RETURN TO PROFITABILITY IN H2
ILouvain-La-Neuve, Belgium, March 21, 2019 - IBA (Ion Beam Applications SA, EURONEXT), the world’s leading provider of proton therapy solutions for the treatment of cancer, today announces its consolidated annual results for the 2018 financial year.
On July 20, 2018, IBA announced that it had decided to explore new strategic alternatives for IBA Dosimetry which could include a sale, merger, initial public offering, or retention of the business. Following the announcement, IBA initiated a disposal process and determined that all criteria of IFRS 5 were met in order to present the assets and liabilities of IBA Dosimetry as assets held-for-sale. As IBA Dosimetry is also a separate operating segment, it also meets the criteria of discontinued operations. Consequently the results of this activity are presented on a separate line in the income statement as “Profit/(loss) from discontinued operations” in 2018 and in the comparative numbers for 2017. Active discussions are currently ongoing on the sale of this division and the Company expects to inform the market of the outcome of these discussions in Q2 2019.
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FY 2018 |
FY 2017 |
Variance |
Variance |
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PT & Other Accelerators |
208 440 |
236 485 |
-28 045 |
-11.9% |
|
Total Net Sales |
208 440 |
236 485 |
-28 045 |
-11.9% |
|
REBITDA |
7 782 |
-11 517 |
19 299 |
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% of Sales |
3.7% |
-4.9% |
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REBIT |
885 |
-17 260 |
18 145 |
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% of Sales |
0.4 % |
-7.3% |
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Profit Before Tax |
-5 152 |
-23 502 |
18 350 |
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% of Sales |
-2.5% |
-9.9% |
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|
|
|
|
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Discontinued operations |
3 171 |
2 457 |
714 |
29.1% |
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|
|
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NET RESULT |
-4 401 |
-39 201 |
34 800 |
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% of Sales |
-2.1% |
-16.6 % |
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Olivier Legrain, Chief Executive Officer of IBA commented:: “IBA made good progress in 2018, having returned to profitability in the second half of the year and achieving a positive REBIT for the full year, despite the challenging proton therapy market. Seven Proteus®ONE contracts were signed in the period with three starting to generate revenues during the year. The double-digit growth in Proton Therapy service revenues underlines our confidence in this expanding revenue stream, and results were also boosted by record orders in Other Accelerators. We have taken clear steps to strengthen the business for the long-term as we focus on cementing our position as proton therapy market global leader. This includes a company-wide focus on cost control to help us achieve sustained profitability.
“Despite the short-term unpredictability of the timing of new contracts, the clinical evidence and real-life experience with our proton therapy systems is driving expansion in new and existing markets around the world. With our flexible product offering, rapid installation capability and commitment to constant innovation, IBA is well placed to benefit from future market growth.”
Financial summary *
- Total 2018 revenues of EUR 208.4 million, down 11.9% (2017: EUR 236.5 million), now composed solely of Proton Therapy and Other Accelerators. The decrease was predominantly due to a slower PT market. Other Accelerators had a 33% increase in equipment sales, boosted by a record order intake.
- Equipment and service backlog of EUR 955 million, comprising an equipment backlog for Proton Therapy and Other Accelerators of EUR 278 million at full year 2018 including upgrades and services backlog of EUR 677 million.
- Full year REBIT amounted to EUR 0.9 million vs a loss of EUR 17.2 million for the previous year. On a proforma basis including Dosimetry numbers, REBIT for 2018 would have amounted to EUR 5.4 million, largely ahead of the break-even guidance that had been announced over the year. This strong improvement was largely driven by a record order intake in Other Accelerators, excellent performance in service and a reduction in operating expenses as part of the ongoing cost cutting initiative.
- Full year REBIT margin of 0.4% versus -7.3% in the prior year (2.1% on a proforma basis vs -4% LY).
- Dosimetry (discontinued operation) net profit of EUR 3.2 million, up 29% (2017: EUR 2.5 million), driven by strong cost control and halting of depreciation in accordance with IFRS 5.
- The Company moved into profit at both REBIT and Net Income at the Group level in the second half compared with the first half of 2018.
- Total Group loss of EUR 4.4 million, representing an 89% improvement versus PY (2017: EUR – 39.2 million), driven by the Group wide programme to reduce costs and the absence of exceptional items.
- Net debt position of EUR -47.1 million (including cash position of Dosimetry for EUR 2.3 million) at the end of 2018 compared to EUR -15.5 million at the end of December 2017, driven for around half by temporary working capital requirements and for half by a lease facility for IBA’s new building. The Group has sufficient credit lines from its banks to finance its cash flow requirements. Moreover, the improved 2018 financial results also allow the Group to meet the bank covenants on its credit lines.
