Earnings Release • Aug 23, 2018
Earnings Release
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Louvain-La-Neuve, Belgium, August 23, 2018 - IBA (Ion Beam Applications SA, EURONEXT), the world's leading provider of proton therapy solutions for the treatment of cancer, today announces its consolidated results for the first half of 2018.
| H1 2018 (EUR 000) |
H1 2017 (EUR 000) |
Variance (EUR 000) |
Variance % |
|
|---|---|---|---|---|
| Sales & services | 114 675 | 151 613 | -36 938 | -24.4% |
| REBITDA | -706 | 5 264 | -5 970 | -113.4% |
| % of sales | -0.6% | 3.5% | ||
| REBIT | -4 533 |
1 901 | -6 434 | -338.6% |
| % of sales | -4% | 1.3% | ||
| Net result | -7 015 |
-4 655 | -2 360 | N/A |
| % of sales | -6.1% | -3.1% |
Olivier Legrain, Chief Executive Officer of IBA SA commented: "IBA made good progress in the first six months of the year with five new proton therapy sales and a record 11 Other Accelerators sales. As expected, revenue recognition was slower over the first half, due to the phasing of backlog conversion and only one new Proton Therapy contract delivering revenues. Reacting to this environment, the Group maintained tight cost controls, making almost EUR 10 million of savings in the first half, whilst maintaining market dominance with all five proton therapy projects sold in the first six months of 2018 awarded to IBA. The Group continued to convert its almost EUR 1 billion backlog in Proton Therapy and Other Accelerators equipment and services with 20 projects on track.
"Looking to the second half of the year, IBA reiterates its outlook for 2018 of a positive REBIT and net profit after tax, driven by a second half weighting, which includes recently signed projects awaiting financing, a strong pipeline of near-term projects and five installations due to start in the second half. We remain confident in the long-term prospects for proton therapy and our focus remains to grow the market through clear evidence generation and improving affordability, whilst maintaining a superior, technologically advanced offering. Most notably, the recent collaboration with Elekta, now formally signed, will complement the Group's existing partnerships with Raysearch and
Philips and see the Group enhancing its technological lead of the market in the important area of software as well as benefitting from co-marketing synergies."
Press release | August 23rd, 2018
A conference call to discuss the half year results will be held today at 3pm CEST / 2pm BST / 9am EDT / 6am PDT and can be accessed online at:
http://arkadinemea-events.adobeconnect.com/iba2308/event/registration.html If you would like to participate in the Q&A, please dial (PIN code 20839073#):
| Belgium: | +32 2 403 58 16 |
|---|---|
| UK: | +44 20 71 94 37 59 |
| NL: | +31 207 09 51 19 |
| LU: | +352 2 730 01 63 |
| US: | +1 64 67 22 49 16 |
| FR: | +33 1 72 72 74 03 |
The presentation will be available on IBA's investor relations website and on https://ibaworldwide.com/content/half-year-2018-results-web-conference-details-and-presentation shortly before the call.
To ensure a timely connection, it is recommended that users register at least 10 minutes prior to the scheduled webcast.
Third Quarter Business Update November 15, 2018 Full Year Results 2018 March 21, 2019
IBA (Ion Beam Applications S.A.) is a global medical technology company focused on bringing integrated and innovative solutions for the diagnosis and treatment of cancer. The company is the worldwide technology leader in the field of proton therapy, considered to be the most advanced form of radiation therapy available today. IBA's proton therapy solutions are flexible and adaptable, allowing customers to choose from universal full-scale proton therapy centers as well as compact, single room solutions. In addition, IBA also has a radiation dosimetry business and develops particle accelerators for the medical world and industry. Headquartered in Belgium and employing about 1,500 people worldwide, IBA has installed systems across the world.
IBA is listed on the pan-European stock exchange NYSE EURONEXT (IBA: Reuters IBAB.BR and Bloomberg IBAB.BB). More information can be found at: www.iba-worldwide.com
*Proteus®ONE and Proteus®PLUS are brand names of Proteus 235
IBA Soumya Chandramouli Chief Financial Officer +32 10 475 890 [email protected]
Thomas Ralet Vice-President Corporate Communication +32 10 475 890 [email protected]
Consilium Strategic Communications Amber Fennell, Matthew Neal, Olivia Manser +44 (0) 20 3709 5700 [email protected]
Press release | August 23rd, 2018
IBA is focused on creating a global proton therapy platform that is built for the long term and is optimally positioned to capture the projected growth of the proton therapy market.
Our growth strategy is focused around two axes: 1) growing the proton therapy market by encouraging the adoption and awareness of proton therapy, including through education and facilitating the generation of robust supporting data and 2) increasing IBA's market share by focusing on technology, speed of delivery and reducing cost.
