DGAP-News 193 0 Kommentare STADA: Final figures for 2016 confirm good year-end result - medium term growth targets for 2019 raised

DGAP-News: STADA Arzneimittel AG / Key word(s): Final Results

STADA: Final figures for 2016 confirm good year-end result - medium term growth targets for 2019 raised

29.03.2017 / 07:25

The issuer is solely responsible for the content of this announcement.

- Sound sales development for Generics in Italy, Russia and Vietnam - strong sales recovery in

Belgium

- Significant sales increase for Branded Products in Germany, Italy and Vietnam

- Gross margin improved to 48.3 percent

- Strategic outlook for 2019 increased - medium-term adjusted EBITDA margin of about 23 percent

expected

- New Member of the Executive Board Dr. Barthold Piening to take office earlier than expected on

April 1, 2017

STADA Group Key Figures

	2016	2015	+/-	Q4/2016	Q4/2015	+/-
Group sales, reported	EUR 2,139.2 million	EUR 2,115.1 million	+1%	EUR 597.5 million	EUR 581.6 million	+3%
Group sales, adjusted	EUR 2,167.2 million	EUR 2,100.4 million	+3%	EUR 598.8 million	EUR 578.3 million	+4%
EBITDA, reported	EUR 361.5 million	EUR 377.1 million	-4%	EUR 72.4 million	EUR 95.9 million	-25%
EBITDA, adjusted	EUR 398.0 million	EUR 389.4 million	+2%	EUR 97.4 million	EUR 95.6 million	+2%
Net income, reported	EUR 85.9 million	EUR 110.4 million	-22%	EUR -14.3 million	EUR 20.5 million	>-100%
Net income, adjusted	EUR 177.3 million	EUR 165.8 million	+7%	EUR 37.4 million	EUR 38.9 million	-4%
Earnings per share, reported	EUR 1.38	EUR 1.79	-23%	EUR -0.23	EUR 0.33	>-100%
Earnings per share, adjusted	EUR 2.85	EUR 2.69	+6%	EUR 0.60	EUR 0.62	-3%
Dividend (proposed 2016)	EUR 0.72	EUR 0.70	+3%	_	_	_

Bad Vilbel, March 29, 2017 - Today, on March 29, 2017, the Executive Board of STADA Arzneimittel AG released the final figures for financial year 2016. Amid a reassessment of a transaction, the final figures for 2016 differ slightly from the preliminary figures that the Group already published on March 1, 2017. In addition, the Executive Board provided details on the development of the segments and confirmed the guidance for 2017 as well as the strategic outlook for 2019.

"In 2016, we were not only able to increase earnings by a substantial margin in some areas, we also slightly surpassed the original forecast for the past financial year in all key figures. This is an excellent result, particularly considering the fact that we pursued a number of changes in connection with the further development of the corporate strategy. Thanks to the faster and more efficient implementation of the measures, we were also in a position to recently raise the strategic outlook for 2019", says STADA Chairman of the Executive Board Dr. Matthias Wiedenfels.

Increase in Group sales
Reported Group sales for 2016 increased by 1 percent to Euro 2,139.2 million (previous year: Euro 2,115.1 million). Group sales adjusted for currency and portfolio effects grew by 3 percent to Euro 2,167.2 million (previous year: Euro 2,100.4 million).

Increase in all adjusted key earnings figures

The earnings situation in the reporting year was impacted by special items - by expenses in connection with reorganization decisions in particular - and totaled Euro 116.7 million before and Euro 91.4 million after taxes (see "STADA reconciliation - special items 2016" on pages 8 and 9).

Reported operating profit recorded a decrease of 20 percent in the reporting year to Euro 178.1 million (previous year: Euro 223.7 million). Adjusted operating profit showed a plus of 4 percent to Euro 294.4 million (previous year: Euro 283.8 million). Reported EBITDA decreased by 4 percent to Euro 361.5 million (previous year: Euro 377.1 million). Adjusted EBITDA showed an increase of 2 percent to Euro 398.0 million (previous year: Euro 389.4 million). Reported net income was down 22 percent to Euro 85.9 million (previous year: Euro 110.4 million). Adjusted net income increased by 7 percent to Euro 177.3 million (previous year: Euro 165.8 million). Reported earnings per share decreased to Euro 1.38 (previous year: Euro 1.79). Adjusted earnings per share increased to Euro 2.85 (previous year: Euro 2.69).

