DGAP-News: STADA: STADA 2009: Good results in a difficult environment - net income significantly improved - positive outlook for 2010
(firmenpresse) - STADA Arzneimittel AG / Final Results
30.03.2010 07:25
Dissemination of a Corporate News, transmitted by
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Important items at a glance
* Good results for 2009 in a difficult environment
- Net income significantly improved to EUR 100.4 million (+32%)
- Group sales declined to EUR 1.57 billion (-5%) as planned, increased by
+4% when adjusted for currency effects and portfolio changes
- Adjusted EBITDA of EUR 287.5 million clearly above minimum goal of EUR
250 million
- Highest cash flow from operating activities in corporate history
* Proposal to increase the dividend to EUR 0.55 per ordinary share
(previous year: EUR 0.52)
* Positive outlook for 2010: sales growth and operating (i.e. adjusted for
one-time special effects) earnings growth with at least stable margin
development expected in an environment that continues to be difficult
Today, on March 30, 2010, STADA Arzneimittel AG published the final
financial results for the year 2009; all of the preliminary results
published on March 1, 2010 were thereby confirmed.
STADA's Chairman of the Executive Board, Hartmut Retzlaff, is satisfied
with the results of financial year 2009: 'Overall, 2009 was a good year for
STADA - despite difficult framework conditions in particular in the German
domestic market and high burdens from currency effects. Thus, in the past
financial year, all reported key earnings figures, for example, increased
significantly. This can primarily be attributed to our strong international
business, that corresponds to approx. 66% of our sales.'
Development of Sales
In financial year 2009, Group sales were clearly influenced by portfolio
changes and currency effects. Adjusted for these effects, Group sales
increased by 4%; reported Group sales went down as expected by 5% to EUR
1,568.8 million (previous year: EUR 1,646.2 million).
As the largest core segment, Generics contributed 71.1% (previous year:
70.1%) to Group sales in the reporting year. With partly very difficult
framework conditions, in particular in the German domestic market, Group
sales of generics adjusted for portfolio changes and currency influences
was 1% above the level of the previous year in 2009; reported sales,
however, decreased by 3% to EUR 1,115.6 million (previous year: EUR 1,154.5
million).
The second core segment Branded Products achieved a share of 25.0%
(previous year: 22.4%) of Group sales in financial year 2009. Adjusted for
portfolio changes and currency influences, this core segment recorded a
sales plus of 15% in 2009; reported sales increased by 6% to EUR 392.6
million (previous year: EUR 368.9 million).
STADA's business continued to be clearly focused on Europe also in 2009.
Here, STADA generated 95.7% (previous year: 96.6%) of Group sales. Adjusted
for portfolio changes and currency influences, Group sales increased by 3%
in Europe; reported sales decreased as planned by 6% to EUR 1,501.0 million
(previous year: EUR 1,590.6 million).
Generally satisfying was in particular the sales development in Eastern
Europe; there 25.0% (previous year: 24.8%) of Group sales were generated.
Although Group sales decreased in the Eastern European markets by 4% to EUR
392.9 million (previous year: EUR 408.0 million) - primarily due to
currency influences. However, Group sales adjusted for portfolio changes
and currency influences increased by 13% in Eastern Europe.
In Asia, in financial year 2009, STADA recorded a sales decrease of 3% to
EUR 45.9 million (previous year: EUR 47.2 million) - also primarily due to
currency influences and portfolio changes. But STADA's accordingly adjusted
sales in the Asian markets increased by 18%. In 2009, sales in Asia
contributed 2.9% (previous year: 2.9%) to Group sales.
Finally, increased export activities led to sales growth of 155% to EUR
14.5 million (previous year: EUR 5.7 million) in America and of 170% to EUR
7.4 million (previous year: EUR 2.7 million) in the rest of the world.
Earnings development
In financial year 2009, all reported key earnings figures of the STADA
Group increased despite the decline in sales; the minimum goal formulated
at the beginning of the year of an adjusted EBITDA of EUR 250 million was
clearly exceeded.
