Press Release

DIASORIN GROUP REPORTS GROWTH IN REVENUES AND PROFITABILITY IN THE FIRST QUARTER 2017,

GENERATING A RELEVANT FREE CASH FLOW

REVENUES: € 157.5 million, +26.5% (+24.1% at CER)1

EBITDA: € 62.5 million, +32.4% (+30.0% at CER), equal to 39.7% of the Group revenues EBIT: € 50.0 million, +31.0%, equal to 31.7% of the Group revenues

NET PROFIT: € 32.9 million, +33.2%, equal to 20.9% of the Group revenues

NET FINANCIAL POSITION: +€ 114.1 million at March 31, 2017 (€ 71.2 million at December 31, 2016) FREE CASH FLOW: € 43.6 million in Q1'17 (+€ 15.2 million compared with Q1'16)

LIAISON/LIAISON XL: net placements amounting to +173 units in Q1'17 (+185 LIAISON XL and -12 LIAISON), for a total of 7,035 units at March 31, 2017, out of which 3,048 LIAISON XL (equal to about 43% of the overall installed base)

Saluggia (Italia), May 8, 2017 - The Board of Directors of DiaSorin S.p.A. (FTSE Italia Mid Cap: DIA), a global leader in the production of diagnostic tests, meeting today:

  • examined and approved the consolidated financial results for Q1'17;

  • examined and approved the 3-years Industrial Plan that will be presented to the financial community on June 26, 2017;

  • evaluated, in accordance with the relevant provisions of the Corporate Governance Code of Borsa Italiana S.p.A., the independence requirements of the Director, Mrs. Fiorella Altruda, recently appointed pursuant to the Shareholders' resolution of April 27th, 2017.

Amounts in millions of euros

Q1

change

2016

2017

amount

%

Revenues

124.5

157.5

+33.0

+26.5%

CLIA tests

94.3

102.9

+8.6

+9.1%

RIA & ELISA tests

15.5

18.6

+3.1

19.7%

Instruments sales and other revenues

14.0

17.7

+3.7

+26.1%

Molecular tests

0.7

18.2

+17.6

n.m.

EBITDA

EBITDA margin

47.2

37.9%

62.5

+15.3

+32.4%

39.7%

+180 bps

EBIT

EBIT margin

38.2

30.7%

50.0

+11.8

+31.0%

31.7%

+100 bps

Net profit

24.7

32.9

+8.2

+33.2%

(a)

(b)

(a) @ CER: +24.1%

(b) @ CER: +30.0%

* The data for 2017 includes the contribution of DiaSorin Molecular's business, consolidated as of May 2016

1 Foreign exchange impact: +€ 3.0 million

SIGNIFICANT EVENTS

Launch of 2 immunodiagnostic tests:

  • FGF 23, a fully automated marker for chronic kidney disease, available outside the US only, on the LIAISON and LIAISON

    XL analyzers.

  • Zika IgM, for the detection of Zika virus infections, available on the LIAISON XL in the European and in the US market, following the FDA Emergency Use Authorization (EUA).

Launch of the Clostridium difficile Direct molecular test, available in the US market on the LIAISON MDX, for the detection of Clostridium Difficile infection.

COMMENT ON RESULTS

In the foreign exchange market, the Euro:

  • lost in value vis-à -vis the U.S. dollar, the Australia dollar and the Brazilian real,

  • strengthened against the Chinese yuan, the Mexican peso and the British pound compared with Q1'16.

    U.S. dollar

    Australian dollar

    Brazilian real

    Chinese yuan

    Mexican peso

    British pound

    Euro

    Q1'17

    -3.4%

    -8.1%

    -22.2%

    +1.7%

    +8.6%

    +11.6%

    Source: Banca d'Italia

    CONSOLIDATED REVENUES

    Revenues: € 157.5 million in Q1'17, +26.5% (+24.1% at CER) compared with Q1'16.

    In Q1'17, the sales trend highlights the following factors:

    • CLIA, net of 25 OH Vitamin D: +12.1% (+10.9% at CER).

