Press Releases
Sponsored by: EasyStockAlerts.com - FREE TRIAL!
Set Up E-mail Alerts For Press Releases » RSS Feed For Press Releases »Tokyo, Aug 29, 2008 - (JCN Newswire) - Honda Sun Co., Ltd., Honda's special-purpose subsidiary established for employment of people with disabilities, today held a ceremony to commemorate the completion of its new plant in Hijimachi, Oita prefecture.
The ceremony was attended by approximately 80 dignitaries, guests, and Honda executives including Katsusada Hirose, the governor of Oita prefecture, and Toshikazu Togari, the president of the Japan Organization for Employment of the Elderly and Persons with Disabilities (JEED), as well as Satoshi Aoki, chairman and representative director of Honda, and Hiroshi Soda, director of Honda.
Honda Sun established this new plant with the goal of making it a world-class plant with a universal design which will further expand employment of people with disabilities, improve the work environment and employee benefits, and improve productivity and logistical efficiency.
The new plant aims to create a work environment where people with disabilities can work in the same way as people without disabilities, and with improved productivity and flexibility. Moreover, special consideration was given so that each worker can work in accordance with their physical conditions.
In addition to achieving high safety standards, the opinions of various people, including those who use wheelchairs, were incorporated in the design of the plant in order to make it a friendly plant tor every worker who works there.
Based on one of Honda's fundamental beliefs, "Respect for the Individual," Honda Sun Co., Ltd. was established in September 1981, as a special-purpose subsidiary of Honda which provides people with disabilities the opportunity to work with people without disabilities and promotes social independence of disabled people. Today, Honda Sun manufactures parts for motorcycles, automobiles, and power products at its two plants in Oita (Beppu Plant and Hiji Plant).
In July 1992, Honda R&D Sun Co., Ltd. was established as a special-purpose subsidiary of Honda R&D Co., Ltd. Within the facility of Honda Sun's Hiji Plant, Honda R&D Sun conducts CAD-based analysis of motorcycles, automobiles, and power products promoting employment in various areas for people with disabilities.
Honda will continue expanding employment of people with disabilities and strengthen its effort to contribute to the wellbeing of society.
About the new plant
Location: 3968 Oaza- Kawasaki, Hijimachi, Hayami, Oita
Size: Lot Size:approximately 4,000m2
Floor Size: approximately7,400m2 (4-story facility)
Plan for new hiring: Approximately 50 associates (including Honda R&D Sun)
*plan to hire new associates in stages by 2012.
Planned investment: Approximately 800 million yen
Construction & Construction began in February 2008, and the plant became
Start of Operation: operational in August 2008
About Honda Sun Co., Ltd.
Establishment: September 1981
Location: Headquarter: 1399-1 Uchikamado, Oaza, Beppu, Oita, Japan
Hiji Plant: 3968 Oaza-Kawasaki, Hijimachi, Hayami, Oita, Japan
Capital Investment: 30 million yen
Capitalization Ratio:51% Honda Motor Co., Ltd.
24% Japan Sun Industries
25% Others
Sales Revenue: 1.45 billion yen (fiscal year ended March 31, 2008)
Representative: Haruyasu Nishida, president
Business: Production of parts for motorcycles, automobiles, power products
Employment: 133 associates (as of July 31, 2008)
About Honda R&D Sun Co., Ltd.
Establishment: July 1992
Location: 3968-1 Oaza-Kawasaki, Hijimachi, Hayami, Oita, Japan
Capital Investment: 30 million yen
Capitalization Ratio:60% Honda R&D Co., Ltd.
25% Honda Motor Co., Ltd.
15% Japan Sun Industries
Sales Revenue: 180 million yen (fiscal year ended March 31, 2008)
Representative: Haruyasu Nishida, president
Business: CAD-based R&D of parts for motorcycles, automobiles,
power products
Employment: 33 associates (as of July 31, 2008)
About Honda Motor Co., Ltd.
Honda Motor Co., Ltd. (TSE:7267/NYSE:HMC/LSE:HNDA.L) is one of the leading manufacturers of automobiles and power products and the largest manufacture of motorcycles in the world. Honda has always sought to provide genuine satisfaction to people worldwide. The result is more than 120 manufacturing facilities in 30 countries worldwide, producing a wide range of products, including motorcycles, ATVs, generators, marine engines, lawn and garden equipment and automobiles that bring the company into contact with over 19 million customers annually. For more information, please visit http://world.honda.com .
Contact:Honda Motor Co., Ltd. Media Inquiries corporate_pr@hm.honda.co.jp +81-3-5412-1512Copyright 2008 JCN Newswire. All rights reserved.
OTTAWA, ONTARIO--(Marketwire - Aug. 29, 2008) -
Audio clips available at www.inspection.gc.ca/english/corpaffr/relations/indexaude.shtml.
The Canadian Food Inspection Agency (CFIA) and Loblaw Companies Limited are warning the public not to serve or consume various store-made sandwiches because the products may be contaminated with Listeria monocytogenes.
This recall is being initiated as these sandwiches contain a few ready-to-eat deli meat products recalled by Maple Leaf Consumer Foods, Burlington, ON. There have been no reported illnesses associated with the consumption of these sandwiches.
The following products were made and sold at Loblaws, Loblaw Superstore, and Real Canadian Superstore in Ontario:
--------------------------------------------------------------------------
Product UPC Pack On Best Before
Dates Up to Dates up to
and including and including
--------------------------------------------------------------------------
Foccacia With
Turkey Breast 229203000000 August 24, 2008 August 25, 2008
--------------------------------------------------------------------------
Meals to Go Turkey
Sandwich Bagette 274263000002 August 24, 2008 August 25, 2008 -------------------------------------------------------------------------- Turkey Wrap Sandwich 229538000003 August 24, 2008 August 25, 2008 -------------------------------------------------------------------------- Grilled Turkey Sandwich 229187000003 August 24, 2008 August 25, 2008 -------------------------------------------------------------------------- Grilled Turkey Sandwich 300360 August 24, 2008 August 25, 2008 -------------------------------------------------------------------------- Ultimate Club Sandwich 229193000004 August 24, 2008 August 25, 2008 -------------------------------------------------------------------------- Swiss Style Sandwich
Turkey 271962000000 August 24, 2008 August 25, 2008
--------------------------------------------------------------------------
Swiss Style Turkey
and Havarti 279161000000 August 24, 2008 August 25, 2008
--------------------------------------------------------------------------
Baguette Turkey Havarti 272128000000 August 24, 2008 August 25, 2008 -------------------------------------------------------------------------- Rustic Turkey Havarti 272257000000 August 24, 2008 August 25, 2008 --------------------------------------------------------------------------
The following products were made and sold at Loblaws and Provigo in Quebec:
--------------------------------------------------------------------------
Product UPC Pack On Best Before
Dates Up to Dates up to
and including and including
--------------------------------------------------------------------------
Meals to Go
Submarine Bologna 271172000000 August 24, 2008 August 27, 2008 -------------------------------------------------------------------------- Meals to Go Submarine
Italian 271183000005 August 24, 2008 August 27, 2008
--------------------------------------------------------------------------
Meals to Go Submarine
Ham 271180000009 August 24, 2008 August 27, 2008 --------------------------------------------------------------------------
Food contaminated with Listeria monocytogenes may not look or smell spoiled. Consumption of food contaminated with this bacteria may cause listeriosis, a foodborne illness. Listeriosis can cause high fever, severe headache, neck stiffness and nausea. Pregnant women, the elderly and people with weakened immune systems are particularly at risk. Infected pregnant women may experience only a mild, flu-like illness, however, infections during pregnancy can lead to premature delivery, infection of the newborn, or even stillbirth.
Loblaw Inc., Brampton, Ontario, is voluntarily recalling the affected product from the marketplace. The CFIA is monitoring the effectiveness of the recall.
For more information, consumers and industry can call one of the following numbers:
Inge van den Berg, Vice President, Public Affairs & Investor Relations, Loblaw Companies Limited at 905-861-2221;
CFIA at 1-800-442-2342 / TTY 1-800-465-7735 (8:00 a.m. to 8:00 p.m. Eastern time, Monday to Friday).
For more information, consumers and industry can call the CFIA at 1-800-442-2342 / TTY 1-800-465-7735 (8:00 a.m. to 8:00 p.m. Eastern time, Monday to Friday).
For information on Listeria monocytogenes, visit the Food Facts web page http://www.inspection.gc.ca/english/fssa/concen/causee.shtml.
For information on receiving recalls by e-mail, or for other food safety facts, visit our web site at www.inspection.gc.ca.
FOR FURTHER INFORMATION PLEASE CONTACT:
Canadian Food Inspection Agency
Office of Food Safety and Recall
English
Garfield Balsom
613-760-4232
Canadian Food Inspection Agency
Office of Food Safety and Recall
French
Linda LeBlanc
613-760-4112
Source: Canadian Food Inspection Agency
SAN JOSE, California, August 29 /PRNewswire/ --
- Copyright-free photos of the Electronic Sports World Cup for the media:
ftp://files.eswc.com/press/tv/ESWC2008_Photos/
((c) Games-Services - Julien Mougnon / Fabien Hebert)
- TV Highlights of the Electronic Sports World Cup:
ftp://files.eswc.com/press/tv/ESWC2008_Videos/
Following three days of competition bringing together the 600 best players on the planet, six world champion titles and $US 200,000 in prize money were awarded in San Jose, California, which hosted the Electronic Sports World Cup Final. Played in front of the public on the large stage of the San Jose Convention Center, broadcast on giant screens and with commentary by electronic sports specialists, the final matches included many of the 40 nations represented. Poland and the United States won two consecutive titles for the first time in the history of the ESWC: for the second consecutive year PGS-Gaming of Poland won the title for the Counter-Strike tournament and SK-Gaming of the United States held onto their title in the Women's Counter-Strike tournament.
Along with other games, the Koreans and the Chinese bagged the first four spots in the Warcraft 3 competition; the Quake 3 tournament was dominated by Belarussian gamer Alexei Yanushevsky and in the Trackmania Nations tournament Swedish gamer Kalle Videkull and Dutch gamer Freek Mollema secured the highest places on the podium. During its first appearance in the competition as an official sport, DOTA allowed the Singaporean team Zenith to leave California basking in the glow of a world champion title.
List of Winners of the 2008 ESWC:
COUNTER-STRIKE
1 PGS GAMING (Poland)
2 ESTRO (South Korea)
3 FNATIC (Sweden)
QUAKE 3
1 CYPHER (Belarus)
2 K1LLSEN (Germany)
3 RAPHA (United States)
WARCRAFT 3
1 MTWAMD.WHO (South Korea)
2 WE.SKY (China)
3 TED (China)
TRACKMANIA
1 FROSTBEULE (Sweden)
2 XENOGEAR (Netherlands)
3 LIGN (France)
DOTA
1 ZENITH (Singapore)
2 KINGSURF (Malaysia)
3 MEETYOURMAKERS (Denmark)
COUNTER-STRIKE WOMEN
1 SK GAMING (United States)
2 EMULATE (France)
3 EHONOR (China)
ESWC's official website: http://www.eswc.com
Games-Services is a production and communication company specializing in digital leisure. Founded in 2000 and based in Paris, Games-Services is the creator of the Electronic Sports World Cup, for which it also holds the rights and which is licensed in over 50 countries.
