Straumann Holding AG (STMN) Earnings Call Transcript & Summary

Ladies and gentlemen, welcome to the Straumann Group Half Year 2026 Results Conference Call and Live Webcast. [Operator Instructions] The conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast. At this time, it is my pleasure to hand over to Guillaume Daniellot, CEO. Please go ahead, sir.

Thank you, and good morning or afternoon to all of you. Thank you for attending this conference call on the Straumann Group's half year 2026 results. . Before we begin, let me address the leadership transition we announced this morning. After almost 20 years with the company, I will conclude my 7-year tenure as CEO of the Straumann Group by the end of the year. I have spent actually for quite some time, and I generally believe it is a very good moment for a smooth leadership transition. The company is in a strong position with a clear vision, strong strategy, which is delivering reasons, many opportunities ahead and more importantly, a high-performing management team well positioned for the next chart. Therefore, I'm sincerely very pleased about Christopher Norbye's appointment, and I'm looking forward to supporting him with a smooth and efficient hand-off. But for the time being, I'm fully focused on closing the year strong, meaning that you will still have the pleasure of hearing from me again for the Q3 results. And now let's move on to talk about our half year results. Please take note of the disclaimer in our media release and on Slide 2. 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. Then let's move directly to Slide 5. I'm very pleased to present our results for the first half of 2026. The excellent second quarter performance continued market share gains and meaningful margin progress led us to upgrade our profitability outlook in June. We delivered revenue of CHF 700 million in the second quarter corresponding with an organic growth of 8.5% and reported growth of 5.9% in Swiss francs. This brought half year revenue to around CHF 1.4 billion representing organic growth of 7.8% or CHF 2.3 billion. The acceleration from the first to the second quarter is important. It shows the pace we drilled through the first half with every region contributing and mature markets performing particularly well. The measures we introduced to improve profitability are also delivering significant improvements. Our core EBIT margin reached 26.9% at constant 2025 exchange rates or 25.7%, including currency effects. Digital Solutions were another key contributor our [ moralscanner ] portfolio, led by CRO grew at double-digit rate. This strong adoption is expanding our active from an access user base at also a double-digit rate and, in turn, driving further growth across software and consumers. This rapidly expanding connected base of users is strengthening our data ecosystem and creating a platform for future growth across infectology, orthodontics and prosthetics. In implantology, IXL continued to deliver customer conversions and new account wins while Noden further expanded its global reach. ClearCorrect also continue to make fast progress with its transformation. And very importantly, we are translating this dynamic growth into higher profitability. Manufacturing productivity and supply chain optimization are lowering our cost base, while disciplined OpEx management is creating further operational leverage. Isabelle will explain the drivers in detail in a moment. Overall, the priorities presented at our Capital Markets Day are clearly translating into results. We are excited about the opportunities ahead and remain fully confident in delivering our upgraded outlook for 2026. Let me now turn to Slide 6 and look at how this performance developed across the regions. Starting with EMEA, our largest region, organic growth reached 8.6% in the second quarter and 8.2% for the first half. Mature markets performed particularly well with Germany delivering solid growth and Poland and Ambari showing especially strong performance supported by positive contribution from Iberia, Benelux and other established European markets. Implantology was the main growth driver. IXL continued to attract new customers and support share gains while Neodent and Anthogyr expanded their reach in the challenger segment through significant new customer acquisition performance. In parallel, ClearCorrect also continued to expand its presence among general practitioners. Moving to North America. Organic growth reached 8.4% in the second quarter and 8.1% in the first half. The region continued to outperform the underlying implant market despite the remaining cautious consumer sentiment and stable patient. Premium implantology led the performance with IXL driving double-digit growth in new customer acquisition and then also pursuing its market penetration. The DSO segment remain an important contributor, supported by long-term strategic purposes and increasing adoption of integrated workflows. Consequently, Digital Solutions also grew at a double-digit rate, supported by our own antiscanner portfolio. In Asia Pacific, organic growth improved to 7.4% in the second quarter, bringing first hike growth to 4.2%. Outside China, the region posted a very strong growth with 25% in the second quarter led by Japan, India and Southeast Asia. Premium in centology and Noden performed well, while Digital Solutions made a significant contribution led by Hero IX and increasing adoption across the region. In China, performance improved sequentially as patient flow gradually recovered and distributor inventory stabilized. We expect the VDP 2.0 process to potentially begin in the sedan for the year with an expected operational implementation planned for early 2027. Finally, Latin America delivered another quarter of double-digit growth, with 11.8% in the second quarter and 15.4% for the first half. Brazil and the Hispanic market, especially in Mexico, Argentina and Colombia were the main contributors. Premium implantology achieved double-digit growth Neodent continued to expand across the region, and Digital Solutions also grew at double-digit rate. Overall, this regional performance highlights the resilience of our business model the high strength of our geographical footprint and our ability to gain share across different market environments. With this 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 half of 2026. Let