Live WebinarA new SPLIT CREST technique
23 Oct 2020, 05:00 PM Berlin
Prof. Tomaso Vercellotti
In its first-half report, the Straumann Group indicated how the crisis had affected company sales and what measures had been taken to overcome the difficulties of this period. In a media release, Guillaume Daniellot, CEO of the Straumann Group, disclosed that, during lockdown, revenue had dropped by almost 70% before beginning to recover in May.
The company took swift steps to mitigate the financial impact in the near to mid-term. The measures included immediate reductions in operating costs, subsidised short-time working, global restructuring and postponed investments.
“The immediate measures we took to cut costs have helped to cushion the impact of the revenue shortfall and we have restructured to prepare for economic recession. While impairments of certain acquisitions have resulted in a reported net loss, we continue to generate cash from our operating activities and our core business remains profitable,” commented Daniellot.
In order to support its customers during lockdown, and at a time in which most educational events have been cancelled, the Straumann Group has hosted numerous online education events devoted to implant dentistry on the Straumann Campus. These efforts included the Immediacy Essentials Symposium and the Straumann 2020 Virtual Immediacy Symposium, and, in total, together with all the other webinars, more than 50 online presentations were delivered to dental professionals around the world. Daniellot commented: “Our efforts to support customers with online education and to help them get back to business quickly have been successful.”
The extent and timing of the pandemic impact varied from country to country. From a regional perspective, the Asia Pacific region has been the least affected, bringing first-half revenue to CHF 117 million (€108 million) or 79% of the comparative period in the prior year. Whereas business decreased in most countries in this region in the second quarter, sequential sales growth in South Korea, Taiwan and China almost doubled.
The Europe, Middle East and Africa region remained the group’s largest revenue contributor, and first-half revenues amounted to CHF 268 million (€249 million) or 80% of the corresponding level in the prior year. However, revenue declined rapidly towards the end of the first quarter and only returned to growth towards the end of the second quarter.
In North America, first-half revenue amounted to CHF 183 million (€170 million) or 81% of the prior year level. Similarly to in the other parts of the world, revenue declined rapidly in March, when SARS-CoV-2 spread through the region. As Canada and parts of the US began to reopen, revenues picked up. The business in Latin America has suffered the heaviest impact from COVID-19 and continues to struggle.
As reported by Dental Tribune International, the Straumann Group signed an agreement to acquire a majority stake in DrSmile in July. DrSmile is one of the fastest-growing providers of orthodontic solutions in Europe and complements Straumann’s existing clear aligner business. Daniellot referred to the acquisition as an “important strategic growth opportunity”.
Even though the dental market is showing signs of recovery and practices have adapted well to new safety standards, it is difficult to determine the extent to which the present improvement is driven by pent-up demand and whether it will continue, bearing in mind the possibility of further waves of SARS-CoV-2.
“General uncertainty due to the COVID-19 crisis, together with the potential of further outbreaks and economic recession prevent us from offering guidance on full-year revenue and profitability,” said Daniellot.