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Bactiguard Holding

Quarterly Report Nov 9, 2017

3004_10-q_2017-11-09_c61c3695-4cf4-49a7-b1ec-1c86dc1cc88a.pdf

Quarterly Report

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Interim report for Bactiguard Holding AB (publ)

Corporate registration number 556822-1187

Third quarter (July-September 2017)

  • During the third quarter, BIP products at a value of SEK 5.2 (3.5) million were delivered, an increase of approx. 48 %.
  • Revenues amounted to SEK 34.8 (34.9) million, a decrease of approx. 0.4 % compared to the corresponding quarter previous year, which is mainly explained by a decrease in other revenues including exchange rate differences.
  • EBITDA1 amounted to SEK 8.4 (9.7) million. EBITDA margin1 of 24 % (28 %).
  • Operating profit amounted to SEK -0.3 (1.4) million.
  • Net profit/loss for the quarter amounted to SEK -0.4 (-0.5) million, corresponding to SEK -0.01 (-0.02) per share.
  • Operating cash flow2 for the quarter amounted to SEK 5.2 (-0.3) million, corresponding to SEK 0.15 (-0.01) per share.

Nine-month period (January-September 2017)

  • During the period, BIP products at a value of SEK 14.5 (10.1) million were delivered, an increase of approx. 44 %.
  • Revenues for the period amounted to SEK 112.3 (94.7) million, an increase of approx. 19 % compared to the corresponding period previous year.
  • EBITDA for the period amounted to SEK 25.6 (10.6) million, an EBITDA margin of 23 % (11 %).
  • Operating profit amounted to SEK -0.7 (-14.4) million.
  • Net profit/loss for the period amounted to SEK -2.3 (-19.4) million corresponding to SEK -0.07 (-0.58) per share.
  • Operating cash flow for the period amounted to SEK 5.7 (-0.7) million corresponding to SEK 0.17 (-0.02) per share.

Key events during the third quarter

  • New major order from China
  • Key events after the end of the third quarter
  • Central venous catheters approved in Hong Kong
  • Central venous catheters approved in India
  • New CFO appointed

  • New partnership in India

  • Three-year bank financing secured

• Bactiguard wins tender in Sweden

Key figures2 Jul-Sep Jul-Sep Jan-Sep Jan-Sep Full year
2017 2016 2017 2016 2016
Revenues3
, SEKm
34,8 34,9 112,3 94,7 128,3
EBITDA, SEKm 8,4 9,7 25,6 10,6 15,1
EBITDA margin, % 24% 28% 23% 11% 12%
Operating profit, SEKm -0,3 1,4 -0,7 -14,4 -18,3
Net profit/loss for the period3
, SEKm
-0,4 -0,5 -2,3 -19,4 -26,9
Operating cash flow, SEKm 5,2 -0,3 5,7 -0,7 -19,8
Earnings per share3
, SEK
-0,01 -0,02 -0,07 -0,58 -0,81
Operating cash flow per share, SEK 0,15 -0,01 0,17 -0,02 -0,60
Equity ratio, % 61% 61% 61% 61% 62%
Net debt1
, SEKm
144,8 117,3 144,8 117,3 134,4
Number of shares at the end of period 33 302 373 33 302 373 33 302 373 33 302 373 33 302 373
Weighted average number of shares3 33 302 373 33 302 373 33 302 373 33 302 373 33 302 373

1 Reconciliation of alternative performance measures see page 17

2 Definition of key figures are presented on page 17

3 Defined according to IFRS

Comments by the CEO

The positive trend in sales of our own product portfolio continues. This means that more and more patients have access to effective and safe infection prevention, not least in Sweden where we have recently won another tender. This reflects the increasing need for effective preventive solutions. We can now put eight quarters of rising sales, based on rolling twelve-month figures, behind us. Volumes are increasing and as we expand the product offerings in the markets where we are already established, the value of sales increases through an improved product mix. At the same time, we are increasing our presence in new, strategically important markets. The value of delivered products increased this quarter by close to 50 percent, mainly due to increased volumes. Our own product portfolio now accounts for approx. 15 percent of sales.

Total revenues were basically unchanged during the quarter, mainly due to negative exchange rate effects. For the full nine-month period, revenues rose by 19 percent, which is close to our financial target of 20 percent growth. License revenues increased during the quarter, but revenues from C.R Bard, which accounts for our largest license business, was lower than the corresponding quarter last year. For the whole nine-month period, sales to C.R Bard were in line with the previous year and the underlying business is stable. However, as reflected in the third quarter, volumes vary between quarters and do not follow any regular seasonal pattern. The new Smartwise licensing business is developing well and we have now invoiced 2 of a total of 2.5 MUSD in revenue for this year. Efforts in developing new license businesses in several application areas are ongoing at a high level of intensity.

