2013 Half-year results - Straumann · 2020. 7. 22. · 2013 Half-year results ... Neodent...

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2013 Half-year results Analysts’ & Media Conference Basel, 20 August 2013 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 presentation 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.

Transcript of 2013 Half-year results - Straumann · 2020. 7. 22. · 2013 Half-year results ... Neodent...

Page 1: 2013 Half-year results - Straumann · 2020. 7. 22. · 2013 Half-year results ... Neodent transaction and IAS19 2 Restructuring charges of CHF 13 million and a decrease in pension

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2013 Half-year results

Analysts’ & Media Conference

Basel, 20 August 2013

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 presentation 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.

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Highlights

Marco GadolaCEO

Straumann 4

Weak economy in Europe Consumer confidence still fragile Raising healthcare costs and co-pay levels reduce disposable income for

dental treatment Market still receding as patients postpone or take cheaper/inferior options Many practice owners perceive general business conditions as negative

Growth potential in North America intact Momentum picks up in Q2 After downward trend in 2012, dental practice activity indicators show

improvements in tooth replacement procedures

Asia: mixed picture China continues to perform well Japanese market still receding

What is happening in the markets?

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5

Fundamental shifts To lower-cost alternatives Dental labs under pressure to find optimal levels of in-house

production, outsourcing, efficiency and quality Role of General Practitioners (GPs) increasing in implant dentistry

New technologies Digital procedures and workflows Optimized materials (improved esthetics,

durability, pre-shaded) No visible threat from substitution technologies

What is happening in the markets?

Straumann

Source: iData Research, US data, 2012 6 Straumann

2008

2014Implant specialistsGPs placing implantsGPs restoring implants

60 600

87 400GPs restorebut don’t place implants

15 900

29 700GPs place implants

GPs are increasingly important and have different preferences and needs

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Resolute cost reduction measures bearing fruit without impairing selling power

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REVENUE KEY PERFORMANCE H1 GROSS MARGIN

CHF 355m +6% (organic l.c.) 78%Slightly down on prior year despite acceleration in Q2

in N. America (+11% in Q2);Europe and Japan remain difficult

Margin expansion through efficiency gains in manufacturing

OPERATING INCOME MARGIN1 HEADCOUNT STRATEGY

18% 2313 Customer-driven solutions

EBIT lifted by initial results from cost optimization measures

Reduction program almostcomplete; some employment contracts still running out

Addressing changed market dynamics and unexploited growth markets

Straumann 1 Excluding cost optimization program costs

Thomas DressendörferCFO

Business and regional review

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in CHF million Change

FX adjustedexcl.

exceptionalsvs. adjusted

Net Revenue 361.7 361.0 354.8 (1.7%)

Gross profit 278.4 277.4 276.2

Gross profit margin 77.0% 76.9% 77.8%

EBITDA 71.0 70.6 74.5 80.0

EBITDA margin 19.6% 19.6% 21.0% 22.5% (2.9%)

Operating profit (EBIT) 54.6 54.1 56.8 62.3

EBIT margin 15.1% 15.0% 16.0% 17.6% 2.6%

Net profit 44.6 53.7

Net profit margin 12.3% 15.1%

Basic earnings per share (EPS) 2.88 3.48

Free Cash Flow 19.9 34.7

Free Cash Flow margin 5.5% 9.8%

H1 2012 H1 2013

Straumann

Margins improved on all levels

1 In 2013, Straumann adopted the revised International Accounting Standard 19 regarding employee benefits. The 2012 figures have been restated accordingly.

2 Throughout this presentation the term ‘exceptionals’ refers to restructuring charges of CHF 13 million and a decrease in pension obligations of CHF 7 million, both in H1 2013 and both related to cost reduction initiatives

3

1

9

2

77.0%

-0.1%

76.9%

-0.1%0.4%

-0.4%1.0%

77.8%

Gross profitH1 2012

FX effect Adjustedgross profit

H1 2011

Volume, Price& Mix

iTero effect Inventorychanges

Manufacturingefficency

gains

Gross profitH1 2013

Straumann 10

Gross margin improved despite lower top line

In % of revenue

1 Decreased proportion of gross margin dilutive iTero scanner sales

1

H1 2012

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15.1%

-0.1%

15.0%

0.9%

2.2% -0.6%0.1%

17.6%

-1.6%

16.0%

EBIT marginH1 2012

FX effect FX adj. EBITmargin H1

2012

Higher grossprofit

SG&Asavings

Higher R&D Other income EBIT marginH1 2013

Exceptionals EBIT marginH1 2013

Straumann 11

SG&A savings lift EBIT margin

In % of revenue

1

2

1 One-time project costs of CHF 6m related to Straumann’s reorganization, Neodent transaction and IAS19

Large international clinical trials set new benchmark

Straumann 12

>1000 Straumann Bone Level implants evaluated in Europe, US and Australia

Implant survival rates of more than 98% in daily practice with practically no bone loss around implant.

