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Dental implant maker Straumann cautious for 2024, bets on China growth

FILE PHOTO: Logo of dental implant manufacturer Straumann Group is seen in Basel

By Andrey Sychev and Marleen Kaesebier

(Reuters) -Swiss dental implant maker Straumann on Tuesday forecast steady 2024 sales growth, taking a cautious stance amidst prolonged economic uncertainty.

"While geopolitical and macroeconomic uncertainties are going to continue to impact consumer confidence in different geographies, the overall patient flow is expected to keep a positive dynamic," CEO Guillaume Daniellot said in a statement.

The shares were 3% lower in early trading, with analysts pointing to profit taking after a four-month rally to two-year highs.

Jefferies analysts wrote in a note that a 154 million franc goodwill impairment stemming from its 2020 acquisition of DrSmile might weigh on the shares.

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The group, which specialises in tooth replacement and orthodontics, expects its organic revenue to grow in a high single-digit percentage this year, with a margin on earnings before interest and taxes around 26% at constant currency rates.

Analysts polled by LSEG were expecting sales to grow by 8.2% and an EBIT margin of 24.9% in 2024.

Straumann reported 9.8% organic growth in 2023 revenue to 2.4 billion Swiss francs ($2.7 billion) and an operating profit margin of 25.1%.

That was in line with analysts' expectations even as a strong Swiss franc against U.S. dollar hit Straumann which makes most of its earnings outside of Switzerland.

Its fourth-quarter Asia-Pacific sales grew by 40%, boosted by the Chinese government's value-based procurement plan - a tender programme for healthcare products aimed at lowering costs for consumers.

Sales grew by 7.2% in North America in local currencies and by 5.8% in Europe, Middle East and Africa (EMEA), slower when compared to the previous year's results.

Europe showed steady patient flow growth, the company noted.

Straumann will propose a dividend of 0.85 francs per share for 2023, up from 0.8 francs a year earlier.

($1 = 0.8791 Swiss francs)

(Reporting by Andrey Sychev and Marleen Kaesebier in Gdansk; editing by Milla Nissi and Jason Neely)