Annual financial statement for 2014: Significant growth with LOQTEQ® (+63%) leads to expansion of trauma business (+27%)
(Thomson Reuters ONE) -
aap Implantate AG /
Annual financial statement for 2014: Significant growth with LOQTEQ® (+63%)
leads to expansion of trauma business (+27%)
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The issuer is solely responsible for the content of this announcement.
aap Implantate AG (XETRA: AAQ.DE) was able to further implement its growth
strategy in financial year 2014 and at the same time achieved progress in
focussing on its trauma business. That is demonstrated by the significant
increase in sales in the trauma business and, above all, in LOQTEQ® product
family sales. Furthermore, during the reporting period two business activities
-the Dutch subsidiary EMCM B.V. (contract manufacturing business) and the
remaining 50% shareholding in the dental joint venture aap BM productions GmbH -
which no longer formed a part of the company's core business were disposed. In
addition, aap Implantate AG succeeded in 2014 inter alia in expanding its IP
portfolio, especially in the area of the strategically important LOQTEQ® range
and in continuing to accelerate development of its highly promising silver
coating technology.
2014 - Successes and Milestones
Operative performance: Continued operations (normalised*)
+----------------+------+------+--------+
| in EUR million | 2014 | 2013 | Change |
+----------------+------+------+--------+
| Sales revenue | 29.8 | 25.8 | 16% |
+----------------+------+------+--------+
| EBITDA | 1.4 | 0.4 | 250% |
+----------------+------+------+--------+
*Sales/EBITDA excluding one-off effects of equity disposal, one-off costs in
connection with strategic measures and project proceeds and costs incurred in
connection with them
In financial year 2014 the company achieved important successes here summarised
once more as follows:
* The financial targets were achieved: sales at EUR 31.6 million were within
the October 2014 guidance of between EUR 30 million and EUR 34 million;
EBITDA at EUR 2.3 million was also in line with expectations (October 2014
target corridor: EUR 2.0 million to EUR 4.5 million)
* Trauma sales went up by 27% on the previous year to EUR 12.2 million,
underlining the strategy of transformation into a pure trauma company
* Significant sales growth of the LOQTEQ® portfolio shows that the anatomic
plate system is increasingly gaining market acceptance (sales up by 63% to
EUR 8.2 million)
* Sale of all shares in the Dutch subsidiary EMCM B.V. for EUR 18 million
* Disposal of remaining 50% shareholding in dental joint venture aap BM
productions GmbH for EUR 1 million
* Notice of allowance from the United States Patent and Trademark Office
(USPTO) for core patent claims in respect of the LOQTEQ® system; scheduled
expansion of the LOQTEQ® portfolio to cover further indication areas (such
as the polyaxial LOQTEQ® radius plate system and the periprosthetic plate
system)
* Patent for silver coating technology received from the United States Patent
and Trademark Office
* Conclusion of a supply contract for a PMMA bone cement for the United
States, Canada and Puerto Rico with a leading US healthcare services company
Evaluation of the 2014 Management Agenda
+------------------------------------------------------------------------------+
| Customers |
+-----------------------------+-------------------------------+----------------+
| Targets of the 2014 |Results of the 2014 Management |Target achieved?|
| Management Agenda | Agenda | |
+-----------------------------+-------------------------------+----------------+
|Growing trauma sales to > EUR|Trauma sales increased by 27% | |
|15 million (>50%); driven by |to EUR 12.2 million; LOQTEQ® as| Partly |
|LOQTEQ® |main driver with +63% to EUR | |
| |8.2 million | |
+-----------------------------+-------------------------------+----------------+
|Expanding the LOQTEQ® |Scheduled expansion of LOQTEQ® | |
|portfolio; striving for >90% |portfolio to cover further | |
|indication coverage |indication areas (e.g. | Yes |
| |polyaxial LOQTEQ® radius plate | |
| |system and periprosthetic plate| |
| |system) | |
+-----------------------------+-------------------------------+----------------+
|Appointing a distributor in |Infrastructure set up with the | |
|the USA and further expansion|founding of a US subsidiary and| |
|of distribution network |the signing of a contract with | Partly |
|beyond BRICS and SMIT |a logistics service provider; | |
|countries |negotiations with different | |
| |distributors | |
+-----------------------------+-------------------------------+----------------+
|Appointing a new global |Conclusion of supply contract | |
|partner for a bone cement |for PMMA bone cement to USA, | |
| |Canada and Puerto Rico with a | Yes |
| |leading US healthcare services | |
| |company | |
+-----------------------------+-------------------------------+----------------+
+------------------------------------------------------------------------------+
| Innovation |
+------------------------------+------------------------------+----------------+
|Targets of the 2014 Management|Results of the 2014 Management|Target achieved?|
| Agenda | Agenda | |
