aap Implantate AG: aap: Q2/2016 sales and EBITDA at upper end of guidance; further important progress with LOQTEQ and Silver Technology

aap Implantate AG / aap: Q2/2016 sales and EBITDA at upper end of guidance; further important progress with LOQTEQ® and Silver Technology . Processed and transmitted by NASDAQ OMX Corporate Solutions. The issuer is solely responsible for the content of this announcement.

• Sales and EBITDA in Q2/2016 at EUR 3.4 million (guidance: EUR 2.5 million to EUR 3.5 million) and
  EUR -1.4 million (guidance: EUR -2.5 million to EUR -1.5 million) respectively 
• US sales in Q2/2016 at EUR 0.7 million (Q2/2015: EUR 0.2 million) and in H1/2016 at EUR 1.3 million (H1/2015: EUR 0.3 million)
• Silver coating technology: good progress in CE conformity assessment procedure; encouraging pre-submission meeting with US Food and Drug Administration (FDA)
• LOQTEQ®: Notice of allowance received for further US patent; "umbrella patent" with comprehensive protection in the USA
• Cost reduction measures: extensive personnel measures with a total annualised effect of up to EUR 1.5 million implemented
• Completed sale of aap Biomaterials GmbH leads to net cash inflow of approx. EUR 34.5 million as at 30 June 2016 and a consolidation profit of about EUR 23.3 million
• Successful course of 2016 annual general meeting

aap Implantate AG ("aap") was able to achieve its set targets in the second quarter of 2016 for both sales and earnings. In the continued operation the company generated sales of EUR 3.4 million in the reporting period (Q2/2015: EUR 3.6 million) which were thus at the upper end of the EUR 2.5 million to EUR 3.5 million guidance. Furthermore, aap reported an EBITDA of EUR -1.4 million in the continued operation in the second quarter of 2016 (Q2/2015: EUR -1.4 million) and thereby a value slightly above the forecast of EUR -2.0 to EUR -1.5 million.

Q2 Sales

In EUR million	Q2/2016	Q2/2015	Change on year
Trauma	3.0	3.3	-8%
Other	0.4	0.3	+73%
Sales continued operation	3.4	3.6	-3%
Sales discontinued operation	1.7*	2.9	-43%
Group sales	5.1*	6.5	-21%

*Includes aap Biomaterials GmbH business from 04/01/2016 to 05/11/2016.

Q2 EBITDA

In EUR million	Q2/2016	Q2/2015	Change on year
EBITDA continued operation	-1.4	-1.4	0%
EBITDA discontinued operation	23.8*	0.6	>+100%
Group EBITDA	22.4*	-0.8	>+100%

*Includes aap Biomaterials GmbH business from 04/01/2016 to 05/11/2016 and deconsolidation profit of sale of aap Biomaterials GmbH.

Compared with Q1/2016 it therefore appears that the sales measures initiated are now also reflected in a corresponding sales and earnings development. In particular, aap put a stronger focus on established markets and has expanded its sales organisation with experienced managerial staff. It must, however, be noted that due to continuing tense economic and political framework conditions in a number of BRICS and SMIT states markets such as China, Turkey and Russia continued in the second quarter to make no contribution towards sales.

H1 Sales

In EUR million	H1/2016	H1/2015	Change on year
Trauma	5.2	6.0	-11%
Other	0.7	0.5	+28%
Sales continued operation	5.9	6.5	-8%
Sales discontinued operation	4.2*	7.1	-41%
Group sales	10.1*	13.6	-25%

*Includes aap Biomaterials GmbH business from 01/01/2016 to 05/11/2016.

EBITDA H1

In EUR million	H1/2016	H1/2015	Veränderung
EBITDA continued operation	-3.6	-3.1	-13%
EBITDA discontinued operation	24.1*	2.5	>+100%
Group EBITDA	20.5*	-0.6	>+100%

*Includes aap Biomaterials GmbH business from 01/01/2016 to 05/11/2016 and deconsolidation profit of sale of aap Biomaterials GmbH.

In the first half of 2016 aap realised sales of EUR 5.9 million in the continued operation (H1/2015: EUR 6.5 million). EBITDA in the first six months of the current financial year was at EUR -3.6 million (H1/2015: EUR -3.1 million).

