2021-02-15

On January 21, 2021, we celebrated the 13^th anniversary of the Fund. No, we don’t suffer from “triskaidekaphobia”. On the contrary, we innovated. Due to Covid19, we held the anniversary by webinar, at which Coltene CFO, Gerhard Mahrle, presented the group, which is active in the dental sector. We have been shareholders in the group since the launch of the Fund.

Several years ago, to be precise in April 2013, I travelled (not on foot then!) across our little mountain country towards Heidiland, where Coltene is headquartered, in order to attend their AGM. This is what I wrote back then:

“Covering the whole dental treatment process, Coltene is a global leader in dental consumables and small equipment. Dentists and dental labs worldwide rely on the company’s products for implant-based therapies and dental reconstruction, as well as traditional therapies. One of their products is COMPONEER "Smile to go".

Historically, Coltene has been your “casebook” pedestrian growth biz with steady cash flows. But then they ventured into Brazil and acquired Vigodent, a distributor/manufacturer in their field. Integrating Vigodent turned out to be a big toothache. The stock stumbled and Coltene was “CEO-less” for about a year. In June 2012, CEO Martin Schaufelberger took the helm of the group and we agreed to meet up after his “First Hundred Days”. That’s when I got to know him. Behind his gentle & affable manner is a greatly focussed & skilled operational leader. In a short time, he grasped what was needed and implemented the right “treatment”. The management team is well on its way to delivering a midterm operating margin of 15% and putting a BIG smile on shareholders’ faces."

In a nutshell, here is what has happened since. In 2018 Coltene completed two strategic acquisitions: SciCan, headquartered in Toronto and claiming a market leading position in North America in cleaning, sterilisation equipment & hygiene protection products. And at the same time, the dental group bought MICRO-MEGA, based in Besançon and focused primarily on endodontics. Latest (extr)action, CEO Schaufelberger & CFO Mahrle bit the bullet & pulled the aching tooth - Brazilian Vigodent was sold in 2020.  

Yes, its capital increased by 40% through these transactions and yes, the stock corrected/consolidated somehow over the last 2 years. but is up close to 13% YTD. The group has a very low debt (less than 10% of its market cap) and its 15% EBIT margin target is within reach, showing the group’s resilience despite Covid19.  

As I said those several years ago: “Pedestrian growth biz with steady cash flows”. For the shareholders, it is definitely “Smile to go!” Since 2013, Coltene stock has tripled.

By the way, did you know that 13 is the lucky number in the Italian football pools (totocalcio). The Italian expression "fare tredici" (literally, "make thirteen") means to hit the jackpot.