Gensmile at a glance

1Notes: 1) Includes highly confident pipeline; 2) Financial year ending in Mar-20; 3) Private includes Denplan; 4) As a percentage of practice revenue; 5) As a percentage of practice revenue; 6) Weighted average private revenue CAGR for practices owned for 24+ months

26

Practices1

4

Dental labs

Existing

• Headquartered in Swindon, Gensmile is a leading private dentistry platform operating a network of 26 practices1 and 4 dental labs, predominantly located across the South of England

Awards

83% 19%Private dentistry revenue3, 4

FY20 Denplan revenue5

FY20

35.2£m

5.8£m

Run-rate revenue Run-rate EBITDA

Highly confident pipeline

5Average number of chairs per practice

9% Private revenue organic CAGR6

HQ

Key figures2

The Gensmile vision

2

Maintain clinical excellence

Provide a best-in-class patient experience

Partner with high-quality principals

A practice-by-practice approach

to management

Promote a people-focused culture

Ambition to build a differentiated platform for the long-term that thrives in a world where most practices will be owned by groups

Gensmile’s model and culture attractsprincipals of the best practices

Superior patient experience and clinicalexcellence creates a natural preferenceover competing 'corporate' practices

They, in turn, continue to operate well-run,high-quality practices that deliver care atthe highest standards

A personal approach to managementensures dentists, hygienists and staffchoose to work for Gensmile, and stay

Core values which underpin Gensmile’s model Creating a platform with longevity in mind

35.9 36.1 36.6 36.7 37.0 37.0 36.9 36.9 36.9 36.7

0.3 0.5 0.5 0.6 0.7 1.1 1.5 1.9 2.3 2.7

0

10

20

30

40

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

NHS supply Total excess demand

Shifting population

demographics

Increased demand for high value treatments

NHS access constraints

Highly supportive market dynamics for private-pay operators

3Sources: ONS; Press; NHS

£

• Historically, NHS dentistry funding growth has been slow (<1% growth p.a.)− Most NHS dentistry funding is not ring-fenced

• Funding levels are insufficient to meet growing patient demand, forcing increasing numbers of patients to ‘go private’

• It is widely expected that individual patient charge costs will overtake the average UDA cost in the next few years

NHS service gap projected to result in c.2.7m additional patients seeking private treatment in 2022/23

• Treatment mix is changing in favour of higher value treatments− Increased patient awareness of full range of treatment options− Growing emphasis placed on appearance by baby boomer generation who

want to preserve the health of their teeth and look good for longer− Extensive marketing campaigns (e.g. by implant providers or Invisalign)

• Trend towards patients appreciating the benefits of visiting a hygienist, resulting in increased visit frequency whilst allowing clinics to identify further work that needs to be done

Increasing spend per patient on private dentistry

• Steady population growth through net immigration and increasing life expectancy

• Higher than average growth in the elderly cohort, who typically have the greatest need for dentistry services:− Teeth and restorations deteriorate with age − Quality of treatments received by this cohort earlier in life was poor− Decreasing proportion of patients with full dentures

• Loyalty to dentists and location is a feature across cohorts and drives revenue recurrence General growth in demand for dentistry services

Projected adult population, UK (m)

NHS supply and demand forecast (millions of patients)

3.0%

1.1%

0.1%

2.7m patients forced to ‘go private’ by 2022/23

54.3 54.5 54.9 55.1 55.0 54.8 54.8 55.3 55.6 55.8

10.6 10.7 11.3 12.2 13.1 13.8 14.4 14.5 14.6 14.61.6 1.6 1.8 1.9 2.3 2.8 3.1 3.3 3.7 4.2

0

20

40

60

80

2018 2019 2022 2026 2030 2034 2038 2042 2046 2050

Below 65 65-84 85+

CAGRs18 - 50

31.0%

(0.0%)

CAGRs18 - 23

“The services you offer can determine how you areperceived by dental consumers. Today's educatedpatients are looking for more than root canals, fillings, orextractions. Meeting these expanded wants and needsrequires you to advance your skills in order to offer moreservices. We've seen the rise of Invisalign, immediateimplants, treatment of snoring and sleep apnea, lasers forboth dentists and hygienists, same-day CAD/CAMrestorations, and other expanded services.”

