2013 Full-year results - Straumann · 2020-06-20 · 1 2013 Full-year results Analysts’ & Media...

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2013 Full-year resultsAnalysts’ & Media ConferenceBasel, 25 February 2014

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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 materially from those expressed or implied in this presentation. Straumann is providing the information in this presentation as of this date and does not undertake any obligation to update any 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.

Disclaimer

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Explanation of terms

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To facilitate comparisons and to show underlying performance, this presentation refers to ‘organic growth’ and ‘exceptionals’

‘Organic growth’ means excluding the effects of:— currency fluctuations — the discontinuation of the intra-oral scanner distribution business (N. America and

Europe only) in October 2012

‘Exceptionals’ refers to: — 2013: Restructuring charges of CHF 17m and a pension curtailment gain of CHF 9m,

both related to cost-reduction initiatives— 2012: Charges of CHF 18m related to cost reduction and severances and the goodwill

impairment of CHF 21m relating to the global regenerative business

2012 figures have been restated due to adoption of the IAS 19R (employee benefits) standard.

2013 HighlightsMarco Gadola, CEO

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5

Achievements and highlights

Organization adapted to changing market environment

Turnaround achieved

Profitability significantly enhanced

Innovation lead restored

Share price / investor confidence restored

Q4 2013

Third consecutive quarter of organic growth

Paradigm-changers launched at successful EAO

Foothold in value segment strengthened

Full-year 2013

Improvements at all levels

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REVENUE BEST PERFORMERS GROSS MARGIN

CHF 680m N. America & ROW 78.8%

Full year: +1% (organic) Fourth quarter: +4% (organic)

Full year: +8% (organic) +95 base points1 driven by further efficiency gains & optimized plant utilization

EBIT MARGIN1 PREMIUM+VALUE STRATEGY ORGANIZATION

18.2% Portfolio expansion Resized & refocused

+333 base points thanks to improved gross profit and benefits from cost optimization measures

Investments in Medentika and Createch complement expanding Neodent

To support sales and adapt to a fast-changing market

1 Excluding exceptionals

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* Straumann, Nobel Biocare, Zimmer Dental, Biomet 3i, Dentsply Implants - based on company and SEC reports as well as management comments.

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Good progress more than offsets the slow start

1Straumann, Nobel Biocare, Zimmer Dental, Biomet 3i, Dentsply Implants - based on company and SEC reports as well as management comments. 2 Source: MRG and iData @2013 FX rates. Data include implants & abutments, but no instruments.7

Straumann19%

Nobel Biocare

17%

DentsplyImplants

13%Biomet 3i7%

Zimmer Dental

5%

Others 40%

Global market for dental implants & abutments (2013: CHF 3 bn 2013)2

Market share

-12%

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

Straumann organic growth

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

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Key growth fundamentals remain intact

20%

32%38%

59%

68%74%

84%

18-24 25-34 35-44 45-54 55-64 65-74 75+

Proportion of US adults missing 1 or more teeth1

0

100

200

Implant penetration per 10 000 population in 20132

Tooth loss due to decay/periodontal disease correlates strongly with age; 3 of every 4 US pensioners have missing teeth

While caries prophylaxis has reduced tooth loss in developed markets, potential for implants is still huge due to demographics, substitution potential etc

50-60% of the US adult population had lost at least one tooth in or prior to 2012

45% of those were fully treated; of the untreated, 31% (approx. 20m) planned to get treatment in the next 3 years

More than a million people needed replacements for existing restorations (e.g. conventional bridges or dentures)

In most countries the number of implantsplaced annually per 10 000 population is less than half the average of the top 3 countries

Top 3

Age

1 Wisdom teeth excluded 2 MRG and iData 2013

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Business and regional reviewThomas Dressendörfer, CFO

10 1 In 2013, Straumann adopted the revised IAS 19R regarding employee benefits. 2012 figures have been restated accordingly.

