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Eckert & Ziegler: Modest start to FY 2013
The Segments in detail
In the largest segment, Isotope Products, sales declined slightly by 3% to €13.6 million. However, EBIT for the segment fell by 8% to €4.1 million compared with the previous year, mainly due to a fall in the gross margin. This can be attributed to a shift from high-margin items to standard components with lower contribution margins. Given that there are no indications of this being a lasting trend, company management assumes that the traditional product range mix and the normal gross margin will be achieved again by the end of the year.
The Radiation Therapy segment registered a substantial 24% fall in sales to €5.5 million. This was caused by a price collapse for prostate implants, which led to lower sales revenues despite the increase in quantities purchased, as well as delays in deliveries of radiation devices and eye applicators. The decline in sales of implants is part of a more stable trend, while representing only a temporary dip for tumor radiation devices and eye applicators resulting from delivery and reporting date effects. As the orders and payments have already been received for most of the radiation devices, the backlog in sales compared with the previous year will be made up for in the coming quarters in the view of segment management. Nevertheless, the lower sales revenues did impact directly on the contribution margin. This effect was, however, lessened by the one-off proceeds in the sum of €1.3 million resulting from the agreement with Core Oncology, Inc., with the result that EBIT for the segment almost doubled from €0.5 million to €0.9 million. Comprehensive statements concerning the Radiotherapy segment can be found in the Eckert & Ziegler BEBIG s.a. quarterly report published at the same time (www.bebig.eu).
The Radiopharma segment maintained the sales of the first quarter of the previous year with a figure of €6.3 million, though the structure of sales also changed in this segment. Sales of fluorine-based radioactive contrast agents (PET tracers) decreased by €0.3 million, while the sales of devices for the production of radio-pharmaceuticals (Modular Lab etc.) increased. Although the growth and decline in sales balanced each other out in total, the lower margin in the device section led in overall terms to EBIT falling by €0.4 million to €0.1 million.
It was a disappointing quarter in the Environmental Services segment, with sales falling by €0.6 million to €1.1 million compared with the previous year. Similar to the Radiation Therapy segment, sector-specific project accounting and reporting date effects made themselves felt here which will in all likelihood be made up during the financial year. The lower sales directly impacted on the result for the first quarter via the lack of contribution margin. However, the decisive factor for the negative EBIT of €2 million was the increase in public authority prices for an important disposal channel rather than the fall in sales revenues. These price increases forced an adjustment of approx. €1 million in the waste disposal provisions. As this was the first increase in prices for a number of years, segment management sees this as essentially being a one-time effect.
To read the full report please click here: http://www.ezag.com/fileadmin/ezag/user-uploads/pdf/financial-reports/englisch/euz113e.pdf
The board of directors and supervisory board will suggest a dividend of 0.60 per share at the Annual General Meeting on 17th May 2013.
The Group expects sales to grow to around €125 million for the financial year 2013 and net earnings after taxes and minority interests in the sum of €2.15 per share.
With around 620 employees the Eckert & Ziegler Group belongs to the largest providers of isotope components for radiotherapy and nuclear medicine worldwide.
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