Quarterly Financial Report. as of March 31, Qarterly Financial Report. as of March 31, 2010

Transcription

1 Quarterly Financial Report as of March 31, 2010 Qarterly Financial Report as of March 31, 2010 PULSION Quarterly Financial Report as at March 31,

2 PULSION at a glance PULSION (Group) according to IFRS Q I Q I Jan-March Jan-March Change Q I in % Revenues KEUR 7,505 6,795 7,505 6,795 10% Gross profit KEUR 5,001 4,453 5,001 4,453 12% Operating expenses KEUR 3,938 3,946 3,938 3, % EBIT KEUR 1, , % Group net profit (after minority interests) KEUR % Cash flow from operating activities KEUR % Shareholders' Equity (as of March 31) KEUR 17,483 16,463 17,483 16,463 6% Shareholders' Equity percentage (as of March 31) % 67% 68% 67% 68% Total assets (as of March 31) KEUR 26,232 24,244 26,232 24,244 8% Employees (average) Number % Revenue per employee KEUR % PULSION Quarterly Financial Report as at March 31,

3 Report of the Management Board To the Shareholders, Ladies and Gentlemen, PULSION has got off to a good start in the current year. The pace of growth seen in 2009 continued to accelerate in the first quarter 2010 with revenues up by 10.4 % against the same period last year. This growth rate is higher than the mid-single digit percentage range forecast for the year as a whole. The Group s first-quarter performance at an EBIT level has also been good, more than doubling to KEUR 1,075 compared to the previous year s figure of KEUR 505. The EBIT margin for the first quarter 2010 was 14.3 % (Q I 2009: 7.4%). Interim Group Management Report of PULSION Medical Systems AG for the period from January 1 to March 31, 2010 Revenues Business Units Q I Q I Change Business Unit * in % KEUR KEUR Critical Care Monitors 1,344 1,488-10% Disposables 5,212 4,358 20% Subtotal 6,555 5,846 12% Perfusion Monitors % Disposables % Subtotal % Total 7,505 6,795 10% *Previous year s figures restated retrospectively to bring them in line with current management reporting. The strongest growth recorded in the first quarter 2010 was by the Critical Care business unit which increased revenues by 12%. Revenues from disposable products, which generate better margins, grew by as much as 20%. Revenues from monitors were slightly lower than in the previous year in line with budget. This positive development largely reflects the success of the BTR Back to the Roots project which focuses on the best use of technologies at a patient level and less on the placement of monitors. PULSION Quarterly Financial Report as at March 31,

4 The sales performance of the Perfusion business unit was a disappointment, with revenues stagnating at their previous year s level. At the same time, however, the installed base of the newly introduced PDE monitors for use in surgery was substantially increased. Regions KEUR Q I Q I Change in % Germany 2,927 2,497 17% Austria % Switzerland % Europe (non DACH) 3,044 2,951 3% US % Australia-Pacific % Other % Total 7,505 6,795 10% The core region for PULSION s marketing is Europe. Above-average growth was achieved with direct sales business in almost all countries in the DACH region (Germany, Austria and Switzerland) and Western Europe. 87% (EUR 6.5 million) of revenues were generated in Europe in the first three months of 2010, up 10% against the same period last year. The benefits of the new sales structure within sales and the strict allocation of resources on the basis of potential reward are beginning to be felt. The new approach focuses on recruiting sales staff with medical experience and training them in conjunction with PULSION s international campaign management. Revenues from distribution business stagnated in the first quarter 2010 at EUR 1.8 million. The level of business done in the USA was down both on budget and on the previous year's actual figure, with first-quarter revenues at KEUR 150 compared with KEUR 179 one year earlier. Sales generated in Australia grew by 1% to KEUR 158. At the same time, first-quarter revenues generated with dealers outside Europe (Other) grew by 21% to KEUR 700. PULSION Quarterly Financial Report as at March 31,