me begin with gross profit on Slide 8. We generated a core gross profit of CHF 972 million in the first half, corresponding to a core gross margin of 7.5%. Let me walk you through the bridge from left to right. After excluding noncore items and translating the prior year results at 2026 exchange rates, the comparable starting point is a core gross margin of 71%. Productivity and mix added 40 basis points. This reflects not only a favorable product mix, but also the continued progress of our operational excellence program and the enhancement of our production network strategy, including our Shanghai campus, which is now fully up and running. As a result, the rightsizing of our production facility in Biller has been finalized with a write-down of equipment that will no longer be used, resulting in a onetime margin effect of 30 basis points. This underlines our technology strategy shift towards more advanced technologies such as the multivendor to further improve productivity in future. U.S. tariffs reduced the margin by a further 60 basis points, resulting in the core gross margin of 7.5%. Importantly, if we exclude the tariff impact and the onetime equipment write-down, the underlying bridge shows a clear improvement in gross margin. On the right-hand side of the bridge, the IFRS gross margin reached 72%. The 150 basis points difference to core mainly reflects U.S. tariff refunds recognized during the first half of the year. Overall, the core gross margin remains at a high level. The underlying trend is encouraging as productivity measures, supply chain optimization and local for local production continued to lower COGS. With the gross margin bridge in mind, let me now turn to Abbott on Slide 9. Our core EBIT amounted to CHF 355 million with a margin of 25.7%, including currency effects. At constant 2025 exchange rates, the margin reached 26.9%. Starting from the comparable prior year core margin of 24.8% at 2026 exchange rates, the 50 basis points gross margin change flow through to EBIT. This was more than offset by 130 basis points of efficiency gains, but other effects added around 10 basis points. As a result, the core EBIT margin improved by around 90 basis points on a comparable current currency base. The main driver behind this was disciplined OpEx management as well as the execution of our operational excellence programs. Core operating expenses increased in absolute terms because we continue to invest in commercial capabilities, innovation, digital platforms and our strategic priorities, whilst keeping our head count flat, improving scalability. As a result, as a percentage of revenue, core OpEx improved by approximately 130 basis points compared to the prior year period at current year exchange rates. This reflects operating leverage, sharper resource allocation and productivity measures across the organization. The improving profitability of ClearCorrect and our intra-oral scanner business also contributed. Overall, we translated revenue growth into a meaningful increase in profitability while continuing to fund future growth. This brings me to the net results on Slide 10. Core net profit reached CHF 262 million in the first half, corresponding to a turn of 19%. On a currency-adjusted basis, this represents an increase of 15.7% compared with the prior year period. The bridge is primarily driven by the improvement in EBIT, which contributed CHF 38 million. The financial results had a small negative impact of CHF 3 million Results from associates added $2 million, while income tax reduced the bridge by $2 million. The effective core tax rate was 18.8%. Noncore items had a net negative impact of CHF 11 million after tax resulting in an IFRS net profit of CHF 251 million. These items mainly include M&A-related effects and legal costs, partially offset by the tariff refunds I mentioned earlier. Overall, this development shows the quality of the earnings improvement and how effectively operating performance converted to the bottom line. Let me now turn to cash flow and investments on Slide 11. In the first half of 2026, we generated a free cash flow of CHF 169 million, an increase of 49% compared with the prior year period. This corresponds to 12.2% of net revenue compared with 8.4% 1 year ago. The increase was supported by higher operating cash generation and lower capital expenditure. Net cash from operating activities amounted to CHF 239 million, while net cash used in investing activities was $105 million. Financing activities and fracking exchange movements reduced cash by CHF 228 million, which included the dividend payment. Cash and cash equivalents amounted to CHF 381 million at the end of June. And we also maintained a net cash position of CHF 350 million, including a solid equity ratio of close to 59%. Capital expenditure amounted to CHF 74 million, or 5.4% of revenue compared with CHF 113 million in the prior year period. The lower capital expenditure reflects the completion of a multiyear period of significant capacity investments. At the same time, we continue to invest in the Shanghai campus with the expansion of Curitiba and productivity initiatives and digitalization. Overall, our cash generation and balance sheet provide the flexibility to support organic growth, innovation and strategic investments. This leads me to our capital allocation priorities on Slide 12. So let me reiterate our capital allocation remains unchanged. First, we reinvest in the business to drive sustainable future growth. Because over the past several years, we have completed an intensive manufacturing investment cycle and substantially expanded capacity across our network. With the Shanghai campus, additional manufacturing capacity in Curitiba and investments in automation are in place. We have the manufacturing footprint to support the growth we expect in the coming years. As a result, we expect capital expenditure intensity to remain below the levels of the peak investment yes. Our second priority is to maintain a strong balance sheet. This gives us the flexibility to accelerate strategic initiatives and pursue value-creating M&A. And such, we remain committed to maintaining and increasing dividends with our earnings. Overall, the disciplined order balances reinvestment for growth, financial flexibility and shareholder returns. With that, I will now hand back to Guillaume for the strategy update and outlook.