    • 25 OH Vitamin D (CLIA): +3.1% (+0.0% at CER).

    • RIA & ELISA tests: +19.7% (+16.6% at CER).

    • Instruments sales and other revenues: +26.1% (+24.4% at CER).

    • Molecular tests: € 18.2 million in Q1'17, mainly as a result of the contribution from sales of DiaSorin Molecular.

In Q1'17, net placements were equal to +173 units, with the installed base totaling 7,035 units. Steady expansion of the LIAISON XL analyzers, amounting to about 43% of the overall installed base as of March 31, 2017

Revenues by geography

The tables below provide a breakdown of the consolidated revenues of the DiaSorin Group by geographic region.

Amounts in millions of euros

Q1

Change

2016

2017

%

Amount

@ current

@ constant

Europe and Africa

60.6

66.7

+6.1

+20.9

+2.5

+3.4

+10.1%

+10.1%

North America

32.2

53.1

+64.9%

+59.3%

Asia Pacific

23.6

26.2

+10.7%

+10.2%

Central and South America

8.1

11.5

+42.4%

+30.0%

Total

124.5

157.5

+33.0

+26.5%

+24.1%

% of revenues contributed

2016

2017

Europe and Africa

48.7%

42.4%

North America

25.8%

33.7%

Asia Pacific

19.0%

16.6%

Central and South America

6.5%

7.3%

Europe and Africa

In Q1'17, revenues totaled € 66.7 million, +10.1% (+10.1% at CER) compared with Q1'16 also as a result of the sales contribution from DiaSorin Molecular's immunodiagnostic and molecular diagnostic tests.

  • Italy: +1.0% (local market: -6.1%)2. Upward trend in sales of CLIA tests, net of 25 OH Vitamin D (+2.4%), mainly Stool testing, 1,25 Vitamin D and PCT sales (+6.7%) bolstered by trends in volumes.

  • Germany: +8.8% (local market: +1.5%)2. Good performance of 1,25 Vitamin D and Stool testing sales.

  • France: +7.4% (local market: +0.5%)2. Upward trend in sales of CLIA tests, net of 25 OH Vitamin D (+8.2%), mainly Infectious Diseases, Prenatal Screening and 1,25 Vitamin D and molecular tests.

    North America

    In Q1'17, revenues amounted to € 53.1 million, +64.9% (+59.3% at CER) compared with Q1'16, following the positive trend in sales of immunodiagnostic and the positive contribution of DiaSorin Molecular's immunodiagnostic and molecular diagnostic tests.

  • USA: +60.6% in local currency; increase in sales of CLIA tests, net of 25 OH Vitamin D, especially 1,25 Vitamin D and Infectious Diseases, Endocrinology and Prenatal Screening tests, also due to the new business acquired at a large laboratory, already customer. Sales of the quarter also benefited from the sales of DiaSorin Molecular's immunodiagnostic and molecular diagnostics products, especially the flu testing.

    Asia Pacific

    In Q1'17, revenues were equal to € 26.2 million, +10.7% (+10.2% at CER).

  • China: +22.6% in local currency; revenues gains for all CLIA products (mainly Hepatitis, Prenatal Diseases, Infectious Diseases and PCT).

  • Distributors: -11.0% (-11.7% at CER) due to the decrease in sales of tests and instruments and to a different business calendarization.

2 Source: EDMA latest data available

Central and South America

In Q1'17, revenues amounted to € 11.5 million, +42.4% (+30.0% at CER) compared with Q1'16.

  • Brazil: +21.2% in local currency; positive trend in sales of CLIA tests, net of 25 OH Vitamin D (Hepatitis, Infectious Diseases and Endocrinology panels), Murex tests and sales of instruments.

  • Mexico: +21.5% in local currency; trend driven by sales of PCT, Hepatitis, Infectious Diseases panels.

  • Distributors: +43.4% (+42.4% at CER) following the upward trend in sales of tests and instruments and the business contribution of the molecular diagnostic tests.

