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Partnering with our customers Powered By Docstoc
					Partnering with
our customers.
AnnuAl RepoRt 2010
Our customers are our partners in every
sense of the word. We share knowledge.
We share a commitment to innovation.
And most importantly, we share a passion
for improving patients’ lives through
advanced dental solutions.

We invite you to meet some of our
partners on the pages that follow.
2010 marked the 42nd anniversary of Dr Babbush’s first dental implant,
which he placed in 1968.
Dr Charles Babbush, DDS, MScD, USA
As a team dentist for the NHL’s Chicago Blackhawks, Dr Baer ensures that the 2010
Stanley Cup winners “have that winning smile”.
Dr Russell Baer, DDS, USA
Dr Ciabattoni is an expert and lecturer in guided surgery based implantology.
His other passion is music, in particular the Irish band U2.
Dr Giampiero Ciabattoni, Italy
Dr Cohen is the founder of the Seattle Study Club, which supports continuing dental
education across a network of 250 clubs worldwide.
Dr Michael Cohen DDS, MSD, USA
A specialist in treating patients with atrophied bones, Dr Davo has been a pioneer in
the use of zygomatic implants.
Dr Ruben Davo, MD, MSc, PhD, Spain
Dr De Santis, a specialist in oral and maxillofacial surgery, believes that
“the smile is the mirror of the soul”.
Dr Daniele De Santis, MD, DDS, MFS, Italy
“The biggest gift I have received in my career is the ability to do my work with passion.”
Dr Egon Euwe, DDS, Italy
“It is truly a blessing to see a new smile change the life of a patient”, says Dr Fromovich,
the inventor of several innovative dental implants.
Dr Ophir Fromovich, Israel
“Quality is never an accident,” says Dr Glauser, an oral implantology specialist in Zurich.
“It is the result of good intention and sincere effort.”
Dr Roland Glauser, Dr med dent, Switzerland
Dr Goldstein is the author of Change Your Smile, the world’s leading consumer book
on cosmetic dentistry.
Dr Ronald Goldstein, DDS, USA
“I enjoy playing golf, and can assure you that my implantology skills are better
than my golf game.”
Robert Hill, Robert Hill Ceramics P/L, Australia
The university setting provides the ideal environment for Dr Holst to conduct high-level
research and share his insights with a new generation of dental care professionals.
Dr Stefan Holst, PhD, DMD, Germany
Dr Oliver Hugo, specialist in implantology: “I believe in trying to improve every day.
Because if you’re not moving forward, you’re moving backwards.”
Dr Oliver Hugo, Germany
“I am proud of my accomplishments as a prosthodontist and teacher, and incredibly
grateful to my family for their support throughout my career.”
Dr Brien R. Lang, DDS, MS, USA
Dr Leziy divides her time between a thriving clinical practice and lecturing on implant
treatments. “The only limitation to doing more is the 24-hour time clock!”
Dr Sonia Leziy, DDS, Dipl Perio, FCDS(BC), FRCD(C), Canada
An expert in oral surgery and implant rehabilitation, Dr Lopes believes that “The key to success
is teamwork – if you find the right partners, your patients will smile.”
Dr Armando Lopes, DDS, Portugal
“Experience has shown me that anything one makes today can be made even better
tomorrow. This motivates me to keep moving forward.”
Dr Paulo Malo, DDS, PhD, Portugal
“We treat patients with the respect and gentleness that should be afforded to them.
This makes our daily clinical practice more enjoyable and enriching.”
Dr Peter Moy, DMD, USA
Dr Gary Orentlicher is a busy clinician: “I prefer doing most of my treatment plans from home,
so I have time to follow my beloved NY Yankees and NY Jets.“
Dr Gary Orentlicher, DMD, USA
In addition to an intense schedule of surgery and lectures, Dr Palacci finds time for jogging,
piloting planes, scuba diving, skiing, and collecting classic motorbikes.
Dr Patrick Palacci, France
“Helping patients with orofacial dysfunction or disfigurement to gain improved function
and social acceptance brings me great happiness.”
Dr Dennis Rohner, PD Dr Dr med, Switzerland
In addition to sharing a surname, these brothers share musical tastes, authorship of
numerous publications, and a passion for dental technology.
Patrick Rutten, MDT, and Luc Rutten, MDT, Belgium
Dr Swart – a maxillofacial and oral surgeon known to his friends as “Blackie” –
has a passion for football. No surprise he is proud of South Africa’s successful
hosting of the 2010 FIFA World Cup.
Dr Louwrens Swart, BChD, MChD, South Africa
As an innovative oral implantologist and avid photography hobbyist, Dr van Gils‘
greatest pride is to capture her patients‘ satisfaction and happiness expressed through
their new smiles.
Dr Rinie van Gils, the Netherlands
Wilfried Wagner is a former President of the German Society for Dental and Oral Medicine,
and currently sits on the scientific health council of the German federal government.
Dr Wilfried Wagner, Prof Dr med, Dr med dent, Germany
Dr Zhang has a background in material sciences, and a passion for creating the next
generation of fracture-resistant, esthetically pleasing restorative materials.
Dr Yu Zhang, PhD, USA
Together with more than 50’000 dental
partners worldwide, we are committed
to advancing dentistry with the most
innovative dental solutions.
Contents.


Annual Review                     02   Financial reporting                  87
Nobel Biocare at a glance         02   Key figures                          88
Letter from the Chairman          10   Financial review                     89
Interview with the CEO            14   Risk management & ICS                92
Financial performance             18   Consolidated financial statements    98
                                       Parent company accounts             148
Strategy and products             23
Markets and strategy              24
Solutions for all indications     28   Share information                   165



Success factors                   35   Other                               170
Research and development          36   Addresses                           170
Corporate social responsibility   42   Disclaimer                          172
Caring for patients               44
Our people                        46
Operations                        48



Corporate Governance              51
Corporate Governance report       52
Board of Directors                61
Executive Committee               75
Remuneration report               79
2   Nobel Biocare Annual Report 2010 — Annual Review




    Nobel Biocare at a glance.


    Mission                                            Markets
    Our mission is to be the most desirable            Nobel Biocare is a world market leader
    partner in science-based solutions that help       in dental implants and CAD/CAM-based
    dental professionals make a real and               prosthetics, as well as in guided surgery.
    lasting difference to the well-being of their      We hold leading market positions in North
    patients, empowering them to lead healthier        America, Europe, and in the emerging
    and more satisfying lives.                         markets. w more on page 24


    Science                                            Complete solutions
    Nobel Biocare is dedicated to providing            As a complete solutions provider, Nobel
    innovative, safe and effective solutions that      Biocare provides the most comprehensive
    are backed by scientific evidence. We adhere       portfolio of restorative and esthetic solutions
    to the highest scientific standards for all our    from tooth to root. We offer the entire range
    solutions and build upon a 40-year heritage        of dental implants, prosthetics, guided
    in scientific research. w more on page 36          surgery solutions, scanners and biomaterials.
                                                       We also offer innovative treatment concepts
                                                       designed to optimize restorative dental
    Innovation                                         treatment. w more on page 28
    We have been the innovator in dentistry since
    the introduction of the original Brånemark
    dental implant in the 1960s. Other major
                                                       Single crowns on                                                  Equipment
    innovations included new implant systems,          natural teeth and implants                                scanner technology

    individualized CAD/CAM-based prosthetics
                                                       Bridges on natural teeth                                 Standardized and
    in the 1980s, guided surgery and the               and implants                                        customized abutments
    NobelActive implant in this decade.
    w more on page 28                                                                                           Fixed and removable
                                                                                                                edentulous solutions


                                                                                                                    Dental implants




                                                       Most comprehensive solutions portfolio in the industry
                                                                                   Nobel Biocare at a glance   3




People                                             Financials
We build on a team of more than 2’400              We are committed to creating value for our
dedicated and highly skilled employees from        shareholders through profitable and sus-
diverse professional and ethnic backgrounds.       tainable growth. Nobel Biocare is listed at the
Our people are the key contributors to our         SIX Swiss Exchange and included in the
success. w more on page 46                         Swiss Leader Index (SLI). w more on page 87



Patients
We offer safe and proven treatment options,
that meet each individual patient’s clinical and
                                                   EMEA 43%
esthetic needs, for an improved quality of life.
w more on page 44
                                                   North America 34%
                                                   Asia Pacific 22%
Global presence                                    Latin America / Rest of the World 1%
We have the broadest geographic coverage
                                                   Revenue 2010 by regions (%)
in the industry with 34 direct representations;
together with distributors we serve more than
60 countries. Our seven manufacturing sites
are spread across all key regions. Nobel Bio-
care is headquartered in Zurich, Switzerland.
w more on page 49
Nobel Biocare is the world leader in
innovative restorative and esthetic
dental solutions. We provide dental
professionals with advanced science-
based solutions from tooth to root,
including dental implants, all-ceramic
crowns, bridges, guided surgery
solutions, scanners and biomaterials.




                      In 2010, we held several local and global
                      symposia focusing on scientific exchange,
                      education and the presentation of our
                      expanded solutions portfolio. The New York
                      Symposium, a four-day event held in June,
                      attracted more than 1’500 participants
                      from all over the world.


                                 more on page 27
                                             Achievements 2010   5




This year, we also successfully expanded
our NobelProcera prosthetics range
with new solutions and materials, allowing
superior esthetic result to better satisfy
each individual patient’s needs.


            more on page 31
6   Nobel Biocare Annual Report 2010 — Annual review




          Advancing digital dentistry was one of our
          priorities in 2010. Besides updates of the
          leading NobelGuide software, we have been
          working on new practice communications
          solutions, which will be available in 2011.


                              more on page 29
                                 Achievements 2010   7




Even in challenging times like these, we affirmed
our market leadership in key regions including
Asia Pacific and North America, the world’s
largest dental market. Also, we have been ex-
panding in emerging economies like China, India,
or Russia.


            more on page 24
8   Nobel Biocare Annual Report 2010 — Annual review




                                   New promising clinical data was presented docu-
                                   menting the efficacy of several of our key dental
                                   solutions, such as the NobelActive™ implant, for
                                   the All-on-4™ concept and our TiUnite® implant
                                   surface. (Pictured above in microscopic enlargement.)


                                                       more on page 36
                                                 Achievements 2010   9




Reflecting our commitment to advanced dental
education, the Universities of Sichuan, China,
Sheffield, United Kingdom, and Heidelberg,
Germany, joined our Global University Partner
Program (GUPP), expanding it to 26 partners.


            more on page 37
10   Nobel Biocare Annual Report 2010 — Annual Review




     Letter from the Chairman.


     Dear Shareholders,

     2010 was not a good year for Nobel Biocare and also not an           Due to the unsatisfactory course of business, the value of
     easy one. Our goal of growing at least as fast as the market         Nobel Biocare shares also declined. We are just as disap-
     has yet to be achieved. However, I can say that significant          pointed about that as you are, but we are convinced the cur-
     progress has been made at all qualitative levels. Unfortunate-       rent stock price reflects neither the true value nor the poten-
     ly, though, the positive effects of those improvements are still     tial of Nobel Biocare adequately. We will do everything in our
     not visible in terms of growth and profitability. But it is impor-   power to correct that in 2011 by regaining investor confi-
     tant and indeed gratifying that we are observing success             dence.
     among our customers. To be successful over the long run,
     we have to come out on top in the market and in the minds            Today, Nobel Biocare is back on the path to market leadership.
     of our customers. And that is precisely what we wish to ex-          My confidence is backed by the fact that the implementation
     press in this Annual Report by introducing several of our many       of our new strategy has made considerable progress. With
     thousands of customers throughout the world.                         its vast expertise, the recently established Strategy and Tech-
                                                                          nology Committee (STC) of the Board of Directors has helped
     New realities in the global economy                                  us to address and respond to further issues in a different way.
     Since the peak of the financial and economic crisis, com-            Not only is Nobel Biocare equipped with a better and more
     mercial activity has progressively recovered. But the crisis has     broadly based organization, our substantially expanded prod-
     led to a shift in terms of global economic weightings. Not           uct portfolio is now almost completely available. It comprises
     least of all due to their massive state indebtedness, the previ-     products and materials that enable us to offer treatment solu-
     ously leading industrialized nations in North America and            tions at various price points.
     Europe are only gradually finding their way back to the growth
     path. That in turn is having an effect on private spending in        In my first year of office as Chairman of Nobel Biocare, I have
     many countries and, by logical extension, also on our busi-          looked deeply into the company and spent an average of two
     ness. The growth dynamic today comes primarily from Asia             days a week with the various departments of our organization.
     and the emerging economies. Countries such as China, India           My conclusions: Nobel Biocare has a strong product portfolio
     and Brazil are currently growing at twice the pace of the            again. All business activities – dental implants, CAD/CAM
     industrialized nations. These new realities of the global econo-     prosthetics and digital dentistry – offer considerable potential.
     my are shaping many industries, and hardly any internation-          The company has a fine and very loyal customer base, is
     ally active company can escape this trend. As a consequence,         globally well positioned except for Latin America, has a prom-
     no company has come away from the recession in the same              ising innovation pipeline, possesses a first-rate brand, employs
     shape it was prior to the crisis. That also applies to Nobel         highly committed individuals, and is very solid financially.
     Biocare.                                                             We can build on that. However, there is still much to do.

     2010 financial performance burdened by economic crisis               Attractive prospects
     As the market leader for advanced dental solutions, Nobel            Our aspiration is to make Nobel Biocare the leading provider
     Biocare was hit harder by the economic slowdown than were            of complete solutions for all indications of restorative and
     most of its competitors. As a general rule, patients have to         esthetic dental medicine and thereby progressively become
     finance expensive high-quality treatments on their own, thus         a pure dental enterprise. In doing so, we think long term and
     in times of economic uncertainty, the tendency is to postpone        orient the company to the requirements and challenges of
     such treatments as opposed to less costly tooth restora-             the future. Our markets evolve, our competitors do no rest,
     tions.                                                               and innovations are quickly imitated. So in order to remain
                                                                          competitive, we must continuously tackle future issues: In
     Our 2010 financial performance underscores that fact. This           which direction is dentistry going? How can we support our
     of course may not deter us from adapting our business mod-           customers, and above all their patients, in the best possible
     el and product portfolio to the changed circumstances. We            manner? What consequences will the shift of global eco-
     cannot simply wait for better times after the crisis has fully       nomic weight toward the emerging economies have on our
     waned, but instead must and will be prepared to come away            company?
     from this crisis stronger than ever.
                   Letter to shareholders   11




Heino von Prondzynski
Chairman of the Board of Directors
12   Nobel Biocare Annual Report 2010 — Annual Review




     For Nobel Biocare, we derive three strategic priorities emanate   After more than three and a half years at Nobel Biocare, Do-
     from this:                                                        menico Scala has decided to step down as CEO. I would like
                                                                       to thank Domenico Scala for his outstanding commitment to
     – strengthening of our core dental implant business;              Nobel Biocare. He took over the company at a highly critical
     – development of our digital dentistry business in order          time and, during his tenure, created a new footing, established
       to shape these future markets;                                  a first-rate management team and successfully expanded the
     – innovation leadership in terms of service, products,            product portfolio. The Board of Directors has appointed
       treatment concepts and technologies.                            Richard Laube as the new CEO. He will assume his duties on
                                                                       1 May 2011. In Richard Laube, Nobel Biocare has a successor
     The expansion of our portfolio represents the main thrust of      who comes with the right qualifications to continue develop-
     our strategy implementation. In this connection, we focus on      ing the company. He brings with him considerable interna-
     long-term trends in the industry, such as digitization of the     tional experience from different industries in which innovation
     dental value chain, new prosthetics solutions and manufactur-     was the key to success. The Board of Directors believes that
     ing processes, as well as the growing demand for improved         his previous experience puts him in an ideal position to build
     treatment concepts. Here, too, the STC lends support; among       on what has been achieved and continue to drive the enor-
     other things, it has the task of anticipating technological and   mous potential of Nobel Biocare. We wish him all the best
     market developments and steering the company’s innovation         for his assignment.
     activities in the appropriate direction.
                                                                       Creating long-term value
     Conditions in the dental market remain challenging, but there     The Board of Directors of Nobel Biocare endeavors to gener-
     are nonetheless attractive opportunities to be seized: low        ate value: to the benefit of the company, our customers and
     penetration rates, today’s demographic trends, increasing         their patients, for you, our shareholders, and for our employ-
     demand from the BRICK economies, and innovations that             ees. In concrete terms, this means:
     enable new customer segments to be treated are all potential
     drivers of future growth.                                         – for our customers and patients, innovative and
                                                                         high-quality products;
     Short-term priorities                                             – for our employees, secure jobs in an attractive work
     Over the short term, however, the task at Nobel Biocare will        environment; and
     be to implement the company’s new strategic approach              – for our shareholders, an attractive return on their
     resolutely and deliver the corresponding results. Nobel             investment.
     Biocare’s Board of Directors and Executive Committee have
     therefore defined operative key performance indicators that       I also wish to sharpen the profile of Nobel Biocare more
     will be examined on a monthly basis and by means of which         keenly among our customers and shareholders, as well as to
     the company will be steered. Among those readings are fac-        reinforce the “WE” feeling among the company’s employees,
     tors such as revenue growth both globally and in the BRICK        who ultimately represent our most valuable asset. Those are
     markets, EBIT growth, customer satisfaction, as well as the       central tasks.
     company’s image, reputation, productivity and sustainability.

     More than anything else now, it is a matter of successfully
     marketing our new products and gaining new customers.
     Then, Nobel Biocare can start to generate incremental sales
     and capture a larger share of its various markets. As soon as
     possible, we want to be growing again at a faster pace than
     our competitors.
                                                                  Letter to shareholders   13




However, we also want to treat our resources with care,
among other things by striving for efficiency gains in the en-
ergy area. An important element of the company’s sustain-
ability policy is evidenced by our social commitment: Nobel
Biocare supports programs that afford patients in need access
to treatments. These charitable activities have been broad-
ened, for example in Brazil where in 2010 we extended our
financial sponsorship of the Brånemark Institute in Bauru.

For the 2010 financial year, the Board of Directors again pro-
poses a dividend distribution to the General Assembly. The
proposed dividend amounts to CHF 0.35 per share. The divi-
dend distribution will be carried out in a shareholder-friendly
way without incurring withholding tax. Thus, you as our share-
holders benefit from a largely unchanged net dividend com-
pared to the prior year. Provided approval by the General As-
sembly, the dividend pay-out date is set for 6 April 2011.

Of great importance to me is the dialogue I have with you,
our valued shareholders, as well as with our other stakehold-
ers. We want to win back the capital markets’ trust in the path
Nobel Biocare is taking. A key factor in this regard is the way
in which management is remunerated. At Nobel Biocare, the
compensation structure is to a considerable extent perfor-
mance-dependent and oriented toward the long term. We
have reinforced this fact in 2011 by linking an even higher
percentage of variable compensation for EC members to
Group key performance indicators. I am convinced that this
corresponds to your interests in the best possible way.

On behalf of the Board of Directors and Executive Committee,
I would like to thank you for the loyalty you show us. My
thanks also go to our customers for their trust, and to our
employees for their outstanding commitment.




Heino von Prondzynski
Chairman of the Board of Directors
14   Nobel Biocare Annual Report 2010 — Annual Review




     Interview with the CEO.


     Mr. Scala, what is your assessment of 2010                          existing ones. However, with NobelProcera we are venturing
     for Nobel Biocare?                                                  into new business fields. And that requires a careful build-up
     2010 was a year with two faces: on one hand, our aim was            of the business, also through the comprehensive training of
     to catch up with the average growth rate of the market. We          all parties involved. In an effort to present proven as well as
     have yet to achieve that goal and therefore cannot be satisfied     new products and address new customers, we conducted
     with the year. On the other hand, we made significant prog-         scientific symposia this past year in our most important mar-
     ress in the expansion of our product portfolio, on the cus-         kets. The response among participants and the feedback we
     tomer front and in strengthening our organization. This gives       have received were very pleasing and we can see the positive
     me confidence that we are on the right path and that Nobel          effects these events produce.
     Biocare is poised for growth.
                                                                         The long-awaited turnaround is still down the road
     Why were you unable to achieve your goal?                           and the patience of shareholders is being put
     The problem is not new. Historically viewed, our activities are     to the test. Have you taken the right steps to bring
     disproportionately focusing on the high-price segment; in           Nobel Biocare back on course?
     other words, we have traditionally specialized in extensive         I understand the impatience. We, too, have the greatest inter-
     and therefore expensive tooth restorations. We lacked the           est in leading Nobel Biocare back to the path of success. But
     products that would allow us to benefit from the less cyclical      that can only happen with a good product portfolio, convinc-
     “normal” business. However, during the past two years, we           ing service and skilled employees. Those topics are our pri-
     have addressed this shortcoming by developing a number of           orities. That being said, we also critically and continuously
     new technologies and rejuvenating a substantial portion of          assess each of our decisions. When I look at Nobel Biocare
     our product portfolio. Today, Nobel Biocare is in a position to     today and see all the things we have accomplished, I am
     offer treatment solutions at various price points – that is some-   confident that the right measures have been taken in the best
     thing new and indeed advantageous. With this new portfolio,         interests of the company and its shareholders. Have we
     we are in much stronger shape than in the past.                     already achieved everything we wanted to? No, there still
                                                                         remains a lot to do. But we are on the right track.
     When will these new products have an effect
     on revenues?                                                        The management team has undergone significant
     It goes without saying that innovations are not simply devel-       changes in the past two years. What is behind this?
     oped overnight and then introduced to the market, especial-         It is of great importance to us to constantly enhance both the
     ly considering that we place very high demands on quality           dental and functional competencies at all levels of the com-
     and clinical evidence. But these new products are now avail-        pany. This process is successfully progressing and we see
     able and the feedback from the marketplace is very encourag-        many outstanding professionals joining Nobel Biocare. They
     ing. Several products are already registering double-digit          are convinced that the path we are taking is right and share
     growth rates: for example, the new NobelActive implant, our         our desire to see Nobel Biocare thrive.
     All-on-4 treatment concept, and prosthetic products such as
     implant-bar solutions. It took some time for NobelProcera to        How did the business develop in the various regions?
     fully deploy and the related new product range has yet              Basically, it can be said that the US is recovering faster than
     to contribute the revenue flow we originally anticipated. In        Europe. Although US revenue growth is at prior year levels,
     several markets, customers are still suffering under the effects    the course of business there is better than in most of the
     of the economic crisis and therefore holding off on invest-         other markets. Europe showed a mixed picture: we recorded
     ments in our new NobelProcera technology.                           good growth in Italy, France, Belgium, Russia and several
                                                                         smaller markets. But Spain continues to suffer heavily under
     What will it take for the new products to prevail                   the economic crisis; and that is something we feel, because
     across a broad front?                                               Spain is one of our largest markets. In the key German market,
     Of fundamental importance in this regard is the training of         we have managed to improve our reputation further and
     our sales representatives and customers on the new products.        stabilize the business. We continue to strengthen our business
     With NobelActive, we have accomplished that quite well. We          in Asia, e.g. in Japan where we are already by far the market
     conduct extensive training courses, and that is paying off in       leader.
     the form of new customer acquisition and our bonding with
                    Letter to shareholders   15




Domenico Scala
Chief Executive Officer
16   Nobel Biocare Annual Report 2010 — Annual Review




     Did Nobel Biocare lose market share in 2010?                      You speak of innovations. What else is Nobel Biocare
     We lost a marginal amount for example in the USA and Spain.       doing in this regard?
     However, we gained market share in Japan, Italy, France and       In 2011, we will launch three new implants. For NobelProcera,
     Australia. And we are attracting new customers – something        several additional prosthetics products are scheduled to fol-
     that is very important, because it expands our customer           low. In addition, we are continuing our work on an intraoral
     base.                                                             scanner and the further development of our prosthetics soft-
                                                                       ware. Implant surfaces, digital diagnosis, treatment planning,
     Your margins eased. Why that?                                     guided surgery and minimally invasive treatments are also
     We operate in a business with high gross margins. The ad-         crucial areas in which we are driving ahead with innovations.
     vantage here is that an increase in revenues has a direct im-     Moreover, we are developing our research and development
     pact on the bottom line. However, if revenues fall, the op-       collaborations with leading academic and research institutions
     posite occurs: each euro of sales that goes missing has an        throughout the world. Thus, our pipeline is well filled.
     immediate influence on profitability. That’s what happened in
     2010. And therefore, we have invested considerable sums in        How do you view the future of the dental market?
     the competitiveness of our company. That of course has no         The dental industry remains attractive and offers many op-
     short-term effect on our financials, but it is all the more im-   portunities. It is possible that the market could return to
     portant for our sustainable success. We are convinced that        double-digit growth in the years ahead. The interesting areas
     the margins will be on the rise again.                            are CAD/CAM-based prosthetics and the digitization of the
                                                                       value chain from dentist to dental laboratory. Also, new treat-
     You have invested sizeable amounts in new                         ment concepts that address the individual needs of patients
     products, especially the CAD/CAM business with                    are quite promising. The players who desire to shape these
     NobelProcera. Where do you stand here?                            future developments must take proactive and determined
     CAD/CAM-based prosthetics is one of the fastest-growing           steps. For our part, we must anticipate the trends and bring
     areas in dentistry. Together with digitization, it is viewed as   products to the market more rapidly.
     one of the most significant trends for the coming years and
     will fundamentally change the work methods of dentists, lab       Discounters have cropped up recently also in
     technicians and manufacturers. Those who wish to play an          the area of dental implants. Does that pose a threat
     active role in this evolution must come up with innovations.      to Nobel Biocare?
     Thus, with NobelProcera we have launched the most compre-         Discounters are essentially nothing new in our industry. But
     hensive prosthetics offensive in the history of Nobel Biocare.    they offer only selected products and differentiate themselves
     Thanks to NobelProcera, we are able to offer complete tooth       primarily via the price tag. Our advantage as a provider of
     restorations, from root to crown, and for each indication. This   top-quality products and comprehensive solutions is that we
     is unique in the marketplace. We anticipate that growth in        offer synergistically compatible components and comprehen-
     this business segment will accelerate in 2011.                    sive treatment concepts. This is an important edge, and it
                                                                       gives our customers as well as their patients a sense of se-
     And how do things look in your core business                      curity. For the patients, the overall costs involved in treatment
     of implants?                                                      are decisive. Through concepts that require fewer visits, for
     Toward the end of the year, we observed a modest pickup in        example, we can optimize those total expenditures.
     the implant business. Our products are proven, reliable and
     rank among the best available in the industry. With the Bråne-    What is your goal for Nobel Biocare?
     mark implant, as well as the world’s most widely used system,     The short-term goal is clear: catching up with the market. We
     NobelReplace, and now with NobelActive, we have a strong          must grow again and enhance our profitability. Longer term,
     implant portfolio. And we are already working on a new gen-       we want nothing less than to make Nobel Biocare the best
     eration of NobelReplace, which will be introduced in 2011.        company in the industry. Nobel Biocare has shaped tooth
     Our implant business is in a better position today than be-       implant technology since day one. And we continue to view
     fore.                                                             that as our cause: a commitment to be the leader in our
                                                                   Letter to shareholders   17




market, at the forefront in terms of innovation, a company
that offers its customers the best products and services and
has the best workforce in the industry. That is our goal. Growth
and returns on investment are then the logical conse-
quence.

And how will the patient benefit from this?
All of our efforts ultimately center on the patient. In whatever
we and our customers do, our focus is on the best interest of
patients. And they benefit in many ways: by knowing that
they can count on qualitatively outstanding and safe treat-
ments, getting very precise and esthetic results, and undergo-
ing treatment procedures that take less time. As a result, the
patient is the clear winner in this evolutionary process.

2010 was an intense year for Nobel Biocare.
What was particularly gratifying for you
at a personal level?
It pleases me to see how greatly customers and employees
alike identify with Nobel Biocare. That is really a motivator.
Nobel Biocare is somewhat special in our industry. The com-
pany has set the trend ever since the industry came into
existence. Also gratifying was the way our employees demon-
strated their total commitment to Nobel Biocare in 2010. The
past two years have not been easy ones for our people. None-
theless, many of them have gone the extra mile to make their
personal contribution to the success of the company. That
deserves recognition and, on behalf of the entire Executive
Committee, I thank them sincerely for their efforts.




Domenico Scala
Chief Executive Officer
18   Nobel Biocare Annual Report 2010 — Annual Review




     Financial performance.


     Due to lower revenue and continued                               declining revenue for the year. However, parts of the fourth
     investments in the product portfolio and                         quarter showed initial signs of momentum improvement,
                                                                      which was neutralized by the strong comparison base due to
     in the organization’s development, pro-
                                                                      scanner sales the year before. The Group has significantly
     fitability and cash flow decreased during                        strengthened its organization during 2010 and thus is well
     2010. At the same time, Nobel Biocare’s                          prepared for a market recovery.
     balance sheet remains strong and sets the
     basis for future growth.                                         In APAC, Nobel Biocare was able to improve its clear position
                                                                      as market leader in Japan, which contributes 68 percent of
                                                                      revenue to the overall region. However, due to the difficult
     In 2010, Nobel Biocare generated revenue of EUR 576.6 mil-       economic environment in Japan, year-on-year growth in this
     lion worldwide, 0.8 percent below 2009. At constant exchange     country was flat. In addition, Australia/New Zealand showed
     rates (CER), the decrease versus prior year was 6.4 percent.     negative growth – also given the high comparative basis from
     Reported operating profit (EBIT) was EUR 84.9 million, 34.0      2009. India and China had double-digit growth; however, they
     percent less versus 2009. Excluding restructuring charges in     still remain small on an absolute basis.
     2009, the decline was 39.0 percent. The Group’s EBIT margin
     for the full year 2010 stood at 14.7 percent (2009: 22.1 per-    Profitability: gross profit and operating profit
     cent as reported, 24.4 percent excluding restructuring). Net     Mainly due to the ramp-up of the NobelProcera business the
     profit for 2010 was EUR 45.7 million, or 56.8 percent lower      gross profit margin came down to 77.7 percent from 80.5
     than in 2009.                                                    percent a year ago. Following the strategy to expand its solu-
                                                                      tion portfolio, Nobel Biocare continued to invest in defined
     Operating cash flow including capital expenditures for 2010      growth areas, mostly in the development of the NobelProcera,
     was EUR 73.8 million compared with EUR 159.6 million in          which was significantly extended in 2010. Also, Nobel Biocare
     2009. At the end of 2010, Nobel Biocare held an almost un-       increased spending on marketing, customer events (scien-
     changed cash position of EUR 239.5 million.                      tific symposia) as well as training and education. Ongoing
                                                                      savings in many other areas funded most of these invest-
     Revenue development                                              ments. Operating expenses on a CER basis increased slight-
     Two years after the peak of the worldwide financial and eco-     ly versus 2009. As a result, the operating margin (EBIT) de-
     nomic crisis, 2010 was still a year with only modest growth      creased to 14.7 percent versus 22.1 percent in 2009 (24.4
     in the dental implant market. This fact, as well as Nobel Bio-   percent excluding restructuring). Foreign currency translation
     care’s specific business and regional mix, led to a revenue      had a negative impact of 1.2 percent on the EBIT margin, but
     decline of 6.4 percent (CER) versus 2009. Year-on-year CER       was effectively hedged in the financial result.
     growth decreased by 6.9 percent for Europe, Middle East
     and Africa (EMEA), by 5.8 percent in North America and by        Net profit
     2.1 percent in Asia/ Pacific (APAC).                             In 2010, net profit was at EUR 45.7 million (2009: EUR 105.8
                                                                      million), and was 56.8 percent below the prior year. While
     The EMEA result is mainly due to Nobel Biocare’s strong, mar-    lower revenue and reduced profitability are the main drivers
     ket leading exposure in Spain and Sweden. On the other hand,     for this development, net profit was additionally reduced by
     countries such as France and Italy grew positively and Ger-      a one-off tax charge of EUR 29.8 million following a restruc-
     many, where historically Nobel Biocare had a rather weak po-     turing of the Groups’s internal profit streams. Net profit mar-
     sition, also somewhat stabilized in the second half of 2010.     gin was 7.9 percent (2009: 18.2 percent). The reported EPS
                                                                      was EUR 0.37 (2009: EUR 0.86).
     In North America, where Nobel Biocare is especially strong
     with regard to large case treatments, the lack of financing
     and a cautious patient flow were the main drivers of the
                                                                                                                                Financial performance   19




Key financials overview
in EUR million                                                            2010    Change (in %)             2009             2008               2007


Revenue                                                                   576.6           –6.41            581.4            619.2              665.9

Gross profit                                                              448.0            –4.3            467.9            493.6              559.3

Profit from operations (EBIT)                                              84.9           –34.0            128.6            132.9              216.7

Profit before tax                                                         100.4           –26.9            137.3            159.4              212.0

Net profit                                                                 45.7           –56.8            105.8            109.7              166.2

Cash and cash equivalents           2
                                                                          239.5            –0.5            240.7            163.4              186.2

Shareholders’ equity                                                      320.0             0.7            317.7            267.6              267.9

Basic earnings per share        3
                                                          (EUR)            0.37           –56.8             0.86             0.90               1.35

Dividend per share   3, 4
                                                          (CHF)            0.35           –36.4             0.55             0.55               0.95

Share price at year-end     3
                                                          (CHF)           17.63           –49.3            34.78            21.42              60.60



1   In local currencies.
2   Including bank overdraft.
3   Figures for 2007 and 2008 adjusted to reflect the 2008 share split.
4   Proposed dividend for 2011.




Investments in the future                                                         After having paid a dividend of EUR 46.3 million and repaid
During 2010, Nobel Biocare continued to invest into its future                    EUR 36.9 million of outstanding debt, the Group held an al-
growth platform. Following the earlier acquisitions of BioCad                     most unchanged cash position of EUR 239.5 million (2009:
and Medicim in 2009, the Group built a unique product port-                       EUR 240.7 million). With a cash ratio of 31 percent (2009: 33
folio for its NobelProcera individualized prosthetic business.                    percent), the Group maintained its very high liquidity, which
Within this context, the Group made significant investments                       is further supported by the renewal of a EUR 330 million
in people, product development, research & development,                           syndicated banking facility for another five years.
information technology, production facilities and marketing.
The objective is to further strengthen the Group’s leading                        Dividend proposal
position as a full-solution provider of implants, prosthetics                     The Board of Directors will propose the dividend payment of
and digital dentistry, as well as to foster its position as the                   CHF 0.35 for each CHF 0.40 par value registered share (2009:
partner of choice for dental professionals and laboratories.                      CHF 0.55/share) to the Annual General Meeting. This corre-
                                                                                  sponds to a payout ratio of 46 percent (previous year: 43
Cash flow development and liquidity                                               percent), calculated on the basis of net profit adjusted for the
During 2010, Nobel Biocare generated an operating cash flow                       one-off tax charge. It is intended to pay this dividend in the
of EUR 97.1 million (2009: EUR 177.8 million). While the cash                     form of a reduction of free reserves in a tax-friendly way to
flow in the prior year was affected by a combination of various                   all shareholders.
favorable one-off transactions, the 2010 cash flow still reflects
prudent cash management and further working capital reduc-
tions. Including acquisitions and capital expenditures, the
cash flow was EUR 73.8 million versus EUR 136.7 million in
2009.
20   Nobel Biocare Annual Report 2010 — Annual Review




     Development of key financial figures.


     Revenue growth in local currencies (%)               Revenue growth by region (2010, in local currency)   Return on average equity (%)

     2010                     –6.4                        Asia/Pacific                     –2.1%               2010              14.2

     2009                     –7.7                        North America                    –5.8%               2009                           35.5

     2008                     –4.2                        EMEA                             –6.9%               2008                                        41.6
                                                          Latin America/                   –42.2%
     2007                                  15.4           RoW                                                  2007                                        49.8


            –20          0            20                                 –50         0                  50              0           25               50




     Gross margin (%)                                     Operating (EBIT) margin (%)                          Cash flow from operations (EUR mn)

     2010                                  77.7           2010                      14.7                       2010                        97.1

     2009                                  80.5           2009                              22.1               2009                                           177.8

     2008                                  79.7           2008                             21.5                2008                                         169.0

     2007                                    84.0         2007                                          32.5   2007                                        134.1


             0           40           80                            0          15                 30                    0            80           160




     Employees worldwide                                  Personnel costs per employee (EUR ’000)              CO2 (kg) per produced unit

     2010                                         2’433   2010                               80.1              2010                                        0.66

     2009                                         2’242   2009                             72.1                2009                                        0.80

     2008                                         2’541   2008                             69.9                2008                                        0.62

     2007                                         2’242   2007                             71.2                2007                                        0.57


             0          1’000        2’000                          0          50                 100                   0            0.4             0.8


                                                                                                               CO2 per produced unit is calculated as a combination
                                                                                                               of electricity, paper and water consumption based on
                                                                                                               Elmix Sweden & USA (electricity conversion factors:
                                                                                                               Sweden 110 g; USA 800 g CO2 / kWh).
                                                                                                                                 21




More solid foundation for 2011.


Attractive dental market offers solid growth opportunities.     Enhanced product portfolio serves all customer needs.

The dental market is one of the most attractive segments in     In the past three years, the Nobel Biocare product portfolio
healthcare. Through our substantial investment in implants,     has been broadly rejuvenated and strengthened with new
CAD/CAM prosthetics and digital dentistry solutions, we         technologies, materials, products and treatment concepts.
can today address new market segments and serve existing        Today, we are the only company to offer such a comprehen-
customers more effectively. The addressable market for          sive range of solutions for all indications of tooth restora-
Nobel Biocare in 2011 has substantially increased and is        tion. In 2011, we plan to exploit the opportunities of CAD/
worth in excess of EUR 5 billion.                               CAM prosthetics with NobelProcera, as well as continue our
                                                                success with the innovative NobelActive implant system.



Strong customer base helps to enhance                           Full innovation pipeline aimed at improving treatment
patients’ quality of life.                                      options and outcome.

Nobel Biocare has one of the largest and most loyal cus-        Nobel Biocare builds on more than 40 years of dental re-
tomer bases in the industry. We are proud of our partnering     search and a broad network of partners. Today, we have a
with more than 50’000 active customers throughout the           strong pipeline of new products and innovations. We are
world. Together with our customers, we are committed to         focusing on innovative approaches that will improve treat-
advancing dentistry and helping patients to address their       ment effectiveness and ensure the preservation of soft tis-
esthetic and restorative dental needs, and thereby improv-      sue. In 2011, we will continue to supplement our product
ing their quality of life. In 2011, we will focus on lending    portfolio with further innovations, including the launch of
added support to our existing customers and gaining new         three new implants, new prosthetic materials, and new
ones through Nobel Biocare’s updated range of services          treatment support technologies.
and products.


Solid financials for investment in the company’s future.        Strong market presence provides access to all key markets.

Nobel Biocare is committed to creating value for its share-     Nobel Biocare operates in 34 countries and our products are
holders through profitable and sustainable growth. Our          sold in more than 60 markets worldwide. We hold leading
business is profitable and generates attractive margins and     positions in today’s most important value markets and are
cash flows. We have the financial capability to invest in the   well positioned in the markets of tomorrow. In order to serve
development and future of our company. In 2011, our             customers effectively, we maintain a network of production
renewed portfolio and strengthened organization should          facilities in most regions of the world. In 2011, we will com-
enable us to close the performance gap with the market and      plete our upgrade to the latest manufacturing technology at
grow at least as fast as our peers.                             all our manufacturing sites, which in turn will result in high
                                                                standards of efficiency and quality.
Strategy and products.


Markets and strategy            24
Solutions for all indications   28
24   Nobel Biocare Annual Report 2010 — Strategy and products




     Markets and strategy – seizing the
     opportunities of growth.

     The dental market is one of the most                                ics (i.e. ceramic and metal crowns, bridges, individualized
     attractive markets in healthcare. We have                           abutments and overdentures manufactured according to spe-
                                                                         cific patient needs) is worth approximately EUR 3 billion, with
     been investing substantially in our solutions
                                                                         a projected growth of 15 to 17 percent until 2012.
     portfolio to address new market segments
     and shape key trends in digital dentistry                           With our ongoing NobelProcera product range expansion and
     and CAD/CAM prosthetics.                                            our move into CAD/CAM-based conventional denture solu-
                                                                         tions, we have significantly enlarged our addressable market.
     Missing or damaged teeth represent a serious global health          It now covers not only dental implants, but also CAD/CAM
     issue. Millions of people on all continents suffer from tooth       prosthetics and equipment as well as conventional prosthet-
     loss, edentulism or periodontal diseases and their related ill-     ics made of porcelain fused metal (PFM), cobalt chrome and
     nesses, such as bone resorption and facial deformations.            titanium. The sum total is an addressable market for Nobel
     Properly functioning teeth are essential for a good quality of      Biocare that is currently worth in excess of EUR 5 billion.
     life.
                                                                         Despite the attractive overall and increased addressable mar-
     Today, dental implants made of titanium and advanced pros-          ket size, the economic recession experienced in the past
     thetics are the solutions of choice to replace or restore miss-     three years has had a severe negative impact on growth rates
     ing or damaged teeth. Dental implants are well documented           in all market segments. In 2009, we believe the implant mar-
     for preserving jaw bone and neighboring teeth, and their sur-       ket underwent a clear contraction in the low single-digit
     vival rate is high. The prosthetics that attach to them allow       range. In the reporting period, it is likely that growth in the
     for esthetic outcomes almost like natural teeth. In the long        implant market as a whole was flat or somewhat growing,
     term, this type of solution is also likely to generate lower        depending on the market.
     overall treatment costs.
                                                                         The tooth restoration market, and our business model with
     Modern implants in combination with an abutment and ad-             its focus on premium solutions, both depend on the general
     vanced prosthetics can almost perfectly mimic and replace a         economic climate. Even more so, due to the fact that health
     single tooth, several teeth or a complete arch. Advanced,           insurance in most countries still does not cover restorative
     individually designed CAD/CAM prosthetics complement the            and implant treatments, which are largely financed privately
     restorative options. An increasing choice of materials and          by the patients themselves. The economic crisis, lower dis-
     color shades enables an even closer match with specific             posable incomes, higher unemployment and limited patient
     patient needs in terms of esthetics and cost.                       access to funding all result in fewer people seeking treatment.
                                                                         Extensive and more complex treatments in particular are
     Our market                                                          being postponed, while simple treatments like single tooth
     Today’s implant-based restorative solutions find increasing         procedures and small bridges are showing greater resil-
     acceptance and penetration. Yet great regional variations           ience.
     remain: degrees of acceptance and penetration are closely
     linked to levels of dental education and patient awareness.         Market trends in 2010
     On average, the penetration of dental implants is still very low;   Influenced by current economic conditions, the implant mar-
     estimates stand at around ten percent.                              ket is also undergoing significant change. About two thirds
                                                                         of the market is still dominated by larger players with strong
     As a full solution provider, we are active in two key market        brands, driven by science and innovation. At the same time,
     segments: implant dentistry, and individualized (CAD/CAM-           a large number of smaller, local players offering imitations
     based) dental prosthetics. Both segments offer attractive           of popular products, sometimes without guarantee or clini-
     margins and substantial growth potential. In 2010, the implant      cal evidence, hold a minority position in the market. Their
     market (which includes our prefabricated implants and abut-         product and geographic range is limited, focuses on the
     ments) was estimated to be worth around EUR 2.2 billion,            most popular components, and seeks differentiation primar-
     excluding components. Its annual growth is expected to be           ily by price. Despite the current macroeconomic environ-
     in the single digits through 2012, with potential to accelerate     ment and structural changes, the fundamental drivers of the
     into double digits beyond that time. The market for prosthet-       restorative dental market are intact. And it is those drivers
                                                                                                                                  Markets and strategy     25




which make dentistry one of the most attractive markets in          Dental market segments and sizes

healthcare.
                                                                    Implant dentistry and C&B prosthetics –
In many societies, an aging population is on an increasing          Total addressable market size:


                                                                    >€ 5bn
quest for high quality of life in their later years. Baby boomers
are evidently more willing to invest in their personal health,
and often are affluent enough to do so. Esthetic treatment
has been on the rise for several years now. Healthy and at-
tractive appearance is becoming an even more significant
aspect of social, as well as professional life.                     Market share in implant dentistry


Implants are becoming the standard of care for tooth restora-
tion, and patient awareness of implant-based techniques is                                                                          Nobel Biocare 22%
growing. Meanwhile, the industry is offering new, integrated
treatment concepts for all indications. This allows clinicians                                           € 2.2bn
to offer treatment options to patients at various price points.

Another driver is the digitization of the value chain involving
both clinicians and labs. This leads to more effective treat-
ments, while CAD/CAM industrial manufacturing is gaining            Market share in C&B prosthetics – PFM, CoCr, Titanium
further acceptance due to the broad choice of products and
materials, cost benefits and superior precision.
                                                                                                                                    Nobel Biocare <1%
Dental universities are placing greater emphasis in their cur-
ricula on implant- and CAD/CAM-based treatments and guid-                                                 € 2bn
ed surgery. Conventional dentures are no longer the standard
of care, given their disadvantages such as poor adhesion,
potential bone loss, speaking problems, loss of taste, discom-
fort, and repetitive investments in denture work. These can
be avoided by implant-retained dentures.                            Market share in C&B prosthetics – all-ceramic CAD/CAM


Besides the structural market drivers, there are also geo-
graphic ones. The emerging markets in general, and the BRIC                                                                           Nobel Biocare 8%

countries specifically, are becoming increasingly attractive –                                            € 1bn
and we are well positioned to seize these growth opportuni-
ties. We have established subsidiary companies and are in-
vesting in building a stronger foothold there. In addition to
our strong position in emerging markets, we are the market
                                                                    Our addressable market consists of the implant dentistry market and the markets for
leader in North America and the Asia Pacific region. We are         CAD/CAM-based prosthetics made of porcelain fused metal (PFM), cobalt chrome
also strong in the EMEA region, leading the market in sev-          (CoCr), titanium, or all-ceramic. This view does not cover dental equipment and com-
eral countries.                                                     ponents (source: Nobel Biocare estimates).



Customer trends
Customer preferences and patient needs are the drivers of
structural change within the industry. On the one hand, basic
customer preferences have remained unchanged: product
quality, clinical documentation, ease of use and customer
service are still the most important decision criteria for gen-
eral practitioners placing implants, restorative dentists, spe-
26   Nobel Biocare Annual Report 2010 — Strategy and products




     cialists like oral surgeons and periodontists, as well as dental    To achieve these strategic objectives we have been:
     laboratories producing prosthetic components. On the other
     hand, we observe that many clinicians are widening their            – Exploring growth opportunities in emerging markets,
     service portfolio and want to offer treatments at different price     especially in the BRIC countries
     points to satisfy their individual patients’ needs. The need for    – Driving numerous initiatives to ensure excellence
     effective and minimally invasive treatments as well as the            in marketing and customer service
     partial outsourcing of production from dental laboratories to       – Implementing efficiency improvements in business
     industrial providers are two factors driving advancements in          operations
     dentistry. Also, there is a clear trend toward an increasing
     number of specialist dental clinics and laboratory chains,          For an overview of strategic priorities and achievements in
     mainly in urban areas.                                              the past two years, see the table on the following page.

     Our business strategy                                               Building on a strong brand
     Based on today’s market and customer trends, and anticipat-         Supporting our business strategy is a strong brand which
     ing what is to come, we strive to leverage our full solution        reflects and reinforces what we strive to achieve. The Nobel
     provider approach and advance the digitization of the dental        Biocare brand enjoys a long heritage, having stood for devel-
     value chain. Being a full solution provider means focusing          opment and innovation since the beginnings of implant-based
     totally on customers, by offering the optimal solution for each     tooth restoration. Our brand has developed significantly in
     customer group and the patient indications they are facing.         the past two years. Visually, the brand has undergone a com-
     Working with Nobel Biocare gives them a unique ability to           plete overhaul. But particularly in terms of brand values, we
     combine, interchange or substitute components from a single         have put much effort in repositioning Nobel Biocare as the
     source to assemble the optimal solution for every indication,       partner of choice in dentistry, mainly by addressing and restor-
     while guaranteeing high quality and compatibility. To achieve       ing our scientific credibility among partners and customers.
     this, we build on innovative, science-based products, clini-        We have introduced new, strong brand names such as
     cally proven treatment concepts and digital solutions for           NobelProcera™, and are projecting our new brand identity
     higher precision and efficiency. We are convinced that this         through all communications channels: at events, in printed
     combination is the winning recipe for shaping the future of         materials, packaging, on the web, etc. We commission stud-
     restorative dentistry.                                              ies into brand awareness and perception in selected markets.
                                                                         Legal protection for our brand has been receiving special
     Nobel Biocare has traditionally been the innovator in implan-       attention, and going forward we plan to make greater use of
     tology as well as in CAD/CAM dentistry; many follow in our          brand metrics for steering and aligning our global brands.
     footsteps to replicate this vision. While our implant business
     is the core activity, we believe that NobelProcera and funda-       Outlook
     mental advances in digital dentistry will be instrumental to        Our customer focus and ability to serve all customer seg-
     success going forward. Our business model is based on in-           ments, product innovation, and service to the customer are
     novation, customer service and Training & Education (T&E),          critical to expanding our leadership position. We are focused
     all of which are fundamental to protecting our position as a        on reinforcing our existing customer base and gaining new
     premium provider. To address the structural changes in our          customers. Thanks to our latest product introductions and the
     industry and build a platform for sustainable growth, we have       expansion of our portfolio with new solutions, more treatment
     been investing heavily in our product portfolio in order to:        options at different price levels can be offered. This allows us
                                                                         to address new market and patient segments. Therefore, pro-
     – Increase the penetration of dental implants by offering           viding full solutions for all our customers is key to our vision.
       solutions at various price points                                 Going forward, we endeavor to further leverage our brand,
     – Seize opportunities in the fast-growing CAD/CAM                   and to move from “just” being a product champion, with
       segment                                                           today’s best available dental solutions, to a customer and
     – Drive the digitization of the treatment process at                patient champion, with the best service and dedication to
       every step                                                        improving patients’ level of information and quality of life.
                                                                                                 Markets and strategy   27




Our strategy and implementation.


Strategic priority               Achievements in 2009                     Achievements in 2010

Increase penetration of          Launch of line extensions for our        Launch of Replace Select TC one-
dental implants                  successful NobelActive™ implant,         stage implant system for overdentures
                                 including new implant lengths            and edentulous solutions. NobelRe-
                                 and prosthetic solutions.                place™ line extension.




Capture the opportunities of     Largest NobelProcera™ product,           Completion of NobelProcera™ solu-
dental CAD/CAM                   materials and technology launch in       tions range, incl. titanium crowns &
                                 company history, including new           bridges, abutments for third-party
                                 scanner, abutments and bridges,          platforms. Preferred Partner Program
                                 as well as overdenture solutions.        with Ivoclar Vivadent, VITA Zahnfabrik,
                                                                          and Noritake.

Drive digitization of the        Update of NobelGuide software            Beta testing of NobelClinician, next
treatment process                including support for the new            generation 3D diagnostics
                                 NobelActive implant.                     and treatment planning software.




Strengthen global presence       Fostered market leadership in            Expansion of Global University Partner
                                 North America and Asia Pacific.          Program to include the universities
                                 Strengthened distributor network         of Heidelberg, Germany, Sheffield, UK,
                                 in emerging markets. Inauguration        and Sichuan, China.
                                 of Asia Pacific headquarters in
                                 Hong Kong.

Drive excellence in marketing    First Brånemark Scientific Symposium     Successful Nobel Biocare Global
and customer service             in Gothenburg, Sweden.                   Symposia in New York and Tokyo,
                                                                          and local symposia throughout
                                                                          the EMEA region.




Improve efficiency in business   Introduction of Ultra Plant concept to   Ramp-up of NobelProcera™
operations                       enhance dental implant manufacturing     production capabilities and overall
                                 performance and efficiency.              production technology upgrade,
                                                                          e.g. 5-axis milling of prosthetics.
28   Nobel Biocare Annual Report 2010 — Strategy and products




     Solutions for all indications – our patient
     focus is our customer’s advantage.

