Release Date: August 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Straumann Holding AG (SAUHF, Financial) reported a strong revenue of CHF1.3 billion for the first six months of 2024, reflecting a 16.1% growth.
- The company achieved a core EBIT margin of 27.8%, despite facing currency headwinds.
- The EMEA region showed robust performance with 12.4% organic revenue growth, driven by key markets like Italy, Iberia, Germany, and Eastern Europe.
- Asia Pacific was the fastest-growing region, with significant contributions from brands like Anthogyr and Straumann.
- The company successfully hosted the largest IPI congress ever in Singapore, enhancing its global presence and showcasing innovations.
Negative Points
- Currency fluctuations, particularly the depreciation of the euro, Chinese renminbi, and various emerging market currencies, negatively impacted revenue by CHF20 million.
- The North American market showed only a modest 5.3% organic revenue growth, indicating slower performance compared to other regions.
- The sale of the DR SMILE business to Impress Group led to a restatement of financials, which may cause some investor uncertainty.
- The company faces ongoing geopolitical and macroeconomic uncertainties, which could impact future performance.
- Despite strong overall performance, the ClearCorrect business in North America remained flat to slightly down, indicating challenges in that market.
Q & A Highlights
Q: How are you seeing the strong momentum in volume growth in China evolve now that you are facing tougher comps? Have you seen any shifts in the competitive responses from other players in that market?
A: We still see very positive momentum on the patient flow and volume growth in China. We are confident in achieving a 15% to 20% growth rate for the second half. Regarding competition, we see a lot of activity from competitors, but our early investments in education and instruments help us maintain our market share.
Q: Is the upgraded guidance entirely driven by moving DR SMILE to discontinued operations, or is the core business also performing better than expected?
A: The updated guidance is significantly influenced by the DR SMILE divestiture, but our core business is also performing better than planned.
Q: Could you quantify the growth in challenger versus premium in EMEA and whether you've seen any similar trends globally?
A: In EMEA, challenger growth has been double-digit, while premium has been single-digit but still healthy. We don't see any meaningful down trading across implants. The geographical mix is driving the significant boost to challenger brands.
Q: Why are you expecting a deceleration in growth from 16% organic in H1 to low double digits for the full year?
A: The higher comparative basis in China and ongoing geopolitical and macroeconomic uncertainties are factors. We remain confident about significant market share gains over the period.
Q: Can you talk about the ClearCorrect performance in North America and whether you have a value offering in that market?
A: ClearCorrect has seen double-digit growth globally, but in North America, the business has been flat to slightly down. We are not planning any value introduction of clear aligner brands in North America.
Q: Are you expecting any cash proceeds from the DR SMILE sale, and how does this impact your expectations for clear aligner growth in Europe?
A: We don't disclose the terms, but the divestiture allows us to reinvest in our B2B business. The sale will not impact the growth rate of clear aligners in EMEA as we will continue to supply Impress Group with ClearCorrect aligners.
Q: Can you comment on the underlying implant dynamic in Europe Q2 versus Q1?
A: The difference is mainly due to the timing of Easter, which pushed some sales into the second quarter. Otherwise, the trend remains stable and strong with consistent new customer acquisition and go-to-market investments.
Q: What are your thoughts on the US market trends and the impact of selling DR SMILE on clear aligner growth in Europe?
A: We expect stability in the US market for the second half. The sale of DR SMILE will not impact clear aligner growth in Europe as we will continue to supply Impress Group with ClearCorrect aligners.
Q: How do you view the second half and why are you expecting a deceleration in growth?
A: The higher comparative basis in China and ongoing geopolitical and macroeconomic uncertainties are factors. We remain confident about significant market share gains over the period.
Q: Can you provide more details on the financial impact of the DR SMILE divestiture?
A: The divestiture allows us to reinvest in our B2B business. We expect to maintain our growth momentum and continue to gain market share.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
