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Annual Report 2001

A Summary of 2001 – 4

During 2001 Nobel Biocare salesamounted to SEK 2,663.2 million andthe operating income (EBIT) was SEK363.7 million. The EBITA margin was18.6 percent for the company as awhole. The Dental Implants businessarea’s EBITA margin was 21.1 percent.

President’s statement – 6

The major challenge ahead is to trans-late words and strategies into action byfocusing on what matters most. We aremeeting this challenge by striving to be bigger, better and quicker than ourcompetitors. Everyone working atNobel Biocare is determined and moti-vated. We have a sense of urgency andthe energy to deliver it.

Business concept, vision, objectivesand strategy – 7

Nobel Biocare’s business concept is to enhance quality of life for patients by offering the best permanent and esthetic replacements for lost teeth.During 2002 the company will priori-tise increased profitability for DentalImplants, prepare a new product rangefor new market segments to belaunched in October 2002 and repo-sition Procera to develop synergiesbetween both business areas.

Dental Implants business area – 9

2 Annual Report 2001 Nobel Biocare

Contents

tures and markets products and systems for dental implants under the Brånemark System® and Steri-Oss®/Replace™ brand names. NobelBiocare has a global market share ofaround 38 percent. The business areawas responsible for 87 percent ofNobel Biocare’s sales in 2001.

Procera® business area – 13

The Procera® business area develops,manufactures and markets NobelBiocare’s individually-designed dentalprosthetics based on a unique IT-basedproduction and business process. The business area was responsible for13 percent of Nobel Biocare’s sales in 2001.

Nobel Biocare is the world's leading producer of innovative dental implants and industrialized dental prosthetics. Operations are run in two business areas - Dental Implants and Procera®. The head office is in Göteborg, Sweden. Nobel Biocare's shares have been quoted on the Stockholm Stock Exchange since 1994. Since 1 January 2002, Nobel Biocare’s shares have been quoted on the Most Traded segment of the A-list.

Within the Dental Implants businessarea Nobel Biocare develops, manufac-

Nobel Biocare Annual Report 2001 3

Employees – 20

Nobel Biocare is a company in a con-tinual state of change. One of its mostimportant success factors are its 1,328employees who contribute to makingNobel Biocare the most successful company in the industry.

Production and processes – 22

Nobel Biocare’s production of dentalimplants takes place at Karlskoga,Sweden and Yorba Linda in California,USA. Production of the all-ceramicproducts within Procera® takes place at facilities in Stockholm, Sweden, and at Fair Lawn in New Jersey, USA.

“The background picture on the front cover is a magnified picture of the surface of Nobel Biocare’s new implant surfaceTiUnite™, for shortening the healing timebetween implant and jaw bone.”

Research and development – 18

In recent years Nobel Biocare has hadthe highest pace of launches in theindustry, with over 40 percent of salescoming from products launched in thepast three years. Around 80 employeeswork with R&D in Göteborg, Swedenand Yorba Linda, California, USA.

Quality and the environment – 19

Financial information 2002Annual General Meeting24 April, 5 p.m. at Goteborg’sKonserthus, Stenhammarsalen,Götaplatsen, Göteborg, Sweden

For further information see separatenotice in Göteborgs Posten, SvenskaDagbladet and the Swedish OfficialGazette or visit www.nobelbiocare.se

Q1 Report January – March24 April

Q2 Report January – June14 August

Q3 Report January – September23 October

Other informationInformation about Nobel Biocare can be ordered from:Nobel Biocare ABInvestor RelationsBox 5190SE-402 26 GöteborgTel: +46 31 81 88 00Fax: +46 31 16 31 52e-mail:[email protected]

Glossary – 23

Directors’ Report – 24

Income statements – 29

Balance sheets – 30

Cash flow statements – 32

Comments and notes

to the Annual Accounts – 33

Seven-year review – 41

Key figures – 41

Share data – 42

Definitions – 42

Proposed allocation of profits – 43

Audit report – 43

Shares and shareholders – 44

Risk management and sensitivity

analysis – 46

Board of Directors – 48

Auditor – 48

Senior executives – 49

Addresses – 50

Patient safety and product safety thatmeets regulatory requirements lie at thecentre of Nobel Biocare’s quality work.High material quality, clinical purityand sterility are key factors withinNobel Biocare’s activities. Productionshould be characterized by reliability,efficiency and minimal environmentalimpact.

Financial review

■ Sales increased by 26 percent to SEK 2,663.2 M (2,109.5).

■ Operating income amounted to SEK 363.7 M (289.6).

■ Cash flow from current operations increased to SEK 684.4 M (261.9).

■ The positive year-on-year currency effects on operating income amounted to SEK 23 M.

■ Within the Dental Implants business area, sales increased by 26 percent totalling SEK 2,329.5 M (1,851.0).– EBITA amounted to SEK 490.4 M (310.1),

resulting in an EBITA margin of 21.1 percent.

■ Within the Procera® business area, sales increased by 29 percent totalling SEK 333.7 M (258.5).– EBITA amounted to SEK 4.1 M (16.3).

■ Earnings per share amounted to SEK 7.45 (5.35)

■ The Board of Directors proposes a dividend for 2001 of SEK 3.00 (2.40) per share.

■ On 1 January 2002, Nobel Biocare’s shares were upgraded to the Most Traded-segment of the Stockholm Stock Exchange’s A list.

A Summary of 2001

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■ Procera® Implant Bridge (formerlyAll-in-One) was introduced through-out Europe.

Effective production andcost management■ The integration between the Dental

Implants and Procera business areaswas initiated.

■ The assortment rationalization program was finalised resulting in a reduction of 1,000 articles.

■ The remaining 50 percent share inProcera Sandvik AB was acquiredfrom Sandvik AB.

Management changes■ Heliane Canepa was appointed

President in August 2001.■ Harrieth Sundaeus was appointed

CFO in September 2001.

Strengthened geographicalpositions■ Dental Implants sales showed strong

growth rates in Latin America,Europe and North America. A newsubsidiary was established in Mexico.

■ The growth rate for Proceraimproved outside North America.

Product launches■ The launch of TiUnite for Replace™

started in September.■ Esthetic Abutment, originally

developed for Replace, was launchedfor Brånemark System.

■ Easy Abutment was introduced for Replace.

■ Sales of Procera AllCeram 0.4 mmfor highly esthetic solutions startedand progressed well.

■ Procera® AllZirkon for strongrestorations in molar teeth waslaunched in Germany.

Sales development■ The market position for Brånemark

System® improved significantly dueto innovative product launches.

■ The new TiUnite™ implant surfaceaccounted for more than 50 percentof Brånemark System total implantsales.

■ Replace Select™ remains the fastestgrowing brand on the market.

■ The distribution of Gore tissue regeneration products progressedwell and provided access to new customers.

■ Volume growth of Procera®AllCeramtotalled 18 percent.

■ Sales of Procera Scanners reachedthe target of 20-25 scanners permonth.

Key events during the year

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President’s statement


When appointed President of NobelBiocare last August, I took over a com-pany that is top rate at just about every-thing. We lead the market with excel-lent products, 35 years of clinical expe-rience, a comprehensive and estheticproduct offering, well-recognisedbrands, experienced and skilled em-ployees, and the strongest distributionnetwork covering every key marketglobally. These competitive advantagescoupled with an extraordinary manage-ment team, helped underpin a smoothsuccession.

But we must make the best evenbetter. The fact is, we are neither thefastest growing nor the most profitablecompany in the industry. And that issomething we have to change – quick-ly! Our goal is to reach an EBITAmargin of more than 24 percent withinDental Implants by the end of 2002,and we aim to achieve a sales growthrate of more than 20 percent from2003.

We expect to achieve our targets by getting into markets more quickly,implementing a new sales strategywhich targets general practitioners,strengthening our position in Japanand Germany, increasing penetrationof Replace TiUnite and exploiting thefull potential of Procera. All my col-leagues and I believe the future is oursbecause of our total determination tosucceed.

We will achieve improved operat-ing income through strict cost man-agement governed by what we believewill be conservative sales growth ofless than 15 percent for 2002. We willcontinue to drive the product rational-ization program and increase produc-tivity in purchasing, manufacturingand logistics. There will also be astrong focus on operating expense

We’ll make the best even better



control by setting precise cost limitsthroughout the organisation. This,however, does not mean that we willreduce our spending in R&D andMarketing.

Our goal is to achieve total sales ofmore than SEK 5 billion within threeyears. This means sustainable salesgrowth of more than 20 percent for thewhole company from 2003. The EBITAgoal shall be the highest in the industry.

High potentialWe have a great deal in our favour. Themarket potential for dental implants isenormous. Throughout the industrializedworld there are more than 240 millionpeople missing one tooth or more.However, only 4 million patients havebeen treated with dental implants.

As the baby boomers born in the1940s reach middle age, the market willaccelerate strongly. Having the moneyto spend, this group will put higheremphasis upon esthetic solutions andoptimal function. Dental implants willbe part of a life style and may become ascommon as eyeglasses, or hearing aids.

Dental implant treatment has anoutstanding degree of success based onlong-term clinical data, they are a per-manent solution that look and feel likenatural teeth and the materials used arevery tissue-friendly.

The critical point will be to trainenough dentists who can offer implanttreatment. The method is not part ofthe general training given to dentists inmany countries and dentists thereforehave to be trained through companiessuch as Nobel Biocare. We have there-fore invested in new training centres atboth Göteborg and Yorba Linda. Thetarget for 2002 is to train over 60,000specialists and general practitioners globally.

Procera® –A competitive advantageIn the last days of the year we alsoacquired Sandvik’s 50 percent share in the production company ProceraSandvik AB, giving us full control of theProcera business. It is very important forthe future that we reached this agree-ment enabling us to fully integratedevelopment, manufacturing, marketingand sales of personalized ceramicprosthetics in our organization. Theacquisition will bring countless oppor-tunities within our two business areasgiving us a competitive advantage in ourefforts to grow in the prosthetic marketwhere we still have an insignificantmarket share.

Procera provides personalized highesthetic solutions and is the most effec-tive, profitable way of working, both fordentists and laboratories. Apart from itsesthetical benefits, Procera also helpsopen doors into general practitioners.They represent a major growth poten-tial for Nobel Biocare, and for this seg-ment we have the best esthetic productrange on the market today. The prod-ucts include components for both con-ventional and implant dentistry.

Together with the Replace TiUniteimplants this is the perfect impetus forour sales force to general practitioners.Nobel Biocare is the only company tooffer its customers the choice of onestage and two stage techniques as wellas immediate function procedures.

The Nobel Biocare immediate func-tion procedure and components incombination with Procera prostheticsmakes implant treatment a most naturalpart of restorative dentistry, availablefor all dentists. Implants will no longerbe seen as an exclusive treatment, butthe first choice as soon as a tooth islost. We will lead this important para-

Business concept,vision, objectivesand strategy

Business conceptNobel Biocare aims to enhance patientquality of life by offering the best per-manent and esthetic replacements forlost teeth.

VisionNobel Biocare will be the world leaderin innovative esthetic dental solutions.

ObjectivesTotal sales: >SEK 5 billion within 3 yearsOrganic growth: >20 percent from 2003EBITA: Highest in the industry

StrategyNobel Biocare will increase its market-ing- and sales efforts towards generalpractitioners in order to increase thepenetration for both dental implantsand individually designed prosthetics.

The priorities for 2002 can be summarized as follows:

ProfitabilityIncreasing EBITA-margin within Dental Implants from 21 percent to >24 percent

GrowthPreparing a new, integrated globalmarket offering to drive long termsales growth

Procera®

Strategic repositioning and full integration with the Nobel Biocareorganization

General Practitioners Nobel Biocare’s growth will primarilycome from the fastest growing marketsegment – the general practitioners


Implants and Procera developed duringthe year, manifested by the continuinglaunch of the Procera Implant Bridge.Within Procera we also introduced twonew copings - Procera AllCeram 0.4 mmfor superior esthetics and ProceraAllZirkon for increased strength.

Product rationalization andcustomer focusThe product rationalization scheme hasenabled us to cut the number of articlesoffered by 1,000 to 2,400. We are alsorationalizing supplies, reducing thenumber of suppliers and renegotiatingexisting contracts with our majorpartners, which will contribute to animproved operating margin.

Every measure we take will be carriedout with customer focus at the forefront.Our customers will always be our mainpriority. Absolute Customer Focus is the key ethos for the new Nobel Biocareteam.

As a part of this change, we will reinforce our efforts within the area ofquality and regulatory affairs. A new sector head has already been appointed,reporting directly to the President.Quality issues will characterize every-thing we do in every part of the com-pany. The process will also include ISO 14001certification of our sites atGöteborg, Karlskoga and Yorba Linda in 2002. As a world market leader, Nobel Biocare has a responsibility forsetting an environmental standard for the entire business. I’m convinced thatthis will also provide considerable com-mercial benefits.

Improving resultsThe results for 2001 indicate that we aremoving in the right direction. The EBITAmargin within Dental Implants reached

digm shift due to our unique com-bination of innovative implants, high esthetic prosthetics and IT-based personalized solutions.

With these simplifications of the treatment procedures with our new products we can now focus on a broadermarket segment, the general practition-ers, to make implants the most attractive solution when a tooth is lost.

Replace TiUnite implant system willbe our prime product range for newcustomers based on ease of use, whileBrånemark System will keep its well-established position as the most versatileand documented system for the implantspecialists.

Integrating the sales forces of ourtwo business areas enables us to offerthe dentist a portfolio covering everyneed a patient might have, dependingon the kind of treatment the dentistoffers.

New products strengthenour positionIn 2001 we implemented a number of initiatives for reaching our strategicgoals. We launched several products thathave already strengthened our positionin the market. The innovative surfaceTiUnite is now available for Replace.TiUnite was originally launched in 2000for Brånemark System and has been a tremendous success, accounting formore than 50 percent of the brand’simplants during 2001.

We also launched Easy Abutmentfor Replace and Esthetic Abutment for Brånemark System for cementedprosthetic reconstructions. EstheticAbutment was developed for Replaceand is an example of how integrationbetween the brands has intensified.Even the integration between Dental

21.1 percent. Total Group sales increasedby 26 percent to SEK 2,663.2 millionand operating income (EBIT) beforenon-recurring items amounted to SEK 430.1 million. The operatingmargin before non-recurring items was16.1 percent compared to 12.7 percent in 2000.

The tragic terrorist attacks in theUnited States on September 11, 2001,had an immediate negative impact ondistribution, especially within theProcera sector, where reliability of delivery is a key issue. Together with theslowdown in the US dental laboratorybusiness, this affected the growth ratefor Procera AllCeram which was 18 percent (42 percent). However, sales of scanners, which are a major drivingforce for growth, reached the target of20-25 unit per month in 2001.

The future looks brightThe major challenge ahead is to translatewords and strategies into action byfocusing on what matters most. We are meeting this challenge by striving tobe bigger, better and quicker than ourcompetitors. My team and I – everyoneworking at Nobel Biocare are deter-mined and motivated. We have a sense of urgency and the energy to deliver it.

We have always been pioneers, buttoday we are also an amazing, centredcompany where technology, science andemployees all work together in harmonyto focus on what’s really important – ourcustomers. I believe we can make magichappen in 2002 by leveraging ourstrengths and staying focused on ourcustomers as well as creating good valuefor our shareholders.

Heliane CanepaPresident


Business area Dental Implants


The market’s widestproduct rangeNobel Biocare is the global marketleader within products and systems forimplant treatment – the fastest growingtreatment form within modern dentalcare. The company markets its productsunder the two brands BrånemarkSystem and Steri-Oss/Replace, thewidest range on the market. The com-pany’s customer offering includes im-plants and prosthetics for single teeth as well as complete sets of teeth, forsimple or more complex treatments, forone stage and two stage treatments pro-viding high esthetic results as well as for all types of surfaces. In addition, the company offers related productssuch as drills and other instruments.

Dynamic, comprehensive develop-ment work in recent years has led to a total upgrading of the product rangewith the Brånemark System. NobelBiocare has the highest launch pace inthe industry and more than 40 percentof the business area’s sales come fromproducts, which have been launchedover the past three years.

The need for rationalizing the rangehas increased in line with the launch ofnew products. Nobel Biocare has there-fore implemented a rationalization pro-gram that resulted in a 25 percentreduction of articles during 2001.

TiUnite™ – the successcontinuesThe new implant surface TiUnite, launched during 2000 for BrånemarkSystem was introduced during autumn2001 for Replace and has proven to bevery successful.

Thanks to TiUnite, Nobel Biocarehas assumed the leadership role indevelopment of implant surface charac-

The past year saw a major breakthroughfor Nobel Biocare’s new implant surfaceTiUnite, which was responsible formore than 50 percent of sales of fixtureswithin the Brånemark System and wasalso launched for Replace. During theyear, further steps were taken to gainsynergies between both Nobel Biocare’sbusiness areas and to gain maximumbenefit from the unique competitiveadvantage provided by Procera.

Sales within the Dental Implant busi-ness area increased during the year by26 percent to SEK 2,329.5 million. Ex-cluding Gore products, sales increasedby 24 percent.

The operating income before non-recurring items and goodwill amortiza-tion (EBITA) for the business areaamounted to SEK 490.4 million (310.1),which is the equivalent of an operatingmargin of 21.1 percent (16.7). With theaim of improving profitability during2001 a scheme was launched whichincludes product rationalization, moreefficient product sourcing, productionand logistics, as well as cutting operat-ing costs.

