Straumann Holding AG

Thank you for attending this conference call on the Strommann Group's half-year 2026 results. Before we begin, let me address the leadership transition we announced this morning. After almost 20 years with the company, I will conclude my seven-year tenure as CEO of the Strommann Group by the end of the year. I have planned it actually for quite some time, and I genuinely believe it is a very good moment for a smooth leadership transition. The company is in a strong position with a clear vision, strong strategy, which is delivering results, many opportunities ahead, and more importantly, a high-performing management team well positioned for the next chapter. Therefore, I'm sincerely very pleased about Christopher Norbye's appointment, and I'm looking forward to supporting him with a smooth and efficient handoff. But for the time being, I'm fully focused on closing the year strong, meaning that you will still have the pleasure of hearing from me again for the Q3 results. And now, let's move on to talk about our half-year results. Please take note of the disclaimer in our media release and on slide two. During this conference call, we are going to refer to the presentation slides that were published on our website this morning. As usual, the discussion will include some forward-looking states. As shown on slide three, I will start with the performance overview. Isabelle will then cover the financial details, and afterwards, I will share strategic updates and our outlook. We will be happy to answer your questions at the end of the presentation. Then let's move directly to slide five. I'm very pleased to present our results for the first half of 2026. The excellent second quarter performance continued market share gains and meaningful margin progress led us to a greater profitability outlook in June. We delivered revenue of 707 million Swiss francs in the second quarter, corresponding to an organic growth of 8.5% and reported growth of 5.9% in Swiss francs. This brought Altier revenue to around 1.4 billion Swiss francs, representing organic growth of 7.8% or 2.3% in Switzerland. The acceleration from the first to the second quarter is important. It shows the pace we've built through the first half with every region contributing and mature markets performing particularly well. The measures we introduced to improve profitability are also delivering significant improvements. Our core EBIT margin reached 26.9% at constant 2025 exchange rates, or 25.7% including currency effects. Digital solutions were another key contributor. Our intraoral scanner portfolio, led by Serial 63, grew at double-digit rate. This strong adoption is expanding our active Stroman access user base at also a double-digit rate, and in turn, driving further growth across software and consumables. This rapidly expanding connected base of users is strengthening our digital ecosystem and creating a platform for future growth across implantology, orthodontics, and prosthetics. In implantology, iXcel continued to deliver customer conversions and new account wins, while new then further expanded its global reach. ClearCorrect also continues to make fast progress with its transformation. And very importantly, we are translating this dynamic growth into higher profitability. Manufacturing productivity and supply chain optimization are lowering our cost base, while disciplined OPEX management is creating further operational leverage. Isabelle will explain the drivers in more detail in a moment. Overall, the priorities presented at our capital market stay are clearly translating into results. We're excited about the opportunities ahead and remain fully confident in delivering our upgraded outlook for 2026. Let me now turn to slide six and look at how this performance developed across the regions. Starting with EMEA, our largest region, organic growth reached 8.6% in the second quarter and 8.2% for the first half. Mature markets performed particularly well, with Germany delivering solid growth and Poland and Hungary showing especially strong performance, supported by positive contributions from Iberia, Benelux and other established European markets. Implantology was the main growth driver, IXL continued to attract new customers and support share gains, while Neodent and Antogir expanded their reach in the challenger segment through significant new customer acquisition performances. In parallel, ClearCorrect also continued to expand its presence among channel practitioners. Moving to North America, organic growth reached 8.4% in the second quarter and 8.1% in the first half. The region continued to outperform the underlying implant market despite the remaining cautious consumer sentiment and stable patient flow. Premium Implantology led the performance with IXL driving double-digit growth in new customer acquisition and Neodent also pursuing its market penetration. The DSO segment remained an important contributor supported by long-term strategic partnerships and increasing adoption of integrated workflows. Consequently, digital solutions also grew at a double-digit rate, supported by our own intraoral scanner portfolio. In Asia Pacific, organic growth improved to 7.4% in the second quarter, bringing first-time growth to 4.2%. Outside China, The region posted a very strong growth with 25% in the second quarter, led by Japan, India, and Southeast Asia. Premium Implantology and Neodan performed well, while Digital Solutions made a significant contribution, led by Serious X3 and increasing adoption across the region. In China, performance improved sequentially as patient flow gradually recovered and distributor inventory stabilized. We expect the VVP 2.0 process to potentially begin in the second half of the year with an expected operational implementation planned for early 2027. Finally, Latin America delivered another quarter of double-digit growth with 11.8% in the second quarter and 15.4% for the first half. Brazil and the Hispanic markets, especially Mexico, Argentina, and Colombia, were the main contributors. Premium implantology achieved double-digit growth. NEO then continued to expand across the region, and digital solutions also grew at double-digit rates. Overall, this regional performance highlights the resilience of our business model, the high strength of our geographical footprint, and our ability to gain share across different market environments. With this visual overview, I will now hand over to Isabelle to take you through the financial performance in more detail.

