2012_nb_FullYearReport_EN_.pdf

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Media Release

Full year report 2012ZURICH, SWITZERLAND 19 FEBRUARY 2013

Nobel Biocare full year 2012 revenue up 2% and net profit up 15%

Revenue for the full year 2012 was up 2.0% versus prior year to EUR 580.5 million and down 2.7%

at constant exchange rates (CER) broadly in line with the estimated market development

Events in Japan continued to impact Q4 revenue which was down 1.1% versus 2011

to EUR 153.0 million and down 3.4% at CER

Revenue excluding Japan was essentially flat for the full year (-0.3% at CER) with growth in implant

system revenue. Revenue declined in individualized copings and small-unit bridges

Operating profit (EBIT) of EUR 68.7 million reflecting a margin of 11.8% Continued shift of resources to R&D and growing market organizations were partially offset

by efficiency gains in administration

Net profit was up 15.3% to EUR 45.8 million (2011: EUR 39.8 million): proposed dividend per share up

33% to CHF 0.20 (2011: CHF 0.15)

Table 1: Selected key figures in EUR million

Q4 2012 Q4 2011 Variance 2012 2011 Variance

20112012 20112012

Revenue 153.0 154.6 1.1% 580.5 569.2 2.0%

Variance at constant exchange rates (CER) 3.4% 0.2% 2.7% 0.7%

Gross profi

t 114.7 117.2 2.1% 437.5 432.5 1.2%Gross margin 75.0% 75.8% 75.4% 76.0%

Operating expenses 100.4 94.2 368.8 360.4

Operating profit (EBIT) 14.3 23.0 37.9% 68.7 72.1 4.8%

EBIT margin 9.4% 14.9% 11.8% 12.7%

Net financial result 0.5 4.3 7.7 16.6

Profit before tax 13.8 18.7 61.0 55.5 10.0%

Tax 2.6 5.4 15.2 15.7

Net profit 11.2 13.3 45.8 39.8 15.3%

Profit margin 7.3% 8.6% 7.9% 7.0%

Basic earnings per share, EUR 0.09 0.11 0.37 0.32 16.4%

Net cash from operating activities 36.5 42.2 103.0 93.1

Richard Laube, CEO: We have achieved a number of important milestones with our 2012 results.Profit before tax, net profit and earnings per share have materially improved. More importantly, we have

broken a vicious cycle of market share loss in our core implant business after years of decline. Our

strategy Designing for Life is being effectively implemented throughout the entire organization and we

see accelerating performance, especially in our efficiency programs during the second half of the year.

We anticipate the market environment to remain difficult in the short-term but we are rebuilding Nobel

Biocare to perform in all conditions.


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2/21Full year report 2012

Business performance update

Table 2: Revenue by region

in EUR million Q4 2012 Q4 2011 * Variance Variance 2012 2011 * Variance Variance

(CER) (CER)

Europe, Middle East and Africa (EMEA) 62.1 63.2 1.7% 2.7% 230.1 237.0 2.9% 3.6%

Share of total revenue 41% 41% 40% 41%

Americas 61.0 56.8 7.4% 2.8% 228.5 208.6 9.5% 1.8%


Asia/Pacific 29.9 34.6 13.6% 14.9% 121.9 123.6 1.4% 8.6%


Total 153.0 154.6 1.1% 3.4% 580.5 569.2 2.0% 2.7%

* A new segment Americas, which reflects realigned management structures, has been reported since 1 January 2012. As previously announced, the revenue of

LatAm/RoW has now been included into other regions, mainly North America. For better comparison, prior year figures have been reclassified to reflect the new regional

segment definition.

In 2012, Nobel Biocare generated revenue of EUR580.5

million, an increase of 2.0% compared with

2011 supported by a positive currency effect driven mainly by the strong US dollar and Japanese yen

against the euro. This development is estimated to be in line with peers. Year-on-year CER growth was

down 2.7%. Revenue was significantly impacted by the double-digit percentage market decline in Japan,

which contributes about 12% to the group revenue. Excluding Japan, revenue for the full year would be

at prior year level at CER (-0.3%).

In Europe, Middle East and Africa (EMEA), revenue (CER) for the full year declined by 3.6% to

EUR230.1 million (Q4 2012: -2.7% CER). Many markets in this region remained weak throughout theyear due to the continued economic and fiscal challenges and subsequent low patient flow for implant-

based tooth restorations. In two large European markets, Spain and Italy, the decline in 2012 was

significant. Nobel Biocare developed at least in line with peers in most markets in Europe. Market sharegains were achieved in Russia and France as well as in Italy and Sweden in declining markets.

In theAmericas, revenue (CER) in 2012 increased by 1.8% to EUR 228.5 million (Q4 2012: 2.8%). This

performance was driven by the low single-digit percent increase in the US, driven by implant systems,

which grew broadly in line with peers, supported by the continued implementation of value-added

services. As a result of the softening market in the US during the course of the year, the landscape has

become more competitive. In Canada performance remained sluggish after a weak start to the year. In

Nobel Biocares two directly-served Latin American countries, Brazil and Mexico, the company achieved

a strong improvement compared with the prior year.

