STRATEC Biomedical (DE:SBSG), a German designer and builder of automated OEM diagnostic systems, has revised its core business guidance for 2016 and 2017 due to volatile client forecasts arising from sales uncertainty and local competition in China. Preliminary 2015 results showed revenues up 1.4% to €146.9m and an improved EBIT margin of 18.3% due to higher service part sales. The about €67m Diatron acquisition adds about €25m revenue in FY16 and €37m in FY17, taking our 2016 consolidated revenue forecast to a revised €176m, with 2017 revenues potentially at €198m. Diatron’s EBIT margin is assumed to be 17%, similar to Stratec’s core business.
FY15 preliminary results
Unaudited revenues of €146.9m were slightly lower than our forecast €148.4m, but EBIT, at about €26.9m, was as expected due to a higher margin at 18.3% vs 18% forecast. The rise was largely due to higher than expected service part sales at 24%+ of revenue, implying €35m+. Service part sales are much higher margin than manufactured systems and recognised development revenues have zero EBIT. Management disclosed that 2015 sales shifted towards higher-value systems.
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