Straumann Holding Ag · SIX:STMN
Straumann — FY2005 Earnings Presentation
41 slides from Straumann's earnings presentation, Feb 16, 2006
Slide 1: Full Year Results 2005
Full Year Results 2005 Analyst & Media Conference Basel, 16 February 2006
Slide 2: Disclaimer
Disclaimer This presentation contains certain “forward-looking statements”, which can be identified by use of terminology such as “expect”, “expectation”, “intend”, “continue”, “achieve”, “maintain”, “improve”, “foresee”, “anticipate”, “product introductions”, “outlook”, “forecast”, or similar wordi
Slide 3: Table of contents
Table of contents 1. Highlights 2005 2. Review 2005 3. Innovation 4. Outlook 2006 5. Q&A 3
Slide 4: Highlights – Key figures
Highlights – Key figures • Solid sales growth of 21% in l.c. and CHF, in line with forecast • Sales growth accelerates to 25% (l.c.) in Q4 • High level of resources deployed to drive future growth • Operating (+23%) and net profit (+28%) rise faster than sales • More than 200 new jobs created 4
Slide 5: Highlights – Regions
Highlights – Regions • Europe - #1 position underpinned - Normalization in Germany and BIO acquisition lift regional growth • North America - #2 position strengthened - Performance not yet at target level • Asia/Pacific - #1 position maintained - Strong growth in Australia despite distribution switc
Slide 6: Highlights – Operational and strategic initiatives
Highlights – Operational and strategic initiatives • Distribution channels taken over - Italian distributor successfully integrated - Direct access to Korean distributor - Australian subsidiary established - Preparations for subsidiaries in Mexico and Denmark • Infrastructure expanded - Relocation o
Slide 7: Highlights – Operational and strategic initiatives (cont.)
Highlights – Operational and strategic initiatives (cont.) • Innovation and key products launched - SLActive implant surface technology - Straumann CARES (Titanium and Ceramic) - Straumann Bone Ceramic • Share of scientific voice expanded - More than 80 peer-reviewed publications - Influential ITI W
Slide 8: Table of contents
Table of contents 1. Highlights 2005 2. Review 2005 3. Innovation 4. Outlook 2006 5. Q&A 8
Slide 9: Sales rise 21%
Sales rise 21% 2005 Regional sales growth in CHF Contribution to 2005 Group sales (Total: CHF 510 million) RoW 54% Asia / Pacific (11m) (CHF 51m) 2% 10% 26% 21% 19% North America Europe (CHF 131m) (CHF 316m) 26% 62% Europe North Asia / RoW America Pacific 9
Slide 10: Sales driven by organic growth and lifted by acquisitions
Sales driven by organic growth and lifted by acquisitions Contribution to 2005 Group sales growth in % 5 21 0.5 21 16 Organic Acquisitions Growth Currency Growth in l.c. effect in CHF 10
Slide 11: Strong Q4 across all regions
Strong Q4 across all regions CHF million Q1 Q2 Q3 Q4 Europe 79.6 84.7 68.6 83.1 Growth in % 12.9 25.4 19.5 24.8 Growth in l.c. in % 14.0 25.0 18.8 24.0 North America 28.9 31.6 33.6 37.2 Growth in % 11.4 12.7 20.5 30.5 Growth in l.c. in % 18.5 15.7 18.4 18.3 Asia/Pacific 14.1 11.5 10.8 14.7 Growth in
Slide 12: Overall profitability increases
Overall profitability increases CHF million FY 2004* FY 2005 Group sales 420.3 509.6 Growth in % 22.2 21.2 Cost of goods sold 77.9 99.5 In % of Group sales 18.5 19.5 Gross profit 342.4 410.1 Gross margin in % 81.5 80.5 Other income 3.9 3.1 Operating costs 219.3 257.3 In % of Group sales 52.2 50.5 Op
Slide 13: Scaling up for long-term growth and profitability
Scaling up for long-term growth and profitability EBIT Total investments Sales margin Capex BIO 600 35% Biora Andover 120 Basel 400 Villeret Villeret 80 Kuros 30% 200 40 0 25% 0 1999 2001 2003 2005 1999 2001 2003 2005 13
Slide 14: Factors affecting EBIT margin
Factors affecting EBIT margin 2005 Group EBIT margin in % Adjusting for Adjusting for negative impacts positive impacts 2.7 -2.3 30.6 31.0 • Andover • Acquisitions start-up • New-product • Discontinuation manufacturing of goodwill amort. • Higher fixed costs • Currency Andover & Basel impact Reporte
Slide 15: Continued improvement in net working capital
Continued improvement in net working capital CHF million FY 2004 FY 2005 Net working capital 17.0 35.5 In % of Group sales 5.8 5.2 Inventory 35.5 48.1 In % of Group sales 8.4 8.2 Inventory days 162 152 Trade receivables 48.8 69.6 In % of Group sales 10.9 11.6 Trade receivable days 39 42 Note: Calcul
Slide 16: High level of investment for future growth
High level of investment for future growth Cash-flow in CHF million 144 Capex Acquisition 107 0.5 94 -121 -37 Cash Operating Investing Financing Currency Cash 1 Jan 05 activities activities activities impact 31 Dec 05 16
Slide 17: Dividend increased by 25%
Dividend increased by 25% • Proposed* ordinary dividend of CHF 39 million or CHF 2.50 per share (+25%) • Payout ratio of 30% • Total shareholder return of 30% in 2005 • Share buyback not foreseen in the near future * To Annual General Meeting on March 24 in Basel 17
Slide 18: Job creation
Job creation • 200 new jobs created • Further investments in development of staff competence • Highest ranking Swiss company in two European surveys • Team Massachussetts Economic Impact Award 2005 18
Slide 19: Leadership team
Leadership team President & CEO G. Achermann Corporate Center Products Market & Product Operations Finance Support S. Matter M. Bürgi D. Lipp M. Gadola* Sales Sales Sales Asia/Pacific North America Europe and RoW G. Achermann** W. Becker P. Louvel * As of May 2006 ** Ad interim 19
