ZURICH, Switzerland, Oct. 19, 2006 (PRIMEZONE) -- Nobel Biocare Holding AG (Other OTC:NBCHF) (Stockholm:NOBE):
-- Revenue in the first nine months was up 25% in local currencies.
-- Gross margin for the first nine months reached a new high of
83.8%.
-- Operating (EBIT) margin for the first nine months up to 33.1%.
-- Net profit for the first nine months, excluding the divestiture
of Entific Medical Systems, increased to EUR 107.8 million.
-- Basic earnings per share for the first nine months were EUR 4.45.
-- Continued expansion into fast growing markets: 34th subsidiary
opened in China.
-- 13 successful training and education World Tour conferences by the
end of September.
-- 11 collaboration agreements signed with dental schools at major
universities in the third quarter.
-- Confirmation of full-year outlook: Approximately 24% revenue
growth in local currencies and operating margin of about 34%.
Table 1. --------------------------------------------------------------------- Selected income Jul-Sep Jul-Sep Change Jan-Sep Jan-Sep Change statement figures 2006 2005 2006 2005 in EUR million --------------------------------------------------------------------- Revenue 132.5 108.3 22.3% 429.0 340.1 26.1% Growth in local currencies 25.3% 24.8% 25.1% 25.5% Gross profit 111.8 90.4 23.7% 359.3 281.0 27.9% Gross margin 84.4% 83.5% 83.8% 82.6% Profit from operations 42.3 32.3 31.0% 142.0 106.6 33.2% Operating (EBIT) margin 31.9% 29.8% 33.1% 31.3% Profit for the period(a) 33.1 23.2 42.7% 107.8 80.5 33.9% Profit margin(a) 25.0% 21.4% 25.1% 23.7% Basic earnings per share(a), EUR 1.32 0.91 4.29 3.14 Basic earnings per share, EUR 1.32 0.91 4.45 4.34 --------------------------------------------------------------------- (a) excluding sale of associate
Continued fast organic growth in all regions
Revenue for the first nine months increased to EUR 429.0 million. This represents an increase of 25% in local currencies over the same period growth last year of 26%. Growth in the third quarter was an unchanged 25% compared to the previous year. The fast acceptance of solutions launched in 2005 and the continued high activity level in the market place underpinned by five more World Tour conferences in the third quarter allowed Nobel Biocare to keep its momentum of overall strong revenue growth.
In Europe, growth in local currencies in the third quarter was up 21%, led by the countries with World Tour events as well as Austria, Belgium, Finland, Russia, Spain and Switzerland. North America grew by 19% in local currencies in the third quarter on top of a record base of 37% in the same period last year. Growth in Asia/Pacific accelerated to 54% in the third quarter, driven by the FDI Congress in China, in addition to the regional World Tour events.
Table 2.
---------------------------------------------------------------------
Revenue by region
- 3rd quarter Jul-Sep Jul-Sep Change in %
in EUR million 2006 2005(b) EUR local curr.
---------------------------------------------------------------------
Europe 51.0 42.1 21.1% 20.9%
Proportion of total revenue 38% 39%
North America 51.5 44.8 15.0% 18.9%
Proportion of total revenue 39% 41%
Asia/Pacific 22.0 15.2 44.7% 54.0%
Proportion of total revenue 17% 14%
Rest of the World 8.0 6.2 29.0% 34.7%
Proportion of total revenue 6% 6%
---------------------------------------------------------------------
Total 132.5 108.3 22.3% 25.3%
---------------------------------------------------------------------
(b) Comparatives were reclassified to conform with the current
period's presentation, see Note 8.
Table 3.
---------------------------------------------------------------------
Revenue by region
- first nine months Jul-Sep Jul-Sep Change in %
in EUR million 2006 2005(b) EUR local curr.
---------------------------------------------------------------------
Europe 186.1 153.9 20.9% 20.9%
Proportion of total revenue 43% 45%
North America 160.7 125.6 27.9% 24.8%
Proportion of total revenue 38% 37%
Asia/Pacific 59.1 42.6 38.7% 42.7%
Proportion of total revenue 14% 13%
Rest of the World 23.1 18.0 28.3% 23.4%
Proportion of total revenue 5% 5%
---------------------------------------------------------------------
Total 429.0 340.1 26.1% 25.1%
---------------------------------------------------------------------
(b) Comparatives were reclassified to conform with the current
period's presentation, see Note 8.
Record gross margin in the third quarter
Continued strong volume growth, combined with a positive mix change drove the gross margin for the third quarter to a new all time high of 84.4% (Q3 2005: 83.5%). The gross margin for the first nine months climbed to 83.8% from 82.6%. The respective gross profit jumped to EUR 359.3 million, up from the prior year's EUR 281.0 million.
