NASDAQ: HSIC
www.henryschein.com
Corporate Overview


   HSIC is the largest distributor of healthcare
products and services to office-based practitioners
...
13 Years as a Public Company


         1995 Worldwide Sales:                        2008 Worldwide Sales:
              $...
Serving Large and Growing Markets


                      Consistent Market Growth

                                      ...
Attractive Market Dynamics


                                                      Aging Population Driving
              ...
Positive Business Environment


                         Fragmented
Consistent
                         Competitors
 Growt...
Dental Services Growth
    Never recorded a
    year of negative
        growth
                                          ...
Physician and Clinical Services Growth
 Never recorded a
 year of negative
     growth
                                   ...
Company Objective


           Our primary objective is to
           partner with our customers


                  Effic...
Key Company Strengths




1) Unique Sales and Marketing Expertise

2) Centralized Leveragable Infrastructure

3) Broad Pro...
1. Unique Sales and Marketing Expertise



• Strong brand identity with over 75 years of
  experience
• Extensive direct m...
Extensive Consultative Selling Skills


Classroom and Web-Based Training




                      Clinical
     Products ...
Customer Analysis Tool (CAT)

Driving more productive
  customer interactions




Proprietary call planning system
Color c...
2. Centralized Leveragable Infrastructure




        75-80% Utilization…
            …With Capacity for Growth
          ...
3. Broad Product and Services Offering

                    Competitive Prices


90,000 SKUs
  in stock
                  ...
Exclusive Product Offerings




                              16
Value-Added Services

 Design Services




                       17
4. Superior Customer Service


• 24/7 ordering by mail, fax,
  telephone, CD-Rom and Web
• Customer Service Statistics:
  ...
Innovative Customer Loyalty Programs




• Designed to attract, retain, and reward preferred
  customers
• Over 28,000 U.S...
5. Practice Management Solutions

Helping our customers become more
       efficient and profitable


        Active Base ...
Key Strategies for Future Growth


      Transition from a Pure Distribution Company

• Expand value-added products and se...
Key Strategies for Future Growth


            Pursue Complementary Initiatives…
• Continue to develop the specialty busin...
Recent Acquisitions
Acquired 10 companies in Q4 2008 with annual sales of $280 million. The more significant
acquisitions ...
Financial Update
Safe Harbor Provision


The Private Securities Litigation Reform Act of 1995
provides a “safe harbor” for forward-looking ...
Growth Since Going Public


                                                                                 Compound
    ...
Full Year 2008


                           Financial Highlights

($ in millions, except per share data)

                ...
Net Sales


             ($ in millions)
                                                              6,395
             ...
Long-Term Financial Objectives


                  Future sales growth will be a balance
                   of internal gr...
Strategic Acquisitions

                   Successfully integrated over 30 acquisitions since 2000
                       ...
Operating Income and Margin

               ($ in Millions)
                                                              ...
Long-Term Financial Objectives

Goals:
• Balanced internal and acquisition sales growth
• Continued operating margin expan...
Diluted EPS and Net Income


                                                                                 $2.96
      ...
Long-Term Financial Objectives

Goals:
• Balanced internal and acquisition sales growth
• Continued operating margin expan...
Operating Cash Flow

         ($ in Millions)

                                                                       $384...
Long-Term Financial Objectives

Goals:
• Balanced internal and acquisition sales growth
• Continued operating margin expan...
Strong Balance Sheet


($ in millions)
     December 27, 2008                   Debt to Total Capitalization Ratio
       ...
Investment Merits



• Leading presence in fragmented growing markets
• Providing high quality service to office-based
  h...
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HENRY SCHEIN 2008IRPresentation_Final

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HENRY SCHEIN 2008IRPresentation_Final

