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08 PlasmaSelect AG Three-Month Report 09 Q1 PlasmaSelect AG >>> Three-Month Report 2009 I 01 Interim management report as of the first quarter 2008/2009 Q1 08/ 09* Q1 07/ 08* Change Key Figures continued operations T-3 T-3 in % Sales 6,137 5,382 14,0 EBIT for continued operations –3,791 –673 n.a. Earnings before tax for continued operations –4,071 –838 n.a. Orders on hand on reporting date 2,774 1,640 69.2 Subscribed capital 24,172 16,922 42.8 Equity capital 56,407 65,200 –13.5 Equity ratio 48.3% 53.6% –9.9 Balance sheet total 116,741 121,592 –4.0 Employees (on reporting date) number 201 195 3.1 Employees (average) number 201 195 3.1 Personal expenses 2,565 2,360 8.7 Capital expenditure 1,367 483 182.8 Cash flow from operating activities –1,995 –614 n.a. Cash flow from investing activities 3,473 –17,776 n.a. Cash flow from financing activities –1,457 586 –348.8 Number of shares (average) 24.2 16.9 43.2 Earnings per share (undiluted and diluted) –0.084 –0.058 n.a. *The financial year commences on December 1 and ends on November 30. PlasmaSelect AG >>> Three-Month Report 2009 I 02 Interim management report as of the first quarter 2008/2009 01. Business and economic conditions PlasmaSelect AG, Munich is an industrial holding company operating in the fields of health care and new technologies. Following the Group’s radical restructuring activities in the last financial year, PlasmaSelect AG is now in the “alignment phase“, the last phase of restructuring. During this phase, holdings with a clear focus on core competences are set up, so that they can successfully develop in long-term growth markets. In the Health Care segment, the DeltaSelect holding is undergoing further development through complementary product lines and internationalisation through coo- peration with partners. To this end, the company has plans, not only to develop its own pharmaceutical licenses, but also to purchase licenses or entire pharmaceu- tical companies. The aim is to broaden the existing product portfolio in such a way as to reinforce its market position as an international supplier of hospital solu- tions in the long term. The investment TheraSelect, which represents German production, is continuing to cut its capacity as planned. Production at the Pfullingen plant is limited to high-volume products for DeltaSelect and non-transferable industrial customers. Alternative options for the Pfullingen plant are currently being considered. The Water Treatment segment is pressing ahead at full speed with the expansion of the global sales and service network for its four business segments – drinking water, process water, waste water and ballast water (nautical sector) – with its company Aquaworx Germany. In the first quarter of 2009, work thus began to esta- blish business hubs in the UK, US and India. Agreements have already been entered into with sales partners in the Benelux countries, Brazil, Scandinavia, India, Russia, Singapore, the Balearic Islands, Canada, Kazakhstan and France. The company Aquaworx ATC has been engaged in activities to obtain the necessary certi- fication for its ballast water treatment system from NIOZ (Netherlands Institute for Sea Research), on the island of Texel in Holland, by means of land and ship- based tests. 02. Course of business and economic situation In the first quarter of the new financial year, business performance was in line with our expectations. The consolidation of the Health Care segment is now almost complete. The closure of the Marburg production site has been postponed in order to permit processing of the last large contract manufacturing order, probably for a month, until June 2009. In the course of the expansion of the product portfolio of the Hospital Solutions segment, investment for several licenses is under review. Work to set up the Water Treatment segment is progressing in leaps and bounds. Aquaworx is very much in demand, particularly in the Waste Water segment. Since this segment is characterized by project business, a certain time elapses between the customer inquiry, the customer order and the acceptance of the service by the customer. The Drinking Water business, which is played out largely at international level, is taking a keen interest in Aquaworx products. PlasmaSelect AG >>> Three-Month Report 2009 I 03 Interim management report as of the first quarter 2008/2009 In the coming months, priority is therefore to be given to continuing to build up production capacity in Switzerland in order to be able to meet market demand. In the Ballast Water segment, Aquaworx is only a short step away from obtaining “basic approvals”, which will signify that the next milestone on the road to the cer- tification of ballast water systems will have been reached. This will bring us another step closer to access to the lucrative nautical market, while confirming Aquaworx technology as an ideal solution to the global ecological problem of ballast water. The first quarter is closing with a negative EBIT of u –3.8 million. This takes account of minority interests in Aquaworx AG totaling u –1.8 million. The result is affec- ted by the Water Treatment segment currently being set up, which accounts for u –2.7 million of the loss. The Health Care segment remains more or less unchan- ged from the previous year, with EBIT of u –0.5 million. Group sales of u 6.1 million, which come largely from the Health Care segment, are around 14 % higher than the same period of the previous year. Sales costs amounted to u 6.7 million, of which u 1.6 million are attributable to the Water Treatment segment and u 5.1 million to the Health Care segment. Sales costs in the Health Care segment include a special effect totaling approx. u –0.5 million compared with the previous year. Allowing for this effect, the gross margin remains unchanged from the previous year. Healthcare The hospital solutions market remains characterized by fierce competition and the far-reaching effects of government