1 2013 First-quarter results Analysts’ & Media Conference Call Basel, 30 April 2013 Straumann 2 Disclaimer This presentation contains certain “forward-looking statements”, which can be identified by the use of terminology such as “will”, “guidance”, “would”, “prevailing”, “still be able to”, “should”, “confidence in achieving”, “turnaround”, “future”, “anticipated”, “continue”, “mid and long term”, “believes”, “outlook”, or similar wording. Such forward-looking statements reflect the current views of Management and are subject to known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of the Group to differ materially from those expressed or implied. These include risks related to the success of and demand for the Group’s products, the potential for the Group’s products to become obsolete, the Group’s ability to defend its intellectual property, the Group’s ability to develop and commercialize new products in a timely manner, the dynamic and competitive environment in which the Group operates, the regulatory environment, changes in currency exchange rates, the Group’s ability to generate revenues and profitability, and the Group’s ability to realize its expansion projects in a timely manner. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this report. Straumann is providing the information in this release 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. The availability and indications/claims of the products illustrated and mentioned in this presentation may vary according to country.
Transcript
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2013 First-quarter results
Analysts’ & Media Conference Call
Basel, 30 April 2013
Straumann 2
Disclaimer
This presentation contains certain “forward-looking statements”, which can be identified by the use of terminology such as “will”, “guidance”, “would”, “prevailing”, “still be able to”, “should”, “confidence in achieving”, “turnaround”, “future”, “anticipated”, “continue”, “mid and long term”, “believes”, “outlook”, or similar wording. Such forward-looking statements reflect the current views of Management and are subject to known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of the Group to differ materially from those expressed or implied. These include risks related to the success of and demand for the Group’s products, the potential for the Group’s products to become obsolete, the Group’s ability to defend its intellectual property, the Group’s ability to develop and commercialize new products in a timely manner, the dynamic and competitive environment in which the Group operates, the regulatory environment, changes in currency exchange rates, the Group’s ability to generate revenues and profitability, and the Group’s ability to realize its expansion projects in a timely manner. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this report. Straumann is providing the information in this release 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.
The availability and indications/claims of the products illustrated and mentioned in this presentation may vary according to country.
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Highlights
Marco GadolaCEO
2008 2012
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No improvement in economic environment or consumer sentiment in Europe and major Asian markets
Emerging markets continue to perform well
Value & low-cost segment has outpaced premium globally
Continuing substitution of standard prosthetics by individualized CADCAM solutions
What is happening in the market?
30-32% ~39%
68-70%~61%
Global dental implant market(2012: ~CHF 3bn)
Premium segmentValue & low cost segment
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Straumann’s response
Investment focus on high-growth markets
Solutions to reduce overall treatment costs and lab equipment investments (CARES Scan & Shape service)
Penetrate value segment by leveraging Neodent and exploring commercial approaches within existing portfolio
Expand the reach & accessibility of our CADCAM franchise
Cost optimization program stepped up
Highlights in Q1 2013
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Group revenue Change in CHF Change organic1
CHF175m -6% -5%excluding iTero effect
Best performer Headcount target Financial flexibility
N. America +2% organic growth
Approx. 2230 CHF 200mmatches record level of sales in prior first quarter
by year-end; cost reduction program significantly intensified
raised in inaugural bond placement
Straumann1 Throughout this presentation the term ‘organic change’ will be used, which excludes the effects of currency fluctuation and the discontinuation of intra-oral scanner distribution business announced in October 2012.
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Business performance
Thomas Dressendörfer CFO
185.1
-0.2 -1.7
183.2
-8.1
+0.9 -1.0-0.2
174.8
Q1 revenue FX Effect iTero Effect Q1 revenue@ 2013 FX
Europe NorthAmerica
APAC ROW Q1 revenue
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+2.1%(7.7%) (4.4%) (2.6%)
Change organic
Tough environment in Europe hinders return to growth
(-0.1%) (0.8%)
2012 2013
(5.6%) in CHF
(4.7%) in organic
in CHF m
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Regeneratives outpace replacement and restorativebusinesses
Implants RegenerativesRestoratives
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Growth intact in N. America; Europe struggles further
56%
Revenue contracts 8% (l.c. and organic)
Weak consumer sentiment slows region
Stiff competition in Italy and Spain
Germany and Switzerland also struggled in Q1
-7.7%-6.3%-5.3%
-7.0%
Q1 2013Q4 2012Q3 2012Q2 2012
Eu
rop
eN
ort
h A
mer
ica
2.1%0.0%
5.1%7.0%
Q1 2013Q4 2012Q3 2012Q2 2012
Revenue flat in l.c.; organic revenue grows 2%
Implant and regenerative businesses grow moderately
Fundamentals remain intact
Revenue change organic
56%
26%
Pie chart segment indicates regional revenue portion of the Group.
