STADA Arzneimittel AG / Interim Report/Quarter Results
13.11.2008
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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Important items at a glance
Significant growth in the first nine months of 2008:
o Group sales EUR 1,231.8 million (+13%)
o Earnings before interest and taxes (EBIT) EUR 151.0 million (+14%)
o Net income EUR 82.0 million (+18%)
Significant details:
o Net income adjusted for one-time special effects
1-9/2008: EUR 91.7 million (-2%)
o International sales 1-9/2008: +18% growth, 65% share in Group sales
o Revival of business trends in German generics business:
+11% sales growth in Q3/2008
o Adjusted operating segment margin Q3/2008: Generics 15.4%
Outlook from H1/2008 confirmed by Executive Board:
o Subdued growth dynamic in H2/2008
o Good chances for significant growth once again in sales
and earnings in the years to come
The financial figures for the first nine months of 2008 published today,
November 13, 2008, by STADA Arzneimittel AG were within the scope of the
expectations of the Executive Board expressed in the Report on the First
Six Months. 'Against the backdrop of a continuing difficult environment in
several national markets, we are satisfied with STADAs current business
development. Both in sales and net income we were able to achieve
double-digit growth rates in the first nine months of the current fiscal
year, and also to attain a net income adjusted for special effects at about
the same high level as in the previous year', said STADA Arzneimittel AGs
Chief Executive Officer Hartmut Retzlaff.
Sales and earnings development of the STADA Group
Group sales increased by 13% to EUR 1,231.8 million in the first nine
months of the current fiscal year (1-9/2007: EUR 1,089.3 million). By
comparing sales in the third quarter of 2008 with those in the third
quarter of 2007, this results in a higher growth rate of 16%; thus, for the
third quarter of 2008, the sales revival on a Group level as announced in
the Report on the First Six Months can be noticed.
STADAs international sales recorded an increase of 18% to EUR 796.3
million (1-9/2007: EUR 672.9 million) and reach with this disproportionate
increase now a share of 64.6% (1-9/2007: 61.8%) in Group sales.
Generics, which continues to be the clearly larger core segment (share in
Group sales in 1-9/2008: 69.3%), sales increased by 4% to EUR 854.2 million
in the first nine months of the current fiscal year (1-9/2007: EUR 821.5
million). Sales of the core segment Branded Products (share in Group sales
in 1-9/2008: 22.2%) showed an also acquisition-related increase of 31%
to EUR 273.0 million in the first nine months of 2008 (1-9/2007: EUR 208.2
million).
In total, the earnings figures of the first nine months of 2008 were
burdened by balanced one-time special effects of EUR 13.9 million before
taxes or EUR 9.7 million after taxes (1-9/2007: burden due to one-time
special effects of EUR 39.2 million before taxes or EUR 23.9 million after
taxes).
Net income increased by 18% to EUR 82.0 million in the reporting period
(1-9/2007: EUR 69.8 million), net income adjusted for one-time special
effects decreased moderately by 2% to EUR 91.7 million (1-9/2007: EUR 93.7
million) and thereby reached a level that was about the same as the
previous year.
Earnings per share in the first nine months of 2008 amounted to EUR 1.40
(1-9/2007: EUR 1.20), adjusted earnings per share were EUR 1.56 (1-9/2007:
EUR 1.61). Diluted earnings per share in the first nine months of the
current fiscal year amounted to EUR 1.36 (1-9/2007: EUR 1.15), adjusted
diluted earnings per share were EUR 1.52 (1-9/2007: EUR 1.54).
The other earnings figures recorded the following changes in the reporting
period as compared to the first nine months of 2007: earnings before taxes
(EBT) increased by 6% to EUR 110.3 million (1-9/2007: EUR 104.4 million),
earnings before interest and taxes (EBIT) grew by 14% to EUR 151.0 million
(1-9/2007: EUR 132.0 million), the operating profit decreased by 7% to EUR
149.8 million (1-9/2007: EUR 160.9 million) and earnings before interest,
taxes, depreciation and amortization (EBITDA) rose by 9% to EUR 210.9
million (1-9/2007: EUR 193.7 million).
Operating profit in the Generics segment amounted to EUR 118.3 million in
the reporting period (1-9/2007: EUR 152.8 million). This resulted in a
sales-related operating segment margin for Generics in the amount of 13.9%
(1-9/2007: 18.6%). By deducting the special effects of the respective
period the adjusted operating segment margin of Generics for the first nine
months of 2008 amounted to 14.6%.
Additionally, STADAs Chief Financial Officer Wolfgang Jeblonski refers to
the current development of this important margin for the Group: 'In the
third quarter of 2008 taken alone we have reached an adjusted operating
segment margin of 15.4% in Group Generics, and are therefore fully within
the scope of our expectations as at the end of the first half of the year.'
The Branded Products segment recorded an operating segment profit of EUR
47.5 million in the first nine months of the current fiscal year (1-9/2007:
EUR 31.4 million). This corresponds to an operating segment margin for
Branded Products in the amount of 17.4% (1-9/2007: 15.1%). By deducting
this segments special effects of the respective period the adjusted
operating segment margin of Branded Products for the first nine months of
2008 amounted to 17.6% and to 13.1% for the third quarter of 2008 taken
alone.
