Interim / Quarterly Report • Oct 27, 2010
Interim / Quarterly Report
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STRATEC DEVELOPS AND MANUFACTURES FULLY AUTOMATED ANALYZER SYSTEMS BASED ON ITS OWN PATENTED TECHNOLOGIES FOR ITS PARTNERS IN THE FIELDS OF CLINICAL DIAGNOSTICS AND BIOTECHNOLOGY. STRATEC'S PARTNERS ARE MOSTLY GLOBAL PLAYERS OPERATING IN THE IN-VITRO DIAGNOSTICS INDUSTRY. THESE COMPANIES MARKET STRATEC'S SYSTEMS, IN GENERAL TOGETHER WITH THEIR OWN REAGENTS, AS SYSTEM SOLUTIONS TO LABORATORIES, BLOOD BANKS, AND RESEARCH INSTITUTES AROUND THE WORLD.
| FOREWORD BY THE BOARD OF MANAGEMENT | 3 |
|---|---|
| INTERIM GROUP MANAGEMENT REPORT | 6 |
| CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 30, 2010 | 11 |
| CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME for the Period from July 1 to September 30, 2010 |
13 |
| CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME for the Period from January 1 to September 30, 2010 |
14 |
| STATEMENT OF CHANGES IN GROUP SHAREHOLDERS' EQUITY for the Period from January 1 to September 30, 2010 |
15 |
| CONSOLIDATED CASH FLOW STATEMENT for the Period from January 1 to September 30, 2010 |
17 |
| NOTES TO THE GROUP INTERIM REPORT for the Period from January 1 to September 30, 2010 |
18 |
| ADDITIONAL INFORMATION | 21 |
STRATEC significantly boosted its rate of growth in the third quarter of 2010 compared with the two previous quarters and the previous year. It achieved this due to continuing strong turnover with analyzer systems already established on the market, the rising number of pre-serial and serial systems to be produced and the working down in the supply backlog reported at the end of the second quarter of 2010.
Year-on-year, sales grew by 34.3% from u 19.5 million to u 26.1 million in the third quarter of 2010. Sales for the first nine months as a whole increased to u 69.2 million, up 23.5% from u 56.0 million in the previous year's period. Consolidated net income for the same period showed growth of 25.1% from u 7.8 million to u 9.7 million. The EBIT margin amounted to 18.5% as of September 30, 2010 (previous year: 17.5%). Notwithstanding the initial costs incurred in the third quarter of 2010 to integrate Ballista, the US company acquired in July 2010, and the temporary comparative weakness of the consumables and spare parts business, the Group managed to increase its EBIT margin for the third quarter of 2010 from 18.1% to 18.5%. As in previous years, the fourth quarter should witness accelerated earnings growth, as a result of which we still expect to generate an EBIT margin of at least 19.0% for the 2010 financial year.
Some companies in the diagnostics industry have in recent months revised their growth expectations in some cases or issued subdued outlooks for the sector. Given STRATEC's business outlook, which has so far not been affected by this, the company can affirm its sales forecast for the 2010 financial year, namely that the Group will post sales in a range between u 96 million and u 102 million (2009 sales. u 79.6 million). Furthermore, the forecasts provided by our customers give reason to expect substantial overall growth in business with the analyzer systems STRATEC produces for them in the foreseeable future.
Alongside growth in its existing business, STRATEC's very good growth prospects are mainly based on market launches of new products by its customers. Although STRATEC's partners have made some changes to their analyzer system market launch schedules in the current year, a significant share of the Group's sales is nevertheless already attributable to these new systems due to the sale of pre-serial units. This development will not have any negative impact on STRATEC's budgeted sales and earnings performance in the 2010 financial year.
STRATEC plans to detail its sales and earnings forecasts for the 2011 financial year and subsequent years as soon as customer approval is received for serial production in the three projects about to be launched onto the market (Gen-Probe, QIAGEN and DiaSorin) and once the operating sales generated by our customers can be realistically planned.
