Quarterly Report • Nov 6, 2018
Quarterly Report
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November 6, 2018
1) See definition on pp. 18-19
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 21
| Amounts in SEK millions | Q3 | Q3 | 9 months | 9 months | 12 months |
|---|---|---|---|---|---|
| Jul-Sep | Jul-Sep | Jan-Sep | Jan-Sep | Jan-Dec | |
| 2018 | 2017 | 2018 | 2017 | 2017 | |
| Net sales | 232,2 | 177,7 | 676,3 | 559,3 | 748,1 |
| C ost of sales | -90,8 | -70,5 | -263,7 | -218,2 | -291,5 |
| Gross profit | 141,4 | 107,2 | 412,6 | 341,0 | 456,7 |
| Operating expenses | -96,2 | -78,0 | -275,8 | -239,6 | -323,0 |
| Operating profit/loss (EBIT) | 45,1 | 29,3 | 136,7 | 101,4 | 133,6 |
| Financial items | -1,8 | 0,7 | 4,1 | 2,6 | 2,6 |
| Profit/loss before tax | 43,3 | 30,0 | 140,8 | 104,0 | 136,3 |
| Tax expenses | 0,7 | 1,1 | -0,5 | 0,1 | 2,5 |
| Total profit/loss for the period | 44,0 | 31,1 | 140,3 | 104,1 | 138,7 |
| Gross margin | 60,9% | 60,3% | 61,0% | 61,0% | 61,0% |
| Operating margin (EBIT) | 19,4% | 16,5% | 20,2% | 18,1% | 17,9% |
1) See definition on pp. 18-19
Biotage continues to grow with increasing profitability and surpasses the financial targets for the quarter as well as for the nine-month period. The business is growing in the regions where we have direct sales. The biggest percentage sales increases are in Asia, which is especially encouraging in view of the direct establishments that Biotage has recently undertaken in this region. Our local head of the organization in India is in place since August and we look forward with excitement to the development of our operations in this growing market.
We are seeing a continued positive development of Biotage's latest acquisition, Horizon Technology Inc. Profitability as well as sales are developing in the right direction. The acquisition strengthens our possibilities to develop our product offering in analytical chemistry in the areas of environment and food, areas where we see great opportunities for further expansion. During the quarter an analysis method for food using one of Biotage's products was approved in South Korea as the official method for analysis of mycotoxins (mould toxins). Traditionally Biotage's sales in Asia have mainly concerned organic chemistry products. Biotage will now invest more in Asia with the ambition to increase analytical chemistry sales. The investments will be made in the form of increased staff and investments in our own analytical labs to enable us to rapidly assist our customers in the challenges they are facing.
Biotage's single biggest product area is purification in organic chemistry, where the flash system Isolera™ accounts for the largest part of the sales together with the Biotage® SNAP consumables for flash purification. During the period intensive preparations have been in progress for the launch of the replacements for these products. On October 1 the commercial launch of the new technology platforms, the flash system Biotage® Selekt and the Biotage® Sfär consumables. We believe that these new products will further consolidate Biotage's already strong position and further develop the market. Biotage® Selekt and Biotage® Sfär enable more efficient separation with higher quality and reduced environmental impact due to lower consumption of solvents.
We are seeing an increased interest in our products from the medical cannabis industry, especially in the US, where this industry is developing rapidly. Also these industries face challenges, with legislation concerning maximum levels of residue from pesticides in the final product. Evaluations of Biotage's products for both analysis and purification in this industry are currently in progress and we have already sold a number of our somewhat bigger systems for flash purification for use in small scale production.
The split of sales between systems and aftermarket products is still not where we wish it to be. In the nine-month period the split is 50/50 between systems and consumables. The main reason for the increased share of system sales is the growth in China, but also successes in peptide synthesis, especially in Australia.
Together with my organization I am looking forward to further develop Biotage's operations towards the new financial targets communicated by the board of directors in a press release on November 5; to achieve an organic sales growth of 8 percent and an operating profit (EBIT) of 20 percent on average on a rolling three-year basis.
Group net sales in the third quarter 2018 amounted to 232.2 MSEK (177.7), which is an increase by 30.7 percent. At comparable exchange rates and adjusted for acquisitions sales increased by 9.9 percent compared to the corresponding quarter last year. The Americas was the biggest market with 43 percent (45) of the net sales. The EU and EMEA contributed 28 percent (27) and Asia 29 percent (28).
The Group's gross margin for the quarter was 60.9 percent (60.3). Larger sales volumes and efficiency improvements in production contributed to increasing the profitability, at the same time as the product mix gave a lower gross margin contribution than during the corresponding quarter last year as well as the first six months. A higher exchange rate SEK/GBP means increased costs when the costs for production in Cardiff are recalculated in the Group's reporting currency SEK. The split of sales between systems and aftermarket products was 49 percent (48) and 51 percent (52), respectively, compared to the target of 40/60.
