Interim / Quarterly Report • Aug 13, 2020
Interim / Quarterly Report
Open in ViewerOpens in native device viewer
STRATEC designs and manufactures fully automated analyzer systems for its partners in the fields of clinical diagnostics and biotechnology.
Furthermore, the company offers complex consumables for diagnostic and medical applications. STRATEC covers the entire value chain – from development to design and production through to quality assurance.
Our partners market the systems, software, and consumables, in general together with their own reagents, as system solutions to laboratories, blood banks and research institutes around the world. STRATEC develops its products on the basis of its own patented technologies.
Current Information / Key Figures 04 Letter from the Board of Management 05 Interim Group Management Report 06 Consolidated Balance Sheet as of June 30, 2020 12 Consolidated Statement of Comprehensive Income for the period January 1 to June 30, 2020 14 Consolidated Statement of Comprehensive Income for the period April 1 to June 30, 2020 15 Consolidated Statement of Changes in Equity for the period January 1 to June 30, 2020 16
Consolidated Statement of Cash Flows for the period January 1 to June 30, 2020 18
Selected Explanatory Notes for the period January 1 to June 30, 2020 19
Further Information 32
| € 000s | H1/2020 | H1/20192 | Change | Q2/2020 | Q2/20192 | Change |
|---|---|---|---|---|---|---|
| Sales | 119,367 | 108,604 | +9.9% | 62,863 | 62,035 | +1.3% |
| Adjusted EBITDA | 23,537 | 17,325 | +35.9% | 13,395 | 10,148 | +32.0% |
| Adjusted EBITDA margin (%) | 19.7 | 16.0 | +370 bps | 21.3 | 16.4 | +490 bps |
| Adjusted EBIT | 18,413 | 12,805 | +43.8% | 10,755 | 7,830 | +37.4% |
| Adjusted EBIT margin (%) | 15.4 | 11.8 | +360 bps | 17.1 | 12.6 | +450 bps |
| Adjusted consolidated net income3 | 15,595 | 10,455 | +49.2% | 9,349 | 6,699 | +39.6% |
| Adjusted earnings per share (€)3 | 1.30 | 0.87 | +49.4% | 0.78 | 0.56 | +39.3% |
| Earnings per share (€)3 | 1.01 | 0.48 | +110.4% | 0.64 | 0.37 | +73.0% |
bps = basis points
1 To facilitate comparison, adjusted figures exclude amortization resulting from purchase price allocations in the context of acquisitions and associated reorganization expenses.
2 Retrospectively adjusted to account for the recognition of the Data Solutions business unit as a discontinued operation pursuant to IFRS 5. 3 Consolidated net income from continuing operations.
| € 000s | 06.30.2020 | 12.31.2019 | Change |
|---|---|---|---|
| Equity | 157,321 | 159,077 | -1.1% |
| Total assets | 312,742 | 299,414 | +4.4% |
| Equity ratio (%) | 50.3 | 53.1 | -280 bps |
bps = basis points
STRATEC can report a very pleasing business performance for the first half of 2020. We achieved substantial year-on-year sales growth of 9.9% in the half-year period. This was driven both by very pleasing system call-up figures and by strong business with service parts and consumables. We also significantly improved our profitability, with our adjusted EBIT margin rising by 3.6 percentage points to 15.4%.
These pleasing results, particularly in the second quarter, are due among other factors to increased demand due to the COVID-19 pandemic. With our systems, we are making a key contribution, and that worldwide, to containing this global health crisis. Many of our partners launched relevant tests onto the market at an early stage of developments, and these tests are performed on systems designed and manufactured by STRATEC. We expect the additional demand for in-vitro diagnostics solutions due to the COVID-19 pandemic to impact positively on our results in the months ahead as well. This expectation is also reflected in our adjusted financial guidance for the 2020 financial year.
By acting early to take extensive measures to protect our staff and secure our supply chain, we managed to uphold our supply capacity in the critical months of the worldwide lockdown. This was the prerequisite for successfully boosting our system output by more than a third.
Despite the challenges presented by the COVID-19 pandemic, STRATEC also reached important milestones in terms of new product developments in the first half of the year and is holding promising negotiations with partners for new projects. The strong development pipeline forms the foundation for our future sustainable growth.
By June 30, 2020, our organic workforce had grown by 14.5% compared with one year earlier. This increase was driven in particular by higher production volumes and the resultant need for additional staff.
We would like to thank our shareholders for their trust, which was also reflected in the high levels of approval granted at this year's Annual General Meeting. These included the approval of a further record dividend of € 0.84 per share, which we were then able to distribute in June 2020. This represents the sixteenth consecutive increase since payment of the first dividend in 2004.
Birkenfeld, August 2020
The Board of Management of STRATEC SE
Marcus Wolfinger Dr. Robert Siegle Dr. Claus Vielsack
Consolidated sales increased by 9.9% to € 119.4 million in the first six months of the 2020 financial year (H1/2019: € 108.6 million). This corresponds to constant-currency adjusted organic sales growth of 8.8%. This growth was driven in particular by a substantial increase in sales with systems as well as service parts and consumables. Here, sales with systems rose year-onyear by 30.6% in the first half of 2020 (constant currency: +29.3%), while sales with service parts and consumables grew by 20.6% (constant currency: +19.4%). Particularly in the second quarter, both areas benefited from higher demand for in-vitro diagnostics products to contain the COVID-19 pandemic. This factor significantly offset the temporary dip in demand for some system lines due to medical tests being postponed during the worldwide lockdowns. By contrast, and consistent with expectations, due to the exceptionally high basis of comparison provided by the previous year's figure of € 23.5 million, sales with development and services fell by 49.9% (constant currency: -50.2%) to € 11.8 million.
| H1/2020 | H1/20191 | Change | |
|---|---|---|---|
| Systems | 66,563 | 50,950 | +30.6% |
| Service Parts & Consumables |
40,677 | 33,739 | +20.6% |
| Development and Services |
11,792 | 23,525 | -49.9% |
| Other | 335 | 390 | -14.1% |
| Consolidated sales | 119,367 | 108,604 | +9.9% |
1 Retrospectively adjusted
Given the higher volume of sales, the gross profit (gross profit on sales) rose from € 23.6 million in the previous year's period to € 33.7 million in the first half of 2020. As of June 30, 2020, the gross margin therefore came to 28.2%, compared with 21.7% in the first half of 2019.
As a result of the development pipeline, which was still well filled, gross development expenses remained at a high overall level of € 19.5 million in the first six months of 2020 (H1/2019: € 18.9 million).
Sales-related expenses increased from € 3.8 million in the previous year to € 5.5 million in the first half of 2020, while general administration expenses rose to € 9.6 million, up from € 9.1 million in the previous year's period.
Adjusted EBIT for the first six months of 2020 rose by 43.8% to € 18.4 million, compared with € 12.8 million in the previous year. Accordingly, the adjusted EBIT margin improved by 360 basis points to 15.4% (H1/2019: 11.8%). This significant margin growth was especially due to positive benefits of scale, as well as a strong sales and product mix. By contrast, measurement items for stock appreciation rights (SARs) had a negative impact of 200 basis points (€ 2.4 million) on the margin.
Given the company's operating earnings growth and a year-onyear reduction in the tax rate, adjusted consolidated net income from continuing operations (pursuant to IFRS 5) also improved, in this case by 49.2% to € 15.6 million (H1/2019: € 10.5 million). Adjusted earnings per share (basic) from continuing operations for the first six months of 2020 rose by 49.4% to € 1.30, up from € 0.87 in the previous year.
To facilitate comparison, key earnings figures have been adjusted to exclude amortization resulting from purchase price allocations in the context of acquisitions and associated reorganization expenses.
A reconciliation of the adjusted figures with those reported in the consolidated statement of comprehensive income is presented in the following tables.
| € 000s | H1/2020 | H1/20191 |
|---|---|---|
| Adjusted EBIT | 18,413 | 12,805 |
| Adjustments • PPA amortization • Expenses relating to transactions and associated restructuring expenses |
-4,076 0 |
-4,535 -1,285 |
| EBIT | 14,337 | 6,985 |
1 Retrospectively adjusted
| € 000s | H1/2020 | H1/20191 |
|---|---|---|
| Adjusted consolidated net income from continuing operations |
15,595 | 10,455 |
| Adjusted earnings per share from continuing operations in € (basic) |
1.30 | 0.87 |
| Adjustments • PPA amortization • Expenses relating to transactions and associated restructuring expenses |
-4,076 0 |
-4,535 -1,285 |
| • Taxes on income | 637 | 1,073 |
| Consolidated net income from continuing operations |
12,156 | 5,708 |
| Earnings per share from continuing operations in € (basic) |
1.01 | 0.48 |
1 Retrospectively adjusted
The business activities of the STRATEC Group are divided into three reporting segments.