Net income rose in the reporting year by 32% to EUR 100.4 million (previous
year: EUR 76.2 million). Operating profit rose in 2009 by 9% to EUR 191.9
million (previous year: EUR 176.4 million). Earnings before interest,
taxes, depreciation and amortization (EBITDA) in financial year 2009 were
at EUR 280.1 million (previous year: EUR 255.4 million) and therefore 10%
higher than the level in the previous year. Earnings before interest and
taxes (EBIT) increased in the reporting year by 10% to EUR 192.5 million
(previous year: EUR 175.2 million). Earnings before taxes (EBT) showed a
plus in 2009 of 34% to EUR 141.5 million (previous year: EUR 105.5
million). Earnings per share therefore increased in 2009 by 32% to EUR 1.71
(previous year: EUR 1.30). Diluted earnings per share were at EUR 1.70
(previous year: EUR 1.28) in financial year 2009.
The key earnings figures included in 2009 burden of one-time special
effects in the net amount of EUR 17.3 million before or EUR 12.5 million
after taxes (previous year: net burden from one-time special effects in the
amount of EUR 40.1 million before or EUR 26.2 million after taxes) as well
as non-operational earnings-burdening effects from currency influences and
interest rate hedge transactions in the total amount of EUR 4.2 million
before or EUR 2.8 million after taxes (previous year: net burden from
non-operational effects from currency influences and interest hedge
transactions in the amount of EUR 19.2 million before or EUR 13.5 million
after taxes).
The earnings level of the previous year adjusted for special effects was
nearly achieved in 2009. Thus, STADA reached the level of the previous year
with an adjusted net income of EUR 115.8 million (previous year: EUR 116.0
million). Adjusted operating profit decreased by 5% to EUR 211.1 million
(previous year: EUR 221.4 million), adjusted earnings before interest,
taxes, depreciation and amortization (adjusted EBITDA) slightly by 2% to
EUR 287.5 million (previous year: EUR 294.3 million), adjusted earnings
before interest and taxes (adjusted EBIT) by 4% to EUR 210.8 million
(previous year: EUR 219.0 million) and adjusted earnings before taxes
(adjusted EBT) slightly by 1% to EUR 163.0 million (previous year: EUR
164.8 million).
Balance sheet and cash flow
On the balance sheet date the equity-to-assets ratio was 35.5% (December
31, 2008: 34.0%) and thereby remained clearly above the intended minimum
rate strived for by the Executive Board. As intended, the Group's net
financial liabilities have been considerably reduced in 2009 to EUR 899.0
million (December 31, 2008: EUR 1,015.7 million). The financial liabilities
to EBITDA ratio thus improved to 3.2 (previous year: 4.0), and the
financial liabilities to adjusted EBITDA ratio improved to 3.1 (previous
year: 3.5).
The Executive Board is currently hesitant to again increase the Group's net
debt in order to finance external growth, without, however, ruling out
taking advantage of special opportunities. More importantly, the Executive
Board is striving for a return of the net debt to adjusted EBITDA ratio toa maximum value of 3; at the same time, the longterm refinancing structure
of the Group to increase liquidity security should be optimized, without
borrowing additional equity.
For larger projects such as acquisitions or cooperations with capital
investments, however, appropriate capital measures continue to be
imaginable if the burden on theequity-to-assets ratio from such
acquisitions or cooperations is too high.
Cash flow from operating activities amounted to EUR 250.5 million (previous
year: EUR 129.3 million) in 2009. Cash flow from operating activities
adjusted for influences outside of the period amounted to EUR 261.2 million
inthe reporting year (previous year adjusted for influences outside of the
period at that time: EUR 151.0 million). Free cash flow in 2009 was at EUR
144.0 million (previous year: EUR -14.0 million), free cash flow adjusted
for significant influences from outside the reporting period as well as for
expenses for acquisitions and proceeds from disposals amounted to EUR 169.4
million (previous year adjusted for significant influences from outside the
reporting period as well as for expenses for acquisitions and proceeds from
disposals at that time: EUR 48.8 million). STADA's Chief Financial Officer
Helmut Kraft thus stated: 'Both cash flow from operating activities and
free cash flow reached the highest value ever in STADA's corporate
history.'