Significant improvement in cash flow from operating activities
Cash flow from operating activities amounted to Euro 333.5 million in financial year 2016 (previous year: Euro 311.7 million). Free cash flow was at Euro 160.9 million (previous year: Euro 133.5 million). Free cash flow adjusted for payments for significant investments or acquisitions and proceeds from significant disposals amounted to Euro 243.0 million (previous year: Euro 212.4 million).

Improved net debt to adjusted EBITDA ratio
Net debt was reduced to Euro 1,118.2 million as of the reporting date (December 31, 2015: Euro 1,215.7 million). The net debt to adjusted EBITDA ratio improved to 2.8 in 2016 (previous year: 3.1).

Guidance for 2017

For financial year 2017, the Executive Board expects Group sales of between Euro 2.280 and 2.350 billion, adjusted for currency and portfolio effects, with an adjusted EBITDA between Euro 430 and 450 million and adjusted net income between Euro 195 and 205 million.

Strategic outlook for 2019 increased

In mid 2016 the Executive Board approved the growth targets for 2019 (see the Company's ad hoc release of July 11, 2016). The Executive Board has now increased this strategic outlook (see the Company's ad hoc release of March 17, 2017). According to the revised targets, adjusted Group sales of between Euro 2.650 and 2.700 billion are to be achieved in financial year 2019 (previously: approximately Euro 2.6 billion). In terms of adjusted EBITDA, the Executive Board expects a range between Euro 570 and 590 million (previously: around Euro 510 million). Adjusted net profit is to increase to between Euro 250 and 270 million (previously: approximately Euro 250 million). Cash flow from operating activities is to improve to between Euro 560 and 580 million. The adjusted EBITDA margin is to be nearly 22 percent in 2019. The Executive Board also expects further efficiency enhancements which will lead to a further improvement in the EBITDA margin to about 23 percent in the medium-term.

New Member of the Executive Board to take office earlier than expected on April 1, 2017

The new member of the STADA Executive Board, Dr. Barthold Piening will take office earlier than expected on April 1, 2017. On the Executive Board, he will be primarily responsible for Production, Supply Chain, Research and Development, Biotechnology as well as Quality Assurance and Control.

> STADA Segment Key Figures Generics>

	2016	2015	+/-	Q4/2016	Q4/2015	+/-
Sales, reported	EUR 1,280.7 million	EUR 1,261.4 million	+2%	EUR 349.0 million	EUR 333.2 million	+5%
Sales, adjusted	EUR 1,287.4 million	EUR 1,253.2 million	+3%	EUR 343.2 million	EUR 331.5 million	+4%
EBITDA, reported	EUR 255.8 million	EUR 233.2 million	+10%	EUR 62.9 million	EUR 73.2 million	-14%
EBITDA, adjusted	EUR 264.9 million	EUR 232.0 million	+14%	EUR 71.3 million	EUR 71.4 million	0%
Margin, reported	20.0%	18.5%		18.0%	22.0%
Margin, adjusted	20.7%	18.4%		20.4%	21.4%

Reported sales of the Generics segment grew by 2 percent to Euro 1,280.7 million in the reporting year (previous year: Euro 1,261.4 million). This development was mainly based on sales growth in Italy, Russia and Vietnam. Sales of the Generics segment adjusted for portfolio effects and currency influences increased by 3 percent to Euro 1,287.4 million (previous year: Euro 1,253.2 million). Generics accounted for 59.9 percent of Group sales (previous year: 59.7 percent).