EBITDA earnings were lower in the third quarter than for the same period last year and the EBITDA margin was 24 percent, compared to our long-term target of a margin of 30 percent. We gradually approach that target and still focus on keeping costs under control. At the same time, we are deliberately investing in our sales and marketing organization by increasing staff levels to drive growth, which has increased personnel costs and affected earnings for the quarter. Cash flow was very strong in the quarter and amounted to approx. 5 MSEK, which is positive.

Marketwise, the main developments were the delivery to China and the product approval of our central venous catheters for infection prevention in both India and Hong Kong. Both these approvals came significantly earlier than expected, enabling us to start marketing and sales efforts before the end of the year. In India, the approval led us to conclude the negotiations and enter into partnership with a new distributor covering the northern, western and eastern parts of the country and they are already well underway with the training of their 80-member sales force ahead of the launch. Hong Kong in itself is not a big market, but strategically important since it serves as a reference for new approvals and market acceptance in China.

Sales in the Middle East continue to develop positively and we can now safely say that the region is back after a weak 2016. During the quarter, we received orders from South Africa and Egypt, our newest, strategically important markets.

We are also continuing to make progress in Sweden. With the recently announced tender in Västra Götaland (VGR), which enables primary and secondary care to order our urinary catheters for infection prevention, Bactiguard's products are procured by the three largest Swedish regions. Earlier this year we concluded framework agreements with the Stockholm County Council, Region Skåne and the County Council of Värmland, which means that we now cover a majority of the population. The fact that the three largest county councils in Sweden have procured our products is a quality stamp we are proud of and will become an important reference in sales to other markets.

An important focus area has been to secure long-term funding for the company. Therefore, it is very pleasing that we have now received a commitment for a three-year credit facility from Skandinaviska Enskilda Banken for a total of SEK 180 million, in the form of an overdraft facility of SEK 30 million and a term loan of SEK 150 million. The credit facility replaces current bank financing as well as a loan from the company's main shareholders and is subject to customary covenants. Thereby, the main shareholders' guarantee commitments for the company's financing will end.

All in all, this means that we are well equipped to develop the business and expand the company.

Christian Kinch CEO

Key events during the third quarter

New major order from China

Bactiguard received a new order from our distributor Jian An Pharmaceuticals in China of 100 000 urinary catheters for infection prevention, which was delivered in September and generated revenues of some 3 million SEK.

Bactiguard's central venous catheters approved in India

In August, the product approval for Bactiguard's central venous catheters (BIP CVC) was announced by the Indian Ministry of Health & Family Welfare. This provides new opportunities for Bactiguard in providing effective infection prevention in one of the largest and fastest growing markets in the world.

Bactiguard appoints new CFO

Bactiguard Holding AB (publ) has appointed Cecilia Edström, former Senior Vice President Sales and New Business, as acting Chief Financial Officer (CFO). Cecilia Edström assumed her new position on September 15.

Key events after the end of the third quarter

Bactiguard's central venous catheters approved in Hongkong

The Hong Kong product approval for Bactiguard's central venous catheters for infection prevention (BIP CVC) was announced in October. Hong Kong is a small, but strategically important market, as it serves as a reference for new approvals and market acceptance in neighbouring China.

Bactiguard wins tender in Sweden

In October Bactiguard won a tender for urinary catheters for the Västra Götaland region (VGR) in Sweden, which enables healthcare providers in both primary and secondary care and 49 municipalities in the region to purchase Bactiguard's urinary catheters for infection prevention.

The contract runs for two years from 1 April 2018 and comprises BIP Foley Catheter Silicone. In accordance with Swedish tender law, the contracting authority will execute the formal contract once the appeal period has expired on 9 November 2017, which is a few days later than previously announced.

Bactiguard enters new partnership in India

Bactiguard has entered a partnership with Neon Laboratories Limited ("Neon") for the north, west and east zones of India, covering a majority of the Indian population. Bactiguard already has a distributor for southern India and will thus cover a majority of the country's population through the partnership with Neon.

Bactiguard's urinary catheter (BIP Foley catheter) for infection prevention was launched in India in early 2016 and in August this year, the Ministry of Health & Family Welfare approved Bactiguard's central venous catheter (BIP CVC).

Three-year financing secured

Bactiguard has received a commitment for a three-year credit facility of SEK 180 million from Skandinaviska Enskilda Banken (SEB), in the form of an overdraft facility of SEK 30 million and a term loan of SEK 150 million.

The facility replaces the bank loan of SEK 100 million, which expires December 31, 2017, the current overdraft facility of SEK 30 million and the loan from the company's main shareholders of SEK 50 million, due on June 30, 2018. The new term loan of SEK 150 million will be amortized by SEK 35 million until maturity. The credit facility is subject to customary covenants. Thus, the main shareholders' guarantee commitments for Bactiguard's financial obligations will end.

