- Revenue for 2011 was down 0.7% (CER) to EUR 569.2 million (minus 1.3% as reported)
- EBIT margin stood at 12.7%; EBIT margin excluding exceptional expenses and currency impact was 14.9%
- Successful launch of several product innovations in 2011
- North American revenue growth of 7.6% at CER demonstrates effectiveness of sharpened strategy
- New directors with healthcare, dental and operational expertise proposed to join the Board of Directors
Table 1: Selected key figures in EUR million
Profit from operations
Operating (EBIT) margin
Operating (EBIT) margin (CER)
Net financial result
Profit before tax
Basic earnings per share, EUR
Net cash from operating activities
Employees at the end of the period (number)
* Figures before exceptionals exclude expenses related to the natural disaster in Japan and the CEO change, both of which total EUR 4.5 million.
** At constant exchange rates (CER)
Richard Laube, CEO: “We delivered on guidance in the fourth quarter and second half. The results give us confidence that our team can execute the strategy and again deliver growth. The heart of our strategy is serving patients with innovation and a unique customer value-added relationship. Our challenge in 2012 is to implement our strategy broadly and effectively, building on our changes and growth foundation. We are optimistic for 2012 despite continued challenging market conditions.”
Business performance stabilized and successful launch of innovations
For the full year 2011, revenue at constant exchange rates (CER) declined by 0.7%. Including the unfavorable foreign currency impact, revenue decreased by 1.3% to EUR 569.2 million. In the fourth quarter, revenue increased by 0.9%, while at CER it was flat (-0.2%). Revenue growth stabilized in the second half of the year (CER 0.0%). Product revenue momentum in Q4 was unchanged from Q3. As a result, for the full year, implant systems revenue was up 1.0%, and revenue from NobelProcera was down 9.0%. Growth drivers remain NobelActive and the new NobelProcera high-end prosthetics – both growing at a double-digit rate. The modest growth in total consumable business was diluted by lower scanner sales versus the prior year.
Profit from operations (EBIT) for the full year was EUR 72.1 million (2010: EUR 84.9 million) reflecting an EBIT margin of 12.7% (2010: 14.7%). While profit from operations was impacted by exceptional expenses (related to the natural disasters in Japan and the CEO change) as well as adverse currency impact, profitability remained as guided, at prior-year levels (14.9%) excluding these items. Net profit was EUR 39.8 million compared with EUR 45.7 million a year ago and reflects earnings per share (EPS) of EUR 0.32 (2010: EUR 0.37).
In Q4 2011, Nobel Biocare successfully introduced several product innovations. The company launched three new implants, new prosthetic materials, as well as a new generation of software for diagnostic and treatment planning. The new implants, NobelReplace Conical Connection and NobelReplace Platform Shift expand the restorative options for the proven NobelReplace tapered implant body. NobelReplace Conical Connection now includes an advanced, third-generation internal conical connection and platform shifting to help achieve healthy soft tissue, while NobelReplace Platform Shift combines the tri-channel connection with platform shifting to enhance soft tissue volume and maintain NobelReplace’s ease-of-use. The fast-growing NobelActive portfolio (>25% growth in volume and value for the full year) has been augmented with a new implant as well. The NobelActive 3.0 mm small-diameter implant was developed for safe placement in areas with limited space in the anterior region. As with other NobelActive implants, it is designed to enhance initial stability, and the implant position can be adjusted for optimal restorative orientation. Composed of commercially pure, cold-worked, grade 4 titanium, it is very strong despite its small diameter. NobelProcera fully launched the IPS e.max full contour crown. These implant and prosthetic introductions are supported by the launch of the multi-platform NobelClinician, the industry’s first diagnostic and treatment planning software available for both Mac OS® X and Windows® operating systems. This software serves an increasing customer need in the dental community, given that many dental professionals frequently use Apple devices in their dental practice.
Also in 2011, new long-term data reconfirmed the efficacy of Nobel Biocare’s proprietary TiUnite osseointegration surface. Three 7-8 year long-term follow up studies with 228 Brånemark implants in 106 patients confirmed a high survival rate (CSR) from 97.1% to 100%. All three studies were accepted in peer-reviewed publications and demonstrate TiUnite’s unique properties for effective osseointegration.
