Straumann Holding AG · SIX:STMN
Straumann — FY2004 Earnings Presentation
40 slides from Straumann's earnings presentation, Feb 17, 2005
Slide 1: Full Year Results 2004 Analyst & Media Conference
Full Year Results 2004 Analyst & Media Conference Basel, 17 February 2005
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”, “product introductions”, “outlook”, “forecast”, or similar wording. Such forwa
Slide 3: Table of contents
Table of contents 1. Highlights 2. The dental implant and tissue regeneration market 3. Operational highlights 2004 4. Financial results 2004 5. Outlook 2005 3
Slide 4: Financial highlights
Financial highlights Net Net sales sales (CHF (CHF m) m) Gross Gross margin margin EBIT EBIT margin margin 500 420 85% 81.5% 35% 80.2% 80.0% 30.4% 400 344 27.3% 28.4% 275 300 75% 25% 200 100 0 65% 15% 2002 2003 2004 2002 2003 2004 2002 2003 2004 Net Net profit profit margin margin Oper. Oper. cashfl
Slide 5: Operational highlights
Operational highlights • Now #2 in US; new US headquarters near completion • Successful product introductions; portfolio optimized. All project development milestones met • Customer base further increased by 20% • Biora integrated and product divisions combined • Management team enlarged, 200 jobs c
Slide 6: Table of contents
Table of contents 1. Overview 2. The dental implant and tissue regeneration market - Market size and growth - Market shares - Straumann’s position by region 3. Operational highlights 2004 4. Financial results 2004 5. Focus & outlook 2005 6
Slide 7: Continued attractive industry growth
Continued attractive industry growth Global implant dentistry & dental tissue regeneration market in CHF billion Straumann 01-04 CAGR 20% CAGR >15% 3.2 CAGR 15-17% 2.1 1.8 Tissue regeneration 1.5 1.3 Implant dentistry 2001 2002 2003 2004 2007 Source: Straumann estimates 7
Slide 8: Overall market position strengthened
Overall market position strengthened Global implant dentistry market in 2004 Others 11% Nobel Biocare Dentsply 7% 31% 9% Zimmer 16% Straumann gained approx. 1% market 26% share in 2004 Biomet 3i Straumann Global dental tissue regeneration market in 2004 Major players include: Geistlich, Gore, Curasa
Slide 9: Improved ranking in North America
Improved ranking in North America Straumann market position in 2004 Market position Region 1 2 3 Europe Straumann moved from North America #3 to #2 position in the US in 2004 Asia/Pacific Source: Straumann estimates (based on end-market revenues) 9
Slide 10: Table of contents
Table of contents 1. Overview 2. Dental implant and tissue regeneration market 3. Operational highlights 2004 - Organization - Markets - Products 4. Financial results 2004 5. Focus & outlook 2005 10
Slide 11: Expanded management team and new organizational structure
Expanded management team and new organizational structure CEO G. Achermann Corporate Center Products Market & Product Operations Finance Support S. Matter M. Bürgi D. Lipp M. Gertsch Sales Sales Sales Sales RoW & North America Europe Germany Distributors R. Olsen G. Achermann W. Becker T. Jaberg 11
Slide 12: On the move...