     Every patient requires a customized solution.                       for tooth restoration. Our product choice provides customers
     We enable dental professionals to satisfy                           with seamless integration of all our solutions. This allows for
                                                                         optimal treatment of every patient indication in terms of clin-
     all their patient’s esthetic and clinical needs.
                                                                         ical safety, functionality and esthetics.
     The demands and requirements for tooth restoration are
     unique and diverse for patients and dental professionals alike.     Each patient needs a unique solution
     We at Nobel Biocare support dental professionals in making          Patients judge the outcome of dental treatment by its func-
     a real and lasting difference to the well-being of patients,        tional and esthetic results. We satisfy patients’ needs with
     thereby improving their quality of life. A progressively expand-    painless and minimally invasive procedures. Our treatment
     ing and versatile portfolio is necessary to provide the best        concepts allow for reduced treatment steps, and natural-
     possible solution for specific treatment situations and indi-       looking esthetics that achieve excellent functionality. Our long-
     vidual patient needs: from the restoration and replacement          standing position as a leader and innovator in our industry
     of a single tooth or several missing teeth, to fixed and fixed-     also comes from a consistent patient focus, and concentration
     removable solutions for edentulous jaws, our solutions ensure       on dental healthcare solutions that regenerate patient’s natu-
     highest quality, flexibility and compatibility.                     ral oral structure and physiology, restore their normal denti-
                                                                         tion, and optimize the success of dental therapy. All Nobel
     The full solution approach                                          Biocare solutions are designed to fulfill the highest patient ex-
     Since 2008, it has been strategically important for us to com-      pectations with regard to quality, flexibility and functionality.
     plement our solutions portfolio with the latest materials and
     products. Our 2010 achievements include finalization of the         Offering solutions for every indication
     company’s largest-ever launch effort to add new prosthetic          Working with a full-solution provider gives dental profession-
     materials and products. Dental prosthetics are now available        als the distinct advantage of choice. Being able to choose
     in a wide range of materials that includes temporary acrylics,      from a full range of treatment options is the most effective
     non-precious metals (cobalt chromium), highly biocompatible         way to truly satisfy patient needs. We give dental profession-
     dental ceramics (alumina and zirconia) and commercially pure        als a wide selection of clinically proven solutions to address
     titanium.                                                           all treatment indications. Our solution process begins with a
                                                                         dentist diagnosing a patient. From this point on, we offer a
     In 2010, we added temporary acrylics with Telio® CAD, cost-         complete treatment flow starting with extensive diagnostics
     efficient metallic cobalt chromium, biocompatible Titanium,         and treatment planning using NobelClinician software. This
     and the new IPS e.max® lithium disilicate glass ceramic. As         leads to a prosthetic decision that involves either our ready-
     part of our prosthetic activity, we also entered into a Preferred   made standard products, or our customized CAD/CAM solu-
     Partner Program with leading material providers Ivoclar Viva-       tions with NobelProcera. A temporary solution can be used
     dent, VITA and Noritake to provide innovative materials and         until a final prosthesis has been produced. The final prosthe-
     veneering solutions. Our industry-leading NobelProcera scan-        sis is then veneered and placed with the patient.
     ner and software were upgraded last year with new features
     including an extended tooth library, customized abutments           At Nobel Biocare, we offer the best possible methods for
     on major competitor implant systems and in-lab implant bar          treating a full spectrum of clinical and restorative needs:
     overdenture scanning. Our most popular implant system,
     NobelReplace Tapered, saw a line extension with the 11.5            Single-unit restorations
     mm length. The tissue level Replace Select TC implant was           An individual crown can be used to restore or replace a single
     launched as a specialized implant for overdenture solutions,        tooth. Crowns can be supported by existing teeth or implants.
     and NobelActive continued its market leading success. Fi-           We offer individualized crowns in acrylic, zirconia, alumina,
     nally, NobelClinician, our new software supporting the Nobel-       titanium, cobalt chromium and lithium disilicate.
     Guide treatment concept, was finalized and prepared for
     launch in 2011.                                                     Multiple-unit restorations
                                                                         When more than one tooth needs restoration or replacement,
     With our 2010 portfolio achievements, we have now become            a dental bridge is an option. Bridges can be cemented to
     the leading full-solution provider offering the industry’s most     existing teeth and/or abutments or screw-retained to implants.
     comprehensive range of dental products and clinical concepts        Our bridges are individually designed and produced.
                                                                                                                    Solutions for all indications   29




Nobel Biocare solutions for all indications




              Single-unit restorations                   Multiple-unit restorations                        Full-arch restorations




Full-arch restorations                                                  Diagnostics
The demand for new solutions to effectively provide full-arch           Detailed diagnostics from 3D imaging information allow den-
restorations is growing. Conventional dentures are becoming             tal professionals to conduct an optimal assessment of bone
progressively outmoded as new solutions offer better func-              and prosthetics issues. They further benefit from NobelGuide’s
tionality and esthetics, as well as positively influencing the          prosthetic-driven planning as it can be used for all indications,
patient’s ability to eat, speak and smile. A variety of solutions       from a single tooth to edentulous cases. This technology also
are available for edentulous situations where either one or             enables coordination of the entire treatment team, including
both arches need to be replaced. Our overdenture solutions              the dental laboratory.
include the full range of possibilities, from the highly esthetic
to effective and functional, from fixed to fixed-removable.             Treatment planning
                                                                        Decision-making prior to carrying out a treatment is much
Digital dentistry with NobelGuide                                       more efficient when the whole treatment team is in sync.
Digitization is one of the key trends for the coming years in           With NobelClinician software, clinicians can plan a treat-
dentistry. New technologies are evolving rapidly and enable             ment without the patient in the chair and thereby evaluate
dental professionals to deliver greater patient satisfaction            the best treatment options. The planning is prosthetic- and
thanks to enhanced diagnostics, prosthetic-driven treatment             results-driven, and can include everyone: the referring doc-
planning and minimally invasive surgeries. Effectiveness,               tor, surgeon, prosthodontist and dental technician. Out-
safety and comfort are the primary expectations for a patient           comes are improved as a result: harmonization saves costs,
receiving implant therapy. Our NobelGuide concept utilizes              shortens treatment times and elevates patient treatment
3D diagnostics, 3D planning and guided dental implant                   quality.
placement to ensure a predictable, positive outcome.
                                                                        Guided surgery
NobelGuide facilitates safe, minimally invasive surgery that            Patients prefer minimally invasive treatments with minimized
results in less patient pain, reduced swelling and shortened            discomfort whenever possible. Guided surgery is a key enabler
healing times. Dental professionals will experience even                for such treatment as it often allows for flapless surgery pro-
more diagnostic and planning capabilities with the release              tocols. Once a treatment plan is agreed upon, a surgical tem-
of NobelClinician, the new software that will power Nobel-              plate is designed and ordered from one of our production
Guide. Moving forward, this new software will be capable                facilities. Implants and all necessary instruments can be in-
of integrating with our NobelProcera CAD/CAM system.                    cluded in the same order. The ready-to-use surgical template
30   Nobel Biocare Annual Report 2010 — Strategy and products




     Digital dentistry with NobelGuide




                                                                                                                                 Model of patient




                                                                                                                        Virtual radiographic guide




                                                                                                                                Surgical template




                                                                                                                               Prosthetic solution




     is then delivered together with all the planning information         Three connections
     required for a safe and predictable procedure.                       We offer dental professionals flexibility in the form of three
                                                                          different implant-to-abutment connections. The internal tri-
     Implant systems for every indication                                 channel connection simplifies insertion with the tactile feel
     We offer a versatile selection of implants to accommodate the        that can only be in one of three positions (tri-channel). Color-
     personal preference, solution level and treatment concept of         coding makes components easy to identify. This connection
     every dental professional. Our assortment contains bone and          is ideal in posterior regions and is available on implants with
     tissue level implants for all indications, bone types and surgical   both machined and textured collars. The internal conical con-
     protocols. Understanding our range is “as easy as 1, 2, 3.”          nection has a dual function. It features hexagonal interlocking
                                                                          and built-in platform shifting. It delivers a balanced load dis-
     One material – TiUnite                                               tribution and very tight abutment fit. The external hex is a
     All our implants are made of cold-worked, commercially pure          benchmark for prosthetic connections, because it consis-
     (c.p.) titanium which facilitates the application of TiUnite. Our    tently results in accurate and secure prosthetic restorations.
     titanium is developed through a special cold-working process         A choice can be made between 6 to 12 positions, depending
     resulting in significantly increased yield, tensile strength and     on the abutment.
     device fatigue strength. TiUnite is our patented, clinically
     proven titanium oxide surface coating. It increases initial sta-     Implants are designed to simulate the natural tooth root. De-
     bility by promoting osseointegration.                                pending on the indication and diagnosis, specific implant
                                                                          types are chosen. Patients benefit from dental professionals
     Two drilling protocols                                               using implants that accommodate the needs of a given indi-
     We offer our customers two protocols for implants: a parallel        cation. We reinforce these benefits by delivering the most
     and a tapered drilling protocol. Our standardized protocols          comprehensive implant selection in the industry.
     are optimized to reduce drilling steps. Our tapered protocol
     is color-coded according to diameter for ease of use and de-         Our implants are designed to deliver high initial stability and can
     livers good primary stability with an identical step-by-step         be used in all bone types and clinical situations. These include
     process for all indications. Our parallel protocol is very versa-    immediate, early or delayed loading, as well as two-stage surgi-
     tile and allows for under-preparation that enhances stability        cal protocols.
     in soft bone and provides a passive fit in dense bone.
                                                                                                                   Solutions for all indications   31




Nobel Biocare implants and abutments (examples)




             NobelReplace™          NobelActive™        Brånemark System™        Snappy™ Abutment        Procera® Esthetic Abutment




NobelReplace™ System                                                   NobelSpeedy™
The NobelReplace implant range is the most-used implant                NobelSpeedy is a parallel-walled implant with a slightly tapered
system in dentistry. Both tapered and straight implants feature        tip and sharp cutting blades. These features deliver high initial
internal tri-channel connections with machined or textured             stability making the implant system preferential for the All-on-4
collars.                                                               concept or in any indication when high initial stability is re-
                                                                       quired. This system is available with internal tri-channel and
In 2010, the line of tapered Replace implants was extended             external hex connections.
with new lengths. Also launched in the course of the year
was Replace Select TC, a parallel-walled, tissue level implant         Leading CAD/CAM solutions for all indications
that offers one-stage treatment simplicity which is an ideal           We offer dental professionals a versatile assortment of stan-
choice for edentulous situations.                                      dard and individualized prosthetic options to provide the final
                                                                       esthetics and function required by the patient.
NobelActive™
NobelActive is our latest and most innovative implant and              Our prosthetic components stand out for their ease of use,
uses the internal conical connection. As a hybrid implant, it          quality, longevity and optimal esthetics. We provide flexibility
has a slightly tapered design but utilizes parallel-walled drilling    with prosthetics available for all Nobel Biocare implant sys-
protocols. NobelActive is an implant for advanced users as it          tems, as well as compatibility with a number of implant sys-
has unique bone-cutting, bone-condensing and redirection               tems from major competitors.
features.
                                                                       Temporary prosthetics
Brånemark System™                                                      Temporary components are used when the clinical situation
The Brånemark System is the original endosseous implant                warrants immediate temporization at the time of surgery or
system and is viewed as the most versatile implant system in           later in the treatment process. Our final prosthetic components
our portfolio. This parallel-walled system was originally devel-       are designed to be versatile to accommodate all indications.
oped by Per-Ingvar Brånemark and is the most documented                Overdenture components provide support for fixed and fixed-
implant system in dentistry with over 20 years of clinical             removable, temporary and permanent overdenture solu-
documentation.                                                         tions.
32   Nobel Biocare Annual Report 2010 — Strategy and products




     NobelProcera scanner and prosthetics




                             NobelProcera™ Scanner                                   NobelProcera™ CAD/CAM Implant Bridge Zirconia




     Individualized NobelProcera prosthetics                             High quality scanner
     Dental professionals can provide patients with a more efficient     Our optical scanner uses unique conoscopic holography tech-
     and precisely-fitting Precision Milled Restoration (PMR) by         nology to capture precise 3D data. In-lab implant bar over-
     using our NobelProcera CAD/CAM offering. Customized CAD/            denture scanning was introduced in 2010 to increase the cost
     CAM solutions from NobelProcera deliver a natural-looking           and time savings for dental labs.
     appearance and enhanced soft-tissue support with a very
     precise fit.                                                        Intuitive software
                                                                         With our latest, easy-to-use software, we provide extensive
     With NobelProcera, we offer a wide range of products, mate-         design tools and enhanced functionality for optimal veneering
     rials and treatment options. Dental professionals who partner       support. New features added in 2010 include an extended
     with NobelProcera experience the value of access to the             tooth library, a cutback function for optimized veneering sup-
     largest established global network in digital dentistry. Nobel      port, and customized abutments on major competitor implant
     Biocare is a dental CAD/CAM pioneer and was the first to            systems.
     offer fully automated industrial production.
                                                                         Advanced production
     Digitization of the restoration process reduces costs with          Centralized industrial production efficiently delivers our PMR
     higher precision and quality, resulting in less chair time and      with a precision of fit that is nearly impossible to attain with
     adjustments. Costs are reduced for the dental lab, with our         conventional casting techniques.
     centralized production cutting labor time by more than 60%.
     Also, compared to in-lab milling, there is only a fraction of the   Comprehensive material selection
     up-front investment required. CAD/CAM further minimizes             We provide a broad choice of biocompatible materials that
     inventory costs through need-based ordering.                        offer strength and mechanical stability. Our materials offering
                                                                         covers the full range available on the market today, from high-
     Leading CAD/CAM solutions for all indications                       end esthetic materials to more cost-effective options. Our
     We are the industry leader in Precision Milled Restorations         selection includes ceramics with zirconia in four shades and
     (PMR) design and production. We offer dental professionals          alumina; titanium; non-precious metals with cobalt chromium
     a complete CAD/CAM system consisting of scanning,                   and temporary acrylics with the 2010 launch of Telio® CAD.
     software design and advanced centralized industrial manu-           Also new in 2010 is lithium disilicate glass ceramic with IPS
     facturing.                                                          e.max®.
                                                                                                                  Solutions for all indications   33




Quality assurance and warranty                                                    New prosthetic materials

NobelProcera offers an extensive 5-year warranty (excluding
temporary acrylics). Fifteen years of cumulative experience
and research is backed by support from highly trained and
                                                                                  Telio® CAD
skilled customer service and technical support specialists.
                                                                                  Cobalt chromium
The treatment flow concludes with an individualized Nobel-
Procera PMR. The final product can then be veneered by a                          Titanium
laboratory using one of our Preferred Partner Program mate-
rial providers: Ivoclar Vivadent, VITA or Noritake. Our indi-                     IPS e.max®
vidualized CAD/CAM solutions produce the best possible
patient outcomes.                                                                 Major product launches




                                                                                                  NobelReplace
Telio®, IPS e.max®, and Ivoclar Vivadent are registered trademarks of
Ivoclar Vivadent AG, VITA of VITA Zahnfabrik AG and Noritake of Noritake Dental
Supply Co., Limited.


                                                                                                  Tapered extension
                                                                                                  Customized abutments
                                                                                                  Replace
                                                                                                  Select TC implant
                                                                                  New Preferred Partner Program




                                                                                                  Ivoclar Vivadent
                                                                                                  VITA Zahnfabrik
                                                                                                  Noritake
34   Nobel Biocare Annual Report 2010 — Strategy and products




     Simplified digital treatment flow




           Dentist discusses treatment                                Scan of patient situation.         Diagnosis and treatment planning on
              options with patient.                                                                      computer with NobelGuide concept.




      Scanning of model and computer-aided                      First treatment with implant, abutment         Ordering of surgical and
            design of final restoration.                                and temporary prosthesis.              prosthetic components.




     Industrial production creates a Precision
            Milled Restoration (PMR).




         Dental lab veneers the PMR and                            Subsequent treatment with final             Patient regains function
            creates final prosthesis.                                 individualized prosthesis.                    and esthetics.
Success factors.


Research and development          36
Corporate social responsibility   42
Caring for patients               44
Our people                        46
Operations                        48
36   Nobel Biocare Annual Report 2010 — Success factors




     Research and development –
     safe and effective innovations.

     For more than forty years, our research and                        In 2005, we introduced the world’s premiere integrated
     development (R&D) has been introducing                             surgery solution, NobelGuide. NobelGuide brought digital
                                                                        dentistry to a new level, using CBCT scanning technologies,
     innovative dental solutions and treatment
                                                                        which allow for accurate planning and placement of dental
     concepts that have improved patient quality                        implants in a digital environment.4
     of life.
                                                                        In 2008, we launched NobelActive. This new generation of
     In order to continue improving the patient treatment experi-       tapered implant has been proven to provide high initial stabil-
     ence and outcome, now and in the future, our R&D effort            ity, especially in narrow ridges and compromised bone indica-
     focuses on basic research, product development and clinical        tions, through its bone-condensing capability.
     follow-up. The ultimate goal is to produce innovative products
     and solutions that meet the needs of dental professionals and      Finally, in 2009, we brought to market a new optical scanning
     satisfy patients’ varying esthetic and functional demands. The     technology with our NobelProcera Optical Scanner. Cono-
     ultimate goal is to maintain crestal bone, improve esthetics,      scopic holography allows the scanning laser and its reflection
     restore speech and eating abilities and improve comfort. Also,     to travel the same pathway. This allows for accurate diagnos-
     we seek to optimize the treatment path through more efficient      tics, scanning of narrow angles and deep crevices, such as
     solutions and processes. Similarly, by refining treatment plan-    teeth profiles in dental impressions.
     ning and surgical protocols, less invasive treatment proce-
     dures are possible that reduce chair time, increase predict-       Our ongoing R&D activities cover the spectrum of basic
     ability and improve patient comfort. The main objective of our     research, product development and clinical follow-up. The
     clinical follow-up is to demonstrate the safety and efficacy of    research effort focuses on several areas:
     our solutions, by maintaining design control processes, con-
     ducting comprehensive preclinical testing and developing           Basic research – the fundamentals of osseointegration
     clinical follow-up documentation.                                  In 2007, Nobel Biocare began exploring the use of molecular
                                                                        biology techniques to investigate the fundamentals of os-
     A legacy of innovation                                             seointegration. This research was conducted in collaboration
     Our legacy builds upon a rich heritage of dental research from     with the Institute for Biomaterials and Cell Therapy (IBCT) at
     which many innovations have become dental industry stan-           Gothenburg University and Tataa Biocenter AB (Gothenburg).
     dards. In 1952, Professor Per-Ingvar Brånemark discovered
     that bone integrates with titanium.1 This process, which he        The study evaluated early gene expression and cellular reaction
     termed osseointegration, revolutionized dentistry and created      on implants with TiUnite and machined surfaces, in a new and
     modern dental implantology. We partnered with P-I Brånemark        experimental in vivo model. Early results indicated that early
     to bring his discovery to market. A successful series of implant   cell activation differs significantly on implants with TiUnite
     systems and components followed in the subsequent years.           versus those with machined surfaces. In 2010, accumulated
                                                                        results were presented at the 19th Annual Meeting of the
     In the early 1980s, we began researching an innovative meth-       European Academy for Osseointegration, in Glasgow, UK.
     od for standardizing the production of dental prosthetics
     using computer-aided design and computer-assisted manu-            The results demonstrated that during the first 24 hours after
     facturing. Today, NobelProcera is the world-leading CAD/CAM        implantation, TiUnite was associated with a greater influx of
     system for creating individualized dental prosthetics, offering    bone-forming cells, higher expression of cell recruitment and
     a complete range of materials and solutions.                       adhesion and lower levels of inflammation. Likewise, during
                                                                        the osseointegration period, the osteogenic differentiation,
     In 1999, we introduced TiUnite, our patented titanium oxide        bone formation and bone remodeling was greater with TiUnite
     implant surface that promotes rapid bone growth and faster         than implants with machined surfaces. These results suggest
     osseointegration.2 TiUnite has allowed to expand implant           that TiUnite strongly influences implant stability, which is well
     treatments to patients with compromised bone indications.3         documented in clinical studies. This research technique is
     TiUnite has demonstrated its efficacy in clinical situations for   now being used to explore the local microbiological environ-
     ten years, and is now featured on all of our implants.             ment around healthy and ailing teeth and implants. Results
                                                                        of such research will potentially lead to prevention and reme-
                                                                                                            Research and development   37




diation methods. Additionally, these techniques may be used         Securing our innovations
in the evaluation of advanced implant surfaces and designs.         Competitiveness in the dental market depends on protecting
                                                                    innovations and ideas. We give high priority to developing
Product development – NobelProcera and digital dentistry            and managing our comprehensive intellectual property port-
We gave our innovative NobelProcera System and Digital              folio. This portfolio is characterized by a system of patents,
Dentistry special attention in 2010. Throughout the year, R&D       designs and copyrights, and trademarks. Trademarks are part
was involved in the development and testing of new designs          of our unique brand identity and are protected on a broad
and materials, and upgrading industrial processes. During the       geographical basis in a large number of countries. We are
first nine months of 2010, initial product additions were com-      continuously filing new applications for intellectual property
pleted and a Preferred Partner Program with leading dental          rights, while simultaneously streamlining the existing portfo-
material providers Ivoclar Vivadent, VITA Zahnfabrik and Nori-      lio and defending against infringements by third parties. We
take was established. Because of this program, NobelProcera         currently administer a comprehensive portfolio of several
is now capable of providing dental professionals with the           hundred patent families.
broadest range of materials available. Five-axis milling process
produces were introduced to improved surface finish and an          Regulatory affairs
emergence angle of up to 90 degrees for better soft tissue          In 2010, Nobel Biocare received more than 120 product
support and esthetic outcome.                                       approvals or clearances worldwide, and around 150 new
                                                                    submissions were filed. The most important clearances in-
Clinical follow-up                                                  cluded in our individualized products range Telio2 CAD Crown
Our R&D initiatives are supported by preclinical studies as         and Bridge for all major markets in June, NobelProcera Base-
well as clinical research and post-market surveillance. This        metal alloy Crown and Bridge in all major markets in July,
breadth of research is necessary to comply with our high            NobelProcera Implant Overdenture Bar attachments in Japan
scientific standards and guarantee that every Nobel Biocare         e.max Crown in all major markets in August. In standardized
solution introduced to the market is thoroughly tested and          products, major clearances were the NobelActive implant for
supported by scientific documentation. Our clinical research        the Japanese market in October, and the Replace Select TC
is responsible for monitoring product effectiveness and per-        for overdenture solutions for all major markets in December.
formance by designing, performing and monitoring clinical           Additionally, throughout the year, a number of NobelProcera
investigations. Most studies run for several years with interim     Titanium and Zirconia abutments for our own implant systems
results published as extended abstracts, or as posters, at sci-     and competitive platforms were cleared for our major mar-
entific congresses. Study results are published in interna-         kets.
tional scientific, peer-reviewed journals.

Strong network of partnerships
Nobel Biocare embraces collaboration with a wide range of
medical and dental experts, including private clinicians, den-
tal laboratories, and leading universities. We focus on improv-
ing dental education at all levels. In 2010, the Universities of
Sheffield in the United Kingdom, Heidelberg, Germany, and
Sichuan, China, joined our Global University Partner Program
(GUPP), expanding it to 26 members. The GUPP is an initiative
to expand dental education curricula in universities to include
basic implant and CAD/CAM dentistry. Together, R&D is in-
volved in ongoing basic research projects with more than 175
partners worldwide. These research collaborations involve
many disciplines, including microbiology, immunology, phys-
ical and organic chemistry, and radiography. We are also in-
volved in numerous collaborations in clinical research – our
research partners in this area are hospitals, private clinics and
physicians.
38   Nobel Biocare Annual Report 2010 — Success factors




     Our innovation pipeline
                                                 Development   Clinical study   Launch             Potential




     Implants and          New                                                                     To extend the leadership of NobelReplace
     abutments             NobelReplace                                                  H2’11     as the most used implant in the world



                           NobelActive                                                             To expand treatment options for compromised
                           3 mm                                                          H2’11     bone situations and in the esthetic zone



                           Overdenture                                                             To offer cost-effective overdenture solutions
                           implant                                                       H2’10



                           New                                                                     To offer a cross-functional treatment
                           NobelGuide                                                    H1’11     planning platform



     NobelProcera          3rd party                                                               To provide full range of solutions enabling
                           abutments                                                     ongoing   labs to increase their efficiency



                           IPS e.max®                                                              To extend global leadership in prosthetic
                           crowns                                                        H2’10     solutions on implants and natural teeth



                           Decentralized
                           scanning of bars                                              H2’10
                                                                                                                                 Research and development     39




Selected publications on clinical trials 2010
Products/concepts              Researchers              Follow-up       Number of implants/   Cumulative      Publication status
                                                                        frameworks            survival rate
                                                                                              (CSR) in %

TiUnite implants               Turkyilmaz et al.        7 years         48                    100             Accepted at AO 2011; manuscript submitted
                               Hahn                     4 years         47                    97.9            J Oral Implantol (epub ahead of print)


Brånemark System               Friberg & Jemt           up to 5 years   280                   98.2            Clin Implant Dent Relat Res 12 Suppl 1:
TiUnite                                                                                                       e95–e103.


Groovy implants                Shibly et al.            2 years         60                    95.0            J Periodontol (epub ahead of print);
                               Shanaman et al           1 year          115                   98.3            manuscript in preparation


All-on-4                       Babbush et al.           up to 29 mo     708                   99.5            Presented at IADR 2010 – conditional
                               Puig                     1 year          195                   97.9            acceptance; Eur J Oral Implantol 3(2): 155–63


Replace                        Mura                     5 years         79                    100             Clin Implant Dent Relat Res. 2010
                               Liao et al.              1 year          20                    94.0            (epub ahead of print); Int J Oral Maxillofac
                                                                                                              Implants 25(4): 784–790

NobelActive                    Martínez-de Fuentes et al. 2 years       117                   95.7            Presented at IADR 2010, manuscript in
                               Babbush et al.             up to 31 mo   1’001                 97.4            preparation; presented at IADR 2010,
                                                                                                              manuscript submitted

NobelReplace                   Shibly et al.            1 year          60                    95.0            Clin Implant Dent Relat Res
                                                                                                              (epub ahead of print)


NobelProcera                   Sorrentino et al.        5 years         48                    100             Presented at IADR 2010, manuscript in
                               Imburgia et al.          3 years         67                    100             preparation; presented at IADR 2010,
                                                                                                              manuscript submitted

NobelSpeedy                    Pozzi et al.             26–40 mo        81                    96.3            Presented at EAO 2010, manuscript
NobelGuide                                                                                                    submitted


Edentulous                     Turkyilmaz et al.        5 years         52                    100             Clin Implant Dent Relat Res 12 Suppl 1:
                               Friberg & Jemt           1 year          268                   98.5            e39–46 / Clin Implant Dent Relat Res
                                                                                                              12 Suppl 1: e56–e62.

Soft tissue management         Weinländer et al.        1 year          20                    100             Accepted at Clin Oral Implants Res
40   Nobel Biocare Annual Report 2010 — Success factors




     Global University Partner Program (GUPP)
     North America                                        Europe & Middle East                           Asia Pacific



     Loma Linda University, USA                           Charité Universitätsmedizin, Berlin, Germany   Peking University School of Stomatology, China



     Louisiana State University, USA                      University of Freiburg, Germany                Shanghai Jiao-Tong University School of
                                                                                                         Stomatology, China


     Medical College of Georgia, USA                      University of Heidelberg, Germany              SUN Yat-sen University Guanghua School of
                                                                                                         Stomatology, China


     New York University, USA                             Catholic University of Leuven, Belgium         The 4th Military Medical University School of
                                                                                                         Stomatology, China


     Tufts University, USA                                University of Sheffield, UK                    Wuhan University School of Stomatology, China



     University of California – Los Angeles, USA          Hebrew University Hadassah School of Dental    Sichuan University – West China College of
                                                          Medicine, Israel                               Stomatology, China


     University of Pennsylvania, USA                      King Saud University, Saudi Arabia             HoChiMinh City University, Vietnam



     University of British Columbia, Canada               University of Tartu, Estonia                   University of Sydney, Australia



     University of Toronto, Canada



     University of Western Ontario, Canada
                                                                                                                                            Research and development       41




Outlook
Our ongoing and future R&D activities will continue to com-
plement our portfolio of products and solutions for the ben-
efit of our customers and their patients worldwide. We will

                                                                                                  NEUES BILD
continue to focus on innovative approaches to improve treat-
ment effectiveness and the preservation of soft tissue. A
highlighted forthcoming project is the rejuvenation of the
popular NobelReplace system.

References
1 Brånemark PI. Osseointegration and its experimental background.
   J Prosthet Dent 1983;50(3): 399–410.
2 Hall J and Lausmaa J. Properties of a new porous oxide surface on
   titanium implants. Appl Osseointegration Res 2000; 1:5–8.
3 Glauser R, Zembic A, Ruhstaller P, Windisch S. Five-year results of implants with
   an oxidized surface placed predominantly in soft quality bone and subjected to
   immediate occlusal loading. J Prosthet Dent 2007; 97 (Suppl 6): 59–S68.            Basic research on the fundamentals of osseointegration: Pictured above is a close-
4 Friberg B and Jemt T. Clinical Experience of TiUnite™ Implants: A 5-year Cross-     up of TiUnite®, our advanced osseointegration surface for dental implants.
   Sectional, Retrospective Follow-Up Study. CIDRR 2010;12(Suppl 1): e95–e103.
5 Kielbassa AM, Martínez-de Fuentes R, Goldstein M, Arnhart C, Barlattani A,
   Jackowski J, Knauf M, Lorenzoni M, Maiorana C, Mericske-Stern R, Rompen E,         Continuous flow of innovations
   Sanz M. Randomized controlled trial comparing a variable-thread novel tapered




                                                                                      120 new product
   and a standard tapered implant: interim one-year results. J Prosthet Dent 2009;
   101(5): 293–305.




                                                                                      approvals received

                                                                                      150 product
                                                                                      approvals submitted
                                                                                      New GUPP members




                                                                                      University of
                                                                                      Sheffield United Kingdom
                                                                                      University of
                                                                                      Heidelberg Germany
                                                                                      University of
                                                                                      Sichuan China
42   Nobel Biocare Annual Report 2010 — Success factors




     Corporate social responsibility –
     helping to make a difference.

     As a responsible corporate citizen, we have                        One of our most important sponsorships benefits the P-I
     a firm commitment to high ethical standards                        Brånemark Institute Bauru in Brazil 1, a non-profit organization
                                                                        that treats patients with missing teeth and often severe max-
     and contributing to a more sustainable
                                                                        illofacial defects, in most cases free of charge. The institute
     world.                                                             was founded by Professor Per-Ingvar Brånemark, the Swedish
                                                                        orthopaedic surgeon whose pioneering work on osseointegra-
     At Nobel Biocare, we take our responsibilities as a corporate      tion laid the scientific roots for Nobel Biocare’s activity. The
     citizen seriously. Our commitment to corporate social respon-      financial backing we have been providing to the institute since
     sibility is reflected in three distinct areas: business ethics,    its founding has permitted several hundred people to be
     protection of the environment, and providing financial and         treated each year – a substantial contribution to the 1,800
     other support to organizations helping people in need, par-        procedures the institute currently carries out annually. In
     ticularly in the area of oral healthcare.                          November 2010, Nobel Biocare announced a new 5-year
                                                                        agreement, worth about EUR 2.5 million, that will enable con-
     Code of Conduct and compliance                                     tinued clinical treatment, follow-up teaching and training. This
     Central to our role as a responsible corporate citizen are high    partnership is an example of how we join forces with clinicians
     standards of business ethics and employee integrity. Our           throughout the world to provide patients with treatments that
     corporate principles and values are formalized in the Nobel        substantially increase their quality of life.
     Biocare Code of Conduct, to which all employees must ad-
     here. It is comprehensive in scope, covering business practice,    In the US, we have been a corporate partner of the National
     corporate governance, patient health and safety, conflicts of      Children’s Oral Health Foundation 2 since 2006, helping this
     interest, insider information, competition laws, bribery, gifts    organization to support the delivery of comprehensive oral
     and donations, property, equality, records, confidentiality, in-   healthcare to more than 1 million underserved children, in-
     tellectual property and environmental law. A confidential and      cluding free surgery for children with missing teeth or other
     anonymous “Ethics hotline” implemented in 2009 is a valu-          dental problems. In 2010, we renewed our support with a
     able tool to further assure compliance with standards set out      $100,000 charitable donation, while also providing marketing
     in the Code of Conduct, allowing all employees and managers        expertise in order to increase public awareness of NCOHF’s
     worldwide to report any behavior they suspect is illegal, un-      humanitarian “smile-saving” mission. Additionally, we match
     ethical, or unprofessional.                                        our employees’ own donations to this organization.

     Environmental footprint                                            Another charitable organization we support is the National
     We have a global monitoring process in place to measure our        Foundation of Dentistry for the Handicapped 3, known since
     environmental footprint. Our global environmental objectives       December 2010 as the Dental Lifeline Network, which has
     are three-fold: to reduce waste and energy, to reduce our CO2      transformed the lives of more than 100,000 disabled, elderly
     emissions and to raise environmental consciousness within          or medically at-risk patients. In 2010, we donated $39,000 in
     the organization. We make particular efforts to reduce water       dental products to this organization.
     and raw material consumption, switch to more eco-friendly
     means of transport, and train all employees on environmental       Supporting dental education and innovation
     issues. Our Environmental Management System (EMS) pro-             We have a broader interest in supporting leading dental so-
     vides a procedure to implement management objectives               cieties in their efforts to promote dental education, enforce
     regarding the environment while delivering continual feed-         professional and business best practices and encourage in-
     back on environmental impact and other parameters. As part         volvement in science and innovation. We partner with dental
     of our ISO 14001 certification, production sites also undergo      universities worldwide by sharing product knowledge and
     periodic third-party environmental audits.                         treatment expertise. We also cultivate an active dialogue with
                                                                        dental organizations and support them where appropriate.
     Community engagement
     We have several philanthropic projects ongoing, focusing           A major philanthropic commitment we have made to a dental
     especially on areas where we can provide expertise in addition     organization is a 5-year, $2.5 million pledge to the Academy
     to financial support. These projects include several charitable    of Osseointegration (AO) Foundation 4. The funds are being
     organizations in the area of oral rehabilitation and care.         used to support research and leadership in the field of
                                                                                                                           Corporate Social Responsibility     43




osseointegration. As part of this engagement, in 2007 we
initiated the annual Nobel Biocare Brånemark Osseointegra-
tion Award, the highest honor bestowed by the AO Founda-
tion, recognizing an individual’s impact on and leadership in
the field of osseointegration. In 2010, this award was given
to Dr George Zarb, who organized P-I Brånemark’s first North
American conference back in 1982.

Outlook
The fight against edentulism is also a fight for greater acces-
sibility to advanced dental solutions. The expansion of our
product portfolio, e.g. with overdenture solutions, is also a
first step towards making our products more affordable for
broader segments of the population. Going forward, we will              Nobel Biocare supports the P-I Brånemark Institute Bauru in Brazil, a non-profit
as part of a program to ensure that the elderly and finan-              organization that treats patients with missing teeth and maxillofacial defects

cially underprivileged have access to proper dental treatment,
Nobel Biocare plans to provide free products and sponsor-               Resource consumption per produced unit 2010

ships to selected dental clinics serving these patient groups.

Weblinks
1 P-I Brånemark Institute Bauru in Brazil (www.branemark.org.br)
                                                                        Water (litres) 2.9
                                                                        Electricity (kWh) 1.7
2 National Children’s Oral Health Foundation (www.ncohf.org)
3 National Foundation of Dentistry for the Handicapped (www.nfdh.org)
4 Academy of Osseointegration (AO) Foundation (www.osseo.org)



                                                                        Paper (#sheets) 0.8
                                                                        CO2 (kg) per produced unit

                                                                        2010                                                               0.66

                                                                        2009                                                                           0.80

                                                                        2008                                                             0.62

                                                                        2007                                                   0.57


                                                                                  0                      0.3                      0.6

                                                                        CO2 per produced unit is calculated as a combination of electricity, paper and water
                                                                        consumption based on Elmix Sweden & USA (electricity conversion factors: Sweden
                                                                        110 g; USA 800 g CO2 / kWh). The ratio has increased in 2009 as a consequence of
                                                                        lower overall production volumes. On a ”per employee“ basis, CO2 emissions have
                                                                        been stable.
44   Nobel Biocare Annual Report 2010 — Success factors




     Caring for patients.


     At Nobel Biocare, we understand that                             an important part of the medical encounter, and we believe
     each patient is a unique individual.                             educational information must be available the moment the
                                                                      patient enters the waiting room. Nobel Biocare offers a wide
     We endeavor to supply the full spectrum
                                                                      range of waiting room materials including leaflets, books,
     of dental products to dental specialists,                        brochures, booklets and posters.
     allowing them to provide each patient
     with a personalized solution.                                    Replacing a missing tooth
                                                                      Daniel is one example of how a loss of even one tooth can
     Dentists often talk of the “mirror effect” when patients see     impair quality of life. Daniel lives in London and works in the
     their new smile immediately after surgery. Reactions vary from   IT industry. He lost a front tooth some years ago due to a
     person to person. Some laugh for the first time in years; some   trauma accident. He received an upper denture to replace the
     shed tears of joy; others are in disbelief of the change they    missing tooth, which he was forced to wear when meeting
     see. Many patients say that their lives have been given back     with clients or friends. “I was always conscious about smil-
     to them, finally seeing themselves as a complete person, for     ing.” Daniel had the habit of carrying his dentures with him
     the first time since years smiling back at them in the mirror.   wherever he went. The lack of a tooth affected how he could
     For decades, we have been helping patients around the globe      chew foods, only taking small bites. Hot drinks were an im-
     living with damaged or missing teeth, and our commitment         possibility for him, because they often caused painful blisters.
     to our patients is one of our most important responsibilities    He eventually found a Noble Biocare partner who gave him
     as a company. We understand that every patient has indi-         a NobelReplace implant, so a new tooth could fill the gap at
     vidual healthcare needs, and we take this fact into consider-    the front of his jaw. Now, after treatment, Daniel is able to
     ation while developing products and solutions.                   bite, chew and smile with confidence. He no longer has
                                                                      to remember to carry his dentures around with him, either.
     Partnering for the patient                                       “Before, I even felt embarrassed in front of my own family,”
     Our responsibility as a company is multi-faceted, and we pride   says Daniel, “now I don’t worry about smiling!”
     ourselves in providing effective solutions, promising clear
     benefits to patients by helping them regain their oral func-     A life without dentures
     tionality and esthetics. Relevant issues such as implant loss,   Some procedures are rarely used, but are necessary for many
     esthetic expectations and soft tissue health are taken into      patients nevertheless. One example is the actor James Cosmo
     consideration when developing products, to ensure long-term      (60), who from the tender age of 12 has been wearing den-
     better patient outcomes.                                         tures after a sporting accident knocked out his teeth. ”They
                                                                      just broke off, and the dentist pulled out the rest by the root.
     A key to our success is our close relationship with leading      Filling the gap with a partial denture was common in those
     dental specialists. Patients worldwide are given access to our   days, even for a 12-year-old,” explains James. Wearing den-
     products and solutions via dental clinicians who are trained     tures was a worry while working as an actor, not knowing
     in modern implant dentistry. We provide new generations of       whether his teeth would dislodge while yelling in battle
     dentists with training at both undergraduate and postgradu-      scenes. ”Losing my teeth didn’t impede my acting, but it was
     ate levels. In addition, the mentorship programs we support      a constant worry and meant I was never completely relaxed,”
     facilitate knowledge transfer on implant and CAD/CAM-based       says James.
     tooth restoration.
                                                                      Since his loose dentures covered the taste receptors in his
     Patient education                                                palate, his sense of taste was impaired: strong flavors such as
     We recognize that an essential role of surgeons and restor-      chili and garlic tasted distinctly dull; fresh fruit and vegetables,
     ative dentists is to educate patients. Beyond providing qual-    which James had always loved, tasted bland. James was
     ity products and solutions, we therefore make available fac-     forced to restrict his diet by avoiding foods which he would
     tual information about our products as well as tools to          have to bite on, or which might get stuck in his dentures.
     facilitate communication between the patient and the dental
     professional. We offer a wealth of patient materials providing   The decision to finally find help was not an easy one. Years
     accurate, unbiased information for the waiting room environ-     of wearing dentures had resulted in severe bone loss, which
     ment and during patient consultations. Patient education is      often happens when there are no natural tooth roots to stim-
                                                                                                                                  Caring for patients   45




ulate the bone. So James had to undergo a more compli-
cated procedure, which involved multiple visits to his dental
surgeon. First, before implants could be placed, his Nobel
Biocare specialist conducted bone graft surgery. Then, zygo-
matic implants were placed. They would provide an anchor
for a bridge of teeth where there was no longer sufficient
bone, while ordinary, shallower implants could be used in
those areas of his jaw that were still robust enough. Finally,
using the unique All-on-4 procedure, James received a full
porcelain bridge that was milled according to a 3D image of
his jaw prepared from computerized imaging and scans. His
new bridge looks and feels like real teeth, and just two hours
after surgery, James was able to have lunch and use his new
teeth – and bite into a steak. ”It was wonderful,” he says. ”I     “Before I even felt embarrassed in front of my own family. Now I don’t worry
savored every mouthful.”                                           about smiling!”, Daniel (54), United Kingdom.



For a better quality of life
As a child, Myrta was always aware that her smile was “dif-
ferent” from children, with obvious gaps in her front teeth.
Myrta was born with the genetic defect “agenesis”, which
resulted in both her upper lateral incisors never developing
during childhood. She felt handicapped, never smiled and
lacked confidence when meeting people. However, an adver-
tisement in a journal on modern dentistry brought her to a
Noble Biocare specialist. After a series of consultations, where
her options were explained and discussed in detail, Myrta
decided to accept treatment. Using Nobel Biocare solutions,
Myrta was given five NobelProcera crowns and a NobelActive
implant. Myrta finally received the smile she never had before,
improving her quality of life. When asked how she felt with        “It was wonderful. I savored every mouthful.”, James Cosmo (60).
her new teeth, her response was simple. With a wide smile,
she said “I feel wonderful!”




                                                                   “I feel wonderful!”, Myrta Lüthi, Switzerland
46   Nobel Biocare Annual Report 2010 — Success factors




     Our people – at the heart of
     the business.

     Our people are key contributors to our                             principles are also regularly being updated to align with
     success. We are dedicated to ensuring a                            industry best practices – details are included in the Remu-
                                                                        neration Report.
     healthy and stimulating work environment
     where our employees can fully realize                              Recent global initiatives
     their potential and apply their professional                       We are placing greater overall emphasis on promoting em-
     expertise.                                                         ployee engagement and improving internal communications
                                                                        throughout our organization. We now carry out regular
     While our focus as a company is to provide advanced dental         global employee surveys to determine which initiatives are
     solutions, people are at the heart of our business and the key     working well and what can be improved. “Engagement cham-
     source of our success. Our employees come from a wide              pions” have been named for each region; their task is to study
     range of national, ethnic and professional backgrounds, a          the survey results and use them to facilitate and strengthen
     diversity that contributes to our strength as an organization.     employee engagement. A new intranet and regular employee
     What they share are openness, ambition and drive, qualities        events facilitate information and the exchange of know-how.
     we seek when hiring and which we promote through our               Another recent initiative is the upgrade of the HR infrastruc-
     corporate culture and values. The respect we accord our            ture. We are implementing a new HR system, which will per-
     employees is a reflection of this culture and a source of pride.   mit the global harmonization of HR data and performance
     An equal opportunity employer, we have a high percentage           management processes and lead to further improvements in
     of women in our organization and practice gender pay               efficiency.
     equality.
                                                                        Learning and development
     We have high expectations of our employees, and these are          Of strategic importance is further improvement to the quality
     embodied in our Code of Conduct, to which each employee            of our sales force, as part of a larger “Field Force Develop-
     must adhere. The Code of Conduct guides our employees in           ment” project. In order to gain, retain and develop sales talent,
     their daily business and ensures that their actions are consis-    we have created competency and career development mod-
     tent with our corporate values and high ethical standards.         els and implemented them in most countries. These then
                                                                        served as a basis for subsequent performance evaluations
     Priorities in 2010                                                 with sales employees. We also implemented a global Sales
     Management expertise and leadership in the HR department           Academy concept to provide comprehensive, module-based
     were strengthened in 2010. A priority is to continuously im-       training programs suited to local requirements.
     prove employee satisfaction, as well as to ensure that the
     workforce is optimally focused on delivering added value to        Successful regional initiatives
     our customers. The HR function is being brought into in-           While we are working toward greater harmonization of pro-
     creased alignment with business needs, making greater use          cedures worldwide, individual regions have the freedom to
     of key performance indicators to reach this goal.                  carry out many of their own initiatives, the subject of many
                                                                        small success stories. In North America, a comprehensive
     The HR department is currently in the process of implement-        “sensitivity training” program was designed and developed
     ing a standardized hiring process across all regions, facilitat-   in conjunction with the legal department to help foster the
     ing identification and recruitment of the best professionals       principles of a respectful workplace. The same region also
     with the highest potential. To enable our employees to de-         designed a 9-month, 9-module training program to assist both
     velop their full potential within our organization, we recently    current and potential leaders on leadership and management
     established a new function charged with this task. Succession      issues. The Karlskoga site in Sweden has been running an
     planning is an important aspect of this function, identifying      extensive program to implement a work philosophy aimed at
     key talents who can take on positions of high responsibility.      efficiency and the elimination of waste and non-value-adding
                                                                        activities, following basic training for all employees that took
     The existing Framework for Performance initiative remains          place in 2009. Initiatives in Russia have strongly focused on
     the core of our performance management program, uniting            customer service, while other regions have introduced awards
     our entire workforce behind a common vision and set of val-        to honor outstanding employees.
     ues and fostering a high-performance culture. Remuneration
                                                                                                                                         Our people    47




Operational health and safety
We care about the health, safety and well-being of our people.
Nobel Biocare maintains health and safety policies to ensure
that working conditions are safe and conform to business
purpose and needs. We comply with all regional health and
safety legislation, and continuously work on minimizing the
incidence of work-related accidents. In 2010, no serious work-
related accidents had to be reported on any of our global
sites.

Employee representation
Trustful relationships with our employees and employee rep-
resentatives are important to us. We support unions wher-
ever they are present in Nobel Biocare operations. In compli-    The diversity and wide range of qualifications of our people make us strong
ance with Swedish legislation, two employee representatives      as an organization.

are on the board of Nobel Biocare AB in Sweden and are
regularly invited to participate in board meetings of Nobel      Building on a global team

Biocare Holding AG.
                                                                 Employees worldwide in 2010



                                                                 2’433
                                                                 Employees by region in 2010



                                                                                                                                    Headquarter 8%
                                                                 Europe, Middle East,                                               Asia Pacific 15%
                                                                 Africa (EMEA) 46%



                                                                                                                                      Americas 32%
48   Nobel Biocare Annual Report 2010 — Success factors




     Operations – increasing efficiency
     and value creation.

     Our global operations are the backbone of                          tion with other functions within the company. The specific
     our value chain. We are constantly striving                        outcomes we are most focused on, reflected in our key per-
                                                                        formance indicators, are customer service level, cost effi-
     to increase efficiency while maintaining the
                                                                        ciency, capacity utilization and inventory turns.
     highest standards of quality.
                                                                        Lean manufacturing
     Nobel Biocare’s global operations are a central element of         Initiatives within our manufacturing operations aim to en-
     value creation in the company’s business processes. Over the       hance flexibility and strengthen capabilities in the organiza-
     past few years, we have implemented numerous projects that         tion. With standardized product manufacturing, we have
     touch on every aspect of our global operations: they aim at        continued to implement a lean production approach and
     improving efficiencies, ensuring high quality, reducing costs      reduce cycle times, inventory levels and lead times. In par-
     and delivering value to customers. By achieving excellence         ticular, we are seeking to minimize non-value-added time by
     and optimal efficiency in our processes, we secure a com-          reducing lead and setup times. We are also acting to harmo-
     petitive advantage in the marketplace and contribute to sus-       nize equipment throughout our production facilities. With
     tainable growth and profitability.                                 individualized product manufacturing, the focus has been on
                                                                        building up capacity for new products and materials, as well
     Global production network                                          as making overdenture bars at our Mahwah site.
     We manufacture our products at several locations around the
     world. Implant and standardized products are manufactured          In 2010, the global manufacturing setup of individualized
     at three facilities: Karlskoga (Sweden), Yorba Linda (USA) and     NobelProcera solutions in Mahwah, Stockholm and Tokyo
     Tel Aviv (Israel). Manufacturing of the NobelProcera product       has been redesigned to allow flexible switching between pro-
     range takes place at four sites: in Stockholm (Sweden), Mahwah     duction lines, in order to optimally meet current demand.
     (USA) and Tokyo (Japan), as well as at the NobelProcera Inno-
     vation Center in Québec (Canada). Software and NobelGuide          Procurement and supply chain initiatives
     expertise is based in Mechelen (Belgium), while our products       We have taken the significant step of centralizing all our pro-
     reach customers primarily through Nobel Biocare’s distribu-        curement activities, presenting a single face to the supplier
     tion centers in Belfeld (the Netherlands) and Yorba Linda.         market. By strengthening negotiation power and strategic
                                                                        buying, this initiative will result in reduced costs, reduced
     Both the Karlskoga and Yorba Linda sites now incorporate a         risks and improved service capability. A General Supply Agree-
     new manufacturing concept, combining full digitization with        ment with all key suppliers was introduced as part of this
     a high degree of automation. This significantly reduces lead       strategy, and material flows from suppliers to both central
     times while guaranteeing high levels of quality and flexibility.   warehouses have been simplified.
     Certain product lines operate according to a flexible model,
     so that if major disruptions were to occur, any of the sister      We have taken numerous other supply chain initiatives with
     sites could take over production without compromising prod-        the goal of reducing costs for both Nobel Biocare and our
     uct quality or delivery.                                           customers, while increasing efficiencies. We have imple-
                                                                        mented a pull-based system, and we are further reengineer-
     Initiatives in 2010                                                ing supply chain processes and reducing the number of steps
     A heightened emphasis on velocity and flexibility is reflected     and inventory days of supply in the material flow from sup-
     in our new efficiency improvement approach, which serves           plier to patient. These goals are being accomplished in part
     as the framework for new initiatives within each department        by increasing the frequency of information and material flow.
     of the Global Operations organization. This approach is part       Because short default delivery lead times can lead to greater
     of a broad set of initiatives with the ultimate aim of adding      complexity and require larger production capacities, these
     economic value.                                                    initiatives are being pursued in conjunction with a close anal-
                                                                        ysis of customer needs in order to arrive at an optimal balance.
     While past initiatives have already gone a considerable            In addition, there have been specific initiatives to optimize the
     distance toward achieving high efficiency, there remains po-       distribution center layouts, plan capacity for individualized as
     tential for further optimization along the entire value chain,     well as standardized production, and to place bar codes on
     which the operations organization is working on in collabora-      primary packages.
                                                                                                                   Operations   49




Nobel Biocare worldwide



                                                                                     Production standardized products
                                                                                     Production individualized
                                                                                     NobelProcera products
                                                                                     Innovation center
                                                                                     Distribution center
                                                                                     Direct sales
                                                                                     Indirect sales
                            Mahwah, USA         Zurich, Switzerland
                                                Global & EMEA headquarters


                                                  Gothenburg, Sweden


                             Québec, Canada         Karlskoga, Sweden



                                                      Stockholm, Sweden




         Yorba Linda, USA                                         Tel Aviv, Israel
         North America
         headquarters                                                                                  Tokyo, Japan
                                               Belfeld, Netherlands
                                                                                        Hong Kong, China
                                              Mechelen, Belgium                         Asia Paci c headquarters
50




     Information technology
     Our IT department supports more than 2’400 users at 41 loca-
     tions, using an IT landscape that relies on a few broad,
     standardized and integrated platforms such as SAP. To make
     sure that IT infrastructure within the company is both func-
     tional and efficient, we are integrating all processes based on
     a small number of international standard tools and harmoniz-
     ing these at each company location.

     Quality management
     Our quality management strategy is focused on assuring the
     expected quality of our products and services, implementing
     best practice in our methods and tools, securing regulatory
     compliance and contributing to the company’s overall busi-        NobelProceraTM production facilities have advanced milling units that produce prod-
     ness strategy. We are steadily increasing the standardization     ucts with high quality and precision of fit.

     of our worldwide processes within a global quality manage-
     ment system that ensures full compliance with our policies        New manufacturing setup for NobelProcera

     and standards. All Quality Assurance processes are now
     incorporated in the company’s Operational Management
     System (OMS), an integrated management system that joins          Mahwah USA
     up the entire organization in quality work at every level. In
     2010, FDA inspections were held at three sites, Gothenburg,       Stockholm Sweden
     Stockholm and Yorba Linda. Three observations were made
     at the Yorba Linda manufacturing site, which in 2009 was          Tokyo Japan
     extensively upgraded to increase efficiency. Those observa-
     tions have since been fully addressed.                            Production improvement 2010




                                                                       Higher production
                                                                       efficiency
                                                                       Increased customer

                                                                       service levels
                                                                       Improved cost

                                                                       efficiency
                                                                       Better capacity

                                                                       utilization
                                                                       Shorter inventory

                                                                       times
Corporate Governance.


Corporate Governance report   52
Board of Directors            61
Executive Committee           75
Remuneration report           79
52   Nobel Biocare Annual Report 2010 — Corporate Covernance




     Corporate Governance report.


     Corporate Governance at Nobel Biocare follows the “Swiss Code of Best Practice
     for Corporate Governance” (economiesuisse, revised version 2008). The information
     published in this report follows the SIX Swiss Exchange Directive on Information
     Relating to Corporate Governance (DCG, SIX Swiss Exchange Corporate Governance
     Directive, revised version 29 October 2008)



     1. Group structure and shareholders
     1.1 Group structure




     Group structure




                                                              Shareholders’ meeting




                                           Internal Audit     Board of Directors




                                                              Executive Committee




     Executive Committee structure as of 31 December 2010




                                                              Chief Executive Officer
                                                              Domenico Scala




      Chief Financial Officer                                 Marketing & Products                        Europe/Middle East /Africa
      Dirk W. Kirsten                                         Hans Geiselhöringer                         Alexander Ochsner




      Latin America /Asia / Pacific                           Business Development & Strategic Planning   North America
      Thomas M. Olsen                                         Petra Rumpf                                 William J. Ryan




      Research and Development                                Global Communications                       Global Operations
      Hans Schmotzer                                          Nicolas Weidmann                            Ernst Zaengerle




     There have been changes to the Executive Committee as per 1 January 2011. Please refer to
     section 4.1 “Members of the Executive Committee” on page 69 for further information.
                                                                                                                          Corporate Covernance report   53




Listed company
Name                                                 Nobel Biocare Holding AG
Domicile                                             8302 Kloten, Switzerland
Listed at                                            SIX Swiss Exchange
Market capitalization                                CHF 2’182 million (as of 31 December 2010)
Security number                                      003785164
ISIN number                                          CH0037851646
Reuters                                              NOBN.VX
Bloomberg                                            NOBN VX

Nobel Biocare Holding AG is the only listed company of the Group.




Subsidiaries
                                                       City and country                                Share capital   Ownership          Ownership
                                                       of incorporation                                      in ’000      interest           interest
                                                                                                                        2010 in %          2009 in %
Nobel Biocare Australia Pty Ltd.                       Macquarie Park, Australia                           AUD 600            100                100
Nobel Biocare Österreich GmbH                          Vienna, Austria                                       EUR 36           100                100
Nobel Biocare Belgium NV                               Groot-Bijgaarden, Belgium                            EUR 138           100                100
Medicim, NV                                            Mechelen, Belgium                                  EUR 1’030           100                100
Nobel Biocare Brasil Ltda                              São Paulo, Brazil                                 BRL 14’111           100                100
Nobel Biocare Canada Inc.                              Richmond Hill, Canada                              CAD 3’012           100                100
Nobel Biocare Procera Services Inc.                    Québec, Canada                                    CAD 40’000           100                100
BioCad Medical Inc.                                    Québec, Canada                                    CAD 14’015           100                100
Nobel Biocare Asia Ltd.                                Hong Kong, People’s Republic of China             HKD 15’010           100                100
Nobel Biocare Commercial (Shanghai) Co. Ltd            Shanghai, People’s Republic of China                USD 700            100                100
Nobel Biocare Trading (Shanghai) Co. Ltd.              Shanghai, People’s Republic of China                USD 140            100                100
Nobel Biocare Colombia S.A.1                           Bogotá, Colombia                                COP 406’050              –                100
Nobel Biocare Danmark A/S                              Hilleröd, Denmark                                    DKK 500           100                100
Nobel Biocare Suomi Oy                                 Helsinki, Finland                                      EUR 8           100                100
Nobel Biocare France S.A.S.                            Bagnolet, France                                      EUR 40           100                100
Nobel Biocare Deutschland GmbH                         Cologne, Germany                                     EUR 307           100                100
Nobel Biocare UK Ltd.                                  Uxbridge, Great Britain                              GBP 620           100                100
Nobel Biocare Magyarország Kft                         Budapest, Hungary                                 HUF 24’000           100                100
Nobel Biocare India Pvt. Ltd.                          Mumbai, India                                        INR 100           100                100
Alpha-Bio Tec Ltd.                                     Petach Tikva, Israel                               ILS 39’100          100                100
Nobel Biocare Italiana S.r.l.                          Agrate Brianza, Italy                                 EUR 10           100                100
Nobel Biocare Japan K.K.                               Tokyo, Japan                                      JPY 12’500           100                100
Nobel Biocare Procera K.K.                             Narashino-Shi, Japan                             JPY 250’000           100                100
Nobel Biocare Lithuania Pty. Ltd.                      Vilnius, Lithuania                                   LTL 280           100                100
Nobel Biocare México, S.A. de C.V.                     Mexico City, Mexico                              MXN 15’050            100                100
Nobel Biocare Investments N.V.                         Willemstad, Curaçao, the Netherlands Antilles      EUR 1’000           100                100
Nobel Biocare Nederland BV                             Houten, the Netherlands                               EUR 90           100                100
Nobel Biocare Distribution Center BV                   Belfeld, the Netherlands                              EUR 18           100                100
Nobel Biocare New Zealand Ltd.                         Auckland, New Zealand                                  NZD 1           100                100
Nobel Biocare Norge AS                                 Son, Norway                                         NOK 100            100                100
54   Nobel Biocare Annual Report 2010 — Corporate Covernance




     Nobel Biocare Polska Sp.z.o.o.                         Warsaw, Poland                                                 PLN 50                  100                  100
     Nobel Biocare Portugal S.A.                            Vila Nova de Gaia, Portugal                                    EUR 60                  100                  100
     Nobel Biocare Russia LLC                               Moscow, Russia                                              RUB 3’000                  100                  100
     Nobel Biocare Singapore Pte Ltd.                       Singapore                                                      SGD 65                  100                  100
     Nobel Biocare South Africa (Pty) Ltd.                  Woodmead, South Africa                                         ZAR 0.1                 100                  100
     AlphaBio - Tec Dental Implants SA                      Woodmead, South Africa                                        ZAR 400                  100                        –
     Nobel Biocare Iberica S.A.                             Barcelona, Spain                                               EUR 60                  100                  100
     Nobel Biocare AB                                       Gothenburg, Sweden                                       SEK 317’186                   100                  100
     Nobel Biocare Dental Products AB 2                     Gothenburg, Sweden                                            SEK 100                  100                  100
     Nobel Biocare i Göteborg AB 2                          Gothenburg, Sweden                                            SEK 150                  100                  100
     Nobel Biocare Holding AB                               Gothenburg, Sweden                                          SEK 10’100                 100                  100
     Nobel Orthopedics AB 2                                 Gothenburg, Sweden                                            SEK 100                  100                  100
     Nobel Biocare AG                                       Kloten, Switzerland                                            CHF 54                  100                  100
     Nobel Biocare Finance AG                               Kloten, Switzerland                                           CHF 100                  100                  100
     Nobel Biocare Management AG                            Kloten, Switzerland                                           CHF 100                  100                        –
     Nobel Biocare Services AG                              Kloten, Switzerland                                           CHF 250                  100                  100
     Nobel Biocare Asia-Africa Holding AG                   Kloten, Switzerland                                         CHF 1’000                  100                  100
     Nobel Biocare Latin America Holding AG                 Kloten, Switzerland                                           CHF 100                  100                  100
     Nobel Biocare Taiwan Co. Ltd.                          Taipei, Taiwan                                          TWD 105’000                    100                  100
     Nobel Biocare (Thailand) Ltd.                          Bangkok, Thailand                                       THB 100’000                    100                  100
     Nobel Biocare USA, LLC                                 Wilmington, USA                                               USD 500                  100                  100
     Nobel Biocare Procera, LLC                             Wilmington, USA                                                 USD 1                  100                  100
     Nobel Biocare Holding USA Inc.                         Wilmington, USA                                              USD 0.01                  100                  100

     1 Liquidated on 30 December 2010
     2 Dormant/not operating




     1.2 Significant shareholders
     As of 31 January 2011, the largest shareholders in
     Nobel Biocare Holding AG known to the Company:


     Voting rights held (directly or indirectly; shares, purchasing and selling rights)
                                                                                                                2010                         %1           Date of disclosure


     Nobel Biocare Holding AG (Switzerland)                                                              4’365’4911 1                      3.531         31 December 2010
     Artio Global Management LLC                                                                           3’852’452                        3.11               09 April 2010
     UBS Fund Management (Switzerland) AG                                                                  3’826’750                        3.09            19 January 2011

     1 Of which 999’246 or 0.81% treasury shares and 3’366’245 or 2.72% purchasing rights. In addition, the Company has issued convertible bonds for 3’746’558 shares 3.03%
       and granted employee stock options for 1’499’250 shares 1.20%.
                                                                                                               Corporate Covernance report   55




Published notifications (1 January 2010 to 31 January 2011)
Publication date             Shareholder                               Reason for notification                                New holding


19 February 2010             BlackRock, Inc.                           Sale                                                         4.92%
19 February 2010             UBS AG                                    Change in group composition                                  4.54%
04 March 2010                BlackRock, Inc.                           Acquisition                                                  5.03%
06 March 2010                FMR LLC                                   Sale                                                         4.85%
09 March 2010                UBS AG                                    Change in group composition                                  4.65%
11 March 2010                UBS AG                                    Change in group composition                                  4.86%
17 March 2010                UBS AG                                    Change in group composition                                  4.89%
01 April 2010                Manning & Napier Advisors, Inc.           Acquisition                                                  3.02%
14 April 2010                Artio Global Management LLC               Acquisition                                                  3.11%
23 April 2010                UBS AG                                    Change in group composition                                  4.99%
07 May 2010                  FMR LLC                                   Sale                                                          <3%
18 May 2010                  BlackRock, Inc.                           Sale                                                         4.95%
28 May 2010                  UBS AG                                    Change in group composition                                  4.48%
04 June 2010                 UBS AG                                    Change in group composition                                  4.67%
09 June 2010                 UBS AG                                    Change in group composition                                  4.66%
16 June 2010                 UBS AG                                    Change in group composition                                  4.69%
13 July 2010                 UBS AG                                    Change in group composition                                  4.11%
16 July 2010                 Nobel Biocare Holding AG                  Update selling positions                                     3.22%
17 July 2010                 The Bank of New York Mellon Corporation   Sale                                                          <3%
30 July 2010                 UBS AG                                    Change in group composition                                  3.96%
07 August 2010               UBS AG                                    Sale                                                          <3%
08 December 2010             Blackrock, Inc.                           Sale                                                          <3%
20 January 2011              Manning & Napier Advisors, Inc.           Sale                                                          <3%
27 January 2011              UBS Fund Management (Switzerland) AG      Acquisition                                                  3.09%

All holdings stated as of registered share capital at that time.




