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Biotage

Annual Report Feb 11, 2016

2894_10-k_2016-02-11_75741900-ed1a-46e4-b390-8e2adb86ce2f.pdf

Annual Report

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Year-end report January - December 2015

February 11, 2016

Year-end report for 2015

Fourth quarter, October – December 2015

  • Group net sales in the fourth quarter 2015 amounted to 168.5 MSEK (137.8), an increase by 22.4 percent compared to the corresponding period last year. At comparable exchange rates sales increased by 6.4 percent.
  • Operating profit (EBIT) amounted to 20.2 MSEK (27.2). The comparative period 2014 includes 13.5 MSEK relating to a retroactive reversal of goodwill writedown. Adjusted for this one-time effect the operating profit increased by 6.4 MSEK from 13.7 MSEK last year, an increase by 47.0 percent.
  • Result after tax amounted to 20.7 MSEK (30.2). Adjusted for the one-time effect 2014 the result after tax increased by 4.1 MSEK from 16.7 MSEK last year, an increase by 24.4 percent.
  • Earnings per share amounted to 0.32 SEK (0.47). Excluding the one-time effect earnings per share amounted to 0.26 SEK in 2014.
  • The cash flow from operating activities increased to 33.3 MSEK (29.0).

Full year January - December 2015

  • Group net sales in 2015 amounted to 610.5 MSEK (490.4), an increase by 120.2 MSEK, corresponding to 24.5 percent. At comparable exchange rates sales increased by 8.4 percent.
  • Operating profit (EBIT) increased by 19.1 percent to 74.8 MSEK (62.8). Excluding the one-time effect 2014 operating profit increased by 25.5 MSEK from 49.3 MSEK, an increase by 51.7 percent.
  • Result after tax amounted to 73.3 MSEK (64.6) an increase by 13.4 percent. Adjusted for the one-time item 2014 the result after tax increased by 22.1 MSEK, corresponding to 43.3 percent.
  • Earnings per share amounted to 1.13 SEK (1.00). Excluding the one-time effect earnings per share increased by 0.34 SEK from 0.79 SEK in 2014.
  • The cash flow from operating activities amounted to 120.1 MSEK (80.9).
  • Net cash at December 31 amounted to 134.9 MSEK (95.0).
  • Dividends to the shareholders to the amount of 48.5 MSEK (38.8) were paid in May.
  • The Board of Directors intends to propose to the AGM dividends to the shareholders for 2015 amounting to 1.00 SEK per share (0.75) and, in addition thereto, an extra ordinary dividend of 0.25 SEK per share. According to the dividend policy Biotage should distribute at least 50 percent of the net profit.

Group financial development in brief

Amounts in SEK millions 4th quarter 4th quarter 12 months 12 months
Oct-Dec
2015
Oct-Dec
2014
Jan-Dec
2015
Jan-Dec
2014
Net sales 168.5 137.8 610.5 490.4
Cost of sales $-74.2$ $-62.8$ $-268.0$ $-223.5$
Gross profit 94.3 74.9 342.6 266.9
Operating expenses $-74.2$ $-47.7$ $-267.8$ $-204.1$
Operating profit/loss (EBIT) 20.2 27.2 74.8 62.8
Financial items $-0.7$ 3.6 1.4 5.5
Profit/loss before tax 19.4 30.8 76.2 68.4
Tax expenses 1.3 $-0.6$ $-2.9$ $-3.7$
Total profit/loss for the period 20.7 30.2 73.3 64.6
Gross profit margin 56.0% 54.4% 56.1% 54.4%
Operating profit margin (EBIT) 12.0% 19.8% 12.2% 12.8%

Comments by CEO Torben Jörgensen

Biotage ends the year with a strong last quarter. For the full year we exceed our financial targets with an organic sales growth of 8.4 percent at comparable exchange rates and an operating margin (EBIT) of 12.2 percent. We have received a good contribution from favorable exchange rates, above all the US dollar, and in reported figures our sales grew by 22.4 percent in the quarter and by 24.5 percent in the full year. At the same time we have a negative currency effect as a great part of our cost base is located in the UK, with a relatively strong GBP during the year.

The operating cash flow for the year has developed very favorably and we achieved a 48 percent improvement compared to last year. All in all 2015 was a very satisfying year for Biotage.