Thank you, Isabelle. Let me now turn to the strategy update. I will start with the size of the market opportunity on Slide 14. When you look at our market position today, 2 things stand out. the strength of the business we have built and the size of the opportunity still ahead of us. That is the logic behind our perform and transform strategy. We are executing both dimensions in parallel, strengthening performance in our core businesses while transforming adjacent high-growth potential businesses with investments in new and differentiated value propositions. On the performance side, we are building from position of real strength. In implantology, we are the clear global leader together with rich innovative. These are categories where our brands, clinical heritage innovation pipeline and strong global customer relationships give us a powerful platform to keep outperforming the market. But leadership does not mean we have reached a ceiling. There is still massive headroom in our core business, and we continue to see opportunities to gain share through innovation, stronger go-to-market execution and broader customer penetration. The transform side is adding a significant dimension of growth. In clear aligners, digital equipment and CADCAM for SDI, our positions for relatively small compared with the size of the opportunity. What is particularly exciting today are the innovations we have invested in over the past quarters are now coming together to transform our competitive capabilities in each of those market segments and start to deliver results. So across the portfolio, we have a powerful combination and implant leadership position we can continue to expand and significant headroom in large adjacent markets where we are only at the beginning of our expansion. This gives us a very attractive runway for sustained growth. Let me now show you how our growth playbook turns this opportunity into execution on Slide 5. Our growth playbook combines product leadership with unique customer experience. Product leadership starts with innovation, differentiated solutions, such as Straumann implant performance system or the SIRIOS X3 and tavalscanner as key examples. They expand clinical applications, simplify treatment and improve clinical outcomes. But being a product champion is only 1 part of a successful equation. [indiscernible] help professionals expect an efficient clinical experience, seamless end-to-end connectivity through efficient workflows, which deliver predictable treatment execution. This is where digitalization is critical. Our trauma access platform turns individual innovations into an integrated ecosystem that improves practice efficiency and create a unique clinician experience. Finally, education completes our dental practice value creation formula. It gives clients the confidence and skills to adopt new solutions and workflows with efficiency. Across implantology, orthodontic and prosthetics, the same logic applies. Innovation creates differentiation digitalization increases efficiency and engagement and education drives adoption. Let's start by the entry point into the ecosystem by moving to Slide 16. We everyday workflow in our ecosystem starts with a scan. This is why we have built a differentiated anthocanner portfolio covering the full market for multiple brand price points. At the premium end, we offered the free shape Prius portfolio. SIRIOS X3 addresses the midrange segment, and SIRIOS provides an attractive entry-level solution. This breadth combined with the successful launch of SIRIOS X3 has significantly accelerated adoption across all our markets. Over the last 12 months, we have captured a very significant share of global antral scanner cells, reflecting the strong adoption of our portfolio. This represents an important strategic opportunity as every scanner placement expands our user base and creates an entry point into from an access our open cloud-based platform shown in the middle of the slide. In the first half of the year, the connected user base grew at a double-digit rate creating a much larger entire base for future growth. Then moving to the right. These workflows connect directly to the Straumann Group product portfolio, supporting clinicians through our implant restorative and outhonotic solution. This is why Atrascanners is truly a strategic segment for us. It is the gateway to recurring revenue per customer engagement and future growth across the entire ecosystem. Let me now show you a clear example about what this means in daily practice on Slide 17. [indiscernible] the from and fast molar treatment solution based on our scalable anatomic healing abutments shows how product innovations, combined with digital integration translate into greater practice efficiency. At the bottom of the slide, you can see the traditional workflow. After surgery, the clinician placed a conventional heating abutment. At a later appointment, the chilling abutment is removed and replaced by a scan body. After the scan, the scan body needs to be removed and the healing abutment is