ZURICH, Switzerland, Aug. 9, 2006 (PRIMEZONE) -- Nobel Biocare Holding AG (Other OTC:NBCHF) (Stockholm:NOBE):
-- Revenue in the first half-year was lifted 25% in local
currencies, or 28% in reporting currency, to EUR 296.5 million,
backed by an already strong first half-year 2005 with 26% growth
in local currencies.
-- Gross margin for the first half-year climbed to 83.5%.
-- Profit from operations for the first six months jumped with 34%
to EUR 99.7 million, upgrading the operating margin to 33.6%.
-- Net profit for the first half-year period, excluding the
divestiture of Entific Medical Systems, increased to EUR 74.7
million.
-- Basic earnings per share for the first six months came to EUR
3.13.
-- 232 new positions have been created worldwide since the beginning
of the year.
-- Overall, the worldwide training and education events on the
science-based innovative solutions attracted around 165,000 dental
professionals in the first six months.
-- The U.S. Food and Drug Administration, FDA, have approved the
application (IDE) for the first pilot clinical investigation on
the Bone Inductive Implant.
-- Confirmation of full-year outlook of approximately 24% revenue
growth in local currencies and operating margin of about 34%.
Table 1.
Selected income Apr Apr Change Jan Jan Change
statement figures -Jun -Jun -Jun -Jun
in EUR million 2006 2005 2006 2005
Revenue 153.8 123.8 24.2% 296.5 231.8 27.9%
Growth in local 23.5% 26.7% 25.1% 25.7%
Gross profit 128.0 102.2 25.2% 247.5 190.6 29.9%
Gross margin 83.2% 82.6% 83.5% 82.2%
Profit from operations 51.2 39.5 29.6% 99.7 74.3 34.2%
Operating (EBIT) margin 33.3% 31.9% 33.6% 32.0%
Profit from the period(a) 37.5 31.2 20.2% 74.7 57.3 30.4%
Profit margin(a) 24.4% 25.2% 25.2% 24.7%
Basic earnings per
share(a) 1.49 1.22 2.97 2.23
Basic earnings per share, 1.65 1.23 3.13 3.43
EUR
(a) excluding sale of associate
Undisputed leadership position in all regions
Driven by the fast acceptance of the solutions launched in 2005, Nobel Biocare continued its record of organic growth in all regions. Revenue for the first half-year came to EUR 296.5 million, representing an increase of 25% in local currencies or 28% in EUR. This was on top of a challenging basis of 26% growth in local currencies from the previous year. Growth in the second quarter was 24% in local currencies compared to a record quarter in the same period a year earlier of 27%, which was boosted by revenues at the bi-annual Nobel Biocare World Conference in Las Vegas as well as the bi-annual International Dental Show, IDS, the largest dental congress.
Nobel Biocare outgrew the estimated market growth in all regions. North America and Asia/Pacific continued their high expansion pace with 28% and 37% growth respectively in local currencies for the first half-year. Revenue in Europe was up 21% in local currencies with Denmark, the Netherlands, Norway and Spain recording the fastest growth. In Switzerland, expansion in the first six months reached a record of 44%. After an already strong first quarter, which was boosted by the successful World Tour kick-off event in Frankfurt and the low comparative base line, growth in Germany decelerated as predicted in the second quarter and resulted in solid growth for the first half-year.
Table 2.
Revenue by region --
2nd quarter Apr-Jun Apr-Jun Change in %
in EUR M 2006 2005(a) EUR local
curr.
Europe 68.3 57.9 18.0% 18.1%
Proportion of total 44% 47%
revenue
North America 56.3 44.0 28.0% 25.4%
Proportion of total 37% 36%
revenue
Asia/Pacific 20.5 15.2 34.9% 39.4%
Proportion of total 13% 12%
revenue
Rest of the World 8.7 6.7 29.9% 21.8%
Proportion of total 6% 5%
revenue
Total 153.8 123.8 24.2% 23.5%
(a) Comparatives were reclassified to conform with the current
period's presentation, see Note 8.
Table 3.
Revenue by region --
first half year Jan-Jun Jan-Jun Change in %
in EUR M 2006 2005(a) EUR local
curr.
Europe 135.1 111.8 20.8% 20.9%
Proportion of total 46% 48%
revenue
North America 109.2 80.8 35.2% 27.8%
Proportion of total 37% 35%
revenue
Asia/Pacific 37.1 27.4 35.5% 36.7%
Proportion of total 12% 12%
revenue
Rest of the World 15.1 11.8 28.0% 17.8%
Proportion of total 5% 5%
revenue
Total 296.5 231.8 27.9% 25.1%
(a) Comparatives were reclassified to conform with the current
period's presentation, see Note 8.
