Demant A/S · OMXCOP:DEMANT
Demant A/S — William Demant Holding — Investor Presentation (March 2006)
24 slides from Demant A/S's investor presentation, March 2006
Slide 1: William Demant Holding A/S Investor Presentation March 2006
Annual Report 2005 William Demant Holding A/S Investor Presentation March 2006 1
Slide 2: Highlights 2005
Annual Report 2005 Highlights 2005 • Revenues and EBIT in line with expectations in 2005 • 18% unit growth in the sale of Group-manufactured hearing aids • Significant market share gains as the market grew an estimated 4-6% in units in 2005 • Market share gains driven by mid-priced products, in part
Slide 3: Hearing Aids
Annual Report 2005 Hearing Aids Growth in HA business • Accounted for 89% of revenues CAG R: 11 % 4,187 3,817 • 9.7% reported revenue growth and 8.4% 3,017 3,429 3,424 measured in local currencies 2,518 • 18% unit growth in sales of Group- manufactured hearing aids • More than half of the units sold
Slide 4: Hearing aid market status
Annual Report 2005 Hearing aid market status • The hearing aid market continues to grow 2-4% in units – however unit growth appeared to be slightly higher in 2005 • As expected, competition in the high-end segment intensified during 2005 • Increased frequency of product launches in most segments • S
Slide 5: Diagnostic Instruments
Annual Report 2005 Diagnostic Instruments • Double-digit growth driven by market share gains – accounted for 6% of Group revenues • Growth is broadly founded with progress in all product categories • Interacoustics’ launch in 2004 of Affinity, a PC-based audiometer and fitting system, contributed po
Slide 6: Personal Communication
Annual Report 2005 Personal Communication • Consists of Phonic Ear and the headset joint venture, Sennheiser Communications (SeCom) • Business area accounted for 5% of revenues in 2005 and generated modest growth • Phonic Ear developed flatly • Personal FM equipment has been transferred from Phonic
Slide 7: Net revenue by business area
Annual Report 2005 Net revenue by business area 5% 6% 89% Percentage change in Percentage local DKK million 2004* 2004** 2005** change currency Hearing Aids 3,817 3,861 4,187 9.7% 8.4% Diagnostic Instruments 242 243 271 11.9% 11.4% Personal Communication 244 247 258 5.7% 4.7% Total 4,303 4,351 4,716
Slide 8: Net revenue by region
Annual Report 2005 Net revenue by region 7% 4% 7% 48% 34% Percentage change in local DKK million 2004* 2004** 2005** currency Europe 2,068 2,073 2,287 10% North America 1,507 1,524 1,589 4% Asia 271 268 328 22% Pacific Rim 309 321 336 5% Other countries 148 165 176 7% Total 4,303 4,351 4,716 8.4% *
Slide 9: Profit and loss account, full-year
Annual Report 2005 Profit and loss account, full-year Percentage change in DKK million 2004 2005 % change local currency Net revenue 4,303 4,716 9.6% 8.4% Gross profit 2,859 3,133 9.6% 8.9% Gross profit ratio 66.4% 66.4% Research and development costs -324 -383 18% 18% Distribution costs -1,264 -1,3
Slide 10: Profit and loss account, second half
Annual Report 2005 Profit and loss account, second half Percentage change in DKK million 2004 H2 2005 H2 % change local currency Net revenue 2,236 2,458 9.9% 6.3% Gross profit 1,490 1,636 9.8% 8% Gross profit ratio 66.7% 66.6% Research and development costs -175 -198 13% 13% Distribution costs -632
Slide 11: Earnings per share
Annual Report 2005 Earnings per share : 16 % GR a rs CA 5 ye 12.2 10.7 8.8 7.9 6.5 5.8 DKK 2000 2001 2002 2003 2004 2005 11
Slide 12: 2005 dedicated to investments in future growth
Annual Report 2005 2005 dedicated to investments in future growth • The refurbishment of the new head office and development centre was completed - relocation in late October 2005 • Our vision: to create the world’s leading and most exciting development centre for hearing aids • Acquired in Dec. 200
Slide 13: Research & Development
Annual Report 2005 Research & Development R: 1 4% AG 5 ye ars C 383 324 295 272 253 198 DKK million 2000 2001 2002 2003 2004 2005 13
