COLTENE : Half-Year re­port 2022

Keeping the Flow

 Half22-Year Report 0

Key Figures

5-Year Overview H1 2018-2022 (in CHF million)

Net Sales				Net Profit
2018	2019	2020	2021	2022	2018	2019	2020	2021	2022
85.6	135.4	103.9	143.5	134.9	6.2	7.9	0.3	18.2	12.1

EBIT
2018	2019	2020	2021	2022
10.2	12.8	2.6	26.0	16.7

Free Cash Flow

-4.1
2018	2019	2020	2021	2022
		1.3		3.1		8.9		7.8

H1 Net Sales by Region in %

45.7 36.8 10.8

  2022   2021

6.7

North America	Latin America	EMEA	Asia
50.3	4.3	35.0	10.4

Highlights H1 2022

67.7%

Gross margin

A stable gross margin was achieved by

changing the product mix and successfully passing on higher input prices to the market.

53

Product lines

With a vast product portfolio, we cover demand for the three workflows Endodontics, Restoration, and Infection Control.

385

Direct service interactions per month

Already, the new customer service software has led to 385 service interactions being handled via the system each month.

1+ month

Order backlog for devices

The order backlog for Infection Control devices has grown by a month, reflecting supply chain constraints but also strong market demand.

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Global supply chain constraints also impact

COLTENE.

Foreword

Dear Shareholders,

The COLTENE Group saw orders rise in the first half (H1) of 2022. The strong demand continued trending from the previous year. Unfortunately, COLTENE has not escaped the global supply chain bottlenecks and

so was unable to derive full benefit from the high levels of demand in H1 2022. Group net sales were CHF 134.9 million,

down 5.9% from H1 2021 (CHF 143.5 million). This corresponds to a 5.3% drop in sales, year-on- year, in local currency terms. Excluding the supply chain constraints, H1 2022 sales would be in line with the exceptionally strong prior-year performance. Operating profit (EBIT) for H1 2022 was CHF 16.7 million (H1 2021: CHF 26.0 million). The EBIT margin was 12.4% (H1 2021: 18.1%; H2 2021:

13.2%). Net profit was CHF 12.1 million (H1 2021: CHF 18.2 million). When comparing H1 sales year-on-year, it is appropriate to bear in mind that the H1 2021 results were exceptionally strong. That period was defined by pandemic-relatedcatch-up effects in Infection Control.

Shipping delays of electronic and other components required flexible employee work schedules in H1 2022. COLTENE has not been affected by shortages of qualified personnel except in a few limited areas, and

was well positioned in H1 2022 to successfully meet the more demanding requirements of flexible production runs. During H1 2022 and also in anticipation of demand in the months ahead, COLTENE has been stockpiling selected components. Even so, there were shipping delays with certain product categories, notably electronic components for Infection Control devices.

In light of this, sales in Infection Control declined by 19.3%. In Efficient Treatment, by contrast, sales were up 3.1%. Dental Restoration sales were virtually unchanged from a year earlier. COLTENE was able to raise prices to pass on higher costs with a slight time lag.

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The outlook for full-year2022 remains positive.

Stronger Customer Focus Thanks to Investments in Infrastructure Begun in 2021, new training infrastructure for customers and key opinion leaders in the USA was completed and inaugurated in H1 2022. These investments enable customer-centric classroom-basedinstruction and hands-ontraining onsite. In addition, the investments made in harmonizing the customer relationship management (CRM) system are paying dividends. The system enables efficient management of customer requests across regions while also promoting internal transparency using key metrics. Ultimately, these investments in training infrastructure and CRM help sharpen our customer focus and heighten the impact of our Marketing and Sales teams.

Outlook

The outlook for full-year 2022 remains positive. COLTENE expects the supply chain bottlenecks to be eased in H2 2022 and H2 sales and profit to outperform both H1 2022 and H2 2021. At constant exchange rates, COLTENE expects full-year 2022 sales in line with 2021 figures and an EBIT margin

trending toward the medium-term target of 15%. The outlook for full-year 2022 is clouded by uncertainties on account of the current state of the global economy.

On behalf of the Board of Directors and Group Executive Management, we would like to thank all our employees for their hard work and their great flexibility in making our quality products. We also wish to thank our business partners and shareholders for the confidence they place in the COLTENE Group.

Sincerely yours,

Nick Huber	Martin Schaufelberger
Chairman of the Board of Directors	CEO

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