DGAP-News: STADA: Good operating results confirm successful financial year 2010 - positive outlook for 2011/2012
(firmenpresse) - DGAP-News: STADA Arzneimittel AG / Key word(s): Final Results
STADA: Good operating results confirm successful financial year 2010 -
positive outlook for 2011/2012
30.03.2011 / 07:25
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Important items at a glance
- Operationally successful financial year 2010 despite difficult
framework conditions:
- Group sales increases to EUR 1.63 billion (+4%)
- Adjusted EBITDA rises to EUR 315.9 million (+10%)
- Adjusted net income goes up to EUR 133.3 million (+15%)
- Adjusted earnings per share grows to EUR 2.27 (+15%)
- High burdening special effects totaling EUR 77.2 million before or EUR
64.8 million after taxes
- Unchanged planned dividend ratio of 32% results in proposed dividend of
EUR 0.37 per common share (previous year: EUR 0.55)
- Further expansion of international business activities
- Positive outlook for 2011 and 2012: Further growth in Group sales and
earnings - Opportunity for an increase in 2011 in adjusted EBITDA in
the high single-digit percentage area to another record level -
Long-term targets for 2014 confirmed
Bad Vilbel, March 30, 2011 - Today, on March 30, 2011, STADA Arzneimittel
AG published the final financial results for the year 2010. All of the
preliminary results published on February 28, 2011 were thereby confirmed.
Hartmut Retzlaff, STADA's Chairman of the Executive Board, was satisfied
with the Group's development in the reporting year: 'In view of the
difficult framework conditions in markets that are important to us and high
one-time special effects, we reached operationally good results in
financial year 2010. In terms of adjusted EBITDA, we even achieved a new
record value in the Company's history. And also in our outlook, despite
some challenges in one or the other local market, we consider ourselves in
the Group overall on a good path to further grow in sales and earnings and
to reaching our ambitious long-term targets for 2014.'
Development of Sales
Despite the challenging environment in individual national markets -
particularly in Serbia and Germany - Group sales increased in financial
year 2010 by 4% to EUR 1,627.0 million (previous year: EUR 1,568.8
million). When effects on sales attributable to changes in the Group
portfolio and currency effects are taken into account, Group sales
increased by 2% in the reporting year.
Sales of Generics, which continues to be the significantly larger core
segment, were, in financial year 2010, at EUR 1,124.2 million at the level
of the previous year (previous year: EUR 1,115.6 million) and contributed
69.1% to Group sales (previous year: 71.1%). Adjusted, generics sales were
also at about the level of the previous year.
Sales in the Branded Products core segment increased by 8% to EUR 425.0
million in financial year 2010 (previous year: EUR 392.6 million) and had a
share of 26.1% (previous year: 25.0%) in Group sales. The Group recorded an
increase of 3% in adjusted sales of branded products in 2010.
The focus of STADA's business activities continued to be clearly on Europe
in the reporting year. Here, the Group achieved sales growth of 3% to EUR
1,553.6 million (previous year: EUR 1,501.0 million). Sales in European
markets thus contributed 95.5% to Group sales (previous year: 95.7%).
Adjusted sales in European markets increased by 2%.
In Western Europe, STADA recorded a sales increase in financial year 2010
in the amount of 4% to EUR 1,148.1 million (previous year: EUR 1,108.1
million). Sales in Western European countries thus amounted to a 70.6%
share (previous year: 70.6%) of Group sales. Adjusted sales in Western
Europe increased by 2%. In Western European markets, decreased sales in
Germany in particular had a noticeable curbing effect.
In Eastern Europe, the Group recorded a sales plus of 3% to EUR 405.5
million in 2010 (previous year: EUR 392.9 million). Sales generated by
STADA in Eastern European markets thus had a share of 24.9% of Group sales
(previous year: 25.0%). Adjusted sales in Eastern Europe increased by 2%.
