Demant A/s · OMXCOP:DEMANT
Demant A/s — Investor Day (2016)
25 slides from Demant A/s's investor day presentation, Dec 31, 2016
Slide 1: DGS
DGS René Schneider CFO of William Demant
Slide 2: René Schneider
René Schneider CFO, William Demant Curriculum • Born in 1973 • M.Sc. in Economics from Aarhus university • CFO since 2015 • Employed with the William Demant since 2015 2
Slide 3: Agenda
Agenda • Introduction to DGS • Operations • IT • Financial Shared Services Centre • Case - The Netherlands 3
Slide 4: Introduction to DGS
William Demant Introduction to DGS
Slide 5: Need for common infrastructure to support growth
Need for common infrastructure to support growth Reported revenue (DKKm) Number of employees 12,000 12,000 10,000 10,000 8,000 8,000 6,000 6,000 4,000 4,000 2,000 2,000 - - 2007 2008 2009 2010 2011 2012 2013 2014 2015 2007 2008 2009 2010 2011 2012 2013 2014 2015 Hearing Devices Diagnostic Instrument
Slide 6: DGS established to effectively support growth
DGS established to effectively support growth DGS is the identity for the shared services functions in William Demant William Demant Holding A/S Global Opera- Hearing Devices Hearing Implants Diagnostic Instruments Personal Communication tions Group Supply Oticon Oticon Medical Maico Sennheiser Fina
Slide 7: DGS vision and values
Vision Through superior shared services, cost efficiency and customer insight, DGS vision and values DGS will support the international brands and businesses of William Demant Keeping customer focus Striving for Deliver excellence synergies 7
Slide 8: DGS – Operations
William Demant DGS — Operations wr | <a id 4 § ay
Slide 9: Efficiency improvements have offset lower prices
Efficiency improvements have offset lower prices Expanding industry-leading gross margins despite lower prices Lower prices Operational efficiency Economies of scale Retail acquisitions (negative for gross margin) (positive for gross margin) (positive for gross margin) (positive for gross margin) Gr
Slide 10: Global operations footprint
Global operations footprint • Economies of scale • Central production • Future ambition to build three main production hubs Global locations: Poland, Mexico Major local locations: Denmark, Italy, Germany, France, USA, Canada, China, Korea, Australia and Japan Standard production Custom production 20
Slide 11: State-of-the-art hearing aid manufacturing
State-of-the-art hearing aid manufacturing Lean set-up: Designed for manufacturing Introduction of nanocoating in 2013 Index Time per hearing aid Index Service frequency 150 150 100 100 50 50 0 0 2011 2012 2013 2014 2015 Apr-16 2013 2014 2015 Apr-16 Note: 2011 = Index 100 Example: Oticon US RITE Not
Slide 12: European central hub in Poland
European central hub in Poland • ~2,000 employees • Knowledge sharing • Flexible and fast ramp-up • High productivity • Design for manufacturing • Access to labour Operations employees in Poland 2,000 1,000 0 2008 2015 Hearing devices Diagnostics Distribution center Service 12
Slide 13: Custom production established in Mexico
Custom production established in Mexico • ~200 employees by end of 2016 • Flexible and fast ramp-up • Access to labour Operations employees in Mexico Production ramp-up in Mexico 200 150 100 50 0 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Employees end of period Units p
Slide 14: DGS – IT
William Demant
Slide 15: IT costs in control and investment in new ERP system
IT costs in control and investment in new ERP system IT spend in % of revenue 40% 50% 60% 50% 2012 2013 2014 2015 = Partner Delivery Centre = Data Centre Infrastructure Applications and support ~30 FTE ~185 FTE ~20 FTE 15
Slide 16: Rolling out a global ERP system
Rolling out a global ERP system Integrated ERP and business process deployment Global ERP system go live 9 8 7 • Low costs 6 • Low risk 5 4 • Country-by-country approach 3 2 1 0 2015 2016E 16
Slide 17: Getting more benefit from being a global company
Getting more benefit from being a global company End-User Facing Retail Back Office Customer Facing Wholesale Back Office Operations Marketing Commercial Finance Customer Commercial Warehouse Finance Terms Portal Terms Call Centre Inventory Procurement Goods Sales Rep Management G/L Reception G/L Ap
Slide 18: Shared retail front- and back-end
Shared retail front- and back-end Are we promoting WDH brands in our clinics? Do we have sufficient test appointments to reach our sales targets? Note: Test data 18
Slide 19: Using transactional data in sales reps' daily work
Using transactional data in sales reps’ daily work Actuals versus targets for the particular Note: Test data customer 19
Slide 20: DGS – Financial Shared Services Centre
DGS – Financial Shared Services Centre 20
Slide 21: Financial Shared Services Centre in Szczecin, Poland
Financial Shared Services Centre in Szczecin, Poland Established in 2015 9 languages 99% spoken graduates ~50 66% employees females 4 business ~6% functions attrition p.a. supported 32 years average age 21
Slide 22: DGS – The Netherlands
William Demant DGS — The Netherlands wr | <a id 4 § ay
Slide 23: Before implementation of ERP and processes
Before implementation of ERP and processes The Netherlands Poland Retail Wholesale DGS WDH Retail Purchase orders and invoicing Purchase orders and invoicing Central Operations Goods delivery and returns Goods delivery and returns Central Production WDH Wholesale Customer End- Service Service and Re
Slide 24: After implementation of ERP and processes
After implementation of ERP and processes The Netherlands Poland Retail Wholesale DGS WDH Retail Automated purchase orders and invoicing Central Operations Goods delivery and returns Central Production WDH Wholesale End- user Service and Repair External Customers Customer Service Customer Service En
Slide 25: Thank you
William Demant / Thank you