BioMerieux sees weaker 2014 as forex, investment costs weigh
PARIS, March 19
PARIS, March 19 (Reuters) - French diagnostics specialist company BioMerieux said it expected operating income to drop this year as it deals with adverse exchange rates, the integration of U.S. company BioFire, and ongoing production issues at a U.S. plant.
The company, which makes tests to detect diseases and to check the quality of food and water, took over U.S. firm BioFire for $450 million last September to strengthen its position as a major player in infectious disease diagnostics.
BioMerieux expects 2014 operating profit - before non-recurring items related to the deal, finalised in January - of 220-245 million euros, down from 262 million last year.
"Despite a volatile currency environment, we will pursue our roadmap in 2014, which will therefore be a year of consolidation and investment focused on deploying our molecular biology solutions after the BioFire acquisition," Chief Executive Jean-Luc Belingard said in a statement.
BioMerieux aims for organic sales growth of 3 to 5 percent after sales rose 4.6 percent to 1.59 billion euros last year, driven by strong growth in emerging markets, though weak currencies there pinched revenue and profit.
Adverse exchange rates should impact operating income much more significantly than last year, BioMerieux warned, as the currency hedges set up in late 2013 prove less protective than those set up in late 2012.
Relative weakness in the U.S. dollar, the Brazilian real, the Indian rupee, the Argentine peso and the Turkish lira cut 54 million euros off revenue last year and 24 million off operating income and BioMerieux expects it will this year cut revenue by 50 million and operating income by "at least 25 million".
BioMerieux also said efforts to restore output levels at its Durham, North Carolina site in the United States would cost around 30 million euros this year and that it would invest another 20 million to increase the site's capacity.
BioMerieux shares, which are up 6.5 percent so far this year, closed 0.5 percent higher before the results, at 81.19 euros, valuing the company at around 3.2 billion euros.
(Reporting by Natalie Huet; Editing by Andrew Callus)
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