PharmiWeb.com - Global Pharma News & Resources
13-Aug-2020

STRATEC WITH SIGNIFICANT SALES GROWTH AND INCREASED PROFITABILITY IN THE FIRST HALF OF 2020

DGAP-News: STRATEC SE / Key word(s): Half Year Results/Change in Forecast
13.08.2020 / 06:55
The issuer is solely responsible for the content of this announcement.

STRATEC WITH SIGNIFICANT SALES GROWTH AND INCREASED PROFITABILITY IN THE FIRST HALF OF 2020

- 2020 financial guidance amended to account for COVID-19 pandemic: Organic sales growth of 14.0% to 18.0% and adjusted EBIT margin of around 15.5% to 16.5% expected
- COVID-19 pandemic leads to substantial additional demand for in-vitro diagnostics solutions
- Sales in H1/2020 rise year-on-year by 9.9% to € 119.4 million (H1/2019: € 108.6 million);
constant-currency growth of +8.8%; system sales up by 30.6%
- Adjusted EBIT rises by 43.8% to € 18.4 million in H1/2020 (H1/2019: € 12.8 million)
- Adjusted EBIT margin improves year-on-year by 360 basis points to 15.4%

Birkenfeld, August 13, 2020

STRATEC SE, Birkenfeld, Germany, (Frankfurt: SBS; Prime Standard, SDAX) today announced its financial results and major events for the period from January 1, 2020 to June 30, 2020 with the publication of its Half-Year Financial Report H1|2020.

KEY FIGURES 1

€ 000s H1/2020 H1/20192 Change Q2/2020 Q2/20192 Change
Sales 119,367 108,604 +9.9% 62,863 62,035 +1.3%
Adj. EBITDA 23,537 17,325 +35.9% 13,395 10,148 +32.0%
Adj. EBITDA margin (%) 19.7 16.0 +370 bps 21.3 16.4 +490 bps
Adj. EBIT 18,413 12,805 +43.8% 10,755 7,830 +37.4%
Adj. EBIT margin (%) 15.4 11.8 +360 bps 17.1 12.6 +450 bps
Adj. consolidated net income3 15,595 10,455 +49.2% 9,349 6,699 +39.6%
Adj. earnings per share (€)3 1.30 0.87 +49.4% 0.78 0.56 +39.3%
Earnings per share (€)3 1.01 0.48 +110.4% 0.64 0.37 +73.0%

Adj. = adjusted
bps = basis points

1 To facilitate comparison, adjusted figures exclude amortization resulting from purchase price allocations in the context of acquisitions and associated reorganization expenses
2 Retrospectively adjusted to account for the recognition of the Data Solutions business unit as a discontinued operation pursuant to IFRS 5.
3 Consolidated net income from continuing operations.


BUSINESS PERFORMANCE
STRATEC increased its consolidated sales by 9.9% to € 119.4 million in the first six months of the 2020 financial year (H1/2019: € 108.6 million). This corresponds to constant-currency organic sales growth of 8.8%. This growth was driven in particular by a substantial increase in sales with systems as well as service parts and consumables. Here, sales with systems rose year-on-year by 30.6% in the first half of 2020 (constant currency: +29.3%), while sales with service parts and consumables grew by 20.6% (constant currency: +19.4%). Particularly in the second quarter, both areas benefited from higher demand for in-vitro diagnostics products to contain the COVID-19 pandemic. This factor significantly offset the temporary dip in demand for some system lines due to medical tests being postponed during the worldwide lockdowns. By contrast, and consistent with expectations, due to the exceptionally high basis of comparison provided by the previous year's figure of € 23.5 million, sales with development and services fell by 49.9% (constant currency: -50.2%) to € 11.8 million.

Adjusted EBIT for the first six months of 2020 rose by 43.8% to € 18.4 million, compared with € 12.8 million in the previous year. Accordingly, the adjusted EBIT margin improved by 360 basis points to 15.4% (H1/2019: 11.8%). This significant margin growth was especially due to positive benefits of scale, as well as a strong sales and product mix. By contrast, measurement items for stock appreciation rights (SARs) had a negative impact of 200 basis points (€ 2.4 million) on the margin.

Given the company's operating earnings growth, adjusted consolidated net income from continuing operations (pursuant to IFRS 5) also improved, in this case by 49.2% to € 15.6 million (H1/2019: € 10.5 million). Adjusted earnings per share (basic) from continuing operations for the first six months of 2020 rose by 49.4% to € 1.30, up from € 0.87 in the previous year.

To facilitate comparison, key earnings figures have been adjusted to exclude amortization resulting from purchase price allocations in the context of acquisitions and associated reorganization expenses and other non-recurring items. A reconciliation of the adjusted figures with those reported in the consolidated income statement can be found in the Half-Year Financial Report H1|2020 also published today.

UPDATE TO FINANCIAL GUIDANCE
Given the high degree of forecasting uncertainty, the financial guidance for the 2020 financial year communicated by STRATEC on May 4, 2020 did not account for any potential implications of the COVID-19 pandemic apart from those effects that had already arisen by the end of April 2020. Drawing on the greater transparency now available, the Board of Management has decided to adjust the financial guidance for 2020 and to account for the potential implications of the pandemic.

