Interim / Quarterly Report • Aug 8, 2018
Interim / Quarterly Report
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Corporate registration number 556822-1187
Second quarter (April-June 2018)
First half year (January-June 2018)
Key events during the second quarter
Key events after the end of the second quarter
| Key figures1 | Apr-Jun 2018 |
Apr-Jun 2017 |
Jan-Jun 2018 |
Jan-Jun 2017 |
Full year 2017 |
|---|---|---|---|---|---|
| Revenues2 , SEKm |
52,4 | 36,5 | 85,3 | 77,5 | 153,6 |
| EBITDA, SEKm | 9,1 | 3,8 | 10,9 | 17,2 | 34,4 |
| EBITDA margin, % | 17% | 11% | 13% | 22% | 22% |
| Operating profit, SEKm | 0,1 | -4,8 | -6,8 | -0,4 | -0,6 |
| Net profit/loss for the period2 , SEKm |
-0,9 | -6,0 | -8,9 | -1,9 | -3,3 |
| Operating cash flow, SEKm | 9,7 | 1,8 | -4,0 | -0,2 | -0,1 |
| Earnings per share2 , SEK |
-0,03 | -0,18 | -0,27 | -0,06 | -0,10 |
| Operating cash flow per share, SEK | 0,29 | 0,05 | -0,12 | 0,00 | 0,00 |
| Equity ratio1 , % |
62% | 61% | 62% | 61% | 62% |
| Net debt1 , SEKm |
156,2 | 149,7 | 156,2 | 149,7 | 152,4 |
| Number of shares at the end of period | 33 302 373 | 33 302 373 | 33 302 373 | 33 302 373 | 33 302 373 |
1 Definition and reconciliation of performance measures see page 19-20.
2 Defined according to IFRS
The second quarter of 2018 was eventful and financially strong, both revenue and profitability wise. Sales increased by more than 40 percent, driven by more than a doubling in sales of our own product portfolio. We also signed a licensing agreement for China that contributed new licensing revenues.
This development reflects our strategy of increasing sales of our own product portfolio for infection prevention (BIP portfolio), while developing new licensing businesses. We can now put eleven quarters of rising sales for the BIP portfolio (based on rolling twelve-month figures) behind us, so the trend is stable. The fact that we now add a new licensing agreement in China to the existing ones with BD, Vigilenz and Smartwise is very important and strengthens the company's view of the licensing business potential.
We generated an EBITDA of SEK 9.1 million, which is more than a doubling compared with the previous year, and a margin of 17 percent. This despite the cost of over SEK 11 million for cancelling our former distribution agreement in China. Net profit for the period is still negative, and this is essentially due to significant depreciation of our technology, even though the real value rises as we develop new products and license applications. Cash flow was strong, both due to increased sales and reduced accounts receivable.
The biggest news during the quarter was undoubtedly the new combined distribution and licensing agreement with Well Lead Medical for China. It initially generates SEK 30 million in product sales and licensing revenues, whereof approximately half in the second quarter and the rest in connection with new deliveries. In the longer term, the value of the partnership is significantly greater than that.
Well Lead is China's largest and one of the world's leading manufacturers of medical device consumables, with significant exports. They will immediately take over the exclusive right to sell and distribute Bactiguard's urinary catheters in China. At the same time, the process of obtaining product approval for locally-produced central venous catheters and endotracheal tubes with Bactiguard's infection preventive technology will commence. This means that, in a few years' time, Well Lead is expected to manufacture and sell all products in our product portfolio in China and generate license revenues for Bactiguard.
Our former partner Jian AN has made a sizeable and important effort by contributing to the product approval and market introduction of Bactiguard's urinary catheters in this huge market. Therefore, it is justified that we compensate them for their work and investment when we now terminate the cooperation ahead of time.
Revenues from our largest licensing partner BD (after their acquisition of C.R. Bard) amounted to SEK 25 million. The underlying business is stable, but volumes vary somewhat between the quarters without following a clear seasonal pattern.
Growth in our own product portfolio comes from several regions; China, Europe, India and the Middle East. China, I have already touched on and we recently announced a new partnership for Germany with Asid Bonz, a well-established and professional partner, who shares our ambition to grow by offering premium products and services to the healthcare sector.
We establish ourselves step by step in the European markets and see positive developments. This applies, for example, to Sweden where the procurement of our urinary catheters for Stockholm and Skåne has generated increased sales. Therefore, it is extra gratifying that we recently won our first Swedish tender for central venous catheters. The Lund University Hospital has positive experience of our products and region Skåne has now decided to make them available to all hospitals through a joint procurement.
The product approval of our central venous catheters in India has opened doors and creates new possibilities to approach intensive care units with a combined product offering for infection prevention. Our distributors have sales staff across most of the country, with initial focus on the major hospitals. Today, our products have been introduced in several well-reputed hospitals and chains, such as Apollo, Fortes, Max and Medanta, where the focus is now on broadening the use.
The Middle East continues to develop positively, and in the quarter, we signed an agreement with a distributor for Oman. The product registration for Egypt is in the final phase and we expect launch in the third quarter.
To further drive growth by leading our sales organization, while developing global sales strategies and processes, we have recruited a Vice President Sales. Jonas Östregård has many years of international sales experience from the pharmaceutical industry at AstraZeneca and is a welcome addition to the management team.
The second quarter has been eventful and strong. I therefore look forward to the continued development this year, which has the potential to be exciting.
