Thomas Dressendörfer, CFO - Straumann...Being the partner of choice Thomas Dressendörfer, CFO...

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Being the partner of choice Thomas Dressendörfer, CFO Inaugural CHF Bond Roadshow Basel/Zurich, 4 April 2013

Transcript of Thomas Dressendörfer, CFO - Straumann...Being the partner of choice Thomas Dressendörfer, CFO...

Page 1: Thomas Dressendörfer, CFO - Straumann...Being the partner of choice Thomas Dressendörfer, CFO Inaugural CHF Bond Roadshow Basel/Zurich, 4 April 2013 ... Market position /share Segment

Being the partner of choiceThomas Dressendörfer, CFOInaugural CHF Bond RoadshowBasel/Zurich, 4 April 2013

Page 2: Thomas Dressendörfer, CFO - Straumann...Being the partner of choice Thomas Dressendörfer, CFO Inaugural CHF Bond Roadshow Basel/Zurich, 4 April 2013 ... Market position /share Segment

� Straumann 2

Disclaimer

This presentation contains certain “forward-looking statements”, which can be identified by the use of terminology such as “will”, “guidance”, “would”, “prevailing”, “still be able to”, “should”, “confidence in achieving”, “turnaround”, “future”, “anticipated”, “continue”, “mid and long term”, “believes”, “outlook”, or similar wording. Such forward-looking statements reflect the current views of Management and are subject to known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of the Group to differ materially from those expressed or implied. These include risks related to the success of and demand for the Group’s products, the potential for the Group’s products to become obsolete, the Group’s ability to defend its intellectual property, the Group’s ability to develop and commercialize new products in a timely manner, the dynamic and competitive environment in which the Group operates, the regulatory environment, changes in currency exchange rates, the Group’s ability to generate revenues and profitability, and the Group’s ability to realize its expansion projects in a timely manner. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this report. Straumann is providing the information in this release as of this date and does not undertake any obligation to update any forward-looking statements contained in it as a result of new information, future events or otherwise.The availability and indications/claims of the products illustrated and mentioned in this presentation may vary according to country.

Page 3: Thomas Dressendörfer, CFO - Straumann...Being the partner of choice Thomas Dressendörfer, CFO Inaugural CHF Bond Roadshow Basel/Zurich, 4 April 2013 ... Market position /share Segment

Straumann in a nutshell

Page 4: Thomas Dressendörfer, CFO - Straumann...Being the partner of choice Thomas Dressendörfer, CFO Inaugural CHF Bond Roadshow Basel/Zurich, 4 April 2013 ... Market position /share Segment

«To be the partner of choice»

Straumann is a global leader in implant and restorative dentistry and oral tissue regeneration

A pioneer of dental implants that offers ‘Swiss’ quality and scientific innovation for more than 50 years

Annual revenue of just under CHF 700 million with a respective Ebit margin of 15%

~2500 employees from ~45 nations

Listed at the SIX Swiss exchange with a market capitalization of CHF 2bn

Mission is ‘Simply doing more for dental professionals and patients’

Straumann 4

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5 Straumann 5

1954 – 1970Material testing and research

1970 – 1990Medical devices

Since 1990Dental medical devices

Half a century of science-based innovation and precision engineering

1974First StraumannDental implant

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Significant business developments since IPO in 1998

1974 - Implant dentistry

2002 – Regenerative dentistry

2007 – Restorative and digital dentistry

Straumann

Page 7: Thomas Dressendörfer, CFO - Straumann...Being the partner of choice Thomas Dressendörfer, CFO Inaugural CHF Bond Roadshow Basel/Zurich, 4 April 2013 ... Market position /share Segment

Straumann serves three dental specialty segments...

