CellaVision — Interim / Quarterly Report 2012

Feb 14, 2013

Growth of 9 per cent and strengthened market position through more partners

January 1 – December 31, 2012

• Net sales increased by 9 % to SEK 169.5 million (155.4).
• Operating profit increased to SEK 20.7 million (17.8).
• Profit before tax increased to SEK 18.6 million (18.5).
• Earnings per share were SEK 0.27 (0.61).¹
• Cash and cash equivalents were SEK 46.2 million (56.8) at the end of the period.
• Global distribution agreement with one more partner, Siemens.
• Increased activities in China; a market office in Shanghai has been established.
• New system for veterinary medicine in North America first order received.
• New tool for small laboratories in networks launched, CellaVision® Image Capture System.
• The Board of Directors proposes an unchanged dividend of SEK 0.40 per share for 2012.

October 1 – December 31, 2012

• Net sales increased by 9 % to SEK 50.4 million (46.4).
• Operating profit was SEK 6.8 million (6.9).
• Result before tax was SEK 6.1 million (7.4).
• Earnings per share were SEK -0.13 (0.31).¹

Comments by CellaVision's CEO Yvonne Mårtensson:

"Sales in the fourth quarter were in line with our expectations.

All geographical regions report growth during the year but variations between quarters have been significant. In the last six months of the year investments in medical devices were affected by the generally harsh economic climate and CellaVision's volume growth was subdued. Fewer new investments in capital goods mean a longer investment cycle for laboratories and more delayed business transactions.

Despite a weak global economy CellaVision reports sales growth of 9 per cent for the full year 2012, which is lower than our growth target and the sales increase we are used to. However it was gratifying that the operating margin for the year rose above 12 per cent.

We have strengthened our position in the market and underlying demand for our products is increasing. A stable base of well-established products and sales channels with several partners contributes to this. Our partners' confidence in us and our products confirms that our solution has become a standard method for digital microscopy of blood and other body fluids.

However, uncertainty in markets important to CellaVision - North America and Europe makes growth prospects for 2013 difficult to assess. Our assessment is that the weak world economy, not least in Europe, has affected hospital laboratories' purchases of equipment and is now having an impact on our distributors' demand. This will affect CellaVision's growth in the short term. In the first quarter of this year we therefore expect lower income and negative earnings.

For the rest of the year, however, prospects are good for CellaVision's continued profitable growth. We continue to grow the company by investing in our own organisation, addressing the market and developing products. We see ahead of us a number of important business transactions that will further strengthen the company for the future. I have great confidence in CellaVision's continued positive development."

Net sales + 9 %

Operating profit SEK 20.7

million Operating margin 12.2 %

Operating profit (Q4) SEK 6.8 Net sales (Q4) + 9 %

"Continuing to grow the company"

Key ratios

(SEK million)	Oct-Dec 2012	Oct-Dec 2011	Full year 2012	Full year 2011
Net sales	50.4	46.4	169.5	155.4
Gross profit	31.7	32.2	110.1	101.4
Operating profit	6.8	6.9	20.7	17.8
Operating margin, %	13.5	15.0	12.2	11.5
Profit before tax	6.1	7.4	18.6	18.5
Return on operating capital	–	–	46	44
Cash flow for the period	-6.4	13.8	-10.6	21.0

Sales, earnings and investment

January 1 – December 31, 2012

Net sales for the Group rose during 2012 to SEK 169.5 million (155.4), an increase of 9 % compared with the previous year. The gross margin for the year was 65 % (65).

The Group's operating profit for the year rose to SEK 20.7 million (17.8). Total operating expenses for the year were SEK 89.4 million (83.7).

Capitalized expenditure for development projects during the year was SEK 9.3 million (4.5).

Investments in property, plant and equipment during the period amounted to SEK 2.1 million (1.4).

October 1 – December 31

Net sales for the Group in the fourth quarter of 2012 were SEK 50.4 million (46.4), an increase of 9 % compared with the same period in 2011.

The gross margin for the quarter was 63 % (69). CellaVision usually has large gross margin variations from quarter to quarter. This is dependent on the share of sales via distributors or via CellaVision's own sales companies, the product mix and exchange rates.

