TIDMCRYO
RNS Number : 9220I
Cryo-Save Group NV
22 March 2010
22 March 2010
Cryo-Save Group N.V.
Revenue up 30%, underlying profit up 38%
Cryo-Save Group N.V. (AIM/Euronext: CRYO, "Cryo-Save", or "the Group"), Europe's
leading adult stem cell storage bank, has published its full year results for
the year to 31 December 2009.
Financial highlights
· Revenue up 30% to EUR38.4 million (2008: EUR29.5 million)
· Gross margin increased to 71% (2008: 69%)
· Underlying* EBITA up 76% to EUR6.0 million (2008: EUR3.4 million)
· Underlying* profit before taxation up 38% to EUR5.4 million (2008: EUR3.9
million)
· Underlying* earnings per share up 34% to 48.4 euro cents (2008: 36.0 euro
cents)
· Proposed dividend of 6 euro cent per share (2008: 5 euro cent)
· Net cash from operating activities EUR4.8 million (2008: EUR2.0 million)
· Operating profit EUR2.3 million (2008: EUR2.3 million)
· Profit before taxation EUR1.8 million (2008: EUR2.9 million)
· Net profit EUR1.4 million (2008: EUR2.6 million)
· Earnings per share 14.6 euro cents (2008: 27.3 euro cents)
Operational highlights
· Leading market position maintained or strengthened in all key markets
· Number of new samples stored up 11% to 27,900 (2008: 25,200)
· Over 120,000 samples stored by the end of 2009
· Several samples released for stem cell transplantation and blood testing
· Strong organic growth in Europe
Outlook 2010
· Combined service of cord blood and cord tissue storage expected to result
in higher revenue
· Launch of the new service Cryo-Lip in first half of 2010
· Higher operational gearing due to restructuring and cost savings in 2009
*Underlying results are adjusted for amortisation of identified intangible
assets, write down of the receivable from the Group's associate, Euronext
listing costs and restructuring costs.
Marc Waeterschoot, Chief Executive, commented:
"2009 was a very strong year for us. Not only did we see good returns and
benefits from our investment programme over the previous few years, but we
continued to invest in developing new products and moving into new countries.
Hence our proposed 20% increase in dividend.
"The strategic rationale for stem cell storage continues to strengthen as
medical advances widen the potential usages for stored cells, whilst our
geographical reach, product range and operational gearing, are enabling us to
maintain our rapid growth."
Enquiries:
+------------------------------------------+------------------+
| Cryo-Save Group | + 31 (0) 575 548 |
| | 998 |
+------------------------------------------+------------------+
| Marc Waeterschoot, Chief Executive | |
| Arnoud van Tulder, Chief Financial | |
| Officer | |
+------------------------------------------+------------------+
| | |
+------------------------------------------+------------------+
| Daniel Stewart & Company plc | + 44 (0) 20 7776 |
| | 6550 |
+------------------------------------------+------------------+
| Simon Leathers/ Emma Earl | |
+------------------------------------------+------------------+
| | |
+------------------------------------------+------------------+
| College Hill (UK) | + 44 (0) 20 7457 |
| | 2020 |
+------------------------------------------+------------------+
| Adrian Duffield/Rozi Morris | |
+------------------------------------------+------------------+
| | |
+------------------------------------------+------------------+
| SPJ Financiële Communicatie Amstelveen | +31 (0)20 |
| (Netherlands) | 6478181 |
+------------------------------------------+------------------+
| Kees Jongsma/Leon Melens | |
+------------------------------------------+------------------+
About Cryo-Save
With more than 120,000 samples saved, Cryo-Save is the leading stem cell bank in
Europe and one of the fastest growing in the world. Driven by its international
business strategy, Cryo-Save is now represented in 38 countries on three
continents and has state-of-the-art processing facilities in Belgium, Germany,
Dubai, India and France (under construction).
Highlights
In March 2009, Cryo-Save announced that it had 100,000 stem cell samples under
storage, underpinning its market leading position in Europe. Quarter on quarter
the Group achieved a storage record, resulting in slightly over 120,000 samples
stored as at 31 December 2009.
During 2009 Cryo-Save completed the development of its new state-of-the art
processing and storage facility in Niel, Belgium. This facility was self-funded
and has been operational since the beginning of September 2009. Cryo-Save
completed the sale and lease back of the Niel facility in April 2009 for EUR4.3
million.
In July 2009, Cryo-Save signed an exclusive distribution agreement with a
leading pan European medical diagnostic labs network. This has further
strengthened the Group's leading position.
Also in July 2009, Cryo-Save acquired Salus Futura in Italy for an initial
consideration of EUR0.4 million in cash and a deferred performance related
payment. Salus Futura is an Italian stem cell storage marketing and distribution
company which concentrates primarily on customer acquisition through diagnostic
centres and private clinics.
Since 22 October 2009, the Group has been listed on NYSE Euronext Amsterdam, in
addition to its listing on the London Stock Exchange Alternative Investment
Market (AIM).
Financial review
Revenue
Group revenue increased sharply to EUR38.4 million (2008: EUR29.5 million), up 30%
as a result of a combination of the increase in storage volumes, the full year
impact of acquisitions, especially Crio Cord in Spain and Cryo-Save Balcanica,
and the full year impact of price increases from late 2008.
Revenue includes the impact of the change of discount rate on the net present
value of deferred revenue amounting to EUR0.2 million (2008: EUR0.2 million).
Overall, total storage of new samples grew 11% to 27,900 samples, in comparison
to the 25,200 new samples stored in 2008. All of this growth was organic and
mainly achieved in Europe and Asia.
Total sales volume for the second half of the year grew 10% to 14,600 new
samples (2HY 2008: 12,700) in comparison to the 13,300 new samples stored in the
first half of 2009 (1HY 2008: 12,500).
Geographical breakdown of revenue
+-----------------------------------------------+------+--------------+
| EUR in millions | 2009 | 2008 |
+-----------------------------------------------+------+--------------+
| Europe | 36.5 | 28.5 |
+-----------------------------------------------+------+--------------+
| Asia | 1.2 | 0.4 |
+-----------------------------------------------+------+--------------+
| Africa | 0.7 | 0.6 |
+-----------------------------------------------+------+--------------+
| Total | 38.4 | 29.5 |
+-----------------------------------------------+------+--------------+
Europe remains Cryo-Save's main market, underpinning its leading position in
Europe. Revenue growth in Europe was a result of a combination of higher sales
volume, the introduction of the combined service storing stem cells from
umbilical cord blood as well as the cord tissue, and the full year impact from
2008 acquisitions.
The growth in Asia is all organic mainly from the Indian business.
Gross profit and gross margin
Gross profit increased by 35% to EUR27.2 million (2008: EUR20.2 million). The gross
margin increased to 71% (2008: 69%). The impact from acquisitions, the late 2008
price increase, and cost savings particularly in terms of logistics, were the
main drivers for the margin improvement.
Operating expenses
Reported operating expenses, excluding depreciation and amortisation, amounted
to EUR22.6 million (2008: EUR16.3 million), but included EUR2.4 million exceptional
non-recurring expenses, resulting in underlying operating expenses of EUR20.2
million (2008: EUR16.3 million). The increase was mainly caused by the impact from
the 2008 acquisitions and the additional investments in the Indian and French
operations, partly offset by cost savings.
In 2009, Cryo-Save continued to invest in its Indian operation, and in France.
The operating expenses of the Group's Indian operations were EUR0.5 million (2008:
EUR0.4 million), and the operating expenses of the French operations were EUR1.1
million higher (2008: EUR0.2 million).
Underlying marketing and sales expenses amounted to EUR10.2 million (2008: EUR7.8
million). Reported marketing and sales expenses increased to EUR10.6 million
(2008: EUR7.8 million), including EUR0.4 million of exceptional non-recurring
restructuring expenses of the Italian subsidiary as a result of the integration
of the Italian subsidiary and the acquired entity Salus Futura.
Research and development costs of EUR0.4 million (2008: EUR0.1 million) relate to:
the new services added to the Cryo-Cord service in June 2008 (the collection,
processing, preservation and storage of the umbilical cord tissue containing
MSCs); the development of Cryo-Lip, a new service of the collection, processing,
preservation and storage of fat tissue containing MSCs obtained via liposuction
from adults (proposed launch in the first half year of 2010) and; funding
applied research.
Underlying general and administrative expenses, excluding the exceptional
non-recurring write down of the receivables from the Arabian associate (EUR1.0
million), the non-recurring Euronext listing costs (EUR1.0 million) and
depreciation and amortisation amounted EUR9.6 million (2008: EUR8.3 million).
Reported general and administrative expenses excluding depreciation and
amortisation amounted EUR11.6 million (2008: EUR8.3 million).
Cryo-Save's associate Cryo-Save Arabia, which operates in the United Arab
Emirates, saw a significant decrease in sales during 2009. As a result, the
Group wrote down EUR1.0 million of receivables due from Cryo-Save Arabia. This
relates to non-cash fees of EUR0.5 million for services regarding the construction
of the processing and storage facility, a non-cash royalty fee of EUR0.2 million
for samples processed and stored in Dubai, and a fee of EUR0.3 million for samples
processed and stored in the Belgium processing and storage facility from UAE
customers. The receivables comprise EUR0.5 million relating to 2007, EUR0.3 million
to 2008 and EUR0.2 million to 2009.
