Demant A/s · OMXCOP:DEMANT

Demant A/s — William Demant Holding — H1 2003 Earnings Presentation

17 slides from Demant A/s's earnings presentation, September 2003

  1. Slide 1: William Demant Holding A/S Investor Presentation

    First Half 2003 William Demant Holding A/S Investor Presentation August/September 2003 1

  2. Slide 2: Background information

    First Half 2003 Background information The William Demant Group develops, manufactures and sells products and equipment designed to help the hearing and communication of individuals. The core business is hearing aids. 2

  3. Slide 3: Background information: Group structure

    First Half 2003 Background information Group structure 3

  4. Slide 4: Headlines

    First Half 2003 Headlines • Core business grew more than 10% from first half 2002 to first half 2003 • The Group captured additional market shares in a soft market for hearing aids • EBIT increased to DKK 423 million and profit margin increased to 22.2% - record levels for the Group • EPS improved t

  5. Slide 5: Revenue in first half 2003

    First Half 2003 Revenue in first half 2003 Diagnostic Personal Instruments Communication • Total sales: DKK 1,903 million DKK 104 million DKK 101 million • Organic growth of 7% • Negative currency impact of 11% • Growth supported by product introductions • Retail activities and Personal Hearing Aids

  6. Slide 6: Gross profit/gross margin

    First Half 2003 Gross profit/gross margin Currency 1300 1250 67,0% 66,0% + Efficiency improvements Improved profitability in retail 1200 65,0% Product mix 1150 64,0% - Strong growth in AHAA 1100 63,0% 1050 62,0% Realised rates 1000 61,0% 1st half 2003 Reported DKK million 1H03 1H02 1H02 950 60,0% 1H

  7. Slide 7: Operating profit

    First Half 2003 Operating profit 450 23,0% • Profit margin of 22.2% - 400 22,0% highest in company history 350 • R&D costs up 13% in local 300 21,0% currency - now DKK 143 250 20,0% million or 7.5% of sales 200 150 19,0% • Distribution costs developed 100 in line with revenues and rose 18,0% 50 by 6

  8. Slide 8: Cash flow

    First Half 2003 Cash flow 400 • 22% increase in CFFO 350 300 • Free cash flow increased 25% 250 • Continued focus on 200 minimizing the working 150 capital 100 • Investments kept at planned 50 level 0 1H01 2H01 1H02 2H02 1H03 CFFO Free Cash Flow 8

  9. Slide 9: Currency impact

    First Half 2003 Currency impact Comparable 2002 revenues Currency USD JPY GBP DKK million Realised rates 1 half 2002 829 6.4 1176 Realised rates 2002 789 6.3 1182 3,924 Realised rates January 2003 700 5.9 1131 3,666 (-6.6%) Realised rates 1 half 2003 674 5.7 1085 3,631 (-7.5%) Realised rates July 20

  10. Slide 10: Key figures - overview

    First Half 2003 Key figures - overview DKK million 1H03 1H02 Growth y/y 2002 Revenue 1,903 1,977 -4% 3,924 Gross profit 1,255 1,267 -1% 2,505 EBIT 423 405 5% 809 Net profit 304 284 7% 779 CFFO 357 291 22% 669 Free cash flow 291 232 25% 549 EBIT margin 22.2% 20.5% 20.6% EPS, DKK 4.3 3.8 12% 7.9 CFPS,

  11. Slide 11: Business areas - hearing aids

    First Half 2003 Business areas - hearing aids • Market growth of 1-2% measured in units and 3-4% measured in value • US market down 1.1% in units • Europe showed positive growth in units. Germany and France saw double digit growth rates • William Demant outpaced market with more than 10% growth in s

  12. Slide 12: New products supporting growth

    First Half 2003 New products supporting growth Price & performance Product launches since 1999: Super Power family: 1999 2000 2001 2002 2003 12

  13. Slide 13: New products - hearing aids

    First Half 2003 New products - hearing aids • Oticon and Bernafon completed their digital product lines in first half 2003 • Atlas by Oticon was introduced in August 2002 - the most successful launch to date (measured in units) • Gaia positioned just below Adapto - featuring Open Ear Acoustics and p

  14. Slide 14: Focus on power products

    First Half 2003 Focus on power products • Introduction of new family of Super Power hearing aids: SUMO • SUMO XP, the most powerful BTE in the world, introduced in December 2002 (MPO of 146 dB SPL and Gain of 85 dB) • Introduction of wireless directional microphone and FM receiver: Lexis • Super dir

  15. Slide 15: Other business areas

    First Half 2003 Other business areas Personal Communication • Returned to growth (1% organic growth) • Phonic Ear reorganized • Production outsourced • Lexis distributed by Phonic Ear, Bernafon, Oticon and Starkey • Sennheiser Communications launched new headset family for PC market • Successful pro

  16. Slide 16: Shareholder information

    First Half 2003 Shareholder information • Share buy-back continues • 2.3 million shares purchased in first half 2003 at a value of DKK 327 million • Since 1998 a total of DKK 1.1 billion has been used to buy back own shares • Largest shareholder, the Oticon Foundation, will sell shares to retain own

  17. Slide 17: Outlook for 2003

    First Half 2003 Outlook for 2003 • Modest market growth rest of 2003 • Revenues in local currencies still expected to grow 7-10% • Negative currency impact of 8%, reported revenues estimated at about DKK 3.9 billion • EBIT estimate retained at DKK 850-900 million • Free cash flow expected to exceed

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