Ladies and gentlemen, good afternoon. Welcome to the Straumann 2015 third quarter sales report webcast and conference call for financial analysts, investors, and journalists. I'm Selena, the conference call operator. I would like to remind you that all participants will be in listen-only mode, and the conference is being recorded. After a 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 or good afternoon, ladies and gentlemen, thank you for joining us for this webcast and conference call on Straumann's 2015 nine months and third quarter results. I know that some of you have a busy program with other companies to cover. We appreciate that you have taken the time to join us. We will be referring to the presentation slides that were published on our website this morning. As usual, we ask you to take careful note of the disclaimer on slide two regarding forward-looking statements. I will begin with a brief review of the highlights, after which Peter Hackel will take you through the numbers. I will follow with an update on our growth and strategic initiatives, other news, and the outlook. After that, the lines will be open, and we will be glad to take your questions.
We will begin with slide four. The main news this morning is that we have succeeded in driving momentum in quarter three, most notably in our largest market, Europe. Barring any foreseen circumstances, we are well on the way to delivering our full-year targets. In the first nine months of 2015, group revenue grew 9% in organic terms, which means excluding acquisition and currency effects. In local currencies, our growth actually reached 18%, while net revenue amounted to CHF 585 million, of which CHF 46 million were contributed by Neodent. In Q3, we posted organic revenue growth of 8%. As I mentioned, the continued strong performance in Europe had a large part in this. Our best performer was Asia-Pacific, driven by double-digit growth in China and Japan.
From a product perspective, our new generation Bone Level Tapered implant was a key growth contributor and is now available in more than 50 markets across six continents. Since the initial launch roughly a year ago, we have sold more than 100,000 Bone Level Tapered implants. To mention three strategic highlights: We have made further progress in unlocking emerging markets, opening a subsidiary in Russia, completing our new distribution model in China, and opening hubs to serve a number of new markets in Latin America. We are looking forward to realizing these and other exciting growth opportunities. On the basis of our performance so far this year, I can comfortably say that we are well on track to delivering our fully organic growth and EBIT targets. With that, I would like to hand over to Peter for the performance details.
Thank you, Marco, good morning or good afternoon, everyone, from my side. Looking at slide number six. You can see on the left that our nine-month revenue in 2014 would have been CHF 28 million lower at this year's currency rates. The negative currency effect was due mainly to the sharp depreciation of the euro after it was unpegged from the CHF by the Swiss National Bank in January. The acquisition effect added CHF 43 million, bringing the adjusted 2014 revenue to CHF 539 million. Using this as a comparison base, our net revenue in the first nine months of 2015 increased nearly 9% in organic terms. You can also see that all our regions developed positively with the largest contributions of CHF 14 million in each case coming from Asia-Pacific and EMEA.
As Marco mentioned, APAC was also our fastest-growing region, delivering double-digit growth both in Q3 and over nine months. In spite of the sluggish economy in its key market, Brazil, Latin America still managed to register healthy organic growth of 9% over the first nine months. The next two slides give you some more details on the regional performances in Q3. In Europe, the Middle East, and Africa, organic growth reached 9% and was fueled by double-digit increases in Iberia, France, and Sweden. Austria, Italy, and the region's largest subsidiary, Germany, all performed well. We are pleased with the positive uptake of our Botiss Biomaterials range, and having completed our first year of distribution, we have clear evidence that our strategy is paying off and that the comprehensive range of GBR products complements our implant business extremely well.
In North America, revenue continued to grow solidly at 6%, albeit slower than in the previous quarters. This mainly reflects the strong comparative quarter in the prior year, when revenue grew 11%, benefiting from the launch of BLT. This year in Q3, we saw pleasing developments in our business with ClearChoice, and I am glad to say that Straumann and Neodent now account for 80% of the implants placed by the clinic network, and the upward trend continues. Asia Pacific has posted fairly consistent mid-teen growth in recent quarters, with the exception of Q1, which was exceptionally strong due to the stocking effect of our new distribution network in China. The leading growth contributors in Q3 were China, which continues to develop dynamically, and Japan, where we believe we gained further market share thanks to SLActive and our Bone Level implants.
