Media Release

Full year report 2012

ZURICH, SWITZERLAND 19 FEBRUARY 2013

Nobel Biocare full year 2012 revenue up 2% and net prot 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 at for the full year (-0.3% at CER) with growth in implant system revenue. Revenue declined in individualized copings and small-unit bridges Operating prot (EBIT) of EUR 68.7 million reecting a margin of 11.8% Continued shift of resources to R&D and growing market organizations were partially offset by efciency gains in administration Net prot 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 gures in EUR million
Q4 2012 Q4 2011 Variance 20112012 2012 2011 Variance 20112012

Revenue Variance at constant exchange rates (CER) Gross prot Gross margin Operating expenses Operating prot (EBIT) EBIT margin Net nancial result Prot before tax Tax Net prot Profit margin Basic earnings per share, EUR Net cash from operating activities

153.0 3.4% 114.7 75.0% 100.4 14.3 9.4% 0.5 13.8 2.6 11.2 7.3% 0.09 36.5

154.6 0.2% 117.2 75.8% 94.2 23.0 14.9% 4.3 18.7 5.4 13.3 8.6% 0.11 42.2

1.1%

580.5 2.7%

569.2 0.7% 432.5 76.0% 360.4 72.1 12.7% 16.6 55.5 15.7 39.8 7.0% 0.32 93.1

2.0%

2.1%

437.5 75.4% 368.8

1.2%

37.9%

68.7 11.8% 7.7 61.0 15.2 45.8 7.9% 0.37 103.0

4.8%

10.0%

15.3%

16.4%

Richard Laube, CEO: We have achieved a number of important milestones with our 2012 results. Prot before tax, net prot 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 efciency programs during the second half of the year. We anticipate the market environment to remain difcult in the short-term but we are rebuilding Nobel Biocare to perform in all conditions.

Business performance update

Table 2: Revenue by region
in EUR million Q4 2012 Q4 2011 * Variance Variance (CER) 2012 2011 * Variance Variance (CER)

Europe, Middle East and Africa (EMEA) Share of total revenue Americas Share of total revenue Asia/Pacic Share of total revenue Total

62.1 41% 61.0 40% 29.9 19% 153.0

63.2 41% 56.8 37% 34.6 22% 154.6

1.7%

2.7%

230.1 40%

237.0 41% 208.6 37% 123.6 22% 569.2

2.9%

3.6%

7.4%

2.8%

228.5 39%

9.5%

1.8%

13.6%

14.9%

121.9 21%

1.4%

8.6%

1.1%

3.4%

580.5

2.0%

2.7%

* A new segment Americas, which reects 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 gures have been reclassied to reect the new regional segment denition.

In 2012, Nobel Biocare generated revenue of EUR580.5million, 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 signicantly 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 the year due to the continued economic and scal challenges and subsequent low patient ow for implantbased tooth restorations. In two large European markets, Spain and Italy, the decline in 2012 was signicant. Nobel Biocare developed at least in line with peers in most markets in Europe. Market share gains were achieved in Russia and France as well as in Italy and Sweden in declining markets. In the Americas, 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 the Asia/Pacic 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 ow declined signicantly 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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Alpha-Bio Tec (ABT) is targeting customer groups with higher price sensitivity and simpler product and solutions needs. ABT continued to show growth rates above 20% thanks to the expansion of its distributor network and increasing market share in its distributor markets. Implant systems (84% of Group revenue) declined 1.3% (CER) for the year. NobelActive continued to grow at strong rates throughout the year, supported by the introduction of the 3.0 version and was up 13% over the prior year. The new implant launches NobelReplace Platform Shift (PS) and Conical Connection (CC) developed on track, attracting new customers and positively contributing to the development of NobelReplace, which is the Groups largest implant line. Excluding Japan, where implant treatments were negatively affected as described above, implant systems grew 1.9% (CER) for the full year. The individualized business (16% of group revenue) declined 9.2% in 2012. In this area high-end implant-retained solutions were at, while the decline was above 20% in scanners and traditional tooth-based restorations, where production is shifting towards chair-side and in-lab. The recently launched NobelClinicianTM treatment planning system, also uniquely available on Mac OS, is improving treatment safety and gaining new subscribers. This tool has sold disproportionally well in Japan in view of the media coverage on implant safety. In October 2012, the rst iPad controlled drill motor OsseoCareTM Pro were delivered and beta testing in the NobelProcera Scan and Design Center started, enabling laboratory customers a convenient way to access precision individualized components to treat edentulous patients.

