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STRATEC SE

Interim / Quarterly Report Jul 28, 2010

416_10-q_2010-07-28_6dc453e0-118b-4ccf-9a36-99e057b4bb5e.pdf

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.

contents

FOREWORD BY THE BOARD OF MANAGEMENT 3
INTERIM GROUP MANAGEMENT REPORT 6
CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 2010 11
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the Period from April 1 to June 30, 2010
13
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the Period from January 1 to June 30, 2010
14
STATEMENT OF CHANGES IN GROUP SHAREHOLDERS' EQUITY
for the Period from January 1 to June 30, 2010
15
CONSOLIDATED CASH FLOW STATEMENT
for the Period from January 1 to June 30, 2010
17
NOTES TO THE GROUP INTERIM REPORT
for the Period from January 1 to June 30, 2010
18
ADDITIONAL INFORMATION 21

FOREWORD BY THE BOARD OF MANAGEMENT

Dear Shareholders,

Alongside the market launch of NEO by Immucor, the first analyzer system to be newly launched in the current year, in the first half of 2010 STRATEC Biomedical Systems AG also managed to lay two important foundations for the company's future development. We concluded a major new development and supply agreement with bioMérieux and prepared the takeover of the US company Ballista Inc., the execution of which was then announced on July 2, 2010.

Given our business performance in the first six months and in view of the three market launches pending by our partners – DiaSorin, Gen-Probe and QIAGEN – in the second half of the year, we can confirm our previous forecast, namely that sales for the 2010 financial year as a whole will range between u 96 million and u 102 million (sales in 2009: u 79.6 million).

We boosted our first-half sales by 18.0 % from u 36.6 million in the previous year's period to u 43.1 million in the current year. Earnings showed disproportionate growth of 24.0 % from u 4.9 million in the previous year to u 6.1 million. The EBIT margin amounted to 18.7 % as of June 30, 2010 (previous year: 17.1 %). Although we stockpiled production in the first half of 2010 in preparation for the relocation of our Swiss production activities into a new building, the brief interruption to production and high volumes of customer demand led to a supply backlog of around u 3.4 million, which we intend to have worked down by the end of the third quarter of 2010.

In terms of new contracts, we were able to announce the placing of a further major development and supply order. bioMérieux, a partner previously largely reliant on internally developed solutions, has commissioned STRATEC to develop and produce various core components for the next generation VIDAS, one of the most-used in-vitro diagnostics systems worldwide. This order will contribute to further growth at our company from 2012 onwards. This order too is a reflection of current developments within our industry, in which diagnostics companies are focusing on their core competencies, namely the development and marketing of reagents, while commissioning highly-specialized independent partners such as STRATEC to supply the corresponding automation and instrumentation solutions. This provides diagnostics companies with a major advantage in terms of the critical factor of time-to-market, as well as enabling them to reliably plan their development financing.

As a longstanding partner with in-depth expertise and a very broad range of available technology, we are endeavoring to further extend this competitive advantage by permanently drawing on innovations, enhancing our processes, and optimizing the value for money we can offer.

It is also against this backdrop that the three acquisitions made by STRATEC in recent years should be viewed. These enabled us to acquire technology and expertise we would otherwise have had to build up ourselves over many years. We in turn provide our partners with added value that they would otherwise have to procure from several other sources and then integrate into their overall solutions.

The software solutions at Sanguin, a company we acquired in 2006, whose middleware software solutions provide an interface between the analyzer systems and laboratory and hospital software, thus represented a new milestone in the range of services were able to offer to our customers. The integration of Invitek in 2009 and the nucleic acid purification solutions acquired as a result enable STRATEC to offer its customers an all-round instrumentation solution, thus covering the key step in the molecular diagnostics market.

The takeover of the US company Ballista announced at the beginning of July 2010 has been driven by similar considerations. Its competencies in the field of optics systems will enable us to market joint solutions offering considerable benefits to our customers. Not only that, we will also be jointly developing a competence center for the solutions on offer at the STRATEC Group. From here, it will be possible to provide our partners with hands-on, prompt assistance in their development and integration projects. What's more, by building up a network of suppliers in the US dollar area, we aim to benefit from natural hedging, thus offsetting the effects of currency fluctuations. The maximum purchase price of US\$ 5.2 million, partly dependent on the company's performance, is being settled from our own cash flow and with treasury stock. These treasury stock shares were already acquired within a share buyback program in 2008 at an average purchase price of around u 15 each. We expect Ballista, which will be consolidated into group accounting from July 1, 2010, to already contribute to the further growth of the STRATEC Group in the near future.