World leader in dental implants


North America 39%

Europe 44%

Asia &Oceania 11%

Latin America 4% Others 2%

Dental Implants 87%

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Dental ImplantsSales on major markets

teristics – an area of great importance inachieving initial stability and for shorten-ing the healing time between implant andjaw bone. TiUnite enables the largestpossible contact surface with the bone.The porous structure also makes it possi-ble in the future to load the surface withbiologically active substances with theaim of further shortening the healingtime.

TiUnite is the first surface that hasbeen launched for both BrånemarkSystem and Replace. Also within theprosthetic field a similar transfer of technology took place when EstheticAbutment was launched for BrånemarkSystem after having been available forseveral years for Replace. EstheticAbutment is an anatomically designedabutment that follows the profile of the gum to provide the best estheticresults. Easy Abutment for considerablysimplified prosthetic treatment waslaunched for Replace.

Procera® providescompetitive advantagesAlongside TiUnite the year was charac-terized by ongoing developments forgaining maximum benefit of the unique,

pace-setting Procera technology.The Procera technology has shown

itself to be applicable, among otherareas, within Nobel Biocare’s “TeethNow”-concept, which is aimed at pro-viding patients with new teeth directly.Consequently, additional steps can betaken along the path started by thedevelopment of Brånemark SystemNovum. During 2001 rollout continuedof the individually designed titaniumbridge Procera Implant Bridge (beforeAll-in-One).

Strong market positionThe distribution agreement withW.L.Gore & Associates, established inJune 2000, is well integrated in NobelBiocare’s sales and marketing organiza-tion and has shown itself to be a com-plement and a door-opener to new cus-tomer groups as expected.

Nobel Biocare has superior geo-graphic coverage compared to all itscompetitors and the company was anearly front-runner in the growth mar-kets of Asia and Latin America. NobelBiocare is the only non-Japanese com-pany to have its own subsidiary in Japan.At year-end, Nobel Biocare had sub-

sidiaries and branches in 26 marketsand the company was representedthrough distributors in a further 25countries.

In Latin America, expansion is tak-ing place with the Brazilian subsidiaryacting as the base. After establishingsales companies during 2000 inArgentina and Chile, a new subsidiaryopened in Mexico in 2001. In SouthEast Asia, marketing is driven by NobelBiocare’s subsidiary in Hong Kong andby distributors on important marketssuch as Korea, Taiwan, China andMalaysia.



In recent years market growth hasbeen around 12-15 percent. A cautiousestimate of the market potential indicatesa total market of around SEK 20 billion.The estimate is based on all countriesshown in the diagram achieving the samepenetration as Switzerland. However thereal potential should be much higher inline with ongoing development.

Future standard treatmentNobel Biocare’s customers are mainlyspecialists and dentists. Depending upontraditions in each individual market, thedentist either carries out the entire treat-ment himself, or alternatively refers thepatient to a surgeon who installs theimplants.

As treatment methods have simpli-fied, the number of dentists carrying outimplants has increased, which has con-tributed to greater market growth, butstill only 25 percent of all dentist in thewest provide dental implants. In thefuture, implants are expected to becomea standard method of treatment amongall general dentists. The difficult caseswill still be referred to specialists.

48 million patientstreatedconventionally

3.5 million patientstreated withdental implants(penetration: ~2 %)

>240 million peoplemissing one tooth or more(North America, Europe, Japan)

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Dental implantsMarket potential

The general practitioners are key in Nobel Biocare’s new sales strategy and is the groupthat stays in direct contact with the end consumer; the patients. Nobel Biocare’s entiresales force will be used in marketing a com-plete assortment of both dental implants andpersonalized prosthetics.

Dental ImplantsMarket penetration

At present market value approx. SEK 6 billion

Dentists doing implantsurgery

Patients

Dentists doing implant prosthetics

General Practioners75%

Number of implants sold per 10,000 inhabitants

A market with greatpotentialIn the industrialized world there are over 240 million people who lack one or more teeth. Of these just two percenthave undergone implant treatment. Theremainder of patients are still treatedwith traditional crowns and bridges.

As implant treatment is made avail-able to more dentists and treatment timegets shorter, the market potential grows.The benefits compared with traditionaltreatments are primarily better function,esthetics, lifelong durability and that adjacent teeth do not need to be grounddown.

Potential market of SEK 20billionIn 2001 it was estimated that the pen-etrated markets for dental implantsamounted to over SEK 6 billion. Thelargest penetration was in Switzerland,Italy and Sweden. In large countries suchas the US, Japan and the UnitedKingdom, the potential for increasedpenetration is high.

Dental ImplantsMarket structure



Global marketleaderWith an estimated global market shareof 38 percent, Nobel Biocare is themarket leader. The company holds aleading position on all markets in NorthAmerica, Europe and Asia as well as onmost individual markets such as the USand Japan.

CompetitorsNobel Biocare, the Swiss companyStraumann, and the US companyBiomet/3i, which together have anapproximate 75 percent share of themarket, have dominated the world mar-ket for dental implants for the past fewyears. Other important players are thetwo US companies, Sulzer Dental andDentsply/Friadent. All the key playersare publicly listed companies or are affiliated to one.

Tough goals for growthand profitabilityNobel Biocare today has a strong posi-tion in most areas. In addition to itsglobal market leadership, the companyhas a technical lead with unique prod-ucts and even more new products in thepipeline. The company’s brands aresome of the best known in the marketand have very good reputation bothamong dentists and in the scientificcommunity. Nobel Biocare also hassuperior distribution power with a presence on all key markets.

There are still areas where furtherimprovements can be made. This main-ly concerns the market position inGermany and market penetration inJapan. Additionally, there is significantpotential for Replace, especially inEurope, and to take full advantage ofthe synergies with Procera.

Therefore, Nobel Biocare made com-prehensive efforts to further improvegrowth and profitability with the DentalImplants business area during 2001.The goal is to ultimately achieve thebest profitability in the business and anorganic sales growth in excess of 20percent from 2003. For 2002 the goal isto achieve an EBITA margin of morethan 24 percent.

Aggressive strategy toachieve goalsDuring 2002, Nobel Biocare will con-tinue its efforts to increase gross profitsby above all further rationalizing theassortment, more efficient purchasing,production and logistics, as well asreviewing the product mix to achievethe profitability goals. The companyhas also implemented strict targets foroperating costs at all units. R&D invest-ments will be kept at a level of approxi-mately 5 percent of sales, in order tomaintain a high level of innovativeproduct launches and research leader-ship in the industry.

The increased growth will beachieved through a completely new

strategy meaning that market invest-ments will be targeted towards new cus-tomer segments to a substantial degreeto increase the number of dentists usingimplant treatments. For its new marketinvestments, Nobel Biocare is develop-ing a completely new market range tobe launched at the end of 2002. Thenew customer range links the best ofthe Brånemark System and Replace anduses the unique competitive advantagesof the personalized solutions with highesthetics offered by Procera.

Nobel Biocare 38%

Straumann 22%Biomet/3i 17%

Sulzer Dental10%

Dentsply/Friadent7%

Others 6%

Global competitive situation


Business area Procera®

Strong growth outsideNorth America Other events within the Procera busi-ness area during 2001 were several keyproduct launches, the upgrading of pro-duction, which has led to increaseddelivery reliability, as well as ongoingsuccess in the Brazilian marketplacewhere Procera was launched the yearbefore. In the Netherlands a pilot cam-paign was launched aimed at dentists,while in Japan Nobel Biocare reached adistribution agreement with Morita,one of the country’s largest dental dis-tributors.

Sales within the Procera businessarea rose during the year by 29 percentto SEK 333.7 million. Growth wasstrong in all markets with the exceptionof North America where the generaldecline in the dental laboratory marketcoupled with certain production disrup-tion during the spring, led to weakerthan expected growth.

The volume growth for ProceraAllCeram amounted to 18 percent. InNorth America, responsible for 69 per-cent of the total volume, the increasewas 15 percent.

In December 2001 Nobel Biocareacquired all of the Procera SandvikAB production company, previouslyjointly owned with Sandvik AB. As aresult Nobel Biocare gained full con-trol over all parts of the Procera busi-ness – from development, productionand distribution to marketing andsales. Important know-how and skillsregarding ceramic materials andprocesses followed with the acquisi-tion and employees of the once joint-ly-owned company are now employedby Nobel Biocare. Procera’s activitieswill be integrated with Nobel Biocareduring the first half of 2002.

The acquisition was an important element of the new strategy set forNobel Biocare during the autumn of2001. This means that market pene-tration will be speeded up by focusingmore on the large group of generalpractitioners who do not yet offerimplant treatments to their patients.A complete product range of dentalimplants and individually adaptedprosthetics from Procera will belaunched during the autumn of 2002.

Procera® strengthens the customer offer

During the year 264 Procera Scannerswere sold, which was in line with thesales target of 20-25 scanners per month.At the end of 2001 there were more than1,300 customers with a Procera Scannerspread across 35 countries.

Leader within all-ceramicsolutionsProcera strengthened its position during2001 as the most complete customeroffering on the market for all-ceramicprosthetic solutions with optimal esthetics.

Procera 13%

Procera®

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North America 56%

Rest ofEurope 28%

Nordic countries 8%

Others 8%

Procera®

Sales on major markets

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of, mainly, Replace™ has been targetedfor some time towards general dentalpractitioners. By being able to make full use of the sales force within DentalImplants and offering dentists the entireNobel Biocare customer offering forimplant treatment and prosthetics, creates mutually increased sales.

Facts about Procera®

Procera is the world’s first, and so far

only, commercially available process

for industrial production of individual-

ly adapted dental prosthetics.

The traditional method of replacing

the natural tooth crown with a fixed

prosthetic crown has been available

for around 100 years.

The dentist files the tooth down and

takes an impression, which is sent to a

dental laboratory where a new crown

is produced in a lengthy, handicraft

procedure. The work at the dental

laboratory can be split in two parts.

First, a supporting inner construction,

the so-called coping, is made.

Afterwards, the coping is coated with

an outer layer of porcelain.

Procera is aimed at the production

of the coping – the part of the

process which today is possible to

industrialize. The dentist sends the

impression to a laboratory where the

model is registered by a Procera

Scanner which is connected to a PC in

which the coping is designed digitally.

The digital information is then trans-

ferred to a central production facility

owned by Nobel Biocare, where the

individually adapted coping is manu-

factured. Within 1-3 days the labora-

tory receives the coping and provides

it with the outer layer of porcelain to

obtain the shape and colour desired.


to sign a distribution agreement withMorita, one of Japan’s biggest distributorsof dental products. Under the agreement,Morita commits itself to sell ProceraScanners as well as being responsible formarketing to dentists and dental labora-tories. Nobel Biocare is responsible fortraining and support at dental laboratories.

Successful campaign to dentistsWith the target of increasing growth, a marketing campaign was implemented inthe spring of 2001 aimed at dentists. The campaign was implemented in theNetherlands and included advertising,meetings with laboratories and telemarket-ing to individual dentists. The idea be-hind the campaign was to create demandfrom dentists to laboratories. Previousmarketing efforts primarily built upon lab-oratories selling the concept to dentists.

The campaign was extremely success-ful and Procera was able to show consid-erable growth in the Netherlands at theend of the year. During 2002 similar cam-paigns will be implemented in the UnitedKingdom and France.

Approaching dentists opens theopportunity for new synergies betweenDental Implants and Procera. Marketing

The main part (75%) of sales withinthe business area comes from the ProceraAllCeram product family. The productrange also includes the dental bridgeProcera AllCeram Bridge, which wasupdated in 2001 to provide increaseduser friendliness, as well as the laminateProcera AllCeram Laminate providing an optimal level of esthetics for the frontteeth. The range also includes individual-ly designed abutments for implant-basedprosthetics.

As a result of the launch of the thin-ner coping Procera AllCeram 0.4mm,Nobel Biocare improved its competitive-ness during 2001 in the high estheticsmarket segment. The new coping wasfirst launched in Europe where it quicklybecame responsible for 10 percent oftotal sales volume. The coping waslaunched in the US in February 2002.

Towards the end of 2001, ProceraAllZirkon was also launched, initially inGermany. Zirkonium is the strongestceramic material on the market and thenew coping is therefore especially suit-able for replacing lost molars wherechewing forces are the strongest. ProceraAllZirkon will be launched at the begin-ning of 2002 in the rest of Europe, whilethe US launch is planned for the secondhalf of the year.

Advances in Japan and BrazilFollowing its launch in 2000, Procera hasseen powerful sales growth in Brazil, thelargest market in Latin America. Braziltraditionally has a highly advanced dentalcommunity, while also providing a plat-form for further expansion in LatinAmerica. In addition to France, Brazilwas the country outside North Americawhere Procera in 2001 saw the most pos-itive growth.

In Japan, where Procera was launchedduring the year, Nobel Biocare was able


The market forfixed prostheticsReplacing the crown of a natural toothwith some form of prosthetic crown isone of the most common treatmentswhich dentists the world over carry out.In the western world alone, 100 millionnatural crowns are replaced each yearwith some form of prosthetic crown. Ofthe fixed prosthetic solutions, replace-ment of single teeth accounts for justover half of the treatments. Other re-placements are carried out in the formof bridge reconstruction techniques.

The total global market for fixeddental prosthetics is estimated at morethan SEK 20 billion. Single crownsaccount for SEK 12 billion while thebridge construction share amounts toSEK 10 billion.

The split between single crown andbridge construction varies according tolocal conditions. In the western world,improved dental health and increasedesthetic demands are pushing towards a growing share of single crowns. Thistrend has progressed furthest in the USwhere single crowns account for around75 percent of all crown treatments. Inthe rest of the world it is estimated thatbridge construction will continue tohold a very strong position within theforeseeable future.

Esthetic demands steerdevelopment towards all-ceramic materialsDevelopment of materials is currentlydriven largely by increased estheticdemands. From the once total domi-nance of porcelain fused to metalcrowns (PFM) with a core of cast metalalloy, the more esthetic all-ceramicmaterial has won market share. While


total market growth is around 3 per-cent, sales of all-ceramic frameworksare growing by 10-15 percent annually.

The benefits of the metal ceramicframeworks are mainly strength, thatthey have been around a long time, thatthey have a large market coverage andthat the method is safe. The material isalso regarded as being easy to use whilealso providing laboratories and dentistsacceptable profitability. The disadvan-tages are that the metal alloy does notprovide optimal esthetic results and canirritate body tissue while productionmethods are work-intensive with limit-ed opportunity for rationalization.

All-ceramic material had its break-through around ten years ago. The benefits include excellent esthetic char-acteristics, as well as the fact that theyare more tissue-friendly. Until Procera AllCeram was launched, the ceramicmaterial was not considered sufficientlystrong to replace molars where chewingstrength is of major importance.

From a price perspective, the all-ceramic frameworks are positioned inthe upper segment. However, the mostcostly is still the PFM crown with acore of high gold content.

The players in the marketThe market for fixed prosthetics con-sists of patients, dentists and dental lab-oratories.

The patient’s choice is based mainlyon esthetics, tissue friendliness and therecommendation of their dentist.

The dentist bases his or her decisionupon how well the form of treatmentmeets the wishes of the patient, thesimplicity of use of the product as wellas the opportunities for good profitabil-ity. Additionally, the relationship withthe dental laboratory is an importantfactor in deciding what method theindividual dentist uses.

For their part, laboratories basetheir decision on how well the differentmethods fit in with their daily workflowand routines, as well as how cost-effec-tive and profitable the different process-es are. An ever more important factor is also to what degree the differentmethods enable the opportunity to provide differentiation with the othermarket players. Increasingly, the labora-tories are looking for a process thatoffers opportunities to work with allavailable materials.

Bridges

Othersinglecrowns

All-ceramicsingle crowns

Market for fixed prosthetics

Global

Bridges

Othersinglecrowns


USA

Bridges

Othersinglecrowns


Germany


The partly new strategy set for all ofNobel Biocare focuses largely upongeneral practitioners as a key group forongoing fast growth. General practi-tioners are also the customer groupwho will come into increasing focus for marketing at Procera. Nobel Biocarewill use the entire sales force in salesefforts for both Dental Implants andProcera.

The target is to achieve a customerbase of 10 percent of the laboratorieson the market. This will be achievedpartly through strengthening sales andsupport organizations within NobelBiocare, and partly through partnershipwith external players with establishedrelations with laboratories.

The short-term strategy regardingthe product range is to furtherstrengthen the position within the all-ceramic segment. In the longer term,the strategy aims at offering a rangeincluding all dominating materials onthe market.


investment for the independent labora-tory as well as placing large demandsupon upgrading and maintenance. Theonly competitor with central industrial-ized production is Cicero, owned byDegussa/Dentsply, a system that isexpected to be launched during 2003.

With over 1,300 laboratoriesthroughout the world, Procera has an impressive lead over all competingCAD/CAM concepts. Additionally,around a further 20-25 laboratories areadded to the Procera network monthly.In addition to Western Europe andNorth America, where ProceraAllCeram is already an establishedbrand, Procera is available in Japan,South East Asia and Latin America.

New sales strategy The strategy can be summarized as follows:■ Increased customer base among lab-

oratories■ Create demand from dentists■ Broaden the product portfolio

Procera® meets the demands of the marketProcera meets the desires of patients as well as dentists and laboratories. Thepatient is offered an esthetically attrac-tive and tissue-friendly replacement for natural teeth. Procera also brings a shorter treatment time at the dentist,which contributes to increased efficien-cy and improved profitability. The method is user friendly and the dentistdoes not need to change his or her rou-tines for imprinting and cementing.