On the move... Fast and seamless transfer of US headquarters moving to global headquarters to Basel Andover April 2005 at end 2004 • Straumann located in 2 world centers of medical, clinical and academic excellence • Expanded state-of-the art training, research and administration facilities, with ca
Slide 13: Important distribution agreements in Italy, Korea and Australia
Important distribution agreements in Italy, Korea and Australia • Italy - Italian distributor BIO srl acquired - Full integration as of 1 January 2005 - Italy is the second largest European market • Korea - Direct distribution agreement with B.I. Trading, Korea (formerly supplied via Japanese distri
Slide 14: Successful product launches
Successful product launches • Successful introduction of our Standard Plus implant for submerged and semi-submerged placement in the anterior region • Global roll-out of our Tapered Effect (TE) implant for immediate and early placement completed • Prosthetics range optimized, focusing on edentulous,
Slide 15: Progress on development projects
Progress on development projects • Positive pre-clinical results published on SLActive • 10-year follow-up data published on the long-term esthetic success of Straumann implants • 15 clinical studies published on Emdogain and 3 multi- center studies initiated • Straumann Bone Ceramic launched in pro
Slide 16: Our scientific partner ITI
Our scientific partner ITI • ITI consensus guidelines for dental implant therapy published - Guidelines include application techniques for the Straumann implant system • Revised cooperation agreement - Reorganization of the ITI with new country sections and member categories - ITI network accessible
Slide 17: Table of contents
Table of contents 1. Overview 2. Dental implant and tissue regeneration market 3. Operational highlights 2004 4. Financial results 2004 5. Focus & outlook 2005 17
Slide 18: Solid sales growth and further profitability improvement
Solid sales growth and further profitability improvement CHF million 2003* 2004 Net sales 343.9 420.3 growth in CHF in % 25.1 22.2 growth in locals in % 28.1 23.6 Gross profit 274.9 342.4 Gross margin in % 80.0 81.5 Operating profit (EBIT) 97.5 127.7 EBIT margin in % 28.4 30.4 growth in % 30.2 30.9
Slide 19: Sales growth driven by continued volume expansion
Sales growth driven by continued volume expansion Contribution to 2004 net sales growth in % 1 24 -2 3 22 20 Volumes Acquisition Price Growth Currency Growth in local impact in CHF currencies 19
Slide 20: All regions contributed to growth
All regions contributed to growth CHF million 2003 2004 2004 sales by region Europe 213.7 262.1 Asia/ Rest of growth in CHF in % 29.0 22.6 Pacific World growth in locals in % 26.3 21.1 10% 2% North America 90.1 110.4 North 26% growth in CHF in % 20.4 22.5 62% America growth in locals in % 38.9 31.8
Slide 21: Solid growth in H2 on top of exceptionally high baseline
Solid growth in H2 on top of exceptionally high baseline Quarterly sales, rolling 4-quarter growth Exceptionally strong Sales in CHF m Q3 & Q4 2003, Sales growth not only due to Biora 120 35% 100 30% 25% 80 20% 60 15% 40 10% 20 5% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 0 0% Q1 Q2 2002 Q3 Q4 Q1 Q2 2003
Slide 22: Profitability at record levels
Profitability at record levels CHF million 2003* 2004 Net sales 343.9 420.3 Cost of goods sold 68.9 77.9 in % of net sales 20.0 18.5 Gross profit 274.9 342.4 Gross margin in % 80.0 81.5 Other income 2.5 3.9 Operating costs 179.9 218.6 in % of net sales 52.3 52.0 Operating profit (EBIT) 97.5 127.7 EB
Slide 23: Significant improvement in net working capital
Significant improvement in net working capital CHF million 2003* 2004 Net working capital 31.6 17.0 in % of net sales 10.6 5.8 Inventories 34.7 35.5 in % of net sales 10.6 8.4 Inventory days 190 162 Receivables 42.4 48.8 in % of net sales 11.1 10.9 Receivable days 40 39 Equity 256.7 311.6 Equity rat
Slide 24: High capex, increased dividend and loan repayment
High capex, increased dividend and loan repayment Cash-flow development 2004 in CHF million 144.3 -66.1 103.4 107.1 -73.6 -0.9 Cash Operating Investing Financing Currency Cash 1 Jan 04 activities activities activities impact 31 Dec 04 24
Slide 25: Solid returns and value generation
Solid returns and value generation Return on equity (ROE) Return on capital employed (ROCE) 43.8% 41.1% 36.2% 35.4% 2003 2004 2003 2004 Return on assets (ROA) Economic profit (in CHF m) 80.1 59.2 26.8% 26.6% 2003 2004 2003 2004 25
