Ladies and gentlemen, good morning. Welcome to the Straumann 2016 first quarter revenue conference call. I'm Sarah, the Chorus Call operator. I would like to remind you that all participants will be in listen-only mode, and the conference is being recorded. After the presentation, there will be a Q&A session. You can register for questions at any time by pressing star and one on your telephone. Should you need assistance, please press star and zero to call an operator. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Mr. Marco Gadola, CEO. Please go ahead, sir.
Thank you. Good morning everyone, and welcome to this conference call on Straumann's 2016 first quarter revenue. Thank you for taking time to be with us, especially as this is a busy day with several companies reporting results. We'll be referring to the presentation slides that were published on our website earlier this morning. Before we begin, I have to inform you that our discussion will include forward-looking statements. Please take careful note of the disclaimer on slide two of the presentation, and at the end of our press release. As usual, I will run you through the highlights, and then Peter Hackl, our CFO, will share the business and regional performances with you. After that, I'll tell you about our strategic progress, our rollout program of new solutions, and our outlook. We will be glad to answer your questions.
The key message this morning is that we have made a very good start to 2016, adding to the momentum that we generated last year, which confirms that our strategy is paying off. As you can see in slide four, group revenue reached CHF 223 million, making this a record quarter for Straumann. I should add that the Neodent business in Brazil contributed to the pleasing result. Stripping out the acquisition and currency effects, group revenue grew 12%, which reflects the resources and energy we have invested in growth markets and segments, and of course, the hard work and determination of our staff. Geographically, the large EMEA region contributed the lion's share of our growth together with North America. EMEA notched up high single-digit growth while the other regions posted double-digit rises.
With regard to product sales, our new Bone Level Tapered implant has just completed its first year in initial markets and has sold more than 300,000 units. One in every five implants we sold in Q1 was a BLT, making it a key growth driver. In Q1, we launched and rolled out several other products and solutions at key trade events around the world, and more are coming because we have a full pipeline. In view of this and the strong performance, we have raised our full-year guidance for top-line growth to the high single-digit range. As you can see in slide five, the growth trend is positive across all our regions, with the largest improvement in North America. I will now hand over to Peter, who will take you through the details region by region.
Thank you, Marco, and good morning, everyone. On slide seven, you can see that group revenue rose 15.4% in CHF to CHF 223 million, which, as Marco said, is the highest level of quarterly sales we have achieved to date. Exchange rate fluctuation neutralized each other. The strength of the US dollar compensated for the weakness of the Brazilian real, and for the first time in many quarters, there was no significant FX impact on group revenue, which is a pleasant change. The acquisition effect amounted to CHF 5.7 million and comprises revenue from Neodent in January and February. Taking the FX and acquisition effects into account, our adjusted 2015 first quarter revenue would have amounted to CHF 199 million. As a result, our revenue growth amounted to 12.2% in organic terms.
We have achieved a solid underlying performance in EMEA, which contributed almost half of the group's revenue and nearly 40% of our growth. Our other regions all posted double-digit increases, with North America and Asia Pacific contributing seven and six million CHF to overall growth respectively. Our smallest region, Latin America, completed the picture with a growth contribution of two million CHF. We can conclude from these results that our current growth is broadly spread, the dental implant markets are generally in good shape, and we are working on the right things and are executing well. Slides eight and nine give you some regional color. Our traditional stronghold, EMEA, posted organic growth of 9%, reflecting the slow first quarter last year. This year, demand has been broadly spread with notable performances in France, Iberia, and Italy, all of which faced tough competition from value and discount players.
Business generated at Expodental, the large Spanish trade fair which takes place every second year, contributed to the very good results in Iberia. We made further progress in building our business with dental chains and service organizations. Being able to offer a full range of premium and value solutions supported by digital workflow makes us an attractive partner, and we have put resources into this fast-growing segment, especially in North America and Europe. In Germany, we generated the same level of sales as last year. This reflects the fact that there were fewer working days for dental surgeries in Q1 this year due to the early Easter break, which predominantly affected our subsidiaries in Central Europe. Across the Atlantic, North America reported a pickup from the deceleration we saw in the second half last year.
