DGAP-News: Celesio AG / Key word(s): Quarter Results Celesio AG: Celesio: H1 performance satisfactory overall, in line with expectations 14.08.2013 / 07:00 --------------------------------------------------------------------- Celesio: H1 performance satisfactory overall, in line with expectations - Earnings forecast for 2013 slightly adjusted to 405 to 425 million euro due to continued discount competition in Germany and additional negative currency effects - Strategic realignment to continue Stuttgart, 14 August 2013. Celesio AG's business performance in the first half year of 2013 was satisfactory overall and in line with expectations. However Celesio expects the discount competition in the German wholesale market as well as additional negative currency effects, to continue in the current financial year. The company therefore adjusts its earnings forecast for the full year to 405 to 425 million euro. Group sales in the first half of 2013 fell by 4.6 per cent to 10.7 billion euro compared to the prior-year period. Unadjusted operating earnings (EBIT) amounted to 202.9 million euro. This corresponds to an increase of 15.3 per cent compared to the to the unadjusted prior-year value. Compared to the prior-year value adjusted for extraordinary effects, however, EBIT dropped by 7.9 per cent. The spokesperson of the Celesio management board, Marion Helmes: 'The business performance in the first half year was satisfactory overall and in line with expectations. Unfortunately we do not expect, on current indications, the discount competition in Germany will decline before the end of the year. As a result, we see ourselves obliged to adjust the previous earnings forecast and now expect adjusted EBIT of 405 to 425 million euro for the 2013 financial year.' The previous forecast was at 445 to 475 million euro. 'Celesio is persistently continuing the strategic realignment announced in autumn 2011. As such, the establishment of centralised procurement activities and the pilot phase for the European Pharmacy Network are on track. The Operational Excellence Programme has generated sustainable cost reductions,' Marion Helmes added. Based on successful operations of the first pilot pharmacies in the UK and Italy, Celesio announced in March that it will accelerate the expansion of the pilot phase. 95 own pharmacies in Europe are supposed to be taking part by the end of the 2013 financial year. In addition to its pilot pharmacies in the UK and Italy, Celesio is now also running pilot pharmacies in Ireland, Norway and Sweden. Performance of divisions The Consumer Solutions division, the pharmacy business, posted sales of 1,680.4 million euro, which is 2.3% below the previous year's value (H1 2012: 1,720.3 million euro). This is exclusively due to currency effects as well as the deconsolidation of the Czech activities. Adjusted for currency effects and the sale of the Czech activities, sales increased by 1.2 per cent, mainly through new service contracts in the UK. Operating profit (EBIT) fell by 8.4% compared to the prior-year value adjusted for extraordinary effects (unadjusted: + 9.3%) to 95.3 million euro. The reduction was partly due to currency effects - adjusted for these effects the EBIT decline amounted to 6.3%. In the UK, the most important pharmacy market for Celesio, Lloydspharmacy showed a positive development in operating terms in the first half of 2013. The closer integration of pharmacy and wholesale activities, which is facilitated by the new Group structure, is bearing fruit. Further cost savings were largely achieved through the TIC procurement initiative (top-in-class procurement) and the Operational Excellence Programme. This was not quite enough, however, to offset negative effects from government measures as well as negative currency effects from the weak pound sterling. The Italian business posted a strong performance. Increases in sales of OTC products and cost cuts boosted earnings in Italy so that profits clearly exceeded the prior-year value. In the pharmacy business in Sweden, the restructuring measures implemented in 2012 and resulting cost savings had a positive effect. In the Pharmacy Solutions division, the wholesale business, sales were down 5.0% compared to the previous year at 9,052.7 million euro. This was mainly due to