DGAP-News: Celesio AG:

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DGAP-News: Celesio AG / Key word(s): Final Results
Celesio AG:

18.03.2014 / 07:00

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Celesio achieves earnings target and continues its successful strategy

* Operating profit (EBIT) of 423 million euro at the upper end of the
forecast
* Dividend of 30 cents per share
* European pharmacy network developing positively

Stuttgart, 18 March 2014 Celesio AG's business performance in 2013 was in
line with expectations. The forecast for operating profits, which was
revised after the first half year of 2013, was achieved despite massive
discount competition in Germany and negative currency effects. Adjusted
EBIT amounted to 423.6 million euro. This represents a fall of 4.8 per cent
(unadjusted: + 9.9 per cent) compared with the previous-year period. When
additionally adjusted to take account of currency effects, it dipped only
slightly by 0.7 per cent and remained almost unchanged compared to the
previous-year level. The annual net profit was 166.4 million euro compared
with -149.0 million euro in the previous year. Group revenue in the year
was 3.9 per cent down on the previous year at 21,407.7 million euro. This
decline is exclusively due to the deconsolidation of the Group's Czech
activities and Irish wholesale business, as well as to currency effects.
When adjusted for these effects, Group revenue actually rose slightly by
0.9 per cent thanks to a positive revenue performance, particularly in
Germany.

"2013 was an eventful, challenging, yet also successful year for Celesio.
We have worked extremely hard to make consistent progress with our
strategic projects," commented Marion Helmes, Speaker of Celesio's
Management Board and CFO.

On an operational level, business performance was influenced by sustained
and intense competition over discounts in Germany, which overshadowed
ongoing optimisation measures across the Group and could not be offset in
full. Nevertheless, revenue actually rose slightly after adjustments for
currency and consolidation effects. Marion Helmes added: "We have achieved
the figures predicted in the revised forecast from the midpoint of the
year. At 423 million euro, adjusted EBIT is towards the top of the expected
range. Piloting our European pharmacy network under the single 'Lloyds'
brand has proved a success: we successfully rolled out the concept over the
course of the year and now have over 100 pilot pharmacies. In addition, we
can be more than satisfied by the results of our Operational Excellence
programme. Some significant progress has been made, most notably with our
'Top-in-Class Procurement' (TIC) purchasing initiative, and the earnings
situation has improved as a result."

On 24 October 2013, the McKesson Corporation, a leading US company in the
healthcare services and information technology sectors, announced its
intention to acquire a majority interest in Celesio. On 23 January 2014,
McKesson then announced that it had acquired a majority stake in Celesio,
enabling the two companies to forge a common path from that point onwards.
"Having joined forces, we are ideally placed to meet the future demands of
the healthcare industry and what is now an increasingly global distribution
network for medicines. We have established a sound basis for further
growth," remarked Marion Helmes.

Performance in the divisions

The Consumer Solutions division, the pharmacy business, generated revenue
of 3,411.9 million euro and was slightly down by 1.5 per cent compared to
the previous year's value. This decrease is entirely due to currency
effects and the deconsolidation of the Group's Czech operations. When
adjusted for these effects, revenue actually rose by 3.2 per cent.

EBIT, adjusted for special effects, fell by 3.7 per cent from 215 million
euro to 206.9 million euro (unadjusted: -2.5 per cent). When currency
effects were additionally adjusted for, EBIT rose by 0.2 per cent.

In the United Kingdom, Celesio's most important pharmacy market,
LloydsPharmacy made good operational progress in 2013, as expected. Closer
dovetailing between the pharmacy and wholesale business, together with the
Group's new structure, is beginning to have an effect. In this connection,
Celesio merged the headquarters of LloydsPharmacy and the pharmaceutical
wholesaler AAH in the United Kingdom in a move aimed at boosting the
efficiency and competitiveness of the business and leveraging synergy
effects. In addition, the TIC purchasing initiative and Operational
Excellence programme were major factors in making further cost savings.
Negative effects from governmental measures as well as negative currency
effects due to the weak pound Sterling could not, however, be fully offset.

The Swedish pharmacy business developed extremely well, as expected, with
both revenue and the gross profit margin recording an improvement. In
Italy, revenue of non-prescription medicines showed a similarly pleasant
improvement in the reporting period, which offset the decline in revenue of
prescription medicines. Earnings came in much higher than in the
previous-year period, benefiting from cost cuts. In Norway, Celesio
likewise saw positive revenue growth, particularly in the non-prescription
business. However, salary increases and higher pension burdens, inter alia,
resulted in higher personnel expenses, which were not fully offset by the
positive revenue performance in the reporting period.

In the Pharmacy Solutions division, the wholesale business, revenue dropped
by 4.3 per cent compared with the previous-year period to 17,996 million
euro. Meanwhile, Germany posted markedly positive revenue growth. The
French market saw a decline, which was mainly due to the substitution of
patent-protected medicines with generic products. The deconsolidation of
the Czech wholesale activities and Irish wholesale business, combined with
currency effects, had a substantially negative impact on business
performance. When adjusted for these effects, revenue rose by 0.4 per cent.