Contact: David Heuze - +33-6-83-25-21-86 - dheuze@initial2d.com
SOURCE Games-Services
PARIS--(BUSINESS WIRE)--
Regulatory News:
Aeroports de Paris (Paris: ADP) (Pink Sheets: AEOPF):
-- Consolidated revenue: +12.3% to EUR 1,214.0 million,
substantially stronger than traffic growth (+2.8%)
-- EBITDA: +14.2% to EUR 404.2 million
-- Restated Group net income(2): +11.0% to EUR 127.1 million
-- Outlook:
2008:
-- Revenue and EBITDA growth targets maintained;
substantially higher than traffic growth
-- Target range for EBITDA growth: between 9% and 12%
2010: EBITDA growth target maintained at a 60% increase in
absolute value between 2005 and 2010
Pierre Graff, Chairman and CEO of Aeroports de Paris, comments:
"Aeroports de Paris' very strong first-half 2008 results were notably buoyed by the diversity of its business activities and the dynamic sales momentum of its services and real estate activities, despite a less favourable economic environment. The Group also benefited from the start-up of new world-class facilities, which not only create value for the company, but also reflect significant improvements in the quality of services for passengers and the airlines alike. Thanks to these strong results, the extensive modernization of our airports and our highly motivated personnel, we are confident in the future and confirm our EBITDA growth target of a 60% increase in absolute value between 2005 and 2010. For full-year 2008, we are targeting EBITDA growth of between 9% and 12%."
Key figures % (EUR millions) 30/06/2008 30/06/2007 change ---------------------------------------------------------------------- Revenue(3) 1,214.0 1,081.4 +12.3% EBITDA(4) 404.2 354.0 +14.2% Current operating income 235.2 209.2 +12.4% Group net income (5) 124.7 201.6 -38.1% Group net income before non-recurring items* 127.1 114.5 +11.0% ---------------------------------------------------------------------- * Non-recurring items in H1 2007 consist mainly of the EUR 109.8m (before tax effect) capital gain on the disposal of BCIA shares and the EUR 30.8m (before tax effect) reorganization charge for the ground handling segment. Non-recurring items in H1 2008 consist mainly of a EUR 2.7m (before tax effect) reorganization charge for the ground handling segment.
I. GROUP RESULTS
Strong performances by the airport services, retailing and real estate segments and by subsidiaries and joint ventures
The first half of 2008 marks another period of robust revenue growth, up 12.3% to EUR 1,214.0 million.
Revenue growth, which far surpassed the 2.8% increase in passenger traffic, can be attributed to several factors:
-- with respect to traffic:
-- a volume effect relating to the 2.8% increase in passenger
traffic and the 1.9% increase in the number of aircraft
movements,
-- a price effect (which was smaller than in H1 2007), via a
rate increase for the main aeronautical fees, up 4.25% at 1
April 2007 and another 3.80% at April 1 2008, and for
ancillary fees, up 4.25% at 1 April 2007 and 4.70% at 1 April
2008,
-- a mix effect due to the relative increase in the weight of
traffic segments that make the largest contributions to
revenue: "International ex Europe", to 38.3% of total traffic
in H1 2008 from 37.4% in H1 2007, and "Europe ex France", to
42.1% of total traffic in H1 2008 from 41.6% in H1 2007,
-- the opening of new facilities (La Galerie Parisienne on 27
June 2007 and new Terminal 2E boarding lounge on 30 March
2008), which led to additional leases of retail areas and
equipment,
-- the very buoyant growth of retail activities, up 11.6%, which
benefit notably from major plans to extend retail areas and
enhance the product offer,
-- the rapid growth in real estate, up 7.1%,
-- and the success enjoyed by subsidiaries in international
markets and telecoms as well as the Societe de Distribution
Aeroportuaire (SDA) joint venture that lifted growth in the
"Other Activities" segment to 26.7%.
EBITDA continued to grow satisfactorily, up 14.2% to EUR 404.2 million in H1 2008, as current operating expenses rose only 9.5%, a much slower pace than revenues.
Thanks to robust revenue growth and a slower increase in current operating expenses, the gross margin (EBITDA-to-revenue ratio) rose 0.6 percentage points to 33.3% in H1 2008 from 32.7% in H1 2007.
Gross margins improved in three of the four segments:
-- EBITDA in the Airport Services segment rose 11.6% to EUR 382.8
million thanks to tight control over expenses despite the
significant development of facilities. The gross margin rose
0.7 percentage points to 40.0% in H1 2008, from 39.3% in H1
2007.
-- In Real Estate, EBITDA climbed 20.8% to EUR 57.5 million, from
EUR 47.6 million in H1 2007, notably due to the positive
impact of provision reversals. Excluding this effect, H1 2008
EBITDA would have increased 10.3% compared to H1 2007, and the
gross margin would have been 51.4%, 1.6 percentage points
higher than in H1 2007.
-- In Other Activities, EBITDA grows sharply by 36% in H1 2008 to
EUR 19.9 million, versus EUR 14.6 million in H1 2007. The
gross margin gained 0.7% percentage points to 10.7% in H1 2008
from 10% in H1 2007.
-- The Ground handling and related services segment generated an
EBITDA loss of EUR 7.8 million in H1 2008, in line with the
EBITDA loss of EUR 7.3 million in the year-earlier period.
Despite this performance, the Group is maintaining its target
of returning the Ground handling segment to breakeven in terms
of current operating profit in 2009. The expected improvement
in the segment's H2 performance should lead to a slight
reduction of the deficit in 2008 compared to the 2007
figure(6).
Current operating profit was EUR 235.2 million, a vibrant 12.4% increase compared to the year-earlier period.
This growth results from two opposite effects: first, the robust 14.2% growth in EBITDA as explained above, and second the substantial increase in depreciation and amortization, up 16.7% to EUR 168.9 million. This sharp increase is due to major start-ups in 2007, notably La Galerie Parisienne, the East baggage sorting system (TBE) and the CDG Val airport shuttle and, to a lesser extent, the March 2008 opening of the new Terminal 2E passenger boarding lounge, and furthermore the refurbishment in progress of Terminal 1 of the Paris-Charles de Gaulle airport (the 3rd quarter was opened in late March 2008).
The Group's current operating margin inched up 0.1 percentage point to 19.4% in H1 2008 from 19.3% in H1 2007. This slight increase was achieved despite the significant number of facilities added to the Paris-Charles de Gaulle airport (capacity increased by 11.4 million passengers between 30 June 2007 and 30 June 2008).
Current operating margins in Real Estate and Other Activities increased strongly between H1 2007 and H1 2008. In contrast, the current operating margin rate in the Airport Services segment contracted in H1 2008 due to the sharp increase in depreciation and amortization pertaining to the opening of new facilities. In Ground handling and related services, the current operating margin declined very slightly.
Net finance expense totalled EUR 42.3 million in H1 2008, compared with net finance income of EUR 69.7 million in H1 2007.
The positive situation in H1 2007 resulted from the EUR 109.8 million capital gain realized on the disposal of the stake held by Aeroports de Paris Management (ADPM) in Beijing Capital International Airport Company Limited (BCIA). Excluding non-recurring items, the Group would have reported a net finance expense of EUR 40.1 million in H1 2007 (compared with EUR 42.3 million in H1 2008).
The cost of gross debt at 30 June 2008 held at EUR 50.0 million, the same level as at 30 June 2007, as no significant change was recorded in the cost of gross debt in H1 2008 while the setting up of hedging instruments effectively dampened the negative impact of the rise in interest rates.
The cost of net debt rose to EUR 41.2 million from EUR 40.8 million at 30 June 2007, taking into account the EUR 8.9 million in income from cash and cash equivalents in H1 2008.
Group net income continued to improve, up 11.0% before non-recurring items
Reported Group net income apparently decreased 38.1% to EUR 124.7 million in H1 2008 from H1 2007, but the first half of last year benefited from the disposal of ADPM's stake in BCIA.
Restated Group net income, excluding non-recurring items, amounted to EUR 127.1 million in H1 2008, up 11.0% from H1 2007 (EUR 114.5 million).
In H1 2007, restatements(7) of non-recurring items primarily consisted in the cancellation of the EUR 109.8 million capital gain on the disposal of BCIA, as well as:
-- the cancellation of the EUR 30.8 million reorganization
expense for the ground-handling services business,
-- the cancellation of EUR 1.4 million in expenses pertaining to
the Terminal 2E accident,
-- the cancellation of the EUR 9.5 million impact of the
afore-mentioned points on income tax.
In H1 2008, non-recurring items were virtually negligible, with the following restatements(8):
-- the cancellation of the EUR 2.7 million reorganization expense
for the ground-handling services business,
-- the cancellation of the EUR 1.0 million in expenses pertaining
to the Terminal 2E accident,
-- the cancellation of the EUR 1.3 million impact of the
afore-mentioned points on income tax.
II. OPERATING PERFORMANCE BY SEGMENT
Robust growth in Airport Services, bolstered by the increase in airport fees, the development of commercial activities and the opening of new facilities
Revenue from Airport services rose 9.8% to EUR 957.4 million in H1 2008. Revenue growth was notably boosted by higher revenues from fees, commercial activities and rentals of premises in the new facilities.
The Airport Services segment achieved this solid performance even though passenger traffic growth was lower than in 2007, thanks to the diversity of services offered by the Group in its core business:
-- Aeronautical fees (passenger, landing, parking, fuelling and
lighting fees) were up 9% to EUR 376.4 million, buoyed by
several factors:
-- A volume effect: passenger traffic grew 2.8% while the
number of aircraft movements rose 1.9 %.
-- A price effect: in accordance with the stipulations of the
Economic Regulation Agreement, the rates of aeronautical fees
were raised 4.25% on average as of 1 April 2007 and by a
further 3.80% on average since 1 April 2008.
-- A positive mix effect: the Group benefits from the more
profitable structure of traffic(9).
-- Lastly, the new facilities delivered in 2007 and 2008 have
also boosted activity. This is the case, for instance, for
the new aircraft parking areas. Parking fees rose a robust
20.5% thanks to the big increase in the number of terminal-
side parking slots with the opening of La Galerie Parisienne
and the new Terminal 2E boarding lounge.
-- The opening of new facilities also benefited ancillary fees, a
category consisting of ancillary fees (baggage handling,
check-in counters, de-icing) and other services (VIP lounges,
network leasing), which surged 26.8% to EUR 66.9 million.
Revenue in the de-icing activity posted vigorous growth,
notably in comparison with the very low level of activity in
2007, when weather conditions were very mild.
