STRATEC reports on first nine months of 2013

STRATEC Biomedical AG / Key word(s): Quarter Results/Interim Report

30.10.2013 / 07:42

STRATEC reports on first nine months of 2013

- Sales of EUR 90.4 million in 9M/2013 (+7.2%; 9M/2012: EUR 84.3 million*)
- EBIT margin of 16.2% in Q3/2013 (Q3/2012: 13.4%)
- EBIT margin of 14.8% in 9M/2013 (9M/2012: 15.8%*)
- Earnings per share of EUR 0.90 in 9M/2013 (-3.2%; 9M/2012: EUR 0.93)
- Financial guidance confirmed

Birkenfeld, October 30, 2013

STRATEC Biomedical AG (Frankfurt: SBS; Prime Standard, TecDAX) today announced its results for the period from January 1, 2013 to September 30, 2013 upon the publication of its Interim Report as of September 30, 2013.

Key figures (EUR 000s) 01.01.-
09.30.2012 *
Sales 90,418 84,316 + 7.2%
EBIT 13,361 13,357 + 0.0%
EBIT margin (%) 14.8 15.8          --
Consolidated net income 10,517 10,865 - 3.2%
Earnings per share (EUR) 0.90 0.93 - 3.2%

* 2012 figure adjusted for a one-off item of EUR 3.3 million due to an income-neutral reclassification from unfinished services and prepayments received upon the write-down of a development project. On an unadjusted basis, sales for the first nine months of 2012 amounted to EUR 87.6 million and the corresponding EBIT margin amounted to 15.3%.

Financial performance
STRATEC generated moderate sales growth in the first nine months of 2013, despite temporary restrictions to day-to-day operations caused by flood damage in June. Net of a one-off income-neutral reclassification in the previous year, sales rose to EUR 90.4 million, up 7.2% on the first nine months of 2012. Sales for the third quarter showed a year-on-year increase of 5.8% to EUR 31.0 million.

The EBIT margin for the first nine-months amounted to 14.8%, compared to 15.8% in the equivalent period in 2012. In H1 2012 we saw strong business performance with service parts resulting in an EBIT margin of 17.1%, before an uncharacteristically sharp decline in H2 2012. Since the beginning of 2013, demand has continued to improve in this segment and order volatility has slightly declined. Consequently, the share of sales from service parts has recovered to a higher level compared to an extraordinary fourth quarter 2012. The EBIT margin for the third quarter alone amounted to 16.2%, compared to 13.4% for Q3 2012, driven mainly by this recovery in service parts year-on-year.

Earnings per share amounted to EUR 0.90 in the period under report, compared with EUR 0.93 in the previous year.

Project development
The systems already established on the market have generated moderate growth rates. The systems launched onto the market in 2013 so far only account for an immaterial share of the current sales growth. We expect their share of sales to rise consistently over the coming quarters. Moreover, the market launch of a new system is due in the fourth quarter. Furthermore, two further market launches and analyzer system approvals are set to follow in 2014.

Alongside a major new development and supply agreement signed in the first quarter of 2013, a further contract is now in the final agreement stage. Both projects are expected to make notable contributions to STRATEC's sales growth from the 2015 and 2016 financial years respectively.

Other developments
On July 12, 2013, STRATEC reported the termination by a customer of a development and supply agreement. Compensation for STRATEC is being negotiated with the customer. At present, no more precise details can be provided as to the nature, amount or timing of such compensation. Neither the other projects with this partner nor projects with other partners have been affected by this contract termination.

Developments in staff totals
Including temporary employees, the STRATEC Group had a total of 544 employees as of September 30, 2013 (September 30, 2012: 524). The company's workforce thus grew by a further 17 employees compared with December 31, 2012.

Outlook and company forecast
The current company forecast published on July 12, 2013 remains valid. Accordingly, STRATEC expects to generate sales of between EUR 127 million and EUR 138 million with an EBIT margin of 14.0% to 15.5% in the 2013 financial year. Average annual sales growth of 8% to 12% based on the figures for the 2013 financial year is then expected in subsequent years until 2017. Profitability is expected to improve slightly, albeit in proportion with the number and scale of new development projects and thus with the investments involved.

Planning reliability in the global diagnostics industry is currently affected by a number of uncertainties, such as government savings measures, high unemployment in important market regions, and healthcare system reforms. Particularly the healthcare reforms in the USA will not be without consequences. According to statements made by several partners, the negative implications of the persistently high pressure on prices expected at laboratories and hospitals are likely to be offset by the increase in test volumes also expected due to the marked rise in the number of people insured.

Our ability to forecast developments continues to be impeded by several other external factors, such as capacity utilization rates at installed systems, the timing of further market launches, the planned production launches for new systems, further consolidation in the IVD market, and macroeconomic market factors.

Further details can be found in our Interim Report as of September 30, 2013 published at > STRATEC Group > Investors > Financial Reports.

STRATEC Biomedical AG ( designs and manufactures fully automated analyzer systems for its partners in the fields of clinical diagnostics and biotechnology. These partners market such systems, in general together with their own reagents, as system solutions to laboratories, blood banks and research institutes around the world. The company develops its products on the basis of its own patented technologies.

Shares in the company (ISIN: DE0007289001) are traded in the Prime Standard segment of the Frankfurt Stock Exchange and are listed in the TecDAX select index of the German Stock Exchange.

Further information can be obtained from:
STRATEC Biomedical AG
André Loy, Investor Relations
Gewerbestr. 37, 75217 Birkenfeld
Tel: +49 7082 7916-190
Fax: +49 7082 7916-999

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