Annual financial statements 2013

aap lays cornerstone to become the leading EU based trauma company 2013: Sales EUR 40 million (+10%); EBITDA EUR 7.0 million (+15%)

aap Implantate AG / Annual financial statements 2013: aap lays cornerstone to become the leading EU based trauma company 2013: Sales EUR 40 million (+10%); EBITDA EUR 7.0 million (+15%) . Processed and transmitted by NASDAQ OMX Corporate Solutions. The issuer is solely responsible for the content of this announcement.

aap Implantate AG (XETRA: AAQ.DE), delivered on its financial and strategic goals, setting the stage for long term growth. We have made progress in 2013, especially in the growth of the Trauma business, further development of the technologies silver coating and magnesium alloys, the divestment of our non-core anti-adhesion product Adcon® and our orthopedic reconstructive implant business (hip, knee and shoulder products) as well as with the divestment of our contract manufacturing business (EMCM B.V.) early 2014.

2013 - Results and Milestones

In EUR million	2013	2012	Change
Sales	40.0	36.4	+10 %
EBITDA (normalized)*	7.0	6.1	+15 %
EBIT (normalized)*	3.8	3.0	+27 %
Cash-EBT	3.5	2.1	+67 %
Economic profit[1]	0.4	-1.6	>100 %

* EBITDA/EBIT without one-time effects from share disposal and costs involved (2013) as well as write-ups on intangible assets (2012)
[1] Economic profit = (ROCE-WACC) x capital employed / Return on Capital Employed (ROCE) is a ratio that indicates the efficiency and profitability of a company's capital investments. Thereby is the EBIT divided by the total capital minus short term liabilities and cash / Weighted Average Cost of Capital (WACC) is the rate that a company is expected to pay on average to all its security holders to finance its assets.

In 2013 we achieved important goals which are summarized as follows:

• Sales revenue increase of 10% to EUR 40 million
• Normalized EBITDA growth of 15% from EUR 6.1 million to EUR 7.0 million
• First time realization of an economic profit of EUR 0.4 million
• Trauma sales (incl. LOQTEQ®) increased from EUR 6.3 million to EUR 9.6 million
• Further market penetration with our LOQTEQ®-system and a sales boost of EUR 2.0 million to EUR 5.0 million (+150 %)
• Net debt reduced from EUR 4.3 million to EUR 3.0 million (incl. discontinued operations)
• Signed a development and supply agreement for a PMMA bone cement and mixing system with a global orthopedic company
• Signed a license agreement for the anti adhesive product Adcon® for EUR 1.6 million
• Spin off of recon business into a joint venture (aap Joints GmbH); sell off of 67% of the shares for EUR 3 million

In 2013, aap increased sales from EUR 36.4 million to EUR 40 million (+10%). The stated goal of a 10% sales increase for 2013 which was published early in 2013 was successfully accomplished. The sales increase was supported especially by the Trauma business, which increased from EUR 6.3 million to EUR 9.6 million but also from the signing of multiple license agreements. The development of our innovative LOQTEQ® portfolio was particularly positive with a sales increase of 150% to EUR 5.0 million.

The EBITDA increased by 4% from EUR 7.1 million to EUR 7.4 million and the EBIT decreased from EUR 3.2 million to EUR -2.1 million. Both financial years contain one-time effects; a normalized EBITDA and EBIT (without one-time effects) make a comparison easier. The one-time effects in the EBITDA 2013 are a positive effect in connection with the divestment of the shares in aap Joints GmbH (EUR 0.6 million) as well as the incurred costs in connection with the divestment of the contract manufacturing business (EMCM B.V.; EUR 0.2 million). In 2012, an appreciation of assets amounting EUR 1.0 million, was reported. The EBIT was affected by extraordinary depreciations (2013: Goodwill EUR 4 million, capitalized development costs EUR 2.3 million; 2012: capitalized development costs EUR 0.8 million) which are associated with the divestment of EMCM as well as the change in the principles for the capitalization of development costs in the Biomaterials business. Without one-time effects, the normalized EBITDA amount to EUR 7.0 million (previous year: EUR 6.1 million; +15%) and the normalized EBIT to EUR 3.8 million (previous year: 3.0 million; +27%). The stated goal at the beginning of 2013 for an increased EBITDA growth of 15% and a corresponding profitable growth was therefore also accomplished.