Strategy shaped with patients first, built on innovation, customer care and people development
In the course of 2011, Nobel Biocare refined its strategy with the objective to re-establish the company as the leader in implant dentistry. As part of the company’s new strategic focus, Nobel Biocare has initiated a transformation to better respond to patient and customer needs. Three strategic pillars have been defined and various measures taken to improve the core areas of innovation, customer care and people development.
As such Nobel Biocare has begun a process of developing a streamlined organizational structure. The goal of sharpening the organization is to cultivate scientific innovation based on customer needs, drive pipeline progress, facilitate strong sales force effectiveness and excellent customer relationships. It is also to position the company to invest in key areas for future growth, including dental implants, prosthetics, digital dentistry and customer care. The company continues to shift resources to the new strategic priorities, improve efficiencies and simplify infrastructure. The new organization has been initiated in the second half of 2011 and will be rolled out during 2012.
As a consequence of designing a more focused organization, the process from idea to market has been organized in two strong complementary organizational units. As such, all product development activities - from idea to a launch-ready product - are concentrated in an integrated “Global Research, Product and Development” business unit. Additionally, the company’s innovation pipeline has undergone a profound re-evaluation, redesigned around eight key clinical themes that Nobel Biocare believes will be central in the future of implant dentistry. Within the renewal, over 50 key projects have been identified. The second key unit is centered on changing and improving relationships with customers. All market, sales and customer-related activities have been integrated in a new “Global Sales and Customer Development” unit. The new unit is applying a market- and customer-centric approach with a strong sales focus aligning the organization to more effectively respond to customer needs at the individual country level. It has begun to globally reapply programs and successes from markets where Nobel Biocare is building market share. The increased customer focus will allow Nobel Biocare to develop more effective solutions to help customers grow and provide superior patient care.
Regional business performance
In Europe, Middle East and Africa (EMEA), full-year revenue (CER) declined by 5.0% to EUR 236.5 million (Q4: -7.1%). Nobel Biocare made progress in various countries but is not performing up to its potential across the region. Market conditions have been deteriorating, and the company continued to be negatively affected by its heavy exposure to southern Europe where economic challenges have been even more prominent. Spain experienced another year of decline, while performance in France became negative towards the end of the year, and Italy fell to low single-digit growth levels. On the other hand, Nobel Biocare's position in Germany, currently the strongest European economy, stabilized but was not sufficient to compensate for the development in other countries.
In North America, revenue (CER) for the full year increased by 7.6% to EUR 200.1 million (Q4: 10.7%). Nobel Biocare made substantial progress in reinforcing its competitive position. Supported by strong underlying market fundamentals, Nobel Biocare was increasingly effective in leveraging its highly innovative treatment solutions with value-adding activities to help customers grow their own business.
In the Asia/Pacific region, revenue (CER) for the full year was down 5.1% to EUR 123.6 million (Q4: -2.1%). In Japan, a country that accounts for almost two-thirds of the regional revenue, Nobel Biocare was negatively affected by the economic consequences of the March 2011 earthquake and tsunami. Excluding Japan, the region grew 7.6% (CER) in 2011, driven by strong double-digit growth in China, which is increasingly relevant for the performance of this region.
In Latin America/Rest of the world, full-year revenue (CER) for 2011 was up by 1.6% to EUR 9.0 million (Q4: -6.8%).
Alpha-Bio Tec (ABT), which was acquired in 2008 and which targets customers with simpler product and solution needs mainly in emerging markets, grew at a double-digit rate during 2011. Alpha-Bio Tec sales are included in the EMEA regional sales figures.
Table 2: Revenue by region in EUR million
in EUR million
Europe, Middle East and Africa (EMEA)
Share of total revenue
Share of total revenue
Share of total revenue
Latin America/Rest of the world
Share of total revenue
Gross profit for the full year decreased to EUR 432.5 million (2010: EUR 448.0 million). This reflects a gross profit margin of 76.0% compared with 77.7% in 2010. While the margin for implant systems benefited from slightly increasing volumes and strong cost management, it was diluted by lower sales prices, higher input prices and increasing royalty payments. The NobelProcera margin was affected by declining coping volumes and a still-rising cost basis (mainly depreciation) resulting from capacity investments in late 2010 and early 2011.
