KLOTEN, Switzerland, Aug. 11, 2005 (PRIMEZONE) -- Nobel Biocare (Other OTC:NBCHF) drives revenue growth up to a record 27% in local currencies and EBIT margin up to 32% in Q2.
Once again, Nobel Biocare outpaces the market and, sets a new record for revenue growth and gross margin.
-- Revenue was lifted 27% in local currencies to EUR 123.8 million
in the second quarter. All regions grew by 20% or more, with
North America expanding 32% in local currencies. Revenue for the
first half year was up 26% in local currencies to EUR 231.8
million.
-- Gross margin in the second quarter climbed to a new high of
82.6%. For the first half year, gross margin was up to 82.2%.
-- Profit from operations (EBIT) in the second quarter climbed over
51% from EUR 26.1 million(a) to EUR 39.5 million. Operating
(EBIT) margin jumped from 26.4%(a) to 31.9%. For the first half
year, EBIT jumped from EUR 48.4 million(a) to EUR 74.3 million,
and the EBIT margin from 26.0%(a) to 32.0%.
-- Net profit was up from EUR 21.0 million(a) to EUR 31.2 million
in the second quarter. For the first half year, net profit was
boosted from EUR 38.6(a) million to EUR 87.9 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 1.23 in the second quarter
and to EUR 3.43 in the first six months.
560 patient driven innovations launched at the World Conference in Las Vegas in June 2005
-- Launch of a solution-based range of 560 innovations, including
NobelGuide(tm) for minimally invasive guided surgery procedures
such as Teeth-in-an Hour(tm).
-- Over 6,000 attending dental professionals made the 2005 Nobel
Biocare World Conference the largest dental event ever. The
conference program included seven live surgeries via satellite
and 50 focus sessions presented by more than 170 of the world's
leading dental experts.
-- Exclusive licensing agreement with Wyeth signed to use rhBMP-2
protein for dental implants.
Table 1.
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Selected income
statement figures Apr-Jun Apr-Jun Change Jan-Jun Jan-Jun Change
in EUR million 2005 2004(a) 2005 2004(a)
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Revenue 123.8 98.8 25.3% 231.8 186.5 24.3%
Growth in local
currencies 26.7% 25.7%
Gross profit 102.2 79.5 28.6% 190.6 148.3 28.5%
Gross margin 82.6% 80.5% 82.2% 79.5%
Profit from
operations 39.5 26.1 51.3% 74.3 48.4 53.4%
Operating (EBIT)
margin 31.9% 26.4% 32.0% 26.0%
Net profit 31.2 21.0 48.4% 87.9 38.6 128.0%
Net profit
margin 25.2% 21.3% 37.9% 20.7%
Basic earnings
per share, EUR 1.23 0.82 3.43 1.51
Basic earnings
per share, CHF 1.89 1.34 5.30 2.35
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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
-- 2nd quarter Apr-Jun Apr-Jun Change in %
in EUR million 2005 2004 EUR local curr.
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Europe 57.5 48.0 19.8% 19.5%
Proportion of
total revenue 46% 49%
North America 44.0 34.4 27.9% 31.8%
Proportion of
total revenue 36% 35%
Asia/Pacific 15.2 11.2 35.7% 39.1%
Proportion of
total revenue 12% 11%
Rest of the World 7.1 5.2 36.5% 35.1%
Proportion of
total revenue 6% 5%
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Total 123.8 98.8 25.3% 26.7%
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Table 3.
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Revenue by region
-- first half
year in EUR Jan-Jun Jan-Jun Change in %
million 2005 2004 EUR local curr.
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Europe 110.9 93.6 18.5% 18.2%
Proportion of
total revenue 48% 50%
North America 80.8 62.6 29.1% 33.2%
Proportion of
total revenue 35% 34%
Asia/Pacific 27.4 21.3 28.6% 31.8%
Proportion of
total revenue 12% 11%
Rest of the World 12.7 9.0 41.1% 39.6%
Proportion
of total revenue 5% 5%
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Total 231.8 186.5 24.3% 25.7%
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All regions continue to outgrow the market
Nobel Biocare accelerated revenue growth in local currencies for the quarter to a new high of 27%, to EUR 123.8 million. All regions continued to show strong growth of 20% or more in local currencies. For the first half year, revenue climbed by 26% in local currencies to EUR 231.8 million, reinforcing the Company's global and regional leadership position.