placed once again before the final restoration at a later stage. This means several component changes, additional chair time and another patient visit. At the top, the tram and fast molar treatment won't flow is much simpler. The clinician places the anatomical healing abutments at the time of surgery and can directly scan it on the same day. The restoration can then be produced from the scan with our intermediate scan body steps with all the necessary data automatically transferred to the dental laboratory. This is saving at least 1 full patient appointment and around 30 minutes of clinical time. For the practice, this means higher productivity, fewer handling steps and a more standardized workflow. For the patient, it means fewer visits, less manipulation of the heating side and a faster, more convenient treatment done. Then for trauma, the workflow strengthened the use of original restorative components and create recurring value around the implant system and its differentiation. The TromanFastmolar treatment workflow towards how digitalization is directly improving treatment execution. In addition, AI is also now more and more enhancing those digital capabilities and drive practice growth. We have just released an important AI-led innovation supporting implement case conversion before treatment begins. Let me turn to Slide 18. Here, the mine Cloud AI-enabled YES technology supports implement as conversion before treatment even begins. As you can see in the video, it transforms a simple 2D patient photo into a dynamic 3D video simulation instantly at the chair side. The patient can see immediately her future new Smile in a kind of real life. This makes the expected outcome tangible, strengthened patient understanding and confidence and support significantly higher and faster conversion of advanced implant cases. Because the solution is connected to Straumann access it also enables more efficient digital case collaboration and further strengthen our ecosystem. Having shown our digitalization supports both treatment efficiency and case conversion, let me now turn to our premium portfolio on Slide 19. In premium implantology, IXL is the main drive. In the first half, it represented close to 40% of toman premium implant volumes globally so. It is attracting new accounts driving conversion from both premium and value competitors and supporting share gains across key geographies. The simplicity of the platform is a key advantage especially combined with the unique SLActive surface and unique oxolate material, which supports clinicians to deliver excellent clinical outcomes with confidence. To continue on our dynamic market penetration, we are further investing in a rich innovation pipeline built around IXL. As another example, we have just launched i-Guide or fully guided surgery solution for IXL, which translates digital treatment planning into precise implant placement through a simple intuitive procedure, giving clinicians greater confidence and predictability. Overall, we are really confident that IXL and the premium pipeline will continue to drive growth and reinforce our market-leading position. Let me now move from premium to the Challenger segment on Slide 20. Our challenger portfolio complements premium and allow us to address distinct customer needs across markets and price points. Neodent is our global challenger brand. It continues to scale at a very dynamic pace through constant go-to-market and education investments in key geographies, supported by additional manufacturing capacity now created in Curitiba. Its differentiated [indiscernible] portfolio and broadening geographical presence make Neodent a very important growth engine for the group. In parallel to Neodent, our Medentika brand is also growing well. building on its leadership on NPS abutment system, multi-platform system abutment compatible with all major implant systems. As a new opportunity, it has locally developed in China, a new implant line, which will suit our challenger offering in this key market. Finally, at the regional level, ontology is expanding in EMEA with Axium X3 combining clinical differentiation with treatment simplicity. Together, Straumann, Neodent, Anthogyr and Medentika, give us a very unique multi-brand, multi-price point portfolio with global reach and especially local relevance. This portfolio is a key part of strategy to continue gaining share in implantology, and China is 1 of the key examples where this multi-brand approach will become increasingly important. Let me turn to Slide 21. China remains 1 of the most compelling long-term opportunities in implantology. As the chart shows, China remains far below mature market benchmarks. Compared with Spain, where penetration is around 48 plants per 10,000 adults China has substantial room to grow. This creates substantial headroom for long-term growth overall. This opportunity is supported by a large patient population, rising treatment awareness and a good growing number of train clinicians. So the opportunity is there. Let's see how we are planning