Corporate News: MeVis Group steers successful course through 2009 global economic crisis

MeVis Medical Solutions continues revenue growth in a difficult market environment and delivers operating profitability for the Group

  • Strategic decisions by management during 2008 ensure profitable revenue growth during fiscal year 2009
  • New products and full consolidation of the business with industry partner Hologic boost consolidated revenue by 28% to 13.9 million euros (previous year: 10.8 million euros)
  • Earnings before taxes and interest (EBIT) increases by 129% to 1,6 million euros (previous year: 0.7 million euros) and the EBIT margin is doubled to 12%
  • Group earnings of 0.4 million euros (previous year: 2.1 million euros) were affected by a negative financial result in the order of –0.5 million euros (previous year: 2.0 million euros)
  • Cash flow from operating activities amounted to 3.1 million euros (previous year: 2.9 million euros)

Bremen, 23 April 2010 – MeVis Medical Solutions AG [ISIN: DE000A0LBFE4], a leading software company specializing in image-based medicine, today published its results for the 2009 financial year. Based on the strategic decisions and actions taken during 2008, Group revenues rose significantly in spite of a depressed medical imaging market and in the wake of the global economic crisis. A series of effective cost reduction activities also contributed to a marked increase in the Group’s operating profitability.

The growth in revenue was largely due to the profitable Digital Mammography business segment which exhibited disproportionate growth of 46%, to 10.1 million euros (previous year: 6.9 million euros). The decisive factors in this development were the market launch for several important ’BreastCare products’, as well as the full consolidation of the business activities with industry partner Hologic since November 1, 2008.

Efforts to increase market share with new products in the areas of Neurology, Prostate and Pulmonary diagnostics proved difficult in a deteriorating market. As a result, consolidated revenue in the Other Diagnostics business segment was stagnant at 3.8 million euros (previous year: 3.9 million euros).

Personnel capacity, at an average of 186 employees (full-time equivalents) for the Group as a whole, was maintained at the 2008 year-end level and is adequate for further corporate development. Due to the rapid increase in employee numbers during the course of 2008, staff costs increased by 27% to 9.8 million euros, despite an unchanged personnel capacity and employees foregoing their variable salary components in 2009. This increase was also partly triggered by the consolidation effect. Nevertheless, due to extensive cost-cutting measures, it was possible to reduce other operating expenses by 19% year-on-year, to 3.3 million euros.

This resulted in a doubling of the Group EBIT margin to 12%, despite an increase in the amortization of previously capitalized development costs through profit and loss in accordance with IFRS.

Apart from increased tax expenses, Group earnings of 0.4 million euros were considerably impacted by a substantially lower net financial result of –0.5 million euros (previous year: 2.0 million euros). This translates into earnings per share of 0.23 euros (previous year: 1.21 euros). The primary reasons for the reduced level of net financial result were lower interest income, addition of accrued interest on the remaining purchase price commitments as well as negative exchange rate effects.

Cash flow from operating activities remained stable at 3.1 million euros (previous year: 2.9 million euros).

With 15.1 million euros in liquid funds (previous year: 20.3 million euros), the MeVis Group continues to have sound financial resources. Moreover, the company’s treasury shares amounted to 2.7 million euros at the balance sheet date. Other financial liabilities amounting to 13.5 million euros are essentially related to the remaining payment obligations arising from the acquisition of company shares and operating units.

“Given the expanded product portfolio and the gradual improvement in the economic climate since the middle of 2009, we anticipate a significant increase in consolidated revenue for 2010. As in 2009, the Digital Mammography segment comprising the established, successful BreastCare applications will have a decisive influence on the Group’s operating profitability,” said Dr. Carl J.G. Evertsz, Chairman of the Executive Board of MeVis Medical Solutions AG. “We are also optimistic regarding EBIT, despite the impact of the expenditures for growth and the amortization of capitalized development costs. However, we think it is premature to make a specific forecast for the current financial year at this stage.”

Taking into account the sustained uncertainty in relation to overall economic trends, the effects of the health reform in the U.S. and increase exchange rate fluctuations, the Executive Board will provide more specific forecasts during the course of the current financial year.

Important information:

The business figures published here are based on unaudited consolidated and individual annual financial statements prepared by the Executive Board but not yet approved by the Supervisory Board.

The company`s financial reports are available for downloading at our website.

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