COLTENE Holding AG, an internationally leading developer and producer of dental consumables, recorded sales of CHF 75.6 million in the first half of 2016 (2015 H1: CHF 73.3 million). This represents a year-on-year increase of 3.2 per cent in the reporting currency of Swiss francs. At constant exchange rates, sales were up by 1.0 per cent. Thanks to a shift in the product mix, efficiency gains and cost optimisation, COLTENE’s operating profit (EBIT) increased by 39.9 per cent to CHF 9.0 million (2015 H1: CHF 6.5 million). This raised the EBIT margin for the traditionally weaker first half of the year to 11.9 per cent (2015 H1: 8.8 per cent). Net profit for the period almost doubled to CHF 7.2 million (2015 H1: CHF 3.8 million; +90.6 per cent). This significant increase is also attributed to the positive net financial result. Last year’s first-half financial result was negatively impacted by heavy foreign exchange losses of CHF 1.7 million at Vigodent due to the significant depreciation in the value of the Brazilian real. Free cash flow slightly decreased to CHF 2.1 million (2015 H1: CHF 2.7 million) due to an increase in inventory, higher taxes and relatively higher capital expenditure. COLTENE Group intensified its innovation management activities and broadened its materials partnership with SIRONA for the CAD/CAM CEREC system in the pursuit of management’s strategic goals for 2016 to 2018.
The expansion of marketing and sales activities, particularly the official inauguration of the new Group subsidiary in Japan, and the recruitment of a Vice President Sales at Group level, have produced first positive results. Special attention was focused on innovation in the key product groups of Restoration, Endodontics and Treatment Auxiliaries. Innovation management efforts were intensified and new structures and resources were put in place to ensure the swift execution of promising projects. At the same time, the various teams continued to streamline product portfolios and move forward with the implementation of globally uniform marketing and branding initiatives. Growth of COLTENE branded products led to an improvement in the margin.
Demand picks up in the EMEA and Asia regions
Sales trends across the various regions varied in the first half of 2016. In Europe, the Middle East and Africa (EMEA), sales rose by 7.5 per cent in Swiss francs, thanks to faster growth in Southern and Eastern Europe and considerable pent-up demand in the CIS region and the Middle East. In the Middle East, COLTENE benefited after international sanctions against Iran were lifted. In Asia, COLTENE increased its sales in Swiss francs by 8.8 per cent. Sales in China, a key market for the future, grew by 13.4 per cent while growth in India was flat at 0.5 per cent after growing briskly in previous reporting periods. In North America, sales declined by 0.8 per cent due to the communicated reduction in inventory at major distributors. However, the sell-out of COLTENE products in the market increased by approximately 3.0 per cent, which is a testimony to the positive demand from dentists in the US for COLTENE products. Turning to Latin America, sales in Swiss francs dropped 6.5 per cent because of the persisting economic difficulties in several key markets. The Congress for Latin America Key Opinion Leaders and Dealers held in Riviera Maya, Mexico in May 2016 had a positive impact on business. Brazilian sales rose by 8.6 per cent in local currency. Management simplified leadership structures at its Brazilian subsidiary by entrusting the local CFO with general management responsibility. Furthermore, it hired a new National Sales Manager who is responsible for all sales teams in the country.