First Half of 2017: Increase in Sales and Improved EBIT Margin

In the first half of 2017, the focus was on the ongoing digital transformation of the Company and the acquisition of Diatech LLC. Progressive digitalization will enable COLTENE to further increase the efficiency of its organization by simplifying and automating processes throughout the value chain and using intelligent tools. In addition, digital technologies in dentistry open up a vast array of new treatment options, creating new business opportunities for COLTENE as a relatively small, agile supplier of top-quality products. Thanks to the acquisition of Diatech LLC, COLTENE is now selling its high-quality diamond and carbide burs under the DIATECH brand name in North America. The transaction simplifies and unifies DIATECH brand management worldwide.

Business performance by region: Growth in all regions
COLTENE Group sales in the first half of 2017 rose in all four major regions, both in Swiss francs and in local currency. COLTENE's sales in Asia increased by 8.2% in Swiss francs and in local currency. Sales were strong in India and China, the key markets of tomorrow, where local sales grew by 42.3% and 11.3%, respectively. Additional sales came from the subsidiary established in Japan in the previous year, which successfully established the Group's presence in the country. In Europe, the Middle East and Africa (EMEA), sales increased by 1.2% in Swiss francs and 2.8% in local currency. Results varied within this region. Positive trends were seen in Southern Europe, France, the Benelux countries and Switzerland, whereas sales decreased in Germany and in the Middle East.
In North America, sales increased only slightly by 1.5% in Swiss francs and 0.2% in local currency despite the planned drawdown of wholesaler inventories. Sales of COLTENE products through distributors covering the North American market (sell-out) grew by 1.1% despite the reduction of field staff at various large wholesalers. Sales in Latin America rose 11.8% in Swiss francs and 3.6% in local currency, led by strong growth at the Group's Brazilian subsidiary. Positive effects from the simplification of the management structure and process workflows were again noticeable in Brazil. The Brazilian subsidiary confirmed its sales turnaround first reported in 2016 and has clearly established a successful market position in the face of the ongoing consolidation among dental distributors. Vigodent increased its sales by 27.6% in local currency.

Business performance by product group: Endodontics strong
All of COLTENE's product groups reported higher sales in the first half of 2017 except for Restoration. The fastest growth was achieved by the Rotary Instruments product group (+8.8%), driven by the acquisition of Diatech LLC. Endodontics followed in second place with 6.3% sales growth to CHF 16.7 million (2016 H1: CHF 15.8 million). Both product groups benefited from the launch of new products that rounded out the established products. Sales of the Prosthetics product group increased by 2.5% to CHF 16.0 million (2016 H1: CHF 15.6 million). Sales of the Restoration product group decreased slightly by 1.2% to CHF 18.8 million (2016 H1: CHF 19.2 million). The Infection Control and Treatment Auxiliaries product groups reported growth of 2.0% and 4.5%, while sales of laboratory products rose by 4.0%.

Outlook
Based on the strategic roadmap for 2016 - 2018 with respect to marketing & sales, innovation and partnerships, COLTENE Group is investing in new growth. By expanding its sales teams, COLTENE systematically strengthened its presence in key markets. The Group upgraded its product portfolio by introducing new products and improving other products already in the marketplace. And management entered new partnerships that will allow the Company to play a constructive role in research projects and in educational programs for dentists and that will give it access to new sales channels. The Group aims to capture the market's future growth potential and sustainably raise the EBIT margin to 15% of net sales.

Interim Report 2017

COLTENE Holding AG interim report 2017 was published today and can be downloaded at www.coltene.com.

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For further information: Gerhard Mahrle, Corporate Communications/Investor Relations, phone +41 71 757 54 37, mobile +41 79 346 23 02, e-mail gerhard.mahrle@coltene.com

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