DJ EQS-Adhoc: Publication of 2019 Annual Results
EQS Group-Ad-hoc: Medacta Group SA / Key word(s): Annual Results
Publication of 2019 Annual Results
06-Apr-2020 / 07:00 CET/CEST
Release of an ad hoc announcement pursuant to Art. 53 KR
The issuer is solely responsible for the content of this announcement.
*Press Release - Publication of 2019 Annual Results *
*Medacta achieves organic growth of 13.9% significantly above the market and
strong profitability equal to 29.5% of Adjusted EBITDA margin[1].*
*- Sales increased organically by 13.9% to EUR 310.6 million on a reported
currency basis (11.3% on a constant currency basis) significantly above
market. *
*- Strong profitability, adjusted EBITDA increased to EUR 91.5 million,
corresponding to an adjusted EBITDA margin of 29.5%. *
*- Strong start into the 2020 financial year prior to the beginning of
coronavirus crisis.*
*- Countermeasures to limit the impact of the coronavirus taken swiftly.
Facilities in Ticino/Switzerland remain operational to date.*
*- Medacta has historically maintained a moderate net debt ratio. To protect
its future cash flow and liquidity, the Board of Directors has proposed not
to distribute a dividend for the financial year 2019.*
*- Conscious of Covid-19 related uncertainties, Medacta withholds financial
guidance for 2020. Mid and long-term fundamentals remain unchanged.*
CASTEL SAN PIETRO, 6 April 2020 - Francesco Siccardi, CEO of Medacta, says
"During these challenging times, our priority is to protect the health and
safety of our employees, customers and patients. The Group Executive Team
along with the Board of Directors are working very hard to assess and
mitigate the risks and take actions to limit the financial impact of the
pandemic on our business.
We expect that orthopaedic patients will generate waiting lists in different
markets and, depending on the duration of the deferral of elective
surgeries, a recovery could start later in the year. Overall, we are
confident that mid and long-term fundamentals have not changed and the
encouraging growth we experienced in the first two months of the year will
be back after the storm ends and the dust has settled".
*Overview of 2019*
Medacta Group SA (Medacta) continued to expand significantly faster than the
orthopaedic market, achieving strong organic revenue growth and double-digit
expansion. Total revenue increased by EUR 38.0 million, or 13.9%, from EUR
272.6 million in 2018 to EUR 310.6 million in 2019 on a reported currency
basis (11.3% on a constant currency basis). The increase was largely due to
higher levels of market penetration in existing territories, which in turn
led to increased sales volumes of the Hip, Knee, Spine and Shoulder product
offerings. Higher levels of market penetration were supported by an expanded
direct sales force, which grew through the addition of direct sales
representatives and agents, strong Medical Education activities including
the successful 9th M.O.R.E. International Symposium, which attracted about
1'500 attendees from all over the world.
KEY FINANCIAL FIGURES 31.12.2019 31.12.2018
(Million Euro)
Revenues 310.6 272.6
Gross Profit 223.7 204.0
Alternative Performance Measures:
EBITDA 53.3 86.3
Adjusted EBITDA* 91.5 87.9
Adjusted EBITDA margin* 29.5% 32.3%
Free Cash Flow 0.6 17.2
Adjusted Free Cash Flow** 22.3 33.2
(Million Euro)
Total Assets 412.6 365.6
Total Equity 123.2 89.1
Equity Ratio 29.9% 24.4%
Number of employees 1'101 973
* Adjusted for IPO costs, one-time tax duty, Fidelity
Bonus, provisions on litigations, extraordinary legal
expenses, profit on sale of non-strategic asset.
The reconciliation is provided in the "Alternative
Performance Measures" section of the Management Report.
IFRS 16 adoption starting from January 1, 2019 positively
impacted our EBITDA, since lease expenses are classified
in depreciation of right-of-use assets (Euro 2'964
thousand) and financial costs (Euro 191 thousand). In the
comparative period, lease expenses were classified within
"Opex" for a total amount of Euro 2'990 thousand.
