henry schein

NASDAQ: HSICwww.henryschein.com

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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 practitionersBroad range of value-added products and services

• One-stop shop for our customersOperations or affiliates in 20 countries Fortune 500® companyMember of the NASDAQ 100® Index

Corporate Overview

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1995 Worldwide Sales: $616 million

2007 Worldwide Sales: $5.9 billion

Dental52%

Tech4%

Int'l17%

Medical27%

Tech2%

Int'l30%

Dental42%

Medical26%

From Continuing Operations

12 Years as a Public Company

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(1) Includes Animal Health

Share Size Share SizeMarket ($ in billions) ($ in billions)U.S. & Canada Dental 11% $3.0 40% 6.0U.S. Medical (1) 3% 4.8 17% 9.0Europe Dental 5% 2.2 18% 6.5Europe Medical (1) ___ _____ 15% 4.0TOTAL 6% $10.0 23% $25.5

20071995Estimated Market

Serving Large and Growing Markets

5% Annual Market Growth

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Attractive Market Dynamics

(1) U.S. Census Bureau

144m

131m

75m

93m

115m

30m

60m

90m

120m

150m

180m

1990 2000 2010 2020 2030

U.S

. Pop

ulat

ion

Age

45-

84 (m

illio

ns)1

45-84 year-old population projected to almost double between 1990-2030

Aging Population Driving Healthcare Spending

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Consistent Growth

Recession Resistant

Fragmented Competitors

Positive Business Environment

Fragmented Customer Base

Markets Served

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Dental Demand is Increasing

Increased dental insurance coverage2

Greater emphasis on cosmetic dentistry3

Growing awareness of correlation between oral health and overall well-beingIncreasing use of dental pharmaceutical therapies and non-invasive diagnostic proceduresGreater dental practice productivity required(1) Centers for Medicare & Medicaid Services, National Health Expenditures Projections(2) 57% of the US population covered in 2006 v. 49% in 1996; NADP(3) Demand has increased 13% over the past 3 years; AACD

Dental services expenditures are expected to increase 6% in each of the next 5 years1

Key Growth Drivers

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Medical Demand is Increasing

Aging populationMigration of procedures from acute-care settings to physician and alternate-care setting

63% of all surgeries are out-patient procedures2

Continued growth in use of vaccines, injectables and other pharmaceuticals in the alternate-care settingStrong growth in companion animal health business

(1) Centers for Medicare & Medicaid Services, National Health Expenditures Projections(2) Centers for Disease Control and Prevention

Physician and clinical services expenditures are expected to increase 6% in

each of the next 5 years1

Key Growth Drivers

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EfficiencyProductivityProfitability

Allowing our customers to focus on delivering quality care to their patients

Company Objective

Improve Practice

Our primary objective is to partner with our customers

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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

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1. Unique Sales and Marketing Expertise

• Strong brand identity with over 75 years of experience

• Extensive direct marketing programs • Highly trained sales professionals

2,600 field sales consultants and specialists1,450 telesales representativesExtensive training to develop consultative selling skills

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60% of reps visit the web site monthly60% of reps visit the web site monthly

Extensive Consultative Selling Skills

Classroom and Web-Based Training

Clinical Techniques

Practice Management

Solutions

Products

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Driving more productive customer interactions

Customer Analysis Tool (CAT)

Proprietary call planning systemColor coding ranks sales activity

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Scalable Centralized Supply Chain

Product Procurement

Expertise

Inventory Management

e-commerce

70-75% utilization……With Capacity for Growth

2. Centralized Leveragable Infrastructure

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3. Broad Product and Services Offering

90,000 SKUs in stock

100,000 special order

itemsavailable

~20,000 proprietary products

Competitive Prices

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Exclusive Product Offerings

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Design Services

Value-Added Services

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4. Superior Customer Service

99% Order Accuracy• 24/7 ordering by mail, fax, telephone, CD-Rom and Web

• In North America:99% fulfillment levels99% of orders shipped same day99% of orders delivered within 2 days (~ 90% next day)99% order accuracy

• 2007 web sales up over 25%

• Innovative Customer Loyalty programs

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Innovative Customer Loyalty Programs

• Designed to attract, retain, and reward dental customers

• Over 25,000 U.S. Dental members

• Drives faster sales and electronic ordering growth

• Similar programs active in 12 international markets• Program recently introduced in U.S. Medical

business

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5. Practice Management Solutions

Installed Base of Over 52,000 Users

Helping our customers become more efficient and profitable

• #1 in customer satisfaction• Integrates with digital

equipment• Provides cross-selling

opportunities

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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

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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

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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.

