NET PROFIT INCREASED 32% AT TURNOVER GROWTH OF 10%
STRUCTURAL IMPROVEMENT IN CASH FLOW (+42%)
Waregem (Belgium) / Rotterdam (Netherlands)1, March 2, 2010
Key points 2009:
Turnover growth of 10.3% to € 391.3 million
REBITDA increases 10.7% to € 52.7 million
Net profit increases 31.8% to € 19.6 million
Operational working capital decreases 170 basis points to 15.6% of turnover
Cash flow from operating activities very strong: +42.4% to € 39.5 million
Proposed dividend 2009: € 0.36 per share; an increase of 20% compared to 2008
2010 outlook: Turnover growth of between 5% and 10% and a REBITDA that is
expected to grow faster than turnover
The Board of Directors appointed Sabine Sagaert, Mario Huyghe and Dirk Van
Lerberghe to Arseus’ Executive Committee
Arseus is included in the Amsterdam Small Cap Index of NYSE Euronext as of March 2, 2010Ger van Jeveren, CEO of Arseus: “We can look back on an excellent year. Arseus proved resilient enough to deal with the challenging market conditions of 2009 and deliver excellent results. Our main focus has been the structural improvement of cash flow, resulting in an increase of 42%. Our healthy financial situation means we can further strengthen Fagron’s
leading market position in 2010 and consider add-on acquisitions for Arseus Dental, Arseus Medical and Corilus as suitable opportunities arise. Based on the current view and the existing portfolio, we are expecting turnover growth of between 5% and 10% in 2010 and a recurring
EBITDA that is expected to grow faster than turnover.”
1) This press release was sent out by Arseus NV and Arseus BV.
INCOME STATEMENT (x 1,000 euro) H2 2009 H2 2008 2009 2008 Change
Net sales 201,142 184,050 391,315 354,506 +10.3%
Gross margin 95,806 85,940 185,914 165,641 +12.2%
As % of net sales 47.6% 46.7% 47.5% 46.7%
Operating costs -68,559 -61,052 -133,246 -118,052 +12.9%
EBITDA before corporate costs and nonrecurring
result
27,247 24,888 52,668 47,589 +10.7%
As % of net sales 13.5% 13.5% 13.5% 13.4%
Corporate costs -2,993 -2,557 -5,655 -4,963 +13.9%
EBITDA before non-recurring result 24,255 22,331 47,013 42,626 +10.3%
As % of net sales 12.1% 12.1% 12.0% 12.0%
Non-recurring result -2,681 -1,739 -4,488 -3,323 +35.1%
EBITDA 21,574 20,592 42,525 39,303 +8.2%
As % of net sales 10.7% 11.2% 10.9% 11.1%
Depreciation and amortisation -6,341 -5,714 -11,983 -9,269 +29.3%
EBIT 15,233 14,878 30,542 30,033 +1.7%
As % of net sales 7.6% 8.1% 7.8% 8.5%
Financial result
excluding revaluation of financial derivatives
-3,064 -4,860 -6,085 -8,085 -24.7%
Revaluation of financial derivatives -6 -3,961 -1,351 -3,961 -65.9%
Profit before taxes 12,164 6,058 23,107 17,987 +28.5%
Taxes -1,920 -1,055 -3,468 -3,087 +12.3%
Net profit 10,243 5,003 19,639 14,900 +31.8%
Recurring net profit2 12,414 9,723 24,516 20,935 +17.1%
Net profit per share (in €) 0.34 0.16 0.65 0.48 +35.4%
Recurring net profit per share (in €) 0.41 0.32 0.81 0.68 +19.1%
Average number of shares 30,221,206 30,552,487 30,214,757 30,680,209
BALANCE SHEET (x 1,000 euro) 31-12-2009 31-12-2008
Intangible assets 229,455 201,126
Property, plant and equipment 38,631 34,473
Deferred tax assets 19,205 16,598
Other non-current assets 2,241 2,018
Operational working capital 63,336 64,159
Other working capital -28,827 -15,696
Equity 196,352 185,530
Provisions 4,222 3,855
Financial instruments 5,312 3,961
Deferred tax liabilities 4,232 4,941
Net financial debt 113,923 104,391
2) Recurring net profit is defined as net profit before non-recurring items and revaluation of financial derivatives, after
taxes at the group’s effective tax rate.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 2009
Income statement
Consolidated turnover in 2009 amounted to € 391.3 million (2008: € 354.5 million), an increase of 10.3% compared with 2008. Organic growth was 4.1%. More detailed information on the development of turnover is given in the press release dated January 15, 2010, which can be found at www.arseus.com.
