Biotage

Quarterly Report • Nov 5, 2019

Interim report

January - September 2019

November 5, 2019

A quarter of records

Third quarter July - September 2019

• Net sales amounted to 282.7 MSEK (232.2), which is an increase by 21.7 percent compared to the corresponding quarter last year. At comparable exchange rates and adjusted for acqusitions1) sales increased by 8.1 percent.
• Operating profit increased by 42.5 percent to 64.3 MSEK (45.1).
• Result after tax increased by 51.3 percent to 66.6 MSEK (44.0).
• Earnings per share increased to 1.02 SEK (0.68) before and after dilution.
• The cash flow from operating activities increased to 80.0 MSEK (50.7).
• Net debt1) at September 30 amounted to 127.1 MSEK (-67.6). Cash and cash equivalents amounted to 131.9 MSEK (177.0). Liabilities to credit institutions amounted to 109.5 MSEK (109.4).

Nine months January – September 2019

• Net sales amounted to 812.8 MSEK (676.3), an increase by 20.2 percent compared to the corresponding period last year. At comparable exchange rates and adjusted for acquisitions1) net sales increased by 8.6 percent.
• Operating profit increased by 24.5 percent to 170.3 MSEK (136.7).
• Result after tax increased by 20.0 percent to 168.3 MSEK (140.3).
• Earnings per share amounted to 2.58 SEK (2.17) before and after dilution.
• The cash flow from operating activities amounted to 135.5 MSEK (103.4).
• Dividends to the shareholders were paid to the amount of 97.8 MSEK (90.6) in the month of May.
• On May 24 the Board of Directors announced that Tomas Blomquist has been hired as new CEO for Biotage effective November 6.

Biotage AB (publ) Box 8 SE-751 03 Uppsala Visiting address: Vimpelgatan 5 Phone: 018-56 59 00 Org. no.: 556539-3138 www.biotage.com Page 1 of 24

• The acquisition of PhyNexus Inc. was completed on January 15. The purchase price amounted to approx. 21.3 MUSD (approx. 190.6 MSEK² ), 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 taking possession. 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. 20-21

2) Based on an exchange rate SEK/USD of 8,93

Group financial development in brief

Amounts in SEK millions	Q3	Q3	9 months	9 months	12 months
	Jul-Sep	Jul-Sep	Jan-Sep	Jan-Sep	Jan-Dec
	2019	2018	2019	2018	2018
Net sales	282.7	232.2	812.8	676.3	910.9
Cost of sales	-105.0	-90.8	-306.3	-263.7	-354.3
Gross profit	177.6	141.4	506.5	412.6	556.6
Operating expenses	-113.3	-96.2	-336.3	-275.8	-384.1
Operating profit/loss (EBIT)	64.3	45.1	170.3	136.7	172.5
Financial items	8.8	-1.8	10.0	4.1	3.8
Profit/loss before tax	73.1	43.3	180.3	140.8	176.3
Tax expenses	-6.5	0.7	-12.0	-0.5	-8.7
Total profit/loss for the period	66.6	44.0	168.3	140.3	167.6
Gross margin	62.8%	60.9%	62.3%	61.0%	61.1%
Operating margin (EBIT)	22.8%	19.4%	20.9%	20.2%	18.9%

1) See definition on pp. 20-21

Comments by CEO Torben Jörgensen

It has been a great pleasure and responsibility to work as the CEO for Biotage for close to 14 years, and to finish with such a strong quarter as this is of course nothing but fantastic. Once again Biotage sets new records. Never before have the sales been so high. The gross margin and the profitability are also at record level. During the quarter Biotage also achieved something that I personally have been looking forward to; on a rolling 12 months basis Biotage now has a turnover of just over one billion SEK.

All geographic regions with the exception of Europe are now showing growth exceeding 8 percent. This enables Biotage to approach its financial target; an average annual organic growth rate of 8 percent measured over a three year period. At comparable exchange rates and adjusted for acquisitions, sales increased by 8.1 percent in the quarter while the corresponding figure for organic growth reaches 8.6 percent for the first nine months of the year.

The sales in Asia continue to develop positively. We are seeing strong growth all over this region and an outstanding example is China, which now contributes 10 percent of Biotage's global sales.

The increased sales are not achieved at the expense of lower profitability. On the contrary, Biotage is growing with improved profitability. It is worth noting that the gross margin for the quarter as well as for the first nine months exceeds our strategic goal of 60 percent. For the quarter the gross margin increased to no less than 62.8 percent.

The development of our offering in Industrial products continues to be strong. This product area now constitutes 12 percent of Biotage's total sales. It is almost a year since we launched the latest flash-purification platform Biotage® Selekt together with the new series of consumables, Biotage ® Sfär. As these products are part of Biotage's single largest product area, Purification, it is of course important that the launch is successful. The product area continues to grow, we are gaining market share and we have succeeded to meet the wishes of our customers in the American pharma industry.

Everything has not gone according to schedule and our wishes, however. The new instrument generation for automatic purification of plasmids, which came to Biotage with the acquisition of PhyNexus earlier this year, will not be launched during 2019 as originally planned. We need more time to ensure that the product meets Biotage's high quality standards and the launch has therefore been postponed to next year.

Already in the six months report I wrote that I was looking forward with confidence to the second half of the year. Now we have one quarter left of 2019 and with a strong order book I continue to look positively to the end of the year. As this is my last interim report as CEO I would like to take the opportunity to thank all coworkers, customers, the Board of Directors and the shareholders who have

made this journey possible. Biotage has recruited a very good successor to me and as previously announced I will continue on the board of Biotage, and, if the shareholders are willing, as Chairman of the Board for Biotage after the extraordinary general meeting on November 7.