Operating expenses for the full year amounted to EUR 360.4 million (2010: EUR 363.1 million). In view of the overall uncertain economic situation and the slow market recovery, Nobel Biocare continued its disciplined cost management across all regions and functions and decreased its underlying operating costs (at CER) by about 3% versus 2010 while investments in customer activities, training and education as well as in product development and innovation continued. However, exceptional costs were recorded in relation to Japan as well as to the CEO change in early 2011. Even including these adverse effects and a negative impact from currencies, the reported operating costs in 2011 were below the level of 2010.
Profit from operations (EBIT) for the full year totaled EUR 72.1 million (2010: EUR 84.9 million), reflecting an operating margin of 12.7% (2010: 14.7%). Adjusted for exceptional expenses related to Japan as well as to the CEO change, EBIT was EUR 76.6 million, which equates to a margin of 13.5% (14.9% at CER) – in line with full year guidance.
Currencies – During 2011, volatility of currencies was at a historic high. The euro crisis and related volatility also had a significant impact on Nobel Biocare's income statement, balance sheet and cash flow. Currency movements affected revenue by -0.6 percentage points, mainly due to the weak US dollar and taking into account the regional growth contribution across the Group. On an EBIT margin level the impact was -1.5 percentage points, mainly due to Nobel Biocare's cost base in Switzerland (headquarter) and Sweden (two production plants). Seventy-seven percent of that currency impact could be gained back through the ongoing EBIT hedging program, which is accounted for in the financial result.
Net financial result for the full year was EUR -16.6 million (2010: EUR 15.5 million). Excluding EUR 30.0 million exceptional foreign exchange gains in 2010, the comparison base in the prior year was EUR -14.5 million. The 2011 foreign exchange result nets two opposing elements: on the one hand the Group recorded EUR 7.0 million in foreign exchange gains from its ongoing hedging program and thus offset 1.2 percentage points of the EBIT margin dilution recorded in operating profit. On the other, EUR 11.6 million one-off hedging costs were incurred in Q3 2011, resulting from special hedging of the convertible redemption against the rapidly falling euro, which abruptly reversed course with the pegging of the Swiss franc by the Swiss National Bank.
Taxes – In 2011, tax expenses were EUR 15.7 million versus EUR 54.7 million in 2010. Excluding exceptional tax expenses of EUR 29.8 million, which were recorded in 2010 due to a restructuring of internal profit streams, the 2010 comparison base is EUR 24.9 million. The significant decrease of tax expenses in 2011 can be explained by lower profit before tax, mainly resulting from the exceptional effects in the financial result. The underlying tax rate in 2011 was 28.3%, compared with 24.8% in 2010. The increase in the tax rate results from changes in the financial result, the lower EBIT margin and an unfavorable development of the regional profit contribution mix. The tax restructuring from 2010 had a positive impact of EUR 6.1 million (11 percentage points on the tax rate) on the 2011 results.
Net profit for the full year was EUR 39.8 million (2010: EUR 45.7 million). The reported net margin was 7.0% versus 7.9% in 2010. While operating profit was EUR 12.8 million lower, the combination of financial result and tax expenses was EUR 6.9 million favorable compared to 2011.
Cash flow from operating activities for the full year totaled EUR 93.1 million (2010: EUR 97.1 million). As in prior years, this cash flow reflects prudent cash management and further working capital reductions. Including cash effects from investments, financing and related hedging needs, free cash flow was minus EUR 94.0 million versus EUR 32.6 million in 2010. A major reason for this change was the redemption of the convertible bond and only a partial refinancing through a 5-year straight bond and a drawdown of the syndicated banking facility. As a result of these transactions as well as a shareholder dividend of EUR 33.0 million, the Group's cash position was 107.5 million at the end of 2011 (2010: EUR 239.5 million).