The operating expenses amounted to 96.2 MSEK (78.0). Of this sum 64.3 MSEK (49.8) were sales costs. The increased sales costs are mainly attributable to a larger sales organization, but also to currency effects at the translation of foreign operations to SEK. The research and development costs amounted to 13.1 MSEK (13.2). The administration costs amounted to 15.5 MSEK (12.4). Other operating items, primarily currency effects on operating liabilities and receivables, was -3.3 MSEK (-2.6).
Operating profit improved by 54.3 percent to 45.1 MSEK (29.3), corresponding to an operating margin (EBIT) of 19.4 percent (16.5). Net financial income amounted to -1.8 MSEK (0.7). The result after tax improved by 41.4 percent to 44.0 MSEK (31.1).
The cash flow from operating activities improved to 50.7 MSEK (30.5). The investments amounted to 13.4 MSEK (9.5). Amortizations and write-downs amounted to 9.7 MSEK (8.4). Capitalized development costs accounted for 6.1 MSEK (4.4) of the investments and 4.0 MSEK (4.6) of the amortizations and write-downs.
Group net sales increased by 20.9 percent in the period and amounted to 676.3 MSEK (559.3). At comparable exchange rates and adjusted for acquisitions, net sales increased by 8.5 percent (13.1). The Americas was the biggest market with 41 percent (44) of the net sales. The EU and EMEA contributed 31 percent (28) and Asia 28 percent (28).
The Group's gross margin was 61.0 percent (61.0). Systems accounted for 50 percent (45) of the sales and aftermarket products for 50 percent (55). The unfavorable product mix has a negative impact on the profitability, and so does the currency effects at the translation of the costs for the production plant in Cardiff from GBP to SEK. This is however counteracted by volume increases and improved production efficiency that contribute to increased profitability.
The operating expenses amounted to 275.8 MSEK (239.6). The 36.2 MSEK increase is mainly attributable to an increase in sales costs by 36.2 MSEK to 188.9 MSEK (152.7) as a result of the expanded sales organization and the acquisition of Horizon Technology Inc. Other operating items, primarily relating to currency effects on operating liabilities and receivables, amounted to 7.3 MSEK (-7.0) and thus give a positive effect of 14.3 MSEK compared to the comparative period.
The operating profit improved by 34.9 percent to 136.7 MSEK (101.4), corresponding to an operating margin (EBIT) of 20.2 percent (18.1). Net financial income was 4.1 MSEK (2.6). The result after tax improved by 34.8 percent to 140.3 MSEK (104.1).
The cash flow from operating activities improved to 103.4 MSEK (102.8). The investments amounted to 167.7 MSEK (25.1). Of this sum 130.3 MSEK relates to the acquisition of Horizon Technologies Inc. Amortizations and write-downs amounted to 28.8 MSEK (25.7). Capitalized development costs accounted for 20.6 MSEK (15.1) of the investments and 12.3 MSEK (13.8) of the amortizations and write-downs.
At September 30, 2018 the Group's cash and cash equivalents amounted to 134.1 MSEK (119.6). At the end of the period the Group had interest-bearing liabilities amounting to 109.4 MSEK (-). The interest-bearing liabilities relate to loans under a credit facility taken out in connection with the acquisition of Horizon Technology Inc. Net cash at September 30 thus amounted to 24.7 MSEK (119.6). During the year dividends to the shareholders have been paid to the amount of 90.6 MSEK (80.9).
The Group reports a total goodwill of 185.0 MSEK (104.0) at September 30. The increase relates to the acquisition of Horizon Technology Inc. that was completed in January. Other reported goodwill relates to the acquisition of MIP Technologies AB and two product lines from Caliper Life Sciences Inc. in 2010.
Other intangible fixed assets amounted to 193.6 MSEK (114.9). Of this sum 102.8 MSEK (92.1) were capitalized development costs. The increased capitalization is related to the development of the products Biotage® Selekt and Biotage® Sfär that were launched on October 1. The rest of the increase primarily consists of identified surplus values in acquired assets in Horizon.
At September 30 the equity capital amounted to 673.6 MSEK (569.6). At the start of the year it amounted to 608.6 MSEK. The change in equity capital during the first nine months is attributable mainly to the net result 140.3 MSEK (104.1), dividends to the shareholders -90.6 MSEK (-80.9), and currency effects at the translation of foreign subsidiaries 15.1 MSEK (-16.3).
Biotage has two financial goals, an organic sales growth target of 8 percent and a profitability target on EBIT-level. On November 5 it was published through a press release that the board of Biotage, as a consequence of the beneficial development of the business, has decided to adjust the profitability goal to 20 percent (earlier 15 percent). The organic sales growth remains unchanged. The goals are formulated as an average for rolling three-year periods.
