DiaSorin : reports growth in profitability and strong free cash flow generation in the first quarter 2019

DIASORIN GROUP REPORTS GROWTH IN PROFITABILITY AND STRONG

FREE CASH FLOW GENERATION IN THE FIRST QUARTER 2019

REVENUES: € 170.8 million, +3.8% (+1.4% at CER).

Group revenues results were strongly impacted by lower molecular Flu sales, mainly in the US, as a result of an unfavorable comparison with Q1 2018, characterized by an exceptionally severe flu season. Net of this element, Q1 2019 revenues grew by 6.5% (+4.1% at CER).

Positive impact of foreign exchange rates on sales amounting to about € 4.1 million.

EBITDA: € 67.5 million, +6.6% (+3.4% at CER) up 105 bps, equal to 39.6% of Group revenues (39.3% at CER).

EBIT: € 53.0 million, +4.4%, equal to 31.0% of Group revenues.

NET PROFIT: € 40.4 million, +5.4%, equal to 23.7% of Group revenues.

NET FINANCIAL POSITION: +€ 78.3 million at March 31, 2019 (€ 75.3 million at December 31, 2018). Negative contribution as a consequence of the IFRS 16 adoption, equal to € 32.2 million.

FREE CASH FLOW: € 35.6 million in Q1'19 (€ 27.8 million in Q1'18).

LIAISON/LIAISON XL: net placements of +103 units in Q1'19 (+124 LIAISON XL and -21 LIAISON), for an overall total of 7,952 units at March 31, 2019, of which 4,125 LIAISON XL (equal to about 52% of the total installed base).

DIASORIN INVESTOR DAY 2019:

2019 - 2022 Business Plan will be examined by the Board of Directors on June 10, 2019. On the same day, a press release will be issued in this regard pursuant to current legislation.

The Plan presentation to the financial community is scheduled for June 11, 2019 at Teatro Vittoria in Turin. The event will be available via webcast through the dedicated "Investor Day 2019" section on www.diasoringroup.com.

Saluggia (Italy), May 9, 2019 - The Board of Directors of DiaSorin S.p.A. (FTSE MIB: DIA), a global leader in the production of diagnostic tests, meeting today in Saluggia under the Chairmanship of Mr. Gustavo Denegri, reviewed and approved Q1 2019 consolidated economic and financial results.

Amounts in millions of euros			Q1			change
	2018		2019		amount	%	%
					@ current	@ CER
Revenues			164.5		170.8		+6.3	+3.8%	+1.4%
CLIA tests			106.0		113.7		+7.8	+7.3%	+5.2%
ELISA tests			21.9		23.0		+1.1	+4.9%	+2.8%
Molecular tests			18.3		16.2		-2.1	-11.5%	-17.2%
Instruments sales and other revenues		18.3		17.8		-0.5	-2.5%	-4.0%
EBITDA			63.3		67.5		+4.2	+6.6%	+3.4%
	EBITDA margin		38.5%		39.6%		+105 bps
EBIT			50.7		53.0		+2.2	+4.4%
	EBIT margin		30.9%		31.0%		+16 bps
Net profit			38.3		40.4		+2.1	+5.4%

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Q1 2019 HIGHLIGHTS

THREE NEW PRODUCTS DEVELOPED ON LIAISON XL:

Launch of Vitamin B12 and Folate tests in addition to the Ferritin test already available in the DiaSorin menu, completing the anemia panel in Europe.

Gastrointestinal stool panel enrichment with the launch of the Elastase-1 test in Europe and in the US.

COMMENT ON RESULTS

The foreign exchange market trend in Q1'19 highlighted, compared to Q1'18, a marked depreciation of the the U.S. Dollar, Chinese Yuan, Mexican Peso and British Pound. Conversely, the Euro appreciated vis-à-vis Real and Australian Dollar.

