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Capture the full market potential Fabian Hildbrand Geneva, 17 June 2019

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Page 1: Capture the full market potential - Straumann...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

Capture the full market potentialFabian Hildbrand Geneva, 17 June 2019

Page 2: Capture the full market potential - Straumann...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

Looking back –Financial performance Q1 2019 and our track

record

2

Page 3: Capture the full market potential - Straumann...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

We develop

high-end implants

3

21

0N

Page 4: Capture the full market potential - Straumann...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

Financial Highlights in Q1

4

17%

ORGANIC SALES GROWTH

APAC & LATAM sustain growth ~20%

TOP PERFORMERS

Organic revenue to grow in

low-teen percentage range; further operating

margin improvements

OUTLOOK 2019

4-5%

IMPLANT MARKET GROWTH

all regions post

double-digit increases

REGIONAL TREND

12% consensus

(Vara Research)

ORGANIC SALES GROWTH 2021

Page 5: Capture the full market potential - Straumann...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

Revenue development (in CHF m, rounded)

Q1 in a ‘nutshell’

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

5

Page 6: Capture the full market potential - Straumann...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

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

6

Page 7: Capture the full market potential - Straumann...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

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

7

Page 8: Capture the full market potential - Straumann...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

Getting fit for the future

8

Villeret expansion project to

add 16 000 m2 production

area (operational early 2021)

2nd plant in Curitiba (Brazil) to add

11 000m2 production space (opening in Q4 2019)

BRA

CH

Page 9: Capture the full market potential - Straumann...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

Success factors

Page 10: Capture the full market potential - Straumann...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

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

10

Preventive

dentistry

represents ~2bn

market opportunity

Page 11: Capture the full market potential - Straumann...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

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

11

Page 12: Capture the full market potential - Straumann...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

Targeted investments in high growth markets

12

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 13: Capture the full market potential - Straumann...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

Reputation as innovation leader underpinned

13

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 14: Capture the full market potential - Straumann...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

Long avenue of growth in other ‘specialties’

Market segments Est. segment size1

(2018 in CHF bn)Growth rate

Our current

market share

Biomaterials 0.7 High-single digits

Implantology1 4.7 Mid-single digits

CAD/CAM

equipment21.5 Double digits

CAD/CAM

prosthetics3.9 Double digits

(All ceramic)

Clear aligners 2.2 >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.

14

Page 15: Capture the full market potential - Straumann...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

Looking ahead –recent achievments and

strategy in action

15

Page 16: Capture the full market potential - Straumann...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

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

16

Page 17: Capture the full market potential - Straumann...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

Focusing on the BLX launchDynamic Bone Management™

17

Page 18: Capture the full market potential - Straumann...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

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

19

Page 19: Capture the full market potential - Straumann...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

The so called ,Value Segment’ – a new business opportunity

Unternehmensberichte, Capital IQ, Bernstein-Analyse, Straumann-Schätzungen

52%

48%

2018

77%

23%

2003

71%

29%

2008

Premium-Segment (value share in %)

Non-Premium-Segment

Page 20: Capture the full market potential - Straumann...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

Half of the implant market is now ‘value’

Premium/value split of implant & abutment market

in value terms (2018)

21

Global

EMEA

NAM

APAC

LATAM

2008: Premium 60-70 %

Premium segment

Value

Page 21: Capture the full market potential - Straumann...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

22

2008: We were trapped in a premium niche market

2008

Premium

Value

Share of market value

Market value

CHF 3bn

Premium Volume Non-Premium Volume

Market volumes of

implant fixtures:

~14m

Page 22: Capture the full market potential - Straumann...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

23

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 23: Capture the full market potential - Straumann...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

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)

241 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 24: Capture the full market potential - Straumann...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

25

Challenge: Bringing cultures

together that play the same game

Page 25: Capture the full market potential - Straumann...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

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

26

Page 26: Capture the full market potential - Straumann...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

An even broader range of digital options

27

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 27: Capture the full market potential - Straumann...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

Clear aligners – one of the most

attractive areas in dentistry

Page 28: Capture the full market potential - Straumann...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

3 out of 4 people

have misaligned

teeth or suffer

from malocclusion

Page 29: Capture the full market potential - Straumann...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

Clear-aligner segment underpenetrated

30

North America:

Clear-aligner

penetration ~14-18%

Outside N. America:

Clear-aligner

penetration ~5-8%

>10mOrthodontic cases

annually

Clear aligner adoption drivers

More dentists trained (GPs/orthod.)

More GPs offer/promote treatment

Current users expand business

Attention to esthetics increasing

Geographic availability

Teenager segment penetration

Product improvement (ease-of- use,

more indications)

Digitalization simplifies workflow and

drives penetration

Source: World Statistics; Global Industry Analysts Inc. 2016; company fillings as well as broker research reports: Robert W. Baird 2015, William Blair 2017,

Stifel 2017, Leerink 2017.

Potential

Page 30: Capture the full market potential - Straumann...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

31

Aligners are custom made –

each aligner is unique

Page 31: Capture the full market potential - Straumann...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

PastMain treatment

providerToday Future

Purely esthetic needs

Mild to severe

Severe

Clear aligners will shake up the orthodontic market

331 Source: William Blair and National health & Nutrition Examination Survey (NHANES III) 1 Source: Company information, AAO, Straumann estimates

Retail shops /

pharmacies

Orthodontist

Orthodontist

General dentist

General

dentist

Orthodontist

Page 32: Capture the full market potential - Straumann...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

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

34

Page 33: Capture the full market potential - Straumann...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

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

35

Page 34: Capture the full market potential - Straumann...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

Outlook 2019

36

Page 35: Capture the full market potential - Straumann...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

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). 37

Page 36: Capture the full market potential - Straumann...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

Calendar of upcoming events

2019 Event Location

14 August First-half 2019 results conference Basel, HQ

28 August Octavian Swiss conference Zurich

03 September Investor meetings Milano

04 September Goldman Sachs conference London

05 September Investor meetings London

06 September UBS Best of Switzerland conference Zurich

Social media Type Source

Analyst Talk Executive interviewed by analysts Corporate Website / youtube

StraumannIR Investor Relations Twitter @StraumannIR

39

Page 37: Capture the full market potential - Straumann...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

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

40

Page 38: Capture the full market potential - Straumann...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

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 scope41

Page 39: Capture the full market potential - Straumann...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

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

42

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Thank you