The changes above were disclosed from 1 January 2010 to                  standings reached between shareholders regarding the reg-
31 January 2011 and duly published on the website of SIX                 istered shares of Nobel Biocare Holding AG they own, or the
Swiss Exchange.                                                          execution of their ensuing shareholders’ rights.

                                                                         1.3 Cross-shareholdings
Detailed information on these disclosures can be accessed                Nobel Biocare Holding AG has no cross-shareholdings with
on http://www.six-swiss-exchange.com/shares/companies/                   other companies, either in capital shareholdings or in voting
major_shareholders_en.html                                               rights.

The disclosures made by the company can also be found on
Nobel Biocare’s website: www.nobelbiocare.com/disclo-
sures

As of 31 January 2011, Nobel Biocare Holding AG is not aware
of any other person directly or indirectly holding more than
3 percent of its share capital.

Nobel Biocare Holding AG does not know of any material
shareholders’ agreements or any other significant under-
56   Nobel Biocare Annual Report 2010 — Corporate Covernance




     2. Capital structure                                                 For further details, please refer to the Articles of Incorporation
                                                                          which are available on the Company website: www.nobelbio-
                                                                          care.com/governance/documents
     2.1 Capital
     As of 31 December 2010, the share capital registered with            2.3 Changes in capital
     the Commercial Register amounted to CHF 49’513’812                   Nobel Biocare Holding AG has had one share repurchase
     divided into 123’784’530 registered shares at a nominal value        program implemented in the last 3 years:
     of CHF 0.40 each. In addition, the Company can issue autho-
     rized share capital by an amount of up to CHF 10’000’000 by          Share buyback program 2008
     issuing up to 25’000’000 fully paid up registered shares with        On 14 May 2008, the Company announced a share buyback
     a nominal value of CHF 0.40 each until 6 April 2011 (for further     program of maximum CHF 750 million on a separate second
     information please refer to 2.2 “Authorized and conditional          trading line. Under this program, the Company acquired
     capital” below).                                                     532’000 shares for a consideration of EUR 12.4 million in
                                                                          2008. On 25 June 2009, the share capital of the Company
     As of 31 December 2010, Nobel Biocare Holding AG had is-             was reduced by CHF 212’800 by way of cancellation of these
     sued neither participation certificates nor bonus certificates.      acquired 532’000 shares after approval by the Annual Gene-
                                                                          ral Meeting on 6 April 2009.
     2.2 Authorized and conditional capital
     As of 31 December 2010, Nobel Biocare Holding AG had an              The total amount of Nobel Biocare Holding AG shares held
     authorized share capital by an amount of up to CHF 10’000’000        directly or indirectly by the Company on 31 December 2010
     – by issuing up to 25’000’000 fully paid up registered shares        was 999’246 (0.81 percent of the then registered share cap-
     with a nominal value of CHF 0.40 each until 6 April 2011. The        ital). In addition, the Company holds options for 3’366’245
     increase in partial amounts is permitted.                            shares (2.72 percent of the registered share capital) as well
                                                                          as has issued convertible bonds for 3’746’558 shares (3.03%)
     If and to the extent the Board of Directors uses its right to        employee stock options for 1’499’250 shares (1.20%) for em-
     issue bonds or similar debt instruments based on the condi-          ployee stock options.
     tional capital (see below), the Board of Directors is not allowed
     to use its right of authorized share capital and create share        Please refer also to the table “Changes in share capital” on
     capital in such amount used.                                         page 59.

     For further details, please refer to the Articles of Incorporation   A table with additional information on the development of the
     which are available on the Company website (link see be-             share capital structure of Nobel Biocare Holding AG and trea-
     low).                                                                sury shares over the last two years can also be found in note
                                                                          16 to the consolidated financial statements on page 122, as
     The conditional share capital of CHF 99’048 (for the issuance        well as notes 4 and 5 of the parent company accounts on
     of 247’620 shares at par value CHF 0.40 each) may be used            pages 151 to 153.
     for the exercise of option rights granted to employees and
     officers of the Company and/or of Group companies (for details       2.4 Shares and participation certificates
     pertaining to warrants and staff options, see section 2.7 “Con-      All Nobel Biocare Holding AG shares are registered shares
     vertible bonds and warrants/options” on page 57. The rights          with a nominal value of CHF 0.40 each. All shares are fully
     of shareholders to subscribe shares in priority are excluded.        paid in, have equal voting rights and entitle the owners to the
                                                                          same share in the Company’s assets and profits. The entire
     In addition, the share capital may be increased by an amount         share capital is evidenced by a Permanent Global Share
     of up to CHF 10’000’000 by issuing up to 25’000’000 fully            Certificate. The shareholders are co-owners (“Miteigentums-
     paid up registered shares with a nominal value of CHF 0.40           anteil”) of the Permanent Global Certificate in proportion to
     each by exercising conversion and/or option rights wich are          their shareholding. Shareholders are not entitled to demand
     granted in connection with the issuance of bonds or similar          the printing and delivery of certificates (security papers) re-
     debt instruments by the company or in connection with a              presenting shares.
     transaction.
                                                                                                             Corporate Covernance report   57




As of 31 December 2010, Nobel Biocare Holding AG had issu-          or confirms that none of the persons it represents, as indi-
ed neither participation certificates nor bonus certificates.       viduals or as a group, holds directly or indirectly 1 percent or
                                                                    more of the share capital as set forth in the commercial reg-
2.5 Dividend-right certificates                                     ister and provided that the nominee has entered into a nom-
Nobel Biocare Holding AG has not issued any profit-sharing          inee agreement with the Board of Directors.
certificates (Genussscheine).
                                                                    Corporate bodies and partnerships or other groups of persons
2.6 Limitations on transferability and                              or joint owners who are mutually interrelated through capital
nominee registrations                                               ownership, voting rights, uniform management or otherwise
The Company maintains a shareholders’ register showing the          linked, as well as individuals or corporate bodies and partner-
names, first names, domicile, address and nationality (in the       ships who act in concert to circumvent the regulations con-
case of legal entities the registered office) of the holders or     cerning limitations placed on nominees, shall be treated as
usufructuaries of registered shares. The right to vote and          one nominee within the meaning of the Articles of Incorpora-
other rights associated with the shares may only be exercised       tion. After hearing the registered shareholder or nominee, the
by a shareholder who is registered in the shareholders’ reg-        Board of Directors may cancel, with retroactive effect as of
ister as a shareholder with the right to vote.                      the date of registration, the registration of shareholders if the
                                                                    registration was effected on the basis of false information.
Every registration in the shareholders’ register requires a cer-    The respective shareholder or nominee shall be informed im-
tification in due form regarding the transfer of the share. The     mediately of the cancellation of the registration. The Board of
Company may deny recognition as a shareholder with the              Directors shall specify the details and issue the necessary
right to vote, if the formal acquirer of the shares to be regis-    orders concerning adherence to these regulations. In particu-
tered does not confirm, by declaring to have acquired and to        lar, it can put into force regulations concerning the registration
hold the shares in his own name and for his own account,            of registered shares. It may delegate its duties.
that he is the beneficial owner of the shares to be registered
and that he bears their economic risk. Upon request, formal         2.7 Convertible bonds and options
acquirers of registered shares may also be registered in the
shareholders’ register with the right to vote, if they comply       Convertible bonds
with the requirements as nominee according to the Articles          Nobel Biocare Investments N.V., a wholly owned subsidiary
of Incorporation. In case of denial of recognition as a share-      of Nobel Biocare Holding AG, has issued a nominal CHF
holder with the right to vote, the formal acquirer or the ap-       385’000’000 of Guaranteed Convertible Bonds due in
plicant respectively shall be entered in the shareholders’          November 2011, convertible into registered shares of and
register as shareholder without voting rights.                      unconditionally and irrevocably guaranteed by Nobel Biocare
                                                                    Holding AG.
Registrations of shareholders in the shareholders’ register are
effected based on information given in the registration request     The following changes to the nominal value have been made
provided to the Company by the depository banks. If the             in 2010:
information provided to the Company in the registration ap-
plication changes, the shareholder has to inform the Com-           Changes in nominal value 2010

pany immediately about the changes. The Company accepts             Date                       Reason        Value CHF      New nominal
                                                                                                                              value CHF
only one representative per share. The Board of Directors may
register applicants holding shares that belong economically         08 June 2010             Reduction      37’980’000      347’020’000

to another person (“nominees”) with the right to vote in the        16 September 2010        Reduction       6’000’000      341’020’000

share register to the extent of up to 3 percent of the registered   20 December 2010         Reduction      22’675’000      318’345’000

share capital as set forth in the commercial register. Regis-
tered shares held by a nominee that exceed this limit may be
entered in the shareholders’ register provided the nominee          These changes were duly published on the website of SIX
discloses the names, addresses and numbers of shares of the         Swiss Exchange: http://www.six-swiss-exchange.com/news/
persons for whose account it holds 1 percent or more of the         official_notices/search_en.html
registered share capital as set forth in the commercial register,
58   Nobel Biocare Annual Report 2010 — Corporate Covernance




     For more information about the convertible bond, please refer      Options allotment 2007

     to note 22 to the consolidated financial statements on page                                       Exercised             Expired 1     Remaining

     133, the table “Changes in share capital” on page 59 or, in-
                                                                        Grant 2007                             –                    –      2’087’250
     cluding a pdf version of the offering prospectus, dated 30
                                                                        31 Dec 2007                            –               36’000      2’051’250
     October 2007, to the web:
                                                                        31 Dec 2008                            –               75’750      1’975’500
     www.nobelbiocare.com/convertible-bond
                                                                        31 Dec 2009                            –             189’250       1’786’250
                                                                        31 Dec 2010                            –             287’000       1’499’250
     A hardcopy of the offering prospectus can be ordered by
                                                                        1 Options expired as a result of the holder leaving the Company.
     e-mail to investor.relations@nobelbiocare.com.

     Employee stock options                                             For further information on employee stock option plans,
     On 9 February 2005, the Board of Directors of Nobel Biocare        please refer to note 18 of the consolidated financial state-
     decided on a new Employee Stock Option program for the             ments on page 124.
     Board of Directors, officers and key employees of the Group.
     This staff option program comprises a total of 5’500’000 op-       The underlying shares for this program were initially provided
     tions (number adjusted for 1:5 share split in 2008), that could    through a share buyback program. In November 2007, the
     be granted over three years. The options vested approximate-       Group decided to hedge its existing exposure from the Em-
     ly 27 months after the grant date and could be exercised           ployee Stock Option program by means of derivatives rather
     during the one-year period starting on the vesting date (ex-       than by holding of physical shares. For further information
     ception granted to the third year grant, see below).               about the share buyback program, please refer to note 16 to
                                                                        the consolidated financial statements on page 122 and note
     In the first two years of the program (2005 and 2006), a total     5 of the parent company accounts on page 153.
     of 3’435’750 options were allotted without consideration.
     Since the exercise period has expired, there remained no           The total amount of all options corresponds to 1.2 percent of
     options from these allotments as per 31 December 2010.             the total registered share capital as of 31 December 2010.

     During 2007, the third and final year of the program, 2’087’250
     options (number adjusted for 1:5 share split in 2008) were
     allotted without consideration. The subscription price for these
     options is CHF 84.70, the average share price during five
     trading days following the publication of the full-year report
     for 2006. Options granted in 2007 vested on 1 July 2009 and
     can be exercised during the period 1 July 2009 up to and
     including 30 June 2013 (extension of exercise period by
     3 years based on a decision of the Board of Directors on
     1 February 2008; the extension is not applicable to board
     members).
                                                                                                                                                 Corporate Covernance report     59




Changes in share capital
in CHF                                                                                           Issued share capital 1     Authorized share capital       Cond. share capital


31 December 2007                                                                                          53’131’588                               –                 103’048
                                                                                                      (26’565’794 sh)                            (–)              (51’524 sh)

1:5 share split                                                                                            53’131’588                              –                 103’048
                                                                                                        (132’828’970)                            (–)             (257’620 sh)

Share cancellation                                                                                         – 3’408’976                             –                         –
                                                                                                         (– 8’522’440)                           (–)                       (–)

Exercised options 2008                                                                                         4’000                               –                   – 4’000
                                                                                                         (+10’000 sh)                            (–)             (– 10’000 sh)

31 December 2008                                                                                           49’726’612                              –                 199’048
                                                                                                        (124’316’530)                            (–)             (247’620 sh)

Share cancellation                                                                                           – 212’800                             –                         –
                                                                                                           (– 532’000)                           (–)                       (–)

Capital increase                                                                                                      –                10’000’000 2               10’000’000 2
                                                                                                                    (–)               (25’000’000) 2            (25’000’000) 2

31 December 2009                                                                                           49’513’812                    10’000’000                  199’048
                                                                                                        (123’784’530)                  (25’000’000)              (247’620 sh)

No changes in 2010                                                                                                    –                            –                         –
                                                                                                                    (–)                          (–)                       (–)

31 December 2010                                                                                           49’513’812                    10’000’000                  199’048
                                                                                                        (123’784’530)                  (25’000’000)              (247’620 sh)

1 Including exercised options not yet registered with commercial register at that time.
2 The indicated amount can only be exercised alternatively either as authorized or conditional capital or a combination of both up to the total amount.
  For further details, please refer section 2.2 of this report or to the Articles of Incorporation which are available on the Company website:
  www.nobelbiocare.com/governance/documents




Conditions of convertible bond
Coupon                                                      1 percent, per annum (payable annually in arrears on 8 November, for the first time on 8 November 2008)
Yield-to-maturity                                           1.50 percent per annum
Denomination                                                CHF 5’000 principal amount or multiples thereof
Settlement date                                             8 November 2007
Maturity date                                               8 November 2011
Form of the bonds                                           The bonds are represented by a permanent global certificate
Source of shares                                            Existing treasury shares and existing shares to be sourced through derivative arrangements
Redemption price                                            102.05 percent of the principal amount (at the maturity date)
Conversion price1                                           CHF 84.97 per registered share of Nobel Biocare Holding AG
Conversion ratio1                                           58.8442972 registered shares: 1 bond
Conversion right                                            Bondholders who convert their bonds will receive shares and cash payments for fractions
Early conversion                                            Upon a change of control event
Exchange listing                                            SIX Swiss Exchange
Swiss security number                                       3.514.539
ISIN number                                                 CH0035145397
Ticker symbol                                               NBI07

1 Repriced as of 8 November 2007 due to the issuance of put options; reflecting the price post 1:5 share split in April 2008.
2 Correction of rounding difference to reflect official publication.
60   Nobel Biocare Annual Report 2010 — Corporate Covernance




     Heino von Prondzynski                              Rolf Watter        Daniela Bosshardt-Hengartner




     Raymund Breu                                       Stig G. Eriksson   Antoine Firmenich




     Edgar Fluri                                        Robert Lilja       Oern Stuge
                                                                                                                                         Corporate Covernance report      61




3. Board of Directors                                                                Professor of Law at the University of Zurich. Current other
                                                                                     assignments: Member of the Board of Directors of Zurich
                                                                                     Financial Services (insurance) and its subsidiary Zurich Insur-
3.1 Members of the Board of Directors                                                ance Company (since 2002), of Syngenta AG (agribusiness)
(as of 31 December 2010)                                                             since 2000, UBS Alternative Portfolio AG (fund of hedge funds
                                                                                     and private equity) since 2000 as well as of A.W. Faber-Castell
Heino von Prondzynski                                                                (Holding) AG (writing, coloring, and creative design products)
Chairman of the Board (non-executive), German, born                                  since 1997. Member of the SIX Regulatory Board and mem-
1949. Heino von Prondzynski is Chairman of the Nomination                            ber of the Disclosure Commission of Experts of the SIX Swiss
and Compensation Committee and the Strategy and Technol-                             Exchange (since 2003 and 2002 respectively). Chairman of
ogy Committee. He brings extensive experience of the phar-                           two charitable institutions. Previous assignments: Chairman
maceutical, diagnostics and medical industries. Heino von                            of Cablecom Holding (telecommunications, 2003–2008); non-
Prondzynski was Chief Executive Officer of Roche Diagnostics                         executive Director of Feldschlösschen Getränke AG (bever-
and a member of the Executive Committee of F. Hoffman-La                             ages, 2001 – 2004), of Centerpulse AG (medical devices,
Roche Ltd (Healthcare, 2000– 2006). From 1996 to 2000, he                            2002–2003), and of Forbo Holding AG (flooring systems,
held several executive positions at Chiron Corporation (bio-                         1999– 2005). Shares: 29’200* / Staff options: 0.
technology); from 1976 to 1996, Heino von Prondzynski was                            * Thereof 1’000 restricted shares granted by the Company, vesting on 30 June 2011,
with Bayer AG, a German-based maker of healthcare products,                          and 2’000 restricted shares granted by the Company, vesting on 30 June 2015.

specialty materials, and agricultural products. Education:
Studies of mathematics, geography and history at Westfäli-                           Daniela Bosshardt-Hengartner
sche Wilhelms University of Münster, Germany. Current                                Non-executive Member, Swiss, born 1972. Daniela
other assignments: Since 2007 board member of Qiagen NV                              Bosshardt-Hengartner is a member of the Strategy and Tech-
(sample & assay technologies); since 2007 board member of                            nology Committee. Ms Bosshardt-Hengartner has been a
Koninklijke Philips Electronics NV; since 2008 board member                          management consultant in the healthcare sector since 2004.
of Caridian BCT (automated collections, therapeutic apheresis,                       From 2003, she was a financial analyst at M2 Capital Manage-
cell therapy, blood component separation and purification                            ment AG (private equity); prior to that she was a financial
technologies); since 2009 board member of Hospira, Inc.                              analyst at Bank am Bellevue, where she covered the fields of
(healthcare) and since 2009 President of the supervisory board                       medical technology, pharma and biotechnology from 1998
of HTL Strefa (safety and personal lancets); since 2010 Chair-                       until 2002. Daniela Bosshardt-Hengarner started her career
man of the Association of Friends of Einsiedeln Abbey. Previ-                        as a pharmacist. Education: MSc in Pharmaceutical Sciences
ous assignments: board member of Epigenomics AG (cancer                              from ETH Zurich, Switzerland. Current other assignments:
molecular diagnostics, 2006–2010). Board member of Tecan                             Since 2006 board member of Vifor Pharma, Switzerland; since
AG (laboratory instruments and solutions in biopharmaceuti-                          2008 board member of Galenica, Switzerland (pharma) and
cals, forensics, and clinical diagnostics, 2006–2007), board                         since 2009 board member of Prothor Holding SA/Manufacture
member (2006–2008) and Chairman of the Board 2008–2009)                              La-Joux Perret, Switzerland (high-tech mechanical clock-
of BB Medtech AG (investment company). Shares: 29’800* /                             works) and since 2010 board member of RepRisk, Switzerland
Staff options: 0.                                                                    (environmental and social risks data provider). Previous
* Thereof 3’000 restricted shares granted by the Company, vesting on 30 June 2015.   assignments: No previous board memberships or relevant
                                                                                     assignments. Shares: 2’000* / Staff options: 0.
Rolf Watter                                                                          * Thereof 2’000 restricted shares granted by the Company, vesting on 30 June 2015.
Vice Chairman of the Board (non-executive), Swiss, born
1958. Rolf Watter is a Member of the Audit Committee. He                             Raymund Breu
has been a partner at the law firm Bär & Karrer AG in Zurich                         Non-executive Member, Swiss, born 1945. Raymund Breu
since 1994. Until September 2009, he was member of its                               is a member of the Nomination and Compensation Commit-
executive board (from 2000) and an executive board member                            tee. Raymund Breu was CFO of Novartis AG (pharmaceuticals)
upon the incorporation of the firm in 2007. He also teaches                          and a member of its Executive Committee from 1996 until
as a part-time professor at the University of Zurich’s law                           2009. He joined the Treasury Department of the Sandoz Group
school. Education: Doctorate in law from the University of                           (pharmaceuticals) in 1975. In 1982, he became Head of Fi-
Zurich, Master of Law degree from Georgetown University,                             nance for Sandoz affiliates in the United Kingdom. In 1985,
62   Nobel Biocare Annual Report 2010 — Corporate Governance




     he was appointed Chief Financial Officer of Sandoz Corpora-                          Firmenich SA (2000–2002); Director Flavor Raw Materials at
     tion in the United States where he was responsible for all of                        Firmenich, Inc. in Princeton, NJ, USA (1996–2000), and an
     Sandoz’ finance activities in that country. In 1990, Raymund                         Associate at Bellevue Asset Management (1995–1996). Edu-
     Breu became Group Treasurer of Sandoz Ltd., Basel, Switzer-                          cation: BSc, Life Sciences, MIT, Cambridge, MA, USA; PhD,
     land, and, in 1993, Head of Group Finance and a member of                            Biochemistry, Stanford University School of Medicine, CA,
     the Sandoz Executive Board. Education: PhD in mathematics,                           USA, and MBA, Stanford Graduate School of Business. Cur-
     Swiss Federal Institute of Technology (ETH), Zurich, Switzer-                        rent other assignments: Since 2010 Member of the Advisory
     land. Current other assignments: Member of the Board of                              Council of Stanford University Graduate School of Business;
     Directors of Swiss Re and the Swiss takeover commission.                             since 2004 Member of the Board and since 2009 Chairman
     Previous assignments: No previous board memberships or                               of Sentarom SA, Switzerland; since 2009 Member of the
     relevant assignments. Shares: 22’000* / Staff options: 0.                            Board of Firmenich International, Switzerland; since 2008
     * Thereof 2’000 restricted shares granted by the Company, vesting on 30 June 2015.   board member of Finarom, Luxembourg; since 2006 board
                                                                                          member of Alatus SA, Switzerland. Previous assignments:
     Stig G. Eriksson                                                                     From 2003 to 2008 Member of the Advisory Board of Edel
     Non-executive Member, Finnish, born 1948. Stig Eriksson                              Therapeutics SA, Switzerland (biotechnology). Shares: 4’000*/
     is a member of the Strategy and Technology Committee. He                             Staff options: 0.
     was Vice President Business Development, International and                           * Thereof 1’000 restricted shares granted by the Company, vesting on 30 June 2011,
     Mergers & Acquisitions of 3M (diversified technology com-                            and 2’000 restricted shares granted by the Company, vesting on 30 June 2015.

     pany) from 2003 until 2006 and a long-time member of 3M’s
     restricted European Operations Committee. Previously, he held                        Edgar Fluri
     various leading positions within the 3M organization including                       Non-executive Member, Swiss, born 1947. Edgar Fluri is
     that of CEO/Senior Managing Director of 3M France (1996–                             Chairman of the Audit Committee. He has spent his profes-
     2003). From 1993 until 1996, he was Managing Director                                sional career with PricewaterhouseCoopers (assurance, tax,
     Healthcare Products Europe. From 1989 until 1993, he was                             legal and advisory services) and has extensive experience
     Managing Director 3M Belgium and Benelux, and from 1986                              serving multinational and national companies in a variety of
     until 1989 Group Director Healthcare Products Europe. Stig                           industries. He was Chairman of PricewaterhouseCoopers
     Eriksson worked at 3M’s headquarters in St Paul, Minnesota,                          Switzerland (1998 –2008), head of Assurance and Business
     USA as International Director Medical-Surgical Products                              Advisory Services EMEA (1998–2001) and a member of the
     (1983 –1986) and was responsible for 3M’s Dental Products                            Global Board of PricewaterhouseCoopers (2002–2005). Be-
     Business in EMEA (1979–1983). Education: MBA in Econom-                              fore the merger of PricewaterhouseCoopers, he was Chair-
     ics and Marketing from the Swedish School of Economics                               man of the Management Committee of STG-Coopers & Ly-
     and Business Administration in Helsinki, Finland. Current or                         brand, a member of Coopers & Lybrand International and
     previous assignments: No other current or previous board                             European Boards (1996 –1998) and Deputy Chairman of the
     memberships or relevant assignments. Shares: 6’250* / Staff                          Management Committee (1991–1996). He first joined the
     options: 0.                                                                          firm in 1977 and became a partner in 1986. Edgar Fluri has
     * Thereof 1’000 restricted shares granted by the Company, vesting on 30 June 2011    been a part-time lecturer in public accounting and auditing
     and 2’000 restricted shares granted by the Company, vesting on 30 June 2015.         at the University of Basel since 1987 and was appointed titu-
                                                                                          lar professor in 1997. Education: Doctorate in Economics and
     Antoine Firmenich                                                                    Business Administration from the University of Basel, Swiss
     Non-executive Member, Swiss, born 1965. Antoine Firme-                               Certified Public Accountant (CPA). Current other assignments:
     nich is a Member of the Nomination and Compensation Com-                             Member of the Board of Directors of Orior AG, Zurich (pre-
     mittee. He has many years of financial and global manage-                            mium convenience food) and Member of the Supervisory
     ment experience. In mid 2008, he became Managing Director                            Board of Brenntag AG, Mülheim an der Ruhr, Germany (chem-
     of Aquilus Pte Ltd (advisory and investment research) in Sin-                        ical distribution), Member of the Board of Trustees of Beyel-
     gapore. In late 2006, he founded Alatus SA, an independent                           er Foundation, Basel, Member of the Board of Beyeler Mu-
     principal investment firm. Previously, he was President of                           seum AG and of the Board of Galerie Beyeler AG, Basel,
     Firmenich’s Global Savory Business Unit (fragrances and fla-                         Member of the Swiss accounting standards body (Swiss
     vors, 2005–2006) and of its Global Business Unit Sweet                               GAAP FER). Previous assignments: Member of the Board of
     Goods (2002–2005); Vice President Encapsulated Flavors at                            the Chamber of Commerce of Basel (1995 –2008), Member
                                                                                                                                         Corporate Governance report      63




of the Board of the Swiss Institute of Certified Public Ac-                          forming the cardiac surgery business and accelerated growth
countants (1995–2007). Shares: 11’500* / Staff options: 0.                           for Medtronic in its cardiovascular, neurological and spine
* Thereof 1’000 restricted shares granted by the Company, vesting on 30 June 2011,   businesses. Prior to Medtronic, he worked in senior manage-
and 2’000 restricted shares granted by the Company, vesting on 30 June 2015.         ment positions for Abbott Laboratories Inc. and Medinor A/S.
                                                                                     Education: Graduated “summa cum laude” in Medicine from
Robert Lilja                                                                         the University of Oslo, Norway; MBA from IMD, Switzerland.
Non-executive Member, Swedish, born 1956. Robert Lilja                               Current other assignments: Member of the Supervisory Board
is a member of the Audit Committee. He has extensive expe-                           of Mediq NV. Previous assignments: No previous board mem-
rience of international financial markets. In 2004, he founded                       berships or relevant assignments. Shares: 2’000* / Staff op-
Lilja & Co. AG, a capital markets advisory boutique, in Zurich,                      tions: 0.
Switzerland. From 1998 to 2004, he held various positions                            * Thereof 2’000 restricted shares granted by the Company, vesting on 30 June 2015.
with Lazard (financial advisory) in London, UK, and Frankfurt,                       All share and staff option holdings are reported as per 31 January 2011.

Germany, including Head of Northern European Equity Capi-
tal Markets Advisory and Interim Co-Head of Lazard Germany.                          None of the board members was a member of the Executive
He became a worldwide partner of Lazard in 1999. In 1998,                            Committee of Nobel Biocare Holding AG or any of its direct/
he executed a special assignment for the Chairman of the                             indirect subsidiary in the three financial years preceding the
Wellcome Trust, the UK-based medical charity, before joining                         period under review.
Lazard’s Capital Markets division in London, UK. From 1994
to 1997, he authored a best selling book on the global equity                        None of the board members has significant business connec-
capital markets published by Euromoney Books – “Interna-                             tions with Nobel Biocare Holding AG or any of its direct/indi-
tional Equity Markets – the Art of the Deal.” In 1985, he joined                     rect subsidiaries.
CSFB, at the time the international investment banking arm
of Credit Suisse, where he spent nine years in the Capital                           3.2 Other activities and vested interests
Markets Department, lastly as Director of Investment Banking                         Apart from what has specifically been mentioned under 3.1,
and from 1982 to 1985, he worked in the Gold & Uranium                               none of the board members holds any positions of relevance
and Finance Divisions of Anglo American Corporation of                               under the aspect of corporate governance in any
South Africa, in Johannesburg, South Africa. Education: Lic.                         – governing or supervisory bodies of any important organi-
oec. HSG, St. Gallen Graduate School of Economics, St. Gal-                            zation, institution or foundation under private or public
len, Switzerland. Current other assignments: No other current                          law;
assignments. Previous assignments: Member of the Invest-                             – permanent management or consultancy function for
ment Committee of the Guernsey-based fund manager Equi-                                important interest groups;
librium Capital Limited (2009–2011). Shares: 20’375* / Staff                         – official function or political post.
options: 0.
* Thereof 1’000 restricted shares granted by the Company, vesting on 30 June 2011,   3.3 Elections and terms of office
and 2’000 restricted shares granted by the Company, vesting on 30 June 2015.

                                                                                     3.3.1 Principles of election and limits on terms of office
Oern Stuge                                                                           The Board of Directors consists of at least four and a maxi-
Non-executive Member, Norwegian, born 1954. Oern Stuge                               mum of nine members. The members of the Board of Direc-
is a member of the Strategy and Technology Committee. He                             tors are elected individually by the Annual General Meeting
is currently working as an entrepreneur and investor, serving                        in each case for a one-year term of office. The term of office
as Executive Chairman for both Impulse Dynamics and Bone-                            of a member of the Board of Directors expires, subject to
support AB; he is also a Senior Advisor for HealthCap AB, a                          prior resignation and removal, on the day of the next Annual
lifesciences investment fund, and Senior Advisor to Uptake                           General Meeting. Newly appointed members shall complete
Medical Inc. Prior to joining Impulse Dynamics, where he                             the term of office of their predecessors.
served one year as CEO, Oern Stuge worked for 12 years at
Medtronic Inc. He was President of the Cardiac Surgery Divi-                         According to the Organizational Regulations, dated 1 May
sion and President for Medtronic Europe and Central Asia.                            2010, after a board member’s initial election to the Board, the
Oern Stuge was also a member of the Medtronic Executive                              Nomination and Compensation Committee (NCC) will recom-
and Operating Committee, and he has been credited for trans-                         mend him/her for reelection for two consecutive years, result-
64   Nobel Biocare Annual Report 2010 — Corporate Governance




     ing in an initial term of three years on the Board, unless there               In Sweden, the MBL Law (“Lagen om Medbestämmande”)
     are specific reasons for the NCC not to do so. After the first                 states that employee (union) representatives have full board
     three years of board membership, each board member is                          member rights and obligations. As a company domiciled in
     subject to a performance assessment. In case of a positive                     Switzerland, Nobel Biocare Holding AG does not have to com-
     review, the NCC will propose the member for another three                      ply with this law. However, to respect the employee represen-
     reelections.                                                                   tation, two employee representatives who are on the board
                                                                                    of the Swedish entity Nobel Biocare AB are invited to par-
     There are no limits established by the Articles of Incorporation               ticipate at board meetings of Nobel Biocare Holding AG as
     regarding how many times a member can be reelected, or                         non-voting observers.
     any upper age limit for election. However, according to the
     Organizational Regulations, a board membership is limited to                   The Board has issued Organizational Regulations that inter
     a maximum of ten years and an upper age is defined the year                    alia include the essential roles and responsibilities of the
     the board member reaches the age of 70.                                        Board, its Chairman*, the CEO and the Executive Committee,
                                                                                    as well as the related procedures and processes. The revised
     3.3.2 Time of first election and remaining                                     version of the Organizational Regulations also clarifies the role
     term of office for each board member                                           of the Board regarding Internal Controls and Executive Risk
     The Annual General Meeting on 25 March 2010 elected the                        Management. The last revision took place in May 2010. The
     following Members of the Board:                                                Board also performs a self-assessment on a regular basis.

     Members of the Board                                                           Board Committees
     Name                           Position        First elected   Elected until   In accordance with the Organizational Regulations, the Board
                                                                                    has appointed a Nomination and Compensation Committee,
     Heino von Prondzynski          Chairman        2010            2011
                                                                                    an Audit Committee and a Strategy and Technology Commit-
     Rolf Watter                    Vice Chairman   2007            2011
                                                                                    tee. Each Board Committee has a written charter approved
     Daniela Bosshardt-Hengartner   Member          2010            2011
                                                                                    by the Board of Directors outlining its objectives and duties
     Raymund Breu                   Member          2010            2011
                                                                                    (the Committee’s charters are published on the Nobel Biocare
     Stig G. Eriksson               Member          2006            2011
                                                                                    website: www.nobelbiocare.com/governance/documents).
     Antoine Firmenich              Member          2005            2011
                                                                                    The members of the Committees and their chairpersons are
     Edgar Fluri                    Member          2008            2011
                                                                                    appointed each year at the first Board meeting after the An-
     Robert Lilja                   Member          2005            2011
                                                                                    nual General Meeting for a period of one year. Each commit-
     Oern Stuge                     Member          2010            2011
                                                                                    tee consists of at least three members of the Board. The Board
                                                                                    may, both on a permanent and interim basis, appoint addi-
                                                                                    tional committees for any other matters or specific areas. The
     3.4 Internal organizational structure                                          Committees report regularly to the Board on their activities
     Based on the Articles of Incorporation, the Board constitutes                  and findings. Overall responsibility for duties delegated to the
     itself (usually at its first meeting after the Annual General                  Committees remains with the Board.
     Meeting). It appoints its Chairman, Vice Chairman as well as
     a Secretary who is not necessarily a member of the Board.
     The Board of Directors meets at least five times a year. During
     2010, the General Counsel served as Secretary of the Board.
     From 1 January 2010 to 31 December 2010, the Board held
     ten meetings, including four times via telephone conference.
     The Board meetings usually lasted around 6 hours, telephone
     conferences around 1 hour. Each board member participated
     in all meetings, except Robert Lilja, who did not take part in
     the telephone conference of 27 April 2010, Raymund Breu
     and Stig Eriksson who did not take part in the telephone
     conference of 22 December 2010.
                                                                                                                Corporate Governance report   65




Committee memberships as of 31 December 2010                             needed under the Organizational Regulations. The CEO at-
Name                           Audit       Nomination     Strategy and   tends the meetings of the Nomination and Compensation
                               Committee   and            Technology
                                                                         Committee, with the exception of meetings that deal with his
                                           Compensation   Committee
                                           Committee                     own compensation or “Board only topics”. From 1 January
Heino von Prondzynski                      C              C              2010 to 31 December 2010, the NCC met seven times, includ-
Rolf Watter                    M                                         ing once via telephone conference. All members participated
Daniela Bosshardt-Hengartner                              M              in all meetings.
Raymund Breu, F                            M
Stig G. Eriksson                                          M              Audit Committee (AC)
Antoine Firmenich                          M                             The Committee is composed of at least three non-executive
Edgar Fluri, F                 C                                         members of the Board of Directors, at least one of which
Robert Lilja, F                M                                         should be a financial expert. The Committee meets at least
Oern Stuge                                                M              four times per year and its primary objective is to support the
C Chairman
                                                                         Board of Directors in the performance of its supervisory du-
M Member                                                                 ties. The Head of Internal Audit, Compliance and Risk Man-
F Financial expert                                                       agement served as the Committee’s secretary throughout
                                                                         2010. The CFO and the Group General Counsel participated
Nomination and Compensation Committee (NCC)                              in the Committee’s meetings on a regular basis, whereas the
In accordance with the organizational regulations, the Com-              Chairman of the Board and the CEO participated on relevant
mittee is composed of three members of the Board of Direc-               agenda topics. The Audit Committee focuses on the following
tors and invited guests from Management. The Board nomi-                 major responsibilities and duties:
nates the Chairman of the NCC. The NCC nominates a                       – review of financial reporting;
member of Management to serve as a Secretary. In 2010, the               – supervision of external audit;
Vice President Human Resources served in that role. The Com-             – supervision of internal audit;
mittee shall meet a minimum of five times a year and has the             – supervision of risk management;
following authority, responsibilities and scope of work:                 – supervision of internal controls;
– discussion and review of all relevant matters regarding                – supervision of compliance with organizational regulations
   Human Resources strategy and implementation as well                      and corporate governance;
   as regarding key management, including nomination                     – supervision of fraud prevention.
   and compensation;
– management development and succession planning,                        The Chairman of the AC presents a report on the outcome of
   to ensure availability of best possible leadership and                the discussions and findings of the AC meetings to the Board
   management;                                                           of Directors in the subsequent Board meeting. The report also
– review of proposals for appointment and replacement                    includes recommendations to the Board and decisions made
   of EC members and related motion for endorsement                      by the AC where the authority has been delegated by the
   by the Board;                                                         Board to the AC.
– review of compensation systems and compensation
   policies;                                                             From 1 January 2010 to 31 December 2010, the Audit Com-
– review and approval of compensation for management                     mittee met eight times, thereof three times via telephone
   members;                                                              conference. All members participated in all meetings.
– review and approval of long-term incentive (LTI) pro-
   grams;                                                                There is a standard agenda for all AC meetings, added by
– composition of the Board and identification of candidates              special topics, based on the annual agenda and upcoming
   with the required skills and expertise;                               priorities. In all meetings, the CFO, the Group Corporate Coun-
– compensation of board members.                                         sel and the Head Internal Audit, Compliance and Risk Man-
                                                                         agement give an update on their activities. Furthermore, at
The NCC will through its Chairman report back to the Board               the end of each meeting, there is a private session of the AC.
and submit for and request Board approval should this be
66   Nobel Biocare Annual Report 2010 — Corporate Governance




     At the AC meetings, the following key topics are presented        The STC will through its Chairman report back to the Board
     and discussed on a regular basis: special accounting and re-      and submit for and request Board approval should this be
     porting topics, cash status and forecast, key financing deci-     needed under the Organizational Regulations. The committee
     sions, tax, status of litigation cases, compliance status and     was established as per 25 March 2010 and through 31 De-
     issues, audit reports and project updates. Additionally, finan-   cember 2010, met four times. Apart from Stig Eriksson, who
     cial statements, media releases and the Annual Report are         did not take part in the meeting of 20 April 2010, all members
     presented, reviewed and approved. The treasury manual and         attended all meetings.
     the charters of the AC and the Internal Audit function are
     reviewed once a year.                                             Board members and attendances 2010
                                                                       Name                             Full Board        AC        NCC            STC

     The risk management process and the Internal Controls
     System (ICS) status are reviewed at least annually. The com-      Number of meetings in 2010              10          8           7             4

     pliance roadmap is reviewed periodically.                         Rolf Soiron 1                            2                      1
                                                                       Heino von Prondzynski 2                  8          5           6             4

     On a regular basis, KPMG is invited for an audit update. Once     Rolf Watter 6                           10          8

     per year, KPMG’s performance is assessed, the audit scope         Daniela Bosshardt-Hengartner 3           8                                    4

     defined and their budget approved.                                Raymund Breu 3                           7                      6
                                                                       Stig G. Eriksson 4                       9                      1             3

     Upon request, the AC also approves key finance, risk and          Antoine Firmenich                       10                      7

     compliance standards.                                             Edgar Fluri                             10          8
                                                                       Robert Lilja                             9          8

     The AC also approves the annual work program of the Internal      Jane Royston 5                           2                      1

     Audit function and assesses its performance.                      Oern Stuge 3                             8                                    4

                                                                       1 Chairman and member of the Board until 25 March 2010.
                                                                       2 Elected member of the Board and appointed Chairman as of 25 March 2010.
     The AC respectively defined members of the AC meet the
                                                                       3 Elected member of the Board as of 25 March 2010.
     CFO, the Group General Counsel and the Head Internal Audit,       4 A member of the NCC until 25 March 2010,
     Compliance and Risk Management for private sessions. The            appointed member of the STC as of 25 March 2010.
     Chairman of the AC also runs meetings with KPMG without           5 Member of the Board until 25 March 2010.
                                                                       6 Vice Chairman of the Board of the Directors
     management attendance.

     Strategy and Technology Committee (STC)                           3.5 Definition of areas of responsibility
     The Committee is composed of at least three and maximum           The Board of Directors is entrusted with the ultimate direction
     four members of the Board of Directors and members of             of the Company as well as the supervision of management.
     Management, one of them being the CEO. The Board estab-           The Board decides on all matters that have not been reserved
     lishes the STC. The STC nominates a Member of Management          for or conferred upon another governing body of the Com-
     to serve as a Secretary. In 2010, the Head of Mergers and         pany by law, by the Articles of Incorporation, or by the Com-
     Acquisitions served in that role. The Committee has the fol-      pany’s organizational regulations. The Board’s duties and
     lowing authority, responsibilities and scope of work:             responsibilities, inter alia, are to:
     – discussion and review of all relevant matters of corporate
        strategy as well as key technologies relevant in the context   – select, appoint, dismiss, supervise, rate the performance
        of corporate strategy;                                           of and approve the remuneration of (i) the CEO (upon pro-
     – review of corporate strategy;                                     posal by the NCC) and (ii) the other members of the EC
     – review of regional and key country strategies;                    (upon proposal by the CEO and motion of the NCC);
     – review of major launch plans;                                   – appropriately instruct and diligently supervise the CEO;
     – review of innovation and technology roadmap;                    – nominate the officers representing Nobel Biocare and de-
     – discussion of options for portfolio enlargement;                  termine their signatory power for registration in the com-
     – review of the key product development process;                    mercial registry;
     – review of patent strategy.                                      – take appropriate actions and pass resolutions on all matters
                                                                         to be submitted to, or required for the preparation of the
                                                                                                            Corporate Governance report   67




    shareholders’ meeting, pursuant to the Articles of Incorpo-    The Chairman of the Board
    ration, such as (i) annual reports to the shareholders, (ii)   In addition to his legal and statutory duties, the Chairman
    payment of dividends, (iii) election or reelection of board    carries out those tasks delegated to him by the Board. The
    members and the statutory auditors of Nobel Biocare and        Chairman, specifically, has the authority, respectively the duty,
    of the Group and (iv) amendments of the Articles;              to:
–   review and approve the overall strategy, the business stra-    – ensure supervision of the CEO;
    tegies, basic organization and the relevant Group policies     – maintain close cooperation with the CEO and the EC;
    and general guidelines;                                        – inform the board on important matters;
–   approve the annual Group budget, the Group’s consolidated      – represent the board vis-à-vis the CEO and the EC;
    quarterly and annual financial statements, Nobel Biocare’s     – represent Nobel Biocare vis-à-vis shareholders and, in spe-
    annual financial statements and the annual report to the         cial cases, maintain relations with shareholders and inves-
    shareholders;                                                    tors, complementing the regular activities of the CEO and
–   approve and regularly review the implementation of the           the EC;
    Group’s overall accounting principles, its financial control   – represent, in special cases, Nobel Biocare and the Group
    and planning procedures, and its compliance program;             vis-à-vis the general public and the media, complementing
–   assess the risks associated with conducting the Group’s          the regular activities of the CEO and the EC;
    business, based on reports provided by the management;         – prepare and chair the Shareholders’ meetings;
–   approve the Group’s overall guidelines on lending and bor-     – prepare and chair the meetings of the Board of Directors;
    rowing limits, and on new investments;                         – supervise the Board Committee’s work;
–   ensure and review the design, implementation and opera-        – supervise the EC’s measures to ensure compliance with all
    tion of a system of internal controls (“IC”) by management       legal provisions and financial market regulations;
    in line with legal obligations and industry practices;         – supervise the implementation of the resolutions of the
–   review the Group information systems (“IS”) strategy;            Board and the Board Committees;
–   review and approve acquisitions, divestitures, liquidations    – attend management meetings, such as EC meetings, in
    and other transactions that are financially or strategically     consultation with the CEO;
    material to the business activities of the entire Group, the   – inspect all relevant books and files.
    materiality being defined as exceeding a value of CHF
    1’000’000;                                                     3.6 Information and control instruments
–   designate a Secretary to the Board of Directors.               vis-à-vis the Executive Committee
                                                                   Group Management reports in a regular and structured fash-
The Board of Directors assumes the ultimate responsibility         ion to the Board of Directors. The primary means of informa-
for the Company’s and Group’s business and affairs. Within         tion are regular systematic reporting by the CEO to the Board,
the framework of the legal requirements of the company, the        regular participation, including presentations, by members of
Board delegates the overall business, affairs and day-to-day       the Executive Committee in Board meetings and regular in-
management to the CEO and the EC, with the exception of            formation on relevant developments via electronic means. In
any Board or Shareholders’ meeting duties and authorities          every meeting, the CEO informs the Board on the current
that cannot be delegated.                                          course of business and important business transactions of
                                                                   Nobel Biocare and the Group. The information must be of a
                                                                   quality that enables the Board to effectively review and su-
                                                                   pervise the routines, guidelines and organizations of Nobel
                                                                   Biocare and the Group. The CFO and the Group General Coun-
                                                                   sel regularly report on financial key figures and parameters
                                                                   and relevant legal matters, respectively. The Chairman of the
                                                                   Board and the CEO meet on a regular basis to address all
                                                                   relevant business issues and to define appropriate follow-up
                                                                   activities. Furthermore, the Chairman holds meetings with
                                                                   individual members of the Executive Management as deemed
                                                                   necessary and appropriate. Each board member is entitled to
                                                                   request information on all matters relating to Nobel Biocare
68   Nobel Biocare Annual Report 2010 — Corporate Governance




     and to the Group as a whole. Board members are expected             In 2010, Internal Audit performed seven business audits, sup-
     to attend Company events and visit operations and subsidiar-        ported one externally managed IT audit and run two special
     ies from time to time. The Chairman of the Audit Committee          investigations.
     has the right to request relevant information directly from
     respective departments of Nobel Biocare.                            The selection of subsidiaries, plants or Group Functions is based
                                                                         on materiality, country and company respectively function risks
     Internal Audit                                                      and rotation. The AC approves the audit scope once a year.
     Internal Audit is an independent monitoring and advisory body
     that reports to the AC, administrative wise to the CEO. The         The scope comprises all audit-relevant business cycles.
     Head Internal Audit, Compliance and Risk Management has
     full access to all required corporate information and can con-      The findings are assessed based on a detailed criteria cata-
     tact all members of the senior management and the AC any-           logue, which has been approved by the AC. Internal Audit
     time. The Internal Audit function complies with IIA stan-           provides in-depth recommendations per finding. Local and
     dards.                                                              Group Management have to comment the findings and rec-
                                                                         ommendations and have to define remediation programs with
     The scope of activities, the accountability and responsibility      deadlines and accountabilities.
     as well as the reporting line are well defined in the Internal
     Audit Charter. The Head Internal Audit, Compliance and Risk         Copies of the full report are sent to local and regional Manage-
     Management is in charge of:                                         ment, CEO, Group General Counsel, CFO, the Chairman of
                                                                         the Board and the members of the Audit Committee. The
     – Assurance activities, including the Letter of Assurance           auditors also receive a full copy of the report.
       program:
     – Enterprise Risk Management (ERM)                                  A reporting cycle has been defined and established, ensuring
     – Whistleblower Management (co-management with the                  timely and structured information of all stakeholders and de-
       Group General Counsel)                                            cision makers.
     – Internal Controls System Management.
                                                                         In case of very material findings like fraud or material breach-
     The scope of Internal Audit activities reaches beyond financials.   es of compliance standards, an exception report is immedi-
     Through operational and compliance audits, the Function pro-        ately issued and sent to the Chairman of the Board, the Chair-
     vides a valuable contribution to the success of business            man of the AC and the CEO.
     activities by identifying relevant risks along the value chain,
     pinpointing potential areas for adding value and devising op-       All reports are presented and discussed in the AC meeting.
     portunities for improvement.                                        A periodic follow-up with the audited units is made to track
                                                                         the implementation of the agreed action points. Once per
     The function provides risk-led analyses and evaluates the           year, this follow-up status report is presented to the AC.
     effectiveness, efficiency and compliance of business pro-
     cesses by:                                                          For further details on the Company’s risk management, please
                                                                         refer to pages 92 to 96.
     – examining the reliability and completeness of financial and
       operational information;
     – examining the adherence to the controls system related to
                                                                         4. Executive Committee
       compliance with internal and external directives, process
       and controls standards, laws, regulations and industry stan-      The Board delegates day-to-day management of the Com-
       dards;                                                            pany to the CEO and the Executive Committee.
     – examining whether the Group’s assets are secured;
     – assessing the business process performance vis-à-vis              The CEO is responsible for Nobel Biocare’s and the Group’s
       Group benchmarks and best practice;                               overall business and affairs and has the final authority in all
     – assessing the business risks and the adequacy of mitigating       matters of management that are not within the duties and
       strategies and action plans.                                      authorities of the Board of Directors or the Shareholders’
                                                                                                          Corporate Governance report   69




meeting pursuant to the provisions of law, the Articles of         – design, implement and operate a system of Internal Con-
Incorporation or the Organizational Regulations. The CEO is          trols in line with legal obligations and industry practices;
responsible for the implementation of all Board resolutions        – appoint, supervise and dismiss the management of the
and the supervision of all management levels in the Group.           Group’s companies;
Without limiting the generality of the aforementioned, the         – appoint members or representatives to the supervisory
CEO has the specific duties and powers to                            boards of subsidiaries;
– develop the strategy of the Group and to obtain approval         – appoint, supervise and dismiss the managers reporting to
  for it by the Board;                                               the individual members;
– be the main contact person of the Board;                         – manage the staff and the divisional functions of the Group.
– direct the EC, specifically by supervising and coordinating
  the activities of the EC, whose members are appointed            4.1 Members of the Executive Committee
  based on his proposal and approval by the Board;                 Members of the Executive Committee are appointed by the
– determine the agenda items of the meetings of the EC in          Board of Directors upon proposal of the CEO and respective
  coordination with its members, conduct those meetings            motion of the NCC.
  and ensure that the EC’s resolutions are implemented;
– represent Nobel Biocare vis-à-vis the shareholders and,          Changes announced in 2010
  together with the other members of the EC and in coordina-       Effective 10 February 2010, Hans Geiselhöringer was ap-
  tion with the Chairman, maintain relations with shareholders     pointed Head of Global Marketing and Products and member
  and investors;                                                   of the Executive Committee (EC). He took over the responsi-
– represent Nobel Biocare and the Group towards the public         bility from Robert Gottlander, who became Head of Key Ac-
  and media, together with the EC and in coordination with         count Management and remained member of the EC.
  the Chairman, who will, in special cases, complement such
  activities;                                                      Effective 25 October 2010, Robert Gottlander, Executive Vice
– inform the Chairman on an ongoing basis and the Board            President Key Account Management, stepped down from his
  regularly on the course of business, compliance with the         duties and is leaving the Company as per 31 May 2011.
  budget, and exceptional occurrences that exceed the nor-
  mal course of business.                                          On 1 December 2010, the Company announced the following
                                                                   changes, effective 1 January 2011:
Executive Committee:                                               Melker Nilsson was appointed President and General Man-
Within the scope of the Organizational Regulations and other       ager North America and member of the EC replacing Bill Ryan,
related internal rules, the members of the EC (excluding the       who reverted back to his role as an advisor to the CEO
CEO) take over individual tasks and are individually respon-       and, additionally, became non-executive Chairman North
sible to the CEO for the performance of these tasks. The mem-      America.
bers of the EC may, with the agreement of the CEO, delegate
the tasks relating to their areas of responsibility.               Mike Thompson was appointed Senior Vice President &
                                                                   General Manager Asia Pacific, and member of the EC. He
Without limiting the generality above, the EC has the spe-         succeeded Tom Olsen, who became Executice Vice President
cific duties to                                                    of Sales for North America.
– organize and execute the management of Nobel Biocare
   within the scope of the delegation so such responsibilities     Jörg von Manger-Koenig, Group General Counsel, was ap-
   by the Board;                                                   pointed Senior Vice President Legal and Compliance and
– prepare decisions to be taken within the scope of respon-        member of the EC.
   sibilities of the Board and implement the related resolutions
   of the Board under the supervision of the CEO;                  For additional information about the Executives appointed as
– further develop and implement the business strategy;             per 1 January 2011 to the EC, please refer to the Company’s
– prepare the consolidated Group budget for the review by          website: www.nobelbiocare.com/ec
   the Board;
– manage the risks associated with conducting the Group’s          A table with the composition of the Executive Committee as
   business;                                                       of 31 December 2010 can be found on page 74. Additional
70   Nobel Biocare Annual Report 2010 — Corporate Governance




     information about the Executive Management is disclosed on       6.1 Voting rights restrictions and representation
     pages 75 to 78.                                                  Please see section 2.6 of this Corporate Governance report
                                                                      on page 57 about the voting rights restrictions. The Board of
     4.2 Other activities and functions                               Directors provides for the rules regarding participation and
     Apart from what is specifically mentioned in the Executive       representation at the Shareholders’ Meeting. A shareholder
     Committee section, none of the Executive Committee mem-          may only be represented by his legal representative, another
     bers has any positions of relevance under the aspect of cor-     shareholder with the right to vote, proxies designated in an
     porate governance in any                                         agreement with the nominee, corporate bodies (“Organver-
     – governing or supervisory bodies of any important organi-       treter”), the independent proxy (“unabhängiger Stimmrechts-
       zation, institution or foundation under private or public      vertreter”) or by a bank or a broker (“Depotvertreter”). The
       law;                                                           Chairman of the Shareholders’ Meeting decides whether a
     – permanent management or consultancy function for im-           proxy will be accepted. Each share entitles to one vote.
       portant interest groups;
     – official function or political post.                           6.2 Statutory quorums
                                                                      The Shareholders’ Meeting passes its resolutions and carries
     4.3 Management contracts                                         out its elections with an absolute majority of the share votes
     Hans Geiselhöringer is employed by Medtech Strategic Ser-        represented, to the extent that neither the law nor the Articles
     vices AG in Küsnacht, and his tasks and responsibilities are     of Incorporation provide otherwise. Decisions at the General
     agreed upon in a management service contract with this com-      Meeting calling for a quorum of at least two thirds of the votes
     pany. These services were compensated with a fixed amount        represented and the absolute majority of the represented
     of EUR 664 k in 2010. The contract has a duration until the      shares par values are required for:
     end of 2011. Further information can be found in note 30 to      – the cases listed in art. 704 para. 1 CO;
     the consolidated financial statements on page 144.               – the conversion of the global share certificate into individ-
                                                                        ual share certificates;
                                                                      – the removal of restrictions on the transfer of registered
     5. Compensations, shareholdings                                    shares;
     and loans                                                        – the conversion of registered shares into bearer shares;
                                                                      – any change to the aforementioned provisions.
     5.1 Content and method of determining the
     compensation and the shareholding programs                       If an election cannot be completed upon the first ballot, there
     For additional information regarding compensation, share-        will be a second ballot at which the relative majority decides.
     holdings and loans of the Board of Directors and the Executive   The Chairman has no casting vote. Elections and votes take
     Committee, please refer to the remuneration report on page       place openly, provided that neither the Chairman nor a simple
     79 as well as in note 11 to the financials of the parent com-    majority of the votes requests a secret ballot.
     pany on page 155.
                                                                      6.3 Shareholder meetings
                                                                      The Articles of Incorporation of Nobel Biocare Holding AG do
     6. Shareholders’ participation                                   not contain any provisions deviating from the law. The Annual
     rights                                                           General Meeting is held within six months after the close of
                                                                      the financial year. Extraordinary General Meetings can be called
     Shareholders’ participation rights are described in detail in    as often as necessary, in particular, in all cases required by law.
     the Articles of Incorporation of Nobel Biocare Holding AG.       Extraordinary General Meetings are convened by the Board of
     These Articles of Incorporation can be downloaded from the       Directors within two months if shareholders representing at
     Company’s website, www.nobelbiocare.com/governance/              least ten percent of the share capital request such a meeting
     documents, or can be ordered via the contact addresses found     in writing, setting forth the items to be discussed and the pro-
     on page 74 of this Annual Report.                                posals to be decided upon. General Meetings are convened by
                                                                      the Board of Directors and, if need be, by the Auditors.
                                                                                                                                       71




The convening of a General Meeting takes place by a publica-        of the Swiss Federal Act on Stock Exchanges and Securities
tion in the Swiss Official Gazette of Commerce at least 20          Trading).
days prior to the day of the meeting. Registered shareholders
may also be informed by mail. The convening text states the         7.2 Clauses on changes of control
date, time and place of the meeting, the agenda, the propos-        As of 31 December 2010, neither a member of the Board of
als of the Board of Directors and the proposal of the share-        Directors nor a member of the Executive Committee or man-
holders who have requested the General Meeting or that an           agement had a contract that provides for benefits upon ter-
item be included on the agenda. No resolutions can be passed        mination of employment due to changes of control.
regarding matters that have not been announced in this man-
ner, except regarding the proposals to convene an extraordi-
nary Shareholders’ Meeting or to carry out a special audit.
                                                                    8. Auditors

The annual business report and the Auditors’ report are sub-        8.1 Duration of the engagement and term
mitted for examination by the shareholders at the registered        of office of the lead auditor
office of the Company at least 20 days prior to the date of the     KPMG assumed the existing auditing engagement for the
ordinary Shareholders’ Meeting. Reference to such submis-           Nobel Biocare Holding Group on 25 March 2010 (first time
sion and to the shareholders’ right to request the conveying        elected in 2002). The Annual General Meeting elects the audi-
of these documents to them are included in the invitation to        tors for a term of one year, renewable annually. The auditor
the Shareholders’ Meeting.                                          in charge is Mr Rolf Hauenstein. He assumed his responsibil-
                                                                    ity in 2008.
6.4 Agenda
One or more shareholders whose combined holdings repre-             8.2 Auditing fees
sent an aggregate nominal amount of at least 0.1 percent of         The following fees were charged for professional services
the Company’s share capital may demand that an item be              rendered by KPMG, for the 12-month period ending 31 De-
included on the agenda of a General Meeting; such a demand          cember:
must be made in writing to the Board of Directors at the latest
45 days before the meeting and include evidence of the              Fees

required shareholding and shall specify the proposals.              in EUR ‘000                                  2010           2009


                                                                    Audit services                                954            950
6.5 Registration in the share register
                                                                    Non-audit services
The Company maintains a shareholders’ register showing the
                                                                    – Tax advice                                   17             32
names, first names, domicile, address and nationality (in the       – Legal advice                                  –              –
case of legal entities the registered office) of the holders or     – Transaction consulting                        –              –
                                                                    – Other non-audit services                      1             22
usufructuaries of registered shares.
                                                                    Total non-audit services                       18             54
                                                                    Total                                         972          1’004
7. Change of control and
defensive measures
                                                                    Audit services consist of standard audit work that needs to
7.1 Duty to make an offer                                           be performed each year in order to issue an opinion on the
Under the Swiss Federal Act on Stock Exchanges and Secu-            consolidated financial statements of the Group and to issue
rities Trading, shareholders and groups of shareholders acting      reports on the local statutory financial statements. It also in-
in concert who acquire more than 33.3 percent of the voting         cludes services that can only be provided by the Group audi-
rights of a company incorporated in Switzerland of which at         tor and includes audit of prospectuses, implementation of
least one class of equity securities is listed on the Swiss Stock   new or revised accounting policies, and internal control review
Exchange must submit a takeover bid to all remaining share-         of systems. Non-audit services include other services pro-
holders. The Articles of Incorporation of Nobel Biocare do not      vided by auditors but not restricted to those that can only be
contain any provisions on opting-out or opting-up (article 22       provided by the auditor signing the audit report.
72   Nobel Biocare Annual Report 2010 — Corporate Governance




     8.3 Additional fees                                              The review of the performance of the external auditors and
     See figures in the table in section 8.2 above.                   their compensation was performed based on answers of cor-
                                                                      porate functions and audited local organzations to a set of
     8.4 Supervisory instruments vis-à-vis the auditors               questions. The questions focussed mainly on the efficiency
     The Board of Directors performs its supervisory functions        of the audit process, professionalism of audit staff, technical
     vis-à-vis the external auditors through the Audit Committee,     proficiency/understanding of accounting policies, adequacy
     which meets at least four times a year. The primary objective    of audit fees and fairness of audit approach.
     of the Audit Committee is to support the Board of Directors
     in monitoring the Company’s internal control, accounting         Independence of the auditors is assessed and confirmed
     principles, risk management, financial reporting and auditing.   yearly. Non-audit services: Non-audit services up to EUR
     Please also refer to section 3.4 of this Corporate Governance    25’000 are at the discretion of the executive management.
     report on page 64. The Audit Committee, on behalf of the         Any assignment above EUR 25’000 requires approval from
     Board of Directors, is also responsible for monitoring perfor-   the Audit Committee. For each additional task, it is manda-
     mance of the external auditors, checking their independence      tory for the external auditors to confirm that it does not inter-
     and coordinating their work with the internal audit. In addi-    fere with independency of their work as external auditors.
     tion, the Audit Committee monitors implementation of find-
     ings of external and internal auditors by management. The
     Audit Committee meets regularly with the statutory external
                                                                      9. Information policy
     auditors as well as with internal audit. Furthermore, the Au-
     dit Committee prepares proposals for the appointment or          Nobel Biocare Holding AG pursues an open and active infor-
     removal of the external auditors for submission to the Board,    mation policy for the benefit of both the financial markets
     which then nominates the external auditor for election by the    and the general public. All stakeholders should be given the
     General Meeting. The Audit Committee reports to the Board        same opportunity to follow Group developments. Publica-
     of Directors about its discussions with the external auditors.   tions are made available to all stakeholders at the same time.
     At least once a year, the lead partner takes part in a meeting   Nobel Biocare’s reporting and transparency surpasses legal
     of the Board of Directors.                                       requirements. Investor Relations (IR) is a staff function at
                                                                      Nobel Biocare and reports to the CEO, who holds ultimate
     The external auditors report their findings (from the mid-       responsibility for all external information to the financial com-
     year limited review and from the full-year audit) twice a year   munity. The IR Department has the task of continuously pro-
     to the Audit Committee and to the Board of Directors. The        viding factual, relevant information to shareholders and the
     auditors have now to report according to the new law in Swit-    stock market. Nobel Biocare’s general information policy in
     zerland (OR 728b Abs. 1).                                        financial matters provides that Nobel Biocare will not publish
                                                                      explicit earnings forecasts. However, the Board of Directors
     In 2010, the external auditors participated in four meetings     has issued guidelines to ensure that investors will be in-
     with the Audit Committee, the Head of Internal Audit, Com-       formed in a timely and appropriate fashion in compliance
     pliance and Risk Management participated in eight meetings       with the rules specified in registration contracts with the SIX
     of the Audit Committee (as secretary). The external auditors     Swiss Exchange.
     attended one Board meeting for a yearly presentation. The
     Head of Internal Audit, Compliance and Risk Management
     participated in one meeting with the Board in 2010.

