Report on the IIIrd Quarter of Period under review January 1, 2002 until September 30, Specialist for regenerative medicine

Transcription

1 Report on the IIIrd Quarter of 2002 Period under review January 1, 2002 until September 30, 2002 Specialist for regenerative medicine

2 CONSOLIDATED GROUP curasan AG, D-Kleinostheim curasan Benelux BV, NL-Barneveld GerontoCare GmbH, D-Kleinostheim Pro-tec Medizinische Produkte GmbH, D-Kleinostheim Titanium Innovations GmbH, D-Kleinostheim Head 100 % Sales 100 % Regulatory Affairs 100 % Manufacturing 100 % Manufacturing KEY FIGURES Euro million to to Change Sales % Biomaterials/Biologicals % Pharmaceuticals % EBIT % Cash Flow % Employees (absolute) % Accounting standards based on IAS principles.

3 Letter to Shareholders Dear Shareholders, The following quarterly report, the third in the current fiscal year, outlines the performance of curasan AG and its subsidiary companies for the period from July to September Overall, we are pleased with our accomplishments in the third quarter. Our cost-management activities have already borne fruit. Indeed, we succeeded in reining back costs by a substantial amount, and we shall continue to pursue this goal in the future. In order to further enhance the positioning of our highly successful bone regeneration material Cerasorb, we endeavour to bolster our presence within the marketplace and accelerate out-and-out penetration of the world's key markets. Participation in major medical conferences is deemed to be an important component of this strategy. In fact, in the period under review we were able to present with great success our biomaterials to professionals attending the World Cleft Congress, which was held in Munich on September 17, We are also delighted with the extremely positive feedback received in connection with our workshops for augmentative surgery. The success of these programmes has prompted us to resume them in the coming year. In addition to the entry-level courses, we also intend to offer advanced training sessions. We would like to take this opportunity to express our gratitude to our employees, our customers and our shareholders. Your trust is the foundation upon which our activities are built. curasan AG Executive Board Kleinostheim, October

4 Our Shares The situation currently witnessed throughout Germany's stock markets is characterised by considerable declines in share prices and a downward spiral of stock indices. Indeed, there seems to be no sign of a sustained upward trend. And particularly in the period under review the key stock indices had to contend with yet another drastic decline in value. The Nemax All Share kicked off with 1,091 points at the beginning of the year, then fell to 664 points towards the end of June 2002, and finally plunged to 389 points in the ensuing months. On average, companies listed within the Neue Markt segment lost 41.4 per cent of their value in the period under review (July 1 to September 30, 2002). curasan's shares were unable to make any substantial headway in an environment characterised by general economic malaise. While our shares outperformed the Nemax All Share at the beginning of the period under review, they were faced with an aboveaverage loss towards the end of the quarter. In the last week of September, curasan's shares even dipped below the Euro 1.00 mark for the first time. In mid-october, news regarding the pan-european approval of Cerasorb block forms briefly propelled our shares well beyond Euro Based on this substantial increase in value, curasan was one of the biggest gainers of the day's trading; we also managed to widen our lead over penny stocks, which are particularly susceptible to short-term speculation. The upward move underlines that confidence in our products, our strategic alignment and our management remains strong. Currently, We believe that our sales activities in the US, which commence soon, highlight the enormous potential of our stock. 4

5 SHARE DATA ( ) Free float Earnings per share (DVFA/SG) Price-to-sales ratio, end of the period Equity per share, end of period Price at end of period High/Low 53.7 % 0.21 Euro 0.27 Euro 3.06 Euro 0.77 Euro 2.59/0.77 Euro SHARE PERFORMANCE curasan Shares Index Nemax All Share Index WEITERE ANGABEN WKN Stock Exchanges Reuters code Bloomberg code Berlin, Bremen, Duesseldorf, Frankfurt, Hamburg, Hanover, Munich, Stuttgart CUR CUR 5

