Straumann Group Reports Record 2017 Financial Results Driven by Strong Growth in Implant Business

VCBeat (WeChat: vcbeat) has learned that dental implant giant Straumann Group recently released its 2017 financial report, showing an annual revenue of CHF 1.112 billion, a 21% increase. The operating profit margin expanded to 26%, net profit grew by 20% to CHF 276 million, and earnings per share reached CHF 17.61, marking the strongest growth since 2007.

In the fourth quarter, organic revenue growth driven by North America and the EMEA region (Europe, the Middle East, and Africa) reached 18%, with all regions achieving double-digit growth. North America (+19%) and Asia-Pacific (+24%) directly contributed to a 16% organic growth.

Acquisitions and business combinations (ClearCorrect, Dental Wings, Equinox, and Medentika) contributed CHF 32 million in revenue.

Straumann Group, headquartered in Basel, Switzerland, is a global leader in dental implants and prosthetics, as well as oral tissue regeneration.

In 1954, Mr. Reinhard Straumann founded the Straumann Company. Until 1970, the company specialized in materials testing and produced alloys for chronometers. Four years later, Straumann launched its first batch of dental implants, including the world’s first one-piece implant.

In 1990, Straumann had become a leading manufacturer of osseointegrated dental implants. In the same year, management sold its entire equity stake in the osseointegrated implant division to establish Synthes, marking the beginning of a new chapter in Straumann’s development.

In 1998, Straumann Holding AG was listed on the Swiss Exchange. In 2000, Straumann established a production facility in Villeret and a technology center in Waldenburg. In 2004, Straumann relocated its global headquarters to Basel.

Since 2003, Straumann has expanded its product portfolio, which now includes solutions for oral tissue regeneration, computer-aided design and manufacturing (CAD/CAM), guided implantology, and intraoral scanning.

In 2017, the Straumann Group initiated a series of mergers and acquisitions, directly resulting in multiple strategic transactions. To further penetrate the mid-to-low-end dental implant market, the Group acquired a controlling interest in Medentika and increased its stake in Dental Wings to 100%, a move that accelerated the development of digital platforms and equipment.

Straumann Group entered the orthodontics sector by acquiring ClearCorrect and purchasing a 38% equity stake in Geniova, acquired a 35% stake in Rapid Shape to secure 3D printing technology, and partnered with 3Shape to begin distributing the CADENT iTero premium intraoral scanning solutions.

Following the approval of Rodo’s innovative fixation device in the United States and Europe, Straumann Group increased its equity stake in Rodo Medical from 12% to 30%. The Group also signed agreements to acquire various distribution companies to penetrate the markets in Turkey, Portugal, and South Africa, thereby enhancing its market appeal.

In the fourth quarter, the Group acquired Loop Digital Solutions, a U.S.-based software startup that has developed an online platform for specialists and dentists to facilitate patient referrals. The platform assists physicians by enhancing communication, thereby improving transparency and security.

In 2017, the Group’s global workforce increased by 29% to 4,881 employees, reflecting the scale effects driven by acquisitions and business and geographic expansion.

The mergers of Equinox, Medentika, Dental Wings, and ClearCorrect added 479 employees, with the remainder resulting from internal expansion, primarily in Brazil, Switzerland, and the United States, and mainly focused on production operations.

All business segments achieved double-digit growth. Two-thirds of the Group’s growth came from the implant business, with bone-level tapered (BLT) implants and Neodent’s Cone Morse and Acqua implants serving as the primary growth drivers.

BLT has become the best-selling implant for the Straumann Group in several markets, particularly the small-diameter (2.9 mm) version. Made from high-strength Roxolid, it is smaller in size than its main competitors and holds a share in the narrow-diameter implant segment.

Straumann Group’s Roxolid (a high-strength new material for dental implants that is stronger than titanium and offers excellent osseointegration) and SLActive (hydrophilic active SLA) have maintained strong momentum, while Titanium SLA implants enable the brand to compete in the low-end market.

In the mid-to-low-end segment, Neodent, Medentika, Anthogyr, and Zinedent all achieved strong growth, with distributor markets in Spain, the United Kingdom, the United States, and Brazil delivering outstanding performance.

The combination of premium and non-premium solutions has been the key to the business success of Straumann Group’s Dental Services Organization, which is headquartered in Europe and has secured significant bids in the rapidly growing dental chain sector.

Additionally, the biomaterials division of the Straumann Group also maintained strong growth. Demand for bone substitutes and membranes was most significant, particularly in the EMEA region, where the Group offers a portfolio of guided bone regeneration (GBR) membrane products.

The restorative business achieved double-digit growth, driven by demand for implantable prostheses (standard and CAD/CAM).

The low-cost, multifunctional Variobase series was also a major contributor to growth. CAD/CAM screw-retained bars and bridges, along with the Pro Arc solutions and Novaloc retention system, all contributed to this growth.

Revenue from intraoral scanners and milling equipment accelerated in the fourth quarter, reflecting Straumann Group’s efforts to provide comprehensive end-to-end solutions.

Double-digit growth returns in the EMEA region. Despite a slightly weaker European market, the Group achieved double-digit revenue growth for the first time in several years. Regional revenue increased by 19% to CHF 488 million.

Following the International Dental Show in March, the Group launched a wide range of innovative products, including the Roxolid, SLActive, BLT, and Variobase series.

In the fourth quarter, regional revenue increased by 29% to CHF 137 million. Digital sales were the primary driver, bolstered by new intraoral scanners and dental milling machines. The best-performing countries were Denmark, France, and the United Kingdom. In the Eastern European market, led by Russia, the main product was BLT. Medentika was successfully launched in Turkey, and the Group established a new subsidiary in Iran.

North America remains on the fast track. In North America, revenue grew by 22% to CHF 312 million. To advance its strategy of attracting customers from major competitors, the region acquired more than 1,000 new customers in 2017 while deepening engagement with existing clients, who increased their purchases across multiple implant suppliers. Many customers were drawn to innovative products such as small-diameter BLT implants, allografts, and digital devices, particularly chairside mills and the Dental Wouth intraoral scanner.

In the fourth quarter, strong performance from BLT and Variobase, as well as Neodent, along with the integration of ClearCorrect and Dental Wings following their October consolidation, drove a 23% organic revenue increase to CHF 91 million.

References:

https://www.straumann.com/group/en/discover/annualreport/2017.html