MARCY L’ETOILE, France–(BUSINESS WIRE)–Sep 4, 2012–Regulatory News:
Solid financial performance:
€128 million in operating income before non-recurring items, up 6.5%
Strong increase in cash flow
Faster expansion in emerging markets:
India: acquisition of molecular biology specialist RAS
Emerging 7 *: organic sales growth of 24%
bioMérieux China: now the Group’s third largest company
The Board of Directors of bioMérieux (Paris:BIM), a world leader in the field of in vitro diagnostics, met today to approve the consolidated financial statements for the six months ended June 30, 2012. The meeting was chaired by Jean-Luc Belingard and attended by the Statutory Auditors, who had performed a limited review of the financial statements.
Consolidated Data
In € millions
Six Months Ended
June 30, 2012
Six Months Ended June 30, 2011
% Change As Reported
Sales
750
673
+11.4%
Operating income before non-recurring items
128
120
+6.5%
Operating income
125
119
+5.0%
Net income of consolidated companies
80
75
+6.5%
Free cash flow
69
36
x 1.9
“Thanks to strict financial discipline, bioMérieux achieved solid first-half results in a challenging economic environment,” said Jean-Luc Belingard, Chairman and Chief Executive Officer. “Consolidated operating income before non-recurring items rose by 6.5% over the period and free cash flow almost doubled. In addition, our presence in emerging markets was deepened during the summer by the acquisition of RAS, an Indian molecular biology company. Backed by our unique strategic positioning, our competitiveness and our robust financial resilience, we are maintaining our 2012 objectives.”
*
Brazil, China, India, Indonesia, Mexico, Russia and Turkey
FIRST-HALF 2012 HIGHLIGHTS
Commercial offer
bioMérieux brought six new products to market in the first half of 2012, including:
VIDAS
®
ANTI-HCV, a test for the diagnosis of hepatitis C. Hepatitis C (HCV) is a virus that causes a serious inflammation of the liver. 130 to 200 million people worldwide suffer from chronic hepatitis C. This test completes the VIDAS ® menu for A, B and C viral hepatitis.
The third version of the Myla® middleware, which is part of the Full Microbiology Lab Automation (FMLA ® ) range. Myla helps to optimize microbiology laboratory workflows and consolidate data, converting them into quickly actionable information for treatment decisions. This third version offers important new features for clinical laboratories, especially for blood culture testing. It may also be used in industrial applications.
For industrial applications, a specialized version of the VITEK®MS mass spectrometry solution for the identification of bacteria and yeast. Compliant with the traceability standards in Title 21 CFR Part 11 of the American Code of Federal Regulations, the solution includes a dedicated database developed by bioMérieux. It is primarily intended for large pharmaceutical laboratories.
In addition, in clinical applications, bioMérieux pursued the process of obtaining FDA clearance to commercialize the VITEK®MS mass spectrometry solution in North America. bioMérieux will file for the corresponding 510(k) dossier before year-end.
Last, the U.S. FDA authorized the sale of the new antibiotic susceptibility test Piperacillin/Tazobactam (TZP) on VITEK ® 2. bioMérieux has also obtained validation from the French Agency for Food, Environmental and Occupational Health and Safety (ANSES, based in Maisons-Alfort) for the ADIAVET™ Schmallenberg virus PCR kit for the detection of the Schmallenberg virus, responsible for an epidemic currently affecting a large number of livestock farms in Europe.
Innovation
Platforms under development
As part of its 2012 – 2015 roadmap, the Company has decided to anchor its growth even more fully in the launch of innovative solutions. In particular, it intends to bring five new platforms to market, each one contributing to improve the medical value of diagnostics, testing processes or laboratory workflow.
– In immunoassays, the new generation VIDAS® instrument will be presented to clinical laboratories during the Journées Internationales de Biologie congress next November in Paris.