Christian Kinch, CEO
Bactiguard has signed a combined distribution and license agreement with Well Lead Medical (Well Lead) for China, including all products in Bactiguard's portfolio. Initially, the agreement generates revenues of more than SEK 30 million in the form of product deliveries and license fees, which will be distributed over a 12-month period starting in Q2 2018. At the same time, the cooperation with the distributor Jian AN is terminated and Bactiguard pays a compensation of SEK 11.5 million for the significant investments Jian AN has made in the marketing and product approval process and repurchase of inventories.
Well Lead is today China's largest and one of the world's leading manufacturers of consumable medical devices and will initially take over the exclusive right to sell and distribute Bactiguard's urinary catheters in China. At the same time, the process of obtaining product approval for locally-produced central venous catheters and endotracheal tubes with Bactiguard's infection preventive technology will be initiated. This means that, in a few years' time, Well Lead will manufacture and sell all products in Bactiguard's portfolio on the Chinese market, which will generate license revenue for Bactiguard.
In May Bactiguard signed distribution agreement for Mexico with Degasa, a well-established family owned company, whose sales force covers most of the country. Through the cooperation with Degasa, Bactiguard strengthens its market presence in Latin America.
Smartwise Sweden AB has signed a strategic collaboration agreement with AstraZeneca regarding, among other things, the development of advanced vascular injection catheters with Bactiguard coating for new, innovative treatment methods of cardiovascular disease and cancer. The agreement initially does not generate any new license revenues for Bactiguard, but when the catheters reach the market it will generate royalties, which is estimated to be about two to three years into the future.
At the Annual General Meeting 2018 Jan Ståhlberg was elected as new member and Chairman of the Board of Bactiguard Holding AB (publ). At the end of the second quarter, Jan Ståhlberg owned shares in Bactiguard corresponding to 7.4 percent of the capital and 3.6 percent of the votes, which means that he was the third largest shareholder in the company at the time.
Jonas Östregård, who has extensive sales experience from various positions at Astra Zeneca, has been recruited to a new global role as Vice President Sales at Bactiguard. Jonas Östregård will join in August and will lead the sales organization, which consists of regional sales directors, sales representatives and external distributors. He will report to the CEO and be responsible for developing global sales strategies and processes.
Bactiguard has entered a new distribution agreement for Germany with Asid Bonz GmbH (Asid Bonz), including all products in Bactiguard's portfolio. Asid Bonz has been supplying solutions to the German healthcare sector since 1811 and is a leading provider of medical consumables with focus on anesthesia, urology, surgery and ward supplies. The new distribution agreement replaces a previous agreement with Roeser Medical GmbH which was signed in December 2016.
Bactiguard has won its first Swedish tender for central venous catheters (CVC), covering the Skåne region. The contract enables hospitals in the region to purchase Bactiguard's anti-infective central venous catheters (BIP CVC), for at least two years.
Bactiguard has two revenue streams, sales of BIP products and license revenues.
Bactiguard's BIP (Bactiguard Infection Protection) product portfolio currently includes sales of the BIP Foley, BIP ETT and BIP CVC products.
License revenues are attributable to sales of products under license, which currently includes the Group's licensing agreement with BD (formerly C.R. Bard) regarding Foley catheters for the USA, Japan, the UK, Ireland, Canada and Australia, a license agreement with Vigilenz Medical Devices for orthopedic trauma implants, covering the ASEAN region, a global license agreement with Smartwise Sweden AB (Smartwise) for vascular injection catheters as well as a license agreement with Well Lead Medical covering all products in Bactiguard's portfolio for the Chinese market, all with the Bactiguard technology.
Other revenue mainly comprises foreign exchange differences and other operating income.
Consolidated revenues for the second quarter amounted to SEK 52.4 (36.5) million, an increase by 44% compared to the corresponding quarter last year. Net sales (revenues excluding other revenues) amounted to SEK 45.0 (36.5) million, which is an increase of 23% compared to the corresponding quarter last year.
The major share of revenues was related to license revenues from BD (formerly C.R. Bard), which amounted to SEK 24.9 (25.7) million. The decrease is due to somewhat lower volumes. The underlying business is stable, but volumes vary between the quarters without following a clear seasonal pattern.
A new license agreement with Well Lead Medical in China, was signed at the end of the second quarter, which generated new license revenues of SEK 5.2 million in the quarter. Through the license agreement, Well Lead is granted the right to use Bactiguard's technology for local production of the products currently included in Bactiguard's product portfolio in the Chinese market. This represents the first part of a license revenue totaling approximately SEK 10 million. The remaining part will be recognized as revenue during the collaborative phase, which commences during the third quarter and is expected to continue for
approximately one year. The corresponding quarter last year included new license revenues of SEK 4.3 million, which were generated by the license agreement with Smartwise for the exclusive and global right to the Bactiguard technology for advanced vascular injection catheters
Sales growth of BIP products was strong during the quarter and amounted to SEK 14.9 (6.5) million, an increase of 129%. BIP revenues represented 28% of the revenues in the quarter. China, Europe, India and MEA (the Middle East and Africa) were the regions generating the largest revenues.
Other revenues during the quarter amounted to SEK 7.3 (0) million, whereof about half were currency effects. This item has also been affected by grants for development projects, changes in inventories of finished goods and work in progress as well as adjustment of prepaid territorial fee to the former distributor in China.
