Corporate | 8 March 2011 07:44

STRATEC reports record sales for 2010 and provides financial guidance

STRATEC Biomedical Systems AG / Key word(s): Final Results

08.03.2011 / 07:44

STRATEC reports record sales for 2010 and provides financial guidance

– Sales at EUR 102.0 million (+28.1%; previous year: EUR 79.6 million)
– EBIT at EUR 17.6 million (+19.6%; previous year: EUR 14.7 million)
– Consolidated net income at EUR 13.0 million
(+11.7%; previous year: EUR 11.7 million)
– Earnings per share at EUR 1.14 (+10.7%; previous year: EUR 1.03)
– 2011 guidance: Sales: EUR 110 – 123 million; EBIT margin: > 18.5%
– 2011 – 2013 guidance: Sales CAGR: > 17.0%; EBIT margin 2012 and 2013: > 19.0%
– Proposed dividend increase to EUR 0.50 per share (+11.1%; previous year: EUR 0.45)

Birkenfeld, March 8, 2011

With today's publication of its 2010 Annual Report, STRATEC Biomedical Systems AG, Birkenfeld, Germany, (Frankfurt: SBS; Prime Standard, TecDAX) has announced financial results in accordance with IFRS (International Financial Reporting Standards) for the financial year ending December 31, 2010. These have been audited and granted an unqualified audit opinion.

Financial performance
With sales of EUR 102.0 million in the 2010 financial year, STRATEC reached the upper end of the guidance figures first published in December 2009, even though the most important new market launches by STRATEC's customers only took place at the end of the year and one launch initially scheduled for 2010 was postponed to 2011. This sales performance, equivalent to growth of 28.1% on the previous year's figure of EUR 79.6 million, was mainly driven by revenue from established, marketed systems as well as new pre-serial systems.

As part of an investment program for the subsidiaries it has acquired, STRATEC has continued to make notable investments in developing their structures and personnel, especially in the fourth quarter of 2010. These investments, as well as the fact that the new system launches only took place in November 2010 and the associated, though temporary, weakness in consumables sales, led to an EBIT margin for the 2010 financial year of 17.3%. These late-year system launches, and the resulting order-book timelines, led to an unfulfilled order backlog of approximately EUR 1.8 million for STRATEC's high-margin spare parts and other consumables.

At EUR 13.0 million, consolidated net income for the full year 2010 was 11.7% up on the previous year's figure of EUR 11.7 million. This corresponds to earnings per share of EUR 1.14 (previous year: EUR 1.03).

EBIT Sensitivity analysis
As the 2010 financial year was affected by a number of atypical or non-operational factors, the following sensitivity analysis is intended to portray the Company's underlying business performance excluding the impact of these factors. Excluding the non-operational, non-cash purchase price allocation for the amortization of the Sanguin, Invitek and Ballista subsidiaries, and excluding the milestone payments of EUR 6.6 million associated with a system launch at year end that were released from unfinished services into revenue with a neutral effect on earnings, STRATEC's 2010 EBIT margin would have amounted to 19.3%. As a further illustration of the margin impact of the level of consumable sales on STRATEC's P&L, if consumables had accounted for the same percentage of sales in 2010 as they did in 2009 the EBIT margin would have been increased by an additional 1.4%.

Outlook and extended guidance for 2011 to 2013
STRATEC expects to see further sales growth and an increased EBIT margin in the 2011 financial year. Specifically, the Company expects to generate sales in a range of between EUR 110 million and EUR 123 million in 2011. Based on the sales reported for the 2010 financial year, STRATEC expects to achieve an average sales growth (CAGR) of at least 17.0% over the financial years 2011 to 2013. Consistent with these expectations, the EBIT margin for 2011 should amount to at least 18.5%, rising to at least 19.0% in both 2012 and 2013.

Achievement of, or even potentially exceeding, the upper end of 2011 revenue guidance is dependent on the timing and profile of the forthcoming market launches of new systems by STRATEC's partners, and on their approval in relevant markets.

Dividend proposal
At the Supervisory Board meeting held on Friday, February 25, 2011, it was resolved to propose an 11.1% higher dividend of EUR 0.50 per share for the 2010 financial year for approval by the Annual General Meeting, due to be held on April 14, 2011.

