DGAP-News: STRATEC Biomedical AG / Key word(s): Quarter Results/Quarterly / Interim Statement
STRATEC reports figures for the first nine months of 2018
STRATEC Biomedical AG, Birkenfeld, Germany (Frankfurt: SBS; Prime Standard) today announced its financial results and major events for the period from January 1, 2018 to September 30, 2018 with the publication of its Quarterly Statement 9M|2018.
Key figures (1)
bps = basis points
(1) For comparison purposes, adjusted figures exclude amortization resulting from purchase price allocations in the context of acquisitions and the associated reorganization expenses, as well as other non-recurring effects.
(2) In accordance with IFRS 9 and IFRS 15.
(3) Not retrospectively restated to reflect IFRS 9 and IFRS 15 (modified retrospective approach). Retrospectively restated to reflect the classification of the nucleic acid preparation business as a discontinued operation in accordance with IFRS 5 and correction in accordance with IAS 8.41.
(4) Results from continuing operations.
The muted organic sales performance in the first nine months of 2018 is attributable in particular to lower system sales, weaker development in the Diatron segment, and a temporary slowdown in demand for service parts and consumables in the third quarter of 2018. In STRATEC's view, the restrained sales momentum that was observed in the third quarter as anticipated reflects the fluctuations that are typical of the business model during the course of the year. Based on the current order book and customer order forecasts, the fourth quarter of 2018 is already expected to see a significant upturn in sales volumes for systems, service parts and consumables.
Adjusted EBIT amounted to EUR 17.0 million in the first nine months of 2018 versus EUR 24.5 million in the previous year. This corresponds to an adjusted EBIT margin of 12.7% compared to 16.4% in the same period last year. This decline in profitability is due in particular to diseconomies of scale as well as higher costs in connection with the realization of a number of current development partnerships. The first-time adoption of IFRS 15 also had a slight negative effect on the adjusted EBIT margin.
Reflecting the reduction in operational profitability, adjusted consolidated net income from continued operations also declined by 29.1% to EUR 13.6 million in the first nine months of 2018 (previous year: EUR 19.2 million). Adjusted earnings per share from continued operations (basic) amounted to EUR 1.14 (previous year: EUR 1.61).
For comparison purposes, the adjusted figures exclude amortization resulting from purchase price allocations in the context of acquisitions and the associated reorganization expenses, as well as other non-recurring effects. The figures for the first nine months of 2018 and 2017 were restated in accordance with IFRS 5 to reflect the decision in the third quarter of 2018 to initiate a sales process for the nucleic acid preparation business, among other things. The nucleic acid preparation business is now reported as a discontinued operation.
A reconciliation of the adjusted figures to those shown in the consolidated statement of comprehensive income can be found in the Quarterly Statement 9M|2018, which is also published today.
Projects and other developments
In addition, a major development agreement for an analyzer system was concluded with a globally operating diagnostics company in the first nine months of 2018. A number of extremely advanced negotiations with existing and potential partners also suggest that further development and supply agreements can be expected to be concluded over the coming months.
Reflecting this planned growth and increased development activity, various measures are currently being implemented within the STRATEC Group in order to increase capacity. In particular, this includes the extensive expansion of building capacity at the company's headquarters in Birkenfeld, Germany, which began in the second quarter of 2018. The construction work is proceeding to plan and the first section is still scheduled for completion in mid-2019.
At an operational level, intensive preparation is currently underway for the second implementation phase for a uniform Group-wide ERP system that will make cross-site cooperation significantly easier and improve workflow efficiency. The first phase of the roll-out was completed in January 2018 with the implementation of the system at our locations in Austria and Hungary. In January 2019, the system is scheduled to go live at the company's headquarters in Birkenfeld, Germany, and its site in Beringen, Switzerland.
Development in personnel
In order to allow it to realize the large number of current development projects, STRATEC has already established additional capacities and is continuing its search for qualified staff. It therefore expects its workforce to increase further over the next quarters.
Initiative to improve earnings
Based on the large number of forthcoming product launches, the partial postponement of sales originally expected in 2018 to subsequent periods and current customer order forecasts, STRATEC expects to return to significantly positive organic sales growth in 2019. The associated economies of scale and initial positive effects from the defined earnings improvement measures are expected to result in a significantly higher adjusted EBIT margin in 2019 than in the previous year.
Due to the planned conversion and expansion activities at the Birkenfeld location, investments in 2018 are expected to be slightly higher than in the previous year.
Conference call and audio webcast
Access data (telephone number, password + individual PIN) will be provided after brief registration at the following link: www.stratec.com/registration.
The conference call can also be followed as an audio webcast at www.stratec.com/audiowebcast20181108 (brief registration necessary). Please note that it is not possible to submit any questions via the audio webcast.
The partners market the systems, software and consumables, in general together with their own reagents, as system solutions to laboratories, blood banks and research institutes around the world. STRATEC develops its products on the basis of its own patented technologies.
Shares in the company (ISIN: DE000STRA555) are traded in the Prime Standard segment of the Frankfurt Stock Exchange.
Further information can be obtained from:
08.11.2018 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
|Company:||STRATEC Biomedical AG|
|Phone:||+49 (0)7082 7916 0|
|Fax:||+49 (0)7082 7916 999|
|Listed:||Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover, Munich, Stuttgart, Tradegate Exchange|
|End of News||DGAP News Service|