     Selection procedure: Selection of the external auditor last
     took place in 2002. Due to the independency criteria, only
     two worldwide operating audit companies were invited to
     submit proposals and at the end of this process KPMG was
     proposed based on regular business evaluation criteria such
     as service level, global presence and rate.
                                                                  Corporate Governance report   73




Insider trading policy
In order to prevent insiders from benefiting from confidential
information, the Board of Directors issued guidelines on how
to deter both corporate insiders and external consultants
from making use of confidential information. The Board of
Directors has established so-called blocking periods to pre-
vent insiders from trading during sensitive periods. The
Board of Directors approved and implemented an amended
Insider Directive with effect of 25 September 2008, which
is in compliance with the EU directive on Market Abuse.

Financial reporting and contact information
Nobel Biocare publishes the Group’s financial accounts, to-
gether with interim reports, every quarter. These reports are
published in English. A shorter media release of those is pub-
lished in German. In each case, results are published before
the start of stock market trading by way of the media and a
posting on the Company’s website, www.nobelbiocare.com.

Media and analyst conferences take place at least once a
year. Telephone conferences for analysts and investors take
place at least once every quarter. At www.nobelbiocare.com,
the Company offers access to its current share price, an-
nual reports, quarterly reports, media releases and presen-
tations made at investors’ and analysts’ conferences. The
website also presents a financial calendar listing all relevant
dates for investors. An e-mail subscription service provides
updates and alerts: www.nobelbiocare.com/email-alerts
74   Nobel Biocare Annual Report 2010 — Corporate Governance




     Executive Committee Members as of 31 December 2010
     Name                          Born                      Nationality                Position                                    Appointed


     Domenico Scala                1965                      Swiss                      Chief Executive Officer                     2007


     Dirk W. Kirsten               1968                      Swiss                      Chief Financial Officer                     2008


     Hans Geiselhöringer           1968                      German                     Executive Vice President                    2010*
                                                                                        Marketing and Products

     Alexander Ochsner             1964                      Swiss                      Senior Vice President and General Manager   2008
                                                                                        Europe, Middle East and Africa

     Thomas M. Olsen               1957                      USA                        Senior Vice President and General Manager   1999
                                                                                        Latin America /Asia Pacific

     Petra Rumpf                   1967                      German                     Senior Vice President                       2007
                                                                                        Business Development & Strategic Planning

     William J. Ryan               1942                      USA                        President and General Manager               2009
                                                                                        North America

     Hans Schmotzer                1959                      German                     Executive Vice President                    2008
                                                                                        Research & Development

     Nicolas Weidmann              1963                      Swiss                      Senior Vice President                       2007
                                                                                        Global Communications

     Ernst Zaengerle               1948                      Swiss                      Executive Vice President                    2009
                                                                                        Global Operations


     Please see page 69 for changes in the EC effective 1 January 2011.
     *Under management service agreement




     2011 Financial calendar
     Annual General Meeting                                  30 March 2011
     Ex-dividend date                                        1 April 2011
     Record date                                             5 April 2011
     Payment of dividend                                     6 April 2011
     Interim Report 1, January – March                       28 April 2011
     Interim Report 2, January – June                        12 August 2011
     Interim Report 3, January – September                   8 November 2011




     Contact information
     Company address                                         Nobel Biocare Holding AG
                                                             P.O. Box, 8058 Zurich-Flughafen, Switzerland
                                                             Phone +41 43 211 42 00, Fax +41 43 211 42 42 or +41 43 211 58 11
                                                             E-mail investor.relations@nobelbiocare.com
                                                             www.nobelbiocare.com

     Investor Relations                                      Süha Demokan, Head of Investor Relations
                                                             Phone +41 43 211 42 30 or +41 79 430 81 46
                                                             E-mail suha.demokan@nobelbiocare.com

     Media Relations                                         Nicolas Weidmann, Sr VP Global Communications
                                                             Phone +41 43 211 42 80 or +41 79 372 29 81
                                                             E-mail nicolas.weidmann@nobelbiocare.com
                                                                                                                       Corporate Governance report   75




10. Executive Committee                                            ment), in combination with Master Studies (Business admin-
                                                                   istration: Finance, Tax, Accounting) at University of Cologne,
                                                                   Germany. Current other assignments: No other relevant cur-
Domenico Scala                                                     rent assignments. Shares: 1’600* / Performance share units:
Chief Executive Officer (CEO), Swiss, born 1965. Dome-             35’367 / Staff options: 0.
nico Scala was appointed CEO of Nobel Biocare Holding AG           * In addition 10 convertible bond units of Nobel Biocare.
in September 2007. From 2006 until August 2007, he was a
member of the Board of Nobel Biocare (non-executive). Prior        Hans Geiselhöringer
to joining Nobel Biocare, he was the Chief Financial Officer of    Executive Vice President Global Marketing & Products*,
Syngenta International AG (agribusiness, 2003–2007) and a          German, born 1968. Hans Geiselhöringer was appointed
member of the Syngenta Executive Committee. Before joining         Executive Vice President Global Marketing & Products in 2010.
Syngenta, Domenico Scala held various leading positions in         He joined Nobel Biocare in 2008 to lead the company’s
finance with Roche Holding AG (healthcare, 1995–2003). He          NobelProcera business. Prior to joining Nobel Biocare, he had
joined Roche in Corporate Finance as Area Controller and was       been expanding his Dental X laboratory business internation-
promoted to Head of Company Financing and Controlling in           ally. Hans Geiselhöringer founded Dental X GmbH in 1998,
1999, and in 2001 he became Group Treasurer of Roche. He           a dental laboratory chain specializing in implantology, ana-
joined Roche from Panalpina (forwarding and logistics ser-         plastology, functional and esthetic reconstructions, and imag-
vices, 1993–1995), where he was Finance Director of Panal-         ing technologies. Education: Trained as a Certified Dental
pina Italy SpA. Domenico Scala started his career with Nestlé      Technician (CDT) in Chicago, USA; further dental training in
(nutrition, 1990 –1993) in Internal Audit where he was ap-         New York, focusing on anaplastology and epithetics; Techni-
pointed Senior International Auditor. Appointments: Tufts Uni-     cal business administrator from the IHK, Germany. Current
versity (Boston) School of Dental Medicine Board of Overseers.     other assignments: No other relevant current assignments.
Education and titles: Dr. h.c. from the Faculty of Medicine,       Shares: 0/Performance share units: 0 / Staff options: 0.
University of Bucharest. Degree in economics with a special-       * Under management service contract.
ization in corporate finance from the University of Basel. Ex-
ecutive Development degrees from INSEAD and London Busi-           Alexander Ochsner
ness School. Current other assignments: No other relevant          Senior Vice President and General Manager, Europe,
current assignments. Shares: 29’280 / Performance share            Middle East and Africa (EMEA), Swiss, born 1964. Alexan-
units: 78’929 / Staff options: 10’000.                             der Ochsner was appointed Vice President and General Man-
                                                                   ager EMEA effective 11 August 2008. Alexander Ochsner has
Dirk W. Kirsten                                                    extensive experience in the medical device industry. He has
Chief Financial Officer (CFO), Swiss, born 1968. Dirk W.           held various international sales, marketing and executive man-
Kirsten was appointed Chief Financial Officer of Nobel Biocare,    agement positions such as Vice President Europe and Asia
effective March 2008. He brings to Nobel Biocare extensive         Pacific – member of Divisional Executive Team at Zimmer
financial expertise, gained over 14 years in various finance       Dental Inc. (formerly Sulzer-Medica Dental and Centerpulse
and senior finance positions on the banking, corporate and         Dental, 2002–2008), Marketing Manager Heart Valves Europe,
advisory side. Prior to joining Nobel Biocare, Dirk Kirsten held   Middle East and Africa – member of the Operating Commit-
the position of Group Treasurer at Syngenta (agribusiness,         tee of Medtronic Europe (1997–2001), and Area Sales Man-
2005–2008) in Basel, Switzerland. Before Syngenta, he was          ager & Executive Director at the Japan subsidiary of Medela
a senior finance executive at Roche Holding AG, in Basel           AG (Medical devices, 1994 –1997). Prior to that, he was a
(healthcare, 2002–2004). Prior to his corporate experience,        Scientific Assistant at the Swiss Federal Institute of Technol-
Dirk Kirsten worked with Deutsche Bank (2000–2002), Price-         ogy, Zurich (1990–1994). Education: MSc and PhD in Natural
waterhouseCoopers (assurance, tax and legal advisory ser-          Sciences at the Swiss Federal Institute of Technology, Zurich.
vices, 1999–2000) and UBS (1995–1998; formerly: SBC War-           Current other assignments: No other relevant current assign-
burg) in various international advisory and investment banking     ments. Shares: 500 / Performance share units: 26’176 / Staff
positions. Education: PhD in Management with specialization        options: 0.
in Corporate Finance/Shareholder Value Management, Uni-
versity of Cologne, Germany; MBA Class, London Business
School, London, England (Program of International Manag-
76   Nobel Biocare Annual Report 2010 — Corporate Governance




     Domenico Scala                                     Dirk W. Kirsten   Hans Geiselhöringer




     Alexander Ochsner                                  Thomas M. Olsen   Petra Rumpf




     William Ryan                                       Hans Schmotzer    Nicolas Weidmann




     Ernst Zaengerle
                                                                                                           Corporate Governance report   77




Thomas M. Olsen                                                   sor to the CEO of Nobel Biocare in July 2008 and President
Senior Vice President and General Manager, Latin Amer-            and General Manager, North America in October 2009. He
ica, Asia/Pacific, US American, born 1957. Thomas M. Olsen        has extensive experience in the dental industry and has held
was appointed Vice President International Markets in Sep-        several management positions: Consultant (dental industry,
tember 2005 and Vice President and General Manager Latin          2004 –2007); President/CEO for North America of Straumann
America, Asia/Pacific in 2007. He has extensive experience in     (dental implant company, 1993 – 2004); Chairman of Opus
the dental industry and has held several management positions     Enterprises (international venture development and consulting
within Nobel Biocare and Steri-Oss (acquired by Nobel Biocare     company, 1991– 1993); President of the US subsidiary of No-
in 1998): Vice President Europe and Asia (2001–2005), Vice        belpharma (now Nobel Biocare, 1987 –1991); Executive Vice
President Europe (1999–2000), Vice President and General          President of Repligen Corporation (biotechnology, 1984–
Manager at Steri-Oss (1998–1999), Vice President Sales and        1987); Vice President of Operations and Finance, later ap-
Marketing at Steri-Oss (1997–1998), Vice President Sales at       pointed President of the healthcare group of Pharmacia In-
Steri-Oss (1995 –1997) and Director of Sales at Steri-Oss         corporated (life sciences, 1977 – 1984). Education: MBA,
(1994–1995). Prior to joining Steri-Oss, he held sales and mar-   Bernard M. Baruch Graduate School of Management, BA,
keting positions at Denar Corporation (oral healthcare, 1993–     City College of New York, Executive Management Program,
1994), 3M Unitek (healthcare, 1985–1993) and Ormco Cor-           Northwestern University. Current other assignments: Since
poration (then a division of American Hospital Supply,            2005 Member of the Board of NovaSoutheastern College of
1980–1985). Education: BA, Long Beach State University,           Dental Medicine. Previous assignments include: Member of
Executive MBA program, University of La Verne, USA. Current       the Board of the Research and Education Foundation of the
other assignments: No other relevant current assignments.         American College of Prosthodontists (1999 – 2004); Member
Shares: 39’890/Performance share units: 23’431 / Staff op-        of the Board of the Harvard School of Dental Medicine (2000–
tions: 75’000.                                                    2003); Member of the Board of the School of Dental Medicine
                                                                  – University of Pennsylvania (1990 – 2000); Member of the
Petra Rumpf                                                       Board of UCONN School of dental medecine; Member of the
Senior Vice President, Business Development and Strate-           Board of OrthoAccel, Inc. (start-up in the orthodontic busi-
gic Planning, German, born 1967. Petra Rumpf joined Nobel         ness). Shares: 0 / Performance share units: 12’816 / Staff
Biocare in December 2007 as Vice President Business Devel-        options: 0.
opment and Strategic Planning. Previously, she spent 16 years
with Capgemini Transformation Consulting gaining experience       Hans Schmotzer
in strategy development, business transformation, and merg-       Executive Vice President Research and Development,
ers and acquisitions working with leading corporations in life    German, born 1959. Hans Schmotzer joined Nobel Biocare in
sciences, manufacturing and high-tech industries. From 2002       June 2008 from Smith & Nephew Orthopaedics AG, which
until 2007, she was Vice President and member of the Central      acquired Plus Orthopedics AG in 2007, where he held various
European Management Team of Transformation Consulting.            senior positions in research and development since 1994.
She was also a member of the Global Transformation Consult-       From 2007 until May 2008, he was Director, Research Europe
ing Certification Board. Prior to that, she was Head of Strat-    & Global Biologic Fixation. Prior to the acquisition, Hans
egy Consulting in Central Europe, Head of Marketing and           Schmotzer was Director of Research and Head of IP at Plus
Sales Consulting in Central Europe and Global Head of Merg-       Orthopedics AG (2006–2007), PI Precision Implants (1999 –
ers and Acquisitions. She joined Capgemini in 1991. Educa-        2005) and Director of Research and Development with MRD
tion: BA in economics, University of Trier (Germany). MBA,        Medical Research and Development (1994 –1999). Prior to
specialization in finance and investment, Clark University,       joining Plus Orthopedics, he was Assistant Professor and
Massachusetts, USA. Current other assignments: No other           Director, USC Orthopedic Research Laboratory at the Univer-
relevant current assignments. Shares: 7’900* / Performance        sity of Southern California in Los Angeles (1992 –1994),
share units: 39’296 / Staff options: 35’000.                      Director Orthopedic Research Laboratories of the Hospital of
* In addition 100 convertible bond units of Nobel Biocare.        the Good Samaritan in Los Angeles (1988 –1992) and worked
                                                                  in the Department of Biomedical Engineering at the Univer-
William J. Ryan                                                   sity of Cape Town, South Africa (1985 –1988). Hans Schmotzer
President and General Manager, North America, US Amer-            is a Visiting Professor at the University of Bath, UK. Education:
ican, born 1942. William J. Ryan was appointed Senior Advi-       Dipl.-Ing. in mechanical engineering from the Technical Uni-
78   Nobel Biocare Annual Report 2010 — Corporate Governance




     versity of Munich, Germany and a PhD in biomedical engineer-      Management with Movado Group (watches) in the USA, and
     ing from the University of Cape Town, South Africa. Current       from 1992–1997 an Executive Vice President of Supply Chain
     other assignments: No other relevant current assignments.         Management with Bally International (shoes and clothes) in
     Shares: 0 / Performance share units: 24’115 / Staff options: 0.   Schönenwerd. From 1988 to 1992, he served as an Executive
                                                                       Vice President of Supply Chain Management and Sales Far
     Nicolas Weidmann                                                  East for Omega SA, Biel (watches and jewelry). Education:
     Senior Vice President, Global Communications, Swiss,              MS in Mechanical Engineering, University of Applied Sci-
     born 1963. Nicolas Weidmann joined Nobel Biocare as Vice          ences in Konstanz and MS in Economics from the University
     President Global Communications in January 2007. He has           of Konstanz. Current other assignments: member of the Board
     extensive global communications experience in various             of Prothor Holding SA (high-tech mechanical clockworks,
     industries. Nicolas Weidmann joined Nobel Biocare from the        since 2009). Current other assignments: No other relevant
     leading Swiss retail group Pfister, where he was Head of Mar-     current assignments. Shares: 4’200* / Performance share
     keting and Communications, and a member of Executive              units: 10’625 / Staff options: 0.
     Management (2006– 2007). Previously, he was Chief Com-            * Thereof 1’000 restricted shares granted by the Company, vesting on 30 June 2011,
     munications Officer at Unaxis Management (now OC Oerlikon,        received for his assignment as a member of the board of Nobel Biocare.

     technology, 2002–2006), Vice President Communications and
     Branding at Gate Gourmet International (airline catering,         All share and staff option holdings are reported as per 31 January 2011.

     2000–2002), and Head of International Brand Management
     and Trademark Licensing at General Motors Europe (automo-
     tive, 1996 – 2000). He also held corporate identity, branding
     and communications positions at GM Europe (1995–1996),
     Wirz Identity (Corporate and Brand Identity, 1994 –1995), and
     Wirz Werbeberatung (advertising, 1993 –1994). Education:
     MA in social psychology and economics from Zurich Univer-
     sity, Switzerland. Studies in journalism at Zurich University.
     Current other assignments: No other relevant current assign-
     ments. Shares: 0 / Performance share units: 25’750 / Staff
     options: 25’000.

     Ernst Zaengerle
     Executive Vice President Global Operations, Swiss, born
     1948. Ernst Zaengerle joined Nobel Bicare’s Executive Com-
     mittee in October 2009. He formerly acted as a non-executive
     member of the Nobel Biocare Board of Directors and a mem-
     ber of its Audit Committee since 2002. From 2000 to 2003,
     he was an Associate Partner of IMG (consulting) in St. Gallen,
     from 1998–2000 an Executive Vice President of Supply Chain
                                                                                                                Remuneration report   79




Remuneration report.


This remuneration report is intended to                           the positions are based, taking into account salary survey data
provide an overview of Nobel Biocare’s                            provided by external service providers. Our HR service provid-
                                                                  ers are Mercer and Towers Watson. None of these providers
compensation principles. It includes com-
                                                                  has further non-HR related mandates with Nobel Biocare.
pensation disclosures of the Executive                            Merit increases reflect ongoing individual performance, salary
Committee and Board of Directors, which                           history, internal equivalence, as well as market salary trends
are also part of the consolidated financial                       and inflation.
statements (note 18) and the parent com-
                                                                  Short-term incentive
pany accounts (note 11).
                                                                  Short-term variable compensation is designed to provide
                                                                  Nobel Biocare employees with the opportunity to participate
Remuneration system                                               in the overall success of the Group based on their personal
Nobel Biocare’s remuneration system is aimed at fostering         contribution and measured against Group and personal objec-
sustained business success, external competitiveness, inter-      tive achievement. A Short-Term Bonus Plan has been in place
nal fairness and high performance orientation. The ultimate       since 2003 and is applied broadly according to position levels.
goal of effective remuneration mechanisms is to strengthen        Objectives for local positions are country-specific. Employee
Nobel Biocare’s global industry leadership for the benefit of     performance is reviewed annually and assessed relative to
its clients while delivering the expected returns to its share-   goal achievement. The performance of global functions is
holders. To ensure long-term effectiveness, Nobel Biocare’s       regularly evaluated on the basis of individual objectives and
remuneration should                                               Nobel Biocare Group’s key performance indicators (KPIs):
– reward sustainable performance;                                 Group KPIs for 2010 were defined as relative net sales growth
– remain flexible to adapt to economic challenges and             and Group profitability.
   changes, as well as market trends;
– be regularly benchmarked against competitors;                   The net sales growth at constant exchange rates (CER) of
– reinforce internal equivalence;                                 Nobel Biocare is benchmarked against an industry peer group
– retain talent;                                                  comprising Straumann, Biomet 3i, Zimmer Dental, Astra Tech
– anticipate business needs;                                      and Dentsply. The objective is to outperform the net sales
– contribute to the further differentiation of Nobel Biocare      growth relative to this peer group.
   in the global marketplace.
                                                                  Nobel Biocare Group profitability is measured on the basis of
Aligning performance and compensation is a major element          earnings before interest and taxes (EBIT) as a percentage of
of Nobel Biocare’s approach to having the right people in         net sales relative to the absolute size of the business. The
the right roles, striving to achieve common goals and metrics     higher the absolute net sales, the higher the EBIT margin
and consistently executing the company’s strategy. Nobel          target to be reached is set. This mechanism considers the
Biocare’s remuneration concept is built around several com-       high operating leverage of Nobel Biocare (high gross margin,
pensation elements: base salary, short-term incentives, long-     relatively static operating cost structure). For 2010, these
term incentives and other employee benefits.                      Group KPIs account for 10 to 30 percent of the short-term
                                                                  variable compensation for eligible Nobel Biocare employees,
Base salary                                                       with the individual KPIs accounting for the remaining 70 to
Base salary is evaluated by taking into account the responsi-     90 percent. This year, core competencies and leadership prin-
bility level of an employee’s position within the organization,   ciples were introduced as part of the individual goal setting.
a comparison with competitors, the scope and impact of an
individual’s role, as well as his or her experience and skills.   Short-term incentive targets can be overachieved up to a
This fixed part of the compensation package is reviewed an-       maximum of 120 percent. Conversely, underperformance in
nually. Nobel Biocare has implemented a position evaluation       individual or Group objectives reduces the short-term incen-
system with a top-down approach, starting with the Executive      tives granted.
Committee (EC) and the company’s managers. Base salaries
are benchmarked on a yearly basis against similar positions       The target short-term variable compensation lies between
in other multinational companies located in the country where     5 and 80 percent of base salary, depending on functional
80   Nobel Biocare Annual Report 2010 — Corporate Governance




     level, and is paid in cash. The target short-term variable com-   mance of the Nobel Biocare (NOBN) share price relative to
     pensation lies for the EC between 33 and 80 percent, the          the Swiss Leader Index for the vesting period. If this relative
     latter of which applies to the Chief Executive Officer (CEO).     outperformance is achieved, each share unit will be convert-
     Apart from those selected global and local functions, sales       ed into a predetermined amount of Nobel Biocare shares at
     representatives receive quarterly incentives based on their       vesting date. One-third (tranche 1) of the allocated share units
     sales performance in the given quarter. These incentive com-      vest after one year (28 February 2011), one-third (tranche 2)
     pensation plans are region-specific. In addition, for selected    after two years (28 February 2012) and the remaining third
     functions, team objectives are defined and rewarded.              (tranche 3) after three years (28 February 2013). In the case
                                                                       of underperformance, the grant will be zero.
     Long-term incentive
     The aim of long-term remuneration is to reward executives         Terms of awards grant 2009
     by linking compensation with Group and country-specific           Vesting is subject to a three-year service period lasting until
     performance over a three-year period, reflecting Nobel            30 April 2012, and to the achievement of market conditions.
     Biocare’s commitment to sustainable growth. The Company           These conditions assume an outperformance of the Nobel
     has two long-term, performance-based plans in place that          Biocare (NOBN) share price relative to the Swiss Market Index
     have been approved by the Nomination and Compensation             for the period. If this relative outperformance is achieved, each
     Committee of the Board of Directors (NCC) in 2010: a Perfor-      share unit will be converted into a predetermined amount
     mance Share Unit Plan (PSUP) and a Performance Cash Bonus         of Nobel Biocare shares at the vesting date.
     Plan (PCBP). The guiding principles of the PSUP and the PCBP
     reinforce Nobel Biocare’s goal of achieving sustainable           Terms of awards grant 2008
     growth, as well as align the compensation structure with best     Vesting is subject to a service period lasting until 31 March
     practices and the interests of the Company’s customers and        2011, and to the achievement of two equally weighted non-
     shareholders.                                                     market performance conditions (compound sales growth and
                                                                       EBIT margin for the financial years 2008 to 2010). The actual
     a) Performance Share Unit Plan (PSUP)                             number of shares allotted upon vesting depends on the
     This long-term incentive plan covers, with a single global pro-   achievement of the performance conditions. If the minimum
     gram, key position holders within the Group, as well as se-       threshold is not met, the PSUs lapse. Achievement of the
     lected employees throughout the units and headquarters, as        maximum threshold would result in allotting shares for 200
     identified by the CEO and endorsed by the NCC. Participants       percent of granted PSUs. Variances within the thresholds are
     are granted performance-based share units. Vesting of these       awarded on a linear basis.
     grants is subject to specific performance achievements over
     the vesting period. The performance achievements are subject      b) Performance Cash Bonus Plan (PCBP)
     to conditions defined by the NCC.                                 This long-term incentive plan covers key position holders
                                                                       within country organizations who would otherwise not be
     The initial value of the grants is between 10 and 100 percent     eligible for the PSUP. The plan is approved by the CEO and
     of the base salary and is allocated to long-term compensation     endorsed by the NCC.
     within the long-term incentive plan as approved by the NCC.
     For the EC, the initial value of the grants is between 50 and     Participants in the Performance Cash Bonus Plan (PCBP) are
     100 percent, the latter of which applies to the CEO. The refer-   entitled to be rewarded on the basis of specific performance
     ence price of the grants is linked to the average share price     achievements over a three-year period. Performance will be
     during the five days following the release of the respective      measured for the period from 2010 to 2012 by a combination
     full year results (2010: CHF 28; 2009: CHF 17.68).                of Group and country-specific KPIs; for 2010, the Group KPIs
                                                                       are a relative growth target measured against a benchmark,
     In the case of a change of control, all restricted share units    as well as an EBIT margin target that depends on the absolute
     of the participant shall immediately vest.                        size of the business. The two additional KPIs for 2010 per coun-
                                                                       try are: net sales, and local costs measured as a percentage of
     Terms of awards grant 2010                                        net sales per local country budget over three years on a cumu-
     Vesting is subject to a service period and to the achievement     lative basis. The local KPIs are determined by the Senior Vice
     of market conditions. These conditions assume an outperfor-       President or President and General Manager in charge of the
                                                                       respective region.
                                                                                                                                               Remuneration report    81




Members of the Executive Committee as of 31 December 2010
Name                                                    Position                                                                             Appointed


Domenico Scala                                          Chief Executive Officer                                                              2007
Dirk Kirsten                                            Chief Financial Officer                                                              2008
Hans Geiselhöringer1                                    Executive Vice President Marketing and Products                                      2010
Alexander Ochsner                                       Senior Vice President and General Manager Europe, Middle East and Africa             2008
Thomas M. Olsen                                         Senior Vice President and General Manager Latin America and Asia/Pacific             1999
Petra Rumpf                                             Senior Vice President Business Development and Strategic Planning                    2007
William Ryan                                            President and General Manager North America                                          2009
Hans Schmotzer                                          Executive Vice President Research and Development                                    2008
Nicolas Weidmann                                        Senior Vice President Global Communications                                          2007
Ernst Zaengerle                                         Executive Vice President Global Operations                                           2009

1 Hans Geiselhöringer was appointed Executive Vice President Marketing and Products, under management service contract, as of 10 February 2010 and succeeded Robert
  Gottlander.


The value is between 10 and 30 percent of base salary and is                         Compensation of Executive Committee (EC) members
fully paid in cash in local currency.                                                Executive Committee members with the exception of one
                                                                                     member under management service contract take part in the
Other employee benefits                                                              PSUP. The fair value per unit was measured based on a Monte
Other employee benefits are country-specific and structured                          Carlo simulation. Market conditions are taken into account
in accordance with local practice, legal requirements and com-                       when estimating the fair value of the instruments granted.
petitive benchmarking. In 2010, Nobel Biocare reviewed its                           Service conditions are not taken into account for the grant
Swiss pension plan and modified the contribution to 2/3 for the                      date fair value measurement of the services received. Addi-
company and 1/3 for the employee. The risk coverage has been                         tional information regarding the measurement of performance
increased as well. Nobel Biocare regularly reviews its other                         share unit grants is disclosed in note 18 to the consolidated
insurance status worldwide and assesses its programs in this                         financial statements.
area with the support of an international broker.
                                                                                     Except for two EC members who reside in the USA and
Changes for 2011                                                                     one member under management service contract, EC mem-
For 2011, Group KPIs for EC members will account for 50                              bers – including the CEO – are covered by the pension scheme
percent of the short-term variable compensation, while 20                            applicable to Swiss subsidiaries.
percent will be based on Functional and 30 percent on Indi-
vidual KPIs.                                                                         Contract details and clauses on changes of control
                                                                                     The CEO contract contains a six-month notice period. The
Responsibilities and methods of determining                                          Company has the option to require a non-competition obliga-
remuneration and compensation plans                                                  tion for one year against payment of salary. The period of
The Board of Directors decides on the Board members’ remu-                           notice for all EC members is up to six months. EC members
neration policies, as well as on the individual compensation                         who left the EC in 2010 were released from some of their
plans based on the NCC’s proposals. In addition to proposing                         duties during their termination period. They retain the right to
remuneration plans and policies, the NCC endorses the base                           receive salary and variable compensation for the duration of
salary and performance goals of the CEO as proposed by the                           the termination period. Based on their individual agreements,
Chairman. The Vice Chairman proposes the remuneration of                             they may be entitled to retain their options and restricted share
the Chairman of the Board. The CEO proposes the base sala-                           units. No severance payments exist. As of 31 December 2010,
ries and performance goals of members of the EC as well as                           no changes of control clauses existed within the employment
Nobel Biocare’s other management members for approval by                             contracts.
the NCC. The NCC regularly informs the full Board of Directors
on the status of compensation. When the remuneration of
individual members of the Board is under discussion, the
affected member abstains from voting.
82   Nobel Biocare Annual Report 2010 — Corporate Governance




     Compensation of the Board of Directors
     The 2010 total compensation of the Board of Directors is
     divided into two parts: cash and restricted shares. The cash
     portion was paid in April and October in equal installments
     and amounted to EUR 47’500 per annum, applied pro rata
     temporis for each member of the Board. An additional reim-
     bursement of EUR 12’500 was paid to the Board members
     who participate in a committee.

     Members of the Board participate in a specific Board of Direc-
     tors share plan. Shares were granted on 30 June 2010, and
     are restricted as to sale until 30 June 2015. For the related
     fair value calculation, please see note 18 to the consolidated
     financial statements. Each Board member received a grant
     of 2’000 restricted shares, pro rata temporis.

     The Chairman of the Board received a cash compensation of
     EUR 60’000 and EUR 12’500 extra for each of the two addi-
     tional commissions he chaired, all prorata temporis, and 3’000
     restricted shares pro rata temporis. The Chairman of the Au-
     dit Committee received a cash compensation of EUR 47’500,
     EUR 22’500 for the commission he chaired, all pro rata tem-
     poris, and 2’000 restricted shares pro rata temporis.

     The Board of Directors’ fees are not pensionable.
                                                                                                                                                        Remuneration report   83




Remuneration of the Executive Committee members for the years ended 31 December
in EUR ‘000                                                           Domenico Scala, CEO 1                     Other Executive                                       Total
                                                                                                            Committee members 2

                                                                       2010               2009              2010                 2009             2010                2009
Fixed compensation                                                       579               431              3’203                2’211            3’782               2’642
Variable compensation 3                                                  278                276               816                 798             1’094               1’074
Fair value of performance share units 4                                  474                132             1’441                 443             1’915                575
Pension expense and social security costs                                159                 94               554                 372               713                466
Other benefits 5                                                          29                  5               267                 138               296                143
Sign-on compensation 5                                                     –                331                  –                  –                    –             331
Severance payments                                                         –                  –                  –                484                    –             484
Fair value of options                                                      –                  –                  –                  –                    –                –
Total                                                                  1’519             1’269              6’281             4’446               7’800              5’715

1 Highest total compensation for a member of the Executive Committee.
2 Other Executive Committee members include Robert Gottlander (he was a member of the Executive Committe until 25 October 2010). More members of EC
  temporary overlap of EC positions
3 Variable compensation is on an accrual basis.
4 Based on the income statement charge 2010 for the PSUP 2008, 2009 and 2010.
5 Other benefits include certain insurance coverages for EC members working in the US. Other benefits also include car allowance and tax equalization payments.
  The CEO is entitled to a car with driver for business commute.



Number of performance share units, shares and stock options held as of 31 December 2010
                                                Number of              Number of          Performance           Performance              Performance          Stock option
                                               shares held 1         performance           share units           share units              share units           grant 2007
                                                                 share units held 2        grant 2010            grant 2009               grant 2008

Domenico Scala                                        29’280                78’929                 28’571               36’765                 13’593                10’000
Dirk Kirsten 3                                          1’600               35’367                 11’700               18’529                  5’138                     –
Hans Geiselhöringer 4                                       –                     –                     –                    –                      –                     –
Robert Gottlander 5                                   47’160                32’168                 10’150               16’075                  5’943                75’000
Alexander Ochsner                                         500               26’176                  9’270               14’649                  2’257                     –
Thomas M. Olsen                                       39’890                23’431                  7’252               12’192                  3’987                75’000
Petra Rumpf 6                                           7’900               39’296                 12’875               20’390                  6’031                35’000
Bill Ryan                                                   –               12’816                  7’615                5’201                      –                     –
Hans Schmotzer                                              –               24’115                  8’313               13’165                  2’637                     –
Nicolas Weidmann                                            –               25’750                  8’125               12’868                  4’757                25’000
Ernst Zaengerle                                        4’200 7              10’625                 10’625                    –                      –                     –
Total                                               130’530               308’673                 114’496            149’834                  44’343               220’000

1   Includes shares acquired in the market.
2   Includes performance share units received in 2010, 2009 and 2008.
3   Amounts do not include EUR 33 k in Nobel Biocare convertible bonds acquired in the market
4   Under management service contract.
5   Robert Gottlander was a member of the Executive Committe until 25 October 2010.
6   Amounts do not include EUR 331 k in Nobel Biocare convertible bonds acquired in the market
7   Including 1,000 restricted shares.
84   Nobel Biocare Annual Report 2010 — Corporate Governance




     Number of performance share units, shares and stock options held as of 31 December 2009
                                                                           Number of            Number of        Performance     Performance     Stock option
                                                                          shares held 1       performance         share units     share units      grant 2007
                                                                                           share units held       grant 2009      grant 2008

     Domenico Scala                                                              14’850                50’358          36’765          13’593          10’000
     Dirk Kirsten 2                                                               1’600                23’667          18’529           5’138               –
     Robert Gottlander                                                           50’160                22’018          16’075           5’943          75’000
     Mathias Krebs 3                                                              1’500                16’620          12’134           4’486          62’500
     Alexander Ochsner                                                              500                16’906          14’649           2’257               –
     Thomas M. Olsen                                                             39’890                16’179          12’192           3’987          75’000
     Petra Rumpf 4                                                                7’900                26’421          20’390           6’031          35’000
     Bill Ryan 5                                                                      –                 5’201           5’201               –               –
     Hans Schmotzer                                                                   –                15’802          13’165           2’637               –
     Nicolas Weidmann                                                                 –                17’625          12’868           4’757          25’000
     Ernst Zaengerle 5                                                           4’200 6                    –               –               –          10’000
     Total                                                                    120’600                 210’797        161’968          48’829         292’500

     1   Includes shares acquired in the market.
     2   Amounts do not include EUR 33 k in Nobel Biocare convertible bonds acquired in the market
     3   Mathias Krebs was a member of the Executive Committee until November 2009.
     4   Amounts do not include EUR 331 k in Nobel Biocare convertible bonds acquired in the market
     5   Appointed EC member on 19 October 2009.
     6   Including 2,000 restricted shares.




     Members of the Board elected by the General Meeting on 25 March 2010
                                                                                                 Nationality         Position    First Elected   Elected until




     Heino von Prondzynski                                                                             German        Chairman            2010            2011
     Rolf Watter                                                                                        Swiss    Vice Chairman           2007            2011
     Daniela Bosshardt-Hengartner                                                                       Swiss         Member             2010            2011
     Raymund Breu                                                                                       Swiss         Member             2010            2011
     Stig G. Eriksson                                                                                  Finnish        Member             2006            2011
     Antoine Firmenich                                                                                  Swiss         Member             2005            2011
     Edgar Fluri                                                                                        Swiss         Member             2008            2011
     Robert Lilja                                                                                     Swedish         Member             2005            2011
     Oern Stuge                                                                                   Norwegian           Member             2010            2011
                                                                                                                                                Remuneration report   85




Remuneration of the Board of Directors for the years ended 31 December
in EUR ‘000                                           Cash 1          Fair value of                2010           Cash 1        Fair value of                 2009
                                                                restricted shares 2                Total                   restricted shares                  Total


Heino von Prondzynski 3                                    64                   39                   103              –                    –                      –
Rolf Soiron 4                                              18                     –                   18             72                   23                    95
Rolf Watter                                                60                   26                    86             60                   16                    76
Daniela Bosshardt-Hengartner 3                             45                   26                    71              –                    –                      –
Raymund Breu 3                                             45                   26                    71              –                    –                      –
Stig G. Eriksson                                           60                   26                    86             60                   16                    76
Antoine Firmenich                                          60                   26                    86             60                   16                    76
Edgar Fluri                                                70                   26                    96             70                   16                    86
Robert Lilja                                               60                   26                    86             60                   16                    76
Jane Royston 4                                             15                     –                   15             60                   16                    76
Oern Stuge 3                                               45                   26                    71              –                    –                      –
Ernst Zaengerle 5                                           –                     –                     –            50                   16                    66
Total                                                    542                   247                  789             492                  135                   627

1   Cash compensation is on an accrual basis.
2   Based on the income statement charge 2010 as disclosed in note 18 to the consolidated financial statements.
3   Compensation based on period of service starting 25 March 2010.
4   Compensation based on period of service ending 25 March 2010.
5   Ernst Zaengerle left the Board of Directors in October 2009 .
86   Nobel Biocare Annual Report 2010 — Corporate Governance




     Number of shares and stock options held as of 31 December 2010
     Board of Directors                               Number of              Number of              Restricted     Restricted   Total number of   Stock option
                                                     unrestricted             restricted          shares grant   shares grant     stock options     grant 2007
                                                     shares held 1          shares held                  2010           2009

     Heino von Prondzynski 2                                26’800                 3’000                 3’000              –                 –              –
     Rolf Soiron 3                                        434’185 4               3’000 5                    –          1’500                 –              –
     Rolf Watter                                            26’200                 3’000                 2’000          1’000                 –              –
     Daniela Bosshardt-Hengartner 2                               –                2’000                 2’000              –                 –              –
     Raymund Breu 2                                         20’000                 2’000                 2’000              –                 –              –
     Stig G. Eriksson                                        3’250                 3’000                 2’000          1’000                 –              –
     Antoine Firmenich                                       1’000                 3’000                 2’000          1’000                 –              –
     Edgar Fluri                                             8’500                 3’000                 2’000          1’000                 –              –
     Robert Lilja                                           17’375                 3’000                 2’000          1’000                 –              –
     Jane Royston 3                                              –4               2’000 5                    –          1’000                 –              –
     Oern Stuge 2                                                 –                2’000                 2’000              –                 –              –
     Total                                                537’310                29’000                19’000          7’500                  –              –

     1   Includes shares acquired in the market.
     2   Period of service starting 25 March 2010.
     3   Period of service ending 25 March 2010.
     4   Number of unrestricted shares held as per 25 March 2010.
     5   Number of restricted shares held as per 25 March 2010 (including grant 2009 and 2008).




     Number of shares and stock options held as of 31 December 2009
     Board of Directors                               Number of              Number of              Restricted     Restricted   Total number of   Stock option
                                                     unrestricted             restricted          shares grant   shares grant     stock options     grant 2007
                                                     shares held 1          shares held                  2009           2008

     Rolf Soiron                                           434’185                 3’000                 1’500          1’500            12’500         12’500
     Rolf Watter                                            16’000                 2’000                 1’000          1’000            10’000         10’000
     Stig G. Eriksson                                        2’250                 2’000                 1’000          1’000            10’000         10’000
     Antoine Firmenich                                            –                2’000                 1’000          1’000            10’000         10’000
     Edgar Fluri 2                                           8’000                 1’500                 1’000           500                  –              –
     Robert Lilja                                           16’375                 2’000                 1’000          1’000            10’000         10’000
     Jane Royston                                                 –                2’000                 1’000          1’000            10’000         10’000
     Ernst Zaengerle 3                                       2’200                 2’000                 1’000          1’000            10’000         10’000
     Total                                                479’010                16’500                 8’500          8’000            72’500         72’500

     1 Includes shares acquired in the market.
     2 Compensation based on period of service starting 1 July 2008.
     3 Compensation based on period of service ending 18 October 2009.
Financial reporting.


Key figures                                           88   Parent company accounts
Financial review                                      89   Nobel Biocare Holding AG, Kloten
Risk management                                       92   Income statement                                 148
                                                           Balance sheet                                    149
Consolidated financial statements
Consolidated income statement                         98   Notes to the parent company accounts
Consolidated statement of comprehensive income        98   Note 1 Basis for preparation                     150
Consolidated balance sheet                            99   Note 2 Property, plant and equipment             150
Consolidated statement of changes in equity          100   Note 3 Details of investments                    151
Consolidated cash flow statement                     102   Note 4 Shareholders’ equity                      151
                                                           Note 5 Treasury shares                           153
Notes to the consolidated financial statements             Note 6 Dividend income                           154
Note 1 General information                           103   Note 7 Financial expense                         154
Note 2 Significant accounting policies               103   Note 8 Tax expense                               154
Note 3 Critical accounting estimates and judgments   110   Note 9 Securities, sureties, guarantees          154
Note 4 Operating segments                            111           and pledges in favor of third parties
Note 5 Personnel expenses                            113   Note 10 Pension liabilities                      155
Note 6 Financial income and finance cost             113   Note 11 Remuneration of the Board of Directors   155
Note 7 Income tax expense                            114           and Executive Committee (EC)
Note 8 Property, plant and equipment                 115   Note 12 Major shareholders                       162
Note 9 Intangible assets                             117   Note 13 Risk assessment                          162
Note 10 Categorization of financial assets           119   Note 14 Subsequent events                        162
Note 11 Non-current receivables                      119
Note 12 Inventories                                  119   Appropriation of available earnings              163
Note 13 Trade and other receivables                  120   Report of the statutory auditor                  164
Note 14 Prepaid expenses and accrued income          121
Note 15 Cash and cash equivalents                    121
Note 16 Equity                                       122
Note 17 Earnings per share                           124
Note 18 Share-based payment transactions             124
Note 19 Deferred tax assets and liabilities          127
Note 20 Provisions                                   129
Note 21 Employee benefits                            129
Note 22 Categorization of financial liabilities      133
Note 23 Trade payables                               134
Note 24 Other liabilities                            134
Note 25 Accrued expenses and deferred income         134
Note 26 Commitments                                  135
Note 27 Contingent liabilities and pledged assets    136
Note 28 Risks related to financial instruments       136
Note 29 Risk assessment                              144
Note 30 Related parties                              144
Note 31 Subsidiaries                                 145
Note 32 Subsequent events                            146
Report of the statutory auditor                      147
88   Nobel Biocare Annual Report 2010 — Financial reporting




     Key figures.


     in EUR million                                                                                    2010    2009     2008    2007    2006



     Income statement
     Revenue                                                                                           576.6   581.4   619.2   665.9   600.6
     Gross profit                                                                                      448.0   467.9   493.6   559.3   504.8
     Profit from operations (EBIT)                                                                      84.9   128.6   132.9   216.7   204.2
     Profit before tax                                                                                 100.4   137.3   159.4   212.0   202.8
     Income tax expense                                                                                –54.7   –31.5   –49.7   –45.8   –44.7
     Profit attributable to owners of Nobel Biocare                                                    45.7    105.8   109.7   166.2   158.1
     Balance sheet
     Non-current assets                                                                                344.4   300.0   275.1   195.8   198.1
     Current assets                                                                                    426.9   422.6   422.4   460.0   306.0
     Total equity                                                                                      320.0   317.7   267.6   267.9   360.8
     Non-current liabilities                                                                            35.9   271.2   287.4   224.8    28.5
     Current liabilities                                                                               415.4   133.7   142.5   163.1   114.8
     Cash and cash equivalents including bank overdraft                                                239.5   240.7   163.4   186.2   130.9
     Miscellaneous
     Net cash from operating activities                                                                 97.1   177.8   169.0   134.1   160.3
     Depreciation, amortization and impairment                                                          29.6    27.8    28.2    17.2    15.6
     Investments in property, plant and equipment                                                       23.3    18.3    30.4    24.9    20.0
     Employees at end of period                                                                        2’433   2’242   2’541   2’242   1’993
     Ratios
     Revenue growth (%)                                                                                 -0.8    –6.1    –7.0    10.9    24.0
     Revenue growth in local currencies (%)                                                             -6.4    –7.7    –4.2    15.4    24.4
     Gross margin (%)                                                                                   77.7    80.5    79.7    84.0    84.0
     Operating expenses/revenue ratio (%)                                                               63.0    58.4    58.3    51.4    50.0
     EBITDA margin (%)                                                                                  19.9    26.9    25.8    35.0    36.6
     Operating (EBIT) margin (%)                                                                        14.7    22.1    21.5    32.5    34.0
     Net profit margin (%)                                                                               7.9    18.2    17.7    25.0    26.3
     Return on average equity (%) 1                                                                     14.2    35.5    41.6    49.8    47.0
     Equity/assets ratio (%)                                                                            41.5    44.0    38.4    40.9    71.6
     Cash/total assets (%)                                                                              31.1    33.4    23.7    28.7    26.2
     Net debt/equity ratio (%)                                                                           4.1    –0.6    24.4   –16.9   -36.9
     Net debt/EBITDA                                                                                    0.12   –0.01    0.41   –0.19   -0.61
     Interest coverage ratio (times)                                                                     6.7     7.7     9.2    35.0    69.8

     1 Includes net profit for the last four quarters over average equity for the last four quarters
                                                                                                                     Financial review   89




Financial review


Revenue
Two years after the peak of the worldwide financial and eco-      Most of the margin decrease (2.7 percentage points) can be
nomic crisis, 2010 was a year with only modest growth in the      explained by additional investments in NobelProcera, and
dental implant business. This fact, as well as Nobel Biocare’s    production volumes of the recently introduced products have
specific business and regional mix, led to a revenue decline      only increased toward the end of the year. Moreover, a nega-
of 6.4 percent versus 2009 at constant exchange rates (CER).      tive mix effect (0.5 percentage points, caused by more prod-
Year-on-year CER growth was minus 6.9 percent for Europe,         ucts with relative lower margins) led to an overall NobelPro-
Middle East and Africa (EMEA), minus 5.8 percent in North         cera margin decline. On the other hand, pricing remained
America and minus 2.1 percent in Asia/Pacific (APAC).             stable during 2010, and the margin of the standardized busi-
                                                                  ness improved due to higher production volumes and in-
The EMEA result is mainly due to Nobel Biocare’s strong           creased cost efficiency.
exposure in Spain and Sweden. Both countries – for different
reasons – showed a strong negative growth versus 2009,            Profit from operations
which particularly strongly affected Nobel Biocare as a market    Profit from operations (EBIT) for 2010 was EUR 84.9 million,
leader. While in Sweden changes in the reimbursement sys-         or 34.0 percent lower than in the previous year. The resulting
tem caused the decline, Spain was still strongly affected by      EBIT margin decreased from 22.1 percent in 2009 to 14.7 per-
the overall economic crisis. On the other hand, countries such    cent in 2010. Reasons for the margin decrease were the afore-
as France and Italy grew nicely and allowed Nobel Biocare to      mentioned decline of revenue, a lower gross margin and the
foster its position as market leader in both countries. In Ger-   high operating leverage – i.e. the high dependency of the EBIT
many, where historically Nobel Biocare had a rather weak          margin on the absolute level of operating expenses.
position, performance stabilized toward the second half of
2010.                                                             During 2010, Nobel Biocare invested significant amounts into
                                                                  further development of NobelProcera. Moreover, a material
In North America, where Nobel Biocare is especially strong        amount was spent on two global and seven local scientific
with regard to large case treatments, the lack of financing and   symposia with more than 7’000 participants. These costs in-
a cautious patient flow mostly explain the negative revenue       creased total operating expenses by about EUR 18 million.
growth versus 2009. However, parts of the fourth quarter          Some of that additional cost was offset through ongoing sav-
showed initial signs of momentum improvement, which was,          ings and efficiency gains in most other areas. Excluding
however, offset by the strong comparison base due to scanner      NobelProcera-related development costs, as well as the sym-
sales the year before. The Group has significantly strengthened   posia-driven marketing costs, the EBIT margin would have been
its organization during 2010 and thus, is well prepared for the   17.0 percent.
expected consumer confidence improvement in 2011.
                                                                  Financial result
In APAC, Nobel Biocare improved its clear position as market      In 2010, the financial result increased to EUR 15.5 million
leader in Japan, which contributes 68 percent of revenue to       versus EUR 8.7 million in 2009. Both years included excep-
the overall region. However, due to the difficult economic        tional foreign exchange gains of EUR 30.0 million and EUR
environment in Japan, year-on-year growth in this country         31.1 million, respectively. These result from a continuous sim-
was flat. In addition, Australia/New Zealand ended with neg-      plification of the internal funding structure as well as risk re-
ative growth – also given the high comparative basis from         duction in the balance sheet.
2009. Some distributor markets in Southeast Asia and Taiwan
showed a negative growth versus 2009. India and China had         Besides these exceptional gains, the main part of the financial
double-digit growth; however, they still remain small on an       result is driven by interest expenses for the outstanding con-
absolute basis.                                                   vertible bond, which will become due in November 2011.
                                                                  Also, in November 2010, Nobel Biocare signed an extension
Gross profit and gross profit margin                              of its existing EUR 330 million syndicated facility (club deal)
In 2010, gross profit decreased to EUR 448.0 million, 4.3         with six international banks. While the related commitment
percent less than in the previous year. This reflects a gross     fee is amortized over the entire life of the new loan facility,
profit margin of 77.7 percent on an as reported basis, com-       remaining fees for the old facility were fully charged to the
pared with 80.5 percent in 2009.                                  income statement in 2010.
90   Nobel Biocare Annual Report 2010 — Financial reporting




     Taxes                                                               cash ratio of 31 percent (2009: 33 percent) the Group main-
     In 2010, tax expenses were EUR 54.7 million versus EUR 31.4         tained its high liquidity, which was further supported by the
     million in 2009. This increase mainly results from restructuring    renewal of a EUR 330 million syndicated banking facility for
     internal profit streams, which shall lead to a material improve-    another five years.
     ment of the Group tax rate going forward. In order to achieve
     such a structure, a one-off tax expense of EUR 29.8 million         Currency impacts
     was booked in 2010. Adjusted for this exceptional item, the         During 2010, currencies again showed significant volatility in
     underlying Group tax rate was 24.8 percent compared with            all major markets. Almost all currencies strengthened against
     22.9 percent in 2009. Although the decrease of operating            the euro, Nobel Biocare’s reporting currency, during the re-
     margin had a negative effect on the underlying tax rate, the        porting period. This had various impacts on the income state-
     exceptional foreign exchange gains offset this effect in            ment and on the balance sheet:
     2010.
                                                                         On the income statement, changes in foreign exchange rates
     Net profit                                                          had a 5.6 percent positive impact on revenue. Especially the
     In 2010, net profit came in at EUR 45.7 million (2009: EUR          strengthening of the yen (+12 percent versus 2009), the Ca-
     105.8 million), or 56.8 percent below prior year. The afore-        nadian dollar (+16 percent) and the US dollar (+5 percent)
     mentioned revenue decrease, the resulting operating leverage        supported top line growth and led to positive foreign exchange
     and the lower gross margin are the main drivers for the low-        impacts of EUR 34.7 million compared with 2009. On the cost
     er operating profit and thus also for the net margin. In 2010,      side, the strong Swedish krona (+11 percent), a stronger yen
     exceptional foreign exchange gains and one-off taxes almost         and the stronger US dollar led to in total EUR 7.8 million
     offset each other. However, foreign exchange gains of a sim-        higher cost of goods sold. Moreover, operating expenses in-
     ilar magnitude were also realized in 2009. In 2010, the re-         creased by EUR 26.7 million, mainly due to the US dollar,
     ported net margin was 7.9 percent versus 18.2 percent in            Swiss franc (+9 percent), Swedish krona and the yen. The
     2009.                                                               positive resulting impact on EBIT was EUR 0.2 million. How-
                                                                         ever, due to the foreign exchange impact on the top line, the
     The reported EPS was EUR 0.37 (2009: EUR 0.86).                     EBIT margin was negatively affected by 1.2 percent. Hedging
                                                                         gains, booked under the net financial result, compensated
     Investments for the future                                          most of this margin effect. Overall, Group profitability was
     During 2010, no acquisitions were executed (2009: EUR 22.9          well protected against currency movements.
     million). However, capital expenditures increased to EUR 23.3
     million from EUR 18.3 million in 2009. Most of these invest-        On the balance sheet, almost all positions carried significant
     ments were done for the extension of NobelProcera opera-            foreign exchange translation effects versus 2009. Working
     tions, specifically the purchase of additional CAD/CAM ma-          capital again decreased on a CER basis compared with the
     chines, as well as the modernization and extension of the           prior year, both on the inventory side as well as on the trade
     manufacturing facilities in Mahwah and Quebec.                      receivables side. However, due to the weakness of the euro,
                                                                         both increased on an as reported basis. On the liability side,
     Liquidity and financial position                                    the outstanding convertible bond value increased by about
     During 2010, Nobel Biocare generated operating cash flow of         EUR 40 million versus 2009 due to a stronger euro against
     EUR 97.1 million (2009: EUR 177.8 million). While cash flow         the Swiss franc. However, this effect was fully compensated
     in the prior year was affected by a combination of various favor-   through related foreign exchange swaps, which were mon-
     able one-off transactions, the 2010 cash flow still reflects pru-   etized in 2009 and used to repurchase outstanding convertible
     dent cash management and further working capital reductions.        bonds in 2009 and 2010. The total cash position increased by
     Including acquisitions and capital expenditures, operating cash     EUR 17 million due to currency impacts. Other translation
     flow was EUR 73.8 million versus EUR 136.7 million in 2009.         gains, both on tangible and intangible assets, strengthened
                                                                         the strong Group equity position of 41.5 percent. Though the
     At 31 December 2010, the Group held an almost unchanged             Group does not systematically hedge its balance sheet, most
     cash position of EUR 239.5 million (2009: EUR 240.7 million),       currency impacts were hedged through natural hedges.
     after having paid a dividend of EUR 46.3 million as well as
     having repaid EUR 36.9 million of outstanding debt. With a
                                                                    Financial review   91




Balance sheet
As in 2009, Nobel Biocare continued to improve its working
capital management, both on the inventory as well as trade
receivables side. Moreover, further improvements in its cash
and liquidity management were achieved. This allowed the
Group to maintain its conservative balance sheet structure
with a 51.5 percent equity ratio and high financial flexibility,
despite lower earnings and cash flow generation, and also
operating within an environment of significant market/foreign
exchange volatility.