Regeneratives Dental implants & abutments

CADCAM restorations on natural teeth

CADCAMrestorations on implants

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Dental Implants & stock abutments

Regeneratives

Digital dentistry

Total market size

Market position /share

Segment size (share of sales)

Straumann active since

No. 1

18%

No. 4

<5%

No. 5

<5%

CHF 3.0bn1

CHF 0.4bn

CHF 2.0bn

1 Including implants, stock abutments and tools ; Source: MRG 2012, iDATA 2012, Straumann estimates

1970

2003

2007

Equipment

CADCAM Elements

Bone Substitutes

MembraneTissue Regeneration

Dental implants

Abutments

~90%

<5%

>5%

…and offers ‘bone to tooth’ solutions

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Main competitors

3M ESPE, Sirona, Dentsply,

3Shape, Nobel Biocare

Geistlich, Zimmer, ACE,

Dentsply, BioHorizons

Nobel Biocare, Dentsply, Biomet 3i,

Zimmer

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Straumann

Why does CADCAM matter for Straumann?

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Digitalization will further change value chain for companies & workflows for dentists and labs

Surgical planning and prosthetic (i.e. crown) design software will converge

Enabler: Implant companies that offer full ‘bone-to-tooth’ solutions will have an advantage offer single component suppliers

The more general dentist will embrace implant treatments, the more important a completive CADCAM prosthetic offering will become

Page 10: Thomas Dressendörfer, CFO - Straumann...Being the partner of choice Thomas Dressendörfer, CFO Inaugural CHF Bond Roadshow Basel/Zurich, 4 April 2013 ... Market position /share Segment

Straumann subsidiaries

Production plants

Distributors

A global footprint…

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Present in >70 countries through 23 fully-owned sales subsidiaries and a broad distributor network

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…with dedicated production sites

Graefelfing (D)CADCAM scanner assembly

Arlington (USA):CADCAM milling

Markkleeberg (D)CADCAM milling

Andover (USA)implant system

Villeret (CH)implant system

Malmoe (S)regenerative products

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Straumann 12

Straumann’s shareholder structure (on 31 December 2012)

Major private shareholders

38.1

Major institutional

shareholders 16.8

Other institutional

shareholders 16.5

Private individuals

11.0

Non-registered

17.6

Switzerland 56.8

Asia 14.2

Europe 9.1

USA 1.9

ROW 0.3

Non-registered

17.6

Major shareholders (REGISTERED)31 Dec 2012 31 Dec 2011

Thomas Straumann (Vice Chairman) 17.3 27.3

Government of Singapore Inv. Corp. Pte. Ltd. 13.8 n/a

Rudolf Maag 12.2 12.2

Simone Maag de Moura Cunha 5.2 5.9

Gabriella Straumann 3.4 3.4

Sprucegrove Investment Management 3.0 n/a

Total 54.9 48.8

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Fundamentals intact – emerging markets with attractive growth profile

Page 14: Thomas Dressendörfer, CFO - Straumann...Being the partner of choice Thomas Dressendörfer, CFO Inaugural CHF Bond Roadshow Basel/Zurich, 4 April 2013 ... Market position /share Segment

The opportunity and the challenge: meeting a huge medical need

Straumann1 Straumann estimates, Finnish National Agency of Medicines2 AFG study 2012 in developed countries with >5000 people interviewed

0-19 20-29 30-39 40-49 50-59 60-69 70-female male

Age distribution of implant treatments1

More than a quarter of a billion people in the industrialized world alone are missing one or more teeth; up to 1/3 of people over 65 have no teeth

59% of the 45-54 year olds and 33% of the <35 have lost at least 1 tooth1

Only ¼ seek treatment and of those only a fraction chooses implants

Reasons:

lack of awareness

lack of trained dentists offering implants

lack of reimbursement

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A global market yet to unlock

1 Straumann estimates, based on Millennium Research Group 2011.

Dental implants per 10 000 population in 20111

0

100

200

KR IT ES CH DE SE BR FR US JP UK CN

Top3193

Today, in most countries, the number of implants placed annually is >50% lower than the average of the three highest-penetrated countries

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1 Straumann definition for dental implant penetration: Number of people treated with dental implants/number of people treated for tooth loss2 Source:Straumann proprietary study based on ~5000 respondents conducted by AFG Research 2011; Straumann estimates

US example: implant penetration rising to 25-30%

Adult population

Implant treatment 2011: 15-20%2020: 25-30%

Conventional treatment2011: 80-85%2020: 70-75%

Straumann

People affected by tooth loss:45-55%

Annual tooth loss cases seeking treatment:5-10%

People actually treated: 45-55%

Oral hygiene / dental awareness / nutrition / aging population / education

‘Pain Level’ / economics / access to treatment / reimbursement / awareness

Financing / awareness / eligibility / treatment acceptance

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35%65%

20-25%

75-80%

10-15%

85-90%

35%

65%

28%

72%

19%

81%

17Emerging market definition according to MSCI; market split by value.Source: Euromonitor, BMI, MRG and Straumann estimates.