All our product areas grew in 2015. In the Industrial products area, which grows by 33 percent on a full year basis, we pursue development in close cooperation with existing and potential customers concerning separation and purification. This work and the sales it generates show that we have a broad and competitive range of polymers and silica-based products. They constitute an attractive base for continued growth in the product area, at the same time as sales vary considerably over time due to the fact that the development work often takes long time and our customers' production often is carried out in campaigns.

Biotage's single biggest product areas are Purification and Sample Prep, which both end a solid year with a good last quarter. In Purification we particularly note strong sales of our Flash system Isolera™ in China, mainly to customers engaged in contract research. We also see a continued good sales development for our system platform Extrahera™ in Sample Prep. Both these systems contribute to driving the sales of consumables and service.

The product launches of recent years are now bearing fruit and we feel that we are well equipped to face the competition in our strategically most important product areas. We continue to invest in our system platforms and related consumables in order to continuously improve our customer offering and strengthen our competitiveness. We are planning for new launches in 2016.

All geographic regions with direct sales grew, in the last quarter as well as in the full year. China had the biggest percentage growth with a high and stable growth rate throughout the year. The organic growth in the Chinese market amounts to no less than 34 percent. Also the Americas, Europe and japan continue their strong sales trend from the previous quarters. Of Biotage's sales in 2015 the Americas – primarily the USA and Canada – account for almost 44 percent. The direct sales in Europe reached a record level for the region and exceeded 50 MSEK in the last quarter of the year. Despite a slow start the annual sales in Europe grew organically by 9 percent. The Japanese sales organization has faced a difficult economic market climate with tough challenges. Still Japan ends the year with a strong last quarter and can report strong growth for the full year.

The distributor sales have generally developed considerably poorer than the direct sales. In EMEA especially the uncertain situation in Saudi Arabia has been a strongly contributing factor to the weak sales. In the APAC countries there are varying causes for why the sales are not materializing as fast as we wish. Here we have carried out relatively comprehensive changes in 2015 which we expect to have effect in 2016. However, we can observe that having our own local sales staff, with or without support from local distributors, is a successful sales model for Biotage.

We are continuously working with improving the efficiency of our production plant in Cardiff, Wales. In 2015 substantial efforts began to have effect and together with the currency effects these contribute to the improvement of the gross margin to 56.1 percent (54.4) in 2015.

In 2015 the distribution of sales of systems versus aftermarket products (consumables and service) was 45 (44) and 55 (56) percent, respectively. We are a bit short of our strategic goal of 40 percent for systems versus 60 percent for aftermarket products. This is largely explained by successful system launches.

All in all 2015 was a fantastic year, but also in many respect a challenging one. We have seen varying financial conditions in many of the markets where we operate. Also 2016 will probably bring challenges, but I look forward to the new year with confidence. We are well prepared to meet the market.

Group result, financial position and cash flow

Fourth quarter October – December 2015

Group net sales increased by 22.4 percent to 168.5 MSEK compared to 137.8 MSEK the corresponding period 2014. At comparable exchange rates sales in the period increased by 6.4 percent. The Americas was the biggest market with 43 (42) percent of the net sales. The EU area contributed 33 (36) percent, Japan 12 (10) percent, China 8 (6) percent, EMEA 3 percent and APAC 2 percent. Together EMEA and APAC, previously called "rest of the world", contributed 5 (6) percent of the net sales.

The Group's gross margin was 56.0 percent (54.4). Biotage's products are priced in local currency in the bigger markets. The exchange rate development, primarily concerning USD, has therefore contributed positively to the sales income also in the fourth quarter. However, the production costs in GBP and USD are also becoming higher as these currencies are strengthened in relation to SEK. The product mix and the distribution of the Group's sales between different sales channels also contribute to variations in the profitability between quarters.

The operating expenses amounted to 74.2 MSEK (47.7). The comparative period includes a 13.5 MSEK positive effect in Other operating items concerning a retroactive reversal of the write-down of goodwill made in the 2014 accounts. Adjusted for this one-time effect the operating expenses were 61.2 MSEK for the comparative period 2014 and the cost increase thus 13.0 MSEK. Sales costs make up 6.1 MSEK of this increase, mainly explained by variable remunerations and currency effects. The costs for research and development increased by 2.4 MSEK. Other operating items amounting to -1.2 MSEK primarily consists of currency effects on operations related liabilities and receivables. Adjusted for the one-time effect of the reversal of the goodwill write-down this item amounts to 0.3 MSEK for the comparative period and thus explains 1.5 MSEK of the total increase of operating expenses.