Thank you, Guillaume, and good morning, good afternoon, also from my side. It's a pleasure to walk you through our financial performance for the first half of 2026. Let me begin with gross profit on slide eight. We generated a core gross profit of 972 million Swiss francs in the first half, corresponding to a core gross margin of 70.5%. Let me walk you through the bridge from left to right. After excluding non-core items and translating the prior year results at 2026 exchange rates, the comparable starting point is a core gross margin of 71%. Productivity and mix added 40 basis points. This reflects not only a favorable product mix, but also the continued progress of our operational excellence program and the enhancement of our production network strategy, including our Shanghai campus, which is now fully up and running. As a result, the right sizing of our production facility in Villere has been finalized with a write-down of equipment that will no longer be used, resulting in a one-time margin effect of 30 basis points. This underlines our technology strategy shift towards more advanced technologies, such as the multi-spindle, to further improve productivity in future. U.S. tariffs reduced the margin by a further 60 basis points, resulting in the cross-margin of 70.5%. Importantly, if we exclude the tariff impact and the one-time equipment write-down, the underlying bridge shows a clear improvement in gross margin. On the right-hand side of the bridge, the IFRS gross margin reached 72%. The 150 basis points difference to core mainly reflects US tariff refunds recognized during the first half of the year. Overall, the core gross margin remains at a high level. The underlying trend is encouraging as productivity measures, supply chain optimization, and local for local production continue to lower COGS. With a gross margin bridge in mind, Let me now turn to EBIT on slide nine. Our core EBIT amounted to 355 million Swiss francs with a margin of 25.7%, including currency effects. At constant 2025 exchange rates, the margin reached 26.9%. Starting from the comparable prior year core margin of 24.8% at 2026 exchange rates, the 50 basis points gross margin change flowed through to EBIT. This was more than offset by 130 basis points of efficiency gains, while other effects added around 10 basis points. As a result, the core EBIT margin improved by around 90 basis points on a comparable current currency base. The main driver behind this was disciplined OPEX management, as well as the execution of our operational excellence programs. Core operating expenses increased in absolute terms because we continue to invest in commercial capabilities, innovation, digital platforms, and our strategic priorities, whilst keeping our headcount flat, improving scalability. As a result, as a percentage of revenue, core OPEX improved by approximately 130 basis points compared with the prior year period at current year exchange rates. This reflects operating leverage sharper resource allocation, and productivity measures across the organization. The improving profitability of ClearCorrect and our infraoral scanner business also contributed. Overall, we translated revenue growth into a meaningful increase in profitability while continuing to fund future growth. This brings me to the net result on slide 10. Core net profit reached 262 million Swiss francs in the first half, corresponding to a margin of 19%. On a currency-adjusted basis, this represents an increase of 15.7% compared with a prior year period. The bridge is primarily driven by the improvement in EBIT, which contributed 38 million Swiss francs. The financial results had a small negative impact of 3 million Swiss francs. Results from associates added 2 million, while income tax reduced the bridge by 2 million. the effective core tax rate was 18.8%. Non-core items had a net negative impact of 11 million Swiss francs after tax, resulting in an IFRS net profit of 251 million Swiss francs. These items mainly include M&A-related effects and legal costs, partially offset by the tariff refunds I mentioned earlier. Overall, this development shows the quality of the earnings improvement and how effectively operating performance converted to the bottom line. Let me now turn to cash flow and investments on slide 11. In the first half of 2026, we generated a free cash flow of 169 million Swiss francs, an increase of 49% compared with the prior year period. This corresponds to 12.2% of net revenue compared with 8.4% one year ago. The increase was supported by higher operating cash generation and lower capital expenditure. Net cash from operating activities amount to 239 million Swiss francs, while net cash used in investing activities was 105 million. Financing activities and foreign exchange movements reduced cash by 228 million, which included the dividend payment. Cash and cash equivalents amount to 381 million Swiss francs at the end of June, and we also maintained a net cash position of 350 million Swiss francs, including a solid equity ratio of close to 59%. Capital expenditure amounted to 74 million Swiss francs, or 5.4% of revenue, compared with 130 million Swiss francs in the prior year period. The lower capital expenditure reflects the completion of a multi-year period of significant capacity investment. At the same time, we continue to invest in the Shanghai campus, the expansion of COVIDTIBA and productivity initiatives and digitalization. Overall, our cash generation and balance sheet provide the flexibility to support organic