Straumann loses bite in Q3, maintains 2010 goals
* Q3 sales 161.6 mln Sfr, trails avg estimate of 168 mln
* Says cautious about short-term market development
* Maintains full-year goals
* Strong franc may stop group beating 2009 sales
* Shares rise 1.2 pct, outperform sector index
(Adds analysts' comments, share price, background)
By Katie Reid
ZURICH, Oct 28 (Reuters) - Swiss dental implant maker Straumann Holding AG (STMN.S) sounded a cautious note on sector prospects after posting weaker-than-expected third-quarter sales due to a stronger Swiss franc hitting its top line.
Straumann, which this year displaced Swiss rival Nobel Biocare (NOBN.VX) from top spot in the industry, said third-quarter sales fell 3.9 percent to 161.6 million francs, falling short of the average estimate of 168 million in a Reuters poll. [ID:nLDE69K1N6]
"With consumer confidence still fragile, we remain cautious about how our markets will develop in the near term and when sustainable economic recovery will come," the group said in a statement on Thursday.
Its shares, which have lost around a third of their value this year, were up 1.2 percent at 0910 GMT, outperforming a 0.5 percent rise in the European healthcare index as investors took comfort that Straumann had confirmed its full-year outlook.
"Maintaining 2010 guidance should provide some support for the stock, though we would expect it to remain weak," analysts at Evolution said.
Straumann expects the market to grow in low single digits in 2010. Chief Executive Beat Spalinger told Reuters growth could pick up in 2011, though he cautioned the market was unlikely to return to double-digit growth before 2012.
Fresh worries about the health of the world's economy have dented hopes of a recovery in the dental implant market, hit hard during the downturn as patients put off non-urgent treatments that are generally not reimbursed by insurers.
This month, U.S. group Biomet said its dental reconstructive device sales slipped 2 percent in the first quarter of its financial year.
CURRENCY CONUNDRUM
Straumann remained confident it would grow ahead of the market due to new products such as a digital dental restoration system and Roxolid, a material that combines titanium and zirconium, making it easier to produce stronger implants.
The group stuck to its guidance for the full year. It expects full-year net revenue and operating margin at least in line with the prior year in Swiss franc terms.
It added the currency's headwind could make it tough to exceed last year's net revenue and operating margin.
Straumann trades around 18 times 2011 earnings, a premium to Nobel Biocare which is due to post quarterly results on Nov. 3.
Many investors say the industry has bright long-term prospects, due to ageing populations in Europe and the U.S. and better awareness of the advantages of implants and veneers.
The biggest threat was from discount manufacturers, analysts at Bernstein said in a note.
Spalinger said he had not seen a major shift of consumers to cheaper rivals, adding the group kept prices stable in the third quarter and there had not been any structural market changes. (Additional reporting by Oliver Hirt; Editing by David Cowell and David Hulmes)
UPDATE 3-Straumann loses bite in Q3, maintains 2010 goals: "Straumann loses bite in Q3, maintains 2010 goals"
* Says cautious about short-term market development
* Maintains full-year goals
* Strong franc may stop group beating 2009 sales
* Shares rise 1.2 pct, outperform sector index
(Adds analysts' comments, share price, background)
By Katie Reid
ZURICH, Oct 28 (Reuters) - Swiss dental implant maker Straumann Holding AG (STMN.S) sounded a cautious note on sector prospects after posting weaker-than-expected third-quarter sales due to a stronger Swiss franc hitting its top line.
Straumann, which this year displaced Swiss rival Nobel Biocare (NOBN.VX) from top spot in the industry, said third-quarter sales fell 3.9 percent to 161.6 million francs, falling short of the average estimate of 168 million in a Reuters poll. [ID:nLDE69K1N6]
"With consumer confidence still fragile, we remain cautious about how our markets will develop in the near term and when sustainable economic recovery will come," the group said in a statement on Thursday.
Its shares, which have lost around a third of their value this year, were up 1.2 percent at 0910 GMT, outperforming a 0.5 percent rise in the European healthcare index as investors took comfort that Straumann had confirmed its full-year outlook.
"Maintaining 2010 guidance should provide some support for the stock, though we would expect it to remain weak," analysts at Evolution said.
Straumann expects the market to grow in low single digits in 2010. Chief Executive Beat Spalinger told Reuters growth could pick up in 2011, though he cautioned the market was unlikely to return to double-digit growth before 2012.
Fresh worries about the health of the world's economy have dented hopes of a recovery in the dental implant market, hit hard during the downturn as patients put off non-urgent treatments that are generally not reimbursed by insurers.
This month, U.S. group Biomet said its dental reconstructive device sales slipped 2 percent in the first quarter of its financial year.
CURRENCY CONUNDRUM
Straumann remained confident it would grow ahead of the market due to new products such as a digital dental restoration system and Roxolid, a material that combines titanium and zirconium, making it easier to produce stronger implants.
The group stuck to its guidance for the full year. It expects full-year net revenue and operating margin at least in line with the prior year in Swiss franc terms.
It added the currency's headwind could make it tough to exceed last year's net revenue and operating margin.
Straumann trades around 18 times 2011 earnings, a premium to Nobel Biocare which is due to post quarterly results on Nov. 3.
Many investors say the industry has bright long-term prospects, due to ageing populations in Europe and the U.S. and better awareness of the advantages of implants and veneers.
The biggest threat was from discount manufacturers, analysts at Bernstein said in a note.
Spalinger said he had not seen a major shift of consumers to cheaper rivals, adding the group kept prices stable in the third quarter and there had not been any structural market changes. (Additional reporting by Oliver Hirt; Editing by David Cowell and David Hulmes)
UPDATE 3-Straumann loses bite in Q3, maintains 2010 goals: "Straumann loses bite in Q3, maintains 2010 goals"
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