Celesio AG / 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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Celesio on track, despite the credit crunch
Quarterly improvement continues forecast for 2008 confirmed
Stuttgart, 13 November 2008. Celesio AG, one of Europes leading trading
and service providers for medicines, continued its predicted quarterly
improvement also in the third quarter 2008, as in the previous two
quarters. Chairman of the Management Board Dr. Fritz Oesterle confirmed the
outlook for 2008: 'Celesio is on the right track'.
As expected, Celesio showed positive growth by quarterly comparison.
Compared to the second quarter of this year, EBITDA increased in the third
quarter 2008 by 4.7 per cent (10.3 per cent without the share price falls
of the investment in Andreae-Noris-Zahn AG (ANZAG)).
In the first nine months of 2008, Group revenues and earnings were below
the figures for the previous year. This was due in particular to the
continuing effects of the massive government measures which came into
effect in the United Kingdom on 1 October 2007 and new reimbursement
mechanisms for generic medicines. The continuing weakness of the British
pound also had a considerable effect on the figures reported in Euros.
Also, price competition in the German wholesale market is waning less
quickly than expected. Finally, there is the impact of the share price fall
in the investment in ANZAG to be considered.
In this reporting period, revenues declined by 2.2 per cent compared with
the prior-year period (increase of 1.2 per cent in local currency),
primarily due to negative currency effects.
Gross profit fell by 6.4 per cent (reduction by 0.4 per cent in local
currency) to 1,768.4 million Euros, due particularly to government cost
saving measures in the United Kingdom and to the price competition in
Germany. The gross profit margin fell from 11.34 per cent to 10.86 per cent
in comparison with the first nine months of the previous year.
Income from investments was heavily burdened by the market valuation of the
investment in ANZAG. The fall in the share price resulted in an impairment
charge of 14.0 million Euros, of which 8.9 million Euros were incurred in
the third quarter.
EBITDA (earnings before interest, taxes, depreciation and amortisation)
fell by 23.9 per cent (reduction by 18.7 per cent in local currency) to
477.7 million Euros, which is 149.7 million Euros below the corresponding
prior-year period. The negative impact of government measures on EBITDA in
the first three quarters of 2008 was approximately 139 million Euros higher
than in the first three quarters of the previous year. Exchange rate
movements had a further negative effect of 32.6 million Euros. Furthermore,
a lower contribution than last year from Celesios German wholesale
business and significantly lower income from other investments contributed
to the fall in EBITDA.
The EBITDA margin declined by 84 basis points to 2.93 per cent, compared to
the same period last year.
Profit before tax fell in comparison with the comparable nine month period
in the previous year by 34.4 per cent (reduction by 29.9 per cent in local
currency) to 296.2 million Euro, net profit fell by 39.8 per cent
(reduction by 35.3 per cent in local currency) to 192.7 million Euro.
The Chairman of the Management Board of Celesio, Dr Fritz Oesterle, said in
Stuttgart: 'We already announced at the beginning of the year that 2008 was
going to be difficult for Celesio. The difficulties can now be seen. They
include both known and new government measures, new reimbursement
mechanisms for generic medicines, the weakness of the British pound, the
slower-than-expected ending of price competition in German wholesale
markets and the lower market valuation of our ANZAG investment. As I said
at that time, we need to take a deep breath in 2008 und re-establish
ourselves. We do this with strength and dynamism'. In this regard, Oesterle
drew attention to the changes made to organisational structures at Group
level and the development of new business models.
The development of a new organisational structure for the Group was
completed in the third quarter and Celesio will begin its implementation in
the fourth quarter. The new structure allows Celesio to orient itself more
strongly to the needs of its customers and offers new services at both ends
of the value creation chain.
Growth in the divisions
Celesio Wholesale developed positively despite difficult market conditions.
In Germany, GEHE Pharma Handel recovered lost market share. In the United
Kingdom, the wholesale subsidiary AAH contributed to the implemention of
alternative distribution models of various manufacturers. In France, OCP
achieved a significant increase in productivity as a result of streamlining
its branch structure.
Celesio Pharmacies remained on target for growth: during this period, a
total of 91 pharmacies were acquired or opened in seven European countries.
As well as this, Celesio continued to press ahead with preparations for the
possible further liberalisation in some European countries. After the
successful hearing before the European Court of Justice on 3 September
2008, the final submission of the Advocate General to the European Court of
Justice regarding possible liberalisation of pharmacy markets in Germany
and Italy is expected on 16 December 2008. On the whole, Apotheke DocMorris
has been developing well.
Celesio Solutions extended its presence in Europe and secured new
contracts, including its first services contracts in Slovenia.
Outlook
Without taking into account possible further share price falls of the ANZAG
share, and subject to there being no further external burdens from
government measures not yet taken into account, Celesio confirms and
substantiates its annual forecast for 2008:
Revenue adjusted for exchange rate effects will rise slightly by about 2
per cent.
Gross profit adjusted for exchange rate effects will be at the same level
as in the previous year.
EBITDA will be significantly lower than in the previous year, even when
adjusted for exchange rate effects.
However, EBITDA will increase in the fourth quarter as against the third
quarter, thereby confirming the trend indicated at the half-year point.
The 2009 forecast was presented in the Half-Year Report 2008 under the
headline 'Optimism', subject to there being no further negative government
measures, no further share price falls of the ANZAG investment and no
further burdens from exchange rates.
In the meantime, the crisis in the financial markets and the beginning of
an economic downturn have abruptly caused a change in circumstances.
Although Celesio is relatively independent of economic cycles the company
is not totally immune to this environment. Falling sales of non-medical
products and reduced financing opportunities for further growth could
pressure on profits. On the whole, Celesio is relatively optimistic about
prospects for 2009 and will focus all its resources on generating further
growth in a customerorientated and systematic manner, in line with the
strategy previously communicated.
Celesio Group in the 1st 3rd quarter of 2008<pre>
2007 2007 2008 2008 Change on Change in
a euro local
basis currency
m % m % % %
of of
revenue revenue
Revenue 16,647.5 100.00 16,285.5 100.00 -2.2 1.2
Gross profit 1,888.5 11.34 1,768.4 10.86 -6.4 -0.4
EBITDA 627.4 3.77 477.7 2.93 -23.9 -18.7
EBIT 545.5 3.28 394.8 2.42 -27.6 -22.5
PBT 451.8 2.71 296.2 1.82 -34.4 -29.9
Net profit 320.2 1.92 192.7 1.18 -39.8 -35.3</pre>
Press contact:
Rainer Berghausen, Celesio AG, +49 (0)711.5001-549
rainer.berghausen@celesio.com
About Celesio Group
Celesio, one of Europes leading trading and service providers for
medicines, generated 22.3 billion Euros revenue in 2007. As of 30 September
2008, the Group employed 37,811 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 13.11.2008
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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 on track, despite the credit crunch
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