Growth was powered by strong volume expansion and favorable mix changes, while the impact of price increases on existing products was about 3.5%.
North America continued its strong performance, growing 32% in local currencies in the second quarter. This was the second consecutive quarter with organic growth above 30%.
Germany recovered strongly after the first quarter slowdown caused by confusion over the healthcare reform, and is back to solid revenue growth in local currency.
Momentum was kept high in the Netherlands, Spain, Belgium, United Kingdom and Switzerland (35%) in the second quarter.
All major countries across Asia/Pacific and Rest of the World continued to expand rapidly.
In the interim period, Nobel Biocare filled 33 new positions and brought the total number of headcount additions for the first half year to 156, the vast majority of which are in direct sales and sales-related functions.
560 new products open up esthetic and implant dentistry to more dental professionals
At its World Conference, Nobel Biocare launched a variety of scientifically-based innovations designed to make it easier for every dental professional to respond to the growing patient demand for Beautiful Teeth Now(tm).
Thanks to a solution-based approach, 560 new products were introduced, each based in the company's proven three core concepts of Easy Esthetics(tm), Immediate Function(tm) and Soft Tissue Integration(tm).
Launch highlights include Nobel Guide(tm), a fully flexible package of minimally invasive guided surgery procedures, enhanced implant features such as grooves, rationalized and simplified drill protocols and fully modular Implant Kits.
Every solution has been designed to minimize chair time, improve productivity and maximize successful, lasting and esthetic outcomes, helping to break down the patient barriers of time, discomfort and cost. All new products are fully complimentary to the existing product range.
Over 6,000 participants at the Nobel Biocare World Conference 2005
From 5 to 9 June more than 6,000 dental professionals from over 70 countries participated at the second Nobel Biocare World Conference in Las Vegas. Featuring the theme "best evidence-based solutions for your patients", emphasizing minimally invasive dental solutions, the conference program included seven live surgeries via satellite and 50 focus sessions presented by more than 170 of the world's leading dental experts.
Exclusive licensing agreement with Wyeth to use rhBMP-2 protein for dental implants
At the World Conference, Nobel Biocare announced a licensing agreement with Wyeth Pharmaceuticals, a division of Wyeth, one of the world's largest research-driven pharmaceutical and health care products companies. This agreement grants Nobel Biocare exclusive rights to recombinant human Bone Morphogenetic Protein-2 (rhBMP-2) in combination with dental implants for North and South America, Australia, New Zealand, Africa and the Middle East.
The companies have collaborated since 1997 on projects involving biologics and bone induction. Experimental research has shown that it is possible to make new bone at dental implants with a technology that combines rhBMP-2 and Nobel Biocare's unique implant surface TiUnite(r). This breakthrough technology is expected to alter today's invasive, painful and time-consuming surgical procedures involving membranes and other grafting techniques for patients who do not have sufficient quantities of bone and to provide them with fast, painless minimal-invasive solutions.
Record gross margin in the second quarter -- profitability continues to improve
Gross profit rose to EUR 102.2 million, up from EUR 79.5 million(b) in the prior-year period. Continued strong volume growth, combined with a favorable mix change and higher prices on existing products, resulted in a record gross margin of 82.6% compared to 80.5%(b) a year earlier. Gross profit for the first half year climbed to EUR 190.6 million and to 82.2% of revenue.
Obsolescence cost related to inventory rationalization, recorded under cost of sales, amounted to EUR 0.6 million for the second quarter and to EUR 0.8 million for the first half year compared to EUR 1.0 million and EUR 1.8 million respectively a year earlier.
