Interim / Quarterly Report • Jul 16, 2018
Interim / Quarterly Report
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July 16, 2018
1) See definition pp. 16-17
| Amounts in SEK millions | Q2 | Q2 | 6 months | 6 months | 12 months |
|---|---|---|---|---|---|
| Apr-Jun | Apr-Jun | Jan-Jun | Jan-Jun | Jan-Dec | |
| 2018 | 2017 | 2018 | 2017 | 2017 | |
| Net sales | 236.1 | 196.3 | 444.1 | 381.5 | 748.1 |
| C ost of sales | -91.7 | -75.3 | -172.9 | -147.7 | -291.5 |
| Gross profit | 144.4 | 121.0 | 271.2 | 233.8 | 456.7 |
| Operating expenses | -94.4 | -83.9 | -179.6 | -161.7 | -323.0 |
| Operating profit/loss (EBIT) | 50.0 | 37.2 | 91.6 | 72.1 | 133.6 |
| Financial items | 1.9 | 0.6 | 5.9 | 1.9 | 2.6 |
| Profit/loss before tax | 51.9 | 37.8 | 97.5 | 74.0 | 136.3 |
| Tax | -0.5 | -0.1 | -1.3 | -1.1 | 2.5 |
| Total profit/loss for the period | 51.4 | 37.7 | 96.3 | 73.0 | 138.7 |
| Gross margin | 61.2% | 61.7% | 61.1% | 61.3% | 61.0% |
| Operating margin (EBIT) | 21.2% | 18.9% | 20.6% | 18.9% | 17.9% |
1) See definition pp. 16-17
Biotage adds yet another strong quarter with new record figures for sales as well as operating profit. The increased representation by own sales representatives in different parts of the world contributes to Biotage's continued strong growth. Our subsidiary in India has now been operational during two quarters and despite being in a build-up and transition phase the result is already encouraging, as we have turned the negative trend around. Sales in India in the first six months of the year increased by 170 percent compared to the corresponding period last year. In general Biotage is growing faster than the markets in which the company is active, which means that we are growing our market share.
Biotage's operations benefit from the current currency situation with a relatively weak SEK. Notwithstanding the currency benefits, sales in both the quarter and the sixmonth period increased by 9 percent at comparable exchange rates and adjusted for acquisitions. The gross margin for the quarter as well as the six-month period exceeds our strategic goal of 60 percent. Despite a slightly less favorable distribution of the sales between systems and aftermarket products than the corresponding period last year (49/51 percent vs. 48/52 percent) the gross margin for the six-month period remained practically unchanged. The operating margin (EBIT) exceeds 20 percent for the quarter as well as the six-month period and now amounts to 16.4 percent as a rolling average for the last three years.
The integration of Biotage's latest acquisition, Horizon Technology Inc., proceeds according to plan and we continue to see good opportunities for growing the business over time. By using Biotage's global sales organization we can increase the proportion of direct sales at the same time as we achieve increased geographic coverage. We also already now see that we are increasing the profitability of the acquired business.
The trend of strong sales of our Isolera™ purification systems continues. The sales of these systems have been strong in China for a long period, but during the quarter we also saw a strong development in the US with a 50 percent increase of sales for these products compared to last year. The development in analytical chemistry is also good and the sales in this product area, which also includes the products from Horizon Technology, are strong.
For a long time we have faced tough price competition on consumables in China from local players. In an attempt to gain market share also in this area, we have introduced consumables for the purification system Isolera™ specially designed for the local market in China. The sales of these have begun to take off and we look forward with interest to see the development going forward.
The initiatives in industrial products continue and during the quarter we launched a UV monitoring kit that improves the user-friendliness of our big purification systems Biotage® Flash 150 and Biotage® Flash 400, for use in the pharma and manufacturing industry.
As we see an increased demand for Biotage's products we are developing our production units. This above all applies to the manufacturing of consumables in organic and analytical chemistry. Projects are under way to increase the internal production capacity both short term and long term. During the quarter we, among other things, implemented improvements of the production flows and installed larger production modules.