– In clinical microbiology, the new automated blood culture system and the incubator incorporating imaging technologies will be brought to market in 2013. This is a particularly important launch for bioMérieux. The two systems meet the automation needs of laboratories. They will help to optimize workflows, enabling technicians to focus on high value-added tasks, while facilitating faster, more reliable clinical decisions to improve patient care.
– In molecular biology, the system under development with the company Biocartis, expected to be launched in 2014, will be able to perform complex tests and integrate all the steps of a molecular assay in a scalable platform.
– In the field of automated point-of-care, bioMérieux and Philips continue their collaboration to create a handheld solution for hospitals. The next technical and analytical milestone is scheduled at the end of this year.
Personalized medicine and theranostics
– At the end of July, bioMérieux filed for U.S. FDA Pre-Market Approval (PMA) for a molecular theranostic test to detect BRAF V600 (V600E and V600K) gene mutations found in several cancers, including melanoma. This test will be used to assist oncologists in choosing the appropriate treatment for patients with metastatic melanoma. Its development follows the collaboration agreement signed by bioMérieux and GSK in May 2010.
– bioTheranostics announced new advances at the 2012 American Society of Clinical Oncology (ASCO) Annual Meeting in June. It presented a prospective study showing significant improvement in the overall survival of patients with cancers of unknown origin and whose oncologic treatment is driven by the results of the CancerTYPE ID ® test. It also announced that it has expanded the biomarker profiles used in its PRECIS SM product line, which helps to predict and track how metastatic tumors respond to treatment.
Operational advances
Integration of AES Laboratoire and ARGENE The process of integrating AES Laboratoire and ARGENE proceeded on schedule during the first half:
– Integrating AES Laboratoire is a priority for 2012. The sales teams of bioMérieux and of the five AES Laboratoire companies are now fully coordinated and, in the Industry Department, a new organization is being deployed.
– ARGENE products are now being commercialized by more than 20 bioMérieux subsidiaries and have been shipped from the International Distribution Center (IDC) since June. The transfer of the production of two ARGENE products to the Grenoble site is ongoing. The validation batches have been produced on schedule.
New commercial subsidiary in Malaysia The international sales network was strengthened with the creation of bioMérieux’s 40 th commercial subsidiary. Based in Malaysia, the new unit is in charge of sales, promotion and maintenance of Group products in the local market.
End of production at the Basingstoke plant As part of the ongoing plan to optimize the manufacturing base, production of culture media at the Basingstoke, UK plant will be terminated in 2013. The leased facility employs eight people.
Deployment of the Global ERP system During the first half, the Global ERP was successfully deployed in Poland, Switzerland and Argentina. Projects carried out during the first half also supported its early July roll-out in Austria, Hungary, Czech Republic and Chile, bringing to twelve the number of countries where the Global ERP has been implemented.
FINANCIAL RESULTS
Sales
*
Net sales for the first six months of 2012 amounted to €750 million, up 11.4% as reported. This represented a year-on-year increase of 8.7% at constant exchange rates and of 2.9% at constant exchange rates and comparable business base (primarily excluding the acquisitions of AES Laboratoire and ARGENE in July 2011 and the divestiture of Dima Diagnostika in early 2012).
Analysis of Sales
In € millions
In %
Sales – Six Months Ended June 30, 2011
673
Currency Effect
+18
+2.7%
Organic Growth (at constant exchange rates and comparable business base)
+19
+2.9%
+8.7%
Change in Business Base
+40
+5.8%
Sales – Six Months Ended June 30, 2012
750
+11.4%
Sales varied by region during the period. Market conditions were difficult in Southern Europe (11% ** of consolidated sales), where governments are trying to cut their public deficits, and in France (11% ** of consolidated sales), where clinical laboratories are continuing to consolidate. Sales in North America (22% of consolidated sales) were stable, reflecting high prior-year comparatives and low consumption of reagents for clinical applications. Demand continued on an upward trend in emerging markets (27% of consolidated sales), with in particular the Emerging 7 reporting organic growth of nearly 24%. bioMérieux China became the Group’s third largest company, with organic growth of 48%.
