FY/18: Sales with double-digit growth in Germany and International, North America below expectations - milestones in silver coating technology; for FY/19 double-digit sales increase planned and start of human clinical study targeted

DGAP-News: aap Implantate AG / Key word(s): Preliminary Results/Forecast FY/18: Sales with double-digit growth in Germany and International, North America below expectations - milestones in silver coating technology; for FY/19 double-digit sales increase planned and start of human clinical study targeted 21.01.2019 / 13:58 The issuer is solely responsible for the content of this announcement. - FY/2018 sales of EUR 10.8 million with double-digit growth rates in Germany (+14%) and international key markets (+24% in Europe without Germany and BRICS); North America below expectations - Silver coating technology: Significant milestones in FY/2018 reached with convincing results of an animal study conducted with the renowned AO Research Institute Davos and submission of the application for approval of a human clinical study to BfArM - Start of study targeted for H1/2019 - Around 20% - 40% sales growth and earnings improvement planned for FY/2019: Forecast for sales of EUR 13.0 million to EUR 15.0 million and EBITDA[1] of EUR -4.4 million to EUR -2.8 million   Sales development in FY/2018 and Q4/2018 aap Implantate AG ("aap") achieved sales of EUR 10.8 million (FY/2017: EUR 10.9 million) according to preliminary figures and thereby a value in line with the guidance of EUR 10.0 million to EUR 11.7 million published in November 2018. In the fourth quarter of 2018 the company registered sales of EUR 2.6 million (Q4/2017: EUR 2.9 million).   FY/2018 Sales In KEUR FY/2018 FY/2017 Change on year Trauma Germany North America North America distributors North America global partners International (without North America) Europe (without Germany) BRICS states Total key markets Rest 10,816 2,774 2,240 2,172 68 5,802 1,864 1,713 3,577 2,225 10,648 2,427 3,071 2,491 580 5,150 1,593 1,297 2,890 2,260 +2% +14% -27% -13% -88% +13% +17% +32% +24% -2% Other (mainly discontinued activities) -38 254 <-100% Sales 10,778 10,902 -1%     Q4/2018 Sales In KEUR Q4/2018 Q4/2017 Change on year Trauma Germany North America North America distributors North America global partners International (without North America) Europe (without Germany) BRICS states Total key markets Rest 2,582 695 557 549 8 1,330 531 346 877 453 2,863 578 620 613 7 1,665 583 421 1,004 661 -10% +20% -10% -10% +14% -20% -9% -18% -13% -31% Other (mainly discontinued activities) 24 5 >+100% Sales 2,606 2,868 -9%   Viewed by region, aap recorded a pleasing development in its home market Germany in financial year 2018 and increased sales by 14% to EUR 2.8 million (FY/2017: EUR 2.4 million). Here, the sales activities, such as the listing at major German hospital groups and purchasing associations, show effect. In contrast, the sales development in North America fell short of expectations in 2018. In this market aap could not sign further contracts with global partners in the past financial year, and distribution business was temporarily burdened by the loss of certain distributors and clinics. This shortfall in sales could not be offset on a short-term basis elsewhere. International key markets Europe (without Germany) and BRICS developed positively and aap recorded growth of 24% to EUR 3.6 million (FY/2017: EUR 2.9 million).   With a view to its innovative antibacterial silver coating technology, aap reached important milestones in financial year 2018 on the way to the start of the human clinical study as prerequisite for the targeted market approval. First, the company achieved convincing results in an animal study undertaken with the renowned AO Research Institute Davos. It was proved that the silver coating developed by aap does not have a negative influence on bone healing, which is a central requirement of the competent authorities. Before the year's end aap then submitted the application to conduct a human clinical study for its silver coating technology to the Federal Institute for Drugs and Medical Devices ("BfArM").   Outlook for 2019 For financial year 2019 the Management Board anticipates a sales increase to a value of EUR 13.0 million to EUR 15.0 million, corresponding to a growth between about 20% and 40%. aap also plans to improve EBITDA[2] and expects a value of EUR -4.4 million to EUR -2.8 million for the current year.   All markets shall contribute to the planned sales growth and earnings improvement. aap is confident that with the measures already initiated in North America a dynamic sales development can be shown again in 2019. At the same time, the positive growth trend in Germany and in international business shall be continued. aap is also working towards strategic partnerships with global orthopaedic companies (distribution networks, licensing deals as well as product development and approval projects).   On the costs side the Management Board anticipates, with the exception of sales-related costs, a declining trend in other expenses. In case of an approval of the human clinical study for the silver coating technology by the competent authorities, development costs and capitalised own work will increase. Last but not least, the one-time effects (e.g. external staff and evaluation of strategic options) burdening in financial year 2018 shall reduce this year.   