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Capture the full market potential Peter Hackel, CFO 21-22 May 2019

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Page 1: Capture the full market potential · HIGH-STRENGTH MATERIAL 24. Current Straumann Group market share 1 out of 4 implants have a fully tapered design Market volume (Implant fixtures)

Capture the full market potentialPeter Hackel, CFO

21-22 May 2019

Page 2: Capture the full market potential · HIGH-STRENGTH MATERIAL 24. Current Straumann Group market share 1 out of 4 implants have a fully tapered design Market volume (Implant fixtures)

Looking back –Financial performance Q1 2019 and our track

record

6

Page 3: Capture the full market potential · HIGH-STRENGTH MATERIAL 24. Current Straumann Group market share 1 out of 4 implants have a fully tapered design Market volume (Implant fixtures)

Good start to 2019 – further growth initiatives taken

CHF 372m

Up 15% on strong 2018

performance

REVENUE

>100 new articles

…introduced at key trade events;

clear aligner business launched in

LATAM, Europe & China

INNOVATION STREAM

+17% organic1

2.3%-point FX effect

Minor acquisition effect

GROWTH

Business expansion

Stakes increased in Anthogyr, Zinedent,

Medentika and Valoc; distribution

agreement with Medit

PORTFOLIO

APAC & LATAM

…sustain growth around 20%;

NAM & EMEA both post double-

digit increases

TOP PERFORMERS

Outperformance

2019: organic revenue to grow in

low-teen percentage range; further

improvements in EBITDA and EBIT

margins

OUTLOOK2

71 Organic growth – i.e. excluding the effects of currency fluctuations and acquired/divested business activities. 2 Outlook expectations barring

unforeseen events/circumstances and assuming fairly stable FOREX.

Page 4: Capture the full market potential · HIGH-STRENGTH MATERIAL 24. Current Straumann Group market share 1 out of 4 implants have a fully tapered design Market volume (Implant fixtures)

Revenue development (in CHF m, rounded)

EMEA and NAM contribute two-thirds of organic growth

0.3

20.2

16.4

13.04.9

LATAMM&A effect APACRevenues

Q1 2018

-6.6

EMEARevenues

Q1 2018

@FX 2019

FX effect

324.1317.8

Revenues

Q1 2019

North

America

372.3

14.9% in CHF

17.1% organic

Change in organic growth

17.4% 19.7%14.4% 22.1% 37%

30%

24%

9% LatinAmerica

AsiaPacific

NorthAmerica

EMEA

Regional share of

organic growth

8

Page 5: Capture the full market potential · HIGH-STRENGTH MATERIAL 24. Current Straumann Group market share 1 out of 4 implants have a fully tapered design Market volume (Implant fixtures)

6.4%

9.1%

13.1%

15.7%

18.9%

2014 2015 2016 2017 2018

24.8%

27.6%28.3%

29.3%29.6%

0

100

200

300

400

2014 2015 2016 2017 2018

EBITDA excl. exceptionals Exceptionals

Underlying margin

Impressive 5-year performance

1 2017 figures restated to reflect updated purchase price allocation for ClearCorrect; figures excl. exceptional effects in all years.

5-year organic revenue growth 5-year EBITDA1 in CHF

million and margin

Market

growth est. 4-5%

A v e r a g e + 1 3 % + 4 . 8 % - p o i n t s

18.4% 18.1%

20.4% 20.7%20.1%

-50

50

150

250

350

450

2014 2015 2016 2017 2018

+ 1 . 7 % - p o i n t s

5-year Net Profit1 in CHF

million and margin

9

Page 6: Capture the full market potential · HIGH-STRENGTH MATERIAL 24. Current Straumann Group market share 1 out of 4 implants have a fully tapered design Market volume (Implant fixtures)

Success factors

Page 7: Capture the full market potential · HIGH-STRENGTH MATERIAL 24. Current Straumann Group market share 1 out of 4 implants have a fully tapered design Market volume (Implant fixtures)

We have broadened our portfolio and deepened our

customer interactions

11

Manufacturer Distribution/subsidiaries Dental professional(our clients)

