.
Globally, ClearCorrect continued to show solid double-digit growth performance in the second quarter. The implantology business being the main revenue contributor drove growth in all areas in the premium and challenger segment which was attributable to their continued geographical expansion and significant investments in education. Revenue from intraoral scanners, which are the entry point to the digital workflow, progressed well, while the Group continued to build the infrastructure of its digital platform Straumann AXS, endorsing the strategy to offer a fully digital cloud-based clinical workflow.
On 13 August 2024, the Group signed a definitive agreement to sell its DrSmile business to Impress Group. With this, Impress Group aims to build a leadership position in the direct-to-consumer clear aligner space in Europe.
Guillaume Daniellot, Chief Executive Officer, commented: “We are very pleased with the half-year results. Our double-digit revenue growth reflects the team's continued strong execution which led to winning new customers and gaining market share. What stood out in the second quarter were our intensified education efforts in all business areas, with the ITI World Symposium in Singapore being clearly the highlight. On top of these efforts, we launched new customer-centric solutions such as iEXCEL and UN!Q. On the consumer side, selling DrSmile to Impress Group will give this company the necessary scale and patient journey expertise to further strengthen patient care to succeed in the European direct-to-consumer clear aligner market. Due to this new situation, we restated the figures and updated our outlook for 2024.”
In the second quarter, revenue in Swiss francs continued to be impacted by negative currency developments, mainly related to the Euro, the Chinese Renminbi and various emerging currencies. While the Group continued to invest significantly in capacity expansion, education and digital transformation, core EBIT margin reached 27.8% including currency headwinds.
STRATEGIC PROGRESS IN THE second quarter
DrSmile to be sold to Impress Group; Straumann Group to keep minority shareholdings of 20%
On August 13, 2024, the Group signed a definitive agreement to sell its DrSmile business to Impress Group and in return will receive a minority shareholding of 20% (on a fully diluted basis) in the company. The transaction is expected to close in due course.
Founded in 2019 and headquartered in Barcelona, Spain, Impress Group is a leading provider of clear aligners in Europe and operates a network of clinics in countries such as Spain, the UK, Italy and Portugal. With the acquisition of DrSmile, Impress Group is well positioned to compete in this market by combining quality clinical treatment with consumer marketing expertise at scale.
The Impress Group covers the end-to-end patient journey, from the initial consultation to the clinical result, which greatly enhances the patient experience. In addition, Impress Group will benefit from a larger geographical footprint by adding Germany, France, the Netherlands and Sweden. The Impress Group commits to ensure the continuing support of all DrSmile patients currently undergoing treatment while Straumann Group will continue to be a major supplier of clear aligners for Impress Group.
Education as a driver for implantology – ITI World Symposium in Singapore
In the second quarter, educational events and activities helped attract new customers and expand market share. One highlight was the ITI (International Team for Implantology) World Symposium in Singapore held in May. More than 5 700 dental professionals attended this event, which was the largest ITI congress ever. The event was mainly supported by Straumann Group, presenting its latest innovations and organizing many scientific and educational activities, that were highly appreciated by practitioners from more than 100 countries. In parallel, challenger brands like Neodent intensified their education activities across the regions, namely in Brazil, Malaysia and India.
Custom implant prosthetics – UN!Q launched in North America
As one outcome of its significant investment in digital transformation, Straumann Group has launched a truly customer-centric solution in North America: Straumann UN!Q. It is a digital on-demand service, that allows dental laboratories to outsource the planning, design and manufacturing of their patient-specific implant prosthetics. With UN!Q, customers benefit from an extensive portfolio and an on-demand workflow that is tailored to their needs. In line with Straumann Group’s aspiration to become a digitally-powered oral care company, the entire workflow is based on the Group’s digital platform Straumann AXS which is transforming the customer experience for all dental laboratory partners.
Straumann SIRIOS intraoral scanner presented at ITI World Symposium
In May, the intraoral scanner (IOS) Straumann SIRIOS was presented at the ITI World Symposium in Singapore. Thanks to its specific technology, the wireless IOS delivers speed and accuracy to customers and complements the Group’s IOS offering with a solution in the mid- to entry-level segment. While Sirios is an open-system solution, its full integration in Straumann AXS, the Group’s digital platform, supports customers in gaining efficiency in their clinical workflow.