Continued high profitability despite significant investments in selling and marketing
Gross profit for the first half year climbed to EUR 247.5 million, up from the prior year's EUR 190.6 million. The respective gross margin rose from 82.2% to 83.5%. Gross margin in the second quarter remained at a very high level, 83.2% (82.6%), primarily driven by strong volume growth and a positive mix change.
Social charges related to the staff option program amounted to EUR 1.3 million for the first half year, compared with EUR 3.7 million for the same period a year earlier.
Despite continued high investment into selling and marketing such as the Nobel Biocare World Tour 2006 and the NobelSmile campaign, educational and research partnerships with universities and rapid staff additions, the relation of operating expenses to revenues was reduced to 49.9% (50.6%) and the operating margin for the quarter improved to 33.3% (31.9%). The operating margin in the first half-year rose from 32.0% to 33.6% -- in line with the Company's target for the full-year.
In the second quarter 2006, all the guarantees related to the divestiture of Entific Medical Systems AB expired. The respective escrow accounts were subsequently released and an additional gain on disposal of an associate was realized, amounting EUR 3.9 million.
Net financial expenses amounted to EUR 3.4 million (EUR 0.9 million) for the first six months. Financial expenses were negatively impacted by foreign exchange losses of EUR 2.1 million (EUR 1.2 million), mainly due to a weakening U.S. dollar and a strengthening Swedish currency, during the last six months.
Net profit for the period (Q2) excluding the one-time effect from the divestiture of Entific Medical Systems AB climbed to EUR 37.5 million compared to EUR 31.2 million last year. For the first half year this profit increased to EUR 74.7 million compared to EUR 57.3 million.
Cash flow from operating activities was substantially impacted by tax payments of EUR 34.8 million, the main propellant being a release of untaxed reserves in Sweden in response to a change in tax law. This offsets the positive development in inventory and receivable management. Inventories decreased to EUR 25.0 million from EUR 30.1 million at year-end 2005 and EUR 27.7 million at the end of the first quarter. Current receivables rose in line with the sales development, from EUR 127.4 million to EUR 145.5 at the end of the first quarter, and decreased to EUR 140.4 million at the end of June 2006. Additionally, EUR 82.8 million were used to finalize the share-buy-back program 2005 in the first quarter of 2006 and initiate a new program in the second quarter of 2006.
Investment in tangible and intangible assets of EUR 14.2 million was higher than the prior year (EUR 10.3 million). Main propellants were investments in manufacturing plants amounting to EUR 5.9 million, leasehold improvements (EUR 2.2 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.
Primarily due to the above-mentioned share buyback program and the dividend payment of EUR 55.7 million (43.9 million), cash and cash equivalents sunk to EUR 77.9 million from 93.7 million at the end of March and from EUR 129.0 million at year-end respectively.
Continued high expansion pace backed by 232 new positions in the first half-year
In addition to the 170 new positions created during the first quarter, another 62 were added in the second quarter, mainly in sales and sales-related functions. At the end of June 2006, Nobel Biocare employed 1,880 employees, reflecting an increase of 450 employees in 18 months.
Fast acceptance of NobelGuide(tm) continues
NobelGuide(tm) and its benefits continue to attract customers, both existing as well as new. It is a comprehensive and unique integrated concept including everything from planning and ordering via shop online to production and delivery. Nobel Biocare is the only provider offering a complete guided surgery solution -- from planning software to the final prosthetic solution.
NobelGuide(tm) offers both clinical and esthetic benefits to patients, and economic benefits to dentists. For the patient, the solution allows nearly trauma-free surgery, much less time in the dentist's chair and the final dental restoration in place at once. Shortening of treatment time and ease of surgery obviously is also of interest for practitioners. The concept is supported by documentation in peer-reviewed journals. As of today, there are close to 120 scientific publications available on NobelGuide(tm) and the relating subjects of Flapless surgery, TiUnite(r) biomaterial and Immediate Function(tm).
Nobel Biocare World Tour 2006 successfully completed 8 of 17 conferences
The Nobel Biocare World Tour concept of combining education and research with live surgeries has successfully continued with six events in South Africa, India, Sweden, the U.S., Japan and France in the second quarter. The event in Tokyo alone attracted around 2,500 participants -- as many participants as the very first Nobel Biocare World Conference event in Las Vegas in 2003.
Overall, the worldwide, comprehensive training and education events on the science-based innovative solutions attracted around 165,000 dental professionals in the first six months.
Education and basic research collaborations with universities extended to Australia
Nobel Biocare has further extended its collaborations with universities to strengthen current pre-doctoral education programs and integrate dental implant therapy and esthetic dentistry into the pre-doctoral curriculum. The Company's commitment is underpinned with these partnerships, which include basic research. After agreements with the University of British Columbia and the University of Maryland in the first quarter, Nobel Biocare has established a collaboration with the University of Sydney, Australia's largest faculty of dentistry. The University will establish the Nobel Biocare Chair of Oral Rehabilitation and the Nobel Biocare Centre of Excellence in Oral Rehabilitation.