Patient pool(our client’s client)

Focus on implant

specialists

R&D team +140%

Active in non-premium

Complete CAD/CAM offering

Entry into clear aligners

Institut Straumann

2012

GPs expanding

into specialty

procedures

>2x our sales force

Dedicated DSO team

Expanding into

esthetic dentistry

Exploring entry into

preventive dentistry

Today

>95% of our business is

conducted directly

Nearly tripled our subsidiaries

Capture growth opportunities in

underpenetrated markets

63

23

Patients with

missing teeth

636363

Page 8: Capture the full market potential · HIGH-STRENGTH MATERIAL 24. Current Straumann Group market share 1 out of 4 implants have a fully tapered design Market volume (Implant fixtures)

Reputation as innovation leader underpinned

12

12

19

Roxolid implant material

13

14

PURE ceramic 1-piece implant

Variobase abutments

BLT implant15

16 ProArch edentulous solution

N!ce fully-crystallized glass-ceramic Grand

Morse

Grand Morse implant

Grand

Morse

Mini implant

PURE 2-piece ceramic implant

17

18

BLX implant

Small diameter implant ( 2.9mm)

Short implant (4mm)

Roxolid-on-all

Chairside 3D printing

Page 9: Capture the full market potential · HIGH-STRENGTH MATERIAL 24. Current Straumann Group market share 1 out of 4 implants have a fully tapered design Market volume (Implant fixtures)

Targeted investments in high growth markets

13

Implant volumes in key markets (million

units in 2017)

1.5

1.2

1.3

2.4

0.8

1.4

2.7

0.2

0.4

1.4

0.3

SPAIN

ITALY

GERMANY

BRAZIL

TURKEY

RUSSIA

USA

UK-IRELAND

JAPAN

CHINA / HONG KONG

INDIA

319

197

160

118

98

160

74

38

33

10

2

Premium

Non-

Premium

Our new

subsidiaries

Penetration: Implants per 10’000 inhabitants

Page 10: Capture the full market potential · HIGH-STRENGTH MATERIAL 24. Current Straumann Group market share 1 out of 4 implants have a fully tapered design Market volume (Implant fixtures)

Uncontested No. 1 in implants…

4.5 bn

25%

#1

~26-28 bn

5%

#7

Implantology1Total

dentistry

Market

Straumann position

Straumann share

2018Others (400+)

25%

19%

12%

8%

7%

6%

4%

19%

Danaher

Dentsply

Sirona

Zimmer

Biomet

Henry

Schein

Osstem

Straumann

Group

1 Implant dentistry market segment includes implant fixtures, final and temporary abutments, healing screws, copings and related

instruments; information based on Decision Resources Group and Straumann data.

Main playersHenry Schein, Patterson,

Danaher, Dentsply Sirona

Align Technology, 3M

Dentium

14

Page 11: Capture the full market potential · HIGH-STRENGTH MATERIAL 24. Current Straumann Group market share 1 out of 4 implants have a fully tapered design Market volume (Implant fixtures)

…and long avenue of growth in other ‘specialties’

Market segments Est. segment size1

(2018 in CHF bn)Growth rate

Our current

market share

Biomaterials 0.6 High-single digits

Implantology1 4.5 Mid-single digits

CAD/CAM

equipment21.5 Double digits

CAD/CAM

prosthetics3.9 Double digits

(All ceramic)

Clear aligners 2.0 >25%

1 Imaging and planning segment is not included in the overview above. Customized prosthetics are listed under CAD/CAM prosthetics, but also belong to

the total implant and abutment market.