In addition, BLT made an initial contribution to sales, having recently received marketing clearance. Moving on to Latin America and the lower chart in slide eight. The growth rates shown for 2014 include both Straumann and Neodent on a pro forma base, so that you can make a meaningful comparison with 2015. The dental markets in the region are suffering from the weak economic environment and political uncertainty. The tooth replacement markets in Brazil have been sluggish throughout the year and held the region back in Q3. Nevertheless, we still managed to improve modestly on the strong comparative period of 2014, when business resumed after the Soccer World Cup. During our first half roadshow, we received several questions expressing concern about the possible impact of the economy on the dental markets in Brazil.
My response to this is that predictability in our business is generally low, and it is difficult to make projections in the current environment. However, we believe that based on our current figures, the rollout of BLT in Q4, our geographic expansion, and our new CAD/CAM business in Latin America, our growth will improve in the remainder of the year, providing that the business climate does not deteriorate further. Looking at the business performance by segment on slide number nine. Growth was driven mainly by implants, including Roxolid and BLT. Two-thirds of our growth in the first nine months were generated by implants. The restorative business, including CAD/CAM prosthetics and digital equipment, posted another quarter of robust growth. Demand was especially strong for customized abutments and bar prosthetics.
Straumann’s fastest-growing business has been biomaterials, driven by the rollout of the Botiss range in Europe and the success of our new regenerative solution sold in the U.S. under license. With that, I’ll hand back to Marco.
Thank you, Peter. Please turn to slide 11. With the acquisition of Neodent and the growth of our premium business, Latin America has become an increasingly important part of our global business. It generates more than 10% of our revenue, and a quarter of our employees are based there. In volume terms, it is one of the largest regions and still offers considerable opportunity for further growth. Because of this, we have decided to include the head of our Latin American region, Matthias Schupp, in the group’s executive management board with effect of January 1, 2016. Matthias has been at Straumann since 2007, when he joined us from Procter & Gamble as regional manager of Western Europe. In 2013, he was appointed head of sales Latam and joined the management of Neodent, of which he became CEO earlier in 2015.
He is German, aged 50, and has a strong track record in country and regional management in various industries. One strategic initiative that Matthias and his team have been driving this year is our expansion into new regional markets. In quarter three, we opened a subsidiary in Colombia and adapted our go-to-market model in Mexico. Next month, we expect to open a further subsidiary in Argentina, and all three locations will serve as hubs for both our premium and value brands in the surrounding countries. To address the large under-penetrated market for tooth replacement in Russia, we have opened a subsidiary in Moscow, which gives us greater control over the business. Russia is an attractive market, investment is needed to expand our business. We are therefore adding sales personnel in addition to incorporating our former distributor and his team. We have also been investing in Asia, as you know.
As you can see in slide 13, our new milling center in Narita, near Tokyo, has just gone into operation. This is our first production facility in Asia, and it enables us to offer customers in Japan CAD/CAM solutions ranging from single tooths to full-arch restorations, as well as drill guides. Production could be expanded in future to offer these services to clients elsewhere in the region. Moving on to slide 14, I am delighted to say that our biggest expansion project to date is now complete. As we have pointed out on previous occasions, the Chinese market is under-penetrated and is expected to more than triple in the next five years.
Having taken over distribution in China last year, we have established a network of 20 independent distributors to cover a much broader geographic spread. We have also added more than 70 consultative sales reps of our own, in addition to marketing, training, and education functions. This will enable us to address the fast-growing private practice sector more effectively by strengthening our leadership position in the public clinic sector. By running our own operation, we have greater control over our customer base, and being closer to the market, we are able to adapt quickly. Moving on to slide 15. For almost a year now, we have been sharing our optimism and excitement with you regarding our Bone Level Tapered implant. With its fast-healing SLActive surface and the superior strength of Roxolid, we are offering a very attractive, differentiated product with broader treatment possibilities.