Within our expansion strategy, at the beginning of July 2010 we extended our presence in the USA by acquiring Ballista. This US company specializes in optical and opto-mechanical precision technology and related development, production and advisory services and can point to a proven track record of expertise in the diagnostics, medical technology, biotechnology and aerospace industries. Its expertise and capacities range from prototype assembly through to serial production. In 2009, Ballista generated sales of US\$ 2.7 million with 18 employees. The company was founded in 2004 and is based in Newbury Park, a short distance from Los Angeles. Its three founding partners have longstanding experience in managing and expanding high-growth companies and they have committed, via employment contracts, stock holdings and options, to remain engaged and to work with STRATEC to further develop its US presence and to work on the targeted expansion of the company's existing customer and technology base. Ballista has been consolidated in the Group's accounts as of July 1, 2010.
In preparation for further growth at the STRATEC Group in future, construction work began in October 2009 and April 2010 on new buildings at the Group's locations in Beringen (Switzerland) and Birkenfeld (Germany). While the 4,000 m² production building in Switzerland was already completed in June 2010, the 5,000 m² development building at the Group's main location in Birkenfeld will be ready for occupation in November 2010. Once construction work has been completed, our Group's production capacities will have virtually doubled. We therefore believe that we are excellently equipped for the further growth spurt expected in the coming years.
Birkenfeld, October 2010
The Board of Management of STRATEC Biomedical Systems AG
Hermann Leistner
Marcus Wolfinger Bernd M. Steidle
While sales rose to u 69.2 million in the first nine months of the 2010 financial year, up 23.5% on the previous year's figure of u 56.0 million, the Group increased its overall performance in the same period by 22.9% from u 62.2 million to u 76.4 million. In line with these developments, the cost of materials also rose from u 30.9 million to u 37.5 million.
Due in particular to the increase in development activities, as well as to the further expansion in production capacities and the acquisition of Invitek in April of the previous year and of Ballista in July of this year, personnel expenses rose from u 14.6 million to u 18.1 million. Other operating expenses increased from u 5.3 million to u 6.5 million. Here too, it should be noted that Invitek and Ballista have been included in the consolidated figures since April 1, 2009 and July 1, 2010 respectively. Depreciation and amortization rose to u 2.2 million. STRATEC thus generated consolidated net income of u 9.7 million in the period under report (previous year: u 7.8 million), corresponding to earnings per share of u 0.85 (previous year: u 0.69).
In the balance sheet, the Ballista acquisition led to an increase in goodwill. Property, plant and equipment grew from u 8.9 million to u 14.2 million due to the capitalization of the new production building at Robion AG in Switzerland, and the progress made with construction of the new development building at STRATEC AG in Birkenfeld. On account of the imminent launch of serial production on three development projects, inventories rose from u 31.6 million to u 42.0 million. Total receivables and other assets increased by u 5.3 million to u 21.8 million, while the payment of the dividend and construction measures led cash and cash equivalents to drop from u 21.2 million to u 11.7 million.
The equity ratio decreased from 69.1% to 66.8%. The rise in accounts payable was driven by higher procurement volumes for raw materials and supplies. Within other current liabilities and provisions, an amount of around u 1.5 million has been recognized for future, in some cases conditional, payments to Ballista's former shareholders.
With an outflow of funds of u 6.7 million, the Group's investment activities in the first nine months of the 2010 financial year were characterized by the completion of the production building at Robion AG, and the progress made on construction in Birkenfeld. Furthermore, over the same period the STRATEC Group invested u 1.7 million (previous year: u 1.4 million) in property, plant and equipment, especially tools, and u 0.3 million (previous year: u 0.3 million) in intangible assets.
