Henry Schein 2008 Investor Relations Presentation

8/9/2019 Henry Schein 2008 Investor Relations Presentation

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NASDAQ: HSICwww.henryschein.com



HSIC is the largest distributor of healthcare productsand services to office-based practitioners

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 23 countries

Fortune 500 ® company

Member of the NASDAQ 100 ® Index

Corporate Overview

2



1995 Worldwide Sales:$616 million 2009 Worldwide Sales:$6.5 billion

Dental

52%

Tech

4%

Int'l

17%Medical

27%

Medical22%

Dental

38%

Tech

3%

Int'l37%

From Continuing Operations

14 Years as a Public Company

3



Serving Large and Growing Markets

(1) Includes Animal Health(2) Proforma includes Butler Animal Health

Share Size Share Size

Market ($ in billions) Market ($ in billions)

U.S. & Canada Dental 11% $ 3.0 U.S. & Canada Dental 40% $ 6.0

U.S. Medical(1)

3% 4.8 U.S. Medical 17% 7.0Europe Dental 5% 2.2 U.S. Veterinary (2) 28% 3.0

TOTAL 6% $10.0 Europe Dental 19% 7.5

Europe Medical 3% 3.0

Europe Veterinary 24% 2.5

TOTAL 23% $29.0

1995 2009

Consistent Market Growth

4



Attractive Market Dynamics

(1) U.S. Census Bureau

75m

93m

115m

131m

144m

30m

60m

90m

120m

150m

180m

1990 2000 2010 2020 2030

U . S .

P o p u l a t i o n A g

e 4 5 - 8 4 ( m i l l i o n s ) 1

45-84 year-old population projected toalmost double between 1990-2030

Aging Population Driving Healthcare Spending

5



Consistent Growth

Recession Resistant

Fragmented Competitors

Positive Business Environment

Fragmented Customer Base

Markets Served

6



Efficiency

Productivity

Profitability

Allowing our customers to focus ondelivering quality care to their patients

Company Objective

ImprovePractice

Our primary objective is to

partner with our customers

7



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

8



1. Unique Sales and Marketing Expertise

• Strong brand identity with over 75 years ofexperience

• Extensive direct marketing programs

• Highly-trained sales professionals

2,750 field sales consultants and specialists

1,400 telesales representatives

Extensive training to develop consultative

selling skills

9



Reps visit the website regularly

Extensive Consultative Selling Skills

Classroom and Web-Based Training

ClinicalTechniques

PracticeManagement

Solutions

Products

10



Driving more productive

customer interactions

Customer Analysis Tool (CAT)

Proprietary call planning system Color coding ranks sales activity

11



75-80% Utilization……With Capacity for Growth

2. Centralized Leveragable Infrastructure

12



3. Broad Product and Services Offering

90,000 SKUsin stock

100,000special orderitems

available

~20,000proprietaryproducts

Competitive Prices

13



Exclusive Product Offerings

14



Design Services

Value-Added Services

15



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%

• 2009 electronic sales up over 11%

• Innovative Customer Loyaltyprograms

16



Innovative Customer Loyalty Programs

• Designed to attract, retain, and reward preferred customers

• Over 27,500 U.S. Dental members, 11,000 U.S.

Medical members, and 8,000 International members

• Drives faster sales and electronic ordering growth

• Similar programs active in 6 international markets

17



5. Practice Management Solutions

Large User Base

Helping our customers become more

efficient and profitable

18



Key Strategies for Future Growth

• 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

Transition from a Pure Distribution Company

Goal - Partner With Customers to Improve Quality of Care

19



Key Strategies for Future Growth

• 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

Pursue Complementary Initiatives…

… To Accelerate Sales and Operating Income Growth

20



Recent Acquisition

On January 4, 2010, Henry Schein, Inc. announced the formation ofButler Schein Animal Health.

• Creates the largest distributor of products and services tothe U.S. Companion Animal market

• LTM combined sales of approximately $850 million

• $620 million incremental sales to HSIC’s existing business

• Consolidated subsidiary 50.1% - owned

• National presence with 300 field sales representatives and200 telesales and customer support representatives

• Slightly dilutive (2 to 4¢) in 2010 primarily due to integrationexpenses

• Accretive (2 to 4¢) in year 2

21



Financial Update



Safe Harbor Provision

In accordance with the “Safe Harbor” provisions of the Private Securities Litigation Reform Act of 1995, we provide the

following cautionary remarks regarding important factors that, among others, could cause future results to differ materiallyfrom the forward-looking statements, expectations and assumptions expressed or implied herein. All forward-lookingstatements made by us are subject to risks and uncertainties and are not guarantees of future performance. These forward-

looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results,performance and achievements or industry results to be materially different from any future results, performance orachievements expressed or implied by such forward-looking statements. These statements are identified by the use of suchterms as “may,” “could,” “expect,” “intend,” “believe,” “plan,” “estimate,” “forecast,” “project,” “anticipate” or other comparableterms. A full discussion of our operations and financial condition, including factors that may affect our business and futureprospects, is contained in documents we have filed with the SEC and will be contained in all subsequent periodic filings wemake with the SEC. These documents identify in detail important risk factors that could cause our actual performance todiffer materially from current expectations.Risk factors and uncertainties that could cause actual results to differ materially from current and historical results include,