This is why we have been able to sell more than 100,000 of the new implants in the first year. BLT currently accounts for one in every eight Straumann implants sold, and more than 4,000 customers now use it, a quarter of whom are new customers. You can see some of their reactions in our video report from the EAO at the link shown at the bottom of the slide. In recent years, there has been a marked increase in the popularity of simple, cost-effective TiBase abutments, most of which are produced by copycat manufacturers. We have responded to this trend by introducing our own Variobase family of abutments. Our aim is to ensure that patients with our implants also receive prosthetics with Straumann original connections, which are produced to our specifications and are covered by our warranty.
The range now includes a specially designed Variobase for CEREC users, allowing dentists to produce chairside restorations with Straumann connections. We have just entered an agreement with Sirona to ensure that our Variobase is fully supported by the CEREC system, which will be the case when the software update is completed early in 2016. We are pleased to say that we are the first premium implant player to have such an arrangement with Sirona. In addition, Sirona lab customers will be able to use Straumann's centralized milling option as a trusted partner in Sirona's in-lab workflow. Slide 17 shows you how the Variobase for CEREC and other products that we have introduced this year support our strategy to be the total solution provider in tooth replacement for dentists and labs. Turning on to slide 18.
At the EAO this year, new data were reported from a large retrospective study of patients treated in Sweden with dental implants produced by various companies. 427 patients with 1,578 implants were evaluated nine years after treatment with regard to the occurrence of peri-implantitis. The outcome was very favorable for our implants, and the lead author, Dr. Jan Derks, noted that Straumann implants showed the lowest rates of early implant loss and presented with lower rates of moderate or severe peri-implantitis than other implants evaluated in the study. The new data have been accepted for publication in the "Journal of Dental Research", and we are excited about sharing this news with dentists and patients around the world.
Looking at slide 19, we received some positive news yesterday from the International Trade Commission in the U.S. with regard to the patent infringement claim brought by Nobel Biocare against Astra Tech and Neodent. The ITC judge has determined that the main patent relating to key features of the NobelActive implant design is not valid. The good news for customers is that we can continue to sell Neodent's attractively priced, high-quality alternative to NobelActive in the U.S. That brings us to slide 20 and our outlook, which is, of course, barring any unforeseen circumstances. In summary, we have not changed our guidance. Based on the development so far, we expect full-year organic revenue growth to be in the mid- to higher single digits, and despite investments, we expect our operating profit margin to be in the low 20% range.
On that positive note, I will move to the Q&A, and I would ask you kindly to limit the number of your questions and follow-up questions to two, and then to rejoin the queue. Operator, can we have the first question, please?
We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use only handsets for asking questions. Anyone who has a question may press star and one at this time. The first question comes from Mr. Michael Jungling from Morgan Stanley. Please go ahead.
Good afternoon, everyone. I have two questions. Firstly, on the sales growth guidance, secondly on Brazil. On the sales growth guidance, I'm confused why you would still leave in your guidance the word mid to higher single digit growth, because effectively, the mid sort of implies to me that the fourth quarter could be a very weak quarter. If it's mid for the full year, it'd be somewhere in the area of 0% growth, and that would be tragic, I would imagine, for the share price. Why have you chosen to leave the word mid in there? Are you guiding us down for the fourth quarter? Question number two is on Brazil. How much of the slowdown in your business is the economy, and how much do you think the lower number of selling days impacted sales growth in the third quarter? Thank you.
Maybe I can take the first part of the question, Peter, you can take the second part on Brazil. A very valid point, Michael. We are not expecting a weak fourth quarter. To the contrary. Brazil, for example, we expect clearly a stronger fourth quarter or in general, Latin America, compared to the third quarter. I agree with you, this mid expression is quite misleading. We may consider to now it's already the fourth quarter we come out again, so we cannot change it for the next quarter. I think it's a valid point. It's kind of misleading. We are not expecting a weaker fourth quarter.