regulations. The competition consists predo- minantly of a small number of rival firms which are dominant because of their financial and organizational resources and their excellent sales performance. Despite the financial crisis, costs continue to increase in this segment due to rising commodity, energy and transport costs. In order to meet the demands of this environ- ment and boost its general competitiveness, PlasmaSelect has by and large outsourced production risks, adjusted its own product portfolio and taken measures to add to its product portfolio in the Hospital Solutions business. In this way, it has succeeded in fleshing out what had formerly been Italian production by founding the joint venture company, Diaco Medical Group, with a view to increasing production potential and improving production results by scaling up purchasing and production. Moreover, with our Greek production partner, we have set up a further reliable pillar to secure the supply of high quality goods. The Health Care seg- ment is expected to make further progress on the market side by broadening its product portfolio and working with international partners. In the first quarter, the Health Care segment generated sales of approx. u 6.0 million, an increase on the adjusted value of the previous year (sales in the previous year including Italy: u 8.7 million, share attributable to Italy: u 3.5 million) of u 5.3 million. At approx. u –0.5 million, EBIT remains more or less unchanged from the previous year’s value of approx. u –0.4 million. From the standpoint of the new strategic direction of the Health Care business, not including own production, if the current production results are regarded as a special effect in the context of discontinuation of German production activities, calculation of the EBIT result for the Health Care segment amounts to approx. u 0.1 million. Water Treatment The water treatment market is a fast-growing future market which is becoming increasingly important, primarily due to a new trend towards greater environmental awareness in society, a shortage of drinking water worldwide and the availability of new technologies. PlasmaSelect AG >>> Three-Month Report 2009 I 04 Interim management report as of the first quarter 2008/2009 The products developed by Aquaworx are ecological and innovative solutions for the submarkets of drinking water, process water (industry), waste water and bal- last water. Products are developed and manufactured in Switzerland. They are to be sold worldwide via the German sales company. Aquaworx is building up an international sales network with selected partners for this purpose. It now has a highly diversified, international sales network. A strategic partnership with the Swiss company, TELSONIC AG provides a basis for the rapid development of the export business. Aquaworx will be able to use the international branches and sales channels of this partner, thus securing for itself maintenance capacities on foreign markets. TELSONIC is one of the leading manufacturers of ultrasound technolo- gy and, among other things, a supplier of Aquaworx. The initial reactions of the markets to the market launch have been extremely encouraging. There is a big demand for water treatment systems, particularly in the drinking and waste water markets, and Aquaworx is offering the right products in these areas. The market for process water is characterized by project business and invitations to tender, which means that it can take some time to acquire individual orders. The Water Treatment segment is still in the process of being set up, and posted sales of u 0.13 million at the end of the first quarter. EBIT stands at u –2.7 million, of which u 1.6 million is due to depreciation on technology. Start-up costs for production in Switzerland and international sales structures account for u 1.1 milli- on. The share of minority interests in EBIT totals u –1.78 million. 03. Earnings situation Consolidated Earnings Situation The review of the earnings situation in the year-on-year comparison includes two prior year items: With effect on November 14, 2008, PlasmaSelect AG disposed of its 100% holding in its Italian subsidiaries NovaSelect S. p. A. and AltaSelect S. r. l. and sold this to Diaco Medical Group GmbH, Villach/Austria. Under IFRS, divestment of the two subsidiaries is regarded as discontinued operation; the previous year's figures have thus been accordingly adjusted in the profit and loss account and cash flow statement. The acquisition of shares in Aquaworx in the third quarter of 2008 is recognized in the year-on-year figures for the costs of ongoing operations. From the 3rd quar- ter 2007/2008, Aquaworx Group has been fully consolidated in the financial statements of the PlasmaSelect Group. A cost comparison is therefore only meaning- ful after the deduction of costs generated by Aquaworx in the first quarter of 2008/2009. With u 6.1 million in the first quarter of fiscal year 2008/2009, Group sales in ongoing operations were up by 14% in the year-on-year comparison figures of u 5.4 million. Additional sales of u 3.5 million were generated in the discontinued area (Italy) in the prior-year quarter. PlasmaSelect AG >>> Three-Month Report 2009 I 05 Interim management report as of the first quarter 2008/2009 In the first quarter, consolidated sales costs of u 6.7 million were reported, thus exceeding sales revenues. The doubling over the same period last year (u 3.3 mil- lion) is due to three main facts. In order to compare sales costs, the previous year's figure (assigned to this area in the previous year under an IFRS option), has to be increased by u 0.6 million, resulting in adjusted sales costs of u 3.9 million. The cost of sales for the reporting period includes amortization of u 1.6 million per quarter for Aquaworx technology, beginning with the third quarter of 2007/2008. A further increase in cost of sales resulted from extraordinary items in the health- care segment in the amount of around u 0.5 million from