Evaluation of the 2013 Management Agenda

Customers
Goals of the 2013 Management Agenda	Results of the 2013 Management Agenda	Goal achieved
Grow Trauma sales to >EUR 10 million (+60%), including LOQTEQ® sales >EUR 5 million (+140%)	Trauma total sales: EUR 9.6 million LOQTEQ® sales: EUR 5.0 million	Yes
Appoint distributors in seven of the nine BRICS- and SMIT-countries (2012: four)	Russia was added, contracts signed now with five out of nine countries	Partly, distributors in 5 out of 9 countries
Expand LOQTEQ® portfolio to twelve plates (2012: six)	CE for 9 plating systems in 2013	Partly
Supply allograft scCO2 products to bone banks in at least four EU countries, preferably including Germany	Signed contracts for Belgium, Netherlands, Austria and Turkey; Germany in application	Yes, even though permission for Germany is pending

Innovation
Goals of the 2013 Management Agenda	Results of the 2013 Management Agenda	Goal achieved
Freshness index of at least 20% (industry benchmark)	Freshness index of 21.5% as proportion of product sales was achieved	Yes
Develop new instrument sets for LOQTEQ®	Improvements made for various instruments	Yes
Initiation of new Trauma portfolio "Polyaxial"	Initiation of development of in-house polyaxial locking system	Yes
Preparation of application file for first silver coated trauma product	Good progress made, including a related technology patent granted in the USA	Yes

Finance
Goals of the 2013 Management Agenda	Results of the 2013 Management Agenda	Goal achieved
Profitable growth: sales +10% and EBITDA +15%	Sales +10% and EBITDA +15%	Yes
Working capital ratio to sales > 2.2	Working capital ratio 2013: 2.4	Yes
Positive Economic Profit (ROCE > WACC)	For the first time achieved a positive economic profit of EUR 0.4 million	Yes
DCR < 2 and ICR > 10 (Basis: operative EBITDA)	DCR 0.5 and ICR 32.9	Yes

Organization/IT
Goals of the 2013 Management Agenda	Results of the 2013 Management Agenda	Goal achieved
Further optimization of supply chain by implementing more ERP functionality	Evaluation of the ERP systems and of the functionalities with consultants; concrete actions planed for 2015	Partly
Study feasibility of outsourcing predefined products	Completed and on going	Yes
Divestment/ out licensing non-core products and IP	Sold the Recon business and outlicensing of the non-core product Adcon®; License agreement for BonOs Inject® (cement used in the spinal region)	Yes

Outlook 2014
The ongoing implementation of aaps focus strategy will be the cornerstone in the financial year 2014. We want to generate strong sales growth with a focus on the Trauma business and the LOQTEQ® product family in particular.
After der divestment of the contract manufacturing business in February 2014, the management board has set itself the following, updated goals for 2014:

• Sales growth with an increase of 22% to EUR 35 million (previous year: EUR 28.6 million) for the continued operations Trauma and Bone cement and mixing systems
• EBITDA between EUR 5 million and EUR 6 million (growth of 0% to 20%)
• Growing Trauma sales to > EUR 15 million (>50%)
• Appointing a distributor in the USA and further expansion of the distribution network beyond BRICS- and SMIT-countries
• Accelerate the development of silver-coated Trauma products
• Expanding the LOQTEQ® portfolio; striving for >90% indication coverage
• Sustain Freshness index of >20%

In the first quarter of 2014 we expect sales between EUR 6.8 million and EUR­­ 7.0 million and an EBITDA between 0 and EUR 0.5 million. The contract manufacturing business (EMCM B.V.) will be included only until the end of February 2014.

The goal is to increase our Trauma activities through a combination of organic growth and additional acquisitions. In order to further accelerate the transformation of aap into an international Trauma company, we have initiated studies to consider the position of aap Biomaterials GmbH (Business with bone cements and mixing systems) as part of our business portfolio.

The full consolidated financial statements of aap Implantate AG will be published latest by April 30, 2014. The reason for this delayed publication lies with the divestment of our subsidiary EMCM B.V. by the end of February and the resulting extensive accounting and reporting requirements as well as the translation of the approved consolidated financial statements from German into English.

