2010 Full-year results

Transcription

1 2010 Full-year results Analysts & Media Conference Basel, 15 February 2011 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 wording. Such forward-looking statements reflect the current views of management and are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause actual results, performance or achievements of the Group to differ materially from those expressed or implied herein. Should such risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this presentation. 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. 2 1

2 Agenda Full-year highlights Business performance Achievements in 2010 Outlook Questions & answers 3 Full-year highlights Beat Spalinger President & CEO 2

3 Signs of market improvement in a challenging environment Despite recovery from recession, 2010 brought little improvement to unemployment, household income and access to credit With consumer sentiment still fragile, dental practices reported no substantial pick-up in complex and elective dental procedures Latest figures point to gradual improvement in the developed tooth-replacement market; emerging markets robust US dollar and euro crash to all-time lows against the Swiss franc, causing unprecedented currency headwind for Swiss-based companies Straumann is well positioned for full market recovery but it is still premature to foresee when that might be, as the economic outlook remains uncertain 5 Results in line with expectations; operating margin sustained despite strong currency headwind Full-year net revenue increases 5% (l.c.) to CHF 738 million, driven by implant volumes with stable pricing Revenues rise 7% (l.c.) in Q4, lifted by CARES Digital Solutions Growth across all regions; N. America & RoW post double-digit rise in Q4 EBIT margin sustained despite currency headwind and increased investments; currency-corrected margin improves 170 base points 190 new jobs (predominantly in M&S); staff fluctuation reduced by 5%-points Unchanged dividend of CHF 3.75 per share proposed 1 Outlook 2011: Accelerated market growth foreseen, further market-share gain expected 1 The Board of Directors once again proposes a dividend of CHF 3.75 per share for 2010, payable in 2011 subject to shareholder approval at the AGM. The dividend ex-date is 22 March

4 Ahead of the market for more than 3 years 25% 15% 5% -5% Q Q2 Q3 Q4 Q Q2 Q3 Q4 Q Q2 Q3 Q4 Q Q2 Q3 Q4-15% Straumann growth l.c. Market growth of leading implant companies 1 Market share weighted growth rates (in l.c.) of Biomet/3i, Dentsply, Nobel Biocare, Straumann and Zimmer; collectively representing 2/3 of the dental implant market. Source: Published company data, 10-K and management comments 7 A leader in markets worth >CHF 5bn Implant dentistry 1 Total market size CHF 3.4bn CADCAM dentistry Total market size CHF 1.7bn Regenerative dentistry Total market size CHF 0.5bn 19% <5% <5% Main competitors: Nobel Biocare, Biomet/3i, Zimmer Dentsply, Astra Tech Main competitors: 3M ESPE, Sirona, Nobel Biocare, Dentsply, 3shape Main competitors: Geistlich/Osteohealth, Zimmer, ACE, Dentsply 1 Including implants, abutments and tools Source: MRG 2008/09, idata 2009, Straumann estimates 8 4

5 No increase in penetration due to weak economy Implants placed per population per year ADULT U.S. POPULATION 200 PEOPLE AFFECTED BY TOOTH LOSS (45-55%) 100 ANNUAL TOOTH LOSS CASES SEEKING TREATMENT (5-10%) 0 Italy Korea Spain Switzerland Sweden Germany Brazil France Japan US Canada Australia UK Russia China India IMPLANT TREATMENT (15-20%) PEOPLE ACTUALLY TREATED (50-60%) CONVENTIONAL TREATMENT (80-85%) The population in the US is aging, resulting in more patients with tooth loss. Patients who have been treated are likely to require maintenance work (predominantly those with conventional treatment). Most people lose more than one tooth in life and thus re-enter the treatment path. Source: 2009 data Straumann proprietary survey, OECD, World Bank and Millennium Research Group 9 Comparatively low emerging-market exposure Dental implant/ abutments (value) 1 Swiss watch exports (value) 1 Deliveries of German automobiles (units) 1 17% 26% 45% Export into emerging-markets 2 Despite rapid growth in emerging markets, 70-75% of modern tooth replacement sales are still concentrated in Europe and North America 1 Sources: MRG, Credit Suisse Research and Federation of Swiss Watch industry FH 2 Emerging market countries according to the Dow Jones definition (excl. Hong Kong) 10 5

6 Business performance Solid performance against currency headwind in CHF million FY 2009 FY 2010 Change Reported FX adjusted Reported FX adjusted Net Revenue Growth in l.c. % (2.1%) 4.6% Gross profit Gross profit margin 79.7% 79.0% 79.6% 0.6% EBITDA EBITDA margin 29.6% 28.1% 28.7% 0.6% Operating profit (EBIT) EBIT margin 22.5% 20.6% 22.3% 1.7% Net profit Net profit margin 19.9% 18.0% 17.8% (0.2%) Free Cash Flow Free Cash Flow margin 29.2% 20.9% 1 Defined as net cash from operating activities less capital expenditures plus net proceeds from property, plant and equipment. 12 6

