide 13: CHF 120m invested in production expansion
CHF 120m invested in production expansion 13 * Expected production capacity increase
Slide 14: Dividend raised
Dividend raised ▪ The Board proposes a dividend increase to CHF 5.75 per share (prior year: CHF 5.25) ▪ Dividend is payable on 15 April 2020 (ex-dividend date: 9 April 2020) 5.75 5.25 4.75 4.25 4.00 3.75 3.75 3.75 3.75 3.75 3.75 3.75 3.75 3.00 2.50 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2
Slide 15: Recent achievements & strategy in action
Recent achievements & strategy in action
Slide 16: Strong performance confirms our strategy
Strong performance confirms our strategy Drive high performance Straumann Group culture and organization Target unexploited growth markets & segments Become the total solution provider for esthetic dentistry 16
Slide 17: Execution – focus on four areas
Execution – focus on four areas Market Share Key opportunities PREMIUM 1 in 4 implants fully tapered; CHF 2.2bn 44% 6% share in fully-tapered premium Gain share outside Brazil; VALUE CHF 2.4bn 10% all price points covered; fully competitive Market growing 20+%; many entrants; ORTHO CHF 3.2bn 2% expa
Slide 18: BLX well received: >100 000 sold in 2019
PREMIUM BLX well received: >100 000 sold in 2019 EMEA • Most markets: Q1/2 2019 • Russia: 2021 • Turkey: 2020 NAM • USA/Canada: Q3 2019 LATAM • Brazil: Q1/Q2 2019 • Mexico: 2020* • Colombia: 2020* APAC • Aus./NZ: Q1 2019 • China: 2021* • Japan: 2020* • Korea: 2020* Straumann‘s team in Thailand prepa
Slide 19: Simplicity, versatility and affordability
VALUE VALUE Simplicity, versatility and affordability – one tapered design matching all customer preferences TM InternalFIT™ ExternalFIT™ ConicalFIT™ Simplicity made accessible. First launch: LATAM Q1
Slide 20: Dedicated business unit for orthodontics
ORTHO Dedicated business unit reflects high potential and strategic importance of orthodontics ▪ Incorporates our ClearCorrect, Smyletec and Geniova clear- aligner brands as well as the Orthodontics recently acquired Bay Materials Business Unit thermoplastics business. ▪ 800 employees worldwide Clea
Slide 21: Clear-aligner business growing rapidly
ORTHO Clear-aligner business growing rapidly +64% case starts ▪ Market estimated at CHF 3.2bn and growing y.o.y. >20% p.a. ▪ 2019: customer base expands >20%; case growth >60% ▪ Capacity fully absorbed by strong growth in NAM; full releases in Europe, LATAM & APAC now starting Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q
Slide 22: Building a powerful team for a broader digital ecosystem
DIGITAL Building a powerful team for a broader digital ecosystem ▪ New dedicated Digital Business Unit includes intraoral and laboratory scanners, centralized CADCAM Orthodontics prosthetics, milling equipment, 3D Business Unit printers and materials, prosthetic design, guided surgery software, and
Slide 23: 'Smile in a Box' – guided surgery & prosthetic design
DIGITAL ‘Smile in a Box’ – guided surgery & prosthetic design made simple, efficient and convenient ▪ Enables clinicians to offer implant treatment using 1 a fully guided digital workflow but without Implant treatment investing in equipment and special digital training planning ▪ Covers all surgical
Slide 24: Strong leadership team with broad skills and diverse backgrounds
Strong leadership team with broad skills and diverse backgrounds Guillaume Daniellot Wolfgang Becker Jens Dexheimer Patrick Loh Petra Rumpf Matthias Schupp Robert Woolley CEO Sales Distributor & Sales Europe Sales Asia/Pacific Dental Services Sales Latin America Sales Emerging Markets EMEA Organizat
Slide 25: Set for the future – first-class production organization
Set for the future – first-class production organization and strong Research, Development & Operations team • Gerhard Bauer retires after a distinguished career at Straumann • Mark Johnson joins Executive Management team as Head RD&O • Highly experienced executive engineer with a strong track record
Slide 26: Outlook 2020
Outlook 2020
Slide 27: Coronavirus – dealing with the unforeseeable
Coronavirus – dealing with the unforeseeable Coronavirus ▪ Public hospitals and dental clinics in China treating emergency / life-threatening conditions only ▪ Private dental practices closed ▪ Travel restricted in most cities ▪ Straumann Group has 350 employees in China; 10 in Wuhan City; none infe
Slide 28: Our 2020 guidance
Our 2020 guidance Barring unforeseen circumstances Global implant market to continue Market growth growing at 4-5% Confident of gaining market share and achieving Our growth organic revenue growth in the low double-digit percentage range Stable core EBIT margin excluding the impact of Profitability
Slide 29: Appendix
Appendix
Slide 30: Calendar of upcoming events
Calendar of upcoming events 2020 Event Location 19 February Investor meetings London 20 February Investor meetings Paris 21 February Investor meeting Geneva 03 March Morgan Stanley Medtech conference London 10 March Investor meetings Montreal 11 March Investor meetings New York 12 March Investor mee
Slide 31: Continuously increasing the addressable market