In theAsia/Pacific region, revenue (CER) for the full year was down 8.6% to EUR 121.9 million (Q4

2012: -14.9%). The market in Japan was heavily affected due to adverse media coverage on dental

implant treatments in general. Subsequently, patient flow declined significantly and the market was

estimated to be down about 15%. Excluding Japan, which accounts for about 60% of the regional

revenue, APAC grew 6.9% (CER) in 2012. Double-digit percent increases were achieved in China, India

and Taiwan, while revenue in Australia and Southeast Asia declined. Thanks to continued rapid growth,

China is now the third largest revenue contributor in the region after Japan and Australia.


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Profit from operations (EBIT) for the full year was slightly down to EUR 68.7 million (2011: EUR 72.1

million). Impact from lower Japan sales, a reassessment of a royalty liability related to prior years and

termination and severance costs accounted for the decrease in EBIT margin over the prior year. Positive

currency impact was largely offset by investments into growth drivers. The EBIT margin for 2012 was

11.8% (or 11.0% in CER) compared with 12.7% in the prior year.

Currencies For 2012, the favorable currency translation impact was 4.7pp on revenue, and 0.8pp on

the EBIT margin. The US dollar and Japanese yen strengthening against the euro drove this positive

currency translation impact. Gross margin was positively impacted by 0.1pp.

The net financial result in the reporting year was EUR-7.7million (2011: EUR-16.6million). Interestexpense in 2012 was lower due to a lower debt level compared with the year before (EUR 250 million

convertible bonds repaid in November 2011 and replaced by a CHF 120 million straight bond). While the

hedging result of the ongoing business was broadly neutral, the overall hedging result comparison

benefitted from a EUR 11.6 million one-off hedging cost in relation to the convertible bond in 2011.

Taxes Tax expenses in 2012 were EUR15.2million versus EUR15.7million in 2011. A more favorableregional profit contribution mix as well as favorable outcome of certain tax disputes led to this improved

result despite a higher profit before tax. The underlying tax rate is 24.8% compared with 28.3% in the

prior year.

Net profit for the year was up by 15.3% to EUR 45.8 million (2011: EUR 39.8 million), reflecting a higher

net profit margin of 7.9% (2011: 7.0%). The improved net financial result and tax result were the main

reasons for this improvement, which led to earnings per share (EPS) of EUR 0.37 (2011: EUR 0.32).

Cash flow from operating activities for the full year totaled EUR 103.0 million (2011: EUR 93.1

million). This improvement was primarily a result of exceptional taxes paid in the previous year. At the

end of 2012, Nobel Biocare reported a cash position of EUR 146.6 million versus EUR 107.5 million in

2011 and has returned to a net cash position. This cash level is further supported by the syndicated

credit facility giving the Group sufficient financial flexibility from a strategic perspective.

Strategy progress update

Nobel Biocares strategy is guided by the company mission Designing for Life. This aims to help

customers treat more patients better for improved quality of life with superior products and solutions

designed to last the life of the patient. This mission is realized and business performance is achieved

through four strategic pillars:

Innovative products and solutions Designing for Life The NobelActive implant system has

reached 5 years of double-digit growth. This performance was supported by the successful launch

execution of the 3.0 narow version, which continues to attract new customers. The introduction of

NobelReplace Platform Shift (PS) and NobelReplace Conical Connection (CC) has also been on track.

Aiding patient safety through the use of digital technology is one of the focus areas. Here, the recently

upgraded NobelClinicianTM treatment planning software continues to gain new subscribers,

disproportionally well in Japan. Further, the Group saw a very well uptake of the new drill motor,


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OsseoCareTM Pro, that was introduced in October and is uniquely operated by an iPad . As previously

reported, the new NobelProcera Scan and Design Center began initial beta testing in early October,

offering customers a convenient way to access precision individualized components needed to treat

edentulous patients. The Group is again at the forefront and widening its lead in the digital workflow.

Customer value add Partnering for Life Over the course of the year, Nobel Biocare has

established a new sales and marketing organization, reducing redundancies and enabling quicker service

to the customer. A tool box with a broad variety of programs to help customers to treat more patients

better was introduced. The programs range from study clubs and the esthetic alliance that improves

professional networking and various patient communication tools designed to attract patient visits. To

facilitate interaction with Nobel Biocare, a new online store went live, first in the US, with gradual

introduction in EMEA and Asia in 2013. To support the recent and upcoming product and solution

launches the Sales Academy sales force training program has been rolled out globally since the

beginning of this year.

Training and education Learning for Life The Company established a new T&E concept withleading clinicians, which aims to help customers to improve quality of treatment care and safety. The

company conducted six very well attended symposia in Europe and North America in 2012. The recently

announced Global Symposium in New York in June, featuring nearly 100 key opinion leaders and experts

in their fields has filled up quickly and only a few seats are left.

Operating efficiency and effectiveness Nobel Biocare is systematically reshaping into a fitter

performance- oriented organization. Efficiency improvement programs have been initiated throughout

the organization, resulting in a reduction in headcount in the fourth quarter. Resources were reallocated

from administration to growth drivers such as R&D and growing country organizations.