Regional Development in the STADA Group
In STADAs ten largest national markets, sales were increased by a total of
15% in the reporting period in spite of mixed local business development.
In Germany, which continues to be STADA's biggest national market with a
share of 35.4% in Group sales (1-9/2007: 38.2%), the Group recorded sales
growth of 5% to EUR 435.5 million (1-9/2007: EUR 416.4 million).
The stronger segment of the Group in terms of growth in the German market
in the first nine months of 2008 was the Branded Products segment. Its
sales went up during that period by 20% to EUR 85.1 million (1-9/2007: EUR
70.7 million).
In a difficult environment characterized by the health-care reform of 2007,
sales in the Generics segment in Germany rose by 1% to EUR 345.6 million in
the first nine months of 2008 as compared to the same period of the
previous year (1-9/2007: EUR 343.4 million). The clearly stronger sales
growth of 11%, when considering the third quarter of 2008 alone as compared
to the same quarter of the previous year, is an indicator of a positive
change of trend.
The ALIUD PHARMA label in particular contributed to this growth with a
sales increase of 30% to EUR 182.7 million (1-9/2007: EUR 140.4 million) in
the first nine months of 2008; ALUID PHARMAs growth rate in the third
quarter taken alone was at a strong 38%. Although for the Groups second
German generics label, STADApharm, the sales achieved under this label
accumulated over the first nine months of 2008 decreased by 20% to EUR
146.4 million (1-9/2007: EUR 183.9 million), this decrease was clearly
slowed down to only 7% in the third quarter of 2008. An improved business
development in the third quarter of 2008 can also be noticed for another
generics sales label of the STADA Group in Germany, cell pharm. After a
sales realignment carried out in the course of the year, cell pharm, which
is active in the areas oncology and nephrology, was able to revive sales in
the third quarter of 2008 strongly with a plus of 30% as compared to the
third quarter of 2007, thus recording a total sales increase of 1% to EUR
14.8 million in the first nine months of 2008 (1-9/2007: EUR 14.7 million).
In general, STADA Groups market share of the German pharmaceutical market
continued to rise. According to IMS Health data, the market share in sales
accumulated in the first nine months of 2008 was at 11.2% in terms of sales
(1-9/2007: 10.8%) or 12.7% in terms of units sold (1-9/2007: 11.0%).
In terms of earnings the German generics business will for the first time
be below Group average in the current fiscal year due to the known high
margin pressure. Here, STADA continues to be able and also strategically
prepared to target further progress in terms of market position and market
share by means of aggressive price and discount policy and even to accept
margin reductions to achieve significant growth in volume for essential
parts of the portfolio, as long as overall a profitable business situation
is maintained.
This also applies in particular to current tenders for new discount
agreements from the Allgemeinen Ortskrankenkassen (AOK) which currently
relate to an annual sales volume of the Group of less than EUR 100 million
(STADA estimate based on market figures) and for which STADA sales
companies have submitted comprehensive bids in due time in the current
fourth quarter. The result of these tenders is not yet known.
However, numerous objections regarding the tender method have been made to
the AOK in the bidding process so far which, from STADAs perspective, have
only partly been removed. Against this backdrop STADA reserves the right to
take legal steps against any contracts being awarded; STADA also expects
that competitors will take such legal steps. If, when and with what result
these new discount agreements intended by the AOK will take effect is
therefore, from the Executive Boards current perspective, not with
certainty foreseeable; STADA is preparing for various possible result
scenarios in an operatively adequate way.
In Russia, STADAs second largest national market, the STADA Groups sales
rose by 66% in local currency or by 56% in Euro to a total of EUR 132,0
million in the first nine months of 2008 (1-9/2007: EUR 84.5 million).
Organic growth in Russia for the first nine months of 2008 amounted to 14%
in local currency or 7% in Euro. The operating margin achieved in the
Russian business thereby continued to be above Group average.
In Serbia, the Group recorded sales growth of 4% in local currency and also
of 4% in Euro to EUR 101.9 million in the reporting period (1-9/2007: EUR
98.3 million). By considering disposals made there since then sales growth
was 9% in local currency or 8% in Euro.
In the United Kingdom sales rose by 179% in local currency or 141% in Euro
to EUR 87.8 million in the first nine months of 2008 (1-9/2007: EUR 36.5
million) due to the inclusion of the Forum Bioscience Group, which has been
consolidated in the STADA Group since October 2007. The Forum Products
division, which was also purchased as part of the acquisition of Forum
Bioscience, was sold on September 23, 2008 at a price of approx. EUR 2.8
million with no effect on income. In the current fiscal year, with a
low-margin sales contribution of EUR 49.8 million, Forum Products, which
does not belong to the Groups core business, contributed 4.0% to STADA
Group sales up to its deconsolidation as of August 30, 2008.