Consolidated revenues and earnings

Revenues

Bactiguard has two revenue streams.

Sales of BIP products

The BIP portfolio currently includes sales of the BIP Foley, BIP ETT and BIP CVC products.

License revenues

License revenues are attributable to sales of products under license, which currently includes the Group's licensing agreement with C.R. Bard regarding Bactiguard coated Foley catheters for the USA, Japan, the UK, Ireland, Canada and Australia, a license agreement with Vigilenz Medical Devices for Bactiguard coated orthopaedic implants, covering the Asean region as well as a license agreement with Smartwise Sweden AB (Smartwise) for Bactiguard-coated vascular injection catheters.

Other revenue

Comprises mainly foreign exchange differences and other operating income.

Bactiguard's BIP (Bactiguard Infection Protection) product portfolio includes medical devices in three areas: urinary tract, respiratory tract and blood streams.

Revenue distribution

Third quarter (July-September)

Consolidated revenues for the third quarter amounted to SEK 34.8 (34.9) million, which is a decrease of approx. 0.4 % compared to the corresponding quarter last year.

Of the total license revenues of SEK 28.3 (27.1) million, 24.3 (27.1) came from license revenues related to C.R. Bard, including a negative currency effect of SEK -1.3 (0.5) million. New license revenues from Smartwise was SEK 4.0 million (USD 0.5 million), or approx. 11 % of revenues. This new license revenue represents the third part of a total revenue in 2017 of USD 2.5 million, out of which USD 2.0 million now has been accounted for as revenue for the exclusive and global right to the Bactiguard technology for advanced vascular injection catheters.

Sales of BIP products amounted to SEK 5.2 (3.5) million, approx. 15% of revenues during the third quarter, with sales primarily to China and MEA (the Middle East and Africa). Out of SEK 5.2 million in revenues, SEK 2.1 million had a cash flow effect. The remaining revenues correspond to a reduction of the debt item deferred income in the balance sheet.

Other revenues during the quarter amounted to SEK 1.4 (4.3) million. The decrease in other revenues is mainly attributable to exchange rate differences.

Nine-month period (January-September)

Consolidated revenues for the period January to September amounted to SEK 112.3 (94.7) million, an increase of approx. 19 % compared to the same period last year. The increase in revenues is mainly a result from new license revenues, amounted to SEK 17.1 million. The bulk of the revenue SEK 77.3 (77.1) million was attributable to license revenues from C.R. Bard including a positive currency effect of approx. SEK 1.6 (-0.1) million.

Sales of BIP products amounted to SEK 14.5 (10.1) million, or approx. 13 % of total revenues compared to the corresponding period last year. The increase of approx. 44 % is attributable to deliveries to China, MEA and Europe.

Other revenues during the period amounted to approx. 3 % or SEK 3.3 (7.6) million and are attributable to exchange rate differences and EU grants for development projects.

Jul-Sep Jul-Sep Jan-Sep Jan-Sep Full year
Revenue split 2017 2016 2017 2016 2016
License revenues 70% 78% 69% 81% 80%
New license revenues 11% 0% 15% 0% 0%
Sales of BIP products 15% 10% 13% 11% 12%
Other revenues 4% 12% 3% 8% 8%

Product deliveries – volume and value4

During the third quarter of 2017 BIP products were delivered with a value of SEK 5.2 million (approx. 137,000 products) compared to approx. SEK 3.5 million (approx. 87,000 products) in the corresponding quarter of 2016. For the period January to September 2017 the value amounted to SEK 14.5 (10.1) million, and number of delivered BIP products amounted to approx. 338,000 (284,000).

During the full year 2016, a total of approx. 418,000 products were delivered with a value of SEK 15.8 million.

Development per quarter, value in TSEK for delivered BIP products, rolling 12 months.

Financial results

Third quarter (July-September)

EBITDA for the third quarter amounted to SEK 8.4 (9.7) million corresponding to an EBITDA margin of approx. 24 % (28 %). The EBITDA decrease of approx. 13 % compared with the corresponding quarter last year is a consequence of higher personnel costs, an effect of the deliberate effort with more employees within sales and marketing.

Consolidated operating profit for the third quarter of 2017 amounted to SEK -0.3 (1.4) million.

Financial items for the quarter amounted to SEK -1.5 (-3.2) million. The decrease is an effect of lower interest expense due to the refinancing in December 2016. Interest expense related to interest bearing loans amounted to SEK -1.5 (-3.8) million.

4 Since the delivered product mix has changed over time, the importance of following only delivered volume has decreased in favour of illustrating the value of delivered BIP products.

Tax for the third quarter amounted to SEK 1.3 (1.2) million and refers to the change in deferred taxes attributable to temporary differences relating to the Group's intangible assets.