Dividend proposal
Already on March 1, 2010, the Executive Board of STADA Arzneimittel AG had
proposed to distribute a dividend in the amount of EUR0.55 (previous year:
EUR 0.52) per STADA ordinary share for financial year 2009, an increase of
3 cent or 6% over the previous year. The Supervisory Board had followed
this proposal. Should the Annual General Meeting follow this proposal on
June 8, 2010, this would result in total dividend paymentsof EUR 32.3
million (previous year: EUR 30.5 million) with a dividend ratio of approx.
32% of net earnings (previous year: approx. 40%).
With this proposed resolution to increase the dividend, Executive Board and
Supervisory Board aim to give shareholders a share in the increased
reported Group earnings, without placing too great a restriction on the
Group's financial flexibility for further growth and calling into question
the mid-term goal of further decreasing net debt.
Regional development in STADA's three largest national markets
In financial year 2009, STADA's three largest national markets were
Germany, Russia and Belgium.
Germany, which continues to be the Group's largest national market, was a
particularly challenging market for STADA in financial year 2009 due to
regulatory-related market changes. Sales here - in view of the constantly
decreasing price level and high discounts to health insurance organizations
due to regulatory initiated discount agreements between manufacturers and
public health insurance organizations in the Generics segment - fell by 6%
to EUR 531.6 million (previous year: EUR 564.0 million) in 2009. STADA's
German business activities thus contributed 33.9% to Group sales in the
reporting year (previous year: 34.3%).
This decrease results from a reduction in generics sales, which went down
in Germany against the background of the difficult market environment in
financial year 2009 by 6% to EUR 426.3 million (previous year: EUR: 455.4
million). According to data from IMS Health for 2009, the STADA Group's
market share in terms of generics sold in German pharmacies remained nearly
stable with a total of approx. 13.5% (previous year: approx. 13.6%).
At EUR 103.1 million (previous year: EUR 103.1 million), sales in the
reporting year in the Branded Products core segment in Germany were at the
level of the previous year.
In the current financial year 2010, from today's perspective, the Executive
Board expects sales approximately at the level of the previous year for the
Group's German activities - in view of the ongoing difficult regulatory and
competitive framework conditions in the German generics market. Operating
profitability of German sales activities overall, will, from today's
perspective, be slightly below the Group average in 2010.
In Russia the Group recorded in financial year 2009 - despite the difficult
economic situation there - pleasing sales growth in the amount of 26% in
local currency. In euro, Russian sales increased by only 5% to EUR 191.9
million (previous year: EUR 183.4 million), since, as compared to the
corresponding period in the previous year, the average exchange rate of the
Russian ruble in 2009 to the euro was significantly weaker.
The two core segments in the Russian market continued to have nearly the
same share of local Group sales. Sales of generics thus amounted to EUR
86.8 million (previous year: EUR 84.8 million) or 45% of STADA's Russian
sales (previous year: 46%). Sales of branded products amounted to EUR 104.5
million (previous year: EUR 97.2 million) or 54% of STADA's local sales
(previous year: 53%).
The demand structure of STADA's Russian business continues to be
characterized by self-pay patients with whom, directly or indirectly via
wholesalers, approx. 88% of Russian sales are generated. In 2009, only
approx. 8% of STADA's Russian sales were achieved in the scope of the state
program for the reimbursement of costs of selected drugs for individual
groups of the population (DLO program); in addition, approx. 4% of sales
were generated directly or indirectly with other state clients, in
particular also via tenders.
For the current financial year 2010, STADA continues to expect strong sales
growth in local currency in the Russian market with operating profitability
which continues to be above Group average. The further development of the
currency relation of the Russian ruble to the euro will continue to have a
significant influence on the translation of sales and earnings of the
Russian business into the Group currency euro; sales and earnings
contributions of the Russian business activities at Group level are largely
dependent on this.
In Belgium, sales recorded by STADA increased by 14% to EUR 125.7 million
in the reporting year (previous year: EUR 110.7 million). In addition to
new product launches, the Group benefited here especially from a moderate
regulatory stimulation of generics prescriptions introduced at the
beginning of 2009.