Improved efficiency is even betterfor laboratories that can almost doubletheir productivity per employee. Thiscreates the conditions for greater prof-itability also for the laboratories. Aninvestment in a Procera Scanner addi-tionally provides access to a wide rangeof products in different materials andeach individual product therebybecomes part of a large production sys-tem with impressive economies of scale.

Lead over competitorsProcera’s competitors will primarilycome from the traditionally made crownsin local laboratories. Industrial suppliersof metal and all-ceramic materials alsoplay an important role. For this type ofproduction, Dentsply and Jelenko arekey players in the metal ceramic materi-als market. Within the all-ceramic mate-rials area both VITA and Ivoclar arepresent with the brand names Inceramand Empress respectively.

In addition, there are several playerswith fairly well developed CAD/CAMconcepts. However, most of these sys-tems are build upon the laboratory buy-ing both the scanning and the produc-tion equipment, meaning a substantial


have shown that the new surface alsofunctions better than expected. TiUniteis also treated to enable use with bio-logically active substances which stimu-late healing between implant and jaw-bone – an area prioritized within NobelBiocare’s development work.

Procera® – a strategic assetPerhaps the largest potential is to befound in better use of the unique tech-nology behind Procera also withinimplant operations. Nobel Biocareexpects many of the future launcheswithin Dental Implants to be based onthe pace-setting technology for indus-trial production of customized compo-nents. In future, the company’s activi-ties will be split into a range-orientatedline and a line for customized products,regardless of whether these are intend-ed to be fixed to implants or naturalteeth.

The potential for industrial produc-tion of customized products givesNobel Biocare a clear competitiveadvantage at the same time as thedemand from patients for improvedesthetics increases.

Apart from the demand for estheticsolutions, implant development is alsosteered by a desire to make implanttreatment increasingly more attractivefor general dental practitioners. This isachieved, partly by making treatmentmore similar to traditional treatmentsbuilt on a technology where the dentistfiles down the damaged tooth in orderto later cement crowns and bridges.Nobel Biocare can also exploit the tech-nology behind Procera within this area,which is always cementable. Throughthe acquisition of the formerly half-owned Procera Sandvik AB, NobelBiocare now has access to the entire

In recent years Nobel Biocare has hadthe highest pace of launches in theindustry, which has included over 40percent of sales coming from productslaunched in the past three years.

The launch program in 2001 wasbuilt on the synergies between the com-pany’s two implant systems, BrånemarkSystem and Replace, as well as betweenthe two business areas.

Research investments within Procerawere further aimed at a completely newdesign tool based on 3D CAM technolo-gy, that was launched in February 2002,as well as an upgrading of certain tech-nical systems for user interfaces for usein production and for customers.

The launches provide a return onaround 5 percent of the revenue whichNobel Biocare invests in R&D annual-ly– an activity which led to 19 newpatents in 2001. In all, around 80 em-ployees at Göteborg and Yorba Lindawork with development activities.Nobel Biocare also has access to a net-work of international clinical know-how from the world’s leading academiccenters.

The best of two worldsThe development work within DentalImplants during 2001 has continued to focus on making implant treatmentsimpler, safer and even more predict-able. The goal is to be able to offerpatients new teeth immediately. NobelBiocare's customer range builds on con-tinued development and combination ofthe best of both of the markets’ leadingimplant systems – Brånemark Systemand Replace.

In addition, there is an ongoingdevelopment of new implant surfaceswhere TiUnite is the latest result.Ongoing clinical studies during the year

Leaders in R&Dproduction unit and the material know-how with ceramics available in thecompany. This further opens newopportunities to develop products withoptimal function and esthetics.

Research & Development


Quality and Environment

ISO 14001 environmental certification.To underline the strategic importance of these issues, the company’s qualityand environment manager was made amember of the corporate managementteam.

Important competitive toolPatient safety and product safety thatmeets regulatory requirements, lie atthe centre of all quality work. Highmaterial quality, clinical purity and sterility are key factors within NobelBiocare’s activities. Production shouldbe characterized by reliability, efficiencyand minimal environmental impact.Both quality and environmental issuesare important competitive factors.

The company is certified accordingto the European Directive on MedicalTechnology. Certification means thatNobel Biocare has the right to inde-pendently place the CE mark on itsproducts. Nobel Biocare’s operationsare constantly reviewed by a notifiedbody appointed by the company, as wellas by the American Food and DrugAdministration. Reviews are carried outat Göteborg, Karlskoga and Stockholm,Sweden, as well as Yorba Linda and FairLawn, USA. Prior to every new productlaunch, additional comprehensive regu-latory checks are implemented.

Updating of quality systemOperations in Göteborg, Karlskoga,Yorba Linda and Stockholm are ISO9001 and ISO 46001certified , with theFair Lawn facilities working accordingto ISO 9002. During 2001, work wasinitiated to implement the new versionof the ISO 13 485 standard, which isespecially adapted for the medical tech-nology industry. Implementation of thenew system encompasses the head officeand all production units. The work

Nobel Biocare prioritized quality andenvironmental issues still further during2001.The quality policy was reviewedand a new policy was launched at thebeginning of 2002. High quality is acondition for good profitability and isan important part of the policy. At thesame time preparations continued for

Priorities in quality and the environmentshould reach completion in 2003 andwill be implemented in stages.

ISO 13 485 comprises a combina-tion of ISO 9001:2000 and ISO 46 001.Compared with earlier standards thenew ISO 13 485 is applied more strictlyon issues such as management responsi-bility, customer satisfaction, process orientation and improvement measures.

Intensive efforts are underway toharmonize the quality system within theGroup. In connection with this work a comprehensive review and updating of routines and procedures at the YorbaLinda facility are underway. Greaterharmonization increases coordinationopportunities of product developmentand production within the Group. Thefacilities at Göteborg, Karlskoga andYorba Linda currently use the samenotified body.

Environmentalcertification close tofinalizationEnvironmental certification will initiallyinclude implant operations. However,the goal is also for production withinProcera to be certified.

Implementation of ISO 14 001means that Nobel Biocare assumes anall-encompassing grip on environmen-tal issues and that the entire organiza-tion, including suppliers, are affected.Environmental concern is shown whenchoosing materials and additives as wellas handling of waste. Energy use andtransportation will also be reviewed, as is the use of packaging.

At present, limited environmentalimpact occurs during surface treatmentwith various solvents as well as use ofmachine oil, which is handled in accor-dance with special routines.


Employees

Number of emplyees

-24 25-34 35-44 45-54 55-0

100

200

300

400

500

600

Age distributionin the group

Nobel Biocare is a company in a conti-nual state of change. One of its mostimportant success factors is its emplo-yees, who contribute to the achieve-ment of the ambitious targets setthrough their everyday work. At theend of 2001, there were 1,328 people in 26 countries worldwide workingtowards the goal of making NobelBiocare the most successful and pro-fitable company in this sector.

Shared vision of leadershipIts rapid expansion and global pres-ence represent a challenge for NobelBiocare’s management. Success for a company requires dedicated man-agers who are prepared to take swiftdecisions, flexible, and receptive tochange. Every manager must also havea strong determination to develop thepotential of his or her staff, togetherwith the ability to show respect forand commitment to individuals. Thiscalls for the ability to create an under-standing of objectives and visions.

Therefore in 2001, Nobel Biocarecontinued with, and stepped up, itsinvestment in leadership development.During the year, a further fifty man-agers underwent the company’s train-ing scheme in practical leadership.This means that nearly all managerswith staff responsibility have attendedthe course.

One of the aims of the scheme is to strengthen the mutual values thatfocus on the way in which managersshould act towards their staff. Thetraining creates contacts betweenmanagers, which helps to lower thebarriers between different units. Thishas led to the establishment of severalnew and informal networks.

Employees’ added valueSkills developmentAn important task for each manager is to make the most of the enthusiasm ofemployees’ self-fulfilment and careerplanning. This is particularly important in an organization such as Nobel Biocare,which has a large proportion of youngand well-educated employees at the startof their professional careers. The basis ofskills development lies in structured per-formance reviews, which take the form of an annual career appraisal with eachemployee. On the basis of these discus-sions, individual development plans aredrawn up, which are reviewed every year.

With the aim of providing develop-ment opportunities for employees withspecial expertise, Nobel Biocare employsa system of alternative career paths as partof the company’s development activities.This system involves a career ladder withthree levels – Chief, Senior, and AssociateScientist – meaning Nobel Biocare canutilize the benefit from the in-depth andunique know-how of the company’s specialists.

Program provision for newmanagersAnother area of priority is making provi-sion for managers. In addition to develop-

ing existing managers, it is necessary tosecure their successors as Nobel Biocaredevelops and grows. As part of thiswork, there is a focus on the rotation of leading positions in the company.Managers who wish to move from onepart of the organization to another areencouraged to do so by the company.

The provision made for future man-agers is continually reviewed. The poli-cy is to have replacement plans for allkey positions for corporate staff, busi-ness areas and subsidiaries. The aim isto achieve a balance between supply anddemand and to ensure that there are asufficient number of internal applicantsfor future positions at all times. Thereview process also creates opportunitiesto identify potential managerial candi-dates at an early stage, in order to prepare them for the future.

Gender equalityTo ensure the availability of competenceinside the company, it is important thatall employees are given the same oppor-tunities to develop. Gender equalityissues are therefore of central impor-tance to Nobel Biocare, 50 percent of whose employees are female.

North America 34%

Sweden 29%

Rest ofEurope 27%

Asia/Oceania 5%

Others 5%

Employeesby region 2001


Employees

The central role played by genderquality issues is demonstrated not leastby a relatively large and growing pro-portion of women in leading positions.

the Ruter Dam (Queen of Diamonds)Foundation, which runs a developmentscheme for women in leading positionsin Swedish industry.

Setting salaries andincentive schemesWorking at Nobel Biocare brings bothdemands and exciting opportunities forprofessional and personal development.This is also reflected in the company’ssalary policy, which aims at encouragingself-fulfilment and good performance.The factors, which govern the setting ofsalaries include the nature of the work,the competence and personal ability ofthe employee, and market factors.

All employees at Nobel Biocare arecovered by different kinds of bonusschemes. The company also has a stockoption scheme for 125 key personnel,which runs for three years.

Employees in figuresOn December 31, 2001, Nobel Biocarehad 1,328 employees, an increase of 132over the previous year. This increase isdue mainly to the takeover of ProceraSandvik AB. On average, the companyhad 1,302 employees (1,164) during the year.

■ Employees are distributed between26 countries (25). Most of them inthe US, Sweden and Germany.

■ The average age of employees in the Group is 38.7 years (38.8).

■ 48.9 percent (49.9) of all employeesin the Group are women.

■ Of the Group’s 240 managers, 88 (37%) are women and 152 men.Of the 48 (47) top executives atheadquarters, 21 (19) are women and 27 (28) men.

Of recent managerial appointments, 90 percent consisted of women. Thisincludes the CEO and CFO.

Nobel Biocare also collaborates with

WomenMen

Number

652

678

1997 1998 1999 2000 20010

200

400

600

800

1000

1200

1400

Value added per employeeTurnover

SEK K

1997 1998 1999 2000 20010

500

1000

1500

2000

2500

Net turnover and valueadded per employee

Number of employees distributedbetween men and women


Production & Processes

During 2001 Nobel Biocare alsointensified efforts to develop a newDental Implant product platform. Thegoal is to harmonize technology, pro-duction and processes between the dif-ferent implant systems. This enablesproduction of all products in both ofthe company’s facilities at Karlskoga andYorba Linda. Over time this will lead tosubstantially increased productivity andwill ensure Nobel Biocare’s further syn-ergies as a result of the acquisition ofSteri-Oss, Inc.

A key part of the efforts to improveefficiency are already underway atgoods supply. Around half of the costsof goods sold are for purchases fromsuppliers. During the year NobelBiocare therefore continued its effortsin reducing the number of suppliers inorder to develop relationships withthose remaining. Fewer external suppli-ers also means improved control func-tions within such areas as quality anddelivery reliability.

Procera®

Within Procera, production during theyear was marked by the launch ofProcera AllCeram 0.4 mm and ProceraAllZirkon. In addition, upgrading of theadministrative systems was implementedat the Stockholm production facility,which led to a one-day shorter deliverytime for customers. The new systemalso enables customers to follow on-linewhere their order is in the process. The equivalent upgrading was alsoimplemented in December at the NewJersey facility.

The American facility suffered deliv-ery problems at the beginning of theyear caused by a fall in quality of ceram-ic powder. The disruption contributedto a degree of uncertainty among cus-tomers, which resulted in lower than

A comprehensive program of productrange rationalization and streamliningmaterial control in 2001, led to sub-stantially improved productivity andfaster inventory turnover. As a result of the scheme, Nobel Biocare was ableto reduce the product range within theDental Implant business area by 1,000components, or 25 per cent, to around2,400 components.

Rationalization work will continueduring 2002 and is expected to lead toan ongoing substantial reduction of therange. This is expected to further im-prove productivity and the speed ofinventory turnover.

Production at four sitesNobel Biocare has production facilitiesat four sites. Production of dentalimplants takes place at Karlskoga,Sweden and Yorba Linda in California,USA. Within Procera, production takesplace at facilities in Stockholm, Sweden,and at Fair Lawn in New Jersey, USA.

Nobel Biocare's production is hall-marked by quality, flexibility and relia-bility. Operations are governed by thefollowing policies:■ Product sourcing policy which

steers activities irrespective of production occurring internally or externally

■ Manufacturing policy which regulates the actual production

■ Purchasing policy which concernsthe relationship with suppliers

■ New products enable increasedproductivity

The facilities at Karlskoga were expand-ed during the year to permit productionof the Procera Implant Bridge, which isnow underway. The enlargement creat-ed the opportunity for a powerfulexpansion concerning all types of indi-vidually adapted prosthetic solutions.

More effective production & processes expected volume growth. With theexception of the days immediately fol-lowing the events of September 11,delivery reliability has returned to nor-mal levels. The risk of future deliverydisruptions will fall successively as aresult of intensive production develop-ment of both the production and thematerial processes.

Acquisition of ProceraSandvik AB In December 2001 Nobel Biocarereached an agreement with Sandvik ABconcerning the acquisition of the com-pany’s 50 per cent share of ProceraSandvik AB, which owns the productionfacilities in Stockholm and New Jersey.Through the acquisition, Nobel Biocareobtained full control over developmentand production within Procera. All crit-ical know-how concerning developmentand industrial manufacture of individu-ally adapted ceramic prosthetics hasbeen transferred to the company.

Sandvik AB and Nobel Biocareestablished the jointly owned companyProcera Sandvik AB in 1992 for thedevelopment and production of ceramiccopings. The collaboration has beeninstrumental to the initial phase ofdevelopment and production.

ITHaving upgraded the Group’s businesssystem, SAP R/3, at the start of theyear, as well as finalizing adaptation tothe Euro, 2001 saw relatively few majorchanges within IT. Levels concerningavailability and security were improved.A contributory factor was the change ofthe central operating supplier, whichalso led to lower operating costs. 2001saw the launch of efforts to create a sys-tem for sales support, which will beimplemented throughout the entiresales organization.


Glossary AbutmentThe connecting element between fixtures anddental crowns, which penetrates the soft tissuebetween the jawbone and the oral cavity.

Dental bridge A permanent prosthetic structure, which onlyimposes a load on the wearer’s teeth. Can also be performed using attachments and support on implants.

Dental coping In the Procera® technique, the industrially-pro-duced inner core of a dental crown made ofceramic or titanium. The dental technician appliesa layer of porcelain to the outside of the dentalcoping to match the patient's other teeth.

Dental crown That part of the tooth normally visible above the gum.

FixtureWithin the Brånemark System®, the name of thetitanium screw, or implant, used as a replacementroot.

Implant From the Latin implantere – to implant. A prosthesis inserted during surgery.

LaminateA thin layer of ceramic that is attached to thefront teeth. Laminates are used primarily foresthetic reasons to conceal superficial damage to the teeth. Within Procera®, the Procera®

AllCeram Laminate is produced industrially.

MembraneUsed in dentistry to generate tissue. Apart frombeing used in conjunction with dental implants,membranes are used to treat bone loss aroundteeth and to improve normal tooth function andesthetics.

Oral surgery That part of dentistry comprising the diagnosisand surgical treatment of diseases of the oral cavity and jaws.

OsseointegrationA direct structural and functional connectionbetween well-organized, living bone and a surface by a force-absorbent implant.

Prosthetics Prosthesis = replacement for a lost body part. Inthis context; oral prosthetics – that part of den-tistry which deals with problems relating to the replacement of teeth and/or jaws.

ScannerThe equipment within Procera® used by dentallaboratories to register the shape of a dental cop-ing. The scanned numerical values are transferredto a CAD/CAM program, which automaticallygenerates the shape of the coping and creates aproduction file which is then electronically trans-ferred to a Procera® production unit.

TitaniumMetallic element, Ti. Atomic number 22, atomicmass 47.90, density 4.54 g/cm3 and meltingpoint 1,668 °C. Similar colour to steel. Relativelycommon in the earth's crust. Its biocompatibleproperties enable it to be used in prosthesesinserted during surgery. The ability of titanium to establish direct contact with bone tissue is well-documented.

