Straumann Holding (SIX Swiss: STMN) Q3 2026 Earnings Call

0:00 My name is Ana Paula Santiago. I was born here in João Pessoa and I'm 37 years old. I have seven children, and I raise them all by myself. As the father abandoned me, I am the mother and the father, they say I am. But we have the strength for everything, we have to stand up to help them, and I do everything they need for them. I was 25 years old when I started losing my teeth because of the strong anemia I have. It's hard to eat what you like, it hurts when you chew it.

0:51 It's very hard to get a job. I met Ana Paula's house on the New Smile expedition. Ana Paula's expedition was in João Pessoa. Then they ended up going to my house, they made a surprise saying that I was going to get a dental implant.

1:15 I liked it, I loved it. It fulfilled my dream. To have met Paulinha on a non-programmed occasion was what made us extremely motivated to move forward with this transformation. Despite being a very young patient, she had a clinical condition that needed, that inspired a lot of care, which made planning her case quite challenging. To be part of this transformation, with my friend Marcel, with this long-term partnership with Neodente, really made everything very special.

1:51 There are people with a good heart today, I believe. Otherwise, there wouldn't have been these people who blessed me. I have full conviction that from today Ana Paula will have a new life.

2:20 I'm very happy, me and everyone, right? My children are very happy for me. That's what I have, gratitude for them, the people who changed my life. And I'm just going to change the smile. And you are always the person I've always been, I'll never stop being. Ladies and gentlemen, welcome to the StrongOne Group Q3 2026 results conference call and live webcast.

3:08 I would like to remind you that all participants will be in listen-only mode and the conference is being recorded. The presentation will be followed by Q&A session. You can register for questions at any time by pressing star and 1 on your telephone. For operator assistance, please press star and 0. The conference must not be recorded through publication or broadcast. This time, it's my pleasure to hand over to Guillaume Daniellot, CEO. Please go ahead.

4:05 Let's get started. Sorry for the technical incident. Then good morning or afternoon to all of you. Thank you for attending this conference call on the commons group's third quarter 2026 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 statements. As shown on slide 3, 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. With this, let's move directly to slide 5.

4:51 I am very pleased to present another strong quarter for the Stroman Group. Organic growth accelerated to 9.2% despite a continued volatile microenvironment showing that we keep gaining market share in the segments we are playing in. Third quarter revenue reached 667.1 million, an increase of 10.8% in Swiss francs. For the first nine months of the year, we generated just over 2 billion Swiss francs in revenue with organic growth of 8.3%. EMEA and Asia-Pacific were highlights. The EMEA region increased growth rates for the third time in a row over the past quarters, and Asia-Pacific is back to double-digit growth. I will come to those retro dynamics in a moment.

5:39 In implantology, our IXL implant system continues to be the major driver of winning new customers in the premium segment, while Neodent is gaining significant share in the challenger segment across all our regions. The opening of the third new manufacturing Curitiba gives the brand the capacity to further support its global expansion. Today, I would like to take a closer look at our newest important innovation, the Stroman FAST full-lunch treatment solution, enabled by the new Sirius APS technology. It reflects the lead we are taking in shortening time to teeth through our important R&D investments combining product and digital innovation together.

6:25 Hence, those developments give us confidence in confirming the full year outlook. Let me now turn to slide six and our regional performance during this quarter. Starting with EMEA, organic growth reached 10.5% in the third quarter and 8.9% for the first nine months. iXcel supported further premium customer conversions while Miodent and Antogia contributed to the challenger segment. Germany, Switzerland and Austria performed well alongside Poland, Romania and Hungary. Our clinical education events played also a key role in this dynamic, helping us in producing our new solutions and deepening customer relationships as education is critical for innovation adoption and fast market penetration.

7:19 In North America, Organic growth reached 7.5% in the quarter and 7.9% over 9 months. This is a very solid performance given cautious consumer sentiment and patient flow that remain broadly stable compared with past quarters. The dynamic pace of customer conversions in premium and challenger implantology together with continued scanner demand shows that our commercial execution is allowing us toward performing the underlying market. Asia Pacific accelerated to 10.3% organic growth in the quarter, bringing nine-month growth to 6.1%. Asia Pacific including China, excluding China, sorry, performed well in the third quarter with strong growth in Japan and India, supported by IXL and commercial activities around our challenger brand across Southeast Asia.

8:19 China also returned to growth after several challenging quarters, benefiting from the combination of a stable patient flow and a lower comparative base. Finally, Latin America delivered 6.5% organic growth in the quarter and 12.1% over the first nine months. Two dynamics shape this performance. First, in Brazil, election-related uncertainty weighed on patient demand. For chasing by large dental groups, softened and orthodontic case volumes decline, while scanner cells remain healthy, although below previous levels.

9:05 We expect patient demand to recover as this uncertainty eases and we remain confident in the market's growth potential. Second, dynamics in Latin America continue to expand in Hispanic markets, particularly Mexico and Colombia, where implant penetration remains low. Overall, we will continue to focus on revenue quality and further market share gains in private practices in Brazil. With that regional 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 nine months of 2026.

9:52 Let me begin with the revenue bridge on slide eight. Revenue for the first nine months reached more than 2 billion Swiss francs, up 8.3% organically and 4.9% in Swiss francs. The difference between those growth rates mainly reflects currency movements. Let me walk you through the bridge from left to right. We start the prior year revenue at around 1.95 billion Swiss francs and translating that base at current exchange rates reduces it by around 60 million while the M&A effect rounds to zero, giving us a comparable base of 1.89 billion. The regional contributions to organic growth then at around 157 million Swiss francs. EMEA contributed 68 million or 43% of that increase followed by North America with 38 million, APAC with 29 million, and Latin America with 22.

