Earnings Release • Apr 9, 2013
Earnings Release
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Press Release Regulated information | Trading update 1st quarter 2013
Waregem (Belgium) / Rotterdam (The Netherlands)1 , 9 April 2013 –In the first quarter of 2013, the consolidated turnover of Arseus increased 1.7% to € 133.3 million.
| x 1,000 euros | Q1 2013 | Q1 2012 | Total growth | Org. growth |
|---|---|---|---|---|
| Fagron | 71,573 | 68,616 | 4.3% | 4.3% |
| Corilus | 10,276 | 8,975 | 14.5% | 14.5% |
| Healthcare Solutions | 28,804 | 29,534 | -2.5% | -2.5% |
| Healthcare Specialties | 22,634 | 23,919 | -5.4% | -5.4% |
| Total | 133,286 | 131,044 | 1.7% | 1.7% |
The evolution of turnover2 per division is as follows:
Ger van Jeveren, CEO of Arseus: "We can look back at a satisfactory first quarter of 2013. Fagron and Corilus showed continuing strong performance, while the development of turnover at Healthcare Solutions and Healthcare Specialties was influenced by the ongoing process of optimisation of the product portfolio and by the lack of clarity and uncertainty in Western Europe surrounding the reimbursement of dental charges.
The continuous strategic focus on innovative products and concepts with substantial added value has had an impact on the development of Arseus' turnover during the first quarter of 2013. The discontinuation of products and distributions with a lower margin at Fagron, Healthcare Specialties and Healthcare Solutions had an effect of € 4 million on turnover in the first quarter of 2013. Consistent optimisation of the product portfolio has resulted in an increase of Arseus' gross margin in the first quarter of 2013 by 2.5 percentage points compared to the same period in 2012.
We look to the future with great confidence and consequently confirm the expectations for 2013 that we announced earlier."
1 This press release was sent out by Arseus NV and Arseus BV.
2 Unaudited management figures.
Fagron grew by 4.3% in the first quarter (+3.7% at constant exchange rates) to € 71.6 million. Organic growth was also 4.3% (+3.7% at constant exchange rates). As part of Fagron's strategy, which focuses on the global optimisation and innovation of pharmaceutical compounding, a total of € 3 million in non-core activities with a lower margin were phased-out in the first quarter of 2013.
Fagron's continuous strong organic growth is due to the successful optimisation and innovation of pharmaceutical compounding to fulfil the worldwide growing need for tailor-made medication, the ongoing investment in innovation and product development and the introduction of new products, concepts and formulations for pharmaceutical compounding.
Internationally, there is growing demand among hospitals for high-quality sterile, aseptic and high-risk compounding. Fagron meets this need through Fagron Compounding Services. From 15 compounding pharmacies around the world, Fagron Compounding Services works together with hospital pharmacies to optimise medication safety, improve efficiency and shorten the time patients spend in hospital. All compounding pharmacies of Fagron Compounding Services operate in accordance with the Good Manufacturing Practice, the highest quality standard for pharmaceutical compounding.
In March 2013, Fagron entered into a partnership with NAFA Medical in Saudi Arabia for the purpose of introducing Fagron's products and concepts onto the Saudi market. Saudi Arabia is investing heavily in developing its pharmaceutical infrastructure in order to facilitate the increasing demand for enhanced tailor-made compounded products. The strong growth of private medical care as well as population growth in the Kingdom are major contributory factors in this regard. The partnership with NAFA Medical reinforces Fagron's position as global market leader in pharmaceutical compounding and constitutes an important step for the further roll-out of Fagron's product range in the Middle East.
At present, Fagron is active in 30 countries on five continents. In 2013, Fagron will further strengthen its position as global market leader through an active buy-and-build strategy, starting up greenfields and robust organic growth.
The turnover of Corilus increased by no less than 14.5% to € 10.3 million in the first quarter of 2013. This impressive result can be explained by the further strengthening of Corilus' market leadership as a supplier of unique integrated ICT solutions with added value for medical specialists in Belgium, France and the Netherlands.
Hector, the in-house developed communication software between hospitals, doctors, laboratories, radiologists and dentists, is currently being used in more than 60% of the hospitals in Flanders. Many hospitals and laboratories now already reach more than 70% of health care providers via this channel. Hector is the first solution to make full use of the eHealthBox system provided by the eHealth platform of the Belgian federal government. Hector is integrated in all the software packages available in the Belgian EMD market. This is clear confirmation of Hector's uniqueness.
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Greenock, state-of-the-art software developed in-house by Corilus for pharmacies, is also steadily continuing its successful growth and now has 500 users throughout Belgium. In the first quarter, Corilus successfully launched Morion, software for opticians, in Belgium. In France, the Centre Hospitalier Sud Francilien selected Softalmo, thereby confirming the package's indisputable position as market leader in ophthalmology in French hospitals.
Healthcare Solutions, the division focusing on the dental and medical distribution activities of Arseus, achieved organic growth of -2.5% in the first quarter of 2013. The distribution activities aimed at ophthalmologists, bandagistery, hospitals and nursing homes achieved strong turnover growth in the first quarter of 2013. During the first quarter of 2013, the distribution activities aimed at dental practices were affected by the lack of clarity and the related uncertainty in Western Europe surrounding the reimbursement of dental charges.