In its Instrumentation segment, STRATEC pools its business with designing and manufacturing fully automated analyzer systems, including service parts and consumables, for its clinical diagnostics and biotechnology customers.
The Diatron segment comprises the business with systems, system components, consumables and tests in the low throughput hematology and clinical chemistry segment.
The Smart Consumables segment includes the business with developing and manufacturing smart consumables in the fields of diagnostics, life sciences, and medical technology.
Sales in the Instrumentation segment grew by 3.1% to € 84.6 million in the first six months of the 2020 financial year (H1/2019: € 82.0 million). Within this segment, sales with systems, service parts and consumables showed double-digit percentage growth. In line with expectations, and due to the strong basis of comparison provided by the previous year's figure, sales with development and services decreased significantly. The adjusted EBIT margin improved by 60 basis points to 14.7% (H1/2019: 14.1%). The positive development in the margin was driven in particular by sales and product mix effects, which were partly offset by negative measurement items for stock appreciation rights (SARs).
The Diatron segment reported substantial sales growth of 35.9% to € 28.1 million in the first half of the 2020 financial year (H1/2019: € 20.7 million). This growth in sales was driven in particular by strong call-up figures for systems, as well as by strong business volumes with service parts and consumables. Alongside the pleasing performance of molecular diagnostics products, Diatron also generated significant sales growth with veterinary diagnostics products. The adjusted EBIT margin for the first six months of 2020 improved to 26.7%, up from 16.2% in the previous year's period. Here, the development in the margin was positively affected in particular by positive benefits of scale and a strong product mix.
The Smart Consumables segment generated sales of growth of 12.9% to € 6.7 million in the first half of the 2020 financial year (H1/2019: € 6.0 million). Adjusted EBIT amounted to € -1.6 million, compared with € -2.1 million in the first half of 2019.
| H1/2020 | H1/20191 | Change | |
|---|---|---|---|
| Instrumentation | |||
| Sales | 84,551 | 81,985 | +3.1% |
| Adjusted EBIT | 12,468 | 11,550 | +7.9% |
| Adjusted EBIT margin | 14.7% | 14.1% | +60 bps |
| Diatron | |||
| Sales | 28,101 | 20,673 | +35.9% |
| Adjusted EBIT | 7,515 | 3,345 | +124.7% |
| Adjusted EBIT margin | 26.7% | 16.2% | +1,050 bps |
| Smart Consumables | |||
| Sales | 6,715 | 5,946 | +12.9% |
| Adjusted EBIT | -1,570 | -2,091 | n/a |
| Adjusted EBIT margin | -23.4% | -35.2% | +1,180 bps |
bps = basis points 1 Retrospectively adjusted
The cash flow from operating activities fell by 7.8% to € 11.9 million in the first half of 2020, as against € 12.9 million in the previous year. This reduction was mainly due to a significant rise in net working capital. In particular, increased stocking requirements in connection with the COVID-19 pandemic led to higher inventories. Furthermore, increases were also seen in other assets and trade receivables.
The cash flow from investing activities came to € -8.8 million, compared with € -14.8 million in the first half of 2019. Outflows of funds for property, plant and equipment decreased to € 6.5 million in the first half of 2020, down from € 8.3 million in the previous year's period. Among other items, investments in property, plant and equipment related to investments in the construction work currently underway to significantly expand building capacities at the company's headquarters in Birkenfeld. Investments in intangible assets amounted to € 5.0 million, compared with € 5.7 million one year earlier.
The investment ratio (investments in property, plant and equipment and intangible assets / sales) therefore amounted to 9.7% in the first half of 2020, which is slightly below the targeted corridor of 10% to 12% for the 2020 financial year as a whole.
The cash flow from financing activities amounted to € 0.1 million and mainly consisted of the dividend of € 10.1 million distributed to shareholders in June 2020, as well as of net new loans of € 8.2 million.
Cash and cash equivalents rose from € 20.4 million as of June 30, 2019 to € 25.8 million as of June 30, 2020.
Total assets grew by € 13.3 million from € 299.4 million as of December 31, 2019 to € 312.7 million as of June 30, 2020.
Due among other factors to the disposal of the Data Solutions business unit in May 2020, non-current assets fell by € 5.8 million to € 164.4 million as of June 30, 2020, compared with € 170.3 million as of June 30, 2019. This reduction mainly resulted from a decrease in goodwill and other intangible assets.
By contrast, property, plant and equipment grew by € 3.3 million from € 47.3 million as of December 31, 2019 to € 50.7 million as of June 30, 2020. Among other factors, this growth was due to the construction work currently underway to significantly expand building capacities at the Birkenfeld location.
Current assets increased from € 129.1 million as of December 31, 2019 to € 148.3 million as of June 30, 2020. This growth was especially due to the greater need to secure inventories on account of the COVID-19 pandemic. Furthermore, the increase in sales volumes was accompanied by a rise in trade receivables from € 34.1 million to € 37.8 million.
Cash and cash equivalents amounted to € 25.8 million as of June 30, 2020, compared with € 22.7 million as of December 31, 2019.
Changes on the equity and liabilities side of the balance sheet related in particular to financial liabilities, which rose from € 100.0 million as of December 31, 2019 to € 110.4 million as of June 30, 2020.
The equity ratio amounted to 50.3% as of June 30, 2020, as against 53.1% as of December 31, 2019. This reduction was due in particular to the dividend distribution of € 10.1 million in the first half of 2020.
As a result of the COVID-19 pandemic and the measures needed to contain the health crisis, worldwide economic activity fell sharply in the first half of 2020. According to the OECD, the global economy is currently (status: June 2020) in its severest recession since the global economic crisis of the 1930s.
In its Economic Outlook published in June 2020, the OECD described the ongoing outlook as exceptionally uncertain. Numerous countries had already partly eased the mandatory measures previously imposed, but the time at which it would be possible to lift all of the restrictions, such as opening all international borders, was not yet foreseeable. According to the OECD, any recovery would be hesitant at first and could be interrupted at any time by a second wave of infections, particularly if targeted measures, such as test and trace, were not taken.
To account for the considerable uncertainties surrounding future economic developments due to the possibility of a second wave, in its Economic Outlook the OECD presented two equally likely scenarios. One scenario assumes that all economies will face a second wave towards the end of the year, while the other scenario assumes that it will be possible to avoid a second wave. In the second-wave scenario, the OECD expects global gross domestic product (GDP) to contract by 7.6% in 2020. In that case, the global economy is only expected to show a slight recovery in 2021, with growth of 2.1%. If a second wave is successfully avoided, the OECD believes that the reduction in global GDP in 2020 can be limited to 6.0%. Not only that, a significantly stronger recovery could then be expected in 2021, with growth of 5.2%.
Given its long-term project and product lifecycles, STRATEC and the decisions its customers take concerning joint development projects are only affected by macroeconomic fluctuations to a limited extent. Having said this, the macroeconomic climate nevertheless plays a major role in STRATEC's entrepreneurial activity and is therefore extensively factored into the company's assessments and planning.
Based on various estimates, in-vitro diagnostics (IVD) is set to remain a growth market, with average annual global growth rates of around 5% through to 2023. By 2023, the IVD market should have an estimated volume of 88 billion US dollars, as against around 68 billion US dollars in 2018. The various segments within IVD will report different growth rates. STRATEC particularly operates in those segments which are expected to generate high growth rates. These include molecular diagnostics, for example, where growth is expected to average around 9% p.a. between 2018 and 2023. Other segments, such as blood glucose self-monitoring, are not growing as fast and are not among STRATEC's areas of activity.
In-vitro diagnostics methods also have a crucial role to play in containing the COVID-19 pandemic. After all, early diagnosis is the only way to successfully trace and interrupt chains of infection. Not only that, antibody tests enable conclusions to be drawn concerning the potential degree of immunity in the population and provide important information to be used in developing a vaccine.
Today, STRATEC offers products and solutions in numerous key areas of the IVD market. Consistently ageing populations, increased prevalence of chronic diseases based on our current lifestyles, and the ever growing significance of personalized treatment – these are key market growth drivers. Over and above that, the research being performed on innovative technologies, such as specific biomarkers, will create new opportunities for future market growth.