The non-recurring Euronext listing costs mainly relate to advisers fees.
EBITA and operating profit
Underlying Earnings Before Interest, Taxation and Amortisation of identified
intangible assets (EBITA before Arabia write down, Euronext listing costs and
Italian restructuring costs) increased significantly by 76% to EUR6.0 million
(2008: EUR3.4 million), as a result of higher gross profit and tight cost control,
partly offset by higher investments in India and France, and higher
depreciation. This EBITA improvement reflects the Group's high operational
gearing. Reported EBITA was EUR3.6 million (2008: EUR3.4 million).
Underlying operating profit was up 76% to EUR6.0 million (2008: EUR3.4 million).
Reported operating profit was EUR2.3 million (2008: EUR2.3 million).
Depreciation was EUR1.0 million (2008: EUR0.6 million), and amortisation EUR1.3
million (2008: EUR1.0 million). The increase of depreciation is mainly caused by
the start of depreciating the Belgium and French building including its new
equipment. Amortisation mainly increased due to the identified intangible assets
of Salus Futura and the start of amortisation of the capitalised costs of
Cryo-CordPlus and the Group's new website.
Net finance costs/income
Net finance costs of EUR0.5 million included EUR0.3 million of non-cash IFRS
expenses from unwinding discounted earn out liabilities.
The change compared to the net finance income of EUR0.6 million in 2008 was mainly
caused by the high interest income in the first half year of 2008 on cash
deposits which were spent on acquisitions in the second half of 2008.
Profit before taxation
Underlying profit before taxation was up 38% to EUR5.4 million (2008: EUR3.9
million). Reported profit before taxation was EUR1.8 million (2008: EUR2.9 million).
Taxation
The underlying effective tax rate (ETR) amounted 17% (2008: 14%), the reported
ETR 24%. The ETR increased compared to 2008 mainly due to losses carried forward
that were not capitalised due to the uncertainty of future profits to offset
these losses. Furthermore, the effective tax rate increased due to increased
profits in countries with a relatively high tax rate compared to the
historically low effective tax rate.
Profit for the period
Underlying profit after taxation for 2009 was up 32% to EUR4.5 million (2008: EUR3.4
million). Reported profit after taxation amounted EUR1.4 million (2008: EUR2.6
million).
Earnings per share
Underlying earnings per share were up 34% at 48.4 euro cents per share (2008:
36.0 euro cents).
Reported earnings per share were 14.6 euro cents per share (2008: 27.3 euro
cents per share, adjusted for the 5:1 Share Consolidation exercised in October
2009).
Dividend
The Board is recommending a dividend of 6 euro cent per share for the year ended
31 December 2009, this represents an increase of 20% from the previous year's
dividend of 5 euro cent per share. If approved at the Annual General Meeting on
19 May 2010, the dividend will be paid on 17 June 2010 to shareholders on the
register at 21 May 2010. The ex-dividend date will be 19 May 2010.
Cash flow
Net cash from operating activities was EUR4.8 million (2008: EUR2.0 million). The
Group invested EUR4.6 million in property, plant and equipment, mainly related to
the new processing and storage facility in Niel, Belgium, which was financed by
the sale and lease back transaction with ING Lease Belgium N.V. of EUR4.3 million.
Strategy
During 2009 the Group delivered on its strategic objectives: organic growth in
existing markets, geographic growth into new markets, growth by acquisitions and
development of new services. The Group strengthened or maintained its leading
market position in all key markets. Cryo-Save will continue to pursue these
strategic objectives also in 2010 to maintain the rapid growth.
Operating review
Cryo-Save is Europe's leading stem cell bank with a market share of around 50%,
having stored over 120,000 samples by the year end 2009. The Group is present in
almost all European countries, by means of its own subsidiary or via a marketing
and sales partnership. There is no stem cell bank that can match Cryo-Save's
geographic spread.
In 2009 there have been several new entrants to the market. Despite this, in
almost all countries the Group maintained or even strengthened its leading
position. Cryo-Save was the first Company that introduced the storage of cord
tissue in several European countries.
In 2009 the Group continued its marketing and sales approach concentrating on
customer acquisition through diagnostic centres and private clinics. Also some
contracts with leading private insurers that support this service towards their
clients were renewed.
In Asia, the main market for Cryo-Save is currently India. The Group has
introduced its services successfully to the market, in several key metropolitan
cities. The concept of banking umbilical cord blood and the cord tissue is
rapidly developing across the country but particularly in urban centres. Public
banking has yet to take off, partly because donation to a public bank is
hampered by the fact that there is a high human leukocyte antigen (HLA)
diversity in the country, which makes a perfect HLA match between donor and
patient difficult to achieve. In slightly over a year Cryo-Save has already
gained a strong market position.
Applied research & development of new services
In the last four months of 2009, after a long period of development and
validation, the Group rolled out its new combined service of storing stem cells
from both the cord blood and umbilical cord itself, in the largest markets
Hungary, Italy and Spain. The uptake by customers has been ahead of
expectations.
The development and validation of the new Cryo-Lip service, which is scheduled
to be launched during the first half year of 2010, progressed well in 2009.
Cryo-Lip involves the collection and storage of fat tissue containing
mesenchymal stem cells obtained via liposuction from adults. In the first half
year of 2009 the Group undertook a detailed validation of the collection and
processing procedures. During the second half of 2009 Cryo-Save further
optimised all of the procedures, including the devices to be used, in order to
improve the quality and lower the cost of the service. A detailed business plan
to introduce Cryo-Lip to the market was developed and first contacts with
Europe's premium cosmetic and plastic surgery clinics were made. These clinics
will be the primary point of contact and sale for this innovative new service
offering.
The three year long CRYSTAL project which was funded by the European
Commission's 6th Framework programme for Research and Development (FP6),
completed during 2009. In 2007 Cryo-Save was selected to work alongside five
European universities, two SMEs and one research institute to collaborate under
the auspices of the University of Cologne, in a major project to develop tools
and procedures to enable cryo-preservation of different types of stem cells in
order to generate sufficient amounts of high-quality stem cells for therapeutic
use. The objectives of the research revolved around three axes: preparation and
cultivation methods, preservation methods, and validation methods. As a result
of its participation in this project Cryo-Save is now at the leading edge of
freezing cells for therapeutic use.
Following the completion of CRYSTAL, the European Commission Framework 7 has now
funded and launched the HYPERLAB project. Cryo-Save is one of eight institutions
which will collaborate under the coordination of Prof. Dr. Heiko Zimmermann.
This three years project, which was launched on 1 February 2010, aims to develop
new and improved culture methods, media, and protocols for stem cell cultivation
and differentiation.
Cryo-Save is the only cord blood bank in Europe to take part in these advanced
projects - reflecting both its market leading position and its commitment to the
development of stem cell research.
Delisting from London Stock Exchange/AIM
The Group is currently listed on the NYSE Euronext Amsterdam Stock Exchange and
the non-regulated London Stock Exchange AIM market. Following examination of the
Company's shareholder base, the costs involved in maintaining its listings, and
shareholder liquidity, the Board has decided to delist from AIM in order to
increase liquidity of its shares on NYSE Euronext Amsterdam Stock Exchange and
to save the costs from two listings. A further announcement will be made in due
course outlining the delisting process and the implications for shareholders.
Current trading and outlook
In the second half of 2009 Cryo-Save strengthened its strategic position and
operational capabilities. The combined service of cord blood and cord tissue
storage has been well accepted by the market and is expected to result in higher
revenue in 2010. In the first half of 2010 the new service Cryo-Lip is planned
for launch whilst restructurings and cost savings in 2009 will also result in a
higher operational gearing in 2010.
With the Group's increased geographic spread, and new services, the Board is
confident that Cryo-Save will continue to maintain its rapid growth.