Group net sales in the second quarter 2018 amounted to 236.1 MSEK (196.3), which is an increase by 20.3 percent (20.5). At comparable exchange rates and adjusted for acquisitions sales increased by 9.0 percent (15.9) compared with the corresponding quarter last year. The Americas was the biggest market with 41 percent (44) of the net sales. The EU and the EMEA area contributed 29 percent (29) and Asia increased its share to 30 percent (27).
The Group's gross margin for the quarter amounted 61.2 percent (61.7). The distribution of sales between systems and aftermarket products was 49 percent (49) and 51 percent (51), respectively. Biotage's profitability continues to be favored by the currency situation with a relatively strong USD against SEK.
The operating expenses amounted to 94.4 MSEK (83.9). Of this sum 64.4 MSEK (52.7) were sales costs. The increase in sales costs by 11.7 MSEK compared to the corresponding period last year is mainly attributable to increased staffing in the sales force, the establishment of direct sales in India, and the acquisition of Horizon Technology in January 2018. The research and development costs amounted to 16.9 MSEK (13.7) and the administration costs amounted to 18.5 MSEK (13.2). Also these costs are affected by the acquisition of Horizon. Other operating items, amounting to 5.5 MSEK (-4.3) primarily consists of currency effects on operations related liabilities and receivables. This year's positive contribution compared to the negative effect in the comparative period thus constitutes a positive net effect of no less than 9.8 MSEK between the years.
Operating profit improved by 34 percent to 50.0 MSEK (37.2), corresponding to an operating margin (EBIT) of 21.2 percent (18.9). Net financial income amounted to 1.9 MSEK (0.6). The result after tax improved by 36 percent to 51.4 MSEK (37.7).
The cash flow from operating activities in the period was 24.6 MSEK (43.1). The decrease is attributable to changes in working capital during the quarter, above all to an increase of accounts receivable as a result of high invoicing at the end of the period. The working capital increase is also partly caused by currency effects at the translation of foreign subsidiaries' balance sheet items to SEK. The investments amounted to 10.3 MSEK (10.7). Amortizations and write-downs amounted to 9.9 MSEK (9.0). Capitalized development costs accounted for 6.8 MSEK (6.6) of the investments and 4.7 MSEK (5.0) of the amortizations and write-downs.
The Group's net sales in the six-month period increased by 16.4 percent (18.6) to 444.1 MSEK (381.5). At comparable exchange rates and adjusted for acquisitions net sales increased by 10.1 percent (14). The Americas was the biggest market with 41 percent (43) of the net sales. The EU and the EMEA area contributed 29 percent (30) and Asia 30 percent (27).
The Group's gross margin for the period was virtually unchanged compared to the corresponding period last year, 61.1 percent (61.3), with a product mix where systems accounted for 49 percent (48) of the sales and aftermarket products for 51 percent (52).
The operating expenses amounted to 179.6 MSEK (161.7). The increase is mainly attributable to an increase of the sales costs by 21.7 MSEK to 124.6 MSEK (102.9).
The operating profit improved by 27 percent (51) to 91.6 MSEK (72.1) corresponding to an operating margin (EBIT) of 20.6 percent (18.9). Net financial income amounted to 5.9 MSEK (1.9). The result after tax was 96.3 MSEK (73.0), an increase by 32 percent.
The cash flow from operating activities was 52.7 MSEK (72.2). The cash flow was negatively affected to the amount of 47.7 MSEK by changes in working capital during the period. Of this sum 7.7 MSEK relates to increased inventories and 34.7 MSEK to increased operating receivables, primarily increased accounts receivable relating to large sales at the end of the period. The investments amounted to 154.3 MSEK (16.7), the net effect of the acquisition of Horizon accounting for 129.8 MSEK. Amortizations and write-downs amounted to 19.1 MSEK (17.3). Capitalized development costs accounted for 14.5 MSEK (10.7) of the investments and 8.8 MSEK (9.2) of the amortizations and write-downs.
