Nobel Biocare Cuts Earnings Forecast on Japanese Market
Nobel Biocare Holding AG (NOBN), the world’s second-biggest maker of dental implants, cut its profit forecast as the market for its products in Japan shrank, adding to woes caused by stagnation in Europe. The stock fell the most in three months.
Earnings before interest and taxes will probably be 67 million euros ($87 million) to 70 million euros this year as revenue declines by a “modest” single-digit percentage at constant exchange rates, the Glattbrugg, Switzerland based- company said in a statement today. Nobel Biocare said in August that full-year profit would be near the level of last year, which was 76.6 million euros, excluding certain items.
“Adverse media reporting on implant treatments has impacted patient flow in Japan,” the company said. “The development is difficult to predict at this point in time, but the company does not anticipate any improvement in the coming months.”
Nobel and its larger rival, Straumann Holding AG (STMN), have been suffering from slow economic growth and high unemployment. Dental implants typically aren’t covered by health insurance, so demand is affected by swings in the economy. The market for implants will “decline modestly” this year, and the company’s revenue will move in line with that, Nobel said today.
Nobel Biocare said it gets about 13 percent of sales from Japan, where it’s the market leader. Third-quarter revenue fell 5.1 percent excluding currency shifts, bringing the nine-month decline to 2.4 percent, it said today.
Sales in Japan have been hurt by media coverage about improperly placed implants that caused health problems, Chief Executive Officer Richard Laube said on a conference call with analysts about second-quarter results on Aug. 22. Nobel Biocare’s sales in Japan, which represented two-thirds of its revenue in the Asia-Pacific region, shrank a year earlier following the March 2011 tsunami.
Nobel Biocare fell 4.3 percent to 9.03 Swiss francs at the close of trading in Zurich for the biggest decline since June 25. The stock dropped as much as 8.9 percent earlier in the day. Straumann lost 3.3 percent to 119.90 francs.
The profit forecast is now 10 percent lower than consensus estimates, Ingeborg Oie, an analyst with Jefferies International Ltd., said in an interview today. She had forecast 76.8 million euros for the year.
“The effect definitely seems disproportionate,” she said. “They mentioned it at second quarter but it wasn’t a huge thing that would hold back profit. The situation seems to have deteriorated.”
Straumann said in August that the European implant market would be stable at best compared with last year, and may contract in the second half.
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