Celesio AG / Half Year Results
12.08.2008
Release of a Corporate News, transmitted by DGAP - a company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.
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Celesio revises 2008 earnings forecast and remains
optimistic for 2009
Governmental measures and market changes delaying recovery CEO Fritz
Oesterle: 'We need to have a longer breath, and that is what we have.'
Stuttgart, 12 August 2008. In the 1st half year of 2008, revenue and profit
at Celesio AG, Europes leading trading company and service provider for
pharmaceuticals, fell versus the 1st half year of 2007. Revenue fell by 2.5
per cent, EBITDA by 26.5 per cent. This was caused mainly by the drastic
reductions in reimbursement prices for generic medicines in the United
Kingdom from 1 October 2007. At the same time, the irresponsible discount
competition in the German pharmaceutical wholesale market is waning less
quickly than expected. The fall in revenue is also a consequence of the
change in distribution models for pharmaceuticals in the United Kingdom. An
additional problem was the weaker British pound, which weighed considerably
on the reported euro figures, as well as the lower market value of the
Andreae-Noris Zahn AG investment.
The Chairman of the Management Board of Celesio, Fritz Oesterle, said in
Stuttgart: 'We have announced our need to take a breath in 2008 in order to
process the massive governmental saving measures from the past year.
Additional governmental measures and market changes are delaying the
recovery. But we are on the right track, we only need longer than was
originally planned. We remain optimistic for 2009.'
With a fall in revenue of 2.5 per cent (+ 0.6 per cent in local currency)
to 10,929.8 million euro Celesios performance in the first half year was
weaker than in the prior-year period (11,214.2 million euro). When adjusted
for exchange rate effects, acquisitions and disinvestments, the reduction
amounted to 1.0 per cent.
Gross profit fell more strongly than revenue, especially due to government
measures in the United Kingdom and the discount competition in Germany. It
fell by 6.6 per cent ( 1.0 per cent in local currency) to 1,179.4 million
euro. The gross profit margin fell from 11.26 per cent to 10.79 per cent.
EBITDA, which shows earnings before interest, taxes, depreciation and
amortisation, fell by 26.5 per cent ( 21.8 per cent in local currency) to
310.0 million euro and was thus 111.6 million euro below the comparable
previous year figure. Governmental measures affected EBITDA in the 1st half
year of 2008 by around 90 million euro more than in the 1st half year of
the previous year. Currency effects contributed another 19.7 million euro.
Ultimately, higher transport costs, the significantly lower contribution
from German wholesale compared to the previous year and the lower market
value of the Andreae-Noris Zahn AG investment also led to the fall in
EBITDA. Despite these considerable burdens, Celesio spends substantial
amounts to open new markets and introduce new business models. Celesio
considers these expenses an investment in its future.
EBIT (Earnings before Interest and Taxes) fell by 30.8 per cent ( 26.3 per
cent in local currency) to 254.8 million euro.
Profit before tax fell by 38.1 per cent ( 34.3 per cent in local currency)
to 190.7 million euro.
Net profit fell by 94.0 million euro to 123.5 million euro. This represents
a reduction of 43.2 per cent ( 39.4 per cent in local currency). Earnings
per share fell by 0.55 euro to 0.72 euro.
Business divisions showed positive performance despite external burdens
- Celesio Pharmacies remained on target for growth: during the period
under review, 80 pharmacies were acquired or opened in seven European
countries. Moreover, Celesio continued to press ahead with preparations
for the anticipated liberalisation in Europe.
- Celesio Wholesale also grew in a difficult market environment. In
Germany, GEHE recovered lost market share. In the United Kingdom, the
wholesale subsidiary AAH invested in implementing alternative
distribution models. In France, extensive productivity increases were
attained, in particular by streamlining the branch structure.
- Celesio Solutions has extended its presence in Europe and initiated its
first business operations in Slovenia. At the same time, the division
sharpened its service profile for manufacturers.
2008 earnings forecast adjusted
Group earnings in the 1st half year of 2008 were significantly lower than
in the comparable period in the previous year. It should be noted, though,
that the half-year figures for 2007 were the best results in Celesios
corporate history. On a positive note, however, 2nd quarter figures for
2008 showed profits which were already much improved in comparison to the
1st quarter of 2008, which reflects the anticipated recovery trend.
During the remaining course of 2008, the Management Board expects a
continuation of this trend towards a recovery of operating profit, which
should show an improvement in the high single percentile range in the 3rd
and 4th quarter in comparison to the corresponding proceeding quarters.
This means that Celesio should expect profits in the 4th quarter of 2008
which are approximately on a par with the 1st quarter of 2007, thus
reaching the level before the significant effects of government measures
began to have an impact, given that there are no further external burdens
in 2008 and no deterioration of the currency effects or in the market value
of the Andreae-Noris Zahn AG investment.
This means that in 2008, Celesio will not attain the profit levels of 2007,
even excluding currency effects, despite positive quarterly results and the
recovery of previous earning power, but that the current year will close
significantly under the previous year. The Management Board is thus
adjusting the company forecast.
Optimistic forecast for 2009 confirmed
The Management Board remains optimistic regarding 2009: Celesio will extend
its European market position and strengthen its efforts across the group to
identify synergies and efficiency potential, and increase its ability to
react to external effects.
The Management Board anticipates that taking into account existing
governmental measures and present exchange rate ratios, it will be able to
reach an operative EBITDA which is significantly above the 2008 level.
Celesio Group in the 1st half year of 2008
2007 2007 2008 2008 Change on Change in
a euro local
basis
currency
m % m % % %
of of
revenue revenue
Revenue 11,214.2 100.00 10,929.8 100.00 -2.5 0.6
Gross
profit 1,262.2 11.26 1,179.4 10.79 -6.6 -1.0
EBITDA 421.6 3.76 310.0 2.84 -26.5 -21.8
EBIT 368.2 3.28 254.8 2.33 -30.8 -26.3
Profit
before tax 308.0 2.75 190.7 1.74 -38.1 -34.3
Net profit 217.5 1.94 123.5 1.13 -43.2 -39.4
Press contact:
Rainer Berghausen, Celesio AG, +49 (0)711.5001-549
rainer.berghausen@celesio.com
About Celesio Group:
Celesio, Europe's leading trading company and service provider for
pharmaceuticals, generated 22.3 billion euro revenue in 2007. As of 30 June
2008, the group employed 37,705 people in 14 countries. The three business
divisions Wholesale, Pharmacies and Solutions cover the entire spectrum of
pharmaceutical distribution and related services. In Wholesale, 121
branches supply over 35,000 pharmacies in twelve countries in Europe daily.
Celesio's 2,332 pharmacies in seven countries serve each day more than
500,000 customers. The Solutions division offers pharmaceutical
manufacturers logistics and transportation services, and supports them with
sales and marketing.
DGAP 12.08.2008
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Language: English
Issuer: Celesio AG
Neckartalstr. 155
70376 Stuttgart
Deutschland
Phone: +49 (0)711 5001-735
Fax: +49 (0)711 5001-736
E-mail: investor@celesio.com
Internet: www.celesio.com
ISIN: DE000CLS1001
WKN: CLS100
Indices: MDAX
Listed: Regulierter Markt in Berlin, Frankfurt (Prime Standard),
München, Düsseldorf, Stuttgart; Freiverkehr in Hannover,
Hamburg; Terminbörse EUREX
End of News DGAP News-Service
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DGAP-News: Celesio AG: Celesio revises 2008 earnings forecast and remains
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