Euro against the Brazilian

US

Brazilian

Chinese

Australian

Mexican

British

Dollar

Real

Yuan

Dollar

Peso

Pound

Euro

-7.6%

+7.2%

-1.9%

+2.0%

-5.3%

-1.2%

Source: Banca d'Italia

CONSOLIDATED REVENUES

REVENUES BY GEOGRAPHY

Revenues: € 170.8 million in Q1'19, +3.8% (+1.4% at CER) compared to Q1'18.

The positive trend in sales of CLIA immunodiagnostics, net of Vitamin D, was strongly impacted by the negative performance of molecular diagnostics revenues, especially in the US, as a consequence of a tough comparison with the previous year, which benefited from an exceptionally severe flu season. It should be noted that the molecular tests, net of flu tests, recorded a growth of more than 10%.

In Q1'19, foreign exchange rates had a positive impact of about € 4.1 million on Group revenues. Sales trend as follows:

 CLIA, net of Vitamin D: +9.2% (+7.8% at CER)

 Vitamin D (CLIA): +2.1% (-2.1% at CER)

 ELISA tests: +4.9% (+2.8% at CER)

 Molecular tests: -11.5%(-17.2% at CER)

 Instruments sales and other revenues: -2.5%(-4.0% at CER)

During Q1'19, the net balance of units installed was +103 units (+124 LIAISON XL and -21 LIAISON), increasing the total number of installed instruments to 7,952 units (of which 4,125 LIAISON XL, equal to ca. 52% of the total installed base).

The following provides the breakdown of the Group consolidated revenues by geographic area.

	Amounts in millions of euros		Q1			Change	%
		2018		2019	amount
						@ current		@ CER
	Europe and Africa		77.1		82.0	+4.9	+6.4%		+6.1%
	%on total revenues		46.9%		48.0%
	USA and Canada		48.3		48.9	+0.5	+1.1%		-6.4%
	%on total revenues		29.4%		28.6%
	Asia Pacific		28.7		30.5	+1.8	+6.2%		+5.1%
	%on total revenues		17.4%		17.9%
	Latin America		10.4		9.4	-1.0	-9.4%		-8.5%
	%on total revenues		6.3%		5.5%
	Total		164.5		170.8	+6.3	+3.8%		+1.4%

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Europe and Africa

Revenues in Q1'19 were € 82.0 million, +6.4% (+6.1% at CER) compared to Q1'18.

 Italy: +22.8% (local market: +3.5%)1; increase in CLIA sales, net of Vitamin D, primarily Infectious Diseases and Bone Metabolism, as well as Vitamin D and Latent Tuberculosis tests.

 Germany: +0.1% (local market: -1.0%)1; positive sales performance of Vitamin D 1.25, Infectious Diseases, Endocrinology and Hepatitis panels.

 France: -0.2% (local market: +0.9%)1; slight decrease mainly due to the introduction of new policies that limit the public reimbursement of some specialty tests and a drop of Vitamin D sales.

 Export: -22.4%(-24.5% at CER); decline mainly due to the seasonality of some large orders in the Middle East.

USA and Canada

Revenues in Q1'19 were € 48.9 million, +1.1% (-6.4% at CER) compared to Q1'18 affected by the different trends in the immunodiagnostic and molecular diagnostic businesses.

Immunodiagnostics sales recorded a slight increase (+0.3%), as a result of the growth of CLIA tests revenues, net of Vitamin D, partly offset by the contraction in Vitamin D sales.

Molecular tests sales, net of flu tests, growing slightly more than 10%, were affected by the negative trend in sales of flu tests resulting from a moderate season compared to the positive peak registered last year.

Asia Pacific

Revenues in Q1'19 were € 30.5 million, +6.2% (+5.1% at CER).

 China: +15.1% in local currency; increase in CLIA sales, net of Vitamin D (+9.5% in local currency), particularly Infectious Diseases panel, Tumor markers and Thyroid tests.

 Australia: +10.9% in local currency; on the back of solid CLIA sales, primarily Vitamin D test, Gastrointestinal Stool testing and Infectious Diseases panels.

 Export: -8.2%(-9.3% at CER); decline due mainly to the seasonality of some important orders.