the pending closure of the plant in Marburg. This leads to computationally comparable cost of sales of u 4.6 million in the first quarter. In the first three months, development costs totaled T-u 414, which were capitalized in accordance with IFRS. Of these, T-u 41 were capitalized in the Health Care segment and T-u 373 in the Water Treatment segment, in this case in the ballast water segment. In the ongoing areas, the balance of sales, administrative and other operating expenses and income was u 3.2 million (previous year: u 2.8 million). Adjusted for the costs of Aquaworx in the first quarter of 2009 (u 1.2 million), the costs during the reporting period amount to u 2.0 million. In order to compare costs, the sum of the costs of the prior-year quarter (assigned to this area in the previous year under an IFRS option) must be reduced by u 0.6 million. The sum of comparable sales, administrative and other operating expenses and income has thus declined by 8.9% from u 2.2 million in the same quarter of the previous year to u 2.0 mil- lion in the first quarter of the reporting period. The depreciations included in the cost of sales, distribution and general administration expenses total u 1.7 million (previous year: u 0.6 million in ongoing opera- tions). In year-on-year comparison, amortization for the Aquaworx technology of u 1.6 million is recognized in the first quarter of the year (previous year: 0). At u –3.8 million, the Group recorded a negative operating result (EBIT) (previous year: u –0.7 million in ongoing operations). Other investors’ share of EBIT amo- unts to u –1.8 million (previous year: 0). After the first-time consolidation of Aquaworx in the third quarter of the previous year, EBIT was adjusted for Aquaworx’ negative EBIT. As a result of the aforementioned facts, EBIT for the Group's ongoing operations fell only slightly to u –1.1 million in the reporting period compared to u –0.7 million in the prior-year quarter. Group earnings after taxes in ongoing operations fell by u –1.0 million in the prior year period to u –3.3 million the reporting period, including the quarterly result of the Aquaworx group of u –1.9 million. Group earnings include the u –1.2 million share of other investors in the period result, leading to a period result of u –2.0 million for PlasmaSelect AG in ongoing operations for the first quarter of the year. Without the Aquaworx result, PlasmaSelect AG’s period result would be u –1.4 million and thus approximately on a par with prior year’s level (previous year: u –1.0 million). In a continuing difficult market environment, the listing of PlasmaSelect’s share showed a downward trend. Thus, after a price of u 0.52 as of November 30, 2008, the share fell by 15% to u 0.44 (Xetra) as of February 28, 2009. PlasmaSelect AG >>> Three-Month Report 2009 I 06 Interim management report as of the first quarter 2008/2009 Earnings Situation by Segment Sales revenues were primarily generated in the Health Care segment (u 6 million), while sales of T-u 46 were generated in the Others segment and T-u 133 in the Water Treatment segment, which is currently in development. Sales costs accrued predominantly in the Health Care segment. The continuing Health Care sector thus recorded an increase in cost of sales from u 3.9 million in the prior-year period to u 5.1 million in the reporting period. In order to compare sales costs, the prior year's figure (assigned to this area in the previous year under an IFRS option), has to be increased by u 0.6 million, resulting in adjusted sales costs of u 4.5 million. Compared to the prior-year quarter, the cost of sales for the reporting period include extraordinary items of u –0.5 million from the pending closure of the plant in Marburg. Excluding extraordinary items, the cost of sales would be at last year's level, at u 4.6 million. The recently added Water Treatment segment generates sales costs of T-u 1,584, resulting primarily from the amortization of technology (T-u 1,557) during the development stage. In the Health Care area, the balance of cost of sales, administrative and other operating expenses and income prior to consolidation was u 1.3 million (prior year: u 1.6 million in the ongoing Health Care area, i.e. excluding Italy). Resulting from improved efficiency at DeltaSelect GmbH, this represents a cost reduction of 14.8%. The Water Treatment segment recorded cost of sales, administrative and other operating expenses and income of u 1.2 million during the development stage (pre- vious year: 0). Before consolidation, the Others segment recorded distribution costs of u 1 million, administrative costs of u 0.7 million and other operating income of u 1.1 mil- lion, with u 1.1 million of sales and administrative costs being recharged to other segments. With u –0.5 million in the reporting period, EBIT for the Healthcare segment remains at last year’s level (previous year: u –0.4 million). EBIT for the prior year, adju- sted for the amount of the discontinued area in Italy, (in November 2008), totaled u –0.2 million. Compared to the prior-year quarter, EBIT for the reporting peri- od includes extraordinary items of u –0.5 million from the pending closure of the plant in Marburg. Excluding special items, EBIT for this segment would break even at u 0 million and thus exceed the adjusted EBIT of u –0.2 million of the previous year. EBIT in the Water Treatment segment of u –2.7 million includes amortization of technology in the amount of u 1.6 million. Other investors’ share of EBIT amounts to u –1.8 million. At u –0.6 million, EBIT for the Others segment remains at last year’s level (u –0.5 million). PlasmaSelect AG >>> Three-Month Report 2009 I 07 Interim management report as of the first quarter 2008/2009 04. Financial position The cash flow from operating activities in the continued operations amounts to u –2.0 million in the reporting period after u –0.6 million in the previous year`s first quarter. The increased cash outflow is mainly due to start-up and development