Consolidated revenues for the first half year amounted to SEK 85.3 (77.5) million, an increase of 10 % compared to the corresponding period previous year. Net sales (revenues excluding other revenues) amounted to SEK 74.3 (75.5) million.
The increase in revenue is mainly due to the sale of BIP products, which amounted to SEK 22.2 (9.3) million, in line with BIP sales for the full year 2017. Sales of BIP products accounted for 26% of total revenues during the first half year. The increase of 138% is mainly attributable to increased sales volumes in China and India, but also the fact that the product mix changed during the year and the value of BIP sales thus increased.
The bulk of the revenue 55% or SEK 46.9 (53.1) million was attributable to license revenues from C.R. Bard. The decrease is due to somewhat lower volumes. The underlying business is stable, but volumes vary between the quarters without following a clear seasonal pattern.
New license revenues from the agreement with Well Lead amounted to SEK 5.2 million and was 6% of total revenues. The corresponding period previous year included new license revenue from Smartwise of SEK 13.1 million.
Other revenues during the period January to June amounted to 13% or SEK 11.0 (2.0) million whereof about half were currency effects. Other revenues, as described under revenue for the second quarter above, has also affected the first half year positively.
| Apr-Jun | Apr-Jun | Jan-Jun | Jan-Jun | Full year | |
|---|---|---|---|---|---|
| Revenue split | 2018 | 2017 | 2018 | 2017 | 2017 |
| License revenues | 48% | 70% | 55% | 68% | 68% |
| New license revenues | 10% | 12% | 6% | 17% | 14% |
| Sales of BIP products | 28% | 18% | 26% | 12% | 14% |
| Other revenues | 14% | 0% | 13% | 3% | 4% |
In the full-year accounts for 2015, Bactiguard changed the principles of revenue recognition to establish a more direct link between product deliveries, reported revenue and cash flow. The business model was also changed, and the company no longer enters distribution agreements based on territorial fees and associated market contributions in the form of commitments on future product deliveries. Following the termination of the contract with Jian AN for China, only a small amount of prepaid territorial fees and commitments on product deliveries remain in the balance sheet. Therefore, it is not relevant to follow the development of the number of products sold and, from now on, we will fully focus on the value of BIP products sold.
During the second quarter of 2018, BIP products at a value of SEK 14.9 million were delivered, compared to SEK 6.5 million in the corresponding quarter of 2017. During the first half year, BIP products at a value of 22.2 (9.3) million have been sold. During the full year 2017, the value of BIP products sold amounted to SEK 21.8 million.
Development per quarter, value in MSEK for delivered BIP products, rolling 12 months.
EBITDA for the second quarter amounted to SEK 9.1 (3.8) million, corresponding to an EBITDA margin of 17% (11%). The increase compared to corresponding quarter last year is primarily a consequence of the growth in sales. While signing a new agreement with Well Lead Medical for China, the agreement with former distributor (Jian AN) was terminated ahead of time. Thus, one-off costs of SEK 11.5 million have been taken to compensate Jian AN for investments made in the marketing and product approval process and repurchase of inventories. These one-off costs have increased other external costs and affected EBITDA negatively in the quarter.
Personnel costs increased during the second quarter compared to previous year, which is a result of investments in sales and marketing to increase sales.
Other operating expenses includes currency effects, which had a negative effect of SEK -1.8 (-1.7) million in the quarter.
Consolidated operating profit for the second quarter of 2018 amounted to SEK 0.1 (-4.8) million. Depreciations, which do not have any impact on cash flow, have affected the operating profit by SEK -8,9 (-8,6) million, whereof depreciations on the Bactiguard technology of SEK -6,0 (-6,0) million.
Financial net amounted to SEK -3.3 (-2.4) million in the quarter. Of these, SEK 2.8 (0.3) million is financial income and SEK -6.0 (-2.7) million financial expenses. Due to non-recurring effects in connection with the termination of the Jian AN contract, the items financial income and financial expenses have each increased by SEK 2.3 million, i.e. a net effect of 0. Other financial expenses consist, among other things, of unrealized value changes in forward hedging which had a negative impact in the quarter, as well as interest expenses on the bank loan.
Tax for the second quarter amounted to SEK 2.2 (1.2) million and refers to the change in deferred taxes attributable to temporary differences relating to the Group's intangible assets. Deferred tax is recalculated to new future tax rates and the effect of changes in deferred tax has been taken in its entirety during the second quarter.
Consolidated net profit for the second quarter amounted to SEK -0.9 (-6.0) million.
EBITDA for the first half year amounted to SEK 10.9 (17.2) million, corresponding to an EBITA margin of 13% (22%). The change compared with the same period last year is largely due to that the first half of the previous year included new license revenues of SEK 13.1 million from Smartwise, while the corresponding period in 2018 included new license income from Well Lead of SEK 5.2 million. At the same time, one-off costs for the termination of the contract with Jian AN for China have had a negative impact on EBITDA of SEK 11.5 million in 2018.
Consolidated net profit for the first half year amounted to SEK -8.9 (-1.9) million. Depreciations have affected the net profit by SEK -17,7 (-17,6) million, whereof depreciations on the Bactiguard technology of SEK -11,9 (-11,9) million.