The operating profit (EBIT) amounted to 20.2 MSEK (27.2) and the operating margin was 12.0 percent (19.8). Adjusted for the one-time item concerning goodwill in the comparative figures the operating profit for the quarter increased by 6.4 MSEK from 13.7 MSEK, an increase by 47.0 percent, and the operating margin (EBIT) increased by 2 percent from 10.0 percent in the comparative period.

Net financial income was -0.7 MSEK (3.6). The result after tax amounted to 20.7 MSEK (30.2). Adjusted for the one-time item the result in the comparative period was 16.7 MSEK and the increase between the years thus 4.1 MSEK, which is an improvement by 24.4 percent.

The investments amounted to 10.0 MSEK (7.7) and the amortizations to 8.9 MSEK (8.8). 5.6 MSEK (4.5) of the investments were capitalized development costs and 4.8 MSEK (4.9) of the amortizations were amortizations of capitalized development costs. The cash flow from operating activities was 33.3 MSEK (29.0).

Full year January - December 2015

Group net sales increased by 24.5 percent to 610.5 MSEK (490.4). At comparable exchange rates net sales increased by 8.4 percent in 2015. The Americas was the biggest market with 44 (41) percent of the net sales. The EU area contributed 32 (35) percent, Japan 12 (13) percent, China 7 (5) percent, EMEA 3 percent and APAC 2 percent. Together EMEA and APAC, previously called "rest of the world" contributed 5 (6) percent of the net sales.

The Group's gross margin improved to 56.1 percent (54.4). Efficiency improvements in the production plant in Cardiff, Wales contribute to the improved profitability. More than half of the Group's sales are invoiced in USD, so a stronger USD in relation to the SEK has a positive effect on the reported sales. At the same time the Group's costs for the production that is outsourced in the USA have increased as a result of the currency development and the strengthened GBP has contributed negatively at the recalculation to SEK of the production costs in Cardiff.

The operating expenses amounted to 267.8 MSEK (204.1). Adjusted for the one-time effect concerning reversal of write-down of goodwill the expenses of the comparative year were 217.6 MSEK. The cost increase is explained primarily by a 30.2 MSEK increase of the sales cost as the result of currency effects, recruitment costs and higher variable remunerations. The research and development costs increased by 11.1 MSEK, among other things as a result of the capitalization of costs for development projects being somewhat lower in 2015 at the same time as the amortizations were higher than the year before.

Operating profit (EBIT) increased with 12.0 MSEK, corresponding to an improvement by 19.1 percent, to 74.8 MSEK (62.8). The operating margin amounted to 12.2 percent (12.8). Excluding the 13.5 MSEK one-time item the operating profit for 2014 was 49.3 MSEK and the operating margin 10.1 percent. The improvement between the years was thus 25.5 MSEK corresponding to an increase of the operating profit of 51.7 percent and of the operating margin of 2.1 percentages. Net financial income amounted to 1.4 MSEK (5.5). The result after tax increased by 8.6 MSEK, corresponding to 13.4 percent, to 73.3 MSEK (64.6). Adjusted for the one-time effect last year's result was 51.1 MSEK and the improvement between the years 22.1 MSEK, corresponding to an increase of the net result of 43.3 percent.

The investments amounted to 31.9 MSEK (32.2) and the amortizations to 36.4 MSEK (31.9). 19.3 MSEK (21.7) of the investments were capitalized development costs and 20.7 MSEK (18.6) of the amortizations were amortizations of capitalized development costs. The cash flow from operating activities increased to 118.2 MSEK (80.9).

Balance sheet items

At December 31, 2015 the Group's cash and cash equivalents amounted to 134.9 MSEK (100.0). At the end of the reported period the Group had no interest-bearing liabilities, compared to 5.0 MSEK at December 31, 2014. Net cash at December 31 2015 thus amounted to 134.9 MSEK compared to 95.0 MSEK at December 31, 2014.

