OREANDA-NEWS. COLTENE Holding AG (SIX Swiss Exchange: CLTN), an internationally leading developer and producer of dental consumables, in a challenging environment achieved net sales of CHF 154.5 million in the financial year 2015 (2014: CHF 162.3 million). At -1.1% in constant currencies, Group sales were nearly held at the year-ago level. In the Company’s reporting currency of Swiss francs, sales declined by 4.8%. Business in China and India, two key markets for future growth, showed pleasing growth of 16.3% and 6.2%, respectively, in local currency. In North America sales increased 5.6% in Swiss francs and 0.5% in local currencies. In EMEA sales volumes receded by 0.4% only despite the soft economy in the CIS region. Due to the weak economy in Brazil sales declined in Latin America 16.3%. With operating profit (EBIT) of CHF 20.4 million (2014: CHF 22.4 million), the Group held the EBIT margin at a solid level of 13.2%. Net profit declined by 14.7% to CHF 13.3 million (2014: CHF 15.6 million) owing to higher tax expenses in the US and the currency-induced deterioration in the net financial result. The Board of Directors will propose at the Annual General Meeting on March 30, 2016, the distribution of a dividend of CHF 2.20 per share.

Particular challenges in 2015 stemmed from the Swiss National Bank's decision to abandon the ceiling on the Swiss franc’s value against the euro announced on January 15, 2015, the economic slowdown in important markets, not to mention the process of destocking among large dental supply dealers in North America. COLTENE addressed the strong Swiss franc by cutting additional costs especially in Switzerland and further globalizing the business. The focus was on standardizing organizational structures and operating procedures and the continued steadfast implementation of the global sourcing concept. In parallel, COLTENE further strengthened its sales structures and established new Group companies in Turkey and Japan. Additionally, COLTENE prepared in its role as the official materials partner for Sirona's CAD/CAM CEREC system the launch of BRILLIANT Crios, new reinforced composite blocs for reliable, aesthetically appealing and quick chairside-manufactured restorations, as of the first quarter 2016.

Business performance by region: Further growth in Asia
In 2015 COLTENE Group defended its position in key core markets despite strong market headwinds. Measured in the reporting currency of Swiss francs, sales in Asia rose by 8.2%. COLTENE achieved strong growth in local currency in the key target markets of China (plus 16.3%) and India (plus 6.2%). With some extra tailwind from the stronger dollar sales in North America rose by 5.6%, while sales growth in local currency amounted to just 0.5%. Due to a deliberate inventory destocking by dealers, sales of COLTENE products to dealers (sell-in) virtually stagnated whereas sales of COLTENE products through distributors covering the North American market (sell-out) rose by more than 4.0%. Sales in the EMEA region were down by 10.7% (at constant currencies by 0.4%). Sales in local currency increased in Germany/Austria (plus 2.7%) and in the sub-regions of the Middle East and Africa (plus 13.1%). In other European markets, Switzerland and France for example, strong competition and parallel imports resulted in lower sales of 5.6% and 8.1%, respectively. Local sales in Russia and other CIS countries showed a sharp contraction of 23.7% compared to the previous year. In Latin America, sales were down by 24.8% (at constant currencies by 16.3%). In local currency, Brazilian sales declined by 29.8%. Sales were impacted by the recession in this market and the ongoing concentration process of the distributor structures.

Business performance by product group: Endodontics now the second-largest product group
The sales performance of COLTENE’s three key product groups Restoration, Prosthetics and Endodontics diverged during the 2015 fiscal year. A positive trend was observable in the Endodontics products group, where sales rose by 3.7% to CHF 31.7 million (2014: CHF 30.6 million). On the other hand, competitive pressure impacted both the Prosthetics and Restoration product groups. Restoration sales receded by 6.3% to CHF 39.2 million (2014: CHF 41.8 million). At Prosthetics sales were down by 12.4% to CHF 31.0 million (2014: CHF 35.5 million). Rotary Instruments and Infection Control reported incremental sales growths of 0.2% to CHF 12.5 million (2014: CHF 12.4 million) and 1.1% to CHF 10.5 million (2014: CHF 10.4 million), respectively.

Group Management expanded and strengthened
COLTENE increased the number of seats on its Group Management Board to five to better support its global setup. This decision established a broader base for top-level executive leadership and will help it to guide and grow the now much more internationalized organization. As of October 1, 2015, COLTENE Group Management, chaired by Martin Schaufelberger as CEO, consists of Gerhard Mahrle, CFO,
Werner Mannschedel, Vice President R&D, Dr. Werner Barth, Vice President Marketing, and Christophe Loretan, Vice President Sales.

Outlook
Looking ahead and taking into consideration the new foreign exchange reality, COLTENE Group aims to boost its innovation and efficiency and improve its operational track record. During the year under review the Board of Directors, working closely with the Executive Management Board, reviewed Company strategy and established new priorities for the 2016-2018 period. The new strategic priorities aim to grow Group sales in step with the underlying market and gradually increase the EBIT margin to 15% during the coming years.

Key Figures in CHF 1 000

2015

2014

?%

Net sales

154 496

162 348

-4.8%

Operating profit

20 385

22 405

-9.0%

in % of net sales

13.2%

13.8%

  

Net profit for the period

13 335

15 633

-14.7%

Cash flow from operating activities

18 164

19 938

-8.9%

Investments (net)

4 451

3 246

37.1%

Free cash flow

13 713

16 692

-17.9%

Total assets

149 187

164 647

-9.3%

Net cash position / (Net debt)

864

(2 525)

-134.2%

Shareholders’ equity

101 578

104 117

-2.4%

in % of total assets

68.1%

63.2%

  

Distribution per share

2.20

2.50

-12.0%

Employees (?)

888

909

-2.3%

 

Financial Calendar

Last day for inscription into the share register before
the shareholders’ meeting 2016

March 23, 2016

Shareholders’ meeting 2016

March 30, 2016

Semi-annual results 2016

 August 5, 2016

Media and analyst’s conference 2016, Annual report 2016

March 9, 2017

Shareholders’ meeting 2017

March 29, 2017

About COLTENE
COLTENE is an internationally active developer, manufacturer and seller of dental consumables and small equipment in the areas of restoration, endodontics, prosthetics and treatment auxiliaries. COLTENE has state?of?the?art production facilities in the US, Germany, Brazil and Switzerland as well as own distribution organizations in all major markets including China and India. Dentists and dental labs all around the globe trust the high?quality COLTENE products. The registered shares of COLTENE Holding AG (CLTN) are listed on SIX Swiss Exchange.