Product launches 2013 Nobel Biocare has established a systematic innovation pipeline following the

relevant clinical focus areas. For 2013 the following launches have already been announced: A new

implant version with a partially machined collar expanding the NobelReplace portfolio. Further, a

significant upgrade of NobelClinician improving images for planning of implant placement and prosthetic

restorations. A new second-generation NobelProcera Scanner and additional restorative components for

competitive implant platforms, further opening NobelProcera. Additionally, an initial milestone step will

be achieved with the opening of the NobelProcera milling system to a third-party scanner with the new

openaccess program.

Executive Committee update Effective 1 January 2013, Walter Ritter, Head Global Human

Resources was appointed to the Nobel Biocare Executive Committee. At the same time, Frank Mengisassumed his responsibilities as Head of Global Operations and member of the Executive Committee.

Frank Mengis has extensive senior management experience in operations and manufacturing in the life

sciences field including the dental industry. Most recently, he held senior management positions inProject Management and Development, Global Manufacturing, Operations and Quality Management at

Straumann.

Annual General Meeting

The Board of Directors proposals to the Annual General Meeting of shareholders (AGM) scheduled for

28 March 2013, in Zurich, Switzerland, in addition to the approval of the annual accounts, include:


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Dividend The Board of Directors proposes a dividend of CHF 0.20 per registered share (2011: CHF

0.15) reflecting the improved net profit of the year and a payout ratio of 44%. 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 8 April 2013 (ex-dividend date: 3 April

2013, record date: 5 April 2013).

Addition to the Board of Directors To drive the implementation of Nobel Biocares strategy, one of

the priorities of the Board of Directors has been to broaden and strengthen its operational and

management expertise, in particular in the area of medical technology and implant-based tooth

restoration. Following this priority, the Board of Directors proposes Franz Maier to be elected as a

Member of the Board. Franz Maier brings a successful track record of over 20 years in both functional

and general management positions, most recently as an Executive Vice President Sales and Member of

the Executive Board of Straumann in the medical devices and biotechnology industry. All existing

Members of the Board stand for re-election.

Outlook

Nobel Biocare believes that the market conditions for 2013 will remain difficult, similar to 2012.

In this environment, the Company targets to modestly build market share and deliver modest revenue

growth. Based on this and the initiated measures, and barring any unforeseen events, Nobel Biocare

expects to deliver an EBIT margin improvement of 50 to100 bps at constant exchange rates (CER).

Nobel Biocare is moving from rebuilding to a phase of continual performance improvements. Within

the next 3 to 5 years, assuming markets improve beyond 2013 to modest mid-single digit growth, Nobel

Biocare targets growing at least in line with the market and to improve EBIT margin also continually

between 50 to 100 bps per annum at constant exchange rates.

Nobel Biocare (NOBN, SIX Swiss Exchange) is a world leader in innovative restorative and esthetic dental

solutions. As a complete solutions provider, Nobel Biocare offers the most comprehensive range of solutions

from tooth to root, for single tooth to fully edentulous indications. The solutions portfolio covers dental

implants (including the key brands NobelActive, Brnemark System and NobelReplace, individualized

prosthetics and equipment (NobelProcera, guided surgery solutions and biomaterials). Nobel Biocare has

approximately 2500 employees and recorded revenue of EUR 580.5 million in 2012. The company is head-

quartered in Zurich, Switzerland. Production takes place at seven sites located in Canada, Israel, Japan,

Sweden, and the US. Nobel Biocare has 34 direct sales organizations.

Further information is available from:

Sha Demokan

Investor and Corporate Relations

Tel: +41 43 211 42 30, +41 79 430 81 46

[email protected]


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The complete Full Year Report 2012 is available in English, while an abridged version of the report is

available in German. Both documents can be downloaded from the Nobel Biocare website at

http://corporate.nobelbiocare.com/en/investors and http://corporate.nobelbiocare.com/de/investors,

respectively. A preliminary PDF version of the Annual Report 2012 in English can be downloaded via

www.nobelbiocare.com or obtained from [email protected].

As Nobel Biocare is covered by various financial analysts, the company has contracted Vara Research to

periodically update the consensus analysis, based on the estimates of all participating brokerage firms.

The most recent analyst consensus can be accessed at any time via the following site:

http://corporate.nobelbiocare.com/en/investors/financial-analysis/analyst-consensus.aspx.

Investor and analyst presentation

An investor and analyst presentation in English will be held today, 19 February 2013, at 10.00 am CET atthe SIX Swiss Exchange, ConventionPoint, Auditorium, Selnaustrasse 30, Zurich, Switzerland.

This presentation can be listened to live via audio-webcast at www.nobelbiocare.com/investors and is

also accessible via telephone conference, using the dial-in numbers below:

+41 (0)91 610 56 00 Continental Europe

+44 (0)203 059 58 62 UK

+1 (1) 631 570 56 13 USA

For additional local dial-in numbers, please Investors section of our website: www.nobelbiocare.com.

To ensure timely participation, please call approximately 510 minutes prior to the times indicated above.

Recording of the webcast will be available on the website shortly after the end of the conference.

