UPDATE 2-Straumann gloomy on European dental market prospects
* 2012 net profit 36.4 mln Swiss francs vs 58 mln forecast
* Net sales 684 mln francs vs 694 mln forecast
* Shares down 3.2 percent (Adds acting CEO comments, analyst, shares)
By Caroline Copley and Oliver Hirt
ZURICH, Feb 21 (Reuters) - Straumann, the world's largest maker of dental implants, sees little prospect of recovery in the European dental market this year, after profit almost halved in 2012 hit by a one off-charge.
The Swiss company and local rival Nobel Biocare are suffering from weak demand in their main market, Europe, as cash-strapped customers cut back on non-essential dental treatment.
"Europe is bad and will stay bad in coming years. At best we will have a sideways movement," said Chairman Gilbert Achermann who is acting as CEO after Beat Spalinger left in January.
His comments echo those of Nobel Biocare which said on Tuesday it expected difficult market conditions to persist this year, after fourth-quarter net profit dropped 16 percent to 11.2 million euros.
"Straumann will have to focus on improving efficiency, getting leaner but not risk its strength in the market. This will be a difficult act," said Vontobel analyst Carla Baenziger who has a 'hold' rating on the stock.
Shares in Straumann, which have risen by around 30 percent since mid November, were trading down 3.2 percent at 122.8 francs at 1200 GMT.
TOUGH JOB FOR NEW CEO
Marco Gadola, who takes the helm in April, has the task of reviving the company's operating profit margin, which sank to 14.5 percent excluding exceptional items in 2012, compared with a peak at 30 percent in 2005.
Straumann announced a cost-cutting programme in October and said it would cut roughly 6 percent of its global workforce.
Achermann said additional cost cuts would not be necessary as long as the market does not deteriorate drastically.
He did not rule out acquisitions and said buying an Asian business or technology were options. The company bought a 49 percent stake in Brazil's Neodent last year to tap into the low-cost market which is developing faster than the premium segment.
Full-year net profit dropped to 36.4 million Swiss francs ($39.4 million), falling short of an average forecast from analysts of 58 million francs.
The result was hurt by an unexpected 21 million franc impairment charge on its global regenerative business.
Full-year sales of 683.6 million francs also missed anlayst forecasts, as double-digit growth in Latin America and China failed to offset sluggish sales in Europe, Japan and the Middle East. ($1 = 0.9237 Swiss franc) (Editing by Erica Billingham)
- Exclusive: Radar data suggests missing Malaysia plane deliberately flown way off course - sources
- Lost Malaysian airliner may have run out of fuel over Indian Ocean : source |
- Investigators focus on foul play behind missing Malaysia plane: sources |
- UPDATE 1-Rolls-Royce concurs with Malaysia on missing jet's engine data
- UPDATE 2-Satellite data shows missing Malaysia plane may have flown thousands of miles-source