2004

Luxury watches

Automotive

Dental implants

2011 2015E

52%48%

58%42%

16%

84%

Emerging markets Developed markets

Emerging markets have gained share rapidly

Straumann

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All BRIC countries will become top 12 healthcare markets by 2020

2000 Rank 2010 Rank 2020 Rank

US US US

Japan Japan China

Germany Germany Japan

France France Germany

Italy China Brazil

UK UK France

Canada Italy UK

China Canada Italy

Spain Brazil Spain

Netherlands Spain Russia

Australia Australia India

Brazil Netherlands Argentina

Source: Business Monitor International, 2010 and International Monetary Fund, World Economic Outlook Database, December 2010

0%

2%

4%

6%

8%

10%

12%

LatinAmerica

China India Russia UnitedStates

EU 5 Japan

Anticipated growth in healthcare costs between 2010-20

Average

Straumann

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Brazil has an attractive growth profile

Straumann

Dental implantmarket size

(value)

Source: MRG 2010, Fundação Getulio Vargas, Ernst & Young, McKinsey Global Institute, BCG, US Census Bureau; Straumann estimates.

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Neodent impresses in 2012 and offers excitingopportunity in South America

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Net revenue 20121 Growth

BRL196m +17%(approx. CHF 93m)

EBITDA

>40%Net profit Margin

BRL53m 27%

StraumannStraumann holds a 49% stake in Neodent with an option to increase to 100%. IFRS consolidation expected in 2015. Market share data from iData 2011.

1 Total revenues from all segments incl. international businesses

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Straumann

LATAM 95%

Europe55%

North America

25%

APAC15%

RoW4%

Neodent

Europe 50%

North America

20%

APAC 15%

LATAM 13%

ROW 2%

How a full combination would look

Pro forma1

1100% combination of Straumann and Neodent

Combination allows Straumann to participate in future growth markets Option to increase to 100% over next five years

Consolidation expected in 2015

<5%

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Recent developments &Financial performance

Page 23: Thomas Dressendörfer, CFO - Straumann...Being the partner of choice Thomas Dressendörfer, CFO Inaugural CHF Bond Roadshow Basel/Zurich, 4 April 2013 ... Market position /share Segment

Straumann 23

Weak economy in Europe Dampened consumer confidencePatients postponing complex treatment or taking cheaper/inferior options

Growth potential in North America intactSlow patient traffic Fundamentals intact

Asia: mixed picture Strong growth in China Sluggish Japan due to damaging media reports

Robust growth in Latin AmericaStraumann and Neodent grow strongly in Brazil

What is happening in the markets?

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New technologies enable full digital procedures with optimized materials (improved esthetics, durability, pre-shaded) No threat from new technologies expected Increased competition from low-cost/inferior alternatives including conventional tooth replacementDental labs under pressure to find optimal levels of production, outsourcing, efficiency and qualityImplant therapies are widely paid out of pocket - no increase in public reimbursement expected

Straumann’s response to these changes:

What is happening in the markets?