Financial calendar:

Annual General Meeting 28 March 2013

Interim Report 1, 2013 25 April 2013Interim Report 2, 2013 22 August 2013

Interim Report 3, 2013 07 November 2013

Full Year Report 2013 18 February 2014


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Disclaimer

This media release contains forward-looking statements based on beliefs of Nobel Biocares management. When used

in this media release, words such as anticipate, believe, estimate, expect, intend, plan and project are

intended to identify forward-looking statements. They may involve risks and uncertainties, including technologicaladvances in the medical field, product demand and market acceptance, the effect of economic conditions, the impact

of competitive products and pricing, foreign currency exchange rates and other risks. These forward-looking statements

reflect the views of Nobel Biocare as of the date made with respect to future events and are subject to risks and uncer-

tainties. All of these forward-looking statements are based on estimates and assumptions made by management of

the company and are believed to be reasonable, though are inherently uncertain and difficult to predict. Actual results

or experience could differ materially from the forward-looking statements. Nobel Biocare disclaims any intention or

obligation to update these forward-looking statements.


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Selected financial informationin EUR million Q4 2012 Q4 2011 FY 2012 FY 2011

Income statement

Revenue 153.0 154.6 580.5 569.2

Gross profit 114.7 117.2 437.5 432.5

Operating expenses 100.4 94.2 368.8 360.4

Profit from operations (EBIT) 14.3 23.0 68.7 72.1

Profit before tax 13.8 18.7 61.0 55.5

Income tax expense 2.6 5.4 15.2 15.7

Profit attributable to owners of Nobel Biocare 11.2 13.3 45.8 39.8

Balance sheet

Non-current assets 297.8 324.5

Current assets 302.8 267.7

Total equity 325.0 281.5Non-current liabilities 140.6 136.8

Current liabilities 135.0 173.9

Cash and cash equivalents including bank overdraft 146.6 107.5

Miscellaneous

Net cash from operating activities 36.5 42.2 103.0 93.1

Depreciation, amortization and impairment losses 7.6 8.8 32.0 32.5

Investments in property, plant and equipment 2.1 3.0 7.6 17.0

Research and development expenses 10.3 8.0 35.0 29.0

Employees as of the end of the period (number) 2496 2472

Key ratios

Revenue growth (%) 1.1 0.9 2.0 1.3

Revenue growth in local currencies (%) 3.4 0.2 2.7 0.7

Gross margin (%) 75.0 75.8 75.4 76.0

Operating expenses/revenue ratio (%) 65.6 60.9 63.5 63.3

EBITDA margin (%) 14.3 20.6 17.4 18.4

Operating (EBIT) margin (%) 9.4 14.9 11.8 12.7

Net profit margin (%) 7.3 8.6 7.9 7.0

Return on average equity (%) 1 15.2 14.0

Equity/assets ratio (%) 54.1 47.5

Share information

Number of shares as of end of period 123784530 123784530

Average number of shares outstanding 123054603 122775158

Share price as of end of period (CHF) 7.76 10.92

Market value as of end of period (MCHF) 961 1352

Basic earnings per share (EUR) 0.09 0.11 0.37 0.32

Diluted earnings per share (EUR) 0.09 0.11 0.37 0.32

Equity per share (EUR) 2.63 2.27

1 Includes net profit for the last four quarters over average equity for the last four quarters


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Audit procedures

The condensed interim report has not been audited. However, the report is based on the consolidated

balance sheet as of 31 December 2012, the consolidated statements of income, comprehensive income,

changes in equity and cash flows for the financial year 2012, and the explanatory notes. The incomestatement, statement of comprehensive income and cash flow statement for the three-month period

from 1 October to 31 December 2012 were not subject to any audit procedures.


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Condensed consolidatedfinancial statements 2012FULL-YEAR REPORT 2012

Nobel Biocare Holding AG, P.O. Box, CH-8058 Zurich Airport

Tel +41 (0) 43 211 42 00


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Income statement

in EUR 000 Note Q4 2012 Q4 2011 FY 2012 FY 2011

Revenue 6 152994 154621 580485 569179

Cost of goods sold 38255 37406 143003 136677

Gross profit 114739 117215 437482 432502

Selling and marketing expenses 1 69557 66066 259536 252219

Administrative expenses 1 20518 20077 74252 79152

Research and development expenses 10346 8028 35008 29005

Profit from operations (EBIT) 14318 23044 68686 72126

Financial income 7 683 414 1207 2335

Finance cost 7 2338 3882 9076 14318

Net foreign exchange result 7 1123 883 178 4674

Profit before tax 13786 18693 60995 55469

Income tax expenses 2636 5428 15146 15688

Profit attributable to owners of Nobel Biocare 11150 13265 45849 39781

Basic earnings per share (EUR) 0.09 0.11 0.37 0.32

Diluted earnings per share (EUR) 0.09 0.11 0.37 0.32

1 Certain comparatives have been reclassified from administrative to selling and marketing expenses.

Statement of comprehensive income

in EUR 000 Note Q4 2012 Q4 2011 FY 2012 FY 2011

Profit attributable to owners of Nobel Biocare 11150 13266 45849 39781

Other comprehensive income:

