COLTENE Group H1 2020: Pandemic impacts sales and profit Freitag, 07. August 2020 - 06:00
Media Release
Altstätten, August 7, 2020
H1 2020: Pandemic impacts sales and profit
After a strong first quarter with high growth and an above-average EBIT margin, sales plummeted as governments mandated the full or partial closing of most dental practices in COLTENE's core markets. While sales were down in Dental Preservation and Efficient Treatment, business grew markedly in the third product group, Infection Control. Based on the sales trend seen over the past three months, COLTENE expects demand for dental consumables to rally in most markets, and anticipates stronger sales and EBIT margin growth in H2 versus H1.
In the first half of 2020, the COLTENE Group posted net sales of CHF 103.9 million (H1 2019: CHF 135.4 million). This corresponds to a 19.2% drop in sales year-on-year in local currency terms, or a 23.3% decline in reporting currency terms. The strong Swiss franc reduced sales by CHF 5.5 million. Operating profit (EBIT) was CHF 2.6 million in H1 2020 and remained in positive territory (H1 2019: CHF 12.8 million). The EBIT margin was 2.5% (H1 2019: 9.4%). Net profit decreased to CHF 0.3 million (H1 2019: CHF 7.9 million).
COLTENE's strategic cornerstones remain unchanged despite COVID-19. The main focus is on organic growth in key markets across all three product groups – Infection Control, Dental Preservation and Efficient Treatment. With its latest product innovations, especially in Infection Control involving IT applications and in root canal treatment, COLTENE plans to further position its brand as a solution provider. The acquisition of the SciCan Group has proved a sound strategic move as demand soared for disinfectants and cleaning, sterilization and disinfection equipment for dental instruments.
Protecting employees, liquidity and profitability
COLTENE has responded to the COVID-19 pandemic with a comprehensive set of measures, prioritizing employee health and safety, liquidity, and profitability. Non-priority investments have been stopped or postponed. Where feasible, management has introduced short-time work or furloughs (temporary layoffs). In addition, COLTENE introduced a bundle of wide-ranging measures to reduce non-personnel and operating expenses. In this context, Kenda – a COLTENE subsidiary since the start of 2018 and a maker of innovative, high-precision silicone polishers – relocated from Vaduz in Liechtenstein to Altstätten, along with its 12 employees, and was folded into the parent company's organization.
Strong demand for Infection Control products
From the start, the COVID-19 crisis has fueled strong demand for SciCan's infection control products. COLTENE swiftly adjusted its product planning and stepped up the pace on product innovations. These include additions to Infection Control product lines such as SciCan's new disinfection solutions but also hardware and software tools developed for tracing dentistry instrument use to individual patients in order to automate and improve the documentation process in dentistry practices.
Outlook
For the second half of 2020, COLTENE foresees an ongoing recovery in most markets. Demand will likely remain robust for disinfectants and for instrument cleaning, sterilization and disinfection products for dentistry use. The market is also growing for smart tracing of dentistry instrument use to individual patients. COLTENE plans to further develop and expand these services. At this stage, it is not yet possible to estimate the financial impact of the COVID-19 crisis on COLTENE's full-year results. As communicated in June, COLTENE anticipates the full-year results to be in positive territory but lower than those for the previous year.
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Half-Year Report 2020
The Half-Year Report 2020 of COLTENE Holding AG was released today and is available for download at
www.coltene.com/investor-relations/financial-publications/half-year-reports/.
Key figures (in CHF 1 000) | 2020 H1 | 2019 H1 | % change |
Net sales | 103 888 | 135 391 | -23.3% |
Operating expenses | 63 329 | 76 249 | -16.9% |
Operating profit (EBIT) | 2 555 | 12 792 | -80.0% |
as % of net sales | 2.5% | 9.4% | |
Net profit | 290 | 7 938 | -96.3% |
Operating cash flow | 8 318 | 8 589 | -3.2% |
Investments (net) | 5 237 | 7 274 | -28.0% |
Free cash flow | 3 081 | 1 315 | 134.3% |
Key figures (in CHF 1 000) | 30/06/2020 | 31/12/2019 | % change |
Net debt | -42 916 | -36 832 | 16.5% |
Total assets | 190 537 | 189 829 | 0.4% |
Equity | 78 257 | 91 210 | -14.2% |
as % of total assets | 41.1% | 48.0% | |
Number of employees (FTE) | 1 245 | 1 414 | -12.0% |
Financial Calendar
Media and analyst conference on 2020 financial year, release of Annual Report 2020 | March 5, 2021 |
Annual General Meeting 2021 | March 31, 2021 |
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For further information: Gerhard Mahrle, CFO,
phone +41 71 757 54 37, mobile +41 79 346 23 02, e-mail gerhard.mahrle@coltene.com
About COLTENE
COLTENE is an internationally active 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, Brazil and Switzerland as well as own distribution organizations in all major markets including Europe, North and Latin America, China and India. Dentists 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
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.