The Group reports a total goodwill of 104.0 MSEK (104.0) at December 31, 2015. The reported goodwill relates to the acquisitions of MIP Technologies AB and two product lines from Caliper Life Sciences Inc. in 2010. In the annual accounts for 2014 a write-down of 13.5 MSEK was made of the part of the goodwill value that at the time was seen as attributable to the part of the operations that entitles the previous owners of MIP Technologies to certain additional purchase sums up to and including the financial year 2015. This was made based on the fact that the sales of the products concerned during the tenor of the additional purchase sum agreement have been below earlier estimates. This goodwill write-down was however criticized by NASDAQ in late 2015, and therefore a retroactive reversal has been made in the 2014 accounts. For more information, see the press release issued by Biotage on December 16, 2015.

Other intangible fixed assets amounted to 115.2 MSEK (124.8). Of this sum patents and license rights amounted to 29.2 MSEK (33.3) and capitalized development costs to 86.0 MSEK (91.5). The inventories decreased to 97.2 MSEK (108.4). Other financial debts amounted to 1.0 MSEK (5.2). At December 31 the equity capital amounted to 546.7 MSEK (516.1). The change in equity capital during the year is attributable to the net result, 79.0 MSEK, and dividends to the shareholders, -48.5 MSEK.

Repurchasing program

Biotage had no holding of own shares at the end of the reported period. No shares were acquired under the repurchasing program decided at the 2015 Annual General Meeting. Complete documentation from the 2015 AGM is available at www.biotage.com.

Patent dispute in the US

Biotage has as previously reported been sued for alleged patent infringement in the US by Scientific Plastic Products, Inc. ("SPP"). These law suits are declared stayed by the court awaiting the results of reexamination cases of the validity of the patents by the US Patent and Trademark Office (USPTO).

SPP has exhausted all possibilities to request reexamination of USPTO's decision to declare the US patents 7,138,061, 7,381,327 and 7,410,571 ("the Patents") invalid. USPTO has issued reexamination certificates canceling all claims of the Patents and the court in the alleged infringement case and has dismissed all claims in the infringement suit concerning the Patents.

Biotage has also filed requests for reexamination of all patent claims in the US patents 8,066,875 B2, which is a continuation of US patent 7,381,327, and US patent 8,070,957, which is a continuation of the US patent 7,410,571. The claims of the patents 8,066,875 B2 and 8,070,957 have been rejected by the USPTO Patent Trial and Appeal Board and the reexamination proceedings continue. These patents are subject to a separate infringement case in court which is also declared stayed, pending the outcome of the reexamination proceedings.

Biotage's analysis indicates that the company has a strong position and that the other party lacks good cause for the alleged patent infringement. Thus no reserves have been booked due to the dispute.

Major events after the reported period

There are no major events after the reported period to report.

Human resources

The Group had 293 (293) employees at December 31, 2015, and 291 at September 30, 2015.

Parent company

The Group's parent company, Biotage AB, has wholly owned subsidiaries in Sweden, the United States, United Kingdom, Germany, France, Italy, Japan and China. 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 0.7 MSEK (0.6) in the fourth quarter and to 2.7 MSEK (2.5) in the full year. The parent company's net financial income was 83.9 MSEK (80.9) for the quarter and 83.0 (65.7) for the full year. The comparative year's item Result from shares in Group companies includes -15.6 MSEK concerning write-down of an inter-company receivable in connection with the merger of two subsidiaries in Cardiff, Wales. The result after financial items amounted to 80.0 MSEK (75.8) for the quarter and to 66.4 MSEK (47.1) for the full year.

Investments in intangible fixed assets amounted to 0.3 MSEK (0.6) in the quarter and to 1.0 MSEK (1.4) in the full year. The cash and bank balance amounted to 0.8 MSEK (1.0) at December 31.

Biotage has noted that the parent company in the annual accounts 2014 erroneously reported the Group's total deferred tax recoverable on the parent company's balance sheet and not only the deferred tax recoverable attributable to the parent company. Therefore a 7.3 MSEK correction is reported as a reduction of the parent company's deferred tax recoverable at December 31, 2014 and equity brought forward at January 1, 2014 (profit brought forward). Equity brought forward 2014 in the parent company after the correction thus amounts to 551.9 MSEK and deferred tax recoverable to 37.7 MSEK at January 1, 2014 and to 37.5 MSEK at December 31, 2014. The correction had no effect on the reported result for 2014. In addition to this the comparative figures in the profit and loss statement concerning 2014 have been adjusted according to RFR 2, whereby the preceding year's write-down of shares in subsidiaries and reversed additional purchase sum are reported net as an adjustment of shares in subsidiaries. The change has not influenced the net result reported for 2014 but only effected an increase in the result from shares in subsidiaries by 13.5 MSEK and a decrease in Other operating items to the amount of 13.5 MSEK.

