3rd quarter 2014: Results note
Natraceutical ends the first nine months of 2014 with net profit of 2.52 M€ compared to 2.17 M€ in September 2013.
- Natraceutical ended the first nine months of the year with turnover of 24.75 M€ compared to 25.30 M€ in September 2013, a 2.2% decline mainly due to the decrease of 4.2% occurred in the first half of the year. However, sales for the months of July to September showed an improvement of 3.2%, strongly supported by the evolution of the weight control segment and the correction of the health/energy range.
- The company’s EBITDA stood at the end of September at 2.72 M€ compared to 3.36 M€ in the same period last year, mainly by the sales decline from the beginning of the year and increased advertising expenditure in the third quarter.
- The continued cash generation of the business enabled Natraceutical to further improve its net cash position after the deduction of debt, which evolved from 1.52 M€ in September 2013 to 3.69 M€ in the same period of 2014.
- The merger between Natraceutical and Laboratorio Reig Jofre, disclosed on June 26, is progressing on schedule after the approval by the respective shareholders’ meetings last October 24. The merger is expected to be effective before the end of the year.
1.- Evolution of the turnover
As already reported in the first half-year results, the performance of Natraceutical between the months of January to June was clearly marked by a change in the procurement model of the pharmacy channel, especially in France -Forte Pharma’s main market.
Funding constraints in Europe coupled with a lack of visibility on the evolution of consumption in the medium term and led the pharmacy channel to change their procurement habits in recent quarters. While traditionally pre-sales campaigns –with preferential conditions- concentrated a higher volume of purchases, the first quarter of the year showed the will to encompass purchases to the evolution of consumption throughout the semester.
This represented a reduction of 4.2% in Natraceutical’s turnover between the months of January to June, which was partially offset by the recovery in sales by 3.2% between July and September. Natraceutical closed September with accumulated turnover in 2014 of 24.75 million euros, compared to 25.30 million in the first nine months of 2013.
Despite the correction in total sales, Natraceutical managed to slightly increase its gross margin, which progressed from 73.7% at end-September 2013 to 74.4% in the first nine months of 2014. Meanwhile, EBITDA stood at the end of September 2014 at 2.72 million euros, compared to 3.36 million in the first nine months of 2013, mainly due to the variation in sales as well as some increase in advertising expenditure and costs linked to the ongoing merger with Laboratorio Reig Jofre.
Evolution of Natraceutical’s operating result, 2013-2014
(in million euros)