Slide 26: Dividend increased by 29%
Dividend increased by 29% • Proposal* for appropriation of retained earnings: Dividend of CHF 31 million or CHF 2.00 per share (29% increase in ordinary dividend per share) • Resulting payout ratio of 31% of net profit • 50th anniversary dividend paid out in 2004 • Share buyback not foreseen in the
Slide 27: Focus on sustainability
Focus on sustainability • Employees: - Personnel expansion in line with sales growth - Incentive compensation model extended to all salary bands in Switzerland - Fluctuation worldwide decreased from 10% to 7%, very low absence rate • Customers - Expanded and new training facilities (e.g. Spain, Neth
Slide 28: Quality, regulatory and environment
Quality, regulatory and environment • Fulfillment of - ISO 9001 & ISO 13485 (integrated management system) - ISO 14971 (risk management for product groups) - ISO 14001(environmental certification) • Global Quality Management/Regulatory Affairs strengthened • Integrated management system passed all i
Slide 29: Efficiency enhanced, protecting the environment
Efficiency enhanced, protecting the environment Sales Sales CO CO22 emissions emissions Acids Acids +20% +7% +8% CO CO22 emissions emissions Electricity Electricity consumption consumption Water Water consumption consumption per employee per employee per per employee employee per per employee employ
Slide 30: Table of contents
Table of contents 1. Overview 2. Dental implant and tissue regeneration market 3. Operational highlights 2004 4. Financial results 2004 5. Outlook 2005 - Markets - Products - Financial 30
Slide 31: Regional trends and strategies
Regional trends and strategies Europe • Maintain market leadership • Further impetus from BIO in Italy and partial reimbursement in Germany North America • Ambitious target of 35% contribution to Group sales (2008) • New headquarters with production and East Coast training center Asia/Pacific • Cont
Slide 32: SLActive – taking surface technology a step further
SLActive – taking surface technology a step further • Pre-clinical results in 2004 - Enhanced cell-response to SLActive - Increased bone-to-implant contact - Statistically significant improvement in early osseointegration • Clinical trials in progress - Multi-center study with 21 clinics - Two addit
Slide 33: Individualized implant prosthetics (collaboration with Sirona)
Individualized implant prosthetics (collaboration with Sirona) Dentist Dental lab Straumann Customized Impression 3D scanning with Computer-aided Ordering abutment Sirona scanner design manufactured Shipping Finishing 33
Slide 34: Straumann Bone Ceramic
Straumann Bone Ceramic • Fully synthetic bone-graft substitute • CE mark and FDA clearance • Benefits - Unique wetting and surgical handling properties - Optimal degradability - Approved for broad indication • Controlled market introduction (started Q4 2004) • Product surveillance ongoing (10 countr
Slide 35: Straumann Membrane
Straumann Membrane • Membrane barrier for guided bone regeneration - Based on innovative, self-curing PEG technology - Fully synthetic • Benefits - Much easier handling - Prolonged barrier function - Completely degradable • Biocompatibility and pre-clinical studies successfully completed, clinical p
Slide 36: Outlook 2005
Outlook 2005 • Straumann intends to continue to grow faster than the market and to expand its market share. The significant strategic achievements in 2004 set the Group on course to achieve this challenging goal. In addition, the implemented structural and organizational adjustments have prepared th
Slide 37: Annual report
Annual report • Audited financials, and corporate governance disclosure • Expert opinions and interviews • Short outlook positions for all main areas and activities • Integrated chapter on sustainability with key environmental performance figures • Also available online in German and English - www.s
Slide 38: Key dates in 2005
Key dates in 2005 March 24 Annual General Meeting 2005 April 22 Media Release Sales Q1 2005 August 12 H1 2005 Report, Analyst Conference October 20 Media Release Sales Q3 2005 38
Slide 39: Upcoming ITI World Symposium
Upcoming ITI World Symposium • Globally renowned congress held every other year • ITI will celebrate its 25th anniversary at this year‘s congress 39
Slide 40: Questions & Answers
Z straumann Q uestions & Answers 40