bioMérieux - 2008 Business Review

Regulatory News:

bioMérieux (Paris:BIM), a global leader in the field of in vitro diagnostics, released its business review for fourth-quarter and full-year 2008.

FINANCIAL REVIEW

Sales

Net sales amounted to €1,111 million in 2008, an increase of 7.5% from the €1,063 million reported in 2007, at constant exchange rates and scope of consolidation (like-for-like). Including the effects of new business development agreements, the period-on-period increase was 9.8% at constant exchange rates.

Fourth-quarter net sales came to €311 million, a like-for-like increase of 8.1% over the year-earlier period.

"bioMérieux performed well in the fourth quarter in a much more challenging economic environment,” commented Chief Executive Officer Stéphane Bancel. "Full-year sales rose 7.5% like-for-like, meeting the targets set a year ago. Our performance shows the strength of our business model and reaffirms our 2012 strategic plan objectives.”

On a reported basis, after taking into account the currency effect and the impact of divested or discontinued operations, at end of year 2008, net sales were up 4.5%:

Geographically, like-for-like sales for full-year 2008 may be analyzed as follows:

• Sales in the Europe - Middle East - Africa region, which accounted for 60% of consolidated business, increased by 7.5% over the period. Operations outside France continued to expand at a sustained pace, gaining 9.6% for the year. Despite the economic slowdown, growth remained robust in Germany (up 12%), Spain (up 8%) and the United Kingdom (up 7%). The new South African subsidiary got off to a good start, and the contract to supply assays to quantify HIV viral load was extended for a further year. Sales in the Middle East climbed 14%. In France (16% of the consolidated total), sales rose 2.2%, in line with the market. A reorganization of the sector is planned, following recommendations made in the French Health Ministry’s Ballereau Report. In anticipation of this change, laboratories are being cautious, slowing sales growth.

Clinical applications experienced sustained growth, led by the VITEK^®2 line, VIDAS^® immunoassay reagents (including high medical value tests, particularly VIDAS^® B.R.A.H.M.S. PCT and VIDAS^® NT-proBNP) and molecular biology. In spite of a greater sensitivity to the economic environment, industrial applications sales expanded by more than 8%, with all of the lines contributing to growth. Spurred by the launch of new reagents, the TEMPO^® range saw sales surge nearly 25%.

• In North America (22% of the consolidated total), sales ended the year up 1.6%, after rising by a sharp 10.2% in 2007. Sales were dampened by flat demand as customers, mainly from the private sector with labs that are already highly automated, postponed purchases of new systems. In this environment, North American instrument sales fell by 20% during the year, versus growth of nearly 25% in 2007. Overall growth in the region was led by the 6% increase in reagent sales. In the United States, second-half sales increased over the 2008 first-half despite the tighter economy.
• In the Asia-Pacific region (11% of the consolidated total), sales rose 15.2%, reflecting gains of 24% in China, 16% in South Korea and 27% in India. In Japan, sales by the joint venture with Sysmex were stable (up 1%) in a difficult market.

In clinical applications, growth was led by the microbiology lines and the VIDAS^® immunoassay line, up nearly 17%. Sales of industrial applications rose more than 22%.

• In Latin America (7% of the consolidated total), growth remained robust across the region, driving an overall increase in sales of nearly 16%. In Brazil, sales were up 9%, thanks to sustained strong sales at the end of the year.

Clinical application sales were lifted by the solid growth of the microbiology lines. Microplate sales reported satisfactory growth in a highly competitive environment. In the industrial segment, sales continued to expand rapidly in every country of the region.

Like-for-like sales for full-year 2008 may be analyzed as follows, by technology:

• In 2008’s challenging economy, business growth was powered by reagent sales, which rose 9.6% during the year and accounted for 83.9% of the consolidated total, versus 82.5% in 2007.
• In clinical applications, sales rose 7.2%, reflecting sustained strong demand for microbiology, VIDAS^® immunoassay and molecular biology reagents. In particular, sales of the VIDAS^® line were lifted by the success of high medical value assays, especially VIDAS^® B.R.A.H.M.S. PCT and VIDAS^® NT-proBNP.
• Sales of industrial applications were up 9.7% for the year, with all lines contributing to the increase, especially VIDAS^® and TEMPO^®. Sales continued to expand quickly in the Asia-Pacific region, Latin America and Europe, a region with sharper disparities among the countries. In North America, growth was driven by reagent sales but was held back by weak instrument sales.