In its latest Economic Outlook, published at the beginning of October 2010, the International Monetary Fund (IMF) forecast global economic growth averaging 4.8% for 2010. The global economy should still grow by 4.2% in 2011. While emerging economies are set to grow at an average rate of 7.1% in 2010, the industrialized economies should only achieve growth of 2.7%. Within the euro area, for which the IMF has forecast economic growth of 1.7% in 2010 and 1.5% in 2011, Germany will act as the key economic driver, with growth of 3.3% and 2.0% forecast for 2010 and 2011 respectively. The IMF has reduced its forecasts for developments in the USA, and now expects to see economic growth of 2.6% in 2010 and 2.3% in 2011.
Global demographic developments represent one of the most serious challenges facing the world. The dynamic growth in the world's population, together with an unprecedented increase in the elderly share of the population and the sharp rise in the number of people with access to medical care, represent key factors that will shape the 21st century. This situation is accompanied by scientific and technological progress, which is opening up ever new possibilities in the fields of medicine, research, diagnostics and life science.
These developments will lead not only to an increase in the numbers of medical tests to be performed, but will also result in new, unique opportunities for which STRATEC is optimally positioned with its automation solutions and on which it will continue to focus its strategy and operations.
In view of the factors outlined above, global economic risks, such as the recent recession, only have a very limited impact on STRATEC's business performance and business model. Moreover, long-term supply agreements with our customers and the fact that the work performed is invoiced almost exclusively in euros further minimize the implications of the crisis for STRATEC.
On December 17, 2009, STRATEC published a forecast of the Group's further sales and earnings performance.
STRATEC expects to generate sales in a range of u 96 million to u 102 million in the 2010 financial year. Further EBIT margin growth will be facilitated by benefits of scale in production, high-margin sales with consumables and spare parts, and not least by the market launches, both pending and already implemented, of four major development programs (the Liaison XL analyzer system for DiaSorin, Panther for Gen-Probe, NEO for Immucor, and the QIAensemble system family for QIAGEN). STRATEC expects its EBIT margin for 2010 to rise by at least 0.5 percentage points compared with the previous year and to reach at least 19.0 %.
Alongside growth in its existing business, STRATEC's very good growth prospects are mainly based on the market launches of new products by its customers. Although STRATEC's partners have made some changes to their analyzer system market launch schedules in the current year, a significant share of the Group's sales is nevertheless already attributable to these new systems due to the sale of pre-serial units. This development will not have any negative impact on STRATEC's budgeted sales and earnings performance in the 2010 financial year.
STRATEC plans to detail its sales and earnings forecasts for the 2011 financial year and subsequent years as soon as customer approval is received for serial production in the three projects about to be launched onto the market (Gen-Probe, QIAGEN and DiaSorin) and once the operating sales generated by our customers can be realistically planned.
Notwithstanding the initial costs incurred in the third quarter of 2010 to integrate Ballista, the US company acquired in July 2010, and the temporary comparative weakness of the consumables and spare parts business, the Group managed to increase its EBIT margin for the third quarter of 2010 from 18.1% to 18.5%. As in previous years, the fourth quarter should witness accelerated earnings growth, as a result of which we still expect to achieve an EBIT margin of at least 19.0% for the 2010 financial year.
The "inventories" balance sheet item, which is at a high level due to the forthcoming launch of serial production for three development projects (Gen-Probe, QIAGEN and DiaSorin), will return to a significantly lower level once our customers launch their respective marketing stages.
As planned, the supply backlog of u 3.4 million reported at the end of the first half of 2010 due to the marked rise in customer demand for analyzer systems and temporary removal-related interruption to production in the second quarter of 2010 was fully worked down during the third quarter of 2010.
In view of the stable growth in all projects and the prospects and customers forecasts received for new programs, STRATEC expects to generate continuous growth in the coming years. The average rate of growth in sales (CAGR) between 2010 and 2012 is thus expected to exceed 15% a year.
Furthermore, we are holding talks on promising projects with existing and potential customers, which lead us to expect further growth driven by new projects well beyond 2012.
