Activity growth consistent with the objectives:
+2.3% at constant exchange rates, or €825.7 million
Villepinte, 14 February 2019 – Guerbet (FR0000032526), a global specialist in contrast agents and solutions for medical imaging, is reporting revenue of €789.6 million at 31 December 2018, down 2.2% due to a very unfavourable foreign exchange impact of €36 million. At constant exchange rates (CER), revenue growth, completely organic, was 2.3%, in line with the announced objective.
Consolidated Group revenue (IFRS)
* At constant exchange rates: amounts and rates of growth are calculated by cancelling out the exchange rate effect, which is defined as the difference between the indicator’s value for period N, converted at the exchange rate for period N-1, and the indicator’s value for period N-1.
2018 financial year highlights
› Presentation in April 2018 of the GEAR 2023 strategic plan, which aims to accelerate organic growth and generate external growth through acquisitions, particularly in the field of Interventional Imaging;
› Further development of NCE Gadopiclenol for MRI. Preclinical studies have demonstrated the efficacy and safety of use of this product, and its development will proceed to phase III starting in early 2019;
› Authorisation obtained from the FDA in the United States (510K) to market Accurate Medical Therapeutics microcatheters and start of sales at the end of 2018;
› Acquisition of a new microsphere technology from Occlugel to strengthen the Interventional Imaging offering;
› In June, a strategic partnership signed with IBM Watson Health to develop and market together artificial intelligence solutions for earlier, more accurate diagnosis and therapeutic decision-making support for liver tumors;
› In October, launch of direct distribution in Japan, the world’s number 2 market;
› An extension of indications obtained in numerous countries for Lipiodol Ultra-Fluid® in Interventional Imaging for chemo-embolisation of liver tumors by microcatheter.
4th quarter 2018: slight increase in sales at CER confirmed
At current exchange rates, 4th quarter sales totalled €208.2 million versus €205.7 million in fourth quarter 2017. The unfavourable foreign exchange effect was €3.3 million.
At constant exchange rates, revenue for the period amounted to €211.5 million compared with €205.7 million in 2017, a 2.8% increase, confirming the trend observed in the nine first months, and which is mainly due to dynamic sales growth outside Europe (+11.0%). In Europe, sales were down 7.1%. In this region and at comparable periods, Dotarem® revenue was slightly down by 0.8%. This is the expression of an increase in volumes due to a market evolution of linear products towards macrocycle products, which is partly offset by a price reduction due to the penetration of generics in Europe for more than two years.
4th quarter consolidated Group revenue (IFRS)
2018 financial year: activity in line with the objectives but affected by a significant foreign exchange effect
The total foreign exchange effect in 2018 resulted in an unfavourable impact of €36.1 million, or 4.5 points of growth, compared with €5.3 million in 2017.
In the Europe zone, at current exchange rates, revenue totalled €339.5 million, incorporating an unfavourable exchange rate impact of €6.7 million, with Turkey alone accounting for more than €5 million. Sales at constant exchange rates were down 7.6%. This decrease, mainly in France and Germany, was due to the presence of a new generic form of Dotarem and was slightly less than what the Group expected.
In Other Markets, revenue at current exchange rates increased 4.1% to €450.1 million, despite a significant negative foreign exchange impact of €29.4 million (Brazil and the US). At constant exchange rates, sales totalled €479.5 million, up 10.9%.
Diagnostic Imaging revenue at constant exchange rates decreased slightly to €722.6 million (-0.7%) compared with the 2017 financial year:
› On the MRI segment, despite the arrival of the generic form, the good level of Dotarem sales confirmed its status as the market’s product of reference. This segment grew by 2.1% to €277.7 million overall, despite the planned decline of Optimark®.
› On the CT/Cath Lab segment, the situation was mixed. Sales of Optiray® were down due to an unfavourable 2017 base effect, while sales of Xenetix® grew. The segment was down 3.2% overall at €363.8 million.
› The Injection Systems and Services (ISS) segment continued its growth (+2.5%) to reach €82.1 million.
The Interventional Imaging activity confirmed its status as a growth driver with revenue at constant exchange rates of €67.2 million, up 18.6%. As a reminder, supply difficulties affected the first nine months of financial year 2017.
After obtaining the 510k from the FDA, the first sales of Accurate Medical Therapeutics microcatheters were made in December. The Group is expecting sales to take off starting in 2019.
Refinancing of the Group’s debt
In order to contribute to the Group’s development as part of its GEAR 2023 strategic plan, Guerbet signed a five-year €500 million credit agreement on 13 February 2019 to refinance its existing debt.
This contract was entered into with nine financial partners, coordinated by BNP Paribas.
This new debt has a single covenant (net debt/EBITDA* = 4.0) over the life of the loan.
* EBITDA: Operating Income + net allowance for amortization, depreciation and provisions
The Group anticipates a restated EBITDA close to 15% of sales at constant exchange rates.
The restated EBITDA excludes the foreign exchange rates effect and two non-recurrent effects:
i) an exceptional profit due to the inventory revaluation of €15.6 million, as previously anticipated and ii) an exceptional charge of €8 million. This charge is the consequence of the Group’s decision, at year end, to focus on the reduction of the inventories which entailed the destruction of obsolete products. This exceptional charge is offset by a provision reversal and does not impact the Operational Income. These exceptional items have no impact on the cash flow of the Company.
Publication of 2018 annual results
26 March 2019, after trading