Straumann Holding AG

Please take note of the disclaimer in our press release and on slide two. During this conference, we are going to refer to the presentation slide, which we published on our website this morning. As always, the presentation and discussion will include some forward-looking statements. Today's conference will follow the usual format. As the agenda on slide three shows, I will provide an overview on where we stand, and then our CFO, Peter Harkon, will share details about the business performance across our regions. After that, I'll give you an update on key strategic initiatives and our outlook for the future. Of course, we'll both be available to answer your questions at the end of the presentation. Moving on to slide four, I'm going to start with our highlights. Please keep in mind that pandemic-related disruptions still had a noticeable effect on our third quarter results in 2020. Therefore, this should be considered when making comparisons to our third quarter results for 2021. Slide five shows that group revenue in the first nine months of this year reached 1.5 billion Swiss francs, achieving 51% growth compared with the corresponding period of 2020, when the pandemic had a significant impact on results, especially in the second quarter. In this third quarter of 2021, spatial flow remains strong. Group revenue reached 496 million Swiss francs, with very strong organic growth of 32%. This result was only possible because our entire team did really a tremendous job of focusing on customers. Looking at our continuing digital transformation journey, we have initiated exciting steps forward during this quarter. The updated version of our intraoral scanner, Virtuo Vivo, has been launched, and in October, we became a founding partner of the innovative open-vendor platform of clinicians and new laboratories called Appreciating Us. We have also made significant progress in implantology. We fully launched our tissue-level-immediacy implant CLX and acquired a stake in Union Evidence to further develop a dynamic surgical navigation system. I will share more information about this later in the presentation. In Q3, we continue to expand our presence in the dental service organization segment and started our partnership with Aspen Dental Management. Establishing and executing large partnerships like this will take time. Therefore, we do not expect to see a revenue impact until next year. Based on these positive developments, we have raised our guidance to fuller organic revenue growth in the high 30% range, with profitability at least at 2019 levels. On slide six, you can see that our strong growth continues in all regions during the third quarter of 2021. EMEA and North America reported organic growth increases of 32 and 27% respectively. In Asia Pacific, we saw organic growth of 29%. Latin America performed strongly with 63% organic growth. However, It is also important to keep in mind that the business in Latin America heavily suffered from the pandemic in the third quarter of 2020 because this season was affected later than the other regions. Overall, the two-year table based on sales from the first nine months of 2021 amounts to 17% for the group. And with this, I will hand over to Peter to provide additional details.

Thank you, Guillaume, and good morning, everyone. As usual, I would like to begin with our revenue development at group level, and we'll then look at our four regions. On slide eight, you can see that foreign currency fluctuations had a manageable impact, lowering our nine-month revenue by 16 million Swiss francs. The effects of mergers and acquisitions are the 21 million bringing the adjusted nine-month revenue base for 2020 to 981 million Swiss francs. The M&A effect in the third quarter was mainly due to Dr. Smile, which we consolidated as of September last year. This means we have now reached the last quarter for which Dr. Smile acquisition will contribute to the acquisition effect. In the center of the chart, you can see that all of our regions reported high double-digit growth for the nine-month period, leading to 51% organic growth in group revenue. This was mainly driven by EMEA and North America, which contributed a combined total of more than 70% of overall growth, as you can see on the right of the main chart. Slide 9 shows the strong growth of the EMEA and North America regions. In both regions, we gained further market share driven by challenger brands unlocking new market segments. The EMEA region remains the group's largest revenue contributor and reported 204 million Swiss francs in the third quarter of 2021, with strong revenue growth of 32%, compared to 2020. Growth was driven by sales of premium implants and by challenger brands like Neodent and OntoGil, which are quickly gathering momentum. The orthodontics business is further expanding with Dr. Smile and ClearCure accelerating growth. The overall result in the region was driven by Germany, France and Turkey. In 2020, the business in North America picked up modestly during the third quarter after lockdown restrictions were eased in June. In the third quarter of 2021, by comparison, the North America region showed strong growth of 27% to reach revenue of 149 million Swiss francs. This growth was supported by overall market share gains due to immediacy solutions and the accelerated growth of the Neodent brand, which has doubled its size in the last 24 months. Digital solutions, such as intraoral scanners, also played a key role. The strong growth of the Stroman and Neodent brands was also driven by established and new partnerships with dental service organizations. Although it is a smaller market than the U.S., The Canadian business is growing very fast, and the group is continuing to increase market penetration with its challenger brands and digital solutions. On slide 10, you can see that Asia-Pacific and Latin America continue to grow very significantly. In the third quarter of 2021, the