Consolidated net profit for the third quarter amounted to SEK -0.4 (-0.5) million.

Nine-month period (January-September)

EBITDA for the period January to September amounted to SEK 25.6 (10.6) million corresponding to an EBITDA margin of approx. 23 % (11 %). The positive change compared with the corresponding period last year is mainly a consequence of new license revenues from the license agreement with Smartwise but also from higher sales of BIP products.

Consolidated net profit for the period January to September amounted to SEK -2.3 (-19.4) million.

Cash flow

Third quarter (July-September)

Operating cash flow (cash flow from operating activities after investments and changes in working capital) for the third quarter amounted to SEK 5.2 (-0.3) million. Cash flow from operating activities contributed positively with SEK 7.4 (8.2) million, but was negatively affected by changes in working capital which amounted to SEK -1.4 (-7.3) million and also by cash flow from investing activities which amounted to SEK -0.9 (-1.2) Mkr.

Cash flow from financing activities amounted to SEK -0.4 (0.0) million. The total cash flow for the third quarter amounted to SEK 4.8 (-0.3) million.

Nine-month period (January-September)

Operating cash flow for the period January to September amounted to SEK 5.7 (-0.7) million. Cash flow from operating activities contributed positively with SEK 21.1 (10.0) million while Cash flow from changes in working capital contributed negatively with SEK -12.7 (-5.7) million. Most of the changes in working capital was accounts receivables attributable to deliveries of BIP products and new license revenues.

Investing activitites, mainly related to capitalized development expenditures, affected cash flow with SEK -2.7 (-5.0) million. Amortisation of financial lease affected cash flow from financing activities negatively with SEK -1.0 (0) million.

Total cash flow for the period January to September was SEK 4.7 (-0.7) million.

Investments

Investments in property, plant and equipment during the third quarter amounted to SEK 0 (0) million. Investments in intangible assets, mainly related to capitalised development expenditures, amounted to SEK 0.8 (1.1) million. No investments were made in financial non-current assets during the quarter.

Financial position

The consolidated equity ratio was 61 % at 30 September 2017 (62 % at 31 December 2016) and equity amounted to SEK 388.3 million (SEK 390.3 million at 31 December 2016).

Interest bearing debts consist of a financial lease of SEK 14.3 million, a bank loan of SEK 100.0 million maturing 31 December 2017 and a loan from the company's main shareholders of SEK 50.0 million, maturing 30 June 2018. The loans carry a base interest rate of STIBOR 90, but not less than 0 %, and a margin of 3.5 %.

After the end of the quarter, Bactiguard has received a commitment for a three-year credit facility of SEK 180 million from Skandinaviska Enskilda Banken (SEB), in the form of an overdraft facility of SEK 30 million and a term loan of SEK 150 million. The credit facility replaces the above bank loan, the current overdraft facility as well as the loan from the company's main shareholders.

The new term loan of SEK 150 million will be amortized by SEK 35 million until maturity. The credit facility is subject to customary covenants. Thus, the main shareholders' guarantee commitments for Bactiguard's financial obligations will end.

Consolidated cash position on 30 September 2017 amounted to SEK 19.5 million (SEK 15.6 million on 31 December 2016). Out of a granted overdraft facility of SEK 30 million, SEK 0 million was utilized as of 30 September 2017. Net debt amounted to SEK 144.8 million (SEK 134.4 million on 31 December 2016).

The total assets of the Group at 30 September 2017 amounted to SEK 634.4 million (SEK 632.1 million on 31 December 2016). The largest asset items in the balance sheet are goodwill of SEK 226.3 million (226.3 million at 31 December 2016) and technology related to Bactiguard's product portfolio, which on 30 September 2017 amounted to SEK 218.8 million (SEK 236.6 million on 31 December 2016).

Accounts receivable (short- and long term) amounted to SEK 51.8 million at 30 September 2017, which is an increase of SEK 8.0 million since 31 December 2016. The main reason for the increase is the accounts receivable related to the third part of the license deal with Smartwise and deliveries of BIP products at the end of the third quarter.

Other disclosures

The share and share capital

Trade in the Bactiguard share takes place on Nasdaq Stockholm under the ticker symbol "BACTI". The last price paid for the listed B share on 30 September 2017 was SEK 22.50, and the market capitalization amounted to SEK 749 million.

The share capital of Bactiguard on 30 September 2017 amounted to SEK 0.8 million divided into 29,302,373 B shares, each with one vote (29,302,373 votes) and 4,000,000 A shares, each with ten votes (40,000,000 votes). The total number of shares and votes in Bactiguard on 30 September 2017 amounted to 33,302,373 shares and 69,302,373 votes.

Ownership

On 30 September 2017 Bactiguard had 2,539 shareholders.