Revenues at check-in counters grew thanks to the opening of
new facilities in Terminal 2E at the Paris-Charles de Gaulle
airport.
Revenue from baggage handling systems continued to grow
satisfactorily, benefiting in particular from the opening of
new baggage handling systems in Terminal 2E at the Paris-
Charles de Gaulle airport.
Lastly, an amount of EUR 3.0 million has been booked under
this heading since H1 2008(10), consisting in revenues from
the introduction of a fee for the manufacturing of security
badges since 1 January 2008 (previously, the cost incurred in
manufacturing these badges was covered by the airport
security tax).
-- The new terminals paved the way for a substantial increase in
rental revenues (rental of premises in terminals), up 18.1% to
EUR 44.9 million. This robust growth was driven by:
-- the full effect, in H1 2008, of the renting of new surface
areas in the terminals at Paris-Charles de Gaulle, notably in
La Galerie Parisienne and new land and buildings in its
vicinity;
-- and the indexing of rents to the ICC (index of construction
cost), which led to a 5.05% increase in fees applied since 1
January 2008.
-- Vigorous growth in commercial activities
Revenues from commercial activities (shops, bars and
restaurants, car rental firms and advertising) jumped 11.6%
to EUR 119.3 million. Virtually all components of this
segment contributed to growth.
Revenues from duty-free shops increased 14.1% and revenues
from bars and restaurants rose 10.1% in H1 2008, notably
thanks to:
-- the full-year effect of the opening of La Galerie
Parisienne (4,600 sq. m. of additional retail space) and the
opening of the second quarter of Terminal 1 at Paris-Charles
de Gaulle,
-- the initial impact of shops opened in H1 2008 in the new
Terminal 2E passenger boarding lounge (4,850 sq. m.) and at
Orly Sud (1,300 sq. m.).
All in all, between late June 2007 (before the opening of La
Galerie Parisienne on 27 June 2007) and the end of June 2008,
Aeroports de Paris opened 10,145 sq. m. in retail surface
areas, lifting the total to 46,510 sq. m., a 27.9% increase
compared to the situation prior to the opening of La Galerie
Parisienne.
-- Car parks and access revenues rose 4.2% to EUR 77.5 million.
Excluding the effect of the loss of the STIF subsidy from the
Ile de France transport union, which the Group no longer
receives since the CDG Val airport shuttle began operating on
1 April 2007 and which was previously accounted for in this
sub-segment, business grew 7.4%. Revenues from hourly fees and
subscriptions increased further.
-- Revenue from industrial services (such as power and water
supply) increased 12.7% to EUR 41.1 million. Sales of heating
and air-conditioning, such as sales of electricity to EDF
(cogeneration at the Paris-Charles de Gaulle airport)
benefited from the indexing of fees to the rise in the cost of
gas. Quantities of thermal units sold also increased because
of a harsher winter in Q1 2008 than in Q1 2007.
-- Airport security tax revenue, which primarily finances
security-related activities, increased 6.3% to EUR 185.9
million.
-- Other revenues (invoicing or re-invoicing of various services)
rose 4.2% to EUR 45.3 million.
EBITDA in the Airport services segment rose 11.6% to EUR 382.8 million since expenses were kept under control despite the significant development of facilities.(11) Nominal capacity increased by 11.4 million passengers between 30 June 2007 and 30 June 2007. The gross margin gained 0.7 percentage points to 40.0% in H1 2008 from 39.3% in H1 2007.
Current operating income rose 7.4% to EUR 238.6 million. The current operating margin slipped to 24.9% in H1 2008 from 25.5% in H1 2007 because of the sharp increase in depreciation, up 19.2% to EUR 144.2 million for the segment.
A dynamic Real estate segment
The Real estate segment reported a 7.1% increase in revenues to EUR 102.2 million in H1 2008.
This growth can be attributed to several factors:
-- The 10.3% growth in external revenue, which primarily
reflected:
-- The full effect over H1 of marketing for the new GB2 cargo
station at the Paris-Charles de Gaulle airport as of 1 July
2007 and various new locations, which illustrates the
commercial drive of this business and amounted to EUR 3.8
million.
-- The increase in rents, indexed to the increase in the index
of construction costs (ICC), i.e. 5.05% at 1 January 2008
(versus 7.05% in 2007), which amounted to EUR 2.7 million.
-- Other: up EUR 0.7 million.
-- A slight 1.8% decrease in internal revenues.
The Real estate segment's current expenses rose 5.6% thanks to tight control of internal consumption.
EBITDA in the Real estate segment increased 20.8% to EUR 57.5 million, versus EUR 47.6 million in the year-earlier period, notably thanks to the positive impact of provision reversals (EUR 5.0 million). Excluding this effect, EBITDA would have grown 10.3% in H1 2008 compared to H1 2007 and the gross margin rate would have been 51.4%, 1.6 percentage points higher than in H1 2007.
The segment reported a current operating profit of EUR 41.6 million in H1 2008, up 30% from the same period the previous year. The current operating margin was 40.7% in H1 2008. Excluding the afore-mentioned effect of provision reversals, current operating profit would have risen 14.4% to EUR 36.6 million and the current operating margin would have stood at 35.8%, 2.3 percentage points higher than in H1 2007, as the level of depreciation was virtually unchanged from H1 2007 (+2.0%).
Ground handling: reorganization of an activity facing fierce competition
The Ground handling and related services segment generated revenues of EUR 97.3 million in H1 2008, up 4.1% from H1 2007.
In H1 2008, the segment reported an EBITDA loss of EUR 7.8 million, in line with the H1 2007 EBITDA loss of EUR 7.3 million (+6.5%), as the increase in H1 revenue was offset by the increase of charges. Nonetheless Alyzia's EBITDA loss of EUR 0.9 million is a significant improvement compared to H1 2007.
The segment's current operating loss increased to EUR 9.0 million in H1 2008, compared to EUR 8.6 million in H1 2007.
The Group is maintaining its target for the Ground handling services segment, which is to return to breakeven in terms of current operating profit in 2009. In full-year 2008, the expected improvement in the segment's H2 performance should result in a slight current operating loss reduction compared to full-year 2007(12).
In H1 2008, the first contracts that were previously executed by Aeroports de Paris' ground handling department were transferred to Alyzia, in compliance with the segment's reorganization plan. At 1 July 2008, the segment had already transferred about 60% of the business to be transferred from ADP's ground handling department to the Alyzia subsidiary under the reorganization plan. During this initial transition phase, the quality of service was maintained and therefore ensured client satisfaction.
In H2 2008, more business activities are scheduled to be transferred in October and November. In compliance with the reorganization plan, we still expect all ground handling activities to be transferred to Alyzia by the end of H1 2009.
Other Activities (subsidiaries and the SDA joint venture) have continued to expand rapidly, with an improvement in margins in H1 2008
In the Other Activities segment, revenue grew 26.7% to EUR 185.7 million in H1 2008.
EBITDA grew faster than revenue in this segment, up 36% to EUR 19.9 million in H1 2008, versus EUR 14.6 million in H1 2007.
Current operating profit surged in H1 2008, up 57.6% to EUR 12.1 million (vs. EUR 7.7 million in H1 2007):
-- The contribution of Societe de Distribution Aeroportuaire
(SDA) grew 28.2% to EUR 5.2 million, buoyed notably by new
retail areas.
-- Hub Telecom(13) contributed EUR 4.6 million, up 39.9% from H1
2007.
-- ADPi's contribution rose to EUR 3 million thanks to numerous
new engineering, architecture and project management contracts
(in Libya, Saudi Arabia, the Sultanate of Oman, Pakistan and
Colombia in 2007 and in Saudi Arabia and Russia in H1 2008).
ADPi's current operating profit continued to grow at an
extremely fast pace of 115.5% in H1 2008 after soaring 181.3%
in full-year 2007.
-- Aeroports de Paris Management, the subsidiary specializing in
managing airports other than the Paris airports, made a
negative contribution of EUR 0.1 million in H1 2008 (versus a
positive contribution of EUR 0.5 million in H1 2007) after an
increase in resources and the prospecting budget, in line with
the Group's strategy of filing bids for several calls for
tenders currently under way.
-- Lastly, the parent company Aeroports de Paris SA contributed a
current operating loss of EUR 0.6 million, which is an
improvement on the H1 2007 loss of EUR 1.5 million. This 62.3%
improvement in the parent company's contribution to current
operating income was primarily due to an EUR 0.8 million
difference in provisions for impairments of receivables net of
reversals between H1 2008 (net reversal of EUR 0.2 million)
and H1 2007 (net allowance of EUR 0.6 million) related to an
engineering contract in Morocco.
The current operating margin of the Other Activities segment gained 1.3 percentage points to 6.5% in H1 2008 from 5.2% in H1 2007.
III. FINANCIAL HIGHLIGHTS AND OUTLOOK
Balance sheet
Group net debt increased slightly to EUR 1,972 million at 30 June 2008 from EUR 1,782 million at 31 December 2007, due in part to a slight reduction in gross debt, down 1.7% to EUR 2,312.8 million at 30 June 2008 (vs EUR 2,353.5 million at 31 December 2007), and in part to the reduction in net cash to EUR 316.4 million (a EUR 207.7 million decrease in the net cash position compared to 31 December 2007).
Net debt to equity increased to 0.68 at 30 June 2008 from 0.60 at 31 December 2007.
Outlook for 2008 and the 2010 EBITDA target
Group revenues and EBITDA have grown rapidly since 2006 (up 8.1% and 11.0% respectively in 2006; 10.4% and 13.5% in 2007; and 12.3% and 14.2% in H1 2008), reflecting the benefits of the Group's strategy. This strategy combines revenue growth, bolstered by the diversity of the Group's business activities and the dynamic sales momentum of its services and real estate activities in particular, and higher margins across all its business activities.
On this basis, despite a broadly less favourable environment, Aeroports de Paris is reiterating its revenue and EBITDA growth targets for 2008, which should be substantially higher than traffic growth. For full-year 2008, the Group is targeting EBITDA growth of between 9% and 12%. Moreover, it is maintaining its 2010 EBITDA growth target of a 60% increase in absolute value between 2005 and 2010.
IV. RELEASE OF THE H1 2008 INTERIM FINANCIAL REPORT
Aeroports de Paris hereby announces the release today of its H1 2008 interim financial report on its website.
This document includes the H1 2008 consolidated financial statements, the interim business report, the statement by officers responsible for the interim financial report and the Statutory Auditors' report on the review of the interim financial statements.