Due not least to the increasing complexity of IVD tests, it is difficult for any one company to develop proprietary products in all technology and market segments. In view of this, diagnostics groups frequently procure specific technologies to maintain their technological leadership and survive in the market. As a result, a process of consolidation has been apparent in the IVD market for years now and is expected to continue in future as well. At the same time, the constant rise in regulation recently seen in the diagnostics industry also represents an increasingly high barrier to potential competitors to STRATEC entering the market. There are only very few comparable companies with the ability to offer a comparable range of products and services from compiling specifications, through development, approval, and production of the respective instruments and solutions. The competitive situation therefore remains very limited and, alongside in-house development departments, is restricted to a handful of specialist companies. With the companies acquired in recent years, STRATEC has further extended the range of products and services it can offer to customers and accessed new market segments. This has further improved the company's competitive situation.
Long-term growth prospects in the target markets served by STRATEC's customers remain just as positive as before, particularly in the field of in-vitro diagnostics. Due to the world's aging population, technological advances, and the increasing prevalence of chronic diseases, global demand for in-vitro diagnostics applications is expected to show sustainable growth. Not only that, STRATEC is benefiting from the growing interest and willingness shown by customers in outsourcing the development and production of automation solutions to specialist partners such as STRATEC. In view of these factors, and given its very full development pipeline, the company is still positive in its assessment of its business prospects.
Given the high degree of forecasting uncertainty, the financial guidance for the 2020 financial year communicated by STRATEC on May 4, 2020 did not account for any potential implications of the COVID-19 pandemic apart from those effects that had already arisen by the end of April 2020. Drawing on the greater transparency now available, the Board of Management has decided to adjust the financial guidance for 2020 and to account for the potential implications of the pandemic.
STRATEC expects that the current additional demand among its customers due to the COVID-19 pandemic will have a significantly positive impact on its sales performance and product mix in the third and fourth quarter as well. Accounting for the potential and currently foreseeable implications of the COVID-19 pandemic, STRATEC therefore now expects to achieve constant-currency adjusted organic sales growth of between 14.0% and 18.0% in the 2020 financial year (2019 sales basis: € 214.2 million). For its adjusted EBIT margin, STRATEC now forecasts a figure of around 15.5% to 16.5% (2019: 13.7%).
STRATEC's previous financial guidance, dated May 4, 2020, was calling for constant-currency adjusted organic sales growth in a low double-digit percentage range accompanied by an adjusted EBIT margin of around 15.0% in the 2020 financial year.
For 2020, STRATEC still expects its investments in property, plant and equipment and intangible assets to correspond to around 10% to 12% of sales. Investments in property, plant and equipment mainly relate to the construction work currently underway to significantly extend the buildings at the company's headquarters in Birkenfeld. This work is scheduled for completion in the third quarter of 2020. As a result, the investment ratio is expected to decrease further in 2021.
Depending on its ability to recruit adequate numbers of suitably qualified employees, STRATEC plans to increase the number of its employees in the years ahead in order to do justice to continuing high demand for development services. STRATEC's financial forecast is based on budgets that account for the specific features of its business model, as well as for numerous internal and external factors, and that weight such factors in accordance with their significance. New order figures, our customers' forecasts and their order behavior, and their stocking of services parts play a superordinate role here, as do the numbers of projects in development and negotiation. This forecast does not account for additional opportunities resulting from external growth. Given the long-term nature of its business relationships, macroeconomic developments are of subordinate significance for STRATEC. The macroeconomic factor is therefore weighted less prominently in the company's forecasts.
We analyze and evaluate the risks facing the company and its business environment within the framework of our risk management system, which has been established as an early warning risk identification system. Furthermore, this system also includes an internal control system (IKS) and a compliance system to additionally ensure compliance with the relevant legal and industry-specific requirements.
One of the core tasks performed by risk management at the STRATEC Group involves managing and monitoring the Group's internal financing requirements and securing the overall company's financial independence.
Financial risks are monitored by the reporting department and managed using detailed rolling financial and liquidity planning.
Given the international political insecurities currently observable and the economic effects of the COVID-19 pandemic, future developments in relevant markets and their currencies can only be assessed to a limited extent. Among other factors, this is reflected in the slight increase in volatility shown by customers in their order forecasts and in correspondingly volatile movements in exchange rates.
From STRATEC's perspective, there were no further changes as of June 30, 2020 compared with the risks and opportunities identified in the Group Management Report for the 2019 financial year dated April 2, 2020. Details of our risk management system and our company's specific opportunity and risk profile and of our use of financial instruments can be found in Section 'D. Opportunities and Risks' in the 2019 Group Management Report.
| € 000s | 06.30.2020 | 12.31.2019 |
|---|---|---|
| Non-current assets | ||
| Goodwill | 38,823 | 40,674 |
| Other intangible assets | 50,074 | 56,418 |
| Right-of-use assets | 7,591 | 8,583 |
| Property, plant and equipment | 50,682 | 47,338 |
| Non-current financial assets | 370 | 447 |
| Non-current contract assets | 15,979 | 15,616 |
| Deferred taxes | 925 | 1,207 |
| 164,444 | 170,283 | |
| Current assets | ||
| Inventories | 62,925 | 55,978 |
| Trade receivables | 37,846 | 34,121 |
| Current financial assets | 2,603 | 1,319 |
| Current other receivables and assets | 10,460 | 6,124 |
| Current contract assets | 6,358 | 4,780 |
| Income tax receivables | 2,288 | 4,101 |
| Cash and cash equivalents | 25,818 | 22,708 |
| 148,298 | 129,131 | |
| Total assets | 312,742 | 299,414 |
| € 000s | 06.30.2020 | 12.31.2019 |
|---|---|---|
| Shareholders' equity | ||
| Share capital | 12,085 | 12,030 |
| Capital reserve | 28,705 | 26,457 |
| Revenue reserves | 119,507 | 120,978 |
| Treasury stock | -65 | -89 |
| Other equity | -2,911 | -369 |
| 157,321 | 159,007 | |
| Non-current debt | ||
| Non-current financial liabilities | 98,452 | 90,378 |
| Non-current other liabilities | 6 | 481 |
| Non-current contract liabilities | 2,451 | 1,869 |
| Provisions for pensions | 5,292 | 5,077 |
| Deferred taxes | 7,199 | 6,931 |
| 113,400 | 104,736 | |
| Current debt | ||
| Current financial liabilities | 11,977 | 9,584 |
| Trade payables | 16,103 | 12,266 |
| Current other liabilities | 8,604 | 6,016 |
| Current contract liabilities | 2,803 | 4,407 |
| Provisions | 1,144 | 1,138 |
| Income tax liabilities | 1,390 | 2,260 |
| 42,021 | 35,671 | |
| Total shareholders' equity and debt | 312,742 | 299,414 |
for the period January 1 to June 30, 2020
| € 000s | 01.01. – 06.30.2020 | 01.01.–06.30.20191 |
|---|---|---|
| Sales | 119,367 | 108,604 |
| Cost of sales | -85,677 | -85,045 |
| Gross profit | 33,690 | 23,559 |
| Research and development expenses | -4,458 | -3,856 |
| Sales-related expenses | -5,495 | -3,836 |
| General administrative expenses | -9,584 | -9,074 |
| Other operating income and expenses | 184 | 192 |
| Earnings before interest and taxes (EBIT) | 14,337 | 6,985 |
| Net financial expenses | -207 | -248 |
| Earnings before taxes (EBT) | 14,130 | 6,737 |
| Taxes on income | -1,974 | -1,029 |
| Earnings from continuing operations | 12,156 | 5,708 |
| Earnings from discontinued operations | -3,526 | -1,819 |
| Consolidated net income | 8,630 | 3,889 |
| Items that may not be reclassified to profit or loss: | ||
| Remeasurements of defined benefit pension plans | -48 | 0 |
| Items that may be subsequently reclassified to profit or loss: | ||
| Currency translation differences from translation of foreign operations | -2,494 | 826 |
| Other comprehensive income (OCI) | -2,542 | 826 |
| Comprehensive income | 6,088 | 4,715 |
| Basic earnings per share in € | 0.72 | 0.32 |
| from continuing operations | 1.01 | 0.48 |
| from discontinued operations | -0.29 | -0.15 |
| No. of shares used as basis (basic) | 12,031,695 | 11,969,239 |
| Diluted earnings per share in € | 0.71 | 0.32 |
| from continuing operations | 1.00 | 0.47 |
| from discontinued operations | -0.29 | -0.15 |
| No. of shares used as basis (diluted) | 12,115,478 | 12,047,271 |
Retrospectively adjusted to account for the recognition of the Data Solutions business unit as a discontinued operation pursuant to IFRS 5.