6 Sales of the product divisions Third-quarter growth in sales revenues generated within the area of Pharmaceuticals (+27 per cent) exceeded the general sales performance witnessed in this sector of the industry. Registering a figure of Euro 7.1 million, the first nine months have already produced the level of revenues achieved in the previous fiscal year. This performance proves that our extended product range is proving to be highly competitive and that curasan AG is gaining further momentum as a major partner to hospitals and clinics. Anti-Infectives and Anaesthetics were the main revenue drivers within this area. At Euro 3.6 million for the first nine months, sales revenues generated by Biomaterials/Biologicals were comparable to the figure posted in the previous year. Biomaterials had a particularly solid performance. These products are mainly used within Germany's dental market, which is characterised by a high level of seasonality and is also influenced by economic conditions. Registering 15.3 per cent, foreign sales in relation to total sales were slightly lower than in the preceding quarter. Sales generated by curasan Benelux, a company within the curasan group, rose substantially year on year. We are particularly delighted that Biomaterials grew exponentially within the international arena. Due to the well-known problems surrounding foreign currencies, sales in local anaesthetics in the Middle East were weaker than in the past. EXPORT SALES South America 76 Rest 74 Asia 130 Middle East 432 ieuro 000 Europe 927 6

7 Income Statement We recorded a year-on-year revenue increase of 16 per cent for the first nine months, taking us to Euro 10.7 million for the aforementioned period; our substantial growth in the third quarter contributed to this performance. Gross profit revenues plus inventory changes plus internally generated assets capitalized, less cost of goods sold showed a substantial increase relative to the previous year. However, due to the pronounced shift in our main revenue drivers towards Pharmaceuticals, the average margin in relation to the previous year dropped to 60.7 per cent. The increase in staff costs, i.e. personnel expenses, from Euro 4.6 million to Euro 4.7 million was more moderate than in previous quarters. This more stable development is due to the fact that staffing levels have remained virtually unchanged for roughly a year. The Management Board has initiated appropriate measures to ensure that cost structures are kept in check. The number of staff employed computed on the basis of full-time staff in the respective functional areas is as follows: FULL-TIME EMPLOYEES Marketing/Sales Operations Research/Registration Finance/Controlling Central Division Total

8 Consolidated Income Statement (IAS) for the period January 1, 2002 September 30, 2002 (EURO 000) to to to to Revenues 3,561 3,225 10,717 9,176 Other operating income Changes in inv. of finished goods and work in progress Production for own fixed assets capitalized Cost of materials/services purchased 1,808 1,472 4,967 3,941 Personnel expenses 1,395 1,659 4,729 4,584 Depreciation and amortization Other operating expenses 1,454 1,427 4,242 4,208 Operating income/loss 998 1,084 2,921 3,169 Interest income and expenditure Other income/expenses Results before taxes 1,009 1,498 3,057 3,539 Income tax ,110 1,285 Net income/loss ,947 2,254 Earning per share (IAS) Earning per share (DVFA/SG) Average number of shares (IAS) 5,000 5,000 5,000 5,000 Cash earnings per share (DVFA)

9 Write-offs were solely in connection with depreciation of fixed assets and amortisation of goodwill. At Euro 4.2 million, other operating expenses were comparable to the figure posted in the same period last year. These include expenses associated with precautionary measures to ensure that the carrying amounts of receivables in connection with long-term commercial credits on goods are appropriate, i.e. that these receivables are not impaired. These expenses do not include any items deemed, by the Group, to be of an extraordinary nature. The operating loss of Euro 2.9 million was roughly 8 per cent better than the figure posted in the previous year. Net interest income has declined due to the lower level of cash and cash equivalents. The differences arising from a change in the fair value of securities held by the company were considerably lower than in the preceding year. As the securities have now been disposed of, no additional losses are expected. The positive figure disclosed under income taxes is associated with deferred taxes, which are recognised in accordance with international accounting standards. The net loss for the first nine months amounted to Euro 1.9 million, which is roughly 14 per cent lower than the figure posted for the same period last year. Research, Development and Regulatory Affairs Efforts to gain pan-european approval of moulded forms and blocks made of the synthetic bone augmentation material Cerasorb were stepped up in the period under review. As a result, approval by the authorities was granted almost immediately. Furthermore, curasan's product range is being maintained and extended with the help of new and updated national and international registrations for drugs and medical products. We have applied for patent protection for a bone adhesive. Additional development phases will be required before this product can be used for medical applications. 9

