DGAP-News: Vita 34 AG

Vita 34 Lays Foundation for Future Growth During H1 2017

- Acquisition of Seracell sets the course for significant, profitable growth

- Revenue increased by 2.5 percent and gross profit by 14 percent as compared with H1 2016

- Profit burdened this year by one-time effect of Seracell acquisition

Leipzig, 30 August 2017 - Vita 34 AG (WKN A0BL84), the second largest stem cell bank in Europe, expanded its market position in the first half-year 2017 significantly with the acquisition of Seracell Pharma AG, Rostock. Thus, the new Vita 34 is the only private German provider on the international market, and has now exceeded the 200,000 storage mark with one large step.

In the first six months revenues rose to nearly EUR 8.2 million compared to EUR 8.0 million in the prior year's period. The gross profit from sales increased by 14 percent to EUR 4.6 million (H1 2016: EUR 4.0 million) because positive synergetic effects and economies of scale from the subsidiaries acquired and integrated in 2015 led to significantly lower selling costs.

Due to fact that the initial consolidation of Seracell was on June 28, 2017, none of the revenues of the acquired company have been incorporated into the half-year figures of Vita 34 AG. At the same time, however, the acquisition related expenses were booked against profits. Specifically, these are transaction costs in the amount of EUR 0.3 million, as well as severance and separation payments totaling EUR 1.0 million. In addition, the company expects costs related to a change in management of EUR 0.6 million.

Due to non-recurring effects totaling EUR 1.9 million, which are already reflected in H1, the earnings before interest, taxes, depreciation and amortization (EBITDA) was reduced in H1 to EUR -0.3 million (H1 2016: +0.9 million). The EBITDA margin decreased correspondingly to -4.1 percent as compared with 10.7 percent in the first six months of 2016. The period result in the first half-year 2017 decreased to EUR -1.0 million (H1 2016: EUR 0.1 million). The earnings per share, taking into consideration the shares of other shareholders, were EUR -0.35 (prior year EUR -0.02), whereby the number of shares issued in the reporting period increased by 302,649 shares in the wake of a private placement.

"Despite the acquisition we had strong operative growth in the two quarters, even though the figures at hand for the first half year have been influenced by a whole series of one-time effects," said Dr. Wolfgang Knirsch, Chairman of the Management Board of Vita 34 AG concerning the development of business in H1 2017. "From April onward we were intensely focused on the acquisition and have worked through all major work packets from Due Diligence to the assumption of operative management at Seracell. A significant factor for the good progress was the two successful capital raises needed for the financing. Following the most important acquisition in our company's history to date, Vita 34 has reached another level in corporate valuation."

Furthermore, in H1 2017 a change in revenue recognition from Bio Save group acquired in 2015 had an effect on the level of consolidated revenues posted. This reflects the removal of revenues from the customers from the Bio Save group, which was not yet fully consolidated in the prior year. In the first half-year 2017, on the other hand, the revenues of Vita 34 contain those of the Bio Save group with the transfer pricing agreed upon.

In Q2 2017 this led to a reduction in revenues posted from EUR 4.0 million down from EUR 4.2 million in the prior year's quarter. Taking this consolidation effect into consideration, revenue growth in Q2 2017 was 2.9 percent. EBITDA in Q2 was EUR 1.0 million due to the acquisition (H1 2016: EUR 0.5 million).

At the beginning of August Vita 34 amended the outlook for the current fiscal year in the wake of the completed acquisition and the initial consolidation of Seracell on June 28, 2017. The Management Board of Vita 34 AG expects revenues of EUR 18.9 to 19.4 million (to date: EUR 17.4 to 17.9 million) and EBITDA of EUR 1.6 to 1.9 million (to date: EUR 2.6 to 2.7 million) for 2017.

"From 2018 onward we expect no further profit burdening special effects from the acquisition of Seracell," emphasized Dr. Wolfgang Knirsch in summary. Thus, as of the second half of the year the operative strength of Vita 34 will be clear to see. In the medium term we will from now demonstrate a new dimension of growth, particularly with regard to profit."

The complete six-month report 2017 is available for download effective immediately on the website at www.vita34group.com in the "Investor Relations" section.

Company Profile

Vita 34 was founded in 1997 as the first private umbilical cord blood bank in Europe and, as a complete provider, offers collection logistics, preparation and storage of umbilical cord blood and cord tissue. The basis for its successful work is an outstanding position in the technological segment of cryo-preservation. Here, cells and tissue are preserved alive at some -190ºC for long periods of time, and can be used if needed in the context of medical treatment. Some 160,000 customer are already taking advantage of this offering and have provided for their children with a stem cell deposit at Vita 34.

Contact:
Ingo Middelmenne
Investor Relations
Vita 34 AG
Deutscher Platz 5a
04103 Leipzig
Phone: +49 (0341) 48792 - 0
Email: ingo.middelmenne@vita34.de