The Group had 411 employees (342) at September 30, compared to 406 on June 30 and 349 at the start of the year. The increase during the year is mainly attributable to the acquisition of Horizon.
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 amounted to 0.6 MSEK (0.6) in the third quarter and to 1.9 MSEK (1.7) in the nine-month period. The operating expenses amounted to 5.8 MSEK (4.9) in the quarter and to 16.7 MSEK (15.8) in the nine-month period. The operating result was -5.2 MSEK (-4.3) in the quarter and -14.8 (-14.0) in the ninemonth period. The parent company's net financial income was -1.0 MSEK (1.1) in the quarter and 1.6 MSEK (3.2) in the nine-month period. The parent company's result after financial items amounted to -6.2 MSEK (-3.3) for the quarter and -13.2 MSEK (- 10.8) for the nine-month period.
The investments in intangible fixed assets amounted to 0.7 MSEK (1.2) in the quarter and to 1.5 MSEK (1.2) in the nine-month period. The parent company's cash and bank balance amounted to 1.5 MSEK (0.7) at September 30.
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 2017. 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 [email protected].
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 2018 AGM. 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 AGM 2019. The members of the nomination committee are:
Shareholders wishing to submit a proposal to the nomination committee can address Biotage' Chairman of the Board by e-mail: [email protected]. Proposals shall, in order to allow time for being taken into consideration by the committee, be received no later than seven weeks before the AGM, which will be held on April 24, 2019.
The year-end report for 2018 will be issued on February 7, 2019. The Annual General Meeting 2019 will be held on April 24, 2019. The interim report for the first quarter 2019 will be published on April 24, 2019. The interim report for the second quarter 2019 will be published on July 16, 2019 The interim report for the third quarter 2019 will be published November 5, 2019. The year-end report for 2019 will be published on February 7, 2020. The Annual Report for 2018 is planned to be made public in week 14 2019. All reports are available at Biotage's website from the above dates.
Uppsala November 6, 2018
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. The information was submitted for publication, through the agency of the contact persons set out above, at 08.30 CET on November 6, 2018.
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 organizations, 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. 410 employees and had sales of 748 MSEK in 2017. Biotage is listed on NASDAQ Stockholm. Website: www.biotage.com
We have reviewed the interim report for Biotage AB (publ) for the period January 1 - September 30, 2018. 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.
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.
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 6, 2018
Deloitte AB
Jonas Ståhlberg Authorized Public Accountant
| 2018-07-01 | 2017-07-01 | 2018-01-01 | 2017-01-01 | 2017-01-01 | |
|---|---|---|---|---|---|
| Amounts in SEK thousands | 2018-09-30 | 2017-09-30 | 2018-09-30 | 2017-09-30 | 2017-12-31 |
| Net sales | 232 204 | 177 715 | 676 322 | 559 259 | 748 147 |
| Cost of sales | -90 815 | -70 470 | -263 736 | -218 212 | -291 483 |
| Gross profit | 141 389 | 107 246 | 412 586 | 341 046 | 456 664 |
| Distribution costs | -64 337 | -49 796 | -188 901 | -152 651 | -207 628 |
| Administrative expenses | -15 529 | -12 406 | -49 282 | -38 447 | -54 705 |
| Research and development costs | -13 093 | -13 178 | -44 988 | -41 505 | -55 986 |
| Other operating income | -3 290 | -2 606 | 7 326 | -7 044 | -4 715 |
| Total operating expenses | -96 250 | -77 986 | -275 845 | -239 647 | -323 034 |
| Operating profit/loss | 45 139 | 29 260 | 136 741 | 101 399 | 133 630 |
| Financial net income | -1 846 | 725 | 4 100 | 2 629 | 2 631 |
| Profit/loss before income tax | 43 293 | 29 985 | 140 842 | 104 028 | 136 260 |
| Tax expenses | 735 | 1 143 | -542 | 70 | 2 487 |
| Total profit/loss for the period | 44 027 | 31 128 | 140 300 | 104 098 | 138 747 |
| Other comprehensive income | |||||
| Components that may be reclassified to net income: | |||||