Consolidated statement of income
in thousands of euros
+--------------------------------------------------+-------+-----------+----------+
| |Notes | 2009 | 2008 |
+--------------------------------------------------+-------+-----------+----------+
| | | | |
+--------------------------------------------------+-------+-----------+----------+
| Revenue | 9 | 38,391 | 29,485 |
+--------------------------------------------------+-------+-----------+----------+
| Cost of sales | | (11,168) | (9,278) |
+--------------------------------------------------+-------+-----------+----------+
| Gross profit | | 27,223 | 20,207 |
+--------------------------------------------------+-------+-----------+----------+
| | | | |
+--------------------------------------------------+-------+-----------+----------+
| Marketing and sales expenses | 10 | | |
+--------------------------------------------------+-------+-----------+----------+
| - Other marketing and sales expenses | | 10,147 | 7,817 |
+--------------------------------------------------+-------+-----------+----------+
| - Non-recurring restructuring expenses | | 421 | - |
+--------------------------------------------------+-------+-----------+----------+
| Research and development expenses | 11 | 403 | 97 |
+--------------------------------------------------+-------+-----------+----------+
| General and administrative expenses | 12 | | |
+--------------------------------------------------+-------+-----------+----------+
| - Other general and administrative expenses | | 11,945 | 9,986 |
+--------------------------------------------------+-------+-----------+----------+
| - Non-recurring write-down on equity accounted | | 1,027 | - |
| investees | | | |
+--------------------------------------------------+-------+-----------+----------+
| - Non-recurring listing expenses | | 952 | - |
+--------------------------------------------------+-------+-----------+----------+
| Total operating expenses | | 24,895 | 17,900 |
+--------------------------------------------------+-------+-----------+----------+
| Operating profit | | 2,328 | 2,307 |
+--------------------------------------------------+-------+-----------+----------+
| | | | |
+--------------------------------------------------+-------+-----------+----------+
| Finance income | 15 | 118 | 988 |
+--------------------------------------------------+-------+-----------+----------+
| Finance costs | 16 | (663) | (434) |
+--------------------------------------------------+-------+-----------+----------+
| Net finance (costs)/income | | (545) | 554 |
+--------------------------------------------------+-------+-----------+----------+
| | | | |
+--------------------------------------------------+-------+-----------+----------+
| Results relating to equity-accounted investees | | 0 | 0 |
+--------------------------------------------------+-------+-----------+----------+
| Profit before taxation | | 1,783 | 2,861 |
+--------------------------------------------------+-------+-----------+----------+
| | | | |
+--------------------------------------------------+-------+-----------+----------+
| | | | |
+--------------------------------------------------+-------+-----------+----------+
| Income tax expense | 17 | 431 | 293 |
+--------------------------------------------------+-------+-----------+----------+
| Profit for the year | | 1,352 | 2,568 |
+--------------------------------------------------+-------+-----------+----------+
| | | | |
+--------------------------------------------------+-------+-----------+----------+
| Attributable to: | | | |
+--------------------------------------------------+-------+-----------+----------+
| - Equity holders of the Company | | 1,352 | 2,568 |
+--------------------------------------------------+-------+-----------+----------+
| - Non-controlling interest | | - | - |
+--------------------------------------------------+-------+-----------+----------+
| Profit for the year | | 1,352 | 2,568 |
+--------------------------------------------------+-------+-----------+----------+
| | | | |
+--------------------------------------------------+-------+-----------+----------+
| Earnings per share (in euro cents) | 18 | | |
+--------------------------------------------------+-------+-----------+----------+
| - Basic* | | 14.6 | 27.3 |
+--------------------------------------------------+-------+-----------+----------+
| - Diluted* | | 14.6 | 27.3 |
+--------------------------------------------------+-------+-----------+----------+
* The comparative figures have been restated for the 5:1 share consolidation.
Consolidated statement of comprehensive income
in thousands of euros
+--------------------------------------------------+------+-----------+----------+
| | | 2009 | 2008 |
+--------------------------------------------------+------+-----------+----------+
| | | | |
+--------------------------------------------------+------+-----------+----------+
| Profit for the year | | 1,352 | 2,568 |
+--------------------------------------------------+------+-----------+----------+
| | | | |
+--------------------------------------------------+------+-----------+----------+
| Other comprehensive income | | | |
+--------------------------------------------------+------+-----------+----------+
| Foreign currency translation differences | | (235) | (428) |
+--------------------------------------------------+------+-----------+----------+
| Other comprehensive income for the year | | (235) | (428) |
+--------------------------------------------------+------+-----------+----------+
| Total comprehensive income for the year | | 1,117 | 2,140 |
+--------------------------------------------------+------+-----------+----------+
| | | | |
+--------------------------------------------------+------+-----------+----------+
| | | | |
+--------------------------------------------------+------+-----------+----------+
| Attributable to: | | | |
+--------------------------------------------------+------+-----------+----------+
| - Equity holders of the Company | | 1,117 | 2,140 |
+--------------------------------------------------+------+-----------+----------+
| - Non-controlling interest | | - | - |
+--------------------------------------------------+------+-----------+----------+
| Total comprehensive income for the year | | 1,117 | 2,140 |
+--------------------------------------------------+------+-----------+----------+
| | | | |
+--------------------------------------------------+------+-----------+----------+
| | | | |
+--------------------------------------------------+------+-----------+----------+
| | | | |
+--------------------------------------------------+------+-----------+----------+
| | | | |
+--------------------------------------------------+------+-----------+----------+
| | | | |
+--------------------------------------------------+------+-----------+----------+
| | | | |
+--------------------------------------------------+------+-----------+----------+
| | | | |
+--------------------------------------------------+------+-----------+----------+
| | | | |
+--------------------------------------------------+------+-----------+----------+
| | | | |
+--------------------------------------------------+------+-----------+----------+
Consolidated statement of financial position
in thousands of euros
at 31 December
+--------------------------------------------------+-------+----------+----------+
| |Notes | 2009 | 2008 |
+--------------------------------------------------+-------+----------+----------+
| Assets | | | |
+--------------------------------------------------+-------+----------+----------+
| Intangible assets | 19 | 35,366 | 37,438 |
+--------------------------------------------------+-------+----------+----------+
| Property, plant and equipment | | 13,964 | 10,421 |
+--------------------------------------------------+-------+----------+----------+
| Investments in equity accounted investees | | 0 | 0 |
+--------------------------------------------------+-------+----------+----------+
| Deferred tax assets | | 1,121 | 640 |
+--------------------------------------------------+-------+----------+----------+
| Trade and other receivables | | 1,054 | 1,304 |
+--------------------------------------------------+-------+----------+----------+
| Total non-current assets | | 51,505 | 49,803 |
+--------------------------------------------------+-------+----------+----------+
| | | | |
+--------------------------------------------------+-------+----------+----------+
| Inventories | | 251 | 287 |
+--------------------------------------------------+-------+----------+----------+
| Trade and other receivables | | 8,907 | 8,156 |
+--------------------------------------------------+-------+----------+----------+
| Current tax assets | | 687 | 1,205 |
+--------------------------------------------------+-------+----------+----------+
| Cash and cash equivalents | | 7,485 | 4,697 |
+--------------------------------------------------+-------+----------+----------+
| Total current assets | | 17,330 | 14,345 |
+--------------------------------------------------+-------+----------+----------+
| | | | |
+--------------------------------------------------+-------+----------+----------+
| Total assets | | 68,835 | 64,148 |
+--------------------------------------------------+-------+----------+----------+
| | | | |
+--------------------------------------------------+-------+----------+----------+
| Equity | 20 | | |
+--------------------------------------------------+-------+----------+----------+
| Issued share capital | | 964 | 964 |
+--------------------------------------------------+-------+----------+----------+
| Share premium reserve | | 38,178 | 38,178 |
+--------------------------------------------------+-------+----------+----------+
| Revaluation reserve | | 669 | 769 |
+--------------------------------------------------+-------+----------+----------+
| Legal reserve | | 134 | 108 |
+--------------------------------------------------+-------+----------+----------+
| Translation reserve | | (683) | (448) |
+--------------------------------------------------+-------+----------+----------+
| Treasury shares | | (3,664) | (3,497) |
+--------------------------------------------------+-------+----------+----------+
| Retained earnings | | 8,209 | 6,979 |
+--------------------------------------------------+-------+----------+----------+
| Equity attributable to equity holders of the | | 43,807 | 43,053 |
| Company | | | |
+--------------------------------------------------+-------+----------+----------+
| Non-controlling interest | | - | - |
+--------------------------------------------------+-------+----------+----------+
| Total equity | | 43,807 | 43,053 |
+--------------------------------------------------+-------+----------+----------+
| | | | |
+--------------------------------------------------+-------+----------+----------+
| Liabilities | | | |
+--------------------------------------------------+-------+----------+----------+
| Borrowings | 21 | 3,795 | 111 |
+--------------------------------------------------+-------+----------+----------+
| Deferred revenue | 22 | 6,090 | 4,885 |
+--------------------------------------------------+-------+----------+----------+
| Deferred considerations | 23 | 2,080 | 5,777 |
+--------------------------------------------------+-------+----------+----------+
| Deferred tax liabilities | | 2,656 | 2,827 |
+--------------------------------------------------+-------+----------+----------+
| Other liabilities | 23 | 84 | 53 |
+--------------------------------------------------+-------+----------+----------+
| Total non-current liabilities | | 14,705 | 13,653 |
+--------------------------------------------------+-------+----------+----------+
| | | | |
+--------------------------------------------------+-------+----------+----------+
| Borrowings | 21 | 180 | 38 |
+--------------------------------------------------+-------+----------+----------+
| Trade and other payables | | 6,533 | 4,193 |
+--------------------------------------------------+-------+----------+----------+
