Annual Report 2003 - Nobel Biocare Corporate

NOBEL BIOCARE ANNUAL REPORT 200329in this region was Japan, with stronggrowth, in particular after the launchof Replace Select.The remaining countries increasedrevenue by EUR 1.1 million, or 6.2percent, to EUR 17.4 million, fromEUR 16.3 million the year before. Inlocal currencies and excluding salesof Gore products, revenue increasedby 24.0 percent.Key eventsIn 2003, Nobel Biocare approachedthe entire dental industry with thenew product offer as part of the newCrown & Bridge & Implant (C&B&I)concept, which incorporates implantsand CAD/CAM Procera technologyin regular dentistry for both teethand implants.In the first quarter, the companylaunched the Procera Piccolo scannerfor high-end ceramic prosthetics forsmall and medium-sized dentallaboratories. Deliveries started in May2003 and by year-end had contributedabout 2 percent of the company'sgrowth in local currencies.In the third quarter, NobelPerfect,the scalloped implant that providesimproved esthetics by preserving bonestructure and soft tissue between theteeth, was introduced. The receptionof this high-priced, niche product hasbeen favorable among the target groupof experienced implant users placingmore than 200 implants per year.NobelPerfect contributed with about1 percent of the company’s revenuegrowth in local currencies for 2003.Revenue growth for the Replacesystem was at exceptionally highlevels in 2003.Gross profitThe gross profit increased in 2003 byEUR 19.9 million, or 8.5 percent, toEUR 255.1 million, from EUR 235.2million in 2002. The product assortmentphase-out was completed by theend of the fourth quarter as planned,resulting in an assortment of about760 articles (down from over 3 400 in2001). The obsolescence cost related toinventory rationalization, expensedunder Cost of sales, was EUR 4.4million in 2003, compared with EUR3.3 million the year before.The gross margin for 2003 was 76.4percent, compared with 75.6 percentin 2002.Profit from operationsFor the full year, profit from operationsbefore goodwill amortization(and restructuring expenses in 2002),EBITA, increased by 33.1 percent inlocal currencies to EUR 96.5 million,from EUR 80.8 million in 2002; 19.4percent in EUR due to the significantnegative currency effects. TheEBITA margin (before restructuringexpenses in 2002) increased to 28.9percent (2002: 26.0 percent). In localcurrencies, the EBITA margin was29.5 percent.In 2003, profit from operations(before restructuring expenses in2002), EBIT, increased by 39.0percent in local currencies to EUR87.2 million (2002: EUR 70.2 million);24.2 percent in EUR. The EBITmargin increased to 26.1 percent from22.6 percent the year before. Thetotal year-on-year currency impact onprofit from operations was a negativeEUR 10.4 million. In local currencies,Gross Margin (%)7674727068666469.075.6 76.42001 2002 2003Operating Expenses in percentof Revenue5040302010053.053.050.52001 2002 2003EBITA Margin (%)252015105018.526.028.92001 2002 2003