Analytik Jena Publishes Group Figures for 2012/2013 Financial Year
Comprehensive restructuring initiated at Japanese subsidiary
Analytik Jena AG closed the 2012/2013 financial year with Group revenue of EUR 97.7 m (previous year: EUR 94.0 m), corresponding to an increase of 4.0 %. It includes the consolidated sales since April 2013 of the UVP Group and, to a lesser extent, also ETG Entwicklungs- und Technologie-Gesellschaft mbH Ilmenau. The Group's sales performance in the reporting period was primarily influenced by the disappointing operational business in Japan.
"With the entry of the Endress+Hauser Group and the largest acquisition in the history of our Company so far, we look back on a very eventful year - one that also involved a number of challenges," said Klaus Berka, CEO of Analytik Jena AG. "Overall, we recorded a disappointing operational business result in the reporting period."
Revenue Development and Segments
The core business unit Analytical Instrumentation was hardest hit by the drop in sales in Japan, leaving the unit unable to realize its usual growth rates for the first time. In this unit, Analytik Jena achieved revenue of EUR 57.8 m (previous year: EUR 60.0 m), corresponding to a fall of 3.7 % from the previous year. However, net of Japan, the business unit once again generated a solid increase in revenue of 5.1 %. The Life Science business unit generated 22.4 % higher revenue in the reporting period, benefiting significantly from the first-time consolidation of UVP. The instruments and kit business of the Company's headquarters in Jena also contributed very positively to revenue development. The business unit generated total consolidated sales of EUR 34.5 m (previous year: EUR 28.2 m), despite having to compensate for weaker sales at the subsidiary Biometra and in Japan. Encouraging developments in the past financial year were experienced at CyBio AG, which was able to win two large orders in the reporting period and was able to demonstrate renewed growth through new products in the instrument business after a long period of stagnation. The Optics business unit recorded a revenue decline of 6.4 % in the period, generating revenue of EUR 5.5 m (previous year: EUR 5.8 m).
Analytik Jena's export ratio rose by 1.5 percentage points to 74.6 % (previous year: 73.1 %). As the traditionally largest sales market, Asia contributed with sustained strong sales of EUR 39.1 m (previous year: EUR 39.2 m). Net of Japan, the growth rate of sales in Asia was 16.5 % and thus comparable to the level in recent years. In Europe (excluding Germany), the Company was able to increase its consolidated revenue by 7.0 % to EUR 21.5 m (previous year: EUR 20.1 m), after having to accept lower sales in the previous year.
Earnings and Results of Operations
Developments in earnings and results of operations fell far short of the Company's expectations. The Group concluded the financial year with earnings before interest, taxes, depreciation and amortization (EBITDA) of EUR 6.8 m (previous year: EUR 10.2 m) with an EBITDA margin of 6.9 % (previous year: 10.8 %), representing a decline of 33.3 % from the previous financial year. At the end of the reporting period, EBIT amounted to EUR 2.1 m (previous year: EUR 6.1 m) with an EBIT margin of 2.2 % in comparison with 6.5 % in the previous year. Operating profits were particularly impaired by higher losses in Japan in both core divisions. Lower sales in Analytical Instrumentation which were almost entirely attributable to a drop in sales related to the marketing of XRF products of the Japanese minority holding Techno X, products that were added to the portfolio in the past financial year, could not be offset. However, sales also stagnated in Life Science. In addition, as of September 30, 2013, Analytik Jena recorded valuation allowances for inventories totaling more than EUR 0.9 m and created provisions for restructuring measures and severance payments of approximately EUR 1.0 m. Write-downs from the purchase price allocation of UVP, LLC of approximately EUR 0.6 m also had to be accounted for. Write-downs from purchase price allocations for all acquisitions made since 2009 total EUR 1.0 m for the past financial year.
Earnings before taxes (EBT) of EUR -2.2 m (previous year: EUR 5.0 m) were primarily impaired by the EUR -1.4 m (previous year: EUR 0.2 m) negative contribution to earnings of AJZ Engineering, which was still consolidated in net finance costs using the equity method as a 49.0 % minority investment in the last financial year, as well as currency developments that were unfavorable for the Company. At the end of the financial year, Analytik Jena recorded a consolidated net loss for the year of EUR -3.1 m (previous year: consolidated net profit of EUR 3.5 m). Including the results recorded directly in equity, the Group reported a total comprehensive income of EUR -2.9 m (previous year: total comprehensive income of EUR 3.4 m). Both basic and diluted earnings per share amounted to EUR -0.56 (previous year: EUR 0.59).
"Overall we have clearly failed to achieve our sales and earnings targets. Against this backdrop, we very quickly accepted the consequences from this development and began the necessary steps to consolidate and restructure the Group, in particular in Japan," Berka continued.
Human Resources
As of September 30, 2013, the Group had a total of 983 employees, including 45 interns (previous year: 827 employees, including 45 interns), or 18.9 % more than at the previous balance sheet date.The increase in personnel is essentially the result of the acquisition of the US firm UVP, LLC and its subsidiary in Britain, the expansion of the international sales network with the establishment of subsidiaries in France and Thailand, and the integration of the Ilmenau-based subsidiary ETG after increasing interest to 80.0 %.
Outlook
For the 2013/2014 financial year, Analytik Jena anticipates an increase in Group sales as well as a positive development in the instrument business as compared to this financial year. As a result of the first-time consolidation of the project company AJZ Engineering, there will be significant expansion of Group sales and consolidated earnings in the next two financial years.
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