Share repurchases and dividend payments
During 2010, no share buyback program was executed. How-
ever, Nobel Biocare spent EUR 35.4 million to repurchase part
of the outstanding convertible bond, which is due in Novem-
ber 2011. The average repurchase price was 100.43 percent
(contractual redemption price: 102.05 percent).

The Board of Directors will propose to the next Annual Gen-
eral Meeting the payment of a dividend of CHF 0.35 for each
CHF 0.40 par value registered share (2009: CHF 0.55/share).
This corresponds to a payout ratio of 75 percent of reported
net profit and 46 percent, calculated on the basis of net prof-
it adjusted for the one-off tax charge. It is intended to pay out
this dividend in the form of a reduction of free reserves in a
tax-friendly way to all shareholders.
92   Nobel Biocare Annual Report 2010 — Financial reporting




     Risk management.


     As an innovative medical technology company, Nobel Biocare          ance and Risk Management coordinates all ERM activities. In
     is exposed to various risks. Therefore, the Group introduced        this role, he reports directly to the CEO and the Chairman of
     a risk management process in 2005. Leveraging the experi-           the Board.
     ence gained during the first five years of actively managing
     risks, Nobel Biocare has established comprehensive Enter-           The risks are reported to the Executive Committee and the
     prise Risk Management (ERM), which was further enhanced             Board of Directors at least once a year. Key risks and signifi-
     throughout 2010. The following risk types are covered and           cant incidents are discussed at all Executive Committee,
     monitored by the ERM:                                               Board and local management team meetings.

     –   Business ecosystem risks                                        The risk categories are defined as follows:
     –   Strategic risks
     –   Legal and compliance risks                                      Business ecosystem risks:
     –   Product-related risks                                           This category includes all risks of the business environment
     –   Customer and sales market-related risks                         (excluding sales markets) in which Nobel Biocare operates.
     –   Operational risks                                               They range from natural hazards to macroeconomic and po-
     –   Financial and management information risks                      litical risks, and also include social security and health insur-
     –   Personnel risks                                                 ance aspects.
     –   Governance risks
                                                                         Strategic risks:
     By the end of 2010, all major risks were quantified in terms        This category includes new technologies, M&A activities, al-
     of their sensitivity to profit and loss, free cash flow and the     liances and partnerships, entrance into new markets, and the
     Group’s equity position. For some risks, a non-quantitative         ability to execute business strategies.
     scenario analysis was introduced. The assessment of all risks
     was accomplished on the basis of both in-house reviews and          Legal and compliance risks:
     comparisons with prior periods, as well as external bench-          This category comprises regulatory risks, non-compliance
     marks where available.                                              with laws and regulations, as well as product liabilities and
                                                                         warranties.
     Furthermore, action plans and mitigation strategies were de-
     fined for each risk. All risks were allocated to designated risk    Product-related risks:
     owners at the Executive Management level and to specific            This category includes potential gaps in the R&D pipeline,
     Board committees or to the Board itself. The overall risk matrix,   time-to-market aspects, counterfeiting and infringement of
     as well as the development of each key risk, is monitored on        third-party patents, all of which limit the options to design
     a regular basis by all Executive Management members, as             and sell new products successfully.
     well by the Board of Directors and its committees.
                                                                         Customer and sales market-related risks:
     In addition to this Group-wide approach, various operational        This category deals with the go-to-market approach, our prod-
     risk management initiatives were significantly strengthened         uct portfolio and positioning, changes in market needs and
     or newly implemented during the year. The Treasury and Risk         structures, as well as risks related to sales processes, people
     Management policies, which were introduced in 2008, were            and systems.
     systematically leveraged into the central and decentral orga-
     nization and are formally monitored by adequate and inde-           Operational risks:
     pendent controller reports.                                         This category includes health, safety & environment (HSE)
                                                                         incidents, business and IT interruptions, cost and price risks
     Also during 2010, the Internal Controls System (ICS) was sys-       (e.g. prices for raw materials), production and supply chain
     tematically improved and further enhanced. It provides high         risks (resilience, technology, know-how, etc.), quality aspects
     quality financial controls, and reduces reporting, fraud and        and planning risks.
     financial risks. In addition, Nobel Biocare has undertaken to
     further integrate and strengthen its governance, risk and com-      Financial and management information risks:
     pliance (GRC) activities. The Head of Internal Audit, Compli-       This category covers financial reporting shortcomings, tax,
                                                                                                                    Risk management   93




liquidity and financing risks, unauthorized commitments and       Legal and compliance risks:
fraud, foreign exchange, market and interest risks, as well as    The Group faces the legal risks attendant to a business op-
pension fund risks. Also included is the risk of inappropriate,   eration where products for human use are researched, devel-
late, missing or incorrect management information.                oped, manufactured, marketed and sold. This includes prod-
                                                                  uct liability and risks related to warranties, as well as
Personnel risks:                                                  unfavorable changes in legislation and regulations, e.g. mar-
This category includes skill gaps of employees, as well as the    keting and advertising, or legal and regulatory repercussions
risk of not attracting and retaining key managers and experts     in case of non-compliance with product regulations.
or not developing them adequately. Personnel risks also in-
clude the corporate culture, Nobel Biocare’s attractiveness as    Furthermore, as an R&D-based operation, the Group focuses
an employer of choice and the risk of losing key team mem-        on building, further developing and defending its portfolio of
bers, e.g. due to accidents.                                      intellectual property (IP) rights, including patents, trademarks,
                                                                  designs and copyrights. In doing so, the Group may face legal
Governance risks:                                                 risks arising from third-party infringements of the Group’s IP,
This category includes organizational structures and process-     violation of confidentiality with regard to our IP, or disclosure
es, staffing of key positions and the interaction between the     of trade secrets and blocking IP rights of a third party, all of
Board of Directors and the Executive Committee.                   which may not be sufficiently remedied by legal means.

The following risks and uncertainties pertain to those that are   The Group also faces general legal risks such as contract-re-
presently material in terms of likelihood and impact or areas     lated claims, employment issues, unauthorized commitments
in which Nobel Biocare faced material issues in 2010. Gen-        and fraud, etc. Furthermore, Nobel Biocare Holding AG, as a
eral risks and uncertainties that affect companies in general     SIX Swiss Exchange-listed company, is highly influenced by
are not outlined here.                                            changes in the area of financial market regulation and corpo-
                                                                  rate governance, as well as by the legal, regulatory and repu-
Business ecosystem risks:                                         tational risks associated with non-compliance in this field.
In general, dental implant treatments are not reimbursed in
the USA, Japan or Europe, with a few exceptions such as           As a globally active enterprise, the Group aims to preempt
Sweden, Germany and the Netherlands, where a portion or           such issues by maintaining a strong legal and compliance
all costs are refunded. It is unlikely that the reimbursement     organization, which is closely involved in the business, and
environment for dental implant procedures will change sig-        by strengthening internal processes and controls.
nificantly in these regions in the near future. As a conse-
quence, most recipients of dental implants will have to con-      Product-related risks:
tinue to fund the procedure themselves. The demand for             The dental implant industry is characterized by rapid product
dental implant therapies is therefore sensitive to changes in     development, with a significant competitive advantage being
the economic environment.                                         gained by companies that are first-to-market with their prod-
                                                                  ucts. Therefore, market participants are in constant pursuit of
The current global economic climate, combined with our sig-       innovative products and techniques and make frequent new
nificant exposure to the USA and some other key markets           product introductions. The Group’s ability to compete suc-
which were, or still are disproportionately affected by the       cessfully also depends on its ability to be a best-in-class ser-
crisis, represent a challenge for Nobel Biocare, especially in    vice provider. Design errors are regarded as significant risks
the high-end segment.                                             in any medical technology company such as Nobel Biocare.
                                                                  Only clinically tested products are launched. A sound design
Strategic risks:                                                  change process with defined gates and a dedicated risk man-
Nobel Biocare acquired several companies in recent years.         agement process with corresponding governance structures
There is a risk of not generating the expected financial return   are in place. Areas of importance include the product ap-
on these transactions. The integration of the acquired com-       proval and registration processes. All products, packages,
panies is well under way or completed. Nobel Biocare cur-         applications and technologies are continuously and system-
rently sees no material downside risks relating to these ac-      atically monitored, tested and improved. The clinical network
quisitions.                                                       of Nobel Biocare is an industry leader.
94   Nobel Biocare Annual Report 2010 — Financial reporting




     The Group’s future growth depends to a large extent on its           Medical Devices, as well as other applicable regulations. No-
     ability to stay ahead of its competitors and new market en-          bel Biocare’s effort is ongoing in terms of the development
     trants. The development cycle for Nobel Biocare’s operations         and further improvement of these key risk processes.
     is generally substantially shorter than that of the pharmaceu-
     tical industry. It normally takes between one and two years          Nevertheless, if the Group fails to comply with the aforemen-
     from concept to launch. Nevertheless, uncertainties relating         tioned requirements, access of products to the market may
     to results from costly clinical trials do represent a risk to the    be delayed, jeopardized or even suspended.
     Group.
                                                                          In general, the primary risks in this risk category also include
     In recent years companies were acquired to strengthen the            production disturbances, dependency on specific suppliers
     R&D and product portfolio. This was undertaken in addition           and price fluctuations for purchased products. There is also
     to Nobel Biocare’s own R&D activities. NobelActive is the first      a risk related to adjusting production capacities to market
     product that has been successfully launched on the basis of          demand. Production disturbances can occur for several rea-
     a new R&D and clinical testing approach. A rigorous develop-         sons, such as technological problems, strikes, fire, earth-
     ment and testing approach has also been chosen for our               quakes or water damage. Therefore, all of our factories have
     digital dentistry activities (NobelProcera). The Group’s product     developed contingency plans and the Group is fully insured
     management strategy aligns R&D activities quickly and ef-            for any losses due to operational interruption. Furthermore,
     fectively with customer needs.                                       the Group minimizes this risk by having multiple production
                                                                          facilities for its entire product range.
     Customer- and sales market-related risks:
     The Group markets its products primarily to general practitio-       Our facilities in Karlskoga, Sweden, and Yorba Linda, Califor-
     ners, but also to specialized dentists who perform dental im-        nia, USA, manage Nobel Biocare’s implant production using
     plant procedures, as well as to dental laboratories that create      globally standardized processes with standardized manufac-
     dental prosthetics. Dental professionals play a significant role     turing technology. The factories are fully compatible with each
     in determining which brand of dental implant or prosthetic a         other and are able to transfer production at short notice if
     patient receives. Therefore, key account management has              necessary. Our three factories for individualized production
     been further strengthened and substantial resources have             in Stockholm, Sweden, Mahwah, New Jersey, USA, and To-
     been invested not only in the training of sales representatives      kyo, Japan, utilize a common system-sharing technology. This
     (Sales Academy), but also in the training and education of           not only ensures compatibility, but also allows orders to be
     customers. The latter involves a combination of technical and        immediately transferred from one production facility to the
     commercial aspects, which help them understand and market            other. The recently acquired production facilities (Alpha-Bio
     Nobel Biocare products to their patients. The speakers and           Tec in Israel and BioCad in Canada) meet the same Group
     trainers are certified and comply with clearly defined guide-        quality requirements.
     lines.
                                                                          Our capacity for implant production is secured through owned
     Operational risks:                                                   or long-term leased facilities.
     This risk category relates to production, supply chain, quality
     assurance and IT. Product and manufacturing process approv-          Product procurement focuses on suppliers that provide in-
     als by authorities, as well as product liability due to production   dustry-standard technology, thus allowing a shift of purchas-
     errors, are regarded as significant risks in any medical technol-    es from one supplier to another. This means that Nobel Bio-
     ogy company such as Nobel Biocare. A permanent quality               care is not dependent on any specific supplier. For strategic
     assurance process with clearly defined change management             products and materials, strategic suppliers are contractually
     procedures is essential. The Group has not faced any negative        bound to maintain a minimum stock on hand.
     consequences in this respect for more than ten years.
                                                                          The Group is dependent to a high degree on its information
     To reduce exposure to these risks, Nobel Biocare adheres to          technology systems. All information technology systems are
     and is in compliance with the US Food and Drug Administra-           potentially vulnerable to damage or interruption from a variety
     tion’s Quality System Regulations, Medical Device Directive          of sources, including, but not limited to, computer viruses,
     93/42/EEC, ISO 13485 – Quality Management System for                 security breaches, natural disasters and telecommunication
                                                                                                                       Risk management   95




failures. Most of the systems are outsourced to a specialized       functions with regional finance teams, which in turn fosters
provider, an approach that ensures that the Group has con-          the Group’s risk management culture to a significant degree.
tinuous access to its systems. Nobel Biocare is further align-
ing its software platforms, thereby reducing risks and              Credit risk represents the risk of financial loss to the Group if
costs.                                                              a customer or counterparty to a financial instrument fails to
                                                                    meet its contractual obligations. This risk arises principally
Financial and management information risks:                         from the Group’s customer receivables and its financial invest-
Non-compliance with the Group’s accounting and treasury             ments. The Group has a credit policy under which each new
policies, International Financial Reporting Standards (IFRS) or     customer is analyzed individually, and credit risk related to
Swiss law can lead to qualified auditors’ opinions and/or the       financial investments is handled and assessed centrally. In
restatement of prior financial disclosures. Non-compliance          2010, the Group’s accounts receivable exposure was further
with the regulations of the SIX Swiss Exchange can lead to          reduced. The Group has improved its global days sales out-
sanctions. External auditors regularly audit the Group’s con-       standing ratio as well as the inherent credit risk associated
solidated financial statements, as well as audit or review the      with its existing credit portfolio. In response to the general
financial statements of its subsidiaries. In 2010, the Group        financial crisis, the Group rigorously monitored its outstanding
further strengthened its Finance team, spent significant time       accounts receivable balances and consequently adjusted al-
to train all central and decentral Finance staff, and also con-     lowances for bad debt wherever required.
tinued to broaden our Internal Control System (ICS) and com-
pliance know-how. We will continue to offer our people ad-          Liquidity risk is the risk that the Group will not be able to meet
ditional training, upgrade our global ICS standards, as well as     its financial obligations when they become due. The Group
further educate and develop finance staff in our subsidiaries       tries to have funds available at all times for investments and
and regions.                                                        expenses. Moreover, in 2010, Nobel Biocare extended the
                                                                    committed syndicated banking facility of EUR 330 million for
Changes regarding the interpretation of or changes to IFRS          five years (through 2015). This facility is designed to optimize
can lead to adverse effects on the balance sheet, cash flow         current funding and also serves as a backup line of credit to
statement and/or income statement. Nobel Biocare tries to           increase the company’s financial flexibility going forward.
anticipate such effects. The Group is in permanent contact
with its auditors and other third-party experts in an effort to     Market risk is the risk that market prices, such as foreign
analyze in advance the impact of any planned changes to             exchange rates and interest rates, move disadvantageously
IFRS.                                                               and thereby adversely affect the Group’s income or the value
                                                                    of its holdings of financial instruments. These risks are par-
Preparing financial statements in accordance with IFRS re-          tially hedged in keeping with our Treasury and Risk Manage-
quires that management make estimates, judgments and                ment policies.
assumptions with regard to the application of policies and
reported amounts of balance sheet positions, income and             Currency risk is the risk that the fair value of or future cash
expense items and the disclosure of contingent liabilities. Key     flows from financial instruments change as a result of foreign
areas of estimation uncertainty include the impairment of           exchange rate fluctuations. The Group is exposed to currency
goodwill, income taxes, share-based payments and provi-             risk with respect to the income statement (transaction risks)
sions. For further details, please refer to note 3.                 and to equity (currency translation risks). Nobel Biocare sys-
                                                                    tematically hedges almost all committed income statement
The Group has an exposure in terms of the use or non-use            risks and partially hedges future income statement risks,
of financial instruments. For further details and a policy expla-   whereas currency translation risks are not systematically
nation, please refer to note 28 of the consolidated financial       hedged at present.
statements. In 2010, Nobel Biocare again strictly adhered to
measures aimed at strengthening its balance sheet through           The Group faces the risk that the fair value of future cash flows
the further reduction of external debt, the streamlining of         from financial instruments change when interest rates fluctu-
its internal funding structure and the broadening of its cur-       ate, and that such changes could have an adverse effect on
rency hedging program to include emerging markets. Strong           the Group’s financial condition. Management of the Group’s
emphasis has been placed on aligning headquarter finance            liquid funds and loans is coordinated centrally.
96   Nobel Biocare Annual Report 2010 — Financial reporting




     The tax laws and regulations in the respective jurisdictions        for addressing clearly defined scenarios. In 2010, the com-
     where the Group may have a liability to pay taxes, as well as       munications function was further strengthened to optimize
     their interpretation by tax authorities may change. Such            internal and external communication.
     changes may have a material impact on the Group’s future
     earnings. In addition, a significant degree of estimation is        Internal Controls System (ICS)
     involved in determining the worldwide provision for income          In 2010, Nobel Biocare further enhanced the documentation
     taxes. There are many transactions and calculations for which       of its Internal Controls System (ICS), which meets Swiss legal
     the ultimate tax burden remains uncertain. In order to reduce       requirements and addresses the needs of a company that
     such potential risks, further measures have been taken to           operates on a global scale.
     improve tax reporting. In addition, the overall Group structure
     has been reviewed to further optimize the tax rate, as well as      The concept is based on the COSO framework. The controls
     to minimize potential future tax risks.                             are designed to mitigate financial reporting, fraud and compli-
                                                                         ance risks across all companies of the Group, and cover a
     Personnel risks:                                                    broad range of business support and core processes. In 2010,
     The Group depends on the continued service of key members           management testing of all relevant controls was implement-
     of senior management and key employees. The loss of any             ed for all subsidiaries in order to verify the operational effec-
     of these individuals could disrupt the Group’s operations.          tiveness of this system. The ICS is also used as a means of
     Moreover, the Group’s future success will depend on, among          standardizing business processes, controls and guidelines
     other things, its ability to continue to hire and retain the nec-   globally.
     essary qualified scientific, technical and managerial personnel.
     The Group competes for such personnel with numerous                 The global whistleblower hotline was used as intended and
     other companies, academic institutions and organizations.           managed as designed. All staff and managers have access to
                                                                         independent and neutral communication channels to report
     By standardizing and documenting processes and information          potential non-compliance with laws, regulations, as well as
     critical to its business, the Group reduces the risk of being       internal and external business standards. No major cases were
     dependent on specific individuals. Furthermore, Nobel Biocare       reported.
     has professionalized the Group-level and regional HR func-
     tions and will pursue additional key initiatives. Our ambition      All subsidiary managers and their controllers have signed a
     is to be the employer of choice in the industry.                    “Letter of Assurance” that covers all relevant aspects of cor-
                                                                         porate governance, compliance, risks and controls. It is a
     Many key people were hired recently, thereby further upgrad-        powerful tool in the effort to further strengthen the compliance
     ing the level of management skills and expertise. This rein-        culture of Nobel Biocare at the Group as well as the subsidiary
     forcement of management capabilities has significantly re-          level.
     duced personnel risk exposure.

     Governance risks:
     There are two elements of governance risks:
     – The organizational structure not being aligned with the busi-
       ness strategy
     – Lack of the best people in key positions

     The Group has adjusted its structure and key management
     processes in order to mitigate this risk.

     All risks have a financial and reputational impact. A negative
     reputation is therefore not a risk but rather a consequence.
     The Group limits the impact of an adverse reputation by com-
     municating transparently with all stakeholders and implement-
     ing a crisis management process that includes procedures
Risk management   97
98   Nobel Biocare Annual Report 2010 — Financial reporting




     Consolidated income statement.


     in EUR ’000                                                                                       Note      2010        2009


     Revenue                                                                                             4    576’583    581’441
     Cost of goods sold                                                                                       –128’610   –113’495
     Gross profit                                                                                             447’973    467’946
     Selling expenses                                                                                         –223’976   –219’645
     Administrative expenses                                                                                  –107’447    –94’688
     Research and development expenses                                                                         –31’641    –25’020
     Profit from operations (EBIT)                                                                             84’909    128’593
     Financial income                                                                                    6      33’152     28’418
     Finance cost                                                                                        6     –17’664    –19’754
     Profit before tax                                                                                        100’397    137’257
     Income tax expense                                                                                  7     –54’728    –31’422
     Profit attributable to owners of Nobel Biocare                                                            45’669    105’835


     Basic earnings per share, EUR                                                                      17        0.37       0.86
     Diluted earnings per share, EUR                                                                    17        0.37       0.85




     Consolidated statement
     of comprehensive income.

     in EUR ’000                                                                                       Note      2010       2009


     Profit attributable to owners of Nobel Biocare                                                            45’669    105’835
     Other comprehensive income:
        Foreign currency translation differences                                                         7      19’573      1’538
        Reclassification of foreign currency translation differences to income statement, net of tax   6, 7    –26’968    –26’063
        Effective portion of changes in fair value of cash flow hedges, net of tax                       7       3’073      1’310
        Net change in fair value of cash flow hedges reclassified to income statement, net of tax        7       –474       6’669
     Total other comprehensive income/(expenses) for the year                                                  –4’796    –16’546
     Total comprehensive income for the year attributable to owners of Nobel Biocare                           40’873     89’289
                                                                           Consolidated financial statements   99




Consolidated balance sheet.


in EUR ’000                                             Note    31 December 2010      31 December 2009


Assets
Land and buildings                                                        16’650                    12’119
Machinery                                                                 63’399                    53’498
Equipment                                                                 10’184                    10’216
Property, plant and equipment                              8              90’233                   75’833
Goodwill                                                                 167’462                   151’097
Other intangible assets                                                   55’926                    56’278
Intangible assets                                          9             223’388                  207’375
Non-current receivables                                10, 11              3’974                     4’269

Deferred tax assets                                       19              26’817                    12’544
Total non-current assets                                                 344’412                  300’021
Inventories                                               12              23’401                    20’485

Trade and other receivables                            10, 13            132’855                   136’614
Current income tax assets                                                  4’016                     4’441
Prepaid expenses and accrued income                       14              14’665                    15’656
Financial investments and derivatives                     10              12’179                     3’757
Cash and cash equivalents                              10, 15            239’816                   241’617
Total current assets                                                     426’932                  422’570
Total assets                                                             771’344                  722’591


Equity and liabilities
Share capital                                             16              31’861                    31’861
Share premium                                                            151’113                   166’429
Treasury shares                                           16             –40’216                   –56’567
Retained earnings                                                        177’231                   175’994
Total equity attributable to owners of Nobel Biocare      16             319’989                  317’717
Provisions                                                20               2’734                     3’955
Pension liabilities                                       21               6’232                     2’699
Convertible bond                                          22                   –                   236’962
Deferred tax liabilities                                  19              26’427                    27’033
Other non-current liabilities                                                494                       548
Total non-current liabilities                                             35’887                  271’197
Bank overdraft                                            15                 297                       880
Borrowings                                                22                   –                     1’331
Convertible bond                                          22             252’366                         –
Trade payables                                         22, 23             19’284                    22’158
Current provisions                                        20               6’745                     7’211

Current income tax liabilities                                            56’202                    27’025
Other current liabilities and derivatives                 24              19’285                    21’011
Accrued expenses and deferred income                      25              61’289                    54’061
Total current liabilities                                                415’468                  133’677
Total liabilities                                                        451’355                  404’874
Total equity and liabilities                                             771’344                  722’591
100   Nobel Biocare Annual Report 2010 — Financial reporting




      Consolidated statement
      of changes in equity.

      in EUR ’000                                                                                    Note   Share capital   Share premium




      Balance as of 1 January 2009                                                                                32’002          183’687

      Comprehensive income:
        Profit for the year
      Other comprehensive income:
         Foreign currency translation differences
         Reclassification of cumulative translation differences to income statement, net of tax
         Effective portion of changes in fair value of cash flow hedges, net of tax
         Net change in fair value of cash flow hedges reclassified to income statement, net of tax
         Total other comprehensive (expenses)/income
      Total comprehensive income/(expenses)
      Transactions with shareholders:
         Share capital reduction                                                                      16            –141
         Acquisition of treasury shares                                                               16
         Sale of treasury shares                                                                      16                           –5’020
         Shares transferred to the seller of BioCad Medical Inc.                                                                     –815
         Expiry of call options on own shares                                                         16                          –10’345
         Allocation of shares to share plan participants                                              18                             –126
         Convertible bond – equity component                                                          22                             –952
         Share-based payment expenses                                                                 18
         Dividends to shareholders relating to 2008                                                   16
      Total transactions with shareholders                                                                          –141          –17’258
      Balance as of 31 December 2009                                                                              31’861          166’429



      Balance as of 1 January 2010                                                                                31’861          166’429

      Comprehensive income:
        Profit for the year
      Other comprehensive income:
         Foreign currency translation differences
         Reclassification of cumulative translation differences to income statement, net of tax
         Effective portion of changes in fair value of cash flow hedges, net of tax
         Net change in fair value of cash flow hedges reclassified to income statement, net of tax
         Total other comprehensive (expenses)/income
      Total comprehensive income/(expenses)
      Transactions with shareholders:
         Acquisition of treasury shares                                                               16
         Expiry of call and written put options on own shares                                         16                          –11’912
         Allocation of shares to share plan participants                                              18                             –194
         Convertible bond – equity component                                                          22                           –3’210
         Share-based payment expenses, net of tax                                                     18
         Dividends to shareholders relating to 2009                                                   16
      Total transactions with shareholders                                                                                        –15’316
      Balance as of 31 December 2010                                                                              31’861          151’113
                                                                     Consolidated financial statements   101




Treasury shares   Translation   Hedging    Other retained   Total retained     Total equity attribut-
                      reserve    reserve        earnings         earnings         able to owners of
                                                                                      Nobel Biocare


       –85’229       –91’361     –7’758          236’235         137’116                    267’576


                                                 105’835          105’835                    105’835


                       1’538                                        1’538                       1’538
                     –26’063                                      –26’063                    –26’063
                                   1’310                            1’310                       1’310
                                   6’669                            6’669                       6’669
                     –24’525       7’979                          –16’546                    –16’546

                    –24’525       7’979          105’835          89’289                      89’289


         13’049                                  –12’908          –12’908                           –
         –6’456                                                                                –6’456
         10’650                                                                                 5’630
           815                                                                                      –
         10’345                                                                                     –
           259                                      –133             –133                           –
                                                     934              934                         –18
                                                    6’788           6’788                       6’788
                                                 –45’092          –45’092                    –45’092
        28’662                                   –50’411         –50’411                     –39’148
       –56’567     –115’886         221          291’659         175’994                    317’717



       –56’567     –115’886         221          291’659         175’994                    317’717


                                                  45’669           45’669                      45’669


                      19’573                                       19’573                      19’573
                     –26’968                                      –26’968                    –26’968
                                   3’073                            3’073                       3’073
                                   –474                              –474                        –474
                      –7’395       2’599                           –4’796                      –4’796
                      –7’395      2’599           45’669          40’873                      40’873


         –4’817                                                                                -4’817
         20’716                                                                                 8’804
           452                                      –258             -258                           –
                                                    3’206           3’206                          –4
                                                    3’709           3’709                       3’709
                                                 –46’293          –46’293                    –46’293
        16’351                                   –39’636         –39’636                     –38’601
       –40’216     –123’281       2’820          297’692         177’231                    319’989
102   Nobel Biocare Annual Report 2010 — Financial reporting




      Consolidated
      cash flow statement.

      in EUR ’000                                                                                               Note                      2010        2009


      Profit before tax                                                                                                                100’397     137’257
      Adjusted for:
         Depreciation, amortization and impairment losses                                                                                29’583     27’757
         Net financial result                                                                                       6                   –15’488     –8’664
         Share-based payment expenses                                                                              18                     3’895      6’602
         Other non-cash expenses                                                                                                          4’228      2’262

      Changes in working capital and provisions:
        Decrease in trade and other current receivables                                                                                  15’752      8’875
         Decrease in inventories                                                                                                          1’176     17’267
         Decrease in trade and other current liabilities                                                                                 –4’461     –8’713
         Increase in provisions, accrued expenses, and deferred income                                                                    4’476      8’716
      Income taxes paid                                                                                                                 –42’439    –13’513
      Net cash from operating activities                                                                                                97’119     177’846
      Acquisition of subsidiary, net of cash acquired                                                                                          –   –22’891
      Purchases of property, plant and equipment                                                                                        –23’334    –18’283
      Purchases of intangible assets                                                                                                     –3’630     –2’499
      Purchases of marketable securities                                                                                                –36’936          –
      Proceeds from sale of marketable securities                                                                                        36’882        631
      Interest received                                                                                                                   1’106      1’566
      Other investing and hedging activities                                                                                              5’408     –3’868
      Net cash used in investing activities                                                                                            –20’504     –45’344
      Acquisition of treasury shares                                                                              16                     –4’817     –6’456
      Proceeds from sale of treasury shares                                                                       16                           –     5’630
      Repayment of short-term borrowings (interest-bearing liabilities)                                                                  –1’429    –25’004
      Repayment of long-term borrowings (interest-bearing liabilities)                                            22                    –35’433    –11’966
      Disposal of derivative hedging instrument                                                                                               –     37’362
      Interest paid                                                                                                                      –7’180     –8’464
      Dividends paid                                                                                              16                    –46’293    –45’092
      Net cash used in financing activities                                                                                            –95’152     –53’990
      (Decrease)/increase in cash and cash equivalents                                                                                  –18’537     78’512
      Cash and cash equivalents as of 1 January, including bank overdraft                                                              240’737     163’373
      Effect of exchange rate differences on cash held                                                                                   17’319     –1’148
      Cash and cash equivalents as of 31 December, including bank overdraft 1                                      15                  239’519     240’737

      1 Cash and cash equivalents including bank overdraft of EUR 0.3 million as of 31 December 2010, and EUR 0.9 million as of 31 December 2009
                                                                                                                                           Notes       103




Notes to the consolidated
financial statements.
General information                                                                                                                                1

Nobel Biocare Holding AG (the Company) is a limited liability        portfolio covers dental implants, including the key brands
company incorporated and domiciled in Switzerland. The               NobelActive™, Brånemark System® and NobelReplace™,
consolidated financial statements of Nobel Biocare for the           individualized prosthetics and equipment (NobelProcera™),
year ended 31 December 2010 comprise the Company and                 guided surgery solutions and biomaterials.
its subsidiaries (the Group).
                                                                     The consolidated financial statements of Nobel Biocare Group
Nobel Biocare (NOBN, SIX Swiss Exchange) is a world leader           were authorized for issue by the Board of Directors of Nobel
in innovative restorative and esthetic dental solutions. As a        Biocare Holding AG on 16 February 2011. A resolution to
complete solutions provider, Nobel Biocare offers the most           approve the consolidated financial statements will be pro-
comprehensive range of solutions from tooth to root, for             posed at the Annual General Meeting on 30 March 2011.
single tooth to fully edentulous indications. The solutions

Significant accounting policies                                                                                                                    2

2.1. Basis of preparation                                            IFRS 3 (revised) – Business combinations (effective from 1 July 2009)
The consolidated financial statements are prepared in accor-         – The revised standard continues to apply the acquisition
dance with International Financial Reporting Standards (IFRSs)         method to business combinations, with some significant
and comply with Swiss law.                                             changes. For example, all payments to purchase a business
                                                                       are to be recorded at fair value at the acquisition date, with
The consolidated financial statements are presented in euro            contingent payments classified as debt subsequently remea-
(EUR), rounded to the nearest thousand. Although the parent            sured through the income statement. Transaction costs that
company is domiciled in Switzerland, the consolidated financial        the Group incurs in connection with a business combination,
statements are presented in EUR since the Group’s cash inflow          such as legal fees, due diligence fees, and other profes-
to a large extent is in EUR. The subsidiaries prepare their indi-      sional and consulting fees, are expensed as incurred.
vidual financial statements using the functional currency in the
respective country. The consolidated financial statements are        IAS 27 (revised) – Consolidated and separate financial statements
prepared on a historical cost basis except that derivative finan-    (effective from 1 July 2009)

cial instruments and financial assets classified as at fair value    – Under the revised standard, acquisitions of non-controlling
through profit or loss are stated at their fair value. Non-current     interests are accounted for as transactions with equity hold-
assets and disposal groups held for sale are stated at the low-        ers in their capacity as equity holders, and therefore, no
er of the carrying amount or fair value less costs to sell.            goodwill is recognized as a result of such transactions.

The accounting policies set out below have been applied con-         The International Accounting Standards Board (IASB) and the
sistently to all periods presented in these consolidated finan-      International Financial Reporting Interpretations Committee
cial statements.                                                     (IFRIC) have issued a number of new and amended standards
                                                                     and interpretations that are not yet effective for the financial
Certain comparative amounts have been reclassified to con-           period ended 31 December 2010. The impact of the following
form with the current year’s presentation (see note 4 – Oper-        new and amended standards and interpretations has not yet
ating segments and note 28 – Risks related to financial instru-      been systematically analyzed. However, management has
ments).                                                              conducted a preliminary assessment:

Effect of adopting new standards, amendments and interpretations
The following new and amended IFRSs were adopted effective           IAS 24 (revised) – Related party disclosures (effective 1 January 2011)

1 January 2010, with no impact on the Group’s consolidated           – The revised standard amends the definition of a related
financial statements:                                                  party and modifies certain related party disclosure require-
                                                                       ments for government-related entities. Applying the revised
                                                                       standard will lead to additional disclosures of transactions
104   Nobel Biocare Annual Report 2010 — Financial reporting




        between the subsidiaries of the Group. The Group will apply       losses is discontinued except to the extent that the Group has
        the revised standard from 1 January 2011.                         incurred obligations with respect to the associate.

      IFRS 9 – Financial instruments (effective from 1 January 2013)      Transactions eliminated on consolidation
      – The standard sets out new requirements for how financial          Intragroup balances and transactions, as well as any unreal-
        assets should be classified and measured. The basis of clas-      ized gains and losses or income and expenses arising from
        sification depends on the entity’s business model and the         intragroup transactions, are eliminated in preparing the con-
        contractual cash flow characteristics of the financial asset.     solidated financial statements.
        The two measurement categories for financial assets are
        amortized cost and fair value. The Group is currently as-         2.3. Foreign currency
        sessing the full impact of IFRS 9. However, initial indications   Foreign currency transactions
        are that the new standard will not have a significant impact      Transactions in foreign currencies are translated at the foreign
        on the Group’s consolidated financial statements.                 exchange rate at the date of the transaction. Monetary assets
                                                                          and liabilities in foreign currencies are translated at the foreign
      Other standards and amendments to existing standards have           exchange rate at the balance sheet date. Non-monetary assets
      been published and are mandatory for the Group’s accounting         and liabilities in foreign currencies that are stated at historical
      periods beginning on or after 1 January 2011, but the Group         cost are translated at the foreign exchange rate at the date of
      has not early-adopted them, nor is a significant impact on the      the transaction. Non-monetary assets and liabilities in foreign
      Group’s accounting policies expected.                               currencies that are stated at fair value are translated at the
                                                                          foreign exchange rate at the date the values were deter-
      2.2. Basis of consolidation                                         mined.
      Subsidiaries
      Subsidiaries are companies controlled by Nobel Biocare Hold-        All foreign exchange differences arising on translation, includ-
      ing AG. Control exists when the Company has the power,              ing the result of hedging transactions related to operations,
      directly or indirectly, to govern the financial and operating       are recognized in the income statement as foreign exchange
      policies of a company so as to obtain benefits from its ac-         gains or losses.
      tivities. Subsidiaries are included in the consolidated financial
      statements from the date the control effectively commences          Financial statements of foreign operations
      until the date control ceases.                                      Assets and liabilities of foreign operations, including goodwill
                                                                          and fair value adjustments arising on consolidation, are trans-
      According to the full consolidation method, all assets and          lated at the foreign exchange rates at the balance sheet date.
      liabilities as well as income and expenses of the subsidiaries      Revenues and expenses of foreign operations are translated
      are included in the consolidated financial statements. The          at rates approximating the foreign exchange rates at the dates
      share of non-controlling interests in the net assets and re-        of the transactions. Foreign exchange differences arising on
      sults is presented separately as non-controlling interests in       translation of foreign operations are recognized directly in
      the consolidated balance sheet and income statement, re-            other comprehensive income and presented in equity as a
      spectively.                                                         translation reserve.

      Associates                                                          If a loan is made to a foreign operation, and the loan in sub-
      Associates are companies where the Group is able to exercise        stance forms part of the Group’s investment in the foreign
      significant influence, but not control, over the financial and      operation, translation differences arising on the loan are also
      operating policies.                                                 recognized directly in other comprehensive income. On dis-
                                                                          posal of a foreign operation, cumulative translation differences
      The consolidated financial statements include the Group’s share     recognized in other comprehensive income are reclassified to
      of the total recognized gains and losses of associates on an        the income statement as part of the gain or loss on disposal.
      equity accounting basis, from the date significant influence
      commences until the date it ceases. When the Group’s share          2.4. Segment reporting
      of losses exceeds the carrying amount of the associate, the         Operating segments are determined based on internal report-
      carrying amount is reduced to zero and recognition of further       ing provided to the chief operating decision maker. The chief
                                                                                                                                Notes   105




operating decision maker is responsible for making strategic       Current tax is the expected tax payable on the taxable income
decisions and for allocating resources to the segments. The        for the year, using tax rates enacted or substantially enacted
Board of Directors has been identified as the chief operating      at the balance sheet date, and any adjustment to taxes payable
decision maker of the Group.                                       with respect to previous years.

2.5. Revenue recognition                                           Deferred tax is recognized, based on the balance sheet liabil-
Revenue is reported net of sales taxes, discounts, rebates and     ity method, on temporary differences between the carrying
return of goods. Revenue is recognized when the amount of          amounts of assets and liabilities for financial reporting pur-
revenue can be reliably measured, it is probable that future       poses and the amounts used for taxation purposes. No tem-
economic benefits will flow to the Group, the associated costs     porary differences are recognized on the initial recognition of
can be estimated reliably and when other specific criteria have    goodwill, on the initial recognition of assets or liabilities that
been met as described below.                                       affect neither the accounting nor taxable profit, or on differ-
                                                                   ences relating to investments in subsidiaries to the extent that
Revenue from the sale of goods is recognized in the income         they will probably not reverse in the foreseeable future. The
statement when the significant risks and rewards of owner-         amount of deferred tax recognized is based on the expected
ship have been transferred to the buyer, which is usually on       manner of realization or settlement of the carrying amount of
delivery to third parties.                                         assets and liabilities, using tax rates enacted or substantially
                                                                   enacted at the balance sheet date.
Revenue from training and education is generally recognized
in the period the services are provided.                           A deferred tax asset is recognized only to the extent that it is
                                                                   probable that future taxable profits will be available against
2.6. Financial income and finance cost                             which the asset can be utilized. Deferred tax assets are re-
Financial income comprises interest receivable on funds in-        duced to the extent that it is no longer probable that the re-
vested, foreign exchange gains and losses, dividends, gains        lated tax benefit will be realized.
on disposal of financial investments and positive changes in
fair value of financial instruments held for trading and deriva-   2.8. Property, plant and equipment
tives that are recognized in the income statement. Interest        Property, plant and equipment are stated at cost less accumu-
income is recognized in the income statement as it accrues,        lated depreciation and impairment losses. Where an item of
using the effective interest method. Dividends are recognized      property, plant and equipment comprises major components
in the income statement on the date the entity’s right to re-      having different useful lives, the components are accounted
ceive payments is established.                                     for as separate items of property, plant and equipment.

Finance cost comprises interest payable on loans calculated        Depreciation is charged to the income statement on a straight-
using the effective interest method, interest expenses derived     line basis over the estimated useful lives of property, plant
from net present value calculations on the deferred purchase       and equipment. Land is not depreciated. The estimated use-
price related to the acquisition of Nobel Biocare Procera AB,      ful lives are as follows:
losses on disposal of financial investments and negative
changes in fair value of financial instruments held for trading    in years
and derivatives that are recognized in the income state-
                                                                   Buildings & leasehold improvements                             25
ment.
                                                                   Machinery                                                      5–8
                                                                   Equipment                                                      3–5
2.7. Income tax
Income tax on the profit or loss for the year comprises current
and deferred tax. Income tax is recognized in the income
statement except to the extent that it relates to items recog-
nized directly in other comprehensive income or equity, in
which case it is recognized in other comprehensive income
or equity, respectively.
106   Nobel Biocare Annual Report 2010 — Financial reporting




      2.9. Intangible assets                                                   Patents and licenses
      Goodwill                                                                 Patents and licenses (intellectual property rights) acquired by
      All business combinations are accounted for by applying the ac-          the Group from third parties or in a business combination are
      quisition method. Goodwill arising on acquisition of a subsidiary        stated at cost less accumulated amortization and impairment
      or associate represents the excess of the cost of the acquisition        losses. Amortization is charged to the income statement on a
      over the fair value of the net identifiable assets acquired. With        straight-line basis over the estimated useful life, normally not
      respect to associates, the carrying amount of goodwill is included       exceeding five years.
      in the carrying amount of the investment in the associate.
                                                                               Other intangible assets
      Goodwill is stated at cost less accumulated impairment losses.           Other intangible assets comprise expenditures for distribution
      Goodwill is allocated to cash-generating units and is tested for         networks, client base, brands and non-competition agreements
      impairment at least once a year. The allocation is made to those         acquired by the Group from third parties or in a business com-
      cash-generating units or groups of cash-generating units that are        bination.
      expected to benefit from the business combination from which
      the goodwill arose.                                                      Other intangible assets are stated at cost less accumulated
                                                                               amortization and impairment losses. Amortization of other in-
      Negative goodwill arising on acquisition is recognized directly in       tangible assets is charged to the income statement on a
      the income statement.                                                    straight-line basis over the estimated useful life, normally not
                                                                               exceeding five years.
      Intangible assets acquired in business combinations
      Intangible assets acquired in a business combination (including          Computer programs
      patents, licenses and in-process research and development) are           Computer programs comprise expenditures for computer soft-
      recognized separately from goodwill if they are subject to con-          ware acquired by the Group from third parties or in a business
      tractual or legal rights or are separately transferable and their fair   combination.
      value can be reliably estimated.
                                                                               Computer programs are stated at cost less accumulated amor-
      Research and development                                                 tization and impairment losses. Amortization of computer pro-
      Expenditures on research and development activities include the          grams is charged to the income statement on a straight-line
      cost of materials, direct labor and an appropriate proportion of         basis over the estimated useful life, normally not exceeding
      overhead relating to research and development.                           five years.

      Expenditures on research activities are expensed as incurred.            2.10. Impairment
      Expenditures on development activities are capitalized if the prod-      The carrying amounts of the Group’s assets, other than in-
      uct or process is technically and commercially feasible, future          ventories and deferred tax assets, are reviewed at each bal-
      economic benefits are probable, the costs can be measured re-            ance sheet date to determine whether there is any indication
      liably, and the Group intends to and has sufficient resources to         of impairment. If any such indication exists, the asset’s recov-
      complete development and to use or sell the asset. Capitalized           erable amount is estimated. Goodwill, intangibles with in-
      development expenditure is stated at cost less accumulated               definite useful life and capitalized development expenditures
      amortization and impairment losses. Amortization is charged to           are tested for impairment at least once a year.
      the income statement on a straight-line basis over the estimated
      useful life of the development, normally not exceeding five years,       An impairment loss is recognized in the income statement
      and starts when the developed assets are available for use. Cap-         whenever the carrying amount of an asset or its cash-gener-
      italized development expenditures are tested for impairment              ating unit exceeds its recoverable amount. The recoverable
      every year.                                                              amount of an asset is the greater of the fair value less costs
                                                                               to sell and value in use.
      Other development expenditure is expensed as incurred.
                                                                               An impairment loss is reversed if there is an indication that
                                                                               the impairment loss may no longer exist, and there has been
                                                                                                                                   Notes   107




a change in the estimates used to determine the recoverable           A discontinued operation is a component of the Group’s busi-
amount. However, an impairment loss of goodwill is not                ness that represents a separate major line of business or geo-
reversed.                                                             graphical area of operations, or is a subsidiary acquired ex-
                                                                      clusively with a view to resell. Classification as a discontinued
2.11. Leases                                                          operation occurs upon disposal or when the operation meets
Leases of property, plant and equipment where the Group has           the criteria to be classified as held for sale, if earlier.
substantially all the risks and rewards of ownership of the leased
asset are classified as finance leases. The Group has no mate-        2.15. Derivative financial instruments
rial finance lease contracts.                                         and hedging activities
                                                                      The Group uses derivative financial instruments to protect
Leases where the lessor effectively retains all the risks and         itself from fluctuations in currencies and variability in future
rewards of ownership are classified as operating leases. Pay-         cash flows. There are established policies and procedures for
ments made under operating leases (net of any incentives              risk assessment and approval, reporting and monitoring of
received from the lessor) are charged to the income statement         such instruments. They are not used for trading purposes.
on a straight-line basis over the period of the lease.
                                                                      Derivative financial instruments are initially recognized at fair
2.12. Inventories                                                     value. Subsequent to initial recognition, derivative financial
Inventories are stated at the lower of cost and fair value less       instruments also are stated at fair value. Any resultant gain
cost to sell. Fair value less cost to sell is the estimated selling   or loss on revaluation of derivative financial instruments that
price in the ordinary course of business, less estimated selling      do not qualify for hedge accounting is recognized immedi-
costs. The cost of inventories consisting of material, labor          ately in the income statement within financial income and
and production costs is calculated according to the first-in,         finance cost.
first-out principle. The cost includes expenditures incurred in
manufacturing or acquiring the inventories and bringing them          All derivatives with a positive fair value are included in
to their existing location and condition. Production costs in-        “Financial investments and derivatives” while all derivatives
clude an appropriate share of overhead based on normal op-            with a negative fair value are included in “Other liabilities and
erating capacity.                                                     derivatives”. The fair value of a derivative financial instrument
                                                                      is classified as a non-current asset or liability when the remain-
2.13. Loans, trade and other receivables                              ing maturity period is more than 12 months and as a current
Loans, trade and other receivables are recognized initially at        asset or liability when the remaining maturity period is 12
fair value and subsequently measured at amortized cost, less          months or less.
provision for impairment. A provision for impairment is rec-
ognized on an individual basis or on a portfolio basis where          Cash flow hedges
there is objective evidence that impairment losses have been          The Group applies hedge accounting for material future cash
incurred.                                                             flows in all foreign currencies and for hedges of particular
                                                                      risks associated with a recognized asset or liability. Where a
2.14. Non-current assets held for sale and                            derivative financial instrument is designated as a highly prob-
discontinued operations                                               able forecasted transaction, the effective portion of any gain
Non-current assets (or disposal groups) are classified as held        or loss on the derivative financial instrument is recognized
for sale if their carrying amount will be recovered princi-           directly in the statement of comprehensive income and pre-
pally through a sale transaction rather than from continuing          sented in the hedging reserve in equity. The gain or loss relat-
use. The asset (or disposal group) must be available for im-          ing to the ineffective portion is recognized immediately in the
mediate sale in its present condition, and the sale must be           income statement within financial income or finance cost.
highly probable. On initial classification as held for sale, non-
current assets and disposal groups are recognized at the              The cumulative gain or loss is removed from equity and
lower of carrying amount and fair value less costs to sell.           recognized in the income statement at the same time as the
Impairment losses on initial classification as held for sale are      hedged transaction. The ineffective part of any gain or loss
included in the income statement.                                     is recognized in the income statement immediately.
108   Nobel Biocare Annual Report 2010 — Financial reporting




      When a hedging instrument is sold, terminated or exercised,       cial papers with a term of 90 days or less from the date of
      but the hedged transaction still is expected to occur, the        acquisition.
      cumulative gain or loss at that point remains in equity and       Bank overdrafts that are repayable on demand and form an
      is recognized in accordance with the above policy when the        integral part of the Group’s cash management are included
      transaction occurs. If the hedged transaction is no longer        as a component of cash and cash equivalents for the purpose
      probable, the cumulative unrealized gain or loss recognized       of the cash flow statement.
      in equity is recognized immediately in the income statement
      within financial income or finance cost.                          2.18. Share capital
                                                                        Ordinary shares with discretionary dividends are classified as
      Hedge of monetary assets and liabilities                          equity. Dividends on ordinary shares are recognized in equity
      Where a derivative financial instrument is used to economi-       in the period in which they are declared.
      cally hedge the foreign exchange exposure of a recognized
      monetary asset or liability, hedge accounting is generally not    2.19. Own equity instruments
      applied. Any gain or loss on the hedging instrument is rec-       When the Company or its subsidiaries purchase the Com-
      ognized as financial income or finance cost in the income         pany’s own shares, the consideration paid, including any at-
      statement. Related foreign exchange gains and losses are          tributable transaction cost, is presented as treasury shares
      also recognized as financial income or finance cost as in-        and deducted from equity. Where such shares are subse-
      curred.                                                           quently sold or reissued, any resulting gain or loss is included
                                                                        in share premium within equity.
      2.16. Financial investments
      Financial investments comprise fixed-term deposits with a         2.20. Financial liabilities
      term of more than 90 days from the date of acquisition, invest-   Borrowings
      ments in debt securities and equity-linked notes.                 Borrowings are initially recognized at fair value, which is the
                                                                        proceeds received, less attributable transaction costs. Sub-
      Fixed-term deposits are initially measured at fair value less     sequent to initial recognition, they are stated at amortized
      transaction costs, and subsequently at amortized cost less        cost with any difference between cost and redemption value
      any impairment losses.                                            being recognized in the income statement over the period of
                                                                        the debt instrument using the effective interest method. Any
      Investments in debt securities are classified as available-for-   discount between the net proceeds received and the principal
      sale financial assets. Subsequent to initial recognition, they    value due on redemption is amortized over the duration of
      are measured at fair value and changes therein, other than        the debt instrument and is recognized as part of finance cost
      impairment losses and foreign exchange gains and losses on        using the effective interest method.
      available-for-sale monetary items, are recognized in the state-
      ment of comprehensive income and presented within equity          Convertible bond
      in other retained earnings. When an investment is derecog-        Compound financial instruments issued by the Group com-
      nized, the cumulative gain or loss in the statement of com-       prise convertible notes that can be converted into share
      prehensive income is transferred to the income statement          capital. The liability component of a compound financial in-
      within financial income or finance cost.                          strument is recognized initially at the fair value of a similar
                                                                        liability that does not have an equity conversion option. The
      Investments in equity-linked notes are classified as held for     equity component is recognized initially as the difference be-
      trading if acquired principally with the purpose of selling in    tween the fair value of the compound financial instrument as
      the short-term. They are initially and subsequently measured      a whole and the fair value of the liability component. Any
      at fair value. Gains or losses arising from the changes in fair   directly attributable transaction costs are allocated to the li-
      value are presented in the income statement within financial      ability and equity components in proportion to their initial
      income or finance cost.                                           carrying amounts. Subsequent to initial recognition, the liabil-
                                                                        ity component of a compound financial instrument is mea-
      2.17. Cash and cash equivalents                                   sured at amortized cost using the effective interest method.
      Cash includes cash on hand, in postal accounts and at banks.      The equity component of a compound financial instrument is
      Cash equivalents comprise fixed-term deposits and commer-         not revalued subsequent to initial recognition.
                                                                                                                                 Notes   109




Trade and other payables                                           life of the employees participating in the plan. Otherwise, the
Trade and other payables are stated at amortized cost.             actuarial gain or loss is not recognized.

