Strategic Analysis and Valuation of Straumann Holding AG

Samanta Maria Clausen & Peder Emil Edemann

Student thesis: Master thesis

Abstract

Straumann is a Swiss company that became publically traded in 1998, and has gone through a journey to become a global market leader within tooth implants. This master thesis will explore this journey and the future aspects of the company with the intention of deciding whether the stakeholders have valued the potential of the company at the right price of 324,5 CHF on 29 february 2016. The authors will start the analysis by introducing the reader to Straumanns strategic changes throughout the past years and what the future can bring to support or go against Straumanns continuous growth. One of the biggest changes was in 2015, where the company finalized their biggest acquisition yet by acquiring the Brazilian brand Neodent and consolidating the companies in the 2015 annual report. By fully acquiring the company, Straumann got closer to the LatinAmerican market and, is now able to offer dental products for the so called value segment. The strategic part includes five models; Porter’s 5 forces, PESTEL, Porter’s Value Chain and the PLC-model. All models are summarized in a SWOT-analysis. Key factors are used to budget Straumanns future profitability. After the first six years of explicit budgetting, the authors have constructed a quantitative industry analysis in order to get two key factors; “long term level” and “persistence rate”. This will be used to budget Straumanns long term ROIC, and will be combined into the DCF to Equity model. The DCF to Equity model and its estimation of a fair price for Straumann are discussed in a sensitivity analysis where we look into how adjustments of specific factors influence Straumanns fair market price, and where we compare the fair price to valuations published by professional analysts. Furthermore the estimation are accompanied by a multiple analysis constructed by two separate peer groups. The DCF to Equity model gives a price of CHF 292 while the multiple analysis gives a price of 256. Both models give prices below the trading price of 324,50, but as the sensitivity model will show, even small adjustments can make a tremendous effect on the estimation of Straumanns’ fair price, which is why the authors recommend a hold strategy.

EducationsMSc in Finance and Accounting, (Graduate Programme) Final Thesis
LanguageDanish
Publication date2016
Number of pages146