| Translation differences related to | |||||
| non Swedish subsidiaries | -3 539 | -6 533 | 15 052 | -16 306 | -12 268 |
| Cash flow hedges | 689 | -630 | 214 | -497 | -213 |
| Total other comprehensive income | -2 850 | -7 163 | 15 266 | -16 804 | -12 481 |
| Total comprehensive income for the period | 41 177 | 23 965 | 155 566 | 87 294 | 126 267 |
| 2018-07-01 | 2017-07-01 | 2018-01-01 | 2017-01-01 | 2017-01-01 | |
|---|---|---|---|---|---|
| Belopp i KSEK | 2018-09-30 | 2017-09-30 | 2018-09-30 | 2017-09-30 | 2017-12-31 |
| Attributable to parent company´s shareholders: | |||||
| Total profit/loss for the period | 44 027 | 31 128 | 140 300 | 104 098 | 138 747 |
| Attributable to parent company´s shareholders: | |||||
| Total comprehensive income for the period | 41 177 | 23 965 | 155 566 | 87 294 | 126 267 |
| Average shares outstanding | 64 714 447 | 64 714 447 | 64 714 447 | 64 714 447 | 64 714 447 |
| Average shares outstanding after | |||||
| dilution (*) | 64 714 447 | 64 714 447 | 64 714 447 | 64 714 447 | 64 714 447 |
| Shares outstanding at end of reporting period | 64 714 447 | 64 714 447 | 64 714 447 | 64 714 447 | 64 714 447 |
| Total profit/loss for the period per share SEK | 0,68 | 0,48 | 2,17 | 1,61 | 2,14 |
| Total profit/loss for the period per share SEK after dilution |
0,68 | 0,48 | 2,17 | 1,61 | 2,14 |
| Earnings per share relates to: | |||||
| Continuing operations | 0,68 | 0,48 | 2,17 | 1,61 | 2,14 |
| Total comprehensive income for the period per share SEK |
0,64 | 0,37 | 2,40 | 1,35 | 1,95 |
| Total comprehensive income for the period per share after dilution SEK |
0,64 | 0,37 | 2,40 | 1,35 | 1,95 |
| Quarterly summary | 2018 | 2018 | 2018 | 2017 | 2017 | 2017 | 2017 |
|---|---|---|---|---|---|---|---|
| Amounts in KSEK | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
| Net Sales | 232 204 | 236 071 | 208 048 | 188 888 | 177 716 | 196 315 | 185 228 |
| Cost of sales | -90 815 | -91 678 | -81 242 | -73 271 | -70 469 | -75 270 | -72 473 |
| Gross profit | 141 389 | 144 392 | 126 805 | 115 617 | 107 246 | 121 045 | 112 755 |
| Gross margin | 60,9% | 61,2% | 61,0% | 61,2% | 60,3% | 61,7% | 60,9% |
| Operating expenses | -96 250 | -94 381 | -85 214 | -83 387 | -77 986 | -83 853 | -77 808 |
| Operating profit/loss | 45 139 | 50 011 | 41 591 | 32 231 | 29 260 | 37 192 | 34 947 |
| Financial net | -1 846 | 1 903 | 4 044 | 2 | 725 | 600 | 1 304 |
| Profit/loss before income tax | 43 293 | 51 914 | 45 635 | 32 233 | 29 985 | 37 793 | 36 250 |
| Tax expenses | 735 | -495 | -782 | 2 417 | 1 143 | -116 | -958 |
| Total profit/loss for the period | 44 027 | 51 419 | 44 853 | 34 650 | 31 128 | 37 677 | 35 293 |
| Amounts in SEK thousands | 2018-09-30 | 2017-12-31 |
|---|---|---|
| ASSETS | ||
| Non-Current assets | ||
| Property, plant and equipment | 48 299 | 45 303 |
| Goodwill | 185 016 | 104 023 |
| Other intangible assets | 193 574 | 118 646 |
| Financial assets | 18 697 | 19 243 |
| Deferred tax asset | 65 333 | 60 735 |
| Total non-current assets | 510 918 | 347 949 |
| Current assets | ||
| Inventories | 126 227 | 95 794 |
| Trade and other receivables | 184 775 | 139 195 |
| Cash and cash equivalents | 134 059 | 174 263 |
| Total current assets | 445 061 | 409 252 |
| TOTAL ASSETS | 955 980 | 757 201 |
| EQUITY AND LIABILITIES | ||
| Capital and reserves attributable to equity holders of the | ||
| parent company | ||
| Share capital | 89 953 | 89 953 |
| Reserves | -81 153 | -96 419 |
| Retained earnings | 664 776 | 615 077 |
| Total equity | 673 577 | 608 611 |
| Non-current liabilities | ||
| Liabilities to credit institutions | 109 363 | - |
| Other financial liabilities | 563 | 656 |
| Deferred tax liability | 14 683 | 1 621 |
| Non-current provisions | 2 023 | 1 936 |
| Total non-current liabilities | 126 631 | 4 212 |
| Current liabilities | ||
| Trade and others liabilities | 149 951 | 139 693 |
| Tax liabilities | 2 714 | 1 899 |
| Current provisions | 3 107 | 2 785 |
| Total current liabilities | 155 772 | 144 377 |
| TOTAL EQUITY AND LIABILITIES | 955 980 | 757 201 |
| Accumulated | |||||
|---|---|---|---|---|---|
| Share | translation | Hedging | Retained | Total | |
| Belopp i KSEK | capital | reserve | reserve | earnings | equity |