Shareholders No. of A shares No. of B shares Total number %
of capital
%
of votes
CHRISTIAN KINCH WITH FAMILY AND COMPANY 2 000 000 7 440 977 9 440 977 28,4% 39,6%
THOMAS VON KOCH WITH COMPANY 2 000 000 7 440 878 9 440 878 28,3% 39,6%
HANDELSBANKEN FONDER AB 1 142 528 1 142 528 3,4% 1,6%
FÖRSÄKRINGSBOLAGET, AVANZA PENSION 899 470 899 470 2,7% 1,3%
SWEDBANK FÖRSÄKRING 724 800 724 800 2,2% 1,0%
BANK OF ÅLAND LTD 644 132 644 132 1,9% 0,9%
LANCELOT ASSET MANAGEMENT AB 605 000 605 000 1,8% 0,9%
CANCERFONDEN - RIKSFÖRENINGEN MOT 559 415 559 415 1,7% 0,8%
FRÖAFALL INVEST AB 516 000 516 000 1,6% 0,7%
RUGFELT, JOHAN 401 632 401 632 1,2% 0,6%
Total, major shareholders 4 000 000 20 374 832 24 374 832 73,2% 87,1%
Total, others 0 8 927 541 8 927 541 26,8% 12,9%
Total number of shares 4 000 000 29 302 373 33 302 373 100% 100%
Human resources
The average number of employees in the Group in the period January to September 2017 amounted to 64
(57), of which 39 (34) are women.
Accounting and valuation principles
The consolidated financial statements are prepared in accordance with International Financial Reporting
Standards (IFRS). The interim report has been prepared in accordance with IAS 34 Interim Reporting and
the Annual Accounts Act. Disclosures in accordance with IAS 34 Interim Reporting are submitted both in
notes and elsewhere in the interim report. The parent company's financial statements have been prepared
in accordance with the Annual Accounts Act and the Financial Reporting Board's recommendation RFR 2
Accounting for Legal Entities.
The accounting and valuation principles are unchanged from those applied in the Annual Report 2016.
The new and amended standards and interpretations that are in place from 1 January 2017 have not had
any significant effect on the Group's financial reports.
Segment reporting
An operating segment is a component of an entity that engages in business activities from which it may
derive revenues and incur expenses, whose operating results are regularly reviewed by the chief operating
decision maker and for which there is separate financial information. The company's reporting of operating
segments is consistent with the internal reporting provided to the chief operating decision maker. The chief
operating decision maker is the function that assesses the operating segment performance and decides
how to allocate resources. The company has determined that the Group executive management constitutes
the chief operating decision maker.
The company is considered in its entirety to operate within one business segment.
Related-party transactions
Transactions between the company and its subsidiaries, which are related parties to the company, have
been eliminated on consolidation.
Services and other transactions between companies within the Group are charged according to commercial
principles. Bactiguard has a bank loan of SEK 100 million where the board member - who is also the CEO

Human resources

Accounting and valuation principles

Segment reporting

Related-party transactions

Services and other transactions between companies within the Group are charged according to commercial

and a major shareholder - Christian Kinch and major shareholder Thomas von Koch have agreed to, without compensation, enter into guarantee commitments for Bactiguard Holding AB's obligations under the loan agreement. Bactiguard has in addition also a loan directly from the main shareholders of SEK 50 million on equivalent commercial terms as the bank loan.

In connection with the refinancing of the above-mentioned bank loan of SEK 100 million and the loan from the main shareholders of SEK 50 million, with a credit facility in SEB, the guarantee commitments by the main shareholders will also end.

In the license agreement signed during the first quarter, the contracting party Smartwise Sweden AB is owned by a group of private investors, including Christian Kinch and Thomas von Koch.

Other than as described above, neither Bactiguard nor its subsidiaries have granted loans, guarantees or sureties to, or for the benefit of, any directors or senior managers of the Group. None of these persons has any direct or indirect participation in any other business transaction with any entity of the Group which is, or was, unusual in its nature or with regard to its terms.

Parent company

Revenues consist of invoiced intercompany expenses (management fees). During the period the parent company received interest on its receivables from group companies. The company's financial expenses have decreased significantly compared with the corresponding quarter last year through the refinancing of the bond loan that occurred at the end of 2016. No investments were made during the period.

Risk factors

Companies within the Group are exposed to various types of risk through their activities. The company continually engages in a process of identifying all risks that may arise and assessing how each of these risks shall be managed. The Group is working to create an overall risk management programme that focuses on minimising potential adverse effects on the company's financial results. The company is primarily exposed to market related risks, operational risks and financial risks. A description of these risks can be found on page 27 and 45-46 in the Annual Report for 2016.