Within the Generics segment, the eight largest countries according to sales developed as follows in financial year 2016:

Sales in the Generics segment in Germany were at the level of the previous year with Euro 308.0 million (previous year: Euro 308.3 million). Sales achieved with generics in Italy increased by 6 percent to Euro 157.7 million, in particular as a result of positive volume effects (previous year: Euro 149.0 million). In Spain, sales of generics decreased by 1 percent to Euro 105.4 million (previous year: Euro 107.0 million). This development was primarily attributable to a high comparable basis in the previous year due to numerous product launches as well as the statutory approval of discounts in the reporting year and the resulting increase in the rate of sales deductions. Sales generated with generics in Russia increased by 18 percent, applying the exchange rates of the previous year. Despite a negative currency effect of the Russian ruble, sales in Euro increased by 11 percent to Euro 92.5 million (previous year: Euro 83.6 million). In Belgium, sales generated with generics declined, particularly due to a still hesitant purchasing and sales strategy of the Belgian sales partner, by 5 percent to Euro 90.7 million (previous year: Euro 95.0 million) - whereby positive sales development was achieved in the second half of 2016. While sales in the first six months of 2016 decreased by 37 percent, an increase of 66 percent was achieved in the second half of the year. Sales generated with generics in France recorded growth of 2 percent to Euro 81.9 million despite continued strong price and discount competition (previous year: Euro 80.1 million). Despite increased price pressure, sales generated with generics in Vietnam grew by 11 percent, applying the exchange rates of the previous year. As a result of a weaker Vietnamese dong, sales in euro increased by 9 percent to Euro 69.1 million (previous year: Euro 63.2 million). This development resulted, in particular, from local hospital tender processes that were won. The sales generated with generics in Serbia decreased by 23 percent, applying the exchange rates of the previous year. In euro, sales declined by 24 percent to Euro 55.8 million as a result of a slightly negative currency effect of the Serbian dinar (previous year: Euro 73.7 million). This development was, among other things, attributable to the decision on declining reimbursement prices. Additionally, wholesalers continued to have high inventories.

Adjusted EBITDA for Generics showed growth of 14 percent to Euro 264.9 million in 2016 (previous year: Euro 232.0 million). This development was primarily attributable to significant increase in the operating profit of the German sales companies due for the most part to a lower rate of sales deductions as well as the good sales performance in Italy, Switzerland and Vietnam. The adjusted EBITDA margin for Generics was at 20.7 percent.

STADA Segment Key Figures Branded Products

	2016	2015	+/-	Q4/2016	Q4/2015	+/-
Sales, reported	EUR 858.5 million	EUR 853.6 million	+1%	EUR 248.5 million	EUR 248.2 million	0%
Sales, adjusted	EUR 879.8 million	EUR 847.1 million	+4%	EUR 255.6 million	EUR 246.7 million	+4%
EBITDA, reported	EUR 186.2 million	EUR 211.8 million	-12%	EUR 28.3 million	EUR 40.3 million	-30%
EBITDA, adjusted	EUR 200.7 million	EUR 220.1 million	-9%	EUR 39.5 million	EUR 38.7 million	+2%
Margin, reported	21.7%	24.8%		11.4%	16.2%
Margin, adjusted	23.4%	25.8%		15.9%	15.6%

Reported sales of the Branded Products segment increased by 1 percent to Euro 858.5 million in financial year 2016 (previous year: Euro 853.6 million). This development was based primarily on declining sales in Russia and occurred despite strong development in Germany and acquisition-related growth in the United Kingdom. Sales of the Branded Products segment adjusted for portfolio effects and currency influences increased by 4 percent to Euro 879.8 million (previous year: Euro 847.1 million). Branded products contributed 40.1 percent to Group sales (previous year: 40.3 percent).

Within the Branded Products segment, development of the five largest countries according to sales was as follows in the reporting year:

Sales generated with branded products in Germany recorded growth of 38 percent to Euro 177.4 million (previous year: Euro 128.3 million). This development was attributable to optimizations in the product portfolio, strong growth for core products and the launch of new products. In the United Kingdom, sales generated with branded products increased by 17 percent, applying the exchange rates of the previous year. Despite the negative currency effect as a consequence of the referendum decision in favor of the United Kingdom leaving the European Union, sales in euro increased by 4 percent to Euro 175.4 million (previous year: Euro 168.0 million). The acquisition of the Socialites Group in December 2015 and of BSMW Limited in February 2016 contributed to this growth in sales. However, a weak cough and cold season at the beginning of the year and reduced sales of suncream products had a dampening effect on sales. In view of the continued difficult framework conditions, in particular in the self-pay market, sales generated with branded products in Russia decreased by 25 percent, applying the exchange rates of the previous year. As a result of a clearly negative currency effect of the Russian ruble, sales in euro declined by 29 percent to Euro 150.1 million (previous year: Euro 212.2 million). This development was primarily driven by growing consolidation on the demand side and consequently higher discount burdens. In addition, price increases in the so-called Vital and Essential Drugs List (EDL) could not compensate for the high inflation rate. Sales generated in Italy with branded products recorded growth of 9 percent to Euro 43.9 million, in particular as a result of acquisitions (previous year: Euro 40.4 million). Sales generated in Vietnam with branded products increased by 21 percent, applying the exchange rates of the previous year. In euro, sales increased due to a slightly negative currency effect of the Vietnamese dong by 19 percent to Euro 36.7 million (previous year: Euro 30.8 million).

