Half-Yearly Financial Report. for the period 1 January to 30 June (Translation: The german version is the legal binding one)

Transcription

1 Half-Yearly Financial Report for the period 1 January to 30 June 2009 Sanacorp Pharmaholding AG (Translation: The german version is the legal binding one)

2 Dear shareholder, The following half-yearly financial report gives you an overview of the business development of Sanacorp Pharmaholding AG in the first six months of the current financial year. Being a pure holding company, net income of Sanacorp Pharmaholding AG almost entirely depends on investment income received. Currently, the Company owns an exclusive investment in Millennium S.p.A., Bologna, Italy. Millennium S.p.A. in turn, owns equity investments in operating pharmaceutical wholesale companies in Germany, France and Belgium. The dividends paid by Millennium S.p.A. to Sanacorp Pharmaholding AG are based on the profits these operating entities generate. We will therefore not only give you an overview of the business development of Sanacorp Pharmaholding AG in this interim financial report but also inform you on the development of the operating companies and Millennium S.p.A in the first six months of The shareholders of Millennium S.p.A. approved a dividend payment to the company's shareholders in their meeting held on 29 April 2009 over the total amount of 19,000 thousand. Sanacorp Pharmaholding AG therefore recognised investment income of 9,500 thousand in the second quarter of 2009 in accordance with its 50 %-investment. This is an increase by 2,100 thousand compared with the investment income the company received the year before ( 7,400 thousand). Hence, the result from ordinary activities was also positive in the first half of It improved from 6,879 thousand year on year to 9,090 thousand. Given the initial consolidation of the von der Linde -Group on 1 April 2009 into the Sanacorp Pharmahandel GmbH subgroup operating in Germany, the current business figures of Sanacorp Pharmahandel GmbH and the Millennium Group can be compared with those of the previous year only to a limited extent. What we said in the first quarter of 2009 on the positive sales trends in France and the solidified earnings performance in Germany continues to be valid, however. 2

3 Interim Management Report General information Sanacorp Pharmaholding AG is a quoted financial holding with a co-operative background; its main shareholder is Sanacorp eg Pharmazeutische Großhandlung. Sanacorp Pharmaholding AG owns a 50 % interest in Millennium S.p.A. domiciled in Bologna, Italy. The joint holding company Millennium S.p.A. unites pharmacist-controlled pharmaceutical wholesalers in Germany, France and Belgium under one roof. CERP Rouen S.A.S in France, CERP S.A. in Belgium, Sanacorp Pharmahandel GmbH and v.d.linde-arzneimittel GmbH in Germany, which are the operating companies combined under this Italian holding company, deliver pharmaceuticals and healthcare products to more than 15,000 pharmacies in these countries. Due to the initial consolidation of the von der Linde -Group into the Sanacorp Pharmahandel GmbH subgroup, the current business figures disclosed in this report of Sanacorp Pharmahandel GmbH and of the Millennium S.p.A.-Group are comparable with last year s figures only to a limited extent. The financial position, cash flows and profit or loss of Sanacorp Pharmaholding AG were not affected by initial consolidation effects in the reporting period. Projects and events The Annual General Meeting of Sanacorp Pharmaholding AG held on 1 July 2009 followed the resolutions proposed by the Management and Supervisory Boards. Along with the dividend payout for the financial year 2008 the shareholders also approved an amendment to the company s Articles of Incorporation to take account of the Act implementing the Shareholder Rights Directive (Gesetz zur Umsetzung der Aktionärsrechterichtlinie, ARUG). Upon expiry of this year s Annual General Meeting, the office term of the Supervisory Board Members elected by the Group s employees ended. On the occasion of the election to the Supervisory Board held on 13 May 2009 six of the previous Supervisory Board members, namely Andrea Holder, Jörg Dieckhoff, Roger Kiene, Hans Rainer Koch, Dieter von Lochow and Hans-Jürgen Ruff were re-elected. Messrs. Rudolf Jaumann and Joachim Lang were elected new members to the Board. Messrs. Peter Gmelch and Stefan Klostermeier left the Supervisory Board. During the second quarter of 2009, Sanacorp Pharmahandel GmbH and Cerp Rouen S.A.S. held their shareholder meetings. They approved a dividend payment of 10,000 thousand each to Millennium S.p.A. The payments were made out of net retained profits of the financial year

