KLOTEN, Switzerland, Oct. 21, 2005 (PRIMEZONE) -- Nobel Biocare (Pink Sheets:NBCHF):
-- Revenue for the first nine months was lifted 26% in local
currencies to EUR 340.1 million. Revenue in the third quarter was
up 25% on top of a very strong comparative period last year. In
North America expansion jumped to a new record high of 37%.
-- Gross margin in the third quarter climbed to a new high of 83.5%.
For the first nine months, gross margin was up to 82.6%.
-- Profit from operations (EBIT) in the third quarter grew over 30%
to EUR 32.3 million. For the first nine months, EBIT jumped 46% to
EUR 106.6 million, and the EBIT margin from 26.9%(a) to 31.3%.
-- Net profit was lifted to EUR 23.2 million in the third quarter.
For the first nine months, net profit almost doubled to EUR 111.1
million, driven by the higher profit from operations and the one-
off impact from the divestiture of Entific Medical Systems AB in
the first quarter.
-- Basic earnings per share climbed to EUR 0.91 in the third quarter
and to EUR 4.34 in the first nine months.
-- NobelGuide(tm) for minimally invasive, safe and predictable tooth
replacement procedures such as Teeth-in-an-Hour have been
overwhelmingly received by the market.
-- Scientific-based innovation attracts dental professionals from
around the world as around 170,000 participants attend the
comprehensive training and education events.
-- Since the beginning of the year, 176 newly created positions
within Nobel Biocare were filled to ensure future innovation and
growth.
Table 1.
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Selected income
statement figures Jul-Sep Jul-Sep Change Jan-Sep Jan-Sep Change
in EUR million 2005 2004(a) 2005 2004(a)
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Revenue 108.3 85.7 26.4% 340.1 272.2 24.9%
Growth in local
currencies 24.8% 24.1% 25.5% 21.3%
Gross profit 90.4 67.4 34.1% 281.0 215.7 30.3%
Gross margin 83.5% 78.6% 82.6% 79.2%
Profit from
operations 32.3 24.8 30.3% 106.6 73.2 45.6%
Operating (EBIT)
margin 29.8% 28.9% 31.3% 26.9%
Net profit 23.2 19.0 22.1% 111.1 57.6 92.8%
Net profit margin 21.4% 22.2% 32.7% 21.2%
Basic earnings per
share, EUR 0.91 0.74 4.34 2.25
Basic earnings per
share, CHF 1.42 1.14 6.72 3.48
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(a) Certain comparatives were reclassified to conform with current
period's presentation. The comparatives were also restated to
reflect the implementation of IFRS 2 Share-based Payment as of 1
January 2005. In addition, goodwill is no longer amortized as of
1 January 2005. Please see Note 4 of the consolidated condensed
financial statements for more details.
Table 2.
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Revenue by region
-- 3rd quarter Jul-Sep Jul-Sep Change in %
in EUR million 2005 2004 EUR local curr.
---------------------------------------------------------------------
Europe 41.6 37.4 11.2% 12.0%
Proportion of
total revenue 39% 43%
North America 44.8 32.3 38.7% 37.1%
Proportion of
total revenue 41% 38%
Asia/Pacific 15.2 10.8 40.7% 38.1%
Proportion of
total revenue 14% 13%
Rest of the World 6.7 5.2 28.8% 15.2%
Proportion of
total revenue 6% 6%
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Total 108.3 85.7 26.4% 24.8%
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Table 3.
---------------------------------------------------------------------
Revenue by region
-- first nine
months in EUR Jan-Sep Jan-Sep Change in %
million 2005 2004 EUR local curr.
---------------------------------------------------------------------
Europe 152.5 131.0 16.4% 16.5%
Proportion of
total revenue 45% 48%
North America 125.6 94.9 32.3% 34.5%
Proportion of
total revenue 37% 35%
Asia/Pacific 42.6 32.1 32.7% 33.9%
Proportion of
total revenue 13% 12%
Rest of the World 19.4 14.2 36.6% 30.6%
Proportion of
total revenue 5% 5%
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Total 340.1 272.2 24.9% 25.5%
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High expansion pace reinforces leadership position -- record growth in North America
Strong volume expansion and favorable mix changes drove up revenue in the third quarter 25% in local currencies to EUR 108.3 million. This was on top of a very strong (+24%) comparative period last year. Revenue for the first nine months was lifted 26% in local currencies to EUR 340.1 million, well above the Company's forecast.
