Straumann reports full-year revenues of CHF 686m

Straumann reports full-year revenues of CHF 686m

  *Solid growth in North America offsets sluggish Europe, while Asia/Pacific
    remains stable
  *Gross profit margin improves 130 base points to 78%; EBIT margin at 15%,
    excluding exceptionals
  *Reported profits reduced by impairment and other exceptional charges1
  *Vision 2020 and market fundamentals intact
  *Neodent performs in line with expectations
  *Unchanged dividend of CHF 3.75 per share proposed
  *New CEO to drive performance

(in CHF million)                 FY 2012  FY 2012       FY 2011  FY 2011
                                          excluding              excluding
                                 reported               reported
                                          exceptionals1          exceptionals1
Revenue                          686.3                  693.6
Change in CHF%                   (1.1)                  (6.0)
Change in l.c.%                  (1.6)                  4.1
Change in l.c. % (excl. iTero2)  (1.0)
Gross profit                     531.5    534.4         528.5
Margin in %                      77.5     77.9          76.2
Change in %                      0.6      1.1           (10.0)
EBITDA                           117.4    130.4         157.4
Margin in %                      17.1     19.0          22.7
Change in %                      (25.4)   (17.2)        (25.7)
Operating profit (EBIT)          61.0     99.5          79.9     120.1
Margin in %                      8.9      14.5          11.5     17.3
Change in %                      (23.7)   (17.2)        (51.4)   (26.9)
Net profit                       36.4                   71.0
Margin in %                      5.3                    10.2
Change in %                      (48.6)                 (45.9)
Basic EPS (in CHF)               2.36                   4.54
Free cash flow3                  95.2                   121.1
Margin in %                      13.9                   17.5
Change in %                      (21.4)                 (21.5)
Number of employees (year-end)   2517                   2452

Basel, 21 February 2013: In 2012, the Straumann Group achieved revenue of CHF
686 million, which was almost 2% below the prior year in local currencies
(l.c.) or just 1% below in Swiss francs, reflecting the first overall positive
currency effect since 2007. North America was the key revenue driver,
complemented by double-digit growth in China and Latin America. Unfortunately,
these solid performances were not enough to compensate for sluggish sales in
Europe, Japan and the Middle East.

Despite an improvement of 130 base points in the gross margin (78%), reported
operating income (EBIT) dipped to CHF 61 million corresponding to a reported
margin of 9%. Excluding exceptionals (i.e. an impairment charge of CHF 21
million related to the regenerative business, and one-time charges of CHF 18
million due to cost optimization initiatives and severances) operating income
would have reached CHF 100 million (versus CHF 120 million in 2011), with a
corresponding margin of almost 15%.

Reported net profit reached CHF 36 million and basic earnings per share
amounted to CHF 2.36 (CHF 4.54 in 2011).

Gilbert Achermann, Chairman & Acting CEO, commented: "We continued to grow our
business in North America, and other key growth markets like China and Brazil,
but their strong performances were not enough to offset shortfalls in our main
region, Europe. With softer sales and our cost base geared for growth, our
margins dropped to a level that requires rigorous cost management at all
levels and a new style of resolute leadership to implement change expediently
and consistently. We have taken measures to address this and are determined to
improve our operating margin to a significantly higher level in the mid term.
The Board is confident that, with the addition of Marco Gadola as new CEO, the
organization will deliver this."


Amid tough conditions in Europe and parts of Asia, Straumann's implant
business succeeded in stabilizing sales at the prior year's level. The
restorative business (CADCAM/digital) was slower in 2012 compared to the
strong previous year. By contrast, Straumann's smallest business,
Regeneratives, posted good growth.

