Villepinte, April 18, 2018 - Guerbet (the
"Company"), a global specialist in contrast agents and
solutions for medical imaging, has released today its GEAR 2023
strategic plan.
About Guerbet
Guerbet is a leading global
medical imaging player. The Company engages in the research,
production and distribution of contrast media, as well as
complementary medical devices and services. Guerbet's products are
used for diagnostic purposes and increasingly for interventional
purposes. Its activities are organized around two franchises:
Diagnostic Imaging and Interventional Imaging.
In Diagnostic Imaging, Guerbet has
operated a successful consolidation of its markets over the past
few years. It estimates that it is now the world #2 player in
Magnetic Resonance ("MR") imaging contrast media, the world #4 in
Computed Tomography ("CT") and Catheterization Laboratory ("Cath
Lab") contrast media and the world #3 in contrast media medical
devices and services. During the same period, Guerbet has
successfully diversified into Interventional Imaging, and it has a
robust R&D pipeline that is balanced across both
franchises.
Guerbet reported 2017 revenue of
€807.1m, representing a 4.7% growth at constant exchange rates, and
an EBITDA of €130.0m, continuing its track-record of profitable
growth.
GEAR 2023 strategic plan
Guerbet has decided to implement
an ambitious strategic plan to better capture growth opportunities
in a context of evolving trends in its markets.
In Diagnostic Imaging, the MR
contrast media market, which is estimated to represent c. €1.0bn,
is expected to face slower growth perspectives in value with the
threat of generic penetration and associated pricing pressure that
may offset the growth in volume. The CT & Cath Lab contrast
media market, which is estimated to represent c. €2.7bn, is
expected to grow sustainably at a low single-digit rate. At the
same time, Guerbet believes that there are significant growth
opportunities in medical devices and services for diagnostic
contrast media, a market with an estimated size of c.
€1.2bn.
The Interventional Imaging underlying markets are underpinned by a
strong drive toward minimally invasive surgical procedures, which
require the use of contrast media. Guerbet believes that it can
address targeted market segments with an estimated combined value
in excess of c. €1.6bn, leveraging its products portfolio and
expertise. Such market segments, including interventional oncology,
interventional radiology embolization and interventional radiology
delivery, would represent significant growth opportunities for
Guerbet.
In order to capture growth
opportunities, the GEAR 2023 strategic plan is built on four key
pillars:
The GEAR 2023 strategic plan
combines "Internal Boost" initiatives, aimed at accelerating
organic growth based on targeted investments in the current
business where there are markets opportunities, together with
"External Boost" initiatives, consisting of the pursuit of
acquisition opportunities in order to compound organic growth and
generate profitability accretion.
In Diagnostic Imaging, Guerbet has
identified several Internal Boost and External Boost
initiatives:
-
Internal Boost:
-
P03277: targeted launch in 2022 of a new
contrast media currently in development and which is showing
best-in-class potential in the Phase II B;
-
Go-direct in Japan: building of own distribution
platform in 2018 to accelerate penetration in the world's 2nd
largest contrast media market for MR and CT & Cath Lab,
currently addressed through a distributor;
-
Capture growth opportunities in key geographies
either by accelerating in countries recently launched after the
CMDS acquisition (Poland, South Africa and Australia) or by
strengthening our presence in large markets where we can seize
further growth opportunities (the US and mainland China); and
-
Digital offering: continued development of a
modular software offering based on a Software as a Service (Saas)
business model aimed at improving operational and clinical
outcomes.
-
External Boost:
-
Medical devices and services: strengthen the
complementarity of Guerbet's product offering by adding new medical
devices and services; and
-
Augmented Intelligence: develop an offering to
address a strong market opportunity leveraging on Guerbet's network
and relationships with radiologists.
In Interventional Imaging,
Internal Boost initiatives will consist of the development of new
indications for Lipiodol® and the development and acceleration of
Accurate Medical Therapeutics' products, which Guerbet has acquired
in 2018.
In terms of External Boost
initiatives in Interventional Imaging, Guerbet intends to build a
unique portfolio through bolt-on acquisitions of mainly start-up
players (replicating the Accurate Medical Therapeutics model). The
Company targets to generate €100m to €150m of revenue in 2023 from
companies acquired over 2018-2023 in Interventional Imaging. The
Company believes it benefits from strong competitive advantages to
seize acquisition opportunities, including its R&D expertise to
identify and evaluate innovative technologies from start-up
companies, its commercial footprint to launch and accelerate their
market penetration and its fast decision making for acquisition.
Guerbet has identified a pipeline of realistic targets and has the
ambition to sign two acquisitions before end of 2018.
As part of GEAR 2023, Guerbet will
implement a plan across its businesses to reduce costs and working
capital requirements.