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21%

28%

28bp1

31%

18%

Sales

Operating Income

Operating Margin

Net Income

Diluted EPS

$616.2

$19.3

3.1%

$9.1

$0.34

1995

$5,920.2

$386.3

6.5%

$235.0

$2.58

Compound Annual

Growth Rate2007

($ in millions, except per share data)

From continuing operations and excluding certain non-recurring items1 Average annual expansion

Growth Since Going Public

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First Quarter 2008

Financial Highlights

Q1 2008 GrowthQ1 2007

Sales $1,525.6 $1,310.1 16.4%

Operating Income $85.2 $73.7 15.6%

Operating Margin 5.59% 5.63% (4) bp

Net Income $52.3 $43.5 20.3%

Diluted EPS $0.57 $0.48 18.8%

($ in millions, except per share data)

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Net Sales

$2,676$3,181

$3,795

$4,526$5,048

$5,920

$1,000

$3,000

$5,000

$7,000

2002 2003 2004 2005 2006 2007

($ in millions)

19%19%

19%12%

17%

11%

CAGR 17%

From Continuing Operations

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Long-Term Financial Objectives

Internal Sales Growth GoalIndustry growth rate 5%

+ Increase in market share 2- 4%Internal Sales Growth Goal 7- 9%

* Local currency ** Adjusted for extra week in 2005

2002 2003 2004 2005 2006**2007Internal 9% 13% 8% 8% 7% 7%Acquisition 1% 2% 11% 11% 5% 7%

Total Sales Growth 10% 15% 19% 19% 12% 14%As originally reported except as noted

Actual Sales Growth*

Future sales growth will be a balance of internal growth and acquisitions

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Strategic Acquisitions

2004 Key Strategic Benefit• Demedis Group Expands European dental equipment offering• Camlog Entrée into the growing market for dental implants

2005• Ash Temple Expands presence in Canadian Dental market• Halas / Shalfoon Strengthens position in Australia and New Zealand

2006• NLS Animal Health Expands presence in U.S. Veterinary market• Darby Companies Strengthens U.S. Dental, Medical and Lab presence• Provet Expands presence in European Veterinary market

2007• Software of

Excellence Provides leading position in U.K. Dental Software market• W&J Dunlop Expands presence in European Veterinary market

Successfully integrated over 30 acquisitions since 2000Revenue1

$345m

$60m

$110m$220m

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

$100m

$50m

$20m$340m

$30m

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$179$217 $205

$262$304

$386

$0

$100

$200

$300

$400

2002 2003 2004 2005 2006 2007

($ in Millions)

Operating Income and Margin

21%

(1) Reflects absence of influenza vaccine profits

-6%28%

16%

27%

All amounts from continuing operations restated to include expensing of stock-based compensation and excludes non-recurring income and merger and restructuring costs

6.7% 6.8% 5.4% 5.8% 6.0% 6.5%Operating Margin

34%

CAGR 17%

1

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Actual Results: 1995 2007

Operating Margin 3.1% 6.5%



Average 28 bp annual increase since going public

Goals:• Internal sales growth of at least 7-9%.

• Operating margin expansion of 30 to 50 bpper year

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Diluted EPS and Net Income

$1.19$1.44 $1.39

$1.70$2.03

$2.58

$0.00

$1.00

$2.00

$3.00

2002 2003 2004 2005 2006 2007

21% -3%22%

19%

27%


(1) Reflects absence of influenza vaccine profits

$105.6 $128.3 $122.5 $150.7 $182.7 $235.0Net Income

29%

CAGR 17%

1

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Goals:• Internal sales growth of at least 7-9%

• Operating margin expansion of 30 to 50 bp per year

Actual Results:

1995 2007

EPS $.34 $2.58


18% CAGR since going public

• Earnings Per Share growth in the mid-teens or greater (before acquisitions)

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Operating Cash Flow

$129.1

$47.5

$123.2

$39.0

$182.6

$37.8

$254.8

$50.8

$235.3

$67.0

$270.2

$56.8

$0.0

$100.0

$200.0

$300.0

2002 2003 2004 2005 2006 2007

Operating Cash Flow Capital Expenditures

($ in Millions)

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Goals:

• Internal sales growth of at least 7-9%

• Operating margin expansion of 30 to 50 bp per year

• Earnings Per Share growth in the mid-teens or greater (before acquisitions)

Since 2002 operating cash flow has exceeded net income by over $265 million

Actual Results


• Cash flow from operations to exceed net income

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Strong Balance Sheet

Cash & Equiv.

Working Capital

Total Assets

Total Debt

Equity

DSOs

Inventory Turns

Net Debt to Total Capitalization Ratio

22.5%20.3%

32.6%29.6%

25.3%

20.4%

0%

10%

20%

30%

40%

2002 2003 2004 2005 2006 2007

Debt to Total Capitalization Ratio$239.0

$983.8

$3,388.5

$458.6

$1,885.8

42.2 days

6.3x

10.4%

($ in millions)

March 29, 2008

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Investment Merits

• Leading presence in fragmented growing markets

• Providing high quality service to office-based healthcare practitioners

• Strong brand recognition

• Highly experienced management team

• Significant growth opportunities

henry schein

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