5 Earnings performance The small improvement in the first-quarter gross margin (up from 65.5 % to 66.6 %) was largely attributable to the product mix since the proportion of disposable products (which generate better margins) went up sharply. The improvement in the gross margin is only small because first-quarter cost of sales was adversely affected by exceptional factors amounting to approximately KEUR 150. Selling and marketing expenses and general and administrative expenses decreased both in absolute and percentage terms compared to the first quarter last year. The only increase was in research and development expenses which rose in line with budget. The introduction of new products at the ISICEM congress at Brussels in March 2010 met with great interest. The new monitoring platform (PULSIOFlex) can be tailored to suit specific situations and patient s needs. This concept also includes the use of the new ProAQT technology for use on relatively stable patients which, in combination with PiCCO Technology, broadens the range of applications in clinics. Since the new products will only become available on the market in the fourth quarter 2010, it will not be possible to reliably measure the success of these products until The sharp increase in revenues, the small improvement in the gross margin and the decrease in operating costs resulted in EBIT doubling to KEUR 1,075 (Q I 2009: KEUR 505). The EBIT margin, at 14.3 % (Q I 2009: 7.4%), came very close to its previous best level recorded in Net assets position There were no significant changes in the net assets position compared to December 31, On the assets side of the balance sheet, intangible assets increased by KEUR 123 as a result of the capitalization of development, patent and product approval costs amounting to KEUR 245 (less scheduled amortization). Property, plant and equipment were practically unchanged. Inventories were reduced by KEUR 192 (approximately 4 %). This corresponds to a period of 179 days (Q I 2009: 175 days) which is still considered to be too high. Cash and cash equivalents (including pledged cash) went up by KEUR 217 to stand at KEUR 4,966 at March 31, On the equity and liabilities side of the balance sheet, current liabilities to banks were reduced in line with budget. Provisions decreased following the agreement reached in March 2010 to terminate the contract of a former member of the Management Board (who had left the company in 2009) on mutually agreed terms. The provision recognized on the consolidated financial statements for the year ended December 31, 2009 was adequate. The equity ratio remained virtually unchanged at approximately 67% (March 31, 2009: 68%). PULSION Quarterly Financial Report as at March 31,

6 Financial position IFRS Q I Q I KEUR Group net profit (after minority interests) Minority interests Amortization and depreciation of intangible assets and property, plant and equipment Interests received 5 12 Interests paid Income taxes received 0 0 Income taxes paid Changes in other assets and liabilities Changes in deferred taxes Changes in tax receivables / tax payables Changes in provisions Other non-cash income and expenses Cashflow from operating activities (before changes in net working capital) 1, Changes in receivables Changes in inventories Changes in trade accounts payable Changes in net working capital Cashflow from operating activities Purchase of intangible assets Purchase of property, plant and equipment (without monitors) Purchase of monitors Proceeds from disposal of intangible assets 0 0 Proceeds from disposal of property, plant and equipment Cashflow from investing activities Free Cash Flow The cash flow from operating activities (before change in net current assets) improved perceptibly from KEUR 280 to KEUR 1,090. The improvement was due primarily to the higher first-quarter group net profit (after amounts attributable to minority interests). By contrast, the cash flow from changes in net current assets deteriorated from a positive KEUR 691 to a negative KEUR 99. Overall therefore, the cash flow from operating activities only improved by KEUR 20, rising from KEUR 971 to KEUR 991. As stated above, good management of net current assets remains a key objective for the Management Board in The cash outflow from investing activities amounted to KEUR 572 for the first quarter While capital expenditure remained at a similar level to the previous year, cash proceeds from the disposal of items of property, plant and equipment decreased by KEUR 226. The main reason for this was a sell-off of monitors in the Asian region during the first quarter PULSION Quarterly Financial Report as at March 31,