Margin expansion at all levels

in CHF million

excl. exceptionals

IAS19 restated

excl. exceptionals

at constant FX

excl. exceptionals

at constant

Revenue 679.9 679.9 686.3 686.3 676.9

Change organic % 1.2% (1.0%)

Gross profit 535.9 531.5 534.4 525.0 0.3% 2.1%

margin 78.8% 77.5% 77.9% 77.6% 95 bps 127 bps

EBITDA 148.4 156.4 119.5 132.5 128.8 18.1% 21.5%

margin 21.8% 23.0% 17.4% 19.3% 19.0% 370 bps 398 bps

EBIT 115.8 123.8 63.1 102.1 97.4 21.2% 27.1%

margin 17.0% 18.2% 9.2% 14.9% 14.4% 333 bps 382 bps

Net profit 101.2 37.5

margin 14.9% 5.5%

Basic EPS 6.55 2.43

Free Cash Flow 139.2 95.2

margin 20.5% 13.9%

FY 2013 Change yoyFY 2012

1

6

Organization adapted to match market development

2 201 2 170

2 3612 452

2 517

2 217

2008 2009 2010 2011 2012 2013

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Headcount reduced by 300 to pre-economic crisis level

Overall restructuring/downsizing costs in 2013 amount to a net CHF 8m including severance packages and curtailed pension obligations

80% of leavers had found new jobs by year-end, helped by outplacement support

Strong, engaged team of professionals retained

Cost optimization

measures implemented

Pick-up in H2 helps to restore margins to acceptable levels

1212

in CHF million

excl. exceptionals

excl. exceptionals

excl. exceptionals

Revenue 354.8 325.1 679.9

Change organic % (0.9%) 3.7% 1.2%

Gross profit 276.2 259.7 535.9

margin 77.8% 79.9% 78.8%

EBITDA 74.5 80.0 73.9 76.4 148.4 156.4

margin 21.0% 22.5% 22.7% 23.5% 21.8% 23.0%

EBIT 56.8 62.3 59.0 61.5 115.8 123.8

margin 16.0% 17.6% 18.1% 18.9% 17.0% 18.2%

Net profit 53.7 47.5 101.2

margin 15.1% 14.6% 15.0%

Basic EPS 3.48 3.07 6.55

Free Cash Flow 34.7 104.5 139.2

margin 9.8% 32.2% 20.5%

H1 H2 FY 2013

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13

Third year of efficiency gains in operations

Bubble sizes illustrate market volume potential

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Significant efficiency gains achieved through:

Broader application of ‘lean’ manufacturing principles

Insourcing

Process re-engineering

Design-to-cost initiatives

77.5%

(0.3%) 0.4%

77.6%

0.3%

0.4% (0.3%)

0.8%

78.8%

Gross profit2012

FX effect Costoptimization

charges

Adj. grossprofit @FX2013

Improvedvolume/mixoffsets price

effect

iTero effect Inventorychanges

Manufacturingefficiency gains

Gross profit2013

In % of revenue

Gross profit margin further expanded

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14

+127bps

1 Lower-margin intra-oral scanner sales discontinued October 2012

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In % of revenue

Successful reorganization drives EBIT improvement

1 One‐time project costs of CHF 6m related to Straumann’s reorganization, Neodent transaction and IAS192 Restructuring charges of CHF 13 million and a decrease in pension obligations of CHF 7 million

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+382bps

9.2%

(0.4%)

5.6%

14.4%

1.6% (2.2%)

4.3% 0.1%

18.2%

(1.2%)

17.0%

RestatedEBIT 2012

FX effect Impairment &cost

optimization

AdjustedEBIT 2012

Gross profit Change indistribution

costs

Change inadmin.

expenses

Other income EBIT 2013excl.

exceptionals

Costoptimization

ReportedEBIT 2013

95.2

10.7

33.1 (11.9)7.1

5.3 (0.3)

