Interim Report January – March 2018
First quarter in brief
- Net sales rose by about 30 percent to SEK 6,246k (4,794k).
- Gross margin* was 90 (89) percent.
- Operating result before depreciation and amortization (EBITDA)** totaled SEK -16k (-2,534k).
- Operating result improved by SEK 1,495k and totaled -1,368k (-2,863k).
- Comprehensive income for the period improved by SEK 1,476 to a loss of SEK 1,396k (loss: 2,872k).
- Comprehensive income per share, basic and diluted, improved by SEK 0.03 to SEK -0.02 (-0.05).
- Cash flow from operating activities was a loss of SEK2,024k (loss: 1,586k).
*Excl. other revenue and “Change in inventory, finished goods”
** Genovis has chosen to apply IFRS 16 in advance, as well as the simplification rule regarding short-term leases. Consequently, this will not have any effect on the figures reported for 2017. Costs for rent and leases are therefore recognized under depreciation and amortization and beginning in 2018 will not affect EBITDA for the Group.
Events after the end of the period
Genovis has hired Kevin Cook as Senior Application & Market Area Manager for the subsidiary Genovis Inc. Kevin Cook has 20 years of experience with mass spectrometry from both the pharmaceutical and technology industries. Over the past ten years Kevin has worked with marketing and sales of instruments, consumables and reagents for mass spectrometry, which is a good fit with the market for Genovis’ products.
Genovis launched a new product, GlycOCATCH™. The new product, GlycOCATCH, is a tool for fast, simple and specific purification of proteins or peptides and is aimed at pharmaceutical and diagnostics companies, as well as universities that work with O-glycosylated proteins. GlycOCATCH is designed to make these analyses easier, which has been requested by both industry and regulatory authorities..
Genovis carried out a directed share issue of 2,805,838 shares in accordance with the authorization granted by the Annual General Meeting on May 11, 2017. The issue was directed to a small group of qualified investors and raised SEK 10.1 million for the Company. The subscription price was SEK 3.60 per share.
Comments from Fredrik Olsson, Chief Executive Officer
2018 begins with strong momentum throughout the business
We continue to show strong growth in the first quarter of 2018. Our sales increased by 30 percent compared with the previous year and now amount to SEK 6.25k (4.8k). This means that we have now had sales growth for 14 consecutive quarters. Growth is exclusively organic as the number of orders continues to rise sharply and the repeat purchase rate continues to develop positively for the entire product portfolio. Just as for our industry colleagues and as we have seen in past years, we experience seasonal variations, with the first and third quarters somewhat weaker on the revenue side. Consequently, it is particularly encouraging that EBITDA was significantly improved this quarter, compared with the previous year, SEK -16k (-2,053k*). Our gross margin remains at an expected high level of 90 percent. We can also report that all geographic markets grew during the quarter.
Our strategy to expand our presence in key markets remains unchanged. After the end of the period we signed an additional distribution agreement, this time with Chayon Laboratories in South Korea, a market where biopharmaceuticals are on the rise. Our goal is to have agreements with partners in all key markets in Asia before the end of the year. In the next phase we are focusing primarily on Japan, Singapore and Taiwan.
We are clearly in a growth phase, where our expanding product portfolio lays the foundation for new business in all markets. We want to take advantage of and accelerate this strong momentum. Consequently, the Board of Directors decided to carry out a rights issue in order to rapidly gain guaranteed access to additional expansion capital. With the capital raised from the rights issue we can immediately strengthen our sales and marketing organization, thereby ensuring continued development of our popular patent-protected products and so continue on the proactive path of our growth journey. The rights issue is a clear acknowledgement of the quality of the Company and increases the value for Genovis shareholders.
As part of our strategy to increase our sales and marketing initiatives we have recruited Kevin Cook for our US sales organization at Genovis Inc. Kevin Cook has extensive experience in marketing and sales in mass spectrometry from both the instrument side and the reagents side, as well as great technological know-how combined with experience from the customer side. With a wide network of contacts, Kevin will focus on potential customers in the biopharmaceutical industry on the west coast of the US, at the same time that his experience will support us in our future product and application development.
In addition to this recruitment in the US, we intend to strengthen our marketing organization with additional employees. With our base in Lund, we are preparing for continued expansion, both in our existing markets and by developing the business in the Asian markets together with our partners and new distributors. Our continued success at Genovis also improves prospects for hiring top-notch talent. We receive many qualified applicants to our positions, including a large number of spontaneous applications, which strengthens us in our ambitions for the future.
At the end of April Genovis launched its first product for enrichment of proteins prior to analysis, GlycOCATCH™. In simple terms, this product facilitates and speeds up analysis processes, which has been requested by the industry, academia and regulatory authorities. This is our first product in this segment and it will be exciting to follow developments moving forward. Just as with many of our previous launches, we expect that GlycOCATCH will mainly begin to be used in the discovery phase, after which it will gradually be integrated into other parts of the value chain.
With a good start to the year from the first quarter, I see great opportunities to improve our business moving forward. The signs at the beginning of the second quarter indicate sales growth will continue to be strong. With our current efforts to further promote growth by enhancing our organization with new talent and several additions to the product portfolio, I look forward to working with my colleagues to strengthen our position as an innovative partner to the global pharmaceutical companies and driving developments at Genovis forward.
* EBITDA for 2017 was adjusted to allow for a fair comparison on the EBITDA level since the Company chose to apply IFRS 16.
For more information, please contact: Fredrik Olsson, CEO, Genovis AB Tel: 0046 (0)46 -101233 email@example.com
Genovis’ business concept is to apply its knowledge and imagination to design and provide innovative tools for the development of the drugs of the future. Today Genovis sells several enzyme products known as SmartEnzymes all over the world in innovative product formats that facilitate development and quality control of biological drugs.
The Group consists of Genovis AB and the wholly owned subsidiary Genovis Inc. (USA). Genovis shares are listed on Nasdaq First North Stockholm and Erik Penser Bank is the Company’s Certified Adviser. T: +46 (0)8-463 83 00.
This information is information that Genovis AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, by the contact person set out above, on May 15, 2018.
This press release is a translation of the Swedish original. In the event of any discrepancy between this translation and the Swedish original, the Swedish version shall prevail.