to capture it on Slide 20. Over the past GDP cycle, the Chinese market was significantly evolved and so are we. Today, we are competing with 3 very important strengths. The first is the breadth of our multi-brand portfolio. We have a clear market-leading position in premium with trauma. And given the low penetration shown on the previous slide, premium still has significant room to grow. At the same time, the Challenger segment has become the larger part of the market by volume and offer substantial headroom for us. onto already gives us an established proposition in this market. Earlier this year, we launched our new locally developed Medentika implant line targeted to the local segment. The Neodent is planned to be finally registered in 2027. This multi-brand approach enables us to address all customer needs and price points. It also gives us multiple options to adopt in the future when VBP 2.0 new rules will be released. After this multi-brand portfolio, our second important strength is local manufacturing, our Shanghai Compass is complete and fully operational. Most of our stromal oncology products for China are now manufactured locally. This improves our cost position, strengthen supply resilience and allows us to compete effectively under different potential VBP 2.0 scenarios. And finally, our third strength is our local education network. Through the ITI and our local education programs, we continue to train new implant dentists and help experience clinicians moving to more advanced cases. This expands occlusion base support treatment adoptions and build long-term customer trust and relationship. We are very confident that these 3 major competitive strength will be able to respond effectively to any scenario under VBP 2.0. With that, let me now turn from Implantology to the transformation of ClearCorrect on Slide 23. Our clear correct transformation is progressing rapidly. The new value proposition is gaining traction with customers, supported by a sharper commercial focus, a more scalable operating model and digital tools designed for digital practitioners. The digital features launched in the middle of the year are driving strong GP adoption, which is accelerating active case growth. AI-enabled tools, especially case assessments made case evaluation and treatment planning easier. They help the GPs treat more patients and start more active cases in full confidence. At the same time, the completed Smart manufacturing transition has improved the consistency of our turnaround times across EMEA and Asia Pacific and is driving the expected COGS improvement. This strengthened the ClearCorrect brand in the GP segment supports further growth and improves the scalability of the business. Together, these developments keep us on track to reach breakeven by end of 2027 for our ClearCorrect business and make it a meaningful growth contributor for the group. This brings me to one final point on our growth strategy. As Isabelle explained, we are moving into a lower capital expenditure cycle the major manufacturing capacity investments are largely behind us. At the same time, we continue to invest selectively in the areas that are critical to our short, midterm and long-term growth. Let me briefly highlight where we are focusing this investment on Slide 2024. First, we continue to invest in innovate and digital transformation including an exciting implant product pipeline for the future and further AI supported ecosystem treatment workflows. Second, we are investing in go-to-market initiatives to strengthen customer reach and our capacity to scale. And third, we continue to invest in our people, organization and culture. They are essential to execute with speed, consistency and entrepreneurial mindset. These 3 dimensions are critical to deliver the ambition we presented at the Capital Market Day and to turn our market opportunities into sustainable dynamic growth. With that, let me now turn to our outlook for 2026 on Slide 26. Following the excellent first half performance, we upgraded our profitability outlook in June, and today, we are pleased to confirm it. We operate in an addressable market of more than CHF 20 billion with significant growth opportunities across our core and adjacent segments. At the same time, we remain mindful that the external environment continues to be volatile with ongoing macroeconomic, geopolitical and regulatory uncertainties. However, our leading market positions, proven business model and strong innovation and transformation pipeline give us confidence that we can continue to perform across different environments, and capture the opportunities ahead. Against this backdrop, for the full year, we continue to expect high single-digit organic revenue growth, together with a core EBIT margin improvement of around 140 to 170 basis points at constant 2025 exchange rate. We remain very confident in our ability to deliver this outlook and excited for the opportunities ahead. With this, we are happy to move to the Q&A session to answer your questions. [Operator Instructions]