Financial targets

Bactiguard's goal is to create value and generate good returns for the shareholders. One financial target is to have an average growth of 20 % per year over a five-year period, with 2015 as the base year, and adjusted revenues of SEK 118.5 million. Another target is to achieve an EBITDA margin of at least 30 % at the end of the five-year period. Bactiguard will continue to expand the business by strengthening the salesand marketing organization, developing new products to the existing BIP portfolio and by entering new license agreements in new therapeutic areas. Other financial targets are to have an equity ratio of at least 30 % and a long-term objective of a dividend of 30-50 % of profit after tax, taking into consideration the company's financial position. The company is in an expansion phase and will therefore in the coming years, prioritize growth over dividends.

Condensed consolidated income statement

Amounts in TSEK Jul-Sep
2017
Jul-Sep
2016
Jan-Sep
2017
Jan-Sep
2016
Full year
2016
Revenues
License revenues 28 270 27 131 94 464 77 108 102 983
Sales of BIP products 5 161 3 477 14 499 10 080 15 753
Other revenue 1 360 4 325 3 321 7 559 9 606
34 790 34 933 112 283 94 746 128 342
Raw materials and consumables -3 637 -2 177 -14 036 -10 945 -15 797
Other external expenses -9 443 -10 718 -30 411 -34 273 -46 701
Personnel costs -12 278 -10 235 -38 542 -33 931 -45 819
Depreciation and amortisation -8 699 -8 308 -26 309 -24 930 -33 375
Other operating expenses -1 003 -2 061 -3 652 -5 027 -4 918
-35 059 -33 499 -112 951 -109 106 -146 610
Operating profit/loss -269 1 435 -668 -14 360 -18 268
Profit/loss from financial items
Financial income 762 1 603 1 228 4 745 9 735
Financial expenses -2 211 -4 784 -6 705 -13 363 -22 800
-1 450 -3 181 -5 477 -8 618 -13 065
Profit before tax -1 719 -1 746 -6 145 -22 978 -31 333
Taxes for the period 1 281 1 220 3 813 3 536 4 482
Net profit/loss for the period -438 -526 -2 332 -19 442 -26 851
Attributable to:
Shareholders of the parent -438 -526 -2 332 -19 442 -26 851
Earnings per share, SEK* -0,01 -0,02 -0,07 -0,58 -0,81

Condensed consolidated statement of comprehensive income

Amounts in TSEK Jul-Sep Jul-Sep Jan-Sep Jan-Sep Full year
2017 2016 2017 2016 2016
Net profit/loss for the period -438 -526 -2 332 -19 442 -26 851
Other comprehensive income:
Items that will be reclassified to profit or loss for the year
Translation differences 136 242 335 -424 -264
Other comprehensive income, after tax 136 242 335 -424 -264
Total comprehensive income for the period -303 -284 -1 997 -19 866 -27 115
Attributable to:
Shareholders of the parent -303 -284 -1 997 -19 866 -27 115
Total earnings per share, SEK* -0,01 -0,01 -0,06 -0,60 -0,81
Number of shares at the end of period ('000) 33 302 33 302 33 302 33 302 33 302
Weighted average number of shares ('000) 33 302 33 302 33 302 33 302 33 302
* no dilution effect

11

Condensed consolidated statement of financial position

Amounts in TSEK 2017-09-30 2016-09-30 2016-12-31
ASSETS
Non-current assets
Goodwill 226 292 226 292 226 292
Technology 218 757 242 563 236 612
Brands 25 572 25 572 25 572
Customer relationships 10 843 12 023 11 728
Capitalised development expenditure 17 911 14 660 16 562
Patents 668 1 109 1 021
Intangible assets 500 042 522 218 517 787
Improvements, leasehold 13 806 16 816 16 133
Machinery and other technical plant 18 217 6 254 5 659
Equipment, tools and installations 2 995 4 357 3 937
Property, plant and equipment 35 018 27 427 25 728
Accounts receivable 16 692 4 670 16 170
Investments in associates 1 228 1 298 1 228
Financial assets 17 920 5 968 17 398
Total non-current assets 552 981 555 614 560 912
Current assets
Inventory 15 337 13 362 15 144
Accounts receivable 35 110 54 295 27 642
Other current receivables 11 501 11 146 12 732
Cash and cash equivalents 19 483 22 118 15 645
Total current assets 81 431 100 920 71 162
TOTAL ASSETS 634 412 656 534 632 074
Equity attributable to shareholders of the parent
Share capital 833 833 833
Other equity 387 499 396 744 389 496
Total equity 388 331 397 576 390 328
Non-current liabilities
Advance payments from customers 17 112 - 18 207
Debt to shareholders - - 50 000
Deferred tax liability 26 472 31 231 30 285
Other long-term liabilities 12 849 - -
56 433 31 231 98 492
Current liabilities
Liabilities to credit institutions and shareholders 150 000 - 100 000
Bond loan - 139 380 -
Accounts payable 4 219 4 343 4 896
Other current liabilities 6 334 3 526 3 835
Accrued expenses and deferred income 29 094 80 477 34 523
189 647 227 727 143 254
Total liabilities 246 081 258 958 241 746
TOTAL EQUITY AND LIABILITIES 634 412 656 534 632 074