The Group's operating profit for the fourth quarter amounted to SEK 6.8 million (6.9).

Total operating expenses for the quarter were SEK 24.9 million (25.3).

CellaVision is conducting several development projects, aimed at strengthening the product portfolio in relation to customers in the field of hematology. Capitalized expenditure for development projects was SEK 2.7 million (1.4) for the quarter.

Investments in property, plant and equipment during the quarter amounted to SEK 0.9 million (0.6).

Net sales SEK 169.5

Net sales SEK 50.4

Sales per quarter and rolling 12 months (SEK million)

Development in geographical markets

In 2012 North America accounted for the largest percentage of sales, 60 % (61), Europe accounted for 33 % (33), and Asia and the Pacific region for 7 % (6). All regions have had an unevenly distributed flow of orders during the year. The North American market accounted for the greatest sales growth during the year, where the main part of sales was via CellaVision's distributors in the USA.

In the fourth quarter North America accounted for 57 % (68) of sales, Europe for 29 % (27), and Asia and the Pacific region for 14 % (5). Asia and the Pacific region accounted for the greatest sales growth in the quarter. The year's increased activities in China resulted in more sales via the region's distributors.

Sales in international markets are mainly in USD and EUR, which means that the company's sales and results are impacted by changes in these currencies. The company hedges 50-75 per cent of planned currency flows to compensate for any foreign exchange fluctuations.

Like others in the medical devices industry selling capital equipment, CellaVision's inflow of orders is unevenly distributed over the year, depending on the distributors' sales, inventory levels and contracted volumes. Consequently, the variation in order volume in individual quarters may be great in the different geographical markets.

Net sales per geographical market, SEK million

North America

All in all, developments in the North American market were positive in 2012. Sales were SEK 101.8 million (94.6), an increase of 8 %. The increase in dollars was 7 %.

Growth slowed down during the year, mainly due to long-drawn-out decision-making processes with resulting longer sales cycles. There is still great uncertainty about coming political decisions in the USA. This also affects Canada, since the economy there normally lags slightly behind the USA in the economic cycle. In the fourth quarter sales in the region were SEK 28.6 million (31.5), a decrease of 9 % in comparison with the previous year. In US dollars sales fell by 7 %.

In the USA CellaVision is working with several distribution channels; Sysmex, Beckman Coulter and its own sales organization, which effectively improves the company's visibility and penetration of the market. In general, demand for the larger analyzer, the CellaVision DM96, is great, since capacity requirements are high at the US laboratories. In 2012 interest in the analyzer for medium-sized hospitals, CellaVision® DM1200, increased and during the year accounted for about a fourth of the North American sales.

To increase the possibility of greater market penetration in the USA, in 2012 CellaVision entered into an agreement with another distribution partner, Siemens Healthcare Diagnostics. With access to more salespeople CellaVision will have a broader geographical reach and create interest in its products faster. The agreement with Siemens came into force on January 1, 2013.

In Canada, where CellaVision sells directly via its own organization, sales have been subdued during the year due to uncertainty about economic developments. Many investment decisions have been slowed down in 2010-2011, due to appreciable caution in Canadian health care funding.

In August CellaVision received its first order for the analyzer that was introduced for the veterinary market in North America at the start of the year. The order covers installation of the CellaVision® DM96 Vet at a major laboratory chain operating in several places in the USA and Canada. The volume of samples at these laboratories is high and the need is great for an effective method of analysis. The product is an analyzer for human samples adapted for veterinary use.

Europe, the Middle East and Africa (EMEA)

The region's sales during the year developed well and increased to SEK 55.3 million (51.2), an increase of 8 %. In euros the increase was 12 %.

Sales increased in the fourth quarter to SEK 14.8 million (12.7), an increase of 16 %. In euros sales increased by 20 %.

Volumes in the European countries developed very well in the first six months, but slowed down drastically in the third quarter, recovering towards the end of the year. The overall volume growth was 12 per cent in local currency. The weaker trend in the second half of the year is largely explained by the strained financial situation in most European countries, which has meant that many hospitals are holding off on major investments. Fewer new investments in capital goods mean that the investment cycle is longer for laboratories and that more business transactions are being delayed, which has affected demand from distributors in the short term.