At June 30, 2018 the Group's cash and cash equivalents amounted to 95.8 MSEK (101.6). At the end of the period the Group had interest-bearing liabilities amounting to 109.3 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 June 30 thus amounted to -13.5 MSEK (101.6). During the period dividends to the shareholders were paid to the amount of 90.6 MSEK (80.9).
The Group reports a total goodwill of 186.0 MSEK (104.0) at June 30. The increase in goodwill 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 191.3 MSEK (115.9). Of this sum 100.8 MSEK (92.3) were capitalized development costs. The rest of the increase primarily consists of identified surplus value in acquired assets in Horizon, see p. 17.
At June 30 the equity capital amounted to 632.4 MSEK (545.7). The change in equity capital during the first six months is attributable to the net result 96.3 MSEK (73.0),
dividends to the shareholders –90.6 MSEK (-80.9) and hedging and currency effects at the translation of foreign subsidiaries 18.1 MSEK (-9.8).
There are no major events after the reported period to report.
The Group had 406 employees (334) at June 30, compared to 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 second quarter. The operating expenses amounted to 5.5 MSEK (5.6) and the operating result to -4.9 MSEK (-5.0). The parent company's net financial income was 1.5 MSEK (1.6) and the result after financial items amounted to -3.4 MSEK (-3.4). The investments in intangible fixed assets amounted in the quarter amounted to 0.5 MSEK (0.0). The parent company's cash and bank balance amounted to 1.5 MSEK (1.5) at June 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].
The interim report for the third quarter 2018 will be issued on November 6, 2018. The year-end report for 2018 will be issued on February 7, 2019. All reports are available at Biotage's website from the above dates.
This report has not been reviewed by the company's auditor.
The Board of Directors and the CEO assure that the interim report gives a fair review of the operations of the Parent company and the Group, their financial positions and results, and describes the significant risks and uncertainties that the Parent company and the Group companies are facing.
Uppsala July 16, 2018
Torben Jörgensen President and CEO
Thomas Eklund Nils-Olof Björk Yvonne Mårtensson Chairman of the Board Board Director Board Director
Peter Ehrenheim Karolina Lawitz Annika Gärdlund
Board Director Board Director Deputy Board Member Employee Representative
Love Amcoff Dan Ohlsson Board Director Deputy Board Member Employee Representative Employee Representative
Torben Jörgensen, President and CEO, phone: +46 707 49 05 84
Erika Söderberg Johnson, CFO, phone: +46 707 20 48 20
This information is information that Biotage AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact persons set out above, at 11.00 CET on July 16, 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. 400 employees and had sales of 748 MSEK in 2017. Biotage is listed on NASDAQ Stockholm. Website: www.biotage.com
| 2018-04-01 | 2017-04-01 | 2018-01-01 | 2017-01-01 | 2017-01-01 | |
|---|---|---|---|---|---|
| Amounts in SEK thousands | 2018-06-30 | 2017-06-30 | 2018-06-30 | 2017-06-30 | 2017-12-31 |
| Net sales | 236,071 | 196,315 | 444,118 | 381,543 | 748,147 |
| Cost of sales | -91,678 | -75,269 | -172,921 | -147,743 | -291,483 |
| Gross profit | 144,392 | 121,046 | 271,198 | 233,801 | 456,664 |
| Distribution costs | -64,439 | -52,702 | -124,564 | -102,855 | -207,628 |
| Administrative expenses | -18,544 | -13,163 | -33,752 | -26,041 | -54,705 |
