Download - Good Friend OSSTEM IMPLANT
OSSTEM IMPLANT Good Friend
Osstem Investor Relations
2
Disclaimer
This presentation contains forward-looking statements .Forward-looking statements may be identified by the use of forward-looking terms such as “may,” “will,”
“expects,” “believes,” “anticipates,” “plans,” “estimates,” “projects,” “assumes,” “guides,” “targets,” “forecasts,” “sees” and “seeks” or the negative of such terms or
other variations on such terms or comparable terminology. All statements other than statements of historical or current fact are, or may be deemed to be, forward-
looking statements.
Such statements are based upon the current beliefs and expectations of management and are subject to significant risks and uncertainties that could cause actual
outcomes and results to differ materially. These risks and uncertainties include, but are not limited to: the possibility that the anticipated synergies and other benefits
from mergers and acquisitions will not be realized, or will not be realized within the expected time periods; the risks and uncertainties related to our ability to
successfully integrate the operations, products, employees and distributors of acquired companies; the effect of the potential disruption of management’s attention
from ongoing business operations due to integration matters related to mergers and acquisitions; the effect of mergers and acquisitions on our relationships with
customers, vendors and lenders and on our operating results and businesses generally; the outcome of government investigations; price and product competition;
the success of our quality and operational excellence initiatives; changes in customer demand for our products and services caused by demographic changes or
other factors; dependence on new product development, technological advances and innovation; shifts in the product category or regional sales mix of our products
and services; supply and prices of raw materials and products; control of costs and expenses; the ability to obtain and maintain adequate intellectual property
protection; the ability to form and implement alliances; challenges relating to changes in and compliance with governmental laws and regulations, including
regulations of the Korea, China, U.S. Food and Drug Administration (the “KFDA”, "CFDA", "FDA") and other foreign government regulators, such as more stringent
requirements for regulatory clearance of products; the ability to remediate matters identified in any inspectional observations or warning letters issued by the KFDA,
CFDA and FDA, while continuing to satisfy the demand for our products; changes in tax obligations arising from tax reform measures or examinations by tax
authorities; product liability and intellectual property litigation losses; the ability to retain the independent agents and distributors who market our products;
dependence on a limited number of suppliers for key raw materials and outsourced activities; changes in general industry and market conditions, including domestic
and international growth rates and general domestic and international economic conditions, including interest rate and currency exchange rate fluctuations; the ability
to collect accounts receivable in emerging markets such as China, Asia and South America.
For a further list and description of such risks and uncertainties, see our reports filed with the Korea Financial Supervisory Service. Copies of these filings, as well
as subsequent filings, are available online at dat.fss.or.kr, www.osstem.com or on request from us. We disclaim any intention or obligation to update or revise any
forward-looking statements, whether as a result of new information, future events or otherwise, except as may be set forth in our periodic reports.
Readers of this presentation are cautioned not to place undue reliance on these forward-looking statements, since, while management believes the assumptions on
which the forward-looking statements are based are reasonable, there can be no assurance that these forward-looking statements will prove to be accurate. This
cautionary statement is applicable to all forward-looking statements contained in this presentation..
Contents
3
I. Introduction
II. Business Overview
III. Growth Strategy
IV. Earnings & Outlook
V. Financial Statements
01
Company Introduction I. Introduction
5
1. General Status
Established in 1997, Osstem has 23 years of business history
OSSTEM IMPLANT Co., Ltd. ( CEO EOM, Tae Kwan )
460.1 Billion KRW(Consolidated, 2018)
World Meridian 2nd Bldg, 123, Gasan Digital 2-Ro, Geumcheon-Gu, Seoul
7.1 Billion KRW Paid in Capital
Corp. Name
Revenue
Location
08th Jan 1997 Foundation
Medical Equipment, Software and Services Business Purpose
6
2. Top Management / Shareholders
Chairman is founder and former dentist,
CEO was former CTO of Osstem
[ March. 2019 ]
[Chairman] CHOI, Kyoo-Ok
• Former CEO
• Founder of OSSTEM IMPLANT
• Dentist, Seoul Dental Clinic
• Ph.D, Korea University
• Graduated School of Dentistry, Seoul National University
[CEO] EOM, Tae-Kwan
• Former CTO
• Daewoo Automotive Lab
• Ph.D, Medical engineering,
Busan National University
• Graduated Mechanical engineering, Yonsei Univ.