  1. 1. NASDAQ: HSIC www.henryschein.com
  2. 2. Corporate Overview HSIC is the largest distributor of healthcare products and services to office-based practitioners in North America and Europe Serving Dental, Physician and Animal Health practitioners Broad range of value-added products and services • One-stop shop for our customers Operations or affiliates in 20 countries Fortune 500® company Member of the NASDAQ 100® Index 2
  3. 3. 13 Years as a Public Company 1995 Worldwide Sales: 2008 Worldwide Sales: $616 million $6.4 billion Int'l Medical Medical Int'l 17% 22% 27% 35% Tech 4% Tech Dental Dental 3% 40% 52% From Continuing Operations 3
  4. 4. Serving Large and Growing Markets Consistent Market Growth Estimated Market 1995 2008 Share Size Share Size Market ($ in billions) ($ in billions) U.S. & Canada Dental 11% $3.0 40% 6.3 (1) U.S. Medical 3% 4.8 15% 9.5 Europe Dental 5% 2.2 19% 7.2 (1) Europe Medical ___ _____ 14% 4.5 TOTAL 6% $10.0 23% $27.5 (1) Includes Animal Health 4
  5. 5. Attractive Market Dynamics Aging Population Driving Healthcare Spending 180m U.S. Population Age 45-84 (millions)1 45-84 year-old population projected to 150m almost double between 1990-2030 120m 144m 131m 90m 115m 93m 60m 75m 30m 1990 2000 2010 2020 2030 (1) U.S. Census Bureau 5
  6. 6. Positive Business Environment Fragmented Consistent Competitors Growth Markets Served Fragmented Recession Customer Base Resistant 6
  7. 7. Dental Services Growth Never recorded a year of negative growth Projected 2009 Growth: 2.0% 20% 17.8 16% 12.0 11.2 12% 9.3 9.2 8.5 9.0 8.6 8.5 8.2 8.0 7.8 7.2 7.5 7.4 7.2 8% 6.7 6.6 6.8 6.6 6.0 6.3 5.7 5.6 5.2 5.2 4.9 5.0 4.8 4% 0% 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 -4% ▪ Dental Services Growth US GDP Growth (constant dollars) Source: -Dental Services Growth - CMS. -GDP - US Department of Commerce 7
  8. 8. Physician and Clinical Services Growth Never recorded a year of negative growth Projected 2009 Growth: 6.0% 20% 17.3 16.6 15.8 16% 14.0 12.8 12.2 11.5 11.5 12% 11.011.1 10.9 10.8 8.5 8.5 8.4 7.9 7.3 7.4 8% 7.0 6.5 6.2 6.4 6.1 5.9 5.2 5.0 4.6 4.8 4.0 4% 0% 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 -4% ▪ Source: Physician and Clinical Services Growth US GDP Growth (constant dollars) -Physician and Clinical Services Growth - CMS. -GDP - US Department of Commerce 8
  9. 9. Company Objective Our primary objective is to partner with our customers Efficiency Improve Productivity Practice Profitability Allowing our customers to focus on delivering quality care to their patients 9
  10. 10. Key Company Strengths 1) Unique Sales and Marketing Expertise 2) Centralized Leveragable Infrastructure 3) Broad Product and Services Offering 4) Superior Customer Service 5) Large Practice Management User Base 10
  11. 11. 1. Unique Sales and Marketing Expertise • Strong brand identity with over 75 years of experience • Extensive direct marketing programs • Highly-trained sales professionals 2,800 field sales consultants and specialists 1,500 telesales representatives Extensive training to develop consultative selling skills 11
  12. 12. Extensive Consultative Selling Skills Classroom and Web-Based Training Clinical Products Techniques Practice Management Solutions Reps visit the website regularly 12
  13. 13. Customer Analysis Tool (CAT) Driving more productive customer interactions Proprietary call planning system Color coding ranks sales activity 13
  14. 14. 2. Centralized Leveragable Infrastructure 75-80% Utilization… …With Capacity for Growth 14
  15. 15. 3. Broad Product and Services Offering Competitive Prices 90,000 SKUs in stock ~20,000 proprietary 100,000 products special order items available 15
  16. 16. Exclusive Product Offerings 16
  17. 17. Value-Added Services Design Services 17
  18. 18. 4. Superior Customer Service • 24/7 ordering by mail, fax, telephone, CD-Rom and Web • Customer Service Statistics: North America Worldwide Order fulfillment 99% 99% Orders shipped same day 99% 99% Orders delivered in 2 days 99% 99% Orders delivered next day 90% 95% Order accuracy 99.9% 99.9% • 2008 Web sales up over 20% • Innovative Customer Loyalty programs 18