Further strong growth of profit from operations
Volume growth and an improved operating expense to revenue ratio, increases year-to-date profit from operations by 33% from EUR 106.6 million in 2005 to EUR 142.0 million. The increase in operating expenses of EUR 217.3 million (EUR 174.4 million) in support of the strong growth is attributable to the many strategic initiatives such as the Nobel Biocare World Tour 2006 and the NobelSmile campaign, educational and research partnerships with universities and rapid staff increase. However, in relation to revenues the operating expenses were reduced to 50.7% (51.3%) in the first nine months. In the third quarter, traditionally the quarter with the lowest revenue due to the vacation season, the ratio improved even more from 53.6% to 52.5%. Subsequently, the operating margin for the third quarter improved to 31.9% (29.8%), whereas the operating margin for the first nine months improved to 33.1% (31.3%).
Social charges related to the staff option program amounted to EUR 1.3 million for the first three quarters, compared with EUR 6.2 million for the same period a year earlier.
Net financial expenses amounted to EUR 3.6 million (EUR 4.3 million) for the first nine months. Financial expenses were negatively impacted by foreign exchange losses of EUR 2.9 million (EUR 4.4 million).
Net profit for the period (Q3) climbed to EUR 33.1 million compared to EUR 23.2 million last year. For the first nine months the profit for the period, excluding the one-time effect from the divestiture of Entific Medical Systems AB, increased to EUR 107.8 million compared to EUR 80.5 million.
Cash flow from operating activities for the first nine months was substantially impacted by tax payments of EUR 39.8 million. This offsets the positive development in inventory and receivable management. Inventories decreased to EUR 28.0 million from EUR 30.1 million at year-end 2005. Current receivables rose in line with the sales development, from EUR 127.4 million to EUR 140.8 at the end of the third quarter. Additionally, EUR 117.0 million were used to buy back shares.
Investment in tangible and intangible assets of EUR 19.2 million was higher than the prior year (EUR 14.6 million). This was due to investments in manufacturing plants amounting to EUR 7.8 million, leasehold improvements (EUR 3.0 million) for office expansions for additional employees, as well as upgrades of training facilities. Investments in intangibles mainly related to demand for upgrades of and additional computer software programs.
Cash and cash equivalents decreased to EUR 88.7 million from EUR 129.0 million at year-end. This was primarily due to the above-mentioned share buyback program and the dividend payment of EUR 55.7 million (EUR 43.9 million) in the second quarter.
Strong growth created 278 new positions in 2006
Continued growth enabled Nobel Biocare to add 46 positions in the third quarter, making it a total of 278 positions for 2006. Most of the new positions are within sales or sales-related departments. At the end of September, Nobel Biocare employed 1,926 employees worldwide.
Entering fast growing markets: China as the 34th subsidiary
Continuing the fast expansion into emerging markets, Nobel Biocare opened its subsidiary in Shanghai, China in September. The new subsidiary includes sales offices and a training center and shall support our solutions, which are well established among leading dentists and universities in China. The Company already has a strong presence in Eastern Asia and the Pacific Rim. This expansion into China follows the opening of subsidiaries during the last twelve months in other growth markets - India, Russia and the Baltic (Lithuania, Estonia and Latvia).
Strategic collaborations with 11 additional universities
Nobel Biocare signed partnership contracts with 11 major universities in the third quarter in the U.S. as well as in Asia and Europe. With these new contracts Nobel Biocare has now a total of 18 strategic partnerships with dental schools around the world. These partnerships form part of the Company's strategy to ensure that the newest treatment solutions for implants and ceramic restoration are included in the undergraduate dental programs at universities.
These partnerships are designed to support the institutions so that they can integrate implantology and esthetic dentistry as a restorative treatment option in both undergraduate and graduate training programs thereby offering their students the best possible education to meet the increasing patient demand. The majority of the new collaborations also include support for clinical and basic research.
The universities added in the third quarter include:
-- University of Sydney, Australia
-- University of Hong Kong, China
-- UCLA, CA, USA
-- Medical College of Georgia, USA
-- Tufts University, MA, USA
-- University of Freiburg, Germany
-- Peking University School of Stomatology, China
-- Shanghai Jiao-Tong University College of Stomatology, China
-- Guanghua School of Stomatology Hospital SUN YET-SEN University,
China
-- Xian No. 4 Military Hospital Medical University School of
Stomatology, China
-- Wuhan University School of Stomatology, China
13 Nobel Biocare World Tour conferences successful
Nobel Biocare held five World Tour conferences in the third quarter, making 13 out of 17 for the year. The combination of an educational program and research with live surgeries was well received in Australia, Brazil, Hong Kong, The Netherlands, and the United Kingdom. In Hong Kong, participants came from over 28 countries around the world, including 20 Asian countries. The event in Sao Paolo, Brazil attracted over 1,000 participants; many of whom came to see the honorary chairman and guest lecturer Professor Per-Ingvar Branemark receive the Dr. Pedro Martinelli Medal for his contribution to advances in dental healthcare.
For the first three quarters of 2006, the Company's comprehensive training and education events and programs have resulted in nearly 245,000 dental professionals trained around the world.
