INTERIM REPORT OF THE BIOHIT GROUP 1.1.-
BIOHIT OYJ STOCK EXCHANGE RELEASE 6.8.2004 AT 10:00
INTERIM REPORT OF THE BIOHIT GROUP 1.1.-30.6.2004
The net sales of the Biohit group totalled MEUR 13,5 (MEUR 12,8 1-
6/2003). The operating profit improved to MEUR 0,3 (MEUR 0,3 operating
loss). The result of the reporting period totalled MEUR 0,1 (loss MEUR
0,5). The market response for the new liquid handling products of
Biohit was positive. Biohit continued to develop the international
sales of its liquid handling and diagnostic product ranges.
Net Sales
The net sales of the Biohit group increased by 6%, and were MEUR 13,5
(MEUR 12,8). The net sales were generated primarily by the sales of
liquid handling products and their disposable tips as well as
maintenance services. During the reporting period the net sales of
disposable tips and the service business grew strongly. The net sales
increased especially in Western Europe and Asia.
Result
The operating profit improved to MEUR 0,3 (MEUR 0,3 operating loss).
Due to the increase in net sales the operating margin increased by 70%
and totalled MEUR 1,2 (MEUR 0,7).
The group accounting principle for development costs was changed as of
January 1, 2004 to comply with IFRS 38. According to this accounting
principle development costs amounting to TEUR 77 have been capitalized
during the reporting period, which improves the operating margin and
operating profit accordingly.
The result for the period totalled MEUR 0,1 (loss MEUR 0,5). The
income taxes MEUR 0,2 have been accounted for on the basis of the
result for the period. However, deferred tax assets relating to the
taxable losses have not been accounted for.
The deferred tax on June 30, 2004 have been calculated based on the
tax rate 26% valid as of January 1, 2005. The change of the tax rate
increased the tax charge for the period by MEUR 0,1.
Balance Sheet
The total assets were MEUR 22,3 (MEUR 22,8) and the equity ratio was
64,3 % (63,2 %) on June 30,2004. In accordance with the decision made
by the annual general meeting on April 15, 2004 accumulated losses of
MEUR 2,3 have been covered by the share premium fund.
Liquidity
The cash flow provided by operating activities during the reporting
period was MEUR 1,0 (MEUR -0,1). The liquid assets at the end of the
reporting period totalled MEUR 1,4 (MEUR 0,9).
Investments
The gross investments of the reporting period totalled MEUR 0,8 (MEUR
0,6). The major part of the investments consisted of machinery and
equipment acquired to the Kajaani plant for the automatization of
liquid handling production, injection molding tools used in the
manufacture of liquid handling devices and of the capitalization of
development costs.
Personnel
The average number of personnel in the group totalled 295 (294) of
which 168 were employed by the parent company (168) and 127 by the
subsidiaries (126).
The industrial co-operation procedure started in May 2004 did not lead
to significant reductions in the amount of personnel as it is
estimated that the required cost savings will be achieved by other
means.
Change in the Membership of the Board of Directors
Hannu Seristö has resigned, due to the acceptance of new duties, from
the Board of Directors of Biohit Oyj as of August 5, 2004.
Main Events of the Reporting Period
Liquid Handling
In the area of liquid handling Biohit continued to develop new
pipettor generations. This development work is based on Biohits
liquid handling product strategy in which new market segments have
been identified and created. These segments differ from each other in
terms of the area of application, performance and price.
In its development work of liquid handling products Biohit has paid
special attention to the safety and ergonomical aspects of pipettors,
which contribute, e.g., to reducing the risk of work-related upper
limb disorders.
During the first quarter Biohit concluded a private label -agreement
with Fisher Scientific U.K., Ltd. for the deliveries of electronic
pipetting controllers intended for large volume ranges. The said
company belongs to the Fisher Scientific International Group, which is
one of the leading sales and distribution organizations of laboratory
equipment in the world. Previously Biohit has concluded agreements
with the Fisher Group for the sales of all Biohits liquid handling
products in North and South America, and in Asia.
During the second quarter Biohit launched the multichannel versions of
the mechanical mLINE -liquid handling product range. The 8- and 12-
channel models launched cover the volume range 0.5-300 microliters.