The interim financial report can be consulted on the Company's website (www.aeroportsdeparis.fr) under the heading "Group, Finance, Publications" at the following address: http://www.aeroportsdeparis.fr/Adp/en-GB/Groupe/Finance/Publications/ Results+and+Revenues/PublicationRapportActiviteDev.htm
Live webcast and rebroadcasts of the analysts meeting
A live webcast of the presentation of the 2008 interim results will be broadcast at 10 a.m. today and rebroadcast from 2 p.m. (Paris time) on our website at the following address: http://www.aeroportsdeparis.fr/Adp/en-GB/Groupe/Finance/
All of the information published today, 29 August 2008, can be viewed on our website: www.aeroportsdeparis.fr
-- Press release:
http://www.aeroportsdeparis.fr/Adp/en-GB/Groupe/Finance/
CommunicationPresse/JulyDecember2008/trafic_juillet_2006.htm
-- Presentation of H1 2008 results,
-- Interim financial report,
-- H1 2008 consolidated financial statements and appendix
http://www.aeroportsdeparis.fr/Adp/en-GB/Groupe/Finance/
Publications/Results+and+Revenues/PublicationRapport ActiviteDev.htm
(Due to length, a URL may need to be copied/pasted into your Internet browser's address field. Remove the extra space if one exists.)
Upcoming events:
Third-quarter 2008 revenue will be released on 13 November 2008.
Warning concerning forward-looking statements
Forward-looking statements are included in the above press release. They are based on data, assumptions and estimates deemed sensible by Aeroports de Paris. They notably include information regarding the financial condition, results of operations and business of Aeroports de Paris. These forward-looking statements include risks (a list of which can be found in the reference document filed on April 28, 2008 with the French financial markets authority (AMF) under the number R. 08-038) and uncertainties, many of which cannot be controlled by Aeroports de Paris and cannot be easily predicted. They can lead to results substantially different from the information included in the forward-looking statements.
Aeroports de Paris builds, develops and manages airports including Paris-Charles de Gaulle ,Paris-Orly and Paris-Le Bourget. Aeroports de Paris is Europe's second-largest airport group in terms of airport revenue and the European leader for cargo and mail. Aeroports de Paris accommodates nearly 460 airlines, including the main companies in the air transport industry.
With an exceptional geographic location and a major trading area, the Group is pursuing its strategy of modernizing its terminal facilities and upgrading quality of services, and also intends to develop its retail and real estate business. In 2007, Aeroports de Paris had revenues of EUR 2,292.4 million and handled 86.4 million passengers.
APPENDIX
Results by segment
Airport services
--------------------------------------------------------------------
(EUR millions) 30/06/08 30/06/07 % change
--------------------------------------------------------------------
Revenue 957.4 872.3 +9.8%
EBITDA 382.8 343.1 +11.6%
Current operating income 238.6 222.2 +7.4%
Real estate
--------------------------------------------------------------------
(EUR millions) 30/06/08 30/06/07 % change
--------------------------------------------------------------------
Revenue 102.2 95.5 +7.1%
EBITDA 57.5 47.6 +20.8%
Current operating income 41.6 32.0 +30.0%
Ground handling and other
services
--------------------------------------------------------------------
(EUR millions) 30/06/08 30/06/07 % change
--------------------------------------------------------------------
Revenue 97.3 93.5 +4.1%
EBITDA loss (7.8) (7.3) +6.5%
Current operating loss (9.0) (8.6) +4.5%
Other activities
--------------------------------------------------------------------
(EUR millions) 30/06/08 30/06/07 % change
--------------------------------------------------------------------
Revenue 185.7 146.6 +26.7%
EBITDA 19.9 14.6 +36.0%
Current operating income 12.1 7.7 +57.6%
Consolidated income statement
====================================================================== (in thousands of euros) H1 2008 H1 2007 ---------------------------------------------------------------------- Revenue from ordinary activities 1 213 952 1 081 355 ---------------------------------------------------------------------- Other ordinary operating income 2 084 9 171 Own work capitalized 21 925 23 535 Changes in finished goods inventory 4 955 40 Raw materials and consumables used (84 001) (67 436) Personnel expenses (352 553) (329 075) Other ordinary operating expenses (402 051) (369 612) Depreciation and amortization (168 933) (144 755) Impairment of assets, net (231) 2 335 Net allowances to provisions 56 3 677 Operating income from ordinary activities 235 203 209 236 ---------------------------------------------------------------------- Other operating income and expenses (3 685) (32 291) Operating income 231 518 176 945 ---------------------------------------------------------------------- Interest income 47 061 231 495 Interest expenses (89 324) (161 780) Net interest income (expenses) (42 263) 69 715 ---------------------------------------------------------------------- Share in earnings of associates 645 1 200 Income before tax 189 900 247 860 ---------------------------------------------------------------------- Income tax expense (65 218) (46 302) Net income for the period 124 682 201 558 ---------------------------------------------------------------------- Net income attributable to minority interests 2 - Net income attributable to equity holders of the parent 124 680 201 558 ====================================================================== Earnings per share (EPS) attributable to holders of ordinary shares of the parent: Basic EPS (in euros) 1,26 2,04 Diluted EPS (in euros) 1,26 2,04 ----------------------------------------------------------------------
Consolidated balance sheet
Assets
======================================================================
ASSETS At At
(in thousands of euros) 30.06.2008 31.12.2007
----------------------------------------------------------------------
Intangible assets 46 012 48 807
Property, plant and equipment 5 235 812 5 232 125
Investment property 308 447 274 252
Investments in associates 28 238 30 359
Other non-current financial assets 55 628 58 358
Deferred tax assets 1 813 2 025
Non-current assets 5 675 950 5 645 926
----------------------------------------------------------------------
Inventories 15 749 9 997
Trade receivables and related accounts 509 219 478 166
Other accounts receivable and prepaid expenses 113 833 104 815
Other current financial assets 51 808 72 925
Current tax due 2 757 213
Cash and cash equivalents 316 420 524 071
Current assets 1 009 785 1 190 186
----------------------------------------------------------------------
TOTAL ASSETS 6 685 735 6 836 112
======================================================================
Stockholders' funds and liabilities
======================================================================
SHAREHOLDERS' EQUITY AND LIABILITIES At At
(in thousands of euros) 30.06.2008 31.12.2007
----------------------------------------------------------------------
Capital 296 882 296 882
Share premium 542 747 542 747
Treasury shares (4 405) (3 704)
Translation gains and losses (1 408) (1 270)
Retained earnings 1 955 735 1 795 543
Net income for the period 124 680 321 836
Minority interests 30 -
Shareholders' equity 2 914 261 2 952 034
----------------------------------------------------------------------
Non-current debt 2 057 998 2 030 454
Provisions for employee benefit obligations
(more than one year) 386 695 386 009
Other non-current provisions 76 155
Deferred tax liabilities 101 435 86 323
Other non-current liabilities 31 508 32 390
Non-current liabilities 2 577 712 2 535 331
----------------------------------------------------------------------
Note 32 - Trade payables and related accounts 413 688 507 309
Other prepayments and deferred revenue 415 660 387 845
Current debt 254 754 323 031
Provisions for employee benefit obligations
(more than one year) 25 656 25 644
Other current provisions 81 839 83 097
Current tax payables 2 165 21 822
Current liabilities 1 193 762 1 348 747
----------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 6 685 735 6 836 112
======================================================================
Consolidated cash flow statement
======================================================================
(in thousands of euros) H1 2008 H1 2007
----------------------------------------------------------------------
Operating income 231 518 176 945
Elimination of income and expense with no impact
on net cash:
-Depreciation, amortization, impairment and net
allowances to provisions 168 394 171 184
- Capital losses (gains) on disposals 188 1 896
- Other 253 559
Interest expense other than cost of net debt (1 014) (433)
-------------------
Operating cash flow before changes in working
capital and tax 399 338 350 151
Decrease (increase) in inventories (5 753) (1 778)
Increase in trade and other receivables (37 665) (52 281)
Increase in trade and other payables 30 272 64 132
-------------------
Change in working capital requirements (13 145) 10 074
Income taxes paid (72 091) (47 777)
----------------------------------------------------------------------
Cash flow from operating activities 314 101 312 448
----------------------------------------------------------------------
Acquisitions of subsidiaries (net of cash
acquired) - (165)
Purchases of property, plant & equipment and
intangible assets (201 918) (335 249)
Acquisitions of non-consolidated equity interests (78) (1 160)
Change in other financial assets 3 815 (3 647)
Proceeds from sales of property, plant & equipment 121 5 269
Proceeds from sales of non-consolidated
investments - 189 872
Dividends received 276 1 136
Change in debt and advances on asset acquisitions (101 640) (45 187)
----------------------------------------------------------------------
Cash flow from investment activities (299 424) (189 131)
----------------------------------------------------------------------
Capital grants received in the period - 477
Proceeds from issue of shares or other equity
instruments 29 -
Purchases of treasury shares (net of disposals) (1 120) (1 292)
Dividends paid to shareholders of the parent
company (161 224) (93 007)
Proceeds on issuance of long-term debt 381 2 764
Repayment of long-term debt (4 280) (4 828)
Interest paid (125 138) (115 156)
Interest income received 62 767 54 251
----------------------------------------------------------------------
Cash flow from financing activities (228 585) (156 791)
----------------------------------------------------------------------
Change in cash and cash equivalents (213 908) (33 474)
----------------------------------------------------------------------
Net cash and cash equivalents at beginning of
period 507 802 503 102
Net cash and cash equivalents at end of period 293 893 469 629
======================================================================
(1) The interim financial report and the present press release announcing its release are published in compliance with regulated information requirements. Unless indicated otherwise, all percentages in this press release and in the interim financial report compare H1 2008 data with comparable data from H1 2007.
(2) Before non-recurring items
(3)Income from ordinary activities
(4) Current operating income including amortisation and depreciation net of reversals
(5) Net income attributable to the equity holders of Aeroports de Paris
(6) The Group's previous forecast was that the current operating deficit of Ground handling services would be significantly reduced in 2008 in comparison with 2007, but H1 results mean this forecast is no longer realistic.
(7) Amounts of non-recurring items are calculated before the tax effect.
(8) Amounts of non-recurring items are calculated before the tax effect.
(9) The increasing weight of the traffic segments that make the largest contributions to revenue: "International ex Europe" and "Europe ex France".
(10) In Q1 2008, these revenues had been booked as "Other receipts" of the "Airport Services" segment.
(11) Including La Galerie Parisienne opened on 27 June 2007. Net capacity including the dismantling of temporary facilities.
(12) The Group's previous forecast was that the current operating deficit of Ground handling services would be significantly reduced in 2008 in comparison with 2007, but H1 results mean this forecast is no longer realistic.
(13) Including BGI Technologie, which was acquired by Hub Telecom on 12 July 2007 and changed its company name to Hub Telecom Region on 28 April 2008.
Source: Aeroports de Paris
PARIS--(BUSINESS WIRE)--
Regulatory News:
-- Results above Group's objectives
-- Group operating income reached 29.3% of sales, up 29.2%
year-on-year
-- Fully diluted Earnings Per Share up 42.1% year-on-year
-- Standalone(1) 2008 financial objectives raised
The Board of Directors of Ipsen (Paris: IPN), chaired by Jean-Luc Belingard, met on 28 August 2008 to review the Group's results for the first half 2008, published today.
