STADA shows good business development in the third quarter of 2017 and the first nine months
STADA Group Key Figures
Q3/2017 Q3/2016 +/- 1-9/2017 1-9/2016 +/- Group sales, reported EUR 554.8 million EUR 507.0 million +9% EUR 1,698.0 million EUR 1,541.7 million +10% Group sales, adjusted EUR 544.7 million EUR 505.1 million +8% EUR 1,641.1 million EUR 1,537.4 million +7% EBITDA, reported EUR 99.4 million EUR 88.4 million +12% EUR 320.3 million EUR 289.1 million +11% EBITDA, adjusted EUR 109.8 million EUR 98.3 million +12% EUR 347.5 million EUR 300.6 million +16% Net income, reported EUR 18.9 million EUR 18.3 million +4% EUR 109.2 million EUR 100.3 million +9% Net income, adjusted EUR 31.2 million EUR 43.8 million -29% EUR 145.4 million EUR 139.9 million +4% Earnings per share, reported EUR 0.30 EUR 0.29 +3% EUR 1.75 EUR 1.61 +9% Earnings per share, adjusted EUR 0.50 EUR 0.70 -29% EUR 2.33 EUR 2.25 +4%
"We achieved substantial sales and EBITDA growth in the third quarter, following our already strong development in the first half. Both our generics and our branded business contributed to this good performance. Also, the Company's transformation process is well on track and we are confident that with all the initiatives underway, STADA will become an even stronger global player in the years to come", says STADA Chairman of the Executive Board Dr. Claudio Albrecht.
Group sales again significantly increased in the third quarter In the first nine months of 2017, reported Group sales increased by 10 percent to Euro 1,698.0 million (Q3/2017: +9% to EUR 554.8 million). Group sales adjusted for currency and portfolio effects recorded growth of 7 percent to Euro 1,641.1 million (Q3/2017: +8% to EUR 544.7 million).
Reported key earnings figures influenced by special items as expected Primarily in the second and third quarters, as expected, special items, in particular as a result of consultancy services in connection with the now completed takeover, were incurred and amounted to Euro 27.8 million before or Euro 20.0 million after taxes, thus influencing development of reported key earnings figures in the reporting period.
Reported and adjusted EBITDA shows double-digit growth in the third quarter In the first nine months of 2017, reported EBITDA increased by 11 percent to Euro 320.3 million (Q3/2017: +12% to EUR 99.4 million). Adjusted EBITDA grew by 16 percent to Euro 347.5 million (Q3/2017: +12% to EUR 109.8 million).
Decline in adjusted net income in the third quarter due to higher tax rate In the first nine months of 2017, reported net income increased by 9 percent to Euro 109.2 million (Q3/2017: +4% to EUR 18.9 million). Adjusted net income recorded growth of 4 percent to Euro 145.4 million (Q3/2017: -29% to EUR 31.2 million). The increase in adjusted net income in the first nine months was primarily attributable to a further improved financial result. However, a significantly higher tax rate, particularly attributable to tax deferrals made in the third quarter of 2017 for future tax liabilities, had an opposing effect in the third quarter of 2017.
Cash flow increasedCash flow from operating activities improved to Euro 211.4 million in the first nine months of 2017 (1-9/2016: Euro 198.0 million). Free cash flow increased to Euro 111.6 million (1-9/2016: Euro 78.6 million). Free cash flow adjusted for payments for significant investments or acquisitions and proceeds from significant disposals increased to Euro 144.7 million (1-9/2016: Euro 132.8 million).
Net debt to adjusted EBITDA ratio improved As of September 30, 2017, net debt was at Euro 1,066.3 million (December 31, 2016: Euro 1,118.2 million). The net debt to adjusted EBITDA ratio in the first nine months of 2017 improved to 2.3 on linear extrapolation of the adjusted EBITDA of the first nine months of 2017 on a full-year basis (1-9/2016: 3.0).
Outlook STADA, from today's vantage point, expects the key earnings figures in the fourth quarter of 2017 to be lower than the corresponding figures in the third quarter of 2017. This is for a number of reasons, primarily including the weakening value of the Russian ruble and British pound sterling compared with the euro, the seasonal marketing expenses that are required to sustain the sales of the branded products for cough-and-cold and to continue the internationalization of certain branded products, and the potentially negative effect on sales in Spain from the political turbulence following the recently held referendum on Catalonian independence.