In the reporting year, generics continued to make the largest contribution
to Group sales in Belgium. Generics sales generated by STADA in the Belgian
market thus recorded an increase of 14% to EUR 120.2 million (previous
year: EUR 105.7 million) in 2009. Branded products, which STADA is
currently establishing in the Belgian market, recorded sales of EUR 5.5
million in the reporting year (previous year: EUR 5.0 million).
For the current financial year 2010 - in view of further product launches
in the Generics segment - STADA expects a repeated clear increase in sales
with operating profitability which is approximately at Group average in
Belgium.
Personnel development
At December 31, 2009, the STADA Group had 7,981 employees (December 31,
2008: 8,299). Personnel expenses fell in financial year 2009 to EUR 247.2
million (previous year: EUR 253.0 million). The ratio of personnel expenses
to sales thus amounted to 15.8% (previous year: 15.4%).
Product development
Research and development costs, which are exclusively costs for product
development at STADA due to its business model focused on off-patent active
pharmaceutical ingredients, were at EUR 46.6 million (previous year: EUR
46.5 million). The sales-related ratio of research and development costs
amounted to 3.0% (previous year: 2.8%). In addition, development costs for
new products in the amount of EUR 14.8 million (previous year: EUR 13.8
million) were capitalized in the reporting year.
In 2009, 486 new products were launched in the Group(previous year: 483);
the sales share of products launched in the last two financial years rose
to 9% (previous year 8%).
Christof Schumann, the STADA Executive Board member responsible for
production and development, is confident about prospects in the area of
product development: 'Our product pipeline remains well-filled, so that
STADA is in a position - particularly in the core segment Generics - to
continually expand the product portfolio, also in the years to come.'
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 March 1, 2010. This is, on the one hand, characterized by the
continued existing structural and operative growth opportunities; on the
other hand there is also a continued operationally challenging environment
and possible burdening non-operational effects such as currency effects.
In the operating business, in the Executive Board's assessment,
far-reaching regulatory interventions, intensive competition and
significant margin pressure will always occur in individual national
markets. The latter applies in particular to the increasing volume of
business in the Generics segment characterized by tenders.
Furthermore, the Group will, also in the future, have to deal with
non-operational influence factors, particularly specific effects from the
global financial and economic crisis. Thereby, also in financial year 2010,
the development of the STADA Group will depend to a large extent on
currency relations, particularly those of the Russian ruble and Serbian
dinar to the euro.
Thus, the sales and earnings development of the STADA Group will, also in
the current financial year 2010, be characterized by differing and
partially contradictory factors in the various national markets. From the
expected sales increase for the Group expected by the Executive Board in
2010, however, positive influences on earnings development should also be
anticipated.
The Executive Board continues to expect that the current project 'STADA -
build the future' for the optimization of Group structures will allow
additional earnings contributions to be achieved, which with the gradual
implementation of the individual measures, will amount to annual savings in
the double-digit million area. However, from today's perspective after
decisions on the implementation of the measures anticipated in the first
half year of 2010 rising investments as well as burdens on the income
statement due to project-related special effects must be expected.
Against the backdrop of these factors influencing the Group's earnings
development, the Executive Board in its overall assessment expects that in
the 2010 financial year operationally there is the opportunity for sales
and earnings growth as well as at least a stabilization of operating
margins.
'It should generally be possible, from today's perspective, to achieve
growth in terms of sales and also in terms of all operational, i.e.
adjusted for one-time special effects, key earnings figures in financial
year 2010', commented Retzlaff on the positive outlook of the STADA Group.
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.
30.03.2010 07:25 Ad hoc announcement, Financial News and Media Release distributed by DGAP. Medienarchiv atwww.dgap-medientreff.deandwww.dgap.de---------------------------------------------------------------------------
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,
Indices: MDAX
Listed: Regulierter Markt in Frankfurt (Prime Standard), Düsseldorf;
Freiverkehr in Berlin, Hannover, München, Hamburg, Stuttgart
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