EUR 850.00 For Business Accounts Only

Morningstar | Straumann's 3Q Results Showed Continued Strength Across All Regions

Straumann's fiscal third-quarter performance provided no major surprises to us. Management's updated organic revenue growth guidance now assumes high teens percentage growth (versus prior guidance of midteens percentage growth), and we anticipate a slight increase in our fair value estimate after we update our growth assumptions. We are reiterating our narrow moat rating.

Straumann's double-digit organic revenue growth versus the year-ago period continued across all regions during the quarter. The company's implant business was bolstered by both premium and nonpremium brands, while digital equipment sales also realized healthy growth during the period. We think the company's premium implant sales will continue to benefit from product innovation, including its recently unveiled BLX implant. Additionally, we expect the ongoing rollout of its Neodent and Anthogyr brands in new regions should continue to boost the company's nonpremium implant performance. Separately, Straumann continued its steady M&A strategy during the quarter as it increased its stake in Taiwanese implant company T-Plus to 60% from 49%. We believe this increased ownership will boost Straumann's Asia-Pacific performance, which continues to be the company's fastest-growing region.

We think the clear aligner business remains on track to become a material growth engine for the company. We anticipate that it will take some time to reach meaningful production capacity, but we remain encouraged by Straumann's progress. However, we are less optimistic about the company's preventative dentistry pilot in Europe. While it remains to be seen whether this segment could prove beneficial for Straumann, we maintain that these less differentiated general consumable products are less attractive than the company's traditionally more complex products.