Based on aap's strategic alignment, the planned sales growth and the targeted start of the human clinical study for its silver coating technology, the company is currently evaluating various measures to strengthen its financial base. These range from technology-related transactions (e.g. outlicensing of technologies, joint venture agreements with a carve-out of technologies or involving other companies in joint development of products) via debt capital measures (e.g. bank loans or asset-based financings) to equity instruments (e.g. cash capital increase or convertible bond). Against the background of the confirmation for a funding for costs arising within the scope of the preparation of the human clinical study received from the Federal Ministry of Education and Research ("BMBF") in 2018, aap also targets to receive grants to carry out the study.   For the first quarter of 2019 the Management Board anticipates sales of EUR 2.0 million to EUR 3.0 million and EBITDA in the range of EUR -1.8 million to EUR -1.2 million.   On the basis of the application to conduct a human clinical study for its silver coating technology submitted to BfArM at the end of 2018, the next step is the submission of applications in the United States and to the ethics commissions of the different German federal states where the hospitals in which the human clinical study is to be undertaken are located. Based on the documents submitted, there will then be an interaction phase with all the authorities involved on the results of which aap will report in due course. Against the background of the current status of the preparations and in particular the required time for interaction with the competent authorities, which is hardly predictable, the company targets to start the study in the first half of 2019.   Management Agenda 2019 After the successful first year 2017 as pure player in trauma, with a trauma sales increase of 20%, the year 2018 overall fell short of expectations. Based on the measures already initiated and planned, the Management Board is confident to show a sales development above the average market growth in financial year 2019 again. In detail, the Management Board has specified its targets for the current financial year as a Management Agenda in four strategic and operational action areas as follows:   Accelerating Value-Based Innovations Silver coating technology - Application on LOQTEQ(R): Start of the human clinical study targeted for H1/2019 Silver coating technology - Development projects with global companies: Initiation of joint product development and approval projects LOQTEQ(R): Further completion of LOQTEQ(R) portfolio with a focus on polyaxial fixation technology, plate systems for the foot and ankle areas as well as implants in sterile packaging   Enhancing Market Access Germany: Increase of market presence International key markets: Extension of distribution network with focus on North America, Europe and BRICS Global partnerships: Distribution networks and licensing deals with global orthopaedic companies   Optimizing Operational Efficiency Quality first: Consequent continuation of the company-wide quality improvement program; adaption of processes and documents to new increased regulatory requirements according to MDR Production and sales efficiency: Increase of ability to provide timely deliveries and performance per sales employee Working capital: Optimisation of working capital management with a higher inventory turnover inter alia by a strict consignment management     Realization of Financial Targets Sales: Sales of EUR 13.0 million and EUR 15.0 million EBITDA[3]: EBITDA of EUR -4.4 million to EUR -2.8 million Financing: Strengthening of financial base for sales growth, human clinical study silver and further development magnesium   Also in 2019 the company will continue to work on various measures for the step-up strategy implementation to develop aap into a sustainably growing pure player in trauma and to unlock the inherent value of the promising and innovative product and technology base.   The sales figures contained in this press release are preliminary as of 31 December 2018 which are subject to change until final publication. aap plans to publish the final, audited figures for the financial year 2018 on 29 March 2019 in its consolidated annual financial statements for 2018. [1, 2, 3] Including special items and effects of IFRS 16; further details will be explained in the consolidated financial report 2018.   ------------------------------------------------------------ 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.: [phone] - 134; Fax.: [phone] - 290; [e-mail] 21.01.2019 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG. The issuer is solely responsible for the content of this announcement. The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Archive at www.dgap.de

Language:	English
Company:	aap Implantate AG
	Lorenzweg 5
	12099 Berlin
	Germany
Phone:	[phone]
Fax:	[phone]
E-mail:	[e-mail]
Internet:	www.aap.de
ISIN:	DE0005066609
WKN:	506660
Listed:	Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Munich, Stuttgart, Tradegate Exchange

End of News	DGAP News Service

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