| Research and development costs | -16,943 | -13,673 | -31,895 | -28,327 | -55,986 |
| Other operating income | 5,545 | -4,315 | 10,616 | -4,438 | -4,715 |
| Total operating expenses | -94,381 | -83,853 | -179,595 | -161,661 | -323,034 |
| Operating profit/loss | 50,011 | 37,193 | 91,602 | 72,140 | 133,630 |
| Financial net income | 1,903 | 600 | 5,947 | 1,904 | 2,631 |
| Profit/loss before income tax | 51,914 | 37,793 | 97,549 | 74,043 | 136,260 |
| Tax | -495 | -115 | -1,277 | -1,073 | 2,487 |
| Total profit/loss for the period | 51,419 | 37,678 | 96,272 | 72,970 | 138,747 |
| Other comprehensive income | |||||
| Components that may be reclassified to net income: | |||||
| Translation differences related to | |||||
| non Swedish subsidiaries | 12,063 | -7,716 | 18,591 | -9,773 | -12,268 |
| Cash flow hedges | -36 | 668 | -475 | 133 | -213 |
| Total other comprehensive income | 12,027 | -7,049 | 18,116 | -9,641 | -12,481 |
Total comprehensive income for the period 63,446 30,629 114,388 63,330 126,267
| 2018-04-01 | 2017-04-01 | 2018-01-01 | 2017-01-01 | 2017-01-01 | |
|---|---|---|---|---|---|
| Belopp i KSEK | 2018-06-30 | 2017-06-30 | 2018-06-30 | 2017-06-30 | 2017-12-31 |
| Attributable to parent company´s shareholders: | |||||
| Total profit/loss for the period | 51,419 | 37,678 | 96,272 | 72,970 | 138,747 |
| Attributable to parent company´s shareholders: | |||||
| Total comprehensive income for the period | 63,446 | 30,629 | 114,388 | 63,330 | 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 | 0.79 | 0.58 | 1.49 | 1.13 | 2.14 |
| Total profit/loss for the period per share SEK after dilution |
0.79 | 0.58 | 1.49 | 1.13 | 2.14 |
| Earnings per share relates to: | |||||
| Continuing operations | 0.79 | 0.58 | 1.49 | 1.13 | 2.14 |
| Total comprehensive income for the period per share SEK |
0.98 | 0.47 | 1.77 | 0.98 | 1.95 |
| Total comprehensive income for the period per share after dilution SEK |
0.98 | 0.47 | 1.77 | 0.98 | 1.95 |
| Quarterly summary | 2018 | 2018 | 2017 | 2017 | 2017 | 2017 |
|---|---|---|---|---|---|---|
| Amounts in KSEK | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
| Net Sales | 236,071 | 208,048 | 188,888 | 177,716 | 196,315 | 185,228 |
| Cost of sales | -91,678 | -81,242 | -73,271 | -70,469 | -75,270 | -72,473 |
| Gross profit | 144,392 | 126,805 | 115,617 | 107,246 | 121,045 | 112,755 |
| Gross margin | 61.2% | 61.0% | 61.2% | 60.3% | 61.7% | 60.9% |
| Operating expenses | -94,381 | -85,214 | -83,387 | -77,986 | -83,853 | -77,808 |
| Operating profit/loss | 50,011 | 41,591 | 32,231 | 29,260 | 37,192 | 34,947 |
| Financial net | 1,903 | 4,044 | 2 | 725 | 600 | 1,304 |
| Profit/loss before income tax | 51,914 | 45,635 | 32,233 | 29,985 | 37,793 | 36,250 |
| Tax | -495 | -782 | 2,417 | 1,143 | -116 | -958 |
| Total profit/loss for the period | 51,419 | 44,853 | 34,650 | 31,128 | 37,677 | 35,293 |
| Amounts in SEK thousands | 2018-06-30 | 2017-12-31 |
|---|---|---|
| ASSETS | ||
| Non-Current assets | ||
| Property, plant and equipment | 49,116 | 45,303 |
| Goodwill | 185,954 | 104,023 |
| Other intangible assets | 191,336 | 118,646 |
| Financial assets | 19,996 | 19,243 |
| Deferred tax asset | 62,049 | 60,735 |
| Total non-current assets | 508,450 | 347,949 |
| Current assets | ||
| Inventories | 120,290 | 95,794 |
| Trade and other receivables | 190,848 | 139,195 |
| Cash and cash equivalents | 95,844 | 174,263 |
| Total current assets | 406,982 | 409,252 |
| TOTAL ASSETS | 915,432 | 757,201 |
| EQUITY AND LIABILITIES | ||
| Capital and reserves attributable to equity holders of the | ||