10:48 This brings us to the rounded closing figure of 2.05 billion Swiss francs shown on the right of the graph. Currency still reduced nine-month revenue, but the headwind became a tailwind in the third quarter. Growth in Swiss francs reached 10.8%, exceeding organic growth of 9.2%. EMEA made the largest absolute contribution to organic growth as you see in the graph. This brings me to China and the next phase of volume-based procurement on slide nine. As Guillaume mentioned, our business in China regained momentum in the third quarter after several challenging quarters marked by uncertainty around the next round of volume-based procurement or the BBP 2.0. The improvement is encouraging while the tender process remains at an early stage.

11:38 and the rules have not yet been announced. We expect the tender process to be implemented in the first quarter of 2027. We will be able to assess the commercial implications more precisely once rules are available, but the important point is that we enter this next phase with a broader portfolio across price segments and a strong local manufacturing base. Together, these capabilities give us the flexibility to respond to different purchasing conditions and continue developing a market where implant penetration remains very low. With that, I will now hand back to Guillaume for the strategy update and outlook.

12:17 Thank you, Isabelle. Let me now turn to the strategy update, starting with the size of our market opportunity on slide 11. When we look at our market position today, two things stand out. The strength of the business we have built on the one side and the size of the opportunities still ahead on the other side. This is the logic behind our perform and transform strategy on which we are continuing to make strong progress. On the perform side, we build from real strength. We are the clear global leader in implantology and together with Regeneratives, our brands, clinical heritage and innovation, give us a powerful platform to keep outperforming the market.

13:04 Leadership is obviously not the ceiling, though. With 35% share in our core implant business, there is still significant headroom to grow, especially with a strong innovation pipeline. The transform side adds a certainly important dimension of growth. In clear aligners, digital equipment, and CAD CAM prosthetics, our positions are still small relative to the opportunity. but as seen in previous quarters, the innovations we have invested in and launched lately are now starting to deliver results. Altogether, this gives us a very attractive runway for sustained growth. Now, let me talk about how we turn this opportunity into growth by combining product leadership with a better, more efficient experience for clinicians on slide 12.

13:57 Product leadership starts with innovation. Differentiated Solutions, such as Stroman IXL Implant Performance System or the CERN-063 Intramural Scanner. They expand clinical applications, simplify treatment, and improve clinical outcomes. But being a product champion is only one part of the equation. Health professionals also expect connected solutions that simplify daily practice, support predictable clinical outcomes, and improve profitability. Chroman Access brings these solutions together in an integrated digital ecosystem while education gives clinicians the skills and confidence to adopt that.

14:42 Across implantology, orthodontics and prosthetics, the same logic applies. Innovation creates differentiation, digitalization improves efficiency and engagement, and education drives adoption. So we are making great progress on this strategy and our latest investments in product innovation and digitalization are translating now into a real competitive advantage. Let me turn to slide 13 and highlight three areas of very significant progress. First, our scanner business continues to grow strongly and outperform the competition. We now have an installed base of more than 65,000 intraoral scanners across our markets.

15:32 That scale matters. The scanner is the entry point to digital treatments, and a broad installed base creates more opportunities to connect clinicians to our ecosystem. Our own brand accounts for the larger share of our scanner sales, and in the first nine months of 2026, we sold more intramural scanner units than it's in all of 2025. Secondary of strong progress, our Stroman access platform is gaining a lot of momentum. The platform now has more than 20,000 regular active users who connect to access through their intraoral scanners and use the services and treatment solutions available for it.

16:19 The investment we made in the platform is now driving customer loyalty with access users substantially more likely to reorder our solutions than non-users based on some initial revenue per customer analysis. Third area of strong progress are unique end-to-end treatment solutions leveraging our IXL system and specifically delivered through access are gaining now significant traction. Together with higher reorder rates, This points to deeper customer engagement and the potential to grow our share of implants and prosthetic sales over time. It shows our product leadership and a connected digital experience reinforce each other.

17:07 On slide 14, let me then show you how we bring those strengths together with our new fast treatment workloads. Averaging the combination between product leadership and Digital Customer Experience is at the foundation of our newly launched FAST treatment solutions. The FAST acronym standing for Fast, Accurate, Simple and Trusted. Last quarter, we talked about our FAST molar solution release, an end-to-end workflow for single tooth treatment. It can save both clinicians and patients at least one appointment and an additional 30 minutes across the remaining appointments.

17:54 It also supports the use of Stroman original restorative components, creating additional value around IXL. To date, we have sold more than 100,000 specific fast molar abutments, demonstrating the rapid adoption of this unique solution. This adoption by clinicians is the proof of the significant value we are creating for each practice. It clearly demonstrates the need of connected workflow efficiency among practices and helps drive sales of IXL implants. We have now applied this approach to full arch treatment, which is one of the most interesting segments in our implant market. Let me turn to slide 15 and show how our new serials APS technology makes that treatment simple.

18:47 Full arch treatment replaces all the teeth in one jaw with a fixed set of teeth supported by four to six implants. There are two options. Patient can wait until healing of the implant place is complete before receiving their new set of fixed teeth, or they may be able to receive a fixed set right after surgery, the so-called immediate loading treatment. Many patients prefer the second option as they don't have to wear a removable denture during the healing phase. For clinicians, immediacy treatments require not only very precise, but also immediate information about the final position of the implants placed during the surgical phase.

19:36 The clinician needs this information to make an immediate, temporary restoration that fits the implant. Until today, practices are using a very costly specific scanner only for this. It is a cumbersome process and adds extra significant cost and working time to an already demanding procedure. Our serious APS innovation makes this process simpler and much more cost efficient, powered by the new unique full-arch scanning APS technology. As you can see in the video, small reference components available exclusively for the Stroman Group implant brands help a serious intraoral scanner capture precisely their positions immediately after surgery.

20:30 The digital file is then sent to the access platform where the clinician and the dental laboratory can work with the same information. This supports immediate full-arch treatment without dedicated costly scanning equipment. This serious APS technology enables the efficient Stroman fast full-arch treatment solution which will be launched in the months to come. For practices, this makes full-arch treatment simpler, more efficient, and more cost-effective. For patients, it can mean getting their new smile sooner without going through a removable dental period. And for Stroman, More conversions of full-arch cases to the IXL implant system and more serious intramural scanner cells.