 

The following highlights indicate the progress aap made in the second quarter of 2016 in implementing the Management Agenda for 2016:

• US sales: Initiated sales measures are taking effect: sales with local distributors and global partners who sell aap products under their own name or the aap label in the USA totalled EUR 0.7 million in Q2/2016 (Q2/2015: EUR 0.2 million) and EUR 1.3 million in H1/2016 (H1/2015: EUR 0.3 million); growing number of weekly operations with LOQTEQ® products
• DACH and International sales: successful new customer acquisition in Austria; presence in Spain and Italy further enhanced; successful new customer acquisition in Latin America and expansion of business in South Africa
• Silver coating technology: good progress in CE conformity assessment procedure for silver-coated LOQTEQ® plate - intensive and constructive exchange with notified body; encouraging pre-submission meeting with US Food and Drug Administration (FDA) at the beginning of July
• LOQTEQ®: Notice of Allowance received for further US patent - comprehensive protection ("umbrella patent") combining and extending many existing patents; scheduled progress in completing the LOQTEQ® product portfolio - focus of research and development activities on new polyaxial LOQTEQ® systems and on additions to already existing LOQTEQ® systems
• Cost reduction measures: implementation of extensive personnel measures corresponding to a total effect of up to EUR 1.5 million if projected for a 12-month period combined with one-off effects of EUR 0.3 million in Q2/2016
• Successful completion of the sale of aap Biomaterials GmbH on 11 May 2016 leads to net cash inflow of approx. EUR 34.5 million as at 30 June 2016 and deconsolidation profit of about EUR 23.3 million; proceeds are to be used to finance further growth and to be distributed to shareholders - for example a dividend payment in FY/2017 based on the annual financial statements for 2016 seems to be conceivable
• 2016 annual general meeting: Counter-motions of Westlake GmbH & Co. Beratungs KG rejected by an overwhelming majority and all resolutions approved by a large majority

 

Outlook for 2016

In the third quarter of 2016, aap aims to achieve further progress in its strategy implementation. The Management Board will be focusing on the following topics:

To accelerate value-based innovations, aap will be taking forward in a targeted manner the further expansion of the LOQTEQ® portfolio for certain indication areas respectively functionalities. In the area of silver coating technology, the active interaction with the approval authorities will be continued regarding the current CE conformity assessment procedure. For the US American approval, based on a very encouraging pre-submission meeting with the FDA, the necessary approval documents are now being prepared for submission to the US authorities.

The company wants to enhance market access by means of two approaches: Firstly, sales activities in the established markets in Western Europe as well as in the United States are to be expanded further. Secondly, further endeavours are to be undertaken to stabilize sales in growth markets such as the BRICS and SMIT countries.

Following the successful divestment of aap Biomaterials GmbH, aap has already initiated extensive measures to reduce personnel and material costs in order to take into account the reduced size of the company. In the third quarter, the company will also continue to work tirelessly to further optimize the cost base.

For the third quarter of 2016, aap is expecting for the continued operation sales to range between EUR 2.5 million and EUR 4.0 million and an EBITDA of EUR -2.0 million to EUR -1.2 million.

  

About aap Implantate AG
aap Implantate AG is a globally operating medical device company headquartered in Berlin, Germany. The company develops, manufactures and markets trauma and biomaterials products for orthopedics. The trauma portfolio includes besides the innovative anatomical plating system LOQTEQ® a wide range of cannulated screws as well as standard plates and screws. In the biomaterials business the company is specialized on bone cements and mixing systems. In German-speaking countries aap Implantate AG directly sells its trauma products to hospitals, buying syndicates and hospital groups while it uses a broad network of distributors in more than 60 countries at the international level. In the biomaterials business sales are handled via OEM and private label cooperations with several selected international orthopedic and trauma companies. aap Implantate AG's stock is listed in the Prime Standard segment of Frankfurt Stock Exchange (XETRA: AAQ.DE). For more information, please visit www.aap.de, or download the Company's investor relations app from the Apple's App Store or Google Play.

Forward-looking statement
This release may contain forward-looking statements based on current experience, estimates and projections of the management board and currently available information. They are not guarantees of future performance. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. Many factors could cause the actual results, performance or achievements of aap to be materially different from those that may be expressed or implied by such statements. These factors include those discussed in aap's public reports. Forward-looking statements therefore speak only as of the date they are made. aap does not assume any obligation to update the forward-looking statements contained in this release or to conform them to future events or developments.

For inquiries please contact: aap Implantate AG, Fabian Franke, Investor Relations, Lorenzweg 5, 12099 Berlin, Germany
Tel.: [phone], fax: [phone], e-mail: [e-mail]

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Source: aap Implantate AG via Globenewswire

HUG#2034942

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aap Implantate AG
Lorenzweg 5 Berlin Germany

WKN: 506660;ISIN: DE0005066609;
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