Financial performance update Gross prot in the reporting period increased to EUR 437.5 million (2011: EUR 432.5 million), reecting a slightly lower gross margin of 75.4% compared with the previous year (2011: 76.0%). The negative sales impact in Japan and the reassessment of a royalty liability related to prior years accounted for the decline in margin. A positive margin impact from currency and a slightly more favorable business mix (implant systems versus individualized) was broadly offset by a higher share of ABT sales and expenses for the build-up of the new NobelProcera Scan and Design Center. The gross margin in individualized was largely in line with a year ago at just about 45%. Operating expenses in the full year were EUR 368.8 million (2011: EUR 360.4 million). In the course of 2012 various initiatives were put into place to reshape Nobel Biocare into a tter, performance-oriented organization. Rightsizing of some functions was driven by reallocating resources to growth drivers such as R&D and training and education. Further, Nobel Biocare rolled out its value-added program into additional markets, shifted sales resources from countries in decline in Europe to growing markets, such as the US, China and Brazil. In addition, the company conducted six successful Nobel Biocare symposia in Europe and North America. As innovative products and solutions are a key growth driver for the business, over 50 R&D projects were initiated and R&D spending increased by EUR 6.0 million or 21% (16% CER). This was partly funded through a reduction of administrative functions and expenses of EUR 4.9 million or 6% (-9% CER). The efciency improvement programs that were initiated throughout the organization resulted in a reduction in headcount in the fourth quarter of the year. Overall operating expenses in 2012 include EUR 13.0 million from currency translation and EUR 3.7 million from nonrecurring costs related to the accelerated measures to improve efciency as well as increased costs related to legal cases. Excluding costs for termination and severance across functions, operating expenses in relation to sales at CER were broadly in line with prior year, and slightly lower in reported currency.

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Prot 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 nancial result in the reporting year was EUR-7.7million (2011: EUR-16.6million). Interest expense 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 benetted 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 favorable regional prot contribution mix as well as favorable outcome of certain tax disputes led to this improved result despite a higher prot before tax. The underlying tax rate is 24.8% compared with 28.3% in the prior year. Net prot for the year was up by 15.3% to EUR 45.8 million (2011: EUR 39.8 million), reecting a higher net prot margin of 7.9% (2011: 7.0%). The improved net nancial 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 ow 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 sufcient nancial exibility 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 workow. 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, rst 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 with leading 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 elds has lled up quickly and only a few seats are left. Operating efciency and effectiveness Nobel Biocare is systematically reshaping into a tter performance- oriented organization. Efciency 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 signicant 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 Mengis assumed 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 eld including the dental industry. Most recently, he held senior managementpositions in Project 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) reecting the improved net prot 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 difcult, 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 headquartered 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 suha.demokan@nobelbiocare.com

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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 investor.relations@nobelbiocare.com. As Nobel Biocare is covered by various nancial analysts, the company has contracted Vara Research to periodically update the consensus analysis, based on the estimates of all participating brokerage rms. The most recent analyst consensus can be accessed at any time via the following site: http://corporate.nobelbiocare.com/en/investors/nancial-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 at the 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 +44 (0)203 059 58 62 +1 (1) 631 570 56 13 Continental Europe UK 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 Interim Report 1, 2013 Interim Report 2, 2013 Interim Report 3, 2013 Full Year Report 2013 28 March 2013 25 April 2013 22 August 2013 07 November 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 technological advances in the medical eld, 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 reect the views of Nobel Biocare as of the date made with respect to future events and are subject to risks and uncertainties. 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 difcult 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 nancial information