The supervisory board already approved the consolidated and individual financial statements of aap Implantate AG as of December 31, 2013. Also, both financial statements received the unqualified audit opinion by our independent auditor. Due to the growing number of non-German speaking investors and other stakeholders as well as the regulations of the German stock exchange which require corporate publications both in German and English, we have decided to delay the publication until the end of April. This press release in German and English is based on the consolidated financial statements as of December 31, 2013, which is approved and issued with an unqualified opinion by the independent auditor. It contains next to the consolidated balance sheet, the consolidated statement of comprehensive income and the consolidated cash flow statement and the consolidated schedule of changes in equity an overview of selected financial figures.

_________________________________________________________________
aap Implantate AG (ISIN DE0005066609) - Prime Standard/Regulated Market - All German stock markets -

About aap Implantate AG
aap is a global medical device company headquartered in Berlin, Germany that develops, manufactures and markets innovative biomaterials and implants that are used in orthopedic procedures. The Company's products, which include a full line of plating systems, cannulated screws and bone cement products, are primarily used in the orthopedic specialty areas of trauma and spine repair. The Company's products are sold through its direct sales force, distribution partners and license agreements with OEM partners. aap's stock is listed in the Prime Standard segment of the Frankfurt Stock Exchange. For more information, please visit www.aap.de, or download the Company's investor relations app from the Apple's App Store or Google Play.

Forward-looking statement
This release may contain forward-looking statements based on current experience, estimates and projections of the management board and currently available information. They are not guarantees of future performance. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. Many factors could cause the actual results, performance or achievements of aap to be materially different from those that may be expressed or implied by such statements. These factors include those discussed in aap's public reports. Forward-looking statements therefore speak only as of the date they are made. aap does not assume any obligation to update the forward-looking statements contained in this release or to conform them to future events or developments.

 

For inquiries please contact: aap Implantate AG, Marc Heydrich, Investor Relations, Lorenzweg 5, 12099 Berlin, Germany
Tel.: [phone], fax: [phone], e-mail: [e-mail]

____________________

Selected Figures in EUR million

Sales and result	1.1. - 31.12.2013	1.1. - 31.12.2012	Change
Sales	40.0	36.4	10%
EBITDA (normalized)[1]	7.0	6.1	15%
EBITDA-margin (sales)	18%	17%
EBIT (normalized)[1]	3.8	3.0	27%
EBIT margin (sales)	10%	8%
Cash-EBT[2]	3.5	2.1	67%
Net result	-3	2	-208%
Cash flow and investments	1.1. - 31.12.2013	1.1. - 31.12.2012	Change
Operative Cash-Flow	3.5	7.1	-51%
Investing activities in intangible assets	2.1	3.0	-30%
Investing activities in tangible assets	3.6	0.9	300%
Total investing activities	5.7	3.9	46%
Value development	31.12.2013[3]	31.12.2012	Change
Intangible assets	14.5	39.4	-63%
Tangible assets	5.9	5.1	16%
Working capital	13.9	14.9	-7%
Working capital Ratio (sales)[4]	2.9	2.4	18%
Non-current assets	22.4	44.9	-50%
Current assets	42.8	23.7	81%
Capital structure	31.12.2013	31.12.2012	Change
Total assets	65.3	68.6	-5%
Shareholders equity	48.5	50.9	-5%
Equity ratio	74%	74%
Debt coverage ratio (DCR)	0.5	0.8	-38%
Interest coverage ratio (ICR)	32.9	11.8	179%
Shares[5]	31.12.2013	31.12.2012	Change
Total amount of shares (million pieces)	30.7	30.7	0%
Share price (closing) (EUR)	2.15	1.34	60%
Market Capitalization (million EUR)	65.9	41.1	61%
Share price (average) (EUR)	1.45	1.02	42%
Share price (high) (EUR)	2.22	1.45	53%
Share price (low) (EUR)	1.22	0.7	74%
Average Volume/day (pieces)	30,426	29,029	5%
Employees group	31.12.20133	31.12.2012	Change
Employees (Headcount)	290	261	11%
Employees (FTE)	274	247	11%