** Please see the "Alternative Performance Measures"
section of the Management Report for the reconciliation
of the "Adjusted Free Cash Flow". IFRS 16 adoption
starting from January 1, 2019 positively impacted our
Free Cash Flow, since lease expenses are classified in
depreciation of right-of-use assets (Euro 2'964
thousand). In the comparative period, lease expenses were
classified within the "Cash Flow from operating
activities" for a total amount of Euro 2'990 thousand.
*Growth in all business lines and regions*
The core Joint product line contribution has been robust. The Hip line
continued to develop, achieving sales growth of 5.2% at constant currency
and reported sales of EUR 163.9 million, and benefit from the AMIS
technique. In the Knee product line there was a strong growth of 13.2% at
constant currency, with reported sales of EUR 111.7 million, sustained by an
integrated proposal of innovative implants, personalized MIKA approach and
GMK Single Use Instrumentation. The patient-matched and minimally invasive
solution MySpine MIS MC have been the key elements of the positive results
of the Spine product line, which showed a good acceleration in the second
part of the year with an impressive 23.4% of revenue growth at constant
currency and reported sales of EUR 25.3 million. Thanks to the comprehensive
product portfolio and a successful deployment strategy, the Shoulder product
line was able to reach 147.4% growth rate at constant currency and reported
revenue of EUR 9.7 million.
Medacta achieved balanced geographic sales growth in all key markets. Europe
registered 7.9% growth rate at constant currency and reported sales of EUR
136.1 million, primarily driven by Italy and Germany. North America market
realized an overall good performance showing 13.2% growth rate at constant
currency and reported revenue of EUR 95.5 million. The U.S. remains one of
Medacta's strategic markets and a key focus for 2020. Asia-Pacific delivered
the strongest result among all geographic areas, reaching 13.3% revenue
growth at constant currency and EUR 66.9 million of reported revenue. This
good result is attributable to a well-executed marketing strategy capable of
generating noticeable acceleration mainly in the second part of the year.
*High CORE Gross Profit margin of 73.0%*
The CORE Gross Profit (adjusted for the Fidelity Bonus for employees)
increased by 11.2%, from EUR 204.0 million in the previous year to EUR 226.9
million in the reporting period.1 The CORE Gross Profit margin, equal to
73.0%, decreased by 1.8% in comparison to the previous year. 1 This was
primarily due to expected price reductions in certain European countries,
higher raw material prices, higher royalties and incremental depreciation
given the investments made on new instruments to sustain future growth, not
sufficiently counterbalanced by positive effects on average selling prices
deriving from revenue geographic mix and product mix.
*Adjusted EBITDA surges to EUR 91.5 million*
The Adjusted EBITDA amounted to EUR 91.5 million, 4.1% increase compared to
a year ago. The adjustments, in the amount of EUR 38.2 million, include
mainly one-time expenses associated with the IPO, Fidelity Bonus,
extraordinary legal costs, stamp duty and accrued provisions on litigation.1
The Adjusted EBITDA corresponds to a margin of 29.5%, compared to 32.3% in
the previous year. The reduction in profitability was mainly due to the
combined effect of expected increasing core business expenses and revenue
growth rate slightly slower than expected. Higher costs were incurred
particularly in association with the listing and the strengthening of
corporate functions as well as in marketing and research activities.
*Solid Balance Sheet*
Medacta's Balance Sheet remains robust, with total assets of EUR 412.6
million and an equity ratio of 29.9% at the end of the reporting period. The
Adjusted Free Cash Flow generated in 2019 amounted to EUR 22.3 million after
significant investments in new instruments and Research & Development to
sustain the future growth of Medacta.1
*Long-term value creation continues*
The orthopaedics market is characterized by continuous technological
changes, frequent new product introductions and evolving industry standards
resulting from technological advances and scientific discoveries. In this
complex environment, Medacta creates long-term value with its strategic
focus on innovation, education and healthcare sustainability. Innovation is
based on three pillars: complete and profound knowledge of the human body,
continuous investments in long and short-term research and development (R&D)
and adoption of cutting-edge technologies. Education is the indispensable
tool to transforming innovation into concrete benefits for patients,
surgeons and healthcare systems. As such, around 1'250 surgeons, on top of
the 9th M.O.R.E. International Symposium, attended educational events and
participated in more than 750 surgeon-to-surgeon visits in the year under
review. As a result, Medacta's innovative products and surgical procedures
improve patient well-being, facilitate the work of the customer surgeons and
increase the sustainability of the healthcare system by improving efficiency
while reducing surgical costs.
