aap Implantate AG / aap: Q3/2016 sales and EBITDA within the guidance;
North America sales in 9M/2016 above expectations; important progress in
LOQTEQ(R) portfolio expansion . Processed and transmitted by Nasdaq
Corporate Solutions. The issuer is solely responsible for the content of
this announcement.
-- Sales and EBITDA in Q3/2016 at EUR 2,9 million (Guidance: EUR 2.5 million
to EUR 4.0 million) and EUR -1.8 million (Guidance: EUR -2.0 million to
EUR -1.2 million)
-- EBITDA burdened by one-time effects in Q3/2016 and in nine-month period
(Q3/2016: EUR 0.5 million; 9M/2016: EUR 0.8 million), which will largely
result in savings effects on the earnings level in the future
-- North America sales in Q3/2016 at EUR 0.7 million (Q3/2015: EUR 0.1
million) and in 9M/2016 at EUR 2.0 million (9M/2015: EUR 0.4 million)
-- LOQTEQ(R): Important progress in portfolio completion through market
launchs of periprosthetic and polyaxial LOQTEQ(R) systems - further
launches planned shortly
-- Silver coating technology: good progress in CE conformity assessment
procedure; preparation of approval documents for US FDA
-- Signing of a notarial share purchase agreement about the remaining stake
of 33% in aap Joints GmbH - Completion planned until year end 2016
-- Change in the Supervisory Board: Jacqueline Rijsdijk follows Ronald
Meersschaert
aap Implantate AG ("aap") achieved in the third quarter of 2016 sales
and EBITDA in line with the expectations. In the continued operation
sales in the reporting period amounted to EUR 2.9 million (Q3/2015: EUR
3.4 million) and were thus within the guidance of EUR 2.5 million to EUR
4.0 million. Furthermore, aap realized an EBITDA of EUR -1.8 million
(Q3/2015: EUR -1.4 million) in the continued operation in the third
quarter of 2016 and thereby a value within the forecasted corridor of
EUR -2.0 million to EUR -1.2 million as well. EBITDA in the reporting
period was burdened by one-time effects from the termination of a
long-term license agreement in connection with the LOQTEQ(R) technology
(EUR 0.3 million) and a value adjustment to customer receivables (EUR
0.2 million) totaling about EUR 0.5 million. The license agreement with
a co-developer of the LOQTEQ(R) technology initially had a long maturity
which was tied to the terms of the LOQTEQ(R) patents. By terminating the
license agreement aap has succeeded in providing mid- and long-term as
well as sustainable relief on the earnings level. Adjusted for the
mentioned special effects recurring EBITDA in the third quarter was at
EUR -1.3 million and thereby at the upper end of the guidance.
Q3 Sales
In EUR million Q3/2016 Q3/2015 Change on year
Trauma 2.3 2.9 -18%
Other 0.6 0.5 +2%
Sales continued operation 2.9 3.4 -15%
Q3 EBITDA
In EUR million Q3/2016 Q3/2015 Change on year
EBITDA continued operation -1.8 -1.4 -30%
One-time effects 0.5 0 > +100%
Recurring EBITDA continued operation -1.3 -1.4 -5%
In connection with the aimed focus on established markets such as North
America, the DACH region and further European countries,
aap
succeeded in increasing sales in North America significantly and
extending customer access in the DACH region. In contrast, China could
not make a contribution towards sales in the third quarter of 2016 as
well as in the year to date. In 2015 China was despite halted growth a
main sales market. We are currently still in negotiations about a
continuation of the distribution business and expect a conclusion as
well as a corresponding recovery of the business until the end of the
financial year. Overall it appears with respect to the sales development
that the realized pleasing sales increases in North America in financial
year 2016 could not compensate the so far missing sales contributions
from China.
9M Sales
In EUR million 9M/2016 9M/2015 Change on year
Trauma 7.6 8.8 -14%
Other 1.2 1.1 +14%
Sales continued operation 8.8 9.9 -11%
Sales discontinued operation 4.2* 12.1< -100%
Group sales 13.0* 22.0 -41%
* Includes aap Biomaterials GmbH business from 01/01/2016 to 05/11/2016.