Foreign currency translation differences 4916 17913 523 37276

Effective portion of changes in fair value

of net investment hedges 867 633

Reclassification of foreign currency translation

differences to income statement, net of tax 7 508 1217

Effective portion of changes in fair value

of cash flow hedges, net of tax 1158 257 3474 6397

Net change in fair value of cash flow hedges

reclassified to income statement, net of tax 7 490 109 1315 2649

Total other comprehensive income/(expenses)

for the period, net of tax 3381 18273 4679 45105

Total comprehensive income/(expenses) for the

period attributable to owners of Nobel Biocare 7769 31539 50528 5324


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Balance sheet

in EUR 000 Note 31 December 2012 31 December 2011

Assets

Property, plant and equipment 70950 86331

Intangible assets 205674 212558

Non-current receivables 3940 3420

Deferred tax assets 17274 22235

Total non-current assets 297838 324544

Inventories 20433 23946

Trade and other receivables 96217 109362

Current income tax assets 17411 5799

Prepaid expenses and accrued income 13743 13754

Derivative financial instruments 8369 7389

Cash and cash equivalents 1 146571 107456

Total current assets 302744 267706

Total assets 600582 592250

Equity and liabilities

Share capital 8 31861 31861

Share premium 108547 111023

Treasury shares 16185 21498

Retained earnings 200825 160118

Total equity attributable to owners of Nobel Biocare 325048 281504

Provisions 3134 3172

Pension liabilities 10353 8643

Loans and borrowings 99505 98400

Deferred tax liabilities 27324 26269

Other non-current liabilities 244 357

Total non-current liabilities 140560 136841Loans and borrowings 36928

Trade payables 19191 15378

Current provisions 8763 5935

Current income tax liabilities 38941 36763

Other current liabilities and derivatives 11443 16748

Accrued expenses and deferred income 56636 62153

Total current liabilities 134974 173905

Total liabilities 275534 310746

Total equity and liabilities 600582 592250

1 As of 31 December 2012, the Group held no restricted cash (31 December 2011: EUR 7122 k).


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Statement of changes in equity

in EUR 000 Note Share Share Treasury Trans- Hedging Other Total Total equity

Capital premium shares lation reserve retained retained attributable

reserve earnings earnings to owners

of NobelBiocare

Balance as of 1 January 2011 31861 151113 40216 123281 2820 297692 177231 319989

Comprehensive income:

Profit for the year 39781 39781 39781

Other comprehensive expenses, net of tax 36059 9046 45105 45105

Total comprehensive income/(expenses) 36059 9046 39781 5324 5324

Transactions with owners of Nobel Biocare:

Acquisition of treasury shares 8 5056 5056

Expiry of call options on own shares 22720 22720

Allocation of shares to share plan participants 301 1054 753 753

Convertible bond equity component 17069 17069 17069

Share-based payment expenses, net of tax 10 4911 4911 4911

Dividends to owners of Nobel Biocare relating to 2010 33016 33016 33016

Total transactions with owners of Nobel Biocare 40090 18718 11789 11789 33161

Balance as of 31 December 2011 31861 111023 21498 159340 6226 325684 160118 281504

Balance as of 1 January 2012 31861 111023 21498 159340 6226 325684 160118 281504

Comprehensive income:

Profit for the year 45849 45849 45849

Other comprehensive income, net of tax 110 4789 4679 4679

Total comprehensive income/(expenses) 110 4789 45849 50528 50528

Transactions with owners of Nobel Biocare:

Sale of treasury shares 8 1792 3960 2168

Allocation of shares to share plan participants 684 1353 669 669

Share-based payment expenses 10 6117 6117 6117

Dividends to owners of Nobel Biocare relating to 2011 9 15269 15269 15269

Total transactions with owners of Nobel Biocare 2476 5313 9821 9821 6984

Balance as of 31 December 2012 31861 108547 16185 159450 1437 361712 200825 325048


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Cash flow statement

in EUR 000 Note Q4 2012 FY 2012 FY 2011

Profit before tax 13787 60995 55469

Adjusted for:

Depreciation, amortization and impairment losses 7612 32033 32451

Net financial result 7 532 7691 16657

Share-based payment expenses 10 1066 6117 4911

Other non-cash (income)/expenses 2050 453 3896

Changes in working capital and provisions:

Decrease in trade and other current receivables 4680 11607 25144

(Increase)/decrease in inventories 1196 2966 203

Increase/(decrease) in trade and other current liabilities 6675 3240 7772

Increase/(decrease) in provisions, accrued expenses and deferred income 2530 2859 3000

Income taxes paid 1222 19285 32655

Net cash from operating activities 36514 102958 93106

Purchases of property, plant and equipment 2126 7576 16987Purchases of intangible assets 865 2834 1367

Interest received 676 1196 2083

Other investing and hedging activities 5546 2911 30528

Net cash used in investing activities 7861 6303 46799

Acquisition of treasury shares 8 5056

Proceeds from sale of treasury shares 8 2168

Proceeds from current interest-bearing loans and borrowings 7 30000 36928

Repayment of current interest-bearing loans and borrowings 7 66928 262812

Proceeds from non-current interest-bearing loans and borrowings 7 95775

Hedging of interest-bearing loans and borrowings 4412

Interest paid 4943 7053 5829

Dividends paid 9 15269 33016

Net cash used infi

nancing activities 4943 57082 178422

Increase/(decrease) in cash and cash equivalents 23710 39573 132115

Cash and cash equivalents at beginning of period 124200 107456 239519

Effect of exchange rate differences on cash held 1339 458 52

Cash and cash equivalents at end of period 1 146571 146571 107456

1 As of 31 December 2012, the Group held no restricted cash (31 December 2011: EUR 7122 k).


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Notes to the condensed consolidated financial statements