Top management Shareholders
Foreigners,47.3%
Korea Institutions,
14.0%
Largest Shareholder,
21.3%
Others,17.4%
7
3. Business History
Pioneer in Korean implant industry, Continuous growth by global expansion
• Implant developed and marketed
• Hanaro(dental clinic Mgmt. S/W)
• Dubeone(reimbursement S/W)
1997~2000
• Digital Dentistry(OneGuide) launched
• Overseas subsidiaries in 25 countries
• Recognized as the Most Excellent Implant R&D Center by Government
2011~2018
2001~2010
• Listed in KOSDAQ(2007)
• Overseas subsidiaries in 12 countries
• AIC Training center established
• Implant laboratory established
• U.S. Market entered by HiOssen
8
Global M/S Korea & China M/S
4. Global Positioning
No.5 player in Global, No.1 in Korea and China
Straumann 22.5%
Danaher (Nobel) 20.0%
Zimmer Biomet 14.1%
Dentsply Sirona 11.1%
OSSTEM 7.5%
Henry Schein 7.0%
Others 17.8% OSSTEM
50%
Dentium
[백분율]
Neo
[백분율]
Dio
[백분율]
Megagen
[백분율]
Misc.
[백분율]
[Korea]
[자료 : MRG, OSSTEM] [자료 : MRG, OSSTEM]
[China]
OSSTEM 33.0%
Dentium 25.0%
Straumann 22.0%
Danaher 9.0%
Dentsply Sirona 7.0%
Others 4.0%
9
5. Vision & Mission
To achieve Global No.1 Implant Company in 2023
We contribute to the promotion of human health,
By creating highest customer values based on talent and technology
Vision
Management Phiosophy
Mission
Core Value
Leading company
in global dental industry
No.1 Implant Company in 2023 (2021 sales over 1 tril. KRW)
Best in
industry Customer
centric Trustability
Global
Talent
II. Business Overview
11
1. Business Domain
Comprehensive offering of products, solution and services for dentists
Global top-tier in
Surface and Design
Implant Materials & Drugs Training (AIC) Dental IT
Efficient production and
Quality management
Global Sales capability
Dental Chair, CT, Panorama
Medical Equipment
GBR , Impression, Whitening
Dental Materials
Dental drugs
Global implat training
for dentists
Implant Symposium
Osstem Meeting/Osstem World Meeting
Reimbursements,
Dental clinic managements S/W
S/W for
Digital Diagnosis
12
Core products internalized: R&D and made by Osstem
2. Product Mix
Portfolio of products & merchandise, total offering for dentists
Intra-oral scanner Medical drugs Dental engine
Implants Medical devices Materials Dental IT
Products
Merchandise Total Offering, partnership for Time-to-Market
13
3. Sales Focus
Direct sales network, AIC training makes virtuous cycle for continuous growth
Dentists participating implant training
More dentists placing implant
Expanding potential market
Relationship with dentists
Higher usability by training
Direct Sales
Direct contact to dental clinic
Also utilizing dealership sales
AIC Training
14
4. Power of Direct Sales
Direct sales network, the solid base for continuing growth
Direct Sales network needs long term investment Core asset of Osstem
(Hard to imitate for competitors in short term)
Direct Sales for No.1 M/S and major markets (Emerging Market, USA)
Patient is our clients (Not dealers’)
Invite dentists for AIC
Ongoing communication(Sales, AS, CS)
New product expansion easily
Long-term purchase contract
Feedback on our product/service
15
5. OSSTEM’s AIC
AIC is Osstem’s unique implant training system for dentists : Outstanding faculties, comprehensive curriculum, academic and practice focused
Dentists incapable of placing
implant
Dentists capable of Implant
Sales Target
AIC Training
AIC Training center (62)
70,000
Global Trainee total
’00 ’01 ’02 ’03 ’04 ’15 ’16 ’17 ’05
…….