Biohit complemented its single-channel mLINE-range with a new pipettor
and, as a result, the single-channel models cover the volume range 0,5-
5.000 microliters. In addition, Biohit launched a new pipettor based
on the mLINE product range, which is intended especially for
applications in which the timing of pipetting is of crucial
importance, e.g., in the measurement of coagulation factors in blood.
During the second quarter Biohit concluded a private label agreement
with the U.S. subsidiary of the bioMérieux Group concerning the
deliveries of mechanical pipettors. The products will be used in
connection with diagnostic applications manufactured by bioMérieux.
During the reporting period Biohit continued the automatization of
production by taking into use a new packaging automate for disposable
tips and by developing further materials management and warehousing.
In the area of liquid handling Biohit Oyj was awarded the following
patents: European patent EP 1085944, Japanese patents 3544905 and
3544906 ,and Russian patent 2225758.
Diagnostics
Biohit continued the evaluations of the GastroPanel during the
reporting period. By the end of the reporting period twenty clinical
evaluations related with the GastroPanel had been completedof which
fifteen in Europe, three in Asia and two in North America. The number
of patients studied in the evaluations totalled approx. 16.900. The
results of the said evaluations have partially been published in
international scientific articles and congress abstracts.
At the end of the reporting period altogether twenty-seven evaluations
were in progress of which seventeen in Europe, seven in Asia, two in
North America, two in Africa, one in South America, and one in the
Near East. The number of patients to be studied in these on-going
evaluations totals approx. 32.400.
On the basis of the results of the evaluations Biohit continued to
develop further the GastroSoft computer program, which interprets the
results of the GastroPanel-test. The said report provides information
as follows:
- Diagnosis of H. Pylori infection of the mucosa of the stomach
(gastritis)
- Diagnosis of atrophic gastritis of the mucosa of the stomach and
related severe malfunction
- Probabilities on the different conditions of the corpus and antrum
sections of the stomach (normal, gastritis or atrophic gastritis)
- Risk assessment for gastric cancer
- Risk assessment for peptic ulcer
- Risk assessment for reflux disease
- Provision of recommendation for gastroscopy and the related
examination of biopsy samples, if necessary
- Recommendation for the eradication therapy of H. pylori infection,
if necessary
- Recommendation for the determination of the levels of vitamin B12
and homocysteine in serum samples, if necessary
If the test result provided by GastroPanel is normal, i.e., the mucosa
of the stomach is healthy, the cause of upper stomach pain and
discomfort is in most cases functional or due to some other, possibly
severe conditions.
During the reporting period the Italian version of the publication
öNon-Invasive Diagnosis for Gastric Diseasesö was distributed by
Biohit to 35.000 general practitioners in Italy. The author of the
publication, professor DiMario, has for approx. two years directed a
research project related with gastrointestinal diseases at the
University of Parma. As to the said research concluded, the
recommendation has been that the general practitioner should conduct
the GastroPanel-examination to all patients suffering from dyspepsia
prior to commencing possible medical treatment. Approximately one
third of the global population suffer from dyspepsia.
During the first quarter Biohit concluded a co-operation agreement
with Biofons Oy. On the basis of the agreement both companies
complement their product ranges with products manufactured by the
other company. Biohit and Biofons will market their overall product
ranges under their own name through their international distribution
channels.
During the first quarter Biohit concluded an agreement with the Iraq
Ministry of Health concerning the deliveries of the GastroPanel and
tests for the determination of celiac disease.
Moreover, during the first quarter Biohit launched the quick tests for
the diagnosis of Helicobacter pylori infection and lactose
intolerance. The market feedback can, on the overall level, be
considered promising; approx. 17% of the adult population in Finland,
and in some countries even as many as 90%, suffers from lactose
intolerance, i.e., the deficiency or lack of the lactase enzyme in the
small intestine. Thus far, a fast and reliable method for the
detection of lactose intolerance has not been available.
During the second quarter Biohit finished the development of the
stabilizer for the Gastrin-17 -test kit of the GastroPanel. The
stabilizer enhances the preservation of the patient sample and
facilitates its delivery. The stabilizer has been developed especially
for the needs of service laboratories.