139.2

Free cash flow2012

Improved grossprofit

(Cash) OPEX Higher workingcapital

Lower CAPEX Less incometaxes paid

Others Free cash flow2013

Impressive cash conversion

FCF margin 20.5%

FCF margin 13.9%

In CHF million

Restructuringcharges included

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Days of sales outstanding

2013: 49 2012: 49

Days of supply

2013: 1612012: 152

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Solid cash position

140.5

139.2 54.2

57.8

199.2 14.0 2.9

383.8

Cash &equivalents

Jan 2013

Free Cash Flow Investments Dividend paid Bond proceeds Sale of treasuryshares

Others Cash &equivalents Dec

2013

In CHF million

Investments in portfolio

expansion: Medentika GmbH

CreatechMedical S.L.

2012 Dividend of CHF 3.75 per share

8.1%(3.2%) 4.7% 8.4%

Change organic

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Decline in Europe offset by solid growth elsewhere

(1.5%) (0.8%)

2012 2013

1.2% organic

In CHF million

(0.9%) in CHF

686.3

(9.4)

(5.4)

671.5

(12.1) 13.64.5

2.4

679.9

Revenue FY FX effect iTero effect Revenue FY@ FX 2013

Europe NorthAmerica

APAC ROW Revenue FY

1 Discontinued of the intra-oral scanner business in October 2012

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Double-digit growth in North AmericaPockets of improvement in Europe

56%

Q4 revenue lags behind prior-year period, reflecting challenging markets

Contractions in Italy, Germany and Benelux

Spain and Nordics improve

(1.4%)(3.4%)

0.2%

(7.7%)(5.6%)

Q4 2013Q3 2013Q2 2013Q1 2013Q4 2012

Eu

rop

eN

ort

h A

mer

ica Second quarter of double-digit

growth

Growth across all businesses, led by implants and regeneratives

Volume expansion and mix (upgrade to Roxolid) contribute to growth

Revenue change (organic)

27%

Pie-chart segment indicates regional sales contribution to the Group19

11.0% 9.1%

10.6%

2.1% 1.8%

Q4 2013Q3 2013Q2 2013Q1 2013Q4 2012

54%

Turnaround in Japan sustains pick-up in Asia

56%

Double-digit increase in Q4; all subsidiaries posted growth

China and South-East Asia distributor markets posted exceptionally strong orders

Recent marketing approval in Japan for SLActive surface

16.3%

7.9%

0.9%

-4.4%-0.9%

Q4 2013Q3 2013Q2 2013Q1 2013Q4 2012

Asi

aP

acif

icR

est

of

Wo

rld

1.8%

35.1%

4.1%-2.6%

-10.4%

Q4 2013Q3 2013Q2 2013Q1 2013Q4 2012

Q4 revenue up 2% (l.c.) after exceptionally strong Q3, reflecting erratic distributor ordering patterns in Middle East

Good growth in LATAM; double-digit growth (l.c.) in Brazil

Currency headwind due to BRL depreciation steals 6% points from regional growth

14%

5%

20

Revenue change (organic)

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Implants

Solid single-digit growth in implant and regenerative businesses offsets decline in prosthetics

� Straumann

Restorative1 Regeneratives

21 1 Excluding the effects of the discontinuation of the intra-oral scanner distribution business in October 2012

Working on the fundamentalsMarco Gadola, CEO

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Tracking the progress of our key priorities

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Lean, high performance organization

Address changed market dynamics

Target unexploited growth markets

Cost reduction measures

Continuing cost discipline

New organizational set-up (customer focus)

Customer- and market-driven solutions ongoing

Address value segment ongoing

Increase presence in fast-growing underpenetrated markets

ongoing

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Implants with high strength and excellent osseointegration open up new treatment possibilities

Small-diameter implants avoid bone augmentation, saving trauma, discomfort and cost – and increasing patients’ acceptance of treatment

Full implant range now available in Roxolid®/SLActive®

New

Loxim™ transfer piece for easier handling

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A new attractive pricing concept