    Revenues by technology

    The following table shows the percentage of the Group's consolidated revenues contributed by each technology.

    % of revenues contributed

    2016

    2017

    CLIA tests

    75.7%

    65.4%

    RIA & ELISA tests

    12.5%

    11.8%

    Molecular tests

    0.5%

    11.6%

    Instruments sales and other revenues

    11.3%

    11.2%

  • CLIA tests: lower percentage on total revenues in Q1'17 (-10.3 percentage points), mainly as a result of the growing contribution provided by DiaSorin Molecular's immunodiagnostic and molecular diagnostic sales. CLIA tests sales confirmed a positive trend.

  • RIA & ELISA tests: decline of the contribution provided by both technologies, albeit improving in absolute value vis-a-vis the previous quarters, due to DiaSorin Molecular's ELISA revenue contribution.

  • Molecular tests: increase of the percentage on total revenues, driven by the sales contribution of DiaSorin Molecular's business.

  • Instruments sales and other revenues: unchanged contribution compared with Q1'16.

    OPERATING PERFORMANCE

    The following provides the Group operating performance in Q1'17.

    GROSS PROFIT

    GROSS PROFIT: € 107.9 million; +25.9%, equal to 68.5% of revenues (68.9% in Q1'16), as a result of higher sales and the different geographic and product mix in the periods under comparison.

    EBITDA

    EBITDA: € 62.5 million; +32.4% (+30.0% at CER), due to the increase in Gross Profit and the lower incidence of operating expenses, also driven by the postponement of some of these in the following quarters. EBITDA margin equal to 39.7% (37.9% in Q1'16).

    EBIT

    EBIT: € 50.0 million; +31.0%, equal to 31.7% of revenues (30.7% in Q1'16).

    FINANCIAL PERFORMANCE

    In Q1'17, net financial expense amounted to € 1.6 million, as against net financial expense of € 1.2 million in Q1'16. This trend is due to the changes occurred in interest expense on financial instruments outstanding at March 31, 2017.

    INCOME TAXES

    In Q1'17, income taxes totaled € 15.5 million, equal to a 32.0% tax rate, down 130 basis points compared with Q1'16, as a result of the computation of the Group's taxable profits across the different geographical areas in the periods under comparison and to the lowered Corporate Income Tax in Italy.

    CONSOLIDATED NET PROFIT

    Consolidated net profit amounted to € 32.9 million, +33.2% and equal to 20.9% of revenues (19.8% in Q1'16).

    CONSOLIDATED NFP

    At March 31, 2017, the Consolidated Net Financial Position was positive by € 114.1 million, up by € 42.9 million compared with the balance at December 31, 2016 (equal to € 71.2 million), as a result of the strong cash flow generated in Q1'17.

    FCF

    In Q1'17, the Free Cash Flow of the Group was equal to € 43.6 million, compared with € 28.4 million in Q1'16.

    BUSINESS OUTLOOK

    In view of the Group's operating performance after March 31, 2017 and taking into account possible evolutions of the global macroeconomic scenario and the diagnostic sector in particular, management provides the following guidance for 2017:

    • Revenues: growth equal to +11% at CER compared with 2016

    • EBITDA: growth equal to +11% at CER compared with 2016

In 2016, the euro/dollar exchange rate was equal to 1.11.

***

The Board of Directors examined and approved the 3-years Industrial Plan that will be presented to the financial community on June 26, 2017;

***

The Board of Directors also assessed and confirmed that the legal requirements for the Independent Director Mrs. Fiorella Altruda, appointed by the Shareholders' Meeting on April 27th, 2017, are still met.

***

Considering that the Legislative Decree 25/2016 (implementing the European Directive 2013/50/EU) effective as of March 18, 2016, eliminated quarterly financial reporting obligations, it is hereby announced that the present Press Release of DiaSorin S.p.A. concerning the main consolidated results referred to the First Quarter of 2017 has been drafted voluntarily following the Company's decision of regular reporting to the market and to investors on economic, financial and operational performances, in line with the conduct of Company's major peers.

