07.29.15
$6.5 Billion
KEY EXECUTIVES:
Heinz-Walter Große, Chairman of the Management Board & CEO
Markus Strotmann, Head of the Avitum Division
Hanns-Peter Knaebel, Head of the Aesculap Division
Meinrad Lugan, Head of the Hospital Care & OPM Divisions
Caroll H. Neubauer, Head of the North America Region
Otto Philipp Braun, Head of the Iberian Peninsula and Latin America
Bruce Heugel, Sr. VP & Chief Financial Officer
Wes Cetnarowski, M.D. Sr. VP, Scientific Affairs & Chief Medical Officer
NO. OF EMPLOYEES: 54,000
GLOBAL HEADQUARTERS: Melsungen, Germany
Few voices have been louder than that of B. Braun Medical Inc.’s in the Herculean struggle to repeal the medical device excise tax, a part of the Patient Protection and Affordable Care Act of 2010. This April, during a Senate Committee on Finance Subcommittee on Healthcare hearing, B. Braun’s Chief Financial Officer (CFO) Bruce A. Heugel made an impassioned plea for lawmakers to hear what he and others in the medtech industry—particularly the smaller companies—are asking for: relief.
“Sustainability is key to B. Braun,” Heugel said. “We have responsibility to our employees, shareholders and community not to end up like Bethlehem Steel. So when the new medical device tax takes away $33 million through 2015, we are forced to launch painful counter measures. As the CFO we follow a simple rule: We balance our check book, and do not spend money we do not have.”
Heugel meant it when he said he will not spend money he doesn’t have. He listed no fewer than 10 areas in which B. Braun has had to make cuts or tighten its belt because of its reported 29 percent increase in its federal tax bill. Those cuts included clinical trials, research and development, pension plans and hiring. Most notably was the company’s decision to scrap plans for a new corporate headquarters building in the Lehigh Valley area near Bethlehem, Pa. In 2013, the company purchased 21.5 acres of undeveloped land from Lehigh University. In 2014, the plans for that new headquarters came to a halt due to the reported $13 million a year the device tax had been costing B. Braun.
“The medical device tax stopped that project,” Chairman and CEO Caroll H. Neubauer said. No plans have been announced for restarting construction.
Despite the strong message B. Braun has been sending regarding the detrimental effects of the device tax, the company is in good shape. In fact, the management board reported in the 2014 annual report that “overall, the B. Braun Group is in a good, stable financial condition.”
In fiscal 2014, sales of the B. Braun Group overall amounted to 5.43 billion euros ($6.59 billion) representing year-on-year growth of 5 percent.
The B. Braun Avitum Division, which provides modern treatment systems, consulting services and training courses, reported particularly good sales growth at 20.5 percent. The Outpatient Market Division also achieved solid growth at 5.7 percent. In contrast, sales in the Hospital Care and the Aesculap Divisions were only slightly higher than the previous year at 2.2 percent and 3.7 percent, respectively.
The regions Latin America as well as Asia and Australia recorded a high level of sales growth in their local currencies—18.3 percent and 10.3 percent, respectively. In euros, however, as a result of the sometimes heavily devalued local currencies, growth rates were more moderate: Latin America at 6.2 percent and Asia and Australia at 7.3 percent. Europe (excluding Germany) experienced stable growth of 3.8 percent, despite the market environment continuing to be challenging. Germany achieved a solid sales growth of 5 percent. In U.S. dollars, the North America region generated growth of 4.3 percent over the previous year. A stronger U.S. dollar at the end of the reporting year contributed to a sales increase in euros of 4.2 percent. In the region Africa and the Middle East, growth was very dynamic at 11.3 percent.
Despite the good sales year, B. Braun’s earnings remained stable at 316 million euros ($342.4 million). Budget cuts within the governmental health systems of some countries in which B. Braun is operational had an impact on earnings which resulted in lower margins. Increasingly complex approval processes for medical devices led to higher costs. Also, even though plans for a new global headquarters in Pennsylvania came to a grinding halt, the company did open its new Canadian headquarters in August, which meant significant investment dollars spent in North America.
“We believe our new office is an investment in the community and will allow us to strengthen collaboration and local networking and grow in the future as our product lines expand,” said Bob Comer, president of B. Braun of Canada Ltd.
Product News
Despite the halting of many areas of operations, B. Braun did have a lot of product movement activity in 2014. In January, the company earned U.S. Food and Drug Administration (FDA) approval of 5 percent dextrose and 0.45 percent Sodium chloride injection containers. In April, the company launched a new 1.5 percent glycine irrigation USP (United States Pharmacopeia) Titan XL 3L container. It was the third launch within B. Braun’s growing line of eco-friendly fluid therapy products. Then in October, The FDA approved B. Braun’s of Sterile Water for Injection USP in 2L and 3L containers. These pharmacy bulk package new products will be used with B.Braun’s Pinnacle TPN Management System and other automated compounding devices.
