bioMerieux: 2007 Financial Results

The Board of Directors of bioMerieux (Paris:BIM) met on Friday, March 14 to approve the consolidated financial statements for the year ended December 31, 2007. The meeting was chaired by Alain Merieux and attended by the Statutory Auditors.
Consolidated data
in EUR millions 2007 2006 % change
----------------------------------------------------------------------
Sales 1,062.8 1,036.9 +2.5%
Gross profit 565.8 541.9 +4.4%
Operating income before non-recurring items 167.0 149.4 +11.7%
Operating income 149.9 152.5 -1.7%
Net income of consolidated companies 98.1 105.4 -6.9%
----------------------------------------------------------------------

"Our 2007 results attest to the dedication and involvement of our teams in an increasingly competitive business environment," said Chairman Alain Merieux. "To strengthen its position in clinical and industrial infectious disease applications and in high medical-value tests, bioMerieux has refocused its operations, carried out a large number of partnerships and acquisitions, and broadened its international footprint. In this way, we are pursuing our strategic commitment to addressing public health challenges around the world, in support of more preemptive, predictive and personalized healthcare."

2007 OPERATING HIGHLIGHTS

-- New products and installed base
-- 33 new products, including 24 reagents, were brought to
market during the year. They have enhanced the bioMerieux
offering, particularly in high medical-value tests (VIDAS(R)
B.R.A.H.M.S PCT(R), VIDAS(R)NT-proBNP and VIDAS(R) C.
difficile A&B) and in microbiology (notably the VITEK(R)2
Compact 15 platform and the VRE chromogenic culture medium).

-- The installed base continued to expand, with the
installation of 3,800 new instruments on customer premises
during the year, bringing the total to around 49,000 at
December 31. Lifted by the strong fourth-quarter growth in
instrument sales, equipment accounted for 12.7% of net sales
for the year, with reagents representing 82.5%.

-- Industrial reorganization

The Boxtel site in the Netherlands will be gradually closed by the end of 2009. Molecular biology reagent R&D and manufacturing will be transferred to Grenoble, where a new plant will be built on the site to accommodate manufacturing of these systems. Microplate immunoassay R&D will be moved to Marcy l'Etoile, while the products will be manufactured in Shanghai by the joint venture created with Shanghai Kehua Bio-Engineering Co. Ltd. Financially, the decision led to the recognition of a non-recurring charge of EUR 28.5 million in the 2007 financial results.

-- Acquisitions
-- In late March, bioMerieux acquired Spanish company
Biomedics to increase its culture media production capacity
and deepen its presence in the Spanish and Portuguese
markets. The company, which has 36 employees, has reported
EUR 3.4 million sales since its acquisition.

-- In September, bioMerieux acquired BTF, an Australian
company that provides the world's most precise quantitative
reference standards for microbiological testing. Its patented
BioBall(TM) technology is used in quality assurance to verify
the performance of control methods. Based in Sydney, BTF
employs 23 people.

-- New subsidiaries

A subsidiary was created in South Africa during the year, and another was being set up in Algeria at year-end. Both companies will start doing business in 2008.

-- Business development agreements
-- An agreement was signed in late June with Sysmex
Corporation by which bioMerieux will become Sysmex's global
partner for distributing its UF-1000i urinalysis system in
microbiology laboratories. Marketing began in September in
Europe, to be followed by the United States and then other
countries in early 2008.

-- An exclusive worldwide license agreement was signed in
April with LabTech Systems Ltd, an Australian health care
equipment and services company, concerning the future
marketing of LabTech Systems' automated pre-poured media
streaker known as PREVI(TM) Isola. To support the alliance,
bioMerieux acquired a nearly 10% stake in LabTech Systems for
AUD 2.15 million.

-- In March, an exclusive worldwide distribution agreement was
signed with Copan, authorizing bioMerieux to market an
innovative sample collection system developed by Copan.

-- An exclusive distribution agreement was signed in May with
AdvanDx, Inc. to distribute the company's Peptide Nucleic
Acid Fluorescence In Situ Hybridization (PNA FISH(TM)) tests
in the United States. Based on bacteria and yeast from
positive blood cultures, the tests enable faster
identification of bloodstream pathogens. In addition,
bioMerieux acquired a nearly 5% stake in AdvanDx for $5
million in late August.

-- An agreement was signed with Eiken Chemical Co., Ltd. by
which some Pre-Poured Media marketed by bioMerieux in Japan
will be manufactured by Eiken. The agreement took effect in
August 2007.