Slide 14: Oticon Delta addresses the oldest promise in the industry
Annual Report 2005 Oticon Delta addresses the oldest promise in the industry • Half of the population over 50 years of age could benefit from a hearing aid • However, so far the industry has failed to reach 9 out of 10 of them • With Oticon Delta, the end-users are offered all available, advanced fe
Slide 15: Oticon Delta: a new category of hearing devices
Annual Report 2005 Oticon Delta: a new category of hearing devices • Oticon Delta is a new high-end hearing aid designed to meet the wishes of the fast-growing group of 50 to 65 year olds • Belongs to a new generation of communication solutions in the Receiver-In-The-Ear (RITE) category • A speaker
Slide 16: Oticon Delta combines the best of two worlds
Annual Report 2005 To be for rele Oticon Delta combines the best of two worlds Ma sale ased rch i 20 n 06 • Is as discreet as a Completely-In-the- Canal (CIC) instrument • Has all the advanced functionalities offered by the most sophisticated Behind-The-Ear (BTE) instruments • The potential of the s
Slide 17: Oticon Delta is available in two versions
Annual Report 2005 Oticon Delta is available in two versions • Targets persons with the frequently occurring mild and high-frequency hearing losses – accounting for approx. 20-30% of the total market but up to half of all first-time users • Is available in two versions with different feature sets an
Slide 18: Oticon Safran: a new advanced hearing aid positioned just below Syncro
Annual Report 2005 Oticon Safran: a new advanced hearing aid positioned just below Syncro • Oticon introduces a new advanced instrument, Oticon Safran, which focuses on balancing optimal sound quality and user comfort • Oticon Safran holds some of the market’s most advanced features • Complete produ
Slide 19: Oticon Safran: bridging the gap between Syncro and Tego Pro
Annual Report 2005 To Oticon Safran: bridging the gap be for rele Ma sal ased between Syncro and Tego Pro rch e in 20 06 • Oticon Safran is replacing Gaia and Adapto in the actively promoted product portfolio • Represents an up-sell opportunity for potential Tego Pro buyers • Safran completes the re
Slide 20: Cash flows
Annual Report 2005 Cash flows DKK million 2004 2005 Year's profit 717 791 10% CFFO 720 892 24% CFFI, excl. acquisitions and investments in new HQ -195 -237 22% Free cash flows, excl. special investments 525 655 25% Acquisitions -30 -12 Investments in new HQ and special investments -171 -185 Buy-back
Slide 21: Balance sheet
Annual Report 2005 Balance sheet DKK million 2004 2005 2004 2005 Assets Liabilities Intangible 59 64 Shareholders' equity 646 756 Tangible 621 856 Long-term payables 504 745 Other 144 252 Short-term payables 1,291 1,392 Long-term assets 824 1,172 Total liabilities 2,441 2,893 Inventories 603 632 Rec
Slide 22: Shareholder information
Annual Report 2005 Shareholder information • Dividends through share buy-back – DKK 695 million repurchased in 2005 • Total net flow of nearly DKK 2.4 billion to shareholders since IPO in 1995 • In addition, shares worth up to DKK 1 billion are expected to be repurchased in 2006, equivalent to 4% of
Slide 23: 2006 guidance
Annual Report 2005 2006 guidance • Revenues of DKK 5.2-5.3 billion based on 10% growth in the underlying business and a positive contribution from currencies • Growth to be supported by new products such as Oticon Delta, Oticon Safran as well as ICOS from Bernafon • The positive impact on Group earn
Slide 24: Capital Market Day on 28 March 2006
Annual Report 2005 Capital Market Day on 28 March 2006 from 8:00 to 16:00 (CET) To be held at our new head office and development centre in Smørum outside Copenhagen See IR section on www.demant.com for a detailed agenda Please sign up by contacting Tine Ribergaard on phone +45 39138366 or tij@deman
William Demant Holding — Investor Presentation (March 2006) on 6ix