Development in staff totals
Including temporary employees, the STRATEC Group had a total of 440 employees as of December 31, 2010 (previous year: 380). This further significant year-on-year increase in the workforce was due to the expansion in development team capacity, especially at STRATEC's subsidiaries, including the acquisition of Ballista, now STRATEC Biomedical USA.

Other events
STRATEC successfully negotiated a number of major new orders in 2010, of which bioMérieux and Abbott, two further top ten companies in the global diagnostics market, are particularly worthy of note.

A total of 2,281 analyzer systems were delivered in 2010. Based on an average operating lifetime of around 5 years, the installation base therefore rose to around 9,000 systems. Given the sharp rise in the number of systems on the market, STRATEC expects to see a further increase in the proportion of sales generated from consumables and other spare parts.

To extend its development and production capacities, the Company has built and now occupies two new buildings, one in Switzerland, and one at its headquarters in Birkenfeld, Germany. STRATEC therefore has the infrastructure for future growth. Within this investment program, the Company also made further investments in its subsidiaries, both in terms of their development programs and of hiring well-qualified staff.

Hermann Leistner, Chairman of STRATEC's Board of Management, commented: 'The 2010 financial year was once again highly successful. STRATEC laid the foundations for further growth at its existing locations, not least by investing in its development activities and significantly expanding its production capacities. These form part of our medium-term growth strategy, our confidence in which is further illustrated by new orders and feasibility studies across the whole STRATEC Group. We see considerable growth potential here for the coming years. Not only that, we also acquired Ballista, a US company specializing in opto-mechanical system solutions and reader technology, which has now been renamed STRATEC Biomedical USA. This acquisition has further boosted our presence in the USA, where many of our customers are based. Recent deals with bioMérieux and Abbott will not only support our growth beyond 2012, but are further confirmation of the shift within the IVD industry of diagnostics companies focusing on core activities and outsourcing their requirements for automation solutions to specialist partners, such as STRATEC. With another year of positive performance secured, we are pleased to be able to allow our shareholders to participate in the Company's success through the dividend, which has now increased for the seventh consecutive year'.

2010 Annual Report
The 2010 Annual Report of STRATEC Biomedical Systems AG can be found of the company's internet site at www.stratec.com > Investor Relations > IR News > Financial Reports.

Forthcoming dates
The interim report as of March 31, 2011 will be published on May 3, 2011.

The Annual General Meeting of STRATEC Biomedical Systems AG will be held in Pforzheim on Thursday, April 14, 2011. The invitation to the Annual General Meeting will be forwarded to STRATEC shareholders via their depositing banks in good time ahead of the Annual General Meeting.

About STRATEC
STRATEC Biomedical Systems AG (www.stratec.com) designs and manufactures fully automated systems for its partners in the fields of clinical diagnostics and biotechnology. These partners market such systems, in general together with their own reagents, to laboratories, blood banks and research institutes around the world. The company develops its products on the basis of its own patented technologies. Shares in the company (ISIN: DE0007289001) are traded in the Prime Standard segment of the Frankfurt Stock Exchange, and are a constituent of the Deutsche Börse TecDAX.

The STRATEC Group consists of the publicly listed parent company STRATEC Biomedical Systems AG as well as subsidiaries and second-tier subsidiaries in Germany, the USA, the UK, Switzerland and Romania.

Further information can be obtained from:
STRATEC Biomedical Systems AG
André Loy, Investor Relations
Gewerbestr. 37, 75217 Birkenfeld
Germany
Phone: +49 7082 7916 190
Fax: +49 7082 7916 999
ir@stratec.com
www.stratec.com

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Language:	English
Company:	STRATEC Biomedical Systems AG
	Gewerbestraße 37
	75217 Birkenfeld
	Deutschland
Phone:	+49 (0)7082 7916 0
Fax:	+49 (0)7082 7916 999
E-mail:	info@stratec.com
Internet:	www.stratec.com
ISIN:	DE0007289001
WKN:	728900
Listed:	Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin, Düsseldorf, München, Stuttgart

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114691  08.03.2011