’18 ’19E
16
qh
Subsidiaries Dealerships European Dealer (Germany)
KOREA
U.S.A
CANADA
GERMANY
MEXICO
JAPAN
CHINA
HONGKONG
RUSSIA
TAIWAN
BANGLADESH
THAILAND
VIETNAM
MALAYSIA
SINGAPORE
INDIA
INDONESIA
NEW ZEALAND
UZBEKISTAN
UKRAINE
PHILIPPINE
AUSTRALIA
KAZAKHSTAN
TURKEY
CHILE
MONGOLIA
NORWAY
FINLAND
ENGLAND
SOUTH AFRICA
BOSNIA
JORDAN
PORTUGAL
SPAIN
ALBANIA
ITALY
EGYPT
KOSOVO
HUNGARY
SLOVENIA
ARMENIA
BULGARIA
TUNISIA
LITHUANIA
LATVIA
CZECH
CROATIA
KUWAIT
GREECE
POLAND
SLOVAKIA
SWITZERLAND
UAE
PAKISTAN
AZERBAIJAN
CAMBODIA
PERU
IRAN
MYANMAR
SRI LANKA
PNG
SAUDI ARABIA
FRANCE
LEBANON
RUMANIA
MACEDONIA
OSSTEM IMPLANT THAT EXTENDS TO
THE WORLD!
IRAQ
BAHRAIN
TAJIKISTAN
OMAN
PALESTINE
COSTA RICA
6. Global Network
Manufacturing plants in Korea/USA, Subsidiaries and Dealers over 70 countries
: Dual brand strategy, customized packages for each market
KOREA – BUSAN & SEOUL
U.S.A. - PHILADELPHIA
Manufacturing plants
17
7. R&D Investment 1)
10 R&D centers developing core technologies of dental implant and digital dentistry
R&D Centers Bone
Medical Equipment
IT System
Dental Drug
Stent Interior
Implant
Oral Care
10 Centers
400 Research staffs
R&D expenses up to 7% of revenue.
Highest level in Korea
18
7. R&D Investment 2)
Focus on global No.1 implant technologies and future growth engine
FIXTURE Top tier surface and design capability
Mature clinical records over 20 years
TS
HA CA BA SOI
Top tier osseointergration technology
Advanced technologies over SLA
Digital Dentistry
SS US MS
SA
Digital Implant Cutting edge
Medical Equipment
New Materials Dental IT S/W
Growth Engine
SURFACE
III. Growth Strategy
20
1. Digital Dentistry 1)
Conventional dental practice heavily depends on dentist’s knowledge/knowhow/skill
Inaccurate and long time of training required
Dentist depedent (knowlege/knowhow/skill) (error 1~2mm diameter)
Procedure Implant
procedure
Prosthetics
Panorama/CT (Knowhow/Skill)
Diag & plan
Prosthesis
Made in dental lab
Patient engage
Dentist dependent (inaccurate)
Impression
Manual tray
Conventional way
21
Making Data Acquistion Design(Plan) Procedure/Cure
1. Digital Dentistry 2)
Digital Dentistry is way of precise and handy treatment
Accurate and shorter time of training required
Digital Dentistry
All digitalized, precise and handy treatment, independent of dentist’s knowledge/knowhow/skill
Chair-side manufacturing, shorter time and lower cost for patients
One platform for multi use : implant, prosthetics, orthodontics, etc.