Outlook and targets
For 2018, the Company expects
revenue in-line with 2017 at constant exchange rates. The EBITDA
margin is expected down by c. 2 percentage points of revenue
compared to 2017, due to the full year impact of generic
competition on Dotarem®, but excluding one-off impacts. One-off
impacts related to the integration of Accurate Medial Therapeutics
and the transition to an own distribution platform in Japan are
expected to decrease EBITDA by c. €10m in 2018. The Company expects
to proceed with net capital expenditure in the range of c. €50m and
to have a neutral to slightly positive change in net working
capital, despite one-off impacts. In 2018, the Company will pay the
upfront consideration of €19.5m associated with the Accurate
Medical Therapeutics acquisition, as well as part of the up to
€37.5m earn-out consideration, which is to be paid in several
installments over 2018-2020, subject to performance conditions.
For 2020, and taking into account
Internal Boost initiatives only, the Company targets revenue
between €850m and €900m at constant exchange rates and an EBITDA
margin above 16.5%. The Company targets net capital expenditure of
c. €50m with an additional one-off impact of c. €10m in 2020 and
2021, consisting of the roll-out of the Group's ERP across CMDS
businesses. Regarding working capital, the Company targets to
decrease requirements as percentage of revenue back to pre-CMDS
acquisition level.
For 2023, and taking into account
Internal Boost initiatives only, the Company targets revenue of
around c. €1.0bn at constant exchange rates and an EBITDA margin
above 20%. The Company targets net capital expenditure of c.
€50m.
External Boost initiatives to be
achieved over 2018-2023 are targeted to contribute an additional
€150m to €250m of revenue by 2023 and to have an overall positive
impact on EBITDA margin.
Regarding the financial policy
over 2018-2023, the Company intends to maintain its net debt to
EBITDA ratio below 3.5x at all times, to maintain its dividend
distribution policy with a pay-out ratio target in the range of 25%
to 35% and to optimize shareholders' return.
Disclaimer
Certain information included in this press release
and other statements or materials published by the Company are not
historical facts but are forward-looking statements. These
forward-looking statements refer in particular to the Company's
management's business strategies, its expansion and growth of
operations, future events, trends or objectives and expectations,
which are naturally subject to risks and contingencies that may
lead to actual results materially differing from those explicitly
or implicitly included in these statements.
Forward-looking statements speak only as of the
date of this press release and, subject to any legal requirement,
the Company does not undertake to update or revise the
forward-looking statements that may be presented in this press
release to reflect new information, future events or for any other
reason and any opinion expressed in this press release is subject
to change without notice. Such forward looking statements are for
illustrative purposes only. Forward-looking information and
statements are not guarantees of future performances and are
subject to various risks and uncertainties, many of which are
difficult to predict and generally beyond the control of the
Company. These risks and uncertainties include among other things,
the uncertainties inherent in research and development of new
products, including future clinical trial results and analysis of
clinical data (including post-marketing data), decisions by
regulatory authorities, such as the Food and Drug Administration or
the European Medicines Agency, regarding whether and when to
approve any drug, device or biological application that may be
filed for any such product candidates as well as their decisions
regarding labelling and other matters that could affect the
availability or commercial potential of such product candidates. A
detailed description of risks and uncertainties related to the
Company's activities is included under Chapter 4.3 "Risk factors"
in the Registration Document (Document de Référence) of the Company
which has been filed with the French Financial Markets Authority on
April 5, 2017 under the number n°D-17-0323 and is available on the
Company's website (www.guerbet.com).
This press release contains statistics, data and
other information relating to markets, market sizes, market shares,
market growth, market positions and other industry data pertaining
to the Company's business and markets. Such information is based on
the Company's analysis of multiple internal and third party
sources, including information extracted from market research,
governmental and other publicly available information, independent
industry publications and information and reports. The Company, its
affiliates, shareholders, directors, officers, advisors, employees
and representatives have not independently verified the accuracy of
any such market data and industry forecasts. Such data and
forecasts are included in this press release for information
purposes only.
Some of the financial information contained in
this press release is not directly extracted from the Company's
accounting systems or records and does not constitute International
Financial Reporting Standards (IFRS) accounting measures, including
in particular EBITDA. The Company calculates EBITDA as operating
income, with the net allowance for amortization, depreciation and
provisions added back in. EBITDA is not a measure of financial
performance under IFRS and the definition of the term used by the
Company may not be comparable to similar terms used by other
companies. Such information has not been independently reviewed or
verified by the Company's auditors.
This press release does not contain or constitute
an offer of securities for sale or an invitation or inducement to
invest in securities in France, the United States or any other
jurisdiction.
Press Release
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announcement is distributed by Nasdaq Corporate Solutions on behalf
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The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: GUERBET via Globenewswire
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