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ADVA achieves record profitability with preliminary Q4 2020 financial results

  • Quarterly revenues EUR 140.6 million, annual EUR 565.0 million at the lower end of guidance
  • Quarterly pro forma operating income EUR 14.4 million (10.2% of revenues), annual EUR 33.8 million (6.0% of revenues) at the upper end of guidance

ADVA (FSE: ADV) today announced that in preparation for its 2020 annual report, the preliminary figures of the fourth quarter and the financial year 2020 deviate significantly from both the previous year’s figures and the available financial analyst estimates. For this reason, ADVA has published the following preliminary financial results for the fourth quarter of 2020 and the fiscal year 2020.

Preliminary results for Q4 2020

  • Preliminary revenues were EUR 140.6 million and down by 7.0% from the year-ago quarter (Q4 2019: EUR 151.1 million)
  • The preliminary pro forma operating income of EUR 14.4 million was up by 39.1% compared to Q4 2019 (Q4 2019: EUR 10.3 million)
  • The preliminary pro forma operating income margin of 10.2% increased by 3.4 percentage points compared to the year-ago quarter (Q4 2019: 6.8%)

Preliminary results for the fiscal year 2020

  • Preliminary revenues were EUR 565.0 million up by 1.5% compared to the previous year (2019: EUR 556.8 million)
  • The preliminary pro forma operating income of EUR 33.8 million was up by 36.4% compared to the previous year (2019: EUR 24.8 million)
  • The preliminary pro forma operating income margin of 6.0% increased by 1.5 percentage points compared to the previous year (2019: 4.5%)

Any potential differences in the above figures are due to rounding. 

As a result of this development, revenues were at the lower end of the guidance corridor of EUR 565 to 580 million and the pro forma operating income margin at the top end of the guidance corridor of 5% to 6%.

The main drivers for the deviations in revenues and profitability from analysts’ expectations are the highly depreciated US dollar compared to the euro and Covid-19-related revenue shifts in Q4.

For the fiscal year 2021, the management expects revenues between EUR 580 and EUR 610 million and a pro forma operating income margin between 6% and 9%.

Management commentary

“The fourth quarter of 2020 was an extraordinary finish to an extraordinary year,” said Uli Dopfer, CFO, ADVA. “Just like the beginning of the year, when the first wave of the pandemic hit, we encountered supply chain bottlenecks in Q4 caused by renewed lockdown regulations. As a result, we could not fulfill all orders as planned and revenue recognition for some projects moved to Q1 2021. In addition, the continuing depreciation of the US dollar against the euro reduced the revenue contributions from the dollar-denominated regions. On the other hand, this exchange rate shift was beneficial for our margins. Thanks to an advantageous customer and product mix and continued tight cost management, we can report today one of the most profitable quarters in our company’s history.”

“We look back with pride on a challenging but also very successful fiscal year,” commented Brian Protiva, CEO, ADVA. “In times of chaos, economic turbulence and global uncertainty, we held course and exceeded some of our ambitious goals. The cost reduction measures we introduced in 2019 continue to deliver sustainable results. In the fourth quarter of 2020, our profitability was well above analyst expectations, our cash generation was outstanding, and our order entry was very good in all regions. We’re starting the new financial year with well-filled order books and a strong tailwind. We are confident about our ability to drive continued profitable growth in the first quarter of 2021.”

The information is based on preliminary and unaudited group figures. The company will publish its final financial results for Q4 and the full fiscal year 2020 on February 25, 2021, as planned. 

Forward-looking statements

The economic projections and forward-looking statements contained in this document relate to future facts. Such projections and forward-looking statements are subject to risks that cannot be foreseen and that are beyond the control of ADVA. ADVA is therefore not in a position to make any representation as to the accuracy of economic projections and forward-looking statements or their impact on the financial situation of ADVA or the market in the shares of ADVA.

Use of pro forma financial information

ADVA provides consolidated pro forma financial results in this press release solely as supplemental financial information to help investors and the financial community make meaningful comparisons of ADVA’s operating results from one financial period to another. ADVA believes that these pro forma consolidated financial results are helpful because they exclude non-cash charges related to the stock option programs and amortization and impairment of goodwill and acquisition-related intangible assets, which are not reflective of the company’s operating results for the period presented. Additionally, expenses related to restructuring measures are not included. This pro forma information is not prepared in accordance with IFRS and should not be considered a substitute for the historical information presented in accordance with IFRS.