Group result, financial position and cash flow

Third quarter July – September 2019

Group net sales in the third quarter 2019 amounted to 282.7 MSEK (232.2) which is an increase by 21.7 percent. At comparable exchange rates and adjusted for acquisitions sales increased by 8.1 percent compared to the corresponding quarter last year. The Americas was the biggest market with 46 percent (43) of the net sales. Asia contributed 31 percent (29) and the EU and EMEA area contributed 23 percent (28).

The gross margin for the quarter increased to 62.8 percent (60.9). The sales consisted to 48 percent (49) of system sales and to 52 percent (51) of aftermarket products (consumables and service). The work to increase production efficiency and the focused efforts to reduce materials costs have led to increased profitability for a number of the company's products. Profitability is also favored by higher sales volumes and the currency situation with a relatively weak SEK, as the great majority of our sales are made in other currencies, primarily USD and EUR.

The operating expenses amounted to 113.3 MSEK (96.2), of this sum 83.3 MSEK (64.3) were sales costs. The 19.0 MSEK increase in sales costs compared to the corresponding period last year is mainly attributable to the expanded sales organization, including acquisitions, but also to currency effects. Research and development costs increased with 5.7 MSEK to 18.7 MSEK (13.1), mainly explained by costs in the acquired operations in the US and the intense work in development projects that were capitalized in the comparative period, primarily the flash purification system Biotage® Selekt and the associated consumables Biotage® Sfär, which were launched on October 1, 2018. This also means increased amortization of capitalized development costs in the quarter, 5.6 MSEK (4.0). The administration costs increased with 3.5 MSEK to 19.0 MSEK (15.5) partly as a result of the acquisition of PhyNexus.

Other operating items, amounting to 7.7 MSEK (-3.3) primarily consist of currency effects on operations related liabilities and receivables and Biotage's share in the result of the associated company Chreto, -0.3 MSEK (-0.6). The positive contribution this year and the negative effect in the comparative period together amount to a positive net effect on the result of the quarter of no less than 11.0 MSEK between the years.

The operating profit (EBIT) improved by 42.5 percent to 64.3 MSEK (45.1) corresponding to an operating margin (EBIT margin) of 22.8 percent (19.4). The

average operating margin for the last three year period now amounts to 18.6 percent (16.9), to be compared to the financial target of 20 percent.

Net financial income amounted to 8.8 MSEK (-1.8). The difference of 10.6 MSEK compared to the corresponding period last year is mainly attributable to currency effects. The result after tax increased by 51.3 percent to 66.6 MSEK (44.0). The reported tax cost increased with 7.2 MSEK to 6.5 MSEK (-0.7). Reported tax is affected by changes in the book value related to fiscal deficits.

Cash flow

The cash flow from operating activities increased to 80.0 MSEK (50.7). 4.9 MSEK (-) of this increase is related to the reporting according to IFRS 16. The investments amounted to 9.7 MSEK (13.4). Amortizations and write-downs amounted to 19.1 MSEK (9.7). Capitalized development costs accounted for 7.6 MSEK (6.1) of the investments and 5.6 MSEK (4.0) of the amortizations and write-downs.

Nine months January – September 2019

Group net sales in the nine months period increased by 20.2 percent to 812.8 MSEK (676.3). At comparable exchange rates and adjusted for acquisitions net sales increased by 8.6 percent (8.5). The Americas was the biggest market with 44 (42) percent of the net sales. Asia contributed 31 (29) percent and the EU and EMEA area 25 (29) percent.

The gross margin increased to 62.3 percent (61.0), with a product mix where systems accounted for 48 percent (50) of the sales and aftermarket products for 52 percent (50).

The operating expenses amounted to 336.3 MSEK (275.8). The increase is to a large extent explained by a 41.8 MSEK increase of the sales costs to 230.7 MSEK (188.9). The administration costs increased with 8.6 MSEK to 57.9 MSEK (49.3) due to costs related to the acquisition of PhyNexus and costs for the recruitment of a new CEO. Research and development costs increased with 11.4 MSEK to 56.4 MSEK (45.0), primarily explained by costs in acquired operations in the US and the effects of capitalization and amortization of costs for development projects. Other operating items amounting to 8.7 MSEK (7.3) primarily consists of currency effects on operations related liabilities and receivables and the share in the result of the associated company Chreto -2.9 MSEK (-1.1).

Despite this the operating profit improved by 24.5 percent to 170.3 MSEK (136.7), corresponding to an operating margin (EBIT) of 20.9 percent (20.2). Net financial income amounted to 10.0 MSEK (4.1). Result after tax increased by 20.0 percent to 168.3 MSEK (140.3).

The cash flow from operating activities increased to 124.6 MSEK (103.4). 14.6 MSEK of this increase is due to the introduction of IFRS 16. The cash flow was negatively affected with 77.7 MSEK from changes in operating capital, of which 16.9 MSEK relates to increased inventories, 1.3 MSEK to reduced operating

liabilities and 59.5 MSEK to operating receivables, primarily increased accounts receivable related to increased sales. The investments amounted to 72.3 MSEK (167.7), the net effect of the acquisition of PhyNexus accounting for 39.5 MSEK. Amortizations and write-downs amounted to 54.1 MSEK (28.8). Capitalized development costs accounted for 18.4 MSEK (20.6) of the investments and 16.7 MSEK (12.3) of the amortizations and write-downs.

Balance sheet items

At September 30 the Group's cash and cash equivalents amounted to 131.9 MSEK (177.0). The interest-bearing liabilities relate to loans under a credit facility taken out in 2018 in connection with the acquisition of Horizon Technology Inc. to the amount of 109.5 MSEK (109.4) and leasing liability calculated to 58.8 MSEK (-) according to IFRS 16. Net cash, which also includes 90.7 MSEK (-) in calculated additional purchase sum related to the acquisition of PhyNexus Inc., thus amounted to 127.1 MSEK (-67.6). During the period dividends to the shareholders were paid to the amount of 97.8 MSEK (90.6).