Gross margin grew from € 165.6 million to € 185.9 million, an increase of 12.2%. Compared with 2008, gross margin as a percentage of turnover was 79 basis points higher at 47.5%. This improvement is a result of Arseus’ strategy of focusing on total solutions with substantial added value to the healthcare sector.
Operating costs increased by 12.9% from € 118.1 million in 2008 to € 133.2 million in 2009. The cost-saving programme, which focused on Arseus Dental, was fully implemented in 2009, and its effects are expected to become visible in 2010. In 2009, Arseus continued investing in improving the organisation, raising the quality of the middle and senior management and marketing its innovative own products. Operating costs have also increased due to acquisitions.
REBITDA3 grew faster than turnover, adding 10.7%, to € 52.7 million.
Corporate costs as a percentage of turnover remained unchanged at 1.4%.
The non-recurring result was € 4.5 million negative, consisting mainly of restructuring costs at Arseus Medical and Arseus Dental as well as integration costs following acquisitions. In addition, an additional provision of € 0.75 million has been made for a 2002 conflict with a customer regarding the payment of delivered products.
EBITDA increased by 8.2% to € 42.5 million. The operating margin (EBITDA as a percentage of turnover) decreased from 11.1% in 2008 to 10.9% in 2009.
Depreciation and amortisation amounted to € 12.0 million. The increase compared with 2008 was partly caused by the writing down of inventory at Arseus Medical as a result of the cessation of a number of distribution agreements.
The financial result, excluding the revaluation of financial derivatives, amounted to € 6.1 million, a decrease of € 2.0 million compared with 2008, mainly reflecting the net effect of a further decrease in the interest rates in 2009 and a limited increase in the net financial debt.
The revaluation of financial derivatives amounted to € 1.4 million and reflects the lower market value of interest-rate hedges that do not qualify for hedge accounting in accordance with IAS 39. As a non-cash item, it had been deducted from the financial result and is shown separately in the income statement.
The effective tax rate, as a percentage of the profit before taxes, was slightly lower and amounted to 15.0% in 2009.
3) EBITDA before corporate costs and non-recurring result.
Net profit amounted to € 19.6 million (€ 0.65 per share), an increase of 31.8%. Recurring net profit amounted to € 24.5 million, an increase of 17.1% compared with 2008. The recurring net profit amounted to € 0.81 per share.
Balance sheet
The main changes at balance-sheet level can be summarised as follows.
Intangible assets increased by € 28.3 million, mainly due to the recognition of goodwill and other intangible assets relating to acquisitions and the R&D activities of Corilus and Owandy.
Property, plant and equipment increased € 4.2 million, which was caused by the assets of acquisitions and by investments in IT as well as in Fagron’s production facilities in the Netherlands.
Operational working capital4 as a percentage of turnover improved structurally in 2009 and decreased 170 basis points to 15.6%. Despite turnover growth of 10.3% and December’s very strong turnover, the working capital decreased 1.3% to € 63.3 million. This structural improvement is primarily the result of an ongoing focus on tight stock and trade receivables management.
Net financial debt5 increased in 2009 by € 9.5 million to € 113.9 million. With the strong improvement in the operating cash flow, Arseus was nearly able to finance acquisitions, investments and the 2009 dividend payment autonomously. At year-end 2009, the net financial debt/annualised REBITDA ratio was 2.19, fully in compliance with the covenant under the
credit facility, which sets a maximum ratio of 3.5.
In 2009 net operational capex6 amounted to € 16.3 million or 4.2% of turnover; approximately 65% of which was expansion capex. Arseus decided to continue investing in the organisation during the economic crisis. In 2009 additional investments were made in the European rollout of the central ERP system. Furthermore, there was targeted investment in areas that Arseus
expects to grow substantially in the years ahead, such as clean rooms, R&D, software and wheelchairs. Arseus estimates an operational capex of around 4% of turnover again in 2010.
4)Operational working capital is the sum of stock, trade receivables less trade payables.
5) Net financial debt is the sum of long-term and short-term financial borrowings, less cash (excluding financial
instruments) and cash equivalents.
6) Net operational capex is defined as intangible assets, property, plant and equipment that have been acquired or
produced (excluding acquisitions), less assets sold.
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