Full acquisition of mininavident – Straumann Falcon launched successfully
In July, Straumann Group completed the acquisition of mininavident, a company based in Liestal, Switzerland, that focuses on developing a miniaturized dynamic navigation system. Its solution, Straumann Falcon, provides guidance during dental-implant surgery by combining free-hand technique with 3D visualization, supporting the clinician in the decisive step of drilling and inserting an implant. Falcon was well perceived at its presentation at the ITI symposium in Singapore. Straumann Group announced in October 2021 that it had acquired 39% of mininavident. The completion of the acquisition supports the Group’s aspiration to offer a differentiated and efficient dynamic navigation system and simplifies development cooperation and market access.
ClearCorrect further enhanced its doctor-facing platforms
Next to intensified education activities, ClearCorrect continued to strengthen its presence in existing markets and further enhanced its doctor-facing platforms for a more efficient practice management. In spring, the new version of the ClearCorrect app, Sync 2.0, was launched globally. It offers clinicians an expanded range of features to easily start, review and manage cases and allows to enter ClearPilot directly. This recently launched software was well received by clinicians, thanks to its advanced editing tools.
Executive Management Board Announcements
Sara Dalmasso will join Straumann Group on August 19, 2024, as Head of the Dental Service Organization (DSO). Sara has held several leadership positions at Omnicell and GE Healthcare, where she has demonstrated her ability to grow franchises and lead diverse teams toward sustainable growth and margin expansion.
After five years at the Straumann Group as Chief People Officer and an impressive career across different industries, Alastair Robertson has decided to retire by the end of 2024. Alastair created significant impact through performing and transforming and made his mark as an exceptional culture leader. Arnoud Michael Middel has succeeded Alastair Robertson in early August as Chief People Officer. Arnoud joined from the Siegfried Group, where he was Chief Human Resources Officer. Over the past 12 years, he supported the company’s dynamic growth and transformation from an HR perspective and was instrumental in building and developing a strong global HR practice. Before joining Siegfried, he held senior HR positions at Syngenta, XL Insurance and Baloise Insurance.
In July it was also announced that Matthias Schupp, Head of Latin America region, decided to leave Straumann Group by the end of October 2024 to become CEO of Medartis. In the last 17 years with the Group, Matthias has held various senior leadership roles, before taking the lead of Latin America and the Neodent team in 2014. He has significantly developed the LATAM region and supported the Neodent expansion to become a global challenger brand. The Group expresses its gratitude to Matthias for all his accomplishments over the many years. The recruitment process for his successor is ongoing.
In July, Straumann Group merged its Data & Tech team and the Digital Platform & Technology department. Thomas Friese has been appointed to lead this newly combined team as Chief Technology & Information Officer (CTIO). Thomas, with Straumann Group for two years, has more than 17 years of successful leadership experience in building high-performance teams and digital platforms. Together with his team, he provided, among other achievements, a seamless, high-quality customer experience through integrated and automated digital dental workflows. Christian Ullrich who was the Chief Information Officer at Straumann Group since 2021, left in July to pursue opportunities outside the company. The Group wants to thank him for the many contributions he has made.
More detailed information on the members of the Executive Management Board can be found here.
REGIONAL PERFORMANCEs in the Second quarter
Market share gains in the EMEA region continued
The Europe, Middle East, and Africa (EMEA) region reported revenue of CHF 261.3 million in the second quarter, or 12.4% organic growth, with markets such as Italy, Iberia, Germany and Eastern European countries as main revenue contributors. The implant business showed strong double-digit growth, primarily driven by the challenger implantology solutions, namely Neodent and Medentika. In the premium segment, Straumann continued to grow and gain market share, further supported by the promising introduction of iEXCEL in May in France, the first market in EMEA to launch. In the B2B orthodontics business, education efforts and intensified customer acquisition of ClearCorrect led to strong growth.
North America delivered solid growth
The North America region reported revenue of CHF 181.4 million in the second quarter, showing a solid 5.3% organic growth. Patient flow dynamic in the second quarter remained the same as in the first quarter. The implantology business remained the primary growth driver, with Straumann gaining market share in the premium segment and Neodent delivering strong results. iEXCEL, the recently launched premium implant system for immediacy treatments, showed positive momentum in the second quarter. ClearCorrect continued to develop its market penetration by improving its value proposition, mainly with general practitioners and also a small number of orthodontists. The demand for digital solutions also showed positive momentum, thanks to good sales of intraoral scanners and the launch of the custom implant prosthetics service UN!Q.