For a couple of years there has been a high level of activity to transfer from manual microscopy to CellaVision's method in European countries, where the distributor Sysmex is the leading player. Generally speaking, the European laboratory market is not as consolidated as the American, but more fragmented, with mid-size laboratories and lower sample volumes. Interest in CellaVision's digital solutions is particularly great in Germany, France, Benelux, Spain, the Czech Republic and the United Kingdom. Sales are for example related to the continuing strong demand for the analyzer for mid-sized test sample volumes, the CellaVision DM1200, which since 2011 has accounted for more than half of the number of analyzers sold in the region. In the Middle East interest in the company's digital solution is gradually rising.

Parallel distribution channels create opportunities

As part of CellaVision's long-term growth strategy, from 2013 CellaVision will also be working with parallel sales channels in Europe. A distribution agreement was signed with Siemens Healthcare Diagnostics in 2012.

In the Nordic region CellaVision signed separate cooperation agreements during the year with Siemens Healthcare Diagnostics, Beckman Coulter and Abbott. CellaVision has also been collaborating for many years with Sysmex in the Nordic countries. CellaVision is responsible for all service and support in the region.

During the year, CellaVision's new product for collaborating laboratories, the CellaVision® Image Capture System, aroused interest at trade fairs and seminars in Europe. There is interest in the product among hospital groups that want to improve efficiency of collaboration in assessing samples and give local laboratories fast access to expertise. The local laboratories use the product in combination with existing microscopes and within their network they can send digital images of the blood sample for examination where there are more resources and a CellaVision DM analyzer. The product helps hospital groups to work faster and achieve more consistent laboratory results.

Asia and the Pacific region

Marketing in Asia and the Pacific region is in process of being built up and so far the region accounts for a limited part of CellaVision's total sales; about 7% for the full year in 2012. CellaVision assesses, however, that in the long term, the markets primarily in China, South East Asia and Japan will have good potential for development.

Sales in the region progressed well during the year and were SEK 12.4 million (9.6), an increase of 30 %. The sales successes can be mainly attributed to sales of analyzers in China, where cooperation between the region's distributors and CellaVision's own market organization went well during the year. Sales in the region increased in the fourth quarter to SEK 7.0 million (2.2).

China is the fastest growing market in pharmaceuticals and medical technology and is currently estimated to be the third largest market in the world after the USA and Japan. To attain broad coverage and address the market effectively, CellaVision has been working with several partners in China since 2010; Sysmex, Beckman Coulter and Vastec. In 2012 CellaVision increased its activities in China by establishing a market office in collaboration with the Swedish Trade Council in Shanghai. Through increased local presence, besides giving support to its distributors, the company can gain knowledge of the Chinese market and increase its visibility. Two people have been employed and are now supporting the company's three distributors in their marketing and sales work. In the third and fourth quarters CellaVision was active in the market and among other things gave presentations at two important trade fairs in Suzhou and Beijing. Our employees are now seeking important opinion formers among customers to build awareness of CellaVision's technology and brand. Initially CellaVision's solution will be marketed to training and research hospitals with more than 500 beds.

In the fourth quarter CellaVision obtained Chinese re-registration of the CellaVision DM96. The delays in the registration procedure, which became known in the second quarter, had no impact on sales in China in 2012.

Development of demand in Japan continues to be subdued in 2012 but some improvement could be seen in the second half of the year, with a number of analyzer sales via the distributor Sysmex. In parallel with Sysmex, CellaVision's own sales organization is continuing to increase knowledge and interest in CellaVision's products, for example through presentations of customers' study results at seminars and industry fairs.

Increased sales in China.

Research and development

CellaVision is conducting several development projects, aimed at strengthening the product portfolio in relation to customers in the field of hematology. In 2012 the company launched the following products:

In February an analyzer for the veterinary markets in the USA and Canada was launched. There is interest in the product mainly among large veterinary laboratories with high test sample volumes and automation needs.

The CellaVision® Image Capture System, the new product for laboratories in networks, was ready to be sold in the market in Europe in mid-October after the clinical studies were completed. The product is supplementary to the analyzers and is intended for small laboratories in a hospital network. The introduction to other markets will take place as the company obtains the relevant market approvals.