Condensed consolidated statement of changes in equity

Amounts in TSEK Equity attributable to shareholders of the parent
Retained
earnings
Other capital Translation including net
profit for the
Share capital contributions reserve period Total equity
Adjusted opening balance, 1 January 2016 833 675 690 352 -259 432 417 443
Profit/loss for the period - - - -19 442 -19 442
Other comprehensive income:
Translation differences - - -424 - -424
Total comprehensive income after tax 0 0 -424 -19 442 -19 866
Transactions with shareholders
Total transactions with shareholders 0 0 0 0 0
Closing balance, 30 September 2016 833 675 690 -72 -278 874 397 576
Opening balance, 1 January 2017 833 675 690 88 -286 283 390 328
Profit/loss for the period - - - -2 332 -2 332
Other comprehensive income:
Translation differences - - 335 - 335
Total comprehensive income after tax 0 0 335 -2 332 -1 997
Transactions with shareholders
Total transactions with shareholders 0 0 0 0 0
Closing balance, 30 September 2017 833 675 690 424 -288 615 388 331

Condensed consolidated statement of cash flows

Amounts in TSEK Jul-Sep
2017
Jul-Sep
2016
Jan-Sep
2017
Jan-Sep
2016
Full year
2016
Cash flow from operating activities
Net profit/loss for the period -438 -526 -2 332 -19 442 -26 851
Adjustments for depreciation and amortisation and other
non-cash items
7 854 8 684 23 432 29 457 22 967
7 416 8 158 21 100 10 015 -3 884
Cash flow from changes in working capital
Increase/decrease inventory -1 120 -1 505 -300 -1 619 -3 416
Increase/decrease accounts receivable 2 554 -4 268 -7 564 -1 319 -803
Increase/decrease other current receivables 1 690 -903 1 416 2 190 370
Increase/decrease accounts payable -1 659 1 350 -662 373 933
Increase/decrease other current liabilities -2 820 -1 926 -5 621 -5 338 -5 611
-1 355 -7 251 -12 732 -5 713 -8 527
Cash flow from investing activities
Investments in intangible assets -839 -1 096 -2 592 -4 081 -6 450
Investments in property, plant and equipment -64 -61 -78 -929 -961
-903 -1 157 -2 670 -5 010 -7 411
Operating cash flow 5 158 -251 5 698 -708 -19 822
Cash flow from financing activities
Amortisation of financial lease -351 - -1 042 - -
Amortisation of loan - - - - -138 000
Debt incurred - - - - 150 000
-351 0 -1 042 0 12 000
Cash flow for the period 4 806 -251 4 656 -708 -7 822
Cash and cash equivalents at start of period 14 905 22 058 15 645 22 119 22 119
Exchange difference in cash and cash equivalents -228 312 -817 707 1 348
Cash and cash equivalents at end of period 19 483 22 118 19 483 22 118 15 645

Condensed parent company income statement

Belopp i Tkr jul-sep jul-sep jan-sep jan-sep helår
2017 2016 2017 2016 2016
Intäkter 1 386 1 503 4 822 5 894 7 563
1 386 1 503 4 822 5 894 7 563
Rörelsens kostnader -2 336 -2 480 -7 471 -7 666 -10 328
-2 336 -2 480 -7 471 -7 666 -10 328
Rörelseresultat -950 -977 -2 648 -1 772 -2 765
Finansnetto -563 -6 301 -1 687 -18 644 -26 897
Resultat efter finansiella poster -1 513 -7 279 -4 335 -20 416 -29 662
Periodens skatt - - - - -
Periodens resultat -1 513 -7 279 -4 335 -20 416 -29 662

Condensed parent company statement of comprehensive income

The parent company has no items in 2017 or 2016 recognised in other comprehensive income. Net profit/loss for the period for the parent company thereby also constitutes the comprehensive income for the period. The parent company therefore presents no separate statement of comprehensive income.

