INTERIM REPORT OF THE BIOHIT GROUP 1.1.-30.9.2004
BIOHIT OYJ STOCK EXCHANGE RELEASE 5.11.2004 AT 10:00
INTERIM REPORT OF THE BIOHIT GROUP 1.1.-30.9.2004
The net sales of the Biohit Group totalled MEUR 19.6 (MEUR 18.9
19/2003). The operating profit improved to MEUR 0.2 (MEUR -0.2). Loss
for the period was MEUR 0.2 (MEUR -0.6). 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 4 % during the period,
improved to MEUR 19.6 (MEUR 18.9). The net sales were generated
primarily by sales of liquid handling products and their disposable
tips as well as maintenance services. During the reporting period,
growth in the net sales of disposable tips and the service business
continued. Net sales saw a particular increase in Western Europe and
Asia.
Result
The operating profit improved to MEUR 0.2 (MEUR -0.2). The operating
margin increased by 21 % and totalled MEUR 1.5 (MEUR 1.3)
The group accounting principle for development costs was changed as of
1 January 2004 to comply with IFRS 38. Under this accounting
principle, development costs amounting to TEUR 113 have been
capitalised during the reporting period, which improves the operating
margin and operating profit accordingly.
Loss for the period was MEUR 0.2 (MEUR -0.6). Income taxes in the
amount of MEUR 0.3 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 taxes on 30 September 2004 have been calculated based on
the 26 % tax rate in effect from 2005. The change of the tax rate
increased the tax charge for the period by MEUR 0.1.
Balance Sheet
Total assets were MEUR 21.4 (MEUR 22.3), and the equity ratio was 65.1
% (64.3 %) on 30 September 2004. In accordance with the decision made
by the annual general meeting on 15 April 2004, accumulated losses of
MEUR 2.3 have been covered by the share premium fund.
Liquidity
The cash flow from operations for the reporting period was MEUR 1.9
(MEUR 0.5). The growth, compared with previous year, resulted from the
positive development of the operating margin, inventories, and sales
receivables. The liquid assets at the end of the period totalled MEUR
1.6 (MEUR 1.2).
Investments
The gross investments of the reporting period totalled MEUR 1.2 (MEUR
0.9). The majority of the investments consisted of machinery and
equipment acquired for the Kajaani plant for the automation of liquid
handling production, injection moulding tools used in the manufacture
of liquid handling devices, and the capitalisation of development
costs.
During the reporting period, Biohit Oyj bought out the French
subsidiarys 9 % minority interest.
Personnel
The average number of personnel in the group totalled 294 (298), of
whom 168 (174) were employed by the parent company and 126 (124) by
the subsidiaries.
Main Events of the Reporting Period
Liquid Handling
During the first quarter, Biohit concluded a private-label agreement
with Fisher Scientific UK Ltd for deliveries of electronic pipetting
controllers intended for large volume ranges. Said company belongs to
the Fisher Scientific International Group, which is one of the worlds
leading sales and distribution organisations for laboratory equipment.
Previously Biohit has concluded agreements with the Fisher Group for
sale of all Biohits liquid handling products in North and South
America as well as in Asia.
In the second quarter, Biohit concluded a private-label agreement with
the US subsidiary of the bioMérieux Group concerning deliveries of
mechanical pipettors. The products will be used in connection with
diagnostic applications manufactured by bioMérieux.
During the second quarter, Biohit launched the multichannel versions
of the mechanical mLINE range of liquid handling products. The
launched 8- and 12-channel models cover the volume range of 0.5-300
microlitres. Biohit complemented its single-channel