Annual financial statements for 2018: Further progress in strategy implementation with double-digit sales growth in key markets and significant milestones in silver coating technology; North America fell short of expectations
DGAP-News: aap Implantate AG / Key word(s): Annual Results
aap Implantate AG ("aap") realized sales of EUR 10.8 million in financial year 2018 (FY/2017: EUR 10.9 million). EBITDA in the reporting period amounted to EUR -6.4 million (FY/2017: EUR -6.2 million).
2018 - Major Results and Progress
- Sales by region: Double-digit growth rates in Germany (+14%) and international key markets (+24% in BRICS and Europe without Germany); North America fell short of expectations (-27%)
- Gross margin and costs: Gross margin at a continued good level of 78%, albeit temporarily influenced by reduced share of high-margin US sales in overall sales; scheduled slight increase in personnel costs; other expenses on previous year level with high one-time costs in connection with extended measures for step-up strategy implementation
- Cash flow and balance sheet: Cash need in FY/2018 totalled EUR 9.0 million with positive effects of working capital reduction (EUR 0.7 million); cash holdings of EUR 7.3 million and a further high equity ratio of 83%
- LOQTEQ(R): Focus on, inter alia, European approval for polyaxial LOQTEQ(R) systems and development of sterile packaging for implants; approval applications submitted to FDA for, among other things, foot and periprosthetic system
- Silver coating technology: Significant milestones with convincing results of an animal study undertaken with the renowned AO Research Institute in Davos and submission of the application for approval of a human clinical study to the Federal Institute for Drugs and Medical Devices (BfArM)
2018 - Financials
With a view to the sales development in the individual regions, aap recorded a pleasing development in its home market Germany in financial year 2018 and increased sales by 14% to EUR 2.8 million (FY/2017: EUR 2.4 million). Here, the sales activities, such as the listing at major German hospital groups and purchasing associations, show effect. In contrast, the sales development in North America fell short of expectations in 2018. In this market aap could not sign further contracts with global partners in the past financial year, and distribution business was temporarily burdened by the loss of certain distributors and clinics. This shortfall in sales could not be offset on a short-term basis elsewhere. International key markets Europe (without Germany) and BRICS continued to develop positively and aap recorded a significant growth of 24% to EUR 3.6 million (FY/2017: EUR 2.9 million). Growth drivers were both the development of business with existing customers and the acquisition of new customers.
EBITDA in financial year 2018 totalled EUR -6.4 million (FY/2017: EUR -6.2 million) and thus could not be improved in the reporting period. It was mainly influenced by the following developments:
- Increased total operating performance with reduced build-up of inventories and higher volume of own work capitalized due to extensive work on silver coating technology
- Gross margin temporarily burdened by reduced share of high-margin US sales in total sales; decrease from 82% to 78%
- Scheduled slight increase in personnel costs to EUR 7.8 million (FY/2017: EUR 7.4 million) due to new recruitments, in particular at the end of 2017, in order to fulfil increased regulatory requirements and for targeted market approval of silver coating technology
- Other operating expenses unchanged compared to previous year at EUR 9.4 million, but with substantial one-time costs in connection with, inter alia, extended measures for step-up strategy implementation
For financial year 2019 the Management Board anticipates a sales increase to a value of EUR 13.0 million to EUR 15.0 million, corresponding to a growth between about 20% and 40%. aap also plans to improve EBITDA and expects a value of EUR -4.4 million to EUR -2.8 million for the current year.
All markets shall contribute to the planned sales growth and earnings improvement. aap is confident that with the measures already initiated in North America a dynamic sales development can be shown again in 2019. At the same time, the positive growth trend in Germany and in international business shall be continued. aap is also working towards strategic partnerships with global orthopaedic companies (distribution networks, licensing deals as well as product development and approval projects).
For financial year 2019 and the following years, the Management Board has set itself the goal of achieving significant sales growth, and further developing the company's pioneering and innovative silver coating technology and to receive market approval. Based on these targets different measures to strengthen the financial base are necessary, which have been adopted in mid-April and which will now be implemented at short notice. These include, besides a capital increase with subscription rights, two external financings. With the inflows from these financing measures totalling at least around EUR 4.0 million, the realisation of the planned sales growth and further planned payment inflows, such as from technology-based transactions and public funding, aap aims to secure the financing of the company sustainably until at least the end of 2020.
With a 25% sales growth to EUR 3.5 million in the first quarter aap made a good start to 2019 and laid a sound foundation for the planned dynamic sales growth in the full year. The intensive current exchange with the BfArM on aap's application to conduct a human clinical study for its silver coating technology makes the company optimistic and different global orthopaedic companies reaffirmed their interest in the innovative silver coating technology as well as in the products of the LOQTEQ(R) family during talks currently conducted.
Based on these developments, the Management Board remains confident to enter into a growth phase now with a magnificent technology pipeline, modern production facilities, international product approvals and a good sales momentum in key markets.
30.04.2019 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
|Company:||aap Implantate AG|
|Phone:||+49 (0) 30 75 01 90|
|Fax:||+49 (0) 30 75 01 91 11|
|Listed:||Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Munich, Stuttgart, Tradegate Exchange|
|EQS News ID:||805219|
|End of News||DGAP News Service|