First quarter revenue grew 13% organically, despite the strong prior year baseline when BLT was fully launched. All business franchises contributed to the increase, especially Roxolid and BLT, which is important because tapered implant designs are very popular in North America. We have sold more than 100,000 BLT implants there so far. Asia Pacific, which accounts for approximately 16% of group revenue, posted the strongest increase with revenue climbing 21%. The main contribution came from China, where the group continues to benefit from the dynamic market and the successful implementation of our hybrid distribution model. Japan also achieved double-digit growth fueled by the rollout of BLT and the increased share of Straumann SLActive. Sales also benefited from the recent introduction of Roxolid. Finally, to Latin America, where revenue climbed 13% in local currencies, fueled by strong increase in Mexico and complemented by high single-digit like-for-like growth in Brazil.
The market conditions in the largest regional market remain challenging and political changes are looming. The main headache here is the Brazilian real, which despite the most recent recovery, has depreciated 24% year-over-year and has squeezed revenues in CHF. Looking at the performance by business segment on slide 10. Implant solutions continued to achieve double-digit growth across all regions, driven in particular by BLT and our high-performance material, Roxolid, which now features in more than two of every three Straumann implants sold. In our restorative business, demand for implant-borne prosthetics, particularly our cost-effective range of value-based abutments and bar and bridge solutions, was high and more than made up for lower sales in tooth-borne prosthetics. biomaterials posted double-digit growth as we continued to roll out the botiss range in Europe, as well as our in-licensed bone graft and membrane products in North America.
With that, I will hand back to Marco.
Thank you, Peter. Since our last update in February, we have taken advantage of several international trade events to profile and launch new implant and CAD/CAM solutions. At the Congresso Internacional de Odontologia de São Paulo, Neodent promoted the full range of Amann Girrbach milling solutions, for which it is now the exclusive distributor in Brazil. Slide 13 is a good illustration of how our customer-facing activities are separate, while our back office and support functions are fully merged in Brazil. As you can see in slide 14, we launched the new Straumann CARES intraoral scanner in North America at the Chicago Midwinter, and our PURE Ceramic Implant at the AO in San Diego.
As Peter mentioned, we had a successful Expodental in Spain. A few days ago, we used the International Osteology Symposium in Monaco to announce our Roxolid Lifetime Plus Guarantee, as well as the launch of Straumann Emdogain in wound healing, which you may have seen in a separate press release this morning. The benefits of enhanced wound healing include reduced risk of complications, pain and swelling, as well as improved aesthetic outcomes and greater patient satisfaction. Straumann Emdogain is the gold standard for periodontal regeneration and has been used to treat more than 2 million patients. Published research has demonstrated its potential to accelerate wound closure, inflammation resolution, and blood vessel formation. This is the basis for its new indication, which we are launching in Europe with other markets to follow as soon as we receive regulatory clearances.
We are the first company in tooth replacement to launch a biologic material to enhance wound healing in implant procedures in general. Moving on to slide 16, I would like to tell you briefly about the success of our global peer-to-peer program, which has already run two events this year. The first was in Warsaw to train and mentor surgeons in using Bone Level Tapered with guided surgery, and the second one was in Vietnam using Bone Level Tapered in complex cases. Both events were carefully documented for publication, and you can see more about the Poland event in a short video that was published yesterday on YouTube. Social media channels are becoming increasingly important, and we showed you a creative digital marketing video in February to promote our Bone Level Tapered Roxolid implants.
