Slide 1: Pushing boundaries – Full-year 2018 results conference
Pushing boundaries Full-year 2018 results conference Basel, 19 February 2019
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: Agenda
Agenda Full-year highlights Business and regional review Recent achievements & strategy in action Outlook 2019 and beyond Q&A and upcoming events
Slide 4: Full-year highlights
Full-year highlights Marco Gadola, CEO
Slide 5: Excellent growth and further margin expansions
Excellent growth and further margin expansions REVENUE GROWTH TOP PERFORMERS CHF 1.36bn +19% organic 1 APAC & NAM Up 23% from 2017 4%-points acquisition effect generate 55% of Group growth; Neutral FX effect APAC growing fastest (+32%) PROFITABILITY2 VALUE CREATION OUTLOOK3 EBITDA +24% Shareholder r
Slide 6: Strong finish to 2018 – growth >20% in 3 out of 4 regions
Strong finish to 2018 – growth >20% in 3 out of 4 regions Organic revenue growth EMEA NAM FY 2018 14.6% FY 2018 20.0% Q4 2018 19.3% Q4 2018 23.6% APAC FY 2018 27.8% Q4 2018 21.2% LATAM FY 2018 20.2% Q4 2018 26.5% Group FY 2018 18.9% Q4 2018 21.6% 6
Slide 7: Growth adding value for shareholders
Growth adding value for shareholders Revenue growth Underlying EBITDA margin Earnings per share in% excl. acquisitions in % excl. exceptionals in CHF excl. exceptionals and FX effects +19% +30bps +16% organic EBIT +20bps 1363.6 16.99 29.6 29.3 14.65 1146.4 FY 2017 FY 2018 FY 2017 FY 2018 FY 2017 FY
Slide 8: Impressive 5-year performance
Impressive 5-year performance 5-year organic revenue growth 5-year EBITDA1 in CHF 5-year Net Profit1 in CHF million and margin million and margin Average +13% +4.8%-points +1.7%-points 18.9% 29.3% 29.6% 450 28.3% 400 27.6% 15.7% 350 20.4% 20.7% 13.1% 24.8% 20.1% 300 18.4% 18.1% 250 9.1% 200 6.4% 150
Slide 9: Market share further bolstered
Market share further bolstered 2018 Total Implantology1 dentistry Others (400+) 19% Straumann 25% Group Market ~26-28 bn 4.5 bn Dentium 4% Straumann share 5% 25% Zimmer 6% Biomet Straumann position #7 #1 7% 19% Danaher Osstem Henry Schein, Patterson, 8% Main players Danaher, Dentsply Sirona 12% Alig
Slide 10: Global team reaches 6000
Global team reaches 6000 Headcount development 1073 new colleagues 7000 since 1 January 6000 5954 5000 5474 31% 4881 4000 4227 3000 69% 2000 1000 Organic increase 0 2017 HY 2017 FY 2018 HY 2018 FY Acquired businesses 1 10 Acquired businesses: Createch, T-Plus, and Batigroup.