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‘More value, same price’ campaign

Upgrade to Roxolid® SLA ® and SLActive®

implants with LOXIM™ transfer piece offered at same price as titanium equivalents with old transfer piece

Implant pricing structure adjusted in German-speaking countries on 01/01/14; pricing of ‘entry-level’ titanium SLA implant reduced to compete more effectively against value players

New Loxim lift-off transfer

piece

Existingcounter-screwtransfer piece


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State-of-the-art e-shop


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New functionality, navigation and design

Added value and convenience for customers

Opportunities for cross-selling and efficiency gains

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27

Exciting roll-out program

New

4mm

impl

ant

Cer

amic

impl

ant

Str

aum

ann®

ON

E

Str

aum

ann®

Var

ioba

se

Reduces need for bone augmentation Highly esthetic, metal-free

Convenient, all-in-one package Original Straumann connectionfor multiple CADCAM systems

Customer- and market-driven

solutions

Covering the remaining white spots

Surgeons

GPs

Premium

Value

New ceramicimplant

Roxolid/SLActive 4mm implant

Single tooth Multiple tooth Edentulous

Ceramic implants

Standard implant solution

packages

Simpleedentulous solutions

Fixed immediate edentulous solutions

Smaller, less invasive implants

Implants for narrow spaces

Esthetic, fast implant solutions with single crown / small bridge

Low-tech

High-tech

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Straumann ONE

Straumann Variobase

Cost-effective, open platform restoration


solutions


15

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SLActive® launched in Japan

1 Compared with grade 4 annealed and cold worked titanium; data on file, comparing material with specifications from standard ASTM F67; 2 Thoma DS et al. Preclinical findings presented at the AO Annual meeting, San Diego, USA, February 2009; Abs. SO4; 3 Al-Nawas B. Data presented at the EAO Annual Scientific Meeting, Monaco, October 2009

Customers and patients in Japan now have access to the clinical benefits of SLActive1, 2, 3

First company to bring a proven documented hydrophilic dental implant surface to market in Japan

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SLA SLActive


solutions

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A visible cultural change

New concept for marketing materials

Fresh, emotive, lifestyle imagery

To strengthen perception as professional, dynamic, reliable partner

Target groups include young and female dentists

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Expanding our offering

Chart for illustration purpose only

Fu

ll-s

olu

tio

n

off

erin

gL

imit

ed

off

erin

g

‘Goodenough’

Innovation and clinical documentation


Straumann

Premium and value price range covered

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Ceramic implant

Roxolid SLActive

Roxolid SLA

Titan SLA

CM

Smart

Addressing the value segment

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Dynamism at Neodent

Strong value proposition— Excellent price-quality ratio— Multiple bone-level implant lines for various

indications and requirements (handling, prosthetics, price)

— ILPAEO training/education faculty— >5 million implants sold since founded

Solid (domestic) performance1

— High-single digit growth in 2013— Net profit margin expanded to >30%

Expansion underway— Successful launch in Spain in Q4— Will cover 90% of Spanish market territories

by year end— Strong product pipeline— US launch in March

1 On an adjusted basis


Focus on fast-growing emerging markets

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Biodenta

Founded in 2007 in Taiwan and Switzerland

Specializes in comprehensive solutions for dentists and dental laboratories (dental implants, intraoral scanning, chairside milling and CADCAM with central milling)

Focus on emerging market

Global organization; regional hubs in Taiwan, US and Switzerland; >200 employees

Cooperation aimed at opening synergies in emerging markets (China, Taiwan, India, Russia/Ukraine, Turkey, Middle East etc) as well as the USA and Switzerland

Straumann has purchased a bond from Biodenta for CHF 6m, which can be converted into common shares

Biodenta will pursue its planned growth strategy and, having completed a pre-listing in 2012, is working towards an IPO in the near-to-mid term


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Straumann expects the global implant market to develop positively in 2014 and its revenue to grow in the low-single-digit range in local currencies

The Group will continue to invest in dental growth markets and will extend the reach of its non-premium offering

Thanks to the full impact of the cost-reduction measures, Straumann aims to expand operating income margin in 2014

Outlook 2014 Barring unforeseen circumstances

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Confidence that we can outperform in 2014 based on….

