DGAP-News: aap Implantate AG
/ Key word(s): 9 Month figures
aap Implantate AG ("aap") recorded sales and EBITDA in line with expectations in the third quarter of 2019. aap generated sales of EUR 2.7 million and thus a value at the same level as the corresponding period in the previous year (Q3/2018: EUR 2.7 million). EBITDA amounted to EUR -1.7 million (Q3/2018: EUR -1.5 million) and were burdened by one-time effects of EUR 0.3 million. On a nine-month basis, aap was able to maintain the growth trend of the current financial year and increased sales by +6% to EUR 8.7 million (9M/2018: EUR 8.2 million). EBITDA amounted to EUR -4.9 million (9M/2018: EUR -4.6 million) in the first nine months of 2019 and were subject to significant one-time effects of EUR 1.3 million. Adjusted for these one-time effects, aap recorded an improved recurring EBITDA of EUR -3.6 million in the first nine months of 2019 compared with the same period in the previous year (9M/2018: EUR -3.9 million).
Q3/2019 and 9M/2019 - Major results and progress
- Sales by region: In traditionally weaker Q3 solid sales growth in Germany and slight temporary decline in USA and international business; USA with positive development since end of September 2019 with almost doubling of weekly number of cases year-on-year and increasing interest from national group purchasing organizations with negotiations on first contracts; 9M: continuation of growth trend driven by Germany and international business, further stabilization in USA
- Earnings: EBITDA in 9M subject to significant one-time effects (EUR 1.3 million), primarily from early termination of contract with former CEO, termination of legal disputes and correction of legacies from inventory of US stocks from previous years; in 9M recurring EBITDA, adjusted for one-time effects, improved to EUR -3.6 million (+7%); EBITDA in Q3 burdened by one-time effects (EUR 0.3 million) and temporary decline in gross margin
- Gross margin: Increased cost of materials for pre-production of systems for human clinical study for silver coating technology and of sterile products as well as correction of legacies from inventory of US stocks from previous years with total volume of EUR 0.3 million lead to temporary decline in gross margin in Q3/2019; gross margin from operating activities (adjusted for above effects) increases to 79% in 9M (9M/2018: 78%)
- Costs: Declining cost level (normalized for one-time effects) for personnel and other expenses both in Q3 (+EUR 0.4 million) and in 9M (+EUR 0.3 million)
- Cash flow and balance sheet: Cash need in 9M/2019 totalled EUR 5.8 million; cash holdings amounted to EUR 4.4 million; first-time application of IFRS 16 - Leasing and concluded factoring agreement lead to shifts in balance sheet, income statement and cash flow
- LOQTEQ(R): FDA approval for polyaxial LOQTEQ(R) VA foot and calcaneus systems - Launch in USA and further markets planned for beginning of 2020; continuous focus on adaption of processes and documents to new regulatory requirements of MDR and development of sterile packaging for implants
- Silver coating technology: BfArM approval received for human clinical study; further funding of human clinical study applied for at BMBF, funding decision expected shortly; training of doctors participating in study and preparation of equipment of corresponding clinics with silver-coated implants; for start of study in Germany approval of ethics committees still required, documents submitted, approval expected
- Resorbable magnesium implant technology: Talks with technology-savvy investors to jointly further develop technology; progress on approval pathway agreement with FDA; pilot animal study with University of Colorado started end of September 2019 to generate key preclinical data
*Includes cost of external staff and correction of legacies from inventory of US stocks from previous years.
* Includes cost of personnel measures, termination of legal disputes (net effect), external staff and correction of legacies from inventory of US stocks from previous years.
In the traditionally weaker third quarter, aap recorded solid sales growth (+4%) in Germany, while a slight temporary decline was recorded in the USA (-3%) and in international business (-1%). In the USA, this was due to the termination of a sales relationship with an US distributor, while in international business a quarterly fluctuation was recorded in the BRICS states. In the USA, aap has seen a positive development since the end of September 2019. The number of weekly operations almost doubled compared to the same period of the previous year. In addition, aap is registering an increasing interest from national group purchasing organizations with negotiations on first contracts, which is reflected in the current negotiations on the first contracts. These developments should also be reflected in the corresponding sales momentum in the coming months. On a nine-month basis, the existing growth trend (+6%) was mainly driven by Germany (+5%) and international business (+7%), while the sales development in the USA (+1%) was further stabilized.
The Management Board will further consistently continue its analysis to identify cost reduction and efficiency enhancement potentials. In this context, measures have already been implemented, such as the change of the stock exchange listing and the discontinuation of parts of the standard trauma portfolio. In addition, aap will in future focus even more on sales expansion with higher-margin customers and products, as well as on further driving forward the marketing of its innovative and promising technologies. With a view to its antibacterial silver coating technology, aap will further intensify talks and negotiations with interested global medical technology companies following the approval of the human clinical study by the Federal Institute for Drugs and Medical Devices ("BfArM"). For its innovative resorbable magnesium implant technology aap aims to push forward the further development of this promising technology jointly with partners under aap's management. In this context the Company is currently in talks with technology-savvy investors. All of these measures shall form the basis for sustainable and profitable growth.
 In the consolidated balance sheet of 30/09/2019 EUR 3.7 million is stated as cash and cash equivalents, while cash with banks totalling EUR 0.7 million is shown under current and non-current other financial assets as it was pledged to secure financial liabilities respectively cash payments were made to secure bank guarantees granted to third parties.
aap Implantate AG; Fabian Franke; Investor Relations; Lorenzweg 5; 12099 Berlin, Germany; Phone: +49/30/750 19 - 134; Fax: +49/30/750 19 - 290; firstname.lastname@example.org
14.11.2019 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
|Company:||aap Implantate AG|
|Phone:||+49 (0) 30 75 01 90|
|Fax:||+49 (0) 30 75 01 91 11|
|Listed:||Regulated Market in Frankfurt (General Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Munich, Stuttgart, Tradegate Exchange|
|EQS News ID:||912971|
|End of News||DGAP News Service|