Demant A/s · OMXCOP:DEMANT

Demant A/s — William Demant Holding — H1 2005 Earnings Presentation

16 slides from Demant A/s's earnings presentation, August 2005

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

    First Half 2005 William Demant Holding A/S Investor Presentation August 2005 1

  2. Slide 2: Headlines first half 2005

    First Half 2005 Headlines first half 2005 • Strong growth in sales DKK 2,258 million – up from DKK 2,067 million in H1 2004 • Organic growth of 12% in wholesale of hearing aids supported by several successful product launches • R&D expenditures up by 24% - totalling DKK 185 million • EBIT of DKK 523

  3. Slide 3: Profit and loss account

    First Half 2005 Profit and loss account % change in local Full Year DKK million H1 2005 H1 2004 % change currency 2004 Net revenue 2,258 2,067 9% 11% 4,303 Gross profit 1,497 1,368 9% 10% 2,859 Gross profit ratio 66.3% 66.2% 66.4% R&D costs -185 -150 24% 24% -324 Distribution costs -648 -631 3% 4% -

  4. Slide 4: Organic growth – WDH Group

    First Half 2005 Organic growth – WDH Group 14% 13% 11% 10% 8% 6-9% 2001 2002 2003 2004 H1 2005 F2005 4

  5. Slide 5: Net revenue by business area

    First Half 2005 Net revenue by business area 6% 5% 89% % change in DKK million H1 2005* H1 2004* local currency H1 2004 Hearing Aids 2,002 1,808 11% 1,832 Diagnostic Instruments 138 115 20% 117 Personal Communication 118 116 2% 118 Total 2,258 2,039 11% 2,067 * Computed at H1 2005 exchange rates 5

  6. Slide 6: Net revenue by region

    First Half 2005 Net revenue by region 7% 3% 7% 50% 33% % change in DKK million H1 2005* H1 2004* local currency Europe 1,123 992 13% North America 744 706 5% Asia 149 124 20% Pacific Rim 162 143 13% Other countries 80 74 8% Total 2,258 2,039 11% * Computed at H1 2005 exchange rates 6

  7. Slide 7: Currency impact on revenue

    First Half 2005 Currency impact on revenue • Negative impact on H1 revenue amounts to DKK 28 million or 1% (versus H1 2004) • USD strengthened more than 10% during H1 2005 • Impact on revenues recognized at the time of currency movement • Positive impact of 1% on revenue expected for the full year b

  8. Slide 8: Balance sheet

    First Half 2005 Balance sheet DKK million 30/6/05 31/12/04 30/6/04 30/6/05 31/12/04 30/6/04 Assets Liabilities Intangible 58 59 27 Shareholders' equity 703 652 474 Tangible 657 621 436 Provisions 36 41 59 Financial 174 143 111 Long-term creditors 674 458 545 Total fixed assets 889 823 574 Short-term

  9. Slide 9: Cash flow

    First Half 2005 Cash flow • CFFO doubled to DKK 423 million (from DKK 209 million in H1 2004) • Strong cash flow driven by improvements in operating performance, working capital and taxes paid • Free cash flow for the full year (including new HQ) expected to exceed the 2004 level 716 579 618 481 426

  10. Slide 10: Hearing aids

    First Half 2005 Hearing aids Growth in HA business • Business area accounted for 89% of revenues 22% 18% • 12% organic growth and 15% unit growth (own 14% manufactured hearing aids) 12% 9% • Growth negatively impacted by the loss of sales to US Veteran Affairs (VA) in H2 2004 • Overall market grew i

  11. Slide 11: Oticon product launches

    First Half 2005 Oticon product launches Price/Performance 1999 2000 2001 2002 2003 2004 2005 Launch year

  12. Slide 12: Bernafon product launches

    First Half 2005 Bernafon product launches Price/Performance 1999 2000 2001 2002 2003 2004 2005 Launch year

  13. Slide 13: Other business areas

    First Half 2005 Other business areas Diagnostic Instruments DKK million * 138 125 – Business area accounted for 6% of revenues 115 101 104 – Strong organic growth of 20% in a market being slightly upward – Growth supported by a more aggressive and concentrated effort in sales and distribution H1 03

  14. Slide 14: Shareholder information

    First Half 2005 Shareholder information • Excess cash distributed to shareholders through buy-backs – DKK 1.9 billion in total since 2002 • At AGM in April 2005, the company cancelled 2.9% of issued shares – the share capital is now DKK 65.6 million • 797,150 treasury shares held on 17 August 2005 c

  15. Slide 15: Guidance

    First Half 2005 Guidance • EBIT guidance for the full year maintained at DKK 1,050-1,100 million • Revenues forecast raised to DKK 4.6–4.7 billion due to currency movements • Currency fluctuations have little impact on EBIT in the short term due to hedging • Consequently, EBIT margin now expected at

  16. Slide 16: Summary of key points

    First Half 2005 Summary of key points • WDH continues to gain market shares Ö 15% unit growth in own manufactured hearing aids in H1 2005 • Oticon Tego has been a huge success so far Ö heavy demand supports Tego’s potential to become one of the world’s best- selling hearing aids • We continue to gen

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