21:22 Let me now turn to the orthodontics on slide 60. CareCorrect delivered double-digit growth in its priority markets as we continued to focus resources where the opportunity among general practitioners is most attractive. We are concentrating on commercial investment where we can build sufficient scale while improvements in production and operations continue to deliver reduced costs. Our new digital tools help general practitioners identify suitable aligner cases and treat them with greater confidence. Case assessment supports an optimal case selection. The outcome simulator helps clinicians presenting the treatment and increasing their case acceptance rate while the remote care supports clinicians monitoring the treatment progress between visits.

22:19 Together, they give clinicians more confidence from the first consultation to the final phase of the treatment so that they can increase their number of case submissions. We are beginning to see these tools enter everyday use. In September, Outcome Simulator was already used in about 30% of the case submissions while case assessments were used in almost 15%. This offering strengthens ClearCorrect's position with general practitioners while a sharper geographic focus and lower costs improve the economics as volumes grow. Together, these advances keep the business on track to reach breakeven by the end of 2027. Let's move to slide 17.

23:08 We have talked about our innovations and new solutions, but success comes only with customer adoption. The first quarter was filled with sold-out clinical education events, including International Aesthetic Days in Copenhagen, with 1,600 participants, and the Neodent Symposiums in the US and upcoming in Asia Pacific. These events are critical helping us deepen customer relationships, drive adoption of our new solutions, and accelerate their market penetration. With that, let me now turn to our outlook for 2026 on slide 90.

23:53 Following the strong first nine months, we are pleased to confirm our full year outlook, including the profitability guidance we raised in June. Daring and forcing even, We continue to expect high single-digit organic revenue growth and an improvement in the core EBIT margin of around 140 to 170 basis points at constant 2025 exchange rates. The acceleration in revenue supports our growth outlook, while disciplined cost management and a more efficient manufacturing footprint underpin the margin improvement. We remain mindful of the different market conditions across regions and the pending VDD tender in China. Our positions in implantology, growing digital reach and disciplined execution give us confidence in delivering the guidance.

24:49 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 questions to two. in order to give all the participants a chance to pose their questions within the available time. Coruscant, can we have the first question, please? Sure. The first question comes from Hugo Solvay from BNP Paribas. Please go ahead.

25:15 Hi, hello, good morning. Congrats on the great quarter and thanks for taking my questions. Firstly, on North America, 7.5% organic growth in Q3. Curious whether you think you can keep up that pace into Q4 as comps get a bit tougher and obviously there are concerns that the US market could deteriorate next year. I know it's a bit early for you to comment on 2027 but could you share with us your view on what do you think is different in this rate cycle versus the previous one? And then, secondly, on China, I'll begin to hear your thoughts on this open inquiry process for VBP. What do you think it implies and whether that changes your expectations leading into VBP 2.0 next year? Thank you very much.

25:59 Thanks for the questions that are obviously at the heart of what the short and mid-term is going to do for us. When it comes to North America, and as expressed in our press release and the script, we have not seen any major difference from a patient flow standpoint. It's stable and we have been playing in the high interest rate environment already for quite some time. We have seen the Fed interest rate decreasing a little bit but not significantly and the Treasury 10 years yield, it's anyway stayed always at very high level. Then we don't expect this to change, okay?

26:48 We don't expect this to deteriorate very significantly. Then we believe that we can continue delivering really very healthy growth rate in North America along the lines that we're doing right now, thanks to two things. I think the first one is obviously very strong execution capabilities. I think the new management that came in last year in May is really delivering the sales leadership that we have been expecting. And especially our innovation pipeline is the way where we can continue increasing the speed of our new customer conversion.

27:36 New customer conversion is the name of the game in a rather sluggish market. And I think as we are being able to demonstrate in the past quarter, we are able to significantly deliver on it. The new, then the serious APS technology will be another strong one for us. As you know, in North America, full-arch treatment is a very important segment of the implant market. and especially they are done by many specialists using large volume of implants. Then being able to deliver this innovation, which is going to increase very significantly the impression process of an immediate full-arch treatment will create a lot of excitement among the specialist community.

28:27 Then we believe that through those continued innovation, we should see still North America being then on the good side, I would say, of our performance. When it comes to China, I think China is, we have been already, as you remember, I'm sure, confident about China's future. And this is at the moment exactly happening as we have planned. We have planned a strong second half of 2026, which is actually coming. And I believe that it's going to be the case also in the fourth quarter for two things. As expressed first, because the patient flow is still stable, you know, the patient flow hit that we have taken with the announcement of EDT 2.0 has been happening last year. And since this, we have been a rather stable patient flow. And as we are now combining this with the much lower comparative base that is starting now for the next year, You know, almost 12 months or until at least, I would say, May, June next year, we still see China as being a healthy region for us.

29:48 First, because the comparative base again will be easing. And secondly, because whatever comes with the VBP 2.0, we believe that we created all the necessary options to play a lot of different scenarios. We have now local manufacturing for a year almost. Then we are, I think, well experienced with this for two of our brands that are the major brands in China for us right now, both Stroman and Antogia. And we have also created then that partnership with a local player for entering the eco-segment with our Medentica brand that has started then just in the beginning of last year and that will be important to be ready for the VVP 2.0 and to be registered as such. Then we are playing in all the different price points with all different brands. We are doing local manufacturing with all our different brands also and we will for differentiation potentially have the opportunity to launch Neodent by mid-2027.

31:00 Thank you very much. The next question comes from Graham Doyle from UBS. Please go ahead.

31:36 Yes, morning. Thanks a lot for taking my questions and congratulations, Guillaume. Hopefully you get some time off now to relax after quite a busy few years. And just a couple of questions, one on China and the second then just on the midterm guidance. Just on China, could you just remind us around the private versus public I'm just wondering if there's a little bit of a dilution of any pricing headwind next year, given that structure. And then secondly, again, if you could also remind us in terms of the sort of structure and philosophy around setting the midterm guidance. Was that said by the board in conjunction with you?

