* Q3 sales rise 4 pct to 156.8 mln Sfr, vs poll 158 mln
* Plans to axe 150 jobs to cut costs
* Confirms outlook for FY sales in line with 2011
* Shares rise 6.1 pct in early trade, outperform sector
(Adds details, analyst, shares)
By Caroline Copley
ZURICH, Oct 30 Swiss dental implant maker
Straumann said it would axe roughly 150 jobs to boost
margins as it grapples with sluggish demand in Europe, its
The euro zone debt crisis has battered sales of dental
implants made by Straumann and its Swiss rival Nobel Biocare
as cash-strapped Europeans, worried about the downturn,
cut back on non-essential dental treatment.
Chief Executive Beat Spalinger said the company had decided
to slash 150 jobs by the start of 2013 - roughly 6 percent of
its global workforce - after operating margins fell below 15
percent in the first half of the year, a level he deemed
The axe will fall on jobs at Straumann's headquarters in
Basel as well as sales subsidiaries around the world while
manufacturing will be spared, Spalinger said.
Third-quarter sales rose 4 percent to 156.8 million Swiss
francs ($167.41 million), compared with an average estimate in a
Reuters poll of 158 million.
The company said the cost cuts would improve annual
operating profit by 35-40 million francs by 2014. It plans to
book an exceptional charge of 15-20 million francs in 2012.
Sarasin analyst David Kaegi said investors would welcome the
bigger-than-expected cost cuts, but cautioned there appeared no
end in sight to the current slump in the dental market.
By 0811 GMT, Straumann's shares, which have shed almost 28
percent so far this year, were trading up 6.1 percent at 124.10
francs, outperforming a flat European healthcare sector index
Straumann, which makes more than half of its revenue in
Europe, said sales in the region fell 2.5 percent in the third
quarter to 82.3 million francs, hampered by austerity measures
that weakened consumer confidence further.
In the worst affected markets of Spain and Italy, Spalinger
said he did not expect any improvement in the near future.
The European sales decline was partly offset by North
America and Asia Pacific where sales leapt 19 percent and 6
percent respectively buoyed by favourable currency effects.
Straumann also said it would increase its stake in Dental
Wings, a maker of dental software and scanners, to 45 percent
from 30 percent for an undisclosed sum. The move is part of a
trend towards digital dentistry to optimise production.
The company confirmed its outlook for full-year sales to be
at least in line with 2011 and for growth in the global tooth
replacement market to remain flat at best over the full year.
($1=0.9366 Swiss francs)
(Editing by Mike Nesbit and David Cowell)