21.06.2016
1
Becoming a ‘Total Solution Provider’ for tooth replacement
Marco Gadola, CEOpresenting at the Vontobel Summer Conference
Interlaken 7‐8 June 2016
Not allowed for further use without permission
2
This presentation contains certain forward-looking statements that reflect the current views ofmanagement. Such statements are subject to known and unknown risks, uncertainties andother factors that may cause actual results, performance or achievements of the StraumannGroup to differ materially from those expressed or implied in this presentation. Straumann isproviding the information in this presentation as of this date and does not undertake anyobligation to update any statements contained in it as a result of new information, futureevents or otherwise.
The availability and indications/claims of the products illustrated and mentioned in thispresentation may vary according to country.
Disclaimer
21.06.2016
2
3
Fund manager snapshot
Enterprise value: 6.0bn
Net debt (-cash) : (117m)
EBITDA: 221m (28% of sales)
Normalized tax rate: 15%
CAPEX: 35m (4% of sales)
FCF: 151m (19% of sales)
NWC: 63m (8% of sales)
Dividend pay-out / ratio1: 4 francs per share or 43%
Daily on-exchange trading volume/ turnover: 34K / CHF11m (180d VWAV)
All figures in CHF and adjusted for business combination exceptionals (Neodent) as per 31 December 2015 115’790’772 shares are outstanding and the 2’691 treasury shares are not entitled to receive a dividend
Relative share price development 3 and 5 yearsFigures in Swiss francs
4
Today’s agenda
Financial performance1
Update on our strategic progress2
Questions & Answers33 Questions & Answers
21.06.2016
3
5 Organic growth – i.e. excluding the effects of acquisitions, divestitures and currency exchange rates . Main competitors incl. Nobel Biocare, Zimmer Dental, Biomet 3i, Dentsply Implants based on company and SEC reports, as well as management comments
Financial performance last 5 years
17.3%14.9%
18.2%20.9%
23.3%
0%
10%
20%
30%
0
50
100
150
200
2011 2012 2013 2014 2015
Operating profit
Operating income ExceptionalsUnderlying EBIT margin
3.2%
‐1.0%
1.2%
6.4%
9.1%
2011 2012 2013 2014 2015
Organic growth vs. main peers
Straumann Main competitors
in CHF million 2011 2012 2013 2014 2015 5‐year average
Revenue 693.6 686.4 679.9 710.3 798.6
growth in %
Organic revenue growth 4.1 ‐1.0 1.2 6.4 9.1 4.0
Acquisiton / Divesture 0.0 ‐0.6 ‐0.8 0.0 9.5 1.6
Total l.c. growth 4.1 ‐1.6 0.4 6.4 18.6 5.6
FX effect ‐10.1 0.5 ‐1.3 ‐1.9 ‐6.1 ‐3.8
Total revenue growth (in CHF) ‐6.0 ‐1.1 ‐0.9 4.5 12.4 1.8
in C
HF
m
2.50
3.00
3.75 3.75 3.75
1.90 2.20
3.75 3.75 3.754.00
1.85 1.55
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
in C
HF
per
sha
re
Dividends paid from reserved capital contributions
Cash dividend
Based on the results and positive developments in 2015, we increased the ordinary dividend by CHF 0.25 (to CHF 4.00) per share
Despite challenging conditions and market contraction, Straumann has maintained its dividend at CHF 3.75 per share since 2008
-10
-5
0
5
10
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Cha
nge
in G
DP
yoy
(%)
US Italy Germany
Increased dividend to 4 Swiss francs
6 Source: Thomson Reuters Datastream
21.06.2016
4
7
Leading market position
Source: market research data & Straumann estimates
1 Includes implants, abutments, tools/instruments; 2 Market size at 2014 exchange rates = CHF 3.5bn
Global dental implant market in 2015 (worth CHF 3.2bn1)
9
Strong momentum continues in Q1
North America28% of Group revenue
Organic growth rates in %
12.5
8.3
Q1 2016 FY 2015
13.3
11.0
Q1 2016 FY 2015
LATAM 8% of Group revenue
9.4
6.1
Q1 2016 FY 2015
EMEA 48% of Group revenue
21.0
19.4
Q1 2016 FY 2015
APAC16% of Group revenue
12.2
9.1
Q1 2016 FY 2015
Group
21.06.2016
5
Change in organic growth
10
Largest growth contribution from EMEA – positive trend across the board
12.2% organic
Revenue development (in CHF million, rounded)
2015 2016
(0.2%) 12.5% 13.3%9.4% 21.0%3.0%
15.4% in CHF
Contribution to growth
EMEA
NorthAmerica
APAC
LATAM
193.2
(0.3) 5.7
198.6
9.26.9
6.2 2.1
223.0
Revenue Q12015
FX effect M&A effect Revenue Q12015 @ FX
2016
EMEA NorthAmerica
APAC LATAM Revenue Q12016
38%
28%
25%
8%
11
We expect the global implant market to grow solidly in 2016
