Interim report January - June 2011

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JANUARY – JUNE 2011
- Net sales amounted to SEK 64.9 million (45.4)
- EBITDA was SEK -9.2 million (0.4)
- Earnings per share totaled SEK -0.48 (-0.17) before dilution

APRIL – JUNE 2011
- Net sales amounted to SEK 37.5 million (25.9)
- EBITDA was SEK -5.5 million (-0.5)
- Earnings per share totaled SEK -0.31 (-0.11) before dilution

HIGHLIGHTS

Continued top-line growth
- Net sales growth of 43 % compared to first six months in 2010
- Increase in market share behind revenue growth

Profitability affected by growing organization and currency movements
- Number of employees now 71 (50)
- Currency effect of SEK -0.5 million (3.2) during first six months

Acquisition of Biophausia’s generic company BMM Pharma AB
- Portfolio of 19 niche products in the Nordic markets expected to generate net sales of
about SEK 30 million on annual basis
- Purchase price of approximately SEK 38 million

 

BUSINESS UPDATE
During the first six months of 2011, Bluefish has continued to grow the local portfolios by launching additional products. After product introductions on Ireland in March and in France in July, Bluefish products are now available in 19 European markets. In contrast to 2010, when Bluefish key focus was to enter additional European markets, during 2011, the company has expanded its marketing operation with the focus to increase market share in all markets.

Net sales for the first six months 2011 amounted to SEK 64.9 million, an increase by 43% compared to the first half of 2010. At the same time, operating costs have increased by 78% compared to the corresponding period last year. To meet the increased demand that results from managing a broad European presence with rapid launches of new products and expansion of the total product portfolio, the company has further expanded its workforce, and Bluefish now has a total of 71 employees compared to 50 at the end of June last year. The increased size of the organization explains the increase in operating costs.

During 2010, the company started two new initiatives to secure sustainable growth of the company. The first was to start development of its own product formulations within chosen niche segments. Today, Bluefish has 5 niche products under development. The second initiative was a preferred partner program with other pharmaceutical companies seeking a partner to market and sell products in Europe on a profit-split basis. Bluefish has succesfully entered into another nine of these distribution agreements during the first six months of 2011, resulting in a substantially increased portfolio of distribution products. Bluefish is expecting the market approval for Levetiracetam by the end of September 2011, after this, the company will have received market approvals for all of its 31 licensed products. Looking at the whole product portfolio, it currently consists of 49 products, compared to 33 at the end of June 2010.

The company’s ambition is to balance growth opportunities with a consistency of EBITDA profitability. However, the effect of new market activities typically has an impact on the cost structure approximately six to nine months prior to the effect on the topline. In addition, compared to the same period last year, when currencies benefited net result by SEK 3.2 million, during the first half of 2011, the corresponding amount was SEK -0.5 million, i.e. a net difference of SEK -3.7 million. As a result, EBITDA for the first six months amounted to SEK -9.2 million, compared to SEK 0.4 in the corresponding period last year.

The increased magnitude of the company’s business has led to a significant increase in working capital through increased inventory during the period. Cash flow from operating activities amounted to SEK -61.5 million during the first six months of 2011, whereof change in working capital amounted to SEK -50.0 million. The increase is explained by a generally broader product offering in all of Bluefish 19 markets, and an increase in inventory of products that will be launched during the coming months. The inventory level is expected to stabilize during the second half of 2011.

Outlook
As market shares increase and the product offering grows, Bluefish expects a gradual increase in net sales throughout the year. For 2011, the company expects net sales to reach SEK 150 million, excluding the BMM portfolio (described in more detail under Key events after the period’s end), corresponding to an annual growth of approximately 60%. With the expected increase in net sales during the second half of 2011, gross profit is expected to match the operating costs towards the end of the year.

For more information, please contact:

Karl Karlsson, President and CEO, tel. +46 (0) 8 5191 1600


Susanna Urdmark, CFO, tel. +46 (0) 8 5191 1600

 

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