Other Quarterly Financial Highlights

• The installed base rose to around 53,000 instruments at December 31, 2008, following the placement of 3,900 new instruments with customers during the year.
• After taking into account the acquisitions of PML Microbiologicals, AB BIODISK and AviaraDx, as well as salesforce reorganization in the United States and Japan, the Group had a total of 6,140 full-time equivalent employees at December 31, 2008. There were 5,771 employees at December 31, 2007.
• Earnings are expected to benefit from the fact that operating expenses are in line with projections.
• Net debt stood at €50 million at December 31 2008, after the dividend payment and the acquisition of AB BIODISK, AviaraDx and PML Microbiologicals. Net cash amounted to €15 million at year-end 2007.

bioMérieux has a €260 million syndicated line of credit available until January 2013. At December 31, 2008, drawdowns on the facility amounted to €65 million.

FOURTH-QUARTER OPERATING HIGHLIGHTS

• Acquisition of PML Microbiologicals, Inc.

On December 8, 2008, bioMérieux announced that it had acquired PML Microbiologicals, Inc., an American in vitro diagnostics company. The privately held company provides culture media and microbiological products for both clinical and industrial applications in North America. It has manufacturing and marketing teams in Portland, Oregon (USA) and Toronto (Canada).

PML Microbiologicals has 205 associates, of whom 172 are employees, and reported sales of $24 million in 2007. It was purchased for $29.6 million.

The acquisition has enabled bioMérieux to become a leading U.S. provider of microbiology testing solutions for pharmaceutical companies and Canada’s number one provider of culture media for clinical applications.

• New product launches

Twenty-seven new products were launched in 2008, including the following in the fourth quarter:

• The PREVI™ Isola automated pre-poured media (PPM) streaker and PREVI™ Color Gram automated slide stainer, both part of the Full Microbiology Lab Automation™ (FMLA™) line of solutions.
• The TEMPO^® YM automated solution for yeast and mold enumeration in food products. The test, one of the fastest available in its field, has expanded the TEMPO^® line, which now includes the majority of the required quality indicators.
• The TANGO™ software application, which allows industrial customers to connect the VIDAS^® and TEMPO^® systems to their lab system using a single interface.

OBJECTIVES

In a deteriorating economic and financial environment, and given the uncertainties concerning instrument sales, particularly in North America, bioMérieux has set an objective of like-for-like growth in sales of 5 to 7% in 2009.

It is targeting overall growth in sales of 7 to 9%, at constant exchange rates and including recent business development agreements. This range is in line with the 2012 strategic plan objectives.

INVESTOR CALENDAR

2008 financial results: March 16, 2009
2009 first-quarter sales: April 23, 2009

The above forward-looking statements are based, entirely or partially, on assessments or judgments that may change or be modified, due to uncertainties and risks related to the Company's economic, financial, regulatory and competitive environment, notably those described in the 2007 Registration Document. Accordingly, the Company cannot give any assurance as to whether it will achieve the objectives described above. The Company does not undertake to update or otherwise revise any forecasts or objectives presented herein, except in compliance with the disclosure obligations applicable to companies whose shares are listed on a stock exchange.

ABOUT BIOMÉRIEUX

Advancing diagnostics to improve public health

A world leader in the field of in vitro diagnostics for over 45 years, bioMérieux is present in more than 150 countries through 39 subsidiaries and a large network of distributors. In 2008, revenues reached €1.111 billion, of which 84% was derived from operations outside France.

bioMérieux provides diagnostic solutions (reagents, instruments, software) that determine the source of disease and contamination to improve patient health and ensure consumer safety. Our products are used for diagnosing infectious diseases and providing high medical value results for cardiovascular emergencies and cancer screening and monitoring. They are also used for detecting microorganisms in agri-food, pharmaceutical and cosmetic products.

bioMérieux is listed on the NYSE Euronext Paris market (Symbol: BIM – ISIN: FR0010096479).

Other information can be found at www.biomerieux.com.

Appendix: Quarterly Sales