| in T€ | 04.01.–06.30.2020 | 04.01. –06.30.20191 |
|---|---|---|
| Sales | 62,863 | 62,035 |
| Cost of sales | -45,841 | -48,972 |
| Gross profit | 17,022 | 13,063 |
| Research and development expenses | -1,683 | -1,687 |
| Sales-related expenses | -2,350 | -1,735 |
| General administrative expenses | -4,435 | -4,540 |
| Other operating income and expenses | 187 | -91 |
| Earnings before interest and taxes (EBIT) | 8,741 | 5,010 |
| Net financial expenses | 69 | 204 |
| Earnings before taxes (EBT) | 8,810 | 5,214 |
| Taxes on income | -1,157 | -818 |
| Earnings from continuing operations | 7,653 | 4,396 |
| Earnings from discontinued operations | -1,399 | -191 |
| Consolidated net income | 6,254 | 4,205 |
| Items that may not be reclassified to profit or loss: | ||
| Remeasurements of defined benefit pension plans | -48 | 0 |
| Items that may be subsequently reclassified to profit or loss: | ||
| Currency translation differences from translation of foreign operations | 1,449 | -440 |
| Other comprehensive income (OCI) | 1,401 | -440 |
| Comprehensive income | 7,655 | 3,765 |
| Basic earnings per share in € | 0.52 | 0.35 |
| from continuing operations | 0.64 | 0.37 |
| from discontinued operations | -0.11 | -0.01 |
| No. of shares used as basis (basic) | 12,038,091 | 11,974,228 |
| Diluted earnings per share in € | 0.51 | 0.35 |
| from continuing operations | 0.63 | 0.36 |
| from discontinued operations | -0.11 | -0.01 |
| No. of shares used as basis (diluted) | 12,131,358 | 12,050,984 |
Retrospectively adjusted to account for the recognition of the Data Solutions business unit as a discontinued operation pursuant to IFRS 5.
| € 000s | Share capital | Capital reserve | |
|---|---|---|---|
| As of 01.01.2019 | 11,969 | 24,119 | |
| Equity translations with owners | |||
| • Dividend payments | |||
| • Issue of subscription shares from stock option programs, less costs of capital issue after taxes | 43 | 1,259 | |
| Allocations due to stock option programs | 160 | ||
| Comprehensive income of the year | |||
| As of 06.30.2019 | 12,012 | 25,538 |
| € 000s | Share capital | Capital reserve |
|---|---|---|
| As of 01.01.2020 | 12,030 | 26,457 |
| Equity translations with owners | ||
| • Dividend payments | ||
| • Issue of subscription shares from stock option programs, less costs of capital issue after taxes | 55 | 1,887 |
| Allocations due to stock option programs | 276 | |
| Allocations due to employee participation program | 85 | |
| Comprehensive income of the year | ||
| As of 06.30.2020 | 12,085 | 28,705 |
| Other equity | ||||||
|---|---|---|---|---|---|---|
| Currency translation | ||||||
| Group equity |
IFRS 5 | Pension plans | Treasury stock |
Accumulated net income |
||
| 152,204 | -827 | 1,572 | -887 | -89 | 116,347 | |
| -9,811 | -9,811 | |||||
| 1,302 | ||||||
| 160 | ||||||
| 4,715 | 827 | -1 | 3,889 | |||
| 148,571 | 0 | 1,571 | -887 | -89 | 110,425 |
| Other equity | |||||
|---|---|---|---|---|---|
| Currency translation | |||||
| Group equity |
IFRS 5 | Pension plans | Treasury stock |
Accumulated net income |
|
| 159,007 | 0 | 1,487 | -1,856 | -89 | 120,978 |
| -10,101 | -10,101 | ||||
| 1,942 | |||||
| 276 | |||||
| 109 | 24 | ||||
| 6,088 | -2,494 | -48 | 8,630 | ||
| 157,321 | 0 | -1,007 | -1,904 | -65 | 119,507 |
| € 000s | 01.01. – 06.30.2020 | 01.01.–06.30.2019 |
|---|---|---|
| I. Operations | ||
| Consolidated net income (after taxes) | 8,630 | 3,889 |
| Depreciation and amortization | 13,555 | 9,201 |
| Current income tax expenses | 2,028 | 1,714 |
| Income taxes paid less income taxes received | -763 | -4,323 |
| Financial income | -30 | -46 |
| Financial expenses | 644 | 513 |
| Interest paid | -660 | -496 |
| Interest received | 47 | 39 |
| Other non-cash expenses | 2,198 | 2,990 |
| Other non-cash income | -2,733 | -790 |
| Change in net pension provisions through profit or loss | 177 | 148 |
| Change in deferred taxes through profit or loss | 580 | -608 |
| Profit (-) / loss (+) on disposals of non-current assets | 0 | -19 |
| Increase (-) / decrease (+) in inventories, trade receivables and other assets | -21,421 | -6,142 |
| Increase (+) / decrease (-) in trade payables and other liabilities | 9,621 | 6,802 |
| Cash flow from operating activities | 11,873 | 12,873 |
| II. Investments | ||
| Incoming payments from disposals of non-current assets • Property, plant and equipment • Financial assets |
1 805 |
22 28 |
| Outgoing payments for investments in non-current assets • Intangible assets • Property, plant and equipment |
-5,022 -6,511 |
-5,685 -8,289 |
| Incoming payments from sale of previously consolidated companies less cash and cash equivalents transferred |
1,927 | -871 |
| Cash flow from investing activities | -8,800 | -14,795 |
| III. Financing | ||
| Incoming funds from taking up of financial liabilities | 22,000 | 8,000 |
| Outgoing payments for repayment of financial liabilities | -13,777 | -1,034 |
| Incoming payments from issue of shares for employee stock option programs | 1,942 | 1,302 |
| Dividend payments | -10,101 | -9,811 |
| Cash flow from financing activities | 64 | -1,543 |
| IV. Cash-effective change in cash and cash equivalents (net balance I – III) | 3,137 | -3,465 |
| Cash and cash equivalents at start of period | 22,708 | 24,095 |
| Impact of exchange rate movements | -27 | -252 |
| Cash and cash equivalents at end of period | 25,818 | 20,378 |
for the period January 1 to June 30, 2020
STRATEC SE designs and manufactures fully automated analyzer systems for its partners in the fields of clinical diagnostics and biotechnology. Furthermore, the STRATEC Group (hereinafter also 'STRATEC') offers complex consumables for diagnostic and medical applications. STRATEC covers the entire value chain – from development to design and production through to quality assurance. The partners market the systems, software and consumables, in general together with their own reagents, as system solutions to laboratories, blood banks and research institutes around the world. STRATEC develops its products on the basis of its own patented technologies.
STRATEC SE, whose legal domicile is at Gewerbestrasse 35-37, 75217 Birkenfeld, Germany, is a publicly listed corporation under European law and is registered in the Commercial Register in Mannheim, Germany, with the number HRB 732007.
This half-year financial report was approved for publication by the Board of Management of STRATEC SE on August 13, 2020.
Consistent with § 115 (2) in conjunction with § 117 No. 2 of the German Securities Trading Act (WpHG), the half-year financial report of STRATEC SE comprises interim consolidated financial statements, an interim group management report, and a responsibility statement. The interim consolidated financial statements, which have not been audited, have been prepared in abridged form in accordance with the requirements of IAS 34 (Interim Financial Reporting) and in accordance with those International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB), London, and interpretations issued by the International Financial Reporting Interpretations Committee (IFRS IC) that were valid and endorsed by the EU as of the reporting date and, in the case of the interim group management report, additionally in accordance with the applicable requirements of the German Securities Trading Act (WpHG).
The group currency is the euro. Unless otherwise indicated, all amounts have been stated in thousand euros (€ 000s). Due to numbers being rounded up or down, individual figures may not add up exactly to the totals stated and percentage figures may not correlate exactly with the absolute figures to which they refer.
Apart from those accounting standards and interpretations requiring mandatory application for the first time in the current financial year and unless indicated otherwise below, the accounting policies applied in the interim consolidated financial statements are consistent with those applied in preparing the consolidated financial statements as of December 31, 2019. A detailed description of the accounting policies was published in the notes to the consolidated financial statements. Reference is made to the information provided in Section 'B. Accounting policies applied' in the 2019 Annual Report.
STRATEC has not made premature application of new or amended accounting standards and interpretations that have already been published but do not yet require mandatory application.