Annual General Meeting
The Board of Directors’ proposals to the Annual General Meeting of shareholders (AGM) scheduled for 29 March 2012, in Zurich, Switzerland, in addition to the approval of the annual accounts, include:
Dividend – The Board of Directors approved a dividend proposal of CHF 0.15 per registered share (2010: CHF 0.35/share). It is planned to pay this dividend out of reserves and in a shareholder-friendly way without deduction of withholding tax. The payment date for this dividend, if approved by the AGM, is set for 5 April 2012 (ex-dividend date: 2 April 2012, record date: 4 April 2012).
Changes in the Board of Directors – Nobel Biocare intends to further strengthen its Board of Directors in a targeted manner through the addition of three highly experienced professionals in the fields of medical technology, dental medicine, information technology and manufacturing. Shareholders will be asked to elect, at the Annual General Meeting on 29 March 2012, Michel Orsinger, Prof. Dr. Georg Watzek and Juha Raisanen to the Board of Directors. Michel Orsinger, President & CEO of Synthes, brings with him a strong track record and extensive experience in the consumer and medtech area. After his election to the Board, he is to be named Chairman of the Board of Nobel Biocare. Prof. Dr. Georg Watzek, head of the Oral Surgery Department at the Vienna University of Medicine, is a renowned expert in the field of dental medicine and implantology. He is co-publisher of one of the most important journals of dental medicine, a member of several leading dental associations, and a recognized lecturer at dental conventions throughout the world. He will supplement the Board through his important in-depth knowledge of the customer dimension of Nobel Biocare’s business. Juha Raisanen is Senior Vice President Manufacturing and Supply Chain at Kone Corporation. He brings broad knowledge and a strong track record in information technology and supply chain management, as well as the lean manufacturing and Six Sigma methodologies from various industries, including electronics semiconductors and mechanical engineering. His expertise will help the company to further increase the effectiveness of its production value chain.
Rolf Watter, Chairman of the Board ad interim, stated: “The Board of Directors is pleased to propose to the Annual General Meeting of Shareholders these proven experts, with their extensive specialized know-how and years of professional experience, to be elected to the Board of Directors. The excellent industry-specific and management competence of Michel Orsinger, Prof. Dr. Georg Watzek and Juha Raisanen will contribute significantly to the implementation and achievement of our strategic goals. Their appointment represents both a crucial reinforcement of our Board of Directors and an important milestone on our path toward delivering sustainable growth at Nobel Biocare.”
After six and seven years of service, in line with internal organizational regulations, Stig Eriksson and Robert Lilja will not stand for re-election. The Board would like to take this occasion to thank them sincerely for their strong dedication and contribution over the past years.
Nobel Biocare has a cautious outlook on the global dental implant market for 2012 with low single-digit percent growth estimated. Increasingly challenging market conditions are expected in many European economies, while the North American market is expected to continue its growth trend. The development in Asia/Pacific will depend on further stabilization in Japan.
Nobel Biocare intends to further build on the strategic changes and improvements initiated in the second half of 2011. Based on this and the above market assumptions, Nobel Biocare targets modest growth in 2012 in its implant systems business. In NobelProcera, the objective for 2012 is to accelerate growth of the consumable business on the basis of the Group’s strong competitive advantage in screw-retained prosthetics.
Nobel Biocare will increase its 2012 investments in product development, marketing, sales and IT spending to drive process efficiencies. These investments will accelerate our strategic execution in the mid-term. For 2012, Nobel Biocare expects profit from operations (EBIT) at CER to be in line with 2011.
Nobel Biocare is a world leader in the field of innovative implant-based dental restorations. The company’s portfolio offers solutions from single tooth to fully edentulous indications with dental implant systems (including key brands NobelActive®, Brånemark System® and NobelReplace®), a comprehensive range of high-precision individualized prosthetics and CAD/CAM systems (NobelProcera®), diagnostics, treatment planning and guided surgery solutions (NobelClinician® and DTX Studio™) and biomaterials (creos™). Nobel Biocare supports its customers through all phases of professional development, offering world-class training and education along with practice support and patient information materials. The company is headquartered in Zurich, Switzerland. Production takes place at six sites located in the United States, Sweden, Japan and Israel. Products and services are available in over 80 countries through subsidiaries and distributors.