The Group reports a total goodwill of 327.0 MSEK (186.1) at September 30. The increase in goodwill relates to the acquisition of PhyNexus Inc. that was completed in January. Other reported goodwill relates to the acquisitions of Horizon Technology Inc. in 2018 and the acquisitions of MIP technologies and two product lines from Caliper Life Sciences in 2010.

Other intangible fixed assets amounted to 268.0 MSEK (192.7). Of this sum capitalized development costs accounted for 102.9 MSEK (102.8). The rest of the increase primarily consists of identified surplus value of acquired assets in PhyNexus, see page 22.

The expected additional purchase price concerning PhyNexus amounts to 89.3 MSEK. Of this sum 71.4 MSEK is reported as long-term financial liability and 17.9 MSEK as short-term financial liability.

At September 30 the equity capital amounted to 867.5 MSEK compared to 702.2 at the start of the year. The 165.3 MSEK change during the nine months period is explained by the net result 168.3 MSEK (140.3), dividends to the shareholders - 97.8 MSEK (-90.6), currency hedging and foreign exchange effects at the translation of foreign subsidiaries 36.1 MSEK (15.1) and the new share issue 58.6 MSEK (-) in connection with the acquisition of PhyNexus.

Major events after the reported period

On October 1it was announced that Erika Söderberg Johnson will leave the position as CFO after eight years employment at Biotage. Erika Söderberg Johnson has a six months' notice period. The company has started the recruitment of a successor.

On October 14 it was announced that the shareholders in Biotage are summoned to an Extraordinary General Meeting on November 7, 2019. For this EGM the nomination committee of Biotage has proposed to extend the board with one member to a total of six board members including the Chairman of the Board, the election of Åsa Hedin as new board member and the election of Torben Jørgensen as new Chairman of the Board for the time until the Annual General Meeting 2020. The complete proposals are available at www.biotage.com.

Human resources

The Group had 461 employees at September 30, compared to 405 at the start of the year. The increase during the year is explained by increased staffing of the sales force and the acquisition of PhyNexus.

Parent company

The Group's parent company, Biotage AB, has wholly owned subsidiaries in Sweden, the United States, United Kingdom, Germany, France, Italy, Japan, China, South Korea and India. The parent company is responsible for group management, strategic business development and administrative functions at group level and towards subsidiaries.

The parent company's net income in the third quarter amounted to 0.7 MSEK (0.6). The operating expenses amounted to 5.0 MSEK (5.8) and the operating result was -4.3 MSEK (-5.2). The parent company's net financial income was 51.2 MSEK (-1.0), 42.2 MSEK (-) refers to reversal of previously written-off intercompany receivables and currency gains from intra-group restructuring, the remaining amount mostly refers to currency gains at the translation of intercompany receivables and liabilities. The result after financial items amounted to 46.8 MSEK (-6.2). Reported tax amounted to -5.4 MSEK (0.3) and was influenced positively last year but negatively this year by changes in the book value related to fiscal deficit. The investments in intangible fixed assets in the quarter amounted to 0.4 MSEK (0.7). The parent company's cash and bank balances amounted to 0.0 MSEK (1.5) at September 30.

The parent company has no significant related party transactions other than transactions with subsidiaries.

Risks and uncertainties

As an international Group, Biotage is exposed to various risks that affect the possibilities to achieve the established targets. There are operational risks, such as the risk that competitive situations affect price levels and sales volumes, and the risk that the economic development in the markets and segments where the Group operates is not stable. There are also financial risks, such as currency risks, interest risks and credit risks. No major changes in significant risks or uncertainty factors have occurred during the period. Our assessment thus remains unchanged compared to the description of the company's risks, uncertainty factors and the handling of these in the company's Annual Report for 2018. Readers wishing to study the Annual Report can download this from the company's website www.biotage.com or order it from Biotage AB, Box 8, SE-751 03, Uppsala, Sweden or info@biotage.com.

Nomination committee

A nomination committee, consisting of members appointed by the three largest shareholders or shareholder groups and the Chairman of the Board has been formed for Biotage AB in accordance with the principles adopted by the 2019 Annual General Meeting. The tasks of the nomination committee shall be to prepare the election of Chairman and other board members, the election of chairman of the meeting, the election of auditors, the determination of fees and matters pertaining thereto, before the Annual General Meeting 2020. The members of the nomination committee are:

• Marianne Flink, chairman. Appointed by Swedbank Robur Fonder.
• Ove Mattsson, appointed by the shareholders Ann-Charlotte Bergström, Eva Forsberg, Lena Westergren, Maria Lenman, Ove Mattsson and Susanne Wetterlin, who have reached an agreement that through concerted exercise of the right to vote adopt a long-term common approach as regards the management of the company.
• Christian Petersen, appointed by Vind AS.
• Thomas Eklund, Chairman of the Board, Biotage AB.

Shareholders wishing to submit a proposal to the nomination committee can address Biotage' Chairman of the Board by e-mail: info@biotage.com. Proposals shall, in order to allow time for being taken into consideration by the election committee, be received no later than seven weeks before the AGM, which will be held on April 28, 2020.

Coming financial reports

An Extraordinary General Meeting will be held on November 7, 2019. The year-end report for 2019 will be issued on February 7, 2020. The Annual General Meeting 2020 will be held on April 28, 2020. The interim report for the first quarter 2020 will be published on April 28, 2020. The interim report for the second quarter 2020 will be published on July 17, 2020. The interim report for the third quarter 2020 will be published on November 5, 2020.

The year-end report for 2020 will be published on February 12, 2021.

The Annual Report for 2019 is planned to be made public in week 14 2020.

All reports are available at Biotage's website from the above dates.