Karlskoga Yorba Linda

2000 2001

Total

1997 1998 199980

100

120

140

160

Productivity improvements

Level 1997 = Index 100


After currency adjustments, Nobel Biocare’s sales increasedby 16 percent in North America. In Europe, excluding theNordic countries, growth was 18 percent compared with 2000.

In Asia, sales increased by 16 percent. Sales increase inJapan were moderate.

Sales in Latin America increased by 33 percent. In 2001, a subsidiary was established in Mexico.

The operating income was SEK 359.6 million (273.3), andthe operating income before non-recurring items was SEK426.0 million (251.0). The operating margin before goodwillamortization and non-recurring items was 21.1 percent (16.8)for the Dental Implant business area.

Procera® business area Sales in the Procera business area amounted to SEK 333.7 million (258.5), equalling an increase of 29 percent comparedwith 2000.

Volume increase for Procera AllCeram was 18 percent com-pared with 2000. Growth in North America, representing 69percent of the total volume, was 15 percent. Prices were stable.

The downturn in the dental laboratory market had animpact on the growth rate for copings in North America.Growth outside North America improved somewhat during2001.

Sales of scanners reached the goal of 20-25 units per monthduring 2001. The total number of laboratories which hasinvested in a Procera scanner exceeded 1,300 spread across 35 countries as of 31 December 2001.

The operating income amounted to SEK 4.1 million (16.3).As from 2001, the Procera business area has been charged withits share of HQ’s operating expenses. The operating marginamounted to 1.2 percent (6.3).

Acquisition of the remaining 50 percent of shares in Procera Sandvik ABOn 27 December 2001, Nobel Biocare AB acquired theSandvik Group’s 50 percent share of the dental technologycompany Procera Sandvik AB. Nobel Biocare therebystrengthened its market position by gaining full control overdevelopment and production of individualized ceramic pros-thetics for both conventional and implant dentistry.

Nobel Biocare will thereafter utilize its worldwide sales and distribution power in a far more cost-effective manner and thereby secure the new strategy of future successful development and penetration of the entire dental market.

All critical knowledge for the development and industrialproduction of individualized prosthetics in ceramics will betransferred to Nobel Biocare. Integration with Nobel Biocare’sproduction and development organizations will be finalized in

Directors’ reportNobel Biocare Aktiebolag (publ), corporate identity number 556002-0231– Annual report and consolidated accounts for 2001

Business operationsNobel Biocare is the world’s leading manufacturer and distri-butor of innovative dental implants and industrialized dentalprosthetics. These business activities are run within NobelBiocare AB and its subsidiaries (the Group) within two businessareas – Dental Implants and Procera®.

Within the Dental Implant business area, Nobel Biocaredevelops, produces and markets the most complete range ofproducts and systems on the market for dental implants, inother words replacements for dental roots for patients whoneed replacement teeth. The products are sold to dentists fortreatment of all forms of missing teeth and are used by around70,000 customers in more than 60 countries. The Group’sBrånemark System® and Steri-Oss®/Replace™ brands hold a global market share of around 38 percent. Production takesplace at Nobel Biocare’s facilities in Karlskoga, Sweden, andYorba Linda, California, USA. In 2001, the business areaaccounted for approximately 87 percent of the Group’s sales.

Within the Procera business area, Nobel Biocare develops,manufactures and markets individualized prosthetics for bothteeth and implants, including dental copings, dental bridges,dental laminates and personalized abutments for implant treat-ment. Procera is the world’s first industrialized process for thedesign and manufacture of individualized prosthetics. NobelBiocare also develops and markets scanning equipment andsoftware that dental laboratories need in order to to be able toregister the shape of the tooth and digitally design the individ-ualized products. Production, comprising the industrial pro-duction of unique teeth shapes, takes place in Karlskoga andStockholm, Sweden, and Fair Lawn, New Jersey, USA. Todate, more than one million patients have been treated withproducts from Procera. In 2001, the business area accountedfor approximately 13 percent of the Group’s sales.

Group salesNobel Biocare’s sales increased by 26% to SEK 2 663.2 million(2 109.5). After currency adjustments, sales increased by 17percent (16) compared with the average currency rates of thepreceding year.

Dental Implant business areaSales in the Dental Implant business area increased by 26 percent to SEK 2,329.5 million (1,851.0). Excluding distributorsales of Gore products, sales increased by 24 percent. Aftercurrency adjustments, the sales growth for Dental Implants was 17 percent (16) compared with 2000.


(25 percent of the entire range) was implemented in 2001. A total of SEK 22.5 million was included in the cost of goodssold in relation to this program.

This reduction coupled with improved material manage-ment, led to strongly improved inventory turnover. As a resultof this and other measures, the working capital was reduced by SEK 150.1 million.

Operating expenses as a share of net sales amounted to 49.1 percent (53.4 excluding charges for redeeming syntheticoptions in 2000).

The operating income before goodwill amortization andnon-recurring items amounted to SEK 494.5 million (326.4).

Operating margin before goodwill amortization and non-recurring items amounted to SEK 18.6 percent (15.5).

Goodwill amortization amounted to SEK 64.4 million(59.1), while depreciation increased by SEK 24.1 million toSEK 86.6 million.

The currency impact on operating income was positive and amounted to SEK 23 million (-16) compared to the preceding year.

Financial income and expenses, net, amounted to SEK -24.8 million (-41.8).

The income before tax amounted to SEK 339.0 million(247.8).

In 2001, SEK 150.0 million (113.7)* was reported as taxes, of which SEK 33.8 million (29.2) is current tax andSEK 116.2 million (84.5)* is deferred tax.

The return on capital employed amounted to 15.4 percent (13.0)*. The return on equity amounted to 10.1 percent (8.1)*.

Research and developmentThe cost of research and development amounted to SEK120.3 million (115.0), equal to 4.5 percent (5.5) of net sales.

Nobel Biocare’s R&D activities focus on the developmentof less complex treatment alternatives, which offer patientsdental implants that function immediately and on maintainingthe group’s position a world leader of IT-based industrial pro-duction of individualized prosthetic dental products.

Nobel Biocare has a strong patent portfolio for com-ponents and systems for all of its brands.

Nobel Biocare has gathered all its R&D resources in ajoint organization. This enables Nobel Biocare to obtain thefull effect of its R&D activities by integrating schemes withinBrånemark System, Steri-Oss/Replace and Procera. Thisgives Nobel Biocare access to the most complete R&D operation on the market.

the first half of 2002. The production units will remain inStockholm, Sweden and Fair Lawn, New Jersey, USA.

The acquisition of 50 percent of the remaining shares inProcera Sandvik AB is made up of a cash payment and adeferred purchase price based on a defined segment of theannual sales value up to and including 2012. Both the cash portion and the estimated deferred purchase price have beenrecorded as participation in Group companies in the parentcompany’s balance sheet as of 31 December 2001.

Nobel Biocare has been selling all Procera Sandvik AB’sproducts and income of sales has been recorded in its entiretyboth in previous years and in 2001.

Up to 27 December 2001, Procera Sandvik AB was an associated company and operating result was consolidated with55 percent, according to the proportional method. From 27December 2001, Nobel Biocare consolidates 100 percent.

Goodwill relating to the acquisition of Procera Sandvik ABamounts to SEK 544 million and will be amortized over 20years from 2002. The amortization period is motivated by thecompany’s research and development schemes for individuallydesigned prosthetics and the material know-how for both conventional and implant dentistry. As a consequence of theacquisition, the Nobel Biocare Group also achieves a more efficient use of its existing sales and distribution network inorder to achieve higher sales growth and a strong position inthe global dental market.

Group resultsThe operating income increased by 26 percent to SEK 363.7million (289.6).

The operating income before non-recurring items increasedby 61 percent to SEK 430.1 million (267.3). Non-recurringitems amounted to SEK -66.4 million (+22.3). Of these, SEK39.1 million are allocated as accruals for scrapping costs due toa new, more conservative policy for inventory valuation. SEK20.9 million refers to accruals for severance pay to the formerexecutive management and SEK 6.4 million refers to costs forreorganizations in the European subsidiaries.

The Group’s exposure to changes in the value of theSwedish krona in relation to the Euro is far greater than that in relation to the US dollar. A comparison of the operatingincome for 2000 and 2001 reveals that the development of theSwedish currency had a positive effect of SEK 23 million onoperating income. The operating margin was 13.7 percent(13.7). Before currency effects, the operating margin was 13.7 percent (13.7). Before non-recurring items, the operatingmargin was 16.1 percent (12.7).

An assortment rationalization program which led to areduction of the assortment by around 1 000 products *) Restated with regard to new accounting principles.


Environmental consideration should include the choice ofmaterials and additives as well as refuse handling. Energy use and transportation will also be included, as well as use of packaging materials.

Ongoing disputesNobel Biocare AB has been sued for an alleged patent infringe-ment by VP Intellectual Property LLC. This dispute, which isbeing handled by a court in New Jersey, USA, relates to thecompany’s sale of certain types of self-tapping fixtures andangulated abutments. The self-tapping fixtures account for alarge percentage of Nobel Biocare’s fixture sales. NobelBiocare totally opposes the suit. In 2000, evidence relating tovalidity was presented and motions relating to what is knownas summary judgement were submitted and studied. No verdictwas made during 2000 or 2001. If these motions are rejected, evidence relating to possible infringement will once again besubmitted, followed by a main hearing.

At the end of 1999, Core-Vent Corporation called for arbitration relating to alleged patent infringement. Core-Vent Corporation has been acquired by Sulzer Dental, which hasassumed the Sulzer Dental action. This arbitration which willtake place in Los Angeles, USA, relates to Nobel Biocare’s salesof certain fixtures with what is known as an internal grip. Suchfixtures comprise a large part of Nobel Biocare’s sales. NobelBiocare totally opposes the suit. Three arbitrators have beennamed and the hearing commenced in 2001. A preliminarydecision to allow Nobel Biocare to question the actual validityof the patent has been made, after which the opposing partyrequested a renewed hearing of the issue.

Group companies are involved in a number of disputesregarding patents, trademarks, income tax, VAT, employeeissues and product responsibility in France, the Netherlands,Germany, Italy and the USA. In France a tax review took placeat the end of 2000, which could lead to certain tax debits. InGermany, a competitor claims that the TiUnite fixture surfacewould infringe an older East German patent. Nobel Biocarerejects the claim in its entirety. No summons has been issued.Arbitration concerning the termination salary of the formerpresident has been initiated. As accruals have been allocated for the aforementioned disputes, they are not judged to haveany material impact to the income of the Group, even if thedecisions go against the company.

Purchase options Nobel Biocare’s former major owners Investment AB Bure andBrown Brothers Harriman & Co, Steri-Oss Inc.’s former mainowner, issued an option scheme for around thirty leading

InvestmentsInvestments in tangible assets, excluding the acquisition ofProcera Sandvik AB and intangible assets, amounted to SEK99.6 million (91.7). Of the year’s investments, SEK 44.7 million(56.0) comprises production-related investments. Investmentsin Training Centers amounted to SEK 10.7 million. Theremaining part of the investments mainly related to IT andequipment.

Financial position and cash flowNobel Biocare’s financial position is strong. The equity/ assetsratio as of 31 December 2001 amounted to 63.5 percent compared to 67.3 * percent at the end of the preceding year.

The Group’s cash flow from current activities strengthenedconsiderably in 2001 and amounted to SEK 684.4 million(261.9) prior to investments.

The Group’s net debt decreasedduring the year by SEK109.7 million to SEK 272.0 million. The acquisition of 50 percent of the shares in Procera Sandvik AB in the fourth quarter led to the net debt being higher on 31 December than30 September 2001.

As of 31 December 2001 the net debt/equity ratio was 14.1percent (22.0)*. The interest coverage ratio was 10.1 times (6.0)for 2001.

PersonnelThe number of employees as of 31 December 2001 was 1 328,of which 418 were in Sweden. The equivalent figure as of 31December 2000 was 1 196 and 379, respectively. The change in2001 is mainly due to the acquisition of Procera Sandvik AB.

The average number of employees amounted to 1,247 in 2001 compared to 1,164 in 2000. The average number of employees in Sweden during 2001 was 351 compared to 372 in 2000.

Environmental informationAt its production unit in Karlskoga, Sweden, Nobel Biocareruns operations that must be reported and require a permitaccording to the Swedish Environmental Code. The produc-tion unit is involved in the production of dental implants. Thecurrent permit relates to the emissions of alcohols into the airand has applied since 1 March 1998. The use of alcohols in the washing processes has been substantially reduced since the permit was first granted and the impact on the externalenvironment is now at a minimum.

In 2001, Nobel Biocare began preparations for ISO 14001environmental certification with the intent of taking a holisticgrip upon environmental issues throughout the Group. *) Restated with regard to new accounting principles.


during the period 1 July 2004 until and including 30 June 2005.There will be 665,333 staff options available for allotment

during 2003. The subscription value for these options should be the same as the average share price during five trading daysafter publication of the full year results for 2002. These optionscan be utilized during the period 1 July 2005 until and including30 June 2006.

The Board of Directors will determine the allocation ofoptions.

Board of Directors and its workThe Board of Nobel Biocare AB comprises five regular mem-bers elected by the Annual General Meeting following the resig-nation of President Jack Forsgren from the Board in the autumnof 2001. The Board has an additional two members, as well astwo deputies for these members, appointed by the employees.

The Chairman of the board is Ernst Thomke. HelianeCanepa is Deputy Chairman and President of Nobel Biocaresince 21 August 2001.

During 2001, the Board met 13 times, of which 7 in meet-ings and 6 by telephone conference. The Board has agreed torules of procedure that include an annual agenda plan as well asan instruction pertaining to allocation of assignments betweenthe Board and the President. The Board has additionally agreedto an instruction regarding financial reporting.

During the year, the Board changed the instructions for thecompensation committee following which the Board in itsentirety has to assume responsibility for remuneration issuesconcerning corporate management based on a proposal from thecompensation committee. The Board has additionally initiatedan Audit Committee, comprising all members of the Board. The Audit Committee shall at special meetings deal with auditing, internal controls and all related questions.

The Secretary of the Board has been the corporate lawyerJan H Johansson. During the business year, issues of structureconcerning the Procera business area and the company’s futurestrategy have been dealt with.

OwnershipNobel Biocare’s largest owners are BB Medtech AG (12.7 percent of the shares and votes) and Fidelity Fund (11.8 percent of shares and votes). Ernst Thomke and HelianeCanepa represent BB Medtech on the Board of Nobel BiocareAB. The percentage of shares registered with owners resident outside Sweden was 88 percent (90) at the end of 2001.

executives. The first part of the scheme was implemented in July1998 by Investment AB Bure and was for 177 500 options forsome ten individuals. The sum of SEK 19.80 was paid for eachoption, a price based on an average market price of SEK 115 (8-14 July 1998). The term for these options expires on 1 May2003 and the redemption price is SEK 140. At the end of 2001around 17 500 options were outstanding.

The second part of the scheme was issued in February 1999by Brown Brothers Harriman & Co and comprised 138 000options to some twenty individuals. For each option, SEK 19.00was paid based on an average market price of SEK 116 (21-27January 1999). The term for these options expires on 1 May2003 and the redemption price is SEK 140. At the end of 2001some 19 250 options were outstanding.

WarrantsIn conjunction with the acquisition of Steri-Oss, Inc., on 10 September 1998, warrants in the company Steri-Oss, Inc.,were converted to warrants in Nobel Biocare AB. A total of665,196 warrants were issued in three series: Series 1, originally303 860 warrants, has a subscription price of SEK 15.50 with aterm ending on 8 January 2007. Series II, originally 233,823warrants, has a subscription price of SEK 12.50 and a term ending on 16 May 2007. Series III, originally 127,513 warrants,has a subscription price of SEK 36.87, and a term ending on 2 April 2008.

At the end of 2001 a total 66 418 warrants remained unsub-scribed for.

Staff optionsAt the Annual General Meeting in 2001 it was decided to launcha staff options program, aimed at around 125 senior executivesand newly appointed key persons.

The staff options program comprises a total of 1,196,000options, distributed over three years. The options run duringthree years after allotment and can be utilized after two years.

During 2001, 265,333 staff options were allotted. The sub-scription price was set at SEK 392, the average share price dur-ing five trading days following the day of publication of the firstquarterly report for 2001. These options can be utilized duringthe period 1 July 2003 up to and including 30 June 2004. At theend of 2001, 207,669 options of the first series remained unsub-scribed to, following this 57,664 options expired as a result ofthe holder leaving the company.

During 2002 there are 265,333 staff options available forallotment. The subscription value for these options is 438 SEK,the average stock price during five trading days after publicationof the full year results for 2001. These options can be utilized


Parent Company Nobel Biocare AB (publ) is the parent company of the NobelBiocare Group. The parent company’s operations includes production in Sweden, central warehousing and distribution inThe Netherlands as well as operations in Nobel BiocareNorden AB, which is the sales and distribution unit forSweden, including branches in Denmark, Finland and Norway.

The parent company’s investments, which largely concerninvestments in office equipment and production machinery,amounted to SEK 46.3 million (35.1) in 2001. The interestbearing assets in the parent company exceeded the interest bearing debts by SEK 498.3 million (SEK 571.0 million at the end of 2000).

Future developmentsNobel Biocare is the world leader for dental implants, with a market share of around 38 percent. The Group’s potential for strengthening its position on the market for dental implantsis outstanding. A large number of important product innova-tions have been presented during the past year and they havebeen given an excellent reception by the market. At present, the product portfolio is the most comprehensive in this sectorand gives Nobel Biocare an opportunity to reach every cus-tomer category with an attractive range.