The curbed sales development in the Eastern European markets was
predominantly characterized by the difficult situation in Serbia, which
affected all market participants there. Adjusted for the development in
Serbia, sales in Eastern Europe increased by 12%.
In Asia, STADA's sales rose by 12% to EUR 51.4 million in the reporting
year (previous year: EUR 45.9 million). Sales in the Asian countries thus
contributed 3.2% (previous year: 2.9%) to Group sales. Adjusted sales in
Asia increased by 7%.
In the rest of the world, Group sales were at the level of the previous
year and amounted to EUR 22.0 million in financial year 2010 (previous
year: EUR 21.9 million). Sales in the rest of the world thus had a share of
1.4% in Group sales (previous year: 1.4%). Adjusted sales in the rest of
the world was also at the level of the previous year.
Earnings development
Despite difficult framework conditions in individual national markets -
particularly in Serbia and Germany - all operational key earnings figures,
i.e. without consideration of the significant earnings-burdening, one-time
special effects increased in the reporting year.
Therefore, adjusted earnings before interest, taxes, depreciation and
amortization (adjusted EBITDA) recorded an increase of 10% to EUR 315.9
million in 2010 (previous year: EUR 287.5 million) and thus reached its
highest value in the Company's history. Adjusted net income rose by 15% to
EUR 133.3 million in financial year 2010 (previous year: EUR 115.8
million). The adjustments each include one-time special effects as well as
non-operational effects from currency influences and interest rate hedge
transactions.
Due to the known high one-time special effects particularly in the third
quarter of 2010 the reported key earnings figures for 2010 decreased.
Earnings before interest, taxes, depreciation and amortization (EBITDA)
recorded a decrease of 4% to EUR 268.8 million in the reporting year
(previous year: EUR 280.1 million). Net income declined by 32% to EUR 68.4
million in 2010 (previous year: EUR 100.4 million).
One-time special effects in the reporting year added up to a burden on
earnings in a total of EUR 79.9 million before or EUR 66.7 million after
taxes (previous year: net burden on earnings due to one-time special
effects in the amount of EUR 17.3 million before or EUR 12.5 million after
taxes). Non-operational effects from currency influences and interest rate
hedge transactions added up to a relief on earnings in financial year 2010
in the total amount of EUR 2.7 million before or EUR 1.9 million after
taxes (previous year: net burden on earnings due to non-operational effects
from currency influences and interest rate hedge transactions in the amount
of EUR 4.2 million before or EUR 2.8 million after taxes).
Taking into account the adjustments resulted in the following development
of the reported and adjusted key earnings figures in 2010:
In EUR million 2010 2009 +/- %Balance sheet and cash flow
Operating profit 161.8 191.9 -16%
Operating profit, adjusted 239.3 211.1 +13%
EBITDA 268.8 280.1 -4%
EBITDA, adjusted 315.9 287.5 +10%
EBIT (earnings before interest and taxes) 162.1 192.5 -16%
EBIT, adjusted 239.6 210.8 +14%
EBT (earnings before taxes) 109.0 141.5 -23%
EBT, adjusted 186.2 163.0 +14%
Net income 68.4 100.4 -32%
Net income, adjusted 133.3 115.8 +15%
Earnings per share in EUR 1.16 1.71 -32%
Earnings per share in EUR, adjusted 2.27 1.97 +15%
The Group's equity-to-assets ratio on December 31, 2010 was 34.6% (December
31, 2009: 35.5%). The figure thereby remains clearly above the minimum
ratio targeted by the Executive Board. As of December 31, 2010, net debt
decreased to EUR 864.1 million (December 31, 2009: EUR 899.0 million).
Helmut Kraft, STADA's Chief Financial Officer, commented positively on the
financial stability: 'We were able to reduce the net debt to adjusted
EBITDA ratio to 2.7 in 2010. Thus, we were significantly below the target
ratio of a maximum of 3 that we strive for, giving us greater flexibility
again for a more focused acquisition policy. Temporarily exceeding this
target ratio for suitable acquisitions also remains imaginable.'