Our new building in Birkenfeld, where our development teams will in future be working together centrally and have additional capacity at their disposal, is scheduled to be ready to move into in November 2010. You can follow the construction progress via the webcam available on our homepage at www.stratec-biomedical.de.

We have a promising second half ahead, and are currently working with our partners to prepare those market launches due to take place in the near future. In view of these, as well as of the strong performance of existing systems, we expect to see a further growth spurt, especially in the fourth quarter of 2010 and the next two financial years. Over and above those systems due to be newly launched, we are already developing several projects on behalf of our customers that guarantee our further growth in the years beyond 2012 as well.

Birkenfeld, July 2010

The Board of Management of STRATEC Biomedical Systems AG

Hermann Leistner

Marcus Wolfinger Bernd M. Steidle

INTERIM GROUP MANAGEMENT REPORT

REPORT ON THE EARNINGS, FINANCIAL AND NET ASSET POSITION

While sales rose to u 43.1 million in the first six months of the 2010 financial year, up 18.0 % on the previous year's figure of u 36.6 million, the Group increased its overall performance in the same period by 21.0 % from u 40.4 million to u 48.8 million. In line with these developments, the cost of materials also rose from u 20.3 million to u 23.9 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, personnel expenses rose from u 9.3 million to u 11.5 million. Other operating expenses increased from u 3.5 million to u 4.2 million. It should be noted in this respect that Invitek has been included in the consolidated figures since April 1, 2009. Depreciation and amortization rose to u 1.4 million. STRATEC thus generated consolidated net income of u 6.1 million in the period under report (previous year: u 4.9 million), corresponding to earnings per share of u 0.53 (previous year: u 0.43).

In the balance sheet, property, plant and equipment grew from u 8.9 million to u 12.5 million due to the capitalization of the new production building at Robion AG in Switzerland, and the start of construction on the development building at STRATEC AG in Birkenfeld. Due to the imminent launch of serial production on three development projects, inventories rose from u 31.6 million to u 40.5 million. Total receivables and other assets increased by u 3.4 million to u 19.9 million, while cash and cash equivalents dropped from u 21.2 million to u 13.7 million in the period under report.

The equity ratio decreased from 69.1 % to 66.0 %. The increase in both noncurrent and current financial liabilities was attributable to the taking up of a loan for the construction of a production building at Robion AG in Switzerland. The rise in accounts payable was driven by higher procurement volumes for raw materials and supplies.

With an outflow of funds of u 4.2 million, the Group's investment activities in the first six months of the 2010 financial year were characterized by the completion of the production building at Robion AG, and the launch of construction work in Birkenfeld. Moreover, over the same period the STRATEC Group invested u 0.9 million (previous year: u 1.0 million) in property, plant and equipment, especially tools, and u 0.2 million (previous year: u 0.3 million) in intangible assets.

CHANGES IN THE BUSINESS ENVIRONMENT AND IMPLICATIONS FOR STRATEC

In its latest Economic Outlook dated July 8, 2010, the International Monetary Fund (IMF) once again raised the growth forecast for the global economy in 2010 to its new level of 4.6 %. The equivalent figure at the beginning of the year had still amounted to 3.9 %. Global growth will be driven in particular by the emerging economic superpowers of China and India in Asia, as well as by Brazil. The IMF also raised its growth forecast for the USA this year to 3.3 %, up from 3.1 % previously, but left its forecast for the euro area unchanged at 1.0 %.

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 which 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.

As a result of the healthcare reform in the USA, there should also be a further increase in the number of people with health insurance, and thus with access to medical care, as well as in the numbers of resultant investigations and related tests.

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.

REPORT ON FORECASTS AND OTHER STATEMENTS CONCERNING THE COMPANY'S EXPECTED DEVELOPMENT

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. 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), benefits of scale in production and the increasing share of sales generated with consumables and spare parts will facilitate further growth in the EBIT margin. STRATEC expects its EBIT margin for 2010 to rise by at least 0.5 percentage points to at least 19.0 %.