Slide 11: Business and regional review
Business and regional review Peter Hackel, CFO
Slide 12: Double-digit growth across all regions
Double-digit growth across all regions Revenue development (in CHF m, rounded) Regional share of 22.6% organic growth in CHF 18.9% organic 10% Latin 21.6 1’363.6 America 54.6 65.9 25% 75.1 Asia 39.1 1’146.4 Pacific 1’112.1 -4.8 30% North Change in organic growth America 14.6% 20.0% 27.8% 20.2% 35% E
Slide 13: EMEA & North America ahead of the market
EMEA & North America ahead of the market EMEA Revenue change (organic) EMEA Q4: acceleration lifted by digital 56% sales and emerging markets 19.3% 17.0% Strong growth in Belgium, Iberia 15.0% 43% of Group 11.9% Russia, Sweden, and the UK 10.1% 9.9% 9.9% 9.8% Good performances in E. Europe & M
Slide 14: Asia Pacific dynamic; Latin America solid
Asia Pacific dynamic; Latin America solid APAC Revenue change (organic) APAC Q4: Nearly all subsidiaries post 56%33.1% 32.5% double-digit growth 27.9% 25.7% 25.0% Dynamic expansion continues in 22.1% 21.2% 19.4% China; strong performance in Korea 19% of Group New subsidiary in Thailand; Neoden
Slide 15: All segments perform well, especially restorative & digital
All segments perform well, especially restorative & digital Restorative & Implants Digital Biomaterials 15
Slide 16: Overview of exceptional effects
Overview of exceptional effects The Group adjusted its consolidated financial statements retrospectively to reflect changes in the fair values 2017 of identifiable assets and liabilities due to the final purchase price allocation of ClearCorrect. The adjustment reduced EBIT by CHF 0.3 million and in
Slide 17: Key financials at a glance
Key financials at a glance in CHF m (rounded) FY 2018 FY 2017 Δ % / bps FX impact FX Change Reported Exceptionals excl. Exceptionals Restated Exceptionals restated / excl. excl. Exceptionals Exceptionals Revenue 1363.6 1112.1 23% #REF! #REF! Organic growth in % 18.9% 15.7% Gross profit 1019.2 (8.8)
Slide 18: Increased CAD/CAM and aligner sales constrain gross margin
Increased proportion of CAD/CAM and aligner sales in product mix constrains gross margin In %, rounded -40bps -50bps 0.1 0.0 -0.4 0.2 -0.1 -0.7 Strong volume growth & stable pricing in base business; (120bps) headwind 75.9 due to 3rd party products 75.6 Batigroup 75.4 74.7 Gross profit Exceptionals
Slide 19: EBITDA margin improves despite lower gross margin
EBITDA margin improves, despite lower gross margin and higher investments in future growth In %, rounded +30bps +10bps 1.0 -0.2 -0.1 -0.6 0.2 -0.6 0.2 29.5 29.6 Batigroup 29.0 29.1 EBITDA Exceptionals FX effect Adj. EBITDA Gross profit Distribution Marketing, Other income Underlying Exceptionals EBI
Slide 20: Increased D&A charges due to acquisitions and investments
Increased D&A charges due to acquisitions and investments in production capacities in CHF m (rounded) 2018 2017 Δ % / bps restated 2018 vs. 2017 EBITDA 395.0 323.5 22% margin 29.0% 29.1% Depreciation 30.0 25.0 20% Total amortization 22.4 15.3 47% Regular amortization 6.4 4.8 35% Amortization (of acq
Slide 21: EBIT expands 20bps despite higher amortization charges
EBIT expands 20bps thanks to operational progress and FX tailwind despite higher amortization charges In %, rounded +20bps -20bps 0.1 -0.1 0.4 -0.2 -0.7 0.1 26.0 Batigroup 25.8 25.5 25.1 EBIT margin Exceptionals FX effect Adj. EBIT EBITDA Regular M&A Underlying Exceptionals EBIT margin 2017 margin 2
Slide 22: Underlying net profit climbs 19%
Underlying net profit climbs 19%, thanks to operational improvements In CHF m Batigroup; 19.3% T-Plus and Createch 66.2 -13.9 consolidation -52.5 -0.3 -7.8 3.9 - Revaluation of PV earn-out consideration for Batigroup - Default interest and final settlement with former Chinese distributor 282.2 277.8
Slide 23: Free-cash-flow increases 17%