A new version of the CellaVision analysis software, CellaVision® DM Software 3.2.1 was completed in the autumn. This version includes functions for working together with the Image Capture product. At the same time the CellaVision® Remote Review Software was approved for installation in a Citrix environment. The product is intended for organizations that use Citrix for software distribution and IT administration.

CellaVision continuously capitalizes costs for new development. During the year capitalized expenditure for development projects amounted to SEK 9.3 million (4.5).

Financing

The funds at the Group's disposal at the close of the year amounted to SEK 51.2 million (61.8), of which SEK 46.2 million (56.8) was cash and cash equivalents and SEK 5.0 million in unutilized credit.

The year's cash flow from operating activities was SEK 11.5 million (32.0). The cash flow from operating activities for the fourth quarter was SEK -1.8 million (12,9). As an effect of high invoicing at the end of the reporting period the operations had a large amount of capital tied up in trade receivables over the balance sheet date.

Total cash flow for the year was SEK -10.6 (21.0), which is due to the binding in trade receivables and to the dividend of SEK 9.5 million distributed by the company in the second quarter.

Taxes

Of the year's tax expense of SEK 12,1 million, SEK 7.2 million is a decrease in deferred tax assets due to the corporate tax rate reduction to 22 per cent as of 2013. This also affects the earnings per share, which excluding this item is SEK 0.57 for the full year 2012 and SEK 0.17 for the fourth quarter of 2012.

Parent company

Parent company sales during the year were SEK 161.9 million (146.6). Profit before tax was SEK 15.5 million (13.8). Parent company sales for the fourth quarter were SEK 51.6 million (43.4). The profit before tax for the quarter was SEK 4.7 million (-1.6).

The parent company's investments in property, plant and equipment and intangible assets during the year amounted to SEK 10.7 million (5.7) and the cash flow was SEK -6.6 million (15.8).

In other respects please refer to the information for the Group.

Two new products during the year

Unappropriated funds SEK 51.2

Cash flow for the year SEK -10.6

Personnel

The number of employees of the Group, restated as full-time positions, was 66 (61) at the year-end. Of these, 37 (35) were men and 29 (26) women.

In 2012 the management team was augmented with Ron Hagner as VP Sales and Business Development and Sven-Åke Henningsson, member of the Board of CellaVision, as acting Chief Financial Officer until a permanent successor has been appointed. Peter Wilson was appointed as new head of the subsidiaries in the USA and Canada.

At the beginning of 2013 Maria Morin was appointed as VP Human Resources and Karin Dahllöf as VP Sales and Marketing. Tina Dackemark Lawesson was appointed as Director of Investor Relations.

Significant events after the period close

There are no significant events to report.

Other information

Group

On December 31, 2012 the Group consisted of the parent company and the wholly-owned subsidiaries CellaVision Inc. (USA), CellaVision Canada Inc. (Canada), CellaVision Japan K.K. (Japan) and CellaVision International AB.

Dividend

The Board of Directors proposes to the Annual General Meeting that a dividend of SEK 0.40 per share (0.40) be distributed for 2012.

CellaVision has decided not to announce a dividend policy for coming years since the company is undergoing strong growth and still requires operational investments. A decision on share dividend will instead be made from year to year, based on the company's development and capital requirements for financing the company's intended growth.

Accounting policies

The consolidated accounts are prepared in accordance with International Financial Reporting Standards, IFRS. The interim report for the Group was prepared in accordance with IAS 34, Interim Financial Reporting, the Annual Accounts Act and in accordance with the Stockholm Stock Exchange rules and regulations for companies listed on NASDAQ OMX Stockholm. The interim report for the parent company was prepared in accordance with the Annual Accounts Act and the Swedish Financial Reporting Board recommendation RFR 2, Accounting for Legal Entities. The interim report has been prepared in accordance with the accounting policies and valuation methods presented in the Annual Report for 2011. New standards and interpretations that came into force on January 1, 2012 have not had any impact on CellaVision's financial reporting for the interim report period.