32:22 We have a lot of questions from investors who assume that that guidance very much will hold under Christopher's tenureship. But if you could just talk us through that again, it'd be super helpful. Thank you.

32:35 Okay, thank you, Guillaume Daniellot. I think really good question on the China side and I will try to be synthetic enough. But yeah, first private versus the public hospital business is split in between 70% to 75% of the total business is private. 25% is public hospitals. What the VBP is really then applied in a mandatory manner is first on the public hospitals, then those 25%. And this is where the price of what has been implemented in 2023 on the 7,500 RMB for a single implant case for patients have been still Then valid for the whole period. However, then on the private side there have been much more competition in between all the different private practices and DSOs than the price of a single implant case for patients went significantly down. Meaning that from 7,500 RMB, the average pricing for an implant treatment is between 4,000 to 4,500, and significantly below. Meaning that,

34:06 obviously, on the private sector, the ASPs have been also decreasing. then that's where you then the question is really interesting and we express that as well that even though the VBP 2.0 will decrease pricing potentially a little bit it will anyway still be higher certainly about the pricing that are actually being experienced on the private side Then let's say that you have a 20% price lower on the VBP side, it will have a very strong caution effect by the fact that the private already lower than this. Then that one of the reason why we're saying that the overall VBP 2.0 price effect will be maximum 5 to 15% down, not more than this, because of the fact that the private sector is already much lower than the VBP 1.0 pricing level.

35:14 When it comes to then the guidance, yes, the midterm guidance has been obviously set then very, very strongly with the board. We had our strategic midterm, then the strategic session with the board last year in April, May, and we all set our, what we call our go beyond then objective of 10% Keiger for the period with the board and we do believe that this is our mid-term guidance still in place and this is what Christopher but also the whole team here at the Strömmen Group is committed to.

36:00 Awesome, that's super clear. Thank you very much guys. Next question comes from Hassan Al-Walkil from Barclays. Please go ahead.

36:13 Morning and thank you for taking my questions. Firstly, on LATAM, if you could please quantify the Brazil performance in Q3 and discuss whether the weakness you've seen is temporary to your mind and a function of political uncertainty that you see improving in Q4 or indicative of maybe something broader. And I think you mentioned the quality of revenue with regards to the expansion. And then secondly, on 2027 margins, If you can talk to the confidence in achieving midterm targets next year and the building blocks around VBP 2.0 based on what you see today, some of the synergies from Smarty, Shanghai, the momentum in scanners, but also cost inflation and FX, which looks to be a tailwind at current levels.

37:02 Thank you.

37:04 Thank you, Hassan. I will take the first question with regard to LATAM. Yeah, indeed, we have seen the Brazil side entering into a challenging environment as the election was coming. And I visited Brazil in September and really witnessed myself a very polarized country. In between the two sides that created also a very different kind of vision for the country, for the future. Then the people were kind of in standby in order to look at what things will happen. Then as there is clarity now, well for as much as we can say, based on the news that we have also learned today about, you know, We will see the higher growth rate when it comes to Brazil and Latin America.

38:23 then we think that we don't want to buy market share with payment terms deterioration as an example then we are also going to monitor this and as we believe volume will come up we are also going to continue doing that in a manner where we can continue to deliver the right gross margin from an improvement standpoint and for the overall profitability which is a good segue for having Isabelle answering your second question. Yeah, thanks for your question, Hasan. So I know that you don't expect a 2027 guidance, but let me maybe start with a more midterm outlook. So Guillaume already said we have a very clear strategy. We stand by our commitment of a 10% growth CAGR on the top line side.

39:08 And the same is true for the quality of our earnings, which Guillaume just referenced as well. And there we said we will see a CAGR of 40 to 50 bps every year. and I think to reiterate the race in profit guidance this year is not a pull forward effect so it means we will still see an up pick next year and we can we are confident we can deliver on our midterm strategy on the midterm guidance and I think the biggest building blocks you already mentioned so for me confidence in achieving our midterm guidance Thank you very much. I like to look at it in a much broader way that we now really have a strong production network and we can leverage our capabilities to respond to not only the VBP but for example to tariffs we have in the US to flexibly move around volumes and make sure we can get the best benefit for the group of it and last but not least obviously the continuation of all the profit improvement measures we've put into place in terms of OPEX as well.

40:38 Brilliant. Thank you. Next question comes from Vik Chopra from BMO Capital Markets. Please go ahead.

40:47 Oh, good morning, and thanks for taking the questions, too, for me, maybe first starting off with China. As China returned to growth in the third quarter, I'm curious whether you saw any changes in competitive behavior ahead of VBP 2.0, particularly from the domestic implant manufacturers. And then I had a quick follow-up, please.

41:09 I think when it comes to China, we have not seen a major difference in competitive behavior. Over the period, we have seen more aggressive pricing from Koreans, as an example, that drove some of that also lowering the price on the private sector, but this has been happening now for the past two years. What we see and what has been public is that there have been much more Chinese companies registering for the VVP 2.0 and some that are still at the very early stage. some that are known already from us for quite some time then obviously we believe that we will see some more active local Chinese company competition but they will first from our perspective attack the challenger segment where Koreans are strong Once again, we still need to see the rules that are going to be implemented to be able to map out what will be the next competitive landscape in the Chinese market.

42:28 Great, thank you. And then my follow-up question was on FAST. I'm just curious, is there any pricing premium to this, or is the benefit purely volume and share? And then when is the FAST full-arch launch? I'm just trying to figure out if that's a contribution in 2027 or if it's more of a 2028 story. Thank you.

42:48 Good question. Yes, FAST will come to see not so much as an additional than the price. But it will drive our higher end product portfolio, which is IXL, then it will drive a positive mix in our overall portfolio sales, which is the effect that we're also expecting because The Fast, when it comes to Fast Molar or even Fast Full-Arch will be on the Stroman portfolio only the TorQix connection, that means the IXL connection for those reference components, meaning that all customers and also then the competitors that will be willing to use this very significant cost-effective workflow will need to be using IXL. And that's the very strong interest that we have here.

