Celesio: Revenue and earnings in the first nine months 2014 up on prior year

Ongoing discount competition in Germany and challenging market environment in France and Brazil anticipated

Celesio generated group revenue of 16,460.0 million euro in the first nine months of 2014, which is up 2.9 per cent year-on-year. When adjusted for currency effects and changes in the consolidated group, revenue actually increased by 3.7 per cent. Market growth in Germany and Brazil and the good revenue performance in the United Kingdom and Norway outweighed the decline in France and Belgium.

Adjusted earnings before interest and taxes (EBIT) rose by 2.1 per cent from 312.0 million euro to 318.7 million euro. This is mainly due to the very good performance in the United Kingdom and Norway which more than compensated for the challenging circumstances caused by the discount competition in Germany, the weak market in France and an unfavourable trend in Brazil. In the first nine months of 2014 Net Financial Debt decreased by 281.3 million euro to 1,082.1 million euro, which can be attributed in particular to the conversion of the 2014 and 2018 convertible bonds.

“The operational performance in the first nine months of 2014 is in line with our expectations,” confirms Marc Owen, Chairman of the Management Board. “Future development will hinge on how quickly the international platform can be set up after the registration of the domination and profit and loss transfer agreement. Therefore an integration team is tasked with identifying areas of potential, preparing solutions and then effecting a gradual integration into the organisational structure of McKesson. A leadership team has been set up to define the strategic and operating priorities. I feel very confident that this team will strengthen the position of Celesio as a leading international wholesale and retail company in the pharmaceutical and healthcare sector in the short term.”

Performance in the divisions
Revenue in the Consumer Solutions division – the pharmacy business – increased by 7.6 per cent from 2,514.8 million euro to 2,706.0 million euro. After adjustments for currency effects, revenue rose by 5.7 per cent.

After adjustments for non-recurring effects, EBIT increased significantly by 15.9 per cent from the prior year’s figure of 144.5 million euro to 167.4 million euro in 2014.

Revenue in the Pharmacy Solutions division – the wholesale business – increased by 2.1 per cent to 13,754.5 million euro. After adjustments for currency effects, revenue increased by 2.8 per cent.

After adjustments for non-recurring effects, EBIT fell significantly by 10.4 per cent.

Earnings forecast
Optimising the company’s cost structures and level of efficiency is fundamental. The expansion of the European Pharmacy Network will also have a positive impact, enabling even stronger growth from 2015 onwards. However, these revenues will still be reduced in part by IT project costs in 2014. The unfavourable situation in Germany, France and Brazil is affecting earnings more than previously expected. The group has also faced higher allowances for debts in Portugal. Overall, adjusted EBIT in the 2014 fiscal year is expected to be slightly lower than in the prior year.

The key figures of the Celesio Group can be found in the PDF here.

ENDS

Stuttgart, 28 October 2014

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About the Celesio Group
Celesio is a leading international wholesale and retail company and provider of logistics and services to the pharmaceutical and healthcare sectors. The proactive and preventive approach ensures that patients receive the products and support that they require for optimum care. With 39,000 employees, Celesio operates in 14 countries around the world. Every day, the group serves over 2 million customers – at about 2,200 pharmacies of its own and over 4,300 participants in brand partnership schemes. With 133 wholesale branches, Celesio supplies 65,000 pharmacies and hospitals every day with up to 130,000 pharmaceutical products. The services benefit a patient pool of about 15 million per day.