costs in the area of Water Treatment. The inflow of funds provided by investment activities came to u 3.5 million, compared to a cash flow of u –17.8 million in the previous year. The cash inflow in 2009 results primarily from the sale of securities, and the cash outflow of the previous year from the purchase of securities. There are also higher acquisition costs for tangible assets and intangible assets of u 0.9 million in the year-on-year comparison for the Health Care and Water Treatment segments. The cash outflow for financing activities totals u 1.4 million, with an inflow of funds in ongoing operations of u 0.6 million in the same quarter last year. The cash outflow during the reporting period is the result of an early redemption of leasing contracts and the surplus from loan repayments against the use of short-term credit lines. At the balance sheet date, the Group has cash and equivalents and short-term securities totaling u 11.9 million. 05. Asset Position Compared to November 30, 2008 (u 120.7 million), consolidated assets were down by 3.3% to u 116.7 million on February 28, 2009, which is due to ordinary business activity – see Earnings Situation – as well as the facts reported under Financial Position. The change of T-u 25 in other capital reserves involves currency translation differences from the consolidation of accounts of Aquaworx companies with headquar- ters in Switzerland. Reported as equity on the balance sheet date, other investors’ share of u 18.6 million includes the 70% stake of Sanaworx AG, Arbon (Switzerland) in Aquaworx AG, Arbon (Switzerland). Other investors’ share fell by its share of loss in the first quarter of 2009. Due to the quarterly loss of 49.3% as of 30 November 2008, the Group’s equity ratio fell to 48.3% on the balance sheet date. PlasmaSelect AG >>> Three-Month Report 2009 I 08 Interim management report as of the first quarter 2008/2009 06. Opportunities and risks In the scope of our risk management, we monitor our chances and risks through early warning and monitoring systems, which we developed in cooperation with our auditors. The supervisory board is regularly updated about the current status regarding the development of the opportunities and risks. The resulting opportu- nities for PlasmaSelect are presented in the Forecast report. For our segments we anticipate the same risks already mentioned in the annual financial statements as of November 30, 2008: Business risks – Health Care area Risks associated with procurement, production and sales >>> The outsourcing of parts of production to foreign contract manufacturers poses a risk. It is primarily a technical project, which may experience technical faults despite the care and commitment of the parties involved, even if the selected manufacturer can demonstrate years of experience in the manufacture of similar pro- ducts and uses a well-established technology. >>> In production, raw materials and energy are required; depending on the market situation their market prices can fluctuate considerably. Regulatory require- ments of the legislative and market conditions do not permit us to pass on rising costs to our customers. As far as possible, we try to protect our interests through long-term delivery contracts. >>> Since the German generics line of business was sold during the 2007 financial year, the Group has concentrated not only on developing new business seg- ments, but also on restructuring and updating the business in infusion, injection and rinsing solutions and other medical products that is now part of the Health Care segment. The aim of the restructuring measures initiated is a return of this segment to profitability. Toward this end, extensive measures have already been introduced. One of the measures taken was to merge the loss-generating business in Italy with the business of a competitor in order to leverage synergies; it was decided that the manufacturing facilities in Marburg, which have experienced difficulties in production, would close. Despite the measures already taken and those still to be seized, the risk that it will not be possible to return the segment to profitable operation still exists. As a result, further unscheduled financing could beco- me necessary to finance further restructuring expenditure on the one hand and business operations on the other. Business risks – Water Treatment segment While controlling and scaling our own technology to the production of marketable products for the individual sub-markets are key to the success of the Water Treatment segment, securing an edge in terms of know-how or differentiating technology from that of competitors are also important. We must furthermore gain a foothold in both national and international markets as quickly as possible in order to achieve the planned market shares and establish ourselves as expert provi- ders. We see numerous risks in this context: >>> Business planning is based on a market research study produced by external specialists. Even if sales and financial performance are calculated with signifi- cantly conservative margins, the risk that Aquaworx will not fully tap the targeted sales and earnings potential cannot be ultimately ruled out. There is thus an impairment risk with respect to the intangible assets capitalized in the Water Treatment segment. PlasmaSelect AG >>> Three-Month Report 2009 I 09 Interim management report as of the first quarter 2008/2009 >>> The competitive position of Aquaworx is heavily dependent on the development of commercially successful products and technologies. There is no guaran- tee that all products currently under development will attain their planned marketability and be able to hold their own against the competition with the degree of success expected. >>> The possibility cannot be ruled out that the market entry of Aquaworx will be unduly complicated as a result of defensive moves by competitors, whether this means new technologies, marketing campaigns or cooperation with experienced and strong