Segment reporting

CellaVision's operations only comprise one operating segment; analyzers for digital microscopy in the field of hematology, and therefore reference is made to the income statement and balance sheet regarding operating segment reporting.

Information concerning risks and uncertainties

Reduced demand and changes in exchange rates constitute uncertainties but not material risks. For a more detailed description of the risks and uncertainties facing CellaVision, please refer to the risk and sensitivity analysis in the Annual Report for 2011.

Number of employees

66

Review

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

Related party transactions

In 2012 CellaVision has had transactions with Member of the Board Sven-Åke Henningsson, who is the company's acting Chief Financial Officer on a consultant basis. The transactions are priced on market terms and have not had any material impact on the company's financial position and performance. The transactions amounted to SEK 0.03 million. No other related party transactions have taken place with any legal or natural person.

The Nomination Committee for the Annual General Meeting in 2013

In accordance with a resolution of the 2012 Annual General Meeting the Nomination Committee shall consist of the Chairman of the Board and a representative of each of the four largest shareholders in terms of voting rights at the end of September 2012. For the 2013 Annual General Meeting the Nomination Committee consists of Lennart Hansson, Chairman (Stiftelsen Industrifonden), Aleksandar Zuza (Metallica Förvaltnings AB), Christer Fåhraeus (Christer Fåhraeus and companies), Caroline af Ugglas (Skandia) and Chairman of the Board Lars Gatenbeck.

Shareholders wishing to submit proposals to the Nomination Committee can send an email to ir@cellavision.com, or ordinary mail to: The Nomination Committee, CellaVision AB, Ideon Science Park, SE 223 70 Lund

Annual General Meeting 2013

CellaVision's Annual General Meeting in 2013 will be held in Lund on April 24, 2013 at 16.00.

Shareholders wishing to have matters considered at the Annual General Meeting can send a written request by email to bolagsstamma@cellavision.se or ordinary mail to: The Board of Directors, CellaVision AB, Ideon Science Park, SE 223 70 Lund. The request must have been received at the latest seven weeks before the Annual General Meeting in order to be included in the notice to attend and thus the agenda of the Annual General Meeting.

Financial calendar

Interim report January – March:	24 April 2013
Annual General Meeting 2013:	24 April 2013
Interim report January – July:	July 17, 2013
Interim report January – September:	October 24, 2013
Year-end bulletin 2013:	February 13, 2014

The annual report for 2012 will be available on CellaVision's website in Week 14, www.cellavision.com.

The interim reports and annual report are available at www.cellavision.com.

The Board of Directors and the CEO certify that the year-end report provides a fair review of the parent company's and the Group's business, financial position and performance and describes material risks and uncertainties to which the parent company and the companies in the Group are exposed.

Lund, February 14, 2013

Lars Gatenbeck Chairman of the Board Christer Fåhraeus Member of the Board

Lars Henriksson Member of the Board Roger Johanson Member of the Board

Sven-Åke Henningsson Member of the Board

Torbjörn Kronander Member of the Board

Anna Malm Bernsten Member of the Board

Yvonne Mårtensson President/CEO

Questions concerning the report can be addressed to:

Yvonne Mårtensson, CEO, CellaVision AB Tel: +46 708 33 77 82. Email: yvonne.martensson@cellavision.se

Sven-Åke Henningsson, Acting CFO, CellaVision AB Tel: +46 705 93 43 81. Email: ir@cellavision.se

Publication

The information in this interim report is disclosed by CellaVision AB (publ) pursuant to the Securities Market Act and/or the Financial Instruments Trading Act. The information was released for public disclosure on February 14, 2013 at 8.20.

Address

CellaVision AB (publ), corporate identity number: 556500-0998 Post: Ideon Science Park, SE 223 70 Lund, Visitors: Scheelevägen 19A, Ideon, Lund Telephone: +46 286 44 00, Fax: +46 46 286 44 70, Email: info@cellavision.com

Web: www.cellavision.com, Blog: blog.cellavision.com, App: CellAtlas

CellaVision is listed on the NASDAQ OMX Stockholm, Small Cap list. The company is traded under the ticker symbol CEVI and ISIN code SE0000683484.

