2018 fiscal year: B. Braun increases sales and invests over 1.2 billion euros
Melsungen. B. Braun Melsungen AG completed the fiscal year 2018 with total sales of € 6,908 million (previous year: € 6,789 million). Sales increased from the previous year by 1.8 percent (currency-adjusted, +5.3 percent). EBITDA fell 3.3 percent from the previous year with € 952.5 million.
"In the fiscal year 2018, we again increased sales and were within the desired target corridor of 5 to 7 percent with 5.3 percent at constant exchange rates. We continued to grow organically and overall had a satisfactory level of business development", said Chairman of the Management Board Prof. Heinz-Walter Große at the annual accounts press conference on Friday, March 22. "Our earnings are below expectations", Große emphasized. This was due to exchange rate alterations, which at over € 100 million negatively affected earnings. Further cost factors arose from bringing new production facilities on line and increasing regulatory requirements. Große presented the figures for the fiscal year 2018 together with Anna Maria Braun, President of the Asia-Pacific region and designated Chairwoman of the Management Board, and Chief Financial Officer Dr. Annette Beller.
The B. Braun divisions: Continued dynamic growth at B. Braun Avitum and Aesculap
All four divisions of the B. Braun Group contributed to sales growth. Hospital Care and OPM grew moderately, while development was particularly dynamic in the Aesculap and B. Braun Avitum divisions.
The largest division, Hospital Care, performed well under difficult conditions and increased sales to € 3,131 million. This amounted to a gain of 0.5 percent over the previous year (4.7 percent at constant exchange rates). Business developed very well in Russia, the Czech Republic, Slovakia, the Netherlands, and Great Britain as well as direct business in the Near and Middle East. Growth was strong in the compounding business for the production of customer-specific solutions for clinical nutrition and automatic infusion pumps. Sales also grew for products in the area of regional anesthetics. Growth was boosted with the launch of a number of new products, such as the innovative infusion pump system, Compact Plus, which introduces a flexible and networkable system to the market. It stands out in particular through its intuitive usability, high degree of robustness and color-coded medication database. This allows a safe use while meeting economic goals. Rounding out the portfolio, the division has also introduced ibuprofen compounds as a ready-to-use product, as well as Viant, a new parenteral multivitamin compound.
The Aesculap division reported sales in the reporting year of € 1,824 million (previous year: € 1,786 million) and was thus 2.1 percent above the previous year (5.3 percent at constant exchange rates). The main drivers of growth were China, Germany, Russia, Spain, USA and Poland. Further growth stimuli came predominantly from Argentina, Australia, Vietnam, Mexico and Turkey. The product business demonstrated a very positive trend in the areas of angioplasty, endoscopy, suture materials, high-speed power systems and access ports. Also contributing were product innovations such as Ennovate, a pedicle screw system which is used in spinal surgery, or the high-speed motor system for neuro and spinal surgery, ELAN 4. Another factor was the expansion of the portfolio in services and digital products, which have been advancing the strategic approach of the system partnership.
The Outpatient Market (OPM) division posted sales of € 841 million (previous year: € 828 million), up 1.6 percent from the previous year (4.3 percent at constant exchange rates). Sales growth was strong in the USA, but due to the movement of the US dollar, growth in euros was significantly less. Other drivers of growth were China, Great Britain and the Czech Republic. In Germany, B. Braun prolabor, the specialist dealer and service provider acquired in 2017, developed very well. The unit's focus was on the continued development of the product areas urology, stoma care, hand disinfection and wound care. The improved version of the Actreen® Hi-Lite disposable catheter, for example, which is discretely transportable and offers improved application features, was brought to market-readiness during the reporting year.
Sales in the B. Braun Avitum division increased by 4.9 percent in the reporting year (at constant exchange rates of 8.4 percent) to € 1,082 million (previous year: € 1,031 million). The operation of 400 dialysis centers worldwide with around 32,000 patients in care developed positively, primarily due to acquisitions in Portugal, Australia, New Zealand and through the expansion of the clinic network in Russia, the Czech Republic and Switzerland. In the product business, the division saw a positive sales development in consumer products and dialysis machines. In 2018, the main goal was to increase treatment quality and efficiency in extracorporeal blood treatment. The focus here was on expanding the functionalities of the Omni acute care system and on the new hemodialysis system, Dialog IQ. These systems are characterized by their numerous optimizations with regard to ease of use and patient comfort, as well as their consistent satisfaction of economic and medical requirements. In the service provider area, B. Braun Avitum has introduced an innovative concept for hemodialysis treatment of chronic patients in the home setting for Germany. This concept is supported by a cloud-based solution that meets all data protection requirements.