The market for dental implants is currently expected togrow by 12-15 percent per year. With this level of growth themarket for dental implants should grow from the current levelof around SEK 6 billion to around SEK 10 billion by 2005.

The financial business climate in each respective marketnaturally impacts upon the business as well as Nobel Biocare’s

sales development and in the short term imposes a risk con-cerning evaluating future growth.

Market growth is currently somewhat higher than the average for the past five-year period and is probably the resultof implant treatment becoming more widely perceived as thestandard treatment for replacing lost teeth. As a consequence,knowledge about implants among dentists and patients hasincreased. Innovative product launches, contributing to simplerand shorter treatment, have also contributed to the increasedgrowth.

Nobel Biocare, together with its four largest competitors,has over 90 percent market share. The main players focus onmarket growth as their means of achieving volume growth.This focus calls for significant investments in marketing andsales activities, as well as continued aggressive research anddevelopment schemes. On the back of these items costs are relatively high and make good gross profit margins essential,something that is reflected in the stable price situation. Thereis real potential for attractive profitability and good cash flowin the industry and Nobel Biocare aims to be the leader inthese areas.

The Procera business area today has around one percentshare of the global market for dental prosthetics. The market,which is relatively stable from year to year, is estimated to beworth › SEK 20 billion. The potential for Procera is dynamic.

The profitability trend for Procera will be positive in linewith the successive use of existing production capacity and thedeveloping synergies with the Dental Implant business area.Profitability is judged to be lower in the short term than forDental Implants.

Operating income

1997 1998 1999 2000 20010

50

100

150

200

250

300

350

400

450

0

2

4

6

8

10

12

14

16

18

Operating margin

SEK M %%

1997 1998 1999 2000* 20016

7

8

9

10

11

12

13

14

DepreciationsInvestments

1997 1998 1999 2000 20010

20

40

60

80

100

120SEK M

Return on average equityexcluding non-recurring items

Invesments (excluding goodwill) Operating income and operating margin excluding non-recurringitems

* Restated due to new accounting recommendations.The comparison years 1995-1999 have not been restated due to new accounting recommendations.


SEK KGroup Parent Company

Note 2001 2000* 2001 2000*Net sales 2,27 2 663 229 2 109 520 1 268 753 964 568Cost of goods sold 5,8,27 -822 086 -638 988 -813 368 -614 257

Gross profit 1 841 143 1 470 532 455 385 350 311

Selling expenses 5,8 -1 089 160 -903 119 -9 855 -10 708Administrative expenses 5,6,8 -199 478 -182 757 -108 056 -114 990Research and development costs -120 258 -114 979 -79 905 -71 723Non-recurring items 4 -66 362 22 280 -29 491 22 280Other operating expenses -2 146 -2 350 -2 968 -2 001

Operating profit 363 739 289 607 225 110 173 169

Result from financial investmentsResult from participation in group companies 7 – – 3 695 12 185Result from participation inassociated companies 8 – – – -13 500Interest income and similar items 9 12 570 6 396 315 301 303 186Interest expense and similar items 10 -37 323 -48 218 -206 657 -227 994Total result fromfinancial investments -24 753 -41 822 112 339 73 877

Profit after financial items 338 986 247 785 337 449 247 046

Appropriations 11 – – 731 731

Profit before tax 338 986 247 785 338 180 247 777

Tax on profit for the year 1,12 -150 032 -113 665 -92 954 -76 796

NET PROFIT FOR THE YEAR 188 954 134 120 245 226 170 981

* Restated due to new accounting recommendations.

Income statements


Balance sheetsSEK K

Group Parent CompanyASSETS Note 2001-12-31 2000-12-31* 2001-12-31 2000-12-31*Fixed assetsIntangible fixed assetsCapitalized expenditurefor computer programs 13 8 047 21 543 5 847 16 793Patents 13 3 568 3 397 3 568 3 397Goodwill 13 1 578 528 1 030 416 5 546 7 840

1 590 143 1 055 356 14 961 28 030

Tangible fixed assetsBuildings and land 14 17 066 25 016 17 066 25 016Machinery 14 143 770 88 706 36 736 21 408Equipment 14 125 771 99 048 32 288 14 940

286 607 212 770 86 090 61 364

Financial fixed assetsParticipation in group companies 15,16 – – 1 038 934 479 655Participation in associated companies 15,17 15 527 7 567 15 527 8 073Receivables from group companies – – 1 012 759 1 053 754Receivables from associated companies – 18 006 – 36 012Deferred tax asset 12 40 334 101 167 – 2 520Other long-term receivables 18 23 967 29 094 2 691 11 039

79 828 155 834 2 069 911 1 591 053Total fixed assets 1 956 578 1 423 960 2 170 962 1 680 447

Current assetsInventoriesRaw materials and consumables 54 009 73 158 5 567 16 300Work in progress 27 069 29 396 16 040 17 675Finished products and goods for resale 137 649 194 267 92 261 105 261

218 727 296 821 113 868 139 236

Current receivablesAccounts receivable 498 385 509 872 50 734 51 087Receivables from group companies – – 201 044 178 520Receivables from associated companies 586 1 359 575 724Deferred tax asset 12 67 541 122 712 2 520 92 954Other receivables 28 022 32 134 13 532 16 013Prepaid expenses and accrued income 19 42 413 32 292 16 974 14 016

636 947 698 369 285 379 353 314

Cash and bank 20 233 790 164 052 81 951 38 748

Total current assets 1 089 464 1 159 242 481 198 531 298

Total assets 3 046 042 2 583 202 2 652 160 2 211 745* Restated due to new accounting recommendations.


Balance sheetsSEK K

Group Parent CompanyEQUITY AND LIABILITIES Note 2001-12-31 2000-12-31* 2001-12-31 2000-12-31*Equity 21Restricted equityShare capital 316 936 314 439 316 936 314 439Statutory reserves 701 215 748 150 609 630 608 699

1 018 151 1 062 589 926 566 923 138

Non-restricted equityProfit brought forward 727 489 541 218 537 848 429 573Profit for the year 188 954 134 120 245 226 170 981

916 443 675 338 783 074 600 554

Total equity 1 934 594 1 737 927 1 709 640 1 523 692

Untaxed reserves 14 – – 8 289 9 020

Allocations 22 203 726 17 064 189 695 3 044

Long-term liabilities 23 450 283 504 650 484 051 474 080

Current liabilitiesShort-term bank loans 72 535 63 603 72 535 63 603Accounts payable 105 849 78 752 69 965 51 486Liabilities to group companies – – 5 444 19 445Liabilities to associated companies – 525 – 1 050Current tax liabilities 22 016 8 673 – –Other liabilities 52 007 45 875 22 205 19 310Accrued expenses and deferred income 24 205 032 126 133 90 336 47 015Total current liabilities 457 439 323 561 260 485 201 909

Total equity and liabilities 3 046 042 2 583 202 2 652 160 2 211 745

Pledged assets 25 15 273 338 14 882 None

Contingent liabilities 26 18 489 9 878 35 922 37 530* Restated due to new accounting recommendations.


Statements of cash flowsSEK K

Group Parent CompanyNote 2001 2000 2001 2000

Current operationsOperating income 363 739 289 607 225 110 173 169Adjustments for items not included in cash flow:

Amortization/Depreciation 5 151 017 121 558 32 359 29 589Expenditures charged against the restructuring reserve -2 212 -17 725 – –Other items not affecting liquidity 74 242 -25 538 86 579 -18 674

586 786 367 902 344 048 184 084Dividends received 7 – – 14 150 18 978Interest received and similar items 12 570 6 396 137 207 72 337Interest paid and similar items -43 417 -44 213 -37 075 -36 230Taxes paid -21 687 -29 086 – –Cash flow generated by current operationsbefore changes in working capital 534 252 300 999 458 330 239 169

Changes in working capitalInventories 58 604 -27 347 25 368 -10 953Receivables 57 192 -16 508 -22 499 65 986Liabilities and allocations 34 351 4 792 39 007 27 181

Cash flow from current operations 684 399 261 936 500 206 321 383

Investment operationsAcquisition of intangiblefixed assets 13 -4 227 -16 061 -2 090 -10 582Acquisition of tangiblefixed assets 14 -98 005 -91 721 -42 596 -24 547Changes in long-term receivablesfrom group companies – – 73 565 -204 762Changes in other financialfixed assets 29 -358 039 -9 061 -360 888 -225Cash flow from investment operations -460 271 -116 843 -332 009 -240 116Cash flow after investment operations 224 128 145 093 168 197 81 267

Financing operationsWarrants and options 21 1 328 3 653 1 328 3 653Loans raised 23 100 000 18 324 100 000 18 324Amortization of loans 23 -196 754 -81 334 -167 278 -79 802Dividends paid 21 -60 774 -50 115 -60 774 -50 115Cash flow from financing operations -156 200 -109 472 -126 724 -107 940

Change in liquid assets 67 928 35 621 41 473 -26 673Cash and bank at the start of the year 164 052 121 797 38 748 62 713Exchange rate difference in cash and bank 1 810 6 634 1 730 2 708Cash and bank at the end of the year 20 233 790 164 052 81 951 38 748


Income statements (average rates)2001 2000

EUR 9.2415 8.4449USD 10.3176 9.1618JPY 0.0850 0.0851GBP 14.8551 13.8620CAD 6.6679 6.1671AUD 5.3408 5.3141HKD 1.3229 1.1757CHF 6.1197 5.4236BRL 4.3877 5.0358

Balance sheets (closing-day rates)2001 2000

EUR 9.4240 8.8570USD 10.6700 9.5300JPY 0.0813 0.0832GBP 15.4800 14.2200CAD 6.6923 6.3500AUD 5.4250 5.2825HKD 1.3675 1.2225CHF 6.3625 5.8135BRL 4.6078 4.9038

InventoriesInventories have been valued at their acquisition price or their actualvalue, whichever is lower. The actual value is the re-acquisition value orthe net sales value, if this is lower. The acquisition value is calculatedaccording to the FIFO (first-in-first-out) method. The acquisition costincludes material, labor and other production costs.

Accounts receivableAccounts receivable are recorded on the basis of individual valuations of the amounts expected to be received.

Fixed assetsFixed assets are recorded at their acquisition price after a deduction forstraight-line amortization or depreciation. Amortization or depreciationtakes place on a straight-line basis over the estimated economic life ofthe asset. The following depreciation periods are used for the varioustypes of assets:

Goodwill 5-20 yearsOther intangible assets 3-5 yearsLand improvements 25 yearsBuildings 25 yearsMachinery 5 yearsEquipment 5 years

The group’s goodwill is related primarily to the acquisition of Nobel Biocare USA, Inc. (formerly Steri-Oss Inc) and Procera Sandvik AB (beingchanged to Nobel Biocare Procera AB). The amortization of these good-will items takes place over 20 years, and the amortization of goodwillattributable to the acquisition of Procera Sandvik AB will begin in 2002.The amortization period for goodwill attributable to Nobel Biocare USA,Inc. is justified by Steri-Oss’ brand names, market position, especially inNorth America, and research and development programs. The amortiza-tion period for goodwill attributable to Procera Sandvik AB is justified by this company's research and development programs when it comesto individualized ceramic prosthetics for both conventional and implant

Comments and notes to the accountsNOTE 1 Accounting and valuation principles

The Nobel Biocare Group’s accounting and valuation principles complywith the recommendations and statements of the Swedish FinancialAccounting Standards Council.

The Swedish Financial Accounting Standards Council has issued newrecommendations, several of which came into force on 1 January 2001.The Nobel Biocare Group has been applying these recommendationsfrom the interim report for the first quarter of 2001. The recommenda-tion which has the greatest effect on the group’s financial reports isDirective No. 9, Income tax. If Directive No. 9 had been applied to theyear 2000, the group’s tax expence for the year would have increasedby SEK 77 M. The group's balance sheet has been converted to takeaccount of the deferred tax asset and the group's opening equity for2001 has been increased by some SEK 223 M.

Consolidated accounts The consolidated accounts include, in addition to the parent company,group companies in which the parent company has more than 50 percent of the voting rights.

The consolidated accounts are prepared in accordance with the recommendations of the Swedish Financial Accounting Standards Council with respect to consolidated accounting and the consolidatedbalance sheet is prepared in accordance with the purchase method. The group applies the so-called current method when converting theaccounts of foreign group companies. The balance sheets of all groupcompanies have been translated at the exchange rates on 31 December,while the income statements have been translated at average exchangerates for the year. Resulting translation differences are credited/chargeddirectly to shareholders’ equity.

Associated companiesAssociated companies are companies in which the parent companyholds a minimum of 20 per cent and a maximum of 50 per cent of thevoting rights and where this ownership constitutes part of a permanentrelationship. On 31 December 2001, Nobel Biocare AB owned one associated company, ENTific Medical Systems AB (39.8 per cent). ENTific Medical Systems is recorded at its acquisition value as this largelycorresponds to Nobel Biocare AB's share of the company's equity on 31 December 2001.

Until 26 December 2001, Procera Sandvik AB was a joint venturebetween Nobel Biocare AB and Sandvik Hard Materials AB and wasrecorded until that date according to the proportional method. From 27 December 2001, Procera Sandvik AB is a group company.

Receivables and liabilities in foreign currency Receivables, liabilities and forward agreements in foreign currency havebeen valued in accordance with Directive No. 8 of the Swedish FinancialAccounting Standards Council. Differences in interest between SEK andindividual currencies are recorded among net interest income/expense,while currency exchange differences are recorded among the cost ofgoods sold.

Currency exchange ratesThe following exchange rates have been used when the income statements and balance sheets of foreign group companies have been translated:


Statements of cash flowsThe statements of cash flows have been drawn up in accordance with Directive No. 7 of the Swedish Financial Accounting Standards Councilrelating to the recording of cash flows in accordance with the indirectmethod. Cash and bank balances are classified as liquid assets.

NOTE 2 Distribution of net sales betweenbusiness areas and geographical marketsNet sales are distributed between business areas as follows:

Group Parent Company2001 2000 2001 2000

Dental Implants 2 329 532 1 851 048 1 000 879 748 775Procera® 333 697 258 472 267 874 215 793Total 2 663 229 2 109 520 1 268 753 964 568

Net sales are distributed between geographical markets as follows:Group Parent Company

2001 2000 2001 2000Nordic countries 177 932 145 612 176 248 168 493Europe, excl. Nordic countries 950 479 739 697 574 280 395 169North America 1 114 749 863 964 313 664 263 064Other markets 420 069 360 247 204 561 137 842Total 2 663 229 2 109 520 1 268 753 964 568

treatment and the fact that, as a result of the acquisition, the Nobel Biocare Group can make more effective use of its existing sales and distribution network to secure future development and positioning onthe total dental market.

LeasingThe group has no financial leasing contracts apart from contracts relat-ing to company cars, which have no material value. No capitalizationhas therefore taken place.

Warranty reservesThe estimated cost of future warranty undertakings is reserved at thetime of sale.

Pension costs/pension liabilitiesThe group’s pension costs are entered as a liability and/or paid to insurance companies as they are earned. The pension liability is basedon actuarial conditions based on the salary and pension levels prevailingon closing day.

Research and development workResearch and development costs are charged in the year in which theyare incurred.

Prices between group companiesThe prices of deliveries between group companies are based on themarket rates.

NOTE 3 Salaries, other remunerations and payroll overheads2001 2000

Salaries and other Payroll overheads Salaries and other Payroll overheadsremunerations (whereof pension costs) remunerations (whereof pension costs)

Parent company 160 957 83 123 (36 946) 124 821 56 947 (16 734)Group Companies outside Sweden 405 842 116 465 (16 258) 340 245 88 420 (8 319)Group Total 566 799 202 619 (53 774) 465 066 145 367 (25 053)

Salaries and other remunerations distributed by country and between board members etc and other employees:

Board 2001 Board 2000and president Other employees and president Other employees

Parent company 16 065 144 892 5 609 119 212Group Companies outside Sweden 18 658 387 184 16 127 324 118Group Total 34 723 523 076 21 736 443 330

In 2001, the current president received a total of SEK 1,000 K (SEK 0 K)in salary and other remunerations. In 2001, the former presidentreceived, a total of SEK 12,045 K (SEK 2,869 K), including salary andbonus both paid and accrued as severance pay.

The parent company's salaries and other remunerations include abonus to the current president of SEK 0 K (SEK 0 K) and to the formerpresident of SEK 3,493 K (SEK 0 K) including bonus accrued as sever-ance pay. Bonuses to the presidents of foreign subsidiaries total SEK2,436 K (SEK 1,247 K).

The president has an agreement including a six-month period ofnotice from the company. The company has the opportunity to main-tain the non-competition clause for one year against payment of salary.In 2001, a pension premium of SEK 0 K (SEK 0 K) was paid on behalf of the current president, while SEK 9,277 K (SEK 2,798 K) includingpension accrued as severance pay was paid on behalf of the formerpresident.

In 2001, other leading executives received a total of SEK 7,383 K insalaries and other remunerations, and former other leading executivesreceived a total of SEK 2,722 K in salaries and other remunerations. In 2000, other leading executives received a total of SEK 8,200 K insalaries and other remunerations. Other leading executives have a peri-od of notice of six months on the part of the company with severancepay of 12 months’ salary, but with a deduction of the income receivedfrom a potential new employer. These executives receive a pension inaccordance with the ITP (supplementary pensions for salaried employ-ees) plan. The age of retirement varies between 60 and 65 years.