but are not limited to: decreased customer demand and changes in vendor credit terms; disruptions in financial markets;general economic conditions; effects of a highly competitive market; changes in the healthcare industry; changes inregulatory requirements; risks from expansion of customer purchasing power and multi-tiered costing structures; risksassociated with our international operations; fluctuations in quarterly earnings; our dependence on third parties for themanufacture and supply of our products; transitional challenges associated with acquisitions, including the failure to achieveanticipated synergies; financial risks associated with acquisitions; regulatory and litigation risks; the dependence on ourcontinued product development, technical support and successful marketing in the technology segment; risks from disruptionto our information systems; our dependence upon sales personnel, manufacturers and customers; our dependence on oursenior management; possible increases in the cost of shipping our products or other service issues with our third-partyshippers; risks from rapid technological change; possible volatility of the market price of our common stock; certainprovisions in our governing documents that may discourage third-party acquisitions of us; and changes in tax legislation.The order in which these factors appear should not be construed to indicate their relative importance or priority.We caution that these factors may not be exhaustive and that many of these factors are beyond our ability to control orpredict. Accordingly, any forward-looking statements contained herein should not be relied upon as a prediction of actualresults. We undertake no duty and have no obligation to update forward-looking statements.

23



18%

26%29bp

28%

17%

Sales

Operating IncomeOperating Margin

Net Income

Diluted EPS

$616.2

$19.33.1%

$9.1

$0.34

1995

$6,538.3

$468.77.2%

$289.5

$3.20

CompoundAnnual

Growth Rate2009

From continuing operations and excluding certain non-recurring items.

Growth Since Going Public

($ in millions, except per share data)

24



Full Year 2009

FY09 GrowthFY08

($ in millions, except per share data)

Sales $6,538.3 $6,380.4 2.5%

Operating Income $468.7 $442.5 5.9%

Operating Margin 7.17% 6.94% 23 bp

Net Income $289.5 $266.4 8.7%

Diluted EPS $3.20 $2.92 9.6%


Financial Highlights

25



Net Sales

4,513

5,022

5,890

6,380 6,538

$1,000

$3,000

$5,000

$7,000

2005 2006 2007 2008 2009

($ in millions)

From Continuing Operations.

19%

11% 17%

8%

CAGR 12%

2%

26



Long-Term Financial Objectives

¹Local currency ²Adjusted for extra week in 2005 ³Adjusted to exclude sales of certain lower-margin pharmaceutical products

2005 2006 ² 2007 2008 ³ 2009 Internal 8% 7% 7% 4% 1%Acquisition 11% 5% 7% 6% 5%

Total Sales Growth 19% 12% 14% 10% 6%As originally reported except as noted

Actual Sales Growth ¹

Future sales growth will be a balance

of internal growth and acquisitions

Goal:

• To continue to grow internal sales faster thanmarket

27



Strategic Acquisitions

Key Strategic Benefit 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 $20mExcellence• 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

2010 • Butler Creates US market leader in companion animal health $620m

Successfully integrated over 30 acquisitions since 2000

Revenue 1

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.

28



$262

$304

$387

$443 $469

$0

$100

$200

$300

$400

$500

2005 2006 2007 2008 2009

($ in Millions)

Operating Income and Margin

16%


27%

14%

6%

5.8% 6.1% 6.6% 6.9% 7.2%OperatingMargin

28%

CAGR 18%

29



Actual Results: 1995 2009

Operating Margin 3.1% 7.2%



Average 29 bp annual increase since going public

Goals:

• Balanced internal and acquisition sales growth• Continued operating margin expansion

30



Diluted EPS and Net Income

$1.67

$2.00

$2.55

$2.92$3.20

$0.00

$1.00

$2.00

$3.00

2005 2006 2007 2008 2009

21% 20% 28%

15%


$147.8 $180.0 $232.5 $266.4 $289.0NetIncome

CAGR 18%

10%

31




Actual Results:

1995 2009

EPS $.34 $3.20

All amounts from continuing operations and excluding certain non-recurring items.

17% CAGR since going public

Goals:

• Balanced internal and acquisition sales growth• Continued operating margin expansion

• Predictable Earnings Per Share growth

32



Operating Cash Flow

$254.9

$50.8

$235.5

$67.0

$270.3

$56.8

$384.8

$50.9

$396.9

$51.6

$0.0

$100.0

$200.0

$300.0

$400.0

2005 2006 2007 2008 2009

Operating Cash Flow Capital Expenditures

($ in Millions)

33




Goals:

• Balanced internal and acquisition sales growth

• Continued operating margin expansion

• Predictable Earnings Per Share growth

All amounts are from continuing operations restated to exclude certain non-recurring items and restructuring costs.

Since 2005 operating cash flow has exceeded net income by over $400 million

• Strong cash flow from operations

34



Strong Balance Sheet

Cash & Equiv.

Working Capital

Total Assets

Total Debt

Equity

DSO

Inventory Turns

Net Debt to Total

Capitalization Ratio

28.0%

24.0%

19.4%17.1%

11.0%

0%

10%

20%

30%

40%

2005 2006 2007 2008 2009

Debt to Total Capitalization Ratio

$471.2

$1,127.3

$3,836.0

$267.9

$2,161.5

38.0 days

6.5x

-10.4%

($ in millions)

December 26, 2009

HSIC has a $400m committed credit line through 2013 at an attractive interest rate.

35



Investment Merits

• Leading presence in fragmented growing markets

• Providing high quality service to office-basedhealthcare practitioners

• Strong brand recognition

• Highly experienced management team

• Excellent growth opportunities

Documents

Henry Schein 2008 Investor Relations Presentation