Asia Pacific region continued to grow strongly
The Asia Pacific region achieved revenue of CHF 154.6 million in the second quarter, a strong 33.8% organic revenue growth against a gradually higher comparison base, as the prior-year quarter was still driven by pent-up demand and the VBP roll-out in China. Implantology remained the main revenue contributor with premium implants and Anthogyr growing in China. The challenger brands Anthogyr and Neodent also grew significantly outside China, namely in Australia, India, Thailand and Vietnam. Demand for digital solutions like SmileCloud and the AlliedStar intraoral scanners remained encouraging. The orthodontics business had a positive impact on the regional performance.
Latin America continued to deliver double-digit revenue growth despite heavy floods
In the second quarter, Latin America grew 14.9% organically, leading to CHF 57.7 million in revenue. Brazil, as the primary revenue contributor, maintained its double-digit growth despite a flood disaster in the state of Rio Grande do Sul. Straumann Group also gained market share in mature markets like Brazil, driven by continued strong demand for Neodent solutions. The orthodontics business grew at a high double-digit rate and made a significant contribution to the region’s performance. Digital solutions, namely the Virtuo Vivo intraoral scanner, also contributed to the region’s success. In the second quarter, Straumann Group extended its sales activities to Costa Rica where it started to commercialize the Straumann, Neodent and ClearCorrect portfolio.
OPERATIONS AND FINANCES[8]
In addition to the results reported under IFRS accounting standards, the Group presents ‘core’ results to facilitate a like-for-like comparison. In the first six months of 2024, the following pre-tax effects were defined as non-core items:
Gross profit margin remains at high level
In the first six months of this fiscal year, the Group’s strong topline growth led to a core gross profit of CHF 922.8 million, which is a currency-adjusted increase of CHF 119 million. The corresponding margin remained solid at 72.5%, despite an unfavorable mix and a decrease of 100 basis points due to a negative currency effect compared to 2023.
Core EBIT margin of 27.8%
In the first six months, EBIT increased by CHF 23 million, amounting to CHF 354 million, including currency headwinds. The core EBIT margin reached 27.8%, including currency headwinds, 120 basis points lower than in the prior-year period. Currency fluctuations had a negative impact of 190 basis points on the core EBIT margin, which is notably due to the weakened Euro, US Dollar, Chinese Renminbi and emerging currencies.
In the period under review, core distribution expenses rose by CHF 30 million to CHF 238 million, due to higher sales-force expenses and logistics costs. Core administrative expenses increased by CHF 11 million to CHF 337 million.
Core net profit reached CHF 282 million
Core net financial expenses were reduced by CHF 19 million to CHF 6 million. This improvement primarily reflects a stabilizing currency environment compared to last year, notably in emerging markets. Income taxes amounted to CHF 60 million, resulting in an income tax rate of 17.5%. Core net profit reached CHF 282 million, resulting in a margin of 22.2%. Core basic earnings per share increased from CHF 1.59 to CHF 1.76, compared to the prior-year period.
Free cash flow remained stable
Free cash flow generation was CHF 145 million, CHF 3 million higher than in the prior year. Capital expenditure in the first six months remained at high levels with CHF 84 million spent, which reflects the continued investments in production expansion and digital transformation.
The cash position on 30 June 2024 remained strong, at CHF 334 million.
OUTLOOK 2024 UPDATED – (BARRING UNFORESEEN CIRCUMSTANCES)
The Group remains confident that, amidst the ongoing geopolitical and macroeconomic uncertainties, it will continue to gain market share within its estimated global addressable market of more than CHF 19 billion. The Group also believes in its capability to cater to various customer requirements and price points, its geographic diversification and extensive educational initiatives that equip a greater number of clinicians with the expertise to conduct implant and orthodontic treatments. The Group continues to invest in digital transformation, capacity expansion, and, following the sale of DrSmile, will focus even more on go-to-market activities in the orthodontics business-to-business area. Subsequently, the Group updates its outlook for 2024 for continuing operations: to achieve organic revenue growth in the low double-digit percentage range and profitability in the 27-28% range at constant 2023 currency rates.
