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Straumann signals appetite for low-cost dental players

By August 22, 2013 December 1st, 2013 No Comments

Straumann, the world’s largest maker of dental implants, could spend over $400 million on buying cheaper rivals, signalling a desire to grab back market share from low-cost competitors.

Faced with sluggish demand in its main market of Europe, analysts and investors have urged Straumann and fellow premium rival Nobel Biocare to develop cheaper brands to compete in the fast-growing area of the market, which now accounts for roughly 60 percent of volumes.

Chief Executive Marco Gadola, who took the helm in April, said Straumann was looking at acquiring discount players in growing markets, such as China, and could spend up to 400 million Swiss francs ($432.5 million).

Last year, Straumann bought a 49 percent stake in Brazil’s Neodent to tap into the low-cost market which is developing faster than the premium segment…Income from its investments in Neodent and Dental Wings, as well as a one-off pension gain helped net profit jump 21 percent in the first-half to 54 million Swiss francs ($58 million), beating the Reuters analyst consensus of 37 million.affordable dental implants london

Sales slipped 2 percent to 355 million francs, but came in slightly ahead of the average analyst forecast. Straumann said business had started to pick up in the second quarter after a soft start to the year.

But the company expects further declines in Europe – which makes up 55 percent of group sales – to weigh on full-year revenues, which will probably not exceed last year’s level.best implant dentist london

“Q2 sales growth, clearly ahead of the market, is most pleasing and contradicts fears about market share losses as a result of the restructuring program,” Credit Suisse analyst Christoph Gretler, who has an ‘outperform’ rating, said in a note.

Shares in Straumann, which have gained more than 30 percent so far this year, were up 5.7 percent at 161.70 francs by 0907 GMT, outperforming a flat European healthcare sector index .

Other analysts said Straumann’s valuation remained demanding given the expectation for no full-year growth and investments needed in the value market…

COST CUTS

The most popular markets for dental implants – Spain, Portugal and Italy – were among the hardest hit in the financial crisis and consumers have cut back on cosmetic dentistry.same day teeth london

Sales in Europe fell 3 percent in the first half, but increased 1.8 percent in the second-quarter, boosted by two extra trading days.

Gadola was optimistic that Spain and Italy may be reaching a turning point and said the company did not anticipate significant negative economic growth in these markets in 2014.

The Swiss company has reduced costs and cut jobs as it seeks to grow profit despite sluggish demand and said it would shed a further 8 percent of its workforce in April.immediate dental implant london

It booked a 13-million-franc restructuring charge in the first half and said it expects a further charge of between 3 and 5 million in the second.affordable cosmetic dentistry london

Straumann said it was confident cost savings would bear fruit in the third quarter and help it to improve full-year profit…read more

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