In 2012, the Straumann Group achieved revenue of CHF 686 million, which was almost 2% below the prior year in local currencies (l.c.) or just 1% below in Swiss francs, reflecting the first overall positive currency effect since 2007. North America was the key revenue driver, complemented by double-digit growth in China and Latin America. Unfortunately, these solid performances were not enough to compensate for sluggish sales in Europe, Japan and the Middle East.
Despite an improvement of 130 base points in the gross margin (78%), reported operating income (EBIT) dipped to CHF 61 million corresponding to a reported margin of 9%. Excluding exceptionals (i.e. an impairment charge of CHF 21 million related to the regenerative business, and one-time charges of CHF 18 million due to cost optimization initiatives and severances) operating income would have reached CHF 100 million (versus CHF 120 million in 2011), with a corresponding margin of almost 15%.
Reported net profit reached CHF 36 million and basic earnings per share amounted to CHF 2.36 (CHF 4.54 in 2011).
We continued to grow our business in North America, and other key growth markets like China and Brazil, but their strong performances were not enough to offset shortfalls in our main region, Europe. With softer sales and our cost base geared for growth, our margins dropped to a level that requires rigorous cost management at all levels and a new style of resolute leadership to implement change expediently and consistently. We have taken measures to address this and are determined to improve our operating margin to a significantly higher level in the mid term.