The following accounting standards and interpretations require mandatory application for the first time in the current financial year:
| Standard | Title | Effective date1 | EU endorsement | ||||||
|---|---|---|---|---|---|---|---|---|---|
| New and amended standards and interpretations | |||||||||
| IAS 1 and IAS 8 | Amendments: Definition of Material | 01.01.2020 | 11.29.2019 | ||||||
| IFRS 3 | Amendments: Definition of a Business | 01.01.2020 | 04.21.2020 | ||||||
| IFRS 9, IAS 39 and IFRS 7 |
Amendments: Interest Rate Benchmark Reform | 01.01.2020 | 01.15.2020 | ||||||
| Conceptual Framework | Amendments: Reference to the IFRS Conceptual Framework | 01.01.2020 | 11.29.2019 |
For companies like STRATEC whose financial year corresponds to the calendar year
The application of these standards and interpretations in the current financial year is consistent with the respective transition requirements. Unless explicitly required by individual standards and interpretations and explained separately below, the respective requirements have generally been applied retrospectively, i.e. the information has been presented as if the new accounting methods had always been applied in the past. In these cases – and where called for by the respective standard – the comparative figures have been adjusted accordingly.
The aforementioned amendments did not have any implications for these interim consolidated financial statements.
Due to the continued integration of further processes and modules into the uniform ERP system introduced across the Group since the 2019 financial year and the enhanced possibilities thus now available for STRATEC's internal reporting, starting in the 2020 financial year the company can allocate its sales from contracts with customers to the respective types of goods and services in greater detail. The figures reported for the comparative period have been adjusted accordingly.
The aggregate effects for individual operating segments in the period from January 1, 2019 to June 30, 2019 are structured as follows:
| Segment | Instrumentation € 000s |
Diatron € 000s |
Smart Consumables € 000s |
Total € 000s |
|---|---|---|---|---|
| Type of goods or services | ||||
| Analyzer systems | -1,424 | 508 | 0 | -916 |
| Service parts and consumables | 369 | -108 | 463 | 724 |
| Development and services | 1,695 | 593 | -523 | 1,765 |
| Other | -640 | -993 | 60 | -1,573 |
| Total | 0 | 0 | 0 | 0 |
The preparation of the interim consolidated financial statements requires a certain number of forward-looking assumptions to be made which have implications for the method of statement and volume of assets, liabilities, expenses, and income thereby recognized. Those forward-looking assumptions which, given the dynamic development in the underlying framework due to the COVID-19 pandemic, may lead to an additional significant risk of material adjustments being required are presented in greater detail below.
Due to the large number of variables involved, impairment tests are subject to a difficult assessment involving a significant degree of uncertainty in the estimates used. Given the dynamic development in the underlying framework due to the COVID-19 pandemic, the calculation of the fair value less costs to sell and of the value in use, which is determined as the present value of future net inflows of cash based on STRATEC's current planning, is subject to additional significant assessment uncertainties. At present, STRATEC is observing significantly positive and slightly negative effects in terms of its customer order and order forecasts. Overall, STRATEC currently expects to see a notably positive follow-up effect. In this respect, recent weeks have brought greater transparency. Although 'Smart Consumables' witnessed postponements in sales in the first half of 2020, based on updated planning the earnings and cash flow at this cash generating unit are still on budget from a full-year perspective. However, the possibility of temporary interruptions arising within the supply chain still cannot be fully ruled out. If necessary to determine the recoverable amount, the material assumptions underlying the impairment test would be adjusted accordingly.
STRATEC uses a sophisticated process to calculate its expected credit losses. This accounts for the creditworthiness of the debtor, the degree by which items are overdue, and the trade credit insurance policies concluded to minimize default risks. Given the dynamic development in the underlying framework due to the COVID-19 pandemic, consideration of credit default risk based on the creditworthiness of the respective debtor means that the calculation is subject to significant assessment uncertainties. If necessary, the material assumptions used to determine expected credit losses would be adjusted accordingly.
STRATEC performs impairment tests pursuant to IAS 36 (Impairment of Assets) on goodwill and other intangible assets with unlimited or indefinite useful lives, as well as on intangible assets not yet ready for use, at least once a year and generally on a year-end basis. Furthermore, impairment tests pursuant to IAS 36 (Impairment of Assets) are performed when specific indications of impairment arise on the basis of external and internal sources of information. Given, among other factors, the dynamic development in the underlying framework due to the COVID-19 pandemic, STRATEC has tested its material
intangible assets and, where necessary, determined the recoverable amount for each asset and/or cash generating unit. This did not lead to the recognition of any impairment losses.
In accordance with the requirements of IFRS 10 (Consolidated Financial Statements), the consolidated financial statements of STRATEC SE (parent company) basically include all companies controlled by STRATEC SE (subsidiaries). Specifically, alongside STRATEC SE these comprise the following subsidiaries:
| Shareholding % | |||
|---|---|---|---|
| Company | Domicile | 06.30.2020 12.31.2019 | |
| Germany | |||
| STRATEC Capital GmbH | Birkenfeld, Germany |
100% | 100% |
| STRATEC PS Holding GmbH | Birkenfeld, Germany |
100% | 100% |
| European Union | |||
| STRATEC Biomedical UK, Ltd.1 |
Burton upon Trent, UK |
0% | 100% |
| STRATEC Biomedical S.R.L. | Cluj-Napoca, Romania |
100% | 100% |
| STRATEC Consumables GmbH |
Anif, Austria | 100% | 100% |
| RE Medical Analyzers Luxembourg 2 S.à r.l. |
Luxembourg, Luxembourg |
100% | 100% |
| Diatron Medicinai Instrumentumok Laboratóriumi Diagnosztikai Fejlesztö-Gyártó Zrt |
Budapest, Hungary |
100% | 100% |
| Mod-n-More Kft. | Budapest, Hungary |
100% | 100% |
| Other | |||
| STRATEC Biomedical Switzerland AG |
Beringen, Switzerland |
100% | 100% |
| STRATEC Biomedical USA, Inc. |
Glendale, US |
100% | 100% |
| STRATEC Services AG | Beringen, Switzerland |
100% | 100% |
| Medical Analyzers Holding GmbH |
Zug, Switzerland |
100% | 100% |
| STRATEC Biomedical Inc. | Southington, US |
100% | 100% |
| Diatron (US), Inc. | Delaware, US | 100% | 100% |
1 STRATEC Biomedical UK, Ltd., was deconsolidated as of May 4, 2020. Reference is made to the comments provided below under 'Discontinued operations'.
Due to its immaterial significance, the subsidiary STRATEC Biomedical (Taicang) Co. Ltd., Taicang, China, has not been included in the consolidated financial statements by way of full consolidation.
By contract dated May 4, 2020, all shares held in STRATEC Biomedical UK, Ltd., Burton upon Trent, UK, all shares held in Sanguin International Inc., Southington, US, and all loans granted by STRATEC SE to STRATEC Biomedical UK, Ltd. were sold. Due the loss of control resulting from this transaction, STRATEC Biomedical UK, Ltd. was deconsolidated as of May 4, 2020. The earnings from this operation have been presented separately in the consolidated statement of comprehensive income. The relevant figures reported for the comparative period have been adjusted accordingly. STRATEC Biomedical UK, Ltd. was allocated to the 'Others' segment. The shares in Sanguin International Inc. were reported under financial assets.
The disposal of the shares held in STRATEC Molecular GmbH impacted as follows on the asset, financial, and earnings position:
| Figures upon deconsolidation € 000s | |
|---|---|
| Agreed purchase price for the shares | 3,403 |
| Purchase price retention | -827 |
| Expected payments due to purchase price retention | 662 |
| Highly probable consideration | 3,238 |
| Right-of-use assets | 1,194 |
| Property, plant and equipment | 108 |
| Inventories | 1,297 |
| Trade receivables | 810 |
| Financial assets | 64 |
| Other receivables and assets | 142 |
| Contract assets | 1,955 |
| Tax claims | 18 |
| Cash and cash equivalents | 649 |
| Currency items recognized in OCI | -1,278 |
| Financial liabilities | 2,256 |
| Trade payables | 506 |
| Other liabilities | 825 |
| Contract liabilities | 967 |
| Net assets | 2,961 |
| Costs of disposal | -21 |
| Deconsolidation result | 256 |
By contract dated February 28, 2019, all shares held in STRATEC Molecular GmbH, Berlin, and all loans granted by STRATEC SE to STRATEC Molecular GmbH were sold. The closing of the contract took place on schedule on March 31, 2019. Due the loss of control resulting from this transaction, STRATEC Molecular GmbH was deconsolidated as of March 31, 2019. STRATEC Molecular GmbH was allocated to the 'Smart Consumables' segment. Details about the effects of the disposal of STRATEC Molecular GmbH can be found in the information included in the notes to the consolidated financial statements as of December 31, 2019.