partners. >>> The knowledge and experience accumulated in the still rather young company may not be enough to ensure a lasting presence in the water treatment mar- ket in competition with rivals that are already operating successfully in the market. Sales targets in individual product segments run the risk of not being met, or could make increased effort, for example in marketing and sales, necessary, thereby putting the planned results at risk. >>> Over the medium term, changes could occur on the market in terms of technology, which could lead to unscheduled depreciation on the technology of Aquaworx. >>> Achieving short-term success depends first and foremost on the granting of the required licenses, particularly in the ballast water segment. Even if the inte- rim results can be assessed as unequivocally positive, delays cannot be ruled out. In the area of drinking water treatment, there are also risks – although more minor – of a delayed market entry within the next financial year. 07. Financial Risks >>> Credit and foreign exchange risks currently do not represent any material risk to PlasmaSelect AG. To ensure the ability to pay, existing and future payment obligations are managed across all Group companies. As part of risk management, plan/actual variances are conducted and measures initiated as needed. Cash and cash equivalents are primarily reserved in the form of call money and time deposits. Moreover, lines of credit are available from the house banks. In view of the crisis predominating on the financial markets, however, the risks facing banks in granting adequate loans by the banks cannot be ruled out completely. >>> Interest rate risks are hedged for the most part by long-term loan agreements with fixed interest rates. Moreover, in order to absorb the effects of possible interest rate changes, PlasmaSelect carried out an interest rate swap for u 5 million which matures on August 29, 2012. >>> The timely payment of the purchase price receivables accrued in selling the two subsidiaries, NovaSelect S.p.A. and AltaSelect S.r.l. to the associate DIACO Medical Group GmbH, amounting to u 8.9 million, could be delayed, or could have a negative impact on the amount of the repayment due to the less-than-posi- tive business performance of the joint venture. PlasmaSelect AG >>> Three-Month Report 2009 I 10 Interim management report as of the first quarter 2008/2009 >>> Under certain circumstances, an obligation by DIACO Medical Group GmbH to financially support NovaSelect S.p.A. and AltaSelect S.r.l. could be created. This would be the case if PlasmaSelect Group were to fall short of a certain purchase quantity of goods during the first year. In addition, PlasmaSelect AG could be required to compensate for losses if a defined third-party transaction did not take place. >>> The development of the new Water Treatment segment could be delayed, postponing – in a departure from the budget established in the business plan – the contribution of surplus revenue to the financing of PlasmaSelect AG and to the further development of this new line of business. In such a case, it could beco- me necessary to provide PlasmaSelect AG and the shareholders holding the majority of the shares with financial means in the form of equity or borrowed capital. Depending on the extent of the departures from the business plan, there is a risk that the financing options would be exhausted. >>> PlasmaSelect AG is currently generating negative cash flow from operating activities. If it is not possible to make the Health Care segment once again pro- fitable and to develop the Water Treatment segment according to plan, risks that threaten the existence of the company and the Group could result. 08. Forecast and Outlook The restructuring of the Health Care segment is for the most part complete. Economies of scale and synergies generated in purchasing and production by the joint venture Diaco Medical Group GmbH with Diaco S.p.A. will lead to improved results in the infusion and rinsing solution business within one year. With the planned expansion of the product portfolio to include the Hospital Solution business, the Health Care segment will gain another foothold in the infusion solutions business. Work on expanding the product portfolio is proceeding well and will ensure that the Health Care segment will expand its market position. We assume that this will allow us to increase the profitability of the Health Care segment with lasting effect. Our planning calls for this segment to return to profita- bility in the next financial year, in consideration of any further restructuring measures in the current 2008/2009 financial year. The activities for gaining the required certifications in the specific field of application have been successful. In the ballast water (nautics) market segment, we are expecting the basic approval to be granted by the IMO (International Maritime Organisation) in the near future. The Type Approval could then be issued at the begin- ning of 2010, giving rise to expectations of sales in this important product group during the 2009/2010 financial year. PlasmaSelect AG >>> Three-Month Report 2009 I 11 Interim management report as of the first quarter 2008/2009 Building the sales company Aquaworx Deutschland GmbH into an effective organization in the segments of technical sales, project and product management and business development has made much progress. This is already obvious from customer surveys. In order to meet market demand, production capacities will be expanded further and prepared for higher demand. According to our current planning, we expect to break even in operations in this segment in the fourth quarter of the current 2008/2009 financial year. In line with our strategic corporate planning, we are expecting positive EBIT for the fourth quarter of the 2008/2009 finan- cial year, which will increase considerably in the 2009/2010 financial year. For the Group, we expect to reach the break-even point and to generate positive cash flow in the first quarter of the new financial year 2009/2010. In our finan- cial planning, based on our business planning, we assume that the financing of the Group is ensured until the break-even point is reached, through careful finan- cial management in the fourth quarter of the current financial year. For any financing bottlenecks that may arise, we will examine alternative forms of financing in order to ensure that no financing gaps are created in the next two years or until the break-even point is reached in the Group. 