This strategy is underpinned by our strong global network of partnerships and collaborations which is central to IBA being able to provide a full spectrum proton therapy offering that will remove barriers to adoption and enable further acceptance and market growth.
| H1 2018 (EUR 000) |
H1 2017 (EUR 000) |
Variance (EUR 000) |
Variance % |
|
|---|---|---|---|---|
| Net Sales | 90 353 | 123 260 | -32 907 | -26.7% |
| - Proton Therapy |
71 600 | 105 030 | -33 430 | -31.8% |
| - Other Accelerators |
18 753 | 18 230 | 523 | 2.9% |
| REBITDA | -3 072 | -372 | -2 700 | N/A |
| % of Sales | -3.4% | -0.3% | ||
| REBIT | -6 156 | -3 548 | -2 608 | N/A |
| % of Sales | -6.8% | -2.9% |
Total net sales were down 26.7% in the first half to EUR 90.4 Million, reflecting the reduced order intake over H2 2017 and that four of the new orders are expected to start recognizing revenues in the second half. Other Accelerator sales showed growth of 2.9%, reflecting the strong conversion of 2017 sales and the record order intake in 2018 so far.
There are currently 20 projects under construction or installation, comprising 12 Proteus®ONE and eight Proteus®PLUS solutions, of which five projects are on schedule to start installation in H2 2018.
Services were up approximately 10% compared to the same period in 2017 and accounted for approximately 48.6% of segment revenues, as six new Proton Therapy contracts started delivering operations and maintenance revenues in H1 2018. Other Accelerators equipment revenues were up 6.5%, reflecting a strong order intake over the last 18 months. Other Accelerators service revenues remained high, boosted by recognition of revenues on multiple high margin upgrades and maintenance services.
Operating expenses reduced by more than 20%, reflecting the continuing cost control measures which have been successfully implemented. The Company remains committed to its ongoing cost control program while maintaining strategic initiatives.
As expected, the proton therapy market during the first half of the year has continued to be slow and, due to this, finalizing contracts has taken longer than usual. However, IBA continues to be the proton therapy market leader with 44% of all proton therapy systems historically sold globally having gone to the Company. IBA has a strong backlog and pipeline and is the only company to have sold systems in 2018, which shows the Company's clear competitive strengths. Today, approximately 70,000 patients have been treated by IBA clients, more than all the installations of its competitors combined.
Despite the characteristic lumpiness of the current proton therapy market, the long-term potential remains encouraging. IBA's pipeline of new prospects is showing a strong increase in the number of potential customers considering investment in proton therapy. A key driver of this interest is IBA's compact Proteus®ONE solution which continues to be a large proportion of the pipeline, due to its cost attractiveness and ability to be integrated into a comprehensive cancer care center.
Updated guidelines from the American Society for Radiation Oncology (ASTRO) and National Comprehensive Cancer Network (NCCN), as well as new guidelines announced recently in Japan for prostate cancer, have further endorsed proton therapy as a treatment option for cancer.
Additional publications and results from ongoing trials will be important to further widen the use of proton therapy. Furthermore, in the University Medical Center Groningen (UMCG) in the Netherlands, an alternative evidence-based methodology to select patients for proton therapy and provide clinical validation of the technology is gaining momentum. The university started treating patients at the beginning of 2018 and has implemented advanced selection procedures for proton therapy in head and neck cancer patients. Preliminary results from this are promising in validating the model-based approach and potentially extending it to other indications.
IBA continues to provide the quickest installation in the market, which enables customers to reduce costs and deliver an optimum business model. This is evidenced by the completion of five projects in the first half, including Newport, UK (Rutherford CC), Sapporo, Japan (Hokkaido Ohno), Groningen, Netherlands (UMCG), Toyohashi, Japan and Caen, France (Cyclhad/Archade), which were all delivered within 12 months. In particular, the project in Newport was delivered in a record time of nine months, demonstrating IBA's speed of delivery from contract signature to first treatment and secures the customers' investment as they can deliver treatment in line with their business plan.
In the period, in line with a Memorandum of Understanding signed in 2017, IBA signed a final agreement with Elekta to collaborate on software development and joint marketing of each other's product portfolios. Both companies will co-invest in developing and selling solutions that seamlessly integrate IBA's Proteus Series and Elekta's Monaco® treatment planning system and MOSAIQ® oncology information system. Adding to the existing partnerships with Raysearch and Philips, the agreement with Elekta is part of IBA's continued strategy to partner and develop technologies to reinforce the Company's market leadership.
