Nobel Biocare Holding AG (NOBN.VX) Wednesday warned the Swiss dental implant maker may struggle for up to another year before catching up with peers due to slow demand in its key markets such as the U.S. and Spain, sending its shares, which have already shed 45% this year, more than 10% lower.

Nobel Biocare, which reported a second-quarter net profit fall of 30.5% to EUR19.6 million from EUR28.2 million, said that although sales notched up to EUR155 million from EUR153.5 million on the back of currency gains, it continued to lose market share and may continue to do so during the remainder of the year.

Chief Executive Domenico Scala said that while he expects the dental implant market to start to grow again in 2010, it may take between nine to 12 months before Nobel Biocare can "return to at least market growth", pouring cold water on hopes for a faster turnaround.

To close the gap to its key competitors, Scala said the company would increase investments in research and development and marketing, a step analysts view as necessary although it will hit margins in the medium term. "We are confident that our strategy of broadening Nobel Biocare's product ... portfolio, as well as the measures that have already been taken, will allow us to return to growth," CEO Scala said.

Once the world's largest dental implant maker by sales, the company slithered into troubles in the U.S. before the economic crisis began as customers complained about an overly aggressive marketing strategy under its former management.

Revamp efforts under its then fresh CEO Scala were undermined by the financial and economic crisis as many customers postponed costly dental surgery and as health care insurance firms started to curtail reimbursements for certain dental operations.

Nobel Biocare's troubles were intensified due to its comparatively costly products and its strong presence in the U.S. and Spain, which were among the hardest hit economies during the financial crisis. CEO Scala noted that without an improvement of the job situation in these countries, dental implant market would remain under pressure.

Nobel Biocare's troubles, meanwhile, were good news for its key competitors, which were all able to improve sales during the second quarter. Dentsply International Inc (XRAY), Zimmer Holdings Inc (ZMH) and Biomet Inc (BMET) were able to grow at the expense of Nobel Biocare and Swiss peer Straumann Holding AG (STMN.EB), which will report figures on August 18, is expected to have extended its lead over Nobel Biocare, analysts said.

"Hopes that results may signal that the worst is over for Nobel have been clearly premature," said Sarasin analyst David Kaegi. He expects the company to remain under pressure for the time being, adding that the company's hopes to turn around looked "optimistic" given the current market situation.

At 1126 GMT, shares of Nobel Biocare were down 12.25%, or CHF2.31, at CHF16.54.

-By Goran Mijuk, Dow Jones Newswires, +41 43 443 80 47; goran.mijuk@dowjones.com
Biomet (NASDAQ:BMET)
Historical Stock Chart
From Mar 2024 to Apr 2024 Click Here for more Biomet Charts.
Biomet (NASDAQ:BMET)
Historical Stock Chart
From Apr 2023 to Apr 2024 Click Here for more Biomet Charts.