Celesio at expected growth course
Stuttgart/Germany (ots) - During the first three months of this year, Celesio continued its growth course. This meant that, overall, the company performed better than the market. As expected, state interventions, particularly those from the previous year, inhibited growth in the first quarter of the current business year.
Celesio increased its Group revenue by 6.2 percent to EUR 5,637.5 million. The trend in the Pharmacies division was positive. During the second half of the prior year and the first quarter of 2007, state measures depressed growth in the Wholesale sector. The Celesio Wholesale divisions in France, Germany and the United Kingdom were particularly effected by this.
The gross profit margin rose from 10.99 percent to 11.16 percent. The causes of this were the higher gross profit margin in the Pharmacies sector and the increasing importance of this division within the Group. The Movianto business unit also contributed to the increase in the absolute gross profit.
As a result of the increased gross profit the EBITDA (earnings before interest, tax and depreciations) rose by 7.4 percent to EUR 201.9 million. Compared with the equivalent time period during the prior year, return on sales, measured against the EBITDA, increased by four base points to 3.58 percent
Profit before tax rose by 4.3 percent to EUR 145.1 million.
Within the first three months of 2007, Celesio increased its net profit by 3.7 percent, from EUR 98.8 million to EUR 102.5 million. Earnings per share rose by 3.7 percent to EUR 0.60 during the first three months of 2007.
From January to March 2007, cash flow increased by 5.1 percent compared with the same period in the prior year, taking it to EUR 138.3 million. Consequently, it was possible to finance not only current investments but also acquisitions entirely from the cash flow.
Celesio set for further growth
State interventions, especially from the second half of 2006, will continue to have an impact on market growth and therefore also on the development of revenue in 2007. This is especially true for Germany, France and the United Kingdom. Furthermore, the new health reform came into force in Germany on 1 April 2007. It is still unclear, however, what specific effects this reform will have on the market. In France, the government is discussing further state measures for the healthcare sector.
In spite of this, Celesio continued to record growth during the first three months of 2007. Celesio's management board is convinced that this positive trend will continue.
In 2007, Celesio Wholesale will grow organically with the comparable market. The business division will cushion the impact of state interventions and excessive competition in Germany with focused operational measures. These include a comprehensive range of services, improved operating procedures and strict cost management.
With regard to the Pharmacies division, the Celesio management board estimates organic growth above the comparable market during the current fiscal year. Acquisitions and the opening of new premises should further strengthen the business division.
Great development opportunities exist for the Celesio Solutions business division in both the medium and long-term. The expansion of the range of services and of storage capacities creates the necessary conditions for Movianto to grow further during the 2007 fiscal year. The Celesio management board is certain that the profit made by the service provider pharmexx, in which Celesio has a strategic holding, will continue on its positive course.
Growth rate of profit before tax for 2007 should be higher than that
In 2007, Celesio will invest 150 to 170 million euros in the existing business. The majority of this amount will be spent on replacement investments, optimising the subsidiary network of Celesio Wholesale and modernising pharmacies.
During the second and third quarters of 2007, the profit growth rate will continue to lie significantly below the growth rate for 2007 as a whole. The first quarters of 2007 will be characterised by the state measures that came into force during 2006, particularly in Germany, France and the United Kingdom. In 2007, for the first time, the effect of these measures will be tangible throughout the entire year, particularly as regards market growth. The absence of the extraordinary items from the previous year is expected to lead to a disproportionately high increase in profit during the fourth quarter of 2007.
For 2007 as a whole, the rise in profit before tax is inspected to be higher than the growth rates of the previous year. This estimate does not take into account the immediate and medium-term effects of the acquisition of the DocMorris group, which was announced on 26 April 2007. As regards the multi-year average, the Celesio management board remains convinced that the profit before tax will increase by an amount in double figures.
Overview of key financial figures
1st quarter 2006 2007 Change in percent
Revenue EUR 5.3 bn EUR 5.6 bn 6.2
Gross profit EUR 583.2 m EUR 628.9 m 7.8
EBITDA EUR 187.9 m EUR 201.9 m 7.4
EBIT EUR 163.6 m EUR 175.5 m 7.3
Profit before tax EUR 139.2 m EUR 145.1 m 4.3
Net profit EUR 98.9 m EUR 102.5 m 3.7
Cash flow EUR 131.6 m EUR 138.3 m 5.1
Earnings per share *EUR 0.58 EUR 0.60 3.7
*Adjusted to take account of the 1:2 share split
About Celesio Group
In 2006 Celesio generated 21.6 billion euros revenue. More than 36,000 people work for the company. Celesio operates in 16 countries. The three business divisions Wholesale, Pharmacies and Solutions cover the whole spectrum of pharmaceutical distribution and services. In Wholesale 135 branches bring medicines to pharmacies about 100,000 times every day. About 2,100 pharmacies serve each day more than 500,000 customers. The Solutions division offers pharmaceutical manufacturers logistics and transportation services und supports them with sales and marketing.
Rainer Berghausen, Celesio AG, +49 (0)711.5001-549,