INTERIM REPORT JANUARY 1 - SEPTEMBER 30
BIOHIT PLC. STOCK EXCHANGE RELEASE Nov. 15, 1999 at 9:00 a.m. 1 (8)
INTERIM REPORT JANUARY 1 - SEPTEMBER 30, 1999
The net sales of the Biohit Group (FIM 87.2 million) increased by 23%
compared with the previous year. The profit before extraordinary items
for the period (FIM 5.0) increased by 43%.
Net Sales
The net sales of the Biohit Group totalled to FIM 87.2 million, i.e.
demonstrating an increase of 23% compared with the previous year.
Foreign sales accounted for 96% (96% in 1998) of Group net sales. 78%
of sales was generated from the European countries, 14% from the
United States and 8% from Asia.
The growth in sales met the targets set and was generated primarily
due to an increased demand of electronic liquid handling equipment.
Profit
The operating profit totalled to FIM 5.2 million in the reporting
period, and to FIM 6.0 million in the preceding year. The operating
profits of 1998 and 1999 are not fully comparable as the operating
profit of 1999 is burdened with the amortization of FIM 4.0 million on
the goodwill associated with Locus genex Oy and Biohit Systems, Inc,
which have been part of the Biohit Group since December 30, 1998, and
with the operating losses of these companies during the reporting
period totalling to FIM 2.2 million. Without the goodwill amortization
the operating profit would have totalled to FIM 9.2 million, i.e. FIM
3.2 million (53%) higher than in the previous year.
In accordance with the decision of the taxation hearing of the
copyright trial pending in the U.K. the Company is obliged to pay FIM
3.7 million, which is included in short-term liabilities on Sept. 30,
1999. The amount payable exceeds the estimate made by outside experts
used (FIM 2.6 million), having been recorded in provisions in prior
financial years, by FIM 1.1 million. The FIM 1.1 million has been
expensed in the reporting period and, thus, reduces the profit of the
period.
The net financial expenses totalled to FIM 0.2 million. The decrease
of FIM 2.3 million consists of reduction in long-term liabilities and
increase in exchange rate gains.
The profit before extraordinary items of the reporting period was FIM
5.0 million (43%) which is 1.5 million higher than in the preceding
year.
The valuation method of inventories was changed in 1998 so that, in
addition to the variable costs, also their share of fixed
manufacturing and purchasing costs is included in their cost value.
The result-improving effect of this change over the preceding fiscal
years (FIM 1.0 million) was shown in 1998 under extraordinary items.
2 (8)
Financial Situation
The liquidity of Biohit continues to be strong. The directed share
issue, which was carried out in June 1999, has essentially
strengthened the financial position of the Biohit Group and made it
possible to start the planned investments and to repay long-term
liabilities. In the reporting period repayments of long-term and short
debts were FIM 7.7 million and FIM 6.0 million, respectively, out of
which FIM 6.6 million have been paid before the scheduled payment
dates.
The net cash flow provided by operating activities totalled to FIM
15.5 million.
The gearing ratio increased from 38.8% at the end of the previous year
to 63.9%.
Main Events of the Reporting Period
Research and Development
In the area of liquid handling the Company finished and entered into
production three new products, which are presented under the section
on marketing. As the Company focuses and invests on the research and
development of the liquid handling product range it is estimated that
the new electronic pipettor generation and the new disposable tip
product range will be launched during 2000.
In the area of diagnostics the development work of the test panel for
screening the risk of gastric cancer, peptic and duodenal ulcer
proceeds in accordance with the targets set. Certain parts of the test
panel as well as the test for lactose intolerance are currently
evaluated clinically. As to the area of instruments, which will form
together with the liquid handling and diagnostic products synergistic
analyzer systems, are in the stage of development.
Production
The liquid handling products and the disposable pipettor tips are
manufactured in the Kajaani and Helsinki plants. During the reporting
period the Company has planned to reorganize the operations in Kajaani
so that it will acquire new production technology and move into new
facilities. The diagnostic tests and instruments will be produced in
Helsinki. The Company has begun to offer more extensively and widely
maintenance services both in Finland and foreign subsidiaries for
Biohit-labelled products and also for those manufactured by other
companies. In connection with this Biohit continues to develop and
harmonize the international maintenance network for its liquid
handling products.