In case of larger projects such as acquisitions or cooperations with
capital investments, the Executive Board continues to deem also appropriate
capital measures imaginable if the burden on the equity-to-assets ratio
from such acquisitions or cooperations is too high.
Free cash flow amounted to EUR 102.4 million in the reporting year
(previous year: EUR 144.0 million). Free cash flow adjusted for payments
for acquisitions and proceeds from disposals in 2010 was EUR 135.0 million
(previous year's free cash flow adjusted for payments for acquisitions and
proceeds from disposals as well as influences from other accounting
periods: EUR 169.4 million). Thus, also for 2010, it is evident that the
Group can continue to finance the operating business, i.e. without
acquisitions, through the self-generated cash flow.
Dividend proposal
Already on February 28, 2011, the Executive Board had proposed a
distribution ratio for financial year 2010 unchanged from the previous year
of approx. 32% of net income. The Supervisory Board supported this
proposal. Should the Annual General Meeting follow this proposal on June
16, 2011, this would result in a dividend of EUR 0.37 per common share
(previous year: EUR 0.55) and total dividend payments of EUR 21.7 million
(previous year: EUR 32.3 million).
With this proposed resolution, the Executive Board aims to give
shareholders a share in net income, without placing too great a restriction
on the Group's financial flexibility for further growth.
Regional development in STADA's two largest national markets
In financial year 2010, STADA's two largest national markets continued to
be Germany and Russia.
In Germany, which continues to be the Group's largest national market,
sales in financial year 2010 decreased by 3% to EUR 516.4 million (previous
year: EUR 531.6 million). STADA's German business contributed 31.7% to
Group sales in the reporting year (previous year: 33.9%). The decrease in
sales in Germany was attributable to the ongoing difficult local framework
conditions for generics. Sales in the German Generics segment in the
reporting year thus decreased by 6% to EUR 401.7 million (previous year:
EUR 426.3 million).
Sales generated with branded products in Germany, however, rose in the
reporting year by 9% to EUR 111.9 million (previous year: EUR 103.1
million) The total share achieved by STADA with branded products in the
German market was 22% in 2010 (previous year: 19%).
For financial year 2011, the Executive Board calculates with further sales
decreases in the generics area and thus for the German business overall, as
the local sales strategy in the German market continues to be geared toward
an appropriate local operating profitability.
In Russia, which continues to be the Group's second most important national
market, sales increased by a pleasing 15% to EUR 221.2 million (previous
year: EUR 191.9 million). Also when applying the exchange rates of the
previous year, a clear sales growth of 9% was recorded - in spite of a
local price regulation introduced on April 1, 2010, for so-called essential
pharmaceuticals, which affects approx. 40% of local Group sales.
The two core segments in the Russian market had nearly the same share of
local Group sales in financial year 2010. With generics, the Group achieved
a sales increase of 18% to EUR 102.6 million (previous year: EUR 86.8
million) or 46% of STADA's sales in Russia (previous year: 45%). Sales of
branded products rose by 13% to EUR 118.2 million (previous year: EUR 104.5
million) or 53% of STADA's sales in the Russian market (previous year:
54%).
In financial year 2011, STADA expects further strong sales growth in local
currency in Russia with operating profitability above Group average.
Personnel development
In financial year 2010, the average number of employees in the STADA Group
was 8,080 (previous year: 8,064) and thus at approximately the level of the
previous year. The personnel reductions during the year in individual areas
and regions of the Group (such as the transfer of the Dutch packaging unit
and the reduction of the Italian branded products sales force) in the
context of the multi-year efficiency improvement program 'STADA - build the
future', which was launched in the reporting year 2010, are not yet
entirely perceptible in these average figures.
