Straumann Holding AG

And thank you for all of you for joining us for this conference call on Stroman 2020 third quarter results. We are glad to have you with us again, and we very much hope that you, your families and your colleagues are all safe and well. I am pleased to say that we have had very few reported cases of COVID in our global organization over the past eight weeks, none of which have been serious and for which we are very grateful. To protect our colleagues and to support the fight against coronavirus in the community, more than 80% of our headquarter colleagues are working remotely and the building is closed to visitors. So I'm very sorry that we can't welcome you physically, but we do hope to see you in person as soon as the situation allows. As usual, this morning's presentation and discussion will include some forward-looking statements So please take note of the disclaimer in our press release and on slide two. As a summary, I will give you a brief overview, and Peter Hackon, our CFO, will share the business performance and financial details with you. After that, I'll bring you up to date on recent events and strategic initiatives. And, of course, we look forward to answering your questions afterwards. Following our previous media conference three months ago, we enjoyed a period of respite in the pandemic, with the recovery trend continuing through the end of September. As you know, earlier in October, the situation tipped and many countries are now battling against a second wave. On slide 5, you can see that in September, the OECD considered the economic outlook to be especially uncertain. It noted that all major economies will have suffered recession this year, with the exception of China. Recovery will be fragile, and GDP next year is expected to be lower than it was in 2019 in many countries. Therefore, risk-ring confidence will be crushed off. In view of the latest event and the current surge in infection rates, the projected recovery curve for GDP is leaning towards the OECD's downside scenario. Confidence is essential, not just for economic recovery in general, but also for industry. The availability of disposable income will also be pivotal because implants and clear aligners are elective procedures that are not generally reimbursed. The chart on the right reflects assessments provided by our country organizations at the beginning of this year. While the majority of dental practices remain open in most regions, restrictive measures to control new outbreaks have increased significantly, especially in EMEA. In North America, the situation is still somewhat challenging. Latin America is beginning to emerge, while Asia Pacific is still running very well. Dental practices are rigorously implementing safety measures, and patient flow is still fairly good at the moment. But we don't know if it will stay like this now that treatment backlogs have been reduced and the pandemic is resurging. Moving on to slide six and how we are adapting to the new reality. The surge of COVID infections means that we are coming back to more stringent measures in many areas to ensure people's safety and business continuity. Safety considerations prevent us from reaching and serving some customers physically in some geographies, and we have shifted to working remotely in many areas. The pandemic has further accelerated the trend in digitalization, and we are leveraging this to expand our base of installed intraoral scanners, in addition to attracting other scanner users by offering seamless connection to the Stroman Group digital ecosystem. We are intensifying our use of alternative channels, such as remote selling and direct-to-consumer, which complement traditional sales and marketing approaches. COVID-19 will also accelerate consolidation, both on the provider and supplier side, making our focus on DSOs even more relevant. In general, customers are seeking solutions that increase efficiency, shorten treatment times, reduce practice visits, and offer greater affordability. We are addressing these needs, for example, by offering a range of emergency solutions and brands that cover all price levels. But the most important thing is to approach these new realities with the right mindset and behaviors, which is where our culture of agility, embracing change, creating opportunities, focusing on customers, building trust, and communicating is key. We'll be sharing more of this later, but first, let's look at the 9-month and third quarter highlights, which you can see in slide 7. The pandemic and stiff currency headwind cut group revenue in the first nine months of this year by 15% in comparison with the corresponding period of 2019. The impact was heavier early in Q2, but we have climbed out of the trough to post third quarter revenues in line with the prior year in Swiss francs. In organic terms, this is excluding the effects of acquisitions and currency exchange rates, we grew 8%, making Q3 the first positive quarter this year. The improvement was driven significantly by pent-up demand for prosthetics, implants, but also clear lines. Further contributions came from strong sales of digital equipment and the Stroman BLX implants. All regions reported a continuation of the improvement that started around mid-Q2, led by Asia Pacific, which posted double-digit growth in Q3. Customer focus has been central to our recovery. Through intense online activities and by tapping into new sales channels, we gained a share of voice and warm customers in many segments. From a brand and product perspective, it is interesting to note that growth was powered both by our premium business with Stroman Bialik Simples and our value franchise with Neodent and Medentica, lifted by Sprung Digital and Cleo Liner Sales. At the same time, we were able to launch new products, which I will tell you about later. In short, Q3 was very encouraging, but pent-up demand has now been fully absorbed. In view of the uncertainty surrounding COVID and the economy, it is still very difficult to make any forecasts, even for just a reminder of the year. Looking at the sequential figures in slide 8, as I just mentioned, all regions reported continued improvements from mid-Q2 onwards, And the sequential improvement from first five to Q3 was between 24 and 27 percentage points in each case. And with that, I will hand over to Peter for more details on the financial performance.