Free-cash-flow increases 17% despite further investments in production & business expansion In CHF m 17.1% 71.5 -35.1 4.3 -1.5 -14.4 169.4 144.7 Production expansion in various Group sites FCF margin FCF margin 13.0% 12.4% Free cash flow 2017 EBITDA improvement Additional CAPEX Change in NWC Change
Slide 24: International production expansion to meet growing demand
International production expansion to meet growing demand Villeret II (CH) Villeret I (CH) Curitiba II (BR) CHF 72m invested in land, buildings and machinery for production plants in Switzerland, Brazil and the US CHF 40 m overall investment in Villeret expansion project to add 16 000 m2 product
Slide 25: Dividend raised
Dividend raised Based on the results and positive developments in 2018, the Board proposes a dividend increase to CHF 5.25 per share (prior year: CHF 4.75) Dividend is payable on 11 April 2019 (ex-dividend date: 9 April 2019) 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
Slide 26: Recent achievements & strategy in action
Recent achievements & strategy in action Marco Gadola, CEO
Slide 27: Strategic progress 2018: Drive high performance culture
Strategic progress 2018 Drive high performance Straumann Group culture and organization Cultural Journey 2.0 initiated Staff survey: high engagement; need to improve collaboration, communication & coaching Increased investment in personal development, career/succession planning Culture emphasi
Slide 28: Strategic progress 2018: Target unexploited growth markets
Strategic progress 2018 Target unexploited growth markets & segments Geographic reach 3 new subsidiaries Non-premium implant segment Neodent in >50 markets; distributors acquired; entry to lower value segment in China with T-Plus Biomaterials Brazilian launch; 30% stake in botiss Corporate dent
Slide 29: Strategic progress 2018: Total solution provider for esthetic dentistry
Strategic progress 2018 Expand scope to become a total solution provider for esthetic dentistry Diffentiating solutions Immediacy & edentulous: Neodent GM; Straumann BLX; Mini-implants Ceramic implant segment: Straumann PURE & SNOW (Z-Systems) Digital: Trios3 roll-out; Zirconzahn milling sol
Slide 30: ClearCorrect smiles spread to new markets
ClearCorrect smiles spread to new markets +81% Case growth: Q4 +81%; full year +61%; case starts Customer base expands >15% in 2018 Continued strong growth in North America ClearCorrect aligners promoted with Dental Monitoring system in the US Preparing for market entries after successful
Slide 31: Entry into Chinese clear-aligner market
Entry into Chinese clear-aligner market Exclusive distribution agreement for state-of-the-art clear aligners developed and registered by Tianjin ZhengLi Technology Company Immediate access to second-largest, fastest-growing1 clear-aligner market (market expected to grow >50% in next five years1)
Slide 32: Creating smiles in the Middle East with Zinedent
Creating smiles in the Middle East with Zinedent Participation increased from 50% to full ownership for approx. CHF 10m (2.01.19) Zinedent supplies implants to Turkey and distributor markets in Middle East, N. Africa, and Eurasia. Products use an established design and are priced for the third
Slide 33: Partnership with Z-Systems creates a leading force in ceramic implants
Partnership with Z-Systems creates a leading force in ceramic implants 34% stake in pioneering leader in ceramic implant systems Loans + capital injection to support Z- Systems’ pipeline and expansion. Exclusive distribution rights for first metal- and plastic-free screw-retained two-piece cer
Slide 34: Investment in Valoc bears fruit
Investment in Valoc bears fruit After a very successful 4-year partnership, the Group increased stake in Valoc from 44% to a controlling 55% (consolidated as of 29.01.19) Swiss-made high-performance retention devices for implant-borne removable dentures Novaloc® and Optiloc® are very durable,
Slide 35: IDS 2019: Innovations with game-changing potential