The first question, please? SP1 The first question comes from Graham Doyle from UBS.

Well hopefully, you get some time off very well earned. Just 2 quick questions. First, just as part of the CEO search, it's reasonable to assume that the midterm guidance was something the new CEO had to buy into. And then maybe just a second question on working capital. Isabelle, if you could just give us some color on the receivables buildup in the first half as well, please.

Why don't you start with the net working capital.

Yes. Happy to start with the net working capital, Graham, and thanks for your questions. So I think -- I mean we need to differentiate between a couple of different things. I think when it comes to inventories, looking at this, we have the tactical built up during last year. With the tariffs, and we're still, as we speak, mitigating half and you all notice, there was a new announcement in July. So we started to slightly stock up again, but this is all planned and nothing to worry about. It's just really us managing basically the uncertainty we have the tariffs as well as the slight uncertainty with the VBP because obviously, we want to be prepared to be able to deliver. And when it comes to the accounts receivable part I mean there were some swings and roundabouts when you look at it at certain points in time because given we are looking at an average of 12-month revenue compared to a spot accounts receivable balance, and there's a lot of saving, obviously, in there looking at it and June was a super strong month. This is why, from a percentage point of view, it was up slightly. But if you look at it, I think what is important to notice please, for the time being, do not only look at trade working capital, but include other working capital as well. Given last year, we had a reclassification from other to trade working capital. And if you look at it, we are basically more or less flat compared to prior year at the same period in time.

Yes, Graham, thank you, Isabelle. For the midterm guidance, Graham, I think I will come back to the short comment I've done at the beginning -- the company is in a very strong situation with a very clear strategy, an ambition that has been aligned with the Board that has been communicated to the capital market and with a strategy which is showing already quite strong results with regard to the performance transform we put together. Then while he has not said yet, but I can speak on his name, but yes, Christopher agrees with the mid-term guidance that we have given. And well, with what we are let's say, transitioning, then this is going to be a good position to get there. At least we are very confident to get there. And something to say as well, is the management team is also then aligned and also confident with that guidance. because we have really very strong leader in all the different parts of the world and the company. And this guidance is a commitment not only by the CEO, but by the entire organization.

The next question comes from David Adlington from JPMorgan.