in EUR million Q4 2012 Q4 2011 FY 2012 FY 2011 Income statement Revenue Gross prot Operating expenses Prot from operations (EBIT) Prot before tax Income tax expense Prot attributable to owners of Nobel Biocare Balance sheet Non-current assets Current assets Total equity Non-current liabilities Current liabilities Cash and cash equivalents including bank overdraft Miscellaneous Net cash from operating activities Depreciation, amortization and impairment losses Investments in property, plant and equipment Research and development expenses Employees as of the end of the period (number) Key ratios Revenue growth (%) Revenue growth in local currencies (%) Gross margin (%) Operating expenses/revenue ratio (%) EBITDA margin (%) Operating (EBIT) margin (%) Net prot margin (%) Return on average equity (%) 1 Equity/assets ratio (%) Share information Number of shares as of end of period Average number of shares outstanding Share price as of end of period (CHF) Market value as of end of period (MCHF) Basic earnings per share (EUR) Diluted earnings per share (EUR) Equity per share (EUR) 1 Includes net prot for the last four quarters over average equity for the last four quarters 0.09 0.09 0.11 0.11 123784530 123054603 7.76 961 0.37 0.37 2.63 123784530 122775158 10.92 1352 0.32 0.32 2.27 1.1 3.4 75.0 65.6 14.3 9.4 7.3 0.9 0.2 75.8 60.9 20.6 14.9 8.6 2.0 2.7 75.4 63.5 17.4 11.8 7.9 15.2 54.1 1.3 0.7 76.0 63.3 18.4 12.7 7.0 14.0 47.5 36.5 7.6 2.1 10.3 42.2 8.8 3.0 8.0 103.0 32.0 7.6 35.0 2496 93.1 32.5 17.0 29.0 2472 297.8 302.8 325.0 140.6 135.0 146.6 324.5 267.7 281.5 136.8 173.9 107.5 153.0 114.7 100.4 14.3 13.8 2.6 11.2 154.6 117.2 94.2 23.0 18.7 5.4 13.3 580.5 437.5 368.8 68.7 61.0 15.2 45.8 569.2 432.5 360.4 72.1 55.5 15.7 39.8

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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 ows for the nancial year 2012, and the explanatory notes. The income statement, statement of comprehensive income and cash ow 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 consolidated nancial statements 2012

FULL-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 Cost of goods sold Gross prot Selling and marketing expenses 1 Administrative expenses 1 Research and development expenses Prot from operations (EBIT) Financial income Finance cost Net foreign exchange result Prot before tax Income tax expenses Prot attributable to owners of Nobel Biocare

152994 38255 114739 69557 20518 10346 14318

154621 37406 117215 66066 20077 8028 23044 414 3882 883 18693 5428 13265

580485 143003 437482 259536 74252 35008 68686 1207 9076 178 60995 15146 45849

569179 136677 432502 252219 79152 29005 72126 2335 14318 4674 55469 15688 39781

7 7 7

683 2338 1123 13786 2636 11150

Basic earnings per share (EUR) Diluted earnings per share (EUR)

0.09 0.09

0.11 0.11

0.37 0.37

0.32 0.32

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

Statement of comprehensive income

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

Prot attributable to owners of Nobel Biocare Other comprehensive income: Foreign currency translation differences Effective portion of changes in fair value of net investment hedges Reclassication of foreign currency translation differences to income statement, net of tax Effective portion of changes in fair value of cash ow hedges, net of tax Net change in fair value of cash ow hedges reclassied to income statement, net of tax Total other comprehensive income/(expenses) for the period, net of tax Total comprehensive income/(expenses) for the period attributable to owners of Nobel Biocare 7 7

11150

13266

45849

39781

4916 867 1158 490 3381 7769

17913 508 257 109 18273 31539

523 633 3474 1315 4679 50528

37276 1217 6397 2649 45105 5324

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Balance sheet
in EUR 000 Note 31 December 2012 31 December 2011

Assets Property, plant and equipment Intangible assets Non-current receivables Deferred tax assets Total non-current assets Inventories Trade and other receivables Current income tax assets Prepaid expenses and accrued income Derivative nancial instruments Cash and cash equivalents Total current assets Total assets
1

70950 205674 3940 17274 297838 20433 96217 17411 13743 8369 146571 302744 600582

86331 212558 3420 22235 324544 23946 109362 5799 13754 7389 107456 267706 592250

Equity and liabilities Share capital Share premium Treasury shares Retained earnings Total equity attributable to owners of Nobel Biocare Provisions Pension liabilities Loans and borrowings Deferred tax liabilities Other non-current liabilities Total non-current liabilities Loans and borrowings Trade payables Current provisions Current income tax liabilities Other current liabilities and derivatives Accrued expenses and deferred income Total current liabilities Total liabilities Total equity and liabilities 1 As of 31 December 2012, the Group held no restricted cash (31 December 2011: EUR 7122 k). 8 31861 108547 16185 200825 325048 3134 10353 99505 27324 244 140560 19191 8763 38941 11443 56636 134974 275534 600582 31861 111023 21498 160118 281504 3172 8643 98400 26269 357 136841 36928 15378 5935 36763 16748 62153 173905 310746 592250