| parent company | ||
| Share capital | 89,953 | 89,953 |
| Reserves | -78,303 | -96,419 |
| Retained earnings | 620,749 | 615,077 |
| Total equity | 632,399 | 608,611 |
| Non-current liabilities | ||
| Liabilities to credit institutions | 109,325 | - |
| Other financial liabilities | 612 | 656 |
| Deferred tax liability | 15,090 | 1,621 |
| Non-current provisions | 2,048 | 1,936 |
| Total non-current liabilities | 127,076 | 4,212 |
| Current liabilities | ||
| Trade and others liabilities | 150,304 | 139,693 |
| Tax liabilities | 1,884 | 1,899 |
| Current provisions | 3,770 | 2,785 |
| Total current liabilities | 155,958 | 144,377 |
| TOTAL EQUITY AND LIABILITIES | 915,432 | 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 - June 30, 2017 | |||||
| Total comprehensive income | - | -9,773 | 133 | 72,970 | 63,330 |
| Total non-owners changes | - | -9,773 | 133 | 72,970 | 63,330 |
| Transacitions with equity holders of the company | |||||
| Dividend to shareholders of the parent company | - | - | - | -80,893 | -80,893 |
| Closing balance June 30, 2017 | 89,953 | -94,000 | 421 | 549,300 | 545,674 |
| Changes in equity in the period of | |||||
| January 1, 2018 - June 30, 2018 | |||||
| Total comprehensive income | - | 18,591 | -475 | 96,272 | 114,388 |
| Total non-owners changes | - | 18,591 | -475 | 96,272 | 114,388 |
| Transacitions with equity holders of the company | |||||
| Dividend to shareholders of the parent company | - | - | - | -90,600 | -90,600 |
| Closing balance June 30, 2018 | 89,953 | -77,903 | -399 | 620,749 | 632,399 |
| 2018-04-01 | 2017-04-01 | 2018-01-01 | 2017-01-01 | 2017-01-01 | |
|---|---|---|---|---|---|
| Amounts in SEK thousands | 2018-06-30 | 2017-06-30 | 2018-06-30 | 2017-06-30 | 2017-12-31 |
| Operating activities | |||||
| Profit/loss before income tax | 51,914 | 37,793 | 97,549 | 74,043 | 136,260 |
| Adjustments for non-cash items | 1,978 | 11,694 | 5,566 | 17,665 | 36,216 |
| 53,891 | 49,487 | 103,115 | 91,708 | 172,476 | |
| Income tax paid | -1,352 | -985 | -2,749 | -2,234 | -5,091 |
| Cash flow from operating activities | |||||
| before changes in working capital | 52,539 | 48,502 | 100,366 | 89,475 | 167,385 |
| Cash flow from changes in working capital: | |||||
| Increase (-)/ decrease (+) in inventories | -2,775 | -5,165 | -7,721 | -6,343 | -12,544 |
| Increase (-)/ decrease (+) in operating receivables | -21,217 | -136 | -34,717 | -8,727 | -6,372 |
| Increase (+)/ decrease (-) in operating liabilities | -3,994 | -149 | -5,230 | -2,164 | 20,463 |
| Cash flow from changes in working capital | -27,985 | -5,449 | -47,668 | -17,234 | 1,547 |
| Cash flow from operating activities | 24,554 | 43,053 | 52,698 | 72,241 | 168,932 |
| Investing activities | |||||
| Acquisition of intangible assets | -7,649 | -7,763 | -18,544 | -11,973 | -26,998 |
| Acquisition of property, plant and equipment | -3,757 | -2,912 | -5,903 | -4,760 | -10,806 |
| Acquisition of financial assets | - | - | -129,822 | - | - |
| Sale of financial assets | 1,114 | 626 | - | 1,113 | 902 |
| Cash flow from investing activities | -10,291 | -10,048 | -154,269 | -15,620 | -36,903 |
| Financing activities | |||||
| Dividend to shareholders | -90,600 | -80,893 | -90,600 | -80,893 | -80,893 |
| Loan raised | 34 | - | 109,319 | - | - |
| Repayment of loans | - | -46 | - | -88 | -160 |
| Cash flow from financial activities | -90,567 | -80,939 | 18,719 | -80,982 | -81,053 |
| Cash flow for the period | -76,304 | -47,934 | -82,852 | -24,361 | 50,976 |