Operating cash flow (cash flow from operating activities after investments and changes in working capital) for the second quarter amounted to SEK 9.7 (1.8) million. Cash flow from operating activities contributed positively by SEK 6.1 (1.3) million, and cash flow from changes in working capital with SEK 4.5 (1.8) million. Working capital has mainly been affected by decreased account receivables due to payment of license fee (Smartwise) received at the beginning of the quarter. Investing activities generated a cash flow of SEK -0.9 (-1.3) million.
Cash flow from financing activities amounted to SEK -10.1 (0.0) million, mainly explained by reduced utilized amount of the overdraft facility of SEK -7.2 million and amortization of bank loan of SEK -2.5 million. The total cash flow for the second quarter amounted to SEK -0.4 (1.8) million.
Operating cash flow for the first half of 2018 amounted to SEK -4.0 (-0.2) million. Cash flow from operating activities before change in working capital contributed positively by SEK 6.7 (13.0) million and was affected by a negative working capital of SEK -8.5 (-11.4). Most of the change in working capital comes from increased prepaid expenses, including an up-front fee for the bank loan, as well as reduced prepaid income.
Total cash flow for the first half of the year was SEK -6.0 million (-0.2).
Investments in property, plant and equipment during the second quarter amounted to SEK 0.2 (0) million. Investments in intangible assets, mainly related to capitalized development expenditures, amounted to SEK 0.6 (1.3) million. No investments were made in financial non-current assets during the quarter.
The consolidated equity ratio was 62% on 30 June 2018 (61% on 30 June 2017) and equity amounted to SEK 376.7 (388.6) million.
Interest-bearing debt consist of a financial lease of SEK 11.7 million, and a three-year term loan of SEK 147.5 million, with a maturity of three years to December 2020. The term loan carries a base interest rate of STIBOR 90, but no less than 0 %, and a margin of 3.0 %. The bank loan will be amortized by SEK 35 million until maturity, whereof SEK 2.5 million has been amortized to date 2018.
Consolidated cash position on 30 June 2018 amounted to SEK 5.7 million (SEK 14.9 million on 30 June 2017). Out of a granted overdraft facility of SEK 30 million, SEK 1.2 million was utilized as of 30 June 2018 (SEK 0 million as of 30 June 2017). Net debt amounted to SEK 156.2 million (SEK 149.7 million on 30 June 2017).
The total assets of the Group on 30 June 2018 amounted to SEK 609.3 million (SEK 640.7 million on 30 June 2017). The largest asset items in the balance sheet are goodwill of SEK 226.3 million (226.3) and technology related to Bactiguard's product portfolio, which amounted to SEK 200.9 (224.7) million.
Accounts receivable amounted to SEK 57.5 million on 30 June 2018, which is an increase of SEK 17.9 million since 31 December 2017. The increase is related to the license agreement with Well Lead at the end of the second quarter, but also an effect of increased deliveries of BIP products.
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 June 2018 was SEK 28.70, and the market capitalization amounted to SEK 956 million.
The share capital of Bactiguard on 30 June 2018 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 June 2018 amounted to 33,302,373 shares and 69,302,373 votes.
On 30 June 2018 Bactiguard had 2,504 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 | 28,4% | 39,6% |
| STÅHLBERG, JAN | 2 463 080 | 2 463 080 | 7,4% | 3,6% | |
| HANDELSBANKEN FONDER | 1 100 000 | 1 100 000 | 3,3% | 1,6% | |
| FÖRSÄKRINGSBOLAGET, AVANZA PENSION | 718 262 | 718 262 | 2,2% | 1,0% | |
| SWEDBANK FÖRSÄKRING | 650 577 | 650 577 | 2,0% | 0,9% | |
| LANCELOT ASSET MANAGEMENT AB | 600 000 | 600 000 | 1,8% | 0,9% | |
| FRÖAFALL INVEST AB | 516 000 | 516 000 | 1,5% | 0,7% | |
| RUGFELT, JOHAN | 401 632 | 401 632 | 1,2% | 0,6% | |
| SARGAS EQUITY AB | 364 090 | 364 090 | 1,1% | 0,5% | |
| Total, major shareholders | 4 000 000 | 21 695 496 | 25 695 496 | 77,2% | 89,0% |
| Total, others | 0 | 7 606 877 | 7 606 877 | 22,8% | 11,0% |
| Total number of shares | 4 000 000 | 29 302 373 | 33 302 373 | 100% | 100% |
| Accounting and valuation principles The consolidated financial statements are prepared in accordance with International Financial Reporting |
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| 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. |
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| The accounting and valuation principles are unchanged from those applied in the Annual Report 2017, in addition to what is explained below. |
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| IFRS 9 Financial Instruments | |||||
| As of January 1, 2018, the Group applies IFRS 9 Financial Instruments. IFRS 9 replaces IAS 39 Financial Instruments: Recognition and measurement. IFRS 9 involves changes in how financial assets is classified and valued, introduces a model for expected credit losses and changes in principles for hedge accounting. |
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| According to IAS 39, the company's financial assets were categorized as "Loan receivables and account receivables" at amortized cost. According to IFRS 9, the financial assets are categorized as "Hold to collect" at accrued amortized cost. |
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| The new standard has not affected the accounting of the company's financial assets other than account receivables. The group is affected by the new expected credit loss model regarding the calculation of the credit reserves for accounts receivables. The model deviates from expected credit losses and end up in an estimated loss for all account receivable, including the ones not yet expired. Bactiguard has chosen to apply the simplified model, e.g. the reservation will correspond to the expected loss covering the entire life span of the account receivables. Bactiguard has chosen not to calculate comparative figures for the 2017 financial |
year, in accordance with the transitional rules of the standard. Opening balance of Equity per 1 January 2018 has been adjusted with SEK -0.9 million as an effect of the new standard, which is also clearly shown in Condensed consolidated statement of changes in equity in page 15. The expected loss model has been adjusted with changes in account receivables as per 30 June 2018 and the effect is shown as other external cost in the Income Statement.