The Executive Board continues to expect that financial year 2017 as a whole will show growth over the previous year. Group sales adjusted for currency and portfolio effects are expected to be in the range of Euro 2.280 billion to Euro 2.350 billion, adjusted EBITDA between Euro 430 million and Euro 450 million and adjusted net income between Euro 195 million and Euro 205 million, consistent with the previously given guidance.
Sales development Generics In the first nine months of 2017, reported sales in the Generics segment recorded an increase of 7 percent to Euro 994.2 million (Q3/2017: +5% to EUR 319.8 million). Sales adjusted for portfolio and currency effects increased by 4 percent to Euro 960.8 million (Q3/2017: +3% to EUR 312.5 million). This development particularly resulted from the initial consolidation of the Serbian wholesaler Velexfarm. In addition, increased segment sales in the Belgian and Italian markets also contributed.
Country development Generics - the eight largest countries according to sales
Q3/2017 Q3/2016 +/- 1-9/2017 1-9/2016 +/- Germany EUR 72.9 million EUR 72.7 million 0% EUR 218.8 million EUR 223.2 million -2% Italy EUR 40.8 million EUR 37.0 million +10% EUR 125.6 million EUR 116.8 million +7% Belgium EUR 32.7 million EUR 16.9 million +93% EUR 88.7 million EUR 57.7 million +54% Russia EUR 29.1 million EUR 26.2 million +11% EUR 81.4 million EUR 75.5 million +8% Spain EUR 26.9 million EUR 26.3 million +2% EUR 79.9 million EUR 79.1 million +1% Serbia EUR 19.2 million EUR 11.6 million +65% EUR 63.2 million EUR 37.2 million +70% France EUR 17.6 million EUR 20.1 million -12% EUR 56.3 million EUR 60.5 million -7% Vietnam (Pymepharco) EUR 8.6 million EUR 10.2 million -15% EUR 30.7 million EUR 28.8 million +6% Country development Generics in the first nine months of 2017
Germany: While sales at ALIUD PHARMA recorded growth due to discount agreement tenders won, sales at STADAPHARM were - against a high comparative base resulting from the expiration of discount agreements in December 2016 - below the corresponding level of the previous year. Business outside of discount agreement tenders at STADAPHARM, which has also included sales by the former cell pharm since July 1, 2017, showed positive development. This includes, among other things, sales with oncology products. Italy: Despite strong competition, positive volume growth, new launches and price effects particularly contributed to sales growth. Belgium: The significant increase in sales mainly resulted from positive volume effects due to the independent execution of sales activities since January 2017 (following the termination of the previous distribution agreement) as well as a reduced discount rate. Russia: Sales development was primarily influenced by lower volume effects and portfolio adjustments. Spain: The slight sales growth resulted for the most part from new product launches. Serbia: The strong sales growth was mainly due to the initial consolidation of the Serbian wholesaler Velexfarm. Furthermore, it is also attributable to the change to the distribution model in the Serbian generics market, in the course of which the Serbian STADA subsidiary will now be increasingly focused on direct sales. France: The sales decline was particularly attributable to continued strong price and discount competition. Vietnam: STADA has two subsidiaries in Vietnam: Pymepharco Joint Stock Company and STADA Vietnam J.V. Co. Ltd. Since financial reports for STADA Vietnam J.V. Co. Ltd. are not available since April 2017, sales for Vietnam in the third quarter of 2017 and the first nine months of 2017 only include sales of Pymepharco. In the first nine months, Pymepharco Joint Stock Company has registered a sales increase based on positive volume effects.
EBITDA and margin development Generics In the first nine months of 2017, the adjusted EBITDA of the Generics segment increased by 14 percent to Euro 220.1 million (Q3/2017: +8% to EUR 69.4 million). This development was particularly a result of improved operating profit in Belgium (following the termination of the previous distribution agreement in December 2016) as well as improved operating profit in the German and Italian Generics segment. In the first nine months of 2017, the adjusted EBITDA margin was 22.1 percent (1-9/2016: 20.8%; Q3/2017: 21.7%; Q3/2016: 21.0 percent).