Slide 20: Sustainable development and good corporate citizenship
Sustainable development and good corporate citizenship Code of conduct • Formalized commitment to ethical and responsible business practice and environmental protection Sustainability management and reporting • Full health, safety and environmental report published • Inclusion of Straumann in the FT
Slide 21: Unique partnership with independent ITI network
Unique partnership with independent ITI network • 440 fellows (+19%) and 1175 members (+310%) worldwide • 15 country sections • 23 research grants and 18 scholarships in 2005 • 106 eminent speakers and more than 2600 participants from 63 countries at ITI World Symposium • Consensus paper rolled out
Slide 22: Global ITI outreach in 2006
Global ITI outreach in 2006 • 1st Asian regional congress, 21 national congresses and events • World Symposium in New York in 2007 22
Slide 23: Quality is our hallmark
Quality is our hallmark • Management Systems at Basel, Villeret and Malmö certified to ISO 9001, 13485 and 14001 • Andover production certified to ISO 13485 • All external inspections successfully passed • SLActive and CARES production performance confirmed through Notified Body • No serious issues
Slide 24: Table of contents
Table of contents 1. Highlights 2005 2. Review 2005 3. Innovation 4. Outlook 2006 5. Q&A 24
Slide 25: Straumann leads surface innovation
Straumann leads surface innovation 1974 1994 2005 1st generation 2nd generation 3rd generation TPS SLA SLActive SLActive Macro Micro Molecular Development of Development of surface surface topography chemistry 25
Slide 26: SLActive – Hydrophilic qualities
SLActive – Hydrophilic qualities 26
Slide 27: SLActive – Significantly increased bone-to-implant contact
SLActive – Significantly increased bone-to-implant contact 100 Bone-to-implant contact in % 80 Competitor - 2nd 60 generation surface 40 SLA – 2nd generation surface 20 SLActive –3rd generation surface 0 2 weeks 4 weeks 6 weeks 27
Slide 28: SLActive – Clinically proven safety
SLActive – Clinically proven safety Stability with SLA Stability with SLActive Source: Oates et. al. Submitted J Dent Res 2005. Clinical results. 28
Slide 29: SLActive – The new standard of care
SLActive – The new standard of care Benefits for patients and dentists • Shorter treatment protocols • Higher predictability • Reduced risk of failure and associated costs • Door-opener to challenging indications 29
Slide 30: SLActive – Direct benefits in a third of all indications
SLActive – Direct benefits in a third of all indications Implant indications 30
Slide 31: SLActive – Bringing the technology to patients
SLActive – Bringing the technology to patients • Europe: Roll-out ongoing • USA: Launch in March 2006 • Asia: Roll-out ongoing in initial markets; Japanese and Korean approvals expected 2007 31
Slide 32: SLActive – A quantum leap
+ Z straumann i ~ SLActive — simply doing more A quantum leap FROST @ SULLIVAN Medical Device Technology of the Year Award 32
Slide 33: CARES – Computer-Aided REstoration Service
CARES – Computer-Aided REstoration Service • Individualized implant prosthetics exclusively for the Straumann® Dental Implant System • Available in titanium and ceramic (zirconia) • Online webshop • Roll-out in Europe 33
Slide 34: Straumann Bone Ceramic & Membrane
Straumann Bone Ceramic & Membrane Straumann Bone Ceramic • Positive reaction to introduction in the US • European launch in 2006; other regions to follow • Clinical program ongoing Straumann Membrane • Introduction planned in North America towards end 2006 (pending favorable clinical results and reg
Slide 35: Table of contents
Table of contents 1. Highlights 2005 2. Review 2005 3. Innovation 4. Outlook 2006 5. Q&A 35
Slide 36: Continued attractive industry growth
Continued attractive industry growth Estimated global implant dentistry & dental tissue regeneration market in CHF billion* Straumann CAGR ~15% 01-05 CAGR 22% In l.c. 3.7 CAGR 15-17% in l.c. 2.4 2.1 1.8 1.5 1.3 Tissue regeneration Implant dentistry 2001 2002 2003 2004 2005 2008 * 2005 exchange rates
Slide 37: Market position underpinned
Market position underpinned Estimated global implant dentistry market in 2005 Others 15% Nobel Biocare Dentsply 5% 32% 9% Zimmer 13% Straumann #1 in Europe and Asia/Pacific; Biomet/3i 26% #2 in North America Straumann Global dental tissue regeneration market in 2005 Major players include: Geistlich,
Slide 38: Outlook 2006 (barring unforeseen circumstances)
Outlook 2006 (barring unforeseen circumstances) For 2006, we anticipate continued growth slightly above the market, coupled with stable profitability margins, comparable to 2005. Taking into account the significant step-up in fixed costs over the past few years, the higher depreciation charges, the
Slide 39: Annual report now available
Annual report now available • Expert opinions and interviews • Integrated chapter on sustainability and environmental performance • Also available online - www.straumann.com 39
Slide 40: Reporting dates 2006
Reporting dates 2006 March 24 Annual General Meeting April 26 Q1 sales 2006 August 11 Q2 and H1 results 2006 October 25 Q3 and 9M sales 2006 40
Slide 41: Questions & Answers
Z straumann Questions & Answers 41