Interim report 3,

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1 Richard Laube, CEO Oliver Walker, CFO Zurich 8 November 2012 Disclaimer This presentation contains forward-looking statements based on beliefs of Nobel Biocare's management. When used in this presentation, words such as "anticipate", "believe", "estimate", "expect", "intend", "plan" and "project" are intended to identify forward-looking statements. They may involve risks and uncertainties, including technological advances in the medical field, product demand and market acceptance, the effect of economic conditions, the impact of competitive products and pricing, foreign currency exchange rates and other risks. These forward-looking statements reflect the views of Nobel Biocare as of the date made with respect to future events and are subject to risks and uncertainties. All of these forward-looking statements are based on estimates and assumptions made by management of the company and are believed to be reasonable, though are inherently uncertain and difficult to predict. Actual results or experience could differ materially from the forward-looking statements. Nobel Biocare disclaims any intention or obligation to update these forward-looking statements. 2 1

2 9M 2012 in brief Continued slowdown of momentum drives modest decline in implant-based tooth restoration market Continued growth in North America despite slowing momentum Weak but stable development across most European markets Japan impacted by adverse media; continued strong growth in China and Australia improving Nobel Biocare continuously transitioning to a more customer-driven and efficient organization focusing on implant-based restorations Revenue development excluding Japan broadly in line with peers Continuous momentum improvement in implant systems (excluding Japan) Becoming systematically more efficient and leaner / reducing resources in administration and shifting to R&D 3 Oliver Walker Chief Financial Officer 4 2

3 Financial summary Solid performance in a challenging environment Key points Revenue performance excluding Japan broadly in line with peers Momentum in Japan significantly dropping in Q3 Increasing momentum in Implant Systems excluding Japan Accelerated decline in Individualized revenue Continuing strong emerging markets sales growth Improvement in profit and profit margin due to positive FX effect and strict cost management Solid cash flow generation Notes Q3: -5.1%, YTD: -2.4% (CER) Q1: 2.1%, Q2: -9.9%, Q3: -29.6% (CER) Q1: 0.9%, Q2: 1.3%, Q3: 2.9% (CER) Q3: -15.3%, YTD: -8.0% (CER) Brazil, Russia, India, China and Taiwan EBIT up by 10.8% to EUR 54.4m (EUR 49.1m in 2011), and, EBIT margin up to 12.7% from 11.8% in 2011 Net cash from operating activities increased to EUR 66.4m (EUR 50.9m in 2011) 5 Financial summary Key figures in EUR million 9M M 2011 in EUR at CER Revenue % 3.1% -2.4% 24% Gross profit - Gross margin Operating profit (EBIT) - EBIT margin Net profit - Profit margin % % % % % % 2.4% -3.4% 10.8% -4.8% 30.9% Basic earnings per share % Net cash from operating activities % Net cash/(debt) Return on average equity 16.7% 10.8% 6 3

4 Revenue development Currency tailwind lifts revenue above prior year in EUR million +3.1% in EUR -2.4% excl. Japan (4.2) excl. Japan (5.9) M 2011 Implant systems Individualized 9M 2012 FX effect 9M Product revenue development Japan offsets improving momentum in Implant Systems in EUR million Q CER 9M 2012 CER Implant Systems % % Individualized % % 9M 2012: -8.0% (H1 2012: -5.0%) Total % % % NobelReplace and NobelActive drive improvement in Implant Systems in Q3 (excluding Japan) Tooth-based restoration components continue to drag Individualized products performance down Implant Systems growth excluding Japan % 9M 2012: -1.2% (H1 2012: -0.4%) Q Q Q % 1.3% 2.9% Implant systems Individualized 8 4