*COVID-19 IMPACT *
We are constantly monitoring the impact of the Covid-19 and how the pandemic
is affecting our business. The health and safety of our employees, customers
and patients are our number one priority and Medacta is working very hard to
assess and mitigate any risks, taking all the actions needed to limit the
impact of the pandemic. Over 270 Headquarters employees have been working
remotely since March 9, and we have adopted all Government guidance and
more, including social distancing, hand sanitizer, daily temperature
measurement and masks, amongst others. As a MedTech company compliant with
Government requirements, and thanks to the swiftly countermeasures taken by
Management, our facilities in Ticino/Switzerland remain operational to date.
From a business perspective, starting from March 2020 we have seen a severe
reduction of elective surgeries in several countries, including Italy,
Switzerland, France, Australia, and we anticipate more countries to follow.
Marketing, Medical Education and other costs have been reduced substantially
due to travel restrictions and we introduced cost containment measures,
including short time work wherever appropriate. Also, we are using all the
available Government support, in Switzerland and in all the markets in which
Medacta operates with its subsidiaries, to offset labour costs whenever
possible.
To further protect our cash flow, the Board of Directors decided not to
propose to the Annual General Meeting any distribution of dividend for the
2019 financial year.
*OUTLOOK 2020*
Sales for the first two months of 2020 were very strong and in line with
management expectations, recording constant currency growth in the low to
mid-teens range. March was heavily affected by the Covid-19 impact, reducing
constant currency growth rate for Q1 to low single digit. Given the
uncertainties brought by the widespread outbreak of Covid-19 and the
inability to forecast the future development, we are not in a position to
provide a short-term outlook. However, we expect, orthopaedic patients will
generate waiting lists in different countries and, depending on the duration
of the deferral of elective surgeries, in several of Medacta's markets, a
recovery could start later in 2020 and partially in 2021. Overall, we do not
believe that mid or long-term fundamentals have changed.
*Detailed reporting*
Medacta's Annual Report 2019 can be downloaded via this link:
https://www.medacta.com/EN/financial-reports [1]
*Webcast today at 3:00 pm (CEST)*
Medacta Group SA will present its Annual Results 2019 during a webcast today
at 3:00 pm (CEST). The results call will be headed by Francesco Siccardi
(CEO) and Corrado Farsetta (CFO).
The conference will be held in English.
Live-Link: https://webcasts.eqs.com/medacta20200406 [2]
For participants to the conference call (slides only):
https://webcasts.eqs.com/medacta20200406/no-audio [3]
Dial-in numbers for conference call function only:
Switzerland: +41 44 580 6522
Germany: +49 692 0174 4220
UK: +44 203 009 2470
US: +1 877 423 0830
Code PIN participants: 82985923#
*Financial Calendar:*
*- *19 May 2020 Annual General Meeting
- 22 July 2020 Publication of 2020 Half-Year unaudited top-line figures
- 7 September 2020 Half-year results 2020
*Contact*
Medacta Group SA
Corrado Farsetta, CFO
Phone: +41 91 696 60 60
investor.relations@medacta.ch
*About Medacta:*
Medacta is an international company specializing in the design and
production of innovative orthopaedic products and the development of
accompanying surgical techniques for joint replacement, spine surgery, and
sports medicine. Established in 1999 in Switzerland, Medacta's products and
surgical techniques are characterized by innovation. Medacta is a pioneer in
developing new offerings on the basis of minimally invasive surgical
techniques, in particular its Anterior Minimally Invasive Surgery ("AMIS")
technique for hip replacements. Medacta has leveraged its orthopaedic
expertise and comprehensive understanding of the human body to develop the
sophisticated "_MySolutions_" technology, which offers surgeons highly
personalized pre-operative planning and implant placement methodologies by
creating advanced personalized kinematic models and 3D planning tools for
use in hip, knee, shoulder and spine procedures.