Finally, during the period, all of IBA's 20 projects under construction are on schedule, and continue to be monitored constantly, based on reviews between project management and customers. To maintain this high level of delivery and to reduce lead-time and costs, IBA is constructing a new Proteus®ONE manufacturing site in Belgium. The construction of this site is on track and set to be operational in the third quarter of 2018, with accompanying offices and a new Customer Center operational by the end of the year.
| H1 2018 (EUR 000) |
H1 2017 (EUR 000) |
Variance (EUR 000) |
Variance % |
|
|---|---|---|---|---|
| Net Sales | 24 322 | 28 353 | -4 031 | -14.2% |
| REBITDA | 2 366 | 5 636 | -3 270 | -58.0% |
| % of Sales | 9.7% | 19.9% | ||
| REBIT | 1 623 | 5 449 | -3 826 | -70.2% |
| % of Sales | 6.7% | 19.2% |
In the first half, Dosimetry sales were down 14.2% versus H1 2017, due to exceptional backlog conversion in H1 2017. REBIT margins were lower due to slower backlog conversion and the fixed cost structure.
There was high order intake in H1 2018 of EUR 25.8 million, similar to 2017. The backlog grew to EUR 16.1 million versus EUR 15.4 million at the end of 2017, boosted by a strong growth in Services and proton therapy dosimetry.
During H1, IBA demonstrated its innovation leadership with the launch of several new products and features, namely Halo, Blue Phantom PT and Compass 2018.
Order intake and revenue recognition in the second half of 2018 are expected to be stronger, thanks to the impact of H1 product launches coupled with the additional launches at the American Association of Physicians in Medicine (AAPM) in early H2, including SMARTSCAN™, SciMoCa,
Blue Phantom PT and DigiPhant with MyQA. SMARTSCAN™ is an automated and guided beam commissioning. SciMoCa is the new Monte Carlo-powered secondary dose check and plan verification software. The Blue Phantom PT allows beam commissioning and Machine QA for Pencil Beam Scanning.
IBA reported revenues of EUR 114.7 million, down 24.4% (H1 2017: EUR 151.6 million), stemming from low revenue recognition on new contracts over the first half and phasing of backlog conversion
The Company's recurring operating loss before interest and taxes (REBIT) line decreased to a loss of EUR -4.5 million from EUR 1.9 million in H1 2017, affected by the low topline.
CAPEX was significantly reduced to EUR 1.3 million (H1 2017: EUR 9.0 million), reflecting higher investments in new projects in 2017 and cost control measures taken in 2018.
There was a reduction in net other operating expenses to EUR 2.0 million from EUR 2.4 million in H1 2017. The expenses stemmed mostly from reorganizational costs incurred early 2018.
Net financial expenses amounted to EUR 0.2 million in H1 2018 compared to expenses of EUR 1.9 million a year earlier, helped by Forex gains on the US dollar.
Cash flow from operations was negative EUR 26.6 million at the end of June 2018 (negative EUR 10.5 million at the end of June 2017), mostly due to the negative variation of working capital, stemming from invoicing of milestones to customers and inventory build-up on projects.
Cash flow from financing was EUR 37.8 million in H1 2018, reflecting increased drawdowns on the Group's credit lines.
IBA had a cash position of EUR 36.3 million at the end of H1 2018 compared to EUR 27.3 million at the end of 2017. The net debt position rose to EUR 39.1 million, reflecting the increase in borrowings to absorb working capital requirements.
Based on the current market outlook, IBA continues to anticipate a positive REBIT and net profit after tax for full-year 2018, driven by second-half weighting, and beyond. This includes recently signed projects awaiting financing, a strong pipeline of near-term projects and five installations due to start in H2.
The fundamentals of the proton therapy market continue to be solid, as demonstrated by the numerous prospects IBA is pursuing across all global markets. However, the market continues to
show signs of lumpiness. IBA remains fully focused on driving growth whilst absorbing this unpredictability through tight cost controls and delivering success through strategic partnerships, continued focus on efficiencies and maintaining the world's most competitive and attractive proton therapy offering.
IBA will remain focused around its two axes for growth: growing the market by facilitating evidence generation and creating awareness of the benefits of proton therapy, whilst improving its affordability, and increasing IBA's market share with its superior clinical technology, industry-leading installation times, proven quality of service and unique ability to completely upgrade all systems to the latest technology available.
We have compared the accounting data presented in the semi-annual press release of Ion Beam Application SA with the interim condensed consolidated financial statements as at 30 June 2018, which show a balance sheet total of € (thousand) 358,495 and a net loss (group share) for the period of € (thousand) 7,015. We confirm that these accounting data do not show any significant discrepancies with the interim condensed consolidated financial statements.