4 Interim Management Report By resolution of 19 May 2009, the European Court of Justice decided that the German ban on third-party ownership of pharmacies does not violate European Law. The right to own and operate a pharmacy therefore will remain reserved to independent pharmacists. In the past already, Sanacorp supported the notion of independent, owner-operated pharmacies. The Management Board therefore welcomes this milestone decision of the European Court of Justice. On 23 July 2009, the 15th Amendment to the German Drug Law and other provisions was enforced in Germany. According to this amendment, pharmaceutical wholesalers are given a public supply mandate and have a claim to being supplied by pharmaceutical manufacturers. The original idea of remodelling the remuneration of the pharmaceutical wholesale has not been included in this amendment. Profit, financial position and cash flows Profit Sanacorp Pharmaholding AG recognized 9,500 thousand of investment income in the first half of This is an increase by 2,100 thousand as against last year. Investment income is the dividend paid by Millennium S.p.A., Bologna, for the previous financial year. Higher personnel expense ( 53 thousand) was offset by a decrease in other operating expenses ( 278 thousand). The financial result amounted to 9,421 thousand up from 7,263 thousand and, as in the year before, reflected the dividend received. The company recognised profit from ordinary activities in the first half of 2009 in the amount of 9,090 thousand up from 6,879 thousand. Since only investment income was recognised, no income tax was payable in the period under review, which resulted in net income of also 9,090 thousand. Revenue of the Sanacorp Group which operates in Germany amounted to a total of 1,561,572 thousand between 1 January and 30 June It included for the first time the revenue realised by v.d.linde-arzneimittel GmbH between the time of initial consolidation (1 April 2009) and 30 June Thus, the sales trends were in line with the overall market growth. In spite of the more competitive environment in North Rhine-Westphalia, the centre of activities of the von der Linde -Group, the Sanacorp Group kept its gross profit margin in Germany largely on a solid level. It amounted to 5.86 % in the first half of 2009 (previous year: 5.84 %). Along with the fact that investment income decreased year on year, the interest due in connection with the acquisition of the von der Linde - Group depressed the financial result. Profit from ordinary activities amounted to 13,797 thousand between 1 January and 30 June 2009 up from 7,050 thousand. Net income for the first six months in 2009 amounted to 10,168 thousand up from 5,884 thousand. 4

5 Interim Management Report The pharmaceutical wholesalers operating in France and Belgium within the Cerp Rouen Group recognised total revenue of 1,668,266 thousand in the first half of This is a year-on-year increase by 4.34 %. The increase was essentially due to sales growth in France not least due to the fact that three new branches started operations. The overall market in France, however, was slightly on the decline. Whereas the modification of wholesale margin calculations enforced by the French government in March 2008 had almost no impact on gross profits in the first half of 2008, the effects of this decree were clearly noticeable in the first half of As a result, the gross profit margin of the Cerp Rouen Group dropped from 4.89 % in the previous year to 4.61 % in the current financial year. The significant rise in sales and the simultaneously increasing other operating income helped offset the company s lower gross profit. The operating profit (under IFRS) was on the decline, however, mainly due to higher personnel and operating costs incurred in connection with the new branches in France, amounting to 13,864 thousand as of 30 June 2009 down from 18,209 thousand the year before. Profit for the period totalled 9,131 thousand down from 11,577 thousand. Financial position Total assets of Sanacorp Pharmaholding AG amounted to 347,407 thousand as of 30 June 2009 increasing by 9,422 thousand compared with the balance sheet date of the financial year The increase was accounted for by higher current assets recognised for the Millennium S.p.A. dividend received. The initial consolidation of the von der Linde -Group into Sanacorp Pharmahandel GmbH brought changes to the financial position of the Sanacorp GmbH subgroup. Especially due to the new von der Linde -branches in Düsseldorf and Herne, the company s total assets rose significantly from 125,176 thousand as of the previous year s balance sheet date to 159,534 thousand as of 30 June The company s merchandise inventories also increased due to the initial consolidation from 185,265 thousand to 271,223 thousand. The total volume of the factoring transactions carried out by Sanacorp GmbH subgroup in an amount of 96,705 thousand reduced trade receivables to 251,467 thousand. Total assets of the Sanacorp GmbH subgroup totalled 733,853 thousand as of 30 June 2009 up from 597,569 thousand. Total assets of the Cerp Rouen Group increased by 39,277 thousand to a total of 801,437 thousand as against the previous year s balance sheet date. Along with a rise of total assets as a result of the new French branches setting up shop, this increase was also due to a rise in current assets. These were up mainly because trade receivables rose due to the encouraging sales trends and a larger securities portfolio. 5