*Disclaimer *
This press release has been prepared by Medacta Group SA ('Medacta' and
together with its subsidiaries, 'we', 'us' or the 'Group'). The information
contained in the press release does not purport to be comprehensive. Please
refer to the Medacta 2019 Annual Report available on our website at
https://www.medacta.com/EN/investors [4].
*Forward-looking information*
This press release has been prepared by Medacta and includes forward-looking
information and statements concerning the outlook for our business. These
statements are based on current expectations, estimates and projections
about the factors that may affect our future performance. These
expectations, estimates and projections are generally identifiable by
statements containing words such as 'expects,' 'believes,' 'estimates,'
'targets,' 'plans,' 'outlook' or similar expressions.
There are numerous risks and uncertainties, many of which are beyond our
control, that could cause our actual results to differ materially from the
forward-looking information and statements made in this press release.
Currently, it is very difficult to provide a meaningful prediction on how
the Swiss governmental action in response to the ongoing outbreak of a novel
coronavirus disease (COVID-19) will affect the Medacta's operations and how
long such measures will remain in place. The COVID-19 outbreak has caused,
and may continue to cause, economic instability and a significant decrease
of total economic output in the affected areas and globally. The impact of
the COVID-19 outbreak on the general economic environment in the markets in
which Medacta operates remain uncertain and could be significant. In
addition, other important factors that could cause such differences include:
changes in the global economic conditions and the economic conditions of the
regions and markets in which the Group operates; changes in healthcare
regulations (in particular with regard to medical devices); the development
of our customer base; the competitive environment in which the Group
operates; manufacturing or logistics disruptions; the impact of fluctuations
in foreign exchange rates; and such other factors as may be discussed from
time to time. Although we believe that our expectations reflected in any
such forward-looking statement are based upon reasonable assumptions, we can
give no assurance that those expectations will be achieved.
*Alternative Performance Measures*
This press release contains certain financial measures of historical
performance that are not defined or specified by IFRS, such as "constant
currency", "EBITDA", "Adjusted EBITDA" or "CORE EBITDA", "Free Cash Flow",
"Adjusted Free Cash Flow", "Net Debt" and "Leverage". Reconciliation of
these measures as well as "CORE" financial measures is provided in the
"Alternative Performance Measures" (APM) section of our 2019 annual report.
These Alternative Performance Measures (APM) should be regarded as
complementary information to, and not as a substitute for, the IFRS
beginning performance measures. For definitions of APM, together with
reconciliations to the most directly reconcilable IFRS line items, please
refer section headed "Alternative Performance Measures" of the 2019 annual
report.
The 2019 annual report is available at
https://www.medacta.com/EN/financial-reports [1].
[1] Alternative Performance Measures: This press release contains certain
financial measures of historical performance that are not defined or
specified by IFRS, such as "constant currency", "EBITDA", "Adjusted EBITDA"
or "CORE EBITDA", "Free Cash Flow", "Adjusted Free Cash Flow", "Net Debt"
and "Leverage". Reconciliation of these measures as well as "CORE" financial
measures is provided in the "Alternative Performance Measures" (APM) section
of the 2019 annual report. These Alternative Performance Measures (APM)
should be regarded as complementary information to, and not as a substitute
for the IFRS beginning performance measures. For definitions of APM,
together with reconciliations to the most directly reconcilable IFRS line
items, please refer section headed "Alternative Performance Measures" of the
2019 annual report. The 2019 annual report is available at
https://www.medacta.com/EN/financial-reports
End of ad hoc announcement
Language: English
Company: Medacta Group SA
Strada Regina
6874 Castel San Pietro
Switzerland
Phone: +41 91 696 6060
E-mail: info@medacta.ch, investor.relations@medacta.ch
Internet: www.medacta.com
ISIN: CH0468525222
Listed: SIX Swiss Exchange
EQS News ID: 1015607
End of Announcement EQS Group News Service
1015607 06-Apr-2020 CET/CEST
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