The marked increase in the "inventories" balance sheet item, which is due to the pending launch of serial production on three development projects (Gen-Probe, QIAGEN and DiaSorin), will return to a lower level once again following the launch of marketing by our customers.

In the meantime, the NEO analyzer system was launched on the European market by Immucor, a customer of ours, in the first quarter of 2010. Following approval by the FDA (the US health authority), the system was launched onto the US market at the beginning of the second quarter of 2010.

The significant increase in customer demand for analyzer systems and the brief interruption to production due to the removal mean that the Group had a supply backlog of u 3.4 million at the end of the first half of 2010. This will be worked down by the end of 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.

In view of our existing development projects and forecasts, as well as the partial conversion of our forecast systems to the dates at which orders are actually placed by STRATEC's customers, however, our degree of forecasting reliability remains very high.

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.

OPPORTUNITY AND RISK REPORT

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.

CONSOLIDATED BALANCE SHEET

as of June 30, 2010 of STRATEC Biomedical Systems AG

assets in u
thousand
06.30.2010 12.31.2009
non
-current
assets
Goodwill 2,195 2,141
Other intangible assets 4,184 4,385
Property, plant and equipment 12,530 8,890
Interests in associates 312 310
Deferred tax assets 242 125
19,463 15,851
current
assets
Raw materials and supplies 9,893 6,915
Unfinished products, unfinished services 29,207 23,893
Finished products and goods 1,179 606
Prepayments made 236 223
Trade receivables 11,270 9,914
Future receivables from construction contracts 6,844 4,922
Receivables from associates 112 165
Other receivables and other assets 1,684 1,456
Securities 754 654
Cash an cash equivalents 13,666 21,186
74,845 69,934
total assets 94,308 85,785
shareholders' equity and debt in u
thousand
06.30.2010 12.31.2009
shareholders
' equity
Share capital 11,482 11,446
Capital reserve 12,054 11,167
Revenue reserves 32,984 26,433
Consolidated net income 6,069 11,674
Other equity -304 -1,433
62,284 59,287
debt
Non-current debt
Non-current financial liabilities 6,517 5,602
Pension provisions 105 105
Deferred taxes 1,849 1,637
8,471 7,344
Current debt
Current financial liabilities 1,664 488
Trade payables 4,937 3,421
Liabilities to associates 153 24
Other current liabilities 14,986 13,670
Current provisions 1,173 1,301
Income tax liabilities 638 250
23,552 19,154
Total shareholders' equity and debt 94,308 85,785

consolidated statement of comprehensive income

for the Period from April 1 to June 30, 2010 of STRATEC Biomedical Systems AG

in u
thousand
04.01.-06.30.2010 04.01.-06.30.2009
Sales 22,897 19,817
Increase in volume of finished and
unfinished products and unfinished services 2,567 1,414
Other own work capitalized 109 96
Overall performance 25,573 21,327
Other operating income 105 129
Cost of raw materials and supplies 12,063 10,250
Cost of purchased services 291 308
Personnel expenses 5,987 4,848
Other operating expenses 2,389 1,817
EBIT
DA
4,948 4,233
Amortization of intangible assets and
depreciation of property, plant and equipment
726 708
EBIT 4,222 3,525
Net financial expenses 37 167
Operating result (EBT) 4,259 3,692
Current tax expenses 1,155 1,016
Deferred tax income 4 71
Consolidated net income 3,108 2,747
Income and expenses recognized directly in equity
(after taxes)
Currency translation of foreign financial statements 859 234
Comprehensive income 3,967 2,981
Earnings per share in v 0.27 0.24
Number of shares used as basis 11,429,881 11,345,699
Earnings per share diluted, in v 0.27 0.24
Number of shares used as basis, diluted 11,594,254 11,405,623