3D Scanner, CBCT
Analysis
Digital S/W (AI) Dental CAD (AI) Dental CAM Digital Guide
22
2. Osstem’s Digital Dentistry Roadmap
Core products/serviced launching in 2019
Launched Scheduled
Reimbursement / Dental EMR, Patient Care S/W
Dental CT
Milling
3D Printer
P2 (Standard Dental X-rays)
OneScan O1 (Intra-oral Scanner)
T1 (CBCT)
OneVision 2D (2D Imaging S/W)
OneVision 3D (3D Imaging S/W)
V-Ceph (2D Ceph Analysis S/W)
OneGuide S/W (Implant Surgical Guide)
OneCAD Pros. (Prosthetics CAD)
OneCAD Ortho. (Orthodontic CAD)
OneMill 4X (Milling Machine)
OneJet (3D Printer)
Dubeone (Reimbursement S/W)
HanaroOK (Dental Hospital Solution)
MAGIC Line (Clear Aligners & Ortho. Guide)
OneScan M1 (Model Scanner)
Dental Hospital SW Diagnosis Manufacturing Data Acquisition Design(Planning)
OneClick (Dental Hospital Solution)
Implant Guide
ABT & Crown
Clear Aligner
2D Imaging & Diag. S/W
3D Imaging & Diag. S/W
Intraoral & Model Scanner
23
3. Digital Dentistry Market
Digital Dentistry’s total addressable market is 18Bil. USD in 2023
0
5
10
15
20
17 18 19E 20E 21E 22E 23E
Digital Imaging
CAD/CAM
S/W
Prosthetics
Implant
(1Bil. $)
[MRG, OSSTEM]
24
4. Digital Dentistry Application
From Implants to Prosthetics, Orthodontics and other areas
Digital Dentistry
Digital Implant ('16)
Orthodontics ('18) Prosthetics ('18)
Double Jaw ('19) Digital Denture ('18)
25
5. OSSTEM’s Perspective
Digital Platform enables global total offering, sales and training
Integration of Products and IT S/W
Integrated
Sales and Training
Globalization
Integration of software, implant and materials
digtal platform for effective and quicker dental cure
Digital Dentistry products, S/W linked in Platform
online order, direct sales and customer loyalty
Customized training for dentists, Online & Offline integrated
Time-to-Market concentration
Accelerated global launch of digital platform
1
2
3
IV. Earnings and Outlook
27
1. Global Market Growth
Emerging market drives global implant market growth
[MRG]
28
2. Sales Forecasts
2018 Sales 460 Bil. KRW, 2019F 15~20% Growth
398
(1Bil. KRW)
’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17
150
170
201 216
217
278
345
CAGR
15% Growth
(`10 ~ `18)
’18
460
’19F
15~20% Growth
29
3. Korea Market
2018 Domestic Revenue 226 Bil. KRW, '19 9~10% Growth
106
128
148
179 193
226
250
13 14 15 16 17 18 19E
‘13~’18
CAGR 13.0%
Implant (60%)
Material
(28%)
Devices (12%)
(1Bil. KRW)
30
3. Korea Implant Reimbursement
Reimbursements up to 70% from July, 2018 (50% 70%)
Population Forecast
[KOSTAT]
[Mil. People, Accumulated]
Policy Effect
[MHW, OSSTEM]
2 implants per patient
Date Age Population
2014. 7. 1 Over 75 80,000
2015. 7. 1 Over 70 100,000
2016. 7. 1 Over 65 150,000
2018. 7. 1 Over 65 160,000
▪ Market Size Forecast ( Average cost 180,000 per unit )
‘14.7.1 80,000 X 180,000 KRW(1~2) = 14.4~28.8 Bil. KRW
‘15.7.1 100,000 X 180,000 KRW(1~2) = 18.0~36.0 Bil. KRW
‘16.7.1 150,000 X 180,000 KRW(1~2) = 27.0~54.0 Bil. KRW
‘18.7.1 160,000 X 180,000 KRW(1~2) = 28.0~55.0 Bil. KRW