| Deferred revenue | 22 | 471 | 389 |
+--------------------------------------------------+-------+----------+----------+
| Deferred considerations | | 1,264 | 859 |
+--------------------------------------------------+-------+----------+----------+
| Current tax liabilities | | 1,875 | 1,963 |
+--------------------------------------------------+-------+----------+----------+
| Total current liabilities | | 10,323 | 7,442 |
+--------------------------------------------------+-------+----------+----------+
| | | | |
+--------------------------------------------------+-------+----------+----------+
| Total liabilities | | 25,028 | 21,095 |
+--------------------------------------------------+-------+----------+----------+
| Total equity and liabilities | | 68,835 | 64,148 |
+--------------------------------------------------+-------+----------+----------+
Consolidated statement of changes in equity
in thousands of euros
+------------------------+---------+----------+-----------+-----------------+----------+
| | Issued | Treasury | Other | Non-controlling | Total |
| | | | reserves | interest | equity |
| | share | shares | | | |
| | capital | | | | |
+------------------------+---------+----------+-----------+-----------------+----------+
| At 1 January 2008 | 964 | (435) | 42,392 | - | 42,921 |
+------------------------+---------+----------+-----------+-----------------+----------+
| | | | | | |
+------------------------+---------+----------+-----------+-----------------+----------+
| Exchange differences | | | | | |
| on | | | | | |
+------------------------+---------+----------+-----------+-----------------+----------+
| translating foreign | | | (428) | | (428) |
| operations | | | | | |
+------------------------+---------+----------+-----------+-----------------+----------+
| Other comprehensive | | | (428) | | (428) |
| income | | | | | |
+------------------------+---------+----------+-----------+-----------------+----------+
| | | | | | |
+------------------------+---------+----------+-----------+-----------------+----------+
| Profit for the year | | | 2,568 | | 2,568 |
+------------------------+---------+----------+-----------+-----------------+----------+
| Comprehensive income | | | | | |
+------------------------+---------+----------+-----------+-----------------+----------+
| for the year | | | 2,140 | | 2,140 |
+------------------------+---------+----------+-----------+-----------------+----------+
| | | | | | |
+------------------------+---------+----------+-----------+-----------------+----------+
| Share-based payments | | | 211 | | 211 |
+------------------------+---------+----------+-----------+-----------------+----------+
| Repurchased shares | | (3,062) | | | (3,062) |
+------------------------+---------+----------+-----------+-----------------+----------+
| Acquisitions | | | 843 | | 843 |
+------------------------+---------+----------+-----------+-----------------+----------+
| At 31 December 2008 | 964 | (3,497) | 45,586 | - | 43,053 |
+------------------------+---------+----------+-----------+-----------------+----------+
+------------------------+--------+-+---------+--+--------+----------+---------+----------+----------+
| Exchange differences | | | | | | | | | |
| on | | | | | | | | | |
+------------------------+--------+-+---------+--+--------+----------+---------+----------+----------+
| translating foreign | | | | | (235) | | | | (235) |
| operations | | | | | | | | | |
+------------------------+--------+-+---------+--+--------+----------+---------+----------+----------+
| Other comprehensive | | | | | (235) | | | | (235) |
| income | | | | | | | | | |
+------------------------+--------+-+---------+--+--------+----------+---------+----------+----------+
| | | | | | | | | | |
+------------------------+--------+-+---------+--+--------+----------+---------+----------+----------+
| Profit for the year | | | | | 1,352 | | | | 1,352 |
+------------------------+--------+-+---------+--+--------+----------+---------+----------+----------+
| Comprehensive income | | | | | 1,117 | | | 1 | 1,117 |
+------------------------+--------+-+---------+--+--------+----------+---------+----------+----------+
| for the year | | | | | | | | | |
+------------------------+--------+-+---------+--+--------+----------+---------+----------+----------+
| | | | | | | | | | |
+------------------------+--------+-+---------+--+--------+----------+---------+----------+----------+
| Share-based payments | | | | | 266 | | | | 266 |
+------------------------+--------+-+---------+--+--------+----------+---------+----------+----------+
| Repurchased shares | | | (167) | | | | | | (167) |
+------------------------+--------+-+---------+--+--------+----------+---------+----------+----------+
| Dividend distributed | | | | | (462) | | | | (462) |
+------------------------+--------+-+---------+--+--------+----------+---------+----------+----------+
| At 31 December 2009 | 964 | | (3,664) | | 46,507 | | - | | 43,807 |
+------------------------+--------+-+---------+--+--------+----------+---------+----------+----------+
Consolidated statement of cash flows
in thousands of euros
+------------------------------------------------+-----------+----------+
| | 2009 | 2008 |
+------------------------------------------------+-----------+----------+
| Cash flows from operating activities | | |
+------------------------------------------------+-----------+----------+
| Profit for the year | 1,352 | 2,568 |
+------------------------------------------------+-----------+----------+
| Adjustments for: | | |
+------------------------------------------------+-----------+----------+
| Income tax expense | 431 | 293 |
+------------------------------------------------+-----------+----------+
| Finance costs | 663 | 434 |
+------------------------------------------------+-----------+----------+
| Finance income | (118) | (988) |
+------------------------------------------------+-----------+----------+
| Gain on sale of disposals | (16) | (27) |
+------------------------------------------------+-----------+----------+
| Depreciation and amortization | 2,319 | 1,644 |
+------------------------------------------------+-----------+----------+
| Equity settled share-based payments | 266 | 211 |
| transactions | | |
+------------------------------------------------+-----------+----------+
| | 4,897 | 4,135 |
+------------------------------------------------+-----------+----------+
| Organic movements in working capital | | |
+------------------------------------------------+-----------+----------+
| (Increase)/decrease in (non)current trade and | (501) | (1,105) |
| other receivables | | |
+------------------------------------------------+-----------+----------+
| (Increase)/decrease in inventories | 36 | (67) |
+------------------------------------------------+-----------+----------+
| (Increase)/decrease in (non)current tax assets | 222 | (1,024) |
+------------------------------------------------+-----------+----------+
| Increase/(decrease) in (non)current | 2,263 | 227 |
| liabilities | | |
+------------------------------------------------+-----------+----------+
| Increase/(decrease) in (non)current tax | (213) | (290) |
| liabilities | | |
+------------------------------------------------+-----------+----------+
| Net cash from operations | 6,704 | 1,876 |
+------------------------------------------------+-----------+----------+
| | | |
+------------------------------------------------+-----------+----------+
| Interest paid | (370) | (192) |
+------------------------------------------------+-----------+----------+
| Interest received | 118 | 980 |
+------------------------------------------------+-----------+----------+
| Income taxes paid | (1,671) | (628) |
+------------------------------------------------+-----------+----------+
| Net cash from operating activities | 4,781 | 2,036 |
+------------------------------------------------+-----------+----------+
| | | |
+------------------------------------------------+-----------+----------+
| Cash flows from investing activities | | |
+------------------------------------------------+-----------+----------+
| Net acquisition spending | (428) | (24,445) |
+------------------------------------------------+-----------+----------+
| Purchase of property, plant and equipment | (4,644) | (9,006) |
+------------------------------------------------+-----------+----------+
| Purchase of intangible assets | (217) | (400) |
+------------------------------------------------+-----------+----------+
| Disposals of non-current assets | 118 | 123 |
+------------------------------------------------+-----------+----------+
| Net cash (used in)/generated by investing | (5,171) | (33,728) |
| activities | | |
+------------------------------------------------+-----------+----------+
| | | |
+------------------------------------------------+-----------+----------+
| Cash flows from financing activities | | |
+------------------------------------------------+-----------+----------+
| Repurchase of own shares | (167) | (3,062) |
+------------------------------------------------+-----------+----------+
| Divided distributed | (462) | - |
+------------------------------------------------+-----------+----------+
| Redemption of borrowings | (474) | (15) |
+------------------------------------------------+-----------+----------+
| Proceeds from borrowings | 4,300 | 15 |
+------------------------------------------------+-----------+----------+
| Net cash generated by/(used in) financing | 3,197 | (3,062) |
| activities | | |
+------------------------------------------------+-----------+----------+
| | | |
+------------------------------------------------+-----------+----------+
| Net increase/(decrease) in cash and cash | 2,807 | (34,754) |
| equivalents | | |
+------------------------------------------------+-----------+----------+
| | | |
+------------------------------------------------+-----------+----------+
| Cash and cash equivalents at 1 January | 4,697 | 39,465 |
+------------------------------------------------+-----------+----------+
| Exchange differences on cash and cash | (19) | (14) |
| equivalents | | |
+------------------------------------------------+-----------+----------+
| Cash and cash equivalents at 31 December | 7,485 | 4,697 |
+------------------------------------------------+-----------+----------+
Notes to the consolidated financial information
(in thousands of euro, unless indicated otherwise)
1. Reporting entity
Cryo-Save Group N.V. ('the Company' or 'the Group') is a limited liability
company domiciled in The Netherlands. The address of its registered office and
principal place of business is IJsselkade 8, 7201 HB Zutphen, The Netherlands.
The Group's principal activity is the collection, processing and storage of
human adult stem cells collected from the umbilical cord blood, and the
umbilical cord itself, at birth.
2. Basis of preparation
Statement of compliance
The consolidated financial statements for the year ended 31 December 2009 were
authorized for issue by the Board of Directors on 19 March 2010.
The consolidated financial statements of the Group have been prepared in
accordance with International Financial Reporting Standards (IFRS) and
International Accounting Standards (IAS) prevailing per 31 December 2009, as
adopted by the International Accounting Standards Board (IASB) and as endorsed
for use in the European Union by the European Commission as at 31 December 2009,
and are prepared on a historical cost basis unless stated otherwise.
The full year 2009 financial figures of Cryo-Save Group N.V. included in the
primary statements in this report are derived from the financial statements
2009. These financial statements have been authorized for issue. The financial
statements have not yet been published by law and still have to be adopted by
the General Meeting of Shareholders. In accordance with section 2:393 BW, KPMG
Accountants N.V. has issued an unqualified auditors opinion on these financial
statements, which will be published on 19 April 2010.
