Fagron : turnover increased by 3.6% to € 436.9 million and net profit increased to € 47.0 million

Regulated information | Consolidated results for the 2017 financial year
Nazareth (Belgium) / Rotterdam (The Netherlands), 7 February 2018

Fagron turnover increased by 3.6% to € 436.9 million and net profit increased to € 47.0 million
Rafael Padilla appointed CEO and member Board of Directors

Highlights - Financial

• Organic turnover growth accelerated to 4.2% in the second half
• REBITDA^[1] increased 5.7% to € 95.7 million or 21.9% of turnover
• EBIT increased 317.2% to € 74.6 million or 17.1% of turnover
• Strong operational cash flow of € 84.2 million
• Net financial debt/REBITDA ratio declined from 3.18 to 2.48
• Dividend proposal of € 0.10 per share
• Further growth of turnover and profitability expected in 2018

Strategic - operational

• Active buy-and-build strategy continued with acquisitions in Croatia and Brazil
• Appointments
  • Rafael Padilla appointed as CEO and co-opted as member of the Board of Directors
  • Ivan Marostica succeeded Rafael Padilla as Area General Manager of Fagron South America
  • Blake Keller succeeded Rita Hoke as President of Fagron North America
  • Marcello Bergamini appointed Area General Manager of Fagron Europe (excl. Benelux)

Rafael Padilla, CEO of Fagron: "Fagron realised strong results in 2017. After good growth in turnover and profit in the first six months, our core activities in Europe, South America and North America also contributed positively in the second half of the year. Turnover increased by 3.6% to € 436.9 million in 2017, while the REBITDA increased by 5.7% to € 95.7 million. Organic turnover growth accelerated in the second half of the year to 4.2%.

In order to consolidate our market leadership in the pharmaceutical compounding market, in August 2017 we finalised the acquisition of Kemig, a leading supplier of pharmaceutical raw materials and packaging materials to pharmacies and wholesalers in Croatia and Bosnia and Herzegovina. We realised a second takeover in October with the acquisition of Brazil-based All Chemistry, a renowned supplier of pharmaceutical raw materials to compounding pharmacies.

In 2017, we successfully started with the worldwide introduction of innovative concepts developed by Fagron, such as FagronLab(TM) (advanced compounding equipment) and TrichoConcept(TM) (patented total solution for alopecia). We will launch the TrichoTest(TM) (genetic test) in March 2018. The TrichoTest(TM) enables prevention and treatment of alopecia to be tailored to the individual characteristics of a person, based on the diagnosis. In 2018 we will continue to actively focus on the development of innovative products and concepts and proceed with our active buy-and-build strategy.

The new sterile compounding facility in Wichita, the United States, secured several licences in 2017. Licences for the states of Arkansas and Maine were received in the fourth quarter, bringing the current total to 48. Although the sterile activities in the United States performed in line with expectations in 2017, we believe we can further accelerate growth in 2018 with the appointment of Blake Keller.

A number of changes were made to the board and management in 2017, including my appointment as CEO. Together with the experienced and motivated Fagron team, we will successfully expand the business further in the coming years. In this context, the focus will be on strong organic growth supplemented by targeted acquisitions in our core markets. I am confident that our strategic focus will provide significant value for our shareholders and other stakeholders."

Koen Hoffman, Chairman of the Board of Directors: "Over the past few months, Mr. Rafael Padilla has proven himself to be a dynamic and inspiring leader, with the right skills and experience to lead the group in an effective manner and to launch the right strategic initiatives to take the group to the next level in terms of performance and value creation. We are convinced that Mr Padilla and his experienced leadership team will be able to expand the group's leading market positions via innovation-driven organic growth and strategic acquisitions. In addition to his appointment as Chief Executive Officer, the Board of Directors has decided, on the advice of the nomination and remuneration committee, to co-opt Mr Padilla as a member of the Board of Directors of Fagron. We will propose Mr Padilla's formal appointment to the General Meeting of Shareholders."

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