As you can see in slide 17, the results have been impressive, and our learning curve has been steep. To meet current and future demand for CAD/CAM prosthetics, especially from large customers like ClearChoice, we have expanded our North American milling center in Arlington significantly, and the extension was officially opened in April. Moving on to slide 19. We continue to make progress with our global strategy to penetrate the value segment. Our instrument subsidiary in the U.K. became operational, and we have now completed the acquisition of a 30% stake in Anthogyr. As a result, we are set to enter the exciting value segment in China with the Anthogyr brand around mid-year. That brings me to slide 20 and our guidance for 2016, which, as always, is barring unforeseeable events and circumstances.
We expect the dental implant market to grow solidly in 2016, and based on our strong performance to date, we are raising our guidance for organic revenue growth from the mid to the high single-digit range. This means that we expect to further strengthen our leading market position. Despite further investments in strategic growth initiatives, our top-line growth and operational leverage should lead to further improvements in the underlying EBIT margin, which amounted to 23.3% in 2015. Now I'd like to open the question and answer session. If you have a question, please press star and one on your touch-tone telephone to join the queue. You can leave the queue by pressing star and two. As usual, I would kindly ask you to delimit the number of your questions to two, including sub-questions and follow-ups.
Kindly rejoin the queue in order to give everyone else a chance to put their questions. Webcast participants who wish to ask questions anonymously can use the tool in the audio webcast, which you'll find in the bottom left corner. Operator, can we have the first question, please?
The first question is from Maja Pataki, Kepler Cheuvreux. Please go ahead.
Good morning. Just two brief questions. The first one, can you give us a bit more granularity on the growth rates that you achieved in Brazil, both for the Straumann brand and also what has Neodent been with regards, also in comparison to the market? The second thing is, I'm not quite sure if I got that right, Peter, but did you say that we've seen a negative impact from an early Easter in Q1? If that is so, could you give us an indication on what you think the magnitude could have been? Obviously, whether we should expect that to come through in Q2. Thank you.
Peter, will you take the question?
Thank you for the questions, Maja. Let's start with the second question about the Easter impact. If you look at the fewer working days in Q1, then despite the fact that this year Easter break was in Q1 versus Q2 last year, we only have one working day less in the first quarter. However, I think talking about Easter, it's not really about the working days impact, it's more about the time that people take holidays around Easter, and that is especially true for the Central European countries and mainly also Germany. There we saw that this year, also the first week after the Easter break was in the first quarter, so we had a certain negative impact this year, and we should benefit in the second quarter, especially for the Central European market in that respect.
If we go then to the first question concerning the growth rate, the overall growth rate for Latin America was 13%. If we look at the Brazilian growth rate, Brazil also, we are not going to comment that going forward, and comment the Neodent growth rate separately. For this time as it is the last quarter where we also see an acquisition impact from Neodent, I will comment on that, and the like-for-like growth rate, organic growth rate in market for Neodent was in the high single digits in the Brazilian market.
Okay. Thank you.
Any other questions?
The next question is from Carla Bänziger, Bank Vontobel. Please go ahead.
Good morning. My question is around BLT. Obviously, you said that every fifth implant sold now is BLT. Can you comment a bit about the cannibalization impact you see there? Obviously, that would imply that growth is stronger than what is reported. The other thing is, on the growth path for BLT, can you guide us a bit through 2016, where you expect the strongest growth rates and where you still have launches going on, et cetera, please?
Obviously there is some cannibalization, especially between Bone Level and Bone Level Tapered. We have many customers who had a second system in their practice, a tapered implant, and they are now switching to Bone Level Tapered. They switch completely to Bone Level Tapered. There is some cannibalization, clearly, within our existing customer base. What I can also tell you is that the first quarter was actually, when it comes to Tissue Level, a rather positive one compared to the full year of 2015. We kind of saw, with Tissue Level also, a much stronger performance. Shows an indication that actually cannibalization, when it comes to Tissue Level, is less prominent than compared to Bone Level, caused by Bone Level Tapered. In terms of launches, we have first launched Bone Level Tapered, as you remember, last year in Q1 in North America.
