Ongoing impact of aap's restructuring clearly reflected in Q3 and 9M sales, earnings, and cash flow
DGAP-News: aap Implantate AG
/ Key word(s): 9 Month figures/Quarter Results
- Sales increased 15% (Q3) to EUR 3.0 million and 29% (9M) to EUR 8.9 million (CER: 18% (Q3) and 39% (9M))
- Continued positive EBITDA in Q3 and 9M; >+100% increase (Q3) to KEUR 20 and >+100% (9M) to EUR 0.1 million
- Operating cash flow balanced for first time in Q3; +87% improvement to EUR -0.4 million (9M); still clear trend towards black zero
- Promising clinical data for antibacterial silver coating technology
aap Implantate AG ("aap" or the "Company") continued profitable growth with double-digit sales increases and positive EBITDA in both the third quarter and the nine-month period of 2021.
Q3/2021 and 9M/2021 - Key results and progress
- Sales by regions: Growth drivers in Q3 especially regions LATAM (= Latin America; >+100%) and APAC (= Asia Pacific; +80%) as well as in 9M LATAM (>+100%), North America distribution business (+35%) and EMEA (= Europe, Middle East, Africa; +18%)
- North America: Sales increase in distribution business in Q3 (+7%) and in 9M (+35%); overall US market continues to grow significantly in 9M (+19%)
- Earnings: Recurring EBITDA improved to black zero in Q3 (Q3/2020: EUR -0.4 million) and to EUR -0.4 million in 9M (9M/2020: EUR -3.3 million)
- Operational trauma business: Positive result (Recurring EBITDA) in Q3 and 9M
- Gross margin and costs: Gross margin remains stable at high level of 85% in 9M and with increase in gross margin in absolute terms in line with sales growth key driver of earnings improvement; reduced cost level with declining personnel (-11% in 9M) and other costs (-15% in Q3 and -13% in 9M) as well as significant decrease in one-time effects
- Balance sheet: Equity ratio at a good level of 45% (31.12.2020: 52%)
- Financing: Successful completion of capital increase with subscription rights with significant oversubscription led to net inflow of approx. EUR 4.8 million
- Silver coating technology: Promising clinical results after use of three silver-coated aap plate systems in IIT study and two individual healing trials in patients with particularly severe infections and complex bone fracture healing disorders; start of human clinical study in Q4/2021
- Resorbable magnesium implant technology: Continued talks with technology-savvy investors on financing up to complete sale of technology
* In Q3/2020, sales development was still reported for the regions Germany, USA (distributors and global partners), International (excluding USA; Europe (excluding Germany), BRICS countries and RoW). The reclassification has been made in the context of the current financial reporting.
In North America, aap's distribution business continued to grow in the third quarter of 2021 (+7%) and showed a further dynamic development in the first nine months as well (+35%), but at the same time felt the effects of the COVID-19 pandemic for the first time. Thus, COVID-19-related hospital stays increased steadily in the period from the end of July to the beginning of September and surgery appointments were cancelled. In the overall US market, sales development in the third quarter of 2021 stabilized at the prior-year level, as the third quarter of 2020 still included follow-up orders from a large order placed by a global partner in the first quarter of 2020, whereas only consumables were ordered in much lower volumes thereafter. In the first nine months of 2021, aap recorded an increase in sales in North America (+19%) and is thus still clearly on a growth track overall.
- Stabilization of gross margin at a high level of 85% and with increase in gross margin in absolute terms in line with sales growth key driver of earnings improvement
- Stabilization of personnel expenses in Q3/2021 at prior-year level (non-significant increase
- Declining trend in other costs (-15% in Q3/2021 and -13% in 9M/2021) with significantly reduced non-recurring expenses
In connection with its innovative antibacterial silver coating technology, aap was able to achieve promising clinical results in three operations with silver-coated plate systems as part of an IIT study and two individual healing trials in patients with particularly severe infections and complex fracture healing disorders. In all three cases, excellent healing processes were recorded, and no indications of infections were found. In addition, measurements of the silver concentration in two of these procedures showed that there was only a relevant increase in the silver concentration locally in the area of the wound where the antibacterial effect is needed. The overall very good results are a positive indication for the planned multicenter human clinical study that aap will start in Germany before the end of the fourth quarter of 2021 to obtain CE approval. The Company will use the funds from the successful capital increase to equip the first participating clinics with silver-coated implants by the end of the year, which will mark the official start of the study.
With a view to securing further financing, aap successfully completed a capital increase with subscription rights in October. The capital increase met with great interest from both existing and new investors and was in the end significantly oversubscribed. All in all, all 1.5 million shares offered were placed at a subscription price of EUR 3.30, so that after deduction of consultancy and other costs the Company received a net inflow of around EUR 4.8 million. aap takes this as a clear appreciation of the performance of the management and the employees in the Company's transformation process in the very challenging times of the COVID-19 pandemic. The Management Board also sees this result as a sign of support for the corporate strategy pursued, both in terms of short-term performance metrics and long-term value creation.
The Management Board continues to closely monitor and assess the global impact of the COVID-19 pandemic on aap's business activities and financial results. Based on the third quarter 2021 results, currently strongly rising incidence figures in Germany as well as in many regions worldwide, the visible volatility as a result of COVID-19 and the labor and staffing environment in the healthcare sector potentially hampering an accelerated recovery, the Company now expects sales at the lower end of the guidance range of EUR 12.0 million to EUR 14.0 million. On the earnings side, management expects EBITDA to be in the upper half of the guidance range of EUR -2.0 million to EUR -0.7 million. The above sales and EBITDA forecasts are, however, subject to the condition that the infection situation in the context of the COVID-19 pandemic does not deteriorate further and that corresponding lockdown measures or other restrictions are imposed in the sales regions relevant for aap or that there are temporary production stoppages at the Berlin location or at aap's service providers/suppliers.
12.11.2021 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 (General Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Munich, Stuttgart, Tradegate Exchange|
|EQS News ID:||1248586|
|End of News||DGAP News Service|