Straumann Earnings Offer Cautionary View of the Global Dental Implants Market

Summary:

Last week, Straumann Group, a global leader in dental implants, restorative dentistry and oral tissue regeneration, issued financial results and offered a cautionary view of the implant market. How will the current economic crisis effect the long-term structure of the implant industry? Will newer, more nimble, implant companies seize the opportunity to grab market share in uncertain times?

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Straumann Is Cautious

It seems as if the economic crisis is taking its toll on the dental implant market. Last week, Straumann Group, a global leader in dental implants, issued financial results, and provided cautionary guidance for the upcoming year.

Even though Straumann reported that unaudited 2008 full-year net revenue increased 15% in local currencies (9% in Swiss francs), in line with the company's past guidance, the Group cautioned that: "Uncertainty in the global economy and historically weak consumer sentiment make it difficult to guide for the year ahead. From Straumann'’s perspective, the market for implant, restorative and regenerative dentistry is not expected to grow in 2009."

In response to the economic slowdown, Straumann has initiated a reduction of its global work force of approximately 3% worldwide. Additionally, due to the economic crisis, the value of Straumann’s intangible assets related to previous acquisitions has been reassessed. In total Straumann is slashing the value of its intangible assets by roughly 50%, implying much lower expectations for recently acquired businesses.

Long Term Market Forecast for Implants is Strong and Newer Competitors Should Get Aggressive
Even though global economic conditions are impacting the growth of the dental implant market at the present time, it seems clear that the long-term growth of the implant industry is very robust. The aging of the population, the still relatively low penetration rates of implants, improving technology and lower prices offered by new entrants into the implant marketplace, make it highly likely that the dental implant market will resume strong growth when this crisis subsides.

Time will tell whether Straumann comes out stronger from this period, or whether the current economic environment simply provides fertile ground for new implant upstarts to seize market share from their larger competitors, like Straumann. It would seem that more nimble competitors who are not beholden to public investors, should seriously consider taking a contrarian stance and increasing their marketing and advertising during this slowdown, so as to fully benefit from any economic recovery. The best advertising opportunities are clearly online, as tech-saavy clinicians, who remain the key target for implant companies, continue to use online resources, such as OsseoNews.com to keep abreast of the latest developments in implant dentistry. In fact, readership of online-only dentistry publications, such as OsseoNews, now undoubtedly exceed readership of the major offline publications.

As in any tough economic period, it is the companies that innovate and experiment with new marketing techniques, that end up prospering when the economy recovers. Those that stick to only conventional methods of business development and marketing, will undoubtedly lose market share, as channel and customer preferences shift over the coming years.

Source:

OsseoNews