Syneron Medical Ltd. Investor Presentation. January 2013

Transcription

1 Syneron Medical Ltd. Investor Presentation January 2013

2 Safe Harbor For Forward Looking Statements Any statements contained in this document regarding future expectations, beliefs, goals, plans or prospects constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of Further, any statements that are not statements of historical fact (including statements containing "believes," "anticipates," "plans," "expects," "may," "will," "would," "intends," "estimates" and similar expressions) should also be considered to be forward-looking statements. There are a number of important factors that could cause actual results or events to differ materially from those indicated by such forward-looking statements, including the risks set forth in Syneron Medical Ltd.'s most recent Annual Report on Form 20-F, and the other factors described in the filings that Syneron Medical Ltd. makes with the SEC from time to time. If one or more of these factors materialize, or if any underlying assumptions prove incorrect, Syneron Medical Ltd.'s actual results, performance or achievements may vary materially from any future results, performance or achievements expressed or implied by these forward-looking statements. 2

3 Investment Highlights Growing aesthetic market for non-invasive procedures Global leader in aesthetic devices with 32% worldwide market share 1 Platform aesthetic company with largest worldwide sales, distribution and service network across 90 countries capable of addressing largest and fastest growing segments of market Financially strong with diversified revenue growth drivers and improving margins Increasing recurring revenue through consumable business model Driving revenue growth and margin expansion in profitable PAD segment Investing in EBU segment and exciting growth markets, with focus on improving segment margins ~$252 million revenue 2 (31% recurring 3 ); $128 million in cash 4 ; No debt Eight consecutive quarter of profitability in PAD on a Non-GAAP basis 1 Based on US publicly traded companies listed here (SLTM, CYNO, PMTI, CUTR, ZLTQ); Professional Aesthetic Device Sector 2 Trailing twelve month revenue 3 Based on 3Q 2012 results in PAD segment 4 September 30, 2012 Balance Sheet 3

4 Leading Aesthetic Industry Applying technology, infrastructure and expertise to drive leadership in all aesthetic categories Professional Aesthetic Devices Emerging Business Units Established global brand reputations and proven clinical efficacy Leveraging global infrastructure and large installed base Multi billion opportunity in new high growth markets 37% revenue growth in 3Q12 9.1% operating margin (non-gaap) Launching new products with high margins and consumables Leverages professional device technology and expertise Focused on improving margins 4

5 Leading Aesthetic Industry Professional Aesthetic Devices Established global brand reputations and proven clinical efficacy Leveraging global infrastructure and customer base 9.1% operating margin (non-gaap) Launching new products with high margins and consumables 5

6 Breadth and Depth of Technologies Electro-Optical Synergy (elōs) Proprietary technology first and only combination of bi-polar radio frequency (RF) and optical energy (laser or light) for synergistic results Candela Lasers 40 years of innovation leadership Best-in-class laser products Ultrasound: Focused ultrasound that destroys fat cells in a non-invasive body contouring procedure Additional Technologies: Fractional RF Skin Lightening Teeth Whitening 6

7 Positioned to Outgrow the Industry Unrivaled breadth and depth of product offering Strongest industry position in largest and fastest growing Professional Aesthetic Device market segments #1 or #2 position in each market segment Complementary products for dermatologists, plastic surgeons and non-core customers * Source: U.S. markets for laser, light, and energy devices 2009 Millennium Research 7

8 Unmatched Global Footprint & Distribution Uniquely Positioned in High Growth Geographies Extensive and superior channel to market capability in over 90 countries Direct presence in 13 key markets Revenue split between North America and International is 32% and 68% respectively Unparalleled global distribution, service, and support capabilities across product segments 8

9 Drivers of Aesthetic Market Growth Increased global awareness growing acceptance of cosmetic procedures Improved efficacy and broader offerings of non-invasive procedures Growing middle class in high growth markets (BRIC countries) Longer average life expectancy Social media / celebrity culture - younger patients Expanding revenue and profit opportunities 9

10 Drivers of Syneron Core Market Growth New business model with consumable trail Larger Installed base to upgrade to newer multi-application platforms and applications New products addressing more segments of the market which can be sold through extensive channel to market infrastructure Range of Body Contouring products to address multiple segments of rapidly growing market 10

