Biotage: Interim Report January - June 2019
UPPSALA, Sweden, July 16, 2019 /PRNewswire/ -- Second quarter April - June 2019
-- Net sales amounted to 282.1 MSEK (236.1), which is an increase by 19.5
percent compared to the corresponding quarter last year. At comparable
exchange rates[1] and adjusted for acquisitions, sales increased by 5.8
percent.
-- Operating profit increased by 12.1 percent to 56.1 MSEK (50.0).
-- Result after tax increased by 5.4 percent to 54.2 MSEK (51.4).
-- Earnings per share amounted to 0.83 SEK (0.79) before and after
dilution.
-- The cash flow from operating activities increased to 43.2 MSEK (24.6).
-- Dividends to the shareholders were paid to the amount of 97.8 MSEK
(90.6).
-- Net debt[1] at June 30 amounted to 192.3 MSEK (-13.5). Cash and cash
equivalents amounted to 108.1 MSEK (95.8). Liabilities to credit
institutions amounted to 149.9 MSEK (109.3).
-- On May 24 the Board of Directors announced that Tomas Blomquist has been
appointed as new CEO for Biotage effective November 6.
Six months January - June 2019
-- Net sales amounted to 530.1 MSEK (444.1), an increase by 19.4 percent
compared to the corresponding period last year. At comparable exchange
rates1) and adjusted for acquisitions, net sales increased by 7.2
percent.
-- Operating profit increased by 15.6 percent to 105.9 MSEK (91.6).
-- Result after tax increased by 5.6 percent to 101.7 MSEK (96.3).
-- Earnings per share amounted to 1.56 MSEK (1.49).
-- The cash flow from operating activities amounted to 55.7 MSEK (52.7).
-- The acquisition of PhyNexus Inc. was completed on January 15. The
purchase price amounted to approx. 21.3 MUSD (approx. 190.6 MSEK[2]), of
this sum approx. 4.8 MUSD (approx. 43.2 MSEK) in cash payment and
approx. 6.6 MUSD (approx. 58.6 MSEK) in newly issued shares in Biotage
was paid in connection with closing. The remaining approx. 10.0 MUSD
(approx. 89.3 MSEK) is expected future additional purchase price
payments based on future results.
-- The issue of consideration shares for the acquisition increased the
number of shares in Biotage from 64,714,447 to 65,201,784, which has
resulted in a dilution of 0.7 percent for existing shareholders.
[1] See definition on pp. 18-20
[2] Based on an exchange rate SEK/USD of 8,93
Comments by CEO Torben Jörgensen
Biotage follows up the strong first quarter with yet another record quarter concerning sales and earnings. The reported sales increased by no less than 19.5 percent compared with the second quarter 2018. At comparable exchange rates and adjusted for acquisitions, sales increased by 5.8 percent in the quarter isolated, while the corresponding figure for organic growth reaches 7.2 percent for the first six months. This means that Biotage is approaching its financial target; an average annual organic sales growth of 8 percent measured over a three year period. The increased sales have effect on profitability and Biotage is growing with increased profitability. The gross margin for the quarter as well as for the six months period exceeds our strategic goal of 60 percent. For the quarter the gross margin increased to 62.3 percent.
The operations in Asia continue to show strong growth. Biotage's initiative with direct sales in India is so far very successful with a sales increase of over 30 percent compared with the corresponding quarter last year. We have been successful especially in organic chemistry and we now have the three largest local Indian contract research organizations in our line of business as our customers. Also the operations in China are growing beyond expectations and here we are especially pleased that the sales of our products in analytical chemistry are gaining momentum. During the quarter we entered into an OEM collaboration with Shandong Yingsheng Biotechnology Co., Ltd. and the first deliveries of systems and consumables for analytical chemistry within the framework of this collaboration were made at the end of the quarter. The Americas is still our single biggest geographical market and after a period with lower sales than expected in the US it is satisfying to see that in the second quarter sales are back on track. Sales in the Americas region, including the US, Canada and Latin America, increased by almost 30 percent compared to the preceding quarter this year. This is partly due to the improved situation concerning recruitment of sales staff in the US, at the end of the quarter we for the first time in a long time no longer had any vacancies in this sales force. The sales in the EU and EMEA decreased by 5 percent adjusted for acquisitions compared to the corresponding quarter last year, which is not at all up to our expectations, but over the first six months of the year the EU and EMEA still grew by a little over 6 percent.
The operating margin (EBIT) is rounded to 20 percent both for the quarter and for the six months period and now amounts to 18.1 percent on a rolling average for the last three years, to be compared with Biotage's profitability target of an average of 20 percent over a three year period.
During the latter part of the quarter we carried out launches of new products primarily for environmental applications, developed at our new unit in Salem, New Hampshire, where we are also working intensely with production transfers of other Biotage products, including products gained in the acquisition of PhyNexus in January. The integration of PhyNexus proceeds according to plan and currently beta testing of a new instrument generation for automated purification of plasmids is in progress, estimated to be launched later this year.
During the quarter Biotage has also launched software updates for the flash purification system Biotage® Selekt that further strength the competitive advantages of this system and the associated consumables Biotage® Sfär. The sales of Biotage® Selekt are gaining momentum and we are seeing an increased use of our systems not least in the US pharma industry. The demand for our systems is increasing also in the area of industrial products, where we see a broad increase all the way from pilot to production scale.
As previously announced Biotage's Board of Directors has recruited a replacement for me and I am very pleased with the selection of Tomas Blomquist as new CEO of Biotage AB. Blomquist takes up his duties on November 6, 2019 and then takes over the responsibility for the Group. He has recently served as Vice President EMEA Cardiometabolic at Abbott.
I look forward to the second half of 2019 with confidence.
Coming financial reports
The interim report for the third quarter 2019 will be published on Nov 5, 2019.
The year-end report for 2019 will be published on February 7, 2020.
All reports are available at Biotage's website from the above dates.
This report has not been reviewed by the company's auditor.
Uppsala July 16, 2019
Torben Jörgensen
President and CEO
For further information, please contact:
Torben Jörgensen, President and CEO, phone: +46-707-49-05-84
Erika Söderberg Johnson, CFO, phone: +46-707-20-48-20
This information is information that Biotage AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact persons set out above, at 08.30 CET on July 16, 2019.
About Biotage
Biotage offers efficient separation technologies from analysis to industrial scale and high quality solutions for analytical chemistry from research to commercial analysis laboratories. Biotage's products are used by government authorities, academic institutions, contract research and contract manufacturing companies, pharmaceutical and food companies, among others. The company is headquartered in Uppsala and has offices in the US, UK, China, Japan, South Korea and India. Biotage has approx. 440 employees and had sales of 911 MSEK in 2018. Biotage is listed on NASDAQ Stockholm. Website: www.biotage.com
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