bioMerieux, Inc. Sticks to Sales Growth Goal
Sales up 9.3% at constant exchange rates
• Of which 3.1% organic growth, in line with objectives
• Strong momentum* in China (up 47%) and India (up 31%)
• Solid performance* in industrial applications (up 11.6%)
Significant operational advances
2012 sales growth objective confirmed
bioMérieux (Paris:BIM), a world leader in the field of in vitro diagnostics, today released its business review for the three months ended March 31, 2012.
Net sales for the period amounted to ?363 million, versus ?328 million in first-quarter 2011, representing an increase of 9.3% at constant exchange rates. Organic growth amounted to 3.1%, at constant exchange rates and comparable business base**.
"bioMérieux's sales for the first three months of 2012 were in line with our objectives for the period," said Jean-Luc Belingard, Chairman and Chief Executive Officer. "They were driven, in particular, by a solid performance in industrial applications and the faster momentum in China and India. According to our 2012-2015 roadmap, we continued to integrate AES Laboratoire and ARGENE, advanced in the development of our five new platforms, created a commercial subsidiary in Malaysia and deployed our Global ERP system in Poland. Backed by these encouraging achievements and a robust portfolio of orders under negotiation, we confirm our 2012 sales growth objective."
* At constant exchange rates and comparable business base
** Excluding the acquisition of AES Laboratoire and ARGENE, the divestiture of Dima Diagnostika and the discontinuation of culture media business for routine clinical tests in North America
SALES
In the three months ended March 31, 2012, sales rose by 3.1% at constant exchange rates and comparable business base, and by 9.3% at constant exchange rates and after changes in the business base (primarily the July 2011 acquisitions of AES Laboratoire and ARGENE).
After a solid fourth-quarter 2011, business was encouraging in early 2012, confirming the pertinence of the Company's balanced geographic footprint. As expected, 2011 trends continued over the period, in particular with very vigorous growth in the Emerging 7 countries* and a more difficult economic and financial environment in Southern Europe.
At constant exchange rates and comparable business base, first-quarter 2012 sales may be analyzed by region as follows: • Sales in the Europe - Middle East - Africa region (54% of the consolidated total) were stable over the period, reflecting the same trends as before.
• In Southern Europe (11% of the consolidated total), demand was dampened by public budget difficulties, with sales contracting in Greece and Portugal, as well as in Spain, where the economy worsened over the period. On the other hand, business was steady in Italy, thanks to strong sales of industrial applications.
• Sales remained on a downward trend in France (12% of the consolidated total). The consolidation of clinical laboratories continued. Sales of clinical reagents, however, performed slightly above Company forecasts. In addition, sales of industrial applications rose by 13% over the period.
• In the rest of Western Europe, business was generally robust. Sales in the United Kingdom turned in another quarter of rapid growth, especially in clinical microbiology. Revenue grew 4% in Germany, led by firm demand for reagents.
• After expanding quickly in fourth-quarter 2011, sales in Turkey, Russia, the Middle East and Africa (6% of the consolidated total) showed a moderate 2% gain in first-quarter 2012. Growth was lifted by strong sales in Russia following the reorganization of the subsidiary's operations in 2011.
• Sales in North America (22% of the consolidated total) ended the period up 2.3%.
Sales of clinical applications benefited from the sustained expansion of the VIDAS® line, led by the success of high medical value tests, VIDAS®B.R.A.H.M.S PCT in particular. However, this dynamic was attenuated by prior-year comparatives, reflecting the strong sales of BacT/ALERT®instruments after the gain of several new customers in first-quarter 2011.
Industrial applications delivered growth of almost 9% thanks to solid instrument sales, in a context of growing interest in food safety.
• Robust sales in the Asia-Pacific region (16% of the consolidated total) continued, with a gain of nearly 14%. Growth was driven by excellent performances in China (up 47%), where there was, in particular, very strong demand for equipment, and in India (up 31%), where VIDAS® continued to expand rapidly. On the other hand, sales contracted in Japan as compared with first-quarter 2011, when sales were boosted by major emergency deliveries as part of the relief effort following the March 11 earthquake and tsunami.
Clinical applications benefited from the higher sales of the VIDAS® and microbiology lines. Particularly in China, the VITEK® 2 ID/AST system enjoys an especially favorable short and medium-term sales environment, following the Chinese Ministry of Health's announcement that it would like to launch a national campaign for the rational use of antibiotics in order to combat bacterial resistance.
• In Latin America (8% of the consolidated total), sales were up almost 6% over the period. The Brazilian subsidiary achieved a 9% increase in reagent sales, building upon the 25% revenue growth reported in first-quarter 2011, despite the postponement over the rest of the year of public orders for automated microbiology solutions.
In clinical applications, the microbiology, VIDAS® immunoassay and molecular biology lines had solid sales growth, while sales of microplates, a non-strategic business for bioMérieux, fell off sharply. Industrial application sales climbed by more than 15%.
* Emerging 7: Brazil, China, India, Indonesia, Mexico, Russia and Turkey
• In clinical applications, the microbiology business continued to benefit from the success of the Full Microbiology Lab Automation (FMLA®) and the automated ID/AST offerings. On the downside, it was impacted by weaker sales in the blood culture line, especially in North America, where significant contracts were signed in first-quarter 2011. Sales of the VIDAS® immunoassay range continued to progress in emerging markets and in high medical value tests. Sales of the other lines were lower year-on-year.