| Opening balance January 1, 2017 | 89 953 | -84 227 | 288 | 557 223 | 563 238 |
| Changes in equity in the period of | |||||
| January 1, 2017 - December 31, 2017 | |||||
| Total comprehensive income | - | -12 268 | -213 | 138 747 | 126 267 |
| Total non-owners changes | - | -12 268 | -213 | 138 747 | 126 267 |
| Transactions with equity holders of the company | |||||
| Dividend to shareholders of the parent company | - | - | - | -80 893 | -80 893 |
| Closing balance December 31, 2017 | 89 953 | -96 494 | 76 | 615 077 | 608 611 |
| Changes in equity in the period of | |||||
| January 1, 2017 - September 30, 2017 | |||||
| Total comprehensive income | - | -16 306 | -497 | 104 098 | 87 294 |
| Total non-owners changes | - | -16 306 | -497 | 104 098 | 87 294 |
| Transacitions with equity holders of the company | |||||
| Dividend to shareholders of the parent company | - | - | - | -80 893 | -80 893 |
| Closing balance September 30, 2017 | 89 953 | -100 533 | -209 | 580 428 | 569 639 |
| 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 |
| 2018-07-01 | 2017-07-01 | 2018-01-01 | 2017-01-01 | 2017-01-01 | |
|---|---|---|---|---|---|
| Amounts in SEK thousands | 2018-09-30 | 2017-09-30 | 2018-09-30 | 2017-09-30 | 2017-12-31 |
| Operating activities | |||||
| Profit/loss before income tax | 43 293 | 29 985 | 140 842 | 104 028 | 136 260 |
| Adjustments for non-cash items | 12 714 | 9 652 | 18 280 | 27 317 | 36 216 |
| 56 006 | 39 637 | 159 122 | 131 345 | 172 476 | |
| Income tax paid | -2 077 | -2 045 | -4 827 | -4 279 | -5 091 |
| Cash flow from operating activities | |||||
| before changes in working capital | 53 929 | 37 592 | 154 295 | 127 066 | 167 385 |
| Cash flow from changes in working capital: | |||||
| Increase (-)/ decrease (+) in inventories | -7 400 | -3 998 | -15 122 | -10 341 | -12 544 |
| Increase (-)/ decrease (+) in operating receivables | 3 261 | -7 530 | -31 456 | -16 257 | -6 372 |
| Increase (+)/ decrease (-) in operating liabilities | 895 | 4 456 | -4 334 | 2 291 | 20 463 |
| Cash flow from changes in working capital | -3 244 | -7 073 | -50 912 | -24 306 | 1 547 |
| Cash flow from operating activities | 50 685 | 30 519 | 103 383 | 102 760 | 168 932 |
| Investing activities | |||||
| Acquisition of intangible assets | -9 837 | -4 867 | -28 381 | -16 840 | -26 998 |
| Acquisition of property, plant and equipment | -3 069 | -3 760 | -8 971 | -8 520 | -10 806 |
| Acquisition of financial assets | -477 | -825 | -130 299 | - | - |
| Sale of financial assets | - | - | - | 288 | 902 |
| Cash flow from investing activities - continuing operations-13 384 | -9 452 | -167 652 | -25 072 | -36 903 | |
| Cash flow from investing activities | -13 384 | -9 452 | -167 652 | -25 072 | -36 903 |
| Financing activities | |||||
| Dividend to shareholders | - | - | -90 600 | -80 893 | -80 893 |
| Loan raised | - | - | 109 319 | - | - |
| Repayment of loans | - | -47 | - | -136 | -160 |
| Cash flow from financial activities | - | -47 | 18 719 | -81 029 | -81 053 |
| Cash flow for the period | 37 302 | 21 020 | -45 550 | -3 341 | 50 976 |
| Cash and cash equivalents opening balance | 95 844 | 101 637 | 174 263 | 128 622 | 128 622 |
| Exchange differences in liquid assets | 914 | -3 104 | 5 347 | -5 729 | -5 336 |
| Cash and equivalents closing balance | 134 059 | 119 552 | 134 059 | 119 552 | 174 263 |
| Additional information: | |||||
| Adjustments for non-cash items | |||||
| Depreciations and impairments | 9 699 | 8 442 | 28 778 | 25 738 | 34 225 |
| Other items | 3 015 | 1 210 | -10 498 | 1 579 | 1 991 |
| Total | 12 714 | 9 652 | 18 280 | 27 317 | 36 216 |
| 2018-07-01 2017-07-01 2018-01-01 2017-01-01 2017-01-01 | |||||
|---|---|---|---|---|---|
| Amounts in SEK thousands | 2018-09-30 2017-09-30 2018-09-30 2017-09-30 2017-12-31 | ||||
| Net sales | 649 | 554 | 1 872 | 1 729 | 2 304 |
| Administrative expenses | -5 220 | -4 217 | -14 841 | -13 585 | -18 012 |
| Research and development costs | -599 | -691 | -1 897 | -2 217 | -2 874 |
| Other operating items | -17 | 7 | 36 | 37 | 14 |
| Operating expenses | -5 835 | -4 900 | -16 701 | -15 765 | -20 871 |
| Operating profit/loss | -5 186 | -4 346 | -14 829 | -14 036 | -18 567 |
| Profit/loss from financial investments: | |||||
