Nobel Biocare Profit Tops Estimates as It Cuts European Jobs

Nobel Biocare Holding AG, the second-biggest maker of dental implants, reported fourth-quarter profit that beat estimates as it moved European jobs to faster-growing markets.

Net income fell to 11.2 million euros ($15 million) from 13.3 million euros a year earlier, the Glattbrugg, Switzerland-based company said in a statement today. The earnings beat the average analyst estimate of 9.5 million euros, according to data compiled by Bloomberg.

Nobel Biocare and competitor Straumann Holding AG face weaker sales amid the economic downturn in southern Europe as people put off getting crowns and bridges, which are mostly paid out of pocket. Rivals Biomet Inc. and Zimmer Holdings Inc. reported declining sales during their most recent quarters.

“We anticipate the market environment to remain difficult in the short term, but we are rebuilding Nobel Biocare to perform in all conditions,” Chief Executive Officer Richard Laube said.

Nobel Biocare said it started a cost-savings plan involving job cuts in the fourth quarter. It moved a net 90 jobs to growth markets in the U.S., Brazil, India and China and expanded its research and development team, according to a company slide presentation.

Modest Growth

For 2013, the company expects to “modestly build market share and deliver modest revenue growth” as conditions remain difficult and on par with the previous year. Nobel Biocare aims to deliver a margin improvement of 50 to 100 basis points on earnings before interest and taxes at constant exchange rates.

“Investors had hoped for more aggressive cost-reduction measures and profitability ambitions,” Christoph Gretler, an analyst with Credit Suisse, wrote in a note.

Nobel Biocare fell 3.2 percent to 9.61 Swiss francs in Zurich, ceding yesterday’s 3.2 percent gain and giving the company a market value of 1.2 billion francs ($1.3 billion).

Fourth-quarter sales fell to 153 million euros from 154.6 million euros, topping the average estimate of 151 million euros. The company proposed a dividend of 20 Swiss centimes a share, compared with 15 centimes a share in 2011 and the Bloomberg forecast of 18 centimes.

For 2012, the company reported Ebit of 68.7 million euros and a sales decline of 2.7 percent, excluding currency shifts, in line with its forecasts. Analysts had expected Ebit of 69 million euros.

Oskar Ronner, a former vice chairman at Straumann, withdrew a request yesterday to put himself and two Siemens AG executives on the Nobel board after the company opposed his nominees. Nobel separately nominated a former Straumann executive, Franz Maier, 48, for the board. Shareholders will elect board members at the annual meeting March 28.

(Updates with closing share price in eighth paragraph.)
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