Note 1 Organization

Nobel Biocare Holding AG (the Company) is a limited liability company incorporated and domiciled in

Switzerland. The condensed consolidated financial statements of Nobel Biocare for the year ended31December2012 comprise the Company and its subsidiaries (the Group).Nobel Biocare is a highly focused and specialized leader in the market of implant-based dental

restorations. The Groups broad portfolio includes dental implant systems for all indications, a

comprehensive range of high-precision individualized prosthetics, CAD/CAM systems, diagnostics,

treatment planning and guided surgery solutions. Nobel Biocare supports its customers through all

phases of professional development, offering world-class training and education as well as a range of

practice support and patient information materials. Nobel Biocare is headquartered in Zurich,

Switzerland.

The condensed consolidated financial statements of Nobel Biocare Group were authorized for issue by

the Board of Directors of Nobel Biocare Holding AG on 18 February 2013.

Note 2 Statement of compliance

The Group applies International Financial Reporting Standards (IFRS). The condensed consolidated

financial statements have been prepared in accordance with the requirements of IAS 34 Interim Financial

Reporting and should be read in conjunction with the audited consolidated financial statements for the

year ended 31December 2012.Note 3 Accounting policies

The accounting policies are the same as those applied in the consolidated financial statements for theyear ended 31 December 2012.

Note 4 Basis of preparation

The condensed consolidated financial statements include all the subsidiaries controlled by Nobel Biocare

and are presented in euro (EUR), rounded to thousands.

The preparation of interim financial statements requires management to make judgments, estimates and

assumptions that affect the application of policies and reported amounts of assets and liabilities, income

and expenses, as well as the disclosure of contingent liabilities. Actual results may differ from these

estimates. Critical judgments made by management in the application of IFRS and key sources of

estimation uncertainties were the same as those applied to the consolidated financial statements for the

year ended 31December2012.Note 5 Seasonality

The Group is not exposed to material seasonal fluctuations in its operations.

Note 6 Operating segments

Operating segments are determined based on the reports reviewed by the Board of Directors that are

used to track performance, make strategic decisions and allocate resources to the segments.


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Operating segments are identified geographically as the business is managed on a global basis and is

run in three geographical areas. The business contribution is derived from sales, the cost of goods

purchased from manufacturing sites and expenses related to the sale of products in the respective

regions. Certain administrative expenses directly attributable to the sale of products are also allocated to

the three geographic regions. The Board of Directors reviews and assesses the business (i.e. sales andbusiness expenses) on this basis.

Revenue arises from two integrated product groups, Implant system products and Individualized

products. These products are sold in all operating segments, often with both Implant system and

Individualized products forming part of a combined offer as Nobel Biocare is a full-solution provider.

in EUR 000 Europe, Middle East Americas Asia/Pacific Total Group

and Africa (EMEA)

FY 2012 FY 2011 1 FY 2012 FY 2011 1 FY 2012 FY 2011 FY 2012 FY 2011

External sales 230140 236942 228441 208641 121904 123596 580485 569179

Share of total revenue 40% 41% 39% 37% 21% 22% 100% 100%

Business expenses 141840 139478 120805 112582 65989 65708 328634 317768

Business contribution 88300 97464 107636 96059 55915 57888 251851 251411

1 Prior year figures are reclassified to reflect changes in the management structure.

Certain expenses, presented in the reconciliation, are not attributable to a particular segment and are

reviewed as a whole across the Group irrespective of geographic origin. Unallocated business expenses

include certain production costs remaining with the manufacturing sites. Functional costs comprise

headquarter and plant functions, which include global marketing, global symposia events, quality,

logistics, IT, research and development, NobelProcera development, legal and finance. Also included are

reconciling and other items, e.g., adjustments and eliminations made in preparing the financial

statements. The business contribution also excludes the effects of Group-wide equity-settled share-

based expenses and depreciation, amortization and impairment expenses. The revenue from externalcustomers reported to the Board of Directors is measured in a manner consistent with that in the income

statement. There are no significant sales between the segments. No individual customer represents a

significant portion of the Groups revenue.