Following the international economic crisis and the resultant economic downturn, the macroeconomic climate has improved once again. All industrial sectors are nevertheless still confronted with a low level of budgeting reliability. This situation continues to harbor risks for STRATEC's customers and suppliers, as a result of which STRATEC also faces economic risks. The ongoing difficult economic climate also means that STRATEC continues to face increased market risk.
Apart from this, since the assessment of the situation of the company provided on March 19, 2010 upon the compilation of the Annual Report for the 2009 financial year, no new information has arisen which could lead to any change in our assessment of the expected development of the company.
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 a compliance system to ensure compliance with the relevant legal and industry-specific requirements.
STRATEC's business activities basically focus on sustainability and responsible behavior. In future, the company will document this in a sustainability report.
Apart from the factors outlined in the "Report on forecasts and other statements concerning the company's expected development", we do not see any changes compared with the risks and opportunities identified in the Group Management Report for the 2009 financial year dated March 19, 2010. Reference is made to the "Risk Report" section within the 2009 Group Management Report for details concerning our risk management system and our company's specific opportunity and risk profile.
as of September 30, 2010 of STRATEC Biomedical Systems AG
| assets in u thousands |
09.30.2010 | 12.31.2009 |
|---|---|---|
| non -current assets |
||
| Goodwill | 5,464 | 2,141 |
| Other intangible assets | 4,078 | 4,385 |
| Property, plant and equipment | 14,203 | 8,890 |
| Interests in associates | 350 | 310 |
| Deferred tax assets | 317 | 125 |
| 24,412 | 15,851 | |
| current assets |
||
| Raw materials and supplies | 10,110 | 6,915 |
| Unfinished products, unfinished services | 30,507 | 23,893 |
| Finished products and goods | 1,149 | 606 |
| Prepayments made | 236 | 223 |
| Trade receivables | 13,931 | 9,914 |
| Future receivables from construction contracts | 5,679 | 4,922 |
| Receivables from associates | 284 | 165 |
| Other receivables and other assets | 1,907 | 1,456 |
| Securities | 426 | 654 |
| Cash an cash equivalents | 11,661 | 21,186 |
| 75,890 | 69,934 | |
| total assets | 100,302 | 85,785 |
| shareholders' equity and debt in u thousands |
09.30.2010 | 12.31.2009 |
|---|---|---|
| shareholders ' equity |
||
| Share capital | 11,483 | 11,446 |
| Capital reserve | 12,564 | 11,167 |
| Revenue reserves | 32,984 | 26,433 |
| Consolidated net income | 9,746 | 11,674 |
| Other equity | 184 | -1,433 |
| 66,961 | 59,287 | |
| debt | ||
| Non-current debt | ||
| Non-current financial liabilities | 6,277 | 5,602 |
| Pension provisions | 106 | 105 |
| Deferred taxes | 1,583 | 1,637 |
| 7,966 | 7,344 | |
| Current debt | ||
| Current financial liabilities | 1,619 | 488 |
| Trade payables | 5,657 | 3,421 |
| Liabilities to associates | 181 | 24 |
| Other current liabilities | 14,843 | 13,670 |
| Current provisions | 1,984 | 1,301 |
| Income tax liabilities | 1,091 | 250 |
| 25,375 | 19,154 | |
| Total shareholders' equity and debt | 100,302 | 85,785 |
for the Period from July 1 to September 30, 2010 of STRATEC Biomedical Systems AG
| in u thousands |
07.01.-09.30.2010 | 07.01.-09.30.2009 | ||
|---|---|---|---|---|
| Sales | 26,117 | 19,449 | ||
| Increase in volume of finished and | ||||
| unfinished products and unfinished services | 1,223 | 2,183 | ||
| Other own work capitalized | 365 | 144 | ||
| Overall performance | 27,705 | 21,776 | ||
| Other operating income | 242 | 116 | ||
| Cost of raw materials and supplies | 13,201 | 10,267 | ||
| Cost of purchased services | 373 | 347 | ||