| Interest income from receivables from group companies | - | - | 41 | - | 150 |
| Interest expense from liabilities to group companies | - | -603 | - | -1 914 | -2 550 |
| Other interest and similar income | - | 1 665 | 2 741 | 5 157 | 4 609 |
| Other interest and similar expenses | -1 002 | - | -1 196 | - | - |
| Group contribution received | - | - | - | - | 86 334 |
| Financial net income | -1 002 | 1 062 | 1 586 | 3 243 | 88 543 |
| Profit/loss before income tax | -6 189 | -3 284 | -13 243 | -10 793 | 69 976 |
| Tax expenses | 251 | 1 767 | 5 253 | 2 041 | 8 649 |
| Total profit/loss for the period | -5 938 | -1 517 | -7 989 | -8 752 | 78 626 |
| STATEMENT OF COMPREHENSIVE INCOME. PARENT | |||||
| Total profit/loss for the period | -5 938 | -1 517 | -7 989 | -8 752 | 78 626 |
| Other comprehensive income: | |||||
| Components that may be reclassified to net income: | |||||
| Translation differences related to | - | - | - | - | - |
| Total comprehensive income, parent | -5 938 | -1 517 | -7 989 | -8 752 | 78 626 |
| Amounts in SEK thousands | 2018-09-30 | 2017-12-31 |
|---|---|---|
| ASSETS | ||
| Non-current assets | ||
| Intangible assets | ||
| Patents and licenses | 10 601 | 10 053 |
| 10 601 | 10 053 | |
| Financial assets | ||
| Investments in group companies | 471 922 | 470 398 |
| Receivables from group companies | 170 378 | 11 685 |
| Shares in associated companies | 19 284 | 19 284 |
| Deferred tax asset | 53 748 | 48 495 |
| 715 332 | 549 863 | |
| Total non-current assets | 725 933 | 559 916 |
| Current assets | ||
| Current receivables | ||
| Receivables from group companies | 2 314 | 55 600 |
| Other receivables | 366 | 307 |
| Prepaid expenses and accrued income | 1 212 | 3 410 |
| 3 893 | 59 317 | |
| Cash and cash equivalents | 1 472 | 1 459 |
| 0 Total current assets |
- 5 365 |
- 60 776 |
| - | - | |
| TOTAL ASSETS | 731 297 - |
620 692 - |
| EQUITY, PROVISIONS AND LIABILITIES | ||
| Equity | ||
| Restricted equity | ||
| Share capital | 89 953 | 89 953 |
| Unrestricted equity | 89 953 | 89 953 |
| Retained earnings | 380 532 | 392 507 |
| Profit/loss for the year | -7 989 | 78 626 |
| 372 543 | 471 133 | |
| Total equity 0 |
462 496 - |
561 086 - |
| Longterm liabilities | ||
| Liabiliteis to credit institutions | 110 000 | - |
| 110 000 | - | |
| Current liabilities | ||
| Trade payables | 1 098 | 876 |
| Liabilities to group companies | 151 184 | 50 669 |
| Other current liabilities | 70 | 47 |
| Accrued expenses and prepaid income | 6 449 | 8 014 |
| 158 801 | 59 607 | |
| TOTAL EQUITY, PROVISIONS AND LIABILITIES | 731 297 | 620 692 |
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. 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 2018 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 2017. These are described on pp. 42-50 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.
IFRS 9 Financial instruments replaces IAS 39 Financial instruments: Recognition and measurement. The application of IFRS 9 came into effect on January 1 2018. IFRS 9 includes new requirements on classification and measurement of financial instruments, for write-off, impairment and general rules for hedge accounting. The new standard means a new model for write-down of accounts receivable in the Group. The analysis performed shows that the Group in essence meets the requirements of IFRS 9 and that it will not have any significant effect on Biotage's accounts.
IFRS 15 Revenue from contracts with customers replaces IAS 18 Revenue and IAS 11 Construction contracts. The basic principle for revenue recognition according to IFRS 15 is that a company shall recognize revenue in a way that reflects the transfer of the promised goods or service to the customer, at the amount that the company expects to be entitled to receive in exchange for the goods or service. Revenue is recognized when the customer obtains control of the goods or services. There is extensive guidance in IFRS 15 for specific areas and the disclosure requirements are extensive. IFRS 15 came into effect on January 1 2018 or later. An analysis of the Group's revenue streams has been performed and the new standard was not found to have affected the timing of recognition of revenue in the Group and is not expected to have any other significant effect on Biotage's accounts.