Uppsala November 5, 2019

Torben Jørgensen President and CEO

For further information, please contact:

Torben Jørgensen, 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. The information was submitted for publication, through the agency of the contact persons set out above, at 08.30 CET on November 5, 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. 460 employees and had sales of 911 MSEK in 2018. Biotage is listed on NASDAQ Stockholm. Website: www.biotage.com

Review Report

Introduction

We have reviewed the interim report for Biotage AB (publ) for the period January 1 - September 30, 2019. The Board of Directors and the CEO are responsible for the preparation and presentation of this interim report in accordance with IAS 34 and the Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.

Scope of Review

We conducted our review in accordance with the International Standard on Review Engagements ISRE 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review has a different focus and is substantially less in scope than an audit conducted in accordance with ISA and other generally accepted auditing practices. The procedures performed in a review do not enable us to obtain a level of assurance that would make us aware of all significant matters that might be identified in an audit. Therefore, the conclusion expressed based on a review does not give the same level of assurance as a conclusion expressed based on an audit.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the interim report is not, in all material respects, prepared for the Group in accordance with IAS 34 and the Annual Accounts Act, and for the Parent Company in accordance with the Annual Accounts Act.

Stockholm, November 5, 2019

Deloitte AB

Jonas Ståhlberg Authorized Public Accountant

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME IN SUMMARY

		2019-07-01 2018-07-01 2019-01-01		2018-01-01	2018-01-01
Amounts in SEK thousands		2019-09-30 2018-09-30 2019-09-30		2018-09-30	2018-12-31
Net sales	282,663	232,204	812,779	676,322	910,896
Cost of sales	-105,031	-90,815	-306,258	-263,736	-354,270
Gross profit	177,632	141,389	506,522	412,586	556,626
Distribution costs	-83,304	-64,337	-230,665	-188,901	-256,670
Administrative expenses	-19,000	-15,529	-57,852	-49,282	-70,165
Research and development costs	-18,746	-13,093	-56,404	-44,988	-65,925
Other operating income	7,749	-3,290	8,658	7,326	8,612
Total operating expenses	-113,302	-96,250	-336,263	-275,845	-384,148
Operating profit/loss	64,330	45,139	170,259	136,741	172,478
Financial net income	8,791	-1,846	10,034	4,100	3,811
Profit/loss before income tax	73,121	43,293	180,293	140,842	176,289
Tax expenses	-6,486	735	-11,966	-542	-8,662
Total profit/loss for the period	66,635	44,027	168,327	140,300	167,627
Other comprehensive income
Components that may be reclassified to net income:
Translation differences related to
non Swedish subsidiaries	18,993	-3,539	36,165	15,052	16,623
Cash flow hedges	-209	689	-33	214	-81
Total other comprehensive income	18,784	-2,850	36,132	15,266	16,542
Total comprehensive income for the period	85,419	41,177	204,459	155,566	184,169

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME IN SUMMARY (Continuing)

		2019-07-01 2018-07-01 2019-01-01		2018-01-01	2018-01-01
Belopp i KSEK		2019-09-30 2018-09-30 2019-09-30		2018-09-30	2018-12-31
Attributable to parent company´s shareholders:
Total profit/loss for the period	66,635	44,027	168,327	140,300	167,627
Attributable to parent company´s shareholders:
Total comprehensive income for the period	85,419	41,177	204,459	155,566	184,169
Average shares outstanding	65,201,784	64,714,447	65,175,583	64,714,447	64,714,447
Shares outstanding at end of reporting period	65,201,784	64,714,447	65,201,784	64,714,447	64,714,447
Total profit/loss for the period per share SEK	1.02	0.68	2.58	2.17	2.59
Total profit/loss for the period per share SEK after dilution	1.02	0.68	2.58	2.17	2.59

Quarterly summary	2019	2019	2019	2018	2018	2018	2018
Amounts in KSEK	Q3	Q2	Q1	Q4	Q3	Q2	Q1
Net Sales	282,663	282,099	248,018	234,574	232,204	236,071	208,048
Cost of sales	-105,031	-106,221	-95,005	-90,534	-90,815	-91,678	-81,242
Gross profit	177,632	175,877	153,012	144,040	141,389	144,392	126,805
Gross margin	62.8%	62.3%	61.7%	61.4%	60.9%	61.2%	61.0%
Operating expenses	-113,302	-119,795	-103,165	-108,303	-96,250	-94,381	-85,214
Operating profit/loss	64,330	56,082	49,847	35,737	45,139	50,011	41,591
Operating margin	22.8%	19.9%	20.1%	15.2%	19.4%	21.2%	20.0%
Financial net	8,791	-1,068	2,311	-290	-1,846	1,903	4,044
Profit/loss before income tax	73,121	55,014	52,158	35,448	43,293	51,914	45,635
Tax expenses	-6,486	-837	-4,643	-8,120	735	-495	-782
Total profit/loss for the period	66,635	54,177	47,515	27,327	44,027	51,419	44,853

Amounts in SEK thousands	2019-09-30	2018-12-31
ASSETS
Non-Current assets
Property, plant and equipment	53,013	48,630
Right-of-use assets	57,500	-
Goodwill	326,955	186,055
Other intangible assets	267,972	192,654
Financial assets	17,260	19,221
Deferred tax asset	54,789	62,205
Total non-current assets	777,489	508,765
Current assets
Inventories	170,689	132,338
Trade and other receivables	262,075	185,080
Cash and cash equivalents	131,875	177,020
Total current assets	564,639	494,438
TOTAL ASSETS	1,342,128	1,003,203
EQUITY AND LIABILITIES
Capital and reserves attributable to equity holders of the
parent company
Share capital	90,630	89,953
Reserves	14,225	-79,877
Retained earnings	762,628	692,104
Total equity	867,484	702,180
Non-current liabilities
Liabilities to credit institutions	109,513	109,400
Lease liabilities	39,086	-
Other financial liabilities	72,422	1,201
Deferred tax liability	30,844	14,780
Non-current provisions	2,519	2,245
Total non-current liabilities	254,384	127,625
Current liabilities
Trade and others liabilities	178,134	166,721
Other financial liabilities	18,253	385
Tax liabilities	1,115	3,132
Lease liabilities	19,674	-
Current provisions	3,084	3,159
Total current liabilities	220,261	173,397
TOTAL EQUITY AND LIABILITIES	1,342,128	1,003,203