| Personnel expenses | 6,500 | 5,270 | ||
| Other operating expenses | 2,270 | 1,822 | ||
| EBITDA | 5,603 | 4,186 | ||
| Amortization of intangible assets and depreciation of property, plant and equipment |
767 | 666 | ||
| EBIT | 4,836 | 3,520 | ||
| Net financial expenses | -52 | 67 | ||
| Operating result (EBT) | 4,784 | 3,587 | ||
| Current tax expenses | 1,325 | 836 | ||
| Deferred tax income | 339 | 128 | ||
| Consolidated net income | 3,798 | 2,879 | ||
| Income and expenses recognized directly in equity (after taxes) |
||||
| Currency translation of foreign financial statements | -98 | -216 | ||
| Comprehensive income | 3,700 | 2,663 | ||
| Earnings per share in v | 0.33 | 0.25 | ||
| Number of shares used as basis | 11,490,217 | 11,363,729 | ||
| Earnings per share diluted, in v | 0.33 | 0.25 | ||
| Number of shares used as basis, diluted | 11,637,953 | 11,447,169 |
for the Period from January 1 to September 30, 2010 of STRATEC Biomedical Systems AG
| in u thousands |
01.01.-09.30.2010 | 01.01.-09.30.2009 | |||
|---|---|---|---|---|---|
| Sales | 69,149 | 56,001 | |||
| Increase in volume of finished and unfinished products and unfinished services |
6,691 | 5,832 | |||
| Other own work capitalized | 579 | 331 | |||
| Overall performance | 76,419 | 62,164 | |||
| Other operating income | 554 | 379 | |||
| Cost of raw materials and supplies | 36,264 | 29,886 | |||
| Cost of purchased services | 1,189 | 1,059 | |||
| Personnel expenses | 18,075 | 14,577 | |||
| Other operating expenses | 6,468 | 5,286 | |||
| EBITDA | 14,977 | 11,735 | |||
| Amortization of intangible assets and depreciation of property, plant and equipment |
2,184 | 1,960 | |||
| EBIT | 12,793 | 9,775 | |||
| Net financial expenses | -12 | 427 | |||
| Operating result (EBT) | 12,781 | 10,202 | |||
| Current tax expenses | 3,332 | 2,633 | |||
| Deferred tax income | 297 | 219 | |||
| Consolidated net income | 9,746 | 7,788 | |||
| Income and expenses recognized directly in equity (after taxes) |
|||||
| Currency translation of foreign financial statements | 1,030 | 60 | |||
| Comprehensive income | 10,776 | 7,848 | |||
| Earnings per share in v | 0.85 | 0.69 | |||
| Number of shares used as basis | 11,446,079 | 11,333,543 | |||
| Earnings per share, diluted, in v | 0.84 | 0.68 | |||
| Number of shares used as basis, diluted | 11,608,080 | 11,363,729 |
for the Period from January 1 to September 30, 2010 of STRATEC Biomedical Systems AG
| January – SEPTEMBER 2009 |
Revenue reserves | |||||
|---|---|---|---|---|---|---|
| in v thousands | Share capital | Capital reserve | Retained earnings |
Other revenue reserves |
||
| Balance at 12.31.2008 | 11,426 | 10,746 | 18,741 | 5,539 | ||
| Dividend payment | ||||||
| Allocation to other revenue reserves | 2,000 | |||||
| Profit carried forward | 154 | |||||
| Disposal of treasury stock | -257 | |||||
| Issue of subscription shares from stock option programs less costs of capital issue |
15 | 169 | ||||
| Allocations due to stock option programs |
164 | |||||
| Comprehensive income | ||||||
| Balance at 09.30.2009 | 11,441 | 10,822 | 18,895 | 7,539 |
| January – SEPTEMBER 2010 |
Revenue reserves | ||||||
|---|---|---|---|---|---|---|---|
| in v thousands | Share capital | Capital reserve | Retained earnings |
Other revenue reserves |
|||
| Balance at 12.31.2009 | 11,446 | 11,167 | 18,893 | 7,540 | |||
| Dividend payment | |||||||
| Allocation to other revenue reserves | 3,000 | ||||||
| Profit carried forward | 3,552 | ||||||
| Disposal of treasury stock | 448 | ||||||
| Issue of subscription shares from stock option programs less costs of capital issue |
37 | 795 | |||||
| Allocations due to stock option programs |
154 | ||||||
| Comprehensive income | |||||||
| Balance at 09.30.2010 | 11,483 | 12,564 | 22,445 | 10,540 |
| Other equity | ||||||
|---|---|---|---|---|---|---|
