Interim Report 3, January-September 1999

Interim Report 3, January-September 1999 The Nobel Biocare Group *Operating income increased by 108% compared to operating income before non- recurring items in 1998 and amounted to SEK 147.3 million (70.8). *The merger with Steri-Oss has been successfully completed and the anticipated synergies have been surpassed. *Sales increased by 45% to total SEK 1,242.2 million (855.1). * Dental Implant sales increased by 43% to total SEK 1,097.8 million (767.4). *Sales within Procera® increased by 65% totalling SEK 144.4 million (87.7). *Earnings per share excluding goodwill amortization and non-recurring items increased by 86% to SEK 5.37 (2.88). SEK M Jan-Sept Jan-Sept Change 1999 1998 Net turnover 1 242.2 855.1 45% of which Dental Implants 1 097.8 767.4 43% of which Procera® 144.4 87.7 65% Operating income excl. non-recurring 147.3 70.8 108% items Non-recurring items - -52.1 Operating income 147,3 18.7 Income after net financial items 119.5 17.8 Earnings per share, SEK 3.72 0.60 Earnings per share excluding goodwill amortization and non-recurring items, 5.37 2.88 86% SEK Group sales Nobel Biocare sales improved by 45% to total SEK 1,242.2 million (855.1). The integration of Nobel Biocare's and Steri-Oss' operations has been completed. The merger of the two organizations as well as the takeover of Steri-Oss' former distributors in Europe and Brazil, has been successfully executed without any disruptions to sales. The distribution power of the company has been greatly enhanced by the integration of the sales forces of Brånemark System and Steri-Oss, most notably in North America. Dental Implant sales in North America and Europe are maintaining their positive momentum. The sales increase was 12% in North America and 17% in Europe (excluding the Nordic region). Two new implant systems, Brånemark System Mk III and Steri-Oss Replace Select, were launched in the last week of September. These products have been very well received. Sales in business area Procera® reached SEK 144.4 million, an increase of 65% compared with last year. Sales in the third quarter remained at the same level as in the second quarter reflecting the seasonally weak vacation period in the third quarter. Sales of copings in North America has improved each quarter since the launch but at a slower pace in 1999 than 1998. However, customer confidence in the Procera® product remain very favorable and laboratories have confirmed aggressive plans that will bring Procera back to a positive growth trend pending the opening of the US production facility at the end of 1999. Group results Operating income increased by 108% to total SEK 147.3 million, compared with SEK 18.7 million (SEK 70.8 million excluding non-recurring items) for the first nine months of 1998. This strong increase is due to high sales volumes for dental implants, revenue and cost saving synergies achieved as a result of coordinating Nobel Biocare and Steri-Oss operations. Positive currency effects amounting to SEK 27 million (SEK 22 million in the first six months of 1999) has also contributed to the positive increase. Excluding currency effects and before goodwill amortization, operating income (before non-recurring items) improved by SEK 86 million. The forecast synergies of more than SEK 70 million a year have been secured and will have full impact from the year 2000. Goodwill amortization amounted to SEK 41.1 million (4.2). Price levels remain stable. Operating expenses as a percentage of sales decreased by 6.9 percentage points from 63.9% to 57.0% due to a strong sales development, cost synergies that have been achieved and good cost containment. Depreciation, SEK 39.8 million (37.0), increased by SEK 2.8 million. The operating margin improved by 3.6 percentage points compared to the first nine months of 1998 (excluding non-recurring items) and increased to 11.9%. Excluding goodwill amortization, the operating margin improved by 6.4 percentage points to 15.2%. Financial income and expenses totalled SEK -27.8 million (-0.9). The change mainly reflects the financial cost of the acquisition of Steri-Oss in September 1998. Refinancing of Steri-Oss debt, integration costs and buy-back of inventory from previous Steri-Oss distributors have increased the net debt of the Group and consequently interest expenses. Income after net financial items amounted to SEK 119.5 million (17.8). ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/1999/10/29/19991029BIT00590/bit0001.doc http://www.bit.se/bitonline/1999/10/29/19991029BIT00590/bit0002.pdf