Celesio AG / Quarter Results 12.08.2010 07:02 Dissemination of a Corporate News, transmitted by DGAP - a company of EquityStory AG. The issuer / publisher is solely responsible for the content of this announcement. --------------------------------------------------------------------------- Celesio reports significant growth in first half year 2010 - Growth programme Agenda 2015 making good headway - Revenue and EBITDA up on previous year - Significant increase in profitability in Wholesale business area - DocMorris developing to become the leading European pharmacy brand - Positive prospects for 2010 defined Stuttgart, 12 August 2010. Celesio, one of the leading international service providers within the pharmaceutical and healthcare markets, significantly increased its revenue and EBITDA in the first half year 2010. Group revenue increased by 10.8 per cent compared with the same period last year to 11.5 billion euro. EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortisation) rose by 9.6 per cent to 324.5 million euro. The main driver behind this was the positive development in earnings from pharmaceutical wholesale, the result primarily of the first consolidation of the Brazilian wholesaler Panpharma, as well as good growth in the operating business. Celesio remains optimistic about its full-year results. 'Our success in the first half of the year shows we are on the right path with our growth programme Agenda 2015 to achieve EBITDA in 2015 of more than one billion euro. As part of this programme, we have increased efficiency, optimised our portfolio and pushed forward innovations in the first half of 2010,' says Fritz Oesterle, Chairman of the Celesio Management Board and CEO. 'We have managed to increase profitability in the wholesale business and within Movianto. Our partnership with Phoenix will place us in an excellent position in the Dutch market. We have also pushed ahead with the internationalisation of DocMorris. We aim to turn DocMorris into Europe's leading pharmacy brand in the years ahead. Finally, we are finding completely new ways: our joint venture with Medco Health Solutions will provide health insurance funds and manufacturers with integrated solutions to increase efficiency reserves in the pharmaceutical and healthcare markets. This will open up medium to long-term growth opportunities for us, and strengthen Celesio's position as the leading service provider in the European healthcare markets.' For the further course of 2010 Oesterle emphasises: 'We have increased revenue and EBITDA compared with the same period last year even more significantly than expected. If this development continues in the same way, we expect EBITDA for the full year to be in the region of 670 to 690 million euro. This means we are fully on track with our growth programme Agenda 2015.' Development within the divisions Between January and June, the Patient and Consumer Solutions division reported revenue of 1,763.6 million euro, 5.0 per cent ahead of the same period last year (a 1.8 per cent increase in local currency). This growth was clearly led by revenue in the Retail Pharmacy business area which increased by 4.1 per cent to 1,619.4 million euro. As of 30 June, Celesio operated 2,311 retail pharmacies throughout Europe. This is 15 fewer than on the same date last year. During the first half of 2010, Celesio opened 22 pharmacies (compared with five in the previous year), 19 of them in Sweden. Revenue in the Mail-order Pharmacies business area rose even more sharply than in the Retail Pharmacies - by 16.8 per cent to 142.2 million euro. Celesio's major mail-order pharmacy, DocMorris, which celebrated its tenth anniversary in June, significantly improved revenue due to continuing strong business in prescription medicines. EBITDA in the Patient and Consumer Solutions division fell in the first half of the year by 4.4 per cent (7.3 per cent in local currency) to 137.1 million euro. The main reason for this was the fall in EBIDTA in the Retail Pharmacies business area of 10.8 per cent to 130.9 million euro - which in turn is a consequence of the expected impact of government savings, particularly in the first quarter, as well as the cost of developing the pharmacy chain in Sweden. In the same period last year, EBITDA in this business area was still feeling the positive one-off effect of the temporary increase in pharmacy payment in the United Kingdom. The Mail-order Pharmacies business area generated EBITDA of 6.7 million euro; the figure of -2.1 million euro in the same period last year was at a time of spending on advertising activities for Apotheke DocMorris. The operating business performed well in Celesio's most important pharmacy market, the United Kingdom, accounting for 62.4 per cent of revenue in the Retail Pharmacies business area. The main driver here - despite the lower number of pharmacies - was increasing revenues from medicines subject to compulsory reimbursement. This increase was not reflected in earnings since the prices of generic medicines in the United Kingdom, which where reduced in October 2009, did burden the earnings of pharmacies. Celesio's business in its second most important pharmacy market, Norway, developed solidly while in Italy and Ireland government savings from the previous year put pressure on pharmacies' profitability. In Sweden, expansion of the DocMorris chain of pharmacies, made possible by the lifting of the state monopoly on pharmacies last year, progressed according to plan. Between mid-February and the end of June, 19 DocMorris pharmacies opened throughout the country. In July, Celesio took the decision to adjust the brand strategy in the Patient and Consumer Solutions division to new challenges of the market. The aim is to optimise brand leadership, expand the franchise business, strengthen the end customer base and implement additional efficiency measures. To this end, Celesio will gradually focus on the two pharmacy brands Lloydspharmacy in the United Kingdom and DocMorris outside the United Kingdom. Outside