Carl Zeiss Meditec AG

Earnings Release • Aug 16, 2001

News Details

Ad-hoc | 16 August 2001 06:01

Asclepion-Meditec AG english

Ad hoc announcement transmitted by DGAP. The issuer is solely responsible for the content of this announcement. ——————————————————————————– Asclepion – Sales and results considerably lower than expectations in third quarter Net loss expected for 2001 Measures already initiated to improve economic situation Asclepion-Meditec AG (WKN: 531 370) is today announcing – earlier than planned – its results for the first nine months of the 2000/2001 financial year. The sales for this period are 30 million euro. This corresponds to an increase of 7% over the previous year. As sales in the third quarter, however, were considerably lower than expected, the earnings before interest and taxes (EBIT) have fallen to -4.1 million euro (1999/2000: 1.9 million euro). This results in a net loss of 1.6 million euro after interest and taxes. The major downturn in the third quarter results from the postponement or cancellation of sales and the fact that planned sales with Icon only could be realised in part. As a result of the development in the third quarter, Asclepion expects sales for the entire 2000/2001 financial year to be no higher than in the previous year. Furthermore, the losses in the third quarter cannot be compensated for in the fourth quarter. Given this situation a series of measures has been adopted. The number of employees will not be increased for the time being. Furthermore, internal flows are to be streamlined, the local structures optimised, and measures taken to lower overhead costs. In addition, the market launch of products with excellent potential for sales and earnings is to be considerably accelerated. These include the extension to the system platform MEL 70 G-Scan, two new products in the Aesthetic unit and the PAD procedure for pain-free caries treatment. Market launches are planned to take place this year. As early as the fourth quarter we expect an increase in sales to the level seen in the first two quarters. Asclepion assumes it will see two-digit growth once again and a swift return to profitability in the coming financial year. end of ad hoc announcement (c) DGAP 16.08.2001 Issuer’s information/explanatory remarks concerning this ad hoc announcement: EXPLANATIONS 1. FRAMEWORK CONDITIONS Asclepion’s business development in the first half of the year was a very robust one despite the onset of a downturn in the global economy. The third quarter proved, however, to be a difficult one. After sales in the first two quarters, at 11.7 million euro (first quarter) and 11.8 million euro (second quarter), were within the planned targets, in the third quarter the company had to contend with a severe slump in sales, to 6.5 million euro and thus fell considerably short of its targets. The orders on hand as of June 30, 2001 were, at some 6.4 million euro, around 94% higher than the corresponding figure for the previous year (3.3 million euro). There are a number of reasons for the shortfalls and delays in sales. – Deterioration in the business situation on important markets: Massive cash devaluation and a dramatic increase in interest rates (for example Turkey, Brazil and Argentina) have led in part to the loss of investments in laser systems or to considerable delays. – Temporary stiffening of competition: The consolidation in the medical laser industry continues apace worldwide. Following a series of take-overs and mergers, in a number of countries there have been massive sell-offs of product lines due for discontinuation and storage capacities have been decreased. – Difficult economic position of the co-operation partner Icon Laser Eye Centers, Inc.: The deliveries of the laser system MEL 70 G-Scan originally planned to be made to this key account could only be realised in part. The reason for this lay in the precarious business situation in which the company found itself after the take-over of the competitor Lasik Vision Corp.. These problems have also led to one-off charges, thus burdening on the company’s earnings. – Downturn in sales with the partner U.S. Medical, Inc.: As a result of the hesitant purchasing policy in the USA, U.S. Medical did not place any new orders in the third quarter. – Problems with suppliers: New products such as KEY 3 could not be delivered to the extent planned as the system components did not correspond in terms of quality and quantity with the original agreements. 2. MEASURES As a result of this situation we have already initiated a series of general measures to achieve a sustained improvement in the company’s development. – A fundamental freeze on recruitment – Optimisation of local structures – Reduction in overheads – Clear streamlining of internal flows These measures are intended to ensure that the costs structure fits in with the sales by the commencement of the new financial year. Specific measures have also been implemented to solve the above-mentioned problems, over which Asclepion has a degree of control, so as to achieve short-term improvements. The re-structuring of the co-operation with the partner Icon Laser Eye Centers, Inc. has been virtually concluded. Final results are to be expected shortly. A number of measures have been launched with U.S. Medical, Inc. so as to stimulate sales in the USA. These are to bear the first fruit in the fourth quarter of the current financial year. The problems with the delivery of KEY 3 components have been remedied, with the effect that a significant rise in sales can be expected in the fourth quarter. In addition to the measures described above, a number of projects whose sales and earnings potential will be tapped in the coming financial year, have picked up pace in the final phase of their development. These include the method for pain-free caries treatment PAD (Photo Activated Disinfection). With PAD a number of different innovative treatments in the field of caries therapy are possible. These include disinfection of a new quality with conventional caries treatments (for instance with the placement of fillings or crowns) and the pain-free, substance-retaining treatment of carious dental material. The market launch of one of the applications from the PAD family is to take place this year. Further technology projects with excellent potential for sales and earnings are the expansion of the product base in the Vision business unit (refractive surgery) and the launch of at least two products by the Aesthetic unit. 3. OUTLOOK For the entire 2000/2001 financial year Asclepion-Meditec AG assumes that sales will be at about the same level as in the previous year. As a result of the costs structure, which was based on a higher growth rate for sales, the company expects a negative result after taxes. Thanks to its leading technology position in a number of fields and its full range of products in the Vision and Aesthetic units, the company ranks among those with the best competitive positions. With the launch of the erbium dental laser KEY 3 and the PAD method, the company has two promising technologies which will ensure the growth of the Dental unit in the long term. We continue to believe that the fundamentally positive estimation of the potential and competitive position of our company is applicable to the coming financial year. After the conclusion of the optimisation programs and the accelerated launch of new products, we assume that we can attain two-digit growth and a swift return to profitability in the coming financial year. ——————————————————————————– WKN: 531 370; Index: Listed: Neuer Markt in Frankfurt; Freiverkehr in Berlin, Bremen, Düsseldorf, Hamburg, Hannover, München, Stuttgart 160601 Aug 01