Summary of audited consolidated results for the first halves 2008
and 2007
(in million euros) 2008 2007 % change 2008/2007 ----------------------------- ---------- ---------- ------------------ Performance sales growth (2) +11.2% Sales 497.4 463.2 +7.4% Other revenues 53.7 35.5 +51.4% Total revenues 551.1 498.6 +10.5% ----------------------------- ---------- ---------- ------------------ Operating income 145.9 112.9 +29.2% Operating margin (in % of sales) 29.3 24.4 ----------------------------- ---------- ---------- ------------------ Recurring operating income (3) 130.6 112.9 +15.6% Recurring operating margin (in % of sales) 26.3 24.4 ----------------------------- ---------- ---------- ------------------ Consolidated net profit (attributable to equity holders of Ipsen S.A.) 111.1 78.2 +42.0% Earnings per share - fully diluted ( EUR ) 1.317 0.927 +42.1% ----------------------------- ---------- ---------- ------------------ Average number of shares Non diluted 84,026,959 84,046,864 Fully diluted 84,135,139 84,128,362 ----------------------------- ---------- ---------- ------------------ Cash flow from operating activities 124.1 47.3 Net cash, end of period (4) 239.4 198.4 ----------------------------- ---------- ---------- ------------------
NOTE 1. "Standalone financial objectives" exclude the impacts of the acquisitions of Ipsen Pharmaceuticals Inc. (former Vernalis Inc.) and Tercica. Inc. in the US as well as of the development rights of OBI-1, which were announced on June 5, 2008.
NOTE 2. "Performance sales growth" or "Underlying Group sales growth" is defined as Group sales growth at constant currency, and excluding Ginkor Fort(R) sales which was sold as of 1 January 2008.
NOTE 3. "Recurring operating income" corresponds to the Group's operating income restated for non-recurring items, such as the EUR 13.7 million in milestones from the sale of Ginkor Fort(R) and EUR 1.6 million from the sale of a land
NOTE 4. Net cash: cash, cash equivalents and securities held for sale minus bank overdrafts, bank borrowings and other financial liabilities plus or minus derivative financial instruments.
Commenting on the performance in the first half 2008, Jean-Luc Belingard, President of the Ipsen Group, stated: "The Group's strong operating performance in the first half 2008 confirms once again the soundness of its positioning and the relevance of the strategic actions we have taken in the past years. We have built a solid, fast growing specialist care business that allows us to seize substantial growth opportunities worldwide, further enhanced through the successful integration of our US neurology and endocrinology platforms."
Review of half year 2008 results
Consolidated Group sales reached EUR 497.4 million for the first half 2008, up 7.4% year-on-year. Underlying Group sales (excluding Ginkor Fort(R) sales, divested on 1 January 2008, and at constant currency) grew by a strong 11.2% year-on-year. This positive development was fuelled notably by a strong growth in endocrinology and neuromuscular disorders franchises, up 20.3% and 19.5% respectively over the period and by the strong performance of gastroenterology products, up 10.3% year-on-year and the sustained growth of Decapeptyl(R).
Other revenues reached EUR 53.7 million for the first half 2008, up 51.4% year-on-year. This sharp increase is largely due to recognition of a EUR 13.7 million milestone on the sale of Ginkor Fort(R) which was signed in August 2007. This milestone includes the recognition in the first half 2008 of part of the initial milestone payment received at signing of the agreement, plus an estimate of the additional variable amount which is linked to the performance of the veinotonics market in France in 2008.
Total revenues therefore reached EUR 551.1 million during the period, up 10.5% year-on-year.
Research and development expenses amounted to EUR 87.3 million in the first half 2008, or 17.6% of sales, down 1.1% on the same period in 2007, when they amounted to EUR 88.4 million and represented 19.1% of sales. At constant exchange rates, research and development expenses increased 5.2% year on year, as a significant share of these expenses is booked in US dollars and Pounds Sterling. Drug-related R&D expenses were up 7.4% on the same period last year, while industrial development expenses have fallen 37.8% compared with the first half 2007, which included substantial costs incurred in preparation for inspections by the FDA (Food and Drug Administration) for the registration of Dysport(R) and Somatuline(R) Depot in the United States.
Operating income reached EUR 145.9 million for the first half 2008, representing 29.3% of sales, up 29.2% year-on-year. Restated for non-recurring items, such as the EUR 13.7 million in proceeds from the sale of Ginkor Fort(R) and EUR 1.6 million from the sale of a plot of land, the Group's recurring operating income amounted to EUR 130.6 million, representing 26.3% of total sales, up 15.6% year-on-year.
The Group's effective tax rate amounted to 21.9% of net profit from continuing operations and share of losses from associated companies, compared with 27.3% a year earlier. The effective tax rate in June 2008 benefited from the positive effect of the new research tax credit system calculation methods applicable from January 1, 2008 in France. In addition, the tax charge for the first half 2007 was affected by a reduction in value of deferred tax assets in the Netherlands following the decrease in this country's tax rate.
The Group's loss from associates amounted to EUR (5.2) million ($(8.0) million) and was solely composed of the Group's share in the net losses of Tercica Inc. for the half year 2008, stated as required under IFRS. Tercica Inc. has been reported under the equity method in the Group's financial statements since October 2006.
Consolidated net profit for the first half 2008 reached EUR 111.1 million, up 42.0% compared with EUR 78.2 million a year ago.
Net cash flow generated by operating activities amounted to EUR 124.1 million for the first half 2008, compared with EUR 47.3 million a year ago. At 30 June 2008, the Group's net cash position stood at EUR 239.4 million, compared with EUR 198.4 million a year earlier.
Total milestones received in cash but not yet recognized as revenues amounted to EUR 216.9 million, compared with EUR 192.7 million a year earlier.
2008 standalone financial objectives
In the context of its solid sales performance in the first half 2008, the Group targets to reach for the full year 2008 - on a standalone basis:
-- as announced on 31 July 2008, the upper-end of its sales
objective: underlying sales growth (Group sales at constant
currency, and excluding sales of Ginkor Fort(R) in 2007 and
2008) of 6.5 to 7.5%;
-- an 'other revenues' growth of 25.0% to 30.0%, at constant
exchange rates, notably with the success of the Ginkor Fort
divestment, against 13.0% to 16.0%, as announced on February
27, 2008;
-- An operating margin of 23.0% to 24.0% of sales, against 22.0%
to 23.0% of sales as announced on February 27, 2008, notably
taking into account the Group's overall strong performance,
the success of the Ginkor Fort(R) divestment and despite
ongoing pre-marketing and launch costs of Adenuric(R) and
Adrovance(R) in France, and Increlex(R) in Europe.
These standalone objectives were prepared without taking into account external growth assumptions, with notably the acquisitions of Ipsen Pharmaceuticals Inc. (former Vernalis Inc.) and Tercica. Inc. in the US as well as of the development rights of OBI-1, which were announced on June 5, 2008 and which may impact this outlook.
Ipsen - Analyst and Investor conference call and webcast (in English)
Ipsen will host a conference call on Friday 29 August 2008 at 1.00 p.m. (Paris time). A live webcast will be available at www.ipsen.com. The webcast will be archived on the Ipsen website for 3 months following the live call. Callers should dial in approximately 5 to 10 minutes prior to the start of the call. No reservation is necessary to participate in the call. The telephone numbers to join the conference call are, from France and Europe: + 33 (0) 1 70 99 43 01 and from the United States: +1 718 354 1387. No access code is necessary.
A replay will be available soon after the live call. The telephone numbers to access the replay are, from France and Europe: +33(0)1 71 23 02 48 and from the United States: +1 718 354 1112. The access code is 8871644#. The replay will be available for one week following the live call.
About Ipsen
Ipsen is an innovation-driven international specialty pharmaceutical group with over 20 products on the market and a total worldwide staff of nearly 4,000. Its development strategy is based on a combination of specialty products, which are growth drivers, in targeted therapeutic areas (oncology, endocrinology and neuromuscular disorders), and primary care products which contribute significantly to its research financing. The location of its four Research & Development centres (Paris, Boston, Barcelona, London) and its peptide and protein engineering platform give the Group a competitive edge in gaining access to leading university research teams and highly qualified personnel. More than 700 people in R&D are dedicated to the discovery and development of innovative drugs for patient care. This strategy is also supported by an active policy of partnerships. In 2007, Research and Development expenditure was about EUR 185 million, in excess of 20% of consolidated sales, which amounted to EUR 920.5 million while total revenues amounted to EUR 993.8 million. Ipsen's shares are traded on Segment A of Euronext Paris (stock code: IPN, ISIN code: FR0010259150). Ipsen's shares are eligible to the "Service de Reglement Differe" ("SRD") and the Group is part of the SBF 120 index. For more information on Ipsen, visit our website at www.ipsen.com
Forward-looking statements
The forward-looking statements, objectives and targets contained herein are based on the Group's management strategy, current views and assumptions. Such statements involve known and unknown risks and uncertainties that may cause actual results, performance or events to differ materially from those anticipated herein. Moreover, the targets described in this document were prepared without taking into account external growth assumptions, as announced on June 5, 2008 and potential future acquisitions, which may alter these parameters. These objectives are based on data and assumptions regarded as reasonable by the Group. These targets depend on conditions or facts likely to happen in the future, and not exclusively on historical data. Actual results may depart significantly from these targets given the occurrence of certain risks and uncertainties. The Group does not commit nor gives any guarantee that it will meet the targets mentioned above. Furthermore, the Research and Development process involves several stages at each of which there is a substantial risk that the Group will fail to achieve its objectives and be forced to abandon its efforts in respect of a product in which it has invested significant sums. Therefore, the Group cannot be certain that favourable results obtained during pre-clinical trials will be confirmed subsequently during clinical trials, or that the results of clinical trials will be sufficient to demonstrate the safe and effective nature of the product concerned. The Group expressly disclaims any obligation or undertaking to update or revise any forward looking statements, targets or estimates contained in this press release to reflect any change in events, conditions, assumptions or circumstances on which any such statements are based, unless so required by applicable law. The Group's business is subject to the risk factors outlined in its registration documents filed with the French Autorite des Marches Financiers.
APPENDIX
Risk factors
The Group carries on business in an environment which is undergoing rapid change and exposes its operations to a number of risks, some of which are outside its control. The risks and uncertainties set out below are not exhaustive and the reader is advised to refer to Ipsen's 2007 Registration Document available on its website (www.ipsen.com).
-- The Group is dependent on the setting of prices for medicines
and is vulnerable to the possible withdrawal of certain
products from the list of reimbursable products by governments
or by the relevant regulatory authorities in the countries
where it does business.
-- A number of products that the Group is developing are still at
the very first stages of development and the Group cannot be
certain that these products will be approved by the competent
regulatory authorities and that they will be successfully
marketed.
-- The Group depends on third parties to develop and market some
of its products, which generates substantial royalties for the
Group, but these third parties could behave in ways which
cause damage to the Group's business.