growth, innovation and strategic investment. This leads me to our capital allocation priorities on slide 12. So let me reiterate, our capital allocation remains unchanged. First, we reinvest in the business to drive sustainable future growth. Because over the past several years, we have completed an intensive manufacturing investment cycle and substantially expanded capacity across our network. With the Shanghai campus, additional manufacturing capacity in Curitiba and investments in automation now in place, we have the manufacturing footprint to support the growth we expect in the coming years. As a result, we expect capital expenditure intensity to remain below the levels of the peak investment years. Our second priority is to maintain a strong balance sheet. This gives us the flexibility to accelerate strategic initiatives and pursue value-creating M&A. And third, we remain committed to maintaining and increasing dividends with our earnings. Overall, the disciplined order balances reinvestment for growth, financial flexibility, and shareholder returns. With that, I will now hand back to Guillaume for the strategy update and outlook.

Thank you, Isabelle. Let me now turn to the strategy update. I will start with the size of the market opportunity on slide 14. When you look at our market position today, two things stand out. The strength of the business we have built and the size of the opportunity still ahead of us. That is the logic behind our perform and transform strategy. We are executing both dimensions in parallel, strengthening performance in our core businesses while transforming adjacent high-growth potential businesses with investments in new and differentiated value propositions. On the perform side, we are building from positions of real strength. In implantology, we are the clear global leader. Together with Regeneratives, These are categories where our brands, clinical heritage, innovation pipeline, and strong global customer relationship give us a powerful platform to keep outperforming the market. But leadership does not mean we have reached the ceiling. There is still massive headroom in our core business, and we continue to see opportunities to gain share through innovation, stronger go-to-market execution, and broader customer penetration. The transform side is adding a significant dimensional growth. In clear aligners, digital equipment, and CAD-CAM proceeding, our positions are relatively small compared with the size of the opportunity. What is particularly exciting today are the innovations we have invested in over the past quarters are now coming together to transform our competitive capabilities in each of those market segments and start to deliver results. So across the portfolio, we have a powerful combination, an implant leadership position we can continue to expand, and significant headroom in large adjacent markets where we are only at the beginning of our expansion. This gives us a very attractive runway for sustained growth. Let me now show you how our growth playbook turns this opportunity into execution on slide 50. Our growth playbook combines product leadership with unique customer experience. Product leadership starts with innovation. Differentiated solutions such as Stroman IXL Implant Performance System or the Sirius X3 Intraoral Scanner as key examples. They expand clinical applications, simplify treatments, and improve clinical outcomes. But being a product champion is only one part of a successful equation. Today, health professionals expect an efficient clinical experience, seamless end-to-end connectivity through efficient workflows, which deliver predictable treatment execution. This is where digitalization is critical. Our Stroman Access platform turns individual innovations into an integrated ecosystem that improves practice efficiency and create a unique clinician experience. Finally, education completes our dental practice value creation formula. It gives clinicians the confidence and skills to adopt new solutions and workflows with efficiency. Across implantology, orthodontics, and prosthetics, the same logic applies. Innovation creates differentiation. Digitalization increases efficiency and engagement. And education drives adoption. Let's start by the entry point into the ecosystem by moving to slide 60. Every digital workflow in our ecosystem starts with a scan. This is why we have built a differentiated intraoral scanner portfolio covering the full market for multiple brands and price points. At the premium end, we offer the free-shaped Trios portfolio. Sirius X3 addresses the mid-range segments, and Sirius provides an attractive entry-level solution. This breadth, combined with the successful launch of Sirius X3, has significantly accelerated adoption across all our markets. Over the last 12 months, we have captured a very significant share of global intraoral scanner cells, reflecting the strong adoption of our portfolio. This represents an important strategic opportunity as every scanner placement expands our user base and creates an entry point into Stroman Access, our open cloud-based platform shown in the middle of the slide. In the first half of the year, the connected user base grew at a double-digit rate, creating a much larger installed base for future growth. Then moving to the right, these workflows connect directly to the Stroman Group product portfolio, supporting clinicians through our implant, restorative, and orthodontics solution. This is why intraoral scanners is truly a strategic segment for us. It