• In industrial applications, all four regions delivered solid growth in revenue. In addition, sales were robust across the main lines, particularly in microbiology (culture media, TEMPO®, VITEK® and BacT/ALERT®).
•Sales of reagents and services rose by more than 3% over the period, led, in particular, by vigorous demand in the Emerging 7 and for high medical value VIDAS® tests. Instrument sales were stable after the important billings in fourth-quarter 2011.
OTHER QUARTERLY FINANCIAL HIGHLIGHTS
• The Group had 7,030 full-time-equivalent employees as of March 31, 2012. There were 7,014 full-time-equivalent employees as of December 31, 2011.
• After taxes and bonuses, which are usually paid in the first quarter, net debt stood at ?131 million at March 31, 2012, unchanged from December 31, 2011.
In April 2012, the Company renewed its syndicated line of credit scheduled to expire in January 2013 and now has access to a five-year, ?350-million revolving credit facility expiring in March 2017. This funding is subject to a sole financial ratio: net debt must not exceed three times EBITDA (leverage ratio).
FIRST-QUARTER OPERATING HIGHLIGHTS
•Commercial offer
bioMérieux has obtained validation from the French Agency for Food, Environmental and Occupational Health and Safety (ANSES, based in Maisons-Alfort) for the ADIAVET™ Schmallenberg virus PCR kit for the detection of the Schmallenberg virus, responsible for an epidemic currently affecting a large number of livestock farms in Europe. The Directorate General for Food (DGAL) has also authorized its use in certified French public veterinary laboratories. Based on molecular biology techniques, the new test was developed by ADIAGENE, a bioMérieux company specialized in the development and production of molecular diagnostic kits. It enables the specific detection of the presence of the virus in just a few hours.
In addition, at the end of March, VIDAS®ANTI-HCV, a test for the diagnosis of hepatitis C, was CE marked by the French notified body LNE/G-MED. Hepatitis C (HCV) is a virus that causes a serious inflammation of the liver. 130 to 200 million people worldwide suffer from chronic hepatitis C. This test completes the VIDAS® menu for A, B and C viral hepatitis.
•Integration of AES Laboratoire and ARGENE
During the quarter, major advances were made in organizing the distribution of AES Laboratoire and ARGENE products.
In France, the bioMérieux and AES Laboratoire sales forces are now coordinated, with sales teams commercializing both companies' product lines. The product portfolio is also being rationalized according to schedule.
In addition, ARGENE's offering is now directly commercialized by the bioMérieux network in around ten countries, including in North America where bioMérieux, Inc. has sold the ARGENE line since April 1, 2012.
•Pipeline of systems under development
During the quarter, the Company continued to actively prepare the five product launches scheduled for 2012 and 2013.
In particular, the development and test phases of the new generation VIDAS®system are proceeding on schedule.
In addition, the "Smart Incubator", incorporating imaging technologies, which is scheduled for launch in 2013, was officially presented at the European Congress of Clinical Microbiology and Infectious Diseases (ECCMID) in late March.
•New commercial subsidiary in Malaysia
During the first quarter, the international sales network was strengthened with the creation of bioMérieux's 40th commercial subsidiary. Based in Malaysia, the new unit will be in charge of sales, promotion and maintenance of Group products in the local market.
•Global ERP system deployment
The Global ERP system was successfully deployed on schedule in Poland in February. Projects conducted during the first quarter also supported roll-out in Switzerland and Argentina in April, bringing to eight the number of countries where the system is up and running.
INVESTOR CALENDAR
Annual Meeting of Shareholders: May 30, 2012
Second-quarter 2012 sales: July 19, 2012, after close of trading
Investor Day: November 29, 2012
The above forward-looking statements are based, entirely or partially, on assessments or judgments that may change or be modified, due to uncertainties and risks related to the Company's economic, financial, regulatory and competitive environment, notably those described in the 2010 Registration Document. Accordingly, the Company cannot give any assurance nor make any representation as to whether the objectives will be met. The Company does not undertake to update or otherwise revise any forecasts or objectives presented herein, except in compliance with the disclosure obligations applicable to companies whose shares are listed on a stock exchange.
ABOUT BIOMERIEUX
Advancing Diagnostics to Improve Public Health
A world leader in the field of in vitro diagnostics for over 45 years, bioMérieux is present in more than 150 countries through 40 subsidiaries and a large network of distributors. In 2011, revenues reached ?1.427 billion with 87% of sales outside of France.
bioMérieux provides diagnostic solutions (reagents, instruments, software) which determine the source of disease and contamination to improve patient health and ensure consumer safety. Its products are used for diagnosing infectious diseases and providing high medical value results for cancer screening and monitoring and cardiovascular emergencies. They are also used for detecting microorganisms in agri-food, pharmaceutical and cosmetic products.
bioMérieux is listed on the NYSE Euronext Paris market (Symbol: BIM - ISIN: FR0010096479).
Other information can be found at www.biomerieux.com.
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