43:46 As we explained a couple of quarters before earlier, all our innovation will come within the IXL environment that will really significantly drive that mix. and secondly speaking we expect to launch it by very early January in North America and Europe and same in Latin America where we will need some additional registration in the largest Asia-Pacific countries such as Japan and China. And it will be a 2027, okay, interesting innovation that would support 2027 growth rate.

44:38 The next question comes from Aija Noor from Orcas Stanley.

44:41 Please go ahead. Hi, good morning, Guillaume and Isabelle. Thank you so much for taking my question. Just following up on Latin America, do you see Brazil's slowdown as temporary or more persistent? And how do you feel about consensus, you know, 14% growth expectations for 2027? And then a technical question on EMEA, given the particularly strong Q4 last year, how should we think about the growth trajectory over the next couple of quarters? Are you planning any price increases towards the year end, which on top of the strong performance of IXL could offset the tougher comp? Thank you.

45:16 When it comes to Brazil then once again I think it's we believe that the situation will ease. It's a bit too early to tell you exactly what we see right now as you know election has just been done last week and we entered into the quarter only three weeks ago. But when we look at the resilience of this country that has proven to be pretty impressive In the past, we believe that there is no reason why Brazil would not be able to come back to, you know, again, healthy growth rate, especially looking at our capability to keep delivering also innovation. The thing that is going to be interesting is the fast workflow will over time be available also on the Neodent portfolio. There is a lot of full arch and immediacy treatment done in Latin America and especially in Brazil.

46:08 This is the way the Neodent portfolio has been designed for immediacy treatment. And finally, when it comes to 2027, we will have a major product launch for Neodent. starting obviously by mid-year in Brazil and Latin America which is the new implant system from Neodent which is going to be the GT Plus replacing the existing already very successful implant system. Then we have innovation to support growth in addition to an easing of the market situation. Then we are still confident for Latin America for 2027. When it comes to EMEA, you're totally right.

46:55 I think Q4 in EMEA last year was really strong. But something which is really, really interesting when you look at our EMEA performance in Q3, we have a very strong performance coming by a super well distributed performance. On the one side, when you look at the geographic standpoint, we had a very good performance from Mathieu Marquet. We explained in the press release, Germany, Switzerland, Nordics as well actually, but also from our Eastern European countries, Poland, Baltics, Hungary, Czech Republic have done very, very well during the third quarter.

47:47 and as we are seeing also then on the Middle East or at least that's part of these regions we have Turkey which has done very well. Then we are not depending on one place in the MEA, it's the entire regions where we have invested if you remember from a go-to-market standpoint especially on Challenger is delivering very well. The second very healthy indicator of growth is that all our franchises, premium, Challenger Digital and Orthodontics are all growing either high single digit or low double digit. Then that means that we have a very well distributed growth from all the innovations and portfolio that we have in this very large region.

48:35 which means that for us we've having a very very balanced growth like this we expect this trend to continue obviously a little bit lower in the fourth quarter based on the very comparative pace but still you know very confident for the months to come and also in 2027. Obviously, we are going to plan some price increase, as we are doing every year. That will happen in January 1st, and we are currently finalizing all of this together with the teams. Perfect. Thanks so much. The next question comes from David Edlingson from JP Morgan. Please go ahead.

49:18 Thanks, guys. Most of my questions have been answered. Maybe there's a technical one for Isabelle. Maybe, Isabelle, could you give us an update on the FX impact on the four-year guidance for this year, both top line and margin? It'd be great. Thank you. Yeah, sure. Thanks for your question, David. Happy to do so. I think as we already indicated, Q3 has been the first quarter in a very long time where we had a little bit of tailwind from FX. So what we currently see, obviously, it's a little bit guessworking, but if you just applied the spot rates we saw end of September, We would expect an impact on the EBIT somewhere in between 70 to 80 BIPs and roughly 200 BIPs on the top line, obviously subject to how the exchange rates will now develop in Q4. But it is much, much milder than what we still expected to see when we disclosed our half-year results.

50:12 Thank you. The next question comes from Julian O'Doer from Bank of America. Please go ahead.

50:22 Good morning and thank you for taking my questions. The first one is on digital, which I think on our estimates has contributed to roughly 200-300 basis points to group growth so far this year. I mean, is it broadly the right order of magnitude? And I saw on your slide, thanks for providing the 65,000 scanner installed base. Can you just provide some color about the split between the serials and 3-shape and maybe just the expected scanner placement for the full year? and just finally on digital, I mean, you begin to lapse tough comps in 2027. Should we still think about similar contribution to group growth or should we need to moderate next year? And just a quick follow-up to Graham's question on the mid-term targets.

51:09 Just in order to reach the ambition of the 10% CAGR in 2027, do you need Improvement in the underlying market growth or all the innovation that you've discussed on this call and market share gains alone can get you there. Thank you very much.

51:25 Thank you, Julien. You are challenging my memory for questions. We'll try to have all of them. Then when it comes to digital, the impact on overall growth, I think I will not, you know, we don't disclose results per franchise, but I would say that it's a really good one. It's a significant impact of digital, but still the biggest in absolute value is significantly implant still. Okay, then that's the really good side for business is that while we are still selling much more digital, it's still a driver for core business. And this is really what is super important for us.

52:13 We don't sell iOS intramural scanner just for the intramural scanner segment, but also strategically speaking for building up. Our user base, which is a good segue to your second question. But I want to also express the fact that while it has been an interesting contribution for our top line, our intraoral scanner has been also a very good contribution for the bottom line by the fact that we have been selling much more of our own intraoral scanner than third-party scanner with a much better gross margin. then we have a very interesting effect this year from that sense. When it comes to the 65,000 intraoral scanner base that we have, a lot it's still and FreeShape who we have still very strong development of connected workflows and that are allowing us to deliver then this kind of connected end-to-end procedure through our access platform and we see this is something that we are starting to analyze We have higher reorder and higher loyalty by customers using actively our access platform as we were expecting than the non-access users.