We gradually launched Bone Level Tapered in Europe, starting in Q2 with Central Europe, and end of Q2, starting of Q3 with Western Europe. We had in Q4, Japan and Brazil. The last large market where we have not yet launched Bone Level Tapered is China. However, there we don't expect a launch neither this year nor potentially the first half of 2017.
Okay, thanks. Maybe an add-on. Australia, et cetera, is it launched there?
Yes.
Okay. That was also Q4?
Yeah.
Okay, thanks.
The next question is from Michael Jüngling, Morgan Stanley. Please go ahead.
Hi, good morning. I have two questions. Firstly, on the EBIT margin for 2016. With a much stronger start to the year, how will you treat the extra operating leverage or profits that you could deliver if you continued like this? Will you decide to reinvest most of it for future growth? Secondly, on the North American market, how much of the growth is driven by your own execution versus the extraordinary challenging results that we've seen at Zimmer Biomet, which has to be probably one of the largest implant manufacturer in North America, declining -6% in the first quarter, and your results are tremendous in the first quarter. Thank you.
I will take your second question. Peter will then comment on your first question. Obviously, the weak performance of one of our key competitors in North America, Zimmer 3i, obviously helped us. We gained quite some share, specifically when it comes to 3i customers. Obviously, this helped our growth rate. On the other hand, we've also seen some very successful new product launches like for example, the PURE implant in North America has been received very well. We have sold as many or more PURE implants in the U.S. yet, than we have sold in Germany, where we have launched this product already two years ago. The Variobase has been received very well, and Bone Level Tapered is continuing to actually make an inroad into the North American market.
It's not only because some of our competitors are struggling, it's also due to some really great new product launches, which have been very well received. Peter, maybe you want to comment on the overall EBIT margin.
Yes. Michael, our strategy in that respect has not changed. I think I always said, and are committed to reinvest part of the incremental margin into our long-term growth strategy to secure our growth in the mid to long-term. That's an investment in the geographical expansion into the value segment, into innovations, but also in strengthening the current sales organization in the existing market. We are committed to increase our profitability as stated in our guidance. If I look at the consensus, the current consensus, I feel rather comfortable with the consensus figures right now.
Okay. Just a follow-up question on Zimmer Biomet. Can you actually see from your sales force commentary that you have made big inroads into Zimmer Biomet, or is it more anecdotal evidence?
We are gaining, obviously, new customers on behalf of 3i and Zimmer. That is not only 3i and Zimmer. We are also converting customers from other competitors, mainly due to the fact that we have now also a tapered implant in our offering.
A follow-up, please, on the EBIT margin. If you look at your growth in the first quarter, you are probably materially exceeding your own expectations for EBIT or EBIT margin this year. Reinvesting some of it is clear. I am interested in the degree of reinvestment, because you could deliver quite a lot of profit to the shareholders in this year, even if you continued with a reasonably material reinvestment in your sales force expansion for both premium and value implants.
Obviously, we could maximize profits in 2016 and deliver an incredible EBIT margin here in 2016. However, we want to actually continue to grow over proportionately in a better and better market environment. To do this, we need to invest today so that we have enough exciting projects in our pipeline to continue the growth trend which we have built over the last couple of years, also beyond 2016 and 2017. We will actually invest a large part of the EBIT margin improvements into making sure that we also deliver in the midterm and longer term future exciting growth rates. It is obviously also in the best interest of our shareholders.
Great. Thank you.
Having said all this, we will actually improve our EBIT margin in 2016.
Thank you.
The next question is from Lisa Clive, Bernstein. Please go ahead.
Hi, good morning. Just wanted to get an update on your Neodent rollout in the U.S. If you could give us just an update on whether this is tracking with your expectations, whether you're seeing any cannibalization of the Straumann premium brand. A second question, very nice uptick in growth in North America. Obviously, that was touched upon a little bit so far, but you did also change management recently, and initially, it sort of commented that it would take a few quarters to get the growth turned around again, but actually you seem to have been there. You seem to have gotten there already. Should we expect continued strong growth, or was there anything in the quarter that was sort of a one-off?