09. Disclaimer This interim management report contains certain forward-looking statements, including statements by the Board of Directors about its current expectations for the Health Care and Water Treatment segments, its business strategy and future developments and expectations. Such forward-looking statements are subject by their very nature to risks and uncertainties, which could cause the actual results and developments to depart materially from the expectations of the Board of Directors. All forward-looking statements pertain exclusively to that point in time at which this Group Management Report was created and published. The Board of Directors assumes no obligation to adjust its statements to future occurrences or developments. PlasmaSelect AG >>> Three-Month Report 2009 I 12 Consolidated Income statement Consolidated Income statement 2008/2009 2007/2008 2007/2008 Q1 (3 months) Q1 (3 months) (12 months) T-w T-w T-w 1. Continued operations Sales 6,137 5,382 20,202 Cost of sales –6,713* –3,302 –25,701 Gross profit –576 –2,080 –5,499 Research and development expenses 0 0 –20 Distribution expenses –2,896 –2,513 –7,572 General and administrative expenses –718 –685 –6,057 Other operating income 548 452 1,513 Other operating expenses –149 –6 –1,835 Operating profit (EBIT) –3,791** –673 –19,470 Other taxes 3 –1 –3 Result from equity accountes investments 0 - –16 Financial result –283 –164 –2,099 Financial result and result on investments –283 –164 –2,115 Earnings before taxes –4,071 –838 –21,588 Income taxes 804 –136 3,395 Net income after taxes –3,267 –974 –18,193 thereof net income attributable to minority interests –1,232 0 –2,031 thereof net income attributable to shareholders of PlasmaSelect from continued operations –2,035 –974 –16,162 Earnings per share (undiluted and diluted) –0.084 1 –0.058 –0.669 1 2. Discontinued operations Sales 0 3,479 13,800 Cost of sales 0 –2,802 –14,237 Gross profit 0 677 –437 Distribution expenses 0 –942 –3,506 General and administrative expenses 0 –136 –613 Other operating income 0 221 2,631 Other operating expenses 0 –38 –210 Loss from the sales of Generics division 0 0 –17,877 Gain from sale of the Italy geographic sub-segment 0 0 1,013 Operating result 0 –218 –18,999 Other taxes 0 –16 –141 Financial result 0 –103 79 Earnings before taxes 0 –337 –19,061 Income taxes 0 262 553 Result from discontinued operations 0 –75 –18,508 3. Total net income attributable to shareholders of PlasmaSelect –2,035 –1,049 –34,670 Earnings per share (undiluted and diluted) –0.084 1 –0.062 1 –1.434 1 *Includes depreciation T-u –1.557 of the Aquaworx Technology, thereof attributable to minority interests: –1,090 ** including minority interests: –1,783 0 –2,972 PlasmaSelect AG >>> Three-Month Report 2009 I 13 Consolidated Balance sheet Consolidated Balance sheet 28/02/09 29/02/08 30/11/08 T-w T-w T-w ASSETS Current assets Cash and cash equivalents 10,871 23,057 10,827 Securities 985 17,640 4,416 Trade receivables 5,734 10,007 5,402 Receivables from income tax 0 143 0 Inventories 5,656 13,261 5,999 Other current assets 2,425 4,431 1,798 Total current assets 25,671 68,539 29,442 Non-current assets Loans 0 3,636 0 Property, plant and equipment 3,337 12,980 2,498 Intangible assets 77,881 14,149 79,069 Investments accounted for using the equity method 0 - 0 Deferred tax assets 912 4,978 798 Other non-current assets 8,940 17,310 8,940 Total non-current assets 91,070 53,053 91,305 Total assets 116,741 121,592 120,747 SHAREHOLDERS` EQUITY AND LIABILTIES Liabilities Current liabilities and provisions Short-term portion of the financial leasing liabilities 185 1,351 557 Trade payables and other liabilities 11,207 14,391 9,471 Current tax 2,157 2,145 2,157 Other provisions 2,136 0 2,216 Current portion of non-current liabilities 5,192 6,303 5,727 Total current liabilities and provisions 20,877 24,190 20,128 Non-current liabilities and provisions Long-term liabilities, less the current portion 25.385 20.212 25.579 Long-term financial leasing liabilities 82 2.200 771 Deferred tax liabilities 13.991 9.790 14.682 Total non-current liabilities and provisions 39.458 32.202 41.032 Shareholders` equity Subscribed capital 24.172 16.922 24.172 Capital reserves 114.725 113.774 114.725 Other reserves –299 –330 –324 Net loss –100.823 –65.166 –98.787 Minority interest 18.631 0 19.801 Total shareholders` equity 56.406 65.200 59.587 Total equity and liabilities 116.741 121.592 120.747 PlasmaSelect AG >>> Three-Month Report 2009 I 14 Consolidated Cash flow statement Consolidated Cash flow statement Cash flow from operating activities Operating profit (EBIT) Depreciation and amortisation of non-current assets Other non-cash income items Result before changes in assets and liabilities Increase (–) / Decrease in trade accounts receivables and other receivables Increase (–) / Decrease in inventories Increase / Decrease(–) in liabilities Cash outflow / inflow from current operations Interest paid Income taxes paid Cash outflow / inflow from operating activities Cash flows from investing activities Interest received Investment in intangible assets and property, plant and equipment Proceeds from the sale of securities Payments for the purchase of securities Cash outflow / inflow from investing activities Cash flow from financing activities Increase / Decrease in financial leasing liabilities Proceeds from short-term and long-term loans Redemption of loans Cash outflow / inflow from financing activities Other changes in