Nobel Biocare Shares Fall To Record Low

Nobel Biocare Holding AG, the world’s largest maker of dental implants, fell to a record in Zurich trading after cutting its 2008 sales target by about half.

Nobel forecast sales rising less than the market average of about 8 percent this year. That compares with an earlier target of revenue growth in the “mid-teens.” The Glattbrugg, Switzerland-based company also reported a 25 percent decline in first-quarter net income today. Nobel named former Syngenta AG executive Domenico Scala chief executive officer last year to replace Heliane Canepa and twice cut its forecast as revenue growth eased in the first half.

“The numbers were weak across the board, particularly North America and Europe,” said Christoph Gubler, an analyst at Bank Vontobel. “They’ve definitely lost market share and this is down to internal problems with management and over-aggressive marketing over the past two years – this goes back beyond Scala.”

Nobel had expected the market to grow by about 15 percent. The Swiss company in February forecast revenue growth in 2008 to be in the “mid-teens” and earnings before interest and taxes as a percentage of sales of about 34 percent. Nobel Biocare also forecast that revenue growth will probably exceed 18 percent by 2010, while the EBIT margin was expected to come in around 36 percent.

“We expected a slow start to the year,” Scala said. “However, the current economic uncertainties led to a more cautious ordering pattern, which will now have an even stronger impact in 2008.”

Sales growth in North America slowed during the first quarter, falling 10 percent to 47.9 million euros. The Swiss company said in February it “may have lost a bit” of market share in the U.S.

Nobel Biocare’s sales in Europe, the Middle East and Africa declined about 6 percent to 77.5 million euros because of a “more cautious ordering pattern,” while revenue in the Asia- Pacific region rose 13 percent to 24.9 million euros. Revenue in Latin America and the rest of the world was unchanged at 5.3 million euros.

Nobel Biocare has tried to expand the market for implants by making the devices simpler to install and by increasing its marketing budget targeted at dentists and consumers. About 9 out of 10 people needing a new tooth choose a traditional crown-and- bridge or denture, because implants typically cost more and require a specialist. They also take more time to insert.

Source: Bloomberg.com