Before you answer Brazil, just a follow-up on that then. When you say a stronger fourth quarter, you mean the organic constant currency growth rate would be stronger than what you've observed in Q3?
For Brazil.
For Brazil. What about
I just mentioned Brazil and Latin America in general, yeah.
What about for the fourth quarter then?
We don't guide on a quarterly basis. I just wanted to follow up on what you just said. We are not expecting a fourth quarter, which would actually bring the full year growth rate down to 5%.
Understand. Thank you. Brazil itself, please. Economy, selling days.
I take the questions on the selling days in Brazil. If you look at the second quarter this year, there we had three more selling days. In the third quarter, we had one less selling day in Brazil. You can make the math, but that will not have a material impact on the growth rate. I think the more important fact is to consider that the comparative base in 2014 was a very strong base because business resumed there after the FIFA World Cup in the second quarter. As I have laid out in my comments, we expect again, a tick up of the growth rate in the fourth quarter in Latin America due to several initiatives that we start there.
On the one hand, the launch of the BLT implant, the start of the CAD/CAM business in Brazil, the expansion project in Colombia, and Neodent business in Mexico as well.
Final follow-up on the Brazil part of the business. Should we be concerned that now that you've taken control of Neodent that a Swiss company owning a Brazilian company with perhaps some lack of Brazilian knowledge of the founder is perhaps starting to have a temporary negative impact on that business?
The founder is still the president of the board. He is still employed by the company, in his function as medical advisor and in charge of product development, as well as training and KOL management. He is still heavily involved in the areas where we feel he can best contribute to the future of the company.
Great. Thank you.
The next question comes from Anasuya Sarma from JP Morgan. Please go ahead.
Good afternoon. Thanks for taking my questions. I have two. Firstly, Q4 in Europe is going to have quite a difficult comp given the VAT increase in Spain last year. What are your expectations for growth in Q4 in Europe? Secondly, how permanent is the distributor change impact in Latin America? Has that sort of washed through? Can you give us an estimate of how much of that impacted the LATAM organic growth in Q3?
On your first question, you're right. We had a very strong fourth quarter in Europe in 2014. However, we also believe that the fourth quarter of this year will be solid. We just launched in the third quarter BLT in many countries in Europe. This will actually help us to also deliver a strong fourth quarter in Europe. Will it be as strong as the second and the third one? Today, honestly, it is too early to comment on this.
Thank you.
Your second question was about the impact of a change in distributors in Brazil. Neodent stopped the relation with a distributor they had within Brazil and took over the business by themselves. That had a certain temporary negative impact on the growth rate in the third quarter. That was also only a temporary impact because during that transition, the old distributor had sell-off his inventory, and we had to transfer the customer relationship. There won't be a negative impact in the fourth quarter again due to that fact. The order of magnitude of that impact was a low around one percentage point on the growth rate in the third quarter.
Okay, perfect. Thanks for that.
The next question is from Mrs. Carla Bänziger from Bank Vontobel. Please go ahead.
Good afternoon.
Could you maybe comment a bit on the China destocking effect? Is it correct to assume that you have not seen it yet, and that we will see that now going forward in Q4? Maybe a follow-on on the BLT question regarding Europe. As far as I know, you didn't roll out BLT just at the beginning of the quarter. Could you maybe give us a bit of feeling how much of the growth is related to BLT and how much is just the general market situation and the Big Bang initiative? Thanks.
I'll take the first question concerning the destocking impact in China. We already have seen part of that impact in the third quarter. Our new route to market was completed at the end of the third quarter, so we expect a bigger impact on the fourth quarter due to that destocking impact. However, we cannot really control that because that is under the control of the former distributor, and we don't have a full transparency how much he has already sold off and how much he's going to sell within the next couple of weeks. On your question in terms of how much of the growth is related to BLT, honestly, I cannot give you a precise number. The only thing I can tell you is that obviously has contributed positively to the development.