is the gateway to recurring revenue deeper customer engagement, and future growth across the entire ecosystem. Let me now show you a clear example about what this means in daily practice on slide 70. The Stroman FastMolar treatment solution, based on our scannable anatomic healing abutment, shows how product innovations combined with digital integration translate into greater practice efficiency. At the bottom of the slide, you can see the traditional workflow. After surgery, the clinician placed a conventional healing abutment. At the later appointment, the healing abutment is removed and replaced by a scan body. After the scan, the scan body needs to be removed and the healing abutment is placed once again before the final restoration at the later stage. This means several component changes additional chair time, and another patient visit. At the top, the Stroman fast molar treatment workflow is much simpler. The clinician places the anatomical healing abutment at the time of surgery and can directly scan it on the same day. The restoration can then be produced from the scan without intermediate scan body steps with all the necessary data automatically transferred to the dental laboratory. This is saving at least one full patient appointment and around 30 minutes of clinical time. For the practice, this means higher productivity, fewer handling steps, and a more standardized workflow. For the patient, it means fewer visits, less manipulation of the healing site, and a faster, more convenient treatment journey. And for Stroman, the workflow strengthened the use of original restorative components, and create recurring value around the implant system and its differentiation. The Stroman FastMolar treatment workflow shows how digitalization is directly improving treatment execution. In addition, AI is also now more and more enhancing those digital capabilities and drives practice code. We have just released an important AI-led innovation supporting implant case conversion before treatment begins. Let me turn to slide 18. Here, the SmileCloud AI-enabled YES technology supports implant case conversion before treatment even begins. As you can see in the video, it transforms a simple 2D patient photo into a dynamic 3D video simulation instantly at the chair side. The patient can see immediately her future new smile in a kind of real life. This makes the expected outcome tangible, strengthen patient understanding and confidence, and support significantly higher and faster conversion of advanced implant cases. Because the solution is connected to from an access, it also enables more efficient digital case collaboration and further strengthen our ecosystem. Having shown our digitalization supports both treatment efficiency and case conversion, let me now turn to our premium portfolio on slide 90. In premium implantology, IXL is the main drive. In the first half, it represented close to 40% of Stroman premium implant volumes globally sold. It is attracting new accounts, driving conversion from both premium and value competitors, and supporting share gains across key geographies. The simplicity of the platform is a key advantage, especially combined with the unique SL-active surface and the unique Oxolid material, which supports clinicians to deliver excellent clinical outcomes with confidence. To continue on our dynamic market penetration, we are further investing in a rich innovation pipeline based around IXL. As another example, we have just launched iGUIDE, our fully guided surgery solution for IXL, which translates digital treatment planning into precise implant placement, through a simple, intuitive procedure, giving clinicians greater confidence and predictability. Overall, we are really confident that IXL and the premium pipeline will continue to drive growth and reinforce our market-leading position. Let me now move from premium to the challenger segment on slide 20. Our challenger portfolio complements premium and allows us to address distinct customer needs across markets and price points. Neodent is our global challenger brand. It continues to scale at a very dynamic pace through constant go-to-market and education investments in key geographies, supported by additional manufacturing capacity now created in Curitiba. Its differentiated ground loss portfolio and broadening geographical presence make Neodent a very important growth engine for the group. In parallel to Neodent, our Medantica brand is also growing well, building on its leadership on MPS abutment system, multi-platform system abutment, compatible with all major implant systems. As a new opportunity, it has locally developed in China a new implant line which will support our challenger offering in this key market. Finally, at the regional level, Antogir is expanding in EMEA with Axiom X3 combining clinical differentiation with treatment simplicity. Together, Stroman, Neodent, Antogir and Medentica give us a very unique multi-brand, multi-price point portfolio with global reach and especially local relevance. This portfolio is a key part of our strategy to continue gaining share in implantology, and China is one of the key examples where this multi-blend approach will become increasingly important. Let me turn to slide 21. China remains one of the most compelling long-term opportunities in implantology. As the chart shows, China remains far below mature market benchmarks. Compared with Spain, where penetration is around 480 implants per 10,000 adults, China has substantial room to grow. This creates substantial