3. Significant accounting policies
New standards and interpretations
The first time application of the amendments and interpretations that became
effective for the year ended 31 December 2009, as listed below, did not result
in substantial changes to the Group's accounting policies:
* Revised IAS 23 Borrowing costs (effective 1 January 2009);
* Revised IAS 1 Presentation of Financial Statements (effective 1 January 2009);
* IAS 27 (Revised) Consolidated and Separate Financial Statements (effective 1
January 2009);
* IFRS 2 (Amendment) Share-based payments (effective 1 January 2009).
The impact of the above standards changes on the Group's equity and result is
not material.
IFRS 3 Business Combinations (Revised) (effective 1 July 2009)
The new standard will become effective for the Group's 2010 financial
statements. The Group has not opted for earlier application. The following key
changes within IFRS 3 Business Combinations (Revised) could have a significant
impact:
* Contingent purchase considerations initially measured at fair value, whereby
and re-measurement is recognized via the statement of income.
* Acquisition-related costs are to be expenses.
The Group opted for early application of IFRS 8 in the consolidated financial
statements for the year ended 31 December 2008.
For further details on the principle accounting policies of the Group, we refer
to our website, www.cryo-savegroup.com, Investor Relations.
4. Change in accounting estimates
In 2009 the Group did not change any accounting estimate.
5. Use of estimates and judgements
The preparation of the consolidated financial statements requires management to
make judgments, estimates and assumptions that affect the application of
accounting policies and the reported amount of assets, liabilities, income and
expenses. Actual results may differ from these estimates. Estimates and
underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognized in the period in which the estimate is revised and in
any future periods affected.
6. Seasonality
The operations of the Company are not impacted by seasonal or cyclical purchase
patterns.
7. Acquisitions
Italy
In July 2009, Cryo-Save acquired Salus Futura Ltd, United Kingdom, which holds
all shares of Salus Futura Srl, Italy ('Salus Futura'), for an initial amount of
EUR0.4 million payable in cash and a deferred performance related payment, payable
annually on the achievement of certain goals until 31 May 2012. Salus Futura is
an Italian stem cell storage marketing and distribution company. Salus Futura
concentrates primarily on customer acquisition through diagnostic centers and
private clinics.
The Salus Futura organization was fully integrated into the Cryo-Save Italy
organization, hence no separate financial information with respect to the
revenue contribution for the year 2009 and contribution to the 2009 operating
profit on this acquisition is available.
Breakdown
Total net acquisition spending in 2009 was EUR0.4 million (2008: EUR24.4 million).
This includes an amount of EUR49,000 relating to costs that are directly
attributable to the Salus Futura acquisition, such as legal fees and audit fees.
The acquisition during 2009 had the following effects on the assets and
liabilities of the Group:
+-------------------------------------+----------+-------------+------------+
| | Carrying | Fair | Recognized |
| | amount | value | values |
| | | adjustments | |
+-------------------------------------+----------+-------------+------------+
| Non-current assets | 2 | 100 | 102 |
+-------------------------------------+----------+-------------+------------+
| Current assets | 254 | - | 254 |
+-------------------------------------+----------+-------------+------------+
| Non-current liabilities | - | - | - |
+-------------------------------------+----------+-------------+------------+
| Current liabilities | (509) | - | (509) |
+-------------------------------------+----------+-------------+------------+
| Deferred tax liabilities | - | (26) | (26) |
+-------------------------------------+----------+-------------+------------+
| Net identifiable assets and | (253) | 74 | (179) |
| liabilities | | | |
+-------------------------------------+----------+-------------+------------+
| Goodwill on acquisitions | | | 628 |
+-------------------------------------+----------+-------------+------------+
| Consideration | | | 449 |
+-------------------------------------+----------+-------------+------------+
| Cash acquired | | | 21 |
+-------------------------------------+----------+-------------+------------+
| Deferred considerations | | | 0 |
+-------------------------------------+----------+-------------+------------+
| Net acquisition spending | | | 428 |
+-------------------------------------+----------+-------------+------------+
The fair value adjustment of EUR0.1 million related to the identified intangible
assets regarding contracts with diagnostic centers. With respect to these
intangible assets, a deferred tax liability was recognized. The goodwill of EUR0.6
million is mainly attributable to the skills and talent of Salus Futura's
management and the synergies expected to be achieved from integrating Salus
Futura into the Group's existing stem cell storage activities. The goodwill was
allocated to the 'stem cell storage' segment.
8. Operating segments
Since the acquisition of Output Pharma Services GmbH ('Output') in January 2008,
the Group identified two operating segments: the extraction and storage of adult
human stem cells, and other types of products and services. The latter mainly
consists of Output.
There are no material levels of integration between the two reportable segments.
The accounting policies of the reportable segments are the same, expect for
revenue recognition. Information regarding the results of each reportable
segments is included below. Performance is measured based on EBITA (earnings
before interest, tax and amortization on identified intangible assets), as
included in the internal management reports that are reviewed by the Board.
There are no inter-segment transactions.
Corporate overhead costs were not allocated to the segment 'other', but to the
segment 'stem cell storage'.
Information about reportable segments
+--------------------------+---------+---------+-------+-------+----------+----------+
| for the year ended | Stem cell | Other | Total |
| 31 December | storage | | |
+--------------------------+-------------------+---------------+---------------------+
| | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 |
+--------------------------+---------+---------+-------+-------+----------+----------+
| Revenue | | | | | | |
+--------------------------+---------+---------+-------+-------+----------+----------+
| Segment revenue | 36,962 | 27,698 | 1,429 | 1,787 | 38,391 | 29,485 |
+--------------------------+---------+---------+-------+-------+----------+----------+
| Other segment | | | | | | |
| information | | | | | | |
+--------------------------+---------+---------+-------+-------+----------+----------+
| EBITA | 3,459 | 3,164 | 92 | 220 | 3,551 | 3,384 |
+--------------------------+---------+---------+-------+-------+----------+----------+
| Finance income | 110 | 987 | 8 | 1 | 118 | 988 |
+--------------------------+---------+---------+-------+-------+----------+----------+
| Finance expense | (663) | (426) | (0) | (8) | (663) | (434) |
+--------------------------+---------+---------+-------+-------+----------+----------+
| Depreciation and | (2,300) | (1,621) | (19) | (23) | (2,319) | (1,644) |
| amortization | | | | | | |
+--------------------------+---------+---------+-------+-------+----------+----------+
| Profit before taxation | 1,684 | 2,652 | 99 | 209 | 1,783 | 2,861 |
+--------------------------+---------+---------+-------+-------+----------+----------+
| Income tax expense | 404 | 227 | 27 | 66 | 431 | 293 |
+--------------------------+---------+---------+-------+-------+----------+----------+
| Segment assets | 68,337 | 63,662 | 498 | 486 | 68,835 | 64,148 |
+--------------------------+---------+---------+-------+-------+----------+----------+
| Segment liabilities | 24,901 | 20,908 | 127 | 187 | 25,028 | 21,095 |
+--------------------------+---------+---------+-------+-------+----------+----------+
| Capital expenditure | 4,856 | 9,381 | 5 | 25 | 4,861 | 9,406 |
+--------------------------+---------+---------+-------+-------+----------+----------+
Revenue from external customers attributed to the Company's country of domicile,
the Netherlands, amounted to EUR0.3 million (2008: EUR0.3 million).
Geographical information
In presenting information on the basis of geographical information, revenue per
continent is based on the geographical location of customers. Non-current
assets, other than financial instruments and deferred tax assets, are based on
the geographical location of the assets.
+----------------------------+-----+------------+--------+----------+----------+
| | | Revenue | Non-current assets |
| for the year ended | | | |
| 31 December | | | |
+----------------------------+-----+---------------------+---------------------+
| | | 2009 | 2008 | 2009 | 2008 |
+----------------------------+-----+------------+--------+----------+----------+
| Europe | | 36,525 | 28,521 | 48,617 | 47,071 |
+----------------------------+-----+------------+--------+----------+----------+
| Asia | | 1,193 | 420 | 711 | 786 |
+----------------------------+-----+------------+--------+----------+----------+
| Africa | | 673 | 544 | 2 | 2 |
+----------------------------+-----+------------+--------+----------+----------+
| Total | | 38,391 | 29,485 | 49,330 | 47,859 |
+----------------------------+-----+------------+--------+----------+----------+
9. Revenue
+------------------------------------------------------------+----------+----------+
| | 2009 | 2008 |
+------------------------------------------------------------+----------+----------+
| Stem cell extraction and storage | 36,962 | 27,698 |
+------------------------------------------------------------+----------+----------+
| Other products and services | 1,429 | 1,787 |
+------------------------------------------------------------+----------+----------+
| Total revenue | 38,391 | 29,485 |
+------------------------------------------------------------+----------+----------+
Revenue from stem cell extraction and storage include the impact of the change
of the discount rate on the net present value of deferred revenue amounting to
EUR0.2 million additional revenue (2008: EUR0.2 million additional revenue). The
discount rate is consistently based on the 20 years AAA-rated euro area
government bonds interest rate, which amounted to 4.4% as at 31 December 2009
(31 December 2008: 4.0%), plus a liquidity premium of 1.0%
10. Marketing and sales expenses
+------------------------------------------------------------+----------+----------+
| | 2009 | 2008 |
+------------------------------------------------------------+----------+----------+
| Employee benefit expenses | 6,439 | 5,465 |
+------------------------------------------------------------+----------+----------+
| Non-recurring restructuring expenses | 421 | - |
+------------------------------------------------------------+----------+----------+
| Other marketing expenses | 3,708 | 2,352 |
+------------------------------------------------------------+----------+----------+
| Total marketing and sales expenses | 10,568 | 7,817 |
+------------------------------------------------------------+----------+----------+
Following the acquisition of Salus Futura in July 2009, we integrated both
companies and restructured top management. This resulted in material redundancy
payments, but will also lead to significantly lower operating costs in the
coming years.