During the reporting period Biohit continued the preparation of new
distribution agreements especially in South America, the Near East,
India and China. These are areas in which as many as 70-90% of the
population may suffer from H. pylori infection. Nearly 50% of the
said patients may suffer from atrophic gastritis, which may develop,
e.g., into atrophic gastritis, peptic ulcer and gastric cancer.
In the business area of diagnostics Biohit was awarded the following
patents during the reporting period: Chinese patent 00812226.1,
Russian patent 2224258 and U.S. patent 6,696,262 related with the
GastroPanel as well as Chinese patent ZL00806948.4 and Russian patent
2223502 for the lactose intolerance test. Previously, e.g., European
patents have been awarded for inventions related with the GastroPanel
and lactose intolerance test.
During the reporting period Biohit published the "Biohit Diagnostics
Product Catalogue". The catalogue describes the diagnostic product
range manufactured by the company, instruments, analyzing systems and
related programs. Moreover, it highlights the licensing and co-
operation possibilities, and provides a description of scientific
articles related with the diagnostic product range (for additional
information please refer to: www.biohit.com / Diagnostics Catalogue).
Authority Approvals for the Diagnostic Tests
Authority approvals represent a key aspect in the launch of diagnostic
products. Currently, all diagnostic products of Biohit can be sold for
research use worldwide. All Biohit diagnostic tests are CE-marked, and
can, thus, be sold throughout Europe for clinical use. The test kits
of the GastroPanel have been approved in Russia and Canada for
clinical use. The said test kits are currently being evaluated for
clinical use by Food and Drug Administration (FDA) in the U.S. and
Chinas State Food and Drug Administration (SFDA).
Equity Turnover and Price Development
The turnover of Biohit B-shares on the NM-list of the Helsinki
Exchanges was during the reporting period EUR 1.286.718, and the
number of shares traded 459.587. The highest price was EUR 3,09 and
the lowest EUR 2,30. The average price was EUR 2,80. The market
capitalization value of the B-shares totalled EUR 24.014.637.
Prospects in 2004
In 2003 Biohit launched new liquid handling products, which have
received a positive feedback from the customer base. Biohit estimates
that this will have a positive impact on the development of the net
sales in 2004.
In the business area of diagnostics Biohit aims to conclude further
new distribution agreements and complete a significant number of
country evaluations in 2004. Especially the length required for the
market penetration of the diagnostic products will have an effect on
the growth of net sales.
During 2004 Biohit will cut costs and enhance the efficiency of its
activities in order to secure a positive development of the cash flow.
Group Income Statement
1-6 1-6 1-12
2004 2003 Change Change 2003
MEUR MEUR MEUR % MEUR
Net sales 13,5 12,8 0,7 6 26,3
Operating expenses -12,3 -12,0 0,3 2 -24,5
Ebitda 1,2 0,7 0,5 70 1,8
Depreciation without
goodwill amortization -0,8 -0,8 0,0 -3 -1,6
Operating profit before
goodwill amortization 0,4 -0,1 0,5 705 0,2
Goodwill amortization -0,1 -0,2 -0,1 -32 -0,4
Operating profit / loss 0,3 -0,3 0,6 209 -0,2
Financial expenses (net) 0,0 -0,1 0,1 92 -0,2
Profit/ loss before
extraordinary items 0,3 -0,4 0,7 170 -0,5
Extraordinary income 0,0 0,0 0,0 0,0 0,0
Extraordinary costs 0,0 0,0 0,0 0,0 0,0
Profit / loss before taxes 0,3 -0,4 0,7 170 -0,5
Profit / loss for the period 0,1 -0,5 0,6 129 -0,7