53:37 Then we see that loyalty effect starting to come in play. As it's a 12 months basis analysis, it's still on a small cohort and we will not be releasing any number to date, but in the future we will be able to openly explain and demonstrate the significant impact of doing a business model through that platform that will allow us to have those recurring revenue and really strong loyalty through unique workflow. When it comes to our digital sales this year versus 2027, we believe that obviously launching another Innovation on the scanner side with that APS technology will then continue to support growth on the digital side.

54:30 We are still developing a lot of solutions around these digital workflows and those digital scanners. Yes, we are confident that we have the capability to continue to grow on top of what we have done this year. Actually, something to consider and why I'm saying this, is that in the past, intraoral scanner were seen as one per practice, and we see obviously more and more intraoral scanner as being one per chair, meaning several intraoral scanners per practice. And this is where it's opening up also significantly addressable market that would allow us for much more significant growth moving forward.

55:15 especially as you want to use the unique workflow that we have been developing. Finally, when it comes to your midterm question, we do believe that we still have our destiny in our hands to be able to then grow along the guidance that we gave. of course a little help from a little tailwind from the market we will not be against this as you can imagine but I think we have proven that we have been able to navigate complex environments and having an innovation pipeline which is allowing us to grow significantly despite the macro that we have to fight against and I would say we are still with our innovation and with the development that we have planned Implants with Neodent in 2027, Serios new technology in 2027, and some additional things that we will not disclose right now will allow us to continue having a good growth rate to achieve the midterm guidance that we put out there.

56:21 Thank you for your excellent memory. Thank you, Guillaume. The next question comes from Richard Felton from Goldman Sachs. Please go ahead.

56:31 Thanks, good morning. Just one question from me, and it's on China and specifically the Shanghai campus. How much of your total China sales is now being produced in China? And is that facility also being used for other APAC markets? And if possible, could you remind us of the benefit to your COGS of shifting production to China and the phasing of those benefits? Thank you.

56:54 Yes, also a good question on our China campus. The way we are selling our product right now is really specifically to the private market. for the China Campus because on the public market we need to have our product registered in the VVP because it's really pretty strict. The public hospitals in China are only able to order what is listed in the VVP and our China Campus was not of course registered at that time. That's why we are also expecting the VVP to come in because we would be able then to deliver 100% of our China product then from our Shanghai manufacturing.

57:45 When it comes to our classic technology, because when it comes to the private market, we are distributing the larger part of the volume used through China campus, which is titanium SLA, meaning the classic version. while our high-end, which is RockSolid and SL-Active, are still only manufactured in Switzerland through imported goods. And that's the way we are doing this, and we are still then looking forward, I think, at VVP to serve even more China with our locally manufactured products. We also, and I think that's also an interesting perspective, as Isabelle was expressing, that we are looking at further leveraging our manufacturing footprint that has significantly evolved for improving our gross margin over time. We are looking at registering on China Compass for also exporting options that would be, of course, first for Southeast Asia markets. and beyond if we believe that in non-strategic SKUs it would be a way also to leverage our gross margin.

59:07 Next question comes from Julien Dormois from Jefferies. Please go ahead.

59:13 Hi, bonjour Guillaume. Hello, Isabelle. Thanks for taking my questions. I'm only left with housekeeping questions, I'm afraid. But would you be kind enough maybe to help us dissect the growth in APAC in the third quarter? I think you did the split between China and ex-China in the previous quarters. So we'd just be interested to have this for Q3 and maybe how we should think about this into Q4 because I guess comps will also play an important role here in the coming quarter. Then the second question, It's pretty much housekeeping again, but I just noticed that on your slides, when you represent the market size for digital equipment, in the current presentation, you put it as a 1.8 billion Swiss franc market, while you were at 2.6 billion at the capital markets the last year. So just curious whether anything has changed here or it's just a segmentation issue on that side. and the very last question relates to IDS which will take place early next year. Anything we should expect from this forum in terms of new product launches or anything that you would like to flag at this stage or don't want to steal the thunder but curious?

1:00:28 Okay, yeah, Julien, good question for housekeeping question. I think still, from a strategic standpoint, it's pretty interesting to look at China and outside China. While we will not give really all the detailed growth rate, because it was just to give an idea last quarter, but China is on the very high single-digit growth standpoint. and outside China will be the low double digit. We have that dynamic in Q4 that will potentially reverse. We are expecting strong double digit in China based on the very low Q4 and still high single or low double on Asia Pacific outside China. We still think a very significant growth anyway from Asia-Pacific in the fourth quarter.

1:01:31 When it comes to the segment of the iOS, when we were in the capital market day, we were having digital equipments integrating 3D printers, infrared scanners, and milling machines. And we decided, because we are not active in milling machine anymore, to remove the milling machine segment. Then it's only the 3D printer and the iOS in which we are active that we have then presented into this histogram. Then you are totally right with this. The next question comes from Susanna Ludwig from Berstein.

1:02:17 Please go ahead.

1:02:20 Good morning and thanks for taking my questions. My first question is a follow-up on digital. Can you talk about how the split between Sirius and 3Shape has shifted throughout 2026 and help think about the magnitude of the margin impact of this shift? And then the second is just on ClearCorrect. You spoke about double-digit growth in priority markets. Can I just confirm whether the U.S. is included as a priority market?

1:02:49 Syrios versus FreeShape. FreeShape was the large majority of our units before we launched Syrios. And the strategy with Syrios was really to go into emerging market, just to explain also how we were viewing this. As our strategy is to enable all our users worldwide to connect to the Stroman Access platform and leveraging our unique workflow, we have done that through our lower technology at a lower price, so that we can really address all our different markets. In the meantime, it happened that new competitors came in, Shining 3D as an example, but some others like Midit that were really aggressive in terms of pricing, even in mature market, that's what we also brought our Serious technology.