Reported EBITDA for Branded Products decreased by 9 percent to Euro 200.7 million in 2016 (previous year: Euro 220.1 million). This development was based on various effects in the Russian market. On the one hand, high inflation negatively affected consumer sentiment and purchasing power of end consumers, on the other hand, increased discount burdens and sales measures in connection with a clearly negative currency effect of the Russian ruble. In addition, despite a positive sales performance, negative translation effects resulting from the EU referendum as well as higher expenses for sales and marketing led to a burden on the key earnings figures of the British subgroup Thornton & Ross. The adjusted EBITDA margin for Branded Products was at 23.4 percent.

STADA reconciliation - special items 2016
>

in EUR million¹	2016 re- ported	Impair- ments/ write-ups on fixed assets	Effects from purchase price allocations and product acquisitions²	Currency translation effects CIS/Eastern Europe³	Measure-ment of derivative financial instruments	Portfolio adjustments/ restructuring expenses⁴	Other⁵	2016 adjusted
Earnings before interest, taxes and amortization (EBITDA)	361.5	--	-2.9	9.1	--	28.2	2.0	398.0
Balance from depreciation/amortization and impairments/write-ups on intangible assets (including goodwill), property, plant and equipment and financial assets	182.7	-65.5	-14.3	--	--	--	--	102.9
Financial income and expenses	51.4	--	--	--	-0.5	--	--	50.9
Income taxes	31.9	12.8	3.1	1.1	0.1	5.3	4.0	58.4

Result distributable to non-controlling interests	9.6	0.5	-1.6	--	--	--	--	8.5
Result distributable to shareholders of STADA Arzneimittel AG (net income)	85.9	52.2	9.9	8.0	0.4	22.9	-2.0	177.3

¹ As a result of the presentation in EUR million, deviations due to rounding may occur in the tables.
² Relates to additional scheduled depreciation and other measurement effects due to purchase

price allocations as well as significant product acquisitions taking financial year 2013 as basis.
³ Relates to currency translation effects recorded in the income statement resulting from the

fluctuation of the Russian ruble as well as other significant currencies of the region CIS/Eastern

Europe.
⁴ Relates to miscellaneous extraordinary expenses, among other things, for the restructuring of the

Germany business, the termination of main parts of the Aesthetics business, expenses in

connection with the deconsolidation of the Egyptian subsidiary as well as the termination of a

distribution agreement in Belgium.
⁵ Relates to miscellaneous extraordinary income and expenses, among other things, from a

milestone payment received in the United Kingdom, tax rate changes in the United Kingdom as

well as a severance payment for the former Chairman of the Executive Board.

Contact:

STADA Arzneimittel AG / Investor Relations / Leslie Iltgen / Stadastraße 2-18 / 61118 Bad Vilbel - Germany / Tel.: +49 (0) 6101 603-173 / Fax: +49 (0) 6101 603-215 / E-mail: leslie.iltgen@stada.de

Or visit us in the Internet at www.stada.com.

29.03.2017 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

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Language:	English
Company:	STADA Arzneimittel AG
	Stadastraße 2-18
	61118 Bad Vilbel
	Germany
Phone:	+49 (0)6101 603- 113
Fax:	+49 (0)6101 603- 506
E-mail:	communications@stada.de
Internet:	www.stada.de
ISIN:	DE0007251803, DE0007251845,
WKN:	725180, 725184,
Indices:	MDAX
Listed:	Regulated Market in Dusseldorf, Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Hamburg, Hanover, Munich, Stuttgart, Tradegate Exchange