Based on the numbers of competitors who commented on their development in Europe, we have clearly gained share in Europe in Q3. I cannot tell you because there is obviously also some cannibalization between Bone Level straight and Bone Level Tapered, especially in markets like Spain, like Italy or France. Just to isolate how much is really purely related to the BLT launch and how much has been the impact of cannibalizing the existing Bone Level straight franchises is not possible. Obviously it has very positively contributed to the growth in Europe.
Okay, thanks.
Next question comes from Mr. Yi-Dan Wang from Deutsche Bank. Please go ahead.
Thank you very much. It's Yi-Dan from Deutsche Bank. Just a quick question on the BLT. Very interested in hearing you saying that 4,000 customers use the product. Can you give us some sense of what the penetration of the product is in your existing customer base, so excluding the 1,000 or so new customers that you have there? Secondly, what percentage of your revenues do the 50 countries that already have BLT account for as a percentage of the group? Thirdly, I think when you launched the Bone Level straight implants, you benefited from that for a few years. Can you give us an update of what the penetration of that product is now? That would be great. Thank you.
What I can tell you, Yi-Dan, is that out of the 4,000 BLT customers, roughly 1,000 are new customers. This number we can obviously share with you. Honestly, I'm a little bit reluctant to tell you how many active customers we have. I don't want to disclose this information. Obviously 3,000 of our existing customers have already purchased BLT, which is still a relatively low percentage of our customer base, but I cannot give you an exact percentage there. Your second question was, can you repeat that one on the Bone Level straight? Also here, it's more than 40%, let's put it that way. More than 40% of our customer base is using a Bone Level Tapered implant, and are now combining the straight with the tapered one.
Our key product still, and sometimes we forget to mention this fact, our key product still is the Tissue Level implant. Still more than 60% of our volumes we sell are Tissue Level implants. We have obviously some hardcore Tissue Level believers who would never and will never place a Bone Level implant. When you look at what I just commented during the presentation, the Derks study and the peri-implantitis issue, obviously the Tissue Level implant is when it comes to preventing peri-implantitis, still by far the best clinical option. Your third question was? Sorry, can you repeat that one?
Sorry. Yeah. It was relating to, again, the Bone Level Tapered implant. Just to follow up on that before I go to the third question, are you able to at least tell us what proportion of your implant revenues these 4,000 customers, or actually I'm more interested in the 3,000 customers that you already had contributed to the group? How long do you think it would take you to cover the rest?
What I can tell you, Yi-Dan, is that it's roughly 12% of our implant volumes which we have sold throughout the first nine months of Bone Level Tapered implants. This information we can share with you.
Right. You're not able to tell us the proportion of your revenues coming from the 3,000 existing Straumann customers? It's okay if you can't tell us that.
No, obviously we can.
It's an interesting number.
This is the information which will contribute to anything, because at the end, as I pointed out before, we have some cannibalization between Bone Level straight and Bone Level Tapered.
Okay. All right. I'll take it offline. Thank you.
Okay. Thank you. Next one.
The next question comes from Christoph Gretler from Credit Suisse. Please go ahead.
Thank you. Good afternoon.
Good afternoon.
Two questions. Hi, Marco. Basically, on Europe, if I remember right, in August, you were still a bit more cautious with respect to these growth trends, and now in Q3 it was even better than in Q2. Basically, what has been which country or which customer group or so, what has been particular strong relative to your expectation back then? The second question is on North America. Basically, I think Peter mentioned that 80%, if I got that correct, 80% of implants ClearChoice are now yours. So it seems like the pickup there has gained momentum. I acknowledge that it was a much tougher comparison base in Q3 versus Q2, but basically, are you satisfied with the growth pace that the organization has over there? That would be it.
Okay. Your first question, very strong performance, much better than expected came out of Spain and of Italy. We had an incredible third quarter in Spain, and also the Italian business developed much stronger than what we would have anticipated. The third country which really developed extremely strong in the third quarter was France.
