Growth trend continued in third quarter of 2013/14

• Total operating performance and revenue increased again despite weak market development in Europe
• Operating result charged by negative exchange rate effects, high intensity of competition in Germany and restructuring expenses
• Net debt and financial result considerably improved compared with the previous year

The PHOENIX group once again underlined its position in Europe as leading pharmaceutical trader in the first three quarters of the 2013/14 fiscal year. Revenue increased by 2.8 per cent (3.6 per cent after adjustment for exchange rate effects) compared with the same period of the previous year to EUR 16,211.9 million. The most significant contribution to this growth is due to higher revenues in Germany, the largest market, where the PHOENIX group benefited from the continued positive growth in the wholesaling market and was also able to noticeably increase its market share.

Total operating performance, including revenue as well as handled volume (handling for service fee), increased by 2.5 per cent to EUR 19,274.6 million. Apart from the positive trend in Germany, the European pharmaceutical markets as a whole experienced only moderate growth in the first three quarters of 2013. “In a persistently challenging market environment, we developed better than the overall European market in terms of revenue and total operating performance in the first three quarters of the 2013/14 fiscal year”, said Reimund Pohl, Chief Executive Officer.

Owing to negative exchange rate effects and the high intensity of competition, particularly in Germany, gross profit declined to EUR 1,539.6 million. In addition to the decrease in gross profit, the restructuring expenses for the PHOENIX FORWARD optimisation programme also had a negative impact on earnings before interest, taxes, depreciation, and amortisation (EBITDA), which dropped by EUR 72.9 million to EUR 336.0 million.

The financial result developed very well, increasing by EUR 31.2 million to EUR ‑80.2 million. Compared with the corresponding period of the previous year, exceptional charges from early refinancing measures of the syndicated loan agreement declined. Interest expenses were significantly lower due to the optimised financing conditions and the distinct reduction in net debt as compared with the previous year. The company also secured favourable borrowing costs for the future thanks to the successful emission of a corporate bond in May 2013.

As expected, the improved financial result did not fully compensate for the lower EBITDA in the first three quarters of 2013/14. The profit for the period therefore fell from EUR 158.4 million to EUR 119.4 million.

Forecast for the 2013/14 fiscal year

Despite the current weak growth of the European pharmaceutical market, the PHOENIX group still anticipates a slight increase in revenue for the 2013/14 fiscal year. The company aims to partially compensate the negative external influences by internal measures and the positive development in the Eastern European markets. With regard to the capital structure, we expect a further reduction in net debt.

Key figures of the PHOENIX group in comparison with the previous year’s period

¹ Total operating performance = revenue + handled volume (handling for service fee)