Straumann Group – continuously increasing the addressable market Addressable market in CHF billion Implant provider 2012 3.4 Total solution provider tooth 2016 7.0 replacement Preventive dentistry Total solution provider esthetic dentistry 2019 14.0 represents ~2bn market opportunity 31
Slide 32: Large potential in markets worth CHF 14 billion
Large potential in markets worth CHF 14 billion Expected values for 2019 in CHF billion Esthetic dentistry To o t h r e p l a c e m e n t m a r k e t 4.0 3.2 2.2 2.4 1.6 0.6 BIOMATERIALS IMPLANT & STANDARD IMPLANT & STANDARD CAD/CAM EQUIPMENT CAD/CAM PROSTHETICS CLEAR ALIGNERS ABUTMENTS PREMIUM ABUT
Slide 33: Reputation as innovation leader underpinned
Reputation as innovation leader underpinned Chairside 3D printing 19 BLX implant Mini implant 18 PURE 2-piece ceramic implant Grand Morse implant 17 N!ce fully-crystallized glass-ceramic Grand 16 ProArch edentulous solution Morse Small diameter implant ( 2.9mm) Grand Morse 15 BLT implant 14 Roxolid
Slide 34: Targeted investments in high growth markets
Targeted investments in high growth markets Implant volumes in key markets (million units in 2018) Penetration: Implants per 10’000 inhabitants INDIA 0,5 2 CHINA / HONG KONG 1,5 10 JAPAN 0,5 33 UK-IRELAND 0,3 38 USA 3,1 74 RUSSIA 1,7 160 TURKEY 0,8 98 BRAZIL 2,6 118 GERMANY 1,3 160 ITALY 1,3 197 SPA
Slide 35: Participating in high growth areas while mitigating economic slowdown risk
Participating in high growth areas while mitigating the risk of an economic slowdown More EM sales1… more balanced product …offered at different portfolio… price points Share of implant volumes in Product portfolio break-down Multi-pricing strategy 2012 vs. 2019 2012 vs. 2019 (in value) Premium Uppe
Slide 36: Tapered and non-premium segments represent large potential
Tapered and non-premium segments represent large potential for future share gains Global implant & Market volume abutment market (Implant fixtures) Lower Fully value tapered Parallel walled ~CHF 27 million 4.6bn units Upper value Premium Apically tapered Premium implants Non-premium implants Current
Slide 37: Comprehensive portfolio of non-premium implant brands
Comprehensive portfolio of non-premium implant brands Global implant & abutment market Lower value ~CHF 4.6bn Upper value Premium Neodent, Anthogyr, Zinedent, T-Plus, and Equinox Premium implants Non-premium implants Current Straumann Group market share Implant dentistry market segment comprises reg
Slide 38: 1 out of 4 implants have a fully tapered design
1 out of 4 implants have a fully tapered design Market volume ▪ Dynamic Bone Management™ (Implant fixtures) Fully ▪ ‘Cut, collect, condense’- tapered properties Parallel Main players: walled ▪ Bi-directional cutting elements Nobel Biocare, BioHorizons, MIS, Implant ▪ Stress-free crestal bone Direct,
Slide 39: Straumann BLX implant portfolio
Straumann® BLX implant portfolio ▪ Full range of implant diameters and lengths ▪ One connection – one prosthetic line ▪ Ø 3.75 for all indications Ø 3.75 → all indications 39
Slide 40: Overview of non-core items
Overview of non-core items The following effects were defined as non-core items: − The Batigroup acquisition led to an exceptional inventory-revaluation expense of CHF 8.8m, reported 2018 under ‘costs of goods sold’, as well as a tax benefit of CHF 1.9m − Amortization of acquisition-related intangib
Slide 41: Core financials at a glance
Core financials at a glance % of Margin Change In CHF m, rounded FY 2019 Comments revenue change in % Revenue 1’596.2 100.0% 17.1% COGS (389.0) 24.4%placeholder (16.0%) GROSS PROFIT 1’207.2 75.6% 20bps 17.4% Operating expenses (775.3) 48.6% (17.4%) FX headwind -60bps EBIT 431.9 27.1% 20bps 17.6% IFR
Slide 42: Reported financials at a glance
Reported financials at a glance % of Margin Change In CHF m, rounded FY 2019 Comments revenue change in % Revenue 1’596.2 100.0% 17.1% COGS (395.7) 24.8%placeholder (14.9%) Fire damage at Dental Wings GROSS PROFIT 1’200.5 75.2% 50bps 17.8% Operating expenses (813.3) 51.0% (20.2%) Align patent settle
Slide 43: Core result reconciliation 2019
CORE RESULT RECONCILIATION 2019 CORE RESULT RECONCILIATION 2018 {incl .000) TS PPA Impairments Legalcases Consolidation Other TOR Gin CHE 000) TRS PPA Impairments Legalcases Consolidation Other cone 2019 amortization result former 2019 2018 amortization result former 3018 Revenue 7596 225 Tss6225 Re
Slide 44: Impact from IFRS 16 (Leases) adoption in 2019
Impact from IFRS 16 (Leases) adoption in 2019 IFRS 16 impact (in CHF million)1 Total Revenue Gross profit +0.5 EBITDA +28.2 EBIT +4.1 Financial results -6.6 Net profit -2.5 44
Slide 45: Growth strategy pays off
Growth strategy pays off 2017 2018 2019 2015 2016 5-year average in CHF m restated Core Core Revenue 798.6 917.5 1112.1 Revenue 1363.6 1596.2 Organic revenue growth in % 9.1 13.1 15.7 Organic revenue growth in % 18.9 17.1 14.8 Acquisiton effect in % 9.5 0.8 4.1 Acquisiton effect in % 4.2 2.5 4.2 Cha
Slide 46: Straumann's currency exposure
Straumann’s currency exposure Revenue breakdown FY20191 FX sensitivity CHF Average exchange rates (rounded) (+/- 10%) on full-year 6% Other Closing 18% 2018 2019 2019 Revenue EBIT BRL EUR 1 EURCHF 1.15 1.11 1.09 +/- 43m +/- 23m 7% 27% 1 USDCHF 0.98 0.99 0.97 +/- 45m +/- 21m CNY 100 BRLCHF 26.9 25.1
Slide 47: Thank You
Thank You investor.relations@straumann.com