IDS 2019: Innovations with game-changing potential Major launches, including BLX 500m2 Arena of Confidence in Hall 4.2 Straumann investor event (Hotel Dorint) and media conference (Convention) on 13 March 35
Slide 36: Planning succession in a position of strength
Planning succession in a position of strength Guillaume Daniellot (EVP Sales NAM) to succeed Marco Gadola as CEO on 1 Jan. 2020 Marco Gadola proposed for election to the Board in 2020 Continuity with experienced, talented, internal candidate, Marco Gadola who shares present CEO’s drive, entrep
Slide 37: Additional Board Member proposed
Additional Board Member proposed Juan-José Gonzalez proposed for election to the Board Expert in the medical-technology and consumer-health sectors, with a deep knowledge of global markets, healthcare systems, and technology 12 years at J&J in Orthopedics and Consumer Health; currently heads t
Slide 38: Outlook 2019 and beyond
Outlook 2019 and beyond
Slide 39: Our 2019 guidance
Our 2019 guidance Barring unforeseen circumstances Global implant market to continue to Market growth grow between 4-5% Our revenue Confident to outperform and achieve organic growth revenue growth in the low-teens percentage range Further improvement in the underlying1 Profitability EBITDA and EBIT
Slide 40: Focusing on the BLX launch
Focusing on the BLX launch Dynamic Bone Management™ ‘Cut, collect, condense’- properties Bi-directional cutting elements Stress-free crestal bone Enhanced drill design More than edentulous and immediacy solutions 40
Slide 41: Plenty of opportunity to gain share in the non-premium implant segment
Plenty of opportunity to gain share in the non-premium implant segment Global implant & abutment market 2018 Lower Non-premium value Premium Upper value Lower value ~CHF 4bn Premium Upper Straumann Group brands are distinguished by innovation, pre-clinical value research, product innovation and brea
Slide 42: 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. 2018 2012 vs. 2018 (in value) Premium Uppe
Slide 43: Questions & answers
Questions & answers straumanngroup
Slide 44: 2018 Annual Report published today
Pushing boundaries 2018 Annual Report published today 44
Slide 45: Investor & Analyst Breakfast
INVESTOR & ANALYST BREAKFAST Program 08.00 Opening 08.30 Start event 10.00 End of event Agenda Update on our strategic initiatives Megatopics in implantology feat. top independent expert in immediacy New digital solutions Trends and achievements in the DSO field Q&A session MARCH 12 13 14
Slide 46: Calendar of upcoming events
Calendar of upcoming events 2019 Event Location 20 February Investor meetings New York 21 February Investor meetings Chicago 13 March IDS Investor event Cologne (D) 21 March Kepler Cheuvreux Swiss Seminar Zurich 26 March Investor meetings Paris 27 March Investor meetings London 05 April AGM 2019 Bas
Slide 47: Estimated impact from IFRS 16 (Leases) adoption in 2019
Estimated impact from IFRS 16 (Leases) adoption in 2019 Approx. IFRS 16 impact (in CHF million)1 Total Revenue Gross margin +0.5 EBITDA +18.0 EBIT +3.0 Financial results -5.0 Profit before tax -2.0 1 Barring unforeseen circumstances, major currency movements and/or change in business scope 47
Slide 48: Growth strategy pays off
Growth strategy pays off in CHF m 2017 2013 2014 2015 2016 2018 5-year average restated H1: 543.421 Revenue 679.9 710.3 798.6 917.5 1'112.1 1363.6 Organic revenue growth in % 1.2 6.4 9.1 13.1 15.7 18.9 12.6 20.9% Acquisiton / Divesture effect in % -0.8 0.0 9.5 0.8 4.1 4.2 3.7 18.2% Change in l.c.% 0
Slide 49: Straumann's currency exposure
Straumann’s currency exposure Revenue breakdown FY20181 FX sensitivity CHF Average exchange rates (rounded) (+/- 10%) on full-year... 6% Other Closing 21% 2017 2018 2018 Revenue EBIT EUR 1 EURCHF 1.11 1.15 1.13 +/- 39m +/- 23m BRL 29% 8% 1 USDCHF 0.98 0.98 0.99 +/- 37m +/- 17m JPY 100 BRLCHF 30.69 2
Slide 50: Investor.relations@Straumann.com
Investor.relations@Straumann.com