DGAP-News: STRATEC Biomedical AG / Key word(s): Half Year Results/Change in Forecast
STRATEC reports H1 2018 figures and adjusts financial guidance
Birkenfeld, August 15, 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 through to June 30, 2018 with the publication of its Half-yearly Financial Report H1|2018.
Key figures (1), (2)
bps = basis points
(1) For comparison purposes, adjusted figures exclude amortizations resulting from purchase price allocations in the context of acquisitions, associated reorganization expenses, as well as other one-off items.
Restrained organic sales growth is due particularly to the weak first quarter of 2018, while in the second quarter positive organic sales growth was again achieved. In the first six months of 2018, revenues from the sale of systems declined, while sales with development and services was increased on an organic basis. The temporarily reduced call-up volume for systems at the beginning of the year due to internal reasons at some key customers improved in the second quarter. However, most recent overall order forecasts from customers for the second half of the year came in below original expectations.
In the first six months of 2018, adjusted EBIT was EUR 8.8 million after EUR 12.8 million in the same period of the previous year. This corresponds to an adjusted EBIT margin of 9.8% after 12.7% in the equivalent period of the previous year. The decline in profitability in comparison to the previous year is due particularly to higher expenses in connection with increased development activities and the lower sales volume with the resulting inability to leverage economies of scale. The first-time adoption of IFRS 15 also had a considerable negative effect of 110 basis points on the adjusted EBIT margin.
Due to temporarily lower operating profitability, in the first six months of 2018 adjusted consolidated net income also declined by 26.9% to EUR 7.2 million (previous year: EUR 9.9 million). Adjusted earnings per share are EUR 0.61 (previous year: EUR 0.84).
For comparison purposes, adjusted figures exclude amortizations resulting from purchase price allocations in the context of acquisitions, associated reorganization expenses, as well as other one-off items.
For a reconciliation of the adjusted figures to those shown in the consolidated statement of comprehensive income, refer to the Half-yearly Financial Report H1|2018.
Development in personnel
In order to realize the large number of development projects, STRATEC has already built up additional capacity and is still looking for qualified staff. This is why STRATEC is expecting rising employee numbers over the coming quarters.
Projects and other developments
In order to deal with this expected growth and the increased level of development activities, additional measures within the STRATEC Group are being taken to extend capacity. These include the recent start of the construction measures for a significant extension of business capacity at the headquarters in Birkenfeld, Germany. Completion of the first construction stage remains planned for the middle of 2019.
At operating level, a key focus for 2018 remains implementing a standardized ERP system across the group with the intention of considerably simplifying cooperation across locations and designing processes more efficiently. With the implementation of the system at our Austrian and Hungarian sites, it was possible to conclude the first rollout phase in January 2018. Currently, preparations are ongoing that include the implementation at the Birkenfeld headquarters, which is scheduled for completion at the beginning of 2019.
Taking account of the new accounting policies, for the 2018 fiscal year STRATEC now anticipates sales growth adjusted for exchange rate effects of approximately 3% to 5% (2017 basis: EUR 209.8 million). It is expected that the first-time adoption of IFRS 15 will impact the reported sales growth in 2018 with a positive factor of approximately two percentage points. Adjusted for this effect, the new guidance implies organic sales growth of between 1% and 3%. The previous guidance indicated organic growth in at least a mid-single-digit percentage range. Lower organic sales growth than originally forecast is due primarily to a slower than expected ramp-up phase for recently launched products and to lower purchase commitments at large customers. In addition, recently expressed expectations of individual market participants and the most recent political and economic trends globally have increased the risks for purchase commitments over the next few quarters.
In fiscal year 2018, an adjusted EBIT margin of approximately 16% to 17% is expected. Slightly reduced expectations on profitability against the previous guidance (around 17%) are due primarily to not being able to leverage economies of scale.
Due to pending launches and numerous very positive ongoing project negotiations, for the next few years STRATEC continues to anticipate compound annual organic sales growth rates (adjusted for exchange rate effects and acquisitions) in the high single-digit to low double-digit percentage range. The parallel positive development of profitability as a result of economies of scales will be attenuated by the temporary upturn in investment and development activities for the planned growth with selected customer projects. As a result, STRATEC anticipates the EBIT margin will develop at an approximately constant level of 17%.
Due to the planned conversion and extension activities at the Birkenfeld location, investments in the 2018 fiscal year are expected to be slightly higher than the level of the previous year.
Annual General Meeting
Half-yearly financial report
Telephone conference and audio webcast
You will receive the access data (telephone number, password + individual PIN) after brief registration under the following link: www.stratec.com/registration
The telephone conference can also be followed as an audio webcast at www.stratec.com/audiowebcast20180815 (brief registration necessary). Please note that no questions can be asked in the audio webcast.
The partners market the systems, software and consumables as system solutions, generally together with their own reagents, to laboratories, blood banks and research institutes around the world. STRATEC develops its products with its own patent-protected technologies.
The shares of the company (ISIN: DE000STRA555) are traded on the Prime Standard of the Frankfurt Stock Exchange.
Further information can be obtained from:
|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|