5 Regional revenue performance Performing broadly in line with peers excluding Japan in EUR million +3.1% in EUR -2.4% excl. Japan (6.8) 2.2 (5 5) (5.5) M 2011 EMEA Americas APAC 9M 2012 FX effect 9M Regional revenue performance Momentum significantly varying between countries in EUR million Americas 0 Revenue Q % 9M % Slowing market momentum in Q3 Stable Implant Systems growth in US, maintaining leading market share Accelerated decline of Individualized sales Improving momentum in Canada Direct markets in Latin America up double-digit APAC EMEA Revenue Q % 9M % Continued market-driven declines in Sweden Sweden, Spain and Italy Soft performance in Germany and the Netherlands Continued growth in UK, Russia and France Implant Systems momentum improving Revenue Q % 9M % Japan significantly affected by media coverage APAC excl excl. Japan up 15.8% in Q3 Continued strong growth in China and India Australian market recovering 10 5

6 Gross margin development in % of revenue Gross profit 9M EUR at million in EUR CER (1.0) % -3.4% 75.5 (0.1) M 2011 Business mix Implant Individualized 9M 2012 FX effect 9M 2012 Systems Implant systems margin slightly improved in Q3 versus H1, despite strong decline in Japan, YTD margin down due to unfavorable product mix and value-added services Individualized: stable margin as lower production cost offset impact from accelerated decline in tooth based restorative components Positive impact from business mix (Implant Systems Individualized) and currency 11 Continuing shift of resources to growth drivers in EUR million 9M M 2011 in EUR Notes Revenue % -2.4% Strong FX impact Research & development in % of revenue % % +17.6% +13.0% Continuous investments 6% headcount increase Selling & marketing in % of revenue % % +2.1% -2.4% Sales force expansion in growing countries and strict cost management in declining markets Administrative expenses in % of revenue % % -9.0% -11.3% Strict cost management Investments in IT Total operating expenses % % +0.8% -3.2% 12 6

7 Operating efficiency and effectiveness Historic development of operating expenses Total revenue & operating expenses (in EUR million) Operating expenses and EBIT as % of revenue % % Re evenue OPEX % 58.4% % % 63.0% 63.3% 62.8% OPEX % EBIT % 22.1% 14.7% 12.7% 12.7% EBIT (9 months) 13 Operating efficiency and effectiveness Areas with improvement potential Establish a proactive cost management approach being part of the management system Streamline global structures and processes Reduce complexity Adjust resources to changing market environment Leverage IT tools to exploit efficiencies Reallocate resources to growth drivers (R&D and customer-facing activities in sales) Continous improvement of operational expenses in relation to revenue, thereby leveraging profitability 14 7

8 EBIT margin development in % of revenue -0.2 pp +0.9 pp (0.8) Operating profit 9M 2012 EUR million in EUR (1.6) % -4.8% 9M 2011 Exceptionals Gross margin Operating leverage OPEX decrease/savings 9M 2012 FX effect Lower operating expenses partly compensate lower gross profit margin and operating leverage Positive currency effect mainly driven by US dollar and Japanese yen YTD Q Foreign exchange impact 9M 2012 FX impact on P&L (EUR million) Structural FX exposure Revenue % Avg chg vs EUR Revenue COGS OPEX COGS -4.7 YoY, in % % of Group % of Group % of Group EUR 26% 25% 32% OPEX USD 10% 32% 29% 21% EBIT % JPY 11% 13% 7% 8% SEK 3% 1% 26% 9% FX result -0.9 CHF 2% 1% 4% 10% Others 27% 9% 20% Net FX impact % 100% 100% 100% currency impact % of revenue Revenue driver Cost driver Impact mainly from US dollar and Japanese yen, which strengthened against the EUR 16 8

9 Improved net profit in EUR million Profit margin 9M M % 6.4% 5.1 (2.2) % 26.5 in EUR 9M 2011 Operating profit Net financial result Tax expense 9M 2012 Uptake in operating profit (EBIT) Improved net interest result and favorable hedging result Lower tax rate (26.5%) compared with previous year lead to reduced tax expenses 17 Stronger cash flow generation in EUR million 30 Sep Dec Sep 2011 Net cash from operating activities in % of revenue % % % Net cash from/(used in) investing activities Free cash flow Net cash used din financing i activities in cash including FX differences