1:03:46 and based on this we have seen that on the global market the IM scanners that are I would say above 15 000 dollars or Swiss francs per unit have been reducing significantly and the major part of the market is now like the middle or the entry level scanner which is going to be between you know 7 000 to 15 000 and Sirius has been part of it. Then that's where we have been able also to compete in mature market with Sirius and as a consequence the largest part of our intraoral scanner today which is like you know something like two-thirds I would say big picture is going to be our own technology.

1:04:35 Then when you compare a third-party product like FreeShape, like we were having margin like a distributor versus our own technology, then there is obviously a significant difference when it comes to gross margin. And it's, I would say, twice as much, at least when we compare the gross margin we are doing on Serious versus FreeShape Trios technology. On the ClearCorrect side, yes, U.S. is definitely, I think, our number one priority market, and we have been very pleased to see growth, actually, in the third quarter in ClearCorrect also than in North America.

1:05:25 Great, thank you. The next question comes from Veronica Dubajova from Citi. Please, go ahead.

1:05:35 Hi, guys. Thank you for squeezing me in at the end. I really appreciate it. I'm going to return to the favorite topics of the day, which is China and the U.S. And on China, apologies, I must have misunderstood this. So I just want to make sure for the benefit for all of us that we understand your expectations for next year. Guillaume, when you talk about the 5% to 15% price cut you're expecting, is that across your entire portfolio? So that's the blended average of public and private? or is that just the price cut you are anticipating in the public segment? It wasn't clear to me. And then if you can remind us, obviously, yes, the market's much more private than it is public, but your market share in the public space is much stronger. So what your breakdown for revenues is. that would be super helpful.

1:06:23 And then my second question is on the US consumer. And obviously, I think the ADA survey that recently came out looked pretty poor. What do you think explains the sort of stability in patient flows that you are seeing and commenting on versus the deterioration in that ADA survey sentiment? Thank you so much.

1:06:49 Veronica, fully understood that those kind of price perception in China are important and need as much clarification as possible. Then things to be very clear, when we are saying 5% to 15%, we are talking about what we expect as a consequence from our total portfolio from a price reduction standpoint. Now, again, it will a lot depend on the rules and it will, when you are saying what it will be between private and public is not yet easy to define because it will depend on the segments that is going to be defined. Are we going to have segment in between locally manufactured and not locally manufactured? Are we going to have segment between high-end technology and lower-end technology like rock solid on one side, titanium on the other side?

1:07:46 They are, that's why I was expressing different scenarios and looking at those different scenarios, we believe we have some really good way to play saying that When we look at those minus 5, potentially minus 15 maximum, we will have the opportunity on our side by playing all our different options to increase significantly our volume, first because of the low comparative base on the first six months, and also because of potentially being well positioned on some of the segment which is going to be defined. Then at the end, as a conclusion, that's why we're seeing China as positive, as we have been expressing also for the second half, which is happening this year. We believe the different scenario and market structure will allow us still to perform. Coming back to our own sales, we are still selling much more to the private sector because of the volume than the public sector, even though where you are right, our market share in the public sector is higher than the market share in the private sector.

1:08:53 But still, the biggest part of our business is on the private side. When it comes to U.S. consumer and ADA, I think the US is the highest priced market when it comes to dentistry worldwide. and what does it mean? It means that when you have very low conservative treatments, which is already still expensive, but when you do a decay treatment or when you do a cleaning treatment, some are reimbursed for the people that are having some insurance. The rest is always anyway co-payments. and if you are short and if obviously then inflation is eating a lot of your discretionary income, you don't go to the dentist for the small treatments.

1:09:47 However, for the people that can afford having an implant, which is already, you know, 6,000, 7,000 US dollars, very often this part of the population can still afford having an implant and the price of the gallon being higher is having somewhat an impact but when you can really pay six or seven thousand cash to a dentist that means you can still be doing it The fact that we have been working in a high interest rate for quite some times has already eliminated all the patients that were seeking for significant consumer credit for doing their full-arch treatment as we explained in the past.

1:10:33 Those cases did not come back yet because of the high interest rate that stayed then on those kind of level since, you know, end of 2022. meaning that again we are not losing them anymore because they did not reappear then the reason that we see some of that stability is because the people that are being you know paying some single implant or several implant cases are still having the financial capability to make it and that's the way we're explaining the difference in between the implant kind of performance and implant development versus the more conservative treatment where A certain part of the population in the U.S.

1:11:20 cannot afford that anymore.

1:11:23 Very clear. Thank you. And congratulations again. I wish you all the best in hopefully a slightly more relaxed pace going forward.

1:11:33 Thank you very much. I appreciate it. The next question comes from Brandon Vasquez from William Blair. Please go ahead.

1:11:42 Hey, everyone. Thanks for taking the question. Guillaume, maybe I can ask you kind of a higher level picture as we look into 2027. And I know we'll probably get more details on this in the future. But if I could try to get a tease from you on what new products or pipeline products might be expecting as we go into next year. I think the story, of course, is driven by innovation. And so I think investors are kind of curious, like kind of what's coming next, or even at least in what segments do you guys think we might see some new products as we go into next year? and then one follow-up for Isabelle. In the past, you guys have talked about moving your COGS to more of the local manufacturing where your local currencies are to help offset some of the FX headwinds. I'm curious if you could update us where you think we are in that process and how meaningful of a benefit we could see from that at all, if you could quantify it at all on a go-forward basis. Thanks, guys.

1:12:37 Yeah, thanks, Brandon. Actually, I really like it's a good opportunity to summarize all the opportunity we are creating for 2027, which is explaining a little bit the reason why we are confident, whatever the macro comes with. On the implant side, when we come first to the Stroman premium side, we have all our unique workflow which is going to be launched just as I explain today since January we will have all that technology APS that will allow us to have a very significant differentiation and full arch and we will continue to roll out the single fast molar treatment. We are going to have also some new development on the prosthetic side then we will continue to deliver additional options on the Stroman Green side. We are also something important, starting to promote a very interesting design from our IXL implant, which is a machine neck that will allow us to fight, again, potential complication around implant.