Do you think that this is market-related, or is it your-
No, it also has to do, obviously, with the Bone Level Tapered launch. Spain, Italy, but also France, are our tapered markets.
Much more than, for example, Switzerland or Germany.
It obviously has helped us to gain share and to drive growth. We have to be cautious in Spain, and I think it has already been mentioned during the call, the VAT change in Spain as per January the 1st of 2015 triggered an extremely strong fourth quarter in 2014. We have to be a little bit more cautious when we look at the fourth quarter, especially when it comes to Spain.
On the U.S., are we 100% happy? Honestly, no. I think we could even perform better. Fact, however, is that we gained again share, also in the third quarter, like in the second one. For the second one, we know that for sure based on the DIMDC data, the market share data developments which we have. We believe that also in the third quarter, we gained share. It has been mentioned that the comparable basis, Q3 2014 was high. We grew by 11% in Q3 of 2014. To be 100% honest and straightforward, 6%, are we fully happy with that? I think its potential is even higher. We could even have grown more if we would have complete our act together in the U.S.
Mm-hmm. It's kind of interesting to see that now actually, except Latin America now, it's actually the slowest growing part of your company. Which, to me, is a bit surprising.
Yeah. On the other hand, 6% is also not too bad.
No. Complaining on a high level.
Two years ago, we still have been extremely happy with the 6% growth in the quarter in North America. To honestly and openly answer your question, I personally believe there is even more potential for us.
No, we are complaining on a high level, I fully acknowledge. Thank you.
The next question comes from Veronika Dubajova from Goldman Sachs. Please go ahead.
Good afternoon. This is Meg Trainor on behalf of Veronika Dubajova. I have two questions. The first is, could you please discuss how you're thinking about your capacity for M&A while you're still integrating the Neodent business? Could you possibly suggest which areas might be of most interest to you given your current footprint? My second question is just following on from your previous commentary on the U.S. market. If you could possibly give us an update on the progress of your partnership with Patterson. Thank you.
On M&A, the Neodent business is fully integrated already, that's actually a normal course of business. There are no construction sites anymore when it comes to integrating that business into our structure, and in managing it like all the pieces of our business. That acquisition has been digested. When it comes to future M&A activities, it's always highly speculative to talk about M&A projects, because at the end, the decision to sell a business is not triggered by us. That's always the other party. Obviously there are still some interesting assets which might come to the market at one point in time. In case this will be the case, then at these assets, we will have a deep look into.
In other words, we are not just sitting still and are actually taking the position that whatever comes to the market in terms of interesting M&A opportunities, we will pass on. To the contrary, we would be eager to have a look at it. On your second question on the U.S., the partnership with Patterson. Also here, I'm straightforward and clear. It has not delivered yet up to what we expected initially when we entered into the partnership and the contract with Patterson. We are currently in discussions with Patterson management in terms of changing the model and potentially rewinding it and changing it, so that at the end, the corporation will yield benefits to those parties. So far, the expectations have not been met yet.
Thank you very much. That's very helpful.
As a reminder, if you wish to register for a question, please press star and one on your telephone. We have a follow-up question from Mr. Michael Jungling. Please go ahead.
Thank you. I have two more questions. On Europe specifically, do you think it is possible to grow organically in the fourth quarter? Secondly, when it comes to M&A, the headlines show that MIS is potentially for sale. Is it a business that you would look at? I have a Neodent question, perhaps those two first.
Okay. Sure. Absolutely, we believe that it's possible to grow organically in Europe in Q4. Yes. We would not be happy if we would see negative growth coming out of Europe. BLT, the potential BLT has by far not yet been exploited. On your second question, yes, we also know that the owners of MIS are potentially considering to put this asset on the market. MIS is an attractive asset. We're talking here roughly 900,000 to 950,000 implants at the global scale. Obviously this is an asset we could not just say we don't look at. It would actually help us to live up to our ambition to also in the value segment, become the number one company globally.