Risks and uncertainties

As an international Group, Biotage is exposed to various risks that affect the possibilities to achieve the established targets. There are operational risks, such as the risk that competitive situations affect price levels and sales volumes, and the risk that the economic development in the markets and segments where the Group operates is not

stable. There are also financial risks, such as currency risks, interest risks and credit risks. No major changes in significant risks or uncertainty factors have occurred during the period. Our assessment thus remains the same as described in the Annual Report 2014. An account of Biotage's risks and uncertainty factors and the handling of these can be found in the company's Annual Report for 2014. Readers wishing to study the Annual Report can download this from Biotage AB's website www.biotage.com or order it from Biotage AB, Box 8, SE-751 03 Uppsala or [email protected].

Reports relating to 2015 and 2016

The interim report for the first quarter 2016 will be issued on April 28, 2016. The Annual General Meeting will be held on April 28, 2016. The interim report for the second quarter 2016 will be issued on August 11, 2016. The interim report for the third quarter 2016 will be issued on November 10, 2016. The year-end report for 2016 will be issued on February 9, 2017.

The Annual Report for 2015 is planned for publication in week 14 2016.

This report has not been reviewed by the company's auditor.

Uppsala February 11, 2016

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

The information in this press release is of the kind that Biotage AB (publ) is required to make public according to the Financial Instruments Trading Act. The information was released for publication at 08.30 on February 11, 2016.

About Biotage

Biotage offers efficient separation technologies from analysis to industrial scale and high quality solutions for analytical chemistry from research to commercial analysis laboratories. Biotage's products are used by government authorities, academic institutions, pharmaceutical and food companies, among others. The company is headquartered in Uppsala and has offices in the US, UK, China and Japan. Biotage has approx. 290 employees and had sales of 611 MSEK in 2015. Biotage is listed on the NASDAQ OMX Stockholm stock exchange. Website: www.biotage.com

Biotage AB (publ) Year end report 2015-01-01 -- 2015-12-31 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME IN SUMMARY

2015-10-01 2014-10-01 2015-01-01 2014-01-01
Amounts in SEK thousands 2015-12-31 2014-12-31 2015-12-31 2014-12-31
Net sales 168,548 137,757 610,534 490,381
Cost of sales -74,241 -62,848 -267,967 -223,462
Gross profit 94,307 74,909 342,568 266,919
Distribution costs -43,547 -37,425 -169,447 -139,201
Administrative expenses -15,378 -13,760 -52,159 -47,650
Research and development costs -14,078 -11,672 -49,528 -38,450
Other operating income -1,150 15,158 3,353 21,195
Total operating expenses -74,153 -47,700 -267,781 -204,106
Operating profit/loss* 20,154 27,209 74,787 62,813
Financial net income -744 3,577 1,403 5,548
Profit/loss before income tax 19,411 30,786 76,190 68,361
Tax expenses 1,310 -633 -2,935 -3,749
Total profit/loss for the period 20,721 30,153 73,255 64,612
Other comprehensive income
Components that may be reclassified to net income:
Translation differences related to
non Swedish subsidiaries -1,718 4,948 5,718 13,861
Cash flow hedges 70 287 70 -176
Total other comprehensive income -1,648 5,236 5,788 13,685
Total comprehensive income for the period* 19,073 35,389 79,043 78,297

* Correction of error – Reversal of write-down of goodwill: The reversal of the write-down of goodwill means that the income statement item Other operating items for the comparative period January 1 – December 31, 2014 is adjust upwards by 13.5 MSEK concerning previously reported write-down of goodwill 2014, which effects an improvement in the comparative period's result compared to the result previously reported in the financial statements and Annual Report for 2014. The background is that Biotage in the 2014 annual accounts made a writedown of goodwill to the amount of 13.5 MSEK, which affected Other operating items negatively with the same amount. This write-down was made in connection with the cancellation of a reserve for additional purchase sums relating to MIP Technologies AB that are no longer expected to be paid, see also note 10 in the 2014 Annual Report. The goodwill item was recorded in connection with the additional purchase sum at the acquisition in 2010 and was attributable to this additional purchase sum. As Biotage according to the accounting principles applied regards all its operations as one cash-generating unit also write-down testing of reported goodwill should be performed only at this level. As no need for write-down was identified for the Group's total goodwill item according to the write-down tests performed in connection with the annual accounts 2014, operating profit for 2014 is therefore adjusted by +13.5 MSEK in this year-end report. Consequently the Group's closing values 2014 and opening values 2015 for profit brought forward and goodwill both increase by 13.5 MSEK. The comparative period's (2014) earnings per share before and after dilution are adjusted from 0.79 SEK per share to 1.00 SEK per share. The comparative period's total result per share before and after dilution is adjusted from 1.00 SEK per share to 1.21 SEK per share.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME IN SUMMARY (Continuing)