the deconsolidation of the Czech activities in November 2012 and of the Irish business in May 2013, the increase of the generics quota in France, and currency effects. EBIT of 153.2 million euro was down 8.7 per cent compared to the prior-year value adjusted for extraordinary effects (unadjusted: + 5.9 per cent). Despite a positive sales trend, the profit performance in Germany was massively burdened by the continuing intensive discount competition. Celesio's pharmaceutical wholesale business in the UK and Norway, however, showed a strong performance. There were no adjustments at either Group or division level in the 2013 reporting period. Earnings forecast The 2013 financial year is all about the strategic realignment at Celesio, with the company persistently continuing on this path. The close integration of pharmacy and wholesale activities in particular as well positive as effects from improved procurement activities and the Operational Excellence Programme will continue to have a positive impact on the profit development. Adverse exogenous factors such as the continuing price competition in Germany, however, will work against the positive trend. The management board is therefore adjusting the previous earnings forecast and now expects that Celesio will generate adjusted EBIT between 405 million euro and 425 million euro in the 2013 financial year. Key figures of the Celesio Group 1st half year 1st half year 2012 2013 Continuing operations Revenue EUR m 11,251.1 10,733.0 EBITDA EUR m 242.6 267.5 adjusted 1) 2) EUR m 286.5 267.5 EBIT EUR m 176.0 202.9 adjusted 1) 2) EUR m 220.2 202.9 Profit before tax EUR m 87.2 135.7 adjusted 1) 2) 3) EUR m 158.1 135.7 Retail pharmacies 4) 2,233 2,177 Wholesale branches 4) 141 132 Discontinued operations Net profit/loss EUR m -213.5 -2.4 Continuing and discontinued operations Employees 4) 45,448 38,407 Net profit/loss EUR m -178.4 85.4 Change on a euro basis % Revenue EUR m -4.6 EBITDA EUR m 10.3 adjusted 1)2) EUR m -6.6 EBIT EUR m 15.3 adjusted 1)2) EUR m -7.9 Profit before tax EUR m 55.6 adjusted 1) 2) 3) EUR m -14.2 Discontinued operations Net profit/loss EUR m 98.9 Continuing and discontinued operations Net profit/loss EUR m - 1) The figures for 2012 are adjusted to eliminate non-recurring income and expenses from the Operational Excellence Program (including tax). 2) The figures reported for 2012 are adjusted to eliminate special effects from revaluations required by IFRS 5 (including tax). 3) The figures reported for 2012 are adjusted to eliminate special effects in the financial result (including tax). 4) Closing figures at the end of the reporting period. Press contact Marc Binder, Celesio AG, +49 (0)711.5001-380 [email protected] Rainer Berghausen, Celesio AG, +49 (0)711.5001-549 [email protected] About Celesio Group As a leading international trading company and provider of logistics and services in the pharmaceutical and healthcare sector, Celesio takes a proactive and preventive approach to ensuring that patients receive the products and support that they require for optimum care. With 38,000 employees, we operate in 16 countries around the world. Every day, we serve over 2 million customers - at 2,200 pharmacies of our own and 4,100 participants in our brand partnership schemes. With around 130 wholesale branches, we supply approximately 65,000 pharmacies and hospitals every day with up to 130,000 pharmaceutical products. Our services benefit a patient pool of about 15 million per day. End of Corporate News --------------------------------------------------------------------- 14.08.2013 Dissemination of a Corporate News, transmitted by DGAP - a company of EQS Group AG. The issuer is solely responsible for the content of this announcement. DGAP's Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------- Language: English Company: Celesio AG Neckartalstr. 155 70376 Stuttgart Germany Phone: +49 (0)711 5001-735 Fax: +49 (0)711 5001-740 E-mail: [email protected] Internet: www.celesio.com ISIN: DE000CLS1001 WKN: CLS100 Indices: MDAX Listed: Regulierter Markt in Berlin, Düsseldorf, Frankfurt (Prime Standard), München, Stuttgart; Freiverkehr in Hamburg, Hannover; Terminbörse EUREX End of News DGAP News-Service --------------------------------------------------------------------- 225732 14.08.2013