11 Paradigm Shift in Business Model Pioneering new treatment categories Clinically proven efficacy with high patient satisfaction with less downtime Growth opportunities with high recurring revenue and margins (consumables) Sublative Rejuvenation For reduction in wrinkles, acne, and scars Less downtime- solid results-high patient satisfaction A safer & more effective fractional alternative specifically for ethnic skin Consumable tip model Rapid ROI 11

12 Sublative Treatment for Acne Scar 3 Treatments Courtesy of Dr. Amy Taub 12

13 Potential Market for Fat Reduction & Body Contouring There are more than 1 billion overweight adults worldwide 30.5% Obese KEY (Based on BMI (1) ) BMI of 30 or above is obese BMI of is overweight BMI of is normal weight BMI of 18.5 or lower is underweight Targeted Populations 34.0% Overweight 33.5% Normal 2.0% Underweight Target market represents 2/3s of the worldwide population Source: National Health and Nutrition Examination Survey (NHANES). (1) The Body Mass Index (BMI) establishes a relationship between weight and height that is associated with body fat. BMI = (Weight in Pounds / (Height in Inches) 2 ) x

14 Potential Market for Non-Invasive Fat Reduction and Body Sculpting Liposuction Market Liposuction is the 2nd most commonly performed aesthetic surgical procedure in U.S. (N=289,000) The American Society of Plastic Surgery 2010 Statistics March, 2011 Consumers who want improvement in body shape but DON T want liposuction A rising demand for body contouring techniques More knowledgeable consumers Desire for natural looking solutions Preference of non-invasive methods that have short downtimes, less risk and are less costly 14

15 Strong Shift Toward Non-Invasive Procedures (Procedures in millions) Invasive Procedures Non- Invasive Procedures (Procedures in millions) 12.0 Growth Rate = 919% M Growth Rate = 75% M 1.6M M Non-invasive procedures account for 82% and majority of growth Source: The American Society for Aesthetic Plastic Surgery 2011Statistics, March

16 Projected Strong Growth in Global Non-Invasive Body Shaping & Skin Tightening Procedures (Procedures in millions) Procedures Volume 12.0 Projected Growth Rate = 68% M M Source: Medical Insight, Feb

17 Major Growth Opportunity Body Shaping Worldwide market for non invasive body shaping techniques estimated at $440M with projected annual growth of >15% Non-invasive body shaping addresses three areas of concern: skin laxity, fat reduction, and cellulite.syneron competes in all three areas Clear leader in non-invasive body shaping and cellulite treatment Tightens collagen fibers surrounding fat cells through thermal action Significant worldwide consumer and customer name brand recognition Consumable business model 7,000+ installed base to sell UltraShape 17

18 Major Growth Opportunity Body Contouring Treatment times are significantly shorter than other fat destructive technology (Consumable business model) Pain-free with rapid results through focused ultrasonic mechanical action specific to fat cells UltraShape s Vertical Dynamic Focus (VDF ) allows selective non thermal destruction of fat cells in various depths of the fat tissue 700+ units installed base - Leverage Syneron s market position Complementary technologies - creates sales bundling - technology integration opportunities 18

19 Leading Aesthetic Industry Applying technology, infrastructure and expertise to drive leadership in all aesthetic categories Emerging Business Units Multi billion opportunity in new high growth markets 37% revenue growth in 3Q12 Leverages professional device technology and expertise Focused on improving margins 19

20 Leadership Opportunity: High Growth Emerging Markets Significant growth opportunities with high margin, recurring revenue products Home Use Devices (HUD) Teeth Whitening and Fluorination Skin Lightening Projected $650M+ market in 2016 with average growth of 12.3% per year 1,2 Increased consumer desire for treatments at home Includes facial/skin rejuvenation, hair removal Blockbuster global market ~$5.5B Methods - white strips, professional treatments, whitening trays/gels Treatments - more effective and last longer Extraordinary global market ~$10B (~$1B professional market) Skin lightening widely used in Asia (~90% of market) Daily use product major recurring revenue opportunity 1 Manufacturer revenues are calculated as 50% of retail sales. 2 Source: Medical Insight, Jan