11. Research and development expenses
+------------------------------------------------------------+----------+----------+
| | 2009 | 2008 |
+------------------------------------------------------------+----------+----------+
| Employee benefit expenses | 265 | 69 |
+------------------------------------------------------------+----------+----------+
| Other research and development costs | 138 | 28 |
+------------------------------------------------------------+----------+----------+
| Total research and development expenses | 403 | 97 |
+------------------------------------------------------------+----------+----------+
Employee benefit expenses increased in 2009 due to less capitalized development
costs. Number of staff did not increase. Other research and development costs
included EUR0.1 million contribution to third parties' research projects.
12. General and administrative expenses
+------------------------------------------------------------+----------+----------+
| | 2009 | 2008 |
+------------------------------------------------------------+----------+----------+
| Employee benefit expenses | 4,392 | 3,455 |
+------------------------------------------------------------+----------+----------+
| Other general and administrative expenses | 7,553 | 6,531 |
+------------------------------------------------------------+----------+----------+
| Non-recurring write-down on equity accounted investees | 1,027 | - |
+------------------------------------------------------------+----------+----------+
| Non-recurring listing expenses | 952 | - |
+------------------------------------------------------------+----------+----------+
| Total general and administrative expenses | 13,924 | 9,986 |
+------------------------------------------------------------+----------+----------+
Employee benefit expenses increased EUR0.9 million due to the full year impact of
the acquired companies in 2008 and investments made in India and France. Other
general and administrative expenses mainly increased due to the increase of
depreciation and amortization (EUR+0.7 million).
The non-recurring listing expenses related to the listing of Cryo-Save Group at
NYSE Euronext Amsterdam at 22 October 2009. The expenses mainly relate to
advisers fees.
Cryo-Save's associate Cryo-Save Arabia, which operates in the United Arab
Emirates, saw a significantly decrease in sales during 2009. As a result, the
Group wrote down EUR1.0 million of receivables due from Cryo-Save Arabia. This
relates to non-cash fees of EUR0.5 million services regarding the construction of
the processing and storage facility, a non-cash royalty fee of EUR0.2 million for
samples processed and stored in Dubai, and a fee of EUR0.3 million for samples
processed and stored in Belgium processing and storage facility from UAE
customers. The receivables comprise of EUR0.5 million relating to 2007, EUR0.3
million to 2008 and EUR0.2 million to 2009.
13. Employee benefit expenses
+--------------------------------------------------+----------+----------+
| | 2009 | 2008 |
+--------------------------------------------------+----------+----------+
| Salaries and wages | 9,665 | 7,308 |
+--------------------------------------------------+----------+----------+
| Social security costs | 1,244 | 1,016 |
+--------------------------------------------------+----------+----------+
| Cost of defined contribution plans | 119 | 74 |
+--------------------------------------------------+----------+----------+
| Share-based payment expenses | 266 | 211 |
+--------------------------------------------------+----------+----------+
| Other personnel expenses | 223 | 380 |
+--------------------------------------------------+----------+----------+
| Total employee benefit expenses | 11,517 | 8,989 |
+--------------------------------------------------+----------+----------+
The number of employees, expressed in full-time equivalents, is 250 as at 31
December 2009 (2008: 196). Full time equivalents (FTEs) increased organically by
54, mainly reflecting the increase of investments in sales staff in India and
France.
14. Depreciation and amortization expenses
+--------------------------------------------------+----------+----------+
| | 2009 | 2008 |
+--------------------------------------------------+----------+----------+
| Depreciation of property, plant and equipment | 999 | 551 |
+--------------------------------------------------+----------+----------+
| Amortization of intangible assets regarding | 1,223 | 1,077 |
| acquisitions | | |
+--------------------------------------------------+----------+----------+
| Amortization of other intangible assets | 97 | 16 |
+--------------------------------------------------+----------+----------+
| Total depreciation and amortization expenses | 2,319 | 1,644 |
+--------------------------------------------------+----------+----------+
The increase of depreciation expenses is mainly due to the new processing and
storage facility in Belgium. The increase of amortization expenses is due to the
full year impact on amortization of identified assets, such as customer
relationship, brand name, contracts and order backlog.
15. Finance income
+--------------------------------------------------+----------+----------+
| | 2009 | 2008 |
+--------------------------------------------------+----------+----------+
| Interest income bank and deposits | 107 | 789 |
+--------------------------------------------------+----------+----------+
| Currency translation differences | 11 | 199 |
+--------------------------------------------------+----------+----------+
| Total finance income | 118 | 988 |
+--------------------------------------------------+----------+----------+
Interest income mainly comprise of interest on bank deposits. Interest income
decreased significantly due to a lower cash position in 2009 following the
acquisition spending in 2008 and lower interest rates.
16. Finance costs
+------------------------------------------------------------+----------+----------+
| | 2009 | 2008 |
+------------------------------------------------------------+----------+----------+
| Bank charges and other finance costs | 280 | 192 |
+------------------------------------------------------------+----------+----------+
| Unwinding of discounted deferred considerations | 293 | 242 |
+------------------------------------------------------------+----------+----------+
| Interest expense sale and leaseback | 90 | - |
+------------------------------------------------------------+----------+----------+
| Total finance costs | 663 | 434 |
+------------------------------------------------------------+----------+----------+
The unwinding of discounted deferred considerations related to three performance
plans with former shareholders of acquired companies. These costs are non-cash
items.
The interest expenses related to the sale and leaseback agreement dated 1
September 2009 of EUR4.3 million at a fixed interest percentage of 5.5% for the
period of 15 years.
17. Income tax expense
+------------------------------------------------------------+----------+-------------------+
| | 2009 | 2008 |
+------------------------------------------------------------+----------+-------------------+
| Income tax recognized in profit or loss | 431 | 293 |
+------------------------------------------------------------+----------+-------------------+
| | | |
+------------------------------------------------------------+----------+-------------------+
| Tax expense comprises: | | |
+------------------------------------------------------------+----------+-------------------+
| Current tax expense/(income) | 1,476 | 988 |
+------------------------------------------------------------+----------+-------------------+
| Deferred tax expense/(income) | (678) | (695) |
+------------------------------------------------------------+----------+-------------------+
| Prior year's tax difference | (367) | - |
+------------------------------------------------------------+----------+-------------------+
| Total tax expense | 431 | 293 |
+------------------------------------------------------------+----------+-------------------+
| | | |
| Reconciliation of the effective tax rate: | | |
+------------------------------------------------------------+----------+-------------------+
| Profit before taxation | 1,783 | 2,861 |
+------------------------------------------------------------+----------+-------------------+
| Income tax using the Company's domestic tax rate | 455 | 730 |
+------------------------------------------------------------+----------+-------------------+
| (Dutch nominal tax rate 2009: 25.5%; 2008: 25.5%) | | |
+------------------------------------------------------------+----------+-------------------+
| | | |
| Tax effect of: | | |
+------------------------------------------------------------+----------+-------------------+
| Effect of tax rates in other countries | (731) | (538) |
+------------------------------------------------------------+----------+-------------------+
| Non-deductible expenses | 173 | 95 |
+------------------------------------------------------------+----------+-------------------+
| Profits offset with unused tax losses for which no | | |
| deferred tax asset | | |
+------------------------------------------------------------+----------+-------------------+
| had been recognized | (17) | (128) |
+------------------------------------------------------------+----------+-------------------+
| Unused tax losses not recognized as deferred tax assets | 918 | 134 |
+------------------------------------------------------------+----------+-------------------+
| Prior year´s tax difference | (367) | - |
+------------------------------------------------------------+----------+-------------------+
| Income tax expense | 431 | 293 |
+------------------------------------------------------------+----------+-------------------+
The weighted average tax rate on profits before taxation was 24.4% (2008:
10.2%).
The positive impact on our effective tax rate of 24.4% from the low tax rate in
especially Switzerland and the over provision in prior years is almost offset by
the impact from unused tax losses not recognized as deferred tax assets.
The Company's unused tax losses amount to EUR10.5 million including a 2007
adjustment of EUR3.9 million (2008: EUR3.9 million excluding the 2007 adjustment of
EUR3.9 million). Due to the uncertainty of realising these unused tax losses in
future periods, a deferred tax asset (in any of the above years) has not been
recognized in respect of those losses. Part of the unused tax losses will expire
on 31 December 2014 (EUR2.1 million), EUR8.4 million can be compensated
indefinitely.
Estimates and judgments by management are required in determining the Group's
provisions for tax liabilities, amongst others corporate income tax and value
added tax. The calculation of the tax liabilities is based in part of the
interpretations of applicable tax laws in the jurisdictions in which the Group
operates. Although the Group believes the tax estimates are reasonable, there is
no assurance that the final determination of the tax liabilities will not be
materially different from what is reflected in the statement of income and
statement of financial position. Should additional taxes be assessed these could
have a material effect on the Group's results of operation or financial
condition.
