DGAP-News: aap Implantate AG
/ Key word(s): Quarter Results
28.05.2021 / 07:30
The issuer is solely responsible for the content of this announcement.
aap Implantate AG (“aap” or “Company”) has successfully started the financial year 2021 with sales growth and a significant improvement in earnings. Although the first quarter continued to be impacted by the still rampant COVID-19 pandemic, aap increased sales by 9% year-on-year to EUR 2.7 million (Q1/2020: EUR 2.5 million). Considering constant exchange rates, the growth rate was even 12%. Regarding earnings, the Company recorded significantly improved EBITDA of EUR -0.2 million in the first quarter of 2021 compared to the corresponding period of the previous year (Q1/2020: EUR -2.2 million), which thus visibly reflects the successes in restructuring. Excluding one-time effects, recurring EBITDA in the first three months of 2021 also improved substantially year-on-year to EUR -0.2 million (Q1/2020: EUR -1.4 million).
Q1/2021 – Key results and progress
– Sales by region: Recovery of business in Germany (+15%) and internationally (excluding USA; +14%) despite still noticeable impact of COVID-19 pandemic
– USA: Continued dynamic development with new record level of surgeries performed per quarter (>500) and sales growth in distribution business (+24%)
– Earnings: Significant improvement in EBITDA to EUR -0.2 million (Q1/2020: EUR -2.2 million) due to sales growth, increase in gross margin and sharply reduced cost level; recurring EBITDA adjusted for one-time effects also substantially improved to EUR -0.2 million (Q1/2020: EUR -1.4 million)
– Gross margin and costs: Increase in gross margin to 89% (Q1/2020: 86%) primarily due to improved product, customer and price mix as well as efficiency improvements in manufacturing process; sharply reduced cost level with declining personnel (-29%) and other costs as well as significant decrease in one-time effects
– Cash flow and balance sheet: Significantly improved EBITDA lead to nearly balanced operating cash flow of EUR -0.2 million (Q1/2020: EUR -2.4 million)
– Silver coating technology: Progressing preparations of human clinical study in Germany with focus on stabilization and standardization of production process, data validation and regulatory compliance; further test coatings performed for potential first joint development projects to be completed; ongoing talks with global medical technology companies on potential co-funding of study and further collaboration opportunities
– Resorbable magnesium implant technology: Currently intensive and very promising talks with technology-savvy investors to finance the further development up to the complete sale of the technology
Q1/2021 – Key financial figures
Looking at the individual regions, aap was able to record a recovery in business both in Germany (+15%) and internationally (excluding the USA; +14%) despite the still noticeable effects of the COVID-19 pandemic and realized corresponding sales increases. However, the picture at international level is ambivalent: While performance in Europe continued to be impacted by the comprehensive lockdown measures and a vaccination campaign that is only progressing slowly, as reflected in a 13% decline, sales in the BRICS region almost doubled (+91%), mainly due to increased demand in Brazil. In the rest of the world (RoW), however, sales in the first quarter were virtually unchanged from the corresponding prior-year level.
In the USA, aap continues to record dynamic development: In the first three months, more than 500 surgeries were performed with aap products, more than ever before. Based on this, sales in the US distribution business increased by 24% to EUR 0.7 million. In the overall US market, sales development in the first quarter of 2021 stabilized at the level of the previous year, as the first quarter of 2020 was still impacted by a major order from a global partner, which thereafter only ordered consumables on a much smaller scale. Basically, the trend shown – continuous increase in weekly surgeries – supports the achievement of the ambitious growth targets for 2021 in the USA. This momentum is driven particularly by the contracts concluded with US-wide purchasing associations and networks that give aap access to many clinics and surgical operation centers.
In the first quarter of 2021, aap was able to improve earnings significantly and achieved almost balanced EBITDA. The background to this development is, in connection with the realized sales growth, a substantial improvement of the gross margin and a sharply reduced cost level. The increase in the gross margin is primarily the result of an improved product, customer, and price mix with lower material expenses as well as the efficiency improvements already achieved in the manufacturing process. In addition, revenue in the first three months of 2021 was largely generated by sales of implants, which in contrast to the sale of entire sets (consisting of implants and instruments) have a significantly improved margin structure. The positive cost development results on the one hand from the measures implemented as part of the ongoing restructuring, which are reflected in declining personnel and other costs, and on the other hand from a significant decrease in one-time effects, which in the first quarter of 2020 were still significantly impacted by the restructuring and refinancing as well as the revision of the quality management system. In addition, EBITDA in the reporting period were positively impacted by an effect in other operating income, primarily due to the recognition in income of a first partial payment from the COVID-19 aid program “Überbrückungshilfe III”. The significant improvement in EBITDA thus visibly reflects the successes realized in the ongoing restructuring, which can be summarized as follows:
– Improvement in gross margin to 89% (Q1/2020: 86%)
– Significant decrease in personnel expenses by 29% or EUR 0.6 million to EUR 1.6 million compared to Q1/2020
– Declining trend in other costs with significantly reduced one-time expenses (Q1/2021: EUR -0.2 million; Q1/2020: EUR -0.7 million)
Based on the developments described above, EBITDA in the first quarter of 2021 amounted to EUR -0.2 million (Q1/2020: EUR -2.2 million). Excluding the one-time effects, recurring EBITDA in the first three months of 2021 also significantly improved year-on-year to EUR -0.2 million (Q1/2020: EUR -1.4 million). Overall, this reflects the targeted development: focus on established markets with higher profit margins and sustainable streamlining of the cost structure to improve operating performance.
Based on the development in the first quarter, the Management Board is confident that as the COVID-19 pandemic continues to subside in conjunction with the withdrawal of the lockdown measures and thus the opening of the markets, a further dynamization of sales will occur in the coming quarters and thus positive EBITDA can be achieved in the operating trauma business for the first time since the focus on trauma. Accordingly, aap expects sales growth for the second quarter of 2021 and plans a sales level above the EUR 3 million mark (Q2/2020: EUR 1.9 million, H1/2020: EUR 4.4 million) and balanced to slightly positive EBITDA. However, based on the current order situation, this only applies under the condition that the COVID-19 pandemic continues to ease, and no additional drastic lockdown measures are imposed.
 Gross margin = sales revenues +/- change in inventories of finished goods and work in progress less cost of materials / cost of purchased services.
About aap Implantate AG
For queries, please contact: aap Implantate AG; Fabian Franke; Head of Investor Relations; Lorenzweg 5; 12099 Berlin, Germany; Phone: +49 (0)30 75019 – 134; Fax: +49 (0)30 75019 – 290; Email: firstname.lastname@example.org
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|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:||1201642|
|End of News||DGAP News Service|