-- The Group's competitors could infringe its patents or
circumvent them through design innovations. In order to
prevent infringements, the Group could engage in patent
litigation which is costly and time-consuming. It is difficult
to monitor the unauthorised use of the Group's intellectual
property rights and it could find itself unable to prevent the
unlawful appropriation of its intellectual property rights.
-- The Group must deal with or may have to deal with competition
(i) from generic products, (ii) products which, although they
are not strictly identical to the Group's products or which
have not demonstrated their bioequivalence, may obtain a
marketing authorisation for indications similar to those of
the Group's products pursuant to the bibliographic reference
regulatory procedure (well established medicinal use) before
the patents protecting its products expire, in particular
Tanakan(R) and (iii) products sold for unauthorised uses when
the protection afforded by patent law to the Group's products
and those of its competitors expires. Such a situation could
result in the Group losing market share which could affect its
current level of growth in sales or profitability. To avoid
such situations or to reduce their impact, the Group could
bring legal actions against the counterfeiters in order to
protect its rights.
-- As a result of its transaction signed in October 2006 with
Tercica Inc., a NASDAQ listed company, the Group holds in its
balance sheet financial assets representing the derivative
components of Convertible Notes and Warrants issued by Tercica
Inc., which have been registered at fair value as at 30 June
2008 in compliance with IAS39. This fair value has been
determined on the basis of the best estimate made by the Group
using existing information to the best of its knowledge.
However, given the specific profile of Tercica Inc., the
criteria used to determine the fair valuation of such
derivative components are highly influenced by the following
elements: illiquidity, absence of credit market, and absence
of volatility market. On this basis the Group cannot guarantee
that the valuation of the corresponding financial assets may
not be subject in due course to unexpected and material
variations. Moreover, due notably to the fact that these
derivatives have been implemented within a global transaction,
the Group cannot guarantee that the value at which those
assets have been registered in the Group's books corresponds
to what third parties would be willing to offer to acquire
similar financial assets. The Group will, at each closing of
its financial statements, update the valuation of those assets
based on criteria then available and could be obliged to
impair significantly the value of these assets.
Major developments in the period under review
During the first half 2008, major developments included:
-- On June 10, 2008 - Ipsen announced that Roche and Ipsen's
investigational diabetes drug taspoglutide has been shown to
be generally well-tolerated and efficacious for the treatment
of patients with type 2 diabetes, resulting in significant
improvements in glucose control and weight loss after only
eight weeks of treatment.
-- On June 5, 2008 - Ipsen announced that it has taken
significant steps forward in building a fully fledged
commercial presence in North America. In the field of
endocrinology, Ipsen entered into a definitive merger
agreement by which it would acquire all of the publicly held
shares of Tercica Inc. the Group does not currently own at a
price of $9.0 per share in cash. In the field of neuromuscular
disorders, the Group signed an agreement with Vernalis Ltd to
acquire its US operations, Ipsen's future platform for the
launch of Dysport(R), and the rights to develop and market
Apokyn(R). In the field of hematology, Ipsen entered into a
purchase agreement with Octagen to acquire all its OBI-1
related assets in order to fully control its future
development.
-- On May 19, 2008 - Ipsen and Medicis announced that the Food
and Drug Administration ("FDA") has accepted the filing of
Ipsen's Biologics License Application ("BLA") for Reloxin(R),
its botulinum toxin type A in aesthetic use (glabellar lines)
in the United States.
-- On May 5, 2008 - Ipsen announced that the European Commission
granted marketing authorisation for Adenuric(R) (febuxostat)
for the treatment of chronic hyperuricaemia in gout.
-- On March 17, 2008 - Medicis and Ipsen announced that Ipsen has
submitted a Biologics License Application ("BLA") for the
botulinum toxin type A, Reloxin(R) , in aesthetic indications
(glabellar lines) to the U.S. Food and Drug Administration's
("FDA") Division of Dermatology and Dental Products, within
the Center for Drug Evaluation and Research.
-- On February 25, 2008 - Ipsen announced that GTx Inc., from
which it licensed the European rights for Acapodene(R)
(toremifene citrate 80 mg) in September 2006, presented the
results of the first phase III study evaluating the efficacy
and safety of toremifene citrate 80mg daily, on multiple side
effects of androgen deprivation therapy (ADT) in advanced
prostate cancer patients. Ipsen also announced its intention
to submit the toremifene citrate 80 mg dossier in Europe
before year-end 2008.
-- On February 21, 2008 - Ipsen announced that the Committee for
Medicinal Products for Human Use (CHMP) of the European
Medicines Agency (EMEA) provided a positive opinion for
Adenuric(R) (febuxostat) 80 mg and 120 mg tablets for the
treatment of chronic hyperuricaemia in gout and recommended it
for marketing authorisation.
-- On February 12, 2008 - Ipsen announced that its partner
Debiopharm presented the results of a phase III study with its
new 6-month formulation of Decapeptyl(R), a luteinizing
hormone releasing hormone (LHRH) agonist for the treatment of
advanced prostate cancer. The results presented showed similar
efficacy and safety to the already marketed 1- and 3-month
formulations of triptorelin.
-- On January 31, 2008 - Ipsen announced that the Food and Drug
Administration (FDA) has accepted the filing of its BLA for
Dysport(R) in the United States to treat patients with
cervical dystonia.
-- On 15 June 2007, a 10% price cut on Tanakan(R) in France as of
1 July 2007 was published in the Journal Officiel.
Comparison of the consolidated income statement for the first half 2008 and first half 2007:
30 June 2008 30 June 2007
----------------- -----------------
(in % of (in % of
thousands sales thousands sales %
of euros) of euros) change
--------------------------- ---------- ------ ---------- ------ ------
Sales 497,371 100.0% 463,164 100.0% 7.4%
Other revenues 53,713 10.8% 35,472 7.7% 51.4%
Total revenues 551,084 110.8% 498,636 107.7% 10.5%
Cost of goods sold (112,709) -22.7% (98,101) -21.2% 14.9%
Research and development
expenses (87,341) -17.6% (88,351) -19.1% -1.1%
Selling expenses (166,011) -33.4% (159,787) -34.5% 3.9%
General and administrative
expenses (40,749) -8.2% (39,773) -8.6% 2.5%
Other operating income and
expenses 1,633 0.3% 295 0.1%
Restructuring costs - - 8 -
Operating income 145,907 29.3% 112,927 24.4% 29.2%
- Income from cash and cash
equivalents 15,820 - 5,910 -
- Cost of gross financial
debt (908) - (815) -
Cost of net financial debt 14,912 3.0% 5,095 1.1%
Other interest income and
expense (11,526) -2.3% (3,877) -0. 8%
Income tax (32,731) -6.6% (31,123) -6.7%
Share of loss/profit from
associated companies (5,226) -1.1% (3,462) -0.7%
Net profit/loss from
continuing operations 111,336 22.4% 79,560 17.2% 39.9%
Net profit/loss from
discontinued operations (225) - (1,340) -0.3%
Consolidated net profit 111,111 22.3% 78,220 16.9% 42.0%
- Equity holders of Ipsen
S.A. 110,836 77,990
- Minority interests 275 230
--------------------------- ---------- ------ ---------- ------ ------
Other revenues
In the first half 2008 other revenues totalled EUR 53.7 million, up 51.4% on the first half 2007 (EUR 35.5 million).
The breakdown of other revenues is as follows:
(in thousands of euros) Change
30 June 30 June
2008 2007 Amount %
---------------------------------- --------- --------- -------- ------
Breakdown by revenue type
- Royalties received 23,726 23,970 (244) -1.0%
- Milestone payments - licensing
agreements 24,121 8,538 15,583 182.5%
- Other (co-promotion revenues,
recharging) 5,866 2,964 2,902 97.9%
---------------------------------- --------- --------- -------- ------
Total 53,713 35,472 18,241 51.4%
---------------------------------- --------- --------- -------- ------
-- Royalties received mainly comprised royalties from the
Kogenate(R) licence, which amounted to EUR 23.1 million for
the first half 2008 and are stable compared with the same
period last year (EUR 22.8 million in the first half 2007).
Royalties received in the first halves 2007 and 2008 were
benefited from the carry-over of royalties from the last
quarter of the previous year into both years.
-- Milestone payments relating to licensing agreements represent
primarily recognition of payments received over the life of
partnership agreements. In the first half 2008, this income
totaled EUR 24.1 million, increasing by EUR 15.6 million
year-on-year. This sharp increase is largely due to
recognition of a EUR 13.7 million milestone on the sale of
Ginkor Fort(R) which was signed in August 2007. This milestone
includes recognition in the first half 2008 of part of the
initial milestone payment received at signing of the
agreement, plus an estimate of the additional variable amount,
linked to the performance of the veinotonics market in France
in 2008. In addition, the first half 2008 also comprised
milestones in relation to the Reloxin(R) agreement with
Medicis, the Tenstaten(R) agreement with Recordati and the BIM
51077 (GLP-1 analogue) partnership with Roche as was the case
in the first half 2007.
-- Other revenues amounted to EUR 5.9 million in the first half
2008, compared with EUR 3.0 million in the first half 2007.
This increase is primarily due to a commission collected after
the renewal of one of the Group's co-promotion agreements.
Cost of goods sold
For the first half 2008, cost of goods sold amounted to EUR 112.7 million, representing 22.7% of sales compared with 21.2% a year ago. Increases in activity and productivity improvements over the period did not offset the negative mix effect stemming from the strong growth in in-licensed products and drug related activities. Some stock depreciation over the period also weighted on the cost of goods sold in the first half 2008.
In addition, as of February 2008, costs generated by one of the Group's active ingredient production sites, which had previously been reported as R&D costs (until then the site's production was used solely for R&D purposes), will gradually be reclassified as cost of goods sold, its production being now partly for commercial purposes. This reclassification will not impact the group's operating income but will reduce both the R&D to sales ratio and the Group's gross margin. This reclassification amounted to EUR 1.2 million in the first half 2008 and should amount to about EUR 3 million in the full year 2008.
Research and development expenses
A comparison of research and development expenses for the first halves 2008 and 2007 is presented in the following table:
(in thousands of euros) Change
30 June 30 June
2008 2007 Amount %
-------------------------------- --------- --------- ---------- ------
Breakdown by expense type
- Drug-related research and
development(1) 77,216 71,908 5,308 7.4%
- Industrial development(2) 8,422 13,545 (5,123) -37.8%
- Strategic development(3) 1,703 2,898 (1,195) -41.2%
-------------------------------- --------- --------- ---------- ------
Total 87,341 88,351 (1,010) -1.1%
-------------------------------- --------- --------- ---------- ------
(1) Drug-related research and development is aimed at identifying new agents, determining their biological characteristics and developing small-scale manufacturing processes. Pharmaceutical development is the process through which active agents become drugs approved by regulatory authorities and is also used to improve existing drugs and to research new therapeutic indications for them. Patent-related costs are included in this type of expense.
(2) Industrial development includes chemical, biotechnical and development-process research costs to industrialise small-scale production of agents developed by the research laboratories.
(3) Strategic development includes costs incurred for research into new product licences and establishing partnership agreements.