Consolidated Income Statement in Summary

All amount in ' 000 SEK	Oct-Dec 2012	Oct-Dec 2011	Jan-Dec 2012	Jan-Dec 2011
Net sales	50 405	46 444	169 512	155 402
Cost of goods sold	-18 709	-14 202	-59 456	-53 991
Gross profit	31 696	32 242	110 056	101 411
Sales and marketing expenses	-11 531	-10 591	-38 859	-35 281
Administration expenses	-7 459	-8 033	-29 060	-27 013
R&D expenses	-5 892	-6 672	-21 435	-21 407
Other operating income	-	0	-	90
Operating result	6 814	6 946	20 702	17 800
Interest income and financial exchange rate gains	53	416	225	1 113
Interest expense and financial exchange rate losses	-736	0	-2 376	-399
Result before income tax	6 131	7 362	18 551	18 514
Tax	1) -9 325	-13	1) -12 100	-3 881
Net result	-3 194	7 349	6 451	14 633

1) The translation effect of deferred tax assets is 7.2 MSEK due to the corporate tax rate reduction from 26.3 per cent till 22 percent

Per share data	Oct-Dec 2012	Okt-Dec 2011	Jan-Dec 2012	Jan-Dec 2011
Comprehensive result for the period	-4 108	8 549	8 386	12 645
Sum of other comprehensive income:	-914	1 200	1 935	-1 988
Translation difference in the group	112	494	31	-480
b)Translation difference
Income tax relating to financial assets	509	-252	-537	538
Revaluation of financial assets	-1 509	1 338	2 342	-99
Reclassified to operating result	-26	-380	99	-1 947
a) Financial assets at fair value
Other comprehensive income:

Earnings per share, SEK */	-0.13	0.31	0.27	0.61
Earnings per share, before translation of deferred tax SEK */	0.17	0.31	0.57	0.61
Equity per share, SEK	5.24	5.29	5.24	5.29
Equity ratio, %	70%	71%	70%	71%
Number of shares outstanding	23 851 547	23 851 547	23 851 547	23 851 547
Average number of shares outstanding	23 851 547	23 851 547	23 851 547	23 851 547
Stock exchange rate, SEK	14.70	13.25	14.70	13.25

*/ In relation to net profit and average outstanding shares

Quarterly Results

All amount in ' 000 SEK	Q4 2012	Q3 2012	Q2 2012	Q1 2012	Q4 2011	Q3 2011
Net sales	50 405	50 405	43 360	40 415	46 444	36 455
Gross profit	31 696	31 696	28 698	27 071	32 242	22 633
Gross margin in %	63	63	66	67	69	62
Overhead cost	-24 882	-24 882	-24 152	-21 711	-25 296	-18 906
Operating result	6 814	6 814	4 546	5 360	6 946	3 727
Net result	-3 194	-3 194	3 110	2 643	7 349	4 991
Cashflow	-6 389	5150	-8 996	-347	13 775	361

Consolidated Balance Sheet in Summary

All amount in ' 000 SEK	2012-12-31	2011-12-31
Assets
Intangible assets	24 152	21 329
Tangible assets	2 693	2 015
Deferred tax	37 994	49 304
Financial assets	91	114
Inventory	16 356	14 450
Trade receivables	40 632	26 653
Other receivables	10 402	8 045
Cash and bank	46 236	56 818
Total assets	178 556	178 728
Equity and liabilities
Equity	124 912	126 067
Short term debt	20 802	18 425
Short term debt with interest	14 272	15 719
Trade payables	16 458	16 549
Other liabilities	2 112	1 968
Total equity and liabilities	178 556	178 728

Consolidated statement of changes in equity

All amount in ' 000 SEK	2012-12-31	2011-12-31
Balance at the beginning of the year	126 067	113 422
Dividend	-9 541	-
Net profit for the year	6 451	14 633
Comprehensive result for the period	1 935	-1 988
Balance at the end of the year	124 912	126 067

