William Demant Holding A/S

Transcription

1 William Demant Holding A/S Stefan Ingildsen VP, Finance and Investor Relations Finansanalytikerforeningens Virksomhedsdag København Den 3. juni 2009

2 2008 proved to be a challenging year for WDH Lack of growth in the non-public hearing aid market. Intensified competition in the hearing aid industry. Oticon Delta s unique market position was challenged by product launches in the segment for cosmetically attractive hearing aids from basically all competitors. Fewer product launches in 2007 and in the beginning of 2008 due to significant development resources being put into establishing and finalising the wireless RISE platform. Unfavourable currency situation for WDH due to cost base in Denmark and Danish kroner as reporting currency. However, the cash flow was strong in

3 Massive product launch schedule at AAA 3

4 Oticon Medical established to target a new untapped market Bone-anchored hearing solutions direct stimulation of the inner ear. Technology addresses conductive and mixed hearing losses as well as singlesided deafness, i.e. no cannibalisation of existing hearing aid business. The market is expected to continue to grow by +20% annually from a base of currently USD million. Today, the main markets include Scandinavia, the UK, the Netherlands and the USA where reimbursement schemes are already in place. Future market growth to be driven by further penetration of these markets and by adding new countries. Our entry into the market will strongly support future market expansion. 4

5 WDH s Q1 review released on 12 May 2009 No additional market deterioration Q could be seen as a first sign of recovery in the HA market. Based on market volumes in Q1 2009, the US market apparently bottomed out in Q Year-to-date development for WDH in accordance with the plans made. ASP for WDH s wholesale of hearing aids is now back on par with Q1/08. Customer reactions to our AAA introductions are encouraging. Diagnostic Instruments: positive development from 2008 has continued, albeit at a slightly slower pace. Personal Communication: the various businesses have to a greater extent been impacted by the financial crisis and the recession. We are on track to meet our full-year promise: WDH wholesale revenue growth exceeding the market growth by 2-4%. 5

6 Appendices 6

7 Group structure Finansanalytikerforeningens 7

8 The hearing aid industry the value chain Component suppliers Research Development Manufact. & logistics Wholesale distribution Retail End-users 4-7% 20-30% 60-75% 8

9 The hearing aid market: Starting points Highly different market trends from market to market. Approx. 9 million hearing instruments per year with a wholesale value of USD billion. 6 largest manufacturers hold approx. 90% of the market. 20,000-25,000 sales points world-wide still highly fragmented retail distribution. The end-users: 10% of population in OECD countries suffer from hearing loss % of population above 65 are hearing-impaired. Low penetration (approx. 20%) mainly caused by stigmatization. Average age of first time user is 70 (in the US). 9

10 Hearing aid market status 2008 The financial crisis and the recession in the world economy resulted in decreasing demand for hearing aids, especially in commercial markets like the US. The global hearing aid market was flat in 2008 as a whole, but in decline in the second-half of the year. This led to increased price competition amongst hearing aid manufacturers. Long-term growth perspectives remain unchanged, driven by the growing elderly population and an increasing number of binaural fittings (outside the US). The technology race continues and the key to future success will be the ability to provide end-users with true audiological and true connectivity benefits by means of wireless technology. 10

11 2008: Hearing Aids Accounted for 89% of Group revenues. Flat revenue growth measured in local currencies. 2% unit growth in Group-manufactured hearing aids. Oticon growth drivers were the two Vigo families. Bernafon growth drivers were Brite, Move, Avanti, Win and Xtreme. Solid growth in deliveries to the NHS in the UK and to a number of international retail chains. 11

12 Net revenue by business area DKK million Change Change in local currency Hearing Aids 4,784 4,920-3% 2% Diagnostic Instruments % 16% Personal Communication % -6% Total 5,374 5,488-2% 2% 12

13 Net revenue by region Finansanalytikerforeningens DKK million Change in local currency Europe 2,688 2,804-1% North America 1,758 1,783 5% Pacific Rim % Asia % Other countries % Total 5,374 5,488 2% 13

14 Income statement full year DKK million Change Change in local currency Net revenue Gross profit Gross profit ratio 5,374 3, % 5,488 3, % -2% -6% 2% -4% Research and development costs % 5% Distribution costs -1,798-1,726 4% 9% Administrative expenses % -23% Income from associated companies 2 3 Operating profit (EBIT) 1,042 1,268-18% -18% Profit margin 19.4% 23.1% Net profit for the year % -24% Earnings per share (EPS), DKK % -22% 14