In accordance with a decision at a shareholders’ meeting in 2001, the chairman of the board receives renmunerations of SEK 302 K (SEK210 K) and other board members each receive, SEK 180 K (SEK 125 K).


NOTE 7 Result from participation in group companies

Parent Company2001 2000

Dividends from group companies 14 150 18 978Write-down of participation in group companies -10 455 -6 793Total 3 695 12 185

NOTE 8 Result from participation inassociated companies


Write-down of participation in associated companiesdue to shareholder´s contribution – -13 500Total – -13 500

The production of Procera AllCeram takes place at the former associatedcompany Procera Sandvik AB (being changed to Nobel Biocare ProceraAB). As a result of the agreement between the former owners, whichregulated the prices between Nobel Biocare AB and Procera Sandvik AB,the parent company’s and the group’s recorded cost of goods sold ishigher, whereas the selling and administrative expenses are lower thanthe corresponding costs in previous years.

NOTE 9 Interest income and similar itemsGroup Parent Company

2001 2000 2001 2000Interest income on receivablesfrom associated companies – – – 2 542Other interest income 11 770 6 109 69 580 69 796Exchange rate differences – – 245 721 230 848Other financial income 800 287 – –Total 12 570 6 396 315 301 303 186

Of which the following relate to group companies Interest income – – 63 002 68 757Exchange rate differences – – 203 464 183 420Total – – 266 466 252 177

NOTE 10 Interest expense and similar itemsGroup Parent Company

2001 2000 2001 2000Interest expense 30 283 44 371 28 100 39 738Exchange rate differences 1 428 115 178 031 187 885Other financial expenses 5 612 3 732 526 371Total 37 323 48 218 206 657 227 994

Of which the following relate to group companiesInterest expense – – 1 612 –Exchange rate differences – – 80 102 88 395Total – – 81 714 88 395

NOTE 4 Non-recurring itemsNon-recurring Group Parent Companyincome 2001 2000 2001 2000Refund of surplus fundsfrom Alecta PensionInsurance, mutually (former SPP) – 22 280 – 22 280

– 22 280 – 22 280Non-recurring expensesSeverence pay to former executive management -20 857 – -20 857 –Reorganization of theEuropean administration -6 405 – -1 634 –Accruals for scrapping costsdue to new valuation policy -39 100 – -7 000 –

-66 362 – -29 491 – Non-recurringitems, net -66 362 22 280 -29 491 22 280

NOTE 5 Amortization and depreciationIntangible fixed Group Parent Companyassets 2001 2000 2001 2000Capitalized expenditurefor computer programs 16 974 14 161 11 930 9 474Patents 935 1 154 935 1 154Goodwill 64 436 59 095 2 294 2 294Total 82 345 74 410 15 159 12 922

Tangible fixed assetsBuildings and land 1 326 1 153 1 326 1 153Machinery 26 063 15 758 9 532 10 293Equipment 41 283 30 237 6 342 5 222

68 672 47 148 17 200 16 668Total 151 017 121 558 32 359 29 590

Group amortization and depreciation is divided between the cost ofgoods sold, SEK 30,889 K (SEK 21,767 K), selling expenses SEK 97,883 K (SEK 80,460 K) and administrative expenses SEK 22,245 K(SEK 19,331 K).

Parent company amortization and depreciation is divided between the cost of goods sold, SEK 9,791 K (SEK 11,446 K), selling expensesSEK 2,425 K (SEK 2,294 K) and administrative expenses SEK 20,143 K (SEK 15,850 K).

NOTE 6 Fees to auditorsGroup Parent Company

2001 2000 2001 2000Ernst & YoungAuditing assignments 2 236 1 202 542 329Other assignments 647 1 325 243 –Other auditing firmsAuditing assignments 199 111 – –Other assignments – 31 – –Total 3 082 2 669 785 329

Auditing assignments involve auditing the annual report and theaccounts, together with the management of the board of directors andthe president and other duties for which the company´s auditors areresponsible. It also includes advice or other assistance resulting fromobservations made during these audits or the performance of other such duties. Everything else is classified as other assignments.


NOTE 13 Intangible fixed assetsCapitalized expenditure Group Parent Companyfor computer programs 2001 2000 2001 2000Opening acquisition value 67 216 54 490 48 737 40 963Investments for the year 3 121 9 506 984 7 774Sales and scrap -38 -47 – –Reclassification – 2 649 – –Translation difference 1 250 618 – –Closing accumulated acquisition value 71 549 67 216 49 721 48 737Opening amortization 45 673 29 978 31 944 22 470Amortization for the year 16 974 14 161 11 930 9 474Sales and scrap -38 -47 – –Reclassification – 1 266 – –Translation difference 893 315 – –Closing accumulated amortization 63 502 45 673 43 874 31 944Closing book value 8 047 21 543 5 847 16 793

Group Parent CompanyPatents 2001 2000 2001 2000Opening acquisition value 21 607 17 867 12 772 9 963Investments for the year 1 106 208 1 106 208Reclassification – 2 601 – 2 601Translation difference 1 057 931 – –Closing accumulatedacquisition value 23 770 21 607 13 878 12 772Opening amortization 18 210 15 191 9 375 8 221Amortization for the year 935 1 154 935 1 154Reclassification – 1 084 – –Translation difference 1 057 781 – –Closing accumulatedamortization 20 202 18 210 10 310 9 375Closing book value 3 568 3 397 3 568 3 397

Group Parent CompanyGoodwill 2001 2000 2001 2000Opening acquisition value 1 193 387 1 125 163 11 472 11 472Investments for the year 553 784 6 347 – –Translation difference 70 821 61 877 – –Closing accumulated acquisition value 1 817 992 1 193 387 11 472 11 472Opening amortization 162 971 95 929 3 632 1 338Amortization for the year 64 436 59 095 2 294 2 294Translation difference 12 057 7 947 – –Closing accumulatedamortization 239 464 162 971 5 926 3 632Closing book value 1 578 528 1 030 416 5 546 7 840

NOTE 11 AppropriationsParent Company2001 2000

Difference between book depreciationand straight-line depreciation 731 731Total 731 731

NOTE 12 TaxesThe group´s tax expense consists of the following components:


Current tax 33 828 29 244 – –Deferred tax on temporary differences 116 204 84 421 92 954 76 796Total 150 032 113 665 92 954 76 796

When applying Directive No. 9 to the year 2000, the group’s tax expencefor the year increased by SEK 77 M. The group's balance sheet has beenrestated to take account of the deferred tax asset and the group's open-ing equity for 2001 has been increased by some SEK 223 M.

The following deferred tax items are related to items booked directly toequity:


Deferred tax assets related to temporary differences – 293 157 – 172 270Total – 293 157 – 172 270

The difference between the group´s tax expense and the tax expensebased on actual tax rates consists of the following components:


Result before tax 338 986 247 785 338 180 247 777Tax according to actual tax rates 125 425 91 680 94 690 69 378Accruals relating to ongoing tax inspections 13 013 6 477 – –Tax losses not included in the basis for deferred tax assets 9 762 9 272 – –Tax effect on income/expenses not being taxable/deductible, net 1 832 6 236 -1 736 7 418Total tax expense 150 032 113 665 92 954 76 796

The actual tax rate for the group is 37% (37%) and in the parent com-pany 28% (28%)

Temporary differences occur when the booked values of the assets/lia-bilities differ from the tax values. The temporary differences in the groupresulted in the following deferred tax assets:

Group Parent CompanyDeferred tax assets 2001 2000 2001 2000Tax losses carried forward 43 934 157 533 2 520 95 474Intercompany profit in inventories 40 334 33 589 – –Other temporary differences 23 607 32 757 – –Total 107 875 223 879 2 520 95 474


Group Parent CompanyEquipment 2001 2000 2001 2000Opening acquisition value 243 285 162 590 53 512 49 918Investments for the year 71 612 52 656 34 216 6 532Sales and scrap -12 973 -5 788 – –Reclassification -10 534 26 346 -10 534 -2 939Translation difference 19 837 7 481 23 1Closing accumulated acquisition value 311 227 243 285 77 217 53 512Opening depreciation 144 237 95 244 38 572 34 309Depreciation for the year 41 283 30 237 6 342 5 222Sales and scrap -7 681 -5 273 – –Reclassification – 20 438 – -955Translation difference 7 617 3 591 15 -4Closing accumulateddepreciation 185 456 144 237 44 929 38 572Closing book value 125 771 99 048 32 288 14 940

NOTE 15 Financial fixed assets Parent Company

Participation in group companies 2001 2000Opening acquisition value 803 821 797 028Investments for the year 558 773 –Capital contributions 10 455 6 793Reclassification 14 006 –Closing accumulated acquisition value 1 387 055 803 821Opening write-down 324 166 317 373Write-down for the year 10 455 6 793Reclassification 13 500 –Closing accumulated write-down 348 121 324 166Closing book value 1 038 934 479 655

Group Parent CompanyParticipation in associated companies 2001 2000 2001 2000Opening acquisition value 21 067 7 567 21 573 8 073Investments for the year 7 960 – 7 960 –Capital contributions – 13 500 – 13 500Reclassification -13 500 – -14 006 –Closing accumulated acquisition value 15 527 21 067 15 527 21 573Opening write-down 13 500 – 13 500 –Write-down for the year – 13 500 – 13 500Reclassification -13 500 – -13 500 –Closing accumulated write-down – 13 500 – 13 500Closing book value 15 527 7 567 15 527 8 073

NOTE 14 Tangible fixed assetsGroup Parent Company

Buildings and land 2001 2000 2001 2000Opening acquisition value 38 470 52 897 38 470 29 376Investments for the year – 9 094 – 9 094Sales and scrap -670 – -670 –Subsidies received -1 586 – -1 586 –Reclassification -4 368 -26 293 -4 368 –Translation difference – 2 772 – –Closing accumulated acquisition value 31 846 38 470 31 846 38 470Opening depreciation 13 454 29 778 13 454 12 301Depreciation for the year 1 326 1 153 1 326 1 153Reclassification – -19 536 – –Translation difference – 2 059 – –Closing accumulateddepreciation 14 780 13 454 14 780 13 454Closing residual valueaccording to plan 17 066 25 016 17 066 25 016Difference between book depreciation and straight-line depreciation – – -8 289 -9 020Closing book value 17 066 25 016 8 777 15 996Book value of realestate in Sweden 8 777 15 996 8 777 15 996Assessed value ofreal estate in Sweden 9 867 8 667 9 867 8 667

Group Parent CompanyMachinery 2001 2000 2001 2000Opening acquisition value 239 570 210 972 140 080 131 161Investments for the year 27 979 29 971 9 958 8 919Acquired group company 44 170 – – –Sales and scrap -1 002 – -1 002 –Reclassification 14 902 -5 303 14 902 –Translation difference 6 190 3 930 – –Closing accumulatedacquisition value 331 809 239 570 163 938 140 080Opening depreciation 150 864 129 560 118 672 110 361Depreciation for the year 26 063 15 758 9 532 10 293Acquired group company 11 742 – – –Sales and scrap -1 002 – -1 002 –Reclassification – 3 252 – -1 982Translation difference 372 2 294 – –Closing accumulated depreciation 188 039 150 864 127 202 118 672Closing book value 143 770 88 706 36 736 21 408


NOTE 16 Participation in group companiesCorporate HQ Capital Percentage of No. of Book value

ID No. voting rights participations of sharesNobel Biocare Norden AB 556230-1001 Gothenburg, Sweden 100% 100% 3 500 501Nobel Orthopedics AB 556238-5798 Gothenburg, Sweden 100% 100% 1 000 100Nobel Biocare Procera AB (being changed to Nobel Biocare Dental Products AB) 556489-2148 Gothenburg, Sweden 100% 100% 100 100Nobel Biocare i Göteborg AB 556250-0883 Gothenburg, Sweden 100% 100% 15 000 –Procera Sandvik AB (being changed to Nobel Biocare Procera AB) 556350-7879 Stockholm, Sweden 50% 50% 10 000 506Sandvik PSAB Invest AB(being changed to Procera Invest AB) 556609-1970 Sandviken, Sweden 100% 100% 1 000 549 034Nobel Biocare Holding AG Zürich, Switzerland 100% 100% 100 641Nobel Biocare Asia Ltd Hong Kong 100% 100% 10 000 –Nobel Biocare Australia Pty Ltd Sydney, Australia 100% 100% 4 1 101Nobel Biocare Benelux BV Utrecht, The Netherlands 100% 100% 200 1 437Nobel Biocare Brasil Ltda Sao Paulo, Brazil 100% 100% 218 180 1 561Nobel Biocare Canada Inc Toronto, Canada 100% 100% 1 850 16 542Nobel Biocare Deutschland GmbH Cologne, Germany 100% 100% – 3 099Nobel Biocare Ibérica S.A Barcelona, Spain 100% 100% 1 000 501Nobel Biocare France S.A.S. Paris, France 100% 100% 40 500 37Nobel Biocare Italiana S.r.l. Milan, Italy 100% 100% 1 97Nobel Biocare Japan KK Tokyo, Japan 100% 100% 250 140Nobel Biocare Polska Spzoo Warsaw, Poland 100% 100% 100 –Nobel Biocare AG Luzern, Switzerland 100% 100% 540 113Nobel Biocare Singapore Pte Ltd Singapore 100% 100% 5 000 –Nobel Biocare UK Ltd London, Great Britain 100% 100% 620 000 4 756Nobel Biocare Österreich GmbH St Pölten, Austria 100% 100% – 394Nobel Biocare USA, Inc. Yorba Linda, USA 100% 100% 50 000 449 176NBiocare Dental Products México S.A. de C.V. Mexico City, Mexico 100% 100% 49 9 098Total 1 038 934

The acquisition of the remaining 50 per cent of the shares in Procera Sandvik AB, via Sandvik PSAB Invest AB, is made up of a cash payment and adeferred purchase price that is based on a defined segment of the annual sales value up to and including 2012. Both the cash portion and the estimat-ed deferred purchase price have been recorded as participation in group companies in the parent company's balance sheet as of 31 December 2001.

NOTE 17 Participation in associated companiesShare of capital rights Share of voting rights Book value in parent company Number of shares2001 2000 2001 2000 2001 2000 2001 2000

ENTific Medical Systems AB 39,8% 39,8% 39,8% 39,8% 15 527 7 567 570 119 500 000Procera Sandvik AB – 50,0% – 50,0% – 506 – 5 000Total 15 527 8 073

Procera Sandvik AB is from 27 December, 2001, a fully-owned group company within the Nobel Biocare Group.In 2001, 70 119 shares have been subscribed at a value of SEK K 7 960 in connection with a new share issue in ENTific Medical Systems AB.

Information relating to corporate ID number, headquarters, equity and income after tax:

Equity Income after taxCorporate ID No. HQ 2001 2000 2001 2000ENTific Medical Systems AB 556561-7114 Gothenburg 36 675 15 817 525 -12 582


NOTE 21 Change in equityGroup Share Restricted Non-

capital reserves restrictedequity

Opening balance in accordancewith adopted balance sheet 314 439 748 150 452 749Effect of new accounting policy – – 222 589Restated opening balance 314 439 748 150 675 338Redemptions of warrants 2 497 931 –Options – – -2 100Change in translation difference – – 67 159Transfers between restrictedand non-restricted equity – -47 866 47 866Dividends – – -60 774Net profit for the year – – 188 954Closing balance 316 936 701 215 916 443

Parent company Share Statutory Share Non-capital reserve premium restricted

reserve equityOpening balance in accordance with adopted balance sheet 314 439 86 935 521 764 505 080Effect of new accounting policy – – – 95 474Restated opening balance 314 439 86 935 521 764 600 554Redemptions of warrants 2 497 – 931 -Options – – – -2 100Change in translation difference – – – 168Dividends – – – -60 774Net profit for the year – – – 245 226Closing balance 316 936 86 935 522 695 783 074

Nobel Biocare AB´s share capital comprises 25,354,900 shares with a parvalue of SEK 12,50 a share. All the shares carry the same voting rights.

The number of outstanding unredeemed subscription rights totals66,418. Each subscription right entitles the holder to subscribe to onenew share.

NOTE 22 AllocationsGroup Parent Company

2001 2000 2001 2000Restructuring measuresin connection with acquisitionof group companies 1 613 2 347 – –Warranties 9 382 7 867 5 695 3 044Pensions 8 731 6 850 – –Deferred purchase price related to the acquisition of group company 184 000 – 184 000 –Total 203 726 17 064 189 695 3 044

Totally accrued deferred purchase price at acquisition of group companyamounts to SEK 202 000 K, whereof the short-term portion, SEK 18 000K, is booked as a short-term liability.

NOTE 18 Other long-term receivablesGroup Parent Company

2001 2000 2001 2000Long-term accounts receivable 13 670 10 329 – –Rent deposits 7 606 7 726 – –Alecta (former SPP) funds 2 691 10 048 2 691 10 048Advances to suppliers – 991 – 991Total 23 967 29 094 2 691 11 039

NOTE 19 Prepaid expenses and accruedincome


Prepaid selling expenses 12 386 8 482 2 192 3 585Prepaid rent 7 069 6 391 2 909 2 801Prepaid R&D expenses 3 338 – 3 338 –Prepaid insurance 1 812 1 409 519 640Prepaid royalty 3 379 9 485 1 192 5 990Other items 14 429 6 525 6 824 1 000Total 42 413 32 292 16 974 14 016

NOTE 20 Cash and bankAt year-end, unutilized credits, which were not included in cash andbank, totalled SEK 409,172 K (SEK 254,681 K) in the group and SEK382,382 K (SEK 247,819 K) in the parent company.