Research and development expenses in the first half 2008 amounted to EUR 87.3 million, or 15.8% of total revenues (17.6% of sales), down 1.1% on the same period in 2007, when they amounted to EUR 88.4 million and represented 17.7% of total revenues (or 19.1% of sales). At constant exchange rates, research and development expenses increased by 5.2% year-on-year, as a significant share of these expenses is booked in US dollars and Pounds Sterling. Drug-related R&D expenses were up 7.4% year-on-year, while industrial development expenses have fallen 37.8% compared with the first half 2007 which included substantial costs incurred in preparation for inspections by the FDA (Food and Drug Administration) for the registration of Dysport(R) and Somatuline(R) Depot in the United States.
-- Over the period, major research and development projects
included clinical development programs for Somatuline(R), for
its potential successor Dopastatin, for Dysport(R) and for the
sulfatase inhibitor, BN83495 (STX-64). In the first half 2007,
major projects included the preparation for submission of the
Dysport(R) registration dossier to the FDA in the United
States and clinical trials for a longer sustained release
formulation of Decapeptyl(R).
-- Major projects in industrial development in the first half
2008 included finalising preparation for inspections by the
FDA for the launch of Dysport(R) in the United States. In the
first half 2007, the group had incurred particularly high
industrial development expenses due to preparation for the FDA
inspections mentioned above. Moreover, as explained above,
industrial development expenses have been reduced by the
reclassification as cost of goods sold from the first half
2008 of EUR 1.2 million previously considered as R&D expenses.
Selling, general and administrative expenses
A comparison of selling, general and administrative expenses for the first halves 2008 and 2007 is presented in the following table:
(in thousands of euros) Change
30 June 30 June
2008 2007 Amount %
-------------------------------------- -------- --------- ------ -----
Breakdown by expense type
Royalties paid 19,399 17,869 1,530 8.6%
Taxes and sales tax 6,122 6,386 (264) -4.1%
Other sales and marketing expenses 140,490 135,532 4,958 3.7%
-------------------------------------- -------- --------- ------ -----
Selling expenses 166,011 159,787 6,224 3.9%
-------------------------------------- -------- --------- ------ -----
General and administrative expenses 40,749 39,773 976 2.5%
-------------------------------------- -------- --------- ------ -----
Total 206,760 199,560 7,200 3.6%
-------------------------------------- -------- --------- ------ -----
Growth of selling, general and administrative expenses was contained and only increased by 3.6% in the first half 2008 to represent 41.6% of sales, compared with 43.1% a year ago. At constant exchange rates, selling, general and administrative expenses increased by 5.6% year-on-year, since a portion of these expenses are booked in US Dollars and Pounds Sterling.
-- Selling expenses in the first half 2008 amounted to EUR 166.0
million or 33.4% of sales, increasing by 3.9% on the same
period last year, when they came to EUR 159.8 million and
represented 34.5% of sales. This increase is below the sales
growth rate for the same period despite a significant rise in
royalties paid to third parties. :
-- Royalties paid to third parties on sales of products marketed
by the Group amounted to EUR 19.4 million in the first half
2008, up 8.6% year-on-year, stemming from the sales growth of
the corresponding products
-- Taxes and sales taxes for the period decreased by 4.1% to EUR
6.1 million, largely because of a lower tax rate in Spain.
-- Other sales and marketing expenses (i.e. marketing and sales
team costs) only increased by 3.7% year-on-year and amounted
to EUR 140.5 million, or 28.2% of sales, compared with EUR
135.5 million or 29.3% of sales in the first half 2007. This
limited increase is mainly due to the Group's cost-containment
policy as well as some seasonal effects.
-- General and administrative expenses only increased by 2.5% to
EUR 40.7 million, compared with EUR 1.0 million a year ago,
reflecting the Group's cost control efforts.
Other operating income and expenses
Other operating income and expenses amounted to EUR 1.6 million for the first half 2008, generated mostly by the sale of a land that was not used for group activity. In the first half 2007, other operating income and expenses were not material.
Impairment losses
No impairment losses were recorded in the first halves 2008 and 2007.
Operating income
As a result of the above, the Group's operating income for the first half 2008 reached EUR 145.9 million, representing 26.5% of total revenues and 29.3% of sales, up 29.2% year on year (first half 2007: 22.6% of total revenues and 24.4% of sales).
Restated for non-recurring items, such as the EUR 13.7 million in milestones from the sale of Ginkor Fort(R) and EUR 1.6 million from the sale of a land, the Group's recurring operating income amounted to EUR 130.6 million, representing 24.3% of total revenues and 26.3% of sales. On this basis, operating income grew by 15.6% compared with the first half 2007, when it did not include significant non-recurring items.
Segment reporting: Operating profit by geographical region
In compliance with IAS 14 "Segment Reporting", the Group's primary reporting format is presented according to geographical segment, since Ipsen operates in a single business segment, i.e. drug research and development, production and sales.
Sales, revenues and operating income for the first halves 2008 and 2007 are presented in the following table by geographical region:
30 June 2008 30 June 2007 Change
(in (in (in
thousands thousands thousands
of euros) % of euros) % of euros) %
---------------- ---------- ------- ---------- ------ ---------- -----
Major Western European countries(1)
Sales 281,217 100.0% 283,022 100.0% (1,805) -0.6%
Revenues 301,769 107.3% 286,612, 101.3% 15,157 5.3%
Operating income 120,601 42.9% 112,303 39.7% 8,298 7.4%
---------------- ---------- ------- ---------- ------ ---------- -----
Other European countries
Sales 124,578 100.0% 106,090 100.0% 18,488 17.4%
Revenues 124,603 100.0% 106,090 100.0% 18,513 17.4%
Operating income 52,573 42.2% 42,538 40.1% 10,035 23.6%
---------------- ---------- ------- ---------- ------ ---------- -----
Rest of world
Sales 91,577 100.0% 74,052 100.0% 17,525 23.7%
Revenues 93,463 102.1% 74,052 100.0% 19,411 26.2%
Operating income 40,414 44.1% 28,240 38.1% 12,174 43.1%
---------------- ---------- ------- ---------- ------ ---------- -----
Allocated total
Sales 497,371 100.0% 463,164 100.0% 34,208 7.4%
Revenues 519,835 104.5% 466,754 100.8% 53,081 11.4%
Operating income 213,588 42.9% 183,081 39.5% 30,507 16.7%
---------------- ---------- ------- ---------- ------ ---------- -----
Non-allocated total
Revenues 31,249 ,5.7% 31,882 6.4% (633) -2.0%
Operating income (67,681) ,-46.4% (70,154) -62.1% 2,473 -3.5%
---------------- ---------- ------- ---------- ------ ---------- -----
Ipsen total
Sales 497,371 100.0% 463,164 100.0% 34,208 7.4%
Revenues 551,084 110.8% 498,636 107.7% 52,448 10.5%
Operating income 145,907 29.3% 112,927 24.4% 32,980 29.2%
---------------- ---------- ------- ---------- ------ ---------- -----
(1) France, Spain, Italy, Germany and the UK
-- In Major Western European countries, first half 2008 sales
dipped -0.6% year-on-year, but increased 3.0% excluding Ginkor
Fort(R) which was sold on January 1, 2008. Total revenues for
the period benefited from the recognition of EUR 13.7 million
in revenues from the sale of Ginkor Fort(R) as well as a
commission collected following the renewal of one of the
Group's co-promotion agreements. Hence, operating income grew
by 7.4% to EUR 120.6 million over the period, representing
42.9% of sales, compared with EUR 112.3 million, or 39.7% of
sales a year ago.
-- In Other European countries, which include other Western
European countries and Eastern European countries, sales
increased by 17.4% year-on-year. Selling and administrative
expenses in this region were controlled and only rose by 8.2%.
Consequently, operating income grew by 23.6% over the period
to EUR 52.6 million, up from EUR 42.5 million a year earlier,
representing 42.2% and 40.1% of sales respectively.
-- In the Rest of the World, where most of the Group's products
are marketed by third-party distributors and agents, except in
certain countries where the Group has a direct presence,
operating income for the first half 2008 continued to grow
strongly, increasing by 43.1% to EUR 40.4 million compared
with EUR 28.2 million in the first half 2007. Operating income
growth reflects significant productivity improvements in the
region as well as some stocking effects in China.
-- Non-allocated operating loss totaled EUR 67.7 million compared
with a loss of EUR 70.2 million a year ago. The non-allocated
operating loss for the first half 2008 included:
-- Revenues of EUR 31.2 million, against EUR 31.9 million in the
first half 2007, derived primarily from royalties received
from the Kogenate(R) license (EUR 23.1 million at end June
2008, compared with EUR 22.8 million for the same period in
2007).
-- Research and development expenses of EUR 79.7 million compared
with EUR 80.8 million a year ago.
-- Non-allocated selling, general and administrative expenses of
EUR 20.8 million, compared with EUR 21.5 million the previous
year.
-- Other operating income of EUR 1.6 million, consisting mainly
of the capital gain of EUR 1.7 million on the sale of a land.
In the first half 2007, the Group recorded other operating
income of EUR 0.3 million.
Cost of net financial debt
In the first half 2008, interest income generated by the Group almost tripled to EUR 15.8 million at 30 June 2008, compared with EUR 5.9 million at 30 June 2007. Of this strong growth, EUR 8.3 million stems from accelerated recognition of interest on Tercica Inc. convertible bonds calculated at the effective interest rate since the bonds were converted into Tercica Inc. shares before maturity on 22 July 2008. Excluding this non-recurring item, interest income rose by 27% year-on-year to EUR 7.5 million, largely as a result of interest rate hikes and of the interests linked to the bonds issued by Tercica Inc. to the Group in September 2007..
Other interest income and expenses also increased sharply year-on-year and represented an expense of EUR 11.5 million at 30 June 2008 compared with EUR 3.9 million at 30 June 2007, mainly comprising:
-- A non-recurring loss related to the fair value adjustment at
30 June 2008 of the conversion options on Tercica Inc. bonds
and warrants, after accounting for the accelerated conversion
of these instruments into Tercica inc. common stock on 22 July
2008. Consequently, a negative fair value adjustment of EUR
6.3 million was recorded in the first half 2008, compared with
a fair value loss of EUR 1.5 million at 30 June 2007.
-- A charge of EUR 3.1 million due to foreign exchange losses on
the Tercica Inc. conversion options and warrants, compared
with a similar charge of EUR 1.4 million at 30 June 2007.
-- A EUR 2.3 million loss at 30 June 2008 on the market value of
foreign exchange transactions set up to hedge the financial
flows expected as a result of acquisitions announced last 5
June and which do not meet IAS 39 hedge conditions.
Income tax
In the first half 2008, the Group's effective tax rate amounted to 21.9% of profit before tax from continuing operations and before share of loss from associated companies, compared with 27.3% a year earlier.