The earnings from the discontinued operations in the period from January 1, 2020 to April 30, 2020 and in the comparative period in the previous year from January 1, 2019 to June 30, 2019 are structured as follows:
| € 000s | 2020 | 2019 |
|---|---|---|
| Sales | 6,153 | 2,215 |
| Current income and expenses | -5,115 | -2,322 |
| Net financial expenses | -16 | -28 |
| Current earnings from discontinued operations (before taxes on income) |
1,022 | -135 |
| Taxes on income | -209 | -76 |
| Expenses from fair value measurement less costs to sell and disposal of discontinued operations |
-4,339 | -1,608 |
| Earnings from discontinued operations (after taxes on income) |
-3,526 | -1,819 |
In the cash flow statement, the discontinued operations had the following implications in the period from January 1, 2020 to June 30, 2020 and in the previous year's comparative period:
| € 000s | 2020 | 2019 |
|---|---|---|
| Cash flow from operating activities | 2,404 | 196 |
| Cash flow from investing activities | -284 | -588 |
| Cash flow from financing activities | -27 | -72 |
Upon the deconsolidation of STRATEC Biomedical UK, Ltd., this company held cash and cash equivalents of € 649k (June 30, 2019: € 1,171k). Upon the deconsolidation of STRATEC Molecular GmbH, this company held cash and cash equivalents of € 871k.
Depreciation and amortization of € 185k and impairments of non-current assets amounting to € 4,170k were attributable to the discontinued operations in the period from January 1, 2020 to April 30, 2020 (previous year: January 1 to June 30, 2019: depreciation and amortization of € 100k and impairments of € 46k).
Incoming payments from the sale of shares held in STRATEC Biomedical UK, Ltd. and STRATEC Molecular GmbH, less the cash funds thereby ceded, have been presented as a separate line item within the cash flow from investing activities, while the income from deconsolidation has been included in other non-cash income and expenses within the cash flow from operating activities.
Apart from the disposal of STRATEC Biomedical UK, Ltd., no changes in segmentation have arisen compared with the consolidated financial statements as of December 31, 2019. STRATEC Biomedical UK, Ltd. was allocated to the 'Others' segment. Existing supply and service relationships between STRATEC and STRATEC Biomedical UK, Ltd. are allocated to the 'Instrumentation' segment.
| Instrumentation (includes service parts and consumables allocable to business unit) € 000s |
Diatron (includes service parts and consumables allocable to business unit) € 000s |
Smart Consumables € 000s |
Total1 € 000s |
Reconciliation2 € 000s |
Total € 000s |
|
|---|---|---|---|---|---|---|
| Sales with external customers |
84,551 | 28,101 | 6,715 | 119,367 | 0 | 119,367 |
| Inter-segmental sales | 818 | 1,938 | 697 | 3,453 | -3,453 | 0 |
| Depreciation and amortization |
3,457 | 3,638 | 2,105 | 9,200 | 4,355 | 13,555 |
| EBITDA | 15,925 | 8,152 | -540 | 23,537 | 0 | 23,537 |
| Adjusted EBITDA | 15,925 | 8,152 | -540 | 23,537 | 0 | 23,537 |
| EBIT | 12,468 | 4,514 | -2,645 | 14,337 | 0 | 14,337 |
| Adjusted EBIT | 12,468 | 7,515 | -1,570 | 18,413 | 0 | 18,413 |
| Interest income | 1,233 | 0 | 17 | 1,250 | -1,220 | 30 |
| Interest expenses | 477 | 1,129 | 241 | 1,847 | -1,220 | 627 |
| Additions to non-current assets |
9,391 | 1,491 | 367 | 11,249 | 284 | 11,533 |
| Average number of employees |
755 | 271 | 176 | 1,202 | 33 | 1,235 |
Excluding segment data pursuant to IFRS 5 (Non-Current Assets Held for Sale and Discontinued Operations)
2With regard to the reconciliation of the figures adjusted for one-off items with the Group figures, reference is made to the information
provided in the 'Report on earnings, financial, and asset position' in the Interim Group Management Report.
| Instrumentation (includes service parts and consumables allocable to business unit) € 000s |
Diatron (includes service parts and consumables allocable to business unit) € 000s |
Smart Consumables € 000s |
Total1 € 000s |
Reconciliation2 € 000s |
Total € 000s |
|
|---|---|---|---|---|---|---|
| Sales with external customers |
81,985 | 20,673 | 5,946 | 108,604 | 0 | 108,604 |
| Inter-segmental sales | 1,062 | 1,134 | 109 | 2,305 | -2,305 | 0 |
| Depreciation and amortization |
3,025 | 3,703 | 2,327 | 9,055 | 146 | 9,201 |
| EBITDA | 13,291 | 3,860 | -1,111 | 16,040 | 0 | 16,040 |
| Adjusted EBITDA | 14,576 | 3,860 | -1,111 | 17,325 | 0 | 17,325 |
| EBIT | 10,266 | 157 | -3,438 | 6,985 | 0 | 6,985 |
| Adjusted EBIT | 11,550 | 3,345 | -2,091 | 12,805 | 0 | 12,805 |
| Interest income | 1,253 | 0 | 0 | 1,253 | -1,206 | 47 |
| Interest expenses | 365 | 1,081 | 246 | 1,692 | -1,206 | 486 |
| Additions to non-current assets |
12,064 | 503 | 809 | 13,376 | 598 | 13,974 |
| Average number of employees |
692 | 216 | 159 | 1,067 | 67 | 1,134 |
Excluding segment data pursuant to IFRS 5 (Non-Current Assets Held for Sale and Discontinued Operations)
2With regard to the reconciliation of the figures adjusted for one-off items with the Group figures, reference is made to the information
provided in the 'Report on earnings, financial, and asset position' in the Interim Group Management Report.
The sales generated from contracts with customers at continuing operations in the period from January 1, 2020 to June 30, 2020 are structured as follows:
| Segment | Instrumentation € 000s |
Diatron € 000s |
Smart Consumables € 000s |
Total € 000s |
|---|---|---|---|---|
| Type of goods or services | ||||
| Analyzer systems | 49,245 | 17,318 | 0 | 66,563 |
| Service parts and consumables | 26,593 | 10,108 | 3,976 | 40,677 |
| Development and services | 8,699 | 359 | 2,734 | 11,792 |
| Other | 14 | 316 | 5 | 335 |
| Total | 84,551 | 28,101 | 6,715 | 119,367 |
| Geographical regions | ||||
| Germany | 12,603 | 9,245 | 229 | 22,077 |
| European Union | 32,513 | 8,351 | 2,563 | 43,427 |
| Other | 39,435 | 10,505 | 3,923 | 53,863 |
| Total | 84,551 | 28,101 | 6,715 | 119,367 |
| Time at which sales are recognized |
||||
| Recognized at a point in time | 81,779 | 28,101 | 6,124 | 116,004 |
| Recognized over time | 2,772 | 0 | 591 | 3,363 |
| Total | 84,551 | 28,101 | 6,715 | 119,367 |
The sales generated from contracts with customers at continuing operations in the period from January 1, 2019 to June 30, 2019 are structured as follows:
| Segment | Instrumentation € 000s |
Diatron € 000s |
Smart Consumables € 000s |
Total € 000s |
|---|---|---|---|---|
| Type of goods or services | ||||
| Analyzer systems | 39,038 | 11,912 | 0 | 50,950 |
| Service parts and consumables | 22,444 | 7,936 | 3,359 | 33,739 |
| Development and services | 20,405 | 593 | 2,527 | 23,525 |
| Other | 98 | 232 | 60 | 390 |
| Total | 81,985 | 20,673 | 5,946 | 108,604 |
| Geographical regions | ||||
| Germany | 10,483 | 3,937 | 178 | 14,598 |
| European Union | 47,568 | 5,668 | 2,496 | 55,732 |
| Other | 23,934 | 11,068 | 3,272 | 38,274 |
| Total | 81,985 | 20,673 | 5,946 | 108,604 |
| Time at which sales are recognized |
||||
| Recognized at a point in time | 78,610 | 20,673 | 5,562 | 104,845 |
| Recognized over time | 3,375 | 0 | 384 | 3,759 |
| Total | 81,985 | 20,673 | 5,946 | 108,604 |
Research and development expenses not meeting the criteria for capitalization pursuant to IAS 38 (Intangible Assets) totaled € 4.5 million at continuing operations in the first six months of the 2020 financial year (previous year: € 3.9 million) and mainly involved personnel expenses and cost of materials. Overall, the STRATEC Group invested a total of € 19.5 million in research and development at continuing operations in the first six months of the 2020 financial year (previous year: € 18.9 million).