7 Straumann sustains recovery FY 2010 net revenue growth Total Group: CHF 738m Organic growth 1 by quarter (l.c.) 20% 13% 4.6% -4.4% 9% 4% 2% 3% 5% 3% 7% 0.2% -1% -1% Net revenue in l.c. Currency effect Net revenue in CHF Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4-8% Organic growth excludes FX effects and includes incremental revenue growth of an acquired business upon consolidation. There were no material M&A effects in Growth across all regions FY 2010 net revenue growth FY 2010 net revenue by region 1 3% 9% 6% 6% 2% 17% 12% 5% 0% 22% 14% 4% 63% 60% Europe CHF 445m North America CHF 165m Asia/Pacific CHF 101m ROW CHF 28m -4% Europe North America Asia/Pacific ROW Group Total Group CHF 738m l.c. CHF 1 Numbers rounded 14 7

8 Modest improvement in Europe 6% growth (l.c.) in Q4 achieved in challenging market environment; strong currency headwind Consumer sentiment fragile as Europe recovers slowly from recession and struggles with sovereign debt crisis Q4: Germany surpass previous year; solid growth in France, the UK and Iberia; Italy improves, Swedish market still difficult Digital Solutions contributes to Q4 acceleration (in CHF million) Q4 09 Q4 10 % CHF FY 09 FY 10 % CHF Net revenue (4.9%) (3.8%) Growth in % l.c. (3.6%) 6.4% (2.2%) 3.2% 15 Further market share gains in North America Double-digit growth in Q4 driven by strong implant business Bone Level range and Roxolid help win new accounts Straumann Allograft adds further impetus Despite signs of improvement, ordering patterns still volatile; complex treatments affected most (in CHF million) Q4 09 Q4 10 % CHF FY 09 FY 10 % CHF Net revenue % % Growth in % l.c. 6.8% 11.9% (1.4%) 8.7% 16 8

9 APAC mixed; strong demand in RoW Straumann works towards turnaround in sluggish Japanese market China continues to grow strongly Exceptional Q4 in Korea ahead of anticipated changes in business regulations Double-digit growth continues in Latin America (in CHF million) Q4 09 Q4 10 % CHF FY 09 FY 10 % CHF APAC net revenue % % Growth in % l.c. (1.6%) 2.9% (4.6%) 2.1% ROW net revenue % % Growth in % l.c. 22.1% 10.7% 8.0% 12.3% 17 Gross margin stable in CHF million Gross margin CHF 79.7% Gross margin CHF 80.5% Gross margin CHF 79.6% Gross profit 2009 FX effect Inventory reduction 2009 Adjusted Gross profit 2009 Inventory increase 2010 Higher volumes, Gross profit 2010 business mix effect and others 18 9

10 Significant investments in M&S to spur future growth in CHF million % EBIT margin CHF 22.5% EBIT margin CHF 20.6% EBIT margin CHF 22.3% Reported EBIT 2009 FX effect FX adjusted EBIT 2009 Gross profit R&D SG&A, 'other income' Reported EBIT Net profit constrained by non-operating items in CHF million EBIT (pre-fx) CHF -1.1m Finance and taxes CHF -14.2m Net profit margin 19.9% Interest income Interest expenses (1.1) (1.0) FX gains/losses (incl. hedging instruments) 8.2 (4.7) Financial result (net) 7.8 (4.6) Net profit margin 17.8% Net profit 2009 Gross profit R&D SG&A + other income Financial result Tax expenses Net profit

11 Free-cash flow margin >20% despite increased tax payments and net working capital in CHF million FCF margin 29.2% FY 2009 FY 2010 Inventory: Days of supply Receivables: Days of sales outstanding FCF margin 20.9% 1 Free Cash Flow generated 2009 EBITDA Working capital Capex Tax payments and others Free Cash Flow generated Defined as net cash from operating activities less capital expenditures plus net proceeds from property, plant and equipment. 21 Stable dividend policy 2010 dividend maintained at CHF 3.75 per share 1 in CHF 5 Payout-ratio 50% Tax saving for eligible shareholders through use of reserves from capital contributions to pay part of the dividend Payout band width % 30% 20% 10% Paid with reserves from capital contributions ( tax exemption ) Dividend Payout ratio 0% 1 Subject to approval by the Shareholders General Meeting 22 11

12 Achievements in 2010 Excellent value and reliability 10-year results Time-tested SLA surface enables Straumann to compete effectively in the value segment One-stage surgical procedure saves time, costs and discomfort for patients Proven long-term reliability; 10-year data from randomized controlled clinical trial 1 1 Fischer K: 10-year outcome of SLA implants in the edentulous maxilla. ITI World Symposium April 2010, Geneva 24 12

13 Prolific launch program in 2010 Guided surgery I.O. scanning MembraGel CADCAM scanner Software Applications Materials 25 Leadership in innovation More innovations brought to market in past 4 years based on US product clearances SLActive and Roxolid both receive Medical Device Techology of the year Awards for innovation 1 MembraGel described as the most significant innovation in regeneratives over past decade R&D investment >5% of net revenue 39 studies in progress; 11 due to start in 2011 >10 projects planned for initial release in next 4 years US FDA 510k clearances over 4 years Straumann 37 Nobel Biocare 23 Zimmer 13 Astra 11 Biomet 3i Bestowed by Frost & Sullivan for Best Practice in Innovation 26 13