-- R&D and Theranostics agreements
-- bioMerieux formed a new strategic relationship with Cepheid
in January, wherein the two companies will use the best of
their respective technologies to develop and market an
innovative line of sepsis test products on the GeneXpert(R)
platform.

-- In September, an agreement was signed with Ipsen by which
bioMerieux will develop a companion test for a new breast
cancer drug currently in phase I clinical development.

-- An agreement was signed with Merck & Co. Inc. in December,
under which bioMerieux and Merck will collaborate to develop
an assay to use in infectious disease studies at Merck. This
test will be based on bioMerieux immunoassay technology.

-- Disputes

On June 13, the Paris Court of Appeal dismissed the infringement claim brought by Diffusion Bacteriologie du Var (D.B.V.) and International Microbio against bioMerieux's "MICOPLASMA IST" kit.

This decision follows on from the Court of Cassation ruling on March 28, 2006, that invalidated previous judgment by the Paris Court of Appeals of May 5, 2004, unfavourable to bioMerieux. International Microbio and D.B.V. have appealed the June 13 rulings. In addition, the infringement claim brought by the same parties against bioMerieux's German subsidiary have been finally dismissed. Infringement proceedings against bioMerieux's Italian and Spanish subsidiaries are still pending.

In light of these developments, the Company has reversed a provision in an amount of EUR 11.4 million.

FINANCIAL DATA

- Income statement

-- Net sales amounted to EUR 1,063 million in 2007, versus EUR 1,037 million in 2006.
This represented growth of 7.4% at constant exchange rates and
scope of consolidation (like-for-like), after a 5.9% gain in
2006. Including the 0.5% increase in sales from acquisitions
and business development agreements, growth amounted to 7.9%.

Sales growth reflected the combination of the following
factors:
In EUR millions
-----------------------------------------------------------
2006 net sales 1,037
Impact of divested operations(1) or discontinued
operations(2) (44)
2006 net sales excluding divested or discontinued
operations 993
Currency effect (29)
Organic growth, at constant exchange rates and scope
of consolidation 73 +7.4%
Impact of 2007 acquisitions and business development +7.9%
agreements 5 +0.5%
Residual sales from divested operations(1) or
discontinued operations(2) 21
2007 net sales 1,063
-----------------------------------------------------------
(1) Hemostasis business
(2) Microplate immunoassays in North America

-- Sales broke down by region as follows:
% change
Full-year Full-year -------------------
In EUR millions 2007 2006 Like-
Reported for-
like
----------------------------------------------------------------------

Europe* 613.2 586.0 +4.6% +5.6%
North America 262.7 268.8 -2.3% +10.2%
Asia-Pacific 118.9 113.1 +5.1% +12.0%
Latin America 68.0 69.0 -1.3% +4.5%

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TOTAL 1,062.8 1,036.9 +2.5% +7.4%
----------------------------------------------------------------------
*Including the Middle East and Africa

-- By application, sales broke down as follows:
% change
-------------------
Full-year Full-year Like-
In EUR millions 2007 2006 Reported for-
like
----------------------------------------------------------------------

Clinical Applications 908.9 894.3 +1.6% +6.8%
Bacteriology 533.9 505.5 +5.6% +8.9%
Immunoassays 288.2 286.9 +0.4% +2.3%
Molecular biology 47.3 39.9 +18.7% +19.5%
Other lines 39.5 62.0 -36.3% -5.0%

Industrial Applications 153.9 142.6 +7.9% +10.7%

----------------------------------------------------------------------
TOTAL 1,062.8 1,036.9 +2.5% +7.4%
----------------------------------------------------------------------

-- Gross profit came to EUR 565.8 million, or 53.2% of sales, versus 52.3% in 2006. This represented a EUR 24 million gain for the year, despite the loss of the contribution from divested or discontinued operations. The improvement was led by organic growth, economies of scale and a decline in non-quality rejects, which together offset the negative impact of currency rates and the high percentage of instruments in the revenue stream.
-- Selling, general and administrative expenses amounted to
EUR 277.6 million, or 26.1% of sales, versus 26.3% in 2006.

-- Research and development expenses stood at EUR 131.8
million, or 12.4% of sales, versus 12.5% in 2006.

-- Royalties from the patent portfolio rose by EUR 0.8 million
to EUR 10.6 million. They included in particular a royalty
payment from Becton Dickinson in a net amount of EUR 5.7
million.

-- With operating expenses under control, operating income before non-recurring items rose by 11.7% to EUR 167 million, representing 15.7% of sales. Excluding the currency effect on sales, the margin would have been at 15.3%, a 90 basis-point improvement over 2006.