Results considerably better than values reported in meta-analysis of studies with other implants

Results add to wealth of strong clinical evidence and provide clear reasons for patients and dentists to insist on Straumann rather than undocumented alternatives

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15.1%

-0.1%

15.0%

0.9%

2.2% -0.6%0.1%

17.6%

-1.6%

16.0%

EBIT marginH1 2012

FX effect FX adj. EBITmargin H1

2012

Higher grossprofit

SG&Asavings

Higher R&D Other income EBIT marginH1 2013

Exceptionals EBIT marginH1 2013

Straumann 13

SG&A savings lift EBIT margin

In % of revenue

1

2

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

19.9

-0.6 -2.3

8.3

3.6

4.7 1.2

34.7

Free cash flowH1 2012

Lower grossprofit

OPEX (cash) Reducedworkingcapital

Lower CAPEX Less incometaxes paid

Others Free cash flowH1 2013

Straumann 14

Improved cash flow despite restructuring charges

FCF margin 9.8%

FCF margin 5.5%

In CHF million

Cash & equivalents 31 Dec 2012 CHF 141m

- Operating cash flow CHF 41m

- CAPEX (CHF 7m)

- Bond proceeds CHF 199m

- Dividend (CHF 58m)

- Others CHF 1m

Cash & equivalents 30 June 2013 CHF 317m

Related to restructuring

initiatives

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15 Straumann

6.3%(3.9%) (1.6%) 0.7%

Change organic

North America partly offsets weakness in Europe

(0.2%) (0.8%)

2012 2013

(1.9%) in CHF

(0.9%) organic

In CHF million

361.7

(0.7) (3.0)

358.0

(8.0)5.5 (0.8) 0.1

354.8

Revenues H12012

FX Effect iTero Effect Revenues H12012 @ FX

2013

Europe NorthAmerica

APAC ROW Revenues H12013

Performance led by core implant business

Implants RegenerativesRestoratives / CADCAM

Straumann 16

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17 Straumann

Strong growth in North America; Europe flat

56%

Revenue flat in Q2 (l.c. and organic)

All countries improve in Q2 and benefit from shift in selling days after disappointing start to the year (H1 -4%)

France, UK and Switzerland return to growth

0.2%

-7.7%-5.6%-5.3%

-7.0%

Q22013

Q12013

Q42012

Q32012

Q22012

Eu

rop

eN

ort

h A

mer

ica

10.6%

2.1%1.8%5.1%

7.0%

Q22013

Q12013

Q42012

Q32012

Q22012

Q2 organic revenues rise 11% (l.c.)

All businesses above previous year; Implants grow double-digit:

Pricing and product mix contribute to growth; fundamentals intact

Revenue change (organic)

55%

26%

Pie chart segment indicates regional sales contribution to the Group.

18 Straumann

Sequential improvements in APAC and RoW

56%

Q2 in line with prior year (l.c.)

Japan: implant market still to recover from negative public perception

Solid performances in China and Australia

0.9%

-4.4%-0.9%

-2.4%

4.2%

Q22013

Q12013

Q42012

Q32012

Q22012

Asi

aP

acif

icR

est

of

Wo

rld

1

4.1%

-2.6%

-10.4%

1.4%

-7.4%

Q22013

Q12013

Q42012

Q32012

Q22012

4% growth in Q2 (l.c.)