Sales
by Region
In € millions
Six Months Ended
June 30, 2012
Six Months Ended June 30, 2011
% Change As Reported
% Change
At constant exch. rates & comparable business base
Europe (1)
395
359
+10.1%
0.0%
North America
167
155
+7.7%
-0.4%
Asia-Pacific
126
99
+26.9%
+17.5%
Latin America
62
60
+3.9%
+4.2%
TOTAL
750
673
+11.4%
+2.9%
(1)
Including the Middle East and Africa
Industrial applications turned in a solid performance, with 8.2%, organic growth, and now account for 20% of consolidated sales. Sales of clinical applications increased by 1.9% over the period. After the strong sales reported in 2011, microbiology ended the period up 3.5% on an organic basis.
Sales
by Technology
In € millions
Six Months Ended
June 30, 2012
Six Months Ended June 30, 2011
% Change As Reported
% Change
At constant exch. rates & comparable business base
Clinical Applications
597
568
+5.1%
+1.9%
Microbiology
379
353
+7.3%
+3.5%
Immunoassays
176
175
+0.6%
+0.3%
Molecular Biology
34
32
+9.1%
-8.7%
Other Lines
8
8
-5.9%
+3.9%
Industrial Applications
153
105
+45.3%
+8.2%
TOTAL
750
673
+11.4%
+2.9%
*
The full first-half 2012 business review may be found at
**
Excluding AES Laboratoire and ARGENE
Consolidated income statement
Gross profit amounted to €393 million in first-half 2012, an 8.3% increase from the €363 million reported in the year-earlier period. The improvement was led by the organic and external growth in sales, and by the favorable currency effect. On the downside, acquisition accounting entries concerning AES Laboratoire and ARGENE represented a €3.2-million expense. Expressed in sales percentage, gross margin narrowed by 1.5 point to 52.4%, primarily as a result of the currency effect and changes in the scope of consolidation.
Operating income before non-recurring items* rose by 6.5% (+ €8 million) to €128 million from €120 million in first-half 2011. It represented 17% of sales or 17.9%, excluding the impact of exchange rates on sales and the acquisition accounting entries concerning AES Laboratoire and ARGENE. Selling, general and administrative expenses amounted to €198 million. Reflecting strict operating cost discipline, they represented 26.4% of sales, a 0.6 point improvement despite the faster deployment of the Global ERP system.Research and development expenses rose by 7.4% at constant exchange rates to €79 million, or 10.5% of sales, from €72 million in first-half 2011.R&D tax credits recognized during the period amounted to €8.5 million versus €6.6 million in first-half 2011.
Lifted by the growth in operating income before non-recurring items, operating income rose by 5% to €125 million. It includes €3.1 million in non-recurring items, versus €1.3 million in first-half 2011.
Net financial expense amounted to €4.8 million, up €2 million for the period due to the increase in net debt following the acquisitions of AES Laboratoire and ARGENE in July 2011.
Income tax expense stood at €40 million or 33.4% of pretax income, versus 35.4% in first-half 2011. The improvement notably reflected the lesser impact from loss-making companies.
As a result, net income ended the period up 6.5% at €80 million, or 10.6% of sales, versus €75 million in first-half 2011. Earnings per share came in at €2.01 versus €1.88 in the year-earlier period.
Consolidated cash flow statement
EBITDA** climbed to €172 million from €159 million in first-half 2011, led by the €8 million growth in operating income before non-recurring items and the €5 million increase in operating depreciation and amortization.
Operating working capital requirement rose by €11 million over the period, which was much less than the €48 million increase in first-half 2011. At constant scope of consolidation, it represented 24.6% of sales, versus 25.4% in the year-earlier period, reflecting the sharp decline in trade receivables. In particular, the one-time payment of €28.5 million from Spanish provinces in late June settled almost all of the pre-2012 public hospital receivables. As a result, bioMérieux’s net receivables due from Greek, Portuguese, Spanish and Italian public-sector customers totaled €79 million at June 30, 2012, compared with €100 million at December 31, 2011. Average days sales outstanding were down by eight days as of June 30, 2012, at constant exchange rates and scope of consolidation.