-- Operating income amounted to EUR 149.9 million, compared with EUR 152.5 million in 2006. It reflects the EUR 28.5 million provision for closure of the Boxtel plant, partially offset by the EUR 11.4 million reversal of the provision on the D.B.V. dispute. In 2006, it included a EUR 10.1 million capital gain on sale of the hemostasis line, as well as a EUR 6.6 million charge related to the decided discontinuation of the US microplate immunoassay business.
-- Net financial income improved by EUR 3.8 million, primarily
due to the decline in average debt and to the EUR 3.3 million
pre-tax capital gain realized on the sale of the OPi shares.

-- Income tax expense amounted to EUR 55.1 million. Because
the provision for the closure of the Boxtel plant gave rise
only to a partial tax savings, the average tax rate rose to
35.6% of pretax income, from 30.4% in 2006. In 2006, on the
other hand, the internal transfer of certain patents held by
bioMerieux BV in the Netherlands enabled part of that
company's tax loss carryforwards to be recognized, thereby
lowering the rate.

The Company recognized a total of EUR 5.2 million in research
tax credits, of which EUR 4.2 million in France, and will
benefit in 2008 from the new French tax regime, which would
triple the percentage tax credit on eligible research
expenditure.

-- Net income amounted to EUR 98.1 million, or 9.2% of sales, versus EUR 105.4 million or 10.2% of sales in 2006.

- Statement of cash flows

-- Cash flow from operations before cost of net financial debt and income tax rose by EUR 31 million to EUR 238 million, led by growth in operating income before non-recurring items. It was negatively impacted in 2006 as a result of payments in settlement of the dispute with Institut Pasteur and Bio-Rad Laboratories, Inc.

-- Working capital requirement increased less than in 2006, in particular due to the fact that inventory and average days sales outstanding remained stable over the year. Operating working capital requirement represented 21% of sales, versus 22% in 2006.

-- Net capital expenditure totaled EUR 90 million, including EUR 40 million for placed instruments, compared with, respectively, EUR 89 million and EUR 47 million in 2006. Most industrial capital expenditure in 2007 was committed to increasing production capacity and improving productivity, as well as to consolidating the sales and marketing operations in France. Expenditure concerned a higher proportion of intangible assets, such as software licenses (particular from SAP) and technologies.

-- Financial investments, totaling EUR 28 million, included the acquisition of BTF, Biomedics and equity stakes in LabTech and AdvanDx.

-- As a result, the Company reported free cash flow of EUR 63 million for the year. Dividends totaling EUR 29.9 million (EUR 0.76 per share) were paid in June.

-- Net cash amounted to EUR 15 million at December 31, 2007, versus net debt of EUR 10 million a year earlier.

DIVIDEND

At the Annual Meeting on June 12, the Board of Directors will recommend setting the dividend at EUR 0.76 per share.

2008 OBJECTIVES

Based on the sustained growth in business, the Company expects to achieve like-for-like growth in 2008 sales ranging from the 7.4% reported in 2007 to 8.5% including the business development agreements. The basis of comparison will be 2007 sales excluding the residual impact of divested or discontinued operations; i.e. EUR 1,042 million.

In 2008, the Company is committed to maintaining its operating margin before non-recurring items at around the 15.7% reported in 2007, at constant 2007 exchange rates, despite the projected nearly 50% decline in royalty payments from Becton Dickinson, the residual fixed costs related to divested or discontinued operations and the impact of higher raw materials and energy prices. In addition, the Company has decided to step up investments critical for its long term growth. In particular, it intends to intensify its marketing drive in the United States, continue to expand its international network and implement a unified ERP system (SAP).

The Company has raised its 2012 target for operating margin before non-recurring items to between 16 and 17%, at constant 2007 exchange rates.

"2007 saw a sharp acceleration in bioMerieux's sales growth and a clear improvement in operating margin before non-recurring items," said Chief Executive Officer Stephane Bancel. "These high-quality results were driven by the dedication and intense involvement of our employees, who all share the same strategic vision. Our robust organic expansion, our Company's solid strengths and our stepped-up business development strategy all mean that we can reaffirm our objectives of driving an average 7 to 9% increase in sales per year through 2012 and raise our targeted 2012 operating margin before non-recurring items to between 16 and 17%, based on 2007 exchange rates."

The above forward-looking statements are based, entirely or partially, on assessments or judgments that may change or be modified, due to uncertainties and risks related to the Company's economic, financial, regulatory and competitive environment, notably those described in the 2006 Registration Document. Accordingly, the Company cannot give any assurance as to whether it will achieve the objectives described above. The Company does not undertake to update or otherwise revise any forecasts or objectives presented herein, except in compliance with the disclosure obligations applicable to companies whose shares are listed on a stock exchange.