As in the past, the Group does not apply hedge accounting.
As of January 1, 2018, the Group applies IFRS 15 Revenue from contracts with customers. Bactiguard has chosen not to calculate comparative figures for the comparison year. IFRS 15 replaces IAS 18 Revenues, IAS 11 Construction contracts and related interpretations. The new standard means a new model of revenue recognition based on when the control of a product or service is transferred to the customer.
Bactiguard has evaluated the group's agreement with customers and the assessment is that the accounting of revenues will not be affected by the transition to IFRS 15, why no change in the opening balance of Equity has been made. Further information regarding the group's revenue distribution is to be found in Note 1.
IFRS 16 Leasing agreements will be replacing IAS 17 Leasing agreements as of January 1, 2019. IFRS 16 has a leasing model for the lessees, which means that virtually all leasing agreements are to be recognized in the statement of financial position. Bactiguard holds leasing agreements primarily for premises. The management's assessment is that IFRS 16 will affect the recognized amounts in the statement of financial position. A detailed analysis of IFRS 16 has begun but not been completed, why there is an inability to quantify the effects.
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.
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 since 2017 a license agreement with Smartwise Sweden AB, a company owned by a group of private investors, including Bactiguard's CEO and main shareholder Christian Kinch and main shareholder Thomas von Koch. During the second quarter of 2018 Smartwise Sweden AB paid the remaining receivable regarding license fee in its entirety.
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 have 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.
Revenues consist of invoiced intercompany expenses (management fees). During the period, the parent company received interest on its receivables from group companies. No investments were made during the period.
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 program that focuses on minimizing 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 29 and 48-49 in the Annual Report for 2017.
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 as the starting point. Another target is to achieve an EBITDA margin of at least 30 % at the end of the five-year period (year 2020). Bactiguard will continue to expand the business by strengthening the sales- and 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.
| Amounts in TSEK | Apr-Jun 2018 |
Apr-Jun 2017 |
Jan-Jun 2018 |
Jan-Jun 2017 |
Full year 2017 |
|
|---|---|---|---|---|---|---|
| Revenues | Note 1 | |||||
| License revenues | 30 142 | 29 999 | 52 116 | 66 194 | 125 609 | |
| Sales of BIP products | 14 901 | 6 504 | 22 195 | 9 338 | 21 849 | |
| Other revenues | 7 330 | -37 | 11 020 | 1 961 | 6 181 | |
| 52 373 | 36 466 | 85 332 | 77 493 | 153 639 | ||
| Raw materials and consumables | -8 058 | -6 530 | -13 617 | -10 399 | -20 262 | |
| Other external expenses | -19 292 | -10 882 | -30 993 | -20 968 | -42 329 | |
| Personnel costs | -14 149 | -13 557 | -27 145 | -26 264 | -51 475 | |
| Depreciation and amortisation | -8 949 | -8 606 | -17 677 | -17 610 | -35 015 | |
| Other operating expenses | -1 802 | -1 656 | -2 660 | -2 649 | -5 141 | |
| -52 249 | -41 231 | -92 091 | -77 891 | -154 221 | ||
| Operating profit/loss | 123 | -4 765 | -6 760 | -399 | -582 | |
| Profit/loss from financial items | ||||||
| Financial income | 2 775 | 326 | 3 957 | 467 | 1 378 | |
| Financial expenses | -6 038 | -2 713 | -9 524 | -4 494 | -9 088 | |
| -3 263 | -2 387 | -5 567 | -4 027 | -7 710 | ||
| Profit before tax | -3 140 | -7 151 | -12 327 | -4 426 | -8 292 | |
| Taxes for the period | 2 237 | 1 176 | 3 449 | 2 532 | 5 042 | |
| Net profit/loss for the period | -903 | -5 976 | -8 878 | -1 894 | -3 251 | |
| Attributable to: | ||||||
| Shareholders of the parent | ||||||
| -903 | -5 976 | -8 878 | -1 894 | -3 251 |
| Amounts in TSEK | Apr-Jun 2018 |
Apr-Jun 2017 |
Jan-Jun 2018 |
Jan-Jun 2017 |
Full year 2017 |
|---|---|---|---|---|---|
| Net profit/loss for the period | -903 | -5 976 | -8 878 | -1 894 | -3 251 |
| Other comprehensive income: | |||||
| Items that will be reclassified to profit or loss for the year | |||||
| Translation differences | -186 | 166 | -632 | 200 | 28 |
| Other comprehensive income, after tax | -186 | 166 | -632 | 200 | 28 |