NOTE 27 Purchases and sales between groupcompaniesThe percentage of the year´s purchases and sales relating to group com-panies is shown below:


Purchases in % 17.4 16.9Sales in % 87.4 84.1

NOTE 28 Average number of employees2001 2000

No of Whereof No of Whereofempl. men empl. men

Parent companyGothenburg 179 92 213 103Karlskoga 172 100 159 93Total for parent company 351 192 372 196

Total for subsidiaries 896 440 792 396Total for the group 1 247 632 1 164 592

NOTE 29 Acquisition of group and associatedcompaniesAcquired assets and liabilities during 2001 according to the acquisition balances:

Capital structure in acquired entitiesLiquid assets 2 849Intangible fixed assets 553 784Tangible fixed assets 32 428Financial fixed assets –Other current assets than liquid assets 39 357

628 418Equity in acquired entities 11 592Long-term liabilities 3 855Short-term liabilities 51 349

66 796Acquisition of group companiesPaid purchase price -352 928Liquid assets in acquired entities 2 849Subtotal -350 079

New share issue in associated companyPaid purchase price -7 960Subtotal -7 960Total -358 039

NOTE 23 Long-term liabilitiesGroup Parent Company

2001 2000 2001 2000Liabilities to group companies – – 42 494 9 924Bank loans 450 283 504 650 441 557 464 156Total 450 283 504 650 484 051 474 080

The long-term liabilities relate to loans raised within the framework ofthe group´s long-term credit facilities. Liabilities in foreign currency havebeen translated at the closing exchange rate. All the liabilities becomedue within five years.

The parent company has an agreement including what is known as anegative clause with the banks that were involved in financing theacquisition of Nobel Biocare USA, Inc. (former Steri-Oss Inc.). There arealso terms regarding some key ratios such as equity/ assets ratio andinterest coverage rate.

NOTE 24 Accrued expenses and prepaidincome


Personnel-related costs 117 250 48 379 64 078 21 860Accrued legal expenses 24 052 4 832 900 500Accrued selling expenses 20 037 16 230 228 2 376Accrued royalties 6 347 8 070 4 259 6 595Accrued interest 1 937 9 459 998 9 447Accrued R&D expenses 5 356 3 554 4 968 3 275Other items 30 053 35 609 14 905 2 962Total 205 032 126 133 90 336 47 015

NOTE 25 Pledged assetsGroup Parent Company

2001 2000 2001 2000Cash and bank 15 273 338 14 882 –Total 15 273 338 14 882 –

NOTE 26 Contingent liabilitiesGroup Parent Company

2001 2000 2001 2000Contingent liabilitieson behalf of other group companies – – 18 934 29 031Other contingent liabilities 18 489 9 878 16 988 8 499Total 18 489 9 878 35 922 37 530

In addition to the contingent liabilities, the group has undertakingsrelating to rental contracts (operational leasing agreements) in whichthe remaining payments amount to and are distributed in terms of timeas follows:


Within one year 45 178 41 739 9 751 7 975Between two to four years 73 632 88 008 8 947 17 930After four years 12 745 16 154 – –


Seven-year reviewIncome statement (SEK M) 2001 2000* 1999 1998 1997 1996 1995Net sales 2 663.2 2 109.5 1 738.1 1 309.7 1 068.2 966.2 928.2Operating income excluding non-recurring items 430,1 267.3 228.2 121.5 83.2 107.6 92.6Non-recurring items -66.4 22.3 -9.1 -47.8 30.4 – -68.2Operating income 363.7 289.6 219.1 73.8 113.6 107.6 24.4Profit before tax 339.0 247.8 184.4 64.7 112.5 112.2 32.2Profit for the year 189.0 134.1 141.1 46.7 97.7 100.3 22.6

Balance sheets (SEK M)Fixed assets 1 956.6 1 424.0 1 263.9 1 182.3 155.2 127.9 120.2Current assets 1 089.4 1 159.2 899.5 818.6 632.2 534.6 463.1Total assets 3 046.0 2 583.2 2 163.4 2 000.9 787.4 662.5 583.3Shareholders´equity 1 934.6 1 737.9 1 309.0 1 192.0 567.1 498.1 421.3Allocations 203.7 17.1 32.7 65.7 33.1 15.7 14.3Long-term liabilities 450.3 504.6 455.8 380.4 2.5 4.3 9.7Current liabilities 457.4 323.6 365.9 362.8 184.7 144.4 138.0Total equity and liabilities 3 046.0 2 583.2 2 163.4 2 000.9 787.4 662.5 583.3Net debt 272.0 381.7 437.5 326.2 pos. pos. pos.

MiscellaneousCash flow from current operations (SEK M) 684.4 261.9 21.1 -13.8 100.9 92.7 75.2Investments in tangible fixed assets (SEK M) 99.6 91.7 82.4 44.5 40.6 24.3 27.9Average number of employees 1 247 1 164 1 111 1 016 782 799 743

Key figures2001 2000* 1999 1998 1997 1996 1995

Growth in net sales (%) 26 21 33 23 11 4 11Operating margin before goodwill amortization (%) 16.1 16.5 15.8 6.9 10.6 11.1 2.6Operating margin (%) 13.7 13.7 12.6 5.6 10.6 11.1 2.6Profit margin (%) 7.1 6.4 8.1 3.6 9.1 10.4 2.4Return on equity (%) 10.1 8.1 11.3 5.5 18.6 21.9 5.3Return on capital employed (%) 15.4 13.0 12.4 7.0 22.0 25.6 8.3Equity/ assets ratio (%) 64 67 61 60 72 75 72Net debt/ equity ratio (%) 14.1 22.8 33.4 27.4 pos. pos. pos.Interest coverage ratio (times) 10.1 6.0 5.9 6.0 – – –

Key figures, excluding non-recurring itemsOperating margin before goodwill amortization (%) 18.6 15.5 16.3 10.6 7.7 11.1 10.0Operating margin (%) 16.1 12.7 13.1 9.3 7.7 11.1 10.0Return on equity (%) 13.7 6.8 12.1 11.0 12.8 21.9 21.7Return on capital employed (%) 18.2 12.0 12.9 11.3 16.4 25.6 22.6

* Restated due to new accounting recommendations.The comparison years 1995-1999 have not been restated due to new accounting recommendations.


Operating marginOperating income divided by net sales.

Profit marginProfit for the year divided by net sales.

Return on equityProfit for the year divided by average equity.

Return on capital employedResult after financial items plus financialexpense divided by average capitalemployed.

Equity/ assets ratioEquity divided by total assets.

Net debt/ equity ratioInterest-bearing liabilities less interest-bearingassets divided by equity.

Interest coverage ratioResult after financial items plus financialexpense divided by financial expense.

Direct yieldThe dividend per share as a percentage ofpurchase price as per 31 December.

Dividend percentageThe dividend per share divided by theprofit per share after tax.

Dividend in relation to equityDividend as a percentage of equity.

Profit per share after financial itemsProfit after financial items divided by the average number of outstanding shares.

Profit per shareProfit after tax divided by the average number of outstanding shares.

Profit per share after dilutionProfit after tax divided by the average number of outstanding shares adjusted for the dilution effect.

Profit per share after full conversionProfit after tax divided by the number ofoutstanding shares after full conversion.

Equity per shareEquity divided by the number of out-standing shares.

Equity per share after full conversionEquity divided by the number of out-standing shares after full conversion.

Cash flow per shareCash flow for the year divided by the average number of outstanding shares.

P/E ratio before goodwill mortizationThe share price at year-end divided by the profit per share before goodwill amortization.

P/E ratio after financial itemsThe share price at year-end divided by the profit per share after financial items.

P/E ratio after taxThe share price at year-end divided by the profit per share after tax.

Data per share2001 2000* 1999 1998 1997 1996 1995

Number of shares on 31 December 25 354 900 25 155 086 24 922 934 24 764 579 18 950 500 18 950 500 18 950 500Number of shares after full conversion 26 617 318 25 421 318 25 421 318 25 421 318 18 950 500 18 950 500 18 950 500Purchase price 31 December (SEK) 437.50 290 120 110 104 116 82.50Market price 31 December (SEK M) 11 093 7 295 2 999 2 724 1 971 2 274 1 573Dividend per share (SEK) 3.00** 2.40 2.00 1.70 1.55 1.35 1.15Yield (%) 0.7 0.8 1.7 1.5 1.5 1.2 1.4Dividend percentage (%) 40 45 35 90 30 26 97Dividend in relation to equity (%) 3.9 3.5 3.8 3.5 5.2 5.1 5.2Profit per share before goodwill amortization (SEK) 10.00 7.71 7.87 2.56 5.15 5.29 1.19Profit per share after financial items (SEK) 13.37 9.88 7.40 2.61 5.94 5.92 1.70Profit per share (SEK) 7.45 5.35 5.66 1.88 5.15 5.29 1.19Profit per share after dilution (SEK) 7.12 5.29 5.55 1.84 5.15 5.29 1.19Profit per share after full conversion (SEK) 7.10 5.28 5.55 1.84 5.15 5.29 1.19Equity per share (SEK) 76.33 69.32 52.52 48.13 29.93 26.29 22.23Equity per share after full conversion (SEK) 72.68 68.37 51.49 46.89 29.93 26.29 22.23Cash flow per share (SEK) 2.68 1.42 -0.20 -0.50 1.74 3.25 1.81P/E ratio before goodwill amortization 44 38 12 19 13 16 25P/E ratio after financial items 33 29 16 42 18 20 49P/E ratio after taxes 59 54 21 59 20 22 69

* Recalculated due to new accounting recommendations. ** Proposed dividendThe comparison years 1995-1999 have not been restated due to new accounting recommendations.

Definitions


Audit Report

The board of directors and the president propose that the profits shouldbe allocated as follows:

To the shareholders, a dividend of SEK 3.00 per share 76 065To be carried forward 707 009TOTAL 783 074

When the proposed allocations have been completed, the parent company´s equity will be as follows:

Share capital 316 936Statutory reserve 86 935Share premium reserve 522 695Retained earnings 707 009TOTAL 1 633 575

Proposed allocation of profitsNobel Biocare´s dividend to its shareholders should reflect thegroup´s long-term financial development. The aim is that the dividend should be approximately one-third of the net profit.

It is proposed that the dividend for 2001 should be SEK 3.00 per share.

SEK KAt the disposal of the Annual General MeetingEarnings retained from the preceding year 537 848Net profit 245 226TOTAL 783 074

On 31 December, 2001, the group´s non-restricted equity totalled SEK 916 443 K. No allocations to restricted reserves are proposed.

Gothenburg, 7 February 2002

Ernst Thomke Jan Ekberg Jan KvarnströmChairman

Ernst Zaengerle Åke Andersson Anne-Kristine Wilson

Heliane CanepaPresident

To the general meeting of the shareholders of Nobel Biocare AB (publ)Corporate identity number 556002 - 0231

We have audited the annual accounts, the consolidated accounts,the accounting records and the administration of the board ofdirectors and the managing director of Nobel Biocare AB (publ) forthe financial year 2001. These accounts and the administration ofthe company are the responsibility of the board of directors andthe managing director. Our responsibility is to express an opinionon the annual accounts, the consolidated accounts and the admin-istration based on our audit.

We conducted our audit in accordance with generally acceptedauditing standards in Sweden. Those standards require that weplan and perform the audit to obtain reasonable assurance that theannual accounts and the consolidated accounts are free of materialmisstatement. An audit includes examining, on a test basis, evi-dence supporting the amounts and disclosures in the accounts. An audit also includes assessing the accounting principles used andtheir application by the board of directors and the managing director, as well as evaluating the overall presentation of informa-tion in the annual accounts and the consolidated accounts. As abasis for our opinion concerning discharge from liability, we exam-ined significant decisions, actions taken and circumstances of thecompany in order to be able to determine the liability, if any, to the

company of any board member or the managing director. We alsoexamined whether any board member or the managing directorhas in any other way acted in contravention of the Companies Act,the Annual Accounts Act or the Articles of Association. We believethat our audit provides a reasonable basis for our opinion set outbelow.

The annual accounts and the consolidated accounts have beenprepared in accordance with the Annual Accounts Act and, thereby,give a true and fair view of the financial position of the company’sand the group’s financial position and of the results of operations inaccordance with generally accepted accounting principles in Swe-den.

We recommend to the general meeting of the shareholders thatthe income statements and the balance sheets of the parent com-pany and the group be adopted, that the profit for the parent com-pany be dealt with in accordance with the proposal in the adminis-tration report and that the members of the board of directors andthe managing director be discharged from liability for the financialyear.

Gothenburg, 7 February 2002

ERNST & YOUNG AB

Bertel EnlundAuthorized Public Accoutant


316,936,250 (314,438,575) distributedbetween 25,354,900 shares (25,155,086)with a nominal value of SEK 12.50. Allshares have equal voting rights andentitle the owners to the same share inthe company’s assets and profits.

Ownership situation andchangesOn 31 December 2001, the total num-ber of registered shareholders amount-

Nobel Biocare’s shares (NOBE) havebeen quoted on the Stockholm StockExchange since 18 March 1994. Since 1 January 2002 the shares havebeen quoted on the list of the mosttraded shares. A round lot amounts to 50 shares.

Share capitalOn 31 December 2001, Nobel BiocareAB’s share capital amounted to SEK

Shares and ownersed to 7,054 (8,217). The proportion ofinstitutional owners was around 90 per-cent and the share of foreign ownerswas approximately 88 percent.

Since the stock market introductionin 1994, a few changes have taken placeregarding share capital. In conjunctionwith Nobel Biocare’s acquisition ofSteri-Oss in 1998, a new share issuecomprising 5,805,622 shares was floatedbringing the total number of shares to24,756,122. In addition 665,196 sub-scription rights were issued. When theyare fully utilised, the total number ofshares will amount to 25,421,318. Thetotal dilution of the number of sharesand votes is around 25 percent. On 31December 2001, 598,778 subscriptionrights had been utilized.

At the Annual General Meeting inApril 2001 it was decided to implement

Shareholders in size classes

Percentage ofNo. of share

owners capital From To

1 - 500 93.5 2.4501 - 1 000 2.5 0.6

1 001 - 2 000 1.0 0.42 001 - 5 000 0.8 0.75 001 - 10 000 0.5 1.0

10 001 - 20 000 0.5 2.020 001 - 50 000 0.6 5.050 001 - 100 000 0.2 4.3

100 001 - 500 000 0.3 22.5500 001 - 1 000 000 <0.1 2.3

1 000 001 - 5 000 000 <0.1 18.15 000 001 - 50 000 000 <0.1 40.7Total: 100 100

Shareholder structure (as of 31/12/2001)Foreign owners 88.3% Swedish owners 11.7%

of whichInstitutions 5.4% Funds 3.1% Private shareholders 3.2%

Number of sharesbought and sold

Affärsvärlden General indexNobel Biocare

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SX351010 Healthcare Equipment & SuppliersNobel Biocare

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2001 2002

Share price information 1/1 2001– 28/2 2002

Share price information 18/3 1994 – 28/2 2002


Price trends and turnoverIn 2001, the highest quoted price wasSEK 450 (November 28) and the low-est was SEK 278 (September 26). Theclosing price paid at the end of theyear was SEK 437.50 (290), represent-ing a price increase of 51 percent overthe year. On December 31, Nobel Biocare’s total market value amountedto SEK 11,090 million (7,308).

During the year, some 18.5 millionshares (18.4) were traded with a totalvalue of SEK 6,450 million (4,161),which equals a turnover rate of 73 percent (73) of the average number of shares. The average number ofshares sold per trading day amountedto 73,882 (73,122).

a staff option program, aimed at around125 senior executives and newlyappointed key individuals. The programcovers a total 1,196,000 options to bedistributed over three years. They runfor three years after allotment and canbe utilized after two years (see furtherdetails in the Directors’ report).

Upon full utilization of all outstand-ing warrants and options the total num-ber of shares will amount to 26,617,318.

The two largest owners in NobelBiocare increased their holding in 2001.The listed Swiss investment companyBB Medtech AG increased its holding to 12.7 percent (10.3) and FidelityFunds to 11.8 percent (7.3) of the sharesand votes.

Analyses of Nobel Biocare sharesNobel Biocare has been analyzed by the following stockbrokers and banks:ABG Sundal Collier Erik MagnussonAlfred Berg Fondkommission Paula Treutiger/Fredrik GutenbrantNordea Securities Stefan WikholmBank am Bellevue Mirjam KaiserBNP Paribas Liz MitchellCazenove Gorm ThomassenCAI Cheuvreux de Vireau Karl-Johan BonnevierD.Carnegie Kristofer Liljeberg SvenssonEnskilda Securities Mats ThorénHandelsbanken Markets Patrik LingMerrill Lynch Michael JünglingMorgan Stanley James McKeanSchroeder Salomon Smith Barney Jeremy GreenSwedbank Markets Martin Sikorski/Jesper NorbergUBS Warburg

The largest owners (as of 31/12/2001)

No. of Shares Percentage of share capitalBB Medtech AG (Schweiz) 3 227 733 12,7%Fidelity fonder (USA) 2 986 300 11,8%Metalor SA (Schweiz) 1 600 000 7,5%Robur Fonder (Sverige) 776 100 3,1%Alecta (Sverige) 452 657 1,8%Thomke, Ernst (Schweiz) 400 000 1,6%Canepa, Heliane (Schweiz) 314 154 1,2%Svenskt Näringsliv (Sverige) 260 000 1,0%Första AP-fonden (Sverige) 237 648 0,9%Nordea Invest Fonder (Danmark) 144 700 0,6%Övriga 14 955 608 57,8%TOTALT 25 354 900 100%

Dividend policy and dividend proposalNobel Biocare’s dividend to its share-holders should reflect the Group’s long-term financial development. The targetis that, over the long term, the dividendshould comprise around one-third ofnet profit. In individual years, the needfor investments and the expected economic fluctuations must be takeninto account.