  19. 19. Innovative Customer Loyalty Programs • Designed to attract, retain, and reward preferred customers • Over 28,000 U.S. Dental members and 7,000 U.S. Medical members and 6,000 International • Drives faster sales and electronic ordering growth • Similar programs active in 9 international markets 19
  20. 20. 5. Practice Management Solutions Helping our customers become more efficient and profitable Active Base of Over 60,000 Users • #1 in customer satisfaction • Integrates with digital equipment • Provides cross-selling opportunities 20
  21. 21. Key Strategies for Future Growth Transition from a Pure Distribution Company • Expand value-added products and services • Practice management software • Financing, Credit card processing and e-claims • Continuing education • Increase customer penetration • Customer loyalty programs • Equipment sales and repair services • Increase number of new customers • Increase number of field sales consultants Goal - Partner With Customers to Improve Quality of Care 21
  22. 22. Key Strategies for Future Growth Pursue Complementary Initiatives… • Continue to develop the specialty business • Implants, orthodontics, surgical, dermatology and pediatrics • Expand product and service offering • Additional exclusive and semi-exclusive distribution agreements • Realize sourcing synergies and supply chain initiatives • Globalize inventory management • Increase sales of Henry Schein proprietary products • Pursue strategic acquisitions … To Accelerate Sales and Operating Income Growth 22
  23. 23. Recent Acquisitions Acquired 10 companies in Q4 2008 with annual sales of $280 million. The more significant acquisitions include: Ortho • Provides entrée into orthodontic market • Expands dental specialties group Organizers • Sales of $30 million Noviko • Leading Czech Republic Animal Health distributor • Provides base of operation for expansion into Eastern Europe • Makes Henry Schein largest Pan-European Animal Health distributor • Sales of $70 million • Italian distribution arm of Cefla Dental (equipment manufacturer) DNA Anthos • Leading distributor of Anthos dental equipment in Italy, nation’s largest installed user base • Five-year exclusive agreement with Cefla to distribute Anthos in most regions of Italy • Sales of $43 million Medka • Full-service provider of Medical consumables, equipment and technical services primarily to physicians • Complements current Henry Schein German operations and provides coverage where there previously was limited presence • Sales of $36 million 23
  24. 24. Financial Update
  25. 25. Safe Harbor Provision The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. Certain portions of this presentation include information that is forward-looking. Certain risks and uncertainties could cause our future results to differ materially from the forward-looking statements, expectations and assumptions expressed or implied in this presentation. Such forward- looking statements should not be relied upon as a prediction of actual results. We undertake no duty and have no obligation to update such forward-looking statements, and we refer you to the cautionary language contained in our filings with the Securities and Exchange Commission. 25
  26. 26. Growth Since Going Public Compound 1995 2008 Annual Growth Rate ($ in millions, except per share data) 20% $616.2 $6,394.9 Sales 27% $19.3 $442.8 Operating Income 29bp 3.1% 6.9% Operating Margin 30% $9.1 $270.0 Net Income 18% $0.34 $2.96 Diluted EPS From continuing operations and excluding certain non-recurring items. 26
  27. 27. Full Year 2008 Financial Highlights ($ in millions, except per share data) Growth 2007 2008 Sales $6,394.9 $5,904.4 8.3% Operating Income $442.8 $387.9 14.2% Operating Margin 6.92% 6.57% 35 bp Net Income $270.0 $236.1 14.4% Diluted EPS $2.96 $2.59 14.3% From continuing operations and excluding certain non-recurring items. 27
  28. 28. Net Sales ($ in millions) 6,395 CAGR 14% 5,904 $7,000 5,036 4,526 8% 17% $5,000 3,795 11% 19% 19% $3,000 $1,000 2004 2005 2006 2007 2008 From Continuing Operations 28
