Straumann Holding AG

Ladies and gentlemen, welcome to the Sharman Group Full Year 2022 Results Conference Call and Live Webcast. I'm Alice, the Coruscant operator. I would like to remind today all participants for the listen-only mode any conference has been recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Guillaume Danilo, Please go ahead, Sir.

Thank you, Operator, and good morning to you all. Thanks for joining this conference call about Schuman Group's four-year reasons for 2022. I very much hope that you, your families, and your colleagues are doing well. Please take note of the disclaimer in our media release and on slide two. During this conference, we are going to refer to the presentation slides that were published on our website this morning. As usual, the presentation and discussion will include some forward-looking statements. The conference will follow the usual format. As shown on the agenda on slide three, we will first give you an overview of our group performance, and then Marcel Kellerhans, our head of investor relations, will share details about the financial. After that, I'll provide you with an update on strategic initiatives and on our outlook for the future. As always, we will answer your questions at the end of the presentation. Let's start with our highlights and move directly to slide five. While the year was characterized by challenging microeconomic developments, thanks to our strong teams and innovative solutions, the group was able to deliver another strong performance. Patient demand remained good through the year, while softening in the second half. Stroman Group's revenue reached 2.3 billion Swiss francs in 2022, with organic growth of 15.7%. In the fourth quarter, the Group generated revenue of 592 million Swiss francs, which is an organic growth of 9.6%. In 2022, we achieved a core margin of 26%, which was an increase of 49 million Swiss francs driven by the top line and influenced by further investments in sustainable growth. We are very proud of what we have achieved and with all the efforts we have made as a team, we held more than 4.4 million smiles in 2022. A special highlight was the performance of our largest region, EMEA, which crossed the 1 billion Swiss francs mark for the first time. Another important milestone was the results of our annual employee survey, which reached an employee engagement score of 81 in 2022, with a response rate of 91%. I will be happy to share more details with you later. We remain confident for 2023 and we continue to invest in our growth and digital transformation despite the uncertainties and the volatile microeconomic environment. We expect organic revenue growth to be in the high single-digit percentage range and profitability at around 25%, including growth investments. With this, we are still on track to achieve our long-term ambition of 5 billion Swiss francs revenue by 2030. Let's move on to slide six. The group advanced significantly in all strategic areas and made great progress in expanding geographically. Let's start with our highlight, our EMEA region, which contributes 44% to the group's performance. EMEA achieved more than 1 billion Swiss francs in revenue with organic growth of 20.5% in 2022 and 13.7% in the fourth quarter. This last quarter of the year, Germany, France, and Spain were the leading countries, while emerging markets strongly contributed to growth. All business areas showed a good performance with many highlights, such as the re-launch of Virtuo Vivo, our strong intraloral scanner. In addition, the group's DSO business in this region picked up momentum in 2020. North America, being the second-biggest region, reported full-year organic growth of 11.6%. In the fourth quarter, the region grew 9.4% organically, with more than 170 million Swiss francs in revenue. The performance was driven mainly by premium implantology. The new then-challenger brands, which grew very strongly as well, and was also supported by the Clearliner business. Digital solutions delivered the highest revenue growth in the fourth quarter. There are now two ways to look at the performance of the APAC region. The first one, outside China, all the APAC countries grew significantly and have reached 23% organically. Australia and New Zealand were the region's biggest growth drivers. On the other hand, China is the largest country in the region, has been strongly impacted by COVID-19 and by delayed treatments due to the announcement of the volume-based procurement process. At the beginning of 2023, the VVP process, as we are calling it, was finalized and the group solutions were selected, which allows us to plan the way forward. Despite the China impact, the AIPAC region is posting an organic growth of 7.2% for the full year and a decline of 2.9% in the fourth quarter. Our fastest growing region, LATAM, showed organic growth of 30.4% in 2022 and 18.9% in the fourth quarter, reaching more than 45 million Swiss francs in revenue. The biggest market in LATAM remains Brazil, which posted strong growth, but other territories in the regions grew faster. Neodem, together with ClearCorrect, are continuing to gain brand recognition, which drives customer acquisition. On top of this, the Virtuo Vivo success story continues in Latin America. With this, I hand over to Marcel Quellerance, who will provide more details about our financial performance.

Thank you, Guillaume, and good morning, everyone. Looking at slide eight, you can see the revenue development. At 2022 exchange rates, our full year 2021 revenue would have been 43 million Swiss francs lower, mainly because of the depreciation of the euro. The favorable development of the US dollar could only partly offset this negative currency effect. In 2022, the currency headwinds were twice as high as the year before. The M&A effect added 27 million to our adjusted revenue base of 2 billion Swiss francs. It was largely related to the acquisition of Nihon and Plus Dental. In the middle of the chart, you can see that except for APAC, all our regions reported strong double-digit organic growth for the full year. The absolute organic growth of 315 million Swiss francs was mainly driven by EMEA and North America, which remain our biggest region. Looking at the gross profit development on slide nine, our gross margin for core and reported amounted to 75.7 and 75.6%, respectively, in 2022. Currency adjusted, this represents a margin increase of 10 basis points. High utilization rates in our production facilities, combined with continued efficient improvements to minimize cost increases, offset the higher exposure towards digital equipment and dental service organizations. As shown on slide 10, investments in expansion as well as the return to normal level of promotion and travel activities, especially in the second half of 2022, led to a currency-adjusted contraction of the core EBIT margin of 60 basis points to 26%. In absolute terms, core EBIT increased by 49 million and reached 603 million Swiss francs, which was driven by top-line growth. Slide 11 provides an overview of the free cash flow development. Operating cash flow amounts to 450 million Swiss francs in 2022, which is 145 million lower than in the previous year. This was mainly driven by a negative change in the networking capital of 191 million. The expansion into emerging market and higher exposure to dental service organizations increased the days of sales outstanding to 63. Days of supply increased to 191 as a result of further expanding the product portfolio globally. The networking capital intensity increased versus last year, however, is below the previous year's average. Capital expenditures reached 195 million sweet drinks, which represents an increase of 75 million compared to 2021. Turning to slide 12, we can take a look at our core financials. For full clarity, you will find the year-on-year comparison on our reported IFRS basis, as well as the core reconciliation table in the appendix of this presentation, and more details can be found in the annual report. The main difference between the core and reported numbers is the amortization of acquisition-related intangible assets amounting to 38 million. This is mainly due to the accelerated amortization of the Plus Dental brand. The accelerated amortization, as well as the restructuring cost of 9 million Swiss francs, were triggered by the group's brand conclusion to run its direct-to-consumer clear-liner marketing business in Europe exclusively under the Dr. Smile brand. Net financial expenses amounted to 30 million Swiss francs, reflecting interest on lease liabilities and payments, as well as currency-related losses. After income taxes of 84 million, net profit increased by 6% to 482 million, resulting in a margin of 21%. Basic core earnings per share increased by 6% to 3 francs and 3 cents. Let's move to slide 13. Based on a 2022 result, our Board of Directors proposes a dividend of 80 cents per share, which is subject to shareholders' approval and payable on April 13, 2023. This represents an increase of almost 20%, which is in line with the company's policy to steadily increase the absolute dividend amount if profitability allows. In 2022, the group undertook a share split, which resulted in an increase of the shareholder base of 40%. With this, I would like to hand back to Guillaume.