European recovery not yet in sight

Economic deterioration, austerity and high unemployment, especially in
southern Europe, dampened consumer confidence, reducing traffic at dental
practices and leading patients to delay treatment or take cheaper, inferior
options. Large markets like Spain and Italy, which are fragmented and highly
permeated by cut-price competitors, suffered the biggest declines as the gap
widened between markets in depressed economies and those in more prosperous

European revenues dipped 5% (l.c.) to CHF 378 million, corresponding to 55% of
the Group total. The currency effect was negative but amounted to just 1
percentage point, helped by the minimum Euro exchange rate set by the Swiss
National Bank.

Growth continues in North America

Straumann's second largest region, North America, achieved solid full-year
growth of 6% (l.c.). After years of decline, the US dollar picked up against
the Swiss franc, lifting growth by 6 percentage points to 12% in Swiss francs.
As a result, revenue in North America reached a record CHF 174 million,
corresponding to 25% of Group revenue. This performance was driven by solid
demand for implants and regeneratives.

Mixed picture in Asia/Pacific

15% or CHF 104 million of Group revenue was generated in Asia/Pacific. This
was stable year on year in local currencies but up 3% in Swiss francs thanks
to currency tailwind. The largest regional market, Japan, was dragged down by
a weakening economy and damaging media reports about implant dentistry, from
which it will take time to recover. The Korean market, which is highly
penetrated and saturated by cut price local manufacturers continued to be very
challenging. As noted previously, China was the region's key performer - with
strong growth throughout.

Rest of the World (RoW) overshadowed by turmoil in Middle East

The region referred to as the 'Rest of the World' contributes approximately 4%
of Group revenue, most of which is generated in Brazil, Mexico, and the Middle
East. In 2012, revenue declined 3% in l.c. or 7% in Swiss francs, to CHF 31

The contraction was due largely to the Middle East, where dentistry like many
other sectors, has suffered the effect of socio/political upheaval, embargoes,
and cuts in private and government spending.

By contrast, the largest market in the RoW region, Brazil, generated strong
growth - both for Straumann and for Neodent.

(in CHF million)                   Q4 2012    Q4 2011    FY 2012    FY 2011
Europe                             93.7       100.7      378.1      404.4
Change in CHF%                     (7.0)      (9.2)      (6.5)      (9.1)
Change in l.c.%                    (6.3)      (3.4)      (5.1)      0.2
North America                      43.3       42.4       173.7      155.6
Change in CHF%                     2.1        2.8        11.7       (5.5)
Change in l.c.%                    0.0        12.0       6.4        10.2
Asia / Pacific                     24.4       25.0       103.9      100.7
Change in CHF%                     (2.1)      3.0        3.2        0.2
Change in l.c.%                    (1.0)      5.7        (0.3)      5.5
Rest of the World (ROW)            6.4        7.5        30.5       32.9
Change in CHF%                     (14.9)     4.7        (7.3)      19.6
Change in l.c.%                    (10.4)     11.1       (3.0)      26.0
GROUP                              167.8      175.6      686.3      693.6
Change in CHF%                     (4.4)      (4.4)      (1.1)      (6.0)
Change in l.c.%                    (4.2)      1.8        (1.6)      4.1
Change in l.c. % (excl. iTero4)    (3.3)                 (1.0)


Gross margin improves to 78%

Excluding exceptionals of CHF 3 million, gross profit stood at CHF 534
million, CHF 6 million higher than in 2011, thanks to price increases,
manufacturing efficiency gains, and a favorable business mix (lower scanner
sales). Collectively these compensated for the reduction in volumes. The
corresponding gross margin thus expanded 170 base points to 78%.

Operating profit excluding exceptionals reaches almost 15%

Reported Selling, General & Administrative (SG&A) costs rose to CHF 424
million mainly due to a goodwill impairment of CHF 21 million - related to an
up-scaling of the Regenerative business - and a charge of CHF 15 million -
related to the cost optimization program and severances. Excluding these
exceptionals, SG&A increased CHF 16 million to CHF 387 million; CHF 5 million
of the increase were related to the reorganization project and the Neodent
transaction in the first half of the year.