9M EBITDA
In EUR million 9M/2016 9M/2015 Change on year
EBITDA continued operation -5.3 -4.5 -19%
One-time effects 0.8 0.2 > +100%
Recurring EBITDA continued operation -4.5 -4.3 -6%
In EUR million 9M/2016 9M/2015 Change on year
EBITDA continued operation -5.3 -4.5 -19%
EBITDA discontinued operation 24.1* 4.2 > +100%
Group EBITDA 18.8* -0.3 > +100%
* Includes aap Biomaterials GmbH business from 01/01/2016 to 05/11/2016
and deconsolidation profit of sale of aap Biomaterials GmbH.
In the first nine months of 2016
aap
realized sales of EUR 8.8 million (9M/2015: EUR 9.9 million) in the
continued operation and an EBITDA of EUR -5.3 million (9M/2015: EUR -4.5
million). EBITDA in the nine-month period of the current financial year
was additionally burdened by an one-time effect from personnel measures
implemented in the second quarter of EUR 0.3 million besides the special
effects already mentioned. Consequently one-time effects in the first
nine months total EUR 0.8 million. In particular the termination of the
long-term license agreement and the personnel measures will result in
noticeable cost savings and thereby earnings improvements of the company
in the years to come. Adjusted for all special effects recurring EBITDA
in the nine-month period 2016 was at EUR -4.5 million and thereby almost
at the level of the corresponding prior year period.
The following highlights indicate the progress
aap
made in the third quarter of 2016 in implementing the Management Agenda
for 2016:
-- North America sales: sales with local distributors and global partners
who sell aap products under their own name or the aap label in North
America totaled EUR 0.7 million in Q3/2016 (Q3/2015: EUR 0.1 million) and
EUR 2.0 million in 9M/2016 (9M/2015: EUR 0.4 million) and were thus
significantly above expectations
-- LOQTEQ(R): important progress in portfolio completion through recent
market launchs of periprosthetic LOQTEQ(R) system and polyaxial LOQTEQ(R)
VA ankle system - Shortly further launchs of various polyaxial LOQTEQ(R)
systems for different anatomical areas
-- Silver coating technology: good progress in CE conformity assessment
procedure for silver-coated LOQTEQ(R) plate - Intensive and constructive
exchange with notified body; preparation of approval documents for US
Food and Drug Administration (FDA)
-- Signing of a notarial share purchase agreement about the remaining stake
of 33% in aap Joints GmbH for EUR 0.4 million on 23 September 2016;
prerequisite for closing is the recertification of three products until
year end 2016; prolongation of the CE approval is a very challenging task
as these are so-called class III products which are in a difficult
approval environment with constantly increasing requirements and partly
long reaction times of approval authorities; conclusion of the contract
led to a value adjustment on the stake in aap Joints GmbH of EUR 0.4
million in Q3/2016
-- Amicable agreement with co-developer of LOQTEQ(R) technology about
premature termination of a long-term license agreement and compensation
with an indemnity payment which is provided as a first fixed payment in
2016 and will subsequently be payed out in tranches if certain sales
targets are reached only in the next three years; termination leads to a
mid- and long-term as well as sustainable discharge of earnings level;
first indemnity payment of EUR 0.3 million leads to an one-off
extraordinary charge on earnings in Q3/2016
-- Change in the Supervisory Board: Jacqueline Rijsdijk follows Ronald
Meersschaert who resigned from his office for personal reasons;
Jacqueline Rijsdijk has acknowledged economic and financial expertise and
an excellent network
Outlook for 2016
In the fourth quarter of 2016,
aap
aims to achieve further progress in its strategy implementation. The
Management Board will be focusing on the following topics:
To accelerate value-based innovations,
aap
will be taking forward in a targeted manner the further expansion of the
LOQTEQ(R) portfolio for certain indication areas respectively
functionalities and plans the market launch of further polyaxial
LOQTEQ(R) systems for different anatomical regions.
In the area of silver coating technology, the active interaction with
the approval authorities will be continued regarding the current CE
conformity assessment procedure. For the US approval the necessary
approval documents are being prepared for submission to the US
authorities.
The company wants to enhance market access by means of two approaches:
Firstly, sales activities in the established markets in North America
and Western Europe are to be expanded further. Based on the very
pleasing sales development in North America in the first nine months of
2016 we expect a continuation of the sales dynamics in the fourth
quarter of 2016. Secondly, further endeavours will be undertaken to
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