1:13:58 And you will hear about this, I'm sure, into our full release in February, where it's going to give another and many more options on the IXL implant portfolio that will be really attractive. Then still on implant, we are going to have our new Neodent, completely new system, then that it's called already GD+, being presented at IDS, launched already in Asia Pacific, then starting on the second quarter, then the same for North America, Latin America, fully launched in June with a major national congress, then a lot of, you know, very important news when it comes to our challenger brands, When it comes to our digital side, there are some big news that we are going to work with.

1:14:49 Of course, our partner on the 3D printing side, there have been a release of new technology on chair-side 3D printer, which is an incredible technology called Nano, which is going to be connected with Sirius and the Stroman platform. Then Procedic will drive also the innovation and attraction and revenues. together with then our Serious APS technology that will drive further serial sales. We are still working and be excited to work alongside FreeShape that should come also with some development for IDS that we cannot talk about obviously right now, then digital will also be very well covered. and the thing we are obviously excited about is on our clear correct side where then our scallop trim line will become more widely available with all the different regulatory approvals that we should get along 2027 In all our different business franchises, we have a lot of things to present that will drive the additional revenue.

1:16:02 Really excited about what's coming in 2027 and what the team will be able to execute on it together with, and I want to express that as well, those kind of congress and significant marketing and promotion and education activities are critical for this adoption. and I'm really happy to say that we are going to have a huge congress with the World ITI Congress taking place in Italy in May next year. It's happening every three years. The last one gathered more than, you know, in between 5,000 to 6,000 participants, driving a lot of sales of our new technology and it will also happen in 2027 together with The International Aesthetic Days that we do in the second part of the year, and also our yearly New Eden Congress in LATAM in Brazil, but that will be a worldwide Congress.

1:17:02 A lot of opportunity to not only launch innovation, but present innovation, and our team fully ready to execute on the commercial side. and this, Isabelle, will answer you the second one. I mean, as excited as Guillaume is about the innovation, as excited I'm about the lower exposure to the Swiss franc, obviously. So very good memory, Brendan. Just to remind everybody, a lot of the translational impact we saw was coming from the fact that we had roughly 20% of our cost base in Switzerland, but only 1 or 2% of our revenue. And one of the big measures we took to mitigate this a little bit is point one, the Shanghai campus, where we now produce an RMB for China, and then transferring more volumes to our campus in Andover, close to Boston, especially for the US, the South American market. This is now, I wouldn't say fully finished, but Andover is up and running, which was one of the huge mitigating measures for the tariffs as well. And Shanghai, as Guillaume explained earlier, a lot of the private market is now already delivered via the Shanghai campus.

1:18:05 The public market, not yet, given we will need to wait for VBP, but this is to come in 2027. So having said this, we are very confident we can reduce our Swiss franc cost base by roughly three percentage points compared to last year. Where we expect it to be, just looking at it isolated, is roughly four percentage points, but obviously still a little bit more to come, especially in China once the VBP has taken place. Thank you very much. The last question we can take today comes from Beatrice Verbeen from Berenberg. Please go ahead. Hi, can you hear me?

1:18:53 Yes, yes, we can. Yes. Thank you. Just all clear, correct. You highlighted a more focused allocation of resources in Europe. Would you be able to expand a little bit on this and how this is impacting business performance And then just quickly following up on LATAM, and sorry if I missed this earlier, but would you be able to perhaps quantify the growth in Brazil versus LATAM ex-Brazil and give us a sense of how these markets compare relatively in terms of size? Thank you.

1:19:20 Yeah, when it comes to ClearCorrect, we have, you know, in EMEA, we have a good traction. We have been then continuing, obviously, to focus on the more the Western European side of EMEA when it comes to ClearCorrect, which is the most interesting market. and we are actually delivering very well along the plan. We are going to continue to drive that growth before investing further in go-to-market for getting the critical mass on this side. Again, when I look at all our 14 focused markets that we have been defining worldwide, we have a really good contribution from all of them.

1:20:10 And we are really looking forward to keep this dynamic in 2027. When it comes to LATAM, Brazil represents something like 80% of our total business in Latin America. It's still a very big part of our business there. However, we know that the market potential of all the other Latin American countries are representing much more than 20%. Then we have a double digit strong growth rate in what we call Hispanic hub. Then country like Colombia, like Chile, like Argentina right now driving really strong growth. And that's where we are also investing additional resources as we have our own subsidiaries.

1:21:06 Most of our competitors are still acting through distributors that are, let's say, cautious when it comes to investment. We have the benefits of really driving all our activities ourselves with our direct selling teams. We believe that Hispanic is going to take more and more share of our overall Latin American business. We see, generally speaking, the ratio Brazil-Latin America is more 70-30 than the 80-20 that we have on our side. That's where we believe that while Brazil will continue to grow, we expect our Hispanic hubs with the investment we have done will continue to really supersede growth of Brazil and take a larger share of the total business.

1:21:54 With this, then, I want to thank you personally for your continued interest in Stromann Wundt. As I obviously now handing over to Christopher Norbye, my successor, this is my last time speaking to you at this earning call. I have valued a lot of our conversations, dialogue, and the trust especially that you have placed in us over the years. Your questions and your perspectives challenged me and the rest of the team in a good way and kept us always focused to deliver the highest potential performance. I believe deeply in our strategy, obviously, our team around the world and the purpose we share. And I'm also confident in the Stroman Group's future and in Christopher's leadership to continue our legacy, but especially to bring now Stroman Group in the next growth phase. For those of you I won't have the chance to see again, thank you and goodbye for now. Since it's a pretty small world, I hope our paths will obviously cross again.

1:22:58 Thank you all for joining us today. Wish you a very nice day and goodbye from Basel.