| Group equity |
Currency translation |
Treasury stock | Fair value reserve | Consolidated net income |
||
| 49,902 | -667 | -2,014 | 0 | 6,131 | ||
| -3,977 | -3,977 | |||||
| -2,000 | ||||||
| -154 | ||||||
| 800 | 1,057 | |||||
| 184 | ||||||
| 164 | ||||||
| 7,848 | 60 | 7,788 | ||||
| 54,921 | -607 | -957 | 0 | 7,788 |
| January – SEPTEMBER 2010 |
Revenue reserves | Other equity |
|---|---|---|
| ----------------------------- | ------------------ | -------------- |
| Group equity |
Currency translation |
Treasury stock | Fair value reserve | Consolidated net income |
||
|---|---|---|---|---|---|---|
| 59,287 | -435 | -998 | 0 | 11,674 | ||
| -5,122 | -5,122 | |||||
| 0 | -3,000 | |||||
| -3,552 | ||||||
| 1,034 | 586 | |||||
| 832 | ||||||
| 154 | ||||||
| 10,776 | 1,030 | 9,746 | ||||
| 66,961 | 595 | -412 | 0 | 9,746 |
for the Period from January 1 to September 30, 2010 of STRATEC Biomedical Systems AG
| in v thousands | 01.01.-09.30.2010 | 01.01.-09.30.2009 |
|---|---|---|
| Consolidated net income (after taxes) | 9,746 | 7,788 |
| Depreciation and amortization | 2,184 | 1,960 |
| Current income tax expenses | 3,333 | 2,633 |
| Income taxes paid less income taxes received | -3,199 | -2,883 |
| Financial income | -163 | -601 |
| Financial expenses | 175 | 175 |
| Interest paid | -174 | 175 |
| Interest received | 63 | 82 |
| Other non-cash expenses | 362 | 167 |
| Other non-cash income | -99 | -333 |
| Cash flow | 12,228 | 9,163 |
| Change in deferred taxes through profit or loss | -297 | -219 |
| Profit on disposals of non-current assets | 0 | -192 |
| Increase in inventories, trade receivables and other assets | -15,350 | -6,390 |
| Increase in trade payables and other liabilities | 3,559 | 1,926 |
| Inflow of funds from operating activities |
140 | 4,288 |
| Incoming payments from disposals of non-current assets | ||
| Property, plant and equipment | 14 | 32 |
| Financial assets | 0 | 889 |
| Outgoing payments for investments in consolidated non-current assets | ||
| Intangible assets | -260 | -300 |
| Property, plant and equipment, excluding new buildings | -1,740 | -1,368 |
| Property, plant and equipment, construction of a new production and a new development building |
-4,456 | 0 |
| Financial assets | 0 | 0 |
| Outgoing payment for acquisition of consolidated companies plus overdraft facilities taken over |
-321 | -2,233 |
| Outflow of funds for investment activities | -6,763 | -2,980 |
| Incoming payments from taking up of financial liabilities | 2,500 | 0 |
| Outgoing payments for repayment of financial liabilities | -1,301 | -456 |
| Incoming payments from issues of shares for employee stock option programs |
833 | 184 |
| Dividend payment | -5,122 | -3,977 |
| Outflow of funds for financing activities | -3,090 | -4,249 |
| Cash-effective change in cash and cash equivalents | -9,713 | -2,941 |
| Cash and cash equivalents at beginning of period | 21,187 | 19,208 |
| Change in cash and cash equivalents | ||
| due to changes in exchange rates | 187 | -44 |
| Cash and cash equivalents at end of period | 11,661 | 16,223 |
for the Period from January 1 to September 30, 2010 of STRATEC Biomedical Systems AG
The consolidated financial statements of STRATEC AG as of December 31, 2009, were prepared in accordance with the International Financial Reporting Standards (IFRS) as adopted by the EU valid at the balance sheet date. In the interim report as of September 30, 2010, which has been prepared on the basis of International Accounting Standard (IAS) 34 "Interim Financial Reporting", application has been made of the same accounting methods as in the consolidated financial statements for the 2009 financial year. Application has also been made of all interpretations of the International Financial Reporting Interpretations Committee (IFRIC) with binding effect as of September 30, 2010.
