2nd UPDATE: Nobel Biocare 2Q Net Beats Hopes, No 2009 Goals
August 12 2009 - 4:21AM
Dow Jones News
Dental implant maker Nobel Biocare Holding AG (NOBN.VX)
Wednesday reported a better-than-expected second-quarter net profit
on lower restructuring costs and higher cost savings, but said its
market remains challenging.
Nobel, the world's largest maker of dental implants by sales,
failed to give a quantitative guidance for 2009, but said it sees a
stabilization in the market for dental implants, which it saw
shrink 10% to 12% in the first half of 2009.
Investors welcomed the news and at 0720 GMT, Nobel shares were
up 4.2% or, CHF1.12, at CHF27.62.
Nobel Biocare said net profit for the three months to June 30
rose to EUR28.2 million from EUR24.3 million a year earlier,
beating analysts' estimates of a drop to EUR21.86 million. The
figure includes restructuring costs of EUR5.8 million, while most
analysts had penciled in costs of around EUR10 million.
"The figures for Nobel Biocare were pretty good," said Bernstein
Research analyst Lisa Bedell. "While sales were below expectations,
the strong margins seen in the second quarter signal internal
improvements that will probably persist. The gross profit strength
also indicates a decent external pricing environment," she said.
Bedell rates Nobel Biocare at marketperform.
"Our cost saving measures and efficiency efforts showed good
results and Nobel Biocare remains highly profitable," Chief
Executive Domenico Scala said during a conference call with
journalists. Scala said right now, it doesn't look like more job
cuts will be necessary, and he sees the company well prepared for a
future recovery of the market.
Nobel Biocare's second-quarter gross profit margin stood at
79.8%, largely stable compared to 81.9% in the the year ago
period.
The Zurich-based maker of implants, crowns and bridges said
sales for the period fell 8.7% to EUR153.5 million as patients,
dental labs and dentists defer costly spending in time of
recession, while the 10 analysts polled by Dow Jones had called for
sales of EUR158.68 million.
"Our growth (in the first six months of 2009) is in line with
the market despite deferred scanner revenues and an unfavorable
country mix," the company said.
Nobel Biocare is currently launching a new scanner and software
system, called Nobel Procera, which will bolster sales as the year
progresses, Scala said in the conference call.
While the company has been gaining market share in Asia,
especially in Japan, it's losing ground in Europe, where sales
dropped 15%, Scala said.
"Especially the Iberian market is in bad shape, but its not
getting worse," Scala said. In North America, where sales fell 2.7%
in the three months to June 30, there were pockets of growth, but
also areas of revenue declines, according to Scala.
Nobel Biocare shares have gained around 24% year-to-date driven
by recent M&A speculation and hopes the company will benefit
from its restructuring efforts once demand for its products picks
up again.
Tuesday, Nobel Biocare's Swiss rival Straumann Holding AG
(STMN.EB) reported a 6.9% drop in first-half sales, but said it had
gained market share in the first six months of the year, also from
Nobel.
Company Web site: www.nobelbiocare.com; www.straumann.com
-By Julia Mengewein, Dow Jones Newswires; +41 43 443 80 45;
julia.mengewein@dowjones.com