15

Page 12: Capture the full market potential · HIGH-STRENGTH MATERIAL 24. Current Straumann Group market share 1 out of 4 implants have a fully tapered design Market volume (Implant fixtures)

Looking ahead –recent achievments and

strategy in action

16

Page 13: Capture the full market potential · HIGH-STRENGTH MATERIAL 24. Current Straumann Group market share 1 out of 4 implants have a fully tapered design Market volume (Implant fixtures)

Straumann Group – continuously

increasing the addressable market

Total solution provider tooth

replacement

Total solution provider esthetic dentistry

2012

2016

2018

Implant provider 3.4

Addressable market

in CHF billion

7.0

13.0

17

Page 14: Capture the full market potential · HIGH-STRENGTH MATERIAL 24. Current Straumann Group market share 1 out of 4 implants have a fully tapered design Market volume (Implant fixtures)

Half of the implant market is ‘value’

Premium/value split of implant & abutment market in value terms (2018)

0 0.5 1

Global

EMEA

NAM

APAC

LATAM

2008:

Premium >70 %

Premium

Value

18

Page 15: Capture the full market potential · HIGH-STRENGTH MATERIAL 24. Current Straumann Group market share 1 out of 4 implants have a fully tapered design Market volume (Implant fixtures)

19

Multi-pricing strategy – comprehensive portfolio

of value implant brands

Neodent,

Anthogyr,

Medentika

Premium

Upper value

Lower value

Global implant & abutment market

~CHF 4bn

Straumann Group share (2018)

Zinedent,

T-Plus,

equinox

Page 16: Capture the full market potential · HIGH-STRENGTH MATERIAL 24. Current Straumann Group market share 1 out of 4 implants have a fully tapered design Market volume (Implant fixtures)

Our latest jewel in the crown

Stake increased from 30% to full ownership

Consolidation 1 June 2019; integration started

Leading French implant manufacturer; established

international provider of upper value implants

Comprehensive implant portfolio

Group to build on successful partnership in China

and Russia

Anthogyr employs 400 people

Total revenues last 12 months: CHF 57 million

(approx. CHF 50 million acquisition effect1)

201 Acquisition effect represents the revenues generated in the 12 months prior to the closing excluding intra-company sales. The amount may

fluctuate with currency movements.

Page 17: Capture the full market potential · HIGH-STRENGTH MATERIAL 24. Current Straumann Group market share 1 out of 4 implants have a fully tapered design Market volume (Implant fixtures)

Getting fit for the future

Construction of new plant in Curitiba (Brazil) underway

11 000m2 production space created in first phase

Automated production of ClearCorrect clear aligners to serve LATAM market

Increased capacity for implant system components

Scheduled opening in Q4 2019 21

Page 18: Capture the full market potential · HIGH-STRENGTH MATERIAL 24. Current Straumann Group market share 1 out of 4 implants have a fully tapered design Market volume (Implant fixtures)

Focusing on the BLX launch

Dynamic Bone Management™

‘Cut, collect, condense’- properties

Bi-directional cutting elements

Stress-free crestal bone

Enhanced drill design

More than edentulous and

immediacy solutions

22

Page 19: Capture the full market potential · HIGH-STRENGTH MATERIAL 24. Current Straumann Group market share 1 out of 4 implants have a fully tapered design Market volume (Implant fixtures)

Full range of implant diameters and lengths

One connection – one prosthetic line

Ø 3.75 for all indications

Straumann® BLX implant portfolio

all indicationsØ 3.75

23

Page 20: Capture the full market potential · HIGH-STRENGTH MATERIAL 24. Current Straumann Group market share 1 out of 4 implants have a fully tapered design Market volume (Implant fixtures)

A unique design with clear benefits

24

Straumann BLX Feature / properties Nobel Active

Ø 3.75 mmSMALLEST ALL-

INDICATION IMPLANTØ 4.3 mm

No tap

2 steps soft and 4 in hard

bone

SIMPLICITY OF

DRILLING PROTOCOL

Tap required

3 steps in soft and 5 in hard

bone

Dynamic Bone

Management™

INSERTION

CONTROL“All-or-nothing” effect

1 connection for

6 diameters

PROSTHETIC

SIMPLICITY

3 connections for

4 diameters

SLA and SLActive surface

(=best long term outcome

in registry)