2015-10-01
2015-12-31
2014-10-01 2015-01-01
2014-12-31 2015-12-31
2014-01-01
2014-12-31
Attributable to parent company´s shareholders:
Total profit/loss for the period
20,721 30,153 73,255 64,612
Attributable to parent company´s shareholders:
Total comprehensive income for the period
19,073 35,389 79,043 78,297
Average shares outstanding 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
Total profit/loss for the period per share SEK* 0.32 0.47 1.13 1.00
Total profit/loss for the period per share SEK after dilution* 0.32 0.47 1.13 1.00
Earnings per share relates to:
Continuing operations* 0.32 0.47 1.13 1.00
Total comprehensive income for the period
per share SEK*
0.29 0.55 1.22 1.21
Total comprehensive income for the period
per share after dilution SEK*
0.29 0.55 1.22 1.21

*Error correction, see previous page.

Quarterly summary 2014 and 2015 2015 2015 2015 2015 2014 2014 2014 2014
Amounts in KSEK kv 4 kv 3 kv 2 kv 1 kv 4 kv 3 kv 2 kv 1
Net Sales 168,548 149,697 148,115 144,175 137,757 118,525 120,383 113,717
Cost of sales -74,241 -65,865 -63,665 -64,196 -62,848 -53,868 -54,724 -52,022
Gross profit 94,307 83,832 84,450 79,978 74,909 64,656 65,659 61,695
Gross margin 56.0% 56.0% 57.0% 55.5% 54.4% 54.6% 54.5% 54.3%
Operating expenses -74,153 -64,856 -66,746 -62,026 -47,700 -52,065 -52,110 -52,231
Operating profit/loss 20,154 18,976 17,704 17,952 27,209 12,591 13,549 9,464
Finansnetto -744 549 -346 1,944 3,577 -865 2,384 451
Profit/loss before income tax 19,411 19,525 17,358 19,896 30,786 11,727 15,933 9,916
Tax expenses 1,310 -1,252 -1,701 -1,292 -633 -728 -539 -1,850
Total profit/loss for the period 20,721 18,273 15,658 18,604 30,153 10,998 15,394 8,066

CONSOLIDATED STATEMENT OF FINANCIAL POSITION IN SUMMARY

Amounts in SEK thousands 2015-12-31 2014-12-31
ASSETS
Non-Current assets
Property, plant and equipment 44,719 43,057
Goodwill* 104,023 104,023
Other intangible assets 115,170 124,822
Financial assets 692 808
Deferred tax asset 47,626 44,765
Total non-current assets 312,228 317,474
Current assets
Inventories 97,182 108,379
Trade and other receivables 124,536 106,612
Cash and cash equivalents 134,885 100,045
Total current assets 356,604 315,036
TOTAL ASSETS 668,832 632,510
EQUITY AND LIABILITIES
Capital and reserves attributable to equity holders of the
parent company
Share capital 89,953 89,953
Other paid-in capital - 4,993
Reserves -88,616 -94,404
Retained earnings* 545,320 515,608
Total equity 546,657 516,150
Non-current liabilities
Liabilities to credit institutions - 4,537
Other financial liabilities 1,075 5,072
Deferred tax liability 1,948 2,465
Non-current provisions 1,468 1,369
Total non-current liabilities 4,491 13,444
Current liabilities
Trade and others liabilities 109,698 98,457
Other financial liabilities 3,698 1,900
Tax liabilities 2,317 848
Liabilities to credit institutions - 502
Current provisions 1,970 1,210
Total current liabilities 117,684 102,916
TOTAL EQUITY AND LIABILITIES 668,832 632,510