[1] EBITDA/EBIT without one-time effects from share disposal and costs involved (2013) as well as appreciation on intangible assets (2012)
[2] EBT excluding capitalized development work and depreciation thereof
[3] Figures considering intangible assets and debts of the discontinued operations that will be assumed by the buyer
[4] Sales for the last four quarters
[5] Closing prices XETRA

Consolidated Balance Sheet according to IFRS as of December 31, 2013

	31.12.2013	31.12.2012
Assets	TEUR	TEUR
Non-current assets	22,394	44,921
Intangible assets	14,502	39,403
Goodwill	1,568	12,490
Capitalized Services	12,074	21,858
Intangible assets	860	5,055
Tangible assets	5,906	5,107
Trade receivables	170	0
At-Equity financial assets	1,554	55
Financial assets	238	356
Deferred taxes	24	0
Current assets	42,843	23,669
Inventories	9,429	13,943
Trade receivable	6,866	4,226
Receivables from service contracts	281	0
Other financial assets	1,405	1,331
Other assets	348	471
Cash and bank balances	1,580	3,698
Assets classified as held for sale	22,934	0
Total assets	65,237	68,590
	31.12.2013	31.12.2012
Liabilities and shareholders' equity	TEUR	TEUR
Shareholdersequity	48,451	50,866
Subscribed Capital	30,670	30,670
Capital reserve	18,768	18,611
Revenue reserve	228	228
Other Reserves	490	608
Consolidated Balance Sheet Profit/Loss	-1,705	749
Non-current liabilities (above 1 year)	3,115	4,706
Financial liabilities	2,144	2,000
Other financial liabilities	190	388
Deferred taxes	0	2,090
Provisions	27	27
Other liabilities	754	201
Current liabilities (up to 1 year)	13,671	13,018
Financial liabilities	2,568	4,486
Advance payment	0	1,125
Gross amount due to customers for contract work	25	0
Trade accounts payable	2,853	3,259
Due to partners	0	1,057
Other financial liabilities	1,491	1,753
Provisions	230	205
Other liabilities	558	1,133
Liabilities due to discontinued business	419	0
Liabilities directly associated with assets classified as held for sale	5,527	0
Total Liabilities and Shareholders' equity	65,237	68,590

Consolidated Statement of Comprehensive Income according to IFRS for the period January 1 to December 31, 2013

	2013	2012	2013	2012	2013	2012		2013	2012
	Continued operations		Discontinued operations		Consolidation			Group Total
	TEUR	TEUR	TEUR	TEUR	TEUR	TEUR		TEUR	TEUR
Sales	28,573	26,965	12,317	10,375	-901	-926		39,989	36,414
Changes in inventories of finished goods and work in progress	-704	3	-265	176	0	0		-969	179
Other own work capitalized	1,742	2,416	279	328	0	0		2,021	2,744
Other operating income	4,164	2,007	380	1,526	-268	-268		4,276	3,265
Cost of purchased materials and services	-8,282	-8,724	-4,565	-2,978	897	926		-11,950	-10,776
Personnel expenses	-11,295	-10,682	-3,293	-2,811	0	0		-14,588	-13,493
Depreciation of tangible assets and intangible assets	-4,362	-1,959	-5,107	-1,952	0	0		-9,469	-3,911
Other operating expenses	-9,063	-8,837	-2,580	-2,641	272	268		-11,371	-11,210
Other taxes	-54	0	0	0	0	0		-54	0
Operating income	719	1,189	-2,834	2,023	0	0		-2,115	3,212
Financial result	-179	-427	-2	-64	0	0		-181	-491
Income / Expense from joint ventures and associates	21	-1	0	0	0	0		21	-1
Result before income taxes (and minority interest)	561	761	-2,836	1,959	0	0		-2,275	2,720
Income tax	131	185	-310	-495	0			-179	-310
Result before minority interest	692	946	-3,146	1,464	0	0		-2,454	2,410
Minority interest	0	0	0	0	0	0		0	0
Result after tax	692	946	-3,146	1,464	0	0		-2,454	2,410
Valuation of available-for-sale assets*	-117	0	0	0	0	0		-117	0
Income tax effect	0	0	0	0	0	0		0	0
Total comprehensive income	575	946	-3,146	1,464	0	0		-2,571	2,410
Net income per share (basic) in EUR	0.02	0.03	-0.10	0.05	-	-		-0.08	0.08
Net income per share (diluted) in EUR	0.02	0.03	-0.10	0.05	-	-		-0.08	0.08
Weighted average shares outstanding (basic) in units	30,670	30,670	30,670	30,670	-	-		30,670	30,670
Weighted average shares outstanding (diluted) in units	31,011	30,670	31,011	30,670	-	-		31,011	30,670
*Might be reclassified in future periods in other income in consolidated statement of comprehensive income