+------------------------------+------------------------------+----------------+
|Sustain freshness index of at |LOQTEQ® sales growth of 63% | Yes |
|>20% | | |
+------------------------------+------------------------------+----------------+
|Accelerate the development of |Final reports on the results | |
|silver coated trauma products;|of initial animal experiments | Yes |
|aiming for market introduction|on toxicity and infection | |
|in 2015 |model received | |
+------------------------------+------------------------------+----------------+
|Extend co-development network |Negotiations with leading | |
|for resorbable magnesium |companies in the magnesium | Partly |
|products; aiming for market |sector | |
|introduction in 2-3 years | | |
+------------------------------+------------------------------+----------------+
|Interim analysis of the |Study of LOQTEQ® osteotomy | |
|LOQTEQ® study for phase 1 |plate's fatigue strength | |
|products in the second quarter|reveals outstanding proven | |
|of 2014 |properties compared with | |
| |market leader; initial results| Partly |
| |of cold welding study show | |
| |that no case of cold welding | |
| |has been observed with LOQTEQ®| |
| |plates and screws so far | |
+------------------------------+------------------------------+----------------+
+------------------------------------------------------------------------------+
| |
| Finance |
+--------------------------------+----------------------------+----------------+
| Targets of the 2014 Management | Results of the 2014 |Target achieved?|
| Agenda | Management Agenda | |
+--------------------------------+----------------------------+----------------+
|Profitable growth: sales of EUR |Adjusted guidance; sales| |
|35 million (+22%) and EBITDA |between EUR 30 million and| |
|between EUR 5 million and EUR 6 |EUR 34 million; EBITDA| Yes |
|million |between EUR 2 million and| |
| |EUR 4 million | |
+--------------------------------+----------------------------+----------------+
|Working capital ratio > 2.4 (in|Working capital ratio at| |
|relation to sales) |1.8; 2014 sales growth with| No |
| |70% of Q4 sales in December| |
| |2014 | |
+--------------------------------+----------------------------+----------------+
|Strengthening the balance sheet |Intangible assets as a| |
|by ongoing reduction of the |proportion of the balance| Yes |
|percentage of intangible assets |sheet total down to around| |
|as of the balance sheet total |26% | |
+--------------------------------+----------------------------+----------------+
|DCR < 3 and ICR > 8 |DCR = 1.6 and ICR = 16.8 | Yes |
+--------------------------------+----------------------------+----------------+
+------------------------------------------------------------------------------+
| Organisation/IT |
+-------------------------------+-----------------------------+----------------+
|Targets of the 2014 Management | Results of the 2014 |Target achieved?|
| Agenda | Management Agenda | |
+-------------------------------+-----------------------------+----------------+
|Further improvements of the ERP|Planning and consolidation | Yes |
|functionality |software implemented | |
+-------------------------------+-----------------------------+----------------+
|Optimisation of supply chain |Improvement of supply | |
|management with a focus on |capability in screw | Yes |
|Trauma products |production and increase in | |
| |plate production | |
+-------------------------------+-----------------------------+----------------+
|Divestment/out licensing of |Disposal of remaining 50% | |
|non-core products and IP |shareholding in dental joint | |
| |venture aap BM productions | Yes |
| |GmbH for EUR 1 million in | |
| |cash | |
+-------------------------------+-----------------------------+----------------+
Key financials of aap Group in 2014
+-------------------------------+------+--------+--------+
| | | | |
| in EUR million | 2014 | 2013 | Change |
+-------------------------------+------+--------+--------+
| Trauma | 12.2 | 9.6 | 27% |
| | | | |
| of which LOQTEQ® | 8.2 | 5.0 | 63% |
+-------------------------------+------+--------+--------+
| Biomaterials | 16.4 | 15.0 | 10% |
+-------------------------------+------+--------+--------+
| Projects | 1.2 | 2.8 | -58% |
+-------------------------------+------+--------+--------+
| Other | 0.8 | 1.2 | -31% |
+-------------------------------+------+--------+--------+
| Sales continued operations | 30.6 | 28.6 | 7% |
+-------------------------------+------+--------+--------+
| Sales discontinued operations | 1.0* | 11.4** | -91% |
+-------------------------------+------+--------+--------+
| Total sales | 31.6 | 40.0 | -21% |
+-------------------------------+------+--------+--------+
* EMCM B.V. sales 01-02/2014: EUR 1.2 million less consolidation effects (EUR
0.2 million)
** EMCM B.V. sales 01-12/2013: EUR 12.3 million less consolidation effects (EUR
0.9 million)
aap Implantate AG's sales totalled EUR 31.6 million in financial year 2014. Of
these EUR 31.6 million an amount of EUR 30.6 million is attributable to the
continued operations (aap Implantate AG excluding EMCM B.V.). As a result of the
sale of EMCM B.V. on February 28, 2014, the sales figures for the financial year
2014 include sales from EMCM for January and February totalling EUR 1.0 million.