3 (8)
Marketing
Biohit launched three new products during the reporting period. The 12-
channel electonic pipettor for the volume range 50-1200 µl, which will
be targeted especially for the U.S. market, complements the
multichannel pipettor range of Biohit. The pipetting pump Midi+ has
been developed for the applications of cell biology and the chemical
industry in which graduated glass and plastic pipets are commonly
used. The adjustable mechanical pipettor for the volume range 0,1 -
2,5 µl has been developed especially for the dispensing needs of small
amounts of liquid in molecular biology. As all these products
complement the liquid handling product range of the Company, it is
believed that they will have a positive impact on the growth of the
market potential for liquid handling products.
During the reporting period the Company continued to invest in the
marketing of the Biohit product range and OEM-products. The Company
continued to train the marketing network especially with respect to
maintenance services. In the future the Company aims to strengthen the
operations of subsidiaries located in the most important market areas.
Year 2000 Compliance
The preparations for year 2000 compliance proceed according to plans.
The Company believes that before year end it has reached the necessary
level, and that year 2000 will not have such impacts which would harm
notably the operations, products or financial standing of the Company.
Prospects for Year 1999
The prospects for the liquid handling business area are favorable in
1999. It is estimated that the electronic pipettor market continues
its growth. Biohit's investments in production and research &
development as well as the new products form good prerequisites to
respond to the challenges posed by the markets. The development of the
international marketing network in 1999, especially in the area of
maintenance services for liquid handling products, has increased the
possibilities of the Company to develop its competitiveness.
As a result of the above, the Company expects that the net sales for
1999 will, according to the targets set, exceed the equivalent net
sales of 1998 although the net sales of the fourth quarter is
estimated to be at the same level as in the equivalent period last
year. The Profit for 1999 before goodwill amortizations of FIM 5.3
million is expected to be higher than in the previous year. After the
goodwill amortization the profit is estimated to be only somewhat
lower than in 1998.
4 (8)
Income Statement
1-9 1999 1-9 1998 Change Change 1-12 1998
MFIM MEUR MFIM MFIM % MFIM
Net sales 87.2 14.7 70.7 16.5 23 100.4
Operating expenses 82.0 13.8 64.7 17.3 27 92.2
Operating profit 5.2 0.9 6.0 -0.8 -13 8.2
Financial expenses
(net) 0.2 0.1 2.5 -2.3 -92 5.5
Profit before
extraordinary items 5.0 0.8 3.5 1.5 43 2.7
Extraordinary items 0.0 0.0 1.0 -1.0 -100 4.1
Profit before taxes 5.0 0.8 4.5 0.5 11 6.8
Profit for the period 3.4 0.6 4.3 -0.9 -21 6.5
The income taxes included in the Income Statement represent the
estimated taxes for the reporting period.
Balance Sheet
30.9.1999 30.9.1998 31.12.1998
Assets MFIM MEUR % MFIM % MFIM %
Fixed assets 52.1 8.8 35 25.0 29 57.5 53
Inventories and
financial assets
Inventories 15.1 2.5 10 12.0 14 14.6 13
Receivables 28.4 4.8 19 33.0 39 30.8 28
Liquid funds 54.7 9.2 36 14.9 18 6.7 6
Total assets 150.3 25.3 100 84.9 100 109.6 100
Liabilities and
shareholders'
equity
Shareholders'
equity 104.3 17.5 70 7.4 9 50.5 46
Minority interest 0.4 0.1 0 0.3 0 0.3 0
Provisions 2.1 2 2.7 3
Long-term
liabilities 21.0 3.5 14 36.9 43 28.8 26
Short-term
liabilities 24.6 4.2 16 38.2 45 27.3 25
Total liabilities
and shareholders'
equity 150.3 25.3 100 84.9 100 109.6 100
5 (8)
1-9/99 1-9/98 Change Change-% 1-12/98
Investments,
gross
Fixed assets MFIM 3.9 3.1 0.8 26 8.3
Staff, average 183 162 21 13 164
30.9.1999 30.9.1998 31.12.1998
Contingent liabilities and
pledges given, MFIM
Corporate mortgages 20.1 20.1 20.1
Pledges given 1.5 1.3 1.5
Total 21.6 21.4 21.6
Leasing commitments, MFIM 17.5 13.5 20.3
Ratios per share
Earnings per share, FIM 0.31 0.53 0.38
Shareholders' equity
per share, FIM 7.81 0.04 4.11
Derivative Contracts
The Group has no off balance sheet financial instruments.