Thank you, Guillaume, and good morning, everyone. As usual, I would like to begin with our revenue development at the group level and then look at our four weeks. On slide 10, you can see that at 2020 exchange rates, our nine-month revenue in 2019 would have been 80 million francs lower because all our major currencies weakened against the Swiss francs. The effects of mergers and acquisitions are the 22 million, bringing the adjusted revenue base to almost 1.1 billion francs. The M&A effect in Q3 was mainly due to Dr. Smile, which we consolidated as of September. In the center of the chart, you can see that all our regions reported double-digit contractions for the full nine-month period, taking group revenue down 19%. This was mainly driven by EMEA and North America, which collectively contributed more than 70% of the reduction. as you can see to the right of the main chart. On the far right, you can see that the good recovery in Q3 did not make up for the heavy decline in the second quarter and slight drop in Q1. Furthermore, the growth in Q3 was driven mainly by pent-up demand and should not be viewed as the new norm. On slide 11, you can see that in our largest region, EMEA, The continuing turnaround lifted quarterly organic revenue by 7%. All the major markets posted growth with strong rebounds in Italy and Spain as treatment backlogs were reduced. Germany and France reported moderate increases, while Turkey achieved dynamic growth fueled by the launches of Stroman B-Elix and Nuvo implants, together with strong digital equipment sales. Russia and distributor markets in Eastern Europe performed well, while the UK, Portugal and the Middle East continued to struggle. One regional highlight that I would like to mention is our expansion in the Romanian market, where 120,000 implants are sold annually. At the end of September, we acquired the business of Arctis Biotech, a well-established national distributor of dental implant systems. This will boost our local presence and presents an excellent opportunity to convert customers from competitive systems to strong and group brands. In North America, both the US and Canada recovered from heavy declines in Q2 to solid growth in the third quarter, when organic revenue climbed 9%. The increase was driven by pent-up demand for implants and restorative solutions, and fueled by strong demand for Stroman BLX, which was launched a year ago. Both the premium and the non-premium implant franchises grew, the latter outpacing the former, driven mainly by neodymium and its growth in DSO channels. Restorative solutions also increased, while digital equipment sales grew substantially thanks to strong sales of TRIOS into our scanners. Moving on to slide 14. Asia-Pacific saw a further sequential improvement in organic revenue from a decline of 12% in Q2 to 11% growth in the third quarter as China, Australia, and New Zealand all rebounded to double-digit growth in Q3, and Taiwan continued to post very strong growth throughout. With the exception of Singapore, all other countries in the region reported sales decreases due to the pandemic. However, nearly all of them experienced a sequential improvement in Q3. In Japan, the comparatively soft sales reflected the exceptionally strong third quarter last year when customers purchased stocks ahead of a tax increase. Implant sales picked up across the region driven by premium and non-premium brands. While our premium business is significantly bigger than non-premium, the latter grew faster, lifted by neodymium, which gained ground in Australia, India, Japan, and Thailand. Sales of intraoral scanners also increased, especially cast-free models, which we distribute in China. Moving across the world to Latin America, the organic revenue in Q3 was just 5% below the prior year period. While still negative, this is a significant improvement from the 60% decline in the second quarter. Of all the countries in the region, only Argentina and Chile managed to grow in Q3. The majority of practices in the region remained closed until July, and even September in some countries. However, most are open now and patients are seeking treatment. In the largest regional market, Brazil, we remain open and continue to supply customers through the 17 Neodent stores across the country. Neodent was the region's main driver in Q3, supported by strong sales of clear aligners, digital equipment, and 3D printing resins. Slide 15 gives you an indication of how the individual businesses have performed. In our core, implant and restorative business, the Strowman Premium range continues to gain market share, reflecting its strong grant equity, innovation, and customer loyalty. Sales of PLX continue to recover, and we are confident that they will exceed the 2019 levels over the full year. Our non-premium franchise continued to outpace the premium business driven by Neodent and listed by Medentica. Share of wallet gains, particularly in the DSO segment, were the main contributors. The digital business achieved dynamic growth in Q3, driven by intra-oral scanner sales, especially TRIOS models, which are now fully integrated into our digital ecosystem and seamlessly connected to ClearCorrect and other workflows. The CAD-CAM restorative business reflected the backlog of restorations that were postponed during lockdown, as well as developments in implant sales. Consumables, including ceramics and 3D printing resins, developed well. Biomaterials also returned to growth in Q3, reflecting the pickup in implant procedures and sales. The orthodontics business picked up substantially, fueled by a large number of case starts, More than half of which were generated outside the US, which is clear for a domestic market. To support expansion in Europe and dynamic growth in the D2C business of Dr. Smile, our new manufacturing unit in Germany went into operation in the third quarter with a production capacity of almost 10,000 aligners per day. And with that, I will hand back to Guillaume.