| Total comprehensive income for the period | -1 089 | -5 810 | -9 510 | -1 694 | -3 223 |
| Attributable to: | |||||
| Shareholders of the parent | -1 089 | -5 810 | -9 510 | -1 694 | -3 223 |
| Total earnings per share, SEK* | -0,03 | -0,17 | -0,29 | -0,05 | -0,10 |
| 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 |
| Amounts in TSEK | 2018-06-30 | 2017-06-30 | 2017-12-31 |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | |||
| Goodwill | 226 292 | 226 292 | 226 292 |
| Technology | 200 902 | 224 708 | 212 805 |
| Brands | 25 572 | 25 572 | 25 572 |
| Customer relationships | 9 958 | 11 138 | 10 548 |
| Capitalised development expenditure | 19 560 | 17 486 | 18 568 |
| Patents | 551 | 770 | 571 |
| Intangible assets | 482 834 | 505 965 | 494 355 |
| Improvements, leasehold | 11 479 | 14 582 | 13 031 |
| Machinery and other technical plant | 18 088 | 19 135 | 19 580 |
| Equipment, tools and installations | 2 665 | 3 236 | 3 107 |
| Property, plant and equipment | 32 233 | 36 953 | 35 717 |
| Long-term receivables | 193 | 16 612 | 17 263 |
| Investments in associates | - | 1 228 | - |
| Financial assets | 193 | 17 840 | 17 263 |
| Total non-current assets | 515 260 | 560 758 | 547 336 |
| Current assets | |||
| Inventory | 13 436 | 14 252 | 13 608 |
| Accounts receivable | 57 523 | 37 601 | 39 596 |
| Other current receivables | 17 311 | 13 161 | 13 300 |
| Cash and cash equivalents | 5 731 | 14 905 | 11 550 |
| Total current assets | 94 001 | 79 918 | 78 054 |
| TOTAL ASSETS | 609 261 | 640 676 | 625 390 |
| Equity attributable to shareholders of the parent | |||
| Share capital | 833 | 833 | 833 |
| Other equity | 375 831 | 387 801 | 386 273 |
| Total equity | 376 663 | 388 634 | 387 105 |
| Non-current liabilities | |||
| Advance payments from customers | - | 18 705 | 17 263 |
| Debt to shareholders | - | 50 000 | - |
| Deferred tax liability | 21 794 | 27 753 | 25 243 |
| Liabilities to credit institutions | 136 235 | - | 142 500 |
| Other long-term liabilities | 11 716 | 13 908 | 12 476 |
| Total non-current liabilities | 169 745 | 110 366 | 197 482 |
| Current liabilities | |||
| Liabilities to credit institutions | 12 500 | 100 000 | 7 500 |
| Accounts payable | 8 737 | 5 870 | 4 832 |
| Other current liabilities | 18 170 | 5 879 | 6 855 |
| Accrued expenses and deferred income | 23 445 | 29 928 | 21 616 |
| Total current liabilities | 62 852 | 141 677 | 40 803 |
| Total liabilities | 232 597 | 252 042 | 238 285 |
| TOTAL EQUITY AND LIABILITIES | 609 261 | 640 676 | 625 390 |
| Amounts in TSEK | Equity attributable to shareholders of the parent Retained earnings including net |
||||
|---|---|---|---|---|---|
| Other capital | Translation | profit for the | |||
| Share capital | contributions | reserve | period | Total equity | |
| Opening balance, 1 January 2017 | 833 | 675 690 | 88 | -286 283 | 390 328 |
| Profit/loss for the period | - | - | - | -1 894 | -1 894 |
| Other comprehensive income: | |||||
| Translation differences | - | - | 200 | - | 200 |
| Total comprehensive income after tax | 0 | 0 | 200 | -1 894 | -1 694 |
| Transactions with shareholders | |||||
| Total transactions with shareholders | 0 | 0 | 0 | 0 | 0 |
| Closing balance, 30 June 2017 | 833 | 675 690 | 288 | -288 177 | 388 634 |
| Adjustments 1 July - 31 December 2017 | |||||
| Profit/loss for the period | - | - | - | -1 357 | -1 357 |
| Other comprehensive income: | - | - | - | - | - |
| Translation differences | - | - | -172 | - | -172 |
| Closing balance, 31 December 2017 | 833 | 675 690 | 116 | -289 533 | 387 105 |
| Adjustment opening balance 1 January 2018, | |||||
| change in accounting principle, IFRS 9 | - | - | - | -932 | -932 |
| Adjusted opening balance, 1 January 2018 | 833 | 675 690 | 116 | -290 465 | 386 173 |
| Profit/loss for the period | - | - | - | -8 878 | -8 878 |
| Other comprehensive income: | |||||
| Translation differences | - | - | -632 | - | -632 |
| Total comprehensive income after tax | 0 | 0 | -632 | -8 878 | -9 510 |
| Transactions with shareholders | |||||
| Total transactions with shareholders | 0 | 0 | 0 | 0 | 0 |
| Closing balance, 30 June 2018 | 833 | 675 690 | -516 | -299 343 | 376 663 |
| Amounts in TSEK | Apr-Jun 2018 |
Apr-Jun 2017 |
Jan-Jun 2018 |
Jan-Jun 2017 |
Full year 2017 |
|---|---|---|---|---|---|
| Cash flow from operating activities | |||||
| Net profit/loss for the period Adjustments for depreciation and amortisation and other |
-903 | -5 976 | -8 878 | -1 894 | -3 251 |
| non-cash items | 6 994 | 7 295 | 15 614 | 14 888 | 31 791 |
| 6 091 | 1 319 | 6 737 | 12 994 | 28 540 | |