NobelSmile patient information campaign continues to grow
In line with its strategic goal to inform patients regarding the latest solutions for restorative and esthetic dentistry, Nobel Biocare's NobelSmile patient information campaign resulted in nearly 400 articles in consumer press in over 30 countries regarding the Company's solutions and the NobelSmile website - a patient information site, which is available in 32 countries.
NobelGuide and esthetic Procera(r) solutions Nobel Biocare highlights at the EAO congress
In October, the European Association of Osseointegration (EAO) held its annual scientific meeting in Zurich, Switzerland with over 2,100 dental professionals attending. A key scientific topic at the meeting was computer-guided surgery, i.e. the use of pre-operative planning system and computer designed drilling templates. Nobel Biocare is leading the development of this novel technique with its NobelGuide concept, which includes everything from planning and ordering via Shop Online to production and delivery. The system offers both clinical and esthetic benefits to patients, and economic benefits to dentists. The surgery is nearly trauma-free and the patients need to spend much less time in the dentist's chair.
The well-attended Nobel Biocare lectures were featuring NobelGuide and the recent launch of innovative Procera solutions of custom-made metal-free, long-lasting esthetic solutions for all patients.
NobelDirect: Nobel Biocare met with SMPA to clarify previously submitted information
In the dispute about the NobelDirect implant, the Company submitted its response to the Swedish Medical Product Agency (SMPA) expert group report on 31 August. Within the scope of SMPA's investigation, Nobel Biocare was also given the opportunity to meet with SMPA on 10 October to clarify its previously submitted information. The information presented by the Company in that meeting will be considered in SMPA's decision about the safety of the implant. The SMPA intends to make a decision during October 2006.
To date Nobel Biocare has provided information in seven scientific studies on 2,053 implants in 1,183 patients. Of this material, 211 implants in 136 patients are followed in the only available prospective multi-center studies on NobelDirect. The information provided includes two-year data from one of the prospective multi-center studies. Based on the currently available data, Nobel Biocare concludes that the NobelDirect implant is safe and that good clinical results can be obtained provided that clinical instructions are followed.
New Vice President Communications
After the nomination of Jacques Gutedel as Vice President Europe, Middle East and Africa effective 1 October 2006, the Executive Management Team has been further strengthened with the recruitment of Nicolas Weidmann as Vice President Communications, effective 1 January 2007.
Nicolas Weidmann is a senior communications person with broad branding and communication experience in companies such as General Motors Europe and Gate Gourmet International. From 2001 until 2005 he was the Vice President Communications at Unaxis, a globally leading company in the field of thin film, vacuum and precision technology. Nicolas Weidmann joins Nobel Biocare from Mobel Pfister, a leading Swiss furniture group, where he has been Head of Marketing and Communications, and member of the executive management.
Outlook remains unchanged
Nobel Biocare reiterates its guidance for the full year to increase revenue by approximately 24% in local currencies and to raise the operating margin to about 34%.
NOBEL BIOCARE HOLDING AG
Heliane Canepa President & CEO
A telephone conference will be held today 19 October 2006 at 15.00 CET.
The dial-in numbers for the telephone conference are:
+41 91 610 5600 (in Europe) +44 20 7107 0611 (in the UK) +46 8 5069 2105 (in Sweden) +1 866 291 4166 (toll free number in the USA)
For more details and additional dial-in numbers, see our homepage: www.nobelbiocare.com
Financial Reporting Calendar:
Full Year Report 2006 8 February 2007 Interim Report 1, 2007 26 April 2007 Annual General Meeting 2007 26 April 2007 Interim Report 2, 2007 9 August 2007 Interim Report 3, 2007 New Date! 25 October 2007
The full Interim Report 3, 2006 is available in English and Swedish, while a shorter version media release is available in German.
Disclaimer:
This report may contain forward-looking statements including, but not limited to, projections of future performance of materials and products, financial conditions, results of operations and cash flows, containing risks and uncertainties. These statements are subject to change based on unknown risks and other factors that could cause the actual results or performance to differ materially from the statements made herein.
Nobel Biocare is a medical devices group and the world leader in innovative esthetic dental solutions with its brands Branemark System(r), NobelSpeedy(tm), NobelReplace(tm), NobelPerfect(r), NobelDirect(r), Replace(r) Select, (dental implants) and Procera(r) (individualized dental prosthetics). Nobel Biocare is a one-stop shop for restorative esthetic dentistry, offering a wide range of innovative Crown & Bridge & Implant products, as well as training and education and clinically documented treatment concepts. Nobel Biocare has over 1,900 employees and recorded revenue of EUR 485 million in 2005. The Company is domiciled in Zurich, Switzerland with headquarters in Zurich and in Gothenburg, Sweden. Production takes place at four production sites located in Sweden and the USA. Nobel Biocare has direct sales organizations in 34 countries. The shares of the parent company Nobel Biocare Holding AG are listed on the SWX Swiss Exchange and on the Stockholm Stock Exchange, Sweden.
Nobel Biocare Group - Interim Report 3, 2006 (PDF):
http://www.newsbox.ch/public/8573/att/8915_interimreportpdf.pdf