* The above numbers are stated with Dosimetry as an Asset Held for Sale except when explicitly mentioned otherwise
Business summary
- Order intake of seven rooms comprising seven Proteus®ONE* solutions sold in the UK, Italy, China, Singapore and Belgium, equating to 58% share of the overall market.
- Currently 21 projects have been financially activated and 37 rooms are under development, comprising 14 Proteus®ONE and 7 Proteus®PLUS*.
- The service business continued to grow, with 29 centers under operation at the end of December 2018. Six IBA proton therapy centers became operational during the period: Toyohashi, Japan; Sapporo, Japan; Caen, France; Newport, UK; Groningen, Netherlands; and Chennai, India at the start of 2019.
- Based on current activated contracts, 50 or more centers are expected to be under operation by 2023.
- Significant progress towards sustained profitability through a company-wide focus on operating expenses and cost-efficiency measures.
- Opening of a new factory at IBA’s headquarters in Louvain-La-Neuve to assist in the efficient production of IBA’s technology and contribute to the overall reduction of costs.
- Market authorization received from the Brazilian Health Regulatory Agency (ANVISA) for a Proteus®ONE single-room solution during the period, expanding global reach of proton therapy.
- Positive developments reinforcing the growth potential for proton therapy include:
- Evidence generation through an increasing body of publications presenting the benefits of proton therapy for various indications.
- On-going use and validation of the model-based approach at the University Medical Center Groningen (UMCG) that show positive early results. An increasing number of institutions in Europe, North America and Asia are showing interest in this model.
- New treatment techniques such as ARC and FLASH demonstrate significant potential patient benefits illustrated by the first irradiation of a Spot Scanning Proton Arc (SPArc) plan at the Beaumont Health Proton Therapy in Michigan and the first Flash irradiation in an IBA gantry treatment room at the University Medical Centre Groningen (UMCG) in The Netherlands.
- Continued commitment to develop clinically relevant proton therapy treatment innovations to patients with the launch of the Victoria Advisory Committee, a consortium of worldwide radiation therapy experts to help define the future of Proton Therapy care, at the American Society for Radiation Oncology (ASTRO) in October.
- Hosting of the 8th Annual Proteus® User Meeting in Miami providing a platform for open dialogue, technical and clinical discussions, collaboration and real-time feedback from the world’s largest and most experienced proton therapy community, with more than 165 participants representing 40 sites in 17 countries.
Dosimetry
As explained earlier, the Dosimetry division has been accounted for as an Asset Held for Sale at the end of FY18 and its net profit is included in the P&L as a Discontinued Operation. Dosimetry showed a FY18 net profit of EUR 3.2 million, up 29% (2017: EUR 2.5 million).
Dosimetry order intake remained close to prior year levels, while sales were down 6.3% mainly due to slower backlog conversion. Gross margin slightly decreased versus 2017, whilst the overall profit margin was more favourable as a result of sustained cost control.
Active discussions are currently ongoing on a sale of this division and the Company expect to inform the market of the outcome of these discussions in Q2 2019.
***ENDS***
The conference call will be held on Thursday, 21 March 2019 at 15:00 CET / 14:00 GMT / 10:00 EDT / 07:00 PDT and can be accessed online at:
http://arkadinemea-events.adobeconnect.com/iba2103/event/registration.html
If you would like to participate in the Q&A, please dial (PIN code 74657221#):
Belgium: +3224035816
UK: +442071943759
NL: +31207095119
LU: +35227300163
US: +16467224916
FR: +33172727403
The presentation will be available on IBA’s investor relations website and on https://iba-worldwide.com/content/full-year-2018-results-web-conference-presentation shortly before the call.
To ensure a timely connection, it is recommended that users register at least 10 minutes prior to the scheduled webcast.
Financial calendar
First Quarter 2019 Business Update Wednesday, May 8, 2019
General Assembly Wednesday May 8, 2019
First Half 2019 Results Thursday, August 22, 2019
Third Quarter 2019 Business Update Thursday, November 14, 2019
About IBA
IBA (Ion Beam Applications S.A.) is a global medical technology company focused on bringing integrated and innovative solutions for the diagnosis and treatment of cancer. The company is the worldwide technology leader in the field of proton therapy, considered the most advanced form of radiation therapy available today. IBA’s proton therapy solutions are flexible and adaptable, allowing customers to choose from universal full-scale proton therapy centers as well as compact, single room solutions. In addition, IBA also has a radiation dosimetry business and develops particle accelerators for the medical world and industry. Headquartered in Belgium and employing about 1,500 people worldwide, IBA has installed systems across the world.
IBA is listed on the pan-European stock exchange NYSE EURONEXT (IBA: Reuters IBAB.BR and Bloomberg IBAB.BB). More information can be found at: www.iba-worldwide.com
*Proteus®ONE and Proteus®PLUS are brand names of Proteus 235