We are confident that we can continue to outperform by achieving organic growth in the high-single-digit range
Despite further investments into strategic growth initiatives, the expected revenue growth and operational leverage should lead to further improvements in the underlying operating profit margin (2015: 23.3%)
Tax rate ~15%; CAPEX ~ CHF 25m
Full-year guidance raisedBarring unforeseen circumstances
11
21.06.2016
6
Update on our strategic progress
Drive a high performance culture and organization
Target unexploited growth markets & segments
Become a total solution provider for tooth replacement
Update on our strategic priorities
13
1
2
3
21.06.2016
7
Some large markets remain underpenetrated
US2 400
(75)
Estimated implants placed in 2015 (in thousand units) and per 10 000 inhabitants (small number in italic)
Brazil2 300 (114)
Japan430(34)
China980(7)
Russia650 (45)Germany
1 100 (136)
S.Korea2 200(412)
Italy1 200(196)
Argentina400(93) Underpenetrated Mature
14
India220 (2)
We aim to expand our share in these high growth markets
1 Based on Straumann estimates
USNo. 2
Dental implant market position of the Straumann Group1
BrazilNo. 1
JapanNo. 2China
No. 1
RussiaNo. 8
GermanyNo. 1
S.KoreaNo. 7
ItalyNo. 2
ArgentinaNo. 7
Underpenetrated Mature
15
Indiano presence
21.06.2016
8
Example of actions taken to unlock the inherent potential...
North America Strengthened education offering
for starters in implantology Instradent Canada launch
mid-year
Brazil Straumann & Neodent
integrated CADCAM service
ChinaEntry into value segment in H2 (Anthogyr)
JapanCADCAM service
LATAMHubs distributing
Straumann & Neodent established in Colombia,
Argentina and Mexico
16
TurkeyJoint venture to supply value implant systems (Zinedent)
UKInstradent opened
RussiaNew subsidiary andprice structure
Common technology andmanufacturing platform
...and we are continuing to build our value platform
Brazil (100%) Germany (51%)
S. Korea(conv. bond)
Spain (30%)
Canada (55%)
Germany (Opt.)
Germany (100%)
17
Taiwan (49%)
USA (13%)
Switzerland (44%)
AustriaTaiwan
(conv. bond)
France (30%) Turkey (JV 50%)
Surgery / implants
CADCAM / prosthetics
Biomaterials
21.06.2016
9
18
With Anthogyr we will enter the fast-growing value segment in China
Straumann acquired a 30% stake in French company
Anthogyr’s dental implant system is already established in China and positioned as a high-quality attractively-priced option
Transfer of Anthogyr’s implantology business activities in China to Straumann by mid-year
Potential to leverage business in other markets through Instradent
Approx. 15% of Anthogyr’s annual revenue of € 45m is in Asia
19
Zinedent is our brand to penetrate the value segment in Turkey and the surrounding markets
Zinedent joint-venture with our distributor to
supply implants and prosthetics in Turkey
(450k implants p.a.) and surrounding markets
Potential of manufacturing implants locally
Benefit from customer proximity to penetrate the
large and fast-growing Turkish non-premium
segment (>350k implants p.a.)
Launch expected by mid-year
21.06.2016
10
We are already a global player in the attractive value implant market
20
Neodent home market Existing value organizations & distributors
Expansion 2016Medentika home market
Drive a high performance culture and organization
Target unexploited growth markets & segments
Become a total solution provider for tooth replacement
Our strategic priorities
22
1
2
3
21.06.2016
11
23
Potential identified to become the total solution provider for dentists and labs
Conventionally manufactured prosthetics on
implants (crowns, bridges, bars)
Stock abutments
Customized abutments
CADCAM m
illing
system
sScanners
Dental implants
DVT / 3D radiology
Surgical planning & drill guides
Global market size ~CHF 7bnShare of the Straumann Group
Bone & tissue
regeneration
CADCAM manu‐‐factured prosthetics
Unparalleled range of proven biomaterials
Straumann botiss Geistlich
Bone allografts 1 Bone xenografts 1 Synthetic bone grafts Bone blocks Custom bone blocks Bone rings Collagen cones Fleeces & sponges Membranes 1 Soft-tissue grafts Emdogain
1 Sold under license in the US
24
21.06.2016
12
Dates indicate timing of full-market release in EMEA. Global market release depending on regulatory approval in the individual countries.