The Board of Directors andPresident propose an increase of thedividend by 25 percent to SEK 3.00(2.40) per share for the 2001 financialyear, equivalent to 40 percent of netprofit. The proposed dividend equals adirect yield of 0.7 percent (0.8) basedon the purchase price on 31 December2001. The dividend in relation to equitycapital amounts to 3.9 percent (4.0).

Shareholder contactsGunilla Ekholtz, telephone +46 31-81 88 36, fax +46 31-16 31 52, e-mail:[email protected]

Nobel Biocare’s quarterly reportsand press releases are distributedthrough Waymaker, by fax or e-mail.

Press releases and other financialinformation are also available on thecompany’s website:www.nobelbiocare.com

Switzerland 47%

UK 18%

Sweden 11%

Others 8%

USA 13%

Geographical structure


within R&D operations. For severalyears now, the company has also haddifferent incentive programs for a num-ber of key individuals.

Payroll expensesSalaries, other remuneration and payroll overheads constitute NobelBiocare’s largest item of expenditureand correspond to around 21 percent of net sales. All things being equal, aone per cent increase in average payrollexpenses per employee affects NobelBiocare’s operating income by 1.6 percent, based on payroll expenses for 2001.

Input goodsApart from payroll expenses, the “costof goods sold” represents the largestitem on Nobel Biocare’s income state-ment. This item is largely made up ofthe cost of producing and purchasingfinished and semi-finished products,plus the purchase of input goods such as titanium, gold, ceramic powder andpackaging material. None of these in-dividual items are, however, so large asto represent a significant risk in termsof changes in price and cost.

CompetitorsWithin Dental Implants, Nobel Biocareencounters competition from severalplayers constantly seeking to challengethe company for its market-leadingposition. Within Procera there are afew competing systems entering themarket. Nobel Biocare counters thecompetition with the market’s mostpowerful R&D program, an unrivalledintroduction tempo and the industry’smost comprehensive market coverage.

As a growth company with a large per-centage of innovative Research &Development, Nobel Biocare is ex-posed to a number of risks related toits operations. It also faces a numberof financial risks.

Risks related tooperationsThe risks related to operations in amedical technology company as NobelBiocare include those associated withquality, regulatory affairs, employees,distribution, input goods, competitorsand patents.

The development cycle for NobelBiocare’s operations is normally farshorter than that in the pharmaceuti-cal industry, for example. It often takesbetween one and two years from con-cept to launch. This means that un-certainty relating to clinical trials, forexample, does not represent a decisiverisk for the company.

Dependence onregulations and keyindividualsApproval of the authorities and pro-duct liability are regarded as significantrisks in any medical technology busi-ness such as Nobel Biocare. To reducethese risks, Nobel Biocare is workingin compliance with GMP, ISO and CEcertifications throughout the Group.

In a number of respects, NobelBiocare’s operations are knowledgeintensive and the company is workingwith general leadership developmentprograms as well as a system for creat-ing alternative pathways for employees

Risk management andsensitivity analyses

PatentsNobel Biocare’s success is partlydependent on patent protection forits products. In 2001 the company’sR&D operations resulted in 19patents. This patent protection ismost important when it comes toProcera, which is surrounded bycomprehensive system patents.Within Dental Implants the compa-ny’s success, the high rate of devel-opment and introduction are of simi-lar importance as patent protection.

Financial risksManagement of the Group’s finan-cial risks takes place within the parent company, Nobel Biocare AB.The Tresury department acts as aninhouse bank for the Group’s com-panies and complies with needsrelating to financing and investment.The policy for handling financialrisks has been drawn up by theNobel Biocare Board of Directorsand is re-assessed regularly, when-ever operations change.

Currency risksMost of Nobel Biocare’s sales aremade in foreign currencies.Currency risk is defined as the riskthat the group’s flows will be affectednegatively in conjunction with achange in the value of foreign cur-rencies compared with the Swedishkrona.

Of Nobel Biocare’s total sales,approximately 90 percent take placeon markets outside Sweden. As mostof the Group’s sales are made in foreign currencies, Nobel Biocare is


The following table shows how thevalue of the anticipated flow to Swedenof the most important currencies isaffected by a general 10 percent weak-ening or strengthening of the Swedishkrona. As the table shows, the compa-ny’s sensitivity to movements of thekrona in relation to the EUR is farhigher than that in relation to the USD.

Currency % Dec 31 +/-10%unsecured 2001

EUR 34% 9.42 15.7 Mkr USD 21% 10.67 5.6 Mkr JPY 45% 0.0813 3.7 Mkr GBP 10% 15.48 0.3 Mkr CAD 5% 6.69 0.1 MkrAUD 41% 5.42 1.4 Mkr HKD 31% 1.37 0.5 Mkr DKK 25% 1.27 0.3 Mkr

Financing and interest risksThe handling of the Group’s liquidfunds and loans is co-ordinated at central level. To minimize the financingrisks, the financing requirements for thenext few years are covered by long-termcredit facilities.

Interest risk exposure is defined asthe risk that the value of interest-bear-ing assets and liabilities will changewhen the market interest rate changes.Interest rate exposure is handled byselecting different interest periods. On

exposed to fluctuations in the exchangerates for a large number of currencies.

The forecast for incoming and out-going net payments in foreign curren-cies are hedged in accordance with anapproved currency policy. Forwardagreements are continuously made for50-100 percent of these flows for thefollowing 12 months, with the opportu-nity to hedge up to 50 percent of themfor the following 12 months. At the endof 2001, around 71 percent of the antic-ipated cash flow in 2002 was hedged.

On 31 December 2001 outstandingforward agreements corresponded to SEK 667.1 million (507.2).

The following table shows the hedg-ing that took place for the most impor-tant currencies on 31 December 2001.

Hedging (31/12/2001)Currency % Secured Average

hedged average rate1) rate 2001EUR 66% 9.24 9.24USD 79% 10.19 10.32 JPY 55% 0.0848 0.0850 GBP 90% 14.74 14.86 CAD 95% 6.59 6.67 AUD 59% 5.41 5.34 HKD 69% 1.37 1.32 DKK 75% 1.25 1.24 1) The secured average rate is the spot price atthe time of hedging, which is the price affect-ing operating income.

31 December 2001 the average periodfor interest-bearing loans was 59 dayswith an average interest rate of 2.82percent. Most of these loans had beenraised in USD.

On the basis of the Group’s netinterest-bearing liabilities on December31, 2001, SEK 272.0 million, theGroup’s net interest expense will beaffected by SEK 2.3 million over thenext 12 months if the interest rate levelchanges by one percentage point.

Credit risksCredit risk is defined as the risk that the Group will make a loss when theexposure counterparties are unable toperform their undertakings. Credit risks are handled and assessed at central level.

A credit risk arises both when liquidfunds are invested and in the form ofcounterparty risks when forward cur-rency agreements are entered into. Toreduce the credit risks, investments ofliquid funds and forward agreements areonly entered into with a limited numberof banks. The Group’s policy is to workwith banks with a high level of credit-worthiness which are also involved inthe Group’s financing.

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Jan Ekberg (b 1936)Board member since 1993Chairman of the board of Bong LjungdahlAB, Christianova AB, Handelsbanken RegionSyd and Doxa Certex ABBoard member of Malmberg Water AB,Partek Oy, Volvo Aero AB, Medhelp AB and Centrecourt ABShareholding in Nobel Biocare AB: 1 000 Options: 10 000

Heliane Canepa (b 1948)Board member since 2000President of Nobel Biocare ABBoard member of MIGROS, Phonak AGand BB Medtech AG Shareholding in Nobel Biocare AB: 314 154 Options: 40 000

Board of Directors

Anne-Kristine Wilson (b 1949)Board member since 1995Key Account Manager, Export Sales, Procera®

Representative of the SIF union at NobelBiocare ABShareholding in Nobel Biocare AB: 174

Åke Andersson (b 1961)Board member since 1995Chairman of the local metalworkers’ unionat Nobel Biocare ABShareholding in Nobel Biocare AB: 0

Ernst Thomke (b 1939)Board member since 2000Chairman of the BoardChairman of the board of BB Biotech AG,BB Medtech AG and Metalor SAMember of the board of Phonak AGShareholding in Nobel Biocare AB: 400 000 Options: 50 000

Jan Kvarnström (b 1948)Board member since 1995Chairman of the Board of Castellum AB Deputy chairman of AB SwedecarrierBoard member of Posten AB, GEVEKO BV,Doxa Certex AB among othersShareholding in Nobel Biocare AB: 1 000 Options: 10 000

Ernst Zaengerle (b 1948) Board member since 2001Options: 30 000

Auditor:Ernst&Young ABMain auditorBertel Enlund (f 1950)Authorized Public AccountantNobel Biocare’s auditor since 2000


Harrieth Sundaeus (b 1956)Employed 1997Head of Finance & ControlShareholding in Nobel Biocare AB: 0 Options: 2 666

Thomas Nortoft (b 1950)Employed 1985Head of Business DevelopmentShareholding in Nobel Biocare AB: 0Options: 7 333

Martin J Dymek (b 1956)Employed 1990 President of Nobel Biocare USA, Inc.Shareholding in Nobel Biocare AB: 0 Warrants: 16 873 Options: 10 000

Heliane Canepa (b 1948)Employed 2001President of Nobel Biocare ABShareholding in Nobel Biocare AB: 314 154Options: 40 000

Jeppe Magnusson (b 1952)Employed 2000Head of Research & DevelopmentShareholding in Nobel Biocare AB: 350 Options: 10 000

Björn Bergh (b 1952)Employed 1986Head of Quality & EnvironmentalAssurance Shareholding in Nobel Biocare AB: 0 Options: 333

Senior ExecutivesThomas M Olsen (b 1957)Employed 1994Head of Sales Europe, Australia and AsiaShareholding in Nobel Biocare AB: 0 Warrants: 9 046 Options: 10 000

Inge Olausson (b 1957)Employed 1995Head of OperationsShareholding in Nobel Biocare AB: 0 Options: 10 000

Lars Henrikson (b 1955)Employed 1986Head of Business area ProceraShareholding in Nobel Biocare AB: 50 Options: 10 000

From left: Jeppe Magnusson, Björn Bergh, Harrieth Sundaeus, Thomas Nortoft, Heliane Canepa, Martin J Dymek, Thomas M Olsen, Inge Olausson and Lars Henrikson.


BELGIUMNobel Biocare BeneluxSphere Business ParkDoornveldIndustriezone Asse 3, nr 11, Bus 29BE-1731 ZellikPhone: +32 2 467 41 70Fax: +32 2 467 41 80Fax: +32 2 467 41 80

BRAZILNobel Biocare Brasil LtdaR. Mariana Correa, 5201444-000 Sao PauloPhone: +55-11-3891 0091Fax: +55-11-3891 0041

CANADANobel Biocare Canada Inc.200 Yorkland Blvd., Suite 600North York, Ontario M2J 5C1Phone: +1 416 490 9909Toll free: +1 800 263 4017Fax: +1 416 490 9916

CHILENobel Biocare Chile Luis Thayer Ojeda 0115, of. 28Providencia, SantiagoPhone: +56 2 231 6167Fax: +56 2 231 6613

DENMARKNobel Biocare Norden ABStrandvejen 130DK-2900 HellerupPhone: +45 39 40 48 46Fax: +45 39 40 42 25

FINLANDNobel Biocare Norden ABHandelshusgatan 7 A 57SF-00930 HelsingforsPhone: +358 9 323 9933Fax: +358 9 323 9090

FRANCENobel Biocare France Sarl.80, avenue des Terroirs de France FR-75607 Paris Cedex 12Phone: +33 1 53 33 89 10Fax: +33 1 53 33 89 33

GERMANYNobel Biocare Deutschland GmbHStolberger Straße 200DE-50933 Köln Phone: +49 221 50085-0Fax: +49 221 50085-333

HONG KONGNobel Biocare Asia Ltd.Room 1408, 14/F Harcourt House39 Gloucester RoadWanchaiPhone: +(852) 2-845-1266Fax: +(852) 2-537-6604

IRELANDNobel Biocare UK Ltd2 Charlemont TerraceCrofton Road, Dun LaoghaireDublinPhone: +353 1 280 28 62Fax: +353 1 280 20 79

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HEAD OFFICENobel Biocare AB Box 5190 Visiting address:Bohusgatan 15SE-402 26 Göteborg, SwedenPhone: +46 31 81 88 00. Fax: +46 31 16 31 52www.nobelbiocare.com

Nobel Biocare ABDimbovägen 2SE-691 51 Karlskoga, SwedenPhone: +46 586 818 50Fax: +46 586 365 60

ARGENTINANobel Biocare USA IncSuc. ArgentinaAv. Santa Fe 2844, Torre C, Piso 21425 Buenos Aires, ArgentinaTel: +54 11 4825 9696Fax: +54 11 4829 9592

AUSTRALIANobel Biocare Australia Pty. Ltd. Level 11, 815 Pacific HighwayChatswood NSW 2067Phone: +61 2 9412 11 44Fax: +61 2 9411 84 37

AUSTRIANobel Biocare Österreich GmbHPeppertstraße 33/2AT-3100 St. PöltenPhone: +43 2742 31 00 11Fax: +43 2742 31 00 31


Addresses

ITALYNobel Biocare Italiana Srl.Centro Direzionale ColleoniPalazzo Orione 2, Viale Colleoni, 15IT-20041 Agrate Brianza (Milano) Phone: +39 039 683 61Fax: +39 039 689 94 74

JAPANNobel Biocare Japan K.K.6 F Shuwa Shinagawa Bldg.3–26–33, TakanawaMinato-ku, Tokyo 108-0074Phone: +81 3 5423 4492Fax: +81 3 5423 4522

Nobel Biocare Japan KKOsaka Office4F Shin-Osaka Daiichiseimei Bldg3-5-24, MiyaharaYodogawa-Ku, Osaka 532Phone: +81 6 6394 5200Fax: +81 6 6394 5008

MEXICON Biocare Dental Products Mexico SA de CVBv. Manuel Avila Camacho 36Pisa 11, Lomas de ChapultepecC.P. 11000Mexico, D.F.Phone: +52-55 524 974 60Fax: +52-55 554 072 77

NETHERLANDSNobel Biocare Benelux B.V.De Molen 23NL-3994 DA HoutenThe NetherlandsTel: 0900-BIOCARE (246 22 73)Phone: +31 30 635 49 49Fax: +31 30 635 49 50

NORWAYNobel Biocare Norden ABGjedrumsvei 12 BN-0484 OsloPhone: +47 22 18 24 92Fax: +47 22 23 89 14

POLANDNobel Biocare Polska Sp zooDomaniewska 4102-672 Warszawa Phone: +48 22 874 59 44+48 22 874 59 45Fax: +48 22 874 59 46

PORTUGALNobel Biocare Ibérica S.AEdificio Via GaiaRua Rei Ramiro, 870 58,S-F 4440 V.N GaiaPhone: +351 22 370 96 98/99Fax: +351 22 370 97 00

SOUTH AFRICANobel Biocare ABP O Box 3377Parklands 2121158 Jan Smuts Avenue, 4nd floorEast WingJohannesburgPhone: +27 11 447 6327/8Fax: +27 11 447 5360

SPAINNobel Biocare Ibérica S.AMoll de Barcelona, s/nWorld Trade Center, Edif. Este, 7aES-08039 BarcelonaPhone: +34 93 508 88 00Fax: +34 93 508 88 01

Nobel Biocare Ibérica, S.AAv. de Somosierra 12 BEdificio Cristal 2a planta derecha28700 San Sebastian de Los ReyesPhone: +34 91 659 12 47Fax: +34 91 663 82 01

SWEDENNobel Biocare Norden ABBox 5211SE-402 24 GöteborgVisiting address: Gårdatorget 2SE-412 50 GöteborgPhone: +46 31 335 49 00Fax: +46 31 40 69 15

SWITZERLANDNobel Biocare AG Industriestrasse 9CH-6010 KriensPhone: +41 41 340 30 40Fax: +41 41 340 47 40

UNITED KINGDOMNobel Biocare U.K. LimitedNobel House, Grand Union Office Park Packet Boat Lane, Cowley Uxbridge UB8 2GHPhone: +44 (0) 1895 430 650Fax: +44 (0) 1895 430 636

USANobel Biocare USA Inc.22715 Savi Ranch ParkwayYorba Linda, CA 92887Phone: +1-714-282-4800Toll free: +1-800-993-8100Fax : +1-714-998-9236

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Nobel Biocare AB, Box 5190, SE-402 26 Göteborg, SwedenVisiting address: Bohusgatan 15

Phone: +46 31 81 88 00, Fax: +46 31 16 31 52www.nobelbiocare.com

annual report 2001 - nobel biocare · biocare’s individually-designed dental prosthetics based on...

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