| Cash and cash equivalents opening balance | 168,889 | 152,097 | 174,263 | 128,622 | 128,622 |
| Exchange differences in liquid assets | 3,258 | -2,526 | 4,433 | -2,625 | -5,336 |
| Cash and equivalents closing balance | 95,844 | 101,637 | 95,844 | 101,637 | 174,263 |
| Additional information: | |||||
| Adjustments for non-cash items | |||||
| Depreciations and impairments | 9,908 | 9,031 | 19,079 | 17,295 | 34,225 |
| Other items | -7,931 | 2,663 | -13,513 | 370 | 1,991 |
| Total | 1,978 | 11,694 | 5,566 | 17,665 | 36,216 |
| 2018-04-01 2017-04-01 2018-01-01 2017-01-01 2017-01-01 | |||||
|---|---|---|---|---|---|
| Amounts in SEK thousands | 2018-06-30 2017-06-30 2018-06-30 2017-06-30 2017-12-31 | ||||
| Net sales | 621 | 585 | 1,224 | 1,175 | 2,304 |
| Administrative expenses | -4,770 | -4,771 | -9,621 | -9,368 | -18,012 |
| Research and development costs | -787 | -803 | -1,298 | -1,526 | -2,874 |
| Other operating items | 46 | 1 | 52 | 30 | 14 |
| Operating expenses | -5,511 | -5,573 | -10,866 | -10,865 | -20,871 |
| Operating profit/loss | -4,889 | -4,988 | -9,643 | -9,690 | -18,567 |
| Profit/loss from financial investments: | |||||
| Interest income from receivables from group companies | 41 | - | 41 | - | 150 |
| Interest expense from liabilities to group companies | - | -656 | - | -1,311 | -2,550 |
| Other interest and similar income | 1,948 | 2,211 | 3,317 | 3,492 | 4,609 |
| Other interest and similar expenses | -520 | - | -769 | - | - |
| Group contribution received | - | - | - | - | 86,334 |
| Financial net income | 1,468 | 1,555 | 2,589 | 2,181 | 88,543 |
| Profit/loss before income tax | -3,421 | -3,433 | -7,054 | -7,510 | 69,976 |
| Tax | 5,003 | 274 | 5,003 | 274 | 8,649 |
| Total profit/loss for the period | 1,582 | -3,159 | -2,052 | -7,235 | 78,626 |
| STATEMENT OF COMPREHENSIVE INCOME. PARENT | |||||
| Total profit/loss for the period | 1,582 | -3,159 | -2,052 | -7,235 | 78,626 |
| Other comprehensive income: | |||||
| Components that may be reclassified to net income: | |||||
| Translation differences related to | - | - | - | - | - |
| Total comprehensive income, parent | 1,582 | -3,159 | -2,052 | -7,235 | 78,626 |
| Amounts in SEK thousands | 2018-06-30 | 2017-12-31 |
|---|---|---|
| ASSETS | ||
| Non-current assets | ||
| Intangible assets | ||
| Patents and licenses | 10,552 | 10,053 |
| 10,552 | 10,053 | |
| Financial as sets | ||
| Investments in group companies | 470,398 | 470,398 |
| Receivables from group companies | 172,546 | 11,685 |
| Shares in associated companies | 19,284 | 19,284 |
| Deferred tax asset | 53,498 | 48,495 |
| 715,726 | 549,863 | |
| Total non-current assets | 726,277 | 559,916 |
| Current assets | ||
| Current receivables | ||
| Receivables from group companies | 3,407 | 55,600 |
| Other receivables | 468 | 307 |
| Prepaid expenses and accrued income | 1,342 | 3,410 |
| 5,217 | 59,317 | |
| Cash and cash equivalents | 1,535 | 1,459 |
| Total current assets | 6,752 | 60,776 |
| TOTAL ASSETS | 733,030 | 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 | $-2,052$ | 78,626 |
| 378,481 | 471,133 | |
| Total equity | 468,434 | 561,086 |
| Longterm liabilities | ||
| Liabiliteis to credit institutions | 110,000 | |
| Current liabilities | 110,000 | |
| Trade payables | 765 | 876 |
| Liabilities to group companies | 148,137 | 50,669 |
| Other current liabilities | 161 | 47 |
| Accrued expenses and prepaid income | 5,533 | 8,014 |
| 154,596 | 59,607 | |
| TOTAL EQUITY, PROVISIONS AND LIABILITIES | 733,030 | 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 0.4 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.