18. Earnings per share
+------------------------------------------------------------+----------+----------+
| | 2009 | 2008 |
+------------------------------------------------------------+----------+----------+
| Underlying* basic earnings per share (in euro cents) | 48.4 | 36.0 |
+------------------------------------------------------------+----------+----------+
| Underlying* diluted earnings per share (in euro cents) | 48.4 | 36.0 |
+------------------------------------------------------------+----------+----------+
| | | |
+------------------------------------------------------------+----------+----------+
| Reported basic earnings per share (in euro cents) | 14.6 | 27.3 |
+------------------------------------------------------------+----------+----------+
| Reported diluted earnings per share (in euro cents) | 14.6 | 27.3 |
+------------------------------------------------------------+----------+----------+
*Underlying results are adjusted for amortization of identified intangible
assets, write down of the receivable from the the Group's associate, Euronext
listing costs and restructuring costs.
Pursuant to the passing of the relevant resolution at the Extraordinary General
Meeting, held on 5 October 2009, the 5:1 share consolidation became effective.
The comparative 2008 basic and diluted earnings per share have been restated for
the 5:1 share consolidation.
Basic earnings per share (EPS) are calculated by dividing profit attributable to
ordinary equity holders of the Company by the weighted average number of
ordinary shares outstanding during the period.
The calculation of diluted earnings per share is based on the calculation of the
basic earnings per share, adjusted to allow for the assumed conversion of all
dilutive share options.
The average market value of ordinary shares during 2009 did exceed the exercise
price of the share options granted in 2009 only. Hence, the options had a
dilutive effect, which was not material.
Reconciliation between issued number of shares and weighted average number of
shares:
+-----------------------------------------------+--------------+-------------+
| | 2009 | 2008 |
+-----------------------------------------------+--------------+-------------+
| Issued ordinary shares at 1 January | 48,195,986 | 48,195,986 |
+-----------------------------------------------+--------------+-------------+
| Effect of share consolidation | (38,556,795) | - |
+-----------------------------------------------+--------------+-------------+
| Shares held in treasury | (409,833) | (1,221,335) |
+-----------------------------------------------+--------------+-------------+
| Weighted average number of shares | 9,229,358 | 46,974,651 |
+-----------------------------------------------+--------------+-------------+
Reconciliation between weighted average number of shares and diluted weighted
average number
of shares:
+-----------------------------------------------+------------+------------+
| | 2009 | 2008 |
+-----------------------------------------------+------------+------------+
| Weighted average number of shares | 9,229,358 | 46,974,651 |
+-----------------------------------------------+------------+------------+
| Share options | 7,478 | - |
+-----------------------------------------------+------------+------------+
| Diluted weighted average number of shares | 9,236,836 | 46,974,651 |
+-----------------------------------------------+------------+------------+
| Profit attributable to ordinary equity | 1,352 | 2,568 |
| holders of the Company | | |
+-----------------------------------------------+------------+------------+
19. Intangible assets
+----------------+-----------+------------+------------+------------+---------+---------+
| | Goodwill | Identified | Internally | Other | 2009 | 2008 |
| | | intangible | | intangible | | |
| | | assets | generated | assets | | |
| | | | intangible | | | |
| | | | | | | |
| | | | assets | | | |
+----------------+-----------+------------+------------+------------+---------+---------+
| At 1 January | | | | | | |
+----------------+-----------+------------+------------+------------+---------+---------+
| Cost | 25,947 | 11,978 | 561 | 45 | 38,531 | 1,943 |
+----------------+-----------+------------+------------+------------+---------+---------+
| Amortization | - | (1,077) | - | (16) | (1,093) | - |
+----------------+-----------+------------+------------+------------+---------+---------+
| Net book value | | | | | | |
| | | | | | | |
+----------------+-----------+------------+------------+------------+---------+---------+
| at 1 January | 25,947 | 10,901 | 561 | 29 | 37,438 | 1,934 |
+----------------+-----------+------------+------------+------------+---------+---------+
| Movements | | | | | | |
+----------------+-----------+------------+------------+------------+---------+---------+
| Translation | (109) | (95) | - | - | (204) | - |
| differences | | | | | | |
+----------------+-----------+------------+------------+------------+---------+---------+
| Acquisitions | 2,028 | 100 | - | - | 2,128 | 36,188 |
+----------------+-----------+------------+------------+------------+---------+---------+
| Investments | - | - | 186 | 31 | 217 | 400 |
+----------------+-----------+------------+------------+------------+---------+---------+
| Deferred | (2,893) | - | - | - | (2,893) | - |
| considerations | | | | | | |
| adjustment | | | | | | |
+----------------+-----------+------------+------------+------------+---------+---------+
| Amortization | - | (1,223) | (83) | (14) | (1,320) | (1,093) |
+----------------+-----------+------------+------------+------------+---------+---------+
| Total | (974) | (1,218) | 103 | 17 | (2,072) | 35,495 |
| movements | | | | | | |
+----------------+-----------+------------+------------+------------+---------+---------+
| | | | | | | |
+----------------+-----------+------------+------------+------------+---------+---------+
| At 31 December | | | | | | |
+----------------+-----------+------------+------------+------------+---------+---------+
| Cost | 24,973 | 11,983 | 747 | 76 | 37,779 | 38,531 |
+----------------+-----------+------------+------------+------------+---------+---------+
| Amortization | - | (2,300) | (83) | (30) | (2,413) | (1,093) |
+----------------+-----------+------------+------------+------------+---------+---------+
| Net book value | | | | | | |
| | | | | | | |
+----------------+-----------+------------+------------+------------+---------+---------+
| at 31 December | 24,973 | 9,683 | 664 | 46 | 35,366 | 37,438 |
+----------------+-----------+------------+------------+------------+---------+---------+
Goodwill increased to the Salus Futura acquisition (EUR0.6 million) and the post
balance sheet date acquisition of the remaining 30% shareholding of Sejtbank and
Cryo-Save CZ (EUR1.4 million).
The deferred considerations adjustment of goodwill of EUR2.9 million mainly
related to the cancellation of the earn out liability to former shareholders of
Sejtbank and Cryo-Save CZ, following the post balance sheet date acquisition of
the remaining 30% minority shareholding.
The amortization expense is recorded under general and administrative expenses
in the statement of income.
The impairment test performed in 2009 showed that the recoverable amount for
each cash-generating unit exceeded the carrying amount, hence no impairment of
goodwill or identified intangible assets was recognized in 2009 (2008: EUR0).
The net book value of the identified intangible assets of EUR9.7 million (2008:
EUR10.9 million) represented the value of brand name EUR1.0 million (2008: EUR1.4
million), customer relationship EUR5.8 million (2008: EUR6.1 million) and contracts
EUR2.9 million (EUR3.4 million).
Identified intangible assets
The items such as brand name, customer relationship and contracts with
distributors and insurers concern assets with a limited useful life. The value
of these identified intangible assets are mainly determined by ongoing strength
of the brand name, retention rate of satisfied customers and potential customers
from contracts with hospitals, insurers and diagnostic centers.
Internally generated intangible assets
Internally generated intangible assets arose from the development of the new
products CryoCordPlus, Cryo-Lip and the Company's website. The capitalized costs
consist of directly attributable costs of employee benefits, as well as
materials and services used. Amortization for the new products will begin when
the developed products are available for sale as intended by management.
Amortization for the website and CryoCordPlus started from May and October 2009
respectively as the website was officially launched and the service CryoCordPlus
was widely rolled out in the market.
In 2009 and 2008 no impairment of these intangible assets was deemed necessary.
Other intangible assets
Other intangible assets relate mainly to capitalized software licences and is
amortised in three years.
In 2009 and 2008 no impairment of these intangibles was deemed necessary. As in
previous year, no intangible assets have been pledged as security for
liabilities.
20. Equity
Share capital and share premium
Authorized shares
On 8 October 2009 the Company performed a 5:1 share consolidation. As a result
of the share consolidation the Company´s authorized share capital now comprises
of 48,000,000 shares with a par value of EUR4,800,000 as per 31 December 2009
(ordinary shares of EUR0.10 each).
At 31 December 2008, the total authorized share capital consisted of 177,686,250
shares with a par value of EUR3,553,725 (ordinary shares of EUR0.02 each).
Issued shares
The total issued ordinary share capital consists per 31 December 2009 of
9,639,191 shares with a par value of EUR0.10 (31 December 2008 restated: 9,639,191
shares).
At the Annual General Meeting of Shareholders held on 20 May 2009, it was
resolved to delegate to the Board of Directors the power (a) to issue shares and
rights to subscribe for shares in the share capital of the Company to a maximum
number of 20% of the issued share capital, and (b) to restrict or exclude the
pre-emptive rights in connection with an issue of such number of shares or
rights to subscribe for shares, each for a period of 18 months.
Translation reserve
The translation reserve contains exchange rate differences arising from the
translation of the net investment in foreign operations, and of the related
hedges. When a foreign operation is sold, exchange differences that were
recorded in equity prior to the sale are recycled through the income statement
as part of the gain or loss on divestment. This reserve is not available for
distribution.