CONSOLIDATED STATEMENT OF FINANCIAL POSITION IN SUMMARY

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY IN SUMMARY

		Other	Accumulated
	Share	payed-in	translation	Hedging	Retained	Total
Belopp i KSEK	capital	capital	reserve	reserve	earnings	equity
Opening balance January 1, 2018	89,953	-	-96,494	76	615,077	608,611
Changes in equity in the period of
January 1, 2018 - December 31, 2018
Total comprehensive income	-	-	16,623	-81	167,627	184,169
Total non-owners changes	-	-	16,623	-81	167,627	184,169
Transactions with equity holders of the company
Dividend to shareholders of the parent company	-	-	-	-	-90,600	-90,600
Closing balance December 31, 2018	89,953	-	-79,871	-5	692,104	702,180
Changes in equity in the period of
January 1, 2018 - September 30, 2018
Total comprehensive income	-	-	15,052	214	140,300	155,566
Total non-owners changes	-	-	15,052	214	140,300	155,566
Transacitions with equity holders of the company
Dividend to shareholders of the parent company	-	-	-	-	-90,600	-90,600
Closing balance September 30, 2018	89,953	-	-81,443	290	664,776	673,577
Changes in equity in the period of January 1, 2019 - September 30, 2019
Total comprehensive income	-	-	36,165	-33	168,327	204,459
Total non-owners changes	-	-	36,165	-33	168,327	204,459
Transacitions with equity holders of the company
New share issue	677	57,970	-	-	-	58,648
Dividend to shareholders of the parent company	-	-	-	-	-97,803	-97,803
Closing balance September 30, 2019	90,630	57,970	-43,706	-39	762,628	867,484

CONSOLIDATED STATEMENT OF CASH FLOWS

				2019-07-01 2018-07-01 2019-01-01 2018-01-01 2018-01-01
Amounts in SEK thousands				2019-09-30 2018-09-30 2019-09-30 2018-09-30 2018-12-31
Operating activities
Profit/loss before income tax	73,121	43,293	180,293	140,842	176,289
Adjustments for non-cash items	6,315	12,714	41,137	18,280	27,684
	79,436	56,006	221,430	159,122	203,974
Income tax paid	-3,141	-2,077	-8,248	-4,827	-9,314
Cash flow from operating activities
before changes in working capital	76,295	53,929	213,182	154,295	194,659
Cash flow from changes in working capital:
Increase (-)/ decrease (+) in inventories	-13,544	-7,400	-16,869	-15,122	-21,416
Increase (-)/ decrease (+) in operating receivables	1,862	3,261	-59,463	-31,456	-30,020
Increase (+)/ decrease (-) in operating liabilities	15,277	895	-1,339	-4,334	11,781
Cash flow from changes in working capital	3,595	-3,244	-77,672	-50,912	-39,654
Cash flow from operating activities	79,890	50,685	135,510	103,383	155,005
Investing activities
Acquisition of intangible assets	-8,100	-9,837	-20,617	-28,381	-34,179
Acquisition of property, plant and equipment	-1,544	-3,069	-11,745	-8,971	-12,979
Acquisition of financial assets	-93	-477	-438	-483	-1,437
Acquisitions of companies and product lines	-	-	-39,536	-129,816	-129,816
Cash flow from investing activities	-9,738	-13,384	-72,337	-167,652	-178,411
Financing activities
Dividend to shareholders	-	-	-97,803	-90,600	-90,600
Proceeds from borrowings	-	-	40,000	109,319	109,942
Repayment of loans	-48,073	-	-54,156	-	-
Cash flow from financial activities	-48,073	-	-111,958	18,719	19,342
Cash flow for the period	22,079	37,302	-48,785	-45,550	-4,064
Cash and cash equivalents opening balance	108,080	95,844	177,020	174,263	174,263
Exchange differences in liquid assets	1,716	914	3,640	5,347	6,821
Cash and equivalents closing balance	131,875	134,059	131,875	134,059	177,020
Additional information:
Adjustments for non-cash items
Depreciations and impairments	19,080	9,699	54,096	28,778	39,412
Exchange rates differences	-12,651	5,194	-15,765	-2,901	-3,348
Other items	-115	-2,179	2,806	-7,597	-8,379
Total	6,315	12,714	41,137	18,280	27,684

INCOME STATEMENT, PARENT IN SUMMARY

		2019-07-01 2018-07-01 2019-01-01 2018-01-01 2018-01-01
Amounts in SEK thousands		2019-09-30 2018-09-30 2019-09-30 2018-09-30 2018-12-31
Net sales	719	649	2,153	1,872	2,537
Administrative expenses	-4,538	-5,220	-15,282	-14,841	-21,998
Research and development costs	-605	-599	-2,351	-1,897	-2,467
Other operating items	98	-17	126	36	17
Operating expenses	-5,045	-5,835	-17,507	-16,701	-24,448
Operating profit/loss	-4,325	-5,186	-15,354	-14,829	-21,911
Profit/loss from financial investments:
Interest income from receivables from group companies	18	-	53	41	216
Result from participations in group companies	42,238	-	42,238	-	-
Other interest and similar income	9,412	-	10,548	2,741	3,335
Other interest and similar expenses	-516	-1,002	-1,311	-1,196	-1,613
Group contribution received	-	-	-	-	90,645
Financial net income	51,151	-1,002	51,528	1,586	92,584
Profit/loss before income tax	46,826	-6,189	36,174	-13,243	70,673
Tax expenses	-5,446	251	-16,337	5,253	-14,872
Total profit/loss for the period	41,380	-5,938	19,836	-7,989	55,801
STATEMENT OF COMPREHENSIVE INCOME. PARENT
Total profit/loss for the period	41,380	-5,938	19,836	-7,989	55,801
Other comprehensive income: Components that may be reclassified to net income: Translation differences related to	-	-	-	-	-
Total comprehensive income, parent	41,380	-5,938	19,836	-7,989	55,801

