Synthes-Stratec 2002 results: Profit growth continues to exceed sales growth
Oberdorf/Switzerland, March 25, 2003
2002 sales from continuing operations grew by 2.5% to CHF 1,561.7 million (+11.6% in local currencies). Net profit before amortization of goodwill from continuing operations of CHF 389.0 million grew by 5.0% (+14.8% in local currencies).
Synthes-Stratec 2002 consolidated sales (including the results of the divested Prosthetics business) grew by 0.4% to CHF 1,571.8 million (+9.3% in local currencies). Net profit before amortization of goodwill of CHF 391.0 million outpaced sales growth at 2.9% (+12.3% in local currencies).
|
 |
|
 Audited Key Figures |
| * | As of January 1, 2002, the company has elected to report its financial statements in accordance with generally accepted accounting principles in the United States (U.S. GAAP). The only significant impact of this change is that, beginning January 1, 2002, amortization of goodwill and intangibles with indefinite lives are not recorded as an expense under U.S. GAAP. According to U.S. GAAP, goodwill and intangible assets with indefinite lives are tested for impairment annually, or when there is an impairment indicator. As of January 1, 2003, the company has elected to report its results in U.S. dollars reflecting the fact that almost 80% of its sales are generated in the North American market. |
Sales performance continues to grow
Sales from continuing operations (excluding the divested Prosthetics business) were CHF 1,561.7 million, an increase of 2.5% versus the prior year (11.6% in local currencies).
The growth in sales for the year was positively influenced by the launch of 85 new products in 2002, most importantly the successful launch of the LCP (Locking Compression Plate System). LCP is an innovative plate-and-screw system which allows either conventional compression or an angular stable fixation of the plate to the fractured bone and is especially suited to secure fragments in osteoporotic bone.
Profit growth in 2002 exceeds sales growth
Growth of net profit before amortization of goodwill for continuing operations continues to outpace sales growth at 14.8% (in local currencies) for 2002. Quality of profits (i.e. profits as a percent of sales) continues to be strong at 24.9% for continuing operations. This performance was mainly due to a further improved production and inventory management efficiency as well as economy of scale. As a result, net liquidity almost doubled from CHF 259 million to CHF 508 million in 2002.
Capital investment
Synthes-Stratec, Inc. continues to invest heavily and focused in the future as evidenced by expenditures of CHF 125.7 million for capital purchases. In 2002, capital spending was 138% of depreciation for the year. The biggest increase (+35.5 %) on capital expenditure was recorded for selling investments whereas investments for machinery and equipment was substantially less than in previous years. The total capital investment was slightly lower than in 2001.
New jobs created
At December 31, 2002, Synthes-Stratec, Inc. employed 3,803 people worldwide, an increase of 333 employees compared to the prior year. Forty-eight percent of the additional staffing was an expansion of the dedicated sales forces in all territories.
Dividend approval
The Board of Directors of Synthes-Stratec, Inc. has approved a dividend of CHF 7.00 per share for the year 2002 payable on April 28, 2003.
Outlook
The large number of new products introduced in 2002, with the current strong pipeline of products under development, bodes well for an increase in the rate of sales growth for 2003.
Synthes-Stratec – A leading orthopaedic trauma and spine company
Synthes-Stratec is a leading provider of instruments, implants and power tools for the orthopaedic and spine surgery market. The company develops, manufactures, and distributes products for the surgical treatment of bone fractures, cranio-maxillofacial trauma and deformities, and a full range of products and systems for spine surgery.