Business Overview 2006 - Synthes

Synthes. Annual Report 2006
Business Report. Latin America, Middle East and Africa
During 2006, Latin America contributed the strongest growth performance
in the company, with a local currency growth rate in the high
twenties that was further supported by a foreign exchange gain. The
Latin American business accounted for more than 3.4% of overall corporate
revenues, compared to approximately 3.0% in 2005.
A new subsidiary in Costa Rica
Synthes owns subsidiaries in Argentina, Brazil, Colombia, Mexico, and
Peru, and added a sixth subsidiary by acquiring the existing distributor
in Costa Rica in late 2006. Operations were strengthened with the
establishment of additional Synthes offices in various cities in Brazil,
Mexico and Peru. The fact that Brazil and Colombia alone accounted
for more than 50% of all revenues in Latin America indicates that this
region still has great potential for future growth.
sections “AO Middle East” and “AOSpine Middle East” will help to
enforce our leadership in Trauma and further improve our market position
in the Spine and Cranio-maxillofacial segments. Indeed, the
performance of the two latter businesses was very positive in 2006;
they were the main contributors to the double-digit growth rate in
the region.
Expanded sales forces in MEA hold competition at bay
We further expanded our sales force in South Africa, the only directly
served country in the region, and successfully encouraged our distributors
in all other countries to increase the number of dedicated
sales personnel as well. Due to this strong presence our high quality
products and service strategy prevailed over numerous local and international
competitors.
The Locking Compression Plate (LCP) system remains the main growth
contributor for the Trauma business and most LCP product lines are
now available throughout the region. Many new LCP specialty plates
such as the Distal Femur Plate and the Compact Hand System were
introduced in 2006. In Spine, PEEK cages and biomaterials contributed
most significantly to growth. Our Cranio-maxillofacial business established
new fields of application, particularly in the neuro market
with the Patient Specific Implants and our unique VEPTR system, offering
customers unprecedented solutions.
During 2006 we substantially increased the penetration of LCP in MEA.
In Spine we experienced a high growth impact from the Universal
Spine System (USS II) and the pedicle screw system Click’X. Finally,
we were able to make customers aware that Synthes is also a significant
player in the Cranio-maxillofacial market, where we doubled our
sales in 2006 and started to promote the latest product systems which
up to now have only been available in highly developed markets.
Training as an important pillar of success
World-class training provided by Synthes and strong cooperation with
the regional AO organization are crucial for sustainable success. This
is true for all markets, but in Latin America, education and training
play an even greater role as more and more fractures are treated surgically.
Synthes has created a new training structure by increasing the
number of dedicated trainers to continually improve the specialized
knowledge of a continually growing sales force. For surgeons and ORpersonnel,
AO Latin America continues to offer an increasing number
of AO courses in all specialties.
Important AO activities in Middle East and Africa
As in Latin America, in the Middle East and Africa (MEA) the most
effective path to sustainable success is through consistent and medically
aligned education. In 2006 Synthes continued to give high priority
to the strengthening of its training and educational efforts in
the region.
Synthes is particularly grateful for the efforts of the AO Foundation
in establishing regional organizations in MEA for Trauma and Spine
and supports the AO’s endeavors in every way possible. The new AO
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