Asia-Pacific region achieved revenue of 105 million Swiss francs which is 29% organic sales growth compared to the same period last year. Patient flow in most countries is strong. Due to the ongoing pandemic-related restrictions, travel opportunities are still limited, which leads to higher disposable income that consumers can spend on oral health locally. China, Japan and Australia are driving growth in this region, with strong contributions from premium implants and digital solutions. The group introduced biomaterials in China for the first time in October, while also launching OntoGer in South Korea and announcing a direct presence in Malaysia. In Latin America, growth is supported by good patient flow and market share gains. roast in the region during the third quarter of 2021 was very strong. This was in sharp contrast to the same quarter of last year when revenue declined because the region was affected by the pandemic later than other regions. Revenue increased by 63% to 38 million restaurants. Patient flow is good and we continue to gain market share in its regions. This trend is being led by Brazil, which is our largest revenue contributor in Latin America, followed by Mexico and Chile. While representing a comparatively small part of the overall revenue in the region, the orthodontics business is expanding very rapidly. Neolint remains the group's strongest brand in Latin America, while the premium implant brands and digital solutions are performing very well with the virtual vivo intraoral scanner successfully established. In the third quarter of 2021, Neodent expanded its direct presence in the region by acquiring the distributor in Peru. Turning to slide 11, we can take a look at our performance by business. Implant sales, once again, contributed the largest share of our growth. The group's premium in EDC solutions continues to be an important growth driver. Our Challenger implant franchise, led by Neodent Grand North Portfolio, almost doubled compared to the previous year and outpaced the premium business again. North America and Turkey showed the strongest growth. Our digital and restorative business saw growth in the mid-20s, with the largest share contributed by EMEA and North America, while Latin America impressed with the highest growth rate of all regions. The trend for digitalization of dentistry is continuing and supports our intraoral scanner sales. Our biomaterials business performed well in parallel with the implant business. Demand accelerated, especially in Asia-Pacific and Latam. Orthodontics was the fastest growing franchise, strongly supported by our expansion in Europe, which is progressing very well. And with this, I will hand back to you.

Thank you very much, Peter. And then let's move on to slide 13 and take a look at our recent achievements and the group's strategic updates. Culture has been our number one must-win battle for the past eight years, and it has become, over time, clearly one of our most important competitive advantages. It is a key enabler in our ability to perform. It has helped us to drive strong growth, but also to be very resilient and proactive in times of crisis. It is energizing all of our colleagues, attracting new talents and increasing loyalty, and is certainly inspiring us to create our future. As our environment keeps changing at a faster pace, we have done extensive work to evolve our cultural foundation. We have sharpened our purpose and vision, and redefined clearly our mission and beliefs as they are guiding our decisions and actions for the future. Our clear purpose is to unlock the potential of people's lives, as we envision a world where oral health is a source of confidence. We will further deliver on our purpose by being the most customer-focused and innovative oral care company in the world, which is the definition of our mission. We will be happy to go into further detail on our beliefs during our Capital Markets Day on December 16th. I'm very proud to see our team have driven our performance to offer the best possible solutions to our customers, and it will be my pleasure to give you some highlights of the great work that has been done during this quarter. And for doing this, let's move on to slide 40. The dental environment continues to be transformed by digital innovation, and we aim to be at the forefront of providing an exceptional customer experience for dental workflows. in both orthodontics and implantology. This is why we are always looking at innovation that provides a platform-based approach with seamless connectivity to our services and solutions. IntraWire scanners are the entry point to this workflow. This includes the launch of the new version of the Virtual Divo IntraWire scanner in several countries. Together with the Medit and FreeShade scanners, we are offering a comprehensive portfolio covering all price points. In October, the group became the founding partner of Appreciate Unite, a new open platform that provides simple and highly efficient access to services and solutions for clinicians and dental laboratories. The platform is seamlessly integrated with the group's broad range of offerings, including Smile in a Box, a full service for implant treatments, as well as clear correct aligners. Later this year, the platform will be accessible to the entire Trios user base, providing additional opportunities for us to connect with clinicians who have not yet experienced Chroman Solutions. Slide 15 shows how we are continuing our implantology activities to sustain and further expand our market share in our core implant business. One of the highlights was the International Team for Implantology World Symposium, which took place in September and focused on patient centricity. The ICI is the largest global scientific network in implantology and provides a unique platform for knowledge exchange. Our partnership drives innovation and advancement in the implant space and helps develop our capabilities