2.21. Employee benefits                                            Where the calculation results in a benefit to the Group, the
The Group operates or participates in both defined contribu-       recognized asset is limited to the total of any cumulative un-
tion and defined benefit plans throughout the world according      recognized net actuarial losses and past service cost and the
to national laws and regulations of the countries in which it      present value of any future refunds from the plan or reductions
operates.                                                          in future contributions to the plan. In order to calculate the
                                                                   present value of economic benefits, consideration is given to
Defined contribution plans                                         any minimum funding requirements that apply to any plan in
Except for Sweden, which has a defined benefit plan that is        the Group. An economic benefit is available to the Group if it
treated like a defined contribution plan (see note 21), the        is realizable during the life of the plan or on settlement of the
majority of the Group’s pension commitments are defined            plan liabilities.
contribution plans in which regular payments are made to
independent authorities or bodies that administer pension          2.22. Share-based payment transactions
plans.                                                             The Group operates several equity-settled share-based pay-
                                                                   ment programs: a performance share unit plan (PSUP), a share
Contributions to defined contribution plans are recognized         plan and an employee stock option program. The fair value
as an expense in the income statement as incurred.                 of the employee services received in exchange for the grant
                                                                   of the awards is recognized as a personnel expense with a
Defined benefit plans                                              corresponding increase in equity. The total amount expensed
Where the Group has personnel pension funds with defined           is recognized over the vesting period, which is the period over
benefit components, the net obligation is determined in ac-        which all of the specified vesting conditions are to be satis-
cordance with the projected unit credit method. The amount         fied.
of future benefit that employees have earned in return for their
service in the current and prior periods is estimated. This        The total amount to be expensed is determined by reference
benefit is discounted to determine the present value, and the      to the grant date fair value of the awards, excluding the impact
fair value of any plan assets is deducted. The discount rate is    of any non-market performance conditions (e.g. achievement
the yield at balance sheet date on high-quality corporate          of profitability and sales growth targets or transfer restrictions)
bonds that are denominated in the currency in which the            and service conditions. Non-market performance conditions
benefits will be paid, and that have maturity dates approximat-    are included in assumptions about the number of options that
ing the terms of the related pension liability. The calculation    are expected to vest. The grant date fair value of the awards
is performed by a qualified actuary on an annual basis. The        is adjusted to reflect non-vesting conditions.
net obligation is calculated separately for each defined ben-
efit plan.                                                         At each balance sheet date, the Group revises its estimates of
                                                                   the number of awards that are expected to vest based on the
When the benefits of a plan are improved, the portion of the       non-market performance conditions. It recognizes the impact
increased benefit relating to past service by employees is         of the revision to original estimates, if any, in the income state-
recognized as an expense in the income statement on a              ment, with a corresponding adjustment to equity.
straight-line basis over the average period until the benefits
become vested. To the extent that the benefits vest immedi-        The Group accrues for the expected cost of social charges in
ately, the expense is recognized immediately in the income         connection with the exercise of the options and with the al-
statement.                                                         lotment of shares under the PSUP. The dilution effect of the
                                                                   share-based awards is considered when calculating diluted
Actuarial gains and losses arising from subsequent calcula-        earnings per share.
tions are recognized to the extent that they exceed ten percent
of the higher of the defined benefit obligation and the fair
value of the plan assets. The amount exceeding this corridor
is amortized over the expected average remaining working
110       Nobel Biocare Annual Report 2010 — Financial reporting




          2.23. Provisions                                                      Disputes and litigation
          A provision is recognized in the balance sheet when the Group         Provisions for tax disputes and litigation regarding patents,
          has a legal or constructive obligation as a result of a past          trademarks and product responsibilities are only recognized
          event, and it is probable that an outflow of economic benefits        when legal advisors believe that it is probable that the Group
          will be required to settle the obligation.                            will have to pay to settle the disputes. The costs provided for
                                                                                correspond to the estimated amount required to settle the
          The amounts recognized as provisions represent manage-                dispute or litigation.
          ment‘s best estimate of the expenditures that will be required
          to settle the obligation as of the balance sheet date. If the         2.24. Contingent liabilities
          effect is material, provisions are determined by discounting          Contingent liabilities are possible obligations arising from past
          the expected future cash flows at a pre-tax rate that reflects        events whose existence will be confirmed only by the occur-
          current market assessments of the time value of money and,            rence or nonoccurrence of one or more uncertain future
          where appropriate, the risks specific to the liability. Provisions    events not wholly within the control of the Group. They may
          are reviewed at each balance sheet date and adjusted to re-           also be present obligations that are unrecognized because
          flect the current best estimate.                                      the future outflow of resources is not probable or the amount
                                                                                cannot be reasonably determined. Contingent liabilities are
          Returns and warranties                                                not recognized in the balance sheet but disclosed in the notes
          Provisions for returns and warranties are recognized when the         to the consolidated financial statements.
          underlying products are sold. The provisions are based on his-
          torical warranty data and historical return rates and a weighting
          of all possible outcomes against their associated probabilities.



      3   Critical accounting estimates and judgments

          The preparation of financial statements in conformity with IFRS       Income taxes
          requires management to make estimates, judgments and as-              The Group is subject to taxes in numerous jurisdictions. Sig-
          sumptions that affect the application of policies and reported        nificant judgment is required in determining a worldwide pro-
          amounts of assets and liabilities, income and expenses, as            vision for taxes. There are many transactions and calculations
          well as the disclosure of contingent liabilities. These judg-         during the ordinary course of business for which the ultimate
          ments, estimates and assumptions are based on historical              tax determination is uncertain. The Group recognizes liabilities
          experience and various other factors that are believed to be          for anticipated tax audit issues based on estimates of wheth-
          reasonable under the circumstances. Actual results may differ         er additional taxes will be due. Where the final tax outcome
          from these estimates. The estimates and underlying assump-            of these matters is different from the amounts that were ini-
          tions are reviewed on an ongoing basis and revised if neces-          tially recorded, such differences will impact the income tax
          sary. Revisions are recognized in the period in which the esti-       and deferred tax provisions in the period in which such deter-
          mate is revised if the revision affects only that period, or in the   mination is made. Management believes that the estimates
          period of the revision and future periods if the revision affects     are reasonable, and that the recognized liabilities for income
          both current and future periods. Critical judgments made by           tax-related uncertainties are adequate (notes 7 and 19).
          management in the application of IFRS that might have a sig-
          nificant effect on the consolidated financial statements and          Share-based payments
          key sources of estimation uncertainties are discussed below.          The Group operates two equity-settled share-based payment
                                                                                programs: a performance share unit plan (PSUP) and a share
          Impairment of goodwill                                                plan. At each balance sheet date, the Group revises its esti-
          Goodwill is tested annually for impairment in accordance with         mates for the PSUP and the number of awards that are ex-
          the accounting policy described in note 2.10. The recoverable         pected to vest based on the related service and non-market
          amounts of cash generating units have been determined                 vesting conditions. It recognizes the impact of the revision to
          based on value-in-use calculations. These calculations require        original estimates, if any, in the income statement, with a
          the use of estimates (note 9).                                        corresponding adjustment to equity (note 18).
                                                                                                                                                                  Notes        111




Provisions                                                                                 has to be applied to estimate the timing and amount of cash
Provisions are made, among other reasons, for returns, war-                                outflows. Depending on the outcome of the respective trans-
ranties, disputes and litigation. A provision is recognized in                             actions, actual payments may differ from these estimates.
the balance sheet when the Group has a legal or constructive
obligation as a result of a past event, and it is probable that
an outflow of economic benefits will be required to settle the
obligation. The nature of these costs is such that judgment



Operating segments                                                                                                                                                         4

Operating segments are determined based on the reports                                     to the sale of products are also allocated to the four geo-
reviewed by the Board of Directors that are used to make                                   graphic regions. The Board of Directors reviews and assesses
strategic decisions and to allocate resources to the seg-                                  the business (i.e. sales and business expenses) on this basis.
ments.
                                                                                           Revenue arises from two integrated product groups, Stan-
Operating segments are identified geographically as the busi-                              dardized products and Individualized products. These prod-
ness is managed on a global basis and is run in four geo-                                  ucts are sold in all operating segments, often with both Stan-
graphical areas. The business contribution is derived from                                 dardized and Individualized products forming part of a
sales, the cost of goods purchased from manufacturing sites                                combined offer as Nobel Biocare is a full-solution provider.
and expenses related to the sale of products in the respective
regions. Certain administrative expenses directly attributable


in EUR ’000                                                 Europe,            North America                   Asia/Pacific     Latin America/               Group total
                                                         Middle East                                                          Rest of the world
                                                          and Africa
                                                  2010          2009         2010          2009        2010           2009     2010       2009       2010          2009


External sales                                 248’330      259’952       193’695     193’254        125’584      114’587      8’974    13’648     576’583     581’441
Proportion of total revenue                        43%         45%            33%         33%           22%          20%         2%        2%        100%         100%
Business expenses                            –143’369      –131’769     –105’284       –95’472       –63’666      –57’633     –6’847   –10’443    –319’166    –295’317
Business contribution                         104’961      128’183        88’411       97’782        61’918       56’954      2’127     3’205     257’417      286’124

*Certain prior year figures are reclassified to reflect minor changes in the management structure.



Certain expenses, presented in the reconciliation, are not at-                             ments and eliminations made in preparing the financial state-
tributable to a particular segment and are reviewed as a whole                             ments. The business contribution also excludes the effects of
across the Group irrespective of geographic origin. Unallo-                                Group-wide equity-settled share-based expenses and depre-
cated business expenses include certain production costs                                   ciation, amortization and impairment expenses. The revenue
remaining with the manufacturing sites. Functional costs                                   from external customers reported to the Board of Directors
comprise headquarter and plant functions, which include                                    is measured in a manner consistent with that in the income
global marketing, symposia events, quality, logistics, research                            statement. There are no significant sales between the seg-
and development, Procera development and legal functions.                                  ments. No individual customer represents a significant por-
Also included are reconciling and other items, e.g., adjust-                               tion of the Group’s revenue.
112   Nobel Biocare Annual Report 2010 — Financial reporting




      Reconciliation
      in EUR ’000                                                                                       2010                  2009


      Business contribution                                                                           257’417              286’124
      Unallocated business expenses                                                                   –10’974              –17’896
      Functional costs                                                                               –128’048             –105’361
      Depreciation, amortization and impairment losses                                                –29’583              –27’757

      Share-based payment expenses                                                                     –3’895               –6’602

      Reconciling and other items                                                                          –8                  85

      Operating profit (EBIT)                                                                          84’909             128’593

      Net financial result                                                                             15’488                8’664
      Profit before tax                                                                               100’397             137’257



      Geographical information
      In presenting information on the basis of geographical areas, revenue is based on the geographical location of the customer.
      The allocation of assets is based on their geographical location.

      Revenue
      in EUR ’000                                                                                       2010                  2009


      United States                                                                                   159’971              162’321
      Japan                                                                                            85’336               76’422
      Switzerland                                                                                       6’449                6’482
      Other countries                                                                                 324’827              336’216

      Total                                                                                           576’583             581’441



      Non-current assets
      in EUR ’000                                                                                       2010                  2009


      United States                                                                                    94’973               82’354
      Israel                                                                                           70’552               60’908
      Sweden                                                                                           48’458               75’940
      Switzerland                                                                                      40’810                8’007

      Other countries                                                                                  58’828               55’999
      Total                                                                                           313’621             283’208
      Non-current receivables                                                                           3’974                4’269
      Deferred tax assets                                                                              26’817               12’544
      Total non-current assets                                                                        344’412             300’021
                                                                                                                      Notes       113




Personnel expenses                                                                                                            5
in EUR ’000                                                                   Note               2010                  2009


Wages and salaries                                                                             159’340             140’505
Social security costs                                                                           17’723               16’826
Defined contribution plan expenses                                             21                5’401                5’893
Defined benefit plan expenses                                                  21                5’017                1’566
Share-based payment expenses                                                   18                3’895                6’602
Total personnel expenses                                                                      191’376              171’392




At the end of 2010, Nobel Biocare employed 2’433 employees    The increase in employees and personnel expenses relates
worldwide, an increase of 191 employees from the previous     mainly to extensions in certain product lines in the areas of
year.                                                         manufacturing and other centralized functions related to the
                                                              extensions.

Personnel expenses are recognized in the following line items in the income statement:


in EUR ’000                                                                                      2010                  2009


Cost of goods sold                                                                              33’331               24’843
Selling expenses                                                                               105’077              103’852
Administrative expenses                                                                         38’928               31’403
Research and development expenses                                                               14’040               11’294
Total personnel expenses                                                                      191’376              171’392




Financial income and finance cost                                                                                             6
in EUR ’000                                                                                      2010                  2009


Interest income                                                                                  1’497                1’604
Net foreign exchange gains                                                                      31’655               26’814
Financial income                                                                               33’152               28’418
Interest expenses                                                                              –11’105              –16’178
Other financial expenses, net                                                                   –6’559               –3’576
Finance cost                                                                                  –17’664              –19’754
Net financial result                                                                           15’488                8’664
114       Nobel Biocare Annual Report 2010 — Financial reporting




          In 2010 and 2009, net foreign exchange gains primarily relate                               In 2010 and 2009, other financial expenses mainly comprise
          to the simplification of internal funding structures, which re-                             fees for the EUR 330 million syndicated banking facility in
          sulted in the reclassification of cumulative translation differ-                            place from 18 March 2009. On 22 November 2010, the Group
          ences to the income statement (before income tax expenses)                                  announced that the agreement was replaced and extended
          in the amount of EUR 29’984 k (2009: EUR 31’049 k), which                                   for five years to 2015. In conjunction with this replacement,
          had been previously recognized in other comprehensive in-                                   the remaining capitalized fees relating to the original agree-
          come as presented in equity. The remainder of net foreign                                   ment were recognized in the income statement in full, in favor
          exchange gains arises from operating in multiple currencies                                 of the new fee structure to be recognized in the income state-
          and also takes into account the gains and losses resulting                                  ment over the life of the amended contract. As of 31 Decem-
          from hedging such exposures.                                                                ber 2010, this facility remained undrawn. For additional infor-
                                                                                                      mation, refer to note 22.



      7   Income tax expense

          The following amounts are recognized in the income statement:

          in EUR ’000                                                                                                                     2010                      2009


          Income taxes relating to the current period, net , before internal business restructuring                                     –25’767                 –37’271
          Income taxes relating to internal business restructuring                                                                      –41’226                       –
          Income taxes relating to past periods, net                                                                                     –1’815                   2’622
          Current income tax expense                                                                                                   –68’808                 –34’649
          Deferred tax income due to temporary differences, before internal business restructuring                                        1’433                   3’653
          Deferred tax income relating to internal business restructuring                                                                11’410                       –
          Increase/(decrease) of recognition of tax loss carryforwards                                                                    1’237                    –426
          Deferred tax income                                                                                                           14’080                    3’227
          Total income tax expense in the income statement                                                                             –54’728                 –31’422



          Tax effects on other comprehensive income are as follows:

          in EUR ’000                                                                                                     2010                                      2009
                                                                                        Before tax            Tax    Net of tax   Before tax            Tax    Net of tax
                                                                                                        (expense)/                                (expense)/
                                                                                                           benefit                                   benefit
          Foreign currency translation differences                                          19’573               –      19’573        1’538               –       1’538
          Reclassification of foreign currency translation
          differences to income statement                                                  –29’984           3’016     –26’968      –31’049           4’986     –26’063
          Effective portion of changes in fair value of cash flow hedges                      3’424          –351        3’073        1’468           –158        1’310
          Net change in fair value of cash flow hedges
          reclassified to income statement                                                     –644           170         –474        9’013         –2’344        6’669
          Total                                                                             –7’631          2’835       –4’796      –19’030          2’484      –16’546
                                                                                                                                             Notes       115




The Group’s tax rate is calculated as follows:

in %                                                                                                                       2010               2009


Statutory income tax rate                                                                                                   7.8               7.8
Effect of higher tax rates in other jurisdictions                                                                          12.0              12.1
Non-deductible tax expenses                                                                                                 2.1               0.4
Current tax losses not recognized and recognition of tax loss carryforwards of prior years                                 –1.2               4.4

Tax rate changes and other effects                                                                                          2.3               0.1

Income tax rate before tax adjustment of prior years
and internal business restructuring                                                                                        23.0              24.8
Tax adjustments of prior years and reassessment of tax exposure                                                             1.8              –1.9
Effect of internal business restructuring                                                                                  29.7                 –
Total income tax rate                                                                                                      54.5              22.9



The increase of 31.6 percentage points in the income tax rate from 22.9 percent to 54.5 percent relates mainly to the effect
of internal business restructuring (29.7 percent). In conjunction with this internal business restructuring, intangible assets
were transferred between Group companies at fair market value.

The income tax rate for the current year excluding the effect of tax adjustments of prior years as well as internal business
restructuring was 23.0 percent (2009: 24.8 percent).

No tax assets resulting from recognized tax loss carryforwards were written off in 2010.



Property, plant and equipment                                                                                                                        8
in EUR ’000                                                                                  Land, buildings   Machinery   Equipment         Total
                                                                                               and leasehold
                                                                                              improvements
Cost
Balance as of 1 January 2009                                                                         16’976       80’592          46’877   144’445
Additions for the year                                                                                 6’699      11’642            178     18’519
Additions related to acquisitions                                                                      1’113       1’298            304      2’715
Disposals                                                                                              –270       –4’450          –2’727    –7’447
Effect of changes in exchange rates                                                                     270        1’974            959      3’203
Balance as of 31 December 2009                                                                       24’788       91’056      45’591       161’435


Accumulated depreciation
Balance as of 1 January 2009                                                                           6’642      32’508          34’120    73’270
Depreciation charge for the year                                                                       5’682       8’096           2’426    16’204
Impairment charge for the year                                                                          400          422             79        901
Disposals                                                                                              –240       –4’448          –2’438    –7’126
Effect of changes in exchange rates                                                                     185          980           1’188     2’353
Balance as of 31 December 2009                                                                       12’669       37’558      35’375        85’602


Carrying amount
As of 1 January 2009                                                                                 10’334       48’084          12’757    71’175
As of 31 December 2009                                                                               12’119       53’498          10’216    75’833
116   Nobel Biocare Annual Report 2010 — Financial reporting




      in EUR ’000                                                   Land, buildings     Machinery      Equipment            Total
                                                                      and leasehold
                                                                     improvements
      Cost
      Balance as of 1 January 2010                                          24’788         91’056              45’591     161’435
      Additions for the year                                                  5’880        13’161               4’217      23’258
      Disposals                                                               –147         –5’823              –6’261     –12’231
      Effect of changes in exchange rates                                     3’588        12’229               4’646      20’463
      Balance as of 31 December 2010                                        34’109        110’623          48’193        192’925


      Accumulated depreciation
      Balance as of 1 January 2010                                          12’669         37’558              35’375      85’602
      Depreciation charge for the year                                        3’068        10’470               5’146      18’684
      Disposals                                                               –145         –5’823              –6’138     –12'106
      Effect of changes in exchange rates                                     1’867         5'019               3’626      10'512
      Balance as of 31 December 2010                                        17’459         47’224          38’009        102’692


      Carrying amount
      As of 1 January 2010                                                  12’119         53’498              10’216      75’833
      As of 31 December 2010                                                16’650         63’399              10’184      90’233



      As of 31 December 2010, the fire insurance value amounted to EUR 247’598 k (2009: EUR 227’807 k).

      The depreciation charge related to property, plant and equipment is recognized in the following lines in the income state-
      ment:

      in EUR ’000                                                                                      2010                 2009


      Cost of goods sold                                                                              13’354              10’839
         of which: impairments                                                                             –                727
      Selling expenses                                                                                 3’486               4’099

         of which: impairments                                                                             –                174
      Administrative expenses                                                                          1’098               1’424

      Research and development expenses                                                                 746                 743
      Total depreciation charge                                                                      18’684              17’105



      As of 31 December 2010, the Group had capital commitments of EUR 4’776 k (2009: EUR 1’778 k).
                                                                                         Notes       117




Intangible assets                                                                                9
in EUR ’000                             Goodwill         Licenses,      Computer         Total
                                                          patents,      programs
                                                      development
                                                      cost & other
Cost
Balance as of 1 January 2009              144’951            42’919        21’362      209’232
Additions for the year                       163              2’185           782        3’130
Additions related to acquisitions           5’429            21’598            62       27’089
Disposals                                        –             –32           –572         –604
Effect of changes in exchange rates         1’580             1’417           567        3’564
Other effects                              –1’026                   –              –    –1’026
Balance as of 31 December 2009           151’097            68’087         22’201      241’385


Accumulated amortization
Balance as of 1 January 2009                                 13’244        10’057       23’301
Amortization charge for the year                              7’539          3’075      10’614
Impairment charge for the year                                      –          38           38
Disposals                                                      –32           –572         –604
Effect of changes in exchange rates                            153            508          661
Balance as of 31 December 2009                              20’904         13’106       34’010


Carrying amount
As of 1 January 2009                      144’951            29’675        11’305      185’931
As of 31 December 2009                    151’097            47’183          9’095     207’375




in EUR ’000                           Goodwill          Licenses,       Computer         Total
                                                         patents,       programs
                                                     development
                                                     cost & other
Cost
Balance as of 1 January 2010           151’097             68’087          22’201      241’385
Additions for the year                      19                390           3’380        3’789
Disposals                                    –             –1’085          –3’231       –4’316
Effect of changes in exchange rates     17’745              9’837           1’616       29’198
Other effects                           –1’399                  –               –       –1’399
Balance as of 31 December 2010        167’462             77’229          23’966       268’657


Accumulated amortization
Balance as of 1 January 2010                               20’904          13’106       34’010
Amortization charge for the year                            8’241           2’702       10’943
Reversal of impairment                                          –            –44           –44
Disposals                                                  –1’085          –3’231       –4’316
Effect of changes in exchange rates                         3’262           1’414        4’676
Balance as of 31 December 2010                            31’322          13’947        45’269


Carrying amount
As of 1 January 2010                   151’097             47’183           9’095      207’375
As of 31 December 2010                 167’462             45’907          10’019      223’388
118   Nobel Biocare Annual Report 2010 — Financial reporting




      The impairment reversal amounting to EUR 44 k was recognized in selling expenses within the income statement.

      The amortization charge related to intangible assets is recognized in the following line items in the income statement:

      in EUR ’000                                                                                           2010                   2009


      Cost of goods sold                                                                                    2’051                 2’433
      Selling expenses                                                                                      2’552                 2’307
        of which: impairments                                                                                 –44                   38
      Administrative expenses                                                                                452                  2’704
      Research and development expenses                                                                     5’844                 3’208
      Total amortization charge                                                                           10’899                10’652



      In 2010, the addition to goodwill of EUR 19 k relates to the       (previously Procera Sandvik AB) resulted in a reduction of
      finalization of the acquisition accounting of BioCad, which        EUR 1’399 k (2009: EUR 1’026 k) for the respective purchase
      was acquired in January 2009.                                      price provision (see note 20). The goodwill reduction is shown
                                                                         as "other effects".
      In 2009, the addition to goodwill of EUR 5’592 k relates to
      the acquisition of BioCad in January 2009 (EUR 5’429 k), to        Goodwill impairment tests
      the finalization of the acquisition accounting of Alpha-Bio Tec    Goodwill has been allocated to the Group’s cash-generating
      in 2008 (EUR 53 k), and to the contingent purchase price           units. The allocation is made to those cash-generating units
      adjustment on the acquisition of a minor business in Hun-          or groups of cash-generating units that are expected to ben-
      gary in 2007 (EUR 110 k).                                          efit from the business combination from which the goodwill
                                                                         arose. The following cash-generating units have carrying
      A new estimate of the contingent purchase price of the             amounts of goodwill:
      50 percent share in the Swedish Individualized business


      in EUR ’000                                                                                           2010                   2009


      Europe, Middle East and Africa                                                                       61’923                54’976
      North America                                                                                        77’856                71’664
      Asia/Pacific                                                                                         25’388                22’442
      Latin America/Rest of the world                                                                       2’295                 2’015
      Total goodwill as of 31 December                                                                    167’462               151’097



      The impairment test for goodwill is based on calculations of       term average growth rate for the industry. A pre-tax discount
      value in use. Cash flow projections based on actual operating      rate between 9.7 percent and 15.7 percent has been used in
      results and the business plan have been used as input in the       discounting the projected cash flows. The impairment test
      calculations, as well as forecasts included in industry reports.   comprises scenarios including higher pre-tax discount rates.
      Cash flows after 2013 are extrapolated using a 2.0 percent         In all scenarios the recoverable amount of the units exceeds
      growth rate. The growth rate is lower than the expected long-      its carrying amount.
                                                                                                                      Notes    119




The pre-tax discount rates used for the value in use calculations are as follows:

in %                                                                                              2010                 2009


Europe, Middle East and Africa                                                                     9.7                 11.1
North America                                                                                     11.5                 12.2
Asia/Pacific                                                                                      11.8                 12.2
Latin America/Rest of the world                                                                   15.7                 12.6




Categorization of financial assets                                                                                            10
in EUR ’000                                                                                       2010                 2009


Derivative instruments at fair value through profit or loss                                      9’277                3’378
Hedging instruments (cash flow hedges)                                                           2’902                 379
Total financial investments                                                                     12’179               3’757
Accrued income                                                                                      35                  34
Receivables (non-current)                                                                        3’974                4’269
Trade and other receivables (current)                                                          132’855              136’614
Cash and cash equivalents                                                                      239’816              241’617
Total loans and receivables                                                                    376’680             382’534
Total financial assets as of 31 December                                                       388’859             386’291




Financial investments comprise primarily foreign exchange forwards. For more information about derivative financial instru-
ments, refer to note 28.



Non-current receivables                                                                                                       11
in EUR ’000                                                                                       2010                 2009


Long-term receivables                                                                            1’696                2’588
Rent deposits                                                                                    2’278                1’681
Total non-current receivables as of 31 December                                                  3’974               4’269




Non-current receivables are carried at amortized cost.



Inventories                                                                                                                   12
in EUR ’000                                                                                      2010                  2009


Raw materials and consumables                                                                    5’092                4’675
Work in progress                                                                                 2’228                1’493
Finished products and goods for resale                                                          16’081               14’317
Total inventories as of 31 December                                                             23’401              20’485
120    Nobel Biocare Annual Report 2010 — Financial reporting




       Inventories have increased by EUR 2’916 k compared with                The amount of inventories recognized as an expense during
       2009. Assuming constant exchange rates inventories would               the year was EUR 103’804 k (2009: EUR 88’246 k).
       however have decreased by EUR 1’179 k.
                                                                              Obsolescence
       Inventories in the amount of EUR 168 k (2009: EUR 370 k)               The recoverability of all inventory items is regularly tested, and
       were carried at their fair values less cost to sell in relation to     provisions are made for obsolete or slow-moving items. The
       the assortment reduction and phase-out program 2008.                   cost for obsolescence is included in cost of goods sold and
                                                                              amounted to EUR 384 k (2009: EUR 3’888 k).




  13   Trade and other receivables

       in EUR ’000                                                                                                  2010                   2009


       Trade receivables due from third parties                                                                   141’777               144’654
       Allowance for bad debt                                                                                     –19’248               –15’875
       Trade receivables                                                                                         122’529               128’779
       Non-trade receivables                                                                                       10’326                 7’835
       Total current receivables as of 31 December                                                               132’855               136’614


       Trade receivables by currency in %                                                                           2010                   2009
       Euro                                                                                                           35                     37
       US dollar                                                                                                      20                     21
       Japanese yen                                                                                                   18                     12
       Other currencies                                                                                               27                     30
       Total as of 31 December                                                                                       100                   100


       Reconciliation of changes in allowance for bad debts                                                         2010                   2009
       Balance as of 1 January                                                                                    –15’875                –8’078
       Additions                                                                                                  –10’026               –12’394
       Reversals                                                                                                    5’077                 3’913
       Write-offs                                                                                                   3’447                 1’513
       Effect of changes in exchange rates                                                                         –1’871                  –829
       Balance as of 31 December                                                                                 –19’248               –15’875




       Ageing of trade receivables
       in EUR ’000                                                    2010                    2010                   2009                  2009
                                                                     Gross               Allowance                  Gross             Allowance
       Not past due                                                  79’310                   –171                  83’994                 –425
       Past due 0 – 30 days                                          12’978                       –                 14’303                 –129
       Past due 31 – 90 days                                         15’246                   –438                  15’381                 –103
       Past due 91 – 180 days                                        10’814                  –1’031                 10’792                 –783
       Past due 181 – 360 days                                        8’196                  –3’205                  9’280               –3’869
       Past due > 360 days                                           15’233                 –14’403                 10’904              –10’566
       Balance as of 31 December                                    141’777                –19'248                144’654               –15’875
                                                                                                                     Notes    121




As of 31 December 2010, terms for receivables in the amount of EUR 2’942 k (2009: EUR 0 k) were renegotiated. The increase
in the allowance for trade receivables more than 360 days past due partly related to the exposure of a single customer in
Europe with whom specific restructuring discussions were initiated in 2010.

Total current receivables have decreased by EUR 3’759 k compared with 2009. Assuming constant exchange rates they would
however have decreased by EUR 14’648 k.

The Group has established an allowance for impairment that represents its estimate of incurred losses in respect of trade
receivables. The allowance is determined based on historical data of payment statistics and regional circumstances.



Prepaid expenses and accrued income                                                                                          14
in EUR ’000                                                                                      2010                 2009


Accrued income                                                                                     35                  34
Selling expenses                                                                                  437                 541
Rent, leases and insurance expenses                                                              2’644               2’453
Marketing expenses                                                                               4’015               4’461
Royalty and R&D expenses                                                                           65                  94
Other items                                                                                      7’469               8’073
Total prepaid expenses and accrued income as of 31 December                                    14’665              15’656


Marketing expenses include prepayments to universities of EUR 2’936 k (2009: EUR 2’883 k), which are related to services
for future periods (see note 26). Other items mainly include prepayments for externally produced components, IT and other
services, as well as prepayment of fees in relation to the syndicated bank facility.



Cash and cash equivalents                                                                                                    15
in EUR ’000                                                                                      2010                 2009


Cash                                                                                           238’318             241’381
Fixed-term deposits and commercial papers < three months                                         1’498                236
Total cash and cash equivalents                                                               239’816             241’617
Bank overdraft                                                                                   –297                –880
Cash and cash equivalents, net of overdraft, as of 31 December                                239’519             240’737



in %                                                                                             2010                 2009


Euro                                                                                               51                  55
Swiss franc                                                                                         3                  18
US dollar                                                                                           7                   6
Swedish krona                                                                                      25                  13
Japanese yen                                                                                        4                   4
Other currencies                                                                                   10                   4
Total as of 31 December                                                                           100                 100



As of 31 December 2010, the Group held restricted cash amounting to EUR 11’975 k (2009: 9’629 k).
122    Nobel Biocare Annual Report 2010 — Financial reporting




  16   Equity

       Share capital
       in EUR ’000                                                                                             2010                       2009


       Issued as of 1 January – fully paid                                                                    31’861                   32’002
       Share capital reduction                                                                                     –                     –141
       Issued as of 31 December – fully paid                                                                  31’861                  31’861




       The share capital of Nobel Biocare Holding AG is held in Swiss    by issuing up to 25 million fully paid-up registered shares with
       franc (CHF). The number of issued shares by Nobel Biocare         a nominal value of CHF 0.40. Alternatively, the share capital
       Holding AG on 31 December 2010 totaled 123’784’530 (2009:         may be increased by an amount of up to CHF 10 million by
       123’784’530) with a par value of CHF 0.40 per share, fully        issuing up to 25 million fully paid-up registered shares with
       paid up.                                                          a nominal value of CHF 0.40 following the exercise of conver-
                                                                         sion and/or option rights which are granted in connection
       The share capital may be increased by issuing no more than        with the issuance of bonds or similar debt instruments by the
       247’620 shares (2009: 247’620), each with a par value of          Company or one of its Group companies in capital markets
       CHF 0.40, to be fully paid up, equaling an amount of no more      or in connection with a transaction.
       than CHF 99’048 (2009: CHF 99’048) by virtue of the exercise
       of options granted to employees, Directors and officers of the    The holders of ordinary shares are entitled to receive dividends
       Group.                                                            as declared from time to time and are entitled to one vote per
                                                                         share at meetings of the Company. All shares rank equally
       The Board of Directors is authorized to increase the share        with regard to the Company‘s residual assets.
       capital until 6 April 2011 by an amount of up to CHF 10 million



       Treasury shares
       The table below summarizes the activities in treasury shares.

       Number of shares                                                       Share buyback   Share buyback              Other   Total treasury
                                                                                  program 1       program 4                              shares
       Balance as of 1 January 2009                                                 703’535        532’000                   –      1’235’535
       Purchase                                                                                                        300’000         300’000
       Sale                                                                        –350’000                                           –350’000
       Share-based payment transactions                                              –8’500                                             –8’500
       Transfer to the seller of BioCad Medical Inc.                                –26’789                                            –26’789
       Cancellation                                                                                –532’000                           –532’000
       Balance as of 31 December 2009                                               318’246               –            300’000        618’246
       Balance as of 1 January 2010                                                 318’246               –            300’000         618’246
       Purchase                                                                                                        403’810         403’810
       Share-based payment transactions                                             –22’810                                            –22’810
       Balance as of 31 December 2010                                               295’436               –            703’810        999’246
                                                                                                                              Notes    123




Share buyback program 1                                             532’000 shares for consideration of EUR 12’382 k. On
On 8 January 2009, the Group transferred 26’789 treasury            6 April 2009, the AGM approved the cancellation of the
shares to the seller of BioCad as part of the purchase consid-      532’000 treasury shares, and on 25 June 2009, these shares
eration.                                                            were cancelled.

On 24 June 2009, 350’000 treasury shares were sold for con-         Other treasury shares
sideration of EUR 5’630 k as these shares were no longer            On 23 December 2009 and 29 December 2009, the Group
required to hedge the existing exposure from the performance        acquired in total 300’000 treasury shares to cover its existing
share unit plan.                                                    exposure from the performance share unit plan for consider-
                                                                    ation of EUR 6’456 k.
On 30 June 2009, 8’500 treasury shares were granted to Board
members under the share plan as described in note 18.               On 26 August 2010 and 24 December 2010, the Group ac-
                                                                    quired in total 403’810 treasury shares to cover its existing
On 30 June 2010, 19’000 treasury shares were granted to             exposure from the performance share unit plan for consider-
Board members under the share plan as described in note             ation of EUR 4’817 k.
18. Participants of the performance share unit plan were
granted 3’810 treasury shares.                                      Options on the Group’s own shares
                                                                    Call options on the Group’s own shares outstanding as of 31
Share buyback program 4                                             December have the following terms:
On 14 May 2008, the Group announced a share buyback
program for a maximum CHF 750 million on a separate sec-
ond trading line. Under this program, the Group acquired



Purpose                                      Type     Expiry date               Exercise              Options                Options
                                                                               price CHF                2010                   2009

Hedging ESOP exposure                         Call     30.06.2010                  84.06                     –             2’015’205
Hedging ESOP exposure                         Call     30.06.2011                  84.06               50’380                50’380
Hedging convertible exposure                  Call     08.11.2011                  84.97             3’315’865             3’315’865
Total as of 31 December                                                                             3’366’245             5’381’450



On 30 June 2010, 2’015’205 call options held to hedge the exposure of the employee staff option program expired.

On 29 March 2010, 517’870 written put options on the Group’s own shares expired. The recognized financial liability of
EUR 8’804 k was reclassified into equity.

Translation and hedging reserve                                     on 1 April 2010, less 35 percent withholding tax. The total
The translation reserve comprises all foreign exchange differ-      amount of the gross dividend paid was CHF 67.7 million or
ences arising from the translation of the financial statements      EUR 46.3 million.
of foreign operations.
                                                                    On 16 February 2011, the Company’s Board of Directors
The hedging reserve comprises the effective portion of the          decided to propose to the AGM a dividend to shareholders of
cumulative net change in the fair value of cash flow hedging        CHF 0.35 per share to be paid out of reserves without deduc-
instruments where the hedged transaction has not yet oc-            tion of withholding tax. The total amount of the proposed
curred.                                                             dividend is CHF 43.4 million or approximately EUR 35 million
                                                                    depending on exchange rates at the pay-out date.
Dividends
On 25 March 2010, the AGM approved a dividend of CHF 0.55
per registered share. The dividend was paid to shareholders
124    Nobel Biocare Annual Report 2010 — Financial reporting




  17   Earnings per share

       Basic earnings per share
       The calculation for basic earnings per share is based on the profit attributable to owners of Nobel Biocare and the weighted
       average number of ordinary shares outstanding during the year.

       in EUR ’000                                                                                         2010                  2009


       Profit attributable to owners of Nobel Biocare                                                     45’669             105’835


       Shares ’000

       Weighted average number of ordinary shares at 31 December                                         123’036             123’276
       Basic earnings per share (in EUR)                                                                    0.37                0.86




       Diluted earnings per share
       The calculation for diluted earnings per share is based on the profit attributable to owners of Nobel Biocare and the weighted
       average number of ordinary shares outstanding during the year, including those performance share units that may be exercised
       and that have a dilutive effect. Anti-dilutive performance share units are not included in the calculation.

       in EUR ’000                                                                                         2010                  2009


       Profit attributable to owners of Nobel Biocare                                                     45’669             105’835


       Shares ’000


       Weighted average number of ordinary shares at 31 December                                         123’036             123’276
       Effect of performance share units on issue                                                              –                 603
       Weighted average number of ordinary shares (diluted) at 31 December                               123’036             123’879
       Diluted earnings per share (in EUR)                                                                  0.37                0.85




  18   Share-based payment transactions

       Summary of share-based payment transactions charged to personnel expenses
       in EUR ’000                                                                                         2010                  2009


       Plan
       Performance share unit plan                                                                         3’650               1’133
       Share plan                                                                                           245                  133
       Staff option program                                                                                    –               5’336
       Total                                                                                              3’895                6’602
                                                                                                                                    Notes   125




Performance share unit program (PSUP)                                  Biocare (NOBN) share price relative to the Swiss Market Index
This long-term incentive plan covers executives of operating           for the period. If this relative outperformance is achieved, each
units and the headquarters with a single, global program.              share unit will be converted into a predetermined amount of
Participants are granted performance-based share units                 Nobel Biocare shares at the vesting date. The performance
(PSUs) under the PSUP. Vesting of these shares is subject to           share units cannot be settled in cash.
specific performance achievements over the vesting period.
The PSUP is accounted for as an equity-settled share-based             The fair value of services received in return for performance
payment plan under IFRS 2.                                             share units granted is measured by reference to the fair value
                                                                       of units granted. Grant date fair value per unit was measured
Terms of awards grant 2010                                             based on a Monte Carlo simulation. The market conditions
Vesting is subject to a service period and to the achievement          are taken into account when estimating the fair value of the
of market conditions. These conditions assume an outperfor-            instruments granted. Service conditions are not taken into
mance of the Nobel Biocare (NOBN) share price relative to the          account for the grant date fair value measurement of the
Swiss Leader Index for the vesting period. If this relative out-       services received.
performance is achieved, each share unit will be converted into
a predetermined amount of Nobel Biocare shares at vesting              Terms of awards grant 2008
date. One-third (tranche 1) of the allocated share units vest          Vesting is subject to a service period lasting until 31 March
after one year (28 February 2011), one-third (tranche 2) after         2011, and to the achievement of two equally weighted non-
two years (28 February 2012) and the remaining third (tranche          market performance conditions (compound sales growth and
3) after three years (28 February 2013). The performance share         EBIT margin for the financial years 2008 to 2010). The actual
units cannot be settled in cash.                                       number of shares allotted upon vesting depends on the
                                                                       achievement of the performance conditions. If the minimum
The fair value of services received in return for performance          threshold is not met, the PSUs lapse. Achievement of the
share units granted is measured by reference to the fair value         maximum threshold would result in allotting shares for 200
of units granted. Grant date fair value per unit was measured          percent of granted PSUs. Variances within the thresholds are
based on a Monte Carlo simulation. Market conditions are               awarded on a linear basis.
taken into account when estimating the fair value of the instru-
ments granted. Service conditions are not taken into account           Grant date fair value per unit was measured at the grant date
for the grant date fair value measurement of the services re-          share price, adjusted for dividends.
ceived.
                                                                       The vesting conditions are not taken into account when esti-
Terms of awards grant 2009                                             mating the fair value of the instruments granted. Instead, the
Vesting is subject to a three-year service period lasting until        number of instruments that are expected to vest is adjusted
30 April 2012, and to the achievement of market conditions.            on the basis of management’s best estimate.
These conditions assume an outperformance of the Nobel


Performance share units – terms of awards
                                                              2010                      2010                  2010                  2009


Tranche                                                            1                       2                    3                      1
Number of awards granted                                   205’686                   205’686              205’686                317’378
Number of awards expected to vest                          190’260                   175’990              162’790                251’190
Fair value per unit (CHF)                                      7.26                     9.15                  9.57                 29.05
Grant date                                              28 Feb 2010              28 Feb 2010           28 Feb 2010           1 May 2009
Vesting date                                            28 Feb 2011              28 Feb 2012           28 Feb 2013          30 April 2012
Expected dividends (yield in %)                                1.32                     1.40                  1.40                  2.65
Risk-free interest rate (%)                                    0.39                     0.66                  0.97                  1.10
126   Nobel Biocare Annual Report 2010 — Financial reporting




      The movements of performance share units are as follows:

      Number of performance share units                                 Grant 2010             Grant 2009                     Grant 2008                       Total


      Outstanding as of 1 January 2009                                                                     –                    108’068                    108’068
      Granted during the period                                                                    317’378                                                  317’378
      Exercised                                                                                            –                           –                          –
      Forfeited/expired 1                                                                          –15’719                       –14’246                    –29’965
      Outstanding as of 31 December 2009                                          –               301’659                         93’822                   395’481
      Outstanding as of 1 January 2010                                            –                301’659                        93’822                    395’481
      Granted during the period                                             617’058                                                                         617’058
      Exercised                                                                   –                –1’905                              –                     –1’905
      Forfeited/expired 1                                                   –23’889               –17’583                         –4’884                    –46’356
      Outstanding as of 31 December 2010                                   593’169               282’171                          88’938                   964’278

      1 Units forfeited is a result of the holder leaving the Group.



      Share plan                                                                      share plan 2010 until 30 June 2015 and for the share plan
      A separate share-based payment plan was established for                         2009 until 30 June 2011.
      members of the Board of Directors in 2008 as they do not
      participate in the PSUP. In June 2010, Board members were                       The fair value of the shares was measured at the grant date
      granted 19’000 shares (2009: 8’500) of Nobel Biocare Holding                    share price, adjusted for transfer restrictions.
      AG for no consideration. A transfer restriction applies for the


                                                                                                        2010                        2009                      2008


      Number of shares                                                                                 19’000                      8’500                     8’000
      Fair value per share (CHF)                                                                        17.80                      23.50                     31.60
      Grant date                                                                              30 June 2010                  30 June 2009               31 July 2008
      Vesting date                                                                            30 June 2015                  30 June 2011               31 July 2010
      Risk-free interest rate (%)                                                                        0.90                       0.80                      1.25


      Staff option program
      With the introduction of the performance share unit plan, no new options were granted in 2010 and 2009 under the stock
      option plan. As of 31 December 2010, only options from the 2007 grant were outstanding.

      Options outstanding as of 31 December have the following terms:

      Grant year 2007                                                  Vesting date      Expiry date       Exercise price                         Number of options
                                                                                                                     CHF

                                                                                                                                           2010                2009

      Options outstanding as of 31 December                             1 July 2009     30 June 2013               84.70            1’499’250             1’786’250
                                                                                                                                                      Notes     127




The movements of options outstanding and their weighted average exercise price are as follows:

Number of options                                                                                   Grant 2007                Grant 2006               Total
Outstanding as of 1 January 2009                                                                         1’975’000             1’421’500          3’396’500
Exercised                                                                                                        –                     –                  –
Forfeited/expired 1                                                                                      –188’750             –1’421’500         –1’610’250
Outstanding as of 31 December 2009                                                                   1’786’250                         –         1’786’250
Outstanding as of 1 January 2010                                                                         1’786’250                                1’786’250
Exercised                                                                                                        –                                        –
Forfeited/expired 1                                                                                      –287’000                                  –287’000
Outstanding as of 31 December 2010                                                                   1’499’250                                   1’499’250

1 Options forfeited is a result of the holder leaving the Group.


                                                                                                            2010                                       2009
                                                                                  Weighted         Number of           Weighted average    Number of options
                                                                            average exercise         options              exercise price
                                                                                 price (CHF)                                      (CHF)
Options outstanding as of 1 January                                                    84.70         1’786’250                     59.66          3’396’500
Options exercised                                                                          –                    –                      –                   –
Options forfeited/expired 1                                                            84.70             -287’000                  72.80          -1’610’250
Options outstanding as of 31 December                                                 84.70         1’499’250                     84.70          1’786’250
Options exercisable as of 31 December                                                 84.70         1’499’250                     84.70          1’786’250

1 Options forfeited is a result of the holder leaving the Group.



The weighted average remaining contractual life of the options                The fair value of services received in return for options grant-
outstanding as of 31 December 2010 is 2.50 years (2009: 3.50                  ed is measured by reference to the fair value of the options
years). No options were exercised in 2010 or in 2009.                         granted. The fair value of the options is measured based on
                                                                              the Black-Scholes option-pricing model.



Deferred tax assets and liabilities                                                                                                                            19

Deferred tax assets and liabilities are attributable to the following items:

                                                                                 Assets                        Liabilities                              Net
in EUR ’000                                                         2010            2009         2010                  2009          2010              2009


Property, plant and equipment                                       1’350          1’139        –7’624               –5’055         –6’274           –3’916
Intangible assets                                                  15’138          3’529       –22’364              –22’168         –7’226          –18’639
Inventories                                                         6’280          4’568           –10                  –17          6’270            4’551
Provisions and accruals                                             7’838          6’480          –173                 –677          7’665            5’803
Unrealized exchange gains                                                                       –2’150               –4’363         –2’150           –4’363
Recognized tax losses carried forward                               1’030          1’037                                             1’030            1’037
Employee benefits                                                   1’075            719                                             1’075              719
Share-based payment transactions                                                     319                                                                319
Tax assets/liabilities                                             32’711        17’791        –32’321              –32’280            390          –14’489
Offset                                                             –5’894         –5’247         5’894                5’247
Total tax assets/liabilities as of 31 December                     26’817        12’544        –26’427              –27’033            390          –14’489
128   Nobel Biocare Annual Report 2010 — Financial reporting




      The Group has not recognized deferred tax assets in respect of the following items:

      in EUR ’000                                                                                                                   2010                       2009


      Tax losses carried forward                                                                                                    8’517                      9’166
      Total unrecognized deferred tax assets as of 31 December                                                                     8’517                      9’166



      The unrecognized deferred tax assets concerning the tax losses carried forward will begin to expire in two years.

      in EUR ’000                                    Balance as Recognized in         Recognized      Recognized     Acquired in     Exchange dif-     Balance as of
                                                   of 1 January profit or loss      in other com-         directly business com-         ferences      31 December
                                                          2009                         prehensive       in equity       binations                              2009
                                                                                          income
      Property, plant and equipment                       –2’356           –1’683                                                              123            –3’916
      Intangible assets                                  –14’073             579                                          –5’333               188           –18’639
      Inventories                                          9’923           –5’346                                                               –26            4’551
      Provisions and accruals                             –4’665           10’812                                                              –344            5’803
      Unrealized exchange gains                           –8’462           –1’005           4’986                                              118            –4’363
      Recognized tax losses carried forward                1’548            –426                                                                –85            1’037
      Employee benefits                                        556           163                                                                                719
      Share-based payment transactions                                       133                              186                                               319
      Total                                             –17’529            3’227           4’986              186         –5’333               –26          –14’489




      in EUR ’000                                                      Balance as Recognized in       Recognized    Recognized      Exchange dif-     Balance as of
                                                                     of 1 January profit or loss    in other com-       directly        ferences      31 December
                                                                            2010                       prehensive     in equity                               2010
                                                                                                          income
      Property, plant and equipment                                        –3’916          –1’508                                             –850           –6’274
      Intangible assets                                                   –18’639         12’735                                            –1’322           –7’226
      Inventories                                                           4’551           1’641                                               78            6’270
      Provisions and accruals                                               5’803           1’585                                              277            7’665
      Unrealized exchange gains                                            –4’363           –521            3’016                             –282           –2’150
      Recognized tax losses carried forward                                 1’037             18                                               –25            1’030
      Employee benefits                                                      719             263                                                93            1’075
      Share-based payment transactions                                       319            –133                           –186                                   –
      Total                                                              –14’489          14’080           3’016           –186             –2’031             390
                                                                                                                             Notes    129




Provisions                                                                                                                           20
in EUR ’000                                           Warranties         Returns        Contingent    Other provisions       Total
                                                                                    purchase price
                                                                                     related to the
                                                                                   acquisition of a
                                                                                   Group company
Balance as of 1 January 2010                               1’102             636             3’343               6’085      11’166
Provisions made                                             401            2’945                  –              3’143       6’489
Provisions used                                            –148           –2’056              –640              –4’128      –6’972
Provisions reversed                                          –55            –167            –1’399               –423       –2’044
Unwinding of discount                                          –               –               137                   –         137
Effect of changes in exchange rates                         139               60                98                406          703
Balance as of 31 December 2010                            1’439            1’418             1’539              5’083        9’479


Non-current provisions                                      413                –             1’059               1’262       2’734
Current provisions                                         1’026           1’418               480               3’821       6’745
Balance as of 31 December 2010                            1’439            1’418             1’539              5’083        9’479




Provisions for returns and warranties are recognized when          The unwinding of the discount related to Nobel Biocare Pro-
the underlying products are sold. The provisions are based         cera AB amounts to EUR 137 k.
on historical warranty data and historical return rates and a
weighting of all possible outcomes against their associated        The present value of the contingent purchase price related to
probabilities.                                                     the acquisition of Nobel Biocare Procera AB amounts to EUR
                                                                   1’539 k (2009: EUR 3’056 k). Of this amount, the non-current
The acquisition in 2001 of the remaining 50 percent share in       portion amounts to EUR 1’059 k (2009: EUR 2’466 k), and
Nobel Biocare Procera AB (previously Procera Sandvik AB)           the short-term portion amounts to EUR 480 k (2009: EUR
was made up of a cash payment and a contingent purchase            590 k).
price based on a defined segment of the annual sales value
up to and including 2012. The reversal of part of the provision    In 2010, other provisions mainly include provisions related
for the contingent purchase price, which was credited to the       to various restructuring activities within the Group of EUR
respective goodwill account (see note 9), was made due to a        1’838 k undertaken in 2009 (2009: EUR 2’762 k), as well as
new estimate of future payment obligations.                        provisions relating to value-added taxation and other expect-
                                                                   ed cash outflows occurring in the normal course of business
                                                                   of EUR 3’245 k (2009: EUR 3’323 k).

Employee benefits                                                                                                                    21

The defined benefit obligation of the pension plans is the         closing date. The Swiss pension plans are treated as defined
present value of accrued pension obligations at the balance        benefit plans in accordance with IAS 19.
sheet date considering future salary and pension increases
and also turnover rates (using the projected unit credit meth-     In Japan, the Group maintains employee retirement allowance
od).                                                               plans that provide both retirement and pre-retirement benefits
                                                                   for all regular employees with benefits based on final monthly
The Group operates defined benefit plans in Switzerland, Ja-       base salary, years of credited service at termination and mode
pan and Sweden. The majority of plans are funded.                  of exit. The actuarial valuations for the defined benefit plans
                                                                   were performed for the Japanese pension plans, which are
In Switzerland, pension liabilities are covered by assets held     treated as defined benefit plans in accordance with IAS 19.
by legally separate entities. The actuarial valuations for the
defined benefit plans were performed at the balance sheet
130   Nobel Biocare Annual Report 2010 — Financial reporting




      The Group has a Swedish multi-employer pension plan that          related to the employee’s final salary and the total employment
      should be accounted for as a defined benefit plan. The Swed-      period covered by the plan. This means that the Group should
      ish plan primarily covers the following benefits:                 report its proportional share of the defined benefit commit-
                                                                        ments, and the assets under management and expenses as-
      –   Retirement pension;                                           sociated with the plan in the same manner as any other de-
      –   ITPK (complementary occupational pension);                    fined benefit plan, and provide the information required for
      –   Disability pension;                                           such plans.
      –   Group family pension.
                                                                        Alecta, however, is currently unable to provide sufficient in-
      Virtually every clerical employee in the private sector in Swe-   formation to report the Group’s proportional share of the de-
      den is covered by such a plan. The plan is financed by employ-    fined benefit commitments, the assets under management
      ers, who determine whether the pension insurance is to be         and expenses associated with the plan. There is also no agree-
      insured with Alecta (Alecta Pensionsförsäkring, Ömsesidigt),      ment on how any surplus or deficit should be distributed to
      or alternatively, as regards retirement pension and ITPK,         the participants in the pension plan. As a result, and in line
      whether a provision is to be made in-house by companies           with the Swedish Financial Accounting Standards Council’s
      within the framework of the FPG/PRI system. The Group has         Emerging Issues Task Force, the scheme is reported as a
      elected to take out pension insurance with Alecta.                defined contribution plan. Accordingly, the Group cannot pro-
                                                                        vide the disclosure requirements with respect to the defined
      Irrespective of how the plan is financed – via pension insur-     benefit plan in Sweden.
      ance with Alecta or through in-house provisions by companies
      – the plan is a defined benefit scheme with respect to retire-    The following tables summarize the Group’s defined contribu-
      ment pensions and group family pensions. Paid pensions are        tion and defined benefit plans.



      Defined contribution plans
      The amounts recognized in the income statement are as follows:

      in EUR ’000                                                                                           2010                   2009


      Cost of goods sold                                                                                    –969                   –965
      Selling expenses                                                                                     –2’655                –2’563
      Administrative expenses                                                                               –999                 –1’527
      Research and development expenses                                                                     –778                   –838
      Expense recognized in the income statement                                                          –5’401                 –5’893



      Defined benefit plans
      The amounts recognized in the balance sheet are as follows:

      in EUR ’000                                                                                           2010                   2009


      Present value of funded obligation                                                                  –32’143              –15’235
      Present value of unfunded obligation                                                                 –3’124               –2’335
      Total present value of obligations                                                                 –35’267               –17’570
      Fair value of plan assets                                                                            22’400               12’547
      Unrecognized actuarial losses                                                                         6’635                2’324
      Net liability in the balance sheet as of 31 December                                                –6’232                –2’699
      Deferred taxes                                                                                        1’075                  719
      Net impact on retained earnings                                                                      –5’157               –1’980
                                                                                                  Notes   131




The amounts recognized in the income statement are as follows:

in EUR ’000                                                                            2010       2009


Current service cost                                                                  -2’740    –1’335
Interest cost                                                                           –626      –448
Expected return on plan assets                                                           473       326
Net actuarial loss recognized in the year                                               –287      –109
Plan amendment losses                                                                 –1’837         –
Expense recognized in the income statement                                            –5’017    –1’566



in EUR ’000                                                                            2010       2009


Cost of goods sold                                                                        –3      –136
Selling expenses                                                                        –855      –485
Administrative expenses                                                               –3’962      –878
Research and development expenses                                                       –197       –67
Expense recognized in the income statement                                            –5’017    –1’566



The movement in the present value of the defined benefit obligation is as follows:

in EUR ’000                                                                            2010       2009


Balance as of 1 January                                                              –17’570   –14’146
Current service cost                                                                  –2’740    –1’335
Interest cost                                                                           –626      –448
Contributions by plan participants                                                    –9’161    –3’492
Plan amendment loss                                                                   –1’837         –
Benefits paid                                                                          5’259     3’043
Actuarial loss on benefit obligation                                                  –3’892    –1’161
Exchange differences                                                                  –4’700       –31
Balance as of 31 December                                                            –35’267   –17’570



The movement in the fair value of plan assets is as follows:

in EUR ’000                                                                            2010       2009


Balance as of 1 January                                                               12’547    10’874
Expected return on plan assets                                                           473       326
Employer’s contributions                                                               1’978       845
Contributions by plan participants                                                     9’161     3’492
Benefits paid                                                                         –5’049    –2’802
Actuarial gain/(loss) on plan assets                                                     169      –203
Exchange differences                                                                   3’121        15
Balance as of 31 December                                                            22’400    12’547
132   Nobel Biocare Annual Report 2010 — Financial reporting




      Plan assets are allocated as follows:

      in %                                                             2010           2009    Expected long-term       Contribution to
                                                                                                    rate of return      rate of return
      Bonds                                                             73.0           73.0                   2.8                 2.0
      Equity securities                                                  2.0            2.0                   6.5                 0.1
      Property                                                          19.0           19.0                   4.0                 0.8
      Other                                                              6.0            6.0                   4.0                 0.2
      Total                                                            100.0         100.0                                        3.1
      Cost                                                                                                                        -0.1
      Net return                                                                                                                  3.0



      In 2010, the actual return on plan assets was EUR 642 k (2009: EUR 119 k).