Mexico posts good growth, while region’s largest market, Brazil, reports sales in-line with prior-year

Distributor markets in the Middle East recovering gradually

14%

5%

1 Revenue contribution from Neodent will be included after consolidation in 2015.

Revenue change organic

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Building for the future

Marco GadolaCEO

Our goal of better profitability…

Straumann 20

Underlying EBIT margin

15-20%

2008 2012 E2013 Mid term

10-15%

>15%

>20%

>25%

Straumann

Dental benchmark1

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

10%

15%

20%

25%

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... and how we will achieve it

Straumann 21

Cost reduction measures implemented in 2012 and 2013

Cost discipline inherent to new Straumann culture

New organizational set-up focusing on customer needs

Lean, high performance organization

Customer- and market-driven solutions

First projects to launch in Q4 2013

Address changed market

dynamics

Address value segment Increase presence in fast-

growing underpenetrated markets

Target unexploited

growth markets

Organization based on ‘bullish’ expectations, which have not materialized

Restorative franchise & GP segment neglected

Innovation and Development technically driven

Pure premium focus

Prior to 2012

2008 2012 2015

Moving forward

Organization adapted to market reality

Straumann 22

23612452

25752517

2431

2243 2230

FY 2010 FY 2011 Q3 2012 FY 2012 Q1 2013 Today FY 2013

≈140

≈200

Lean, high performance organization

Resizing Resizing

1 At the end of Q2, Straumann had a global workforce of 2313 including redundancies in subsidiaries where employment contracts finished ater 30 June.

1

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... and how we will achieve it

Straumann 23

Cost reduction measures implemented in 2012 and 2013

Cost discipline inherent to new Straumann culture

New organizational set-up focusing on customer needs

Lean, high performance organization

Customer- and market-driven solutions

First projects to launch in Q4 2013

Address changed market

dynamics

Address value segment Increase presence in fast-

growing underpenetrated markets

Target unexploited

growth markets

Organization based on ‘bullish’ expectations, which have not materialized

Restorative franchise & GP segment neglected

Innovation and Development technically driven

Pure premium focus

Prior to 2012

2008 2012 2015

Moving forward

Tapping exciting growth opportunities... Target unexploited

growth markets

Single tooth Multiple tooth Edentulous

Ceramic implants

Simpleedentulous solutions

Smaller, less invasive implants

* Bubble size illustrates market volume potential Straumann 24

Implants for narrow spaces

Esthetic, fast implant solutions with single crown / small bridge

Standard implant solution

packages

Fixed immediate edentulous solutions

Low-tech

High-tech

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affordability

Straumann 25

...with solutions to suit:

customer segments

local market conditions

Surgeons

GPs

Premium

Value

Spain

Target unexploited

growth markets

Outlook

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Outlook 2013 and beyondBarring unforeseen circumstances

While positive developments are expected to continue in North America and other underpenetrated markets, Straumann expects the effects of the weak economy and consumer sentiment to continue in Europe, constraining overall revenue development in 2013.

Despite a shortfall in full-year revenue, the successful outcome of cost reduction initiatives will drive sustainable profitability improvements as anticipated, with the main savings beginning to have an impact in Q3.

In the mid term, Straumann aims to return to solid growth and a higher operating margin.

27 Straumann

Questions & answers

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70

80

90

100

110

2012 2013

USDCHF EURCHF JPYCHF

EUR 21%

CHF 47%

Other 13% USD/CAD/AUD

19%

Other 21%

CHF 11%

EUR 41%

USD/CAD/AUD 27%

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Slight currency headwind expected for the full year

Cost breakdown 20121

Revenue breakdown 2012

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.

Straumann

Average exchange rates (rounded)

FY 2012 H1 2013

EURCHF 1.21 1.23

USDCHF 0.93 0.93

JPYCHF 1.17 0.99

Straumann’s major exchange rates since 2012 (indexed to 100)

Calendar of upcoming events

26 August Investor meetings Stockholm/Copenhagen

27 August Investor meetings Amsterdam/Brussels

28 August Investor meetings Frankfurt

04 September Goldman Sachs Medtech conference London

05 September Investor meetings London

16 September Investor meetings Geneva

17 September Investor meetings Vienna

30 September Investor meetings New York

01 October Investor meetings Boston

02 October Investor meetings Toronto

31 October Third quarter results Webcast

25 February Full-year results conference Basel

11 April Annual General Meeting Basel

Detailed calendar on www.straumann.com

Straumann 30

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Straumann 31

Your contacts

Fabian Hildbrand

Corporate Investor Relations

Phone +41 (0)61 965 13 27

Mobile +41 (0)79 392 80 32

Email [email protected]

Mark Hill Thomas Konrad

Corporate Communications

Phone +41 (0)61 965 13 21 Phone +41 (0)61 965 15 46

Email [email protected] Email [email protected]