the UK, the Patient and Consumer Solutions division will be managed by the newly formed company DocMorris-International Retail Centre (IRC). Revenue of the Pharmacy Solutions division improved significantly in the first half of 2010 in comparison with the same period last year, rising 10.9 per cent to 9,425.1 million euro (an increase of 8.6 per cent in local currency). The Wholesale business area contributed revenue of 9,422.5 million euro, a rise of 10.9 per cent. This significant increase was primarily as a result of including the Brazilian wholesale revenue which had not been included in the first half of 2009, and positive business development in both Germany and the United Kingdom. EBITDA rose even more sharply than revenue, increasing 23.7 per cent to 230.1 million euro (19.4 per cent in local currency) compared with the previous year. Excluding currency and consolidation effects, the increase amounted to 4.6 per cent. EBITDA in the remaining business areas fell to -4.2 million euro (-0.2 million euro in the previous year). In the Wholesale business area, EBITDA climbed 25.8 per cent to 234.3 million euro, primarily a result of additional profit contributions from Brazilian wholesaler Panpharma and positive growth in operating business. Consolidation of the wholesalers Panpharma in Brazil and Laboratoria Flandria in Belgium, which were acquired in 2009, increased our count of wholesale branches to 132 as of 30 June 2010. This means an increase of 11 compared with 30 June 2009. During the first six months of the current fiscal year, the Manufacturer Solutions division generated gross profit of 204.1 million euro compared with 80.8 million euro in the first half year of 2009. The main reason for this significant increase was the inclusion of the pharmexx Group which has been fully consolidated since July 2009 and contributed 115.3 million euro to the division's gross profit. The Movianto business area increased gross profit by 9.2 per cent to 87.8 million euro. Gross profit from the other business areas increased from 0.4 million euro to 1.0 million euro. The division's 53.1 per cent increase in EBITDA (51.5 per cent in local currency) to 5.9 million euro was primarily as a consequence of the positive increases in earnings from the Movianto business area. The optimisation measures implemented in 2009 had a positive impact on EBITDA, which saw a sharp increase of 26.5 per cent (25.7 per cent in local currency) to 6.7 million euro. The pharmexx business area generated EBITDA of just 1.4 million euro (-0.2 million euro in the previous year), its main pressure coming from integration and restructuring costs. Development costs for Evolution Homecare and Celesio Manufacturer Solutions Sales affected in EBITDA from the other business areas of -2.2 million euro (-1.3 million euro in the previous year). Earnings forecast 2010 The management board maintains its optimistic forecast for the fiscal year 2010. If the positive business developments reported in the first half year 2010 continue unabated the second half of the year, Celesio expects to see group EBITDA of between 670 and 690 million euro for the full year. Celesio will reap the benefits both from acquisitions in the previous fiscal year as well as growing organically. Net liabilities will still be reduced to below 2 billion euro and the most critical financial figures will continue to improve over the full year. This forecast is based on the assumption that there will be no significant new regulatory effects or shifts in the exchange rates of Celesio's major foreign currencies. Key figures of the Celesio Group 1st half year 1st half year 2009 2010 Revenue EUR m 10,384.1 11,508.6 EBITDA EUR m 296.0 324.5 Earnings before tax EUR m 189.5 164.3 Net profit EUR m 124.4 98.8 Employees* 38,566 46,984 Retail pharmacies* 2,326 2,311 Wholesale branches* 121 132 Change on Change in Comparison a local figures EUR basis currency 2nd quarter in % in % 2010 Revenue 10.8 8.4 5,840.3 EBITDA 9.6 5.5 171.3 Earnings before tax -13.3 -16.9 73.1 Net profit -20.6 -24.9 39.3 * Values refer to the date at the end of the reporting period 1) For the Manufacturer Solutions division, it is absolute gross profit achieved rather than revenue that is the most critical measure of success. The background to this is that customers as a rule pay service-related fees; retail revenue is generated only in exceptional cases. Press contact: Rainer Berghausen, Celesio AG, +49 (0)711.5001-549 media@celesio.com About Celesio Group: Celesio is one of the leading international service providers within the pharmaceutical and healthcare markets. The company is active in 27 countries worldwide and employs approximately 47,000 people in its three divisions Patient and Consumer Solutions, Pharmacy Solutions and Manufacturer Solutions. Approximately 2,300 of Celesio's own retail pharmacies, as part of Patient and Consumer Solutions, serve over 600,000 customers every day. In its wholesale activities, which are part of Pharmacy Solutions, more than 130 wholesale branches deliver to over 65,000 pharmacies - day in, day out. In the Manufacturer Solutions division, Celesio offers pharmaceutical manufacturers logistics and distribution solutions and supports them in sales and marketing. 12.08.2010 07:02 Ad hoc announcement, Financial News and Press Release distributed by DGAP. Medienarchiv at |[![CDATA[|[a href="http://www.dgap-medientreff.de"|]www.dgap-medientreff.de|[/a|]]]|] and |[![CDATA[|[a href="http://www.dgap.de"|]www.dgap.de|[/a|]]]|] --------------------------------------------------------------------------- Language: English Company: 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 Frankfurt (Prime Standard), Berlin, Stuttgart, München, Düsseldorf; Freiverkehr in Hannover, Hamburg; Terminbörse EUREX End of News DGAP News-Service ---------------------------------------------------------------------------
DGAP-News: Celesio AG: Celesio reports significant growth in first half year 2010
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