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APAC slows while RoW picks up
56%
4% contraction in l.c.
Japan: perception of implant dentistry tarnished by media and will take time to restore
Solid performances in China and Australia
-4.4%
-1.0%-2.4%
4.2%
Q1 2013Q4 2012Q3 2012Q2 2012
Asi
aP
acif
icR
est
of
Wo
rld
1
-2.6%
-10.4%
1.4%
-7.4%
Q1 2013Q4 2012Q3 2012Q2 2012
3% contraction in l.c.
Difficult conditions continue in Middle East
Brazil posts good growth
13%
5%
1 Revenue contribution from Neodent will be included after consolidation in 2015.
Revenue change organic
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‘BBB stable’ rating1 used for successful bond placement
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Inaugural 7-year domestic straight bond issue oversubscribed
CHF 200 million raised with coupon of 1.625% (all-in cost: 1.695%)
Added liquidity will enable Straumann to increase Neodent stake in coming years without compromising independence or scope for other attractive investment opportunities
Multiple enhancements to save treatment time and cost launched at IDS and Chicago Midwinter
Loxim implant transfer piece
Sterile healingIndication-Based Product Selection
Guide
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Resizing for a changed market
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23612452
25752517
2434
2230
FY 2010 FY 2011 Q3 2012 FY 2012 Q1 2013 FY 2013
Initial reduction measures announced
Current organization built based on ‘bullish’ market growth expectations, which have not materialized
In view of current developments and mid-term economic outlook, today’s staff level and cost base are no longer sustainable
As part of our drive to reduce operational costs, we are targeting a headcount of approx. 2230 by year end
≈140
≈200
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Reductions mainly in non-sales functions and non-essential activities, without compromising our standard of quality, innovation and service
Majority of reductions (approx. 110) at global headquarters
Cost reduction program will result in exceptional charges of CHF 18-20m in 2013
Despite resizing, we will continue to have a strong, competitive team of professionals to drive our business in the future
Adjusting our cost base to current market conditions
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Thomas DressendörferFinance & IT
Frank HemmCustomer Solutions
& Marketing
Dr Sandro Matter Strategic Projects
& Alliances
Andy MolnarSales North America
Organizational structure simplified and adapted to focus more on customer needs and solutions
Marco GadolaCEO
Wolfgang Becker Sales Central Europe
Guillaume DaniellotSales Western Europe
& LATAM
Dr Alexander OchsnerSales APAC
Dr Gerhard Bauer Operations, Research
& Development
Executive Management Board (as of May 2013)
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Straumann expects the effects of the weak economy and consumer sentiment to continue in Europe, while attractive markets like North America, China and Brazil should perform well.
Based on the overall business fundamentals, strategic plan and cost optimization, the Group assumes that it will be able to deliver improved profit levels1 in 2013, even if the market remains sluggish.
In the mid term, it aims to return to solid growth and a significantly higher operating margin.
Outlook Barring unforeseen circumstances
18 Straumann 1 Excluding exceptionals / charges for cost optimization program in both years.
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Questions?
Calendar of upcoming corporate events
30 April Q1 sales Webcast
20 August Q2 sales and H1 results Basel, Conference
1 These distribution charts represent the total net revenues and the total COGS, SG&A costs as well as R&D expenses in the various currencies. All numbers are rounded and based on 2012 figures.
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Average exchange rates (rounded)
FY 2011 FY 2012
EURCHF 1.23 1.21
USDCHF 0.89 0.93
JPYCHF 1.11 1.17
70
80
90
100
110
2012 2013
USDCHF EURCHF JPYCHF
Straumann’s major exchange rates since 2012 (indexed to 100)
