-- Sales grow in high teens across all regions with Europe lifted
by improvement in Germany and contribution from new Italian
subsidiary
-- Operating and net income rise 20% and 25% respectively
-- Earnings per share increase 25% to CHF 4.37
-- New North American HQ with world-class training and
production facilities operational in record time; BIO srl.
integrated and other strategic initiatives on track
-- Close to 100 new jobs created
BASEL, Switzerland, Aug. 12, 2005 (PRIMEZONE) -- In the first six months of 2005, Straumann (Other OTC:SAUHF) Group sales rose 19% in local currencies (l.c.), or 18% in Swiss francs to CHF 256 million on top of an exceptionally strong comparative period of last year. With operating profit rising 20% to CHF 80 million, net income grew 25% to CHF 68 million. Correspondingly, the operating and net margins expanded to 31% and 27% respectively, while earnings per share rose 25% from the first half of 2004 to CHF 4.37. Straumann created a further 96 new jobs in the first six months of 2005 and increased its total number of employees to 1,228.
Key figures
(in CHF million) H1, 2005 H1, 2004
Group Sales 256.0 217.2
Growth in % 17.8 32.9
Growth in local currencies in % 19.3 32.1
Operating profit (EBIT) 80.4 67.2
Margin in % 31.4 30.9
Growth in % 19.6 45.2
Net profit 68.1 54.4
Margin in % 26.6 25.1
Growth in % 25.0 42.6
Earnings per share in CHF 4.37 3.49
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Strategic achievements
In June, Straumann inaugurated its new North American headquarters in Andover near Boston, Massachusetts, just over a year after construction began. Incorporating state-of-the-art education and manufacturing centers, the new facility initiated the company's first production outside Switzerland.
The company advanced its strategy to gain direct control of its distribution channels. Having successfully completed the integration of BIO srl., Straumann now generates more than 85% of Group turnover through its own subsidiaries. A further contribution will come from Straumann Australia Pty, which took over distribution of Straumann products at the beginning of July.
Product development and launch program
The Group made further progress with its product development and launch program. Straumann's individualised implant prosthetics service, 'CARES', was received very positively at various trade fairs / meetings in the second quarter and is being rolled out in Germany, Switzerland and Austria, with other markets to follow. In addition, the company launched a new synOcta(r) gold abutment, the Straumann Bone Block Fixation set, and a new range of 'single patient' drills. These are just some of the numerous new products and meaningful contributions that Straumann introduced to improve handling and convenience for dental professionals.
At the recent World Symposium of the International Team for Implantology (ITI) in Munich, independent medical and scientific researchers presented the initial body of scientific evidence to support Straumann's innovative implant surface technology SLActive, which significantly reduces healing time. Based on the scientific platform of the current gold standard SLA(r) surface, SLActive is supported by more scientific studies than any other implant at launch. To date, more than 500 SLActive implants have been placed and the selective introduction of the new surface technology is now underway. A further clinical update will be provided during the European Association for Osseointegration meeting in Munich in September. SLActive will be available to customers in Europe and Asia in September, and in the USA in March 2006.
Progress was also made with other exciting new products, notably the Straumann Bone Ceramic, which continues its selective introduction and the Straumann Membrane, which is undergoing clinical trials.
Sustained job creation and talent recruited
Straumann continued to invest in talent recruitment, creating 96 new positions worldwide in the first six months of 2005. This and the addition of the Italian distributor team increased the global workforce to 1228.
Double digit growth continued
The increase in Group sales of 19% (l.c.) is well in line with the company's forecast. Organic growth contributed 14% points to sales growth in the first six months of 2005, while 5% points were acquisition related. With the Swiss franc remaining stable against the Euro and strengthening against the U.S. dollar, sales growth amounted to 18% in Swiss francs.