Disclaimer
This press release contains forward-looking statements that reflect the current views, beliefs and expectations of management at the time the statements are made. They are subject to risks and uncertainties including, but not confined to, future global economic conditions, pandemics, exchange rates, legal provisions, market conditions, activities by competitors and other factors outside Straumann's control. Should one or more of these risks or uncertainties materialize or should underlying assumptions prove incorrect, actual outcomes may vary materially from those forecasted or expected. Straumann is providing the information in this release as of this date and does not undertake any obligation to update any statements contained in it as a result of new information, future events, or otherwise. This release constitutes neither an offer to sell nor a solicitation to buy any securities.
[1] Figures refer to continuing operations, following the agreement signed on August 13, 2024, to sell the Group’s DrSmile business to Impress Group. Details on the discontinued operations can be found on page 25f.
[2] The ‘core’ figures in this document exclude M&A effects from purchase-price allocation (PPA) amortization and related changes of contingent considerations, impairments, restructuring expenses, legal cases, consolidation result of former associates, and other non-recurring incidents. Details and a reconciliation of the reported and core income statement are provided on pages 12ff.
[3] Constant exchange rate (CER) equals prior-year figures at 2024 currency exchange rates.
[4] Figures refer to continuing operations, following the agreement signed on August 13, 2024, to sell the Group’s DrSmile business to Impress Group. Details on the discontinued operations can be found on page 25f.
[5] Figures refer to continuing operations, following the agreement signed on August 13, 2024, to sell the Group’s DrSmile business to Impress Group. Details on the discontinued operations can be found on page 25f.
[6] Regional revenue figures including the DrSmile business can be found on page 9.
[7] Constant exchange rate (CER) equals prior-year figures at 2024 currency exchange rates.
[8] The numbers stated in the below paragraph reflect continuing operations.
[9] Constant exchange rate (CER) equals prior-year figures at 2024 currency exchange rates.
- Half-year revenue reached CHF 1.3 billion1, growing 16.1%1 organically, achieving CHF 654.9 million1 or 14.8%1 in the second quarter
- Core2 EBIT margin at 27.8%1 including currency headwinds, in the first half year
- DrSmile to be sold to Impress Group; Straumann Group to keep minority of 20% in the combined entity
- Transitions in the Executive Management Board
- Updated outlook 2024 for continuing operations: organic revenue growth in the low double-digit percentage range and profitability in the 27-28% range at constant 2023 currency rates
Globally, ClearCorrect continued to show solid double-digit growth performance in the second quarter. The implantology business being the main revenue contributor drove growth in all areas in the premium and challenger segment which was attributable to their continued geographical expansion and significant investments in education. Revenue from intraoral scanners, which are the entry point to the digital workflow, progressed well, while the Group continued to build the infrastructure of its digital platform Straumann AXS, endorsing the strategy to offer a fully digital cloud-based clinical workflow.
On 13 August 2024, the Group signed a definitive agreement to sell its DrSmile business to Impress Group. With this, Impress Group aims to build a leadership position in the direct-to-consumer clear aligner space in Europe.
Guillaume Daniellot, Chief Executive Officer, commented: “We are very pleased with the half-year results. Our double-digit revenue growth reflects the team's continued strong execution which led to winning new customers and gaining market share. What stood out in the second quarter were our intensified education efforts in all business areas, with the ITI World Symposium in Singapore being clearly the highlight. On top of these efforts, we launched new customer-centric solutions such as iEXCEL and UN!Q. On the consumer side, selling DrSmile to Impress Group will give this company the necessary scale and patient journey expertise to further strengthen patient care to succeed in the European direct-to-consumer clear aligner market. Due to this new situation, we restated the figures and updated our outlook for 2024.”
In the second quarter, revenue in Swiss francs continued to be impacted by negative currency developments, mainly related to the Euro, the Chinese Renminbi and various emerging currencies. While the Group continued to invest significantly in capacity expansion, education and digital transformation, core EBIT margin reached 27.8% including currency headwinds.
STRATEGIC PROGRESS IN THE second quarter
DrSmile to be sold to Impress Group; Straumann Group to keep minority shareholdings of 20%
On August 13, 2024, the Group signed a definitive agreement to sell its DrSmile business to Impress Group and in return will receive a minority shareholding of 20% (on a fully diluted basis) in the company. The transaction is expected to close in due course.