STRATEC expects that the current additional demand among its customers due to the COVID-19 pandemic will have a significantly positive impact on its sales performance and product mix in the third and fourth quarter as well. Accounting for the potential and currently foreseeable implications of the COVID-19 pandemic, STRATEC therefore now expects to achieve constant-currency adjusted organic sales growth of between 14.0% and 18.0% in the 2020 financial year (2019 sales basis: € 214.2 million). For its adjusted EBIT margin, STRATEC now forecasts a figure of around 15.5% to 16.5% (2019: 13.7%).

STRATEC's previous financial guidance, dated May 4, 2020, provided for constant-currency adjusted organic sales growth in a low double-digit percentage range accompanied by an adjusted EBIT margin of around 15.0% in the 2020 financial year.

For 2020, STRATEC still expects its investments in property, plant and equipment and intangible assets to correspond to around 10% to 12% of sales. Investments in property, plant and equipment mainly relate to the construction work currently underway to significantly extend the buildings at the company's headquarters in Birkenfeld. This work is scheduled for completion in the third quarter of 2020. As a result, the investment ratio is expected to decrease further in 2021.

PROJECTS AND OTHER DEVELOPMENTS
The key focus in the first half of 2020 was on containing and managing the challenges presented by the COVID-19 pandemic. In particular, this involved upholding supply capacity and protecting the health of employees. By introducing measures at an early stage, STRATEC largely managed to avoid infections within its workforce and interruptions to its production activities, and was thus able to maintain the supply to its customers of products relevant to combating the pandemic. In this regard, STRATEC achieved classification as a Critical Infrastructure Operator (KRITIS) in connection with the COVID-19 pandemic in April 2020 already.

Despite the challenges presented by the COVID-19 pandemic, STRATEC also reached important milestones in terms of new product developments in the first half of the year and is holding promising negotiations with partners for new projects.

DEVELOPMENT IN PERSONNEL
Including personnel hired from a temporary employment agency and trainees, the STRATEC Group had a total of 1,335 employees as of June 30, 2020 (Previous year: 1,220). Compared with the previous year and adjusted to account for the disposal of the Data Solutions business unit, this corresponds to organic workforce growth of 14.5%. Among other factors, this dynamic growth in the number of employees is due to the increase in production capacities required in connection with the COVID-19 pandemic

CHANGE IN SUPERVISORY BOARD
At the request of the management of STRATEC SE, on July 21, 2020 Mannheim District Court appointed Dr. Rolf Vornhagen as a new member of the company's Supervisory Board. Dr. Vornhagen most recently held various management positions at the US diagnostics group Bio-Rad Laboratories, Inc. from 2010 to 2018. Among other roles, he was Managing Director of various subsidiaries and Director of R&D at the immunohematology division. Given his extensive experience and expertise in the diagnostics industry, Dr. Vornhagen will be able to provide significant support in the further development of STRATEC SE.

Rainer Baule, previously Deputy Chairman of the Supervisory Board of STRATEC SE, had already stood down from this position due to personal reasons. The Supervisory Board and Board of Management would like to thank him very warmly for his commitment and his very successful work on the Supervisory Board of STRATEC SE, of which he had been a member since June 2017.

HALF-YEAR FINANCIAL REPORT H1|2020
The Half-Year Financial Report H1|2020 of STRATEC SE has been published on the company's website at www.stratec.com/financial_reports.

CONFERENCE CALL AND AUDIO WEBCAST
To mark the publication of the results for the first six months of 2020, STRATEC will be holding a conference call in English at 2.00 p.m. (CEST) today, Thursday, August 13, 2020.

You will receive the dial-in data (telephone number, password + individual PIN) following brief registration at the following link: www.stratec.com/registration.

The conference call will also be available at the same time as an audio webcast at www.stratec.com/audiowebcast20200813 (brief registration required). Please note that no questions can be submitted via the audio webcast. Clicking this link also enables you to follow or download the slide presentation.

ABOUT STRATEC
STRATEC SE (www.stratec.com) designs and manufactures fully automated analyzer systems for its partners in the fields of clinical diagnostics and biotechnology. Furthermore, the company offers complex consumables for diagnostic and medical applications. STRATEC covers the entire value chain - from development to design and production through to quality assurance.

The partners market the systems, software, and consumables, in general together with their own reagents, as system solutions to laboratories, blood banks and research institutes around the world. STRATEC develops its products on the basis of its own patented technologies.

Shares in the company (ISIN: DE000STRA555) are traded in the Prime Standard segment of the Frankfurt Stock Exchange and are listed in the SDAX select index of the German Stock Exchange.

FURTHER INFORMATION IS AVAILABLE FROM:
STRATEC SE
Jan Keppeler | Investor Relations & Corporate Communications
Tel: +49 7082 7916-6515
Fax: +49 7082 7916-9190
ir@stratec.com
www.stratec.com



13.08.2020 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases.
Archive at www.dgap.de


Language: English
Company: STRATEC SE
Gewerbestr. 37
75217 Birkenfeld
Germany
Phone: +49 (0)7082 7916 0
Fax: +49 (0)7082 7916 999
E-mail: info@stratec.com
Internet: www.stratec.com
ISIN: DE000STRA555
WKN: STRA55
Indices: SDAX
Listed: Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover, Munich, Stuttgart, Tradegate Exchange
EQS News ID: 1116757

 
End of News DGAP News Service

Editor Details

Last Updated: 13-Aug-2020