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:
- Grow our existing products;
- Expand into adjacencies;
- Acquire new technologies; and
- Return to shareholders.
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.
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