6 Interim Management Report Cash flows As a result of the net retained profits Sanacorp Pharmaholding AG recognised in the first half of 2009, the company s equity was up from 320,014 thousand as of the previous year s balance sheet date to 329,105 thousand on 30 June The liabilities of 17,670 thousand remained largely unchanged and almost entirely resulted from intercompany liabilities. Just as the initial consolidation of the von der Linde -Group affected the financial position it had also a major impact on the cash flows of the Sanacorp GmbH subgroup. Due to the initial consolidation and the increase in total assets, equity and liabilities, the company s equity-to-assets ratio dropped from 56.71% on 31 December 2008 to % on 30 June Along with the provisions, trade payables were also rising. The liabilities to banks amounted to 111,835 thousand on 30 June They were thus largely on the level they had on the previous year s balance sheet date, influenced, however, by the factoring programmes. Whereas non-current liabilities of the Cerp Rouen-Group slightly dropped in the period under review, the Group s current liabilities were up by 39,209 thousand. This was mainly due to an increase in liabilities from intercompany financing ( 19,374 thousand), rising trade payables ( 9,558 thousand) and an increase in liabilities to banks by 5,797 thousand. 6

7 Interim Management Report Millennium S.p.A. Pro-forma income statement of the Millennium Group (under IFRS) for the period 1 January to 30 June 2009 and 1 January to 30 June 2008: 1 Jan-30 June 09 1 Jan-30 June 08 thous. thous. Sales revenue 3,229,838 2,941,252 Other operating income 40,976 23,600 Cost of materials 3,061,407 2,779,273 Gross profit 209, ,579 Personnel expenses 101,435 92,021 Amortization and depreciation expense 13,068 11,633 Other operating expenses 70,041 62,654 Operating profit 24,863 19,271 Net financial income 1,034 5,021 Profit before income tax 25,897 24,292 Income taxes 7,781 7,612 Net profit for the period 18,116 16,680 Between 1 January and 30 June 2009 cumulative revenue of the companies combined in Millennium S.p.A. rose from 2,941,252 thousand to 3,229,838 thousand. This sales growth was due to the satisfactory sales trend in France, but also to the initial consolidation of revenues from the von der Linde -Group as from 1 April The significant change in other operating income mainly resulted from the effects of the service fee introduced in Germany in June The changes in French health policy and the related effects on profits in particular led to a decline in the gross profit margin of the Millennium Group. It amounted to 5.21 % after 5.51 % in the previous year. Personnel expenses, depreciation and amortisation charges and other operating expenses were also affected by the initial consolidation of the von der Linde -Group. The reasons for the decline in finance income from 5,021 thousand to 1,034 thousand were lower investment income from Andreae-Noris Zahn AG and higher interest expenses in connection with financing the acquisition of the von der Linde -Group. The profit from ordinary activities amounted to 25,897 thousand up from 24,292 thousand. Profit for the period ended on 30 June 2009 totalled 18,116 thousand up from 16,680 thousand in the same period last year. 7