Condensed parent company balance sheet

Amounts in TSEK 2017-09-30 2016-09-30 2016-12-31
ASSETS
Non-current assets
Financial assets 596 589 699 774 598 089
Total non-current assets 596 589 699 774 598 089
Current assets
Receivables from group companies 18 783 25 746 22 395
Prepayments and accrued income 227 534 243
Other current receivables 4 - -
Cash and cash equivalents 1 112 1 368 1 118
Total current assets 20 126 27 647 23 756
TOTAL ASSETS 616 715 727 421 621 845
EQUITY & LIABILITIES
Total equity 464 196 477 777 468 531
Non-current liabilities - - 50 000
Liabilities to credit institutions and shareholders 150 000 - 100 000
Bond loan - 227 013 -
Other liabilities 2 519 22 632 3 314
Current liabilities 152 519 249 644 103 314
Total liabilities 152 519 249 644 153 314
TOTAL EQUITY AND LIABILITIES 616 715 727 421 621 845

Key figures

Equity ratio

Equity and untaxed reserves (less deferred tax) in relation to the balance sheet total

Net debt

Interest-bearing liabilities less cash and cash equivalents

EBITDA

Earnings before interest, taxes, depreciation and amortisation

EBITDA margin EBITDA/revenue

Earnings per share Earnings for the period/weighted average number of shares during the period, issue-adjusted

Operating cash flow

Cash flow from operating activities after investments and changes in working capital

Profit/loss from financial items Financial income minus financial expenses

Alternative Performance Measures

The Company presents certain financial measures in the interim report that are not defined under IFRS. The Company believes that these measures provide useful supplemental information to investors and the company's management as they allow for the evaluation of the company's performance. Because not all companies calculate the financial measures in the same way, these are not always comparable to measures used by other companies. Therefore, these financial measures should not be considered as substitutes for measures as defined under IFRS.

The tables below present measures that are not defined under IFRS.

EBITDA

Shows the companys earning power from ongoing operations irrespective of capital structure and tax situation and is meant to facilitate comparisons with other companies in the same industry.

Amounts in TSEK Jul-Sep Jul-Sep Jan-Sep Jan-Sep Full year
2017 2016 2017 2016 2016
Operating profit/loss -269 1 435 -668 -14 360 -18 268
Depreciation and amortisation 8 699 8 308 26 309 24 930 33 375
EBITDA 8 429 9 742 25 641 10 570 15 107

Net debt

Is a measurement used to describe the group's indebtedness and its ability to repay its debt with cash generated from the group's operating activities if the debts matured today.

Amounts in TSEK 2017-09-30 2016-09-30 2017-09-30 2016-09-30 2016-12-31
Liabilities to credit institutions 100 000 139 380 100 000 139 380 100 000
Debt to shareholders 50 000 0 50 000 0 50 000
Other long-term liabilities 12 849 0 12 849 0 0
Other short-term liabilities 1 449 0 1 449 0 0
Interest-bearing liabilities 164 298 139 380 164 298 139 380 150 000
Cash and cash equivalents
Net debt
-19 483
144 814
-22 118
117 262
-19 483
144 814
-22 118
117 262
-15 645
134 355

Forthcoming disclosures of information

6 February 2018 Year-end report 2017
18 April 2018 Annual report 2017
8 May 2018 Interim report, 1 Jan – 31 Mar 2018
8 August 2018 Interim report, 1 Apr – 30 Jun 2018
6 November 2018 Interim report, 1 Jul – 30 Sep 2018

Annual General Meeting

The Annual General Meeting of Bactiguard Holding AB (publ) will be held on Wednesday, 16 May 2018.

Contacts

For additional information, please contact: Christian Kinch, CEO: +46 8 440 58 80 Cecilia Edström, acting CFO: +46 72 226 23 28

Signatories to the report

The Board of Directors and the CEO certify that the interim report, to the best of their knowledge, provides a fair overview of the parent company's and the group's operations, financial position and results and describes the material risks and uncertainties faced by the parent company and the companies included in the Group.

Stockholm, 9 November 2017

Stanley Brodén Mia Arnhult

Board member Board member

Chairman Board member

Svante Östblom Marie Wickman-Chantereau

Christian Kinch

CEO and Board member

Bactiguard is a Swedish medtech company with a mission to save lives. To achieve this mission, we develop and supply infection protection solutions which reduce the risk of healthcare associated infections and the use of antibiotics. This way, we save significant costs for healthcare and the society at large. The Bactiguard coating prevents healthcare associated infections through reducing bacterial adhesion and formation on medical devices. Bactiguard-coated urinary catheters are market leading in the US and Japan through our license partner C.R. Bard and the company has also its own product portfolio consisting of urinary catheters, endotracheal tubes and central venous catheters. Bactiguard is in a strong expansion phase focused on the European markets, Middle East, Asia and Latin America. The company has about 60 employees worldwide. Its headquarters and production facility is in Stockholm. Bactiguard is listed on Nasdaq Stockholm. Read more about Bactiguard at www.bactiguard.com.

This information is information that Bactiguard Holding 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 2017-11-09, at. 08.00.

Review report

Introduction

We have reviewed the interim report for Bactiguard Holding AB (publ) for the period 1 January 2017 – 30 September 2017. 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, 9 November 2017

DELOITTE AB

Kent Åkerlund

Authorized Public Accountant

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