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Statement of changes in equity

in EUR 000 Note Share Capital Share premium Treasury shares Translation reserve Hedging reserve Other retained earnings Total Total equity retained attributable earnings to owners of Nobel Biocare

Balance as of 1 January 2011 Comprehensive income: Prot for the year Other comprehensive expenses, net of tax Total comprehensive income/(expenses) Transactions with owners of Nobel Biocare: Acquisition of treasury shares Expiry of call options on own shares Allocation of shares to share plan participants Convertible bond equity component Share-based payment expenses, net of tax Dividends to owners of Nobel Biocare relating to 2010 Total transactions with owners of Nobel Biocare Balance as of 31 December 2011 10 8

31861

151113

40216

123281

2820

297692

177231

319989

39781 36059 36059 9046 9046 39781

39781 45105 5324

39781 45105 5324

5056 22720 301 17069 22720 1054 753 17069 4911 33016 40090 31861 111023 18718 21498 159340 6226 11789 325684 753 17069 4911 33016 11789 160118

5056 4911 33016 33161 281504

Balance as of 1 January 2012 Comprehensive income: Prot for the year Other comprehensive income, net of tax Total comprehensive income/(expenses) Transactions with owners of Nobel Biocare: Sale of treasury shares Allocation of shares to share plan participants Share-based payment expenses Dividends to owners of Nobel Biocare relating to 2011 Total transactions with owners of Nobel Biocare Balance as of 31 December 2012 10 9 8

31861

111023

21498

159340

6226

325684

160118

281504

45849 110 110 4789 4789 45849

45849 4679 50528

45849 4679 50528

1792 684

3960 1353 669 6117 15269 669 6117 15269 9821 200825

2168 6117 15269 6984 325048

2476 31861 108547

5313 16185 159450 1437

9821 361712

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Cash ow statement
in EUR 000 Note Q4 2012 FY 2012 FY 2011

Prot before tax Adjusted for: Depreciation, amortization and impairment losses Net nancial result Share-based payment expenses Other non-cash (income)/expenses Changes in working capital and provisions: Decrease in trade and other current receivables (Increase)/decrease in inventories Increase/(decrease) in trade and other current liabilities Increase/(decrease) in provisions, accrued expenses and deferred income Income taxes paid Net cash from operating activities Purchases of property, plant and equipment Purchases of intangible assets Interest received Other investing and hedging activities Net cash used in investing activities Acquisition of treasury shares Proceeds from sale of treasury shares Proceeds from current interest-bearing loans and borrowings Repayment of current interest-bearing loans and borrowings Proceeds from non-current interest-bearing loans and borrowings Hedging of interest-bearing loans and borrowings Interest paid Dividends paid Net cash used in nancing activities Increase/(decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Effect of exchange rate differences on cash held Cash and cash equivalents at end of period 1 1 As of 31 December 2012, the Group held no restricted cash (31 December 2011: EUR 7122 k). 9 8 8 7 7 7 7 10

13787

60995

55469

7612 532 1066 2050

32033 7691 6117 453

32451 16657 4911 3896

4680 1196 6675 2530 1222 36514 2126 865 676 5546 7861 4943 4943 23710 124200 1339 146571

11607 2966 3240 2859 19285 102958 7576 2834 1196 2911 6303 2168 30000 66928 7053 15269 57082 39573 107456 458 146571

25144 203 7772 3000 32655 93106 16987 1367 2083 30528 46799 5056 36928 262812 95775 4412 5829 33016 178422 132115 239519 52 107456

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Notes to the condensed consolidated nancial statements