Growth in specific regions
In Germany, sales increased by 2.5 percent to € 1,163 million despite highly competitive conditions.
Europe (excluding Germany) saw very positive sales growth of 7.1 percent to € 2,274 million at constant exchange rates, with growth of 4.5 percent in euros. The markets Russia, Czech Republic, Slovakia, Poland, the Netherlands, Belgium, Great Britain and Switzerland performed well.
The Asia-Pacific region was partly strong in local currencies, with sales up by 4.4 percent. Growth in euros amounted to 0.4 percent, resulting in an increase in sales to € 1,241 million. Drivers of growth were China, the Philippines and Vietnam.
North America showed solid growth in sales in US dollars with 5.4 percent, which equals a gain in euros of 0.8 percent.
In Latin America, the positive development of +9.2 percent in the markets was significantly hindered by declines in the value of local currencies in Argentina and Brazil. Sales therefore declined by 5.1 percent in euros from the previous year at € 417 million.
Sales in Africa and the Middle East amounted to € 217 million and with growth of +0.8 percent in local currencies remained at the previous year's level. However, currency movements reduced sales by 1 percent compared to the previous year.
Investments and expenditures for research and development at a high level
In 2018, the Group again invested over one billion euros. After € 1,285 million was invested in 2017, in 2018 € 1,240 million was invested primarily in the expansion of production capacities and in the development of new products and processes. Through targeted acquisitions, access was further secured to technologies and markets in strategically critical business areas.
The Hospital Care division expanded its global capacities for large volume infusion solutions in Spain, Indonesia, Romania and Argentina, for example at the new site in Daytona Beach, Florida, USA. In Kenya, a manufacturer of infusion solutions was acquired. In Penang, Malaysia, multiple new production facilities were officially opened in 2018. Here the focus is on production facilities for disposable products and solutions for infusion therapy and for surgical instruments. At the Penang site, around € 770 million has been invested in the last nine years. With around 7,700 employees, this site is now one of the largest locations of the B. Braun Group.
The Aesculap division continued with the automation of production in the Closure Technologies area and through targeted acquisitions strengthened the comprehensive therapeutic approach in cardio-thoracic surgery.
The OPM division also invested in Penang in the production of pen needles. In France, the first steps were taken towards the development of a master plan for the expansion of production capacities, along with the upgrade of sterilization, and development continued on an ambulatory pump in the USA.
During the reporting year, B. Braun Avitum division opened Europe's most up-to-date factory for dialysis filters in Wilsdruff near Dresden. With investments of around € 100 million, 140 jobs were created. Additional market shares were secured in the operation of dialysis centers, the "provider" market. Here the focus was on expanding existing dialysis centers, constructing new centers and acquiring centers in various countries.
Almost 64,000 employees worldwide
As of December 31, 2018, the B. Braun Group had 63,751 employees. This is up 3.5 percent from the previous year (61,583 employees). In Germany, the number of employees rose 2.9 percent to 15,860 (previous year: 15,415). This development was due to further expansion of production capacities and the launch of the B. Braun Avitum Wilsdruff site for dialysis filter production as well as the acquisition and creation of dialysis centers and distribution companies.
The ability to acquire qualifications through a wide range of vocational training programs has great importance at B. Braun, particularly, in view of demographic changes. At present, there are 801 young people in vocational training programs in Germany. 229 trainees successfully completed their vocational training in 2018 and were offered a job in the company. 94 trainees also completed their dual training and degree program at a cooperative education institution or university. At sites in Brazil, Malaysia, Vietnam and Switzerland, 233 young people are currently completing their vocational training. 119 completed their program in 2018.
"For the financial year 2019, we expect that the Group will continue to grow in sales and earnings", Anna Maria Braun noted in her statement. Sales growth will be between five and seven percent assuming exchange rates remain constant. "Our clear objective is the further development of earnings and continuing to grow together with the commitment of all employees", said Braun. With a spirit of innovation, along with the expansion and development of new markets as well as the continuing digitalization of the portfolio and internal processes, it will also be possible to secure the long-term competitiveness of the Group well into the future.
You can find information about B. Braun at www.bbraun.de.