Dual brand strategy in selected marketsContinued high R&D investments to maintain innovation leadershipNew technologies and solutions to reduce cost of treatment and CAPEXFurther expansion of ITI network (due to lack of trained dentist)Drive sales efficiency (new sales force set-up implemented in 2012)

Page 25: Thomas Dressendörfer, CFO - Straumann...Being the partner of choice Thomas Dressendörfer, CFO Inaugural CHF Bond Roadshow Basel/Zurich, 4 April 2013 ... Market position /share Segment

Above-average performance in a challenging market

1 Market share weighted growth rates (l.c.) of Biomet/3i, Dentsply, Nobel Biocare, Straumann and Zimmer; collectively representing 2/3 of the dental implant market. Source: Published company data, 10-K and management comments

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

Straumann organic growth

Market for tooth replacement & restoration (leading implant companies)1

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in CHF million ChangeReported excl.

exceptionals FX adjusted Reported excl.

exceptionals vs. adjusted

Revenue 693.6 693.6 697.5 686.3 686.3 (1.6%)

excl. iTero discontinuation (1.0%)

Gross profit 528.5 528.5 531.9 531.5 534.4

Gross profit margin 76.2% 76.2% 76.2% 77.5% 77.9% 1.6%

EBITDA 157.4 157.4 158.3 117.4 130.4

EBITDA margin 22.7% 22.7% 22.7% 17.1% 19.0% (3.7%)

Operating profit (EBIT) 79.9 120.1 120.3 61.0 99.5

EBIT margin 11.5% 17.3% 17.2% 8.9% 14.5% (2.7%)

Net profit 71.0 36.4

Net profit margin 10.2% 5.3%

Basic earnings per share (EPS) 4.54 2.36

Free Cash Flow 121.1 95.2

Free Cash Flow margin 17.5% 13.9%

FY 2011 FY 2012

Straumann

Performance on like-for-like basis

1 Throughout this presentation the term ‘exceptionals’ comprises the following: in 2011, the impairment of intangible assets in Japan of CHF 40m (and related tax effect); in 2012, the goodwill impairment of CHF 21m relating to the global regenerative business, and charges of CHF 18m related to the Group’s cost optimization program and severances

1

2

3

1

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Page 27: Thomas Dressendörfer, CFO - Straumann...Being the partner of choice Thomas Dressendörfer, CFO Inaugural CHF Bond Roadshow Basel/Zurich, 4 April 2013 ... Market position /share Segment

Adapting from growth – to cost optimization and selective expansion

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REVENUE KEY DRIVER 2012 GROSS MARGIN

CHF 686m +6% (l.c.) 78%Promising start to 2012Market slowed from Q2

Solid growth in North America partly offset slow Europe (-5% l.c.)

Efficiency gainsMargin expanded

OPERATING INCOME MARGIN1 UNCHANGED DIVIDEND STRATEGY

15% CHF 3.75 VisionEBIT margin disappointing: Cost optimization programReduction of 150 positions

Return to normal cash dividend Reorganization; investment in key growth markets (e.g. Brazil, China, US); digital strategy advances to next level

Straumann 1 Excluding exceptionals

Page 28: Thomas Dressendörfer, CFO - Straumann...Being the partner of choice Thomas Dressendörfer, CFO Inaugural CHF Bond Roadshow Basel/Zurich, 4 April 2013 ... Market position /share Segment

Straumann 28

Despite heavy FX headwind, strong gross margin -OPEX rightsizing underwayIn CHF million

1 All figures pre-exceptional figures

79.7% 79.6% 76.2% 77.9% 76-78%

29.6% 28.7%22.7%

19.0%

up to 30.0%

2009 2010 2011 2012 Vision 2020

Gross margin EBITDA

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Straumann 29

Solid cash generation

1 All figures pre-exceptional figures2 Investments in Neodent and Dental Wings

377 (266)2

(58)

(27)

115 141

0

100

200

300

400

Cash &equivalentsJanuary '12

Acquisitions Dividend CAPEX& others

Operatingcash

Cash &equivalents

Dec '12

in CHF Mio.