Healthcare Specialties focuses on developing and launching innovative dental and medical solutions and products. Healthcare Specialties incorporates Arseus' activities aimed at dental laboratories, the activities aimed at the production of precision components and orthopaedic tools for dental and medical professionals (Hader), the activities aimed at digital dental imaging and complete software for dental practices (Julie-Owandy) and the surgical solutions offered by Duo-Med.
The turnover of Healthcare Specialties decreased in the first quarter of 2013 by 5.4% to € 22.6 million. The activities aimed at dental laboratories have had a moderate quarter. Dental laboratories showed a reluctance to invest due to the lack of clarity and the related uncertainty in Western Europe concerning the reimbursement of dental charges. Ceka-Preciline, an own brand and leading supplier of dental attachments, experienced strong growth during the first quarter of 2013. During the Internationale Dental-Schau (IDS) in Cologne, Arseus was appointed as the exclusive distributor of the entire product range of AmannGirrbach in Belgium, the Netherlands, France and Luxembourg.
The French company Julie-Owandy achieved good organic growth during the first quarter of 2013. During the IDS held in March, Julie-Owandy successfully launched Opteo, an in-house developed innovative intra-oral sensor. The Swiss company Hader had a reasonable quarter, in spite of several large orders being moved from the first quarter to the second quarter of 2013. In line with the innovation strategy, Hader has developed and launched new dental and medical orthopaedic products with added value, such as the Hader Lucky, in 2013. Hader Lucky is the latest surgical torque wrench and is a high precision dental instrument used by dental surgeons for tightening dental implants.
In the first quarter of 2013, Duo-Med, which supplies doctors and hospitals in the Benelux with innovative products, solutions and services, conducted a comprehensive evaluation of its product range. The focus was to identify ways of securing innovative products and solutions with high added value as well as phasing out distributions with a lower margin. During the Belgian Surgical Week to be held in Oostende and the Surgical Days (Chirurgendagen) to be held in Veldhoven in May, Duo-Med will launch Cardica's new Microcutter technology. The Microcutter offers patients
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numerous benefits. The Microcutter allows smaller incisions to be made and that means faster recovery, less pain and less risk of infections.
During the period from 20 December 2012 to 28 March 2013, Arseus acquired 377,420 treasury shares. Arseus additionally transferred 14,121 treasury shares on 25 March 2013 as subsequent payment for an acquisition. Prior to these transactions, Arseus already held 611,247 treasury shares. On 9 April 2013, Arseus owns 974,546 treasury shares. This represents 3.12% of the total number of shares outstanding.
A gross dividend of € 0.60 per share will be proposed to the annual general meeting of shareholders to be held on 13 May 2013. This represents an increase of 20.0% compared to € 0.50 per share in 2012.
Based on the current view and the existing Arseus portfolio, for 2013 as a whole the management is expecting healthy organic growth and profitability that is expected to once again grow faster than turnover.
Ger van Jeveren (CEO) will provide further details on the trading update for the first quarter of 2013 during a conference call scheduled for today. The conference call starts at 9:30 CET. You can join from 09:15 CET onwards by calling +31 10 713 72 95 (Netherlands) or +32 2 401 53 07 (Belgium).
From 10:30 onwards a recording of the conference call may be listened to by calling telephone number +31 20 713 34 87 and entering access code 427809#. From Wednesday, 10 April, the conference call may be listened to at or downloaded from the corporate website of Arseus (www.arseus.com).
On 25 April 2013, Arseus will host a Capital Markets Day at the offices of Fagron Netherlands in Capelle aan den IJssel. The management of Arseus will, amongst other things, provide a full review of Arseus' strategy and outlook. If you wish to register or you have any questions, please contact Stephanie Hopmans on +31 88 33 11 283 or at [email protected].
3 This press release contains data related to the future based on the current internal estimates and forecasts in addition to market forecasts. The statements concerning the future contain inherent risks and are only applicable on the date on which they are issued. There may be substantial differences between the actual results and the results cited in the statements about the future.
| 25 April | Capital Markets Day in Capelle aan den IJssel (Netherlands) |
|---|---|
| 13 May | General Meeting of Shareholders in Waregem (Belgium) |
| 2 August | Half-year figures 2013 |
| 8 October | Trading update, third quarter 2013 |
Results and trading updates will be published at 07:30 CET.
Constantijn van Rietschoten Director of Corporate Communications + 31 88 33 11 222 (office) + 31 6 53 69 15 85 (mobile) [email protected]
In the event of any discrepancy between the English translation and the original Dutch version of this press release, the latter shall prevail.
Arseus is a multinational group of companies that supplies products, services and concepts to professionals and institutions in the healthcare sector in 30 countries around the world. Arseus is subdivided into four divisions and operates in the markets for pharmaceutical compounding for pharmacies, dental products, medical and surgical products, and medical ICT solutions. The Belgian company Arseus NV is located in Waregem and is listed on NYSE Euronext Brussels and NYSE Euronext Amsterdam. The operational activities of the Arseus group are driven by the Dutch company Arseus BV. The head office of Arseus BV is located in Rotterdam.
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