Cryo-Save Group N.V. (Euronext: CRYO, 'Cryo-Save', or 'the Group'), the leading international stem cell storage company and the largest family stem cell bank in Europe, has published its financial results for the year ended 31 December 2012.
The results during 2012 have been impacted by the economic headwind, especially in Southern Europe and by the effect of certain non-recurring costs as a result of restructuring and implementation of cost saving programs, which amounted to €16.2 million, of which €15.1 million were non-cash. This negatively affected the 2012 financial results.
Group revenue decreased with €5.1 million to €36.8 million, largely due to declining volumes in Southern Europe, predominantly Spain and Italy. Price increases and enhanced services only partly offset the negative effect of the volume decline.
Gross profit decreased to €23.8 million (2011: €27.9 million). The gross profit margin decreased with 1.9 percentage point to 64.7%, among others due to increased demand for higher reimbursements of the collection of the umbilical cord blood and cord tissue in the hospitals, cost increases related to the transport of the samples to the processing and storage facilities and price increases concerning consumables related to the processing of the samples.
Severance costs and costs related to termination of contracts with service providers and distributors amounted to € 1.1 million. Cryo-Save reduced its headcount with 18 people, approximately 6% of the total headcount. The group also impaired a large portion of its goodwill (€ 14.0 million) and the debt free building in Lyon, France which is now held for sale (€1.1 million). Underlying operating expenses slightly increased with €0.3 million. During the first half of 2012, the operating expenses increased with almost €1 million compared to the first half of 2011. As a result of restructuring and cost saving programs, the Group has been able to lower its underlying operating expenses with €1.1 million from €11.5 million during the first half of 2012 to €10.4 million during the second half of 2012.
Cryo-Save is now focusing on restoring its market penetration in Southern Europe and improving its market share. Further cost savings programmes are being implemented.
Cryo-Save's strategic direction for 2013 will be focussing on a turnaround to regain profitable growth. In order to accomplish this, the focus will be on current markets and current services. In these markets Cryo-Save will aim to grow the penetration of its services whilst capturing further market share.
As at 31 December 2012, Cryo-Save had a solid cash position of €7.1 million (31 December 2011: €7.0 million).
Arnoud van Tulder, Chief Executive officer, commented:
"We do regret to announce these results for the financial year 2012. We are facing the consequence of the economic downturn, which lasts longer than foreseen, especially in countries such as Spain and Italy. This required the Group to take far-reaching restructuring measures.
"We are confident that the action taken and the focused strategic approach to regain profitable growth will allow Cryo-Save to improve its results."