There were no indications of any potential impairment in goodwill at the interim balance sheet date.
The company's interim reports are neither audited, nor subject to an audit review, by the group auditor, WirtschaftsTreuhand GmbH Wirtschaftsprüfungsgesellschaft Steuerberatungsgesellschaft, Stuttgart.
Reference is made to the consolidated financial statements of STRATEC AG as of December 31, 2009 with regard to further information concerning the individual accounting and valuation methods applied.
The Group's currency is the euro. Unless otherwise indicated, all amounts have been stated in thousand euros (u thousand).
Following the acquisition of Ballista as of July 8, 2010, for the sake of simplicity the company has been consolidated in the interim consolidated financial statements of STRATEC AG for the first time as of July 1, 2010. This has not had any material impact on the Group's net asset, financial and earnings position.
The purchase price, equivalent to around u 2.8 million, is structured as follows: Alongside a cash amount of u 0.3 million due for immediate payment, purchase price installments of u 0.8 million, and 35,790 treasury stock shares in STRATEC Biomedical Systems AG that may only be sold if certain conditions are met, a conditional purchase price component amounting to a maximum of u 0.7 million was also agreed. The conditions governing the predominant share of the conditional components are expected to be met during the coming financial year.
The valuation of Ballista's assets and liabilities taken over upon the acquisition (purchase price allocation) has not yet been finalized. Their presentation in these interim financial statements is therefore based on preliminary assessment by the Board of Management of STRATEC Biomedical Systems AG, which mainly relates to the recognition of goodwill.
Based on our preliminary assessment, we do not expect the valuation of this acquisition in terms of Ballista's inclusion in the annual financial statements to lead to any significant charge on consolidated earnings in 2010.
The breakdown of sales by geographical region represents the distribution of the STRATEC Group's products. As the customers of the STRATEC Group generally supply their country outlets and customers from central distribution centers, however, this breakdown of sales does not represent the geographical distribution of the final operating locations of the STRATEC Group's analyzer systems.
There have been no changes in the segmentation of the Group's results compared with the consolidated financial statements as of December 31, 2009.
Sales can be broken down by geographical regions (customer locations) as follows:
| in v thousands | Germany | EU | Other | Total |
|---|---|---|---|---|
| 12,776 | 43,076 | 13,297 | 69,149 | |
| January – September 2010 | 18.5% | 62.3% | 19.2% | 100.0% |
| in v thousands | Germany | EU | Other | Total |
| 12,688 | 35,780 | 7,533 | 56,001 | |
| January – September 2009 | 22.7% | 63.9% | 13.4% | 100.0% |
The expenses relating to research and project management, and to development services not fulfilling the capitalization criteria set out in IAS 38, amounted to u 4.7 million in the first nine months of the 2010 financial year (previous year: u 3.7 million). These have been reported, mainly as personnel expenses, in the company's consolidated statement of comprehensive income. Moreover, procurement volumes of around u 0.8 million (previous year: u 0.7 million) were incurred during the period under report in connection with materials used in research and development. These have been included in the cost of materials item.
The development in shareholders' equity at the STRATEC Group has been presented in the statement of changes in group shareholders' equity on Pages 15 and 16.
