Cryo-Save Group N.V. (Euronext: CRYO, 'Cryo-Save', or 'the Group'), the leading international stem cell storage company and the largest family stem cell bank in Europe, has published its financial results for the six months ended 30 June 2012.
The first half of 2012 has been impacted by the economic crisis in Europe, as well as non-recurring restructuring expenses amounting to €2.0 million. The continued economic turmoil in Southern Europe, particularly in Spain, along with the termination due to non-compliance of a contract with a large Italian distributor, which started its own processing and storage facility during the second quarter of 2012, impacted volume, revenue and result significantly. Most other European countries showed improved or stable results during the first half of the year, whilst India and South-Africa achieved higher storage numbers.
Mainly due to the cessation of Cryo-Lip® activities and the closure of France, increased (non-recurring) expenses were reported in the first half of 2012. These costs related to the termination of contracts with several employees and suppliers, impairment of the debt free French building which is now held for sale, and a provision for the termination of contracts with distributors.
Lower revenue and higher operating expenses resulted in an operating result of -€2.8 million (1HY 2011: €2.0 million). The previously announced costs saving programs have been implemented, which resulted in non-recurring expenses of €2.0 million for the first half. The underlying operating result was -€0.8 million. The full impact of the restructuring and cost saving programs will start to come through in the second half of 2012. The total number of employees, denominated in full time equivalents, decreased from 282 at the end of December 2011 to 257 at 30 June 2012.
The Group had a solid cash position of €6.1 million as at 30 June 2012.
Due to the economic crisis, the total European market for stem cell storage shrank by more than 10% during the first half of 2012, mainly caused by Spain and Italy. The Spanish market has stabilised during the second quarter of 2012 and the Group's Italian subsidiary has also seen improved performance. Cryo-Save has been able to secure its market share and remains the largest stem cell bank in Europe.
The Group continues to focus on further strengthening its market leadership in Europe, on growing the market for stem cell storage and restoring its financial performance.
Arnoud van Tulder, Chief Executive officer, commented:
"As previously reported, we anticipated a tough first six months of 2012, affecting the Company's top and bottom line results.
"Restructuring and cost saving programs have been implemented and will bear fruit in the second half of 2012, and we expect to report a significantly higher EBITDA for the second half of 2012.
"We are confident that the action steps taken and the focussed approach to enhance the stem cell market in combination with our market leading position will allow Cryo-Save to emerge stronger going forward."