Revaluation reserve
The revaluation reserve relate to the accounting of the 2008 acquisition of 50%
of the remaining shares of Cryo-Save Balcanica S.A. As part of the purchase
price allocation, the intangible assets relating to the 50% of the shares
already owned by Cryo-Save were revalued. Along with the amortization, the
reserve will be released to retained earnings. This reserve is not available for
distribution.
Legal reserve
Legal reserve contains appropriations of profits of Group companies which are
allocated to a legal reserve based on statutory and/or legal requirements. This
reserve is not available for distribution.
Dividends
In July 2009, the Company distributed a maiden dividend of 1 euro cent for the
year ended 31 December 2008 (5 euro cent restated for 5:1 share consolidation).
The total dividend distributed amounted to EUR462,000.
Treasury shares
To cover the dilutive effect of the granted share options in 2007, 2008 and 2009
under the 2007 and 2009 Share Option Scheme to staff and to fund acquisitions,
the Group started a share buyback programme in 2007. At 31 December 2009 the
Group had acquired 424,000 of its own shares in treasury (31 December 2008:
354,000). Treasury shares are recorded at cost and amounted to EUR3.7 million at
31 December 2009 (31 December 2008: EUR3.5 million), representing the market price
on the acquisition date.
At the Extraordinary General Meeting of Shareholders held on 5 October 2009, it
was resolved to delegate to the Board of Directors the power (a) to repurchase
shares up to a maximum of 10% of the Company's issued shares as at the date of
the of the extraordinary general meeting of shareholders, (b) by acquiring
shares or depository interest; (c) for a purchase price not less than ten euro
cents and not higher than the highest of either (i) the average closing price
over the five trading days prior to the date of acquisition on Euronext
Amsterdam by NYSE Euronext plus a 10% premium or (ii) the average closing price
over the five trading days prior to the date of acquisition on AIM plus a 10%
premium; (d) for a period of 18 months.
+---------------------------------------+----------+---------+-------+-------+
| | Number of shares | Purchase |
| | | price |
+---------------------------------------+--------------------+---------------+
| | 2009 | 2008 | 2009 | 2008 |
+---------------------------------------+----------+---------+-------+-------+
| Balance at 1 January | 354,000 | 31,000 | 3,497 | 435 |
+---------------------------------------+----------+---------+-------+-------+
| Share buyback | 70,000 | 323,000 | 167 | 3,062 |
+---------------------------------------+----------+---------+-------+-------+
| Balance at 31 December | 424,000 | 354,000 | 3,664 | 3,497 |
+---------------------------------------+----------+---------+-------+-------+
The purchase price of the share buyback transactions during 2009 ranged from
187.5 pence to 262.5 pence.
21. Borrowings
+------------------------------------------------+-----------+--------+
| | 2009 | 2008 |
+------------------------------------------------+-----------+--------+
| Borrowings - non-current liabilities | 3,795 | 111 |
+------------------------------------------------+-----------+--------+
| Borrowings - current liabilities | 180 | 38 |
+------------------------------------------------+-----------+--------+
| Total borrowings | 3,975 | 149 |
+------------------------------------------------+-----------+--------+
In March 2009 the Group entered into a sale and leaseback agreement with ING
Lease Belgium N.V. in relation to the Group´s processing and storage facility in
Niel, Belgium. Pursuant to the agreement, NG Lease Belgium N.V. purchased the
facility and agreed to finance its construction for an amount of EUR4.3 million.
The Group leased the facility for a fixed period of 15 years. Lease instalments
are paid quarterly in advance commencing on 1 September 2009, and are computed
on an annuity basis. The interest is fixed for 15 years at 5.5%. The first
quarterly payment amounted to EUR430,000 followed by quarters of EUR93,000. The
lease obligation is recognized as financial lease obligation (borrowings). After
the initial 15-years lease period, the Group has the right to purchase the
facility from ING Lease Belgium N.V. for 10% of the invested amount (EUR430,000).
22. Deferred revenue
+------------------------------------------------+-----------+--------+
| | 2009 | 2008 |
+------------------------------------------------+-----------+--------+
| Deferred revenue - non-current liabilities | 6,090 | 4,885 |
+------------------------------------------------+-----------+--------+
| Deferred revenue - current liabilities | 471 | 389 |
+------------------------------------------------+-----------+--------+
| Total deferred revenue | 6,561 | 5,274 |
+------------------------------------------------+-----------+--------+
Deferred revenue will be earned as revenue by means of the annual storage over a
contractually committed 20 years period. The part of deferred revenue that will
be recognized as revenue within one year, is disclosed under current
liabilities.
23. Non-current other liabilities
+------------------------------------------------+---------+----------+
| | 2009 | 2008 |
+------------------------------------------------+---------+----------+
| Deferred considerations | 2,080 | 5,777 |
+------------------------------------------------+---------+----------+
| Other non-current liabilities | 84 | 53 |
+------------------------------------------------+---------+----------+
| Total non-current other liabilities | 2,164 | 5,830 |
+------------------------------------------------+---------+----------+
Deferred considerations relate to three performance plans agreed with former
owners of acquired entities. The duration of the contracts is 3 years.
24. Share-based payments
In 2009 the Group recognized EUR0.3 million share-based payment costs, relating to
three option plans issued in 2007, 2008 and 2009 respectively (2008: EUR0.2
million).
Share option scheme
At 23 April 2009 options were granted for 67,000 ordinary shares in Cryo-Save
Group N.V. The Company granted 35,000 options to Directors of the Company and
32,000 options to certain other employees of the Company all at an exercise
price of 279 pence per share.
Share options
+----------------------------+----+--+----------+----------+----------+---------+
| | | | Share option plans for the years: |
+----------------------------+----+--+------------------------------------------+
| | | | 2009 | 2008 | 2007 | Total |
+----------------------------+----+--+----------+----------+----------+---------+
| Outstanding at 1 January | | | - | 68,000 | 68,000 | 136,000 |
| 2009 | | | | | | |
+----------------------------+----+--+----------+----------+----------+---------+
| Conditionally awarded | | | 67,000 | - | - | 67,000 |
+----------------------------+----+--+----------+----------+----------+---------+
| Vested | | | - | - | - | - |
+----------------------------+----+--+----------+----------+----------+---------+
| Forfeited | | | 8,000 | 30,000 | 15,000 | 53,000 |
+----------------------------+----+--+----------+----------+----------+---------+
| Outstanding at 31 December | | | 59,000 | 38,000 | 53,000 | 150,000 |
| 2009 | | | | | | |
+----------------------------+----+--+----------+----------+----------+---------+
| End of period | | | 2019 | 2018 | 2017 | |
+----------------------------+----+--+----------+----------+----------+---------+
| Exercise price in pence | | | GBP2.79 | GBP10.50 | GBP11.05 | |
+----------------------------+----+--+----------+----------+----------+---------+
The former Chief Executive Officer, Rob Koremans, left the Group per 31 July
2009. Mr. Koremans held 20,000 options granted in 2009 which were exercisable
until 30 January 2010. The options granted to Mr. Koremans in 2007 (15,000) and
2008 (20,000) lapsed as per 31 July 2009 when he left the Company. The remainder
forfeited share options related to senior managers that left the Company.
The fair market value of each conditionally awarded share in 2009 under the
Share Option Scheme was GBP1.86 (Share option plan 2008: GBP4.65, Share option
plan 2007: GBP4.74), as determined by an outside consulting firm.
Shareholding of the Directors
The Directors hold the following interest in the Company as at 31 December 2009:
+------------------------------------------------------------+-----------+-----------+
| | 2009 | 2008 |
+------------------------------------------------------------+-----------+-----------+
| M.J. Waeterschoot* | 1,792,704 | 1,850,334 |
+------------------------------------------------------------+-----------+-----------+
| A.P. van Tulder | 13,000 | 7,000 |
+------------------------------------------------------------+-----------+-----------+
| J.P.G. Goossens* | 1,612,127 | 1,612,127 |
+------------------------------------------------------------+-----------+-----------+
| W.A.A. van Pottelberge | 16,210 | 11,210 |
+------------------------------------------------------------+-----------+-----------+
* The interest of these Directors includes the interests of their immediate
families and any other persons connected with them, and of companies of which
the Directors are a controlling shareholder.
25. Events after the reporting period
Acquisition remaining 30% shares of Sejtbank and Cryo-Save CZ
At 25 February 2010, the Company acquired the remaining 30% minority
shareholding of its Hungarian subsidiary, Sejtbank Egeszegugyi Szolgaltato
Korlatolt Felelossegu Tarsasag ('Sejtbank') and Cryo-Save CZ (formerly Archiv
Bunek s.r.o.), for a total cash consideration of EUR1.4 million.
The Annual Report 2009 will be available on the Company's website
www.cryo-savegroup.com in April 2010.
+-----------------------+--------------------------------------------+
| Contact details | For more information on Cryo-Save visit |
+-----------------------+--------------------------------------------+
| Cryo-Save Group N.V. | www.cryo-savegroup.com, or contact |
| | Investor Relations |
+-----------------------+--------------------------------------------+
| IJsselkade 8 | at ir@cryo-save.com |
+-----------------------+--------------------------------------------+
| 7201 HB Zutphen | |
+-----------------------+--------------------------------------------+
| The Netherlands | |
+-----------------------+--------------------------------------------+
| +31 (0)575 548998 | |
+-----------------------+--------------------------------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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