21 Home Use Devices mē Home Use Hair Removal System Dual action More effective on light colored hair Suitable for nearly all skin types Fastest performance on the market CE Mark and available internationally Tanda Pearl Teeth Whitening Home Use System Breakthrough patented ionic technology Pivotal clinical study (120 patients) demonstrated superior results Q launch in the upscale retail consumer market FDA cleared Oct. 2012; launching in U.S. in 1Q

22 Home Use Devices Tanda LED Home Use Devices Clinically validated LED light therapy Multi-pronged distribution model Tanda product categories: Acne and Anti-Aging ēlos Skin Rejuvenation Home Use Device Strategic partnership with Procter & Gamble Designed with strong focus on exceptional results, ease-of-use and safety controls 22

23 elure Advanced Skin Lightening Advanced Skin Brightening Night Cream wins Essence Magazine Best in Black Beauty award Allure Magazine awarded elure 2011 and 2012 Best in Beauty Provides superior efficacy and speed of action Patent-protected until 2023 Strong clinical results and intellectual property Expect to obtain regulatory approval in several Asian markets pending approval Established direct key market introduction in US physician dispensers; Began distribution in Singapore, Hong Kong, Philippines and Israel 23

24 Financial Strength $128 million cash 65,000 Revenues GM (%) OM (%) PAD Results by Quarter 55.6% 54.5% 56.2% 57.3% 60.0% Expanding recurring revenue (31% of PAD segment revenue) 60, % 50.0% Improving margins 55, % Ongoing operating expense reductions 50,000 55,051 56,542 61, % 20.0% Clear market leader with 32% market share 1 of professional segment 45,000 40,000 53,223 51, % 10.1% 11.4% 8.1% 9.1% Q Q Q Q Q % 0.0% 1 Based on US publicly traded companies only 24

25 Third Quarter 2012 Highlights (Non-GAAP) Revenue of $60.1 million, up 6% YoY - International revenue of $40.8 million, up 8% YoY - North America revenue of $19.3 million, up 1% YoY - Service and consumables represented 31% of PAD segment revenue Gross margin of 55.3% 1, up from 53.8% YoY Improved PAD margins sequentially and YoY Operating profit in Professional Aesthetic Device business of $4.9 million 1; (or operating margin of 9.1%); Continued investment in EBU Emerging Business Units revenue of $6.9 million, up 37% YoY and representing ~11% of total revenue Net income of $1.0 million 1, or $0.03 per share (same as prior year) 1 Non-GAAP figures exclude stock-based compensation, amortization and other non-recurring items. 25

26 YTD 2012 Highlights (Non-GAAP) Revenue of $190.9 million, up 14% YoY - International revenue of $128.2 million, up 16% YoY - North America revenue of $62.7 million, up 11% YoY - Service and consumables represented 31% of PAD segment revenue Gross margin of 54.7% 1, up from 53.8% YoY Operating profit in Professional Aesthetic Device business of $16.4 million 1 (or operating margin of 9.6%) ; Continued investment in EBU Emerging Business Units revenue of $20.0 million, up 42% YoY and representing ~10.5% of total revenue Net income of $3.4 million 1, or $0.10 per share up from $0.04 per share YoY 1 Non-GAAP figures exclude stock-based compensation, amortization and other non-recurring items. 26

27 Investment Highlights Growing aesthetic market for non-invasive procedures Global leader in aesthetic devices with 32% worldwide market share 1 Platform aesthetic company with largest worldwide sales, distribution and service network across 90 countries capable of addressing largest and fastest growing segments of market Financially strong with diversified revenue growth drivers and improving margins Increasing recurring revenue through consumable business model Driving revenue growth and margin expansion in profitable PAD segment Investing in EBU segment and exciting growth markets, with focus on improving segment margins ~$252 million revenue 2 (31% recurring 3 ); $128 million in cash 4 ; No debt Eight consecutive quarter of profitability in PAD on a Non-GAAP basis 1 Based on US publicly traded companies listed here (SLTM, CYNO, PMTI, CUTR, ZLTQ); Professional Aesthetic Device Sector 2 Trailing twelve month revenue 3 Based on 3Q 2012 results in PAD segment 4 September 30, 2012 Balance Sheet 27

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