IFRS 16 Leases means that all assets that Biotage rents under a leasing agreement, including rental agreements for premises, shall be recognized as an asset and liability, and a cost for depreciation and interest reported on the income statement. The standard will mean that higher assets as well as higher liability will be reported in the balance sheet than today. IFRS 16 shall be applied from the financial year 2019 at the latest and is not yet adopted by the EU. 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.
Biotage has a financial asset of 0.1 MSEK measured as fair value concerning an option to acquire all outstanding shares in Chreto Aps. Biotage owns 22 percent of Chreto. 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. Other financial assets and financial debts are measured according to accrued acquisition value and the value reported for these is considered to be a good approximation of fair value.
For definitions of the key ratios and financial metrics used in the Group's financial reporting, see Biotage's Annual Report for 2017, page 76.
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.
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 % | 2018-07-01 | 2017-07-01 | 2018-01-01 | 2017-01-01 | ||||
| 2018-09-30 | 2017-09-30 | 2018-09-30 | 2017-09-30 | |||||
| KSEK | % | KSEK | % | KSEK | % | KSEK | % | |
| Reported sales in the comparison period | 177 715 | 167 032 | 559 259 | 488 766 | ||||
| Reported sales in the period* | 210 844 | 177 715 | 622 212 | 559 259 | ||||
| Reported Change | 33 129 | 18,6 | 10 683 | 6,4 | 62 954 | 11,3 | 70 492 | 14,4 |
| Sales in current period to the comparable periods exchange rates* |
195 262 | 183 318 | 606 741 | 552 844 | ||||
| Change to comparable rates | 17 547 | 9,9 | 16 286 | 9,8 | 47 482 | 8,5 | 64 078 | 13,1 |
* Excluding sales from companies acquired during the year
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 cash is reported defined as cash reduced by liabilities to credit institutions.
| Net cash | 2018-09-30 | 2017-09-30 |
|---|---|---|
| Cash | 134,1 | 119,6 |
| Liabilities to credit institutions | -109,4 | 0,0 |
| Net cash | 24,7 | 119,6 |
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 | 2018-09-30 | |||||
|---|---|---|---|---|---|---|
| 2017-10-01 2018-01-01 | Rolling 12 | 2016-10-01 2017-01-31 | Rolling 12 | |||
| 2017-12-31 2018-09-30 | months | 2016-12-31 2017-09-30 | months | |||
| Net sales | 188,9 | 676,3 | 865,2 | 179,1 | 559,3 | 738,4 |
| Operating profit | 32,2 | 136,7 | 169,0 | 24,1 | 101,4 | 125,5 |
| Net sales increase % | 17,2% | 12,3% |
In this report Biotage uses the result measure EBIT, Earnings Before Interest and Taxes, as an alternative term for operating profit.
At September 30, 2018 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.
On January 16, 2018 Biotage AB acquired 100 percent of the privately held company Horizon Technology Inc. Horizon, based in New Hampshire, USA, is a supplier of automated systems and consumables for separation in the areas of water purification, food testing, petrochemicals and the pharma industry. Horizon's product offering complements Biotage's product portfolio well and strengthens Biotage's position above all in the areas of food safety and environmental applications. Biotage's global direct sales are furthermore expected to benefit the sales of Horizon's products. Biotage acquired all shares in Horizon by cash payment of the entire purchase price of 143 MSEK on the day of acquisition.
In this acquisition analysis no differences between book values and actual values concerning other receivables have been identified. The stock is valued at book value.
| The acquired company's net assets at the time of acquisition | Acquisition analysis |
|---|---|
| Tangible fixed assets | 0.6 |
| Intangible assets: Customer relations | 26.4 |
| Intangible assets: Trademarks | 13.0 |
| Intangible assets: Patents/technology | 19.5 |
| Other intangible assets | 2.1 |
| Stock | 8.2 |
| Accounts receivable and other receivables | 9.0 |
| Cash and cash equivalents | 12.7 |
| Accounts payable and other operating liabilities | -10.0 |
| Deferred tax | -12.4 |
| Net identifiable assets and liabilities | 69.2 |
| Consolidated goodwill | 73.3 |
| Transferred payment | 142.5 |
In the acquisition analysis goodwill amounts to 73 MSEK. The goodwill included in the acquisition corresponds partly to Biotage's estimated ability to increase the sales of Horizon's 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 environmental area and in water purification that exists in the acquired company. This goodwill is not deemed to be tax deductible.