Sales development Branded ProductsReported sales of the Branded Products segment increased by 15 percent to Euro 703.8 million in the first nine months of 2017 (Q3/2017: +16% to EUR 235.0 million). Sales adjusted for portfolio and currency effects grew by 12 percent to Euro 680.3 million (Q3/2017: +15% to EUR 232.2 million). This positive development primarily resulted from strong growth in segment sales in Russia and an increased sales contribution from the Serbian subgroup.
Country development Branded Products - the five largest countries according to sales
Q3/2017 Q3/2016 +/- 1-9/2017 1-9/2016 +/- Russia EUR 60.3 million EUR 41.7 million +45% EUR 168.3 million EUR 101.8 million +65% Germany EUR 48.6 million EUR 42.9 million +13% EUR 140.0 million EUR 143.1 million -2% United Kingdom EUR 35.0 million EUR 34.6 million +1% EUR 117.1 million EUR 118.2 million -1% Italy EUR 10.9 million EUR 8.6 million +27% EUR 32.5 million EUR 30.1 million +8% USA EUR 9.8 million EUR 8.5 million +15% EUR 27.4 million EUR 22.7 million +21%
Country development Branded Products in the first nine months of 2017 Russia: Most of the sales increase was attributable to growth in volume, particularly for some of the key brands which were out-of-stock in the previous year. Germany: Third quarter sales were strong due to the early delivery of cough & cold products as well as some launches; however the year-to-date sales were lower than the corresponding period of the previous year, partly because of a high comparative base, and partly due to a decline in sales of the Parkinson's treatment APO-Go in Germany. United Kingdom: This sales increase was mainly attributable to the two acquisitions, BSMW and Natures Aid. Italy: The sales increase was particularly attributable to a reorganization of sales structures carried out at the end of 2016. USA: The sales growth resulted from the good development of Parkinson's treatment APO-Go.
EBITDA and margin development Branded Products In the first nine months of 2017, the adjusted EBITDA of Branded Products increased by 19 percent to Euro 191.5 million (Q3/2017: +33% to EUR 70.1 million). This development was particularly attributable to strong sales development and positive foreign exchange translation effects in Russia. In addition, there were reduced write-downs on non-current assets in the Branded Products segment. The adjusted EBITDA margin of Branded Products was 27.2 percent in the first nine months of 2017 (1-9/2016: 26.4%; Q3/2017: 29.8%; Q3/2016: 25.9%).
About STADA Arzneimittel AG STADA Arzneimittel AG is a publicly-listed company with headquarters in Bad Vilbel, Germany. STADA consistently focuses on a multi-pillar strategy of generics and branded products (OTC) with an increasingly international market orientation. Worldwide, STADA is represented in more than 30 countries with more than 50 subsidiaries. Branded products such as Grippostad and Ladival are among the highest selling in their product categories in Germany. In financial year 2016, STADA achieved adjusted Group sales of Euro 2,167.2 million, adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of Euro 398 million and adjusted net income of Euro 177.3 million. As of December 31, 2016, STADA employed 10,900 people worldwide.
Additional information for journalists: STADA Arzneimittel AG / Media Relations / Stadastraße 2-18 / 61118 Bad Vilbel - Germany / Phone: +49 (0) 6101 603-165 / Fax: +49 (0) 6101 603-215 / E-mail: firstname.lastname@example.org Or visit us in the Internet at www.stada.com.
09.11.2017 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.The issuer is solely responsible for the content of this announcement.The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Archive at www.dgap.deLanguage: English Company: STADA Arzneimittel AG Stadastraße 2-18 61118 Bad Vilbel
Germany Phone: +49 (0)6101 603- 113 Fax: +49 (0)6101 603- 506 E-mail: email@example.com Internet: www.stada.de ISIN: DE0007251803, DE0007251845, WKN: 725180, 725184, Indices: MDAX Listed: Regulated Market in Dusseldorf, Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Hamburg, Hanover, Munich, Stuttgart, Tradegate Exchange End of News DGAP News Service