14 Stocked pipeline despite recent introductions Project Benefits Due 1 New small diameter implant design New implant material Soft tissue control Implant maintenance Prosthetic & surgical flexibility Tooth-colored Tissue control round implants Implant rescue /13 Enhanced bone graft Enhanced remodeling & regeneration 2012 Multi-unit implant restoration New restorative materials New abutment solutions New materials for provisionals Advanced digital versatility Improved digital workflow for implant restoration Restorative options Restorative options Restorative options Handling Applications & workflow efficiency Process efficiency Refers to planned initial market acceptance testing, controlled relese, or initial market launch, depending on product type, clinical results and regulatory clearances/approvals. Further details on Straumann s product pipeline can be found in our Annual Report. 27 New skills added in specific areas 190 new jobs to drive future growth Marketing & Sales team expanded 12% Initiatives to strengthen specialist sales team begin to pay off Regulatory capabilities enhanced to prepare for increasing requirements Production staff maintained Fluctuation rate lowered by 5% points 2nd highest Swiss company in Europe s 500 top growth companies Employees by function in 2010 (total 2361) 9% 20% Research & Development Production & Logistics Marketing & Sales Admin & Finance 25% 46% 28 14

15 Outlook Continued currency headwind expected in EURCHF 1.2 USDCHF Jan Feb Mrz Apr Mai Jun Jul Sep Okt Nov Dez Jan Feb Mrz Apr Mai Jun Jul Sep Okt Nov Dez Ø exchange rates (rounded numbers) FY 2009 FY 2010 YTD 2011 EURCHF USDCHF JPYCHF

16 Outlook 2011 (barring unforeseen circumstances) Straumann expects the recovery in its main markets to continue slowly provided, of course, that the general economy does not deteriorate. As consumer sentiment is still fragile, the Group remains cautious in predicting when the markets will recapture sustainable solid growth. It assumes that they will grow on a currency-adjusted base in the mid-single-digit range in Based on its clinically-proven products, organizational strength, differentiated services, and the stream of products launched in 2010, the Group is convinced that it can again deliver abovemarket performance. The prevailing instability and uncertainty in the financial markets, particularly with regard to currencies, add to its caution in offering guidance on margins, especially as more than 90% of the Group s business is outside Switzerland, where it has its main cost base. With the euro and the US dollar at historic lows at the end of 2010, currency headwind has to be expected for some time in This will obviously continue to detract from net revenue in Swiss Francs and profit margins. Straumann will continue to invest in all its franchises, its innovation pipeline, and its Marketing & Sales organization to create and drive superior treatment solutions and services. The Group will also continue to optimize efficiency. However, as the Swiss Franc is expected to retain its strength over the near term, profits will come under further pressure, although Straumann is confident that its operating margin will remain around 20% in Questions & Answers 16

17 2010 Annual Report pre-print version available Comprehensive value reporting Independent expert opinions, executive interviews, corporate governance, compensation report, outlooks, etc. Follows GRI guidelines for sustainability reporting Straumann s reporting quality recognized in 2009 Swiss Annual Report awards 33 Calendar of upcoming events 16 Feb 2011 Roadshow New York & Frankfurt 17 Feb 2011 Roadshow Boston & Paris 18 Feb 2011 Roadshow Toronto & Geneva 18 Mar 2011 AGM Basel (Congress Center) 24 Mar 2011 Investor Breakfast IDS Cologne 27 Apr 2011 First-quarter results Basel (Audio webcast) Detailed calendar on All the above-mentioned investor events are non-deal roadshows 34 17

18 Appendix Net revenue growth Full-year 2010 CHF million Q Q Q Q FY 2010 Europe growth in % CHF growth in % l.c. (0.2) 1.4 (2.0) 3.9 (9.0) 1.2 (4.9) 6.4 (3.8) 3.2 North America growth in % CHF growth in % l.c Asia / Pacific growth in % CHF growth in % l.c. (0.5) (1.7) (0.6) Rest of the world growth in % CHF growth in % l.c Group growth in % CHF growth in % l.c (3.9) (0.2)

19 Transactional currency exposure Global net revenue distribution in % Global cost distribution in % CHF 13% Others 17% USD/CAD/AUD 24% EUR 46% CHF 41% Others 15% EUR 27% USD/CAD/AUD 17% These distribution charts represent the total net revenues and the total cost of goods sold, Selling, General & Administrative costs as well as R&D expenses in the various currencies. All numbers are rounded approximations and represent 2010 values. 37 Your investor relations & media contacts Fabian Hildbrand Corporate Investor Relations Phone +41 (0) Mobile +41 (0) fabian.hildbrand@straumann.com Mark Hill Thomas Konrad Corporate Communications Phone +41 (0) Phone +41 (0) mark.hill@straumann.com thomas.konrad@straumann.com 38 19