Cash Flow Analysis in Summary

All amount in ' 000 SEK	Oct-Dec 2012	Oct-Dec 2011	Jan-Dec 2012	Jan-Dec 2011
Result before taxes	6 131	7 362	18 551	18 514
Adjustment for items not included in cash flow	3 532	6 989	7 668	8 266
Taxes	-790	-	-790	-
Cash flow from operations before changes in
working capital	8 873	14 351	25 429	26 780
Changes in working capital	-10 715	-1 453	-13 936	5 235
Cash flow from operations	-1 842	12 898	11 493	32 015
Capitalisation of development costs	-2 724	-1 433	-9 256	-4 537
Aquisitions in financial non-current assets	10	1	23	19
Aquisitions in tangible non-current assets	-703	-638	-1 854	-1 373
Cash flow from investment activities	-3 417	-2 070	-11 087	-5 891
New loans and instalments of dept	-1 130	2 947	-1 447	-5 117
Dividend	0		-9 541
Cash flow from financing activities	-1 130	2 947	-10 988	-5 117
Total cash flow	-6 389	13 775	-10 582	21 007
Liquid funds at beginning of period	52 625	43 043	56 818	35 811
Liquid funds at end of period	46 236	56 818	46 236	56 818

Income Statement - Parent Company

All amount in ' 000 SEK	Okt-Dec 2012	Okt-Dec 2011	Jan-Dec 2012	Jan-Dec 2011
Net sales	51 561	43 423	161 949	146 640
Cost of goods sold	-27 593	-24 478	-78 322	-71 567
Gross profit	23 968	18 945	83 627	75 073
Sales and marketing expenses	-5 234	-3 858	-15 705	-11 276
Administration expenses	-7 459	-8 033	-29 060	-27 014
R&D expenses	-5 892	-6 672	-21 435	-21 407
Other operating income	-	0	-	90
Operating result	5 383	382	17 427	15 466
Write-downs of shares in group companies	-	-2 400	-	-2 400
Interest income and financial exchange rate gains	52	451	217	1 103
Interest expense and financial exchange rate losses	-753	0	-2 106	-360
Result before income tax	4 682	-1 567	15 538	13 809
Tax	1) -8 553	-180	1) -11 408	-4 224
Net result	-3 871	-1 747	4 130	9 585

1) The translation effect of deferred tax assets is 7.2 MSEK due to the corporate tax rate reduction from 26.3 per cent till 22 percent

Statement of Comprehensive Income

All amount in ' 000 SEK	Okt-Dec 2012	Okt-Dec 2011	Jan-Dec 2012	Jan-Dec 2011
Net result for the period	-3 871	-1 747	4 130	9 585
Other comprehensive income:	-	-	-	-
Sum of other comprehensive income:	0	0	0	0
Comprehensive result for the period	-3 871	-1 747	4 130	9 585

Balance Sheet - Parent Company

All amount in ' 000 SEK	2012-12-31	2011-12-31
Assets
Intangible assets	24 152	21 329
Tangible assets	2 126	1 737
Deferred tax	37 092	48 500
Financial assets	9 852	9 852
Inventory	12 286	10 457
Trade receivables	31 840	19 462
Receivables from group companies	12 642	16 499
Other receivables	7 762	7 260
Cash and bank	42 301	48 919
Total assets	180 053	184 015
Equity and liabilities
Equity	131 410	136 820
Short term debt	16 086	13 104
Short term debt with interest	14 272	15 719
Trade payables	16 173	16 404
Other liabilities	2 112	1 968
Total equity and liabilities	180 053	184 015

This is CellaVision

CellaVision's customers are large and mid-sized hospital laboratories and commercial laboratories, mainly in Europe and North America. In most countries sales are via the hematology companies Sysmex and Beckman Coulter, and from 2013 also Siemens. Products are sold directly in the Nordic countries and via subsidiaries in the US, Canada and Japan.

CellaVision's analyzers rationalize manual laboratory work and secure and support effective workflows and competency development within and between hospitals. In 2012 sales were SEK 169,5 million, corresponding to an increase of 9 %. The target is for sales to continue to increase by at least 15 % annually over an economic cycle.

The products replace manual microscopy in laboratories for blood analyses

After taking the sample, most blood tests are first analyzed using cell counters. If the sample shows signs of disease it is examined further to enable it to be used as a basis for diagnosis. This analysis is carried out automatically by CellaVision's analyzer. Without CellaVision's analyzer it must be done manually in a microscope.