In North America and Asia, expansion jumped to new record high of 37% and 38% respectively in the third quarter. North American revenue contributed by more than 40% to Group revenue making it the third consecutive quarter with organic growth above 30%. This very strong momentum is also reflected in revenue growth of 35% for the first nine months, which is significantly above estimated market growth.
Revenue in Europe was up 17% in local currencies for the first nine month with the Netherlands, Spain, Switzerland and Belgium expanding the fastest. Revenue in Germany normalized with solid growth after a slow adoption to the healthcare reforms.
High reception of recently launched solutions drive expansion of training and education program
Lasting high esthetics and patient comfort combined with shorter, simpler and safer treatment procedures are priority demands from the market. In June at its World Conference Nobel Biocare launched a variety of scientifically based innovations designed to benefit everyone, from dentists to dental laboratories to patients.
Comprehensive introduction activities took place in the third quarter at various trade fairs and industry conferences around the world. The reception has been very positive, in particular for Nobel Guide(tm). This scientifically proven concept gives the dental professional an easy-to-use solution for every indication. It offers the flexibility to choose between a conventional model-based or a computer-based approach for the treatment planning. This, along with the guides and customized templates, provides higher safety and predictability when placing implants. Combined with Immediate Function(tm), the minimally invasive procedure used with Nobel Guide(tm) results in shorter treatment and healing time, reduced pain and no swelling, and as little discomfort as possible for the patient. Due to very high interest in this solution, various additional training and education courses were scheduled on short notice. Overall, in the first nine months Nobel Biocare had around 170,000 participants in its training and education courses, well in line with the target of 200,000 for the full year.
High interest was generated in the patient information campaigns such as the Nobel Biocare Truck tour and www.nobelsmile.com, the dedicated patient website.
Excellent clinical results on benchmark surface TiUnite(r)
The scientific evidence on the biomaterial surface TiUnite(r) was updated with excellent four-year clinical results proving its leading benchmark position. The study confirms and supports clinical benefits of the remarkable osseoconductive properties, allowing bone to grow into the pores of the surface. This results in faster osseointegration and higher biological stability, thus minimizing time at risk for effective and safe Immediate Function(tm).
The introduction of the Groovy technology provides yet another step in implant development, and clearly demonstrates Nobel Biocare's leading position in this field. With this technology, the speed of osseointegration was further increased, and the biological stability was enhanced by up to 30%.
Overall, the scientific evidence of TiUnite(r) consists of 15 pre-clinical studies and 35 clinical studies, including unique human histology evaluations.
Nobel Biocare recently announced the exclusive licensing agreement with Wyeth on BMP-2 in combination with dental implants. This combination allows for the development of the next generation of implant surfaces, the osseoinductive surfaces. This technology has the potential of widening the indications for implant treatment and eliminating the need for invasive and time consuming grafting procedures.
The preparation for clinical studies is under way and the first pilot study is planned for 2006.
Sustainable development and corporate citizenship
Maintaining high quality is of utmost importance for a medical device company. Nobel Biocare's commitment to the highest quality was recognized with the new global Quality certificate, ISO 13485:2003.
In late September the 40-year celebration of the first patient treated with the original scientific dental implant system, the Branemark System(r) took place in Brazil. At the same time, the P-I Branemark Institute was inaugurated. This institute will promote scientific and technological development in osseointegration and is aimed at needy patients who require osseointegrated reconstructions but otherwise would not be able to afford such a treatment. Since the Institute is run primarily on donations to support patient treatment and to cover administration costs, Nobel Biocare announced that the Company will cover the treatment of 1,200 patients over the next three years.
Record gross margin in the third quarter
Continued strong volume growth, combined with a favorable mix change and higher prices on existing products continued to drive gross profit and margin. Gross profit for the quarter climbed to EUR 90.4 million, up from the prior year's EUR 67.4 million(a). The respective gross margin jumped to 83.5% from 78.6%(a) in the third quarter last year. For the first nine months the gross profit was lifted to EUR 281.0 million compared with EUR 215.7 million(a) a year ago resulting in a margin of 82.6% (2004: 79.2%(a)).
Obsolescence cost related to inventory rationalization, recorded under cost of sales, amounted to EUR 0.3 million for the third quarter and to EUR 1.1 million for the first nine months compared to EUR 0.2 million and EUR 2.0 million respectively a year earlier.