Practices located in areas with highly supportive demographics

4

Practices

Highly confident pipeline

350 500 570 640 890 1080

UKAverage1, 2

Notes: 1) Median gross weekly earnings for full-time employees for all Local Authorities by place of work; 2) Excluding greater LondonSources: ONS; ACORN

Better-off villagers£ ££

Upmarket downsizers

Comfortably-off families in modern housing

Asset rich families

Settled suburbia; older people

Retired and empty nesters

Gensmile is a highly resilient business

5Note: 1) As at Oct-19; excluding Highcliffe, Sherborne, Sparkle practices due to availability of data

Low proportion of NHS / NHS upsell revenue

• Limited NHS capacity to absorb additional private patients in a downturn, with NHS funding growth currently belowinflation

• Patients had the option to trade down to NHS dentistry during the last recession against a backdrop of growingcapacity and funding

Affluent base of older patients

• Practices in affluent areas likely to perform well in a downturn as patients continue to spend on dentistry• 77% of Gensmile’s private patients are over 401, making them far less transient than younger patients

- Higher disposable income / resilience of the ‘grey pound’- Greater need for dentistry / treatments more essential as patients age

Resilient private revenue mix

• Core focus is family dentistry, which tends to be recurring in nature and resilient• NHS upsell and highly discretionary treatments were hit hardest in last recession; neither is a focus for Gensmile• Very small proportion of revenue derived from cosmetic treatments (e.g. teeth whitening, facial aesthetic

treatments, full smile makeovers)

Quality of practices • Well-invested practices with strong reputation are best placed to outperform and gain market share in a downturn• Marketing capabilities and resources to help sustain patient visits

Resilience factors Commentary

c.500

Huge buy-and-build opportunity for private-led operators

Note: 1) Backed by institutional moneySources: Mintel; Christie; DC intelligence

Administrative and compliance requirements are becoming increasingly burdensome for independent clinics, with expert support becoming increasingly valuable for CQC inspections

Growing importance of investment in marketing, digital capabilities, financial reporting and sophisticated IT functions to remain competitive

Increased value placed on flexible working hours, particularly by the growing proportion of younger female dentists

Demand for the ability to collaborate with professional peers and to access a wider network in order to share knowledge

Partnering with a group enables dentists to focus solely on their clinical profession or to manage their retirement plan from the industry if they wish to do so

UK dental practice ownership

12%

88%

Corporate ownership1

Independently owned

11k

c.1k

6

12,500 clinics in UK

88% independently owned

Estimated that 8-10% come to market each year

Approximately half assumed too heavily NHS-reliant

Estimated # of independently owned, primarily private clinics that come to market p.a.

c.500

Favourable market dynamics and excellent clinic availability… …supported by evolving dentist demographics and priorities which will favour larger chains in the long-term

Comparison of NHS, Private & Mixed dental models

NHS

Pros• Demand stable• Independent of individual

dentist• Opportunities of new

contract• Resilient to economic

shocks/ countercyclical

Cons• Recruitment issues• Falling profitability• Low growth• Harder to upsell than in the

past• Young dentists reluctant to

work in NHS• Higher footfall is harder to

manage & means more wear and tear

• Regulatory friction

Private

Pros• Growth potential• Higher revenue per

hour/chair• Larger range of potential

revenue streams (e.g. specialisms)

• Higher profit potential• Independent of govt policy• Where dentists want to be• Plans offer stable revenue

Cons• More reliant on individual

dentists• More reliant on marketing to

generate demand• Expectation of higher

standards, which may require higher capex

• Risk in consumer downturn

Mixed

Pros• Diversifies revenue• Favourable profile of stable

NHS revenue and growth from private

• Bigger addressable acquisition market

• NHS patients can be converted to private/plan

• Larger pool of patients for referrals

Cons• Can be difficult to

manage/culturally• Private: service• NHS: delivery

• Cost structure may be too high for NHS

• How justify to private patients that they are paying where others are treated for ‘free’

• How compete for private business vs. pure private