BALANCE SHEET, PARENT

Amounts in SEK thousands	2019-09-30	2018-12-31
ASSETS
Non-current assets
Intangible assets
Patents and licenses	11,657	10,983
	11,657	10,983
Financial assets
Investments in group companies	472,103	471,922
Receivables from group companies	152,295	169,378
Shares in associated companies	19,284	19,284
Deferred tax asset	17,286	33,623
	660,968	694,207
Total non-current assets	672,625	705,190
Current assets
Current receivables
Receivables from group companies	3,880	73,783
Other receivables	934	2,616
Prepaid expenses and accrued income	1,149	2,389
	5,963	78,788
Cash and cash equivalents	27	2,111
Total current assets	5,990 -	80,899 -
TOTAL ASSETS	678,615 -	786,088 -
EQUITY, PROVISIONS AND LIABILITIES
Equity
Restricted equity
Share capital	90,630	89,953
	90,630	89,953
Unrestricted equity
Other contributed capital	57,970	-
Retained earnings	338,530	380,532
Profit/loss for the year	19,836	55,801
	416,337	436,333
Total equity 0	506,967 -	526,286 -
Longterm liabilities
Liabiliteis to credit institutions	110,000	110,000
Current liabilities	110,000	110,000
Trade payables	168	1,717
Liabilities to group companies	54,104	139,974
Other current liabilities	205	71
Accrued expenses and prepaid income	7,170	8,041
	61,648	149,802
TOTAL EQUITY, PROVISIONS AND LIABILITIES	678,615	786,088

NOTES

Accounting principles

The Group reporting of Biotage is based on International Financial Reporting Standards as adopted by the EU. The Group's interim report is prepared in accordance with IAS 34 Interim Reporting and the Swedish Accounting Act. The parent company's interim report is prepared in accordance with the Swedish Accounting Act and The Swedish Financial Reporting Board's recommendation RFR 2 Reporting for Legal Entities. The Group and the parent company have applied the same accounting principles and calculation methods in the interim report as in the latest annual report, except that from January 1, 2019 IFRS 16 Leases is applied instead of IAS 17 Leasing agreements. Information according to IAS 34 Interim Reporting is given in notes as well as in other places in the interim report. Changed and new standards and interpretations from IASB and IFRS Interpretations Committee which have come into effect and apply to the fiscal year 2019 have not had any effect on the Group's financial reporting.

In the preparation of the Group's and the parent company's interim reports, the same accounting principles and calculation methods were applied as in the preparation of the Annual Report for 2018. These are described on pp. 44-54 in the Annual Report. For balance sheet items figures in brackets refer to the value at the end of the corresponding period last year. For result and cash flow items the corresponding period last year is referred to.

New and changed standards and interpretations

IFRS 16 Leases replaces IAS 17 Leasing agreements. IFRS 16 introduces a new "right-of-use model" which for the lessee means that practically all leasing agreements shall be reported on the balance sheet, no classification into operational and financial leasing agreements shall thus be made. IFRS 16 is applicable for financial years starting January 1, 2019. Adjustments according to IFRS 16 are made on overall group level. The parent company does not report leasing agreements in the balance sheet but continues to report lease payments as costs on a straight-line basis over the leasing period in accordance with the exception from IFRS 16 found in RFR 2 Reporting for Legal Entities. An analysis of the Group's leasing agreements has been performed in order to ensure that the requirements of the new standard are met. The major leasing agreements in the Group relate to leasing of rental contracts and passenger cars.

As transition method to IFRS 16 a modified retroactive method has been chosen, where the asset value has been set equal to the liability throughout. The new accounting principles are described in more detail on page 44 and in Note 5 on page 60 in the 2018 Annual Report. Here also the weighted marginal interest rate used at discounting is reported as well as the transition effects at the transfer to IFRS 16. Opening values for the right-of-use asset was 64.9 MSEK, the long-term leasing debt 47.1 MSEK, the short-term leasing debt 17.8 MSEK. Cash flows from leasing agreements are classified as follows: amortization of the leasing debt is included in financing operations, interest payments are included in current operations. Payments for short-term leasing and leasing agreements of low value not included in the valuation of the leasing debt are reported in the current operations.

The corporate management's assessment is that the other new and revised standards and interpretations will not have any material effect on the Group's financial statements for the period in which they are applied for the first time. The effects of the new standard are reported in the 2018 Annual Report.

Fair value

Biotage has a financial liability concerning additional purchase sum at business acquisition measured at fair value through profit or loss. The additional purchase sum, relating to the acquisition of PhyNexus Inc., is based on the agreed allocation of the gross profit on related products during the period 2019 to 2023. The agreement with the sellers does not include a maximum amount. For the financial year 2019, which is settled in 2020, the additional purchase sum is calculated to 17.9 MSEK, which is also the company's best estimate of fair value at September 30, 2019. Calculations of fair value are based on level 3 in the fair value hierarchy, which means that fair value has been established according to a valuation model where essential inputs are based on unobservable data. Valuation has been made based in expected future cash flows.