8 Interim Management Report Pro-forma cash flow statement of the Millennium Group (under IFRS): 1 Jan-30 June 09 1 Jan-30 June 08 thous. thous. Cash flows from operating activities +190, ,437 Cash flows from investing activities -126,421-10,611 Cash flows from financing activities -37,821-75,937 Along with the increase in trade payables, the recognised cash from operating activities of 190,792 thousand increased significantly due to the factoring programme launched for the first time. The increase in cash outflows from investing activities to 126,421 thousand reflects the acquisition of the von der Linde - Group and the establishment of three new branches in France. Cash used in financing activities includes the dividend paid in the amount of 19,000 thousand and the repayment of debt of 18,821 thousand. Workforce development Sanacorp Pharmaholding AG had no employees of its own in the reporting period. The number of full-time equivalents working in the operating companies totalled 4,706 people by 30 June This figure includes for the first time the 640 employees of the von der Linde -Group. In addition, the number of employees in France rose because the three new branches started operations. Report on post-balance sheet events There were no significant events after the reporting date until the preparation and signing of the half-yearly financial report that would have materially affected the financial position, cash flows and profit or loss. 8

9 Interim Management Report Risk and opportunity reporting The comments we made in the management report on the annual financial statements for the year ended 2008 with regard to the risk profile of Sanacorp Pharmaholding AG are still valid. Sanacorp Pharmaholding AG, through its investment in Millennium S.p.A., is indirectly affected by the operating development of the Sanacorp Group in Germany, and of the Cerp Rouen S.A.S. Group in France and Belgium. We will therefore only discuss the significant changes in the risk profiles of the companies mentioned. The bleaker economic prospects expected for Germany will affect the health market with delay, if at all. A short-term intervention by the current government into the health care system does not seem very likely as there will be parliamentary elections in the autumn of Along with the large proportion of the direct business between manufacturers and pharmacies, it is the significant increase in discount agreements signed between the health insurance companies and pharmaceutical companies which burdens the traditional business model of the pharmaceutical wholesale which is based on combined costing. By including the pharmaceutical wholesale in the public supply mandate on the basis of the 15th amendment to the German Drug Law enforced on 23 July 2009, the direct business between manufacturers and pharmacists may decline. The operating companies will not be able to avoid an adjustment of margins for current financing due to the effects of the current financial crisis. The provision of finance for the acquisition of the von der Linde - Group by Sanacorp Pharmahandel GmbH was fully hedged against interest rate risks. Report on expected developments Given the increase in investment income received in the second quarter of 2009, Sanacorp Pharmaholding AG expects an all-year increase in earnings compared with the financial year The Management Board is therefore confident that the dividend continuity existing for years may be kept up in in the financial year In the course of the second quarter of 2009, the pharmaceutical wholesalers operating for Millennium S.p.A. distributed the total amount of 20,000 thousand to Millennium S.p.A. The Management Board of Sanacorp Pharmaholding AG therefore expects Millennium S.p.A. to be able to pay a dividend to Sanacorp Pharmaholding AG in the financial year 2010, as it has done in the current year. In view of the results which the companies operating for Millennium S.p.A. in Germany, France and Belgium achieved in the first half of 2009, they are expected to be able to pay a dividend to Millennium S.p.A. in the financial year 2009, which will be on the same level as it was the year before. The results achieved in the financial year 2009 should also enable the operating companies to retain part of their profits. 9

10 Balance Sheet of Sanacorp Pharmaholding AG as of 30 June 2009 Assets 30 June Dec 08 thous. thous. Fixed Assets Financial assets 330, ,221 Total fixed assets 330, ,221 Current assets Receivables and other assets Receivables from other other long-term investees and investors 17,186 7,629 Other assets - 17, Total current assets 17,186 7,764 Total assets 347, ,985 Equity and liabilities 30 June Dec 08 thous. thous. Equity Subscribed capital 24,638 24,638 Capital reserve 98,934 98,934 Other revenue reserves 186, ,500 Net retained profit 19,033 9,942 Total equity 329, ,014 Total provisions Liabilities Liabilities to banks - 13 Trade payables 23 1 Liabilities to other long-term investees and investors 4,595 4,560 Other liabilities 13,052 12,936 Total liabilities 17,670 17,510 Total equity and liabilities 347, ,985 10

