Activity at constant exchange rates in line with the end-2020 objectives
- -9.1% at constant exchange rates (CER)* at €548.3 million
- -11.2% at current exchange rates at €536.0 million
Gradual upturn in activity in the third quarter, particularly in Asia and Europe
Villepinte, October 22, 2020 – Guerbet (FR0000032526), a global specialist in contrast agents and solutions for medical imaging, has announced its revenue for the first nine months of its 2020 financial year.
At September 30, 2020, reported revenue was €536.0 million, an 11.2% decrease from the same period last year, including a significant negative forex impact of €12.3 million. Revenue at constant exchange rates (CER) totaled €548.3 million over the first nine months. This figure is consistent with the Group’s expectations, down 9.1%.
Consolidated Group revenue (IFRS)
After a second quarter down 17.8% from 2019, revenue at constant exchange rates for the third quarter totaled €181.3 million, down 10.7%, reflecting an upturn in activity. The negative forex impact over the quarter was €8.9 million.
Gradual upturn in activity during third quarter in line with expectation
As previously reported, the postponement of non-essential radiological examinations and procedures by radiologists, combined with spontaneous cancellations by some patients and reduced performance in services due to the increase in longer disinfection and protection measures due to COVID-19, continue to affect MRI activity and, to a lesser extent, CT/Cath Lab activity. Although still erratic, the upturn in activity is at hand.
In Asia, activity remains strong, with volumes rising steadily. Cumulative revenue at constant exchange rates increased by nearly 10%.
In Europe, the Group’s activity improved significantly during the third quarter with revenue down only 6.5% and stable volumes over the period. As a reminder, sales in Europe for the first half of the year were down 21.1%. At September 30, cumulative revenue at current exchange rates was €212.7 million (-16.6%).
In the Americas, sales at CER during third quarter were down more than 20%. This decrease is explained by a negative volume effect for the region resulting from the decline in activity due to the health crisis, particularly in Latin America, as well as the shutdown of the subcontracting activity following the sale of the Montreal plant in Canada in July 2020. Excluding the subcontracting effect, the decrease in North America was slightly less than 15% at CER. The Group also incurred a negative forex effect of nearly €7.0 million over the third quarter in the region, mainly due to exchange rate fluctuations in Brazil and the US.
At September 30, excluding the negative forex effect of €10.9 million, cumulative revenue at CER in the Americas amounted to €181.4 million (-12.6% compared with the same period last year).
An analysis of the activity over the first nine months of the financial year shows:
Diagnostic Imaging revenue totaled €462.5 million, compared with €533.5 million at September 30, 2019, down 13.3% (-11.1% at CER). The main reason for this decrease was the impact of the health crisis following the lockdown measures in most countries.
- MRI sales decreased 18.3% (-17.2% at CER) to €168.3 million. During third quarter activity started to pick up, the decrease being only 14.4% at CER versus prior year.
- CT/Cath Lab revenue was down 10.6% at €290.5 million, with volumes down across all products in the range except Xenetix®. Revenue at CER was €300.4 million (-7.6%) at the end of September 2020.
Interventional Imaging continued to be driven by Lipiodol® sales. Its nine-month revenue totaled €53.6 million, stable at +0.6% (+0.9% at CER) compared with €53.3 million in the same period in 2019.
The future of the health situation remains uncertain, and the gradual upturn in activity is still inconsistent. Despite these conditions, Guerbet is maintaining the objectives reported with its half-year results.
In the coming months, the Group’s activity is expected to be affected by the initial sales of the generic of Dotarem® in the United States. The Group believes that the impact will be moderate in Dotarem® with volumes and prices changes comparable with Europe, where the generic has already been available for more than two years. Moreover, Guerbet should continue to benefit from the good performance of Lipiodol® and the strength of Xenetix® and Optiray®.
Given the impact of the generic and against the backdrop of a stabilized health crisis with normal operation of the healthcare system, the Group expects second-half revenue to be largely comparable with the first-half revenue, down 12% compared with 2019 at constant exchange rates. On this basis, the Group expects EBITDA for the 2020 financial year to be around 14% of revenue.
Lastly, the Group is confident that it can lower its level of structural costs for the long term with expectations of a very favorable impact on profitability once business is back to normal.
(*) At constant exchange rates: amounts and rates of growth are calculated by canceling 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.
Publication of 2020 annual revenue
February 11, 2021, after trading