STRATEC invested a total of € 11,533k in intangible assets and property, plant and equipment in the first six months of the 2020 financial year (previous year: € 13,974k). Of this total, investments of € 284k in intangible assets and property, plant and equipment were attributable to STRATEC Biomedical UK, Ltd. through to the date of its deconsolidation (previous year: € 552k).
Investments in intangible assets mainly relate to the capitalization of development expenses, while the investments in property, plant and equipment chiefly involve the extension to the buildings at the Birkenfeld location and the acquisition of machinery, tools, test materials, and hardware.
The following table presents the carrying amounts and fair values of individual financial assets and liabilities for each individual class of financial instruments pursuant to IFRS 9 (Financial Instruments) and reconciles these with the corresponding balance sheet items.
As financial liabilities also include the financial instruments covered by IFRS 2 (Share-based Payment), which are exempted from the scope of IFRS 7 (Financial Instruments: Disclosures), the 'Not in scope of IFRS 7' column provides a corresponding reconciliation of these items.
| AC | Measured at (amortized) cost |
|---|---|
| FVTPL | Measured at fair value through profit or loss |
| FVTOCI | Measured at fair value through OCI |
| n/a | Not attributable to any measurement category |
| Figures in € 000s 06.30.2020 (12.31.2019) |
IFRS 9 cate gory |
Carrying amount |
Amortized cost |
of which Level 1 |
of which Level 2 |
of which Level 3 |
Not in scope of IFRS 7 |
Total | Fair value |
|---|---|---|---|---|---|---|---|---|---|
| Non-current assets | |||||||||
| Financial assets | |||||||||
| • Investments in associates | n/a | 100 (160) |
100 (160) |
100 (160) |
100 (160) |
||||
| • Other financial assets | AC | 270 (287) |
270 (287) |
270 (287) |
270 (287) |
||||
| Current assets | |||||||||
| Trade receivables | AC | 37,846 (34,121) |
37,846 (34,121) |
37,846 (34,121) |
37,846 (34,121) |
||||
| Financial assets | |||||||||
| • Amortized cost | AC | 1,035 (411) |
1,035 (411) |
1,035 (411) |
1,035 (411) |
||||
| • Fair value through profit or loss |
FVTPL | 1,567 (907) |
1,224 (907) |
343 (0) |
1,567 (907) |
1,567 (907) |
|||
| • Fair value through OCI | FVTOCI | 0 (0) |
0 (0) |
0 (0) |
0 (0) |
||||
| Cash and cash equivalents | AC | 25,818 (22,708) |
25,818 (22,708) |
25,818 (22,708) |
25,818 (22,708) |
||||
| Total financial assets | |||||||||
| • Amortized cost | AC | 64,969 (57,527) |
64,969 (57,527) |
64,969 (57,527) |
|||||
| • Fair value through profit or loss |
FVTPL | 1,567 (907) |
1,224 (907) |
343 (0) |
1,567 (907) |
||||
| • Fair value through OCI |
FVTOCI | 0 (0) |
0 (0) |
0 (0) |
|||||
| • Not in scope of IFRS 7 |
n/a | 100 (160) |
100 (160) |
100 (160) |
Fair value
| Figures in € 000s 06.30.2020 (12.31.2019) |
IFRS 9 cate gory |
Carrying amount |
Amortized cost |
of which Level 1 |
of which Level 2 |
of which Level 3 |
Not in scope of IFRS 7 |
Total | Fair value |
|---|---|---|---|---|---|---|---|---|---|
| Non-current debt | |||||||||
| Financial liabilities | |||||||||
| • Amortized cost | AC | 97,384 (89,846) |
97,384 (89,846) |
97,384 (89,846) |
96,008 (88,281) |
||||
| • Not in scope of IFRS 7 |
n/a | 1,068 (532) |
1,068 (532) |
1,068 (532) |
1,068 (532) |
||||
| Current liabilities | |||||||||
| Financial liabilities | |||||||||
| • Amortized cost | AC | 9,587 (9,053) |
9,587 (9,053) |
9,587 (9,053) |
10,485 (9,847) |
||||
| • Fair value through profit or loss |
FVTPL | 0 (0) |
0 (0) |
0 (0) |
|||||
| • Not in scope of IFRS 7 |
n/a | 2,390 (531) |
2,390 (531) |
2,390 (531) |
2,390 (531) |
||||
| Trade payables | AC | 16,103 (12,266) |
16,103 (12,266) |
16,103 (12,266) |
16,103 (12,266) |
||||
| Total financial liabilities | |||||||||
| • Amortized cost | AC | 123,074 (111,165) |
123,074 (111,165) |
123,074 (111,165) |
|||||
| • Fair value through profit or loss |
FVTPL | 0 (0) |
0 (0) |
||||||
| • Fair value through OCI |
FVTOCI | 0 (0) |
0 (0) |
||||||
| • Not in scope of IFRS 7 |
n/a | 3,458 (1,063) |
3,458 (1,063) |
3,458 (1,063) |
To enhance the comparability and consistency of fair value measurements and related disclosures, IFRS 13 (Fair Value Measurement) stipulates a fair value hierarchy that allocates the input factors used in valuation methods to calculate fair value to three levels. The hierarchy grants the highest priority to prices (taken over without amendment) on active markets for identical assets or liabilities (Level 1 input factors) and the lowest priority to non-observable input factors (Level 3 input factors). The following specific definitions apply:
Input factors: Assumptions that would be used by market participants when determining the price of an asset or liability, including risk assumptions, such as:
Input factors may be observable or non-observable.
Level 1 input factors: Listed prices (taken over without amendment) on active markets for identical assets or liabilities to which the company has access on the valuation date.
Level 2 input factors: Input factors other than the listed prices included in Level 1 that are either directly or indirectly observable for the asset or liability.
Level 3 input factors: Input factors not observable for the asset or liability.
Observable input factors: Input factors derived from market data, such as publicly available information about actual events or transactions, which reflect those assumptions that would be used by market participants when determining the price of the asset or liability.
Non-observable input factors: Input factors for which no market data is available and which are derived from the best information available concerning the assumptions that would be used by market participants when determining the price of the asset or liability.
No items were reclassified within the three input factor levels in the period from January 1 to June 30, 2020 or in the comparative period. The financial assets allocated to Level 1 involve shares in listed companies, which have been measured at the closing price on the stock market with the highest trading volumes as of the balance sheet date. The financial liabilities allocated to Level 2 involve forward exchange transactions intended to hedge currency risks. Overall, this had the following implications for the consolidated statement of comprehensive income:
| € 000s | Level 1 | Level 2 | Level 3 |
|---|---|---|---|
| Balance at 01.01.2019 | 696 | -15 | 0 |
| Total gains or losses recognized through profit or loss |
|||
| • Other operating income | 0 | 0 | 0 |
| • Other operating expenses | 0 | 0 | 0 |
| • Other financial income/expenses | 151 | 39 | 0 |
| Total gains or losses recognized in OCI |
|||
| • Changes in value | 0 | 0 | 0 |
| • Reclassifications out of OCI | |||
| into profit or loss | |||
| (other operating income) | 0 | 0 | 0 |
| Additions | 0 | 0 | 0 |
| Retirements | |||
| • Due to sale | -28 | 0 | 0 |
| • Due to derecognition | 0 | 0 | 0 |
| Balance at 06.30.2019 | 819 | 24 | 0 |
| Balance at 01.01.2020 | 907 | 0 | 0 |
| Total gains or losses recognized | |||
| through profit or loss | |||
| • Other operating income | 0 | 343 | 0 |
| • Other operating expenses | -1 | 0 | 0 |
| • Other financial income/expenses | 390 | 0 | 0 |
| Total gains or losses recognized in OCI |
|||
| • Changes in value | 0 | 0 | 0 |
| • Reclassifications out of OCI | |||
| into profit or loss | |||
| (other operating income) | 0 | 0 | 0 |
| Additions | 0 | 0 | 0 |
| Retirements | |||
| • Due to sale | -72 | 0 | 0 |
| • Due to derecognition | 0 | 0 | 0 |
| Balance at 06.30.2020 | 1,224 | 343 | 0 |
Financial liabilities include liabilities to banks of € 93,710k (12.31.2019: € 82,893k). In some cases, the relevant loan agreements include agreements concerning compliance with specific key financial figures (covenants) and of general obligations involving restrictions on the disposability of assets and provisos concerning further borrowing.
Furthermore, financial liabilities include the total obligation of € 3,458k stated for expected payments in connection with stock appreciation rights (SARs) granted (12.31.2019: € 1,063k). In the period under report, expenses of € 2,395k were recognized through profit or loss for cash-settled share-based payments (previous year: € 750k).