We have issued a review report, in which we declare that, based on our review, nothing has come to our attention that causes us to believe that the interim condensed consolidated financial statements is not prepared, in all material respects, in accordance with IAS 34 as adopted for use in the European Union
Diegem, 22 August 2018
Ernst & Young Réviseurs d'Entreprises SCCRL Statutory auditor represented by
Vincent Etienne Partner
In accordance with the Royal Decree of November 14, 2007, IBA indicates that this announcement was prepared by the Chief Executive Officer (CEO), Olivier Legrain, and the Chief Financial Officer (CFO), Soumya Chandramouli.
Press release | August 23rd, 2018
Press Release Inside/Regulated information
| 30/06/2018 | 30/06/2017 | Variance | ||
|---|---|---|---|---|
| (EUR '000) | (EUR '000) | (EUR '000) | % | |
| Sales and services | 114 675 | 151 613 | -36 938 | -24.4% |
| Cost of sales and services | 74 738 | 96 663 | -21 925 | -22.7% |
| Gross profit/(loss) | 39 937 | 54 950 | -15 013 | -27.3% |
| 34.8% | 36.2% | |||
| Selling and marketing expenses | 12 357 | 14 332 | -1 975 | -13.8% |
| General and administrative expenses | 17 911 | 21 743 | -3 832 | -17.6% |
| Research and development expenses | 14 202 | 16 974 | -2 772 | -16.3% |
| Recurring expenses | 44 470 | 53 049 | -8 579 | -16.2% |
| Recurring profit/(loss) | -4 533 | 1 901 | -6 434 | -338.5% |
| -4.0% | 1.3% | |||
| Other operating expenses/(income) | 1 970 | 2 417 | -447 | -18.5% |
| Financial expenses/(income) | 227 | 1 929 | -1 702 | -88.2% |
| Share of (profit)/loss of equity-accounted companies | 0 | -71 | 71 | -100.0% |
| Profit/(loss) before tax | -6 730 | -2 374 | -4 356 | na |
| Tax (income)/ expenses | 280 | 2 256 | -1 976 | -87.6% |
| Profit/ (loss) for the period from continuing operations | -7 010 | -4 630 | -2 380 | na |
| Profit/(loss) for the period from discontinued operations | -5 | -25 | 20 | -80,0% |
| Profit/ (loss) for the period | -7 015 | -4 655 | -2 360 | na |
| REBITDA | -706 | 5 264 | -5 970 | -113.4% |
Press release | August 23rd, 2018
IBA | Ion Beam Applications SA Chemin du Cyclotron, 3 | 1348 Louvain-la-Neuve | Belgium | RPM Nivelles | VAT : 0428.750.985 T +32 10 47 58 11 | F +32 10 47 58 10 | [email protected] | iba-worldwide.com
| 30-6-18 | 31-12-17 | 30-6-17 | |
|---|---|---|---|
| (EUR '000) | (EUR '000) | (EUR '000) | |
| Net profit/(loss) for the period | -7 015 | -39 201 | -4 655 |
| Adjustments for: | |||
| Depreciation and impairment of property, plant and equipment | 1 745 | 3 381 | 1 551 |
| Amortization and impairment of intangible assets | 1 749 | 2 742 | 1 274 |
| Write-off on receivables | 251 | 1 994 | 1 152 |
| Changes in fair value of financial assets (gains)/losses Changes in provisions |
1 653 1 525 |
834 -2 146 |
191 -3 427 |
| Deferred taxes | -261 | 16 586 | -9 |
| Share of result of associates and joint ventures accounted for using | 0 | -92 | -71 |
| the equity method | |||
| Other non cash items Net cash flow changes before changes in working capital |
-634 -987 |
-737 -16 639 |
47 -3 947 |
| Trade receivables, other receivables, and deferrals | -20 162 | -3 477 | 2 526 |
| Inventories and contract in progress | -4 838 | -20 066 | -6 957 |
| Trade payables, other payables, and accruals | -1 195 | 1 044 | 555 |
| Other short-term assets and liabilities | -317 | -3 019 | -710 |
| Change in working capital | -26 512 | -25 518 | -4 586 |
| Income tax paid/received, net | -36 | -3 436 | -2 391 |
| interest (income)/expenses | 946 | 952 | 438 |
| Net cash (used in)/generated from operations | -26 589 | -44 641 | -10 486 |
| Cash flow from investing activities | |||