Note 1 Organization Nobel Biocare Holding AG (the Company) is a limited liability company incorporated and domiciled in Switzerland. The condensed consolidated nancial statements of Nobel Biocare for the year ended 31December2012 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 nancial 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 nancial 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 nancial statements for the year ended 31December 2012. Note 3 Accounting policies The accounting policies are the same as those applied in the consolidated nancial statements for the year ended 31 December 2012. Note 4 Basis of preparation The condensed consolidated nancial statements include all the subsidiaries controlled by Nobel Biocare and are presented in euro (EUR), rounded to thousands. The preparation of interim nancial 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 nancial statements for the year ended 31December2012. Note 5 Seasonality The Group is not exposed to material seasonal uctuations 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 identied 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 and business 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 and Africa (EMEA) FY 2012 External sales Share of total revenue Business expenses Business contribution 230140 40% 141840 88300 FY 2011 1 236942 41% 139478 97464 FY 2012 228441 39% 120805 107636 Americas FY 2011 1 208641 37% 112582 96059 FY 2012 121904 21% 65989 55915 Asia/Pacic FY 2011 123596 22% 65708 57888 FY 2012 580485 100% 328634 251851 Total Group FY 2011 569179 100% 317768 251411

1 Prior year gures are reclassied to reect 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 nance. Also included are reconciling and other items, e.g., adjustments and eliminations made in preparing the nancial statements. The business contribution also excludes the effects of Group-wide equity-settled sharebased expenses and depreciation, amortization and impairment expenses. The revenue from external customers reported to the Board of Directors is measured in a manner consistent with that in the income statement. There are no signicant sales between the segments. No individual customer represents a signicant portion of the Groups revenue.

Reconciliation
in EUR 000 FY 2012 FY 2011

Business contribution Unallocated business expenses Functional costs Depreciation, amortization and impairment losses Share-based payment expenses Reconciling and other items Operating prot (EBIT) Net nancial result Prot before tax

251851 18150 126897 32033 6117 32 68686 7691 60995

251411 13982 128011 32451 4911 70 72126 16657 55469

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Note 7 Net nancial result

in EUR 000 Q4 2012 Q4 2011 FY 2012 FY 2011

Interest income Financial income Interest expenses Net change in fair value of interest rate swap (cash ow hedge) reclassied from other comprehensive income Other nancial expenses Finance cost Net foreign exchange losses Net derivative instruments at fair value through prot or loss Net change in fair value of cash ow hedges reclassied from other comprehensive income Net foreign exchange result 1 Net nancial result

683 683 1331 226 781 2338 2484 2834 773 1123 532

414 414 2632 241 1009 3882 5858 5505 530 883 4351

1207 1207 5084 904 3088 9076 5148 5769 443 178 7691

2335 2335 10029 241 4048 14318 28056 35798 3068 4674 16657

1 Foreign currency gains and losses have been separated from nancial income and nance cost to better reect the nature of income and losses arising from nancial instruments. Prior year gures have been reclassied 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 reclassied from other comprehensive income over the term of the bond and is shown under nance cost. Other nancial 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 prot 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 ow 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 par value 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 ofcers of the Group. In addition, the share capital may be increased by an amount of up to CHF 10 million by issuing up to 25million fully paid-up registered shares with a nominal value of CHF 0.40 following the exercise of conversion 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, 81981 treasury 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 CHF0.15 per registered share to be paid out of reserves 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 specic 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 predened 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 predetermined 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 ve-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 Share plan Total 1066 1066 701 44 745 5448 669 6117 4158 753 4911

Note 11 Ongoing disputes Litigation / Legal proceedings At the beginning of July 2005, a lawsuit against Nobel Biocare claiming patent infringement was led 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 Ofce 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 nal 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 management company became nal. Nobel Biocare will consider whether to le for sanctions against the asset management company. Nobel Biocare has led a court case in Switzerland to establish inter alia for refund of certain unjustied fees paid. The rst instance decision of the court in Zug in February 2012 granted all of Nobel Biocares claims, against which the asset management company has led 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 rst instance decision granting Nobel Biocares requests.

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In June 2010, a Canadian company led 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 patent infringement suit. In addition, Nobel Biocare had led 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 ve US patents of the Canadian company alleging Nobels surgical guides and implant bar overdentures are infringing. The US Nobel entities led 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 motions against 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 led 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 certication had been met. The certied class includes all individuals in the United States who have purchased any NobelDirect dental implants other than NobelDirect Groovy. Nobel Biocare led for motions for summary judgment and for reconsideration. In August 2012, the Federal Court narrowed down the class certication 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 laborrelated 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 that would require adjustments to the consolidated nancial statements or disclosures.

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