Thanks for the question. Maybe just on the CEO change and thanks for your work over last 7 years. But I just want to check, did you check internally and what was the thought process to go external? . And then secondly, just on -- a question maybe just on VBP. I got your latest thoughts on what you think the likely price impact is going to be.

Yes. On the CEO change, obviously, it's more a question for the Board because this or the Board owning the CEO decisions and selection. But what I can confirm is, yes, I think we are looking at talent inside and outside. And at the end I think the Board has decided to go with the candidate, which is providing the breadth of expertise and experience that will be the most adequate with what we want to achieve. And I think Christopher is coming with obviously a very large expertise and experience on different functions, different geographies, different industries. And as we have a very strong dental knowledge internally, I think that the value will lie in the combination of bringing all those knowledge together and I'm sure that as we believe as a personal trade that fit well with the stroma culture, that's where we believe that it would be a good asset and a value creation for the organization. When it comes to VBP, I see VBP in still in a positive way for, I would say, 3 major reasons. The first 1 is we are entering into a very low comparison base. we have done double -- significant double-digit decline in China than now since Q3 2025, meaning that -- we have almost 4, at least 2.5 quarters to go with a low comparison base that could absorb any kind of changes also in the Chinese market coming from a potential price standpoint. The second side is that I believe that from a pricing standpoint, I don't see a significant price reduction. And I think I explained a couple of times because in the private market, which is representing 80% of the market in China, the price of already much lower than the VBP price level that has been set 4 years ago. and that it may decrease the price that was set 4 years ago. But the reality is that the ASP is already lower than I don't expect a major overall ASP drop versus what we had in the past. The third reason why I'm confident is that we have local manufacturing and multi-price point with our multi-brand strategy. Then while we don't know what the rules of the VBP will be, I think what was critical for us is really to prepare multiple options. And we have multiple options in price points a lot of options from a manufacturing standpoint. And I think we have the premium company with being the most advanced in local manufacturing in the country. Then if you combine lower costs with acceptable we said between minus 5% to minus 15% ASP decreased maximum and the capability to play in different segments, we see the VBP as a potential opportunity to continue to gain share if we play the new rules in the right manner. And obviously, everything will depend on those roles. We will do, as usual, being agile, being dynamic and execution and especially at the end, serving clinicians and customer in the better way because this is also what is guarantying long-term success by creating relationship and engagement from that.

Next question comes from Hassan Al-Wakeel from Barclays.

Firstly, another on the CEO transition, and thank you for the interactions over the years, Guillaume congrats on the many successes. Can you elaborate on why now having presented the 2030 strategy relatively recently and the Board's view on what Christopher will bring to advance growth strategy of the company. The strength, his expertise, particularly given a more limited health care background. And then secondly, if you could help unpack the magnitude and drivers of the strength in digital solutions in North America, how SIRIOS X3 is trending since the Q4 launch and the extent to which this is supporting your higher profitability view for the year given the mix benefit? And how significant a growth driver or accelerator of growth in NAM could this be in the years ahead given the success here in recent months?