SURFACE

MANAGEMENTStandard surface

RoxolidHIGH-STRENGTH

MATERIAL

24

Page 21: Capture the full market potential · HIGH-STRENGTH MATERIAL 24. Current Straumann Group market share 1 out of 4 implants have a fully tapered design Market volume (Implant fixtures)

Current Straumann Group

market share

1 out of 4 implants have a fully tapered designMarket volume

(Implant fixtures)

25 million

units

Parallel

walled

Apically

tapered

Fully

tapered

Main players:

Nobel Biocare,

BioHorizons,

MIS, Implant

Direct, Megagen

Neodent,

Anthogyr and

Equinox

25

Page 22: Capture the full market potential · HIGH-STRENGTH MATERIAL 24. Current Straumann Group market share 1 out of 4 implants have a fully tapered design Market volume (Implant fixtures)

Large potential for growth in digital equipment

Source: Straumann proprietary GP survey in US, DE, IT, and UK; samples size >200 dentists.

9% 11%

24%

12%

5% 4%

13% 11%

38%43%

68%

80%

UK Italy US GER UK Italy US GER UK Italy US GER

GPs using intra-oral scanners(IOS)

Dentists using IOS & chairsidemilling equipment

Dental technicians using labscanners

27

Page 23: Capture the full market potential · HIGH-STRENGTH MATERIAL 24. Current Straumann Group market share 1 out of 4 implants have a fully tapered design Market volume (Implant fixtures)

An even broader range of digital options

28

Virtuo Vivo™

intraoral scanner

3Shape TRIOS 4 Medit T-Series

DWOS 8 & CoDiagnostiX with Easy Modes;

Carestream, Camfacture, Medit integrated

3D printing capsule system

Page 24: Capture the full market potential · HIGH-STRENGTH MATERIAL 24. Current Straumann Group market share 1 out of 4 implants have a fully tapered design Market volume (Implant fixtures)

Clear aligners – one of the most

attractive areas in dentistry

Page 25: Capture the full market potential · HIGH-STRENGTH MATERIAL 24. Current Straumann Group market share 1 out of 4 implants have a fully tapered design Market volume (Implant fixtures)

ClearCorrect smiles spread to new markets

Case growth: Q1 +73%; FY’18 +61%;

Customer base expands by close to 20% in 2019

Continued strong growth in North America

ClearCorrect aligners promoted with Dental

Monitoring system in the US

Brazilian launched at CIOSP in Brazil and entry into the

attractive Chinese market

Expanding our production capacity

ClearCorrect and Align Technology settle patent disputes:

Non-binding letter of intent to explore distribution & development of Align’s

iTero® IO-scanner integrated in Straumann’s CARES® / DWOS® workflow

Straumann Group expects one-time expense of max CHF 24m in H1

2019, including CHF 16m, if distribution & development agreement does

not materialize 30

Page 26: Capture the full market potential · HIGH-STRENGTH MATERIAL 24. Current Straumann Group market share 1 out of 4 implants have a fully tapered design Market volume (Implant fixtures)

ClearCorrect

Launched in Brazil and Europe

Production expansion

Fresh new branding

Smyletec

Exclusive distribution agreement

Affordable, state-of-the-art solutions for China

World’s second largest market for clear aligners,

expected to grow >50% p.a. in the next 5 years

Smyletec launched in March; Dental Monitoring to

follow later in 2019

Clear-aligner business launched in Brazil, China and

Europe

31

Page 27: Capture the full market potential · HIGH-STRENGTH MATERIAL 24. Current Straumann Group market share 1 out of 4 implants have a fully tapered design Market volume (Implant fixtures)

Our esthetic dentistry solutions portfolio

Implant systemsMulti-platform

prostheticsDigital Orthodontic Biomaterials Preventive

Glo

ba

l

bra

nd

sL

oc

alb

ran

ds

Te

ch

no

log

y

bra

nd

s&

pa

rtn

ers

32

Page 28: Capture the full market potential · HIGH-STRENGTH MATERIAL 24. Current Straumann Group market share 1 out of 4 implants have a fully tapered design Market volume (Implant fixtures)