KEY EXECUTIVES:
Heinz-Walter Große, Chairman of the Management Board & CEO
Markus Strotmann, Head of the Avitum Division
Hanns-Peter Knaebel, Head of the Aesculap Division
Meinrad Lugan, Head of the Hospital Care & OPM Divisions
Caroll H. Neubauer, Head of the North America Region
Otto Philipp Braun, Head of the Iberian Peninsula and Latin America
Bruce Heugel, Sr. VP & Chief Financial Officer
Wes Cetnarowski, M.D. Sr. VP, Scientific Affairs & Chief Medical Officer
NO. OF EMPLOYEES: 54,000
GLOBAL HEADQUARTERS: Melsungen, Germany
Few voices have been louder than that of B. Braun Medical Inc.’s in the Herculean struggle to repeal the medical device excise tax, a part of the Patient Protection and Affordable Care Act of 2010. This April, during a Senate Committee on Finance Subcommittee on Healthcare hearing, B. Braun’s Chief Financial Officer (CFO) Bruce A. Heugel made an impassioned plea for lawmakers to hear what he and others in the medtech industry—particularly the smaller companies—are asking for: relief.
“Sustainability is key to B. Braun,” Heugel said. “We have responsibility to our employees, shareholders and community not to end up like Bethlehem Steel. So when the new medical device tax takes away $33 million through 2015, we are forced to launch painful counter measures. As the CFO we follow a simple rule: We balance our check book, and do not spend money we do not have.”
Heugel meant it when he said he will not spend money he doesn’t have. He listed no fewer than 10 areas in which B. Braun has had to make cuts or tighten its belt because of its reported 29 percent increase in its federal tax bill. Those cuts included clinical trials, research and development, pension plans and hiring. Most notably was the company’s decision to scrap plans for a new corporate headquarters building in the Lehigh Valley area near Bethlehem, Pa. In 2013, the company purchased 21.5 acres of undeveloped land from Lehigh University. In 2014, the plans for that new headquarters came to a halt due to the reported $13 million a year the device tax had been costing B. Braun.
“The medical device tax stopped that project,” Chairman and CEO Caroll H. Neubauer said. No plans have been announced for restarting construction.
Despite the strong message B. Braun has been sending regarding the detrimental effects of the device tax, the company is in good shape. In fact, the management board reported in the 2014 annual report that “overall, the B. Braun Group is in a good, stable financial condition.”
In fiscal 2014, sales of the B. Braun Group overall amounted to 5.43 billion euros ($6.59 billion) representing year-on-year growth of 5 percent.
The B. Braun Avitum Division, which provides modern treatment systems, consulting services and training courses, reported particularly good sales growth at 20.5 percent. The Outpatient Market Division also achieved solid growth at 5.7 percent. In contrast, sales in the Hospital Care and the Aesculap Divisions were only slightly higher than the previous year at 2.2 percent and 3.7 percent, respectively.
The regions Latin America as well as Asia and Australia recorded a high level of sales growth in their local currencies—18.3 percent and 10.3 percent, respectively. In euros, however, as a result of the sometimes heavily devalued local currencies, growth rates were more moderate: Latin America at 6.2 percent and Asia and Australia at 7.3 percent. Europe (excluding Germany) experienced stable growth of 3.8 percent, despite the market environment continuing to be challenging. Germany achieved a solid sales growth of 5 percent. In U.S. dollars, the North America region generated growth of 4.3 percent over the previous year. A stronger U.S. dollar at the end of the reporting year contributed to a sales increase in euros of 4.2 percent. In the region Africa and the Middle East, growth was very dynamic at 11.3 percent.
Despite the good sales year, B. Braun’s earnings remained stable at 316 million euros ($342.4 million). Budget cuts within the governmental health systems of some countries in which B. Braun is operational had an impact on earnings which resulted in lower margins. Increasingly complex approval processes for medical devices led to higher costs. Also, even though plans for a new global headquarters in Pennsylvania came to a grinding halt, the company did open its new Canadian headquarters in August, which meant significant investment dollars spent in North America.
“We believe our new office is an investment in the community and will allow us to strengthen collaboration and local networking and grow in the future as our product lines expand,” said Bob Comer, president of B. Braun of Canada Ltd.
Product News
Despite the halting of many areas of operations, B. Braun did have a lot of product movement activity in 2014. In January, the company earned U.S. Food and Drug Administration (FDA) approval of 5 percent dextrose and 0.45 percent Sodium chloride injection containers. In April, the company launched a new 1.5 percent glycine irrigation USP (United States Pharmacopeia) Titan XL 3L container. It was the third launch within B. Braun’s growing line of eco-friendly fluid therapy products. Then in October, The FDA approved B. Braun’s of Sterile Water for Injection USP in 2L and 3L containers. These pharmacy bulk package new products will be used with B.Braun’s Pinnacle TPN Management System and other automated compounding devices.