NobelSmile consumer awareness campaign greatly increasing interest in the general public
Nobel Biocare further strengthened its consumer awareness program around the world by launching its campaign to inform the general public about Beautiful Teeth Now. The campaign includes patient information material, features in healthcare and lifestyle media, a truck tour and a consumer website: www.NobelSmile.com, which is now available in 31 countries. The campaign has been well received and resulted in 90,000 visits to the website during the period April-June.
NobelDirect: Towards a constructive dialogue
The Company yesterday sent a letter to the Swedish Medical Product Agency (SMPA) proposing steps towards a constructive dialogue. With regard to the recent conclusions of the Expert group, established by SMPA, NobelBiocare noticed that the Expert group has commented on certain statements in Nobel Biocare's promotional material for NobelDirect, whereas no comments were made in respect of the instructions for use. However, the Company drew SMPA's attention to the fact, that the comments made on Nobel Biocare's promotional material were based on outdated 2004 editions, which had already been revised in April 2005. The Company informed SMPA, that it nevertheless decided to put promotional material for NobelDirect voluntarily for 60 days on hold in order to give SMPA the opportunity to review it.
Nobel Biocare re-emphasized its need to have access to all studies and data of the Gothenburg Group provided to others. Otherwise a meaningful analysis and constructive discussion of their allegations would be impossible. This access has not been given yet.
The Company fundamentally believes in the intrinsic quality of its product. In this sense it submitted yesterday 3 studies for peer review to professional journals, one of them a prospective multi-center study. In the same sense, NobelBiocare wants to reconfirm its offer to have a periodic, open and constructive dialogue with SMPA on the progress of the on-going prospective study.
The aforementioned letter is published in the investors and media section on our website www.nobelbiocare.com
Additional innovative esthetic Procera(r) solutions
Procera(r) provides individualized prosthetics with the highest precision fit for crowns, laminates, abutments and bridges -- perfectly combining simplicity, strength and beauty. At its World Tour event in Sydney 2 August 2006, Nobel Biocare introduced a number of new products further strengthening the company's Easy Esthetics(tm) range of restorative esthetic dental solutions. The highlights of the innovations include: the Procera(r) Implant Bridge Zirconia, the Procera(r) Bridge Alumina, a Procera(r) Esthetic Abutment Selection kit and the NobelRondo(tm) Gingiva Zirconia porcelain. The Procera(r) Abutments Titanium and Zirconia were extended to include Camlog Biotechnologies and Astra Tech implant systems. The Procera(r) CAD Software was upgraded.
All introductions are designed to offer dental professionals custom-made metal-free, long-lasting esthetic solutions for all their patients. The product innovations are backed by a wide range of campaign material for dental professionals and dental labs, including a news magazine for patients and a Procera(r) book. More information on these launches is available on www.nobelbiocare.com.
FDA approval for initiating pilot study on Bone Inductive Implants
The U.S. Food and Drug Administration, FDA, approved the IDE for the first pilot study for the Bone Inductive Implant. This implant, which incorporates the bone stimulating agent rhBMP-2, will be the first of its kind tested on humans, introducing a new era in implant dentistry.
New executive for Europe, Middle East and Africa (EMEA)
Effective 1 October Jacques Gutedel will join Nobel Biocare as Vice President Europe, Middle East and Africa (EMEA) in the Nobel Biocare Executive Management Team.
Jacques Gutedel has extensive sales and marketing experience in the medical devices industry. From 1990 until 2001 he held various management positions with Mallinckrodt Medical GmbH, a global manufacturer and marketer of healthcare products in the areas of respiratory care and diagnostic imaging. Since 2001 he has been Vice President at Boston Scientific in charge of all divisions in the midsize countries and Electrophysiology in Europe. In this position he has been a member of the European Management Committee. In 2005 his responsibility for Electrophysiology was extended to International.
Outlook remains unchanged
After the first half year, Nobel Biocare is very well on track to achieve its ambitious targets for the full year. The Company is confident that it will achieve its target of boosting revenue in 2006 by approximately 24% in local currencies in a market that independent research estimates to grow by about 18%, and raising the operating margin to about 34%.
NOBEL BIOCARE HOLDING AG
Heliane Canepa President and CEO
A telephone conference will be held today 10 August, 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: Interim Report 3, 2006 19 October 2006 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 18 October 2007
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 1,900 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 33 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 2, 2006 (PDF):
http://www.newsbox.ch/public/7615/att/7899_nobelbiocaregroupinterimreportpdf.pdf