The positive sales development in the reporting period was particularly driven
by the trauma business. This underlines the strategic alignment of the
management board transforming aap Implantate AG in a leading European trauma
company. In financial year 2014 the company reported sales of EUR 12.2 million
in the trauma business, corresponding to a growth rate of 27% with respect to
the result in the previous year (FY 2013: EUR 9.6 million).
Considering the sales in the trauma business more detailed, the development of
the LOQTEQ® product family has to be emphasized particularly. Here the company
was able to increase sales in the reporting period by 63% to EUR 8.2 million (FY
2013: EUR 5.0 million). The positive sales development of LOQTEQ® demonstrates
that the IP protected product family is increasingly well established at the
market and has a strong appeal among several customers. All in all, the growth
dynamic in financial year 2014 underlines the successful implementation of the
strategy sustainably aligning aap Implantate AG on the trauma business.
In its biomaterials business the company achieved year-on-year sales growth of
10% in financial year 2014 to EUR 16.4 million (FY 2013: EUR 15.0 million).
+--------------------------------+------+------+--------+
| in EUR million | 2014 | 2013 | Change |
+--------------------------------+------+------+--------+
| EBITDA continued operations | 2.3 | 5.1 | -55% |
+--------------------------------+------+------+--------+
| EBITDA discontinued operations | 0.0 | 2.2 | n.a. |
+--------------------------------+------+------+--------+
| EBITDA | 2.3 | 7.4 | -69% |
+--------------------------------+------+------+--------+
+------------------------------------------+------+------+--------+
| in EUR million | 2014 | 2013 | Change |
+------------------------------------------+------+------+--------+
| EBITDA continued operations | 2.3 | 5.1 | -55% |
+------------------------------------------+------+------+--------+
| of which projects | 0.8 | 4.4 | -82% |
+------------------------------------------+------+------+--------+
| of which one-off effects | 0.1 | 0.3 | -67% |
+------------------------------------------+------+------+--------+
| EBITDA continued operations (normalised) | 1.4 | 0.4 | 250% |
+------------------------------------------+------+------+--------+
+------------------------------+------+------+--------+
| in EUR million | 2014 | 2013 | Change |
+------------------------------+------+------+--------+
| EBIT continued operations | -0.1 | 0.8 | -113% |
+------------------------------+------+------+--------+
| EBIT discontinued operations | 0.0 | -2.9 | n.a. |
+------------------------------+------+------+--------+
| Total EBIT | -0.1 | -2.1 | 95% |
+------------------------------+------+------+--------+
In financial year 2014 aap Implantate AG's EBITDA amounted to EUR 2.3 million
(FY 2013: EUR 7.4 million). EBIT improved by 95% from EUR -2.1 million in
financial year 2013 to EUR -0.1 million in the reporting period. For continued
operations, EBITDA in the last financial year was at EUR 2.3 million
(FY 2013: EUR 5.1 million), whereas EBIT amounted to EUR -0.1 million
(FY 2013: EUR 0.8 million). Both financial years include special effects so that
an assessment of year-on-year operative development should be based on
normalised EBITDA (excluding special effects).
In financial year 2014 the company earned project income totalling EUR 0.8
million from a development contract for a bone cement and the mixing system to
go with it. On the basis of the abovementioned contract and of a further
contract covering the outlicensing of a bone cement to a Chinese partner aap
Implantate AG reported project income totalling EUR 4.4 million in the previous
year. Furthermore, there were one-off effects in both financial years. In
financial year 2014 the company sold the remaining 50% shareholding in its
dental joint venture, including operating resources, leading to a EUR 1.2
million effect on EBITDA. One-off expenses totalling roughly the same amount
were also incurred in the reporting period. They related, for example, to up-
front costs for the planned sale of aap Biomaterials GmbH, extensive
negotiations on existing contracts with various major customers, expenses
incurred in connection with structural measures at the level of the management
holding company and consulting costs in connection with ongoing audits by the
Deutsche Prüfstelle für Rechnungslegung and company audits in years gone by. The
special effects contained in the EBITDA for financial year 2013 were based on a
positive effect arising from the disposal of a shareholding in aap Joints GmbH
(EUR 0.6 million) and on costs already incurred in connection with the disposal
of the contract manufacturing business (EMCM B.V.; EUR 0.2 million). Excluding
special effects, normalised EBITDA in the financial year 2014 totalled EUR 1.4
million (FY 2013: EUR 0.4 million), which corresponds to a growth rate of more
than 100% on the previous year. Overall, it can be said that in respect of the
operative development of continued operations profitable growth was achieved in
both core areas, Trauma and Biomaterials, on the basis of normalised results.