Interest on Capital Loans
The unrecorded interest accrued on capital loans was FIM 3.2 million
on September 30, 1999 and FIM 2.8 million on December 31, 1998. In the
light of the development of the Group's result it is likely that part
of the interest accrued will be recorded as expense during fiscal year
1999.
The figures of the Interim Report are unaudited.
Helsinki, November 15, 1999
Board of Directors of Biohit Plc.
Biohit in Brief
Biohit manufactures liquid handling products and accessories and
develops diagnostic test systems for use in research, health care and
industrial laboratories. Biohit's main products are currently
electronic and mechanical liquid handling devices and their disposable
tips. Biohit, estalished in 1988, is the global market leader of
6 (8)
electronic pipettors. Moreover, the liquid handling product range
marketed by the Company is the widest in the world today.
The objective of Biohit is to maintain its technological leadership in
liquid handling products and in the long range develop into a major
supplier of complete, synergistic analyzing systems. These analyzing
systems will be comprised of liquid handling products, diagnostic
products, instruments and maintenance and training services supporting
them. The tests related with cancer diagnostics and the prevention of
cancer as well as the laboratory instruments are currenty under
development.
The net sales of the Biohit Group totalled to FIM 100.4 in 1998. The
customer base of Biohit includes numerous major companies in the field
of laboratory technology. For example, Biohit manufacures tailor-made
OEM-products complementing their analyzing systems for Becton
Dickinson, bioMérieux, Eppendorf, Johnson & Johnson and 3M. Biohit is
the leading manufacturer of electronic OEM -liquid handling devices in
the world.
Biohit's production facilities are located in Helsinki and Kajaani and
the subsidiaries in Finland, France, Germany, Italy, Japan, the U.K.
and the U.S.
Biohit became a public limited company in April 1999 and listed on the
New Market -list of the Helsinki Exchanges in June 1999.
Future Prospects
Biohit is a growth company which has established itself on the
international market place. The bases for the innovative business
concept are founded on both intellectual and real capital. The share
issue, which was carried out in connection with the listing of the
Company, produced approx. FIM 50 million in new capital. This capital
will be used to strengthen research & development, international
marketing and for possible acquisitions in the most important market
areas. Biohit's liquid handling products and the diagnostic test and
instruments, which are currently under development, form the basis for
the Company's business, which is anticipated to grow significantly,
especially after the tests and instruments have been launched during
2000 - 2001.
The Company anticipates that the product ranges of mechanical and
electronic pipettors will demonstrate significant growth after the new
products have been launched in 2000. Biohit believes that current
collaboration with companies such as Becton Dickinson, bioMérieux,
Johnson & Johnson and 3M and new similar projects will lead especially
to the strong growth in the demand for the electronic pipettors
manufactured by the Company. It is estimated that the value of the
global market for mechanical pipettors and disposable tips is over FIM
2.0 billion. The global market potential for electronic pipettors is
estimated to be at least of the same magnitude. Biohit is the global
7 (8)
market leader of electronic pipettors with an approx. 70% market
share.
Biohit estimates that the demand for its electronic liquid handling
devices will increase as a result of the research and develpment work
which has in specific taken into consideration the tightening demand
for quality, efficiency and safety in laboratory work. Biohit
anticipates also a strong demand for the liquid handling unit, which
can be connected to different laboratory automates. Finally, the
development and harmonization of the Company's international
maintenance network is also expected to increase competitiveness and
profitable growth.