Actually, with the development of our Instradent U.S. business, we are very happy. We see more than 100% growth year-on-year. In the first quarter, we have launched also the Identica in the U.S. under the Instradent umbrella. We are continuing to grow significantly with our value franchise in the U.S. market. In terms of, obviously, EBIT contribution, it's still quite diluted. We don't have the critical size yet in the U.S. in terms of business, but that's actually what we'd expected. It will take us another, I would say, two years at least until we will generate EBIT margins which are contributing positively to our EBIT margin. Your question on Italy, I think we are not the only ones who see a pickup in our business in Italy. The dental market in Italy is in better shape in Q1 compared to last year.
Honestly, I don't have any insights into the competitors' situations. The only thing I can comment is that, yes, the first quarter in Italy was positive. Will that actually continue throughout the rest of the year? I cannot confirm, but I would also not deny it at this point in time.
Sorry, I'd actually asked, although I appreciate the color on Italy as well. Just in terms of North America, you recently had management turnover there, thought that that would take a while to turn that around, the growth was clearly quite strong. Should we expect sort of a continued trend in the U.S., given how Q1's gone?
There were no one-offs in the U.S., actually, to come back to your question. The impact of the leadership change is obviously one point which contributed to the pickup in terms of growth in Q1 compared to especially Q4. We actually noticed that we were able to convert much more customers from competition to us in Q1 compared to the preceding quarters. This is actually, in our view, a clear indication that the focus the new management is putting in place when it comes to aggressively going after competitive accounts is starting to pay off.
Okay, thanks very much.
The next question is from Veronika Dubajova, Goldman Sachs. Please go ahead.
Good morning, gentlemen, thank you for taking my questions. I have two. My first one is just an M&A, I think, Marco, when we last caught up, you were clearly indicating there was a bigger asset for sale that you were considering. I'm just wondering if you have an update on that process. Then in general, if you can help us think through any cash deployment priorities that you see for 2016 and beyond. My second question is just a very quick maintenance question for Peter, which is given the volatility in currencies, I was hoping you might be able to help us think through FX, both on the top line and from an EBIT perspective for the full year. Thank you very much.
I guess, Veronika, you're referring to the MIS transaction. We have decided to pull out of this process just because we believe that the price expectations are, in our view, unreasonable. At the end, every M&A transaction also has to deliver value to our shareholders, we are just not prepared to pay whatever price there might be asked. We are prudent when it comes to M&A transactions. If it makes sense, also from a value generation point of view, yes, we consider obviously opportunities, but this one we actually stepped away. We have one large transaction in front of us, that's MegaGen. I guess most of you know, we have this convertible bond outstanding, we have actually the opportunity if we want to convert the bond into shares in the second half of this year.
We are in the middle of actually making up our mind if we're going to ask the company to pay us back the bonds, or if we're going to convert the bonds into shares.
I take your question on the volatility of the FX rate, Veronika. As you have seen, on the top line, we basically don't have a FX impact in the first quarter. If the FX rate.
If they stay as they are today, I would also not expect an FX rate for the full year. What we have seen is EUR is around CHF 109. That is pretty much stable over the last couple of weeks or months. We see a certain negative impact in the BRL, but that was offset by a strong USD in the first quarter. If they stay as they are, I would not expect any impact full year in 2016.
That's great, Peter. From a margin perspective, just given the disparate distribution of your cost base, would you expect a full year impact on margins from FX?
No. If we don't see an FX impact on the top line, I would also not expect-
Understood. Apologies. I misunderstood you on that. Got it.
I'm sorry. Thank you.
The next question is from Christoph Gretler, Credit Suisse. Please go ahead.
Yes. Thank you. Good morning. Actually, I have just one question left on your upgrade to guidance. Can we basically get a bit of a sense what triggered that? From our perspective, the market didn't improve that much, just looking at some of your competitors. I was wondering, is this more a reflection of your view that the market has improved, or is it all coming to better than expected company specific development?