Outlook for 2015
aap Implantate AG aims to continue to implement its growth strategy in financial
year 2015. Its focus continues to be on transformation into a pure trauma
company. As a consequence the company aims especially to achieve strong trauma
sales growth, with the LOQTEQ® product family continuing to be acting as the
main driver of this development.
The Management Board has set itself the main targets as follows for the
financial year 2015:
* Sales growth to a value of between EUR 33 million and EUR 35 million
(FY 2014: EUR 30.6 million)
* EBITDA of between EUR 2.5 million and EUR 3.5 million (FY 2014: EUR 2.3
million)
* Trauma sales growth of between 20% and 25% to between EUR 14.8 million and
EUR 15.4 million (FY 2014: EUR 12.3 million)
* Development of US market; appointment of distributors in BRICS and SMIT
countries not yet covered; impact on business development expected for the
second half of 2015
* Implementation and conclusion of all approval-relevant work (CE) in the
silver technology sector and submission of approval application for silver
technology
* Further expansion of LOQTEQ® portfolio with target of >90% indication
coverage
* Maintenance of a freshness index of at least 20%
* Increase in biomaterials sales by 10%
For the first quarter of 2015 aap Implantate AG expects sales of between EUR
6.5 million and EUR 7.0 million. For EBITDA the company anticipates a value of
between EUR -0.5 million and EUR 0.1 million for the first three months of the
current financial year.
After negotiations with a consortium of private equity bidders on the sale of
aap Biomaterials GmbH have been broken off shortly before their conclusion the
subsidiary is now to be developed further as planned. aap Implantate AG plans to
measure the progress of this process in the second half of 2015 and derive
concrete options for action.
On its way to becoming a pure trauma company aap Implantate AG aims to pursue
the targeted further development of its trauma business and, especially, to add
further indication areas to the LOQTEQ® portfolio to complete it. There is a
further focus on accelerating the silver coating project in order to strengthen
and extend competitiveness on a lasting basis by means of innovations. In
financial year 2015 aap Implantate AG intends in particular to concentrate on
lasting sales growth of its trauma products. The company's aim is to achieve
annual trauma sales growth of more than 20% in the years ahead. These growth
rates are to be generated in particular by opening up new markets, which will
increase costs in the short term. As sales increase and a critical mass is
reached there will be a perceptible improvement in results. Furthermore aap
Implantate AG continues to screen the market for potential smaller bolt-on
acquisition targets.
aap Implantate AG's complete consolidated annual financial statement will be
published by 30 April 2015 at the latest. The reason for the delay is the recent
abortion of negotiations on the sale of aap Biomaterials GmbH with the result
that a disposal of the subsidiary any time soon could no longer be considered
likely. aap Biomaterials GmbH accordingly had to be treated and stated as part
of the aap Group, requiring extensive adjustments.
This press release is based on the consolidated and audited results for the
financial year 2014, including besides an overview of key financials the
consolidated balance sheet, the consolidated income statement, the consolidated
cash flow statement and the consolidated statement of changes in equity.
About aap Implantate AG
aap is a global medical device company headquartered in Berlin, Germany that
develops, manufactures and markets innovative biomaterials and implants that are
used in orthopedic procedures. The Company's products, which include a full line
of plating systems, cannulated screws and bone cement products, are primarily
used in the orthopedic specialty areas of trauma and spine repair. The Company's
products are sold through its direct sales force, distribution partners and
license agreements with OEM partners. aap's stock is listed in the Prime
Standard segment of the Frankfurt Stock Exchange. For more information, please
visit www.aap.de, or download the Company's investor relations app from the
Apple's App Store or Google Play.
Forward-looking statement
This release may contain forward-looking statements based on current experience,
estimates and projections of the management board and currently available
information. They are not guarantees of future performance. Various known and
unknown risks, uncertainties and other factors could lead to material
differences between the actual future results, financial situation, development
or performance of the company and the estimates given here. Many factors could
cause the actual results, performance or achievements of aap to be materially
different from those that may be expressed or implied by such statements. These
factors include those discussed in aap's public reports. Forward-looking
statements therefore speak only as of the date they are made. aap does not
assume any obligation to update the forward-looking statements contained in this
release or to conform them to future events or developments.
For inquiries please contact: aap Implantate AG, Fabian Franke, Investor
Relations, Lorenzweg 5, 12099 Berlin, Germany
Tel.: +49 30 7501 9-134, fax: +49 30 7501 9-290, e-mail: f.frankeh(at)aap.de
Consolidated and audited results for the financial year 2014:
http://hugin.info/130121/R/1908079/679886.pdf
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(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: aap Implantate AG via GlobeNewswire
[HUG#1908079]
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Datum: 31.03.2015 - 19:42 Uhr
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News-ID 382532
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