DGAP-News: aap Implantate AG: Sound start to 2018 with sales and EBITDA at the upper end of the guidance

aap Implantate AG ("aap") got off to a sound start in financial year 2018, achieving its financial targets for the first quarter of 2018. The company realized sales of EUR 2.8 million in the first three months of the current year (Q1/2017: EUR 3.1 million) which were thus at the upper end of the guidance (EUR 1.8 million to EUR 3.0 million). EBITDA in the first quarter of 2018 improved by 5% on the corresponding period in the previous year to EUR -1.6 million (Q1/2017: EUR -1.7 million) and was therefore at the upper end of February's forecast of EUR -1.9 million to EUR -1.4 million as well. Regarding trauma sales aap achieved with EUR 2.8 million a value roughly at the level of the corresponding period last year (Q1/2017: EUR 2.9 million).
 

Q1/2018 - Key results and progress

- Sales and earnings: Sales with EUR 2.8 million and EBITDA with EUR -1.6 million at upper end of guidance

- Gross margin and costs: Positive development of gross margin thanks to focus on established markets; decrease in other operating costs

- Cash flow and balance sheet: Cash need in Q1/2018 totalled EUR 2.1 million with further positive effects of working capital reduction; cash holdings of EUR 14.7 million^[1] and a further high equity ratio of 85%

- Focus on established markets: Stable development in focus market Germany with slight sales increase (+3%)

- LOQTEQ(R): Completion of portfolio with focus on polyaxial fixation technology, plate systems for the foot and ankle areas as well as implants in sterile packaging planned for 2018

- Silver coating technology: Continued intensive preparation of various applications at authorities involved for clinical study; in addition currently intensive work on validation of relevant internal processes, which is a further important prerequisite for beginning of the study; start of a multicentric two arm single blind study with about 200 patients in several countries strived for 2018
 

Q1/2018 - Financials

Sales

With regard to the sales development, aap realized a significant sales increase in the international region (+32%) in the first quarter of 2018. Growth drivers were the expansion of business with existing customers and the acquisition of new customers, including in South Africa. In contrast, the distribution business in North America was below expectations in the first three months of the current financial year, while the decline in business with global partners in this market was due primarily to an extensive initial order in the first quarter of 2017. Overall, however, aap continues to see many promising opportunities in North America, meaning that the region will be a central pillar of growth this year. Furthermore, in Germany, which is also a focus of the growth strategy, the company was again able to report a slight sales increase (+3%) and therefore a continued stable development.
 

EBITDA

EBITDA improved due to the positive development of the gross margin and decreased other costs in the first quarter of 2018 by 5% on the first three months of the previous year to EUR -1.6 million (Q1/2017: EUR -1.7 million), thereby reflecting the aimed development: a focus on established markets with higher profit margins and simultaneous a disciplined cost management to improve operational performance. These areas of activity are of central significance for the management in the financial year 2018.
 

Outlook for Q2/2018
For the second quarter of 2018 aap anticipates sales of EUR 1.8 million to EUR 3.0 million and EBITDA of EUR -1.9 million to EUR -1.4 million.

^[1] In the consolidated balance sheet of 03/31/2018 EUR 11.2 million is stated as cash and cash equivalents, while cash with banks totalling EUR 3.5 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.

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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