The acquisition related expenses amounted to 2.8 MSEK and relate to fees paid for external legal counsel and consultants in connection with due diligence, among other things. 2.5 MSEK of these costs were reported already in 2017. The expenses have been reported under Administration costs in the Group's statement of profit or loss and other comprehensive income.
| Third quarter | 9 months | ||||
|---|---|---|---|---|---|
| 2018-07-01 2017-07-01 | 2018-01-01 2017-01-01 | ||||
| Composition of income: | 2018-09-30 2017-09-30 | 2018-09-30 2017-09-30 | |||
| Net sales - distribution between products and services: |
|||||
| Products | 209 828 | 146 137 | 611 053 | 486 631 | |
| Services | 20 764 | 30 159 | 59 366 | 68 300 | |
| Other sales revenue | 1 612 | 1 419 | 5 903 | 4 328 | |
| Total sales revenue | 232 204 | 177 715 | 676 322 | 559 259 |
| Organic Chemistry | Analytical Chemistry | Industrial products | Total | |||||
|---|---|---|---|---|---|---|---|---|
| Revenue by geographical market | 2018-07-01 2017-07-01 | 2018-07-01 2017-07-01 | 2018-07-01 2017-07-01 | 2018-07-01 2017-07-01 | ||||
| and product area Q1 2017 | 2018-09-30 2017-09-30 | 2018-09-30 2017-09-30 | 2018-09-30 2017-09-30 | 2018-09-30 2017-09-30 | ||||
| North- and South America | 41 895 | 39 385 | 51 016 | 33 998 | 6 325 | 5 458 | 99 236 | 78 841 |
| Europa | 32 936 | 25 497 | 19 415 | 14 428 | 4 876 | 2 625 | 57 227 | 42 549 |
| Japan | 20 765 | 14 702 | 2 517 | 2 627 | 3 739 | 2 767 | 27 021 | 20 096 |
| China | 17 425 | 12 629 | 6 436 | 3 070 | 1 | 0 | 23 861 | 15 699 |
| EMEA and APAC | 4 710 | 6 830 | 8 515 | 5 693 | 1 025 | 396 | 14 250 | 12 918 |
| South Korea | 7 070 | 5 147 | 2 696 | 1 508 | 294 | 0 | 10 060 | 6 655 |
| India | 287 | 249 | 181 | 410 | 81 | 297 | 550 | 957 |
| Total sales revenue | 125 088 | 104 438 | 90 776 | 61 735 | 16 340 | 11 543 | 232 204 | 177 715 |
| Organic Chemistry | Analytical Chemistry | Industrial products | Total | |||||
|---|---|---|---|---|---|---|---|---|
| Revenue by geographical market | 2018-01-01 2017-01-01 | 2018-01-01 2017-01-01 | 2018-01-01 2017-01-01 | 2018-01-01 2017-01-01 | ||||
| and product area Q1 2018 | 2018-09-30 2017-09-30 | 2018-09-30 2017-09-30 | 2018-09-30 2017-09-30 | 2018-09-30 2017-09-30 | ||||
| North- and South America | 125 957 | 121 810 | 138 080 | 100 081 | 18 853 | 17 995 | 282 891 | 239 886 |
| Europa | 96 010 | 88 173 | 54 171 | 41 207 | 15 706 | 16 976 | 165 887 | 146 356 |
| Japan | 59 875 | 57 234 | 7 266 | 9 220 | 10 364 | 6 295 | 77 505 | 72 750 |
| China | 52 832 | 40 087 | 11 120 | 8 744 | 44 | 4 | 63 996 | 48 835 |
| EMEA and APAC | 17 853 | 13 368 | 28 696 | 14 443 | 2 738 | 1 664 | 49 287 | 29 475 |
| South Korea | 19 610 | 13 830 | 9 218 | 3 058 | 294 | 37 | 29 121 | 16 925 |
| India | 6 691 | 3 742 | 832 | 635 | 113 | 655 | 7 635 | 5 033 |
| Total sales revenue | 378 827 | 338 245 | 249 383 | 177 388 | 48 112 | 43 626 | 676 322 | 559 259 |
The distribution relates to sales per product area to customers located
in the above geographical areas.
| Third quarter | 9 months | ||||
|---|---|---|---|---|---|
| 2018-07-01 2017-07-01 | 2018-01-01 2017-01-01 | ||||
| Revenue by sales channel | 2018-09-30 2017-09-30 | 2018-09-30 2017-09-30 | |||
| Direct sales through own sales channel | 217 954 | 164 797 | 627 036 | 529 784 | |
| Sales through distributors | 14 250 | 12 918 | 49 287 | 29 475 | |
| Total sales revenue | 232 204 | 177 715 | 676 322 | 559 259 | |
| Third quarter | 9 months | ||||
| Point in time of transfer of goods | 2018-07-01 2017-07-01 | 2018-01-01 2017-01-01 | |||
| and services | 2018-09-30 2017-09-30 | 2018-09-30 2017-09-30 | |||
| Goods transferred at a point in time | 211 461 | 161 298 | 616 977 | 508 757 | |
| Services transferred at a point in time | 5 220 | 4 573 | 15 907 | 14 243 | |
| Service contracts and other services transferred over a period of time |
15 524 | 11 844 | 43 438 | 36 260 |
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