Reconciliation

in EUR 000 FY 2012 FY 2011

Business contribution 251851 251411

Unallocated business expenses 18150 13982

Functional costs 126897 128011

Depreciation, amortization and impairment losses 32033 32451

Share-based payment expenses 6117 4911

Reconciling and other items 32 70

Operating profit (EBIT) 68686 72126

Net financial result 7691 16657

Profit before tax 60995 55469


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Note 7 Net financial result

in EUR 000 Q4 2012 Q4 2011 FY 2012 FY 2011

Interest income 683 414 1207 2335

Financial income 683 414 1207 2335

Interest expenses 1331 2632 5084 10029

Net change in fair value of interest rate swap (cash flow

hedge) reclassified from other comprehensive income 226 241 904 241

Other financial expenses 781 1009 3088 4048

Finance cost 2338 3882 9076 14318

Net foreign exchange losses 2484 5858 5148 28056

Net derivative instruments at fair value through profit or loss 2834 5505 5769 35798

Net change in fair value of cash flow hedges reclassified

from other comprehensive income 773 530 443 3068

Net foreign exchange result 1 1123 883 178 4674

Net financial result 532 4351 7691 16657

1 Foreign currency gains and losses have been separated from financial income and finance cost to better reflect the nature of income and losses arising from financial in-

struments. Prior year figures have been reclassified accordingly.

In 2012, interest expenses related mainly to the CHF 120000 k straight bond issued on 10 October

2011, and to amounts that had been drawn on the EUR 330000 k syndicated banking facility. On 6

February 2012, EUR 36928 k, which had been drawn in 2011, was repaid, and a further EUR 30000 k

was drawn and later repaid on 8 May 2012. As of 31 December 2012, no drawings on the syndicated

banking facility were outstanding. In 2011, interest expenses related mainly to the CHF 385000 k

convertible bond, which was outstanding until 8 November 2011.

A forward-starting interest rate swap had been put in place to protect against interest rate changes prior

to the issuance of the currently outstanding straight bond. The net change in the fair value of that hedge

is being reclassified from other comprehensive income over the term of the bond and is shown under

finance cost.

Other financial expenses mainly comprise fees for the EUR 330000 k syndicated banking facility.

Net foreign exchange gains and losses arise from operating in multiple currencies, while gains and

losses on derivative instruments result from hedging such exposures. In 2011, derivative instruments at

fair value through profit or loss included option premiums paid to hedge the economic risk of the rising

Swiss franc against the euro in conjunction with the approaching redemption of the convertible bond. As

a result of the decision of the Swiss National Bank in September 2011 to set a minimum exchange rate

of CHF 1.20 to the euro, these options lost their value resulting in a loss of EUR 11648 k. This amount

was included within the cash flow statement under other investing and hedging activities along with

rollover effects on derivatives.

Note 8 Equity

Share capital

The share capital of Nobel Biocare Holding AG is held in Swiss franc (CHF). The number of issued shares

by Nobel Biocare Holding AG on 31 December 2012 totaled 123784530 (2011:123784530) with a parvalue of CHF 0.40 per share, fully paid up.


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The share capital may be increased by issuing no more than 247620 shares (2011: 247620), each with a

par value of CHF 0.40, to be fully paid up, equaling an amount of no more than CHF 99048

(2011:CHF99048) by virtue of the exercise of options granted to employees and officers of the Group.

In addition, the share capital may be increased by an amount of up to CHF 10 million by issuing up to25million fully paid-up registered shares with a nominal value of CHF 0.40 following the exercise ofconversion and/or option rights which are granted in connection with the issuance of bonds or similar

debt instruments by the Company or one of its Group companies in capital markets or in connection

with a transaction.

The holders of registered shares are entitled to receive dividends as declared from time to time and are

entitled to one vote per share at meetings of the Company. All shares rank equally with regard to the

Companys residual assets.

On 14 March 2012, the Group sold 240000 treasury shares that had been held to cover its exposure

from the performance share unit plan for consideration of EUR 2168 k, and on 2 July 2012, 81981treasury shares were granted to share plan participants as described in note 10. On 16 March 2011, the

Group acquired in total 360754 treasury shares to cover its existing exposure from the performance

share unit plan for consideration of EUR 5056 k.

Note 9 Dividends

On 29 March 2012, the AGM approved a dividend of CHF 0.15 per registered share to be paid out ofreserves without deduction of withholding tax. The dividend was paid to shareholders on 5 April 2012

out of reserves without deduction of withholding tax. The total amount of the dividend paid was

CHF18.4million or EUR 15.3 million.On 18 February 2013, the Companys Board of Directors decided to propose to the AGM a dividend to

shareholders of CHF 0.20 per registered share to be paid out of reserves without deduction of

withholding tax. The total amount of the proposed dividend is CHF 24.6 million or approximately

EUR20million depending on exchange rates at the pay-out date.Note 10 Share-based payment transactions

Performance share unit program (PSUP)

This long-term incentive plan covers executives of operating units and the headquarters with a single,

global program. Participants are granted performance-based share units (PSUs) under the PSUP. Vesting

of these shares is subject to specific performance achievements over a graded three-year period where

one-third of the share units vests after one year, one-third after two years and one-third after three years.The PSUP is accounted for as an equity-settled share-based payment plan under IFRS 2.

Vesting is subject to a service period and to the achievement of a predefined performance of the Nobel

Biocare (NOBN) share price relative to the Swiss Market Index (SMI) or the Swiss Leader Index (SLI) for

the period. If this relative performance is achieved, each share unit will be converted into a pre-

determined amount of Nobel Biocare shares at the vesting date. The performance share units cannot be

settled in cash.


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The fair value of services received in return for performance share units granted is measured by

reference to the fair value of units granted. Grant date fair value per unit was measured based on a

Monte Carlo simulation. Market conditions are taken into account when estimating the fair value of the

instruments granted. Service conditions are not taken into account for the grant date fair value

measurement of the services received.