Implant type variations
Tissue Level Bone Level Bone Level Bone Level Tissue Levelparallel-walled parallel-walled apically tapered fully tapered Ceramic /Monotype
25
Efficient treatmentprotocol
Esthetics
ProArch
1'060
0 200 400 600 800 1000 1200 1400 1600 1800
Fully tapered
Apically tapered
Parallel walled
Fully tapered
Apically tapered
Parallel walled
Tis
sue
Leve
lB
one
Leve
l
STMN share Potential to grow Lower priced tapered implants
Substantial growth potential in the tapered implant segment in 2015 and beyond
Combined implant market US & Germany (approx. 3.2m implants1)
1 Based on available data in October 2015, AFG & Straumann proprietary surveys and estimates 26
Bone Level
Tissue Level
Straumann share Potential to grow Lower price implants
In 1000 implants
2015
2007
1986
Date of launch
21.06.2016
13
28
Enlarging our restorative business – high quality multi-platform solutions
Straumann Neodent Medentika For 3rd party
Pre-fabricated
Standard & pre-shaped abutment Medentika
Titanium base abutment Medentika /
etkon i-dent
Pre-milledabutment Medentika /
etkon i-dent
Individualized
CADCAM individualized abutment
Medentika / etkon i-dent
‘Crown in a box’ Medentika / etkon i-dent
Implant system
Straumann enters chairside & in-lab CADCAM market through partnerships with Dental Wings (intra-oral and in-lab scanners) and Amann Girrbach (milling machines), complementing Straumann’s central milling and Scan&Shape services
Entry to chairside and in-lab CADCAM market
In-lab Chairside
Lab System
Desktop scanner CARES® Visual MSeries milling
machine
Intra-oral scanner (stand-alone)
Intra-oral scanner CARES® Visual
Practice lab system
Intra-oral scanner CARES® Visual MSeries milling
machine
Chairside system
Intra-oral scanner CARES® Visual CSeries milling
machine
21.06.2016
14
Intra-oral scanning allows convenient and reliable impression taking
30
Conventional process:
31
Next generation technology – developed by Dental Wings for Straumann
Small light handpiece
Real-time 3D scanning; open STL files
Patented and compact 3D capture technique (“Multiscan Imaging Gesture Control”)
Attractive price, no click fees
Distributed through Benco and Burkhart in the US, serving approx. 40K dentists and labs with broad sales and service network
New intra-oral scanning technology –scaled distribution in the US
21.06.2016
15
Equipment complemented by a large variety of dental materials
Proprietary Common brands Distributed
n!ce1
Pre-milled abutment blanks
Cobalt-Chrom
Zirconia
Vita® blocks
Ivoclar® blocks
321 New glass ceramic (lithium disilicate reinforced lithium aluminosilicate) with high flexural strength, short milling times and easy
finishing. It comes in two version, one ideal for the dental lab and the fully crysallized version convenient for chairside applications.
34
Our future growth drivers in summary
Portfolio extension:
implant solutions with superior mechanical & esthetic properties;
less invasive procedures;
enter the chairside system & consumables market
advanced biomaterials
Further penetrate the global value segment
New customer segments (fast expansion of dental chains and networks; growing customer group of General dentists)
Targeted investments in underpenetrated markets
$
21.06.2016
16
Questions & answers
Calendar of upcoming events
2016
07/08 June Vontobel summer conference Interlaken
15 June Mainfrist healthcare tour Basel
04/05 July Investor meeting Toronto, Montreal
06 July Investor meetings New York
07 July Investor meetings Boston
23 August Half-year results publication Webcast
06 September Investor meetings London
07 September Goldman Sachs HC conference London
14 September BKB Investor Event Basel
27 October Q3 revenue publication Webcast
36 More information on straumann.com → Events
21.06.2016
17
CHF37%
EUR19%
USD/CAD/AUD24%
BRL11%
Other11%
CHF9%
EUR33%
USD/CAD/AUD29%
BRL10%
Other19%
37
Straumann’s currency exposure
Cost breakdown FY20151
Revenue breakdown FY20151
1 These distribution charts represent the total net revenues and the total COGS, as well as OPEX in the various currencies. All numbers are rounded and based on FY 2015 figures and include Neodent since 1 March.
Average exchange rates (rounded)FX sensitivity
(+/- 10%) on full-year...
2014 2015 YTD 2016 Revenue EBIT
1 EURCHF 1.21 1.08 1.096 +/- 26m +/- 16m
1 USDCHF 0.92 0.96 0.99 +/- 20m +/- 7m
1 BRLCHF 0.389 0.295 0.255 +/- 8m +/- 2m
100 JPYCHF 0.86 0.80 0.86 +/- 5m +/- 3m
37
50
70
90
110
130
2014 2015 2016
EURCHF BRLCHF USDCHF JPYCHF