(RTTNews.com) - STRATEC Biomedical AG (SBSG) reported first-half earnings per share of 0.22 euros compared to 0.52 euros, prior year. Adjusted EBIT was at 8.8 million euros compared to 12.8 million euros. Adjusted EBIT margin was 9.8% after 12.7% in the equivalent period of the previous year. The company said the decline in profitability in comparison to the previous year is due particularly to higher expenses in connection with increased development activities and the lower sales volume with the resulting inability to leverage economies of scale. Adjusted earnings per share was 0.61 euros compared to 0.84 euros.
First-half organic sales declined 3.9% (nominal: down 10.5%) to 90.2 million euros from 100.7 million euros, previous year. The company said the restrained organic sales growth is due particularly to the weak first quarter of 2018.
For 2018, STRATEC now anticipates sales growth adjusted for exchange rate effects of approximately 3% to 5%. It is expected that the first-time adoption of IFRS 15 will impact the reported sales growth in 2018 with a positive factor of approximately two percentage points. Adjusted for the effect, the new guidance implies organic sales growth of between 1% and 3%. The previous guidance indicated organic growth in at least a mid-single-digit percentage range. In fiscal year 2018, an adjusted EBIT margin of approximately 16% to 17% is expected. The company said the slightly reduced expectations on profitability against the previous guidance (around 17%) are due primarily to not being able to leverage economies of scale.
For the next few years STRATEC continues to anticipate compound annual organic sales growth rates (adjusted for exchange rate effects and acquisitions) in the high single-digit to low double-digit percentage range. STRATEC anticipates the EBIT margin will develop at an approximately constant level of 17%.
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