Leading innovation and solutions

— Only company with Roxolid small implants

— First company with hydrophilic implant surface in Japan

— Open CADCAM workflow; extended collaboration with 3Shape allowing users to design & order customized abutments with Straumann original connection

— ‘More Value’ campaign

Initiatives to address GP segment (T&E, dedicatedproduct solutions)

Investments in salesforces in growth markets andin selling skills

Traction from ITI World Symposium

Entrepreneurial value segment strategy

— With Neodent, Medentika, Createch and Dental Wings, Group satisfies a broader range of customer needs andbudgets than other global implant companies

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First step towards goal of restoring historicmargin levelsUnderlying EBIT margin

15-20%

2008 2012 2013 Mid term

14.5% 10-15%

18.2%

>20%

27.4%

Straumann Dental benchmark1

1 Peers comprise Nobel Biocare, Dentsply, Patterson, Henry Schein, Osstem, and Sirona.

10%

15%

20%

25%

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10-15%

20.7%@ 2013 FX rates

10-15%

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2014 – An anniversary year


60th anniversary of Straumann

40th anniversary of our pioneering entry into implant dentistry

25th anniversary of Straumann Netherlands and USA

Longevity demonstrates our sustainable business approach

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Questions & Answers

2013 Annual Report and IR twitter now available

Comprehensive value reporting

Corporate governance,

compensation report, environmental

report, outlooks, etc.

Subscribe and receive regular

investor related news under

‘twitter.com/StraumannIR’

4040

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Calendar of upcoming events

2014

27 February Investor meetings Frankfurt

28 February Investor meetings Paris

05 March Investor meetings New York

06 March Investor meetings Mid Atlantic

07 March Investor meetings Chicago

02 April Kepler Cheuvreux Swiss Conference Zurich

04 April Investor meetings Singapore

11 April Annual General Meeting Basel

15 April Dividend ex-date

30 April First quarter sales Webcast

26 August Half-year 2014 results Basel HQ

Detailed calendar on www.straumann.com

4141 Publication and corporate events

0.8

0.9

1

1.1

1.2

1.3

1.4

2012 2013

USDCHF EURCHF JPYCHF

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Straumann’s currency exposure

Cost breakdown 20131

Revenue breakdown 2013

1 These distribution charts represent the total net revenues and the total COGS as well as OPEX expenses in the various currencies. All numbers are rounded and based on 2013 figures.

Average exchange rates (rounded) FX sensitivity (+/- 10%) on...

FY 2013 YTD 2014 Revenue EBIT

EURCHF 1.23 1.24 +/- 25 million +/- 15 million

USDCHF 0.93 0.92 +/- 17 million +/- 7 million

JPYCHF 0.95 0.89 +/- 4 million +/- 2 million

Development of Straumann’s main exchange rates since 2012

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EUR 40%

CHF 12%

USD / CAD / AUD 28%

Other 20%

EUR 21%

CHF 45%

USD / CAD /

AUD 22%

Other 12%

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Your contacts

Fabian Hildbrand

Corporate Investor Relations

Tel. +41 (0)61 965 13 27

Email [email protected]

Mark Hill Thomas Konrad

Corporate Communications

Tel. +41 (0)61 965 13 21 Tel. +41 (0)61 965 15 46

Email [email protected] Email [email protected]

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International Headquarters

Institut Straumann AGPeter Merian-Weg 12CH-4002 Basel, SwitzerlandPhone +41(0)61 965 11 11Fax +41(0)61 965 10 01www.straumann.com

2013 Full-year results - Straumann · 2020-06-20 · 1 2013 Full-year results Analysts’ & Media...

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