Giving patients a smile - this is Straumann's goal. As a specialist in dental implants and orthodontics, the medical technology company is virtually predestined for this. However, the management does not leave it at the mere formulation. Rather, a formula has been defined to measure progress on this strategic priority. Two implants sold or the start of treatment with a clear aligner to correct malocclusions counts as one smile. In 2022, Straumann achieved 4.4 million "Smiles" in this way - almost 19% more than in the previous year. CEO Guillaume Daniellot is far from satisfied with this figure. In 2024, he would like to achieve 5 million smiles. From this level, the annual figure should double again by the end of the decade. Regardless of their dental care, the faces of many Straumann shareholders may have brightened recently. Since the turn of the year, the mid cap is up by more than a third.
After a small dip, the company was able to restart the rally with its first quarter sales figures. From January to March 2023, the Straumann Group increased its revenues organically by 3.4% to CHF 596 million, with Asia-Pacific being the only region where sales declined. Here, the Corona pandemic kept patients from visiting the dentist at the beginning of the year. In addition, in the Middle Kingdom, the switch to volume-based procurement pushed by Beijing weighed on sales prices. "An exciting first quarter is behind us," the CEO commented on the figures. At the same time, Daniellot emphasized that the implant business has grown in both the premium and value segments. The Frenchman was also very satisfied with the initial feedback on the newly presented digital solutions. These include "Smilecloud," a centralized collaboration platform for interdisciplinary treatment planning.
"Against this backdrop, we confirm our full-year outlook despite the uncertainty surrounding potential economic and geopolitical developments," the CEO said. Daniellot is targeting high single-digit organic sales growth for the current period and aims to achieve profitability of around 25%. Compared with 2022, this would see the group slow its pace while shrinking its margin. With organic revenue growth of 15.7%, Straumann had posted profitability (core EBIT level) of 26% for 2022. Nevertheless, the latest news was well received on the stock market. Analysts at Jefferies highlighted that Straumann had performed slightly better than expected in the first quarter - despite headwinds in China and a high comparison base.
Bernstein looks at the longer-term prospects of the dental and hearing aid industry in a recent study. Because of limited reimbursement and easily postponed treatments, the analysts compare the two medical technology sectors to consumer goods. The penetration of these technologies is still quite low. Theoretically, Bernstein therefore sees an untapped market potential of USD 30 billion in the hearing aid segment, while this sum is more than USD 100 billion in the dental business. From a structural point of view, the Wall Street house gives preference to the dental specialists. Fittingly, Bernstein initiates coverage of Straumann with an "outperform" rating. In contrast, the broker rates Sonova's outlook as more challenging.
As one of three underlyings for a new softcallable barrier reverse convertible (BRC), Swiss hearing system maker Sonova nevertheless makes for interesting terms. Leonteq brings the SMI stock together with the two mid caps Straumann and Ems-Chemie. With a guaranteed coupon of 13% p.a., the trio enters the term with barriers of 65% of the respective initial level. As long as none of the three shares falls below this threshold, the structured product will yield the maximum return at maturity. Another new product on the market is a softcallable BRC based solely on Straumann. Here, investors can expect a fixed quarterly coupon payment of 10% p.a.. Similar to the multi-BRC, the risk buffer is 35%. Both new issues include a quarterly call option. For the first time, Leonteq can make use of this after six months. In the event of termination, the BRCs will be redeemed early together with the pro-rata coupon.
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