Net Sales and Operating Profit before Goodwill Amortization by
Quarters
2004 2003
Q2 Q1 Q4 Q3 Q2 Q1
Net Sales 6,9 6,6 7,5 6,1 6,3 6,4
Operating profit
before goodwill
amortization 0,2 0,2 0,1 0,2 -0,1 0,0
Profit/loss for
the period 0,1 0,0 -0,1 -0,1 -0,2 -0,3
Group Balance Sheet
30.6.2004 30.6.2003 31.12.2003
Assets MEUR % MEUR % MEUR %
Non-current assets
Intangible assets 3,6 16 3,9 17 3,7 17
Tangible assets 6,1 28 6,4 28 6,2 28
Financial assets 0,0 0 0,1 1 0,0 0
Current assets
Inventories 4,0 18 3,9 17 4,1 19
Receivables 6,1 27 6,3 28 5,7 26
Deferred tax
assets 1,0 5 1,3 5 1,1 5
Cash and cash
equivalents 1,4 6 0,9 4 1,1 5
Total assets 22,3 100 22,8 100 21,9 100
Liabilities and
shareholders
equity
Shareholders equity
Share capital 2,2 10 2,2 10 2,2 10
Share premium 13,1 59 15,4 68 15,4 70
Accumulated losses -1,1 -5 -3,3 -15 -3,6 -16
Capital loans 1,2 6 1,2 5 1,2 6
Minority interest 0,1 0 0,1 0 0,1 0
Long term
liabilities 2,4 11 2,8 12 2,3 11
Short-term
liabilities 4,4 19 4,4 20 4,3 19
Total liabilities
and shareholders
equity 22,3 100 22,8 100 21,9 100
Cash Flow Statement
1-6/2004 1-6/2003 1-12/2003
MEUR MEUR MEUR
Cash flow from operating
activities:
Profit / loss before 0,3 -0,4 -0,4
extraordinary items
Adjustments 1,0 1,0 2,2
Change in net working -0,2 -0,5 -0,6
capital
Interest and other -0,2 -0,2 -0,4
financial items paid
Interests received 0,2 0,1 0,2
Income taxes paid -0,1 -0,1 -0,1
Net cash flow from 1,0 -0,1 0,9
operating activities
Net cash flow from
investing activities:
Investments in tangible and -0,8 -0,6 -1,1
intangible assets
Grants received 0,0 0,0 0,0
Proceeds from the sales of 0,0 0,0 0,1
other investments
Net cash flow from -0,8 -0,6 -1,0
investing activities
Net cash flow from
financing activities:
Proceeds from share issue 0,0 0,0 0,0
Increase in long term loans 0,4 0,6 0,6
Repayments of long term -0,3 -0,4 -0,8
loans
Net cash flow from 0,1 0,2 -0,2
financing activities
Net increase (+) / decrease 0,3 -0,5 -0,3
(-) in cash and cash
equivalents
Cash and cash equivalents 1,1 1,4 1,4
at the beginning of the
period
Cash and cash equivalents 1,4 0,9 1,1
at the end of the period
1-6/04 1-6/03 Change Change-% 1-12/03
Investments, gross
fixed assets MEUR 0,8 0,6 0,2 30 1,2
% net sales 5,8 5,1 4,5
Employees average 295 294 1 0 298
Mortgages and shares pledged for liabilities and leasing commitments
30.6.2004 30.6.2003 31.12.2003
MEUR MEUR MEUR
Loans from financial
institutions 2,1 2,4 2,0
Corporate mortgages 3,4 3,4 3,4
Pledges on leaseholds 1,5 1,5 1,5
Other long-term liabilities 0,7 0,8 0,8
Mortgages 0,8 0,8 0,8
Leasing commitments 4,0 3,8 2,8
30.6.2004 30.6.2003 31.12.2003
Ratios
Equity ratio, % 64,3 63,2 64,7
Earnings per share, EUR 0,01 -0,04 -0,06
Shareholders equity per
share, EUR 1,10 1,10 1,08
Average number of shares 12.937.627 12.937.627 12.937.627
Number of shares at the end
of the period 12.937.637 12.937.627 12.937.627
Interest on Capital Loans
The unrecorded interest accrued on capital loans totalled MEUR 0,6 on
June 30, 2004 and MEUR 0,5 on June 30, 2003.
Derivative Contracts
The Group does not have any off balance sheet financial instruments.
The figures of the Interim Report have not been audited.
Helsinki August 6, 2004
Board of Directors of Biohit Oyj
Helena Hentola
Information Resource and Corporate Communications
Additional information: Osmo Suovaniemi, President & CEO, Professor
Tel: +358-9-773 861, direct: +358-9-773 86
250, mobile: +358-40 745 5605,
osmo.suovaniemi@biohit.com
http://www.biohit.com
Distribution: Helsinki Exchanges
Financial Supervisory Authority
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