10 Richard Laube Chief Executive Officer 19 Clear mission and strategy Mission: Designing for Life Passionate and proud about making a real and lasting difference by improving patients' lives through superior implant-based restorations Performance objective Sustainable and profitable market share growth Strategy with four value drivers / pillars 1. Design innovative products and solutions to last the life of the patient 2. Design value-added added services helping our customers treat more patients better 3. Design and support training and education programs to improve customers knowledge and skill set 4. Design and develop an effective and efficient organization 20 10

11 Unchanged short- and mid-term targets Short-term (2012) Mid-term ( ) Execute on strategy Manage new launches for full impact Apply best practice customer initiatives globally s moving rapidly into place Maintain determined and systematic execution of strategy Grow core business in line with market Grow strategic product lines ahead of market Continuously leverage profitability 21 Implant competitors public reports (2007 9/2012) Revenue development * 20% 16% 12% 8% 4% 0% -4% -8% Nobel Biocare Straumann Biomet Zimmer Dentsply Source: Company reports 22 11

12 Making constant progress on all pillars of strategy Innovation Customer value Established systematic pipeline following clinical focus areas NobelActive with 19 quarters of double-digit growth Recent product launches well on track Digital workflow to facilitate treatment Launch of first ipad -controlled drill motor: OsseoCare TM Pro New global sales and marketing organization Practice Resource Center to help doctors win new patients New online store launched in the US T&E Organization New concept established with leading clinicians Sold-out Nobel Biocare symposia in Toronto and Rimini and high interest tat industry conferences Global Symposia in June 2013 in New York City Executive team strengthened and streamlined Efficiency improvement measures across the organization Systematically shifting resources from administration to R&D and customer value adding activities Design innovative products and solutions to last the life of the patient Innovation themes Designing for life Patient focus Clinically relevant Evidence based Eight innovation themes > 50 projects established Global advisory panel of leading clinicians and academia Mid- and long-term impact Strong team formed under new leadership Increase effectiveness of innovation management 1 Minimally Invasive 2 Immediate Function 3 Prosthetics / esthetics & function 4 Treatment of the fully edentulous 5 Osseointegration & bone preservation 6 Soft tissue health 7 Ease of use 8 Affordability 24 12

13 1. Design innovative products and solutions to last the life of the patient The integration of the digital work-flow is key to our mission Help Treat more patients better Design innovative products and solutions to last the life of the patient NobelActive 3.0 with promising first year Steady uptake in the market, used by >4,500 customers Named Best product 2012 in September issue of Dental Product Shopper NobelReplace Conical Connection (CC) and Platform Shift (PS) Launch well received by customers Constantly gaining new users, in particular for CC Included in NobelClinician for planning and guided surgery NobelClinician: >5,000 installed licenses NobelClinician users purchased 20% of all implants in 2011 New NobelClinician customers >30% more implants year-onyear Currently every second new license purchased in Japan 26 13

14 1. Design innovative products and solutions to last the life of the patient OsseoCare TM Pro Setting a smarter standard First ipad -controlled drill motor Intuitive user interface Multiple users Highest treatment efficiency and safety High interest in industry conferences Roll-out started in October Design value-added services to helping our customers to treat more patients better Constantly improving sales force efficiency and effectiveness New global sales and marketing organization established CRM tool implemented Sales Academy for sales force training introduced; modular mobile training Shifting resources to growing countries # of representatives increased in US, China and Brazil 28 14

15 3. Design and support training and education programs to improve customers knowledge and skill set New concept established with leading clinicians High attendance at Nobel Biocare symposia and industry conference events Celebration of landmark dates: 60 years since discovery of osseointegration and 30 years since international acceptance Global symposium 2013 in New York City Featuring over 100 world renowned researchers, scientists, clinicians and academics to present key current and emerging trends in the dental implant industry Innovative program format based along treatment workflow Design and develop an effective and efficient organization People development programs implemented Leadership training Performance development Executive team strengthened with operational capabilities and industry knowledge Operations and Process Excellence Committee State-of-the-art tools and programs to drive a change and efficiency improvement program across the organization Key efficiency programs identified and progressing IT systems NobelProcera operations 30 15