Outlook 2019

33

Page 29: Capture the full market potential · HIGH-STRENGTH MATERIAL 24. Current Straumann Group market share 1 out of 4 implants have a fully tapered design Market volume (Implant fixtures)

Our 2019 guidanceBarring unforeseen circumstances

Market growth

Our revenue

growth

Profitability

Global implant market to continue to

grow between 4-5%

Further improvement in the underlying1

EBITDA and EBIT margin

Confident to outperform and achieve organic

revenue growth in the low-teens percentage range

1 Profitability objectives exclude exceptional effects related to acquisitions, business combinations as well as the impact from the adoption of

IFRS16 (see next slide). 34

Page 31: Capture the full market potential · HIGH-STRENGTH MATERIAL 24. Current Straumann Group market share 1 out of 4 implants have a fully tapered design Market volume (Implant fixtures)

Participating in high growth areas while mitigating the

risk of an economic slowdown

1 Emerging market classification based on MSCI GICS definition

More EM sales1… more balanced product

portfolio…

…offered at different

price points

Share of implant volumes in

2012 vs. 2018

Western Europe

Emerging markets (EM)

Other growth markets in developed

countries

Premium implant solutions

Non-premium implant solutions

New or adjacent products

Multi-pricing strategyProduct portfolio break-down

2012 vs. 2018 (in value)

Premium

Upper value

Lower value

36

Page 32: Capture the full market potential · HIGH-STRENGTH MATERIAL 24. Current Straumann Group market share 1 out of 4 implants have a fully tapered design Market volume (Implant fixtures)

Calendar of upcoming events

2019 Event Location

21 May UBS Healthcare conference New York

22 May Berenberg US conference Tarrytown (US)

04-05 June Vontobel Switzerland conference Interlaken (CH)

13 June Exane BNP Paribas CEO conference Paris

14 August First-half 2019 results conference Basel, HQ

Social media Type Source

Analyst Talk Executive interviewed by analysts Corporate Website / youtube

StraumannIR Investor Relations Twitter @StraumannIR

37

Page 33: Capture the full market potential · HIGH-STRENGTH MATERIAL 24. Current Straumann Group market share 1 out of 4 implants have a fully tapered design Market volume (Implant fixtures)

Estimated impact from adopting

IFRS 16 (leases) in 2019

Approx. IFRS 16 impact (in CHF million)1 Total

Revenue

Gross margin +0.5

EBITDA +18.0

EBIT +3.0

Financial results -5.0

Profit before tax -2.0

1 Barring unforeseen circumstances, major currency movements and/or change in business scope38

Page 34: Capture the full market potential · HIGH-STRENGTH MATERIAL 24. Current Straumann Group market share 1 out of 4 implants have a fully tapered design Market volume (Implant fixtures)

CHF29%

EUR22%

USD/CAD/AUD26%

JPY3%

BRL8%

Other12%

CHF6%

EUR29%

USD/CAD/AUD31%

JPY5%

BRL8%

Other21%

Straumann’s currency exposure

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 2018 figures as well as average FX rates in 2017-18. They also include recent acquisitions and new subsidiaries.

Cost breakdown FY20181

Revenue breakdown FY20181

Average exchange rates (rounded)FX sensitivity

(+/- 10%) on full-year...

2017 2018

Closing

2018 Revenue EBIT

1 EURCHF 1.11 1.15 1.13 +/- 39m +/- 23m

1 USDCHF 0.98 0.98 0.99 +/- 37m +/- 17m

100 BRLCHF 30.69 26.87 25.36 +/- 11m +/- 2m

100 JPYCHF 0.87 0.88 0.90 +/- 7m +/- 4m

70

75

80

85

90

95

100

105

110

115

01.2017 06.2017 11.2017 04.2018 09.2018

Exchange rates development in 2017-18

USDCHF EURCHF JPYCHF BRLCHF

39

Page 35: Capture the full market potential · HIGH-STRENGTH MATERIAL 24. Current Straumann Group market share 1 out of 4 implants have a fully tapered design Market volume (Implant fixtures)

Thank you