NEXT FINANCIAL PRESS RELEASES

-- April 25, 2008: First-quarter sales and business review

-- June 12, 2008: Annual Meeting of Shareholders

ABOUT BIOMERIEUX

Advancing diagnostics to improve public health

A world leader in the field of in vitro diagnostics for 45 years, bioMerieux is present in more than 150 countries through 38 subsidiaries and a large network of distributors. In 2007, revenues reached EUR 1,063 million, of which 84% was derived from operations outside France.

bioMerieux provides diagnostic solutions (reagents, instruments, software) which determine the source of disease and contamination to improve patient health and ensure consumer safety. Our products are used for diagnosing infectious diseases and providing high medical value results for cardiovascular emergencies and cancer screening and monitoring. They are also used for detecting microorganisms in agri-food, pharmaceutical and cosmetic products. bioMerieux is listed on the Euronext Paris market. Other information can be found at www.biomerieux.com.
bioMerieux
CONSOLIDATED INCOME STATEMENT


JAN 07 JAN 06 JAN 05
- DEC - DEC - DEC
In millions of euros 07 06 05

----------------------------------------------------------------------

NET SALES 1,062.8 1,036.9 993.6

----------------------------------------------------------------------

COST OF SALES -497.0 -495.0 -473.2

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GROSS PROFIT 565.8 541.9 520.4

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OTHER OPERATING INCOME 10.6 9.8 8.3

----------------------------------------------------------------------

SELLING AND MARKETING EXPENSES -189.3 -186.7 -177.3
GENERAL AND ADMINISTRATIVE EXPENSES -88.3 -86.0 -81.9
RESEARCH AND DEVELOPMENT EXPENSES -131.8 -129.6 -130.7
TOTAL OPERATING EXPENSES -409.4 -402.3 -389.9

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OPERATING INCOME BEFORE NON-RECURRING ITEMS 167.0 149.4 138.8

----------------------------------------------------------------------
OTHER NON-RECURRING INCOMES (EXPENSES) -17.1 3.1 0.1

----------------------------------------------------------------------
OPERATING INCOME 149.9 152.5 138.9

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COST OF NET FINANCIAL DEBT 0.0 -0.9 -1.6
OTHER FINANCIAL ITEMS 4.7 1.8 1.2
INCOME TAX -55.1 -46.6 -48.4
INVESTMENTS IN ASSOCIATES -1.4 -1.4

NET INCOME OF CONSOLIDATED COMPANIES 98.1 105.4 90.1

----------------------------------------------------------------------
ATTRIBUTABLE TO THE MINORITY INTERESTS 0.1 0.1 0.0

ATTRIBUTABLE TO THE PARENT COMPANY 98.0 105.3 90.1

----------------------------------------------------------------------

----------------------------------------------------------------------

NET INCOME PER SHARE (a) 2.48 2.67 2.28

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(a) In the absence of dilutive instruments, diluted net income per
share is identical to basic net income per share
bioMerieux
CONSOLIDATED BALANCE SHEET


----------------------------------------------------------------------

ASSETS NET NET NET
In millions of euros 12/31/2007 12/31/2006 12/31/2005

----------------------------------------------------------------------

NON-CURRENT ASSETS

. Intangible assets 42.8 31.1 19.5
. Goodwill 76.9 74.8 69.6
. Property, plant and equipment 284.3 271.7 276.2
. Financial assets 17.8 14.9 15.8
. Investments in associates 3.1 4.9
. Other non-current assets 21.7 21.5 22.6
. Deferred tax assets 20.1 24.9 24.6

TOTAL 466.7 443.8 428.3

CURRENT ASSETS

. Inventories and work in
progress 145.8 146.8 156.0
. Accounts receivable 293.6 280.8 277.7
. Other operating receivables 23.8 23.7 14.2
. Non-operating receivables 14.0 10.6 9.0
. Cash and cash equivalents 54.5 33.9 20.9

TOTAL 531.7 495.8 477.8

TOTAL ASSETS 998.4 939.6 906.1

----------------------------------------------------------------------

LIABILITIES AND SHAREHOLDERS' EQUITY 12/31/2007 12/31/2006 12/31/2005

----------------------------------------------------------------------

SHAREHOLDERS' EQUITY

. Share capital 12.0 12.0 12.0
. Additional paid-in capital 63.7 63.7 63.7
. Retained earnings 458.9 382.2 312.8
. Other comprehensive income 0.6 0.9 -1.3
. Translation reserve -32.3 -7.0 20.9
. Net income for the year 98.0 105.3 90.1