Launch activities and headcount expansion continued in line with the Company's forecast. Operating expenses in the third quarter amounted to EUR 58.1 million compared with EUR 42.6 million(a) in the previous year. Operating expenses in the first nine months were EUR 174.4 million, up from EUR 142.5 million(a). Despite the fast expansion in the first nine months, operating cost in relation to revenue dropped from 52.4%(a) to 51.3%(a).
Based on the implementation of international financial reporting standard 2 (IFRS 2, Share-based Payment), cost for staff options amounted to EUR 1.8 million in the third quarter of 2005 and to EUR 5.1 million for the first nine months. The restatement for the prior year is EUR 1.1 million and EUR 2.8 million respectively.
Social charges related to the staff option program were EUR 2.5 million compared to EUR 0.6 million income in the third quarter a year earlier. For the first nine months, social charges related to the option program were EUR 6.2 million (EUR 6.0 million). A favorable decision from a social security authority had a positive one time effect of EUR 2.0 million during the reporting period.
Profit from operations (EBIT) rose over 30% to EUR 32.3 million (EUR 24.8 million(a)) in the third quarter. In the first nine months EBIT jumped over 45% to EUR 106.6 million (EUR 73.2 million(a)). The EBIT margin climbed to 29.8%, up from 28.9%(a) in the third quarter and to 31.3% from 26.9%(a) in the first nine months.
Total capital expenditure on property, plant and equipment in the first nine months remained at the same level as previous year, amounting to EUR 14.2 million (EUR 14.5 million).
(a) Certain comparatives were reclassified to conform with current period's presentation. The comparatives were also restated to reflect the implementation of IFRS 2 Share-based Payment as of 1 January 2005. In addition, goodwill is no longer amortized as of 1 January 2005. Please see Note 4 of the consolidated condensed financial statements for more details.
Balance sheet remains healthy
In line with the introduction of the new products inventory rose to EUR 27.7 million compared to EUR 24.5 million at the end of the second quarter.
Within the share buyback program, initiated in the second quarter, Nobel Biocare acquired 30,250 shares for a total price of EUR 5.5 million in the third quarter and 481,650 shares for a total price of EUR 78.2 million since the start of the program.
Cash and cash equivalents rose to EUR 173.0 million compared to EUR 156.4 million at the end of the second quarter.
Outlook remains unchanged
The Company is confident that it will achieve its financial objectives of improving annual revenue growth and profitability.
NOBEL BIOCARE HOLDING AG
Heliane Canepa President and CEO
A telephone conference will be held today 21 October 2005 at 15.00 CET.
For more details, see our homepage: www.nobelbiocare.com
The dial-in numbers for the telephone conference are:
+41 91 610 5600 (in Europe) +44 20 7107 0611 (in the U.K.) +46 8 5069 2105 (in Sweden) +1 866 291 4166 (toll free number in the USA)
A Digital Playback service will be available after the conference from 17.30 CET on Friday 21 October, until 17.30 CET on Tuesday 25 October.
Please dial any of the numbers below and enter ID code 498 followed by the Number/pound sign key.
+41 91 612 4330 (in Europe) +44 20 7108 6233 (in the U.K.) +1 866 416 2558 (in the USA) Financial Report Calendar: Full Year Report 2005 9 February, 2006 Interim Report 1, 2006 3 May, 2006 Annual General Meeting 2006 3 May, 2006 Interim Report 2, 2006 10 August, 2006 Interim Report 3, 2006 19 October, 2006
All reports are available in English, German and Swedish
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 and Bridge and Implant products, as well as training and education and clinically documented treatment concepts. Nobel Biocare has some 1,600 employees and recorded revenue of EUR 388 million in 2004. 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 29 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.
Celebrating 40 years of scientific heritage. In 1965, the first patient was treated with the original scientific dental implant system, the Branemark System(r). This event marked a breakthrough in modern dental implant therapy. Since then, millions of people have been helped with dental implants, enjoying improved function, appearance and quality of life. The original fixtures that were placed in the first patient 40 years ago are still in place, providing the individual with firm bridge support. The Branemark System(r) has been scientifically documented in 1,500 articles.
The entire release, including financial tables, is available at: http://media.primezone.com/cache/4624/file/2343.pdf