Financial debt measured at fair value		9/30/2019 12/31/2018
Additional purchase sum, long-term part	71.4	0.0
Additional purchase sum, short-term part	17.9	0.0
Total	89.3	0.0
Opening value January 1, 2019		0
Acquisition		89.3
Reversal of reserve reported in result Settled during the year		0.0
Value carried forward June 30, 2019		89.3

A calculation of fair value based on discounted future cash flows, where a discount rate reflecting the counterparty's credit risk constitutes the most significant input, is not considered to result in any significant difference compared to the reported value for financial assets and short-term financial debts valued at accrued acquisition value. For these financial assets and liabilities the reported value is thus considered to be a good approximation of fair value.

Key ratios and financial metrics

For definitions of the key ratios and financial metrics used in the Group's financial reporting, see Biotage's Annual Report for 2018, page 75.

Financial metrics in the interim report not defined according to IFRS

In this report Biotage discloses information that the corporate management uses to assess the development of the Group. Some of the financial metrics presented are not defined according to IFRS. The company believes that these metrics give valuable supplementary information to stakeholders and corporate management, as they contribute to the evaluation of relevant trends and the company's performance. As not all companies calculate financial metrics in the same way, they are not always comparable with the metrics used by other companies. These financial metrics should thus not be seen as a substitute for metrics defined according to IFRS.

Effective July 3, 2016 ESMA's guidelines on "alternative performance measures" are applied, which means increased information demands concerning financial metrics not defined by IFRS. An explanation of the financial metrics that Biotage finds relevant according to the new guidelines is given below.

Net sales at comparable exchange rates

As the major part of the Group's income is paid in other currencies than the accounting currency SEK, the reported sales are affected to a relatively high degree by exchange rate variations between the periods. In order for stakeholders and corporate management to be able to analyze the sales development cleared of currency effects the company reports the sales development in relation to the comparative period at constant exchange rates. The current period's sales in the respective currencies are recalculated according to the exchange rates used in the reporting of the comparative period.

	Third quarter			9 months
Sales change in %	7/1/2019		7/1/2018		1/1/2019		1/1/2018
	9/30/2019		9/30/2018		9/30/2019		9/30/2018
	KSEK	%	KSEK	%	KSEK	%	KSEK	%
Reported sales in the comparison period	232,204		177,715		676,322		559,259
Reported sales in the period*	273,965		210,844		788,919		622,212
Reported Change	41,761	18.0	33,129	18.6	112,597	16.6	62,953 11.3
Sales in current period to the comparable periods exchange rates*	250,963		195,262		734,485		606,741
Change to comparable rates	18,759	8.1	17,547	9.9	58,163	8.6	47,482	8.5

* Excluding sales from companies acquired during the year

Net debt

In order for stakeholders and corporate management to be able to follow and analyze the Group's financial strength, information on the Group's net debt is reported defined as cash reduced by liabilities to credit institutions and leasing liability in accordance with IFRS 16.

Net debt		9/30/2019 12/31/2018
C ash	-131.9	-177.0
Liabilities to credit institutions	109.5	109.4
Lease liabilities	58.8	0.0
Other interest-bearing liabilities	90.7	0.0
Net debt	127.1	-67.6

Graphs of net sales and operating result

Biotage has chosen to report graphs of the net sales and the operating result on a rolling 12 month basis as corporate management also follows the development over time on a rolling 12 month basis and believes that this provides supplementary information to the calendar-based interim data otherwise given in the report.

Rolling 12 months		9/30/2019		9/30/2018
	10/1/2018	1/1/2019	Rolling 12	10/1/2017	1/31/2018	Rolling 12
	12/31/2018	9/30/2019	months	12/31/2017	9/30/2018	months
Net sales	234.6	812.8	1,047.4	188.9	676.3	865.2
Operating profit	35.7	170.3	206.0	32.2	136.7	169.0
Net sales increase %			21.1%			17.2%

EBIT and EBIT margin

In this report, Biotage uses the result measure EBIT, Earnings Before Interest and Taxes, as an alternative term for operating profit. EBIT margin is thus an alternative term for operating margin, calculated as operating profit divided by net sales.

Non-current liabilities

On September 30, 2019, Biotage has a non-current liability to credit institution amounting to 109.5 MSEK (109.4). All covenants related to this are fulfilled at the period end date.

Pledged assets

At September 30, 2019 Biotage had pledged assets amounting to 22.5 MSEK (22.5), no material change has occurred during the reporting period. There are no contingent liabilities of a material character.

Business acquisition

Acquisition of PhyNexus, Inc.

On January 15, 2019 Biotage AB acquired 100 percent of the privately held company PhyNexus, Inc., based in California, USA. Through the acquisition Biotage strengthens its position as a separations company in the growing biomolecules area. With PhyNexus' innovative technology platform with patented pipette-based consumables Biotage will be able to offer its global customers automated solutions for efficient purification of biomolecules such as proteins, plasmids and antibodies in laboratory scale. Biotage predicts that this platform long-term has the potential to address a growing market worth several billion USD. The acquired technology platform can enable the development of new approaches for clinical tests and tests in forensic medicine, the environment and food with streamlined workflows, through dispersive solid phase extraction in combination with high throughput pipetting robotics and development programs for new consumables.

The purchase price amounted to a total of approx. 21.4 MUSD, corresponding to approx. 191.3 MSEK1), based on a debt-free value. Of the total purchase price approx. 10.0 MUSD (approx. 89.3 MSEK) are expected future additional purchase payments for the years 2019 to 2023, which will be based on future results. The additional purchase sum is paid annually when the gross result from related products exceeds an amount defined in the agreement. There is no upper limit for the additional purchase payments during this period. The remaining purchase price of approx. 11.4 MUSD (approx. 102.0 MSEK) was paid when taking possession. Of this sum, approx. 6.6 MUSD (approx. 58.6 MSEK) were in the form of 487,337 newly issued shares in Biotage and approx. 4.8 MUSD (approx. 43.3 MSEK) was cash payment. Net cash flow for the acquisition amounts to -39.5 MSEK.