consolidated statement of comprehensive income

for the Period from January 1 to June 30, 2010 of STRATEC Biomedical Systems AG

in u
thousand
01.01.-06.30.2010 01.01.-06.30.2009
Sales 43,140 36,552
Increase in volume of finished and
unfinished products and unfinished services
5,467 3,616
Other own work capitalized 214 187
Overall performance 48,821 40,355
Other operating income 302 286
Cost of raw materials and supplies 23,073 19,601
Cost of purchased services 811 720
Personnel expenses 11,532 9,310
Other operating expenses 4,235 3,484
EBIT
DA
9,472 7,526
Amortization of intangible assets and
depreciation of property, plant and equipment
1,416 1,295
EBIT 8,056 6,231
Net financial expenses 39 360
Operating result (EBT) 8,095 6,591
Current tax expenses 2,006 1,793
Deferred tax expenses (previous year: tax income) 20 96
Consolidated net income 6,069 4,894
Income and expenses recognized directly in equity
(after taxes)
Currency translation of foreign financial statements 1.128 157
Comprehensive income 7,197 5,051
Earnings per share in v 0.53 0.43
Number of shares used as basis 11,424,011 11,318,450
Earnings per share, diluted, in v 0.52 0.43
Number of shares used as basis, diluted 11,591,930 11,354,134

STATEMENT OF CHANGES IN GROUP SHAREHOLDERS' EQUITY

for the Period from January 1 to June 30, 2010 of STRATEC Biomedical Systems AG

January – june 2009 Revenue reserves Other equity

in v thousand 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
Company acquisition in return for shares
from holdings of treasury stock
(change in scope of consolidation)
-257
Issue of subscription shares
from stock option programs
1 2
Allocations due to
stock option programs
113
Comprehensive income
Balance at 06.30.2009 11,427 10,604 18,895 7,539
January
– june
2010
Revenue reserves
in v thousand 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
Issue of subscription shares
from stock option programs
36 778
Allocations due to
stock option programs
108
Comprehensive income
Balance at 06.30.2010 11,482 12,053 22,445 10,540
Other equity
Currency
Group
equity
Treasury stock
translation
Fair value reserve Consolidated
net income
-2,014
-667
49,902
0 6,131
-3,977 -3,977
-2,000
-154
1,057
800
113
157
5,051
4,894
-957
-510
51,892
0 4,894

January – june 2010 Revenue reserves Other equity

Currency
translation
-998
-435
1,128
Treasury stock Fair value reserve Consolidated
net income
0 11,674
-5,122
-3,000
-3,552
6,069
693 -998 0 6,069

CONSOLIDATED CASH FLOW STATEMENT

for the Period from January 1 to June 30, 2010 of STRATEC Biomedical Systems AG

in v thousand 01.01.-06.30.2010 01.01.-06.30.2009
Consolidated net income 6,069 4, 894
Depreciation and amortization 1,416 1,295
Current income tax expenses 2,006 1,793
Income taxes paid less income taxes received -1,618 -2,350
Financial income -146 -280
Financial expenses 107 108
Interest paid -106 -108
Interest received 46 71
Other non-cash expenses 319 115
Other non-cash income -314 -210
Cash flow 7,779 5,328
Change in deferred taxes through profit or loss 20 -96
Profit on disposals of non-current assets 0 -190
Increase in inventories, trade receivables and other assets -11,973 -5,522
Increase in trade payables and other liabilities 2,939 2,653
Outflow of funds from operating activities
(previous year: inflow)
-1,235 2,173
Incoming payments from disposals of non-current assets
Property, plant and equipment 14 30
Financial assets 0 889
Outgoing payments for investments in consolidated non-current assets
Intangible assets -204 -281
Property, plant and equipment -3,218 -979
Prepayments made / assets under construction -746 0
Financial assets 0 0
Outgoing payment for acquisition of consolidated companies plus
overdraft facilities taken over
0 -2,233
Outflow of funds for investment activities -4,154 -2,574
Incoming payments from taking up of financial liabilities 2,494 0
Outgoing payments for repayment of financial liabilities -573 -239
Incoming payments from issues of shares
for employee stock option programs
814 3
Dividend payment -5,122 -3,977
Outflow of funds for financing activities -2,387 -4,213
Cash-effective change in cash and cash equivalents -7,776 -4,614
Cash and cash equivalents at beginning of period 21,187 19,208
Change in cash and cash equivalents
due to changes in exchange rates 255 50
Cash and cash equivalents at end of period 13,666 14,644

NOTES TO THE GROUP INTERIM REPORT

for the Period from January 1 to June 30, 2010 of STRATEC Biomedical Systems AG

Summary of principal accounting and valuation methods

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 June 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 June 30, 2010.

