Regulated information | Consolidated results for the 2016 financial year Waregem (Belgium) / Rotterdam (The Netherlands) [1] , 7 February 2017
Fagron realises turnover of € 421.8 million
REBITDA of € 90.6 million or 21.5% of turnover
Highlights:
- Turnover of € 421.8 million, a decrease of 1.3% (2015: € 427.6 million)
- REBITDA [2] amounts to € 90.6 million or 21.5% of turnover (2015: 23.1%)
- Net financial debt/REBITDA ratio amounts to 3.18 thanks to the capital increase of € 216.1 million and strong operational cash flow of € 76.8 million
- Impairment of € 48.4 million on Freedom Pharmaceuticals in the United States results in a net loss of € 18.1 million
Hans Stols, CEO of Fagron : "In 2016, almost all of Fagron's activities have developed positively. Fagron's FSPS activities in the United States have shown strong growth over the past year. The contribution from the new facility in Wichita (Kansas, US) was still limited, as expected. When the final licenses have been obtained, the new facility will be fully operational in March of this year. South America has also realised a good development during the year, with a strong organic growth. A modest growth was realised in Europe in 2016. Despite the negative impact of the changed reimbursement system for non-sterile compounding in the United States on the results there, we have realised a total turnover in 2016 which was well within our expectations.
T aking into account the changed market circumstances, we announced a cost-savings programme in 2015, which is clearly bearing fruit. In the second half of the year we have realised a cost reduction of approximately 6% compared to the same period in 2015. Partially due to the cost reduction, REBITDA increased in the second half of the year by 10.4%. The change in the reimbursement system has lowered the profitability of our American operation. Given the structural consequences, an impairment charge of € 48.4 million on Freedom Pharmaceuticals in the United States was recorded at the end of 2016.
Due to the strong operational cash flow, the net financial debt/REBITDA ratio on 31 December 2016 was 3.18, significantly below the level of 5.02 as was agreed upon with the financiers for the Long Term Waivers and also below the level of 3.25 as established in the Revolving Credit Facility and the Note Purchase Agreement. As a result of the substantially decreased net financial debt and the debt ratio, the interest margins on the loans will be significantly lower in 2017.
The past 18 months were characterised by change, both in part of our market and in our financial position and organisation. Over the course of 2016, the successful completion of the capital increase has enabled us to fully focus on the business again. We are positive on the possibilities in the different markets we are active in.
[1] This press release was sent out by Fagron NV and Fagron BV. [2] EBITDA before non-recurring result.
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