  29. 29. Long-Term Financial Objectives Future sales growth will be a balance of internal growth and acquisitions Goal: • To continue to grow internal sales faster than market Actual Sales Growth¹ 2004 2005 2006² 2007 2008³ Internal 8% 8% 7% 7% 4% Acquisition 11% 11% 5% 7% 6% Total Sales Growth 19% 19% 12% 14% 10% As originally reported except as noted ¹Local currency ²Adjusted for extra week in 2005 ³Adjusted to exclude sales of certain lower-margin pharmaceutical products 29
  30. 30. Strategic Acquisitions Successfully integrated over 30 acquisitions since 2000 Key Strategic Benefit Revenue1 2005 • Ash Temple Expands presence in Canadian Dental market $100m • Halas / Shalfoon Strengthens position in Australia and New Zealand $60m 2006 • NLS Animal Health Expands presence in U.S. Veterinary market $110m • Darby Companies Strengthens U.S. Dental, Medical and Lab presence $220m • Provet Expands presence in European Veterinary market $50m 2007 • Software of Provides leading position in U.K. Dental Software market $20m Excellence • W&J Dunlop Expands presence in European Veterinary market $340m 2008 • Minerva Dental Expands full-service dental presence in U.K. $40m 2009 • Noviko Expands Veterinary presence in the Czech Republic $70m • DNA Anthos Strengthens Dental equipment presence in Italy $43m • Medka Expands Medical presence in Germany $36m • Ortho Organizers Provides entrée into orthodontic market $30m 1 Represents the approximate revenue in the fiscal year prior to acquisition or expectation for revenue contribution in the 12 months immediately following acquisition date. 30
  31. 31. Operating Income and Margin ($ in Millions) $443 CAGR 21% $500 $388 $400 $305 14% $262 27% $300 $205 16% 28% $200 -6% $100 $0 2004 2005 2006 2007 2008 Operating 5.4% 5.8% 6.1% 6.6% 6.9% Margin From continuing operations and excluding certain non-recurring items. 31
  32. 32. Long-Term Financial Objectives Goals: • Balanced internal and acquisition sales growth • Continued operating margin expansion Actual Results: 1995 2008 Operating Margin 3.1% 6.9% Average 29 bp annual increase since going public From continuing operations and excluding certain non-recurring items. 32
  33. 33. Diluted EPS and Net Income $2.96 CAGR 21% $2.59 $3.00 $2.04 14% $1.70 27% $1.39 $2.00 20% 22% $1.00 -3% $0.00 2004 2005 2006 2007 2008 Net $122.5 $150.7 $183.5 $236.1 $270.0 Income From continuing operations and excluding certain non-recurring items. 33
  34. 34. Long-Term Financial Objectives Goals: • Balanced internal and acquisition sales growth • Continued operating margin expansion • Predictable Earnings Per Share growth Actual Results: 1995 2008 EPS $.34 $2.96 18% CAGR since going public All amounts from continuing operations and excluding certain non-recurring items. 34
  35. 35. Operating Cash Flow ($ in Millions) $384.6 $400.0 $270.2 $254.8 $300.0 $235.3 $191.0 $200.0 $67.0 $56.8 $100.0 $50.9 $50.8 $37.8 $0.0 2004 2005 2006 2007 2008 Operating Cash Flow Capital Expenditures 35
  36. 36. Long-Term Financial Objectives Goals: • Balanced internal and acquisition sales growth • Continued operating margin expansion • Predictable Earnings Per Share growth • Strong cash flow from operations Since 2004 operating cash flow has exceeded net income by over $381 million All amounts are from continuing operations restated to exclude certain non-recurring items and restructuring costs. 36
  37. 37. Strong Balance Sheet ($ in millions) December 27, 2008 Debt to Total Capitalization Ratio $369.6 Cash & Equiv. $882.6 Working Capital 40% $3,599.6 Total Assets $428.0 Total Debt 30% 32.6% 29.6% $1,932.2 Equity 25.3% 20% 43.0 days DSO 20.4% 18.1% 6.2x Inventory Turns 10% 2.9% Net Debt to Total Capitalization Ratio 0% 2004 2005 2006 2007 2008 HSIC has a $400m 5-year committed credit line at an attractive interest rate. 37
  38. 38. Investment Merits • Leading presence in fragmented growing markets • Providing high quality service to office-based healthcare practitioners • Strong brand recognition • Highly experienced management team • Excellent growth opportunities 38

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