▪ For 5years CAGR 10%~15% Market Growth(E)
▪ Total cost = USD 1,100 ~ 1,300 /implant X 70%
31
4. China Market 1)
2019F, China Revenue 110 Bil. KRW
192 240
290
350
600
17 18 19E 20E 23E
74
89
110
135
245
17 18 19E 20E 23E
[Unit : USD M]
[자료 : MRG, OSSTEM] [자료 : OSSTEM]
‘17 ~ ’23
CAGR 20%
‘17 ~ ’23
CAGR 22.2%
[Unit : USD M]
Market Size Sales Forecast
32
4. China Market 2)
Sales follows increase in AIC trainee and sales network expansion
AIC trainee Sales Network
Accumulated 18,946
[OSSTEM] [OSSTEM]
39 46 53 57 66 76
260 277
326
383
456 475
13 14 15 16 17 18
Branch Staff
1,565 1,780
2,133
2,466
2,849 3,024
13 14 15 16 17 18
33
5. North America Market 1)
2019F, North America sales 77 Bil. KRW
Market Size Sales Forecast
[MRG, OSSTEM]
[Unit: 1Bil. KRW] [Unit : USD M]
[OSSTEM]
‘17 ~ ’23
CAGR 8.5%
‘17 ~ ’23
CAGR 14.9%
1,412 1,600
1,720 1,900
2,500
17 18 19E 20E 23E
59 68
77
86
130
17 18 19E 20E 23E
34
5. North America Market 2)
AIC trainee Sales Network
Accumulated 14,249
[OSSTEM] [OSSTEM]
Sales follows increase in AIC trainee and sales network expansion
1,270
1,922 1,992
1,657
2,354
2,854
13 14 15 16 17 18
30 37 48 52 61 66
185 170
205
242
282 304
13 14 15 16 17 18
Branch Staff
35
6. Global Market at a glance
Continuing high growth in China, U.S., and Russia
Country ’12 ’13 ’14 ‘15 ‘16 ‘17 '18
China (Beijing)
272 346 341 410 241 528 632
Guang Dong 49 52 73 302 153 184
Hong Kong 34 36 10 31 40 46 49
US 291 350 298 349 471 528 635
Canada 7 24 31 37 46 57 67
Russia 15 26 45 73 116 170 203
Germany 83 73 95 85 96 112 114
India 33 42 53 60 85 108 82
Others 289 278 270 320 411 517 543
Sum 923 1,150 1,135 1,350 1,717 2,113 2,509
(Unit: 100Mil. KRW)
306
431 403
514
583
727
890
291
350
298
349
471
528
635
0
100
200
300
400
500
600
700
800
900
’12 ’13 ’14 ‘15 ‘16 ‘17 '18
China CAGR 19%
USA CAGR 14%
Russia CAGR 54%
36
Key Takeaways in 2019
7. 2019 Key Takeaways
‘19 Revenue 15~20% Growth
Operating Margin 8~9%
Reduced deficit in subsidiaries
R&D & new product launch for continuing growth
Global management system for further growth
V. Financial Statements
38
Financial Statements
2018 2017 2016
Current Asset 362,680 318,270 277,673
Non-current Asset 275,246 237,429 197,584
Total Asset 637,926 555,699 475,257
Current Liability 479,643 352,274 324,868
Non-current Liability
44,287 83,028 38,657
Total Liability 523,930 435,302 363,525
Capital 7,143 7,143 7,143
Capital excess of par value
54,047 54,057 54,057
Other Capital -36,728 -33,154 -31,424
Profit Surplus 84,151 84,938 74,587
Non-controlling interests
5,374 7,413 7,368
Total Capital 113,995 120,397 111,731
(1Mil. KRW) [Income Statement] (1Mil. KRW) [Balance Sheet]
2018 2017 2016
Sales 460,147 397,791 344,582
Cost of Sales 201,600 165,703 141,139
Gross Profit 258,547 232,087 203,443
SG&A 227,571 210,385 169,194
Operating profit 30,975 21,702 34,250
Net Income before Tax
18,023 19,430 32,483
Income Tax 11,768 13,770 12,150
Net Income (Loss) 6,255 5,660 20,333
Thank you