The fair value of stock appreciation rights (SARs) developed as follows:
| Stock appreciation rights (SARs) |
Tranche 1/2020 |
Tranche 1/2019 |
Tranche 1/2018 |
|---|---|---|---|
| Issue date | 01.23.2020 | 01.15.2019 | 10.25.2018 |
| Fair value at issue date | € 17.55 | € 18.43 | € 16.18 |
| Fair value at 12.31.2019 | n/a | € 17.74 | € 17.71 |
| Fair value at 06.30.2020 | € 35.58 | € 40.36 | € 39.32 |
The development in the number of stock appreciation rights (SARs) is presented below:
| Number of rights | Total at 01.01.2020 | Granted | Exercised/lapsed/ forfeited |
Total at 06.30.2020 |
of which exercisable |
|---|---|---|---|---|---|
| Tranche 1/2018 | 30,000 | 0 | 0 | 30,000 | 0 |
| Tranche 1/2019 | 30,000 | 0 | 0 | 30,000 | 0 |
| Tranche 1/2020 | 0 | 30,000 | 0 | 30,000 | 0 |
| Total | 60,000 | 30,000 | 0 | 90,000 | 0 |
STRATEC's assets, liabilities and future activities are subject to liquidity risks, default risks, and market risks resulting from changes in exchange rates, interest rates and stock market prices.
The allowances recognized for expected credit losses on trade receivables are structured as follows:
| € 000s | Gross amount | of which: not overdue at balance sheet date |
of which: overdue at balance sheet date within following time bands |
||
|---|---|---|---|---|---|
| up to 60 days |
between 60 and 90 days |
more than 90 days |
|||
| 06.30.2020 | 39,755 | 31,216 | 6,286 | 348 | 1,905 |
| Expected credit loss |
278 | 259 | 81 | 1,304 | |
| 12.31.2019 | 35,608 | 26,579 | 6,890 | 374 | 1,765 |
| Expected credit loss |
130 | 187 | 66 | 1,117 |
Furthermore, allowances of € 137k were recognized as of June 30, 2020 for expected credit losses on contract assets (12.31.2019: € 162k).
STRATEC had concluded hedging transactions as of June 30, 2020. These involve currency futures intended to secure future cash flows from sales in USD. No use was made of the hedge accounting provisions of IFRS 9 (Financial Instruments).
The development in shareholders' equity at STRATEC and dividends paid is presented in the consolidated statement of changes in equity. The number of ordinary shares issued by STRATEC SE as of June 30, 2020 amounts to 12,085,845. All shares are fully paid in and are registered shares.
The company owned a total of 3,579 treasury stock shares at the interim balance sheet date. This corresponds to a prorated amount of € 3,579.00 of the company's share capital and to a 0.03% share of its equity. In the period from January 1 to June 30, 2020, 1,416 treasury stock shares were surrendered in connection with the employee participation program.
The company had two stock option programs (equity-settled share-based payment) as of June 30, 2020.
In the financial years 2015 to 2017, the individual members of the Board of Management were not granted any stock options. Rather than stock options, they were granted stock appreciation rights (cash-settled share-based payment – SARs) as a variable compensation component of a long-term incentive nature. From the 2018 financial year, a modification to this approach means that the company no longer exclusively grants stock appreciation rights (SARs), but has once again granted stock options at a ratio of 75% (SARs) to 25% (stock options).
The following option schedule provides a summary of the development in stock option rights in the period under report:
| Stock option rights |
Board of Management |
Employees | Total |
|---|---|---|---|
| Outstanding on 01.01.2020 |
|||
| • of which exercisable |
60,000 40,000 |
140,400 10,600 |
200,400 50,600 |
| Granted | 10,000 | 22,750 | 32,750 |
| Exercised | 40,000 | 15,550 | 55,550 |
| Lapsed | 0 | 1,000 | 1,000 |
| Forfeited | 0 | 9,500 | 9,500 |
| Outstanding on 06.30.2020 • of which exercisable |
30,000 0 |
137,100 8,300 |
167,100 8,300 |
The currency translation reserve of € -1,007k recognized within other comprehensive income (OCI) as of June 30, 2020 (previous year: € 1,571k; 12.31.2019: € 1,487k) mainly comprises currency differences arising upon the translation of the separate financial statements of companies whose functional currency is not the euro and from the translation within equity of group-internal net investments as of the reporting date. The change in this item is recognized in the 'Currency translation differences from translation of foreign business operations' line item in the statement of comprehensive income. Upon the deconsolidation of STRATEC Biomedical UK, Ltd., an amount of € 1,278k from the currency translation reserve was recognized through profit or loss under earnings from discontinued operations.
In the first half of 2020, STRATEC SE purchased services of € 172k from STRATEC Biomedical (Taicang) Co. Ltd. (previous year: € 97k). As of the interim reporting date, there were receivables of € 13k (12.31.2019: € 13k) and liabilities of € 13k (12.31.2019: € 24k).
Mod-n-More Kft. purchased services of € 64k from STRATEC Biomedical (Taicang) Co. Ltd. in the first half of 2020 (previous year: € 67k). As of the interim reporting date, there were liabilities of € 30k in this respect (12.31.2019: € 34k).
Hermann Leistner did not receive any compensation in the period under report for his activity as a member of the Administrative Board of STRATEC Biomedical Switzerland AG (previous year: equivalent of € 7k).
In the first half of 2020, STRATEC SE generated revenues of € 36k from transactions with DITABIS Digital Biomedical Imaging Systems AG (previous year: € 41k) and purchased services of € 1,255k from this company (previous year: € 272k). As of the interim reporting date, the company had no receivables (12.31.2019: € 113k) and liabilities of € 72k (12.31.2019: € 0k). Services were performed on customary contractual conditions.
As of June 30, 2020, STRATEC reported outstanding balances of € 4,456k in connection with profit participation by members of the Board of Management (12.31.2019: € 2,419k).
Including temporary employees, STRATEC had a total of 1,335 employees as of June 30, 2020 (previous year: 1,220). The disposal of STRATEC Biomedical UK, Ltd. reduced the number of employees by 49 upon the date of deconsolidation.
No events of particular significance which can be expected to materially influence the Group's earnings, financial, or asset position have occurred since the interim reporting date.
We hereby affirm that, to the best of our knowledge, and in accordance with the applicable reporting principles for interim financial reporting, the interim consolidated financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group consistent with the principles of proper accounting, and the interim group management report includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal opportunities and risks associated with the expected development of the Group in the remainder of the financial year.
Subject to amendment.
Quarterly statements and half-year financial reports are neither audited nor subject to an audit review by the group auditor Ebner Stolz GmbH & Co. KG Wirtschaftsprüfungsgesellschaft Steuerberatungsgesellschaft, Stuttgart.
STRATEC SE (www.stratec.com) designs and manufactures fully automated analyzer systems for its partners in the fields of clinical diagnostics and biotechnology. Furthermore, the company offers complex consumables for diagnostic and medical applications. STRATEC covers the entire value chain – from development to design and production through to quality assurance.
The partners market the systems, software and consumables, in general together with their own reagents, as system solutions to laboratories, blood banks and research institutes around the world. STRATEC develops its products on the basis of its own patented technologies.
Shares in the company (ISIN: DE000STRA555) are traded in the Prime Standard segment of the Frankfurt Stock Exchange and are listed in the SDAX select index of the German Stock Exchange.
STRATEC SE Gewerbestr. 37 75217 Birkenfeld Germany Phone: +49 7082 7916-0 Fax: +49 7082 7916-999 [email protected] www.stratec.com
Fax: +49 7082 7916-9190 [email protected]
Forward-looking statements involve risks: This half-year financial report contains various statements concerning the future performance of STRATEC. These statements are based on both assumptions and estimates. Although we are convinced that these forward-looking statements are realistic, we can provide no guarantee of this. This is because our assumptions involve risks and uncertainties which could result in a substantial divergence between actual results and those expected. It is not planned to update these forward-looking statements.
This half-year financial report contains various disclosures that from an economic point of view are not required by the relevant accounting standards. These disclosures should be regarded as a supplement, rather than a substitute for the IFRS disclosures.
Apparent discrepancies may arise throughout this half-year financial report on account of mathematical rounding up or down in the course of addition.
In this half-year financial report, words in the masculine include words in the feminine; in parts of the half-year financial report, the masculine form has solely been used to make the document easier to read.
This half-year financial report is available in both German and English. Both versions can be downloaded from the company's website at www.stratec.com. In the event of any discrepancies between the two, the German report is the definitive version.
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.