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CASH & EQUIVALENTS EBITDA1 NET DEBT/EBITDA

CHF141m CHF130m -1.08xMostly held centrally at the HQ; 1st tranche (49%) of Neodent acquisition financed through cash position

Or 19% of revenues. Solid profitability level despite challenging European market environment; cost optimization program running 2012-2013

Conservatively financed with a strong net cash position

EQUITY RATIO NET WORKING CAPITAL ANNUAL CAPEX (3Y AVERAGE)

82% CHF63m CHF20mNo Debt and shareholder equity of CHF 631 million

Or 9% of revenues Or 3% of revenues

Straumann 1 Excluding exceptionals

Debt free and solid cash generation

Page 31: Thomas Dressendörfer, CFO - Straumann...Being the partner of choice Thomas Dressendörfer, CFO Inaugural CHF Bond Roadshow Basel/Zurich, 4 April 2013 ... Market position /share Segment

Building for the future

Page 32: Thomas Dressendörfer, CFO - Straumann...Being the partner of choice Thomas Dressendörfer, CFO Inaugural CHF Bond Roadshow Basel/Zurich, 4 April 2013 ... Market position /share Segment

Demographics

The drivers of our industry

Patient awareness on esthetics & quality of life

Dentist training & experience

Increasing acceptance

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Implant market assumed to grow in high single digits

Implant dentistry market1 value (in CHF bn)

2011 2020 CAGR 2011-20

~3.5 6-8 6-10%

Main threat to long-term market growth in implant dentistry is the possibility of another global recession between now and 2020 (lower range estimate)

1 Includes implants, abutments, tools. These data only include inflation element.Source: MRG 2011, Straumann data. 33 Straumann

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The building blocks of our strategy

Extension of scope

Base

Defined growthinitiatives1

Based on market growth and our ability to outperform our market segment

Acceleration by capturing additional growth opportunities

Acceleration by extending business scope

Straumann1 Growth initiatives include regional strategies, sales force expansion in selected markets and access to new technologies.

Page 35: Thomas Dressendörfer, CFO - Straumann...Being the partner of choice Thomas Dressendörfer, CFO Inaugural CHF Bond Roadshow Basel/Zurich, 4 April 2013 ... Market position /share Segment

Straumann and the ITI – a unique collaboration in evidence-based dentistry

Founded in 1980, the ITI is the world‘s largest implant dentistry network exceeding 13 000 members in 95 countries

Straumann is exclusive implant manufacturing partner

Thousands of training courses each year covering all levels of proficiency

Practice-driven education based on scientific evidence and consensus papers

Clinical activitiesPublications

Education

Network

Research

Commercialactivities

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Page 36: Thomas Dressendörfer, CFO - Straumann...Being the partner of choice Thomas Dressendörfer, CFO Inaugural CHF Bond Roadshow Basel/Zurich, 4 April 2013 ... Market position /share Segment

Envisioned key financials and regional mix in 2020

~ 76-78%up to25%

36STRAUMANN CMD 2012Copyright Straumann. All rights reserved.

Net revenue(CHF)

>1.5bn

Gross margin

~76–78%

EBIT margin

up to25%

Europe

NAM

APAC

LATAM & ROW

20112020

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Key points in brief

Growth fundamentals are intact; existing markets provide attractive opportunities

‘Vision 2020’ provides a valuable roadmap for the future

Straumann has already started implementation, through a redesigned organization, tailored regional strategies and a portfolio of innovative solutions and services, to address key customer and market needs

Our vision statement “to be the partner of choice” remains unchanged and we will remain focused (i.e. modern tooth replacement market)

Straumann

Page 38: Thomas Dressendörfer, CFO - Straumann...Being the partner of choice Thomas Dressendörfer, CFO Inaugural CHF Bond Roadshow Basel/Zurich, 4 April 2013 ... Market position /share Segment

Questions?

Page 39: Thomas Dressendörfer, CFO - Straumann...Being the partner of choice Thomas Dressendörfer, CFO Inaugural CHF Bond Roadshow Basel/Zurich, 4 April 2013 ... Market position /share Segment

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EUR 21%

CHF 47%

Other 13% USD/CAD/AUD

19%

Straumann’s currency exposure

2011

2012

Cost breakdown1Net revenue breakdown

1 These distribution charts represent the total net revenues and the total COGS, SG&A costs as well as R&D expenses in the various currencies. All numbers are rounded and based on 2012 figures.

Other 21%

CHF 11%

EUR 41%

USD/CAD/AUD 27%

Straumann

Transaction exposure hedged for up to max 12 months Reduction of currency risk through natural hedges where possibleIncrease purchasing in foreign currencies Translation risk not hedged