Latin America

Revenues in Q1'19 were € 9.4 million, -9.4%(-8.5% at CER) compared to Q1'18.

 Brazil: -13.8% in local currency; the result was negatively affected by the decline in Vitamin D and ELISA Murex sales in the period.

 Mexico: +16.1% in local currency; positive trend in CLIA sales, primarily Infectious Diseases and Hepatitis panels and Thyroid tests.

 Export: -10.6%(-12.1% at CER).

	The following provides a breakdown of Group revenues by technology.
REVENUES BY
TECHNOLOGY				Q1
		% of revenues contributed			Change
		2018		2019
		CLIA tests	64.4%		66.6%		+218 bps
		ELISA tests	13.4%		13.5%		+4 bps
		Molecular tests	11.1%		9.5%		-164 bps
		Instruments sales and other revenues	11.1%		10.4%		-68 bps

1Source: EDMA latest data available	3

OPERATING PERFORMANCE

GROSS

PROFIT

EBITDA

EBIT

FINANCIAL PERFORMANCE

INCOME

TAXES

CONSOLIDATED NET PROFIT

CONSOLIDATED NFP

FCF

The following provides the Group operating performance in Q1'19.

GROSS PROFIT: € 118.6 million, +6.7% equal to 69.5% of revenues, up from Q1'18 (67.6%), primarily due to a favorable mix of sales channels, with higher revenues in countries where the Group has a direct presence versus countries where the Group operates through third-party distributors.

EBITDA: € 67.5 million, +6.6% (+3.4% at CER), equal to 39.6% of revenues (39.3% at CER), up 105 bps versus Q1'18 (38.5%).

Increased profitability reflects both comments provided on gross profit and the positive effect consequent to the adoption of the IFRS 16 accounting standard.

EBIT: € 53.0 million, +4.4% equal to 31.0% of revenues (30.9% in Q1'18).

In Q1'19, net financial expenses were € 0.4 million, as against net financial expenses of € 0.9 million in Q1'18.

Income taxes in Q1'19 were € 12.2 million, with a tax rate of 23.2%, in line with Q1'18.

Consolidated Net Profit was € 40.4 million, up 5.4%, equal to 23.7% of revenues (23.3% in Q1'18).

Consolidated Net Financial Position at 31 March 2019 was positive at € 78.3 million, an increase of € 2.9 million compared to the balance at year-end 2018 (equal to € 75.3 million), confirming the consistent generation of operating cash for the period. It is worth to underline the negative impact consequent to the adoption of the IFRS 16, amounting to € 32.2 million.

The Group Free Cash Flow in Q1'19 was € 35.6 million as against € 27.8 million in Q1'18.

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BUSINESS OUTLOOK

Management confirms the guidance already announced for 2019 at CER compared to 2018:  Revenues: growth between 5.0% and 8.0%.

 EBITDA margin: incidence on Group revenues comparable to 2018 EBITDA margin result.

In 2018, the euro/dollar exchange rate was equal to 1.18.

***

Given that Legislative Decree No. 25/2016, implementing European Directive 2013/50/UE, in force as of 18 March 2016, eliminated the obligation to publish the Interim Management Report, it should be noted that this Press Release of DiaSorin S.p.A. on the main consolidated results of Q1'19 was prepared on a voluntary basis as part of a Company decision to provide regular information on the economic, financial and operating performance of the Company aimed at the market and investors, in line with the conduct of the Company's main peers.

Mr. Piergiorgio Pedron, the officer in charge of preparing the corporate accounting documents of DiaSorin S.p.A. declares that, pursuant to paragraph 2, Art. 154 bis of the Consolidated Law on Finance, to the best of his knowledge, the accounting information contained in this Press Release corresponds to the documental results, accounting books and records.

For additional information, please contact:
Riccardo Fava	Ines Di Terlizzi
Corporate Vice President Communication & Investor Relations	Investor Relator
Tel. [phone]	Tel. [phone]
[e-mail]	[e-mail]

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