Well, a lot of questions I think for the kind words. Why now. Very often, people are expecting a management change when you have a crisis in an organization. And what is really important is was that my -- I see my role as 1 of the last very important things that needs to be done is to do a very smooth and efficient transition. And that was also part of my responsibility, and I'm not taking that lightly. 2 years in an organization, 7 years as you can count the Cove years double. Then I think it's also the right time that we can have some fresh eyes and a different perspective to continue then to enrich the Straumann Journey and bring it to the next level. Then I'm proud about the years I've done here to serve. But I think that value could be created also by different perspective after a while. Then as we are in a very strong situation, as we have a very good strategy, I think it allows more flexibility in that transition and looking at obviously different candidates. That's 1 of the reasons it's now. It's also because I had planned that for quite some time, and there is a limit to every good thing and December 2026 will be this 1 for me. When it comes to Christopher, I think once again, it's a board decision. I've been happy to be associated in the search and being able to see then his background. And I think what Christopher has done is interesting in many ways. I think First thing he has done a lot of different roles. He had responsibilities in finance. He has responsibilities in operations, in sales and obviously, also CEO in both private equity and listed company standpoint. And I believe that this is always already giving a very, very good overview on how you can also maximize value creation in an organization. The second approach where I think it's a lot of value for us, he lived in China, he lived in the U.S. He lived in Europe and looking at the split of our business at Straumann, which is truly global. -- with 45% in Europe, 30% of our business in NAM, 20% in Asia Pacific, 8% to 10% in Lat Am, you need to be global in your way of thinking but still having local relevance in what you are talking about. And I think there are a few leaders that have that breadth of experience from a geographical standpoint and from also then the different functions in an organization. And the third, I think it's also I think Christopher has a very strong track record on value creation in the different companies we led which is also something, obviously, that is very critical for the Board and every investors are making sure that this is a proven leader in the organization where it went. And finally, to your point on no health care or not so much health care experience, indeed, he has not lately a lot of experience on health care, but he started his career in Orca where he spent acres on the orthopedic side and [indiscernible] has already then experienced this environment. At the same time, as I expressed on it before, we have a very strong management team that are knowing dental very, very well. And when you have a new leader coming, it's also a specific expertise that are coming from his past experience that will be an asset for organization. a lot of M&A in greater experience if I remember in ASSA ABLOY, there have been a lot of digital transformation in all those locking systems that you have been able to lead. Then yes, I take a lot to learn -- and I think a good leader from a control standpoint that together with the lithium and the 2,000 worldwide foment team members will lead this company to the next level when it will take over in December. Now a very strong onboarding will be done. It needs to travel in all the even regions in all the different manufacturing sites, meeting people and customers where they are. And this is what I actually develop it even by myself, and I will make sure that we will see all the key areas, key customers and especially being confronted with the key topics in order to be ready to take the lead and of course, drive this then the journey to then the future. When it comes to then the digital side, you were asking in North America, yes, double-digit growth in North America and Deveron. It's a strong acceptance of our SIRIOS X3, but once again, it's also a strong partnership with Free Shape, where we are really selling what the customer one. And I think this is very important. There are a lot of different expectations when it comes to starting digital dentistry. You have the high-end doctors that want to have already the high-end technology being able to leverage maybe more advanced software capabilities that are going together with the scanner. And that's where our partnership would free shape that we really value is supporting us to offer that right solution as it's fully connected with our roman access. Now Asterios is offering the opportunity for GPs that want to have a lower investment to then be able to stop also their digital tone. And that's why it was so important for us to have an entry level scanner that we have with SIRIOS, which is the level below SIRIOS X3, which is also very supportive allowing us to do product bundled with implant or clear aligners because of the fact that as a proper technology, then our cost of goods is very different than a third-party product. And that's what we are doing. And while we have been able to grow significantly in this business, we did not need to increase significantly head count because we have automated a lot of those processes. And I think with the maturity of our team, having increased significantly in digital, I think we are also much more efficient in the way we are handling digital customers.

Next question comes from Julien Dormois from Jefferies.

Guillaume, before my 2 questions. congrats on the highly successful senior and also thank you for the openness and engage you have shown with all of us over the years. So I wish every success in the next chapter. My 2 questions. The first one, pretty much relates to the midterm guidance. Obviously, were pretty optimistic about the company continuing to improve its margin between 2025 and 2030. -- but you've almost delivered 3 years in 1 in 2026 already. So how should we think about the path to 2030? Is the objective pretty much the same? Or has it been upgraded in the meantime? And the second question is back to China and VBP 2.0. First, we're now at the end of August. So have you seen any sign of change, any early sign of change in ordering patterns among your customers? And whether you believe that following the implementation, we should see a pretty meaningful rebound in patient volumes like what we saw in VBP 1.0. .