Research & Development investments increased to CHF 49 million or 7% of
revenue, reflecting the Group's commitment to innovation. It also reflects the
fact that Straumann has expanded its development activities in digital
solutions, in addition to maintaining a stocked pipeline.

Due to the abovementioned items, earnings before interest, tax, depreciation,
amortization (EBITDA) and before exceptionals slid CHF 27 million to CHF 130
million, or 19% of sales.

After ordinary amortization and depreciation charges of approximately CHF 35
million, operating profit (EBIT) excluding exceptionals amounted to CHF 100
million in comparison with CHF 120 million in 2011. Currency movements had no
significant impact. The corresponding EBIT margin was 15%, slightly less than
3 percentage points lower than in the prior year.

Net profit constrained by impact of exceptionals

The net financial result was slightly positive compared with a negative CHF 2
million in 2011. The contributions from Neodent and Dental Wings (of which
Straumann holds 49% and 44% respectively) are disclosed in the income
statement under 'share of result from associates'. Together they contributed a
positive CHF 7 million. However, considering amortization charges resulting
from the purchase-price allocation, the share of profit from the two entities
was a negative CHF 6 million5. Going forward, these investments are expected
to be accretive to IFRS earnings in 2013.

Income taxes came to CHF 19 million, CHF 12 million higher than in 2011, when
the tax rate of 9% was considerably reduced as a result of the impairment in

Taking the aforementioned factors and exceptionals into account, reported net
profit amounted to CHF 36 million, with the corresponding margin reaching 5%.
Basic earnings per share amounted to CHF 2.36.

Improved working capital

Net cash from operating activities decreased 18% to CHF 115 million, owing to:
higher tax payments in the period, severance contributions, and increased
operating expenses. Year on year the 'change in net working capital' improved
by CHF 7 million due to a reduction in trade receivables and an increase in
payables. With capital expenditure remaining more or less constant at CHF 19
million, free cash flow amounted to CHF 95 million and the respective margin
was 14%.

The purchase consideration for the 49% stake in Neodent amounted to CHF 261
million. Straumann also paid CHF 5 million for the 14% increase in its stake
in Dental Wings. These were paid in cash. The equity ratio amounted to 82% at
the end of 2012.

Net cash used for financing activities totaled CHF 63 million after the
payment of CHF 58 million for the ordinary dividend. Consequently, cash and
cash equivalents at the end of 2012 amounted to CHF 141 million.

Unchanged dividend

The Board of Directors will propose an ordinary dividend of CHF 3.75 per share
to the Shareholders at the Annual General Meeting on 5 April 2013.

Cost reductions from headcount reduction to appear in 2013

In the fourth quarter, the Group announced a reduction of 150 positions
worldwide - through transfers, natural fluctuation, early retirement and
redundancies. The latter have been approached with due regard to the company's
social responsibilities. Initial reductions were made in 2012 with the
remainder to follow in 2013.

OUTLOOK 2013 (barring unforeseen circumstances)

Straumann's performance is expected to face continuing constraints due to the
economy and consumer sentiment in Europe, while growth markets like North
America, China and Brazil should continue to perform well. Straumann will
continue to invest selectively in such growth markets.

Based on the overall business fundamentals, strategic plan and the outcome of
its cost optimization program, the Group assumes that it will be able to
deliver improved profit levels in 2013, even if the market remains sluggish.
In the mid term, it aims to return to solid growth and a significantly higher
operating margin.

Annual Report 2012

The pre-print version of Straumann's 2012 Annual Report is now available at as well as through the Media and Investors pages at

About Straumann

Headquartered in Basel, Switzerland, Straumann (SIX: STMN) is a global leader
in implant, restorative and regenerative dentistry. In collaboration with
leading clinics, research institutes and universities, Straumann researches,
develops and manufactures dental implants, instruments, prosthetics and tissue
regeneration products for use in tooth replacement and restoration solutions
or to prevent tooth loss. Straumann currently employs approximately 2500
people worldwide and its products and services are available in more than 70
countries through its broad network of distribution subsidiaries and partners.