In Belgium, a revival in demand has become apparent in the local generics
business after the difficult first half of 2008. Thanks to strong growth of
31% in the third quarter of 2008 sales in Belgium increased by 7% to EUR
82.5 million for the first nine months of 2008 (1-9/2007: EUR 77.1
million).
In Italy, sales went up slightly by 0.3% to EUR 80.6 million (1-9/2007: EUR
80.4 million) in the first nine months of 2008. By taking into account
disposals as well as discontinued commercial activities the adjusted sales
increase in Italy in the first nine months of 2008 was 5%.
In France, STADA achieved sales growth of 9% to EUR 64.6 million in the
reporting period (1-9/2007: EUR 59.3 million). Thanks to numerous product
launches this increase was achieved despite the very intense discount
competition in the pharmacy distribution channel.
In Spain, sales increased by 5% to EUR 50.4 million in the first nine
months of the current fiscal year (1-9/2007: EUR 48.1 million) despite a
continuing intense discount competition as well as regulatory-related price
reductions.
In the Netherlands, STADA recorded a slight sales plus of 0.1% to EUR 30.1
million in the first nine months of 2008 (1-9/2007: EUR 30.0 million). The
sales decrease as compared to the previous year after six months
significantly related to local price reductions was offset by tenders
from local health insurance organizations which were won in the third
quarter of 2008.
In Ireland sales increased also acquisition-related by 49% to EUR 20.3
million in the first nine months of 2008 (1-9/2007: EUR 13.6 million).
In the Asian countries, the Group recorded a sales growth of 14% to EUR
36.3 million (1-9/2007: EUR 31.9 million) in the first nine months of 2008
in spite of a mixed local development.
High number of new products
Overall, STADA launched 322 individual products worldwide in the first nine
months of 2008 (1-9/2007: 270 product launches) in individual national
markets. STADAs product pipeline remains well-filled for a continuous flow
of new products, particularly with the development focus Generics and thus
guarantees future significant sales potentials.
Financial position and cash flow
In the Executive Boards view, the STADA Groups financial position
continues to be stable. Thus, the equity-to-assets ratio was 36.8% as of
September 30, 2008 (December 31, 2007: 36.6%) and thereby remains clearly,
from the Executive Boards perspective, in a satisfying area of above
approx. 30%. Net debt amounted to EUR 1,059.1 million on the reporting date
September 30, 2008 (December 31, 2007: EUR 958.5 million) and is mainly
financed via long-term promissory notes from various international and
national banks with maturities in the area of 2010-2015.The Groups gross cash flow was EUR 142.7 million in the first nine months
of the current fiscal year (1-9/2007: EUR 135.7 million). Cash flow from
operating activities amounted to EUR 37.0 million in the reporting period
(1-9/2007: EUR 111.1 million). By deducting one-time effects, the result is
a comprehensively adjusted cash flow from operating activities of EUR 75.2
million approximately at the level of the previous year (1-9/2007: EUR 78.0
million).
Outlook
The outlook remains unchanged in principle regarding the statements made in
the Report on the First Six Months. Even if various Group companies must
continue to operate in a challenging environment, the Executive Board deems
chances as good for a positive business development of the Company in the
years to come. The basis for these chances continues to be the strategic
focusing on growth markets as well as the Groups proven operative
strengths. Beyond that, suitable acquisition objects will continue to be
sought.
In the outlook for the results of fiscal year 2008 overall, from todays
perspective, once again clear sales growth within the Group is to be
expected. It is still unclear, however, whether the growth rate will be in
the double-digit percentage range.
In terms of earnings, the Executive Board continues to assume, from todays
perspective, that net income in 2008 will again show double-digit
percentage growth as compared to net income 2007 (EUR 105.1 million) which
was burdened by high one-time special effects. The earnings level adjusted
for special effects of the previous year (adjusted net income 2007: EUR
146.8 million) will, however, not be achieved in fiscal year 2008.
'In view of our strategic and operating strength, we continue to deem
chances as good for the years to come that despite conditions that remain
challenging to once again be in a position to achieve significant growth in
sales and earnings', commented STADA CEO Retzlaff.
Further information:
STADA Arzneimittel AG / Corporate Communications / Stadastraße 218 / 61118
Bad Vilbel / Germany
Phone: +49(0) 6101 603-113 / Fax: +49(0) 6101 603-506 /
E-Mail: communications@stada.de
Or visit our website at www.stada.com
DGAP 13.11.2008
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Language: English
Issuer: STADA Arzneimittel AG
Stadastraße 2-18
61118 Bad Vilbel
Deutschland
Phone: +49 (0)6101 603- 113
Fax: +49 (0)6101 603- 506
E-mail: communications@stada.de
Internet: www.stada.de
ISIN: DE0007251803, DE0007251845,
WKN: 725180, 725184,
Indices: MDAX
Listed: Regulierter Markt in Frankfurt (Prime Standard), Düsseldorf;
Freiverkehr in Berlin, Hannover, Hamburg, München, Stuttgart
End of News DGAP News-Service
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DGAP-News: STADA results 1-9/2008: Sales +13%, net income +18% outlook confirmed
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