Thank you very much, Peter. I have already referred to the immediate measures and initiatives we are taking to adapt to the new realities. Now, I would like to give you an update on our recent progress with our three long-term strategic priorities. The first of which is to drive our high-performance Stroman Group culture and organization. For the past six years, we have constantly fostered the player learner mindset, which, as you can see in slide 19, embraces change and stimulates growth, in contrast to the less flexible victim-knower mindset. All through the crisis, our staff have shown agility, flexibility, creativity, but also teamwork, customer focus, and endurance, which I'm convinced are reflected in the turnaround and market share gains we have achieved. I would like to commend and thank them sincerely for this. Slide 20 presents some recent examples of this player-learner agility. When lockdown came, our colleagues quickly focused on leveraging our digital capabilities and strengths creating one of the broadest online education networks in our field, including Stroman Campus, which is a complete web learning environment. It offers advanced interacting virtual events with live booths, webinars, expert talks and chats. The campus activities in the past two quarters have been some of the most intense digital approaches in the industry. Due to travel restrictions and healthcare precautions, dental conferences and education events around the world have either gone virtual or have been canceled altogether. To gain share of voice at digital conferences, we have orchestrated multiple virtual forums and symposia to offer training and education to showcase new solutions and to present clinical evidence. To fill the vacuum resulting from constellations, we are creating our own virtual events. For example, APEX events in North America, which are designed to give the impression of being at an event and visiting our exhibition stand. The experiences feature interactive tours, education sessions, panel discussions, augmented reality presentations of latest technology, special promotions, interactive sales appointments, and more. This year's EAO meeting was completely virtual and drew more than twice the number of visitors. Our satellite symposium live attracted 800 participants, and we had more than 1,600 visits at our virtual booth. Another example of our strong online outreach in Q3 was the EMES Summit of our Women in Plantology Network. WIN is a key initiative to reach, support, and encourage the growing number of female dentists. Rather than postponing this year's summit, we also went virtual and welcomed more than 3,800 dental professionals offering education, advice, technology updates, and networking over a period of seven days. Our campaigns to introduce new products have also gone virtual. Last week, we had a pre-launch event online to present Stroman's new Zygoma implant system and our Imidiaxi concept, which was attended by more than 500 participants in 30 countries. It featured four hours of lectures demonstrations, and panel discussions, in addition to providing direct access to key opinion leaders and local representatives. We also introduce the Learn in a Box experience, which enables dentists to select and configure a package of information, training, and hands-on materials. Another unique online event was our Global DSO Summit, which brought more than 50 CEOs from the world's leading dental service organizations together with top speakers to discuss the impact of COVID-19 on DSO leadership and also the future of oral healthcare. As you can see in slide 21, the participants represented 28 countries and more than 31,000 clinicians over the world. Through lockdown, we continued collaborating closely with DSOs, helping them to bounce back and building relationships for the near future. As you can see in slide 22, our second strategic priority focuses on accelerating growth in our core implant market and strategic segments. With regard to the premium implant segment in slide 23, Our smile-in-the-box service provides opportunities for customers to grow their businesses, offering easy access to digital dentistry and enabling them to perform complete treatments in a single session, reducing patient visits accordingly, saving time and increasing productivity. Strowman BLX is a key element in our strategy to drive premium implant segments. As you know, one of the key advantages of BLX is high primary stability, making it ideal for immediacy protocols. Thanks to its unique selling points, BLX has continued to show great progress this year, and as Peter mentioned already, we are very confident that BLX sales will exceed the 2019 levels despite the pandemic impact. Sales will gain further momentum from launches in APAC and LATAM early next year. Building on its success, we have developed a next-generation tissue-level implant called BLX. This combines the innovative, fully-tapled design of BLX with our iconic proven tissue-level implant, which is one of the longest and best-selling implants on the market. With hyper instability combined with the advantages of tissue-level design, like per-implant health preservation and reduced surgical procedures, CLX will help us to gain further share of the fully tapered segment, bringing us closer to the goal of the market leadership in immediacy. The clinical program is now underway and includes a large prospective randomized control trial at the University of Perth. At this point, we would like to show you a short interview with Professor Daniel Buser, one of the world's most respected and well-known implantologists, who helped to pioneer our tissue-level influence more than 30 years ago.