The division's adjusted EBIT amounted to 307.3 million euro, 4.1 per cent
below the previous-year period (unadjusted: +15.2 per cent). When
additionally adjusted for negative currency effects, adjusted EBIT dipped
slightly by 1.0 per cent.

The sustaining intensive discount competition in Germany had a huge
negative impact on earnings in spite of solid market growth. This trend
poses huge challenges for the entire industry. The negative effects of this
could not completely be counteracted by a rigorously pursued cost reduction
policy. As expected, the development of the wholesale market in the UK
declined slightly in terms of revenue. However this trend was more than
offset by encouraging revenue in generic products by the Group's
pharmaceutical wholesaler subsidiary AAH. The more favourable product mix,
together with improvements in purchasing and additional efficiency
increases, contributed to a gratifying rise in earnings.

Dividend proposal for 2013

Celesio is maintaining its dividend policy, thus guaranteeing that it will
distribute an attractive amount that is commensurate with the company's
economic situation. The Management Board and Supervisory Board will
therefore propose to the Annual General Meeting that a dividend of 0.30
euro per share be paid for the 2013 fiscal year, meaning that the amount
distributed per share will remain constant compared with the previous year.

Earnings forecast

Celesio will systematically pursue the Group's strategic realignment in
2014. Progressive improvements will be made to companies' levels of
efficiency, in addition to the optimisation of cost structures. The
expansion of our European pharmacy network will also have a positive
impact, enabling us to grow even more strongly from 2015 onwards. Overall,
Celesio's Management Board expects to achieve an adjusted EBIT in 2014 that
is slightly above the previous year.




Key figures of the Celesio Group


                                                   2012               2013
Continuing
operations
Revenue                        EUR m           22,270.8           21,407.7
EBITDA                         EUR m              542.5              532.8
adjusted 1) 2)                 EUR m              579.6              548.6
EBIT                           EUR m              370.1              406.6
adjusted 1) 2) 3)              EUR m              444.8              423.6
Net profit/loss                EUR m              109.6              171.2
adjusted 1) 2) 3) 4)           EUR m              201.5              186.4
Retail pharmacies 5)                              2,177              2,175
Wholesale
branches 5)                                         136                133
Discontinued
operations
Net profit/loss                EUR m             -258.6               -4.8
Continuing and
discontinued
operations
Employees 5)                                     38,940             38,871
Net profit/loss                EUR m             -149.0              166.4




                                                       Change
                                                         on a
                                                   euro basis

                                                            %
Revenue                          EUR m                   -3.9
EBITDA                           EUR m                   -1.8
adjusted 1) 2)                   EUR m                   -5.4
EBIT                             EUR m                    9.9
adjusted 1) 2) 3)                EUR m                   -4.8
Net profit/loss                  EUR m                   56.2
adjusted 1) 2) 3) 4)             EUR m                   -7.5
Discontinued
operations
Net profit/loss                  EUR m                   98.1
Continuing and
discontinued
operations
Net profit/loss                  EUR m                    ---



1) Adjusted for special effects from certain non-recurring expenses and
income (including tax effect)
2) Adjusted in 2012 for special effects from revaluations pursuant to IFRS
5 as well as deconsolidation effects in 2013 (including tax effect)
3) Adjusted in 2012 for impairment losses on non-current assets (including
tax effect)
4) Adjusted in 2012 for special effects in the financial result (including
tax effect)
5) Closing figures at the end of the reporting period


About Celesio Group

Celesio is a leading international wholesale and retail company and
provider of logistics and services to the pharmaceutical and healthcare
sectors. The proactive and preventive approach ensures that patients
receive the products and support that they require for optimum care.
With 39,000 employees, Celesio operates in 14 countries around the world.
Every day, the group serves over 2 million customers - at 2,200 pharmacies
of its own and 4,300 participants in brand partnership schemes. With around
130 wholesale branches, Celesio supplies 65,000 pharmacies and hospitals
every day with up to 130,000 pharmaceutical products. The services benefit
a patient pool of about 15 million per day.


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18.03.2014 Dissemination of a Corporate News, transmitted by DGAP - a
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Language:    English                                                    
Company:     Celesio AG                                                 
             Neckartalstr. 155                                          
             70376 Stuttgart                                            
             Germany                                                    
Phone:       +49 (0)711 5001-735                                        
Fax:         +49 (0)711 5001-740                                        
E-mail:      investor@celesio.com                                       
Internet:    www.celesio.com                                            
ISIN:        DE000CLS1001, DE000CLS1043                                 
WKN:         CLS100, CLS104                                             
Indices:     MDAX                                                       
Listed:      Regulierter Markt in Berlin, Düsseldorf, Frankfurt (Prime  
             Standard), München, Stuttgart; Freiverkehr in Hamburg,     
             Hannover; Terminbörse EUREX                                
 
 
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257946 18.03.2014