shareholders` equity/currency translation Net change 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 I 15 December 1, 2008 to February 28, 2009 December 1, 2008 to February 28, 2008 continued discontinued continued operations Total operations operations T-w T-w T-w T-w –3,791 –891 –217 –674 1,716 818 269 549 –458 0 –2,533 –73 52 –125 –958 4,404 –1,594 5,998 343 –929 501 –1,430 –1,736 –3,684 1,001 –4,685 –1,412 –281 –40 –241 –583 –464 –106 –358 0 –47 –31 –16 –1,995 –791 –177 –614 202 197 0 197 –1,367 –506 –23 –483 4,638 0 0 0 0 –17,489 0 –17,489 3,473 –17,799 –23 –17,776 –1,061 –206 0 –206 333 1,341 182 1,159 –729 –393 –25 –368 –1,457 743 –157 586 24 44 –17,847 –43 –17,804 10,827 40,904 122 40,782 10,871 23,057 79 22,978 PlasmaSelect AG >>> Three-Month Report 2009 I 16 Consolidated Segment information by business segment Consolidated Segment information by business segment Health Care Water Treatment 08/09 07/08 08/09 07/08 T-w T-w T-w T-w External sales 5,957 8,746 133 0 Operating profit (EBIT) –514 –424 –2,701 0 Earnings before taxes –815 –1,016 –2,699 0 Capital expenditure 558 166 431 0 Depreciation and amortization 138 799 1,555 0 Employees (on reporting date 28/02) 129 244 19 0 Segment assets 28/02 27,299 111,719 73,994 0 Segment liabilities 28/02 43,965 100,727 15,409 0 I 17 Other Reconciliations Total group 08/09 07/08 08/09 07/08 08/09 07/08 T-w T-w T-w T-w T-w T-w 46 116 6,136 8,862 –577 –467 –3,792 –891 –588 –159 –4,073 –1,176 378 340 –1,367 506 23 19 1,716 818 53 51 201 295 86,438 91,809 –70,990 –81,936 116,741 121,592 25,633 17,562 –24,672 –61,897 60,335 56,392 PlasmaSelect AG >>> Three-Month Report 2009 I 18 Consolidated Development of group equity Consolidated Development of group equity Subscribed Capital Other Net income/ PS AG Anteile anderer Gesamtes capital reserves reserves loss shareholder` Gesellschafter Eigenkapital equity T-w T-w T-w T-w T-w T-w T-w Balance as of December 1, 2006 16,922 113,774 –330 –63,701 66,665 0 66,665 Net loss 0 0 0 –416 –416 0 –416 Balance as of November 30, 2007/ December 1, 2007 16,922 113,774 –330 –64,117 66,249 0 66,249 Initial consolidation of Aquaworx 0 0 0 0 0 20,090 20,090 Currency translation differences 0 0 30 0 30 70 100 Capital increase 7,250 951 0 0 8,201 1,672 9,873 Cost of capital increase 0 0 –34 0 –34 0 –34 Deferred tax on cost of capital increase 0 0 11 0 11 0 11 Net loss 0 0 0 –34,670 –34,670 –2,031 –36,701 Balance as of November 30, 2008 24,172 114,725 –324 –98,787 39,787 19,801 59,587 Currency translation differences 0 0 25 0 25 62 87 Net loss 0 0 0 –2,036 –2,036 –1,232 –3,268 Balance as of February 28, 2009 24,172 114,725 –299 –100,823 37,775 18,631 56,406 I 19 Three-Month Report 2008/2009 Notes on the consolidated three-month report statements as of February 28, 2009 >>> Accounting and valuation principles >>> >>> Mergers >>> >>> Other provisions >>> >>> Segment report >>> >>> Unusual circumstances >>> >>> Events after balance sheet reporting date >>> >>> Corporate bodies >>> >>> Interest held by the Corporate bodies of PlasmaSelect AG >>> PlasmaSelect AG >>> Three-Month Report 2009 I 20 Notes on annexes 01. Accounting and valuation principles The three-month financial statements for the period ending February 28, 2009 were prepared in accordance with the international Financial Reporting Standards (IFRS), particularly the interim reporting requirements set forth in IAS 34. The same accounting principles and policies and calculation methods were used as in the previous annual financial statements for the period ending November 30, 2008, with the exceptions set forth below. No deferred tax assets were recognized for tax loss carry forwards of TheraSelect GmbH amounting to u 0.8 million because it is unlikely that they can be offset against future taxable income. 02. Mergers None 03. Other provisions In late August 2008, the management of TheraSelect GmbH, a wholly-owned subsidiary of PlasmaSelect, informed the works council of its decision to close down the production plant in Marburg in the second quarter of 2009. The close-down of the plant will move probably about one month. Due to the decision to close down the production plant in Marburg, other provisions were formed for the first time in the third quarter of 2008 for restructuring measures. From the other provisions for the close-down of the plant Marburg amounting to u 1.4 million in the balance sheet as per 30/11/2008 u 0.1 million have come to the payment in the actual three-month period. PlasmaSelect AG >>> Three-Month Report 2009 I 21 Notes on annexes 04. Segment report The segment report is attached as an appendix to these financial statements. The regulations of IFRS 8 are voluntarily applied in the current financial year. a) Business segments Following the partial takeover of Aquaworx AG in the third quarter of 2008, the group’s internal reporting and organizational structure was changed. In accordan- ce with the company’s business activities, the new organizational structure is divided into the following segments: >>> Healthcare >>> Water Treatment >>> Others The purpose of the new segmentation is to make the productivity and the assets and financial position transparent for the individual activities. The prior-year figu- res have been duly adjusted to the new segments. The business activities in the Health Care segment comprise the distribution and production of infusion solutions, generics, and other pharmaceutical or chemical products, as well as the sale of medical consumables and supplies. The distribution of the products of TheraSelect GmbH as well as, in addition, from contract manu- facturers is provided by DeltaSelect GmbH and FarmacoNetwork BV, The Netherlands. The last year's figures contain the contributions of the NovaSelect S.p.A., Potenza (Italy) and the AltaSelect S.r.l., Verona (Italy) who were sold with effect to November 14, 2008. The Water Treatment segment comprises the business of the Aquaworx Group in which PlasmaSelect holds 30 % of the shares and 50.1 % of the voting