      Principal actuarial assumptions are as follows:

                                                                               Switzerland                                    Japan
      in %                                                             2010           2009                  2010                 2009
      Discount rate                                                      2.8           3.5                    2.0                2.3
      Expected return on plan assets                                     3.0           3.5                    NA                 NA
      Average future salary increases                                    1.5           1.5                    2.0                2.0
      Future pension increases                                           0.3           0.3                      –                  –



      Assumptions regarding future mortality experience are set based on actuarial advice in accordance with published statistics
      and experience in each country.

      As this is the second year this information is disclosed, only current year and comparatives for 2009 and 2008 are presented.

      in EUR ’000                                                                    2010                   2009                 2008


      Fair value of plan assets                                                     22’400                 12’547             10’874
      Present value of benefit obligation                                          –35’267               –17’570            –14’146
      Deficit                                                                      –12’867                –5’023             –3’272


      Gains/(losses) on plan liabilities from changes in assumptions                –3’218                   –758                680
      Experience losses on plan liabilities                                           –903                   –338               –815
      Experience gains/(losses) on plan assets                                         187                   –203               –340
      Total actuarial losses                                                        –3’934                –1’299               –475



      Contributions expected to be paid in 2011 amount to EUR 2,713 k.
                                                                                                                             Notes     133




Categorization of financial liabilities                                                                                               22
in EUR ’000                                                                                             2010                  2009


Convertible bond                                                                                      252’366              236’962
Trade payables                                                                                         19’284               22’158
Non-trade payables and other liabilities                                                               11’694               18’776
Accrued expenses                                                                                       14'794               15’222
Borrowings                                                                                                  –                 1’331
Bank overdraft                                                                                           297                   880
Total non-derivative financial liabilities                                                           298'435               295’329
Derivative instruments at fair value through profit or loss                                             7’748                 1’851
Hedging instruments (cash flow hedges)                                                                   337                   932
Total derivative financial instruments                                                                 8’085                 2’783
Total financial liabilities as of 31 December                                                        306'520               298’112




Borrowings were fully repaid in 2010. On 22 November 2010,           ing credit line agreements include covenants covering the net
the Group announced the replacement and extension of the             debt/EBITDA ratio. The covenant was met as of 31 December
existing EUR 330 million committed syndicated banking facil-         2010, and 31 December 2009.
ity for five years to 2015. It was signed with the same six in-
ternational banks as the original line. The facility is structured   The nominal amount of the convertible bond issued through
to optimize current funding and also as a back-up facility go-       the Group’s wholly-owned subsidiary Nobel Biocare Investment
ing forward. As of 31 December 2010, and 31 December                 N.V., Curaçao, Netherlands Antilles, was CHF 385’000 k
2009, no amount was drawn on the facility.                           (EUR 308’151 k), of which the nominal value of CHF 318’345
                                                                     k (EUR 254’800 k) was outstanding as of 31 December 2010.
As of 31 December 2010, unused credit lines amounted to              The maturity date of the convertible bond is 8 November 2011.
EUR 333’043 k (2009: EUR 332’312 k). The principal part of           Consequently, the carrying amount was reclassified from non-
existing credit lines is with Nobel Biocare Holding AG. Exist-       current liabilities to current liabilities.

The following table shows the change in the carrying amount of the convertible bond.

in EUR ’000                                                                                             2010                  2009


Carrying amount of liability as of 1 January                                                          236’962             238’805
Repurchase of liability                                                                               –35’433              –10’202
Accrued interest                                                                                       11’121               10’740
Interest paid                                                                                          –2’415               –2’485
Translation difference                                                                                 42’131                 104
Carrying amount of liability as of 31 December                                                       252’366              236’962




Positive translation effects from other balance sheet items compensated the negative translation difference from the convert-
ible bond. The currency transaction risk of the convertible bond was fully hedged.
134    Nobel Biocare Annual Report 2010 — Financial reporting




  23   Trade payables

       in EUR ’000                                                                  2010      2009


       Trade payables as of 31 December                                            19’284    22’158



       Trade payables by currency in %                                              2010      2009
       Euro                                                                            22       33
       Swiss franc                                                                     13        7
       US dollar                                                                       32       21
       Swedish krona                                                                   22       28
       Other currencies                                                                11       11
       Total                                                                         100      100




  24   Other liabilities

       in EUR ’000                                                                  2010      2009


       Other non-current liabilities                                                 494      548
       Other current liabilities                                                   11’200   18’228
       Derivative financial instruments                                             8’085    2’783
       Total other current liabilities                                             19’285   21’011
       Total other liabilities as of 31 December                                   19’779   21’559


       For information about derivative financial instruments, refer to note 28.



  25   Accrued expenses and deferred income

       in EUR ’000                                                                  2010       2009


       Personnel-related expenses                                                  32'842   27’340
       Accrued selling expenses                                                     5’949    5’313
       Accrued marketing expenses                                                   3’776    4’261
       Accrued legal and tax expenses                                               2’722    2’628
       Accrued royalty and R&D expenses                                             2'347    3’020
       Other items                                                                 13’653   11’499
       Total accrued expenses and deferred income as of 31 December                61’289   54’061
                                                                                                                        Notes    135




Commitments                                                                                                                     26
Operating leases

in EUR ’000                                                                                        2010                  2009


Buildings and leasehold improvements                                                              54’427               46’112
Cars                                                                                               5’247                4’883
Other                                                                                              1’076                1’707
Total operating lease commitments as of 31 December                                              60’750               52’702




In 2010, EUR 17’525 k (2009: EUR 15’479 k) were expensed in the income statement with respect to operating leases.

Non-cancelable operating leases are payable as follows:

in EUR ’000                                                                                        2010                  2009


Less than one year                                                                                16’413               13’232
Between one and five years                                                                        34’479               33’514
More than five years                                                                               9’858                5’956
Total operating lease commitments as of 31 December                                              60’750               52’702



Universities, R&D and clinical research contracts
The Group supports various universities in integrating dental implant therapy into the overall pre-doctoral education of the
general dentist, as well as supporting various research projects. The Group also has various contracts with regard to R&D and
clinical research with other institutions.

The following table shows the Group’s commitments with respect to non-cancelable support contracts with universities, as
well as commitments with regard to R&D and clinical studies.

in EUR ’000                                                                                        2010                  2009


Less than one year                                                                                 5’543                7’239
Between one and five years                                                                         7’101                9’418
More than five years                                                                                424                  457
Total non-cancelable contracts as of 31 December                                                 13’068               17’114



The charges with respect to universities, R&D and clinical research contracts were recognized in the following line items in
the income statement:

in EUR ’000                                                                                        2010                  2009


Selling expenses                                                                                   2’807                3’927
Administrative expenses                                                                             102                     –
Research and development expenses                                                                  1’377                2’241
Total charge                                                                                      4’286                6’168
136    Nobel Biocare Annual Report 2010 — Financial reporting




  27   Contingent liabilities and pledged assets

       As of 31 December 2010, the Group had no contingent liabil-           In June 2010, a Canadian company filed a complaint against
       ities (2009: EUR 4’273 k), and pledged assets of EUR 623 k            BioCad Medical Inc. suing for patent infringement in the Fed-
       (2009: EUR 652 k).                                                    eral Court Quebec, Canada. The lawsuit alleges that BioCad
                                                                             infringes a Canadian patent owned by said Canadian company
       Ongoing disputes                                                      on the production of superstructures for dental implants. Bio-
       Litigation/Legal proceedings                                          Cad Medical Inc. and its consulting patent lawyers are of the
       At the beginning of July 2005, a lawsuit against Nobel Biocare        opinion that no valid claims of the Canadian company’s Sinlab
       claiming patent infringement was filed by a doctor in New             patent are being infringed and will, therefore, vigorously defend
       York. The suit concerns two patents, which the doctor alleges         the patent infringement suit. In addition, Nobel Biocare has
       are infringed by the Stargrip and Replace products. The suit          filed for invalidation of the respective German patent of the
       was put on hold by the court pending reexamination proceed-           Canadian company with the German Federal Patent Court and
       ings at the US Patent Office regarding one of the patents.            for declaratory judgment with the competent court in Milan,
       Those proceedings are complete, and the Court reinstated              Italy, that neither the respective Italian nor the German patent
       the litigation in May 2009. Nobel Biocare has evaluated these         of said company are infringed.
       patents in depth and has numerous defenses that it will vigor-
       ously pursue. Nobel Biocare contends that it does not infringe        In July 2010, a Californian dentist filed a class action suit in the
       these patents, and that the patent claims are invalid based on        Federal Court of Los Angeles (USA) against Nobel Biocare USA
       prior art.                                                            LLC, Nobel Biocare AB and Nobel Biocare Holding AG alleging
                                                                             product defects of NobelDirect implants and claiming dam-
       Nobel Biocare Investments N.V. is facing claims by an asset           ages. Nobel Biocare rejects the claims and is of the opinion
       management company. The asset management company has                  that the available long-term data on the product, which were
       obtained an attachment of an account of Nobel Biocare Invest-         thoroughly reviewed by the competent Swedish Medical Prod-
       ments N.V. in the Netherlands Antilles. In April 2009, a New          ucts Agency (SMPA) several times, prove that NobelDirect is
       York court rejected the asset management company’s request            to be regarded as safe and efficacious.
       to start arbitration in the US. In October 2009, the Federal Ap-
       peals Court in New York ruled on the asset management com-            There are other minor disputes pending regarding contrac-
       pany’s appeal against this decision, vacated the case and re-         tual obligations, including warranty- and labor-related dis-
       manded it back to the first instance court for further proceedings.   putes, arising from the ordinary business of Nobel Biocare
       Nobel Biocare rejects all claims by this company as lacking any       and its subsidiaries.
       legal basis and has filed a court case in Switzerland to establish
       this fact as well as for refund of certain unjustified paid fees.     In the opinion of the Management, and based on currently
       On 14 December 2009, the competent court in Zug decided to            available information, the handling and settlement of these
       have jurisdiction over the case. A decision of the Netherlands        disputes will have no material adverse effect upon the financial
       Antilles court on the merits of the attachment of Nobel Biocare       position or operation of the Group.
       Investment N.V.’s account is expected in 2011.



  28   Risks related to financial instruments

       Risk management                                                       as foreign exchange risk, interest rate risk, credit risk, the use
       Group Treasury is responsible for evaluating, monitoring and          of derivative financial instruments and non-derivative financial
       managing financial exposures within the parameters outlined           instruments, and investment of excess liquidity. In 2010, the
       in the Group Treasury Policy. The Audit Committee, on behalf          Group-wide Treasury Management System was updated and
       of the Board, approved the annual update of the Group Trea-           all Treasury administration centralized.
       sury Policy in August 2010. It is binding on a Group-wide
       basis including all subsidiaries. The Group Treasury Policy           Basic financial exposure management principles
       provides written principles for overall risk management, as           Management has to ensure that the number and experience
       well as detailed written policies covering specific areas, such       of personnel, as well as infrastructure capacity, meet the re-
                                                                                                                                                      Notes   137




quirements with respect to business volume and complexity,                                quires a strong credit rating for counterparties and ensures that
and that adequate internal control processes and mechanisms                               the commitment terms of funds do not exceed 12 months. The
are in place.                                                                             minimum short-term rating for major financial counterparties
                                                                                          is A1, and the minimum long-term rating is single A. During
The Group evaluates the following financial exposures:                                    2010, Nobel Biocare continued to rigorously apply the best
                                                                                          practice introduced in 2009 for monitoring the credit quality of
– Credit risk                                                                             the Group’s financial counterparties on a regular basis.
– Liquidity risk
– Market risk                                                                             Trade receivables
  – Currency risk                                                                         Nobel Bicoare’s customer base mainly consists of dentists,
  – Interest rate risk                                                                    dental clinics and dental laboratories. The Group’s exposure
  – Other price risk                                                                      to credit risk with respect to trade receivables is considered
                                                                                          low compared with other industries. Under the Group’s cred-
Credit risk                                                                               it policy, each new customer is analyzed individually, and for
Credit risk is the risk of financial loss to the Group if a cus-                          each customer an individual credit limit is established. Such
tomer or counterparty to a financial asset fails to meet con-                             limits are reviewed periodically.
tractual obligations.
                                                                                          On a global basis, no individual customer represents a sig-
The Group’s credit exposure with respect to financial instru-                             nificant portion of the Group’s revenue or a significant portion
ments consists of cash and cash equivalents, derivative financial                         of the total trade receivables. The demographics of the Group’s
instruments and surplus liquidity invested in marketable secu-                            customer base also have a low degree of influence on credit
rities, as well as placements with banks. In addition, credit risk                        risk, again due to the very low default risk of the industry. The
arises from credit exposure to customers, including outstanding                           exposure to credit risk for trade receivables by geographical
receivables and committed transactions. In order to minimize                              region is as follows (please refer also to note 13):
credit risk related to financial instruments, Nobel Biocare re-

Net trade receivables by region
in EUR ’000                                                                                                                    2010                   2009


North America 1                                                                                                               27’346                31’668
Europe, Middle East and Africa                                                                                                56’465                61’062
Asia/Pacific                                                                                                                  31’915                26’370
Latin America/Rest of the world 1                                                                                              6’803                 9’679
Total as of 31 December                                                                                                     122’529               128’779

1 Certain prior year figures are reclassified to reflect minor changes in the management structure.



Concentration of credit risk                                                              age of liquidity could arise from weak operational performance,
As of 31 December 2010, the positive value of derivative in-                              insufficient cash holdings or limited access to external debt and
struments amounted to EUR 12’179 k (2009: EUR 3’757 k).                                   equity financing, either through banks or capital markets.
Of the total Group cash and cash equivalents, EUR 174.4
million (2009: EUR 193.6 million) was placed at major relation-                           During 2010, the Group continued to maintain a strong focus
ship banks, which are large international banks with a mini-                              on minimizing any liquidity risk by centralizing cash at the
mum credit rating of A. The highest cash amount deposited                                 Group’s core banks.
at a single bank was EUR 41.2 million (2009: EUR 47.4 mil-
lion). The carrying amount of financial assets as disclosed in                            As of 31 December 2010, the Group held EUR 239.8 million
note 10 represents the maximum credit exposure.                                           (2009: EUR 241.6 million) liquidity on its balance sheet, there-
                                                                                          of 167.2 million (2009: EUR 186.5 million) centrally.
Liquidity risk
Liquidity risk is the risk that the Group would not be able to
meet its financial obligations when they fall due. Such a short-
138   Nobel Biocare Annual Report 2010 — Financial reporting




      In addition to its on-balance sheet liquidity, as of 31 December 2010, the Group had the following committed and uncommit-
      ted credit lines with various banks:

      Credit lines
      in EUR ’000                                                                                                       2010                  2009


      Committed syndicated facility (six banks)                                                                       330’000              330’000
      Other committed credit lines                                                                                      1’053                4’078
      Uncommitted credit lines                                                                                          2’285                  459
      Total as of 31 December                                                                                         333’338             334’537



      On 22 November 2010, the Group announced the replacement                   the uncommitted credit lines, no amount was drawn as of 31
      and extension of the existing EUR 330 million committed syn-               December 2010.
      dicated banking facility for five years to 2015. In addition to the
      extension, Nobel Biocare was able to improve the implied fund-             In line with its liquidity planning and monitoring, the Group
      ing terms for the new facility, which was signed with the same             analyzes the entire liquidity/maturity profile of all existing fi-
      six international banks as the original line. The facility is struc-       nancial assets and liabilities on a continuous basis, including
      tured to optimize current funding and also as a back-up facility           derivatives (on a gross basis), which are needed for foreign
      going forward. As of 31 December 2010, no amount was drawn                 exchange and interest rate hedging. The table below gives an
      on the facility.                                                           overview of all contractual cash flows. Balances due within
                                                                                 12 months equal their carrying balances, as the impact of
      Other committed credit lines totaled EUR 1’053 k. Of this                  discounting is not significant.
      amount, EUR 295 k was used as of 31 December 2010. Of


      Maturity analysis of financial assets and liabilities
      in EUR ’000                                              Carrying         Total       6 month     6–12 months         1–2 years     2–5 years
                                                                amount    contractual         or less
                                                                           cash flow
                                                                             amount
      as of 31 December 2010
      Non-derivative financial assets
      Net trade receivables                                     122’529      122’529         111’359         11’170                  –            –
      Other receivables                                          14’300       14’591           8’052          2’606              2’678        1’255
      Cash and cash equivalents                                 239’816      239’816         239’816              –                  –            –
      Total non-derivative financial assets                    376’645       376’936        359’227          13’776             2’678        1’255
      Non-derivative financial liabilities
      Convertible bond                                         –252’366     –260’025               –       –260’025                  –            –
      Trade payables                                            –19’284      –19’284         –19’284              –                  –            –
      Non-trade payables and other liabilities                  –11’694      –11’733         –10’998           –201              –148         –386
      Accrued expenses                                          –14’794      –14’794         –14’528           –266                  –            –
      Bank overdraft                                               –297         –297            –297              –                  –            –
      Total non-derivative financial liabilities               –298’435     –306’133        –45’107        –260’492              –148         –386
      Gross-settled derivatives
      Outflow (at fair value through profit or loss)                        –626’080        –626’080              –                  –            –
      Inflow (at fair value through profit or loss)                          628’545         628’545              –                  –            –
      Outflow (cash flow hedges)                                             –49’463         –24’794        –18’649             –6’020            –
      Inflow (cash flow hedges)                                               50’849          25’549         19’173              6’127            –
      Total gross-settled derivatives                             3’307        3’851          3’220             524               107                –
      Total net-settled derivatives                                787           787           –522           1’309                  –               –
      Net surplus / (exposure)                                  82’304        75’441        316’818        –244’883             2’637          869
                                                                                                                                  Notes   139




in EUR ’000                                      Carrying          Total         6 month     6–12 months       1–2 years      2–5 years
                                                  amount     contractual           or less
                                                              cash flow
                                                                amount
as of 31 December 2009
Non-derivative financial assets
Net trade receivables                             128’779           128’779       116’577          10’828          1’300             74
Other receivables                                  12’104            12’104         6’409           3’770          1’150            775
Cash and cash equivalents                         241’617           241’617       241’617               –              –              –
Total non-derivative financial assets            382’500        382’500           364’603         14’598          2’450            849
Non-derivative financial liabilities
Convertible bond                                 –236’962       –262’711                –          –2’477       –260’234              –
Trade payables                                    –22’158           –22’158       –21’885           –273               –              –
Non-trade payables and other liabilities          –18’776           –18’856       –18’058           –157           –158            –483
Accrued expenses                                  –15’222           –15’222       –14’150          –1’072              –              –
Borrowings                                         –1’331            –1’331        –1’331               –              –              –
Bank overdraft                                       –880             –880            –43           –837               –              –
Total non-derivative financial liabilities       –295’329      –321’158           –55’467         –4’816       –260’392           –483
Gross-settled derivatives
Outflow (at fair value through profit or loss)                  –322’618         –321’481          –1’137              –              –
Inflow (at fair value through profit or loss)                       325’465       324’349           1’116              –              –
Outflow (cash flow hedges)                                          –60’962       –24’450         –36’512              –              –
Inflow (cash flow hedges)                                            60’629        24’130          36’499              –              –
Total gross-settled derivatives                      789             2’514          2’548            –34               –              –
Total net-settled derivatives                        185               185            185               –              –              –
Net surplus/(exposure)                            88’145            64’041        311’869          9’748       –257’942            366




As of 31 December 2010, except for EUR 494 k, the Group                equivalents and derivatives) and all interest-bearing financial
had no other non-current financial liabilities. Current financial      liabilities, the Group had a net debt position of EUR 13’200 k
liabilities included the convertible bond, with a carrying amount      as of 31 December 2010, compared with a net cash position
of EUR 252’366 k as of 31 December 2010. Other current fi-             of EUR 1’867 k as of 31 December 2009.
nancial liabilities amounted to EUR 53’339 k and included bank
overdrafts, trade payables and other liabilities (including de-        Derivative instruments
rivative financial instruments). For more information, refer to        Financial instruments held by Nobel Biocare comprise de-
note 22. For off-balance sheet commitments to universities             rivative financial instruments that are stated at fair value and
and other institutions and for non-cancelable operating lease          are presented under "Financial investments and derivatives"
commitments, refer to note 26.                                         and under "Other liabilities". As of 31 December 2010, these
                                                                       consisted of interest rate swaps, foreign exchange forwards
As of 31 December 2009, except for its convertible bond, with          and foreign exchange options. The full fair value of a deriva-
a carrying amount of EUR 236’962 k, and other non-current              tive financial instrument is classified as a non-current asset
liabilities of EUR 9’175 k (see note 22), the Group only had           or liability when the remaining maturity period is more than
current liabilities (bank overdraft, trade payables and other li-      12 months and as a current asset or liability when the remain-
abilities, including derivative financial instruments).                ing maturity period is 12 months or less.

The conversion element of the convertible bond is covered by           The level in a fair value hierarchy under which a financial in-
treasury shares and options booked into equity. For more de-           strument is classified is determined based on the significance
tails please refer to note 16.                                         of the data used to calculate the fair value. The first level
                                                                       comprises quoted prices in active markets where arm’s-length
Including all interest-bearing financial assets (cash and cash         transactions for identical items are conducted regularly. The
140   Nobel Biocare Annual Report 2010 — Financial reporting




      second level comprises externally observable data. Such data         and of future (uncommitted) exposures is executed with for-
      may include the use of recent arm’s-length transactions, ref-        ward and option contracts. Combinations of plain vanilla op-
      erence to other instruments that are substantially the same,         tions are also allowed as per Treasury Policy, but only on a
      discounted cash flow analysis and option-pricing models,             neutral or net-long basis. The fair value of various derivative
      while making maximum use of market inputs and relying as             instruments used for hedging purposes is disclosed in notes
      little as possible on entity-specific inputs. The third level com-   10 and 22. Movements in the hedging reserve in shareholders’
      prises all other inputs not externally observable.                   equity are shown in the consolidated statement of changes
                                                                           in equity. There was no ineffectiveness to be recorded from
      At the balance sheet date, the fair value of derivative instru-      cash flow hedges related to sales.
      ments is determined using valuation techniques. These in-
      clude spot and swap rates published by Bloomberg. There-             During 2010, various internal funding structures were re-
      fore, the fair value measurements of all financial derivative        viewed and restructured. In 2010, non-recurring foreign ex-
      instruments held by Nobel Biocare correspond to level two,           change gains were reclassified from other comprehensive
      while other financial instruments are measured at amortized          income to the income statement following the simplification
      cost, which approximates fair value.                                 of internal funding structures.

      Market risk                                                          The Group has certain investments in foreign operations,
      Currency risk                                                        whose net assets are exposed to foreign currency translation
      Foreign exchange risk arises from future commercial transac-         risk. Currency exposure arising from the net assets of the
      tions, recognized assets and liabilities and net investments in      Group’s foreign operations is managed primarily through bor-
      foreign operations.                                                  rowings denominated in the relevant foreign currencies. In
                                                                           2010, Group Treasury continued to focus on monitoring for-
      Foreign currency exposures of individual affiliates are man-         eign currency translation risk, which is reported to senior
      aged and optimized against the functional currency of the            management on a regular basis. There is as yet no system-
      respective entity. According to the Treasury Policy, Group           atic hedging of translation risk by net investment hedges.
      Treasury has the mandate to hedge a minimum of 90 percent
      of committed balance sheet exposures. In addition to this,           Foreign currency risk analysis
      Nobel Biocare has continued to reduce future EBITDA volatil-         During 2010, Group Treasury continued to focus on its risk and
      ity by hedging parts of its anticipated EBITDA for up to two         compliance function by using quantitative risk analysis models
      years, on a rolling basis. While the effective hedging ratio is      to monitor and control the Group’s currency risks on a regular
      also impacted by the availability of transactional exposures         basis. A regular treasury and risk management record is com-
      that qualify for hedge accounting, near-term cash flows are          piled by the independent treasury controller and is distributed
      hedged with a higher ratio than more future cash flows.              to Senior Management. The report contains state-of-the art
      Hedge accounting is applied whenever possible and feasible.          quantitative risk management monitoring, as well as qualitative
      At the end of 2010, the average cash flow hedge horizon of           comments. Statistical models of value at risk (VaR) and earn-
      all future sales had a maturity of less than one year.               ings at risk (EaR) build up the quantitative basis of analysis for
                                                                           currency transaction and translation risks. Analysis of currency
      Nobel Biocare designates certain derivatives as hedges of a          economic risk is performed on an ad hoc basis. Both VaR and
      particular risk associated with a recognized asset or liability      EaR are similar techniques used to quantify the expected loss
      or a highly probable forecasted transaction (cash flow hedge).       from an adverse market movement with a specified probabil-
      At the inception of the transaction, the Group documents the         ity over a particular period of time. They reflect the interdepen-
      relationship between hedging instruments and hedged items,           dencies between risk variables and provide management with
      as well as its risk management objectives and strategy for           a more comprehensive understanding of the Group’s risk pro-
      undertaking various hedging transactions. Also, the effective-       file. While the VaR measures the potential currency impact on
      ness of all hedges is documented at inception and tested on          the Group’s consolidated equity, the EaR measures such im-
      a regular basis.                                                     pacts on the Group’s consolidated profit or loss.

      The Treasury Policy contains a list of approved hedging instru-      By assuming that past changes in risk factors reflect future
      ments. Hedging of existing exposures in the balance sheet            movements of market rates, and by taking into account the
                                                                                                                                         Notes    141




current risk portfolio, the Group has chosen the historical                   risk factors, the output of the analysis may vary. Therefore, in
simulation method to assess currency risks. Other major as-                   the concrete risk management process, this method is always
sumptions underlying the analysis include the following:                      used based on a thorough understanding of underlying ex-
                                                                              posures.
– The calculation uses a 95 percent confidence level as de-
  fined in the Treasury Policy. Thus, on average, there is a 5                For the year 2010, the aforementioned risk analysis presented
  percent probability of market fluctuations affecting the                    the following results. The gross impact implies the potential
  Group’s net income or equity by more than the simulated                     adverse movement from the exposures only, whereas the net
  net EaR or VaR during the holding period.                                   impact also includes the movement of the hedges in place.
– A holding period of 12 months has been applied as per                       The diversification effect considers the correlations between
  Treasury Policy.                                                            different risk factors and the nature of underlying exposures
– The portfolio, consisting of underlying currency exposures                  in the portfolio, such as long and/or short positions.
  and hedges, is assumed to remain the same at the end of
  each holding period.                                                        Due to changes in the Group legal structure and related
– Historical market data for various risk factors (foreign ex-                changes in the value flows, the foreign currency transaction
  change rates and interest rates) from the past three and ten                risk shifted from the Swedish krona to the euro toward the
  years is used.                                                              end of 2010. This shift is reflected in the Group’s foreign ex-
                                                                              change exposures as presented in the following earnings at
However, as the results of the analysis largely rely on the                   risk analysis.
chosen historical data, the model does not cover any event
not occurring within the time period chosen. By choosing a
longer or shorter time horizon of applied historical rates for


Earnings at risk for a 12-month holding period (currency transaction risk) – committed
As of 31 December                                                                         2010                                            2009


Currency, in EUR ’000                        Gross impact       Net impact       Risk reduction   Gross impact     Net impact    Risk reduction
Swiss franc                                         34’506            2’211              93.6%           4’682            628            86.6%
Euro                                                 1’057              173              83.6%           3’101            120            96.1%
Japanese yen                                         7’612              781              89.7%           3’906            563            85.6%
Swedish krona                                       31’909            1’473              95.4%           7’636             53            99.3%
US dollar                                            9’831            2’047              79.2%          10’668          3’118            70.8%
Other core currencies                                1’173              454              61.3%           2’248            601            73.3%
Remaining currencies                                 2’814            1’370              51.3%           2’339          1’469            37.2%
Total undiversified                                88'902            8’509               90.4%         34’580           6’552           81.1%
Diversification                                    –18’401           –6’894                   –        –13’280         –4’661                 –
Earnings at risk – committed                       70’501            1'615               97.7%         21’300           1’891           91.1%



As of 31 December 2010, the potential adverse net impact in value (after hedging) of all committed cash flows, was EUR
1’615 k (2009: EUR 1’891 k) for one year ahead.
142   Nobel Biocare Annual Report 2010 — Financial reporting




      Earnings at risk for a 12-month holding period (currency transaction risk) – uncommitted
      As of 31 December                                                                                2010                                                2009


      Currency, in EUR ’000                           Gross impact       Net impact         Risk reduction        Gross impact      Net impact    Risk reduction
      Swiss franc                                                3’432           1’804                47.4%                   23            23                 –
      Japanese yen                                               3’171           2’929                  7.6%               2’247          1’870           16.8%
      US dollar                                                 11’410           9’185                19.5%               13’455         11’281           16.2%
      Swedish krona                                              5’326           3’128                41.3%                    –              –                –
      Euro                                                           –               –                      –                409           319            22.0%
      Other core currencies                                      2’077           2’077                 0.0%                2’165          2’165                –
      Remaining currencies                                       3’931           3’931                 0.0%                3’934          3’934                –
      Total undiversified                                      29'347       23'054                    21.4%               22’233        19’592           11.9%
      Diversification                                          –13’302          –9’141                      –             –4’676         –4’467                –
      Earnings at risk – uncommitted                           16'045       13'913                    13.3%               17’557        15’125           13.9%



      As of 31 December 2010, the potential adverse net impact in value (after hedging) of all anticipated cash flows was EUR
      13’913 k (2009: EUR 15’125 k) for one year ahead.


      Value at risk for a 12-month holding period (currency translation risk)
      As of 31 December                                                                                                                   2010             2009


      Currency, in EUR ’000                                                                                                        Gross impact    Gross impact
      Swiss franc                                                                                                                        15’096          13’228
      Swedish krona                                                                                                                      41’204          60’910
      US dollar                                                                                                                          14’612          17’640
      Other core currencies                                                                                                                   –           2’071
      Remaining currencies                                                                                                               10’644           5’862
      Total undiversified                                                                                                               81’556           99’711
      Diversification                                                                                                                   –31’331         –61’731
      Value at risk                                                                                                                     50'225           37’980



      As of 31 December 2010, the potential adverse impact on Group equity of all currency translation risk exposures was EUR
      50’225 k (2009: EUR 37’980 k) for one year ahead.

      Interest rate risk
      Interest rate risk is the risk of the result and/or cash flows                     Interest rate risks are presented by way of a sensitivity analy-
      being negatively affected by changes in interest rates.                            sis based on the following assumptions:

      At Nobel Biocare, borrowing and investment horizons have to                        Fair value interest rate risk:
      be compatible with the needs and requirements of operation-                        Fixed-rate borrowings (including the convertible bond) are
      al activities. Thus, duration gaps between assets and liabilities                  excluded from the sensitivity analysis as they are not mea-
      can occur. In 2010, the only material interest-bearing financial                   sured at fair value and, therefore, not subject to fair value
      liability consists of the convertible bond, which is measured at                   interest rate risk. As of 31 December 2010 and 2009, the
      amortized cost. Due to the short period remaining until matu-                      Group did not hold any significant fixed-rate financial instru-
      rity Nobel Biocare did not actively manage the duration risk of                    ments that were measured at fair value.
      the convertible bond. To pre-hedge the interest rate risk of
      potential future long-term refinancing activities, the Group en-                   Cash flow interest rate risk:
      tered into interest rate swaps in the second half of 2010. Hedge                   The Group has no significant variable-rate investments or bor-
      accounting was applied to these instruments.                                       rowings. Cash flow interest rate risk is, therefore, limited to
                                                                                                                               Notes   143




fluctuations in the interest rate on cash and cash equivalents    & Poor’s or better rating equivalent. This is achieved through
held.                                                             prudent and conservative risk and balance sheet management
                                                                  and supported by the strong organic cash flow generation of
The sensitivity analysis assumes the same interest rate shift     Nobel Biocare. Investments, i.e. capital expenditures and ac-
for all currencies.                                               quisitions, are done based on a proper analysis of future cash
                                                                  flow generation, as well as their potential risk for the Group
With all other variables held constant, an increase/(decrease)    balance sheet. The Board, represented by the Audit Commit-
in interest rates by 25 basis points would have resulted in an    tee, monitors cash and capital structure development on an
annualized increase/(decrease) in profit for the year 2010 of     ongoing basis and decides on the appropriate level of risk
EUR 451 k (2009: EUR 464 k) mainly due to increased/(de-          limits on a regular basis. Throughout 2010, the equity ratio as
creased) interest income on cash and cash equivalents. Eq-        well as the cash ratio remained stable.
uity would not have been affected.
                                                                  The dividend policy is based on the above balance sheet man-
Other price risk                                                  agement principles and is designed to maintain attractive
Other price risk would mainly comprise security price risk or     dividend yields for investors and an affordable pay-out ratio
commodity price risk. Since the Group has very limited com-       of between 35 percent and 45 percent (calculated as dividend
modity price risk exposure due to the nature of the business,     in percentage of available profit for the year) as a general
it is not actively managed by financial risk management.          target. Additionally, share repurchases can make sense in the
                                                                  case of significant surplus cash, which cannot be reinvested
With respect to security price risk, Management has made          into the business at proper capital returns. Financial flexibility
an active decision to no longer invest in any financial securi-   must not be reduced through shareholder returns and has to
ties other than highly rated commercial paper and short-term      be guaranteed at any point in time through appropriate cash
bonds. This decision, backed by the Treasury Policy and ap-       holdings and/or committed credit lines. By doing so, the
proved by the Audit Committee on behalf of the Board of           Group seeks to balance the interest of shareholders and debt
Directors, was strictly followed in 2010.                         holders.

Fair value                                                        During 2010, the Group continued to tighten its capital man-
For financial receivables and payables with a remaining life      agement and consequently strengthened its balance sheet.
of less than one year, the nominal amount is deemed to reflect    During 2010, the Group acquired in total 403’810 treasury
the fair value. As of 31 December 2010, the Group did not         shares to hedge its existing exposure from the performance
have any material non-current financial assets. The fair value    share unit plan.
of the outstanding portion of the convertible bond was EUR
258’579 k (2009: EUR 245’788 k) as of 31 December 2010.           Neither the Group nor any of its subsidiaries are subject to
The carrying amount of the convertible bond was EUR 252’366       externally imposed capital requirements.
k (2009: EUR 236’962 k) at the end of 2010 (see note 22).

Capital management
The Group’s strategy, reflected through its financial policies,
is to maintain a strong equity base and hold at any point in
time a minimum credit quality of BBB as defined by Standard
144    Nobel Biocare Annual Report 2010 — Financial reporting




  29   Risk assessment

       As part of the Enterprise Risk Management (ERM) system,                              The Group has also implemented an Internal Controls System
       the Group has systematically analyzed, updated and docu-                             (ICS) for all subsidiaries and relevant Group functions based
       mented its risk assessment with regard to risks that could                           on the Committee of Sponsoring Organizations (COSO) frame-
       have a material effect on the financial statements.                                  work. Nobel Biocare complies with the Swiss Code of Obliga-
                                                                                            tions. The controls and processes are designed to provide
       Risks are reported to the Executive Committee and the Board                          reasonable assurance regarding the reliability of financial re-
       of Directors at least once a year. Key risks and significant in-                     porting and the preparation of financial statements in accor-
       cidents are discussed in all Executive Committee, Board, as                          dance with International Financial Reporting Standards (IFRS)
       well as in local management team meetings. The Board of                              and with Swiss law.
       Directors of Nobel Biocare last approved the Risk Assessment
       in their Board meeting held on 15 December 2010.



  30   Related parties

       Transactions with related parties are conducted on an arm’s-length basis.

       Transactions with members of the Executive Committee and the Board of Directors
       Members of the Executive Committee and the Board of Directors control 0.2 percent (2009: 0.5 percent) of the voting shares
       of the Company.

       There are no material loans, securities, advances or credits granted to any members of the Board of Directors or the Executive
       Committee.

       Executive Committee
       in EUR ‘000                                                                                                                         2010                            2009


       Short-term benefits (including fixed salaries and variable compensation)                                                            5’172                          3’859
       Sign-on compensation 1                                                                                                                   –                          331
       Severance payments                                                                                                                       –                          484
       Post-employment benefits                                                                                                              713                           466
       Share-based payments                                                                                                                1’915                           575
       Total compensation                                                                                                                 7’800                       5’715

       1 Stock options and cash compensation were granted to the Chief Executive Officer and other Executive Committee members at sign-on to compensate for the loss of
         options from the previous employer.


       Board of Directors
       in EUR ’000                                                                                                                         2010                            2009


       Cash compensation                                                                                                                     542                            492
       Share-based payments                                                                                                                  247                            135
       Total compensation                                                                                                                    789                            627
                                                                                                                                    Notes    145




No member of the Board of Directors or the Executive Com-                   period. Based on their individual agreements, they retain the
mittee received additional fees or compensation for addi-                   right to receive salary and bonuses and may be entitled to
tional services performed on behalf of Nobel Biocare Holding                retain their options and restricted share units.
AG or its subsidiaries with the exception of Hans Geiselhöring-
er, who became Executive Vice President Marketing and                       Other related party transactions
Products and a member of the Executive Committee on 10                      None of the Board members holds or has held any opera-
February 2010. During 2010, a company in which Hans Gei-                    tional positions within the Group during the last five years.
selhöringer has an economic interest provided laboratory
services amounting to EUR 309 k, and Nobel Biocare sold                     Rolf Watter, member of the Board of Directors, was an ex-
products to this company amounting to EUR 139 k. Another                    ecutive board member in the law firm Bär & Karrer AG, Zurich,
company in which Hans Geiselhöringer has an economic in-                    until September 2009. As of 31 December 2010, Mr. Watter
terest provided consultancy services, included above in short-              was a 4 percent (2009: 4 percent) shareholder in Bär & Karrer
term benefits, amounting to EUR 664 k. Nobel Biocare also                   AG. In 2010, the Group had transactions with Bär & Karrer
reimbursed expenses such as travel expenses (EUR 151 k)                     AG of EUR 4 k (2009: EUR 47 k).
relating to the consultancy services.
                                                                            Further information as required by Swiss law relating to re-
As of 31 December 2010, there were no significant outstand-                 muneration and ownership of shares and options of the mem-
ing receivables from or payables due to any related party.                  bers of the Board of Directors and the Executive Committee
                                                                            can be found in note 11 of the parent company accounts.
Executive Committee members who left the EC in 2010 were
released from some of their duties during their termination



Subsidiaries                                                                                                                                31
                                              City and country                               Share capital     Ownership       Ownership
                                              of incorporation                                     in ’000       interest        interest
                                                                                                               2010 in %       2009 in %
Nobel Biocare Australia Pty Ltd.              Macquarie Park, Australia                           AUD 600             100             100
Nobel Biocare Österreich GmbH                 Vienna, Austria                                      EUR 36             100             100
Nobel Biocare Belgium NV                      Groot-Bijgaarden, Belgium                           EUR 138             100             100
Medicim, NV                                   Mechelen, Belgium                                 EUR 1’030             100             100
Nobel Biocare Brasil Ltda                     São Paulo, Brazil                                 BRL 14’111            100             100
Nobel Biocare Canada Inc.                     Richmond Hill, Canada                             CAD 3’012             100             100
Nobel Biocare Procera Services Inc.           Québec, Canada                                   CAD 40’000             100             100
BioCad Medical Inc.                           Québec, Canada                                   CAD 14’015             100             100
Nobel Biocare Asia Ltd.                       Hong Kong, People’s Republic of China            HKD 15’010             100             100
Nobel Biocare Commercial (Shanghai) Co. Ltd   Shanghai, People’s Republic of China                USD 700             100             100
Nobel Biocare Trading (Shanghai) Co. Ltd.     Shanghai, People’s Republic of China                USD 140             100             100
Nobel Biocare Colombia S.A.1                  Bogotá, Colombia                                COP 406’050               –             100
Nobel Biocare Danmark A/S                     Hilleröd, Denmark                                   DKK 500             100             100
Nobel Biocare Suomi Oy                        Helsinki, Finland                                     EUR 8             100             100
Nobel Biocare France S.A.S.                   Bagnolet, France                                     EUR 40             100             100
Nobel Biocare Deutschland GmbH                Cologne, Germany                                    EUR 307             100             100
Nobel Biocare UK Ltd.                         Uxbridge, Great Britain                             GBP 620             100             100
Nobel Biocare Magyarország Kft                Budapest, Hungary                                HUF 24’000             100             100
Nobel Biocare India Pvt. Ltd.                 Mumbai, India                                        INR 100            100             100
Alpha-Bio Tec Ltd.                            Petach Tikva, Israel                              ILS 39’100            100             100
Nobel Biocare Italiana S.r.l.                 Agrate Brianza, Italy                                EUR 10             100             100
Nobel Biocare Japan K.K.                      Tokyo, Japan                                      JPY 12’500            100             100
146    Nobel Biocare Annual Report 2010 — Financial reporting




       Nobel Biocare Procera K.K.                          Narashino-Shi, Japan                              JPY 250’000           100             100
       Nobel Biocare Lithuania Pty. Ltd.                   Vilnius, Lithuania                                    LTL 280           100             100
       Nobel Biocare México, S.A. de C.V.                  Mexico City, Mexico                              MXN 15’050             100             100
       Nobel Biocare Investments N.V.                      Willemstad, Curaçao, the Netherlands Antilles      EUR 1’000            100             100
       Nobel Biocare Nederland BV                          Houten, the Netherlands                               EUR 90            100             100
       Nobel Biocare Distribution Center BV                Belfeld, the Netherlands                              EUR 18            100             100
       Nobel Biocare New Zealand Ltd.                      Auckland, New Zealand                                  NZD 1            100             100
       Nobel Biocare Norge AS                              Son, Norway                                          NOK 100            100             100
       Nobel Biocare Polska Sp.z.o.o.                      Warsaw, Poland                                        PLN 50            100             100
       Nobel Biocare Portugal S.A.                         Vila Nova de Gaia, Portugal                           EUR 60            100             100
       Nobel Biocare Russia LLC                            Moscow, Russia                                     RUB 3’000            100             100
       Nobel Biocare Singapore Pte Ltd.                    Singapore                                             SGD 65            100             100
       Nobel Biocare South Africa (Pty) Ltd.               Woodmead, South Africa                                ZAR 0.1           100             100
       AlphaBio - Tec Dental Implants SA                   Woodmead, South Africa                               ZAR 400            100               –
       Nobel Biocare Iberica S.A.                          Barcelona, Spain                                      EUR 60            100             100
       Nobel Biocare AB                                    Gothenburg, Sweden                               SEK 317’186            100             100
       Nobel Biocare Dental Products AB 2                  Gothenburg, Sweden                                   SEK 100            100             100
       Nobel Biocare i Göteborg AB 2                       Gothenburg, Sweden                                   SEK 150            100             100
       Nobel Biocare Holding AB                            Gothenburg, Sweden                                SEK 10’100            100             100
       Nobel Orthopedics AB 2                              Gothenburg, Sweden                                   SEK 100            100             100
       Nobel Biocare AG                                    Kloten, Switzerland                                   CHF 54            100             100
       Nobel Biocare Finance AG                            Kloten, Switzerland                                  CHF 100            100             100
       Nobel Biocare Management AG                         Kloten, Switzerland                                  CHF 100            100               –
       Nobel Biocare Services AG                           Kloten, Switzerland                                  CHF 250            100             100
       Nobel Biocare Asia-Africa Holding AG                Kloten, Switzerland                                CHF 1’000            100             100
       Nobel Biocare Latin America Holding AG              Kloten, Switzerland                                  CHF 100            100             100
       Nobel Biocare Taiwan Co. Ltd.                       Taipei, Taiwan                                   TWD 105’000            100             100
       Nobel Biocare (Thailand) Ltd.                       Bangkok, Thailand                                THB 100’000            100             100
       Nobel Biocare USA, LLC                              Wilmington, USA                                      USD 500            100             100
       Nobel Biocare Procera, LLC                          Wilmington, USA                                        USD 1            100             100
       Nobel Biocare Holding USA Inc.                      Wilmington, USA                                     USD 0.01            100             100

       1 Liquidated on 30 December 2010
       2 Dormant/not operating



  32   Subsequent events

       On 18 January 2011, the first instance court in New York City                      There have been no other material events between 31 Decem-
       dismissed the asset management company’s claim against                             ber 2010, and the date of authorization that would require
       Nobel Biocare Investments N.V. with prejudice on the merits                        adjustments to the consolidated financial statements or dis-
       and costs imposed on them still to be determined. The asset                        closures.
       management company had failed to produce any evidence
       supporting its claim. It appealed the decision of the first in-
       stance court.

       On 16 February, the Board of Directors appointed Richard
       Laube as new CEO to assume his duties on 1 May 2011. He
       will join the company on 1 April 2011 and follow Domenico
       Scala who decided to leave the company with effect from
       30 April 2011.
                                                                                                                               Notes   147




Report of the statutory auditor.


Report of the Statutory Auditor on the Consolidated
Financial Statements to the General Meeting of
Shareholders of Nobel Biocare Holding AG, Kloten

As statutory auditor, we have audited the accompanying con-        obtained is sufficient and appropriate to provide a basis for our
solidated financial statements of Nobel Biocare Holding AG,        audit opinion.
which comprise the balance sheet, income statement, state-
ment of comprehensive income, statement of changes in eq-          Opinion
uity, cash flow statement and notes on pages 98 to 146 for the     In our opinion, the consolidated financial statements for the
year ended 31 December 2010.                                       year ended 31 December 2010 give a true and fair view of the
                                                                   financial position, the results of operations and the cash flows
Board of Directors’ Responsibility                                 in accordance with International Financial Reporting Standards
The board of directors is responsible for the preparation and      (IFRS) and comply with Swiss law.
fair presentation of the consolidated financial statements in
accordance with International Financial Reporting Standards        Report on Other Legal Requirements
(IFRS) and the requirements of Swiss law. This responsibility      We confirm that we meet the legal requirements on licensing
includes designing, implementing and maintaining an internal       according to the Auditor Oversight Act (AOA) and indepen-
control system relevant to the preparation and fair presentation   dence (article 728 CO and article 11 AOA) and that there are
of consolidated financial statements that are free from mate-      no circumstances incompatible with our independence.
rial misstatement, whether due to fraud or error. The board of
directors is further responsible for selecting and applying ap-    In accordance with article 728a paragraph 1 item 3 CO and
propriate accounting policies and making accounting estimates      Swiss Auditing Standard 890, we confirm that an internal
that are reasonable in the circumstances.                          control system exists, which has been designed for the prep-
                                                                   aration of consolidated financial statements according to the
Auditor’s Responsibility                                           instructions of the board of directors.
Our responsibility is to express an opinion on these consoli-
dated financial statements based on our audit. We conducted        We recommend that the consolidated financial statements
our audit in accordance with Swiss law and Swiss Auditing          submitted to you be approved.
Standards as well as International Standards on Auditing. Those
standards require that we plan and perform the audit to obtain
reasonable assurance whether the consolidated financial state-     KPMG AG
ments are free from material misstatement.
                                                                   Rolf Hauenstein                Peter Stössel
An audit involves performing procedures to obtain audit evi-       Licensed Audit Expert          Licensed Audit Expert
dence about the amounts and disclosures in the consolidated        Auditor in Charge
financial statements. The procedures selected depend on the
auditor’s judgment, including the assessment of the risks of
material misstatement of the consolidated financial statements,    Zurich, 16 February 2011
whether due to fraud or error. In making those risk assess-
ments, the auditor considers the internal control system rele-
vant to the entity’s preparation and fair presentation of the
consolidated financial statements in order to design audit pro-
cedures that are appropriate in the circumstances, but not for
the purpose of expressing an opinion on the effectiveness of
the entity’s internal control system. An audit also includes
evaluating the appropriateness of the accounting policies used
and the reasonableness of accounting estimates made, as well
as evaluating the overall presentation of the consolidated fi-
nancial statements. We believe that the audit evidence we have
148   Nobel Biocare Annual Report 2010 — Financial reporting




      Parent company accounts.


      Income statement
      in CHF ’000                                              Note      2010       2009


      Financial income                                                   5’992     6’460
      Dividend income                                            6     674’818    80’000
      Total income                                                    680’810    86’460
      Personnel expenses                                               –13’639   –17’933
      Administrative expenses                                          –22’644   –26’060
      Depreciation                                                        –776     –777
      Financial expenses                                         7     –21’901   –14’295
      Net foreign exchange gains                                        29’110    56’997
      Depreciation investments                                   6    –514’102         –
      Total expenses                                                  –543’952   –2’068
      Profit before tax                                               136’858    84’392
      Tax income/(expenses)                                      8         221    –1’784
      Net result                                                      137’079    82’608
                                                                                                               Parent company accounts Nobel Biocare Holding AG, Kloten           149




Balance sheet
in CHF ’000                                                                                                     Note       31 December 2010                31 December 2009


Assets

Equipment and leasehold improvements                                                                                                       1’147                        1’405
Property, plant and equipment                                                                                       2                      1’147                        1’405
Computer programs                                                                                                                               7                         115
Intangible assets                                                                                                                               7                         115
Investments                                                                                                         3                 2’330’905                    2’330’748
Loans due from Group companies                                                                                                           146’853                      212’603
Financial assets                                                                                                                     2’477’758                    2’543’351
Total non-current assets                                                                                                             2’478’912                    2’544’871
Other receivables due from Group companies                                                                                                40’408                          992
Other receivables                                                                                                                          1’075                        1’021
Treasury shares                                                                                                     5                     17’617                       19’545
Prepaid expenses and accrued income                                                                                                        3’843                        3’851
Cash and cash equivalents                                                                                                                  5’152                       54’302
Total current assets                                                                                                                     68’095                       79’711
Total assets                                                                                                                         2’547’007                    2’624’582


Shareholders’ equity and liabilities
Share capital                                                                                                                             49’514                       49’514
Share premium                                                                                                                          1’130’970                   1’130’970
   thereof: reserves from capital contribution                                                                                        1’130’970 1                            –
Reserve for treasury shares                                                                                         4                     32’831                       27’072
Free reserve                                                                                                                             220’257                      226’016
Retained earnings                                                                                                                        535’833                      466’495
Shareholders’ equity                                                                                                4                1’969’405                    1’900’067
Loans due to Group companies                                                                                                             256’678                             –
Total non-current liabilities                                                                                                           256’678                              –
Loans due to Group companies                                                                                                             315’303                      660’382
Other payables due to Group companies                                                                                                      2’660                        1’832
Other payables                                                                                                                               632                        3’075
Tax liability                                                                                                                                534                        1’887
Provision for unrealized foreign exchange gains                                                                                                 –                      47’164
Accrued expenses and deferred income                                                                                                       1’795                       10’175
Total current liabilities                                                                                                               320’924                      724’515
Total liabilities                                                                                                                       577’602                      724’515
Total shareholders’ equity and liabilities                                                                                           2’547’007                    2’624’582

1 The total reserves from capital contribution are subject to final approval by the Swiss Federal Tax Authorities. However, the proposed withholding tax-free dividend for 2010
  has already been approved by the Swiss Federal Tax Authorities.
150       Nobel Biocare Annual Report 2010 — Financial reporting




          Notes to the parent
          company accounts.
      1   Basis for preparation

          These financial statements have been prepared on a historical cost basis and are in accordance with Swiss law.



      2   Property, plant and equipment
          Equipment and leasehold improvements
          in CHF ’000                                                                                  2010                 2009


          Cost
          Balance as of 1 January                                                                      3’326               3’277
          Additions for the year                                                                        410                   49
          Balance as of 31 December                                                                   3’736                3’326


          Accumulated depreciation and impairment losses, if any
          Balance as of 1 January                                                                      1’921               1’273
          Depreciation charge for the year                                                              668                  648
          Balance as of 31 December                                                                   2’589                1’921


          Carrying amount as of 31 December                                                           1’147                1’405



          The fire insurance value amounts to CHF 1’640 k as of 31 December 2010 (2009: CHF 1’010 k).
                                                                                                                  Notes to the parent company accounts        151




Details of investments                                                                                                                                    3

Investments held directly by Nobel Biocare Holding AG are:

Company, domicile, purpose                                                           Percentage   Share capital         Percentage        Share capital
                                                                                           held       (in ’000)               held            (in ’000)
                                                                                                          2010                                    2009
Nobel Biocare Services AG, Kloten, Switzerland                                             100    CHF      250                100       CHF       250
Acquisition, divestment and administration, including marketing and granting of
licenses of intellectual property rights of any kind in favor of the Nobel Biocare
Group, as well as the rendering of other services in favor of the Nobel Biocare
Group in the fields of management and marketing
Nobel Biocare AG, Kloten, Switzerland                                                      100    CHF       54                100       CHF        54
Distribution of dental implants and industrialized dental
prosthetics
Nobel Biocare Asia-Africa Holding AG,                                                      100    CHF    1’000                100       CHF     1’000
Kloten, Switzerland
Acquisition, divestment and administration of direct and indirect
investments in Asia and Africa
Nobel Biocare Latin America Holding AG, Kloten, Switzerland                                100    CHF      100                100       CHF       100
Acquisition, divestment and administration of direct and indirect
investments in Latin America
Nobel Biocare Finance AG, Kloten, Switzerland                                              100    CHF      100                100       CHF       100
Financing, investments and trading
Nobel Biocare Holding AB, Gothenburg, Sweden                                               100    SEK 10’100                  100        SEK 10’100
Development, manufacturing and sale of pharmaceuticals
and medical technical products
Nobel Biocare Investments N.V., Willemstad, Curaçao,                                       100    EUR    1’000                100       EUR     1’000
the Netherland Antilles
Financing, investments and trading
Nobel Biocare Holding USA Inc., Wilmington, New Castle County                              100    USD 12’000                  100       USD 12’000
Delaware, USA
Acquisition, sale and administration of direct and indirect
investments in North America
Nobel Biocare Management AG, Kloten, Switzerland                                           100    CHF      100
Rendering of services in favor of the Nobel Biocare Group including but not
limited to the fields of management and administration, marketing, research
and development and IT services
AlphaBio – Tec Dental Implants SA, Woodmead, South Africa                                  100    ZAR      400
Distribution of dental implants and dental devices and related activities



For investments held indirectly see note 31 Subsidiaries in the notes to the consolidated financial statements.

Investments are valued at acquisition cost less adjustments for impairment.

Nobel Biocare Holding AG is the parent company of the Nobel Biocare Group.



Shareholders’ equity                                                                                                                                      4

As of 31 December 2010, the issued share capital of the Company consists of 123’784’530 shares with a par value of CHF
0.40 each (2009: 123’784’530). The shares of the Company are listed on the SIX Swiss Exchange.

There are no voting restrictions.
152   Nobel Biocare Annual Report 2010 — Financial reporting




      Equity reconciliation
      in CHF ’000                                           Number      Share        Share   Reserve for       Free   Retained       Total
                                                           of shares   capital    premium       treasury   reserves   earnings
                                                                                                  shares
      Balance as of 1 January 2009                       124’316’530   49’727    1’130’970       57’859    206’412     451’968   1’896’936
      Dividend payment                                                                                                 –68’081     –68’081
      Allocation of shares to share plan participants                                              –203        203                       –
      Transfer to seller of BioCad Medical Inc.                                                    –639        639                       –
      Cancellation                                         –532’000      –213                   –19’627       8’444                –11’396
      Acquisition of treasury shares                                                             20’387     –20’387                      –
      Disposal of treasury shares held by other                                                 –30’705     30’705                       –
      Group companies
      Net result                                                                                                        82’608      82’608
      Balance as of 31 December 2009                    123’784’530    49’514    1’130’970       27’072    226’016    466’495    1’900’067
      Balance as of 1 January 2010                       123’784’530   49’514    1’130’970       27’072    226’016     466’495   1’900’067
      Dividend payment                                                                                                 –67’741     –67’741
      Allocation of shares to share plan participants                                              –898        898                       –
      Acquisition of treasury shares                                                               6’657     –6’657                      –
      Net result                                                                                                       137’079     137’079
      Balance as of 31 December 2010                    123’784’530    49’514    1’130’970       32’831    220’257    535’833    1’969’405




      Conditional share capital
      The share capital may be increased by issuing no more than
      247’620 shares (2009: 247’620), each with a par value of CHF
      0.40, to be fully paid up, equaling an amount of no more than
      CHF 99’048 (2009: CHF 99’048) by virtue of the exercise of
      options granted to employees, Directors and officers of the
      Group (see note 18 Share-based payment transactions in the
      notes to the consolidated financial statements).