Piergiorgio Pedron, the Officer Responsible for the preparation of corporate financial reports of DiaSorin S.p.A., in accordance with the second subsection of art. 154-bis, part IV, title III, second paragraph, section V-bis, of Legislative Decree February 24, 1998, no. 58, declares that, to the best of his knowledge, the financial information included in the present document corresponds to book of accounts and book-keeping entries of the Company.

For additional information, please contact:

Riccardo Fava Ines Di Terlizzi

Investor Relations & Corporate Communication Senior Director Investor Relator Tel. +39.0161.487988 Tel. +39.0161.487567

riccardo.fava@diasorin.it ines.diterlizzi@diasorin.it

CONSOLIDATED INCOME STATEMENT

(Amounts in millions of euros)

Q1

Change

2016

2017

amount

%

Net Revenues

124.5

157.5

+33.0

+26.5%

Cost of sales

(38.7)

(49.5)

-10.8

+27.9%

Gross profit

85.8

107.9

+22.2

+25.9%

68.9%

68.5%

-0.3%

Sales and marketing expenses

(24.3)

(29.8)

-5.5

+22.8%

Research and development costs

(7.2)

(10.2)

-3.0

+41.7%

General and administrative expenses

(13.6)

(16.0)

-2.4

+17.6%

Total operating expenses

(45.1)

(56.0)

-10.9

+24.2%

(36.2)%

(35.6)%

+0.6%

Other operating income (expense)

(2.5)

(2.0)

+0.6

-22.5%

non recurring amount

(1.9)

(0.3)

+1.7

n.m.

EBIT

38.2

50.0

+11.8

+31.0%

30.7%

31.7%

+1.1%

Net financial income (expense)

(1.2)

(1.6)

-0.5

+39.4%

Profit before taxes

37.0

48.4

+11.4

+30.7%

Income taxes

(12.3)

(15.5)

-3.2

+25.8%

Net result

24.7

32.9

+8.2

+33.2%

EBITDA (1)

47.2

37.9%

62.5

+15.3

+32.4%

39.7%

+1.8%

(1) The Company defines EBITDA as the "result from operations" before amortization of intangibles and depreciation of property, plant and equipment. EBITDA, which the Company uses to monitor and assess the Group's operating performance, are not recognized as an accounting tool in the IFRSs and, consequently, should not be viewed as an alternative gauge to assess the Group's operating performance. Because the composition of EBITDA is not governed by the reference accounting principles, the computation criterion used by the Group could be different from the criterion used by other operators and/or groups and, consequently, may not be comparable.

Unaudited data.

CONSOLIDATED BALANCE SHEET

(Amounts in millions of euros)

12/31/2016

3/31/2017

Change

Goodwill and intangibles assets

357.1

351.8

-5.3

Property, plant and equipment

92.1

89.9

-2.2

Other non-current assets

24.0

24.9

+0.9

Net working capital

165.0

159.8

-5.2

Other non-current liabilities

(46.1)

(47.0)

-0.9

Net Invested Capital

592.2

579.4

-12.8

Net Financial Position

71.2

114.1

+42.9

Total shareholders' equity

663.4

693.5

+30.1

Unaudited data as of March 31, 2017.

CONSOLIDATED STATEMENT OF CASH FLOWS

(Amounts in millions of euros)

Q1

2016

2017

Cash and cash equivalents at the beginning of the period

212.2

130.5

Cash provided by operating activities

33.8

51.2

Cash used in investing activities

(5.8)

(8.0)

Cash provided/(used) in financing activities

(5.2)

(0.8)

Acquisitions of companies and business operations

-

(0.1)

Net change in cash and cash equivalents before investments in financial assets

22.9

42.3

Divestment/(Investments) in financial assets

57.0

-

Net change in cash and cash equivalents

80.0

42.3

Cash and cash equivalents at the end of the period

292.1

172.8

Unaudited data

DiaSorin S.p.A. published this content on 08 May 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 26 May 2017 10:05:19 UTC.

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