rights. The Others segment comprises the holding area and the business activities of PlasmaSelect Zentrale Services GmbH, which mainly renders administration and logi- stics services in the group. b) Period results per segments Health Care segment At u 6 million, the sales in this segment fell by 31.9 % compared to the same three-month period of the previous year (u 8.7 million). The Italian companies sold in November 2008 have contributed u 3.5 million to the turnover of the last year's quarter. Adjusted by this contribution of u 3.5 million the sales increase by 13 % from u 5.3 million to u 6 million in the continued Health Care business. The EBIT in the Health Care Segment in the reporting period lies with u –0.5 million on last year’s level (previous year: u –0.4 million). After deducting the contri- bution of the Italian business sold in November 2008 the adjusted EBIT of the last year's quarter is amounting to u –0.2 million. In the reporting period the EBIT contains a special effect of approx. u –0,5 million in comparison to the last year's quarter which results from preparing measures for close-down the plant Marburg. PlasmaSelect AG >>> Three-Month Report 2009 I 22 Notes on annexes Without special influence the EBIT of this segment would be on Break-Even at u 0 million and would lie therewith over the adjusted EBIT of u –0.2 million of the year before. The improved financial result in the Health Care segment from u –0.6 million in the same period of the previous year (respectively after deduction of the contribu- tion of the sold Italian business: u –0.5 million) to u –0.3 million in this year’s three-month period stands out as a positive development. The reduction of loans by DeltaSelect GmbH contributed to this improved result. Water Treatment segment This business segment realized sales revenues of T-u 133 in the reporting period. Depreciation on the technology of u 1.6 million are included in the EBIT of u –2.7 million in this business segment that is still in the setup stage. Minority interests had a share of u –1.8 million in the EBIT and u –1.2 million in the total segment result. Others segment PlasmaSelect Zentrale Services GmbH generated sales revenues of T-u 46 (previous year: 116) from transportation services for third parties. The EBIT of the Others Segment before consolidation amounted to u –0.6 million. General and administrative expenses as well as distribution expenses amounting to u 1.7 million were incurred, u 1.1 million of which were recharged. b) Significant changes in assets per segment Health Care segment The significant changes to assets in this segment are as follows: 28/02/2009 30/11/2008 Change T-w T-w T-w Trade receivables 5,519 8,546 –3,027 Intercompany accounts receivable 1,251 0 +1,251 Financial leasing liabilities short-term and long-term 267 1,328 –1,061 Trade payables and other liabilities 7,684 6,181 +1,503 Intercompany accounts payable 23,500 28,966 –5,466 PlasmaSelect AG >>> Three-Month Report 2009 I 23 Notes on annexes The intercompany accounts receivable constitute mostly of DeltaSelect GmbH’s short-term receivable against the parent company which are to be led back on business practices usual in the group. The change of trade receivables and trade payables and other liabilities have been originated in the normal day trading. A premature contract termination of some financing leasing contracts with, at the same time, purchase of the leasing objects led to a decrease of financial leasing liabilities. Payments to the Other segment led to a decline in intercompany accounts payable. Water Treatment segment The assets and debts in this segment enclose the consolidated balance positions of the Aquaworx group. The essential changes of the balance positions in this seg- ment are: 28/02/2009 30/11/2008 Change T-w T-w T-w Intangible assets 39,891 41,064 –1,173 Intercompany accounts payable 1,173 298 +875 The residual value of the intangible assets declined due to scheduled depreciation and amortization, including u 1.6 million per quarter for the technology of the Aquaworx, and increased due to investments in this area in the amount of u 0.4 million. Mainly to the integration in the Group’s cash pooling resulted in the increase of intercompany accounts payable. Other segment The significant changes in assets and liabilities in this segment are as follows: 28/02/2009 30/11/2008 Change T-w T-w T-w Cash and cash equivalents 4,918 3,847 +1,071 Securities 985 5,416 –4,431 Intercompany accounts receivable 23,422 29,264 –5,842 Trade payables and other liabilities 2,527 6,059 –3,532 Proceeds from the sale of short-term securities had a main impact on the increase of the freely available funding. PlasmaSelect AG >>> Three-Month Report 2009 I 24 Notes on annexes The demands compared with affiliated company have decreased on the basis of payment mainly from the segment Health Care. Mainly due to the payment from the Health Care segment, intercompany accounts receivable have decreased. The decrease of trade payables and other liabilities are essentially due to the clearing of a single liability. Related party transactions and relationships The facts stated in the business report as of November 30, 2008, have not changed during the reporting period. 05. Unusual circumstances None 06. Events after the balance sheet reporting date None PlasmaSelect AG >>> Three-Month Report 2009 I 25 Notes on annexes Corporate Bodies Supervisory Board Wilfried Riggers, Business Manager Chairman of the Supervisory Board Dr. Bernd Achten, Physician Deputy Chairman of the Supervisory Board Simon Riggers, Business Manager Member of the Supervisory Board Board of Directors Bernhard Giessel, MBA Executive Officer since December 1, 2007, Chief Executive Officer since August 15, 2008 Interests held by the corporate bodies of PlasmaSelect AG Shares Options Board of Directors (number) (number) Bernhard Giessel 10,000 30,000 PlasmaSelect AG Bernhard-Wicki-Strasse 5 80636 Munich email@example.com www.plasmaselect.de
"Three Month Report"