Product development
Research and development costs, which exclusively comprise costs for
product development at STADA due to its business model focused on
off-patent active pharmaceutical ingredients, amounted to EUR 54.9 million
(previous year: EUR 46.6 million) in 2010. The sales-related ratio of
research and development costs was at 3.4% (previous year: 3.0%). In
addition, development costs for new products in the amount of EUR 13.3
million (previous year: EUR 14.8 million) were capitalized in 2010.
In the reporting year, the Group was able to launch 572 individual products
worldwide (previous year: 486). 'With this large number of product
launches, we reached the highest figure ever in our Company's history in
2010', was the positive comment from Dr. Axel Müller, Chief Production and
Development Officer at STADA, on the Group's sustainable and successful
development and approval activities.
The high importance for the Group of this successful product development
can also be seen from the 10% of Group sales in 2010 generated by products
which STADA introduced in the last two years (previous year: 9%).
In the Executive Board's view, the Group's product pipeline continues to be
well-filled. As at the balance sheet date, approval procedures totaled over
1,100 for over 120 active pharmaceutical ingredients for more than 50
countries within the STADA Group. STADA should also be able to launch
numerous new products in the individual national markets in the future.
This applies in particular with regard to generics in the EU.
Outlook
In the Annual Report published today, the Executive Board confirms the
positive outlook for the future development of the STADA Group already
given on February 28, 2011. STADA's sales and earnings development will
thereby be generally characterized in financial year 2011 and 2012 by
differing and partially contradictory factors in the various national
markets. The overall sales increase for the Group expected by the Executive
Board, however, should positively influence earnings development.
In 2011, the Executive Board thus expects further recovery in the Serbian
business. Continued strong growth is expected for Russia and Asia in the
current financial year. In Western Europe, increased volume growth -
supported, among other things, by numerous patent expirations and
increasing generics penetration - should more than compensate for potential
state cost-cutting measures.
Positive effects on earnings as a result of the implementation of the
'STADA - build the future' project are to be expected for EBITDA adjusted
for one-time special effects and the correspondingly adjusted net income to
a significant extent from the current financial year 2011 and mainly in
2012. By 2013, from today's perspective, project-related investments of a
total of approx. EUR 20 million as well as project-related expenditure for
special write-offs, personnel expenses and consultancy services of a total
of approx. EUR 50 million are expected (each including the past financial
year 2010). The Group will recognize each of these project-related costs as
a one-time special effect according to progression of the project.
Overall, STADA is well positioned for its successful development to
continue. For financial years 2011 and 2012, the Group expects further
growth in Group sales and earnings. 'For 2011, from today's perspective, we
see the opportunity for an increase in adjusted EBITDA in the high
single-digit percentage area. This would mean that adjusted EBITDA in 2011
would reach again a record value in our Company's history', said Hartmut
Retzlaff optimistically on the Group's outlook.
In addition, the Executive Board continues to hold to the long-term targets
published in June 2010 for financial year 2014, according to which Group
sales of approx. EUR 2.15 billion, an adjusted EBITDA of approx. EUR 430
million and net income of approx. EUR 215 million should be reached.
Additional information:
STADA Arzneimittel AG / Corporate Communications / Stadastraße 2-18 / D -
61118 Bad Vilbel /
Phone: +49 (0) 6101 603-113 / Fax: +49 (0) 6101 603-506 / E-mail:
communications(at)stada.de.
Or visit us in the Internet at www.stada.com.
End of Corporate News
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Language: English
Company: STADA Arzneimittel AG
Stadastraße 2-18
61118 Bad Vilbel
Deutschland
Phone: +49 (0)6101 603- 113
Fax: +49 (0)6101 603- 506
E-mail: communications(at)stada.de
Internet: www.stada.de
ISIN: DE0007251803, DE0007251845,
WKN: 725180, 725184,
Listed: Regulierter Markt in Düsseldorf, Frankfurt (Prime
Standard); Freiverkehr in Berlin, Hamburg, Hannover,
München, Stuttgart
End of News DGAP News-Service
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Datum: 30.03.2011 - 07:25 Uhr
Sprache: Deutsch
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