There were no indications of any potential impairment in goodwill at the 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 (v thousand).

Segment disclosures

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 thousand Germany EU Other Total
January – June 2010 7,474 28,012 7,654 43,140
17.3% 65.0% 17.7% 100.0%
in v thousand Germany EU Other Total
9,121 22,522 4,909 36,552
January – June 2009 25.0% 61.6% 13.4% 100.0%

Research and development expenses

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 3.1 million in the first six months of the 2010 financial year (previous year: u 2.5 million). These have been reported, mainly as personnel expenses, in the company's consolidated statement of comprehensive income. Moreover, procurement volumes of around u 0.5 million (previous year: u 0.5 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.

Shareholders' equity

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 June 30, 2010, amounts to 11,482,036. These are all bearer shares.

Dividend distribution

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.

Disclosures on the volume of treasury stock and on subscription rights held by members of the company's executive and supervisory bodies and its employees pursuant to § 160 (1) Nos. 2 and 5 of the German Stock Corporation Act (AktG)

STRATEC AG owned a total of 63,895 treasury stock at the interim balance sheet date. This corresponds to a prorated amount of € 63,895.00 of the company's share capital and to a 0.56 % share of its equity.

Stock option programs

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
45,430 310,430
Issued
0
0 0
Exerciesed
35,000
1,300 36,300
Lapsed
0
0 0
Outstanding on 06.30.2010
230,000
44,130 274,130

Due to the issuing of 36,300 shares at an average price of u 22.43, the company's share capital increased by u 36,300.00 and its capital reserve increased by u 777,818.00. As a result, conditional capital has reduced by u 36,300.00.

Employees

Including temporary employees the STRATEC Group had a total workforce of 399 employees as of June 30, 2010 (previous year: 325)

Major events after the interim reporting date

On July 2, 2010, STRATEC announced the acquisition of 100% of the voting capital in the US company Ballista Inc. Within its expansion strategy, STRATEC is thus extending its market presence in the USA.

Ballista specializes in precision optics technology and related development, production and advisory services with a strong track record as a supplier to the diagnostics and 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 build on Ballista's existing customers and technology base.

The purchase price, which still has to be adjusted for receivables and liabilities, amounts to a maximum of US\$ 5.2 million. This includes the handover of 35,790 treasury stock shares with an equivalent value of US\$ 1.2 million (based on STRATEC's average share price of u 27.27 on XETRA in the period from June 21, 2010 to June 25, 2010). The cash component of up to US\$ 4.0 million consists firstly of a performance-related component of around US\$ 1.0 million (earn-out), secondly of temporarily deferred purchase price installments with a total value of US\$ 1.0 million, and finally of a sum of US\$ 2.0 million due for immediate payment and to be reduced by the net balance of the company's receivables and liabilities. The shares are subject to various lockup periods. It is planned to consolidate Ballista into the STRATEC Group from July 1, 2010.

Due to the proximity of the date of publication of this interim report to the acquisition date, it is not possible to make any statements concerning the fair value of the assets and liabilities acquired, or of any goodwill. STRATEC expects to be able to present the preliminary results of the purchase price allocation due to be performed in the near future in the interim group management report upon publication of the interim report as of September 30, 2010.

Responsibility statement

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.

additional information

Financial calendar

July 28, 2010 Interim report as of June 30, 2010
Oktober 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:

August 2010 Commerzbank Chemicals & Life Sciences Conference, Frankfurt am Main, Germany
September 2010 DZ Bank 8th German Healthcare Conference, Zurich, Switzerland
UBS Global Life Sciences Conference, New York, USA
Oktober 2010 Jefferies Global SpecPharma & European Healthcare Conference, London, UK
November 2010 WestLB Deutschland Conference, Frankfurt am Main, Germany
HS
BC 4th HealthCare Conference, Frankfurt am Main, Germany

Partially incomplete/subject to amendment

about Stratec

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.

imprint

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

Investor Relations

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]

notice

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.

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

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