7 Overall, free cash flow (i.e. before cash flow from financing activities) fell to a disappointing KEUR 419, corresponding to an EBIT/free cash flow conversion rate of only 39%. The figure for the same quarter last year was 119%. Capital expenditure Capital expenditure for the first three months of the year was unchanged at approximately EUR 0.7 million. Capital expenditure related to the following: EUR 0.3 million was invested in placing loan equipment on the market, in addition to demonstration, study and test equipment, hospitals also have the opportunity to use PULSION technologies in return for purchase volume agreements for consumable products. Capital expenditure in this area in the corresponding quarter last year totalled EUR 0.3 million. EUR 0.2 million was invested in intangible assets including in particular, the capitalization of product and software development costs and the cost of acquiring patents. EUR 0.2 million was invested in technical equipment, plant and machinery as well as other equipment, furniture and fixtures. The capital expenditure ratio (capital expenditure /revenues) for the first quarter was 9% (Q I 2009: 10%). Personnel PULSION had an average worldwide workforce in the first quarter 2010 of 134 employees (Q I 2009: 142). This represents a decrease of 6%. The fluctuation on a quarter-by-quarter basis (4%) was within the normal range. As a result of the increased level of revenues and the reduction in the head count, annualized revenues per employee increased by 17% from KEUR 191 to KEUR 224. Risks and opportunities Risks and opportunities and the risk management system of PULSION AG are described in the Annual Report The situation described in that report has not changed significantly. Outlook The Management Board continues to forecast that revenues will rise in 2010 within a mid-single digit percentage range and that EBIT at an operating level (i.e. adjusted for exceptional items) will improve on a similar scale. The operating EBIT in 2009 excluding exceptional items amounted to EUR 3.5 million. Munich, May 2010 The Management Board PULSION Quarterly Financial Report as at March 31,

8 Consolidated Balance Sheet of PULSION Medical Systems AG as of March 31, 2009 IFRS ASSETS March 31, 2010 Dec. 31, 2009 KEUR Non-current assets 9,587 9,419 Intangible assets 4,098 3,975 Property, plant and equipment 5,294 5,246 Investment property Current assets 16,645 16,328 Inventories 4,972 5,164 Trade accounts receivable 5,622 5,582 Other current assets 1, Tax receivables 65 0 Cash and cash equivalents* 4,966 4,749 Total assets 26,232 25,747 IFRS EQUITY AND LIABILITIES March 31, 2010 Dec. 31, 2009 KEUR Equity 17,483 16,981 Subscribed capital 9,577 9,577 Additional paid-in capital 1,427 1,416 Statuatory reserve 1 1 Other reserves Accumulated profit 6,597 6,052 Minority interests Non-current liabilities 2,756 2,446 Provisions Liabilities to bank Other liabilities Deferred taxes 1,773 1,461 Current liabilities 5,993 6,320 Provisions Liabilities to banks Trade accounts payable 1,476 1,513 Lease liabilities Tax payables Other liabilities 2,596 2,794 Total equity and liabilities 26,232 25,747 * including fixed term deposits of KEUR 105 (Dec. 31, 2009 KEUR 105) pledged as security PULSION Quarterly Financial Report as at March 31,

9 Consolidated Income Statement of PULSION Medical Systems AG for the period from January 1 to March 31, 2010 IFRS Q I Q I Jan-March Jan-March KEUR Sales 7,505 6,795 7,505 6,795 Cost of sales -2,504-2,342-2,504-2,342 Gross profit 5,001 4,453 5,001 4,453 in % of sales 67% 66% 67% 66% Selling and marketing expenses -2,558-2,620-2,558-2,620 Research and development expenses General and administrative expenses Other operating expenses Other operating income Operating profit 1, , Exchange losses Exchange gains Earnings before interest and taxes (EBIT) 1, , in % of sales 14% 7% 14% 7% Interest expenses Interest income Earnings before taxes (EBT) 1, , Income taxes Group net profit (before minority interests) of which attributable to shareholders of the group parent company of which attributable to minority interests Earnings per share Earnings per share after minority interests (undiluted) Earnings per share after minority interests (diluted) Average number of shares in circulation (undiluted) 9,577,302 9,577,302 9,577,302 9,577,302 Average number of shares in circulation (diluted) 9,577,302* 9,577,302* 9,577,302* * *The current average share price does not result in any dilutive effects. PULSION Quarterly Financial Report as at March 31,

10 Reconciliation of Result to Total Comprehensive Income of PULSION Medical Systems AG for the period from January 1 to March 31, 2010 IFRS Q I Q I KEUR Group net profit (before minority interests) Exchange differences on translating foreign operations Exchange differences on net investment in subsidiaries Income and expenses recognised directly in equity Total comprehensive income of which attributable to minority interests of which attributable to owners of the parent company Total comprehensive income for the period Statement of Changes in Equity of PULSION Medical Systems AG as of March 31, 2010 IFRS KEUR Subscribed capital Additional paid-in capital Statuatory reserve Accumulated deficit / profit Other reserves Minority interests Total Balances at January 1, ,577 20, , ,240 Exchange differences Group net profit Total result for the period Employee share option programs Total items directly recognised in equity Total Balances at March 31, ,577 20, , ,463 Balances at January 1, ,577 1, , ,981 Exchange differences Group net profit Total result for the period Dividends Employee share option programs Total items directly recognised in equity Total Balances at March 31, ,577 1, , ,483 PULSION Quarterly Financial Report as at March 31,

11 Consolidated Statement of Cash Flows of PULSION Medical Systems AG for period from January 1 to March 31, 2010 IFRS Q I Q I Jan-March Jan-March KEUR Group net profit (after minority interests) Minority interests Amortization and depreciation of intangible assets and property, plant and equipment Changes in receivables Changes in inventories Interests received Interests paid Income taxes received Income taxes paid Changes in other assets and liabilities Changes in deferred taxes Changes in tax receivables / tax payables Changes in trade accounts payable Changes in provisions Other non-cash income and expenses Cashflow from operating activities Purchase of intangible assets Purchase of property, plant and equipment (without monitors) Purchase of monitors Proceeds from disposal of intangible assets Proceeds from disposal of property, plant and equipment Cashflow from investing activities Payments to minority shareholders Repayments of bank borrowings Repayments of financial liabilities Repayments of finance leases Cashflow from financing activities Decrease / increase in cash funds Cash funds at the beginning of the period* 4,644 2,995 4,644 2,995 Cash funds at the end of the period* 4,861 3,475 4,861 3,475 * excluding pledged fixed term deposits of KEUR 105 (January 1, 2010: KEUR 105) PULSION Quarterly Financial Report as at March 31,

12 Explanatory notes 1. Accounting principles The quarterly financial report of PULSION Medical Systems AG as of March 31, 2010 complies with currently valid International Financial Reporting Standards (IFRS) issued by the International Accounting Standard Boards (IASB) and with currently valid Interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC). The same consolidation, accounting, computational methods and estimates have been applied in the Quarterly Financial Report as of March 31, 2010 as in the Consolidated Financial Statements for the year ended December 31, The interim report has been prepared in accordance with IAS 34 (Interim Financial Reporting). A description of the Group s accounting policies is provided in the notes to the consolidated financial statements for the financial year 2009 (see Annual Report 2009). 2. Consolidated companies The group reporting entity as of March 31, 2010 corresponds with the group reporting entity applicable for the consolidated financial statements as of December 31, This is presented on page 84 of the Annual Report Balance sheet items Intangible assets: The carrying amount of intangible assets increased from EUR 4.0 million to EUR 4.1 million during the first three months of the year: Intangible Assets March 31, 2010 Dec. 31, 2009 KEUR KEUR Historical costs 6,167 5,921 Accumulated amortization -2,069-1,946 Carrying amount 4,098 3,975 Intangible assets comprise approvals, patents, capitalized product development costs, software and goodwill. Property, plant and equipment: Capital expenditure on property, plant and equipment relates primarily to monitors loaned out to customers. The carrying amount of property, plant and equipment increased from EUR 5.2 million to EUR 5.3 million during the first quarter 2010 and was made up as follows: PULSION Quarterly Financial Report as at March 31,

13 Property, plant and equipment March 31, 2010 Dec. 31, 2009 KEUR KEUR Historical costs 10,357 10,109 Accumulated depreciation -5,063-4,863 Carrying amount 5,294 5,246 Inventories: Inventories as of March 31, 2010 and December 31, 2009 were made up as follows: Inventories March 31, 2010 Dec. 31, 2009 KEUR KEUR Raw materials and supplies 2,905 2,938 Work in progress Finished goods and goods for resale 1,765 1,995 Total inventories 4,972 5,164 Write-downs totalling KEUR 219 (Q I 2009: KEUR 4) were recognized on inventories in the first quarter Other operating income Other operating income also includes a government grant of KEUR 27 (Q I 2009: KEUR 0). The application was submitted in 2009 in conjunction with the Central Innovation Program for Mittelstand Companies and the approval period runs until September The grant, which is intended to promote one specific development project, is earmarked for a specific purpose and may only be used in conjunction with the specified project in accordance with the terms of the application and only to cover costs incurred in conjunction with that project. The grant is not repayable. The amount recognized relates to expenses incurred in the previous year and the first quarter Further grants will only be paid after approval and audit of the relevant project phases. 5. Segment reporting In accordance with IFRS 8, PULSION reports on its operating segments based on the way information is reported internally to the chief operating decision maker and in line with the way that the chief operating decision maker in each operating segment checks that information. Information on operating segments is presented on the basis of geographical regions (management approach). Items are allocated to geographical segments on the basis of the location of the relevant legal entities. Inter-segment transactions are based on a cost-plus model. PULSION Quarterly Financial Report as at March 31,

14 Segment information at March 31, 2010 is analysed as follows: KEUR Germany France Rest of Europe USA Australia Reconciliations Group Sales - 3rd parties 4, , ,505 thereof equipment 1, ,531 thereof disposables 3, , ,222 thereof indication / diagnosis Sales - intercompany 1, ,846 0 Depreciation and amortization Impairments Non-cash income and expenses Operating segment result before 1, ,075 interest and taxes Interest expenses Interest income Income taxes Minority interests Group net profit (after Minority interests) 545 Segment assets 41,703 1,654 5, ,580 26,232 Segment liabilities 6,842 4,530 5,520 6,916 3,237-18,296 8,749 Segment capital expenditure (without monitors) Segment capital expenditure monitors Segment information at March 31, 2009 was as follows: KEUR Germany France Rest of Europe USA Australia Reconciliations Group Sales - 3rd parties 4, , ,795 thereof equipment 1, ,517 thereof disposables 2, , ,358 thereof indication / diagnosis Sales - intercompany 1, ,459 0 Depreciation and amortization Impairments Non-cash income and expenses Operating segment result before interest and taxes Interest expenses Interest income Income taxes Minority interests Group net profit (after Minority interests) 67 Segment assets 39,440 1,209 4, ,896 24,244 Segment liabilities 7,446 3,221 4,765 5,377 2,377-15,405 7,780 Segment capital expenditure (without monitors) Segment capital expenditure monitors PULSION Quarterly Financial Report as at March 31,

15 6. Stock option plans During the first three months of 2010, no stock options were granted to employees or members of the Management Board and no stock options were exercised by employees or members of the Management Board. As of March 31, 2010, 202,000 stock options were held by employees and none were held by members of the Management Board. As in the previous year, the expense of KEUR 11 (Q I 2009: KEUR 19) for granting stock options in conjunction with stock option plans is reported within personnel expense. 7. Earnings per share Earnings per share are calculated in accordance with IAS 33 on the basis of consolidated earnings for the first three months and the weighted average number of shares and exercisable option rights in circulation during the reporting period. Q I 2010 Q I 2009 Weighted average number of shares (undiluted) Number 9,577,302 9,577,302 Dilutive effect of options Number 0 0 Weighted average number of shares (diluted) Number 9,577,302 9,577,302 Group net profit (after minority interests) KEUR Earnings per share (undiluted) EUR Earnings per share (diluted) EUR Dividends No dividends were paid during the period under report. 9. Order book and price trends Since PULSION processes customer orders within a few days, it has virtually no order backlog. Due to the unique features of its products and the potential cost savings to be gained compared to traditional and alternative methods, PULSION does not currently face any particular pressures from competitors which could affect the level of pricing. 10. Seasonal and cyclical influences As a group with worldwide operations, PULSION is exposed to various economic trends. As a result of its innovative and cost-saving technologies, the impact of cyclical economic factors on the business model is not currently significant. PULSION Quarterly Financial Report as at March 31,

16 11. Events after the end of the reporting period There have been no significant events after the balance sheet date. 12. Litigation Dr. Dr. Pfeiffer and UP Med AG i.l. filed an application with the Regional Court I of Munich for enforcement of the settlement dated January 28, 2009, since, allegedly, the publication of a press release by PULSION relating to the settlement agreement had not been published in accordance with the contractual agreement. Based on the assessment of attorneys representing PULSION in this matter, the application is unfounded. A provision has therefore not been recognized. As with all legal proceedings, however, it cannot be ruled out that the court responsible for the proceedings will not have a different legal opinion. The French subsidiary has been sued by an ex-director whose appointment was revoked in the past. The lawsuit was resumed during the financial year 2009 and a provision was recognized in that year on the basis of an assessment of the potential risk. This assessment remains unchanged at March 31, Neither the parent company nor any of the group companies were involved in any other legal disputes or arbitration or similar procedures which could have a significant impact on the financial position of the group. 13. Related parties The parent company is PULSION Medical Systems AG, based in Munich, Germany. Transactions between PULSION AG and its subsidiaries that are also related parties were eliminated on consolidation. These transactions are not commented on in this note on related parties. Transactions with related parties were charged on the basis of arm s length principles. A guarantee of KEUR 60 has been issued on behalf of the Spanish subsidiary. The Company has also issued a comfort letter on behalf of the subsidiary PULSION Pacific Pty. Limited as security for the financing of that company up to December 31, In accordance with IAS 24, the Group also reports all transactions between it and its related parties (including family members). Members of the Management Board and Supervisory Board (and their relatives) have been defined as related parties. An underground parking space has been rented out to Christoph R. Manegold, member of the Management Board, by the Company at cost price for operational use. PULSION Quarterly Financial Report as at March 31,

17 Shareholdings of members of Management Board and Supervisory Board March 31, 2010 March 31, 2009 Shares Options Shares Options Management Board 0 0 1,803,886 45,000 thereof Christoph R. Manegold* thereof Hans-Hubert Schmitt (since Jan. 4, 2010) thereof Dr. Burkhard Wittek (until May 14, 2009)** 0 0 1,761,573 0 thereof Matthias Bohn (until Nov. 30, 2009) ,313 10,000 thereof Frank Posnanski (until Nov. 30, 2009) ,000 * Options held by Christoph R. Manegold have been treated as employee options in accordance with the resolution taken to issue the options. Similarly, shares acquired prior to his appointment to the board, have not been disclosed. ** attributed via FORUM European Smallcaps GmbH. Supervisory Board members gave notice to the Company at March 31, 2010 that they held shares in the Company as follows: Based on the conclusion of a shareholders agreement, Dr. Burkhard Wittek reported at March 31, 2010 that he held 3,237,472 shares which were attributable jointly to pool participants pursuant to 30 (2) p.1.of the German Securities Transitional Act (WpÜG). At March 31, 2010 Frank Fischer, directly and with close family members, holds 56,611 of the Company s shares. In total, 607,231 shares are attributable directly and directly via Mr. Fischer's activities as management board member of Shareholder Value Management AG and Shareholder Value Beteiligungen AG. 13. Contingent assets and liabilities There were no contingent assets or liabilities at the balance sheet date. 14. Unusual items No further items that are unusual because of their nature, size or incidence existed at the balance sheet date. PULSION Quarterly Financial Report as at March 31,

18 Timetable and contacts Events Annual General Meeting May 18, 2010 Munich Half-year financial report August 11, 2010 Quarterly report on 1st 9 months November 11, 2010 Contacts Silvia Klaus Investor Relations Tel: investor@pulsion.com This Quarterly Financial Report contains forward-looking statements. These forward-looking statements represent the judgement of PULSION Medical Systems AG at the date of publication of this Quarterly Financial Report. The actual results achieved by PULSION Medical Systems AG may diverge significantly from the comments made in the forward-looking statements. PULSION Medical Systems AG disclaims any obligation to update any of these forward-looking statements. PULSION Quarterly Financial Report as at March 31,