      The Board of Directors is authorized to increase the share
      capital until 6 April 2011 by an amount of up to CHF 10 million
      by issuing up to 25 million fully paid-up registered shares with
      a nominal value of CHF 0.40. Alternatively, the share capital
      may be increased by an amount of up to CHF 10 million by
      issuing up to 25 million fully paid-up registered shares with
      a nominal value of CHF 0.40 following the exercise of conver-
      sion and/or option rights which are granted in connection
      with the issuance of bonds or similar debt instruments by the
      Company or one of its Group companies in capital markets
      or in connection with a transaction.
                                                                                                    Notes to the parent company accounts       153




Treasury shares                                                                                                                            5
                                                                   Share buyback    Share buyback              Other               Total
                                                                       program 4        program 1                       treasury shares


Balance as of 1 January 2009                                              532’000               –                   –           532’000
Purchase                                                                                  353’535             300’000           653’535
Share-based payment transactions                                                           –8’500                                –8’500
Transfer to seller of BioCad Medical Inc.                                                 –26’789                               –26’789
Cancellation                                                             –532’000                                              –532’000
Balance as of 31 December 2009                                                  –        318’246             300’000           618’246
Balance as of 1 January 2010                                                    –         318’246            300’000            618’246
Purchase                                                                                                     403’810            403’810
Share-based payment transactions                                                          –22’810                               –22’810
Balance as of 31 December 2010                                                  –        295’436             703’810           999’246




Regarding the treasury shares of the Group, see note 16          Share buyback program 4
Equity in the consolidated financial statements.                 On 14 May 2008, the Group announced a share buyback
                                                                 program of maximum CHF 750 million on a separate, second
Treasury shares held by Nobel Biocare Holding AG are carried     trading line. The Group intends to cancel these shares when
at the lower of cost or market.                                  all shares under the program have been acquired. Under this
                                                                 program, the Group acquired 532’000 shares for a consider-
Share buyback program 1                                          ation of CHF 19’627 k. On 6 April 2009, the Annual General
After the aquisition of BioCad Medical Inc. on 8 January 2009,   Meeting approved the cancellation of the 532’000 treasury
Nobel Biocare Holding AG transferred 26’789 treasury shares      shares acquired through share buyback program 4 in 2008.
to the seller of BioCad Medical Inc. as part of the purchase     On 25 June 2009, these shares were cancelled.
consideration.
                                                                 Other treasury shares
On 23 June and 17 December 2009, Nobel Biocare Holding           On 23 December and 29 December 2009, the Group acquired
AG acquired 353’535 treasury shares from a subsidiary for a      in total 300’000 treasury shares to cover its existing exposure
total consideration of CHF 10’641 k.                             from the performance share unit plan for consideration of
                                                                 CHF 9’746 k.
On 30 June 2009, 8’500 treasury shares were granted to the
Board members under the share plan as described in note 18       On 26 August 2010 and 24 December 2010, the Group ac-
Share-based payment transactions in the notes to the con-        quired in total 403’810 treasury shares to cover its existing
solidated financial statements.                                  exposure from the performance share unit plan for consider-
                                                                 ation of CHF 6’657 k.
On 30 June 2010, 19’000 treasury shares were granted to
Board members under the share plan as described in note 18
to the consolidated financial statement. Participants of the
performance share unit plan were granted 3’810 treasury
shares.
154       Nobel Biocare Annual Report 2010 — Financial reporting




      6   Dividend income

          In 2010, dividend income of CHF 674’818 k (2009: CHF 80’000 k) relates to dividends received from subsidiaries. The dividend
          income from one subsidiary of CHF 514’102 k subsequently resulted in an impairment of that subsidiary. However, invest-
          ments compared with the previous year remained unchanged due to a capital contribution in another subsidiary in the same
          amount.



      7   Financial expenses

          in CHF ’000                                                                                             2010                   2009


          Interest expenses                                                                                       –573                –6’720
          Other financial expenses                                                                              –21’328               –7’575
          Total financial expenses                                                                             –21’901               –14’295




          In 2010, other financial expenses comprise the amortization        structure to be recognized in the income statement over the
          of the arrangement fee as well as the payment of commitment        life of the amended contract.
          fees for a credit facility of CHF 3’883 k (2009: CHF 3’132 k).
          On 22 November 2010, it was announced that the agreement           In 2010 other financial expense comprise a CHF 8’314 k
          was replaced and extended for five years to 2015. In conjunc-      write-down of treasury shares to their market value as of
          tion with this replacement, the remaining capitalized fees         31 December 2010, and a write-down of intercompany loans
          relating to the original agreement were recognized in the in-      of CHF 7’733 k.
          come statement in full (CHF 1’595 k), in favor of the new fee



      8   Tax expense

          As a holding company, Nobel Biocare Holding AG is only             relief. The total tax income of CHF 221 k relates to capital tax
          subject to direct federal tax at an effective tax rate of 7.83     expenses of CHF 650 k (2009: 628 k) and tax income of CHF
          percent. Dividend income of subsidiaries or of other qualifying    871 k related to a reversal of tax provisions for former fiscal
          participations, as well as gains on disposal of qualified par-     years.
          ticipations are basically exempt from tax due to a participation



      9   Securities, sureties, guarantees and pledges in favor of third parties

          in CHF ’000                                                                                             2010                   2009


          Contingent liabilities

          Guarantees to bond holders                                                                            385’000               385’000
          Third party guarantees                                                                                 45’050                60’675
          Total contingent liabilities                                                                         430’050               445’675
                                                                                                  Notes to the parent company accounts    155




Nobel Biocare Investments N.V., Curaçao, the Netherlands          Third-party guarantees include a guarantee to a service pro-
Antilles, issued a one percent convertible bond in the princi-    vider.
pal of CHF 385’000 k due in 2011. Nobel Biocare Holding AG
irrevocably and unconditionally guarantees to the bondhold-       Existing credit lines include a negative pledge clause. Cove-
ers in accordance with Article 111 of the Swiss Code of Ob-       nants covering key ratios such as the net debt/EBITDA ratio
ligations.                                                        are included in these agreements. All covenants were met as
                                                                  of 31 December 2010, and 31 December 2009.
Nobel Biocare Holding AG provided a guarantee to its sub-
sidiary Nobel Biocare Holding AB. Nobel Biocare Holding AG        The Company is part of a value-added tax (VAT) group and,
guarantees an equity ratio of 5 percent. The guarantee only       therefore, jointly liable to the Swiss Federal Tax Authorities
applied if called upon by the subsidiary on or before 31 De-      for the VAT liability of the other members.
cember 2010.



Pension liabilities                                                                                                                      10

Liabilities due to the pension plan as of 31 December 2010 amount to CHF 0 k (2009: CHF 20 k).



Remuneration of the Board of Directors and Executive Committee (EC)                                                                      11

Remuneration system                                               bility level of an employee’s position within the organization,
Nobel Biocare’s remuneration system is aimed at fostering         a comparison with competitors, the scope and impact of an
sustained business success, external competitiveness, inter-      individual’s role, as well as his or her experience and skills.
nal fairness and high performance orientation. The ultimate       This fixed part of the compensation package is reviewed an-
goal of effective remuneration mechanisms is to strengthen        nually. Nobel Biocare has implemented a position evaluation
Nobel Biocare’s global industry leadership for the benefit of     system with a top-down approach, starting with the Executive
its clients while delivering the expected returns to its share-   Committee and the company’s managers. Base salaries are
holders. To ensure long-term effectiveness, Nobel Biocare’s       benchmarked on a yearly basis against similar positions in
remuneration should                                               other multinational companies located in the country where
– reward sustainable performance;                                 the positions are based, taking into account salary survey data
– remain flexible to adapt to economic challenges and chang-      provided by external service providers. Our HR service provid-
   es, as well as market trends;                                  ers are Mercer and Towers Watson. None of these providers
– be regularly benchmarked against competitors;                   has further non-HR related mandates with Nobel Biocare.
– reinforce internal equivalence;                                 Merit increases reflect ongoing individual performance, sal-
– retain talent;                                                  ary history, internal equivalence, as well as market salary
– anticipate business needs;                                      trends and inflation.
– contribute to the further differentiation of Nobel Biocare in
   the global marketplace.                                        Short-term incentive
Aligning performance and compensation is a major element          Short-term variable compensation is designed to provide No-
of Nobel Biocare’s approach to having the right people in the     bel Biocare employees with the opportunity to participate in
right roles, striving to achieve common goals and metrics and     the overall success of the Group based on their personal con-
consistently executing the company’s strategy. Nobel Bio-         tribution and measured against Group and personal objective
care’s remuneration concept is built around several compen-       achievement. A Short-Term Bonus Plan has been in place
sation elements: base salary, short-term incentives, long-term    since 2003 and is applied broadly according to position levels.
incentives and other employee benefits.                           Objectives for local positions are country-specific. Employee
                                                                  performance is reviewed annually and assessed relative to
Base salary                                                       goal achievement. The performance of global functions is
Base salary is evaluated by taking into account the responsi-     regularly evaluated on the basis of individual objectives and
156   Nobel Biocare Annual Report 2010 — Financial reporting




      Nobel Biocare Group’s key performance indicators (KPIs):          PSUP and the PCBP reinforce Nobel Biocare’s goal of achiev-
      Group KPIs for 2010 were defined as relative net sales growth     ing sustainable growth, as well as align the compensation
      and Group profitability.                                          structure with best practices and the interests of the Com-
                                                                        pany’s customers and shareholders.
      The net sales growth at constant exchange rates (CER) of
      Nobel Biocare is benchmarked against an industry peer group       a) Performance Share Unit Plan (PSUP)
      comprising Straumann, Biomet 3i, Zimmer Dental, Astra Tech        This long-term incentive plan covers, with a single global pro-
      and Dentsply. The objective is to outperform the net sales        gram, key position holders within the Group, as well as se-
      growth relative to this peer group.                               lected employees throughout the units and headquarters, as
                                                                        identified by the CEO and endorsed by the NCC. Participants
      Nobel Biocare Group profitability is measured on the basis of     are granted performance-based share units. Vesting of these
      earnings before interest and taxes (EBIT) as a percentage of      grants is subject to specific performance achievements over
      net sales relative to the absolute size of the business. The      the vesting period. The performance achievements are subject
      higher the absolute net sales, the higher the EBIT margin         to conditions defined by the NCC.
      target to be reached is set. This mechanism considers the
      high operating leverage of Nobel Biocare (high gross margin,      The initial value of the grants is between 10 and 100 percent
      relatively static operating cost structure). For 2010, these      of the base salary and is allocated to long-term compensation
      Group KPIs account for 10 to 30 percent of the short-term         within the long-term incentive plan as approved by the NCC.
      variable compensation for eligible Nobel Biocare employees,       For the Executive Committee the initial value of the grants is
      with the individual KPIs accounting for the remaining 70 to       between 50 percent and 100 percent, the latter of which ap-
      90 percent. This year, core competencies and leadership prin-     plies to the CEO. The reference price of the grants is linked
      ciples were introduced as part of the individual goal setting.    to the average share price during the five days following the
                                                                        release of the respective full year results (2010: CHF 28.00;
      Short-term incentive targets can be overachieved up to a          2009: CHF 17.68).
      maximum of 120 percent. Conversely, underperformance in
      individual or Group objectives reduces the short-term incen-      In the case of a change of control, all restricted share units of
      tives granted.                                                    the participant shall immediately vest.

      The target short-term variable compensation lies between 5        Terms of awards grant 2010
      and 80 percent of base salary, depending on functional level,     Vesting is subject to a service period and to the achievement
      and is paid in cash. The target short-term variable compensa-     of market conditions. These conditions assume an outperfor-
      tion lies for the Executive Committee between 33 percent and      mance of the Nobel Biocare (NOBN) share price relative to
      80 percent, the latter of which applies to the CEO. Apart from    the Swiss Leader Index for the vesting period. If this relative
      those selected global and local functions, sales representa-      outperformance is achieved, each share unit will be convert-
      tives receive quarterly incentives based on their sales perfor-   ed into a predetermined amount of Nobel Biocare shares at
      mance in the given quarter. These incentive compensation          vesting date. One-third (tranche 1) of the allocated share units
      plans are region-specific. In addition, for selected functions,   vest after one year (28 February 2011), one-third (tranche 2)
      team objectives are defined and rewarded.                         after two years (28 February 2012) and the remaining third
                                                                        (tranche 3) after three years (28 February 2013). In the case
      Long-term incentive                                               of underperformance the grant will be zero.
      The aim of long-term remuneration is to reward executives
      by linking compensation with Group and country-specific           Terms of awards grant 2009
      performance over a three-year period, reflecting Nobel Bio-       Vesting is subject to a three-year service period lasting until
      care’s commitment to sustainable growth. The Company has          30 April 2012, and to the achievement of market conditions.
      two amended alternative long-term, performance-based plans        These conditions assume an outperformance of the Nobel
      in place that have been approved by the Nomination and            Biocare (NOBN) share price relative to the Swiss Market Index
      Compensation Committee of the Board of Directors (NCC) in         for the period. If this relative outperformance is achieved, each
      2010: a Performance Share Unit Plan (PSUP) and a Perfor-          share unit will be converted into a predetermined amount of
      mance Cash Bonus Plan (PCBP). The guiding principles of the       Nobel Biocare shares at the vesting date.
                                                                                                                             Notes to the parent company accounts     157




Terms of awards grant 2008                                                          Other employee benefits
Vesting is subject to a service period lasting until 31 March                       Other employee benefits are country-specific and structured
2011, and to the achievement of two equally weighted non-                           in accordance with local practice, legal requirements and
market performance conditions (compound sales growth and                            competitive benchmarking. In 2010 Nobel Biocare reviewed
EBIT margin for the financial years 2008 to 2010). The actual                       its Swiss pension plan and modified the contribution to 2/3
number of shares allotted upon vesting depends on the                               for the company and 1/3 for the employee. The risk coverage
achievement of the performance conditions. If the minimum                           has been increased as well. Nobel Biocare regularly reviews
threshold is not met, the PSUs lapse. Achievement of the                            its other insurance status worldwide and assesses its pro-
maximum threshold would result in allotting shares for 200                          grams in this area with the support of an international bro-
percent of granted PSUs. Variances within the thresholds are                        ker.
awarded on a linear basis.
                                                                                    Changes for 2011
b) Performance Cash Bonus Plan (PCBP)                                               For 2011, Group KPIs for EC members will account for 50
This long-term incentive plan covers key position holders                           percent of the short-term variable compensation, while 20
within country organizations who would otherwise not be                             percentwill be based on Functional and 30 percent on Indi-
eligible for the PSUP. The plan is approved by the CEO and                          vidual KPIs.
endorsed by the NCC.
                                                                                    Responsibilities and methods of determining remuneration and
Participants in the Performance Cash Bonus Plan (PCBP) are                          compensation plans

entitled to be rewarded on the basis of specific performance                        The Board of Directors decides on the Board members’ re-
achievements over a three-year period. Performance will be                          muneration policies, as well as on the individual compensation
measured for the period from 2010 to 2012 by a combination                          plans based on the NCC’s proposals. In addition to proposing
of Group and country-specific KPIs; for 2010 the Group KPIs                         remuneration plans and policies, the NCC endorses the base
are a relative growth target measured against a benchmark,                          salary and performance goals of the CEO as proposed by the
as well as an EBIT margin target that depends on the absolute                       Chairman. The Vice Chairman proposes the remuneration of
size of the business. The two additional KPIs for 2010 per                          the Chairman of the Board. The CEO proposes the base
country are: net sales, and local costs measured as a percent-                      salaries and performance goals of members of the Executive
age of net sales per local country budget over three years on                       Committee as well as Nobel Biocare’s other management
a cumulative basis. The local KPIs are determined by the Vice                       members for approval by the NCC. The NCC regularly informs
President and General Manager in charge of the respective                           the full Board of Directors on the status of compensation.
region.                                                                             When the remuneration of individual members of the Board is
                                                                                    under discussion, the affected member abstains from voting.
The allocated incentive is between 10 and 30 percent of base
salary and is fully paid in cash in local currency.

Members of the Executive Committee as of 31 December 2010
Name                                                                                                                            Position                 Employed


Domenico Scala                                                                                                    Chief Executive Officer                      2007
Dirk Kirsten                                                                                                       Chief Financial Officer                     2008
Hans Geiselhöringer 1                                                                   Executive Vice President Marketing and Products                        2010
Alexander Ochsner                                             Senior Vice President and General Manager Europe, Middle East and Africa                         2008
Thomas M. Olsen                                                Senior Vice President and General Manager Latin America and Asia/Pacific                        1999
Petra Rumpf                                                          Senior Vice President Business Development and Strategic Planning                         2007
William Ryan                                                                              President and General Manager North America                          2009
Hans Schmotzer                                                                      Executive Vice President Research and Development                          2008
Nicolas Weidmann                                                                           Senior Vice President Global Communications                         2007
Ernst Zaengerle                                                                               Executive Vice President Global Operations                       2009

1 Hans Geiselhöringer was appointed Executive Vice President Marketing and Products, under management service contract, as of 10 February 2010 and succeeded
  Robert Gottlander.
158   Nobel Biocare Annual Report 2010 — Financial reporting




      Compensation of Executive Committee (EC)                                                 no changes of control clauses existed within the employment
      members                                                                                  contracts.
      Executive Committee members with the exception of one
      member under management service contract take part in the                                Compensation of the Board of Directors
      PSUP. The fair value per unit was measured based on a Mon-                               The 2010 total compensation of the Board of Directors is di-
      te Carlo simulation. Market conditions are taken into account                            vided into two parts: cash and restricted shares. The cash
      when estimating the fair value of the instruments granted.                               portion was paid in April and October in equal installments
      Service conditions are not taken into account for the grant                              and amounted to CHF 65’645 per annum, applied pro rata
      date fair value measurement of the services received. Addi-                              temporis for each member of the Board. An additional reim-
      tional information regarding the measurement of performance                              bursement of CHF 17’275 was paid to the Board members
      share unit grants is disclosed in note 18 to the consolidated                            who participate in a committee.
      financial statements.
                                                                                               Members of the Board participate in a specific Board of Direc-
      Except for two EC members who reside in the USA and one                                  tors share plan. Shares were granted on 30 June 2010, and
      member under management service contract, EC members                                     are restricted as to sale until 30 June 2015. For the related
      – including the CEO – are covered by the pension scheme                                  fair value calculation, please see note 18 to the consolidated
      applicable to Swiss subsidiaries.                                                        financial statements. Each Board member received a grant of
                                                                                               2’000 restricted shares, pro rata temporis.
      Contract details and clauses on changes of control
      The CEO contract contains a six-month notice period. The                                 The Chairman of the Board received a cash compensation of
      Company has the option to require a non-competition obliga-                              CHF 82’920 and CHF 17’275 extra for each of the two addi-
      tion for one year against payment of salary. The period of                               tional commissions he chaired all prorata temporis, and 3’000
      notice for all EC members is up to six months. EC members                                restricted shares pro rata temporis. The Chairman of the Au-
      who left the EC in 2010 were released from some of their                                 dit Committee received a cash compensation of CHF 65’645,
      duties during their termination period. They retain the right to                         CHF 31’095 for the commission he chaired all pro rata tem-
      receive salary and variable compensation for the duration of                             poris and 2’000 restricted shares pro rata temporis.
      the termination period. Based on their individual agreements,
      they may be entitled to retain their options and restricted share                        The Board of Directors’ fees are not pensionable.
      units. No severance payments exist. As of 31 December 2010

      Remuneration of the Executive Committee members for the years ended 31 December
                                                                                      Domenico                       Other Executive                                     Total
                                                                                     Scala, CEO 1                Committee members 2
      in CHF ’000                                                       2010                  2009              2010                 2009              2010               2009


      Fixed compensation                                                  800                  650              4’427               3’338              5’227             3’988
      Variable compensation 3                                             384                  418              1’127               1’204              1’511             1’622
      Fair value of performance share units 4                             655                  199              1’992                 669              2’647               868
      Pension expense and social security costs                           219                  141                766                 562                985               703
      Other benefits 5                                                      39                    8               370                 208                409               216
      Sign-on compensation                                                   –                 500                  –                    –                  –              500
      Severance payments                                                     –                    –                 –                 731                   –              731
      Fair value of options                                                  –                    –                 –                    –                  –                –
      Total                                                             2’097                1’916             8’682                6’712            10’779              8’628

      1   Highest total compensation for a member of the Executive Committee.
      2   Other Executive Committee members include Robert Gottlander who was a member of the Executive Committee until 25 October 2010.
      3   Variable compensation is on an accrual basis.
      4   Based on the income statement charge 2010 for the PSUP 2008, 2009 and 2010
      5   Other benefits include certain insurance coverage for EC members working in the US. Other benefits also include car allowance and tax equalization payments.
          The CEO is entitled to a car with driver for business commute.
                                                                                                                               Notes to the parent company accounts   159




Number of performance share units, shares and stock options held as of 31 December 2010
                                                 Number of            Number of              Performance        Performance       Performance         Stock option
                                               shares held 1        performance               share units        share units       share units          grant 2007
                                                                share units held 2            grant 2010         grant 2009        grant 2008


Domenico Scala                                        29’280               78’929                  28’571             36’765             13’593             10’000
Dirk Kirsten 3                                         1’600               35’367                  11’700             18’529              5’138                   –
Hans Geiselhöringer 4                                       –                        –                      –              –                  –                   –
Robert Gottlander 5                                   47’160               32’168                  10’150             16’075              5’943             75’000
Alexander Ochsner                                        500               26’176                    9’270            14’649              2’257                   –
Thomas M. Olsen                                       39’890               23’431                    7’252            12’192              3’987             75’000
Petra Rumpf 6                                          7’900               39’296                  12’875             20’390              6’031             35’000
Bill Ryan                                                   –              12’816                    7’615             5’201                  –                   –
Hans Schmotzer                                              –              24’115                    8’313            13’165              2’637                   –
Nicolas Weidmann                                            –              25’750                    8’125            12’868              4’757             25’000
Ernst Zaengerle                                        4’2007              10’625                  10’625                  –                  –                   –
Total                                               130’530              308’673                 114’496            149’834             44’343            220’000

1   Includes shares acquired in the market
2   Includes performance share units received in 2010, 2009 and 2008
3   Amounts do not include CHF 50 k in Nobel Biocare convertible bonds acquired in the market
4   Under management service contract
5   Robert Gottlander was a member of the Executive Committee until 25 October 2010
6   Amounts do not include CHF 500 k in Nobel Biocare convertible bonds acquired in the market
7   Including 1’000 restricted shares



Number of performance share units, shares and stock options held as of 31 December 2009
                                                                    Number of                 Number of         Performance       Performance         Stock option
                                                                   shares held 1            performance          share units       share units          grant 2007
                                                                                         share units held        grant 2009        grant 2008


Domenico Scala                                                            14’850                  50’358              36’765             13’593             10’000
Dirk Kirsten 2                                                              1’600                 23’667              18’529              5’138                   –
Robert Gottlander                                                         50’160                  22’018              16’075              5’943             75’000
Mathias Krebs 3                                                             1’500                 16’620              12’134              4’486             62’500
Alexander Ochsner                                                             500                 16’906              14’649              2’257                   –
Thomas M. Olsen                                                           39’890                  16’179              12’192              3’987             75’000
Petra Rumpf 4                                                               7’900                 26’421              20’390              6’031             35’000
Bill Ryan 5                                                                     –                  5’201               5’201                  –                   –
Hans Schmotzer                                                                  –                 15’802              13’165              2’637                   –
Nicolas Weidmann                                                                –                 17’625              12’868              4’757             25’000
Ernst Zaengerle 5                                                          4’200 6                      –                  –                  –             10’000
Total                                                                   120’600                 210’797             161’968             48’829            292’500

1   Includes shares acquired in the market
2   Amounts do not include CHF 50 k in Nobel Biocare convertible bonds acquired in the market
3   Mathias Krebs was a member of the Executive Committee until November 2009
4   Amounts do not include CHF 500 k in Nobel Biocare convertible bonds acquired in the market
5   Appointed EC member on 19 October 2009
6   Including 2’000 restricted shares
160   Nobel Biocare Annual Report 2010 — Financial reporting




      Members of the Board elected by the General Meeting on 25 March 2010
      Name                                                                                         Nationality              Position   First elected   Elected until


      Heino von Prondzynski                                                                            German              Chairman            2010            2011
      Rolf Watter                                                                                        Swiss         Vice Chairman           2007            2011
      Daniela Bosshardt-Hengartner                                                                       Swiss              Member             2010            2011
      Raymund Breu                                                                                       Swiss              Member             2010            2011
      Stig G. Eriksson                                                                                  Finnish             Member             2006            2011
      Antoine Firmenich                                                                                  Swiss              Member             2005            2011
      Edgar Fluri                                                                                        Swiss              Member             2008            2011
      Robert Lilja                                                                                     Swedish              Member             2005            2011
      Oern Stuge                                                                                    Norwegian               Member             2010            2011



      Remuneration of the Board of Directors for the years ended 31 December
                                                                                                         2010                                                  2009
      in CHF ’000                                           Cash 1         Fair value of                 Total                Cash 1   Fair value of           Total
                                                                              restricted                                                  restricted
                                                                                 shares                                                      shares
      Heino von Prondzynski 3                                   88                    53                   141                     –              –               –
      Rolf Soiron 4                                             25                     –                    25                  108              36             144
      Rolf Watter                                               83                    36                   119                   91              24             115
      Daniela Bosshardt-Hengartner 3                            62                    36                    98                     –              –               –
      Raymund Breu 3                                            62                    36                    98                     –              –               –
      Stig G. Eriksson                                          83                    36                   119                   91              24             115
      Antoine Firmenich                                         83                    36                   119                   91              24             115
      Edgar Fluri                                               97                    36                   133                  106              24             130
      Robert Lilja                                              83                    36                   119                   91              24             115
      Jane Royston 4                                            21                     –                    21                   91              24             115
      Oern Stuge 3                                              62                    36                    98                     –              –               –
      Ernst Zaengerle 5                                           –                    –                     –                   74              24              98
      Total                                                    749                  341                 1’090                   743             204             947

      1   Cash compensation is on an accrual basis
      2   Based on the income statement charge 2010 as disclosed in note 18 to the consolidated financial statements
      3   Compensation based on period of service starting 25 March 2010
      4   Compensation based on period of service ending 25 March 2010
      5   Ernst Zaengerle left the Board of Directors in October 2009
                                                                                                                       Notes to the parent company accounts   161




Number of shares and stock options held as of 31 December 2010
Board of Directors                               Number of             Number of Restricted shares Restricted shares   Total number of        Stock option
                                                unrestricted            restricted      grant 2010        grant 2009     stock options          grant 2007
                                                shares held 1         shares held

Heino von Prondzynski 2                                26’800                 3’000          3’000                 –                  –                   –
Rolf Soiron 3                                        434’1854                3’000 5             –             1’500                  –                   –
Rolf Watter                                            26’200                 3’000          2’000             1’000                  –                   –
Daniela Bosshardt-Hengartner 2                               –                2’000          2’000                 –                  –                   –
Raymund Breu 2                                         20’000                 2’000          2’000                 –                  –                   –
Stig G. Eriksson                                        3’250                 3’000          2’000             1’000                  –                   –
Antoine Firmenich                                       1’000                 3’000          2’000             1’000                  –                   –
Edgar Fluri                                             8’500                 3’000          2’000             1’000                  –                   –
Robert Lilja                                           17’375                 3’000          2’000             1’000                  –                   –
Jane Royston 3                                              –4               2’000 5             –             1’000                  –                   –
Oern Stuge 2                                                 –                2’000          2’000                 –                  –                   –
Total                                               537’310                 29’000         19’000             7’500                   –                   –

1   Includes shares acquired in the market
2   Period of service starting 25 March 2010
3   Period of service ending 25 March 2010
4   Number of unrestricted shares held as of 25 March 2010
5   Number of restricted shares held as of 25 March 2010 (including grant 2009 and 2008)




Number of shares and stock options held as of 31 December 2009
Board of Directors                               Number of             Number of Restricted shares Restricted shares   Total number of        Stock option
                                                unrestricted            restricted      grant 2009        grant 2008     stock options          grant 2007
                                                shares held 1         shares held


Rolf Soiron                                          434’185                  3’000          1’500             1’500             12’500             12’500
Rolf Watter                                            16’000                 2’000          1’000             1’000             10’000             10’000
Stig G. Eriksson                                        2’250                 2’000          1’000             1’000             10’000             10’000
Antoine Firmenich                                            –                2’000          1’000             1’000             10’000             10’000
Edgar Fluri 2                                           8’000                 1’500          1’000              500                   –                   –
Robert Lilja                                           16’375                 2’000          1’000             1’000             10’000             10’000
Jane Royston                                                 –                2’000          1’000             1’000             10’000             10’000
Ernst Zaengerle 3                                       2’200                 2’000          1’000             1’000             10’000             10’000
Total                                               479’010                16’500            8’500            8’000             72’500              72’500

1 Includes shares acquired in the market
2 Compensation based on period of service starting 1 July 2008
3 Compensation based on period of service ending 18 October 2009
162    Nobel Biocare Annual Report 2010 — Financial reporting




  12   Major shareholders

       The Board of Directors is aware of the following major shareholders with a holding exceeding 3 percent of all votes as of 31
       December:

                                                                                                            2010                      %                   2009                      %


       Nobel Biocare Holding AG and Subsidiaries 1                                                       999’246                     0.8               618’246                    0.5
       Artio Global Management LLC                                                                     3’852’452                     3.1         not disclosed                     <3
       BlackRock, Inc. (USA)                                                                       not disclosed                     <3              7’776’074                    6.3
       FMR, LLC (USA)                                                                              not disclosed                     <3              6’198’326                    5.0
       UBS (Switzerland)                                                                           not disclosed                     <3              6’185’831                    5.0
       Bank of New York Mellon Corporation (USA)                                                   not disclosed                     <3              5’631’346                    4.5
       Gartmore Investment Limited (UK)                                                            not disclosed                     <3              4’032’351                    3.3
       Others                                                                                       118’932’832                    96.1            93’342’356                    75.4
       Total                                                                                       123’784’530                   100.0           123’784’530                   100.0

       1 Nobel Biocare held in addition: in 2010: 3’366’245 call options, representing 2.7 percent shareholdings; in 2009: 5’381’450 call options, representing 4.4 percent sharehold-
         ings and 517’870 put options, representing 0.4 percent shareholdings.




  13   Risk assessment

       As part of the Enterprise Risk Management (ERM) System                                    The Company has implemented a risk based Internal Controls
       the Company has systematically analyzed, updated and doc-                                 System (ICS) based on the Committee of Sponsoring Orga-
       umented its risk assessment with regard to risks that could                               nizations (COSO) framework. The controls are designed and
       have a material effect on the financial statements.                                       tested to provide reasonable assurance regarding the reli-
                                                                                                 ability of financial reporting and the preparation of financial
       Risks are reported to the Executive Committee and the Board                               statements in accordance with the International Financial
       of Directors at least once a year. Key risks and significant                              Reporting Standards (IFRS) and with Swiss law. The Audit
       incidents are discussed in all Executive Committee, Board, as                             Committee monitors the quality of the executed controls and
       well as in local management team meetings. The Board of                                   processes, as well as the design of the ICS.
       Directors of Nobel Biocare last approved the Risk Assessment
       in their Board meeting held on 15 December 2010.



  14   Subsequent events

       On 16 February, the Board of Directors appointed Richard                                  There have been no other material events between 31 De-
       Laube as new CEO to assume his duties on 1 May 2011. He                                   cember 2010 and the date of authorization that would require
       will join the company on 1 April 2011 and follow Domenico                                 adjustments to the financial statements or disclosure.
       Scala who decided to leave the company with effect from
       30 April 2011.
                                                                                                                         Notes to the parent company accounts   163




Appropriation of
available earnings.
Appropriation of available earnings
in CHF                                                                                                                        2010                     2009
                                                                                                                   Proposal of the         Resolution of the
                                                                                                                 Board of Directors         Annual General
                                                                                                                                                    Meeting
Available earnings at the disposal of the Annual General Meeting                                                       535’832’838               466’495’327
Dividend of CHF 0.55 gross per CHF 0.40 share                                                                                     –              –67’741’456
Carryforward                                                                                                          535’832’838              398’753’871


Allocation of reserves from capital contributions                                                                       43’324’586                         –
Withholding tax free distribution as dividend of CHF 0.35 per registered share out of free reserves                    –43’324’586                         –

Carryforward                                                                                                                      –                        –



If the Annual General Meeting approves the above proposal                                 Dividends on staff options and warrants, which may be exer-
from the Board of Directors, the dividend of CHF 0.35 per                                 cised before the date of dividend payment and totaling
share will be paid as of 6 April 2011.                                                    247’620 shares, could lead to additional dividend payments
                                                                                          of CHF 136’191.
164   Nobel Biocare Annual Report 2010 — Financial reporting




      Report of the statutory auditor.


      Report of the Statutory Auditor on the Financial
      Statements to the General Meeting of Shareholders
      of Nobel Biocare Holding AG, Kloten

      As statutory auditor, we have audited the accompanying finan-       Opinion
      cial statements of Nobel Biocare Holding AG, which comprise         In our opinion, the financial statements for the year ended
      the balance sheet, income statement and notes on pages 148          31 December 2010 comply with Swiss law and the company’s
      to 163 for the year ended 31 December 2010.                         articles of incorporation.

      Board of Directors’ Responsibility                                  Report on Other Legal Requirements
      The board of directors is responsible for the preparation of the    We confirm that we meet the legal requirements on licensing
      financial statements in accordance with the requirements of         according to the Auditor Oversight Act (AOA) and indepen-
      Swiss law and the company’s articles of incorporation. This         dence (article 728 CO and article 11 AOA) and that there are
      responsibility includes designing, implementing and maintain-       no circumstances incompatible with our independence.
      ing an internal control system relevant to the preparation of
      financial statements that are free from material misstatement,      In accordance with article 728a paragraph 1 item 3 CO and
      whether due to fraud or error. The board of directors is further    Swiss Auditing Standard 890, we confirm that an internal
      responsible for selecting and applying appropriate accounting       control system exists, which has been designed for the prep-
      policies and making accounting estimates that are reasonable        aration of financial statements according to the instructions
      in the circumstances.                                               of the board of directors.

      Auditor’s Responsibility                                            We further confirm that the proposed appropriation of avail-
      Our responsibility is to express an opinion on these financial      able earnings complies with Swiss law and the company’s
      statements based on our audit. We conducted our audit in            articles of incorporation. We recommend that the financial
      accordance with Swiss law and Swiss Auditing Standards.             statements submitted to you be approved.
      Those standards require that we plan and perform the audit to
      obtain reasonable assurance whether the financial statements
      are free from material misstatement.                                KPMG AG

      An audit involves performing procedures to obtain audit evi-        Rolf Hauenstein              Peter Stössel
      dence about the amounts and disclosures in the financial state-     Licensed Audit Expert        Licensed Audit Expert
      ments. The procedures selected depend on the auditor’s judg-        Auditor in Charge
      ment, including the assessment of the risks of material
      misstatement of the financial statements, whether due to fraud
      or error. In making those risk assessments, the auditor consid-     Zurich, 16 February 2011
      ers the internal control system relevant to the entity’s prepara-
      tion of the financial statements in order to design audit proce-
      dures that are appropriate in the circumstances, but not for the
      purpose of expressing an opinion on the effectiveness of the
      entity’s internal control system. An audit also includes evaluat-
      ing the appropriateness of the accounting policies used and
      the reasonableness of accounting estimates made, as well as
      evaluating the overall presentation of the financial statements.
      We believe that the audit evidence we have obtained is suffi-
      cient and appropriate to provide a basis for our audit opinion.
                     The Nobel Biocare share   165




Share information.
166   Nobel Biocare Annual Report 2010 — Share information




      The Nobel Biocare share.


      Share information                                                           Share trends and turnover

      Listing                                                SIX Swiss Exchange                                        2010                  2009

      Security number                                                003785164
                                                                                  Share price at year-end          CHF 17.63            CHF 34.78
      ISIN number                                                CH0037851646
                                                                                  Market value                  CHF 2.182 mn         CHF 4.305 mn
      Reuters                                                         NOBN.VX
                                                                                  Variance                           – 49.3%              + 62.4%
      Bloomberg                                                       NOBN VX
                                                                                  All-year high                    CHF 36.15            CHF 35.69
                                                                                  Date                           04 Jan 2010           29 Dec 2009
      Further capital and share related information may be found
                                                                                  All-year low                     CHF 15.20            CHF 16.15
      in the Corporate Governance section.
                                                                                  Date                           03 Nov 2010           11 Feb 2009
                                                                                  Trading volume (shares)           303.0 mn             259.6 mn
      Dividend policy and proposal
                                                                                  Average per day                  1’192’882             1’034’370
      Nobel Biocare’s dividend policy is based on the capital man-
      agement principles as outlined in Note 28 (page 143) and
      should reflect the Group’s long-term financial development,                 The analysts listed on page 168 follow the Nobel Biocare
      taking into account the need for investments and the ex-                    share. Please note that any opinions, estimates or forecasts
      pected economic fluctuations in particular years. It is designed            regarding Nobel Biocare’s performance made by these ana-
      to maintain attractive dividend yields for investors and an                 lysts are theirs alone and do not represent opinions, forecasts
      affordable payout ratio of between 35 percent and 45 percent                or predictions of Nobel Biocare or its management. Nobel
      (calculated as dividend in percentage of available profit for               Biocare does not by its reference above imply its endorsement
      the year) as a general target.                                              of or concurrence with such information, conclusions or rec-
                                                                                  ommendations.
      For 2010, the Board of Directors proposes a dividend of CHF
      0.35 (2009: CHF 0.55). The proposed dividend for the 2010
      financial year is equivalent to 75 percent of profit after tax.
      (2009: 43 percent).
                                                                                                                             The Nobel Biocare share   167




Share data 1
                                                                     2010          2009          2008          2007          2006              2005


Shares on 31 Dec                            (number)           123’784’530   123’784’530   124’316’530   132’828’970   131’496’125      129’774’415
Average number of shares                    (number)           123’035’900   123’276’298   122’269’517   123’439’020   124’789’750      127’704’525
Shares after full conversion 3              (number)           149’032’150   149’032’620   124’564’150   133’086’590   133’086’590      133’086’590
Share price 31 Dec                             (CHF)                 17.63         34.78         21.42         60.60         72.05            57.80
Market value 31 Dec                        (CHF mn)                  2‘182         4’305         2’663         8’049         9’474            7’501
Dividend per share 2                           (CHF)                  0.35          0.55          0.55          0.95          0.85             0.70
Yield 2                                           (%)                 1.99          1.58          2.57          1.57          1.18             1.21
Dividend percentage 2                             (%)                  75            43            41            46            45                38
Basic earnings per share                       (EUR)                  0.37          0.86          0.90          1.35          1.27             1.21
Diluted earnings per share                     (EUR)                  0.37          0.85          0.90          1.34          1.26             1.19
Equity per share                               (EUR)                  2.59          2.58          2.19          2.17          2.89             2.80
Equity per share after full conversion         (EUR)                  2.15          2.13          2.15          2.01          2.71             2.69
Cash flow from operations per share            (EUR)                  0.79          1.44          1.38          1.09          1.28             0.84
P/E ratio after tax                                                    34            27            16            27            35                31

1 Numbers prior to 2008 adjusted to reflect 1:5 share split.
2 Proposed dividend for 2011.
3 Includes conditional capital of 25’247’620 shares.
168   Nobel Biocare Annual Report 2010 — Share information




      Analyst coverage
      Firm                                               Analyst                                          E-mail


      Bank am Bellevue                                   Sandra Künzle                                    sku@bellevue.ch
      Bank of America Merrrill Lynch                     Ed Ridley-Day                                    ed.ridleyday@baml.com
      Bank Vontobel                                      Carla Bänziger                                   carla.baenziger@vontobel.ch
      Berenberg Bank                                     Tom Jones                                        tom.jones@berenberg.de
      BZ Bank                                            Urban Fritsche                                   –
      Cheuvreux                                          Thomas Bernhardsgruetter                         –
      Citigroup                                          Cora McCallum                                    cora.mccallum@citi.com
      Commerzbank                                        Oliver Metzger                                   oliver.metzger@commerzbank.com
      Credit Suisse                                      Christoph Gretler                                christoph.gretler@credit-suisse.com
      Deutsche Bank                                      Yi-Dan Wang                                      yi-dan.wang@db.com
      Equita SIM                                         Fabio Fazzari                                    f.fazzari@equitasim.it
      Evolution Securities                               Chris Donnellan                                  chris.donnellan@evosecurities.com
      Exane BNP Paribas                                  Julien Dormois                                   julien.dormois@exanebnpparibas.com
      Goldman Sachs                                      Veronika Dubajova                                veronika.dubajova@gs.com
      Helvea                                             Daniel Jelovcan                                  djelovcan@helvea.com
      J.P. Morgan Cazenove                               David Adlington                                  david.adlington@jpmorgan.com
      Jefferies International                            Stephan Gasteyger                                sgasteyger@jefferies.com
      Kepler Capital Markets                             Florian Gaiser                                   florian.gaiser@keplercm.com
      Macquarie                                          Claudia Lakatos                                  claudia.lakatos@macquarie.com
      MainFirst Bank                                     Marcus Wieprecht                                 marcus.wieprecht@mainfirst.com
      Morgan Stanley                                     Michael Jüngling                                 michael.jungling@morganstanley.com
      Morningstar                                        Bill Buhr                                        bill.buhr@morningstar.com
      Nomura                                             Martin Brunninger                                martin.brunninger@nomura.com
      NZB Neue Zürcher Bank                              Stephan Vollert                                  stephan.vollert@nzb.ch
      Redburn Partners                                   Ilan Chaitowitz                                  –
      Sanford C. Bernstein                               Jack Scannell                                    jack.scannell@bernstein.com
      Standard & Poor’s                                  Jacob Thrane                                     jacob_thrane@standardandpoors.com
      UBS                                                Maja Stephanie Pataki                            maja-s.pataki@ubs.com
      Zürcher Kantonalbank                               Sibylle Bischofberger                            sibylle.bischofberger@zkb.ch




      Contact information
      Company address                                    Nobel Biocare Holding AG
                                                         P.O. Box, 8058 Zurich-Flughafen, Switzerland
                                                         Phone +41 43 211 42 00, Fax +41 43 211 42 42
                                                         E-mail investor.relations@nobelbiocare.com
                                                         www.nobelbiocare.com
      Investor Relations                                 Süha Demokan, Head of Investor Relations
                                                         Phone +41 43 211 42 30 or +41 79 430 81 46
                                                         E-mail suha.demokan@nobelbiocare.com
      Media Relations                                    Nicolas Weidmann, Sr. VP Global Communications
                                                         Phone +41 43 211 42 80 or +41 79 372 29 81
                                                         E-mail nicolas.weidmann@nobelbiocare.com
                                                                                                                   The Nobel Biocare share   169




Nobel Biocare vs. Swiss Market Index 2010 (in percent)


  10

   0

 – 10

 – 20

 – 30

 – 40

 – 50


        Jan 10                            Apr 10                          Jul 10                   Oct 10                          Dec 10

        Nobel Biocare
        Swiss Market Index




Nobel Biocare vs. Swiss Market Index since 5 years (in percent)


  60

  40

  20

   0

 –20

 –40

 –60


        2006                       2007                           2008               2009                   2010

        Nobel Biocare
        Swiss Market Index




Nobel Biocare vs. Swiss Market Index since listing (in percent)


 400

 300

 200

 100

   0

–100


                 2003          2004                2005            2006       2007          2008     2009               2010

        Nobel Biocare
        Swiss Market Index
170   Nobel Biocare Annual Report 2010 — Other




      Nobel Biocare worldwide.


      Headquarter                             BioCad Medical, Inc.                   India                                  Europe
                                              750 Boulevard Du Parc-Technologique    Nobel Biocare India Pvt Ltd
      Switzerland                             Quebec, Quebec G1P 4S3 Canada          Fortune 2000, 103 A &B 1st Floor,      Austria
      Nobel Biocare Holding AG                Phone +1 418 683 8435                  C-Wing                                 Nobel Biocare Österreich GmbH
      P.O. Box                                Fax +1 418 263 2531                    Bandra Kurla Complex, Bandra (East)    Linke Wienzeile 244–246
      8058 Zürich-Flughafen, Switzerland                                             400051 Mumbai, India                   1150 Vienna, Austria
      Visiting address: Balsberg              Nobel Biocare Procera Services, Inc.   Phone +91 22 6751 9999                 Phone +43 1 892 8990
      Balz Zimmermann-Strasse 7               750 Boulevard Du Parc-Technologique    Fax +91 22 6751 9900                   Fax +43 1 892 8990 21
      8302 Kloten, Switzerland                Quebec, Quebec G1P 4S3 Canada
      Phone +41 43 211 42 0                   Phone +1 418 683 8435                  Japan                                  Belgium
      Fax +41 43 211 42 42                    Fax +1 418 263 2531                    Nobel Biocare Japan K.K.               Nobel Biocare Belgium NV
                                                                                     8F Shinagawa Grand Central Tower       Industriezone Maalbeek
                                              Mexico                                 2-16-4, Konan                          Roekhout 17
                                              Nobel Biocare Mexico SA de CV          108-0075 Minato-Ku, Tokyo, Japan       1702 Groot-Bijgaarden, Belgium
      Africa                                  Blvd. Manuel Avila Camacho No. 36      Phone +81 3 6717 6191                  Phone +32 2 467 41 70
                                              Piso 11, Lomas de Chapultepec          Fax +81 3 6717 6176                    Fax +32 2 467 41 80
      South Africa
                                              11000 Mexico City, Mexico
      Nobel Biocare South Africa (Pty) Ltd
                                              Phone +52 55 524 974 60                Nobel Biocare Procera K.K.             Medicim NV
      Unit E105, First Floor, Building 5,
                                              Fax +52 55 554 072 77                  3-6-2 Akanehama                        Kardinaal Mercierplein 1
      Yellow wood Place
                                                                                     275-0024 Narashino-shi, Chiba, Japan   2800 Mechelen, Belgium
      Woodmead Business Park,
                                              USA                                    Phone +81 47 455 0171                  Phone +32 15 44 32 00
      145 Western Services Road
                                              Nobel Biocare USA, LLC                 Fax +81 47 455 0181                    Fax +32 15 44 32 09
      2157 Woodmead, South Africa
                                              22715 Savi Ranch Parkway
      Phone +27 11 802 0112
                                              Yorba Linda, California 92887 USA      New Zealand                            Netherlands
      Fax +27 11 802 0120
                                              Phone +1 714 282 4800                  Nobel Biocare New Zealand Ltd          Nobel Biocare Nederland BV
                                              Fax +1 714 998 9236                    Level 4                                De Molen 23
      Alpha-Bio Tec Dental Implants SA
                                                                                     7 Eden Park Drive                      3994 DA Houten, Netherlands
      Unit E105, First Floor, Building 5,
                                              Nobel Biocare Procera, LLC             2113 Macquarie Park, Australia         Phone +31 30 635 49 49
      Yellow wood Place
                                              800 Corporate Drive                    Phone +61 2 8064 5100                  Fax +31 30 635 49 50
      Woodmead Business Park,
                                              Mahwah, New Jersey 07430 USA           Fax +61 2 9888 5266
      145 Western Services Road
                                              Phone +1 201 529 7100                                                         Nobel Biocare Distribution Center BV
      2157 Woodmead, South Africa
                                              Fax +1 201 828 9250                    Singapore                              Kozakkenberg 4
      Phone +27 11 802 0112
                                                                                     Nobel Biocare Singapore Pte. Ltd       Industrial Zone 7708
      Fax +27 11 802 0120
                                                                                     400 Orchard Road No. 19–07             5951 DL Belfeld, Netherlands
                                                                                     Orchard Tower                          Phone +31 77 47 57 420
                                              Asia/Pacific                           238875 Singapore, Singapore            Fax +31 77 47 57 439
      Americas                                                                       Phone +65 6737 7967
                                              Australia                              Fax +65 6737 7801                      Denmark
      Argentina                               Nobel Biocare Australia Pty Ltd
                                                                                                                            Nobel Biocare Danmark A/S
      Nobel Biocare USA LLC                   Level 4, 7 Eden Park Drive             Taiwan                                 Milnervej 43l
      Sucursal Argentina                      2113 Macquarie Park, Australia         Nobel Biocare Taiwan Co. Ltd.          4300 Hilleröd, Denmark
      Av Santa Fe 2844 – Torre C – Piso 2     Phone +61 2 8064 5100                  5 F, No. 68, Rueiguang Rd              Phone +45 39 40 48 46
      1425 Buenos Aires, Argentina            Fax +61 2 9888 5266                    Neihu District                         Fax +45 39 40 42 25
      Phone +54 11 4825 9696                                                         114 Taipei, Taiwan
      Fax +54 11 4829 9592                    China                                  Phone +886 2 2793 9933                 Finland
                                              Nobel Biocare Trading                  Fax +886 2 2793 9883                   Nobel Biocare Suomi Oy
      Brazil                                  (Shanghai) Co. Ltd
                                                                                                                            Handelshusgatan 7 A 57
      Nobel Biocare Brasil, Ltda.             No. 137 Xian Xia Road, Room 801/806    Thailand                               00930 Helsinki, Finland
      Rua Samuel Morse, 120–4º andar          Sheng Gao International Building       Nobel Biocare (Thailand) Ltd           Phone +358 9343 69 70
      04576-060 Brooklin, São Paulo, Brazil   200051 Shanghai, China                 87 M Thai Tower 23/F,                  Fax +358 9343 69 774
      Phone +55 11 5102 7000                  Phone +86 21 5206 6655                 All Seasons Place
      Fax +55 11 5102 7001                    Fax +86 21 5206 0774                   Wireless Road, Lumpini, Pathumwan      France
                                                                                     10330 Bangkok, Thailand                Nobel Biocare France S.A.S
      Canada                                  Hong Kong                              Phone +662 627 9495                    Les Mercuriales, Tour du Levant
      Nobel Biocare Canada, Inc.              Nobel Biocare Asia Ltd                 Fax +662 627 9160                      40, avenue Jean Jaurès
      9133 Leslie Street                      14/F Cambridge House, Taikoo Place
                                                                                                                            93170 Bagnolet, France
      Unit 100                                979 King’s Road
                                                                                                                            Phone +33 1 49 20 00 30
      Richmond Hill, Ontario L4B 4N1          Quarry Bay, Hong Kong
                                                                                                                            Fax +33-1 49 20 00 33
      Canada                                  Phone +852 2 845 12 66
      Phone +1 905 762 3500                   Fax +852 2 537 66 04
      Fax +1 905 762 3504
                                                                                                         Addresses   171




Germany                            Portugal                                 Middle East
Nobel Biocare Deutschland GmbH     Nobel Biocare Portugal, S.A
Stolberger Strasse 200             Edificio Tower Plaza                     Israel
50933 Cologne, Germany             Rotunda Eng. Edgar Cardoso, 23,          Alpha-Bio Tec Ltd.
Phone +49 221 500 850              Piso 15                                  4 Tnufa St.
Fax +49 221 500 853 33             4400-676 Vila Nova de Gaia, Portugal     P.O. Box 3936
                                   Phone +351 22 374 73 50                  49511 Petach Tikva, Israel
Hungary                            Fax +351 22 3709700                      Phone +972 3 929 1000
Nobel Biocare Magyarország Kft.                                             Fax + 972 3 922 8078
Bocskai út 134–146                 Russia
1113 Budapest, Hungary             Nobel Biocare Russia LLC
Phone +36 1 279 3379               B. Haritonevsky pereulok 22/24. str. 2
Fax +36 1 279 33 71                107078 Moscow, Russia
                                   Phone +7 495 974 77 55
Ireland                            Fax +7 495 974 77 66
Nobel Biocare UK Ltd
7th Floor, Hume House              Spain
Ballsbridge                        Nobel Biocare Ibérica SA
Dublin 4, Ireland                  Josep Plà, 2
Phone + 44 208 756 3300            Torre B2, pl. 9
Fax + 44 442 085 736 740           08019 Barcelona, Spain
                                   Phone +34 93 508 88 00
Italy                              Fax +34 93 508 88 01
Nobel Biocare Italiana Srl
Centro Direzionale Colleoni,       Sweden
Palazzo Orione                     Nobel Biocare AB
Viale Colleoni, 15                 Bohusgatan 15
20041 Agrate Brianza (MB), Italy   40226 Gothenburg, Sweden
Phone +39 039 683 61               Phone +46 31 818 800
Fax +39 039 689 94 74              Fax +46 31 16 31 52


From May 2011                      Production Stockholm:
Nobel Biocare Italiana Srl         Nobel Biocare AB, Procera
Parco Tecnologico ENERGY PARK      Västbergavägen 26
Building 03, Via Monza, 7/a        12630 Härgersten, Sweden
20059 Vimercate (MB), Italy        Phone +46 8 578 540 00
Phone +39 039 683 61               Fax +46 8 578 540 01
Fax +39 039 689 94 74
                                   Production Karlskoga:
Lithuania                          Nobel Biocare AB
UAB Nobel Biocare                  Dimbovägen 2
Vytenio st. 9/25                   69151 Karlskoga, Sweden
Vivulskio g.25                     Phone +46 586 818 50
03113 Vilniaus, Lithuania          Fax +46 586 365 60
Phone +370 5 2683448
Fax +370 5 2683374                 Switzerland
                                   Nobel Biocare AG
Norway                             Balsberg, Balz Zimmermann-Strasse 7
Nobel Biocare Norge AS             8302 Kloten, Switzerland
Brevikbråteveien 9                 Phone +41 43 211 32 50
1555 Son, Norway                   Fax +41 43 211 32 60
Phone +47 23 24 98 30
Fax +47 23 24 98 31                United Kingdom
                                   Nobel Biocare UK Ltd
Poland                             3 Furzeground Way, Stockley Park
Nobel Biocare Polska Sp. z o.o.    UB11 1EZ Uxbridge, Middlesex
Poste pu 18                        United Kingdom
02-676 Warszawa, Poland            Phone +44 (0) 208 756 3300
Phone +48 22 874 59 44             Fax +44 (0) 208 573 6740
Fax +48-22-874 59 46
172   Nobel Biocare Annual Report 2010 — Other




      Disclaimer.


      This Annual Report contains forward-looking statements. Forward-looking statements          currently available to them. Forward-looking statements involve significant known
      are not based on historical facts but rather on management’s expectations regarding         and unknown risks, uncertainties and assumptions and other factors that may cause
      future growth, results of operations, performance, future capital and other expen-          Nobel Biocare actual results, levels of activity, performance or achievements to differ
      ditures (including the amount, nature and sources of funding thereof), competitive          materially from those implied by forward-looking statements. These factors should be
      advantages, business prospects and opportunities. Statements by Nobel Biocare               considered carefully and undue reliance should not be placed on the forward-looking
      about its future plans and intentions, results, levels of activity, performance, goals or   statements. Although the forward-looking statements are based upon what Nobel
      achievements or other future events constitute forward-looking statements. Wher-            Biocare’s management believes to be reasonable assumptions, Nobel Biocare can-
      ever possible, words such as “anticipate”, “believe”, “expect”, “may”, “could”, “will”,     not assure investors that actual results will be consistent with these forward-looking
      “potential”, “intend”, “estimate”, “should”, “plan”, “predict” or the negative or other     statements. Nobel Biocare undertakes no obligation to update forward-looking state-
      variations of these words, or similar words or phrases, have been used to identify          ments to reflect events or circumstances that occur after the date the statements
      these forward-looking statements. Such forward-looking statements reflect Nobel             were made.
      Biocare management’s current beliefs and assumptions and are based on information

      Imprint
      Nobel Biocare Holding AG
      P.O. Box, 8058 Zürich-Flughafen, Switzerland
      Phone +41 43 211 42 00
      www.nobelbiocare.com


      The binding version of the Nobel Biocare Annual Report 2010
      is in English. A condensed version is available in German.


      Concept and design: New Identity Ltd., Basel, Switzerland
      Editorial: Nobel Biocare Corporate Communications
      Photographer: Stephan Knecht, Zurich, Switzerland
      Prepress/Press: Linkgroup, Zurich, Switzerland
      Printed in Switzerland.
www.nobelbiocare.com

				
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