| Second quarter | 6 months | |||||||
|---|---|---|---|---|---|---|---|---|
| Sales change in % | 4/1/2018 | 4/1/2017 | 1/1/2018 | 1/1/2017 | ||||
| 6/30/2018 | 6/30/2017 | 6/30/2018 | 6/30/2017 | |||||
| KSEK | % | KSEK | % | KSEK | % | KSEK | % | |
| Reported sales in the comparison period | 196,315 | 162,859 | 381,543 | 321,734 | ||||
| Reported sales in the period* | 216,055 | 196,315 | 410,853 | 381,543 | ||||
| Reported Change | 19,740 | 10.1 | 33,456 | 20.5 | 29,310 | 7.7 | 59,809 | 18.6 |
| Sales in current period to the comparable periods exchange rates* |
213,943 | 188,691 | 417,192 | 366,795 | ||||
| Change to comparable rates | 17,628 | 9.0 | 25,832 | 15.9 | 35,649 | 9.3 | 45,061 | 14.0 |
* 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 | 6/30/2018 | 6/30/2017 |
|---|---|---|
| C ash | 95.8 | 101.6 |
| Liabilities to credit institutions | -109.3 | 0.0 |
| Net cash | -13.5 | 101.6 |
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 | 6/30/2018 | 6/30/2017 | ||||||
|---|---|---|---|---|---|---|---|---|
| 7/1/2017 | 1/1/2018 | Rolling 12 | 7/1/2016 | 1/31/2017 | Rolling 12 | |||
| 12/31/2017 | 6/30/2018 | months | 12/31/2016 | 6/30/2017 | months | |||
| Net sales | 366.6 | 444.1 | 810.7 | 346.2 | 381.5 | 727.7 | ||
| Operating profit | 61.5 | 91.6 | 153.1 | 51.3 | 72.1 | 123.5 | ||
| Net sales increase % | 11.4% | 13.7% |
In this report Biotage uses the result measure EBIT, Earnings Before Interest and Taxes, as an alternative term for operating profit.
At June 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.
| Second quarter | 6 months | ||||
|---|---|---|---|---|---|
| 4/1/2018 | 4/1/2017 | 1/1/2018 | 1/1/2017 | ||
| Composition of income: | 6/30/2018 | 6/30/2017 | 6/30/2018 | 6/30/2017 | |
| Net sales - distribution between products and services: |
|||||
| Products, Systems | 120,241 | 96,754 | 213,053 | 183,692 | |
| Products, Consumables and spare parts | 94,100 | 78,474 | 188,172 | 156,802 | |
| Service contracts and other services | 19,901 | 19,685 | 38,602 | 38,141 | |
| Other sales revenue | 1,829 | 1,403 | 4,291 | 2,909 | |
| Total sales revenue | 236,071 | 196,315 | 444,118 | 381,544 |
| Organic Chemistry | Analytical Chemistry | Industrial produc ts | Total | |||||
|---|---|---|---|---|---|---|---|---|
| Revenue by geographical market | 4/1/2018 | 4/1/2017 | 4/1/2018 | 4/1/2017 | 4/1/2018 | 4/1/2017 | 4/1/2018 | 4/1/2017 |
| and product area Q1 2017 | 6/30/2018 | 6/30/2017 | 6/30/2018 | 6/30/2017 | 6/30/2018 | 6/30/2017 | 6/30/2018 | 6/30/2017 |
| North- and South America | 43,903 | 42,583 | 46,561 | 33,895 | 5,004 | 7,105 | 95,468 | 83,583 |