TOTAL EQUITY BEFORE MINORITY
INTERESTS 600.9 557.1 498.2

MINORITY INTERESTS 0.4 0.4 0.3

TOTAL SHAREHOLDERS' EQUITY 601.3 557.5 498.5

NON-CURRENT LIABILITIES

. Net financial debt - long-term 18.2 17.3 16.9
. Deferred tax liabilities 12.8 5.4 3.5
. Provisions 71.4 59.9 74.2

TOTAL 102.4 82.6 94.6

CURRENT LIABILITIES

. Net financial debt - short-term 21.3 27.1 47.3
. Provisions 7.5 17.0 7.7
. Accounts payable 98.1 95.8 99.2
. Other operating liabilities 140.6 132.3 131.5
. Tax liabilities 12.3 11.0 14.5
. Non-operating liabilities 14.9 16.3 12.8

TOTAL 294.7 299.5 313.0

TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY 998.4 939.6 906.1
bioMerieux
CONSOLIDATED STATEMENT OF CHANGE IN NET FINANCIAL DEBT
----------------------------------------------------------------------

jan 07- jan 06- jan 05-
In millions of euros dec 07 dec 06 dec 05
12 12 12
months months months
----------------------------------------------------------------------

Net income of consolidated companies 98.1 105.4 90.1
Net depreciation and provisions, and
others 95.2 59.0 71.9
(Increase) / Decrease in fair value of
derivatives -1.1 0.3 0.2
Net realized capital gains (losses) -3.5 -6.4 (2) -2.4
Cash flow from operating activities 188.7 158.3 159.8

Cost of net financial debt 0.0 0.9 1.6
Current income tax expense 48.9 47.0 52.6
Cash flow from operating activities
before cost of net financial debt and
income tax 237.6 206.2 214.0
Increase in inventories -1.4 -4.5 -16.3
Increase requirements in accounts
receivable -18.2 -21.7 -2.7
Increase (Decrease) in accounts payable
and other operating working capital 11.2 -2.3 20.0
Decrease / (Increase) in operating
working capital -8.4 -28.5 1.0

Income tax paid -56.3 -53.5 -46.0
Cost of net financial debt 0.0 -0.9 -1.6
Other 0.4 3.2 -1.1
(Increase) / Decrease in non-current
assets -2.3 -1.9 -1.8
Decrease / (Increase) in working
capital requirements -66.6 -81.6 -49.5
Net cash flow from operations 171.0 124.6 164.5

----------------------------------------------------------------------

Purchase of property, plant and
equipment -89.7 -88.6 -81.6
Proceeds on fixed asset disposals 8.0 8.0 12.2
Purchase of financial assets /
Disposals of financial assets -1.1 0.8 -5.7
Net cash from the sale of Hemostasis
line of business 2.3 33.7
Impact of changes in the scope of
consolidation -21.6 (1) -18.4 (3) -0.5 (4)
Other investing cash flows -1.3

Net cash flow from (used in) investment
activities -103.4 -64.5 -75.6

----------------------------------------------------------------------

Purchases and proceeds of treasury
stocks -5.0 -3.6 -0.1
Dividends to bioMerieux SA shareholders -29.9 -18.1 -15.8
Net cash flow from (used in)
shareholders' equity -34.9 -21.7 -15.9

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CHANGE IN NET FINANCIAL DEBT (5) 32.7 38.4 73.0
----------------------------------------------------------------------

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ANALYSIS OF CHANGE IN NET FINANCIAL
DEBT

Net financial debt at the beginning of
the year 10.5 43.3 118.1
Impact of currency changes on net
financial debt 7.2 5.6 -1.8
Change in net financial debt: -32.7 -38.4 -73.0
- Confirmed facilities 2.5 -0.9 -97.5
- Cash and other bank deposits -35.2 -37.5 24.5
Net financial debt at the end of the
year -15.0 10.5 43.3

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(1) Acquisition of Biomedics S.L. (11,3 MEUR ), net of cash at the
acquisition date (1,3 MEUR )
Acquisition of BTF (11,7 MEUR ), net of cash at the acquisition
date (0,1 MEUR )
(2) Including net income before tax on the sale of Hemostasis line of
business: 10,1 MEUR , or 6,9 MEUR after tax
(3) Including Acquisition of Bacterial Barcodes Inc (11,6 MEUR )
Including Acquisition of Relia, consolidated under equity method
(6,8 MEUR )
(4) Partial buyout of bioMerieux Mexico minority shareholder
(5) Change in net financial debt, excluding impact of exchange rates