The issue of consideration shares for the acquisition increases the number of shares in Biotage from 64,714,447 to 65,201,784, which results in a dilution of 0.7 percent for existing shareholders. The new shares have been subscribed by the main owners in PhyNexus (including the largest shareholder Doug Gjerde, representing approx. 60 percent of the shares and votes in PhyNexus). Additional shares may be issued in connection with the price adjustments that may be made after the completion of the acquisition and at the payment of future additional purchase sums.

In this acquisition analysis no differences between book values and actual values concerning other receivables have been identified. Useful lives of identified intangible assets have been assessed individually for the respective asset to be 10 to 15 years, except for trademarks that are assessed to have unlimited useful lives.

Of the Group's total sales, 23.9 MSEK is related to the acquired company's products. If PhyNexus had been wholly-owned since January 1 2019 the company's contribution to the Group's sales would have increased with a further 0.8 MSEK. The effect of the acquired business on the Group's profit and cash flow is difficult to estimate as it has been integrated in the Group's other operations.

The acquired company's net assets at the time of acquisition	Acquisition analysis (preliminary)
Tangible fixed assets	0.0
Intangible assets: Customer relations	49.2
Intangible assets: Trademarks	10.3
Intangible assets: Patents/technology	13.4
Inventory	8.3
Accounts receivable and other receivables	5.3
Cash and cash equivalents	3.7
Accounts payable and other operating liabilities	-3.1
Deferred tax	-15.3
Net identifiable assets and liabilities	71.8
Consolidated goodwill	119.4
Transferred payment	191.3

1) Based on an exchange rate SEK/USD of 8.93

Goodwill

In the acquisition analysis goodwill amounts to 119 MSEK. The goodwill included in the acquisition corresponds partly to Biotage's estimated ability to increase the sales of PhyNexus' products in a bigger marketplace due to its global sales organization, partly to the synergies that occur as Biotage's product offering is widened, and also to the knowledge in the area of biomolecules that exists in the acquired company. This goodwill is not deemed to be tax deductible.

Acquisition related expenses

The acquisition related expenses amounted to 4.2 MSEK with a cash flow effect of -4.2 MSEK. Of this sum 1.0 MSEK was charged to the period's result and cash flow and relate to fees paid for external legal counsel and consultants in connection with due diligence, and the establishment of agreements, among other things. The expenses have been reported under Administration costs in the Group's statement of profit or loss and other comprehensive income.

Composition of income

	Third quarter		9 months
	7/1/2019	7/1/2018	1/1/2019	1/1/2018
Composition of income:	9/30/2019	9/30/2018	9/30/2019	9/30/2018
Net sales - distribution between
products and services:
Products	256,702	209,069	736,709	611,053
Services	23,610	20,996	70,217	59,366
Other sales revenue	2,351	2,140	5,854	5,903
Total sales revenue	282,663	232,204	812,779	676,322

	America		EU & EMEA		Asia		Total
Revenue by geographical	7/1/2019	7/1/2018	7/1/2019	7/1/2018	7/1/2019	7/1/2018	7/1/2019	7/1/2018
market and product area Q1	9/30/2019	9/30/2018	9/30/2019	9/30/2018	9/30/2019	9/30/2018	9/30/2019	9/30/2018
Organic Chemistry	43,848	40,539	29,322	35,076	68,633	45,297	141,803	120,912
Analytical Chemistry	53,610	51,025	27,372	25,500	13,625	14,446	94,606	90,972
Industrial products	24,514	8,253	7,331	5,146	5,801	6,921	37,646	20,320
Biomolecules	7,288	0	984	0	335	0	8,607	0
Total sales revenue	129,260	99,818	65,009	65,722	88,394	66,664	282,663	232,204

	America		EU & EMEA		Asia		Total
Revenue by geographical	1/1/2019	1/1/2018	1/1/2019	1/1/2018	1/1/2019	1/1/2018	1/1/2019	1/1/2018
market and product area YTD	9/30/2019	9/30/2018	9/30/2019	9/30/2018	9/30/2019	9/30/2018	9/30/2019	9/30/2018
Organic Chemistry	127,378	116,465	98,427	101,538	191,306	142,762	417,110	360,765
Analytical Chemistry	157,134	138,294	77,147	71,866	44,726	40,065	279,007	250,225
Industrial products	53,052	29,060	23,363	19,504	16,477	16,769	92,892	65,333
Biomolecules	17,868	0	4,784	0	1,117	0	23,770	0
Total sales revenue	355,433	283,819	203,721	192,907	253,625	199,596	812,779	676,322

The distribution relates to sales per product area to customers located

in the above geographical areas.

Service contrac ts and other services

transferred over a period of time

	Third quarter		9 months
	7/1/2019	7/1/2018	1/1/2019	1/1/2018
Revenue by sales channel	9/30/2019	9/30/2018	9/30/2019	9/30/2018
Direct sales through own sales channel	268,507	214,484	768,964	627,035
Sales through distributors	14,156	17,720	43,815	49,287
Total sales revenue	282,663	232,204	812,779	676,322
	Third quarter		9 months
Point in time of transfer of	7/1/2019	7/1/2018	1/1/2019	1/1/2018
goods and services	9/30/2019	9/30/2018	9/30/2019	9/30/2018
Goods transferred at a point in time	259,053	211,461	742,563	616,977
Services transferred at a point in time	5,115	5,220	17,174	15,907

Total sales revenue 282,663 232,204 812,779 676,322

18,495 15,524 53,043 43,438