As of 28 February 2012, a total of 581847 performance share units 2012 with similar terms and

conditions as the 2011 program were granted to the plan participants.

Share plan

A separate share-based payment plan was established for members of the Board of Directors in 2008 as

they do not participate in the PSUP. On 2 July 2012, share plan participants were granted 81981 shares

(2011: 56880 shares) of Nobel Biocare Holding AG for no consideration. A five-year transfer restriction

applies for the share plans 2012 and 2011.

in EUR 000 Q4 2012 Q4 2011 FY 2012 FY 2011

Plan

Performance share unit plan 1066 701 5448 4158

Share plan 44 669 753

Total 1066 745 6117 4911

Note 11 Ongoing disputes

Litigation / Legal proceedings

At the beginning of July 2005, a lawsuit against Nobel Biocare claiming patent infringement was filed by

a doctor in New York. The suit concerns two patents, which the doctor alleges are infringed by the

Stargrip and Replace products. The suit was put on hold by the court pending reexamination

proceedings at the US Patent Office regarding one of the patents. Those proceedings are complete, and

the Court reinstated the litigation in May 2009. Nobel Biocare has evaluated these patents in depth and

has numerous defenses that it will vigorously pursue. Nobel Biocare contends that it does not infringe

these patents, and that the patent claims are invalid based on prior art. No date for a court hearing has

been set yet.

Nobel Biocare was facing claims by an asset management company, which is currently in liquidation due

to lack of corporate structure. In Curaao, the final decision of the Court of Appeals rejected all claims of

the asset management company against Nobel. Consequently, all assets of Nobel Biocare under

attachment since 2008 were unblocked. In the US, the July 2012 decision of the United States Court of

Appeals for the Second Circuit in favor of Nobel Biocare rejecting all requests of the asset managementcompany became final. Nobel Biocare will consider whether to file for sanctions against the asset

management company. Nobel Biocare has filed a court case in Switzerland to establish inter alia for

refund of certain unjustified fees paid. The first instance decision of the court in Zug in February 2012

granted all of Nobel Biocares claims, against which the asset management company has filed appeal. In

January 2013, the liquidator of the asset management company in Zug, Switzerland, indicated that he

would not continue the court proceedings in the Court of Appeals case against the first instance decision

granting Nobel Biocares requests.


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In June 2010, a Canadian company filed a complaint against BioCad Medical Inc. suing for patent

infringement in the Federal Court of Qubec, Canada. The lawsuit alleges that BioCad infringes a

Canadian patent owned by said Canadian company on the production of superstructures for dental

implants. BioCad Medical Inc. and its consulting patent lawyers are of the opinion that no valid claims of

the Canadian companys patent are being infringed and will, therefore, vigorously defend the patentinfringement suit. In addition, Nobel Biocare had filed for invalidation of the respective German patent of

the Canadian company with the German Federal Patent Court and for declaratory judgment with the

competent court in Milan, Italy, that neither the respective Italian nor the German patent of said company

are infringed. In September 2012, the German Federal Patent Court invalidated all claims of the Canadian

companys German patent, a decision against which the Canadian company announced it would appeal.

The main hearing of the court in Milan on the question of its international competence is scheduled for

early 2013. In June 2012 Nobel Biocares US entities received a notice of infringement letter concerning

five US patents of the Canadian company alleging Nobels surgical guides and implant bar overdentures

are infringing. The US Nobel entities filed a Declaratory Judgment action in July 2012 in Federal District

Court Eastern District of Virginia asking the court to declare that Nobel does not infringe the patents

and/or that they are invalid. In January 2013, the court granted Nobels summary judgment motionsagainst the Canadian company, declaring that the US Nobel entities do not infringe the companys

patents. Judgment in favor of Nobel was entered and the case was dismissed with prejudice.

In July 2010, a Californian dentist filed a class action suit in the Federal Court of Los Angeles (USA)

against Nobel Biocare USA LLC, Nobel Biocare AB and Nobel Biocare Holding AG alleging product

defects of NobelDirect implants and claiming damages. In August 2011, the United States District Court

for the Central District of California in Los Angeles granted the dentists motion, holding that the

requirements for a class certification had been met. The certified class includes all individuals in the

United States who have purchased any NobelDirect dental implants other than NobelDirect Groovy.

Nobel Biocare filed for motions for summary judgment and for reconsideration. In August 2012, the

Federal Court narrowed down the class certification to claims under California Unfair Competition Law,

thus considerably reducing the value of the claims at stake and limiting the remedy to restitution (i.e.,

either replacement or refund of the implant). In December 2012, the parties concluded a settlement

agreement while compensation of attorneys costs on the plaintiffs side to be negotiated or determined

by the court.

There are other minor disputes pending regarding contractual obligations, including warranty- and labor-

related disputes, arising from the ordinary business of Nobel Biocare and its subsidiaries.

Note 12 Subsequent events

There have been no material events between 31 December 2012 and the date of authorization thatwould require adjustments to the consolidated financial statements or disclosures.

Documents

2012_nb_FullYearReport_EN_.pdf