Consolidated Cash Flow Statement according to IFRS

	01.01. - 31.12.2013	01.01. - 31.12.2012
	TEUR	TEUR
Net income (after tax) from continued operations	692	946
Net income  (after tax) from discontinued operations	-3,146	1,464
Net income (after tax)	-2,454	2,410
Expenses from share based payments	158	208
Depreciation and impairment loss of fixed assets/current assets	9,469	3,911
Appreciation of fixed assets	0	-999
Changes in deferred taxes	-121	-86
Changes in provisions	95	11
Gain/Loss from retirement of subsidiary	-782	-945
Gains/loss from retirement of fixed assets	679	11
Share of net profit/loss of associates	-21	1
Changes in inventories, other receivables and other assets	-4,289	1,353
Changes in other liabilities	813	1,213
Cash flow from operating activities	3,547	7,088
Additions to intangible and tangible assets	-5,719	-3,902
Incoming payments from investing activities	24	9
Incoming payments from subsidiary minus incurred cash	0	-2
Incoming payments from retirement of shares from subsidiaries minus incurred cash	3,475	-25
Cash flow from investing activities	-2,220	-3,920
Outgoing payments from raising ownership shares in subsidiaries	0	-101
Inflow from financial liabilities	2,262	2,963
Redemption of shareholder loan	-750	-2,395
Redemption of financial liabilities	-3,815	-2,001
Redemption of finance lease	-217	-88
Dividend payments	0	0
Cash flow from financing activities	-2,520	-1,622
Decrease / Increase in cash & cash equivalents	-1,193	1,546
Cash & cash equivalents at beginning of period	3,698	2,152
Cash & cash equivalents at end of period	2,505	3,698

Consolidated Schedule of Changes in Equity

			Revenue reserves		Non-cash changes in equity
	Subscribed capital	Capital reserve	Legal reserves	Other revenue reserves	Revaluation reserve	Available-for-sale assets	Total	Balance Sheet result	Shares of the group	Minority interests	Total
01.01.2012	30,670	40,422	42	186	608		608	-23,575	48,353	-3	48,350
Increase in shares	0	0	0	0	0		0	0	0		0
Stock options	0	208	0	0	0		0	0	208		208
Settlement of capital reserve with balance sheet loss	0	-21,914	0	0	0		0	21,914	0		0
Raising ownership shares in subsidiaries	0	-105	0	0	0		0	0	-105	3	-102
Income of the group 2012	0	0	0	0	0		0	2,410	2,410		2,410
31.12.2012	30,670	18,611	42	186	608	0	608	749	50,866	0	50,866
Increase in shares	0	0	0	0	0		0	0	0		0
Stock options	0	157	0	0	0		0	0	157		157
Valuation of available-for-sale assets	0	0	0	0	-118		-118	0	-118		-118
Raising ownership shares in subsidiaries	0	0	0	0	0		0	0	0		0
Income of the group 2013	0	0	0	0	0		0	-2,454	-2,454		-2,454
31.12.2013	30,670	18,768	42	186	490	0	490	-1,705	48,451	0	48,451

aap_KJA2013_ENG

---

This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: aap Implantate AG via Globenewswire

HUG#1772897

--- End of Message ---

aap Implantate AG
Lorenzweg 5 Berlin Germany

WKN: 506660;ISIN: DE0005066609;
Listed: Freiverkehr in Börse Stuttgart,
Freiverkehr in Hanseatische Wertpapierbörse zu Hamburg,
Freiverkehr in Börse Berlin,
Freiverkehr in Börse Düsseldorf,
Freiverkehr in Bayerische Börse München,
Freiverkehr in Niedersächsische Börse zu Hannover,
Prime Standard in Frankfurter Wertpapierbörse,
Regulierter Markt in Frankfurter Wertpapierbörse;