The effective tax rate in June 2008 benefited from the positive effect of the new research tax credit system calculation methods applicable from January 1, 2008. In addition, the tax charge for the first half 2007 was affected by a reduction in value of deferred tax assets in the Netherlands following the decrease in this country's tax rate.
Share of loss from associated companies
The Group's share of loss from associated companies amounted to EUR (5.2) million ($(8.0) million) and was solely composed of the Group's share in the net losses of Tercica Inc. in the first half 2008, stated as required under IFRS. For the same period in 2007, the loss amounted to EUR (3.5) million ($(4.6) million). In the first half 2008, Tercica Inc. recorded sales of $10.7 million or an increase of $7.6 million from $3.1 million in the first half 2007. This was largely due to higher Increlex(R) sales volumes and the launch of Somatuline(R) Depot in the United States.
The cost of goods sold for the period amounted to $10.0 million, compared with $2.8 million for the first half 2007, in line with sales growth. Research and development expenses came to $11.5 million, against $8.9 million for the same period in 2007. This rise was mainly the result of an increase in clinical activities associates with combination of growth hormone and IGF-1 product candidates, as well as to an increase in payroll. Selling, general and administrative expenses amounted to $34.6 million in the first half 2008, compared with $25.9 million for the same period in 2007. The increase mostly reflects sales and marketing activities for the launch of Somatuline(R) Depot as well as the promotion of Increlex(R) in the United States. Tercica Inc.'s cost of net financial debt for the first half 2008 was an income of $8.2 million. This included $6.9 million relating to the fair value assessment of the conversion options on the convertible bonds and warrants issued by Tercica Inc. for the Group and of their accelerated conversion into Tercica Inc. shares on 22 July 2008. Other interest income and expenses represented an expense of $15.8 million, including $12.8 million dollars relating to the accelerated recognition of the interest due on the convertible bonds subscribed by the Group, calculated at the effective interest rate because these bonds were converted into Tercica Inc. shares on 22 July 2008. Finally, at 30 June 2008 the Group has booked $20.7 million of tax income on Tercica Inc.'s loss before tax of $51.7 million over the period. At 30 June 2008 Tercica Inc. had a positive net cash position of $71.4 million.
Net profit/loss from continuing operations
As a result of the items described above, profit from continuing operations for the first half 2008 amounted to EUR 111.3 million, up 39.9% from EUR 79.6 million a year earlier. Profit from continuing operations represented 20.2% of total revenues, compared with 16.0% for the same period in 2007.
Net profit/loss from discontinued operations
The Group's discontinued operations generated a loss of EUR (0.2) million in the first half 2008, largely related to the disposal of technical facilities. In the first half 2007, the loss from discontinued operations came to EUR (1.3) million.
Consolidated net profit
As a result of the items noted above, consolidated net profit grew by 42.0% to EUR 111.1 million (EUR 110.8 million attributable to equity holders of Ipsen S.A.), compared with EUR 78.2 million (EUR 78.0 million attributable to equity holders of Ipsen S.A.) a year earlier. Consolidated profit represented 22.3% of revenues in the first half 2008, compared with 16.9% in the first half 2007.
Milestones received in cash-in but not yet recognised as revenues
In the first half 2008, total milestones received in cash by the Group but not yet recognised as revenues in its consolidated income statement amounted to EUR 216.9 million, compared with EUR 192.7 million in the first half 2007.
These payments will be recognised in the Group's income statement as revenues going forward as follows:
Milestones received in cash but
(in million euros) not yet recognised as revenues in
the periods ending:
----------------------------------- ----------------------------------
30 June 30 June
2008 2007
----------------------------------- ---------------- -----------------
Total 216.9 192.7
----------------------------------- ---------------- -----------------
These receipts will be recognised in the Group's income statement as
revenues in the future as follows:
In the second half of year N 11.2 8.3
In year N+1 22.4 17.2
In years N+2 and beyond 183.3 167.2
----------------------------------- ---------------- -----------------
CASH FLOW AND CAPITAL RESOURCES
The consolidated cash flow statement shows a positive change in the Group's net cash position during the first half 2008 of EUR 25.8 million compared with decrease of EUR 63.7 million in the first half 2007.
Analysis of the cash flow statement for the first halves 2008 and 2007
30 June 30 June
(in thousands of euros) 2008 2007
---------------------------------------------------- -------- --------
- Cash flow before variation in working capital
requirements 141,301 112,590
- (Increase) / decrease in working capital
requirements for operations (17,167) (65,298)
-- Net cash flow generated by operating activities 124,134 47,292
,
- Net cash flow relating to investment activities (38,432) (29,997)
- Other items
- Deposits paid 8 (4,338)
- Variation in cash securities held for sale 6,000 (12,063)
-- Net cash flow used in investment activities (32,424) (46,398)
-- Net cash flow used in financing activities (64,894) (66,778)
-- Net cash flow provided by discontinued activities (977) 2,173
INCREASE / (DECREASE) IN CASH FLOW 25,839 (63,711)
Cash and cash equivalents at beginning of period 240,907 283,743
Impact of foreign exchange variations (3,090) 9
---------------------------------------------------- -------- --------
Cash and cash equivalents at end of period 263,656 220,041
---------------------------------------------------- -------- --------
Net cash flow generated by operating activities
During the first half 2008, net cash flow generated by operating activities before changes in working capital totalled EUR 141.3 million, compared with EUR 112.6 million a year ago.
Working capital requirements for operating activities increased by EUR 17.2 million in the first half 2008 compared with an increase of EUR 65.3 million in the first half 2007. This evolution in the first half 2008 is linked to the following:
-- Inventories increased by EUR 1.2 million in the first half
2008 compared with an increase of EUR 7.7 million a year ago,
mainly due to the build-up of Adrovance(R) inventories. Trade
receivables rose by EUR 36.8 million in the first half 2008,
mainly due to growth in business in international markets,
compared with an increase of EUR 17.9 million in the first
half 2007. Furthermore, in the first half 2008, trade payables
decreased by EUR 3.0 million, partly because of payment in the
first half 2008 of services recorded in 2007.
-- On the other hand, the tax variation in the first half 2008
generated a positive cash inflow of EUR 26.1 million relating
mainly to a corporate tax refund of EUR 25.8 million by the
French tax authorities. Tax payable decreased by EUR 24.4
million in the first half 2007, since interim payments made
during the period, calculated on the basis of 2006 taxable
income, were higher than the actual tax charge for the period.
-- The balance between current assets and current liabilities
represents a reduction in debt of EUR 2.2 million in the first
half 2008, following debt reduction of EUR 9.6 million in the
year-earlier period.
-- In the first half 2008, the Group recognised advance payments
of EUR 18.5 million received in connection with its
partnership agreements. This income was partly offset by the
recognition in the income statement of EUR 9.2 million mainly
in relation to agreements with Medicis, Roche, Tercica Inc.
and Recordati. This item also includes prepaid expenses
relating to growth through acquisitions in the United States
(Vernalis Inc, Tercica inc), as well as changes in other
operating liabilities and debt.
-- As a result of the above, net cash flow generated by operating
activities amounted to EUR 124.1 million in the first half
2008, compared with EUR 47.3 million in the first half 2007,
Net cash flow used in investment activities
At 30 June 2008, net cash flow used in investment activities comprised two main components:
-- 1. Net cash flow relating to investment in the strict sense;
-- 2. Other flows related to investment activities.
-- Net cash flow used in investment activities in the strict
sense represented EUR 38.4 million compared with EUR 30.0
million for the same period in 2007. This mainly comprised
asset acquisitions, net of disposals of EUR 17.0 million in
the first half 2008 compared with EUR 20.4 million in the
first half 2007, as well as an increase in working capital
requirements relating to investment activities of EUR 12.6
million in the first half 2008 following an increase of EUR
8.2 million in the first half 2007.
-- In the first half 2008, tangible fixed asset acquisitions
totaled EUR 26.2 million, mostly consisting of capital
expenditure required to maintain the Group's industrial
facilities, as well as some investment in capacity, such as
EUR 10.0 million for the new Dysport(R) secondary production
plant at the Wrexham site and EUR 4.5 million at the Dublin
site.
-- During the same period, intangible asset acquisitions amounted
to EUR 8.0 million, mainly relating to the first milestone
payment in connection with the acquisition from Erasmus MC of
a patent, access to the Decapeptyl(R) sustained release
formulations, the Acapodene(R) license and investment in the
renewal of some information systems.
-- Net cash flow was boosted by income of EUR 17.2 million
generated primarily from the sale of Ginkor Fort(R) and of a
plot of land.
-- The increase of EUR 12.6 million in working capital
requirements for investment activities in the first half 2008
relates primarily to payment during the period of debts due
against fixed assets recognised at the end of 2007, mainly in
France.
-- Other net cash flows related to investment activities
represented EUR 6 million, stemming from the sale of cash
securities held for sale, compared with EUR 12.1 million for
the purchase of similar securities in the same period last
year.
Net cash flow used in financing activities.
In the first half 2008, net cash flow used in financing activities totaled EUR 64.9 million compared with EUR 66.8 million in the first half 2007. The Group paid out EUR 55.0 million in dividends in the first half 2008, compared with EUR 50.4 million in the first half 2007. At 30 June 2008 the Group has repaid bank loans worth EUR 4.6 million. The Group also used EUR 5.5 million in the first half 2008 to finance its share buyback program compared with EUR 18.7 million in the first half 2007.
Net cash flow provided by discontinued activities.
At 30 June 2008, net cash flow provided by discontinued activities amounted to EUR (1.0) million, resulting from the increase in working capital requirements linked to tax transactions following the sale of Dynport in 2004, compared with an increase of EUR 2.2 million in June 2007, itself resulting from the decrease in working capital requirements linked to the Group's primary care business in Spain, sold in October 2005.
ANALYSIS OF NET CASH1
30 June 30 June
(In thousands of euros) 2008 2007
---------------------------------------------------- -------- --------
Cash in hand 37,550 30,927
---------------------------------------------------- -------- --------
Short-term investments 200,734 184,009
---------------------------------------------------- -------- --------
Interest-bearing deposits 31,434 6,185
---------------------------------------------------- -------- --------
Cash and cash equivalents 269,718 221,121
---------------------------------------------------- -------- --------
Securities held for sale(2) "Securities held for
sale" correspond to shares in mutual funds held for
trading which the Group intends to sell in the near
future. They are included in the calculation of the
Group's net cash position. - 12,063
---------------------------------------------------- -------- --------
Assets subtotal 269,718 233,184
---------------------------------------------------- -------- --------
Bank overdrafts liabilities (6,062) (1,080)
---------------------------------------------------- -------- --------
Liabilities subtotal (6,062) (1,080)
---------------------------------------------------- -------- --------
Closing net cash and cash equivalents 263,656 232,104
---------------------------------------------------- -------- --------
---------------------------------------------------- -------- --------
Short-term debt - (8,397)
---------------------------------------------------- -------- --------
Other financial liabilities (16,253) (16,194)
---------------------------------------------------- -------- --------
Non-current subtotal (16,25