In the area of diagnostics Biohit is developing a test panel for
screening the risk of gastric cancer as well as gastric and duodenal
ulcers from blood samples. When the Pepsinogen and Gastrin 17
-concentrations in blood are measured information is received on the
condition of the mucous membrane of the entire stomach. This basic
test panel will be complemented by a test for measuring also the
helicobacter antibodies from the blood sample. It has been estimated
that the global market potential of the test panel for screening the
risk of gastric cancer is nearly FIM 3.0 billion.
Biohit aims also to develop a test for determining from a blood sample
the lack of vitamin B-12 caused by the atrophy of the mucous membrane
of the stomach, a condition preceding gastric cancer. The objective of
the Company is to complement the test panel with tests for lactose
intolerance and cyclooxygenase-2 (Cox-2), which are performed on the
biopsies taken in connection with the endoscopy of the stomach. Part
of the aforementioned tests are currently in clinical evaluations in
Finland and Japan. At the turn of the year Biohit will launch three
tests to detect from a blood sample the celiac disease caused by grain
products.
The Company estimates that within a few years it is possible to launch
the phytoestrogen and homocysteine tests. The reduction of certain
phytoestrogens in the body and their scarcity in nutrition may make
people more exposed to cancer and cardiovascular diseases. Due to the
atrophy of the mucous membrane of the stomach the lack of vitamin B-12
leads to the increase of the level of homocysteine in blood, which, on
its part, may increase the risk of cardiovascular diseases and stroke.
Currently Biohit sells 24 different monoclonal antibodies primarily
for the detection of different types of cancer from tissue samples.
Biohit is also licensing to other companies operating within the field
clones, i.e. the nearly eternally operating biological production
units of monoclonal antibodies. Biohit's monoclonal antibodies and
microplates which can be used in vertical measurement applications
form a basis for the development and production of the diagnostic
tests. Recently the Company has acquired personnel, technology and
patents (e.g. FI 100556 and U.S. 5,700,641) for the determination of
telomere antibodies from blood samples. The test is used to detect the
8 (8)
systemic lupus erythematosus (SLE), a connective tissue disease with
numerous symptoms, which resembles rheumatic diseases. This test will
be launched in the next few months. The purpose is to market all of
Biohit's diagnostic tests through its seven subsidiaries and
international co-operation partners.
The key personnel of Biohit have a long experience on the development
of instruments based on vertical photometry and their supplementary
products. The applications of this invention by Dr. Osmo Suovaniemi
together with the supplementary products have generated via numerous
internationally operating companies a business worth annually USD 1.0
billion. In addition, the principle of vertical measurement enhanced
the development of new types of immunological methods, e.g. for the
diagnosis of cancer and infectious diseases. It has been estimated
that the annual sales generated by these methods exceed USD 10
billion. The Company also aims, through an acquisition, to complement
its product range with instruments operating on the basis of vertical
photometry and their supplementary products. The instruments will be
marketed both as separate products as well as parts of synergistic
analyzing systems comprised, in addition, of liquid handling products
and diagnostic tests.
Biohit's numerous patented innovations, other intellectual capital and
substantial investments in products, production and international
marketing and collaboration at Biohit Plc. and its seven subsidiaries
create the possibility for Biohit to continue its global growth. The
products of the Company enhance reliable and safe work in laboratories
and the diagnosis and prevention of certain diseases. The maarket
potential of these products and services enhancing safety and the
health and well-being of individuals does not hinder even a strong
global growth.
Biohit Plc.
Helena Hentola
Information Management
Additional information: Osmo Suovaniemi, President & CEO, Tel: +358-9-
773 861, direct: +358-9-773 86 250
Terttu Ollikainen, Accounting & Finance, Tel:
+358-9-773 861, direct: +358-9-773 86 226
http://www.biohit.com
Distribution: Helsinki Exchanges
The Financial Supervision Authority
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