| Acquisition of property, plant, and equipment | -1 145 | -9 913 | -7 078 |
| Acquisition of intangible assets | -207 | -5 363 | -1 908 |
| Disposals of other investments | 0 | -494 | 0 |
| Other investing cash flows | -3 | 2 891 | -2 |
| Net cash (used in)/generated from investing activities | -1 347 | -12 871 | -8 988 |
| Cash flow from financing activities Proceeds from borrowings |
34 863 | 15 000 | 0 |
| Repayments of borrowings | -2 215 | -2 151 | -1 110 |
| Interest paid/Interest received | -839 | -796 | -397 |
| Capital increase (or proceeds from issuance of ordinary shares) | 139 | 981 | 438 |
| Dividends paid | 0 | -8 232 | -8 515 |
| Other financing cash flows | 5 898 | 5 391 | 4 327 |
| Net cash (used in)/generated from financing activities | 37 846 | 10 193 | -5 257 |
| Net cash and cash equivalents at the beginning of the year | 27 273 | 74 564 | 74 564 |
| Changes in net cash and cash equivalents | 9 910 | -47 319 | -24 731 |
| Exchange gains/(losses) on cash and cash equivalents | -881 | 28 | 126 |
| Net cash and cash equivalents at the end of the year | 36 302 | 27 273 | 49 959 |
IBA | Ion Beam Applications SA Chemin du Cyclotron, 3 | 1348 Louvain-la-Neuve | Belgium | RPM Nivelles | VAT : 0428.750.985 T +32 10 47 58 11 | F +32 10 47 58 10 | [email protected] | iba-worldwide.com
11
| 30-6-18 | 31-12-17 | ||
|---|---|---|---|
| (EUR '000) | (EUR '000) | (EUR '000) | |
| ASSETS | |||
| Goodwill | 3 821 | 3 821 | 0 |
| Other intangible assets | 10 589 | 12 396 | -1 807 |
| Property, plant and equipment | 21 655 | 22 686 | -1 031 |
| Investments accounted for using the equity method and other investments |
8 909 | 8 909 | 0 |
| Deferred tax assets | 6 319 | 6 017 | 302 |
| Long-term financial assets | 382 | 2 289 | -1 907 |
| Other long-term assets | 20 023 | 18 572 | 1 451 |
| Non-current assets | 71 698 | 74 690 | -2 992 |
| Inventories and contracts in progress | 143 904 | 140 288 | 3 616 |
| Trade receivables | 82 481 | 61 000 | 21 481 |
| Other receivables | 23 001 | 26 218 | -3 217 |
| Short-term financial assets | 1 109 | 3 049 | -1 940 |
| Cash and cash equivalents | 36 302 | 27 273 | 9 029 |
| Current assets | 286 797 | 257 828 | 28 969 |
| Total assets | 358 495 | 332 518 | 25 977 |
| EQUITY AND LIABILITIES | |||
| Capital stock | 42 094 | 42 053 | 41 |
| Capital surplus | 41 420 | 41 322 | 98 |
| Treasury shares | -8 502 | -8 502 | 0 |
| Reserves | 12 941 | 16 205 | -3 264 |
| Currency translation difference | -3 470 | -3 320 | -150 |
| Retained earnings | 12 461 | 20 937 | -8 476 |
| Capital and reserves attributable to Company's equity holders |
96 945 | 108 695 | -11 750 |
| TOTAL EQUITY | 96 945 | 108 695 | -11 750 |
| Long-term borrowings | 31 404 | 19 286 | 12 118 |
| Long-term financial liabilities | 52 | 0 | 52 |
| Deferred tax liabilities | 667 | 667 | 0 |
| Long-term provisions | 5 303 | 5 975 | -672 |
| Other long-term liabilities | 13 877 | 8 970 | 4 907 |
| Non-current liabilities | 51 303 | 34 898 | 16 405 |
| Short-term provisions | 6 807 | 6 722 | 85 |
| Short-term borrowings | 43 985 | 23 464 | 20 521 |
| Short-term financial liabilities | 1 267 | 118 | 1 149 |
| Trade payables | 34 082 | 46 332 | -12 250 |
| Current income tax liabilities | 222 | 756 | -534 |
| Other payables | 123 884 | 111 533 | 12 351 |
| Current liabilities | 210 247 | 188 925 | 21 322 |
| Total liabilities | 261 550 | 223 823 | 37 727 |
| Total equity and liabilities | 358 495 | 332 518 | 25 977 |
IBA | Ion Beam Applications SA Chemin du Cyclotron, 3 | 1348 Louvain-la-Neuve | Belgium | RPM Nivelles | VAT : 0428.750.985 T +32 10 47 58 11 | F +32 10 47 58 10 | [email protected] | iba-worldwide.com
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