H1 2023 result outperforms prior year at constant exchange rates
August 04, 2023 at 12:02 am EDT
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COLTENE Holding AG / Key word(s): Half Year Results
H1 2023 result outperforms prior year at constant exchange rates
04-Aug-2023 / 06:00 CET/CEST
Release of an ad hoc announcement pursuant to Art. 53 LR
The issuer is solely responsible for the content of this announcement.
COLTENE, a leading international developer and manufacturer of dental consumables and small equipment, achieved a pleasing business performance in the first half (H1) of 2023 despite a challenging business environment. Net sales were up 1.7% year-on-year, at constant exchange rates, outperforming the strong result of the same period a year earlier. The business performance reflects our success in clearing delivery backlogs on our side, but also the reduction of inventories at our distribution partners and – in particular – highly negative exchange rate effects. Against this background, sales declined in Dental Preservation and Efficient Treatment but saw an impressive increase in Infection Control.
Half-year result heavily impacted by exchange rates
Exchange-rate movements had a significant impact on the half-year result, especially the currencies Euro (EUR), US dollar (USD) and Canadian dollar (CAD). In CHF terms, accordingly, the COLTENE Group posted H1 2023 net sales of CHF 131.4 million, down 2.6% year-on-year. In local-currency terms, by contrast, net sales were up 1.7%, a pleasing increase considering the strong performance in the same period a year earlier (CHF 134.9 million). Operating profit (EBIT) was CHF 14.4 million (H1 2022: CHF 16.7 million) and the EBIT margin was 11.0% (H1 2022: 12.4%). Net profit was CHF 10.0 million (H1 2022: CHF 12.1 million). Free cash flow received a sharp lift from optimized net working capital, ending the half year at CHF 16.7 million (H1 2022: CHF 7.8 million). This was supported in part by the scaling back of stockpiling activities as supply chain constraints eased generally.
Impressive growth in Infection Control sales
In H1 2023, most of the backlogs affecting instrument reprocessing equipment as a result of supply chain bottlenecks were cleared, as by and large, the supply chain situation has returned to normal. At the same time, however, the state of the global economy weighed on demand for devices. Despite these challenges, Infection Control sales grew 6.2%, year-on-year. In local currencies, in fact, the increase was 10.6%. By contrast, sales in Efficient Treatment and Dental Restoration suffered as distribution partners reduced their existing inventories, above all in the key markets Europe and North America. In Efficient Treatment, growth was accordingly modest (0.3% in local currency terms and -4.2% in CHF terms). Dental Restoration business performance was further hampered by delays in the certification process for endodontic files caused by a notified body (-5.5% in local currency terms, -9.5% in CHF terms). In the meantime, COLTENE has received these certifications, and hence is on track to start generating sales in H2 2023.
Positive growth in North America
North America sales were up an impressive 4.2% in local currency terms, growing their share of total sales to 47.2% (H1 2022: 45.7%). Europe, Middle East and Africa (EMEA) came to account for 35.4% of our business (H1 2022: 36.8%), with sales down 1.6% in local currency terms (-6.2% in CHF terms). While some European markets performed sharply better, Middle East and Africa did not continue their strong sales growth of the prior-year period. Impressively, Asia sales year-on-year were 7.4% higher (-0.4% in CHF terms), contributing 11.1% to Group turnover in H1. India performed extremely well, reporting 22.4% higher sales in local currency terms. China sales had a subdued start to 2023 but ended H1 up 13.9% in local currency terms. In Latin America, sales were down 6.2% in local currency terms.
Digital transformation increases patient safety
COLTENE is well advanced in the transition to the new EU Medical Device Regulation (MDR) requirements. By H1 2023, 92% of sales were realized with MDR certified products. In H2, the Group is launching and phasing in new products and services in key markets to further accelerate digital transformation at COLTENE. This will enhance patient safety and efficiency in dental practices while also improving information for service technicians.
Outlook for 2023
The outlook for the global economy and the geopolitical environment remains uncertain. This may weaken the more cyclical demand for Infection Control devices, in particular, assuming inflation and interest rates remain high. Nevertheless, the COLTENE Group looks to H2 2023 with confidence. We expect that our distribution partners will have finished optimizing their inventories in the course of H2. We are also enthusiastic about the products and services we will be launching in the coming months to further drive digital transformation at COLTENE and access new customers. In addition, COLTENE will benefit from the newly received certifications that have cleared our endodontic files for sale and from further economic recovery in China. Given its healthy balance sheet, moreover, COLTENE is well positioned for growth through acquisitions.
Based on the factors listed, the Group confirms its medium-term target of an EBIT margin of 15% with sales growth modestly above the market average.
Half-year report 2023
The half-year yeport 2023 of COLTENE Holding AG is available for download at global.coltene.com/investor-relations/financial-publications/half-year-reports/.
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Financial Calendar
Release of Annual Report and
media and analyst conference on 2023 financial year
8 March 2024
Annual General Meeting 2024
17 April 2024
Release of Half-Year Report and
media and analyst conference on 2024 half-year results
8 August 2024
About COLTENE
COLTENE is an international developer, manufacturer and seller of dental consumables and small equipment in the areas of Infection Control, Dental Preservation and Efficient Treatment. COLTENE has state-of-the-art production facilities in the USA, Canada, Germany, France and Switzerland as well as own sales organizations in all major markets including Europe, North and Latin America, Japan, China and India. Dentists, DSOs, dental clinics and dental labs all around the globe trust COLTENE's high-quality products. The registered shares of COLTENE Holding AG (CLTN) are listed on SIX Swiss Exchange. Learn more about COLTENE and our products at www.coltene.com.
Contact information
COLTENE Holding AG
Feldwiesenstrasse 20
9450 Altstätten, Switzerland
P + 41 71 757 53 00 investor@coltene.com www.coltene.com
This written statement and oral statements or other statements made, or to be made, by us contain forward-looking statements that do not relate solely to historical or current facts. These forward-looking statements are based on the current plans and expectations of our management and are subject to a number of uncertainties and risks that could significantly affect our current plans and expectations, as well as future results of operations and financial condition. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Coltene Holding AG is a Switzerland-based Company active in the healthcare sector. It develops, manufactures and sells dental consumables and small equipment focusing on mechanical instruments and filling materials. It has production facilities in Switzerland, the United States, Germany and Hungary. The Company's product range comprises six product groups: Adhesives / Restoratives; Endodontics; Prosthetics; Rotary Instruments; Treatment Auxiliaries; and Hygiene. Coltene Holding AG has a number of wholly owned subsidiaries active in production and sales of dental specialties based in Switzerland, Germany, Hungary, Canada, the United Kingdom, France, China, India, the United States and Brazil.
COLTENE HOLDING AG 
