UPDATE 2-Nobel Biocare Q1 lags rivals, shares tumble
* Shares tumble 13 pct, underperform main competitor
* Nobel Biocare looking to narrow gap with rivals in 2010
* Q1 net more than doubles on one-off forex gain
(Recasts, adds CEO comments, analysts' comments, shares)
By Katie Reid
ZURICH, April 28, 2010 (Reuters) - Swiss dental implant maker Nobel Biocare (NOBN.VX) trailed rivals with an unexpected drop in first-quarter sales, as patients are still shying away from the more complex and expensive treatments the group focuses on.
Nobel Biocare, the world's largest maker of dental implants, posted a 7 percent slump in sales in the first three months of the year to 136.7 million euros ($182.1 million), falling short of even the lowest estimate in a Reuters poll. [ID:nLDE63L1SJ]
The drop contrasts with a 3 percent rise in first-quarter sales at Swiss rival Straumann (STMN.S) [ID:nLR409944] and a 6 percent increase in sales of dental products at U.S. peer Zimmer (ZMH.N) [ID:nN22224287], and highlights the weakness of Nobel Biocare's product mix.
At 0840 GMT, shares in the group were trading 13.7 percent lower at 25.8 Swiss francs, underperforming a 2.2 percent drop in Straumann shares on an index down 0.7 percent.
"While some improvement in top-line growth would have been logical given the market stabilization and low comparison base, the reported sales performance and associated market share losses is very disappointing," said Credit Suisse analyst Christoph Gretler in a note.
NARROWING THE GAP
Nobel Biocare was more exposed to larger and more complex cases that are often expensive, while rivals are focusing more on single or multi-unit treatments, Chief Executive Domenico Scala said. This has made Nobel Biocare more susceptible to cautious ordering patterns.
Nobel Biocare should, however, narrow the gap on its rivals in the next few quarters as the overall market was likely to return to growth, Scala said, but he cautioned that visibility remained low.
"After Straumann results pointed to some green shoots in the dental market especially in North America, Nobel's 1Q 10 results are a harsh disappointment and show that Nobel is continuing to lose market share," said Sarasin analyst David Kaegi.
Patients cut back on non-urgent dental treatments that can often be very costly during the global financial crisis as they worried about job losses. An improvement in employment rates in the United States and Europe is key to boosting prospects for the sector.
Straumann cautioned on Tuesday that demand was likely to remain sluggish in 2010 and predicted the market would either be flat or grow in the low-single-digit range this year.
Nobel Biocare topped analysts' expectations on the bottom line after net profit more than doubled to 38.7 million euros.
However, the jump was due to a one-off foreign currency gain, leading to a net financial result of 25.3 million euros. (Editing by Rupert Winchester) ($1=.7508 Euro)
* Q1 sales fall 7 percent to 136.7 mln euros, miss poll
* Nobel Biocare looking to narrow gap with rivals in 2010
* Q1 net more than doubles on one-off forex gain
(Recasts, adds CEO comments, analysts' comments, shares)
By Katie Reid
ZURICH, April 28, 2010 (Reuters) - Swiss dental implant maker Nobel Biocare (NOBN.VX) trailed rivals with an unexpected drop in first-quarter sales, as patients are still shying away from the more complex and expensive treatments the group focuses on.
Nobel Biocare, the world's largest maker of dental implants, posted a 7 percent slump in sales in the first three months of the year to 136.7 million euros ($182.1 million), falling short of even the lowest estimate in a Reuters poll. [ID:nLDE63L1SJ]
The drop contrasts with a 3 percent rise in first-quarter sales at Swiss rival Straumann (STMN.S) [ID:nLR409944] and a 6 percent increase in sales of dental products at U.S. peer Zimmer (ZMH.N) [ID:nN22224287], and highlights the weakness of Nobel Biocare's product mix.
At 0840 GMT, shares in the group were trading 13.7 percent lower at 25.8 Swiss francs, underperforming a 2.2 percent drop in Straumann shares on an index down 0.7 percent.
"While some improvement in top-line growth would have been logical given the market stabilization and low comparison base, the reported sales performance and associated market share losses is very disappointing," said Credit Suisse analyst Christoph Gretler in a note.
NARROWING THE GAP
Nobel Biocare was more exposed to larger and more complex cases that are often expensive, while rivals are focusing more on single or multi-unit treatments, Chief Executive Domenico Scala said. This has made Nobel Biocare more susceptible to cautious ordering patterns.
Nobel Biocare should, however, narrow the gap on its rivals in the next few quarters as the overall market was likely to return to growth, Scala said, but he cautioned that visibility remained low.
"After Straumann results pointed to some green shoots in the dental market especially in North America, Nobel's 1Q 10 results are a harsh disappointment and show that Nobel is continuing to lose market share," said Sarasin analyst David Kaegi.
Patients cut back on non-urgent dental treatments that can often be very costly during the global financial crisis as they worried about job losses. An improvement in employment rates in the United States and Europe is key to boosting prospects for the sector.
Straumann cautioned on Tuesday that demand was likely to remain sluggish in 2010 and predicted the market would either be flat or grow in the low-single-digit range this year.
Nobel Biocare topped analysts' expectations on the bottom line after net profit more than doubled to 38.7 million euros.
However, the jump was due to a one-off foreign currency gain, leading to a net financial result of 25.3 million euros. (Editing by Rupert Winchester) ($1=.7508 Euro)
* Q1 sales fall 7 percent to 136.7 mln euros, miss poll
posted by Zo Heri at 7:50 AM
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