| Europa | 36,458 | 32,434 | 18,726 | 13,489 | 4,164 | 7,905 | 59,349 | 53,827 |
| Japan | 18,699 | 20,274 | 2,274 | 3,153 | 3,458 | 2,414 | 24,431 | 25,841 |
| China | 17,059 | 14,000 | 2,816 | 2,577 | 22 | 2 | 19,898 | 16,578 |
| EMEA and APAC | 8,352 | 3,757 | 12,007 | 4,282 | 909 | 488 | 21,268 | 8,528 |
| South Korea | 6,705 | 5,730 | 3,320 | 1,004 | 0 | 0 | 10,025 | 6,734 |
| India | 5,412 | 1,017 | 211 | 103 | 8 | 104 | 5,631 | 1,224 |
| Total sales revenue | 136,589 | 119,795 | 85,915 | 58,502 | 13,566 | 18,018 | 236,071 | 196,315 |
| Organic Chemistry | Analytical Chemistry | Industrial produc ts | Total | |||||
|---|---|---|---|---|---|---|---|---|
| Revenue by geographical market | 1/1/2018 | 1/1/2017 | 1/1/2018 | 1/1/2017 | 1/1/2018 | 1/1/2017 | 1/1/2018 | 1/1/2017 |
| and product area Q1 2018 | 6/30/2018 | 6/30/2017 | 6/30/2018 | 6/30/2017 | 6/30/2018 | 6/30/2017 | 6/30/2018 | 6/30/2017 |
| North- and South America | 84,063 | 82,425 | 87,064 | 66,083 | 12,528 | 12,536 | 183,655 | 161,045 |
| Europa | 63,074 | 62,677 | 34,756 | 26,778 | 10,830 | 14,351 | 108,661 | 103,806 |
| Japan | 39,110 | 42,532 | 4,749 | 6,594 | 6,625 | 3,528 | 50,484 | 52,654 |
| China | 35,407 | 27,458 | 4,684 | 5,674 | 43 | 4 | 40,135 | 33,136 |
| EMEA and APAC | 13,143 | 6,538 | 20,180 | 8,750 | 1,713 | 1,268 | 35,036 | 16,557 |
| South Korea | 12,540 | 8,683 | 6,522 | 1,550 | 0 | 37 | 19,062 | 10,270 |
| India | 6,404 | 3,493 | 651 | 225 | 31 | 358 | 7,086 | 4,076 |
| Total sales revenue | 253,739 | 233,807 | 158,607 | 115,653 | 31,772 | 32,083 | 444,118 | 381,544 |
The distribution relates to sales per product area to customers located
in the above geographical areas.
| Second quarter | 6 months | |||
|---|---|---|---|---|
| 4/1/2018 | 4/1/2017 | 1/1/2018 | 1/1/2017 | |
| Revenue by sales channel | 6/30/2018 | 6/30/2017 | 6/30/2018 | 6/30/2017 |
| Direc t sales through own sales channel | 214,802 | 187,788 | 409,082 | 364,987 |
| Sales through distributors | 21,268 | 8,528 | 35,036 | 16,557 |
| Total sales revenue | 236,071 | 196,315 | 444,118 | 381,544 |
| Second quarter | 6 months | |||
|---|---|---|---|---|
| Point in time of transfer of goods | 4/1/2018 | 4/1/2017 | 1/1/2018 | 1/1/2017 |
| and services | 6/30/2018 | 6/30/2017 | 6/30/2018 | 6/30/2017 |
| Goods transferred at a point in time | 216,170 | 179,274 | 405,516 | 347,458 |
| Services transferred at a point in time | 5,271 | 4,948 | 10,687 | 9,670 |
| Service contracts and other services transferred over a period of time |
14,630 | 12,093 | 27,914 | 24,415 |
| Total sales revenue | 236,071 | 196,315 | 444,118 | 381,544 |
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