I think it's a combination, Chris, of both factors. We see actually our larger markets, obviously with the exception of Brazil, in very good shape. We believe that the global growth in 2016 will be between 3% and 4%, which is, we think, rather solid. Obviously, on top of that, we have some very company specific things going for us, BLT specifically. I also mentioned the PURE launch, for example, in the U.S. Botiss is gaining ground in Europe and also the biomaterials franchise in the U.S., where we have a portfolio of different products which we actually source from different suppliers. There are many initiatives which are starting to really pay off, which are company specific. This all on the back of what we believe a stronger market environment.
Okay. Sounds clear. Thank you.
The next question is from Ines Silva, Bank of America, Merrill Lynch. Please go ahead.
Hi. Good morning. Thank you so much for taking my questions. I have just two, please. First of all, on both the North American and the Asian markets, given the solid performances, especially if we look on a two-year basis, could you give us some of the reasoning why you think growth has been stronger? I know you've already referred to market share gains in North America. How do you see those reasons going into the following quarters in 2016? Just a quicker broader picture question, which is, could you give us an idea of the breakdown of the value versus the premium growth on these segments? Just any color around these dynamics in your revenue currently. Thank you.
Yes. On North America, it's obviously a combination. Our strong growth in Q1, it's a combination of some competitors going through some difficult times. The combination of 3i and Zimmer, it's for sure for them quite the project and the weak performance in Q1 is actually a reflection of that. We obviously were able, I guess some of our competitors were able to actually take advantage of the situation and then convert some of their customers to our franchise. On the other hand, as I just mentioned before, we also have some company specific things going for us. I mentioned the products, BLT, PURE, and also the value-based biomaterials. I also strongly believe that the management change which we initiated at the end of last year is already starting to pay off and showing results.
More focus on actually customer acquisition, more aggressively going after competitive accounts, more focus when it comes to the activities of our sales force. At the end, it's a combination of several factors. On your second question on the value segment, if you look overall at the growth of our value segment, including Neodent, then actually overall, the impact has been slightly diluted. Neodent in Brazil compared to the rest of the group, was slightly underperforming in terms of growth. The rest of our value business the Instradent franchises are still relatively insignificant.
Just a quick follow-up on the growth in Asia or more specifically in China. How do you see that in the rest of 2016, please?
Yeah. China, we had an extremely strong first quarter. As pointed out during the presentation, we are now preparing the launch of Anthogyr to also penetrate the value segment in China. We expect that during Q3 of this year, we will actually be ready to generate first revenues with the Anthogyr brand in China. This obviously will actually generate incremental revenues, which we didn't have in our P&L before. We are very positive when it comes to the outlook on our business in China.
Thanks very much.
As a reminder, if you wish to register for a question, please press Star and One on your telephone. The next question is a follow-up question by Michael Jüngling. Please go ahead.
I have one more question on EBIT margin. Is the faster growth that you're experiencing in Asia Pac materially dilutive to your business? Is it a significantly lower margin business than the rest of your business?
No, not at all. I could now say to the contrary, but I haven't said that. No, it's not diluted. It's not.
Okay. Then final question is on payroll expenses. Last year when the Swiss National Bank de-pegged the Swiss franc, you curtailed the P&L expenses quite materially, especially in Switzerland. You sort of forwent some of your bonus. Now with the business humming along really nicely, are you going to reverse that, meaning the Swiss-based cost base will get rewarded for the success?
We will keep the contractual arrangements which we put in place after the Swiss franc crisis in January of 2015. We will keep these contractual arrangements in place. However, what we did, obviously in 2015, we actually made our employees whole for the compensation cuts due to the very good performance in 2015. Obviously, if the trend continues throughout 2016, there's a high probability we will also make our employees in Switzerland whole for the compensation cuts in 2016.
Great. That's helpful. Thank you.