| Cash flow from changes in working capital | |||||
| Increase/decrease inventory | -1 352 | 1 178 | 497 | 819 | 1 565 |
| Increase/decrease accounts receivable | 6 186 | 813 | 205 | -10 118 | -12 476 |
| Increase/decrease other current receivables | -85 | 161 | -4 283 | -274 | 1 231 |
| Increase/decrease accounts payable | 3 197 | 1 238 | 3 894 | 997 | -56 |
| Increase/decrease other current liabilities | -3 461 | -1 610 | -8 824 | -2 801 | -12 687 |
| 4 484 | 1 780 | -8 512 | -11 377 | -22 424 | |
| Cash flow from investing activities | |||||
| Investments in intangible assets | -630 | -1 293 | -1 902 | -1 753 | -3 661 |
| Investments in property, plant and equipment | -234 | - | -338 | -14 | -2 571 |
| -864 | -1 293 | -2 240 | -1 767 | -6 233 | |
| Operating cash flow | 9 711 | 1 806 | -4 016 | -150 | -117 |
| Cash flow from financing activities | |||||
| -400 | - | -760 | - | -1 398 | |
| Amortisation of financial lease Utilized bank overdraft |
-7 186 | - | 1 235 | - | - |
| Amortisation of loan | -2 500 | - | -2 500 | - | -150 000 |
| Debt incurred | - | - | - | - | 150 000 |
| Up-front fee loan | - | - | - | - | -1 800 |
| -10 086 | 0 | -2 025 | 0 | -3 198 | |
| Cash flow for the period | -375 | 1 806 | -6 041 | -150 | -3 315 |
| Cash and cash equivalents at start of period | 6 022 | 13 682 | 11 550 | 15 645 | 15 645 |
| Exchange difference in cash and cash equivalents | 84 | -583 | 222 | -590 | -780 |
| Cash and cash equivalents at end of period | 5 731 | 14 905 | 5 731 | 14 905 | 11 550 |
| Apr-Jun | Apr-Jun | Jan-Jun | Jan-Jun | Full year |
|---|---|---|---|---|
| 2017 | ||||
| 6 464 | ||||
| 2 077 | 1 804 | 3 741 | 3 437 | 6 464 |
| -9 941 | ||||
| -2 884 | -2 602 | -5 417 | -5 135 | -9 941 |
| -807 | -798 | -1 676 | -1 698 | -3 477 |
| -2 245 | ||||
| -1 317 | -1 334 | -2 684 | -2 823 | -5 722 |
| - | ||||
| -1 317 | -1 334 | -2 684 | -2 823 | -5 722 |
| 2018 2 077 -2 884 -510 - |
2017 1 804 -2 602 -537 - |
2018 3 741 -5 417 -1 008 - |
2017 3 437 -5 135 -1 125 - |
The parent company has no items in 2018 or 2017 recognized 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.
| Amounts in TSEK | 2018-06-30 | 2017-06-30 | 2017-12-31 |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | |||
| Financial assets | 615 989 | 598 089 | 622 989 |
| Total non-current assets | 615 989 | 598 089 | 622 989 |
| Current assets | |||
| Receivables from group companies | - | 19 421 | - |
| Prepayments and accrued income | 1 713 | 192 | 1 962 |
| Other current receivables | 4 | - | 4 |
| Cash and cash equivalents | 1 030 | 473 | 374 |
| Total current assets | 2 747 | 20 086 | 2 340 |
| TOTAL ASSETS | 618 736 | 618 175 | 625 329 |
| EQUITY & LIABILITIES | |||
| Total equity | 460 125 | 465 708 | 462 809 |
| Non-current liabilities | |||
| Liabilities to shareholders | - | 50 000 | - |
| Liabilities to credit institutions | 135 000 | - | 142 500 |
| Total non-current liabilities | 135 000 | 50 000 | 142 500 |
| Current liabilities | |||
| Liabilities to group companies | 8 837 | - | 9 775 |
| Liabilities to credit institutions | 12 500 | 100 000 | 7 500 |
| Other liabilities | 2 274 | 2 467 | 2 746 |
| Total current liabilities | 23 611 | 102 467 | 20 020 |
| Total liabilities | 158 611 | 152 467 | 162 520 |
| TOTAL EQUITY AND LIABILITIES | 618 736 | 618 175 | 625 329 |
| Amounts in TSEK | Total Group | Total Group |
|---|---|---|
| Apr-Jun 2018 |
Jan-Jun 2018 |
|
| Type of product/service | ||
| License | 30 142 | 52 116 |
| BIP-products | 14 901 | 22 195 |
| Total | 45 043 | 74 311 |
| Time for revenue recognition | ||
| Performance commitment is met at a certain time | 45 043 | 74 311 |
| Performace commitment is met during a period of time | 0 | 0 |
| Total | 45 043 | 74 311 |
The company presents certain performance measures in the interim report that are not defined in accordance with IFRS (so-called alternative key ratios according to ESMA guidelines). The Company believes that these measures provide useful supplementary information to investors and the company's management as they allow for the evaluation of the company's performance. Since not all companies calculate the measures in the same way, these are not always comparable to measures used by other companies. These performance measures should therefore not be considered a substitute for measures as defined under IFRS.
Definitions and tables below describe how the performance measures are calculated. The measures are alternative in accordance with ESMA's guidelines unless otherwise stated.
