UPDATE 2-Straumann bets on cheaper implants in difficult market
* FY sales of 680 mln Swiss francs vs 678 mln forecast
* Net profit 101 mln Sfr, in line with poll
* Proposes unchanged dividend of 3.75 Sfr per share
* Expects low-single digit sales growth in 2014 (Adds CEO comments, shares, analyst)
ZURICH, Feb 25 (Reuters) - The world's largest maker of dental implants, Straumann Holding Ltd, expects to grab back market share from low-cost competitors by launching its cheaper products in more markets this year.
Premium implant makers Straumann and local Swiss rival Nobel Biocare have faced sluggish demand in Europe, their main market, as cash-strapped consumers cut back on pricey dental treatment or trade down to cheaper brands.
To try and win back market share, Straumann has vowed to expand in the lower-priced, value segment of the market, which is growing faster than the premium sector.
Announcing fourth-quarter results on Tuesday, the company said it was cautious on the overall outlook for sales this year as Europe, its biggest market, was likely to remain weighed down by Germany, where sales fell 5 percent last year.
"Germany can make or break it. We are anticipating in our outlook that we will see a more or less similar situation in Germany in 2014 as we have seen in 2013, so no recovery for that market," Chief Executive Marco Gadola told Reuters.
Straumann owns a stake in Brazil's Neodent and plans to start selling the lower-priced brand in the United States from March, having already launched in Spain in October.
"We are actually looking at launching Neodent in other larger European countries still during the course of this year," Gadola said.
By expanding in the value segment, the company is opting for a different strategy than Nobel, which continues to focus on the premium market by investing in research and development and improving relationships with dentists.
Straumann has also cut the price of its standard titanium implants by around 10 percent in Germany, Austria and Switzerland and offered its customers better implants at the same price as older products to try and close the gap on rivals.
Gadola said the initial results of this campaign were "extremely positive" and "quite promising."
Shares in Straumann were up 2.7 percent by 0835 GMT after the company reported that its underlying earnings before interest and tax (EBIT) margin rose to 18.2 percent for 2013 from 14.9 percent a year earlier.
The shares, which have gained 10 percent so far this year on expectations for an improved outlook for the sector, outperformed a slightly weaker European healthcare sector index .
LOW SALES GROWTH
Straumann said it expects sales growth in the low-single digit range this year which Gadola said should be "slightly ahead" of the overall market.
While demand in Europe is subdued, Gadola was more upbeat about North America, which posted a double-digit increase in sales in the fourth quarter of 2014 and expects a market recovery in Japan to lift sales in the Asia Pacific region.
Full-year sales for 2013 slipped 0.9 percent to 680 million Swiss francs ($764 million), the company said on Tuesday, in line with a Reuters poll, but were up 1.2 percent excluding currency effects and the discontinuation of its intra-oral scanner distribution business.
"It seems that Straumann was able to adapt to the challenging markets at least in the short term better than Nobel Biocare," said J. Safra Sarasin analyst David Kaegi, who has a 'neutral' rating on Straumann.
Despite its focus on cheaper brands, Straumann still expects to expand its operating income margin in 2014.
The company has cut costs and slashed 12 percent of its global headcount to boost profit in the face of weak demand.
It reported a full-year net profit of 101 million francs for 2013, in line with forecasts, and proposed an unchanged dividend of 3.75 francs per share. ($1 = 0.8897 Swiss francs) (Reporting by Caroline Copley; Editing by Matt Driskill and Susan Fenton)