The number of ordinary shares with a nominal value of u 1.00 each issued by STRATEC AG as of September 30, 2010, amounts to 11,485,498. These are all bearer shares.
The Annual General Meeting held on May 21, 2010 approved the distribution of a dividend of u 0.45 per share with dividend rights. This corresponds to a total distribution of u 5.1 million.
STRATEC acquired the US company Ballista at the beginning of July 2010. Part of the purchase price payment was settled by transferring 35,790 treasury stock. STRATEC AG owned a total of 28,105 treasury stock at the interim balance sheet date. This corresponds to a prorated amount of u 28,105.00 of the company's share capital and to a 0.25 % share of its equity.
Members of the Board of Management / Managing Directors and employees held the following numbers of subscription rights (share option rights) at the interim balance sheet date:
| Board of Management / Managing Directors |
Employees | Total | |
|---|---|---|---|
| Outstanding on 12.31.2009 | 265,000 | 44,130 | 309,130 |
| Issued | 0 | 1,300 | 1,300 |
| Exerciesed | 35,000 | 2,856 | 37,856 |
| Lapsed | 0 | 0 | 0 |
| Outstanding on 09.30.2010 | 230,000 | 42,574 | 272,574 |
A total of 1,300 stock option rights were granted to employees on the basis of contracts dated February 1, 2010.
Due to the issue of 39,762 shares (equivalent to the exercising of 37,856 stock option rights) at an average price of u 20.94, the company's share capital has increased by u 39,762.00 and its capital reserve by u 792,979.04. As a result, conditional capital has reduced by u 39,762.00.
Including temporary employees and staff at Ballista, a company acquired in July 2010, the STRATEC Group had a total workforce of 440 employees as of September 30, 2010 (previous year: 351).
No events of particular significance with material implications for the business performance of our Group have occurred since the interim balance sheet date.
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, and the interim management report of the Group 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 for the remaining months of the financial year.
October 27, 2010 Interim report as of September 30, 2010 November 24, 2010 Deutsches Eigenkapitalforum, Frankfurt am Main, Germany – Analysts' conference –
Furthermore, based on current planning, STRATEC will also be taking part in the following capital market conferences in 2010:
November 2010 WestLB Deutschland Conference, Frankfurt am Main, Germany HSBC 4th HealthCare Conference, Frankfurt am Main, Germany
December 2010 Berenberg Conference, London, Großbritannien
Partially incomplete/subject to amendment
STRATEC Biomedical Systems AG designs and manufactures fully automated analyzer systems for its partners in the fields of clinical diagnostics and biotechnology. These partners market such systems, in general together with their own reagents, as system solutions to laboratories, blood banks and research institutes around the world. The company develops its products on the basis of its own patented technologies.
Shares in the company (ISIN: DE 0007289001) are traded in the Prime Standard segment of the Frankfurt Stock Exchange.
The STRATEC Group consists of the publicly listed parent company STRATEC Biomedical Systems AG and of subsidiaries and second-tier subsidiaries in Germany, the USA, the UK, Switzerland and Romania.
Further information about STRATEC is available on the internet at www.stratec-biomedical.de.
Published by STRATEC Biomedical Systems AG Gewerbestr. 37 75217 Birkenfeld Germany
Phone: +49 7082 7916-0 Fax: +49 7082 7916-999 [email protected] www.stratec-biomedical.de
Andreas Künzel Phone: +49 7082 7916-185 Fax: +49 7082 7916-999 [email protected]
Andre Loy Phone: +49 7082 7916-190 Fax: +49 7082 7916-999 [email protected]
Forward-looking statements involve risks: This interim 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.
Discrepancies may arise throughout this interim report on account of mathematical rounding up or down in the course of addition.
This interim report is also available in German.
Gewerbestr. 37 75217 Birkenfeld Germany
Phone: +49 7082 7916-0 Fax: +49 7082 7916-999
[email protected] www.stratec-biomedical.de
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