Capture the full market potential Peter Hackel, CFO Flims, 17 January 2020
Looking back – Financial performance Q3 2019 and our track record 2
Strong momentum sustained over nine months; full-year revenue target raised REVENUE REVENUE GROWTH REGIONAL DRIVERS +17% organic 1 CHF 1.2 bn NAM & EMEA +16% vs 9M 2018 Q3: +19% organic, +21% in CHF generate 68% of 9M growth; NAM edges FX headwind CHF 20m Q2: +16% organic; +14% in CHF ahead of APAC as fastest growing region Acquisition effect: CHF 14m Q1: +17% organic; +15% in CHF OUTLOOK 2 BUSINESS DRIVERS INVESTMENTS Rollouts Raised Reach & Capacity BLT & BLX, clear aligners, Distribution JV in Hong Kong & Macau; Full-year organic revenue growth in the mid- value brand rollouts, Korean implants; teen percentage range supply agreements with DSOs Implant & clear aligner production 1 Organic growth – i.e. excluding the effects of currency fluctuations and acquired/divested business activities 2 Outlook expectations barring unforeseen events/circumstances 3
Double-digit growth continues in all regions Revenue development (CHFm, rounded) Regional share of organic growth 16.4% 17.1% CHF organic 9% LATAM 1’151.1 15.7 37.9 23% 57.6 APAC 56.7 989.0 20.2 14.4 983.2 34% North Change in organic growth America 13.5% 19.9% 20.4% 18.1% 34% EMEA Revenues FX effect M&A effect Revenues EMEA North APAC LATAM Revenues 9M 2018 9M 2018 America 9M 2019 @ FX 2019 4
H1 2019 5-year performance 5-year EBITDA 1 (in CHF m) and margin 5-year organic revenue growth Av e r a g e + 1 5 % + 3 . 9 % - p o i n t s 18.9 31.5% 400 16.3 15.7 29.3% 29.6% 28.3% 27.6% 13.1 300 9.1 200 Market 100 growth est. 4-5% 0 2015 2016 2017 2018 H1 2019 2015 2016 2017 2018 H1 2019 EBITDA excl. exceptionals Exceptionals Underlying margin 1 Adjusted for non-recurring or exceptional effects if applicable. 5
Success factors
Straumann Group – continuously increasing the addressable market Addressable market in CHF billion Implant provider 3.4 2012 Total solution provider tooth 7.0 2016 replacement Preventive dentistry Total solution provider esthetic dentistry 14.0 2018 represents ~2bn market opportunity 7
Long avenue of growth in other ‘specialties’ Our current Est. segment size 1 Market segments Growth rate market share (2018 in CHF bn) Biomaterials 0.7 High-single digits Implantology 1 4.5 Mid-single digits CAD/CAM 1.5 Double digits equipment 2 CAD/CAM Double digits 3.9 prosthetics (All ceramic) Clear aligners 2.6 >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 8 the total implant and abutment market.
Targeted investments in high growth markets Implant volumes in key markets (million Penetration: Implants per 10’000 inhabitants units in 2017) INDIA 2 0.3 10 CHINA / HONG KONG 1.4 33 JAPAN 0.4 UK-IRELAND 38 0.2 74 USA 2.7 RUSSIA 160 1.4 98 TURKEY 0.8 BRAZIL 2.4 118 160 GERMANY 1.3 ITALY 1.2 197 SPAIN 319 1.5 Premium Our new subsidiaries Non- Premium 9
Reputation as innovation leader underpinned Chairside 3D printing BLX implant 19 Mini implant 18 PURE 2-piece ceramic implant Grand Morse implant 17 N!ce fully-crystallized glass-ceramic Grand 16 ProArch edentulous solution Morse Small diameter implant ( 2.9mm) Grand Morse 15 BLT implant 14 Roxolid-on-all Short implant (4mm) 13 Variobase abutments PURE ceramic 1-piece implant 12 Roxolid implant material 10
Looking ahead – recent achievements and strategy in action 11
Multi-pricing strategy – comprehensive portfolio of value implant brands Global implant & abutment market Lower value Zinedent, T-Plus, equinox ~CHF 4.5 bn Upper value Premium Neodent, Anthogyr, Medentika Straumann Group share (2018) 12
BLX – highly appealing to customers ▪ Full market release in most key markets except for China, Japan, Russia and Turkey ▪ 70 000 BLX implants sold in in the first 9 months, despite aggressive competitor promotions ▪ Many new customers attracted by BLX who then also bought BLT ▪ Innovative, next-generation BLX implant, priced at a premium to Straumann’s popular BLT range 13
1 out of 4 implants have a fully tapered design Market volume (Implant fixtures) Fully tapered Parallel walled Main players : Nobel Biocare, BioHorizons, MIS, Implant Direct, Megagen 25 million Neodent, units Anthogyr and Equinox Current Straumann Group market share Apically tapered 14
Unlocking the potential of clear aligners ▪ Market worth CHF 2.6bn; expected to grow >25% ▪ 60% case growth in North America in Q3 ▪ Direct-to-patient expected to outpace conventional approach ▪ Partnership with Smyletec to address Chinese market ▪ Production capacity expension in Round Rock (USA) ▪ New production units in Curitiba (Brazil) and Markkleeberg (Germany) ▪ Orthodontic planning service acquired ▪ Orthodontic materials company acquired 15
The right to win in clear aligners Intra-oral scanning Treatment planning 3D model printing Production and software appl. • Dental Wings • Round Rock Digital Planning Rapidshape • 3Shape • Curitiba Service Private Ltd. • Carestream • Markkleeberg • Tianjin Materials Patient monitoring Brands to address Sales network and global market reach • Yller Dental Monitoring Global organization • Bay Materials (DenToGo) to address all customer groups 16
Digitalization happening at tremendous speed IOS penetration follows classical S-curve ▪ In 5 years’ time one in two dental 100% clinics is forecast to have an intraoral scanner (IOS) corresponding to a potential market of 300 000 scanners ▪ Approx. 65% of practices expect to Est. global reach: 50% 2024 invest in a digital impression system in the next 3 years ▪ Orthodontists and implant surgeons have the highest buying 13% Global penetration 18’ intentions 15’ 16’17’18’ 24’ 17
Getting fit for the future BRA 2 nd plant in Curitiba (Brazil) to add 11 000m 2 production space (opening in Q4 2019) Villeret expansion project to add 16 000 m 2 production area (operational early 2021) CH 18
Strong culture as foundation for success WHY VISION More than creating smiles – restoring confidence We want to be the partner of choice in esthetic dentistry STRATEGY CULTURE WHAT HOW Player-learner mindset 3 strategic priorities 9 must-win battles Core behaviors 55 must-win initiatives >5000 people to make it happen 19
Thank You! 20
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