What is driving growth?

The demand for CellaVision's products is strong and is due to increased efficiency and quality assurance requirements in the healthcare market, particularly in Europe and North America. Growing staff shortages in laboratory operations make CellaVision's automated products a highly interesting solution. The trend is for more hospitals to join together and collaborate in county council or hospital groups and seek tools to help them work more effectively and coordinate geographically spread services.

Five foundations for growth

CellaVision's overall growth strategy is based on global expansion, partnership and product development. Growth takes place through focusing on customers and the market. Our goal is for our analytical method to be standard at clinical laboratories throughout the world.

1. Customers. We currently target clinical laboratories in hematology with a growing need for automation. These are mainly found in Europe, North America and selected markets in Asia, mainly Japan, China and South East Asia.

2. Customer relations. Customers' purchasing behavior and needs direct our business. Only through satisfied customers can CellaVision continue to grow and develop. We work close to partners and end customers to ensure that our products meet market requirements for quality, function and user-friendliness. In customer surveys in the last two years the average score for reliability and user-friendliness of the product has been just over four, on a scale from one to five.

3. Sales channels. CellaVision reaches a broad geographical market by cooperating with strong, strategic and complementary partners with a local presence. We sell our products through the largest hematology companies in the world; Sysmex, Beckman Coulter and Siemens with a presence in more than 150 countries. Our own sales organizations in the Nordic area, the USA, Canada and Japan give continuous support and training to our partners during the sales process. We are constantly looking at new opportunities and forms of cooperation.

4. Product development. We will grow by broadening our product range for existing customer groups and by examining the possibility of commercializing new areas of analysis. We seek the best solution and preferably develop it ourselves, but the strategy also includes development through cooperation with partners. The emergence of competing companies in the market puts further demands on our future product development.

5. Company culture. Satisfied employees create the conditions for satisfied customers. It is important to us that our employees feel involved and motivated. Initiative and responsibility are important factors behind CellaVision's positive development. With leading-edge expertise in image analysis, artificial intelligence and automated microscopy, as well as a great quantity

of IT knowledge, we can develop solutions that bring considerable gains to our customers.

About CellaVision's geographical markets

North America

North America is CellaVision's most important growth market. Automation has long been the most important driver for meeting greater effectiveness requirements in North American laboratories. The growing staff shortages that exist in laboratory operations in the western world are particularly evident in the USA and Canada. Laboratories are therefore seeking solutions that ensure effective and secure management of large and growing sample volumes. On top of the requirements for reduced labor costs and shorter response times, sample volumes are growing due to the ageing population. The distributors Sysmex America, Beckman Coulter and Siemens sell CellaVision's products in the USA in parallel with CellaVision's own sales organization. In Canada CellaVision sells directly to the end customer.

Europe, the Middle East and Africa

Europe is CellaVision's largest market in terms of the number of analyzers sold to date. The transition from manual microscopy to CellaVision's method has been in full swing for a couple of years in the European countries. The laboratories are seeking solutions that can increase productivity and offset the coming years' shortage of biomedical analysts. In Europe the distributors Sysmex and Siemens sell CellaVision's products. Marketing work has just started in the Middle East and Africa.

Asia and the Pacific region

CellaVision products are also appreciated in Asia and the Pacific region for their time-saving and quality assurance potential. China, Hong Kong and South East Asia are markets with great long-term potential and demand is gradually starting to take off. In most markets CellaVision sells via the distributors Sysmex, Siemens and Beckman Coulter.

There are more than 20,000 hospitals in China. The target group for CellaVision's products consists of about 800 of China's largest hospitals. In 2012 CellaVision established a market office in China with two employees who support the region's distributors.

Japan is a market with important growth potential for CellaVision. Japanese health care is facing several challenges with funding problems as expenditure increases for an ageing population that at the same time demands better quality. Consequently, products that are well able to solve quality and efficiency problems are highly interesting to the Japanese health care sector. Since the start in 2008 CellaVision's subsidiaries have marketed the company's technology to the thousand or so major clinical laboratories in Japan. Since 2010 the distributor Sysmex also sells CellaVision's products.