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Dentware – CEO interview

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Dentware Scandinavia AB
 is an innovative dental company employing proprietary adapted 3D metal printing technology to produce individualized patient adapted crowns and bridges to be attached onto the implants. A fast, precise and cost-effective technology that completely replaces more expensive, wasteful and complicated milling technology. Recently, Dentware completed the merger with Brånemark Integration AB, one of the most known “brand” names in this marketplace worldwide.

We had the chance to reach out to Dentware’s CEO Per Dybwad to hear more about the prospects of the company. Here is what he had to say:

Nordic Investor:You have recently completed the acquisition of Brånemark Integration. What was the main rationale for this acquisition? interest already?

images-6Per Dybwad: The main rationale is that the acquisition takes Dentware to a new level and increases our offering (products & services), our recognition (the Brånemark name is known and respected worldwide within the dental profession) our reach (clients and markets).

NI: It has been discussed that you are contemplating a name change of the company to “Brånemark”. How come? Have you noticed an increased interest already?
PD: We plan to change the company’s name to Brånemark Integration AB for the reason that the direct reference to the world’s most respected and well-known name (Brånemark) will add credibility and open doors. The mere mention of this name change has already had an effect in the market.

NI: Brånemark recently launched a new implant system called “Respect”. How was this received by customers? Have your already received initial orders?
PD: The new implant system ”Respect” was presented in a pre-launch at he EAO congress in Stockholm last September and was very well received. There is high interest among customers and high expectations on our side. Significant pre-orders have been taken and more are underway.

NI: The global dental implants market is estimated to be worth around EUR 3bn annually and is growing at 7% annually. Currently, 60% of the market are dominated by four major players, namely Straumann, Nobel Biocare, Dentsply and Zimmer Biomet. How can you compete with these industry giants? What is your competitive advantage? How wide-spread is the use of EBM and laser additive manufacturing in the industry in general?
PD: All the leading companies were themselves small at one point and there is no single magic element that enabled them, or prohibits Dentware from joining their league. It comes down to good products, good customer service, good marketing, fair terms of business and access to good people and growth capital. We have the science and the products (though both can and will be further developed), we already offer good customer service (but are not resting on these or other laurels), we are working on our marketing and presence, we believe we offer fair terms and value for money, we have good people (and will continue to recruit skilled people with the right attitude), and we shall continue to strive to offer an attractive investment so as to have access to further capital. Getting these elements right will ensure our success. To paraphrase a company slogan I like: We shall make money the old-fashioned way – We shall earn it !

NI: At a presentation in early December, you mentioned that you target revenues of EUR 20m by 2020, up from pro-forma EUR 2.5m in 2015. This would imply annual growth of around 50%. What makes you so confident that you will reach this target? Can you name a few concrete examples of how and where you expect to grow in the near-term?
PD: Your math is correct and our ambitions are clearly high, but they are not unrealistic. We believe we have very good chances of achieving our 20-20 Vision. We are a very small company today and are barely scratching the surface of our potential. With the broader product offering and increased name recognition we expect to penetrate existing markets deeper and enter new markets rapidly. European markets will be our initial focus.

NI: You entered into a co-operation with Höganäs AB in October 2015. Höganäs is known for its metal powders that play a crucial role within additive manufacturing. Who approached who and what do you expect to get out of the co-operation?
PD: Höganäs initially approached us, but were of course already on our radar screen as a potentially very interesting party to be in contact with. Time will show what our co-operation will lead to. For the moment I can’t and won’t elaborate for confidentiality reasons.

NI: You also announced a co-operation with Swiss implant manufacturer Thommen Medical. Aren’t Thommen’s implants competing with your own? What are the financial impacts of this co-operation?
PD: Dentware has always-, and will continue to serve all possible implant platforms (brands and makes) with 3D printed prosthetics. Our universal applicability and offering is a key part of our DNA and our appeal to the dental profession. Having our own brand of implants now through the acquisition of Brånemark Integration does not change this policy or the value of it. We offer one-stop-shopping (implants and prosthetics), but let the customers decide what they want: our implants and our prosthetics, or just one or the other. The purpose of the agreement with Thommen is to ensure that there is a good fit between their implants and our 3D printed bridges – both physically and business-wise. Given Thommen’s small market share, the financial impact on Dentware will be limited and depends on how many of Thommen’s customers and / or the dental laboratories these customers use that chose to order their metal framework prosthetics from us.

NI: M&A activity in the dental implants industry has been high in recent years. Dentsply only recently merged with Sirona Dental Systems. Recent reports have stated Strauman and Dentsply are weighing a deal for Israel’s MIS Implants Technologies. What is driving industry consolidation and how does it affect Dentware/Brånemark?
PD: Like in so many other industries and sectors, larger companies are always on the lookout for opportunities to pick up competitive technologies and market positions. It is not unusual for industry innovation to take place in small, nimble companies and for the larger players to realise that it is simpler and cheaper to buy these innovative companies than to develop similar innovations internally. There is also an argument for simply eliminating competition buy buying it up. Thus, consolidation ensues. Time, and our own abilities and achievements, will show how this will affect Dentware / Brånemark Integration.

NI: Should we expect further add-on acquisitions in the future or are you focusing on organic growth?
PD: I cannot rule out additional acquisitions in the future, but for the moment focus is on combining our companies and delivering on the promise of our joint offering and skills.

Nordic Investor

For a more detailed analysis of Dentware (in Swedish), please visit www.vafinans.se

Disclaimer: Nordic Investor holds shares in Dentware

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