to fulfill clinicians' needs. About 10,000 participants took part in the symposium, where comprehensive education sessions opened up discussions with a specific focus on patient-centricity and immediacy treatment protocols. The Stroman BLX Implant was fully launched during the symposium, following the very well-released limited marketable implant, was fully launched during the symposium, following the very well-released test with the BLX fully-apered design, which is Stroman's most advanced technology for immediate treatments. The implant's tissue-level color is designed to preserve current health. The inflamed body has been developed for optimal primary stability and immediate protocols in all bone types. It's a technology that creates real benefits for the patient, and this launch marks another major milestone for our immediate strategy. Let's move to slide 16. Guided dental surgery improves precision in infant placement and helps to make treatment outcomes more predictable for the benefit of patients. To make the use of guided surgery fast and convenient for clinicians, we have invested in a 39% stake of meaning evidence to further develop their dynamic surgical navigation system, a new exciting digital technology. It is a miniaturized navigation system which is directly fitted to the surgical handpiece. In real time, it guides the surgeon to the correct implant position and angle via a digital 3D environment. The technology is compatible with most 3D implant planning software. It means that dental surgery can be guided digitally without having to produce physical drilling guides beforehand. With slide 17, I would like to share some progress on our rapidly growing orthodontics business. We have further enhanced the clinician experience by significantly reducing the time it takes us to propose a treatment plan. We are able to deliver this thanks to an enhanced performance software for setting up alignment treatments. In order to support clinicians who want to improve their skills on clear alignment treatments, and to help them and their staff being successful with their treatment, patient communication, and practice management, we launched the Ortho Campus in October. It offers a comprehensive collection of orthodontic tools, programs, and professional education curriculums. Slide 18 illustrates our ongoing success with dental service organizations known as DSOs. In the last couple of years, we have established ourselves as a strong business partner for them. Today, the value how we support their growth is our consultative approach, our commitment to education and training, and our end-to-end portfolio of solutions and services. Today, we are working with DSOs on all continents, and our journey to winning an increasing share of the DSO market has been further strengthened in the last couple of months. In May 2021, we entered in a multi-year strategic partnership with the California-based West End Dental and Orthodontics to advance four adductoria together. More recently, in September, we started our partnership with Aspen Dental Management. This collaboration also includes ClearSource Dental Implant Centers, which Aspen acquired in 2020. Aspen operates more than 930 locations across 45 states in the U.S., while Trier Choice operates 71 locations in 28 states. These two GSOs combined are the largest providers of fixed and removable dental prosthetics in the United States. Slide 19 gives insight into our next investment. In order to continue to be a leader in innovation, we are going to build a new technology and innovation center in Arlesheim, near Basel in Switzerland. This investment of around 18 million Swiss francs will further support our growth strategy as we are reaching the maximum capacity of our current office, lab and warehouse space in the region. The new facility will unite departments that are currently located at different sites. The center will host business and development and will act as a hub for global supply chain, logistics and warehousing activities. A training center and interactive showing for customers will also complement the site. To safeguard the environment and foster our team's health and well-being, The facility will meet the latest standards for energy efficiency and ergonomics, including green roofs and solar panels, as well as recycling exhaust heat. The location is well-linked to public transport and will offer numerous charging stations from electric cars. Construction will start in 2022, and the new facility will become operational in the first half of 2023. Slide 20 brings us to the full year outlook for 2021. Better practices were operating with healthy patient flows through the first nine months of 2021. Our innovative solutions and our strong execution will grow in the third quarter and net continued market share gains. Pandemic-related restrictions are still limiting spending alternatives, such as travel to a certain extent. leaving some customers with more disposable income to spend on specialty dental treatments. While we believe this trend can be expected to gradually soften as spending opportunities continue to open up, we are raising our guidance to further organic revenue growth in the high 30% rate range, with profitability achieved at the 2019 level. Moving on to slide 22, It's my pleasure to announce our Capital Market Day on December 16 on behalf of the entire Executive Management Board. We will discuss the evolution of our culture, of our strategy, and approach to sustainability. More information will follow in due course. Until then, please stay tuned. We definitely hope to see you there. Now, I would like to open the question and answer session. If you have a question, please press star and one on your phone to join the queue. As usual, can we ask you to limit the number of questions to two in order to give all the participants questions to ask their questions within the available time? So, can we have the first question, please?