11 Income Statement of Sanacorp Pharmaholding AG for the period 1 January to 30 June 2009 and 1 January to 30 June Jan-30 June 09 1 Jan-30 June 08 thous. thous. Other operating income - - Gross profit - - Personnel expenses Other operating expenses Operating profit Income from long-term equity-investments 9,500 7,400 Other interest and similar income Interest and similar expenses Profit from ordinary activities 9,090 6,879 Income taxes - - Net profit for the period 9,090 6,879 11

12 Notes and other disclosures Notes and other disclosures of Sanacorp Pharmaholding AG for the period from 1 January to 30 June 2009 Accounting policies The accounting policies applied in this interim financial report are identical to those applied in our last annual financial statements. The interim financial statements were prepared in accordance with the provisions of the German Commercial Code (HGB) and the German Stock Corporation Act as amended by the time the financial statements were prepared. This interim financial report was critically reviewed by the audit committee of the Supervisory Board and discussed with the Management Board. The auditor of the financial statements did not separately audit this interim financial report. Major related party transactions The scope of related party relationships is shown in the following table: 1 Jan-30 June 09 1 Jan-30 June 08 thous. thous. Related party disclosures Revenue and income from services, loans and amounts charged on Purchase of services. loans and amounts charged on Receivables from related entities 17,201 7,456 Liabilities to related entities 17,875 16,987 Relationship with the Management Board Revenue Receivables from the Management Board Relationship with the Supervisory Board Revenue 6,607 3,897 Receivables from the Supervisory Board 1,160 1,170 Relationship with other related parties Revenue 1,243 1,119 Receivables from other related parties The remuneration of management in key positions comprises the remuneration of the active Management and Supervisory Board members. This did not change significantly as compared with the last annual financial statements. The disclosures on revenue and receivables from the Management Board, the Supervisory Board and the other related parties refer to the operating companies in Germany. Millennium S.p.A. distributed a dividend of 9,500 thousand to Sanacorp Pharmaholding AG in the reporting period. 12

13 Notes and other disclosures Other disclosures The number of shares held by the members of the Supervisory Board on 30 June 2009 was the same as that shown in the financial statements as of 31 December 2008 and totalled 3,040 company preference shares. The composition of the Supervisory Board changed after the end of the reporting period. The changes in share ownership resulting from the new composition will be discussed in the report for the nine months. The members of the Board of Management do currently not own any securities issued by Sanacorp Pharmaholding AG. Sanacorp share The Sanacorp share performed well in the first half of 2009 reflecting a price gain of some 41% between 1 January and 30 June On 30 June 2009 the share closed at reaching its highest level in the current financial year. Along with the general recovery of the equity markets starting mid-march 2009, it was the upcoming dividend payment on 2 July 2009 and the positive decision of the European Court of Justice on the ban on third-party ownership of pharmacies which increased demand for Sanacorp shares. 145% 140% 135% 130% 125% 120% 115% 110% 105% 100% 95% 90% 85% 80% 75% 70% 1 Jan 2009 Sanacorp CDAX SDAX 30 June 2009 Sanacorp share performance compared with CDAX and the SDAX linked to the index between 1 Jan 2009 and 30 June 2009 in %. (Closing price Sanacorp Frankfurt, Others XETRA ) 13

14 Notes and other disclosures Responsibility statement To the best of our knowledge, and in accordance with the applicable reporting principles, the interim financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the company, and the interim management report includes a fair review of the development and performance of the business and the position of the company, together with a description of the principal opportunities and risks associated with the expected development of the company. Planegg, 14 August 2009 Sanacorp Pharmaholding AG Manfred Renner Dr. Herbert Lang Klaus Edelmann Ulrich von der Linde Dr. Christoph Mauz 14

15 Upcoming Events: September 2009 Expopharm fair 2009 in Dusseldorf 13 November 2009 Release of the interim report for the period 1 January bis 30 June March 2010 Release of the financial report for the fiscal year June 2010 General Meeting of Sanacorp Pharmaholding AG for the fiscal year 2009 Sanacorp Pharmaholding AG Investor Relations Semmelweisstraße Planegg Contact Florian Meilinger Tel.: Fax: ir@sanacorp.de