Then a question on Neodent. Can you comment on the success that you've had so far, in Southern Europe and in the U.S. excluding ClearChoice, the implementation of Neodent as a second brand in those markets?
We have been extremely successful with the Neodent portfolio in countries like Italy, Spain, Portugal, and the U.S. That's where we have our direct Instradent sales force, marketing, the Neodent product range. When it comes to full-arch restoration, these type of indications, we have, for example, also gained a large chain in Italy just recently. Not the same size as ClearChoice, but also substantial volumes. This chain is doing more or less the same work ClearChoice is doing in Italy. We also are gaining or have gained larger accounts besides Neodent in the U.S., besides ClearChoice in the U.S., and also in Spain. We see that Neodent is for many large specialists when it comes to full-arch restorations, a very good alternative to, for example, the Nobel Biocare range.
Would you assess that and then that the Neodent strategy of a second brand is working for you? Have you gained confidence, and will you roll it out further?
Oh, yes. Absolutely. As mentioned, we are going to sell the Neodent range in Colombia, in Mexico. We are also looking at other markets like China, like Russia, like also India. We are looking at other markets in Europe. We believe that Neodent has the potential to become a global brand, based on our experiences so far in the countries I just mentioned before. Interestingly enough, it's not because of the price, it's because of the product features, primarily. The price obviously also then helps to close the deal. From a pure product feature point of view, many of our customers, they tell us this is a much better product than many of the competitive products they used to work with before.
That's very helpful. Thank you.
Last question.
The last question comes from Yi-Dan Wang. Please go ahead.
Okay. Just a quick follow-up on your comment just now on Neodent. As you look at these businesses, can you comment on what the net benefit to your business of having Neodent and also having the Straumann brand? Taking ClearChoice as an example, previously was a pure premium priced account, and now it seems that Neodent is contributing quite significant, or it's taken up quite a significant portion of the volume. If you could comment on that would be great. Thank you.
Obviously, the ClearChoice account was not our account before, so everything we sell into ClearChoice, independently of the mix, if we sell Straumann or Neodent is incremental revenue and incremental gross margin and EBIT for us. For us, this is actually a great opportunity. Obviously, the price ClearChoice pays for the Neodent implants, we assume, we don't have transparency on that, but we assume that they don't pay the same price for implants as they used to pay for the implants of the former incumbent.
Okay. Perhaps, would you be able to give us the mix of the volumes that you're getting between Neodent and the Straumann brand in the ClearChoice account?
I can give you an indication and can tell you that actually the majority of the implants we sell into ClearChoice are still Neodent implants.
Okay. Yeah. Basically, what I'm more interested in finding out is that as we observe you continue to expand the Neodent brand, should we expect that as the market develops, more and more of the volume will go to the Neodent brand versus the Straumann brand, or is this purely really a full arch restoration product?
No. Obviously, you cannot compare Neodent to Straumann. For example, from a material point of view, we have Roxolid, we have SLActive surface. We have now 10-year clinical studies on some of our implants. We have the Tissue Level implant, which is still more than 60% of our volumes. That's also what we see in actually the customer platform of our Instradent customers or Neodent customers, there is very little cannibalization between Neodent and Straumann. What we actually sell under the Instradent umbrella is incremental revenue for us, it's not cannibalizing the Straumann franchise.
Okay, great. Thank you.
Okay. Thank you once again for your interest and participation in this call. If we were not able to answer all your questions, please contact our investor relations department. You can find our reporting and events calendar at the end of the presentation. In particular, we would like to draw your attention to our visit today in Brazil on the 2nd of December when Neodent will open its doors to the investor community for the first time. This will give you the opportunity to see its implant and CAD/CAM manufacturing facilities in Curitiba, and we hope very much that you can join us. Until we meet next time, I wish you a pleasant day and goodbye. Thank you.
Ladies and gentlemen, the conference is now over. Thank you for choosing Straumann and thank you for participating in the conference. You may now disconnect your lines. Goodbye.