*Se comments under Consolidated statement of comprehensive income in summary

Biotage AB (publ) Year end report

2015-01-01 -- 2015-12-31

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY IN SUMMARY

Amounts in SEK thousands Share
capital
Other
payed-in
capital
Accumulated
translation
reserve
Hedging
reserve
Retained
earnings
Total
equity
Opening balance January 1, 2014 89,423 4,993 -108,265 176 490,447 476,774
Changes in equity in the
period of January 1 -december 31, 2014
Total comprehensive income* - - 13,862 -176 64,611 78,297
Total non-owners changes - - 13,862 -176 64,611 78,297
Transactions with equity holders of the company
Cancellation of treasury shares ** -6,588 - - - 6,588 -
Increase of share capital without the issue -
of new shares, bonus issue ** 7,119 - - - -7,119 -
Dividend to shareholders of the parent company - - - - -38,829 -38,829
Share buy-back by parent company ** - - - - -93 -93
Closing balance December 31, 2014 89,953 4,993 -94,404 - 515,607 516,150
Changes in equity in the
period of January 1, - December 31, 2015
Total comprehensive income - - 5,718 70 73,255 79,044
Total non-owners changes - - 5,718 7
0
73,255 79,044
Transacitions with equity holders of the company
Cancellation of treasury shares ** - - - - - -
Increase of share capital without the issue
of new shares, bonus issue ** - - - - - -
Dividend to shareholders of the parent company - - - - -48,536 -48,536
Reclassification expired share option program - -4,993 - - 4,993 -
Closing balance December 31, 2015 89,953 - -88,687 7
0
545,320 546,657
*See comments under Consolidated statement of comprehensive income in summary

**Repurchased shares, cancellation of repurchased shares and bonus issue

The 2015 Annual General Meeting resolved to authorize the Board to continue to let the company repurchase shares up until the AGM 2016 so that the company's holding of own shares amounts to a maximum of 10 percent of the number of registered shares. At the balance sheet date December 31, 2015, the company held no repurchased shares

CONSOLIDATED STATEMENT OF CASH FLOWS

2015-10-01 2014-10-01 2015-01-01 2014-01-01
Amounts in SEK thousands 2015-12-31 2014-12-31 2015-12-31 2014-12-31
Operating activities
Profit/loss before income tax 19,411 30,786 76,190 68,361
Adjustments for non-cash items 11,655 325 45,921 31,654
31,066 31,111 122,111 100,016
Income tax paid -661 -2,144 -1,638 -4,631
Cash flow from operating activities
before changes in working capital 30,405 28,967 120,473 95,384
Cash flow from changes in working capital:
Increase (-)/ decrease (+) in inventories 7,591 -5,253 11,196 -22,492
Increase (-)/ decrease (+) in trade receivables -12,649 -5,219 -16,799 -9,702
Increase (-)/ decrease (+) in other current receivables 4,354 4,416 -6,499 1,916
Increase (+)/ decrease (-) in other liabilities 3,596 6,080 11,708 15,800
Cash flow from operating activities 33,297 28,992 120,078 80,906
Investing activities
Acquisition of intangible assets -6,195 -5,108 -21,195 -23,410
Acquisition of property, plant and equipment -4,079 -2,637 -10,834 -8,767
Acquisition of financial assets - - -96 -
Sale of financial assets 261 - 261 -
Cash flow from investing activities -10,014 -7,745 -31,865 -32,177
Financing activities
Dividend to shareholders - - -48,536 -38,829
Buy-back of shares - - - -93
Loan raised - 315 - 1,391
Repayment of loans -3,901 -191 -6,698 -3,894
Cash flow from financial activities -3,901 124 -55,234 -41,425
Cash flow for the period 19,382 21,371 32,980 7,304
Cash and cash equivalents opening balance 115,718 77,992 100,045 90,769
Exchange differences in liquid assets -214 682 1,861 1,972
Cash and equivalents closing balance 134,885 100,045 134,885 100,045
Additional information:
Adjustments for non-cash items
Depreciations and impairments 13,119 9,919 40,679 33,869
Other items -1,463 -9,595 5,242 -2,215
Total 11,655 325 45,921 31,654
Interest received 19 18 46 128
Interest paid 29 -248 -93 -292