Shows the company's earnings capacity from ongoing operations irrespective of capital structure and tax situation. The key figure is used to facilitate comparisons with other companies in the same industry. The company considers this key figure to be the most relevant performance measure of the business because the company has a large asset item in Technology, which generates large depreciation while the value is considered to be significant for the company even after it is fully depreciated. Bactiguard's patented and unique technology can be applied to a wide range of products, both in the BIP portfolio and through license deals.
The company defines EBITDA as operating profit/loss excluding depreciation and amortization of tangible and intangible assets.
| Amounts in TSEK | Apr-Jun | Apr-Jun | Jan-Jun | Jan-Jun | Full year |
|---|---|---|---|---|---|
| 2018 | 2017 | 2018 | 2017 | 2017 | |
| Operating profit/loss | 123 | -4 765 | -6 760 | -399 | -582 |
| Depreciation and amortisation | 8 949 | 8 606 | 17 677 | 17 610 | 35 015 |
| EBITDA | 9 072 | 3 841 | 10 917 | 17 212 | 34 432 |
Shows the company's earnings capacity from ongoing operations, irrespective of capital structure and tax situation, in relation to revenues. The key figure is used to facilitate analysis of the company's result in comparison with comparable companies.
| Amounts in TSEK | Apr-Jun | Apr-Jun | Jan-Jun | Jan-Jun | Full year |
|---|---|---|---|---|---|
| 2018 | 2017 | 2018 | 2017 | 2017 | |
| EBITDA | 9 072 | 3 841 | 10 917 | 17 212 | 34 432 |
| Revenue | 52 373 | 36 466 | 85 332 | 77 493 | 153 639 |
| EBITDA-margin | 17% | 11% | 13% | 22% | 22% |
Net debt is a measure 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. The company considers this key figure interesting for creditors who want to understand the group's debt situation.
The company defines net debt as interest-bearing liabilities less cash and cash equivalents at the end of the period.
Interest-bearing liabilities consist of debt to credit institutions and shareholders, as well as interest-bearing part of other long-term and current liabilities.
| Amounts in TSEK | Apr-Jun | Apr-Jun | Jan-Jun | Jan-Jun | Full year |
|---|---|---|---|---|---|
| 2018 | 2017 | 2018 | 2017 | 2017 | |
| Interest-bearing part of other long-term liabilities | 11 716 | 13 908 | 11 716 | 13 908 | 12 476 |
| Non interest-bearing part of other long-term liabilities | - | - | - | - | - |
| Other long-term liabilities | 11 716 | 13 908 | 11 716 | 13 908 | 12 476 |
| Amounts in TSEK | Apr-Jun | Apr-Jun | Jan-Jun | Jan-Jun | Full year |
| 2018 | 2017 | 2018 | 2017 | 2017 | |
| Interest-bearing part of other current liabilities | 1 501 | 741 | 1 501 | 741 | 1 466 |
| Non interest-bearing part of other current liabilities | 16 669 | 5 138 | 16 669 | 5 138 | 5 389 |
| Other current liabilities | 18 170 | 5 879 | 18 170 | 5 879 | 6 855 |
| Amounts in TSEK | Apr-Jun | Apr-Jun | Jan-Jun | Jan-Jun | Full year |
|---|---|---|---|---|---|
| 2018 | 2017 | 2018 | 2017 | 2017 | |
| Liabilities to credit institutions | 148 735 | 100 000 | 148 735 | 100 000 | 150 000 |
| Debt to shareholders | - | 50 000 | - | 50 000 | - |
| Interest-bearing part of other long-term liabilities | 11 716 | 13 908 | 11 716 | 13 908 | 12 476 |
| Interest-bearing part of other current liabilities | 1 501 | 741 | 1 501 | 741 | 1 466 |
| Interest-bearing liabilities | 161 953 | 164 649 | 161 953 | 164 649 | 163 942 |
| Cash and cash equivalents | -5 731 | -14 905 | -5 731 | -14 905 | -11 550 |
| Net debt | 156 222 | 149 745 | 156 223 | 149 744 | 152 392 |
Equity ratio is a measure that the company considers important for creditors who want to understand the company's long-term ability to pay. The company defines equity ratio as equity and untaxed reserves (less deferred tax), in relation to the balance sheet total.
| Amounts in TSEK | Apr-Jun | Apr-Jun | Jan-Jun | Jan-Jun | Full year |
|---|---|---|---|---|---|
| 2018 | 2017 | 2018 | 2017 | 2017 | |
| Equity | 376 663 | 388 634 | 376 663 | 388 634 | 387 105 |
| Balance sheet total | 609 261 | 640 676 | 609 261 | 640 676 | 625 390 |
| Equity ratio | 62% | 61% | 62% | 61% | 62% |
Profit attributable to holders of ordinary shares in the Parent Company divided by the weighted average number of outstanding ordinary shares during the period, in accordance with IFRS.
Cash flow from operating activities after investments and changes in working capital. Direct reconciliation against financial report possible.
Financial income minus financial expenses. Direct reconciliation against financial report possible.
6 November 2018 Interim report, 1 Jul – 30 Sep 2018 February 2019 Year-end report, 2018
For additional information, please contact: Christian Kinch, CEO: +46 8 440 58 80 Cecilia Edström, CFO: +46 72 226 23 28
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, 8 August 2018
Jan Ståhlberg Mia Arnhult
Chairman Board member
Board member 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 70 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 2018-08-08, at. 08.00.
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