10 Balance Sheet and Cash Flow At the end of the period under review, the structure of the balance sheet was comparable to that disclosed at the end of the previous quarter. Shareholders' equity amounts to over 71 per cent of total assets, despite the net loss recognised in this period. Our current liabilities have remained virtually unchanged in numerical terms and are currently equal in value to roughly half of our current assets. Cash and cash equivalents at the end of the period under review amounted to approximately Euro 1.5 million, which is similar to the figure posted at the end of the previous quarter. Compared with the same period last year, our cash requirements are now considerably lower. In fact, they have almost halved in relation to the previous year. This is mainly attributable to the level of scheduled investments in fixed assets, the reduction in inventories and the stabilised increase in receivables. The Management Board is currently assessing and negotiating alternatives as regards financing the company up to the planned breakeven point. 10

11 Consolidated Balance Sheet (IAS) at September 30, 2002 (EURO 000) Assets Current assets Cash and cash equivalents Short-term investments/marketable securities Trade accounts receivable Inventories Prepaid expenses and other current assets Total current assets Property, plant and equipment Intangible assets Goodwill Deferred taxes Total assets Liabilities and Shareholders Equity Current liabilities Short-term debt Trade accounts payable Accrued expenses Other current liabilities Total current liabilities Long-term debt Pension accrual Other non-current liabilities Shareholders equity Share capital Additional paid-in capital Profit/loss carried forward Annual result Total shareholders equity Total liabilities and shareholders equity 1, ,838 3, ,762 2,439 5, ,892 21, , ,923 1, ,000 19,844 7,578 1,947 15,319 21,395 1,598 3,576 1,540 3, ,321 2,514 4, ,782 23,203 1,007 1, ,812 1, ,000 19,844 4,705 2,873 17,266 23,203 11

12 Statement of Cash Flow (IAS) to (EURO 000) Net income/loss Depreciation of fixed assets Unsheduled depreciation of current assets Payment invalid assets (deferred taxes) Increase in long-term accruals Profits on the disposal of fixed assets Increase/Decrease in inventories, receivables and other assets Increase/Decrease in accounts payable and other liabilities Cash Flow from operating activities Expenditure in investments in fixed assets Cash Flow from investing activities Investments/proceeds from the negotiation/ liquidation of bonds and debts Cash Flow from financing activities Change in cash and cash equivalents Other changes in cash and cash equivalents Cash and cash equivalents at the beginning of the period Cash and cash equivalents at the end of the period to , , ,793 1,347 1, , ,174 1, to , , ,307 1,660 2,024 3,554 3, , ,531 6,048 12

13 Statement of Changes in Shareholders Equity (IAS) for the period January 1, 2002 September 30, 2002 CAPITAL ACCOUNTS Euro million Share Capital Reserves Acc. Deficit Total Status as at Acc. net loss Status as at Directors' Holdings (in shares 000) NAME Position Stock Change since Hans-Dieter Rössler Chairman of the Executive Board 2,300 Bought-in 32 Dr. Detlef Wilke Chairman of Supervisory Board 12 Helmut Trahmer Member of the Executive Board 1 Sale 18 13

14 Outlook The increase in curasan's share price in the past few weeks proves that participants within the financial markets remain confident in our company strategy i.e. specialising in regenerative medicine. In view of the company's solid performance, the Management Board anticipates a further increase in curasan AG's share price. Our Cerasorb range of products has been complemented by Cerasorb block forms, for which we have now received pan-european approval. Therefore, we will gain access to new areas of application in various fields of medicine. These mainly include traumatology, orthopaedics and sports medicine. We have also made ground as regards negotiations with our US partners. Conclusion of these negotiations in the near future now seems to be a distinct possibility. Therefore, we are on track to achieving our goal of marketing Cerasorb in the US in the coming year. In addition, we are about to finalise a deal covering the distribution of a US dental product, which is designed to complement our portfolio in this segment. 14

15 FINANCIAL CALENDAR Preliminary Annual Results 2002 Annual Report 2002 Balance Sheet Press Conference/DVFA Conference First Quarter Report 2003 Shareholders Meeting 2003 January 2003 March 2003 April 2003 May 15, 2003 June 2003 Concept, Text & Design: ZIEGLER & ZIEGLER IR Consulting GmbH, Hamburg

16 Contact curasan AG Lindigstrasse 4, Kleinostheim Phone: +49 (0) Fax : +49 (0) Investor Relations: Ralph Wintermantel Phone: +49 (0) Fax : +49 (0) ir@curasan.de