Capital expenditure outlays reached €54 million, compared with €45 million in first-half 2011, including €38 million in industrial capital expenditure versus €30 million in the year-earlier period. Industrial capital expenditure primarily concerned the new Global ERP system, as well as the ongoing upgrade and extension projects at the Group’s main production facilities.
Based on the above, free cash flow before dividends, acquisitions and divestments stood at €69 million for the period, versus €36 million in first-half 2011.
In June 2012, the Company paid a dividend of €0.98 per share, for an aggregate payout of €38.7 million, unchanged from 2011.
During the first half, the Company received payment for the Dima Diagnostika divestiture.
Based on the above, net debt amounted to €94 million at June 30, 2012, compared with €131 million at December 31, 2011. It is financed mainly by commercial paper, backed by the €350 million syndicated revolving line of credit that the Company implemented in April 2012.
*
Operating income before “significant, extraordinary and non-recurring items”, which are included in “other non-recurring operating income and expenses”
**
Operating income before non-recurring items, depreciation and amortization
Other financial highlights
The installed base at June 30, 2012 reached approximately 66,300 instruments, an increase of 1,500 new instruments over the period.
Human resources
The Company had 7,105 full-time-equivalent employees as of June 30, 2012. There were 7,014 full-time-equivalent employees as of December 31, 2011.
SUBSEQUENT EVENT
In late July 2012, bioMérieux acquired a 60% interest in India’s RAS Lifesciences Pvt. Ltd (RAS) for €1.6 million. Based in Hyderabad, RAS is a privately held start-up specialized in molecular diagnostics and does not yet have significant sales. The commercialization of its product range is beginning in specialized laboratories. Its offering is comprised of 26 reagents developed, produced and approved for sale in India. RAS’s expertise, service laboratory and range of reagents, which are intended primarily for the diagnosis of infectious diseases, will enable bioMérieux to commercialize a menu of molecular diagnostic tests primarily in India and, over the medium term, in emerging markets.
2012 OBJECTIVES
In 2012, bioMérieux expects to see sales growth of between 3% and 5% for the year, at constant exchange rates and comparable business base. Until July 2012, this objective excludes the impact of external growth operations, which should add around 3% in growth.
In addition, bioMérieux confirms its full-year objective for operating income before non-recurring items of between €255 million and €270 million.
INVESTOR CALENDAR
Third-quarter 2012 sales: October 23, 2012, after close of trading Investor Day: January 23, 2013
The above forward-looking statements are based, entirely or partially, on assessments or judgments that may change or be modified, due to uncertainties and risks related to the Company’s economic, financial, regulatory and competitive environment, notably those described in the 2011 Registration Document. Accordingly, the Company cannot give any assurance nor make any representation as to whether the objectives will be met. The Company does not undertake to update or otherwise revise any forecasts or objectives presented herein, except in compliance with the disclosure obligations applicable to companies whose shares are listed on a stock exchange.
ABOUT BIOMERIEUX
Advancing Diagnostics to Improve Public Health A world leader in the field of in vitro diagnostics for over 45 years, bioMérieux is present in more than 150 countries through 40 subsidiaries and a large network of distributors. In 2011, revenues reached €1,427 million with 87% of sales outside of France. bioMérieux provides diagnostic solutions (reagents, instruments, software) which determine the source of disease and contamination to improve patient health and ensure consumer safety. Its products are used for diagnosing infectious diseases and providing high medical value results for cancer screening and monitoring and cardiovascular emergencies. They are also used for detecting microorganisms in agri-food, pharmaceutical and cosmetic products. bioMérieux is listed on the NYSE Euronext Paris market (Symbol: BIM – ISIN: FR0010096479). Corporate website: www.biomerieux.com. Investor website: www.biomerieux-finance.com.
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