Straumann Holding AG, Peter Merian-Weg 12, 4002 Basel, Switzerland.

Phone: +41 (0)61 965 11 11 / Fax: +41 (0)61 965 11 01

E-mail: or



Corporate Communication:

Mark Hill

+41 (0)61 965 13 21

Thomas Konrad

+41 (0)61 965 15 46

Investor Relations:

Fabian Hildbrand

+41 (0)61 965 13 27


This release contains certain 'forward-looking statements', which can be
identified by the use of terminology such as 'future', 'vision', 'assumption',
'will', 'goal', 'opportunity', 'long-term', 'value creation', 'potential',
'propose', 'well positioned', 'to succeed', 'aims', 'continue', 'outlook', or
similar wording. Such forward-looking statements reflect the current views of
management and are subject to known and unknown risks, uncertainties and other
factors that may cause actual results, performance or achievements of the
Group to differ materially from those expressed or implied. These include
risks related to the success of and demand for the Group's products, the
potential for the Group's products to become obsolete, the Group's ability to
defend its intellectual property, the Group's ability to develop and
commercialize new products in a timely manner, the dynamic and competitive
environment in which the Group operates, the regulatory environment, changes
in currency exchange rates, the Group's ability to hire and retain key
talented individuals, to generate revenues and profitability, to realize its
expansion projects in a timely manner, and to maintain its business
relationships with suppliers, customers and other third parties. Should one or
more of these risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially from those
described in this report. Straumann is providing the information in this
release as of this date and does not undertake any obligation to update any
forward-looking statements contained in it as a result of new information,
future events or otherwise.

Media and analysts' conference

Straumann's full-year 2012 financial results conference will take place at
10.00h Swiss time in Basel today. The event will be webcast live on the
internet ( The recorded webcast will be available
for the next month.

Presentation slides

The corresponding conference visuals are available at and on the Media and
Investors pages at

Annual Report 2012

The pre-print version of Straumann's 2012 Annual Report is available under the
following link and on the Media and Investors pages

In addition, the conference can also be accessed by telephone at the following
dial-in numbers:

+41 (0) 91 610 56 09 (Europe & RoW)

+44 (0) 203 059 58 62 (UK)

+1 (1) 866 291 41 66 (USA)

Upcoming corporate/investor events

26 February 2013 Investor meetings, Zurich

05 April 2013 2013 Annual General Meeting ('Congress Center', Basel)

25 March 2013 Exane BNP Paribas Healthcare conference, Paris

26 March 2013 Investor meetings, London

27 March 2013 Investor meetings, Edinburgh

09 April 2013 Dividend ex-date

12 April 2013 Dividend payment date

30 April 2013 First quarter results (webcast/conference call)

02 May 2013 Investor meetings, Frankfurt

28 May 2013 Investor meetings, New York

29 May 2013 Investor meetings, Toronto

30 May 2013 Deutsche Bank Healthcare conference, Boston

20 August 2013 Half-year results conference, Basel

Details on upcoming investor relations activities are published on (Investors > Events).

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1 In this release 'exceptionals' comprise the following: In 2011, the
impairment of intangible assets in Japan of CHF 40m (and related tax effect);
in 2012, the goodwill impairment of CHF 21m relating to the global
regenerative business; and charges of CHF 18m related to the Group's cost
optimization program and severances.

2 Growth corrected to accommodate the discontinuation of distribution of iTero
intra-oral scanners announced in October 2012.

3 Defined as net cash from operating activities less capital expenditures plus
net proceeds from property, plant and equipment.

4 Growth corrected to accommodate the discontinuation of distribution of iTero
intra-oral scanners announced in October 2012.

5 In 2012, the IFRS value was particularly impacted by a one-time expense on
the fair-value adjustment of the inventory.

2012 Full-year results - Media Release (Download)

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