16 Outlook* Based on the first nine months market anticipated to decline modestly for the full year Development in Japan difficult to predict, no further deterioration foreseen in this outlook Nobel Biocare expects revenue for the full year to decline in line with market in the modest single-digit percentage range and the EBIT to be about EUR million (as reported). *Outlook barring any unforeseen events 31 Appendix 32 16

17 Financial calendar 2012/2013 and contact info Full year report February 2013 Annual General Meeting March 2013 Interim report 1, April 2013 Interim report 2, August 2013 Interim report 3, November 2013 Detailed financial and industry conference calendar on Media: Investors: Nicolas Weidmann Süha Demokan SVP Global Communications Head of Investor Relations Tel Tel Mobile Mobile nicolas.weidmann@nobelbiocare.com suha.demokan@nobelbiocare.com 33 P&L by quarter EUR million Q1 Q2 Q3 YTD Q1 Q2 Q3 YTD Revenue CER growth % -0.2% -2.2% -5.1% -2.4% 1.5% -3.9% 0.2% -0.9% Reported growth % 2.8% 4.2% 2.2% 3.1% 5.0% -7.8% -2.7% -2.1% Gross profit Gross margin 75.4% 75.5% 75.7% 75.5% 76.1% 77.0% 75.0% 76.1% Operating expenses as % of revenue 61.3% 60.9% 66.5% 62.8% 65.5% 61.3% 65.9% 64.2% EBIT EBIT margin 14.1% 14.5% 9.1% 12.7% 10.5% 15.7% 9.0% 11.8% Net financial result Income tax expense Tax rate 27.0% 23.8% 30.6% 26.5% 25.5% 24.8% -38.6% 27.9% Net profit Net margin 9.3% 9.4% 5.3% 8.1% 9.0% 11.1% -1.8% 6.4% Free cash flow

18 Key ratios EUR million Q3 9M / / 2011 Revenue % * % * Gross profit % % Gross margin 75.7% 75.0% % 76.1% -60 Operating expenses % % as % of revenue 66.5% 65.9% % 64.2% -140 EBIT % % EBIT margin 9.1% 9.0% % 11.8% 90 Net financial result % % Income tax expense nm % Tax rate 30.6% -38.6% 6' % 27.9% -140 Net profit nm % Net margin 5.3% -1.8% % 6.4% 170 Free cash flow nm nm 35 Reclassifications of the 2011 figures (EUR million) Q Q Q Q Q Q Q Q Revenue by region YTD YTD YTD YTD Europe, Middle East and Africa (EMEA) Reported growth 0.3% -6.2% -5.6% -7.1% 0.3% -3.0% -3.8% -4.7% CER growth -1.2% -6.2% -5.3% -7.0% -1.2% -3.7% -4.2% -4.9% Americas Reported growth 11.4% -6.4% -1.5% 10.0% 11.4% 1.7% 0.7% 3.1% CER growth 8.8% 4.1% 6.5% 9.9% 8.8% 6.2% 6.3% 7.2% Asia/Pacific Reported growth 4.9% -13.3% 0.2% 3.2% 4.9% -5.2% -3.3% -1.6% CER growth -4.8% -12.6% -0.8% -2.1% -4.8% -9.1% -6.2% -5.1% Total Reported growth 5.0% -7.8% -2.7% 0.9% 5.0% -1.8% -2.1% -1.3% CER growth 1.5% -3.9% 0.2% -0.2% 1.5% -1.4% -0.9% -0.7% Q Q Q Q Old New Old New Old New Old New Selling and marketing expenses Administrative expenses

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