headroom for long-term growth overall. This opportunity is supported by a large patient population, rising treatment awareness, and a good growing number of trained clinicians. So the opportunity is there. Let's see how we are planning to capture it on slide 2022. Over the past GDP cycle, the Chinese market has significantly evolved, and so have we. Today, we are competing with three very important strengths. The first is the breadth of our multi-brand portfolio. We have a clear market-leading position in premium with Strommen, and given the low penetration shown on the previous slide, premium still has significant room to grow. At the same time, the challenger segment has become the larger part of the market by volume and offers substantial headroom for us. Antochi already gives us an established proposition in this market. Earlier this year, we launched our new locally developed Medentica implant line targeted to the local eco-segment. And Neodent is planned to be finally registered in 2027. This multi-brand approach enables us to address all customer needs and price points. It also gives us multiple options to adopt in the future when VBP 2.0 new rules will be released. After this multi-brand portfolio, our second important strength is local manufacturing. Our Shanghai campus is complete and fully operational. Most of our Stroman and Ontogeo products for China are now manufactured locally. This improves our cost position, strengthens supply resilience, and allows us to compete effectively under different potential GDP 2.0 scenarios. And finally, our first strength is our local education network. Through the ITI and our local education programs, we continue to train new implant dentists and help experienced clinicians move into more advanced cases. This expands the clinician base, support treatment adoptions, and builds long-term customer trust and relationship. We are very confident that these three major competitive strengths will be able to respond effectively to any scenario under VBP 2.0. With that, let me now turn from Implantology to the transformation of ClearCorrect on slide 23. Our ClearCorrect transformation is progressing rapidly. The new value proposition is gaining traction with customers, supported by a sharper commercial focus, a more scalable operating model and digital tools designed for digital practitioners. The digital features launched in the middle of the year are driving strong GP adoption, which is accelerating active case growth. AI enabled tools, especially case assessments, make case evaluation and treatment planning easier. They help the GPs treat more patients and start more active cases in full confidence. At the same time, the completed smart team manufacturing transition has improved the consistency of our turnaround times across EMEA and Asia Pacific, and is driving the expected COGS improvement. This strengthened the ClearCorrect brand in the GP segment, supports further growth, and improves the scalability of the business. Together, these developments keep us on track to reach breakeven by end of 2027 for clear, correct business and make it a meaningful growth contributor for the group. This brings me to one final point on our growth strategy. As Isabelle explained, we are moving into a lower capital expenditure cycle as the major manufacturing capacity investments are largely behind us. At the same time, we continue to invest selectively in the areas that are critical to our short, mid-term and long-term growth. Let me briefly highlight where we are focusing this investment on slide 2024. First, we continue to invest in innovation and digital transformation. including an exciting implant product pipeline for the future and further AI-supported ecosystem treatment workflows. Second, we are investing in go-to-market initiatives to strengthen customer reach and our capacity to scale. And third, we continue to invest in our people, organization, and culture. They are essential to execute with speed, consistency, and entrepreneurial mindset. These three dimensions are critical to deliver the ambition we presented under Capital Market Day and to turn our market opportunities into sustainable dynamic growth. With that, let me now turn to our outlook for 2026 on slide 26. Following the excellent first high performance, we upgraded our profitability outlook in June, and today we are pleased to confirm it. We operate in an addressable market of more than 20 billion Swiss francs with significant growth opportunities across our core and adjacent segments. At the same time, we remain mindful that the external environment continues to be volatile with ongoing macroeconomic, geopolitical, and regulatory uncertainties. However, our leading market positions proven business model and strong innovation and transformation pipeline give us confidence that we can continue to perform across different environments and capture the opportunities ahead. Against this backdrop, for the full year, we continue to expect high single-digit organic revenue growth together with a core EBIT margin improvement of around 140 to 170 basis points at constant 2025 exchange rate. We remain very confident in our ability to deliver this outlook and excited about the opportunities ahead. With this, we are happy to move to the Q&A session to answer your questions. As usual, we kindly ask you to limit the number of your questions to two in order to give other participants a chance to pose their questions within the available time. Can we have the first question, please?