INCOME STATEMENT, PARENT IN SUMMARY

2015-10-01 2014-10-01 2015-01-01 2014-01-01
Amounts in SEK thousands 2015-12-31 2014-12-31 2015-12-31 2014-12-31
Net sales 682 643 2,720 2,502
Administrative expenses -4,181 -4,806 -17,034 -18,437
Research and development costs -711 -783 -2,470 -2,398
Other operating items 236 -174 172 -255
Operating expenses -4,656 -5,763 -19,332 -21,090
Operating profit/loss -3,974 -5,120 -16,612 -18,588
Profit/loss from financial investments:
Interest income from receivables from group companies 138 315 138 2,383
Interest expense from liabilities to group companies -422 -950 -1,293 -3,614
Result from participations in group companies 45,101 53,703 45,063 38,124
Other interest and similar income 0 9 2 110
Other interest and similar income -20 830 -72 1,708
Group contribution received 39,127 27,011 39,127 27,011
Financial net income 83,925 80,918 82,966 65,722
Profit/loss before income tax 79,950 75,798 66,354 47,134
Tax expenses 761 -149 761 -149
Total profit/loss for the period 80,711 75,649 67,115 46,985
STATEMENT OF COMPREHENSIVE INCOME. PARENT
Total profit/loss for the period 80,711 75,649 67,115 46,985
Other comprehensive income:
Components that may be reclassified to net income:
Translation differences related to
non Swedish subsidiaries
- - - -
Total comprehensive income, parent 80,711 75,649 67,115 46,986

BALANCE SHEET, PARENT

Amounts in SEK thousands 2015-12-31 2014-12-31
ASSETS
Non-current assets
Intangible assets
Patents and licenses 8,386 8,224
Financial assets
Investments in group companies 468,128 468,128
Receivables from group companies 11,241 14,763
Deferred tax asset 38,271 37,511
517,641 520,403
Total non-current assets 526,026 528,627
Current assets
Current receivables
Receivables from group companies 59,945 61,791
Other receivables 584 498
Prepaid expenses and accrued income 1,070 964
61,599 63,254
Cash and cash equivalents 813 974
Total current assets 62,412 64,227
TOTAL ASSETS 588,438 592,854
EQUITY, PROVISIONS AND LIABILITIES
Equity
Restricted equity
Share capital 89,953 89,953
89,953 89,953
Unrestricted equity
Fair value reserve -66,055 -66,055
Retained earnings 487,480 489,030
Profit/loss for the year 67,114
488,540
46,986
469,962
Total equity 578,493 559,915
Provisions - 3,850
Current liabilities
Other financial liabilities 3,423 1,900
Trade payables 499 769
Liabilities to group companies 643 21,391
Other current liabilities 123 778
Accrued expenses and prepaid income 5,257
9,944
4,251
29,089
TOTAL EQUITY, PROVISIONS AND LIABILITIES 588,438 592,854
Pledged assets 22,500 22,500
Contingent liabilities - -

Accounting principles

Biotage's Group reporting 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. Revised and new standards and interpretations from IASB and IFRS Interpretations Committee which have come into effect and apply to the fiscal year 2015 have not had any effect on the Group's financial reporting.

Fair value

Biotage has a financial debt concerning additional purchase sums in connection with acquired operations which has been measured as fair value allocated to the result. The additional purchase sums, relating to the acquisition of MIP Technologies AB, are based on the distribution of gross profit applying to certain areas and may be paid until the end of 2015. The agreement with the sellers does not stipulate a maximum sum, as there has been considerable uncertainty about the future outcome. For the fiscal year 2015, which is the last period for which an additional purchase sum may be paid and which will be settled in 2016, the additional purchase sum is calculated to amount to 3.4 MSEK, which is also the company's best assessment of fair value at December 31, 2015. As the fair value is less than the previously reported sum, the difference amounting to 0.3 MSEK has been reported on the 2015 profit and loss statement. 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. The measurement has been made based on expected future cash flows.

Financial debt measured at fair value 2015-12-31 2014-12-31
Additional purchase sum, long-term part 0 3,850
Additional purchase sum, short-term part 3,423 1,900
Total 3,423 5,750

The change in financial debt in 2015 is presented below:

Opening value January 1, 2015 5,750
Reversed reserve reported in result -275
Adjusted during the year -2.052
Value carried forward December 31, 2015 3,423

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.

In the preparation of the Group's and the parent company's interim reports, the same accounting principles and calculation methods were in all other respects applied as in the preparation of Biotage's Annual Report for 2014. These are described on pp. 37-44 in the Annual Report.

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