Despite the cost relating to the World Conference and the product launches as well as the higher headcount, operating cost in relation to revenue was reduced to 50.6% (54.0%(b) prior year) in the second quarter. For the first half year, operating cost in percent of revenue dropped to 50.2% (53.5%(b)). Operating expenses amounted to EUR 62.6 million, up from EUR 53.4 million(b). Operating cost for the first half year was EUR 116.3 million compared to EUR 100.2 million(b) in the previous year.
Based on the implementation of international financial reporting standard 2 (IFRS 2, Share-based Payment), cost for staff options amount to EUR 2.3 million in the second quarter of 2005 and to EUR 3.3 million for the first half year. The restatement for the prior year is EUR 1.1 million and EUR 1.7 million respectively.
Social charges related to the staff option program were EUR 1.0 million compared to EUR 4.3 million in the second quarter a year earlier. For the first half year, social charges related to the option program were EUR 3.7 million (EUR 6.6 million).
Improved gross profit and persistently tight controls on operating cost drove profit from operations (EBIT) to EUR 39.5 million (EUR 26.1 million(b)) in the second quarter and to EUR 74.3 million (EUR 48.4 million(b)) in the first half year. The EBIT margin rose to 31.9%, up from 26.4%(b) in the second quarter and to 32.0% from 26.0%(b) in the first half year.
Total capital expenditure on property, plant and equipment remained in the first half of the year at the same level as previous year, amounting to EUR 9.9 million (EUR 9.7 million).
(b) 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
As indicated in the previous quarter, inventories increased with the introduction of the new products and amounted to EUR 24.5 million compared to EUR 18.9 million at the end of the first quarter.
In the second quarter, the Company initiated a share buyback program. Within this program, Nobel Biocare acquired 451,400 shares for a total price of EUR 73.1 million in the second quarter.
Due to the share buyback program and the dividend payment in the second quarter, cash and cash equivalents were reduced to EUR 156.4 million compared to EUR 251.9 million at the end of the first quarter.
Annual General Meeting elected two new board members
The Annual General Meeting, held on 28 April 2005, endorsed all proposals put forward by the Board of Directors. The meeting approved a dividend of CHF 2.65 gross per share, which was paid on 3 May 2005. Antoine A. Firmenich and Robert Lilja were elected as new board members replacing Jan Ekberg and Jan Kvarnstrom who each have served more than ten years on Nobel Biocare's Board. All board members have been elected for a one-year term. Dr. Rolf Soiron was re-elected as Chairman of the Board at the board meeting following the AGM.
New management structure
Nobel Biocare has undergone an intense period of growth over the past few years. Now, the knowledge, competencies, and structures must be adapted to meet future challenges and development of the Company. Consequently, effective 1 September 2005, the management structure and the Executive Management Team will be reorganized.
Robert Gottlander was promoted to Executive Vice President Marketing and Products. Robert Gottlander has been with the Company for over 20 years in various key management positions, most recently as Vice President Global Marketing.
Mathias Krebs, who joined the Company as of 1 June 2005, was appointed Executive Vice President Planning and Technology. Mathias Krebs has considerable experience from several international top management positions within Fresenius Medical Care Group, SGL Carbon AG and Robert Bosch GmbH. Most recently he was Managing Director of the medical division of the Trumpf Group, a leading company in production technology.
Executive Management Team of Nobel Biocare Group
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Heliane Canepa President and CEO
Thomas Bogli Chief Financial Officer
Robert Gottlander Marketing and Products
Matthias Krebs Planning and Technology
Kevin Mosher North America
Tom Olsen Latin America / Asia-Pacific
Greater focus on social responsibility
In line with the Company's aim to be a leader in this field, Nobel Biocare has become one of the donors of the first SOS Children's Village in Brovary outside Kiev in the Ukraine. Construction of this village, that will provide homes for 120 orphaned and destitute children, has started recently. Furthermore Nobel Biocare announced a contribution to the Prof. Per-Ingvar Branemark foundation in Brazil. Over the next three years Nobel Biocare will cover the treatment of 1,200 patients who otherwise would not be able to afford such treatment.
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
The entire release, including financial tables, is available at:
http://www.newsbox.ch/public/3969/att/4058_nobelbiocaregroupinterimreport.pdf
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