The next question-
More questions
is from Julien Dormois, Exane BNP Paribas. Please go ahead.
Hi. Good morning. Thanks for taking my question. I just have one, which relates to the CAD/CAM business. I think you indicate in your press release that you have seen slower sales in the CAD/CAM business. If I'm right, you have several initiatives underway in that space. Should we see a pickup in that activity for the remainder of the year? If you could just detail the various levers for that, please.
Yeah. When we refer to the slower CAD/CAM business, we were referring to the tooth-borne elements production, which is less and less important when you look at our overall CAD/CAM business. On the other hand, we launched our intraoral scanner in Q1 in the U.S., and we will actually roll this equipment out throughout the rest of our group companies during the rest of the year. Again, with a range of materials. We have also launched our in-lab milling setup in Q1, and we have already sold quite some in-lab setups, and we will roll this also out throughout the rest of this year. When it comes to our CAD/CAM franchise, we believe that due to the portfolio extensions I just commented, that we will see actually quite some exciting growth coming through.
Okay. Thank you.
The next question is from Lisa Clive at Bernstein. Please go ahead.
Hi. A few follow-up questions. Just wanted to dig in a little bit on a prior question around the premium versus discount split, and what the relative growth rates were. Maybe if you could just comment on the U.S. market. Is it safe to say that your premium brand is growing double digits since I think as you commented that Instradent remains very small today? And then second question on the U.S. market. Could you just update us on your strategy of targeting GPs in the U.S.? Obviously, after the discontinuation of the Patterson collaboration, it's unclear what your strategy is there. Or frankly, do you have enough growth momentum with the specialists that that's not as much of a priority? Any update on that would be helpful.
Yes, I can confirm that our premium business in the U.S. grew double-digitally in Q1. On your second question on the GP strategy in the U.S., yes, you are right. Our trial with Patterson was not a success, so we pulled out of this cooperation already at the end of last year, so during the fourth quarter of last year. We are now working together with the Engel Institute, which is the most reputed education body for general practitioners who want to become active in placing implants. First experiences have been extremely positive. We have now two modules. We have actually for GPs who want to become familiar with the prosthetic part of implant dentistry, we are working together with Spear.
We have been actually working together with Spear for quite some time now, and we have added since the beginning of the year, the cooperation with the Engel Institute when it comes to the surgical part. Again, as pointed out, first indications are that this is actually a very compelling setup, and GPs are actually extremely happy to have the opportunity to get into Straumann products and get familiar with Straumann protocols through these initiatives.
Great. If I could, just one additional question. On your CAD/CAM business, could you just give us an idea of the growth of CAD/CAM relative to that 12% organic growth rate? Is it materially different from that? You mentioned the decline in the tooth-borne. Could you also remind us of what the proportion of your consumables today are still tooth-borne?
Actually, the first quarter in terms of CAD/CAM overall was growing less than the rest of the franchise. This is due to the fact that we launched in Q1 of 2015 our new 3Series and 7Series scanners. We had an extremely strong Q1 2015, and we are comparing Q1 2016 against Q1 2015. Q1 2015, when it comes to the, we call them digital enablers or CAD/CAM, how you call it, was not actually a strong growth quarter. However, as I pointed out, for the rest of the year due to new launches, so the in-lab milling and the intraoral scanner and the corresponding material is. For the remainder of the year, we are expecting that actually the CAD/CAM franchise will gain in terms of momentum and will grow at least at the levels of the other franchises.
In terms of tooth-borne, this is a flat business. Over the last couple of years, we had declining numbers on our tooth-borne CAD/CAM business. We were actually able to turn this around during 2015. However, we have not the expectation that this part of our business will actually grow at the same level as the rest of our franchises.
Okay, thanks for that.
Thank you for your interest and your questions. In closing, I would like to draw your attention to the investor relations calendar, which you can find on slide 23 and on our website. Thank you again for joining us. Have a good day. Goodbye. Thank you.
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