Founded in 2019 and headquartered in Barcelona, Spain, Impress Group is a leading provider of clear aligners in Europe and operates a network of clinics in countries such as Spain, the UK, Italy and Portugal. With the acquisition of DrSmile, Impress Group is well positioned to compete in this market by combining quality clinical treatment with consumer marketing expertise at scale.
The Impress Group covers the end-to-end patient journey, from the initial consultation to the clinical result, which greatly enhances the patient experience. In addition, Impress Group will benefit from a larger geographical footprint by adding Germany, France, the Netherlands and Sweden. The Impress Group commits to ensure the continuing support of all DrSmile patients currently undergoing treatment while Straumann Group will continue to be a major supplier of clear aligners for Impress Group.
Education as a driver for implantology – ITI World Symposium in Singapore
In the second quarter, educational events and activities helped attract new customers and expand market share. One highlight was the ITI (International Team for Implantology) World Symposium in Singapore held in May. More than 5 700 dental professionals attended this event, which was the largest ITI congress ever. The event was mainly supported by Straumann Group, presenting its latest innovations and organizing many scientific and educational activities, that were highly appreciated by practitioners from more than 100 countries. In parallel, challenger brands like Neodent intensified their education activities across the regions, namely in Brazil, Malaysia and India.
Custom implant prosthetics – UN!Q launched in North America
As one outcome of its significant investment in digital transformation, Straumann Group has launched a truly customer-centric solution in North America: Straumann UN!Q. It is a digital on-demand service, that allows dental laboratories to outsource the planning, design and manufacturing of their patient-specific implant prosthetics. With UN!Q, customers benefit from an extensive portfolio and an on-demand workflow that is tailored to their needs. In line with Straumann Group’s aspiration to become a digitally-powered oral care company, the entire workflow is based on the Group’s digital platform Straumann AXS which is transforming the customer experience for all dental laboratory partners.
Straumann SIRIOS intraoral scanner presented at ITI World Symposium
In May, the intraoral scanner (IOS) Straumann SIRIOS was presented at the ITI World Symposium in Singapore. Thanks to its specific technology, the wireless IOS delivers speed and accuracy to customers and complements the Group’s IOS offering with a solution in the mid- to entry-level segment. While Sirios is an open-system solution, its full integration in Straumann AXS, the Group’s digital platform, supports customers in gaining efficiency in their clinical workflow.
Full acquisition of mininavident – Straumann Falcon launched successfully
In July, Straumann Group completed the acquisition of mininavident, a company based in Liestal, Switzerland, that focuses on developing a miniaturized dynamic navigation system. Its solution, Straumann Falcon, provides guidance during dental-implant surgery by combining free-hand technique with 3D visualization, supporting the clinician in the decisive step of drilling and inserting an implant. Falcon was well perceived at its presentation at the ITI symposium in Singapore. Straumann Group announced in October 2021 that it had acquired 39% of mininavident. The completion of the acquisition supports the Group’s aspiration to offer a differentiated and efficient dynamic navigation system and simplifies development cooperation and market access.
ClearCorrect further enhanced its doctor-facing platforms
Next to intensified education activities, ClearCorrect continued to strengthen its presence in existing markets and further enhanced its doctor-facing platforms for a more efficient practice management. In spring, the new version of the ClearCorrect app, Sync 2.0, was launched globally. It offers clinicians an expanded range of features to easily start, review and manage cases and allows to enter ClearPilot directly. This recently launched software was well received by clinicians, thanks to its advanced editing tools.
Executive Management Board Announcements
Sara Dalmasso will join Straumann Group on August 19, 2024, as Head of the Dental Service Organization (DSO). Sara has held several leadership positions at Omnicell and GE Healthcare, where she has demonstrated her ability to grow franchises and lead diverse teams toward sustainable growth and margin expansion.
After five years at the Straumann Group as Chief People Officer and an impressive career across different industries, Alastair Robertson has decided to retire by the end of 2024. Alastair created significant impact through performing and transforming and made his mark as an exceptional culture leader. Arnoud Michael Middel has succeeded Alastair Robertson in early August as Chief People Officer. Arnoud joined from the Siegfried Group, where he was Chief Human Resources Officer. Over the past 12 years, he supported the company’s dynamic growth and transformation from an HR perspective and was instrumental in building and developing a strong global HR practice. Before joining Siegfried, he held senior HR positions at Syngenta, XL Insurance and Baloise Insurance.
