BASEL, Switzerland: The Straumann Group has posted strong financial results for the first half of 2019, with organic revenue up around 16%. Founding new subsidiaries, expanding its business, signing new partnerships and increasing collaboration with industry partners—the strategies behind the group’s double-digit growth demonstrate how the dentistry business will remain in good health.
With a portfolio that caters to most fields in dentistry, a strong financial result from global player Straumann and its subsidiaries is a warranty of fitness for dentistry at large.
In the group’s half-year 2019 results, increases in revenue were posted in double digits across all regions. In the Europe, Middle East and Africa (EMEA) region, which accounts for 43% of the group, organic revenue growth, which excludes profits or growth attributable to mergers and acquisitions, was up 13.6%. In North America, home to 30% of the group, revenue was up by 18.1%. In the Asia Pacific and Latin America regions, which account for 19% and 9% of Straumann, revenues were up by 18.9% and 18.5%, respectively. Across the board, core revenue at the Swiss-headquartered company for the six-month period increased by 16.3% to reach CHF 780 million (€718 million), while core net profit increased by 11% to reach CHF 170 million.
With half-year revenue rising beyond the group’s expectations, Chief Executive Officer Marco Gadola said it had raised its outlook for 2019. Straumann now expects full-year organic revenue growth to increase by a number in the low-to-mid teens compared with the 2018 results. This would follow another strong year, with organic revenue growth in 2018 having been 18.9 percentage points above that recorded in 2017.
What is behind the dental giant’s gains? Gadola commented that the driving factors were premium and non-premium implants and what he called “exciting” developments in the group’s clear aligner business. “The launch of innovative products, like our next-generation implant system BLX, as well as portfolio and geographic expansions provided additional lift and helped us to achieve more customer gains,” Gadola noted in the half-year report.
Expanding on implants
Business expansion through partnerships with regional players and collaboration with industry partners was also a key factor in boosting the group’s performance in the six-month period. This was particularly evident in the implants segment.
Straumann is investing in the South Korean company Warantec to boost its penetration into the non-premium implants segment. Straumann said in July that it would provide a capital injection to bolster the established implant manufacturer’s production and international business. In return, the Straumann Group will obtain a stake of just over one-third in the company and the exclusive rights to distribute Warantec implants outside of South Korea. Straumann said that the South Korean company’s Oneplant implant system offers reliable clinical results and affordability in the segment and that product registrations had been obtained in China, the US and Europe. The group will leverage its international marketing and distribution capabilities to deliver Oneplant implants to dental practices in these markets.
Straumann founded a new subsidiary in Taiwan and the group is set to collaborate with clinics and universities on implant research and development in the country. Around 400,000 dental implants are sold every year in Taiwan. Meanwhile, further sales growth is expected in the Balkan implants market where at least 130,000 dental implants are placed annually. Straumann acquired its former distributor in Croatia in July in order to create a hub for the local and surrounding markets of Albania, Bosnia, Montenegro and Kosovo.
Sales of Straumann’s own premium BLX implant proved strong in the first half, more than 30,000 implants having sold over the six-month period. BLX was launched in most markets in the EMEA region in March and April, and launches are currently underway for BLX in markets in the Americas and in Australia. Straumann sold more non-premium implants in the period, however, with the rolling out of the brands Neodent, Medentika and Anthogyr, helping the group to increase its share of the implants market in Brazil, the US, Mexico and Turkey. In its half-year results, the group reiterated its February expectation of a growth rate of between 4 and 5% for the global dental implants market in 2019.
Collaborating on digital dentistry
Digital dentistry continues to dominate discussions among dental practitioners, and the market for scanners and CAD/CAM solutions is another area of focus for Straumann in 2019, particularly in Asian markets. In the second quarter, the group announced that it would expand its collaboration with 3Shape by integrating its software platforms into 3Shape intra-oral scanners. The group’s digital workflows for guided surgery and orthodontic and prosthetic applications will be incorporated into 3Shape’s TRIOS scanners, and the two companies are expanding the scanner’s software to include a workflow for planning and ordering ClearCorrect clear aligners. Straumann said that the partnership would help it tap into the full potential of the burgeoning clear aligner business.
In Pakistan in July, Straumann acquired the clear aligner treatment and diagnostic company Digital Planning Service, which handles case planning for ClearCorrect. In South Korea, Straumann signed an agreement with local scanner manufacturer Medit. According to the agreement, Medit will integrate Straumann’s DWOS operating solution into its scanners and Straumann will have the right to distribute and co-brand Medit’s laboratory scanners. The group expects to begin selling Medit scanners later this year. In neighbouring China, where the group says the market for digital solutions and intra-oral scanners is still small but rapidly growing, Straumann has entered into an expanded distribution agreement with imaging equipment provider Carestream. According to the agreement, Straumann will sell a co-branded version of the Carestream CS 3600 intra-oral scanner as it awaits approval from Chinese regulators to sell its own Dental Wings scanner.
Further revenue growth can be expected from the group this year in its digital business as demand for clear aligners continues to grow. The group said that it had seen an increase of 60% in cases started in the six-month period, but noted that its international expansion in the segment is “still in its infancy”.
Moving into the third quarter, CEO Gadola said that a strong performance in the first half has allowed the group to further invest in the development of new products, technologies, partnerships and other initiatives and that these, in turn, will help to support further growth in the coming years.
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