Sales grew in the high teens across all regions. European revenues were up 19% in both l.c. and Swiss francs to CHF 164 million, on top of strong growth of 28% in the comparison period of 2004. With the region contributing 64% of Group turnover, sales growth was lifted by additional revenues from the acquired Italian distributor, which helped to offset temporary shortfalls in Germany due to the slow adoption of the healthcare reforms. German sales picked up considerably in the second quarter, resulting in first-half growth in the mid teens.
North American revenues continued to be driven by implant sales and rose 17% to CHF 61 million (24% of Group sales), on top of exceptionally strong first-half growth of 43% in 2004. Owing to the negative currency impact, sales growth amounted to 12% in Swiss francs.
The Asia/Pacific region contributed 10% of Group revenues and posted first-half sales growth of 18% to CHF 26 million on the back of exceptional first-quarter orders ahead of announced price increases. Sales grew strongly through both quarters in Australia as the distribution team prepared to transition to the new Straumann subsidiary.
Revenues in the rest of the world climbed 59% to CHF 6 million or 2% of Group sales.
EBIT margin expands to 31%
Operating costs excluding other income decreased from 70% to 69% of sales, despite an expected increase in the cost of goods sold to 19% of sales. Selling costs remained at 38% of Group sales, while general administrative costs and research and development costs decreased to 7% and 5% of sales respectively. As a result, operating profit (EBIT) rose 20% to CHF 80 million and the EBIT margin expanded to 31%.
Net income rises 25%
The development of the U.S. dollar and the Euro against the Swiss franc contributed to a positive financial result. This together with the improved operating result and successful tax management lead to a 25% increase in net income to CHF 68 million. As a result, the net profit margin improved 2% points to 27% of sales.
High capital expenditure
Operating cash flow reached CHF 61 million, leading to an operating cash-flow margin of 24%. Capital expenditure totaled CHF 97 million, reflecting significant investments in projects such as the new U.S. headquarters, infrastructure expansion, and the acquisition of the Italian distributor.
As a result of all these activities, overall cash and cash equivalents on 30 June 2005 amounted to CHF 37 million.
Outlook (barring unforeseen circumstances)
With strategic achievements and first-half developments fully in line with the company's forecasts, the Group confirmed its expectation for 2005 sales to grow in the region of 20% in local currencies, with operating and net profit margins expanding by about one percentage point.
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: investor.relations@straumann.com or corporate.communication@straumann.com Homepage: www.straumann.com
Disclaimer
This release contains certain "forward-looking statements", which can be identified by the use of terminology such as "scheduled to", "will", "expected to", "forecast", "expectation", 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 generate revenues and profitability, and the Group's ability to realize its expansion projects in a timely manner. 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.
About Straumann
Headquartered in Basel, Switzerland, Straumann (SWX:STMN) is a global leader in implant dentistry and oral tissue regeneration. In collaboration with the International Team for Implantology (ITI), leading clinics, research institutes and universities, the Group researches, develops, produces and distributes implants, instruments and tissue regeneration products for use in tooth replacement solutions or to prevent tooth loss. Straumann also provides training and services to the dental profession worldwide. The Group manufactures implant system components and instruments in Switzerland and the USA and dental tissue regeneration products in Sweden. Straumann's products and services are available in more than 60 countries worldwide through the Group's 16 distribution subsidiaries and a broad network of distribution partners. Straumann employs 1,228 people worldwide, and generated sales of CHF 420 million and a net income of CHF 101 million in 2004.
Media and analysts' conference
Straumann will be presenting the 2005 first-half results to representatives of the media and financial community at 09.30 Swiss time in Basel. The event will be webcast live on the Internet and a playback will be available. A telephone dial-in service is also offered at +41 (0)1 800 96 59.
Further information and the presentation slides are available at www.straumann.com.
Photographs
A selection of photographs of today's conference will be available at http://straumann.imagedirector.net/album?album_code=cbcq9yy717ar immediately after the event for a limited period. Other pictorial material is available at www.straumann.com
Further key reporting dates in 2005 20 October 2005 Media release Q3/9M sales
The entire release, including financial tables, is available at: