Guerbet: 2020 Half-year results
2020 half-year results
- Revenue affected by the COVID crisis
- -9.2% at current exchange rates at €363.7 million
- -8.4% at constant exchange rates (CER)1 at
€367.1 million
- Satisfactory results in the midst of COVID
- Strict management of operating costs
- EBITDA margin rate of 14.7% of revenue
- Operating income of €25.4 million
- Net income of €8.2 million
- Improvement of the already very solid financial
structure
- Sharp improvement in WCR
- Cash flow generation increase
- Net debt decrease
- Continued transformation of the Group
- Development strategy roadmap maintained: diagnostic imaging,
interventional imaging, digital solutions, and artificial
intelligence
- Reinforcement of the Executive Committee
- 2020 objectives: EBITDA margin around 14%
- Second-half revenue comparable with the first half, leading to
a decrease of approximately 10% over the year at CER
- Long-term reduction of structural costs, improving operational
leverage
- Acceleration of the transformation
Villepinte, September 23, 2020 – Guerbet
(FR0000032526), a global specialist in contrast agents and
solutions for medical imaging, announced its consolidated results
for the first half of 2020.
On the occasion of this publication, David Hale,
Chief Executive Officer of Guerbet, stated: “Together we’ve shown
agility and exemplary resilience during this unusual period. In
that respect, I’d like to give warm thanks to all our staff. We’ve
also implemented strict budgetary discipline to return to our path
to sustainable development. During this period, we continued the
roadmap on our promising projects: continued R&D, digitization,
and an active search for acquisitions in Interventional Imaging.
With a portfolio of quality products in growing markets, a
reinforced Executive Committee, and a solid financial structure,
all the pieces are there to speed up our profitable growth once
business will be back to normal”.
Europe and the Americas impacted by the
health crisis, good sales in Asia
The health crisis had a major impact on the
first half of the year. Since the crisis began, Guerbet has taken
swift action to ensure employee safety and business continuity. All
of the Group’s production plants and logistics centers around the
world continued to operate.
The postponement of non-essential radiological
examinations and procedures by radiologists, combined with
spontaneous cancellations by certain patients and the increase in
longer disinfection and protection measures due to SARS-Cov-2,
impacted activity, especially MRI but also CT/Cath Lab.
The development of artificial intelligence
solutions and digital solutions continued without any impact on
project progress or on their actual market release date. Regarding
Gadopiclenol, the recruitment of phase IIIb patients was logically
slowed down during the lockdown, delaying the process in progress
accordingly. The market release is still planned for the first part
of 2023.
Revenue was €363.7 million at June 30, down
9.2% compared with the first half of 2019, including an unfavorable
forex impact of €3.4 million (€367.1 at constant exchange
rates). This decrease at constant exchange rates was driven by
sales drop of 21.2% in Europe and 13.6% in the Americas. In Asia,
the implementation of Go-Direct in Japan and good sales in China
led to 9% increase.
Diagnostic Imaging revenue was
€308.4 million, compared with €354.6 million in the first
half of 2019, down 13.0% (-11.9% at CER). The main reason was the
impact of the health crisis following the lockdown in most
countries.
- MRI sales decreased 18.7% (identical at
constant exchange rates) to €110.9 million;
- CT/Cath Lab revenue was down 9.7% at
€196.0 million with reduced volumes across all products in the
range except for Xenetix® used in some countries for the diagnostic
of the most serious Covid cases (At CER, revenue for the half-year
period was €199.9 million, down -7.9%).
Interventional Imaging
continued to be driven by Lipiodol® sales. Its revenue totaled
€36 million, up 3.1% (+1.9% at CER) from €34.9 million in
the same period last year.Satisfactory results under
unprecedented health conditions
In millions of eurosConsolidated financial statements (IFRS) |
H1 2019 |
H1 2020 |
Revenue |
400.6 |
363.7 |
EBITDA (2) |
61.6 |
53.3 |
% of revenue |
15.4% |
14.7% |
Operating income |
22.3 |
25.4 |
% of revenue |
5.6% |
7.0% |
Net income |
19.0 |
8.2 |
% of revenue |
4.8% |
2.3% |
Net Debt |
358.1 |
269.3 |
The financial statements for the first half of 2020, approved by
the Board of Directors on 23 September 2020, underwent a limited
review by the statutory auditors. The statutory auditors’ report is
currently being drawn up.
EBITDA stood at €53.3 million compared with
€61.6 million in the first half of 2019. However, it
represents 14.7% of revenue for the period, which was a
satisfactory performance for the Group given the significant drop
in activity.
The EBITDA margin rate was maintained thanks to
strict budgetary discipline. It concerned sales and marketing costs
and the acceleration of the “Cost to Win” plan. The total reduction
of expenditures over the first half of the year was around
€20 million.
As of June 30, 2020, operating income totaled
€25.4 million and represented 7.0% of revenue. Net income was
€8.2 million compared with €19.0 million at June 30,
2019. This decrease between the two periods is primarily explained
by significant favorable forex gains in 2019 as well as the
write-down of the Canadian subsidiary’s assets in June 2020 for
€5.7 million in anticipation of the sale of the Montreal
production plant on July 15, 2020, associated with the agreed sale
price.
Sound financial structure
As of June 30, 2020, shareholders’ equity
amounted to €374.9 million compared with €367.9 million
for the same period last year. The Group has reduced its debt
dramatically. At the end of June, the net debt/EBITDA ratio was
2.61 compared with 3.06 at June 30, 2019. This improvement brought
net debt to €269.3 million at June 30, 2020, compared with
€358.1 million at the end of the first half of 2019.
Stronger governance
To accelerate its transformation and achieve its
strategic ambitions, the Group recently announced the reinforcement
of its Executive Committee with four new functions dedicated to
Diagnostic Imaging and Interventional Imaging franchises and its
Asia-Pacific, Americas, and EMEA regions.
2020 outlook
The future of the health situation remains
uncertain, and the gradual upturn in activity is still
inconsistent. July benefited from a restocking effect, but activity
fell in August.
In the coming months, the Group’s activity is
expected to be affected by the initial sales of the generic of
Dotarem® in the United States. The Group believes that the change
in Dotarem® volumes and prices should be comparable with Europe,
where the generic has already been available for more than two
years. Moreover, Guerbet should continue to benefit from the good
performance of Lipiodol® and the strength of Xenetix® and
Optiray®.
Given the impact of the generic and against the
backdrop of a stabilized health crisis with normal operation of the
healthcare system, the Group expects second-half revenue to be
largely comparable with the first-half revenue, down 12% compared
with 2019 at constant exchange rates. On this basis, the Group
expects EBITDA for the 2020 financial year to be around 14% of
revenue.
Lastly, the Group is confident that it can lower
its level of structural costs for the long term with expectations
of a very favorable impact on profitability once business is back
to normal.
(1) At constant exchange rates: amounts and
rates of growth are calculated by canceling out the exchange rate
effect, which is defined as the difference between the indicator’s
value for period N, converted at the exchange rate for
period N-1, and the indicator’s value for period N-1.
(2) EBITDA refers to operating income with the net allowance for
amortization, depreciation, and provisions added back in.
Upcoming events:
Publication of revenue at September 30, 2020
October 22, 2020, after
trading
About
Guerbet
Guerbet is a leader in medical imaging
worldwide, offering a comprehensive range of pharmaceutical
products, medical devices, and digital and AI solutions for
diagnostic and interventional imaging to improve patient diagnosis
and treatment. A pioneer in contrast media for more than 90 years,
with more than 2,800 employees worldwide, Guerbet continuously
innovates and devotes 9% of its sales to research and development
in four centers in France, Israel, and the United States. Guerbet
(GBT) is listed on Euronext Paris (segment B – mid caps) and
generated €817 million in revenue in 2019. For more
information about Guerbet, please visit www.guerbet.com
Forward-looking statements
Certain information contained in this press
release does not reflect historical data but constitutes
forward-looking statements. These forward-looking statements are
based on estimates, forecasts, and assumptions, including but not
limited to assumptions about the current and future strategy of the
Group and the economic environment in which the Group operates.
They involve known and unknown risks, uncertainties, and other
factors that may result in a significant difference between the
Group’s actual performance and results and those presented
explicitly or implicitly by these forward-looking statements.
These forward-looking statements are valid only
as of the date of this press release, and the Group expressly
disclaims any obligation or commitment to publish an update or
revision of the forward-looking statements contained in this press
release to reflect changes in their underlying assumptions, events,
conditions, or circumstances. The forward-looking statements
contained in this press release are for illustrative purposes only.
Forward-looking statements and information are not guarantees of
future performance and are subject to risks and uncertainties that
are difficult to predict and are generally beyond the Group’s
control. These risks and uncertainties include but are not limited
to the uncertainties inherent in research and development, future
clinical data and analyses (including after a marketing
authorization is granted), decisions by regulatory authorities
(such as the US Food and Drug Administration or the European
Medicines Agency) regarding whether and when to approve any
application for a drug, process, or biological product filed for
any such product candidates, as well as their decisions regarding
labeling and other factors that may affect the availability or
commercial potential of such product candidates. A detailed
description of the risks and uncertainties related to the Group’s
activities can be found in Chapter 4.8 “Risk management and
risk factors” of the Group’s Universal Registration Document filed
with the French Financial Markets Authority (AMF) under
number D-20-0369 on April 28, 2020, available on the Group’s
website (www.guerbet.com).
For more information about Guerbet, please
visit www.guerbet.com
Contacts
Jérôme
EstampesChief Financial
Officer+33 (0)1 45 91 50 00 |
Financial
CommunicationsBenjamin
Lehari+33 (0)1 56 88 11 25blehari@actifin.fr PressJennifer
Jullia+33 (0)1 56 88 11 19jjullia@actifin.fr |
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