15 Cash flows DKK million 2008 H H Profit for the year CFFO CFFI, excl. acquisitions and special investments Free cash flows, excl. special investments Acquisitions Special investments Buy-back of shares Other financing activities Net effect for the year

16 Finansanalytikerforeningens Investor Presentation Virksomhedsdag May 2009 The industry s best looking hearing device Also happens to deliver the most impressive experience

17 Finansanalytikerforeningens Oticon Dual: a major launch with two new product lines Oticon Dual represents a major improvement and expansion of the Group s product offering, especially in the high end of the market. By combining the best of Delta with the best of Epoq, the industry s most attractive design and most advanced technologies will now be available in one single product. With Oticon Dual, new standards are set for what can be expected from the most attractive and sophisticated products in the market. Oticon Dual is primarily a high-end product concept, however numerous price/performance variants will appeal to a very wide target group. The introduction of Oticon Dual has significantly strengthened Oticon s position in the global hearing aid market. Released for sale in the autumn

18 Finansanalytikerforeningens Connect series Dual XW Dual W Dual V Dual Pro One brand Small in size, big in range Two series Dual m5 Dual m7 Mini series Dual m9 18

19 Finansanalytikerforeningens Oticon: more price options Oticon Hit and Oticon Hit Pro are two new allstyle families in the lower mid-priced segment. RISE sound quality made affordable 8 Hz bandwidth and fast sound processing. Easy and straightforward fitting procedure based on familiar software and well-known features. Fast end-user acceptance should be expected. The new Hit families will significantly improve Oticon s positioning in the segment available for sale at AAA. 19

20 Finansanalytikerforeningens Oticon: more power and fitting range New Power BTE launched at AAA fitting range up to 110 db HL. Available in Epoq, Vigo and Hit in a total of seven price points. Based on a very compact 13-size battery shell with a classic hook. Complements Oticon s RITE Power solutions already on the market (Epoq and Vigo). New BTE 13 style also launched (Epoq, Vigo and Hit). BTE 13 instrument is the leading style category in many markets. BTE 13 doubles battery life (compared with BTE 312). BTE 312 BTE 13 Previous 13 platform Corda2 as thin-tube solution. 20

21 Finansanalytikerforeningens Oticon: more connectivitiy Introducing Oticon ConnectLine as the brand umbrella for all connectivity solutions. At AAA, Oticon significantly expanded its connectivity offering: ConnectLine TV solution ConnectLine Landline solution Addresses the biggest end-user requirements! Streamer ConnectLine ConnectLine TV streams sound to hearing instruments in premium quality ultra-fast transmission prevents echo from acoustic sound from TV speakers. ConnectLine Landline provides incoming call notification in hearing instruments. Unique for Oticon ConnectLine: TV, landline phones and mobile phones can be used at the same time hassle-free switching between applications The expanded Oticon connectivity offerings will increase the demand for Epoq and Dual. 21

22 Finansanalytikerforeningens Additional product launches at AAA Bernafon presented Vérité, a new high-end device: Wireless binaural co-ordination RITE technology Award-winning design ChannelFree approach allows precise gain shaping without breaking the signal into frequency bands. Interacoustics presented Titan, a new portable middle-ear analyzer. Titan targets ENT doctors and hearing care professionals. Can be used as a hand-held device or operated via a PC. Is expected to gain status as the best and most sought-after middle-ear analyzer on the market. 22

23 Finansanalytikerforeningens Bone-anchored hearing solutions: a unique long-term growth opportunity Oticon s R&D organisation has spent a number of years on this project. Product portfolio includes: Implant parts (e.g. titanium screw) Sound processor Fitting software Patient accessories: FM, telecoil, audio adaptor etc. Tools for the surgical procedure The wholesale price for a complete system is around USD 4,000-6,000. Additional costs associated with surgical procedure, fitting and training. Was showcased at AAA and will be released for sale in H Represents a unique opportunity to lever Oticon s technology platform, brand, manufacturing and distribution infrastructure. 23

24 Finansanalytikerforeningens Outlook for 2009 (as communicated 10 March 2009) The uncertainty related to the financial crisis and global recession makes it difficult to forecast trends for The Group expects flat volume growth for the market with a slightly negative H1 and a slightly positive H2. Average selling prices are expected to contribute neutrally or negatively to market growth. The Group s hearing aid wholesale activities are expected to exceed market growth by 2-4%. Growth to be driven by strong, updated product portfolios and also by the introductions scheduled for this spring and the remainder of The effective tax rate for 2009 is estimated at 25%, which is slightly above the 2008 level. Expected CAPEX level of DKK million. No share buy-back is expected. 24