In July it was also announced that Matthias Schupp, Head of Latin America region, decided to leave Straumann Group by the end of October 2024 to become CEO of Medartis. In the last 17 years with the Group, Matthias has held various senior leadership roles, before taking the lead of Latin America and the Neodent team in 2014. He has significantly developed the LATAM region and supported the Neodent expansion to become a global challenger brand. The Group expresses its gratitude to Matthias for all his accomplishments over the many years. The recruitment process for his successor is ongoing.
In July, Straumann Group merged its Data & Tech team and the Digital Platform & Technology department. Thomas Friese has been appointed to lead this newly combined team as Chief Technology & Information Officer (CTIO). Thomas, with Straumann Group for two years, has more than 17 years of successful leadership experience in building high-performance teams and digital platforms. Together with his team, he provided, among other achievements, a seamless, high-quality customer experience through integrated and automated digital dental workflows. Christian Ullrich who was the Chief Information Officer at Straumann Group since 2021, left in July to pursue opportunities outside the company. The Group wants to thank him for the many contributions he has made.
More detailed information on the members of the Executive Management Board can be found here.
REGIONAL PERFORMANCEs in the Second quarter
Market share gains in the EMEA region continued
The Europe, Middle East, and Africa (EMEA) region reported revenue of CHF 261.3 million in the second quarter, or 12.4% organic growth, with markets such as Italy, Iberia, Germany and Eastern European countries as main revenue contributors. The implant business showed strong double-digit growth, primarily driven by the challenger implantology solutions, namely Neodent and Medentika. In the premium segment, Straumann continued to grow and gain market share, further supported by the promising introduction of iEXCEL in May in France, the first market in EMEA to launch. In the B2B orthodontics business, education efforts and intensified customer acquisition of ClearCorrect led to strong growth.
North America delivered solid growth
The North America region reported revenue of CHF 181.4 million in the second quarter, showing a solid 5.3% organic growth. Patient flow dynamic in the second quarter remained the same as in the first quarter. The implantology business remained the primary growth driver, with Straumann gaining market share in the premium segment and Neodent delivering strong results. iEXCEL, the recently launched premium implant system for immediacy treatments, showed positive momentum in the second quarter. ClearCorrect continued to develop its market penetration by improving its value proposition, mainly with general practitioners and also a small number of orthodontists. The demand for digital solutions also showed positive momentum, thanks to good sales of intraoral scanners and the launch of the custom implant prosthetics service UN!Q.
Asia Pacific region continued to grow strongly
The Asia Pacific region achieved revenue of CHF 154.6 million in the second quarter, a strong 33.8% organic revenue growth against a gradually higher comparison base, as the prior-year quarter was still driven by pent-up demand and the VBP roll-out in China. Implantology remained the main revenue contributor with premium implants and Anthogyr growing in China. The challenger brands Anthogyr and Neodent also grew significantly outside China, namely in Australia, India, Thailand and Vietnam. Demand for digital solutions like SmileCloud and the AlliedStar intraoral scanners remained encouraging. The orthodontics business had a positive impact on the regional performance.
Latin America continued to deliver double-digit revenue growth despite heavy floods
In the second quarter, Latin America grew 14.9% organically, leading to CHF 57.7 million in revenue. Brazil, as the primary revenue contributor, maintained its double-digit growth despite a flood disaster in the state of Rio Grande do Sul. Straumann Group also gained market share in mature markets like Brazil, driven by continued strong demand for Neodent solutions. The orthodontics business grew at a high double-digit rate and made a significant contribution to the region’s performance. Digital solutions, namely the Virtuo Vivo intraoral scanner, also contributed to the region’s success. In the second quarter, Straumann Group extended its sales activities to Costa Rica where it started to commercialize the Straumann, Neodent and ClearCorrect portfolio.
OPERATIONS AND FINANCES[8]
In addition to the results reported under IFRS accounting standards, the Group presents ‘core’ results to facilitate a like-for-like comparison. In the first six months of 2024, the following pre-tax effects were defined as non-core items:
- Special items, amortization of acquisition-related intangible assets and changes in the fair value of related contingent considerations, amounting to CHF 10 million
- Restructuring costs of CHF 2 million
- Litigation costs of CHF 5 million
Gross profit margin remains at high level
In the first six months of this fiscal year, the Group’s strong topline growth led to a core gross profit of CHF 922.8 million, which is a currency-adjusted increase of CHF 119 million. The corresponding margin remained solid at 72.5%, despite an unfavorable mix and a decrease of 100 basis points due to a negative currency effect compared to 2023.
