DGAP-News: aap Implantate AG: Double-digit Q2/2018 sales growth; sales and EBITDA at upper end of guidance

aap Implantate AG ("aap") realized sales and EBITDA at the upper end of the guidance in the second quarter of 2018. Sales in the second quarter of 2018 rose by 13% on the corresponding period in the previous year to EUR 2.7 million (Q2/2017: EUR 2.3 million) and were therefore at the upper end of the forecast of EUR 1.8 million to EUR 3.0 million. EBITDA improved by 7% in the second quarter of 2018 year-on-year to EUR -1.5 million (Q2/2017: EUR -1.6 million) and was thus also at the upper end of the guidance of EUR -1.9 million and EUR -1.4 million. First-half sales totalled EUR 5.4 million (H1/2017: EUR 5.4 million EUR). EBITDA improved by 6% in the first six months of 2018 compared to the same period in the last year to EUR -3.1 million (H1/2017: EUR -3.3 million).

Q2/2018 and H1/2018 - Key results and progress

- Sales: Trauma sales increase in Q2 and H1 by 16% to EUR 2.7 million (Q2/2017: EUR 2.3 million) and by 5% to EUR 5.5 million (H1/2017: EUR 5.2 million) respectively

- Earnings: EBITDA improves in Q2 and H1 by 7% to EUR -1.5 million (Q2/2017: EUR -1.6 million) and by 6% to EUR -3.1 million (H1/2017: EUR -3,3 million) respectively

- Gross margin and costs: Gross margin^[1] remains at a good level with 76% in Q2 and 77% in H1, even though temporarily influenced by reduced share of high margin US sales in total sales; personnel costs nearly unchanged and decreasing trend in other expenses in both periods under review

- Cash flow and balance sheet: Cash need in H1/2018 totalling EUR 3.7 million with positive effects of working capital reduction (EUR 0.8 million); cash holdings of EUR 12.7 million^[2] and a further high equity ratio of 84%

- Focus on established markets: Positive development in focus market Germany with 28% sales growth in Q2 and 15% in H1

- LOQTEQ(R): Continued focus on European approval of fully developed polyaxial LOQTEQ(R) systems, adapting internal processes and documentations to new regulatory requirements and development of sterile packaging for implants

- Silver coating technology: Focus on intensive preparation of various applications for human clinical study at the competent authorities, internal validation of relevant processes and start of training for physicians participating in the study

Q2/2018 and H1/2018 - Financials

Q2 Sales (reported)

Q2 Sales (constant exchange rates)

H1 Sales (reported)

H1 Sales (constant exchange rates)

Assuming constant US$-EUR exchange rates, year-on-year sales grew by 16% and 2% respectively in the second quarter of 2018 and the first six months of 2018.

With regard to trauma sales, aap registered year-on-year growth by 16% in in the second quarter and by 5 % in the first half of the year to EUR 2.7 million (Q2/2017: EUR 2.3 million) and to EUR 5.5 million (H1/2017: EUR 5.2 million) respectively. Growth drivers were in particular the German market and the international business. In Germany aap increased sales by 28% in the second quarter and by 15% in the first six months. This pleasing development shows that sales activities in recent months, such as listing at major German hospital groups, are gradually bearing fruit. In contrast, the company could not conclude any further agreements with global partners in North America in the second quarter. Furthermore, changes at the end customer side at an important US distributor occurred which had a temporary negative influence on second quarter sales. In the international region aap achieved year-on-year sales growth in the second quarter and the first half of the year of 25% and 28% respectively. The background to this positive development was the expansion of business with existing customers and the acquisition of new customers, for example in South Africa.

EBITDA Q2

EBITDA H1

Based on the increase in total operating performance, a further good gross margin level, almost unchanged personnel costs and a decreasing trend in other expenses, EBITDA improved by 7% in the second quarter of 2018 to EUR -1.5 million (Q2/2017: EUR -1.6 million) and in the first half of 2018 by 6% to EUR -3.1 million (H1/2017: EUR -3.3 million).

Outlook
For the third quarter of 2018 aap expects sales of EUR 2.0 million to EUR 3.8 million and EBITDA of EUR -1.8 million to EUR -0.9 million. Overall, the company confirms its outlook for financial year 2018 and expects sales and EBITDA at the lower end of the guidance of EUR 13 million to EUR 15 million and EUR -5.0 million to EUR -3.4 million respectively.
^1]In terms of sales revenues, changes in inventories of finished goods and work in progress and cost of purchased materials and services.

^[2]In the consolidated balance sheet of 06/30/2018 EUR 9.5 million is stated as cash and cash equivalents, while cash with banks totalling EUR 3.2 million is shown under current and non-current other financial assets as it was pledged to secure financial liabilities respectively cash payments were made to secure bank guarantees granted to third parties.

_______________________________________________________________________________________
aap Implantate AG (ISIN DE0005066609) - Prime Standard/Regulated Market - All German stock markets -

About aap Implantate AG
aap Implantate AG is a globally operating medical device company headquartered in Berlin, Germany. The company develops, manufactures and markets trauma products for orthopaedics. The IP protected portfolio includes besides the innovative anatomical plating system LOQTEQ(R) and trauma complementary biomaterials a wide range of cannulated screws as well as standard plates and screws. Furthermore, aap Implantate AG has an innovation pipeline with promising development projects as the antibacterial silver coating technology and magnesium based implants. These technologies address critical problems in surgery that haven't yet been resolved adequately. In German-speaking Europe aap Implantate AG directly sells its products to hospitals, buying syndicates and hospital groups while it uses a broad network of distributors in more than 25 countries at the international level. aap Implantate AG's stock is listed in the Prime Standard segment of Frankfurt Stock Exchange (XETRA: AAQ.DE). For more information, please visit www.aap.de, or download the Company's investor relations app from the Apple's App Store or Google Play.

Forward-looking statement
This release may contain forward-looking statements based on current experience, estimates and projections of the management board and currently available information. They are not guarantees of future performance. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. Many factors could cause the actual results, performance or achievements of aap to be materially different from those that may be expressed or implied by such statements. These factors include those discussed in aap's public reports. Forward-looking statements therefore speak only as of the date they are made. aap does not assume any obligation to update the forward-looking statements contained in this release or to conform them to future events or developments.
Contact:
aap Implantate AG; Fabian Franke; Investor Relations; Lorenzweg 5; D-12099 Berlin Tel.: ++49/30/750 19 - 134; Fax.: ++49/30/750 19 - 290; f.franke@aap.de