Core EBIT margin of 27.8%
In the first six months, EBIT increased by CHF 23 million, amounting to CHF 354 million, including currency headwinds. The core EBIT margin reached 27.8%, including currency headwinds, 120 basis points lower than in the prior-year period. Currency fluctuations had a negative impact of 190 basis points on the core EBIT margin, which is notably due to the weakened Euro, US Dollar, Chinese Renminbi and emerging currencies.
In the period under review, core distribution expenses rose by CHF 30 million to CHF 238 million, due to higher sales-force expenses and logistics costs. Core administrative expenses increased by CHF 11 million to CHF 337 million.
Core net profit reached CHF 282 million
Core net financial expenses were reduced by CHF 19 million to CHF 6 million. This improvement primarily reflects a stabilizing currency environment compared to last year, notably in emerging markets. Income taxes amounted to CHF 60 million, resulting in an income tax rate of 17.5%. Core net profit reached CHF 282 million, resulting in a margin of 22.2%. Core basic earnings per share increased from CHF 1.59 to CHF 1.76, compared to the prior-year period.
Free cash flow remained stable
Free cash flow generation was CHF 145 million, CHF 3 million higher than in the prior year. Capital expenditure in the first six months remained at high levels with CHF 84 million spent, which reflects the continued investments in production expansion and digital transformation.
The cash position on 30 June 2024 remained strong, at CHF 334 million.
OUTLOOK 2024 UPDATED – (BARRING UNFORESEEN CIRCUMSTANCES)
The Group remains confident that, amidst the ongoing geopolitical and macroeconomic uncertainties, it will continue to gain market share within its estimated global addressable market of more than CHF 19 billion. The Group also believes in its capability to cater to various customer requirements and price points, its geographic diversification and extensive educational initiatives that equip a greater number of clinicians with the expertise to conduct implant and orthodontic treatments. The Group continues to invest in digital transformation, capacity expansion, and, following the sale of DrSmile, will focus even more on go-to-market activities in the orthodontics business-to-business area. Subsequently, the Group updates its outlook for 2024 for continuing operations: to achieve organic revenue growth in the low double-digit percentage range and profitability in the 27-28% range at constant 2023 currency rates.
Disclaimer
This press release contains forward-looking statements that reflect the current views, beliefs and expectations of management at the time the statements are made. They are subject to risks and uncertainties including, but not confined to, future global economic conditions, pandemics, exchange rates, legal provisions, market conditions, activities by competitors and other factors outside Straumann's control. Should one or more of these risks or uncertainties materialize or should underlying assumptions prove incorrect, actual outcomes may vary materially from those forecasted or expected. Straumann is providing the information in this release as of this date and does not undertake any obligation to update any statements contained in it as a result of new information, future events, or otherwise. This release constitutes neither an offer to sell nor a solicitation to buy any securities.
[1] Figures refer to continuing operations, following the agreement signed on August 13, 2024, to sell the Group’s DrSmile business to Impress Group. Details on the discontinued operations can be found on page 25f.
[2] The ‘core’ figures in this document exclude M&A effects from purchase-price allocation (PPA) amortization and related changes of contingent considerations, impairments, restructuring expenses, legal cases, consolidation result of former associates, and other non-recurring incidents. Details and a reconciliation of the reported and core income statement are provided on pages 12ff.
[3] Constant exchange rate (CER) equals prior-year figures at 2024 currency exchange rates.
[4] Figures refer to continuing operations, following the agreement signed on August 13, 2024, to sell the Group’s DrSmile business to Impress Group. Details on the discontinued operations can be found on page 25f.
[5] Figures refer to continuing operations, following the agreement signed on August 13, 2024, to sell the Group’s DrSmile business to Impress Group. Details on the discontinued operations can be found on page 25f.
[6] Regional revenue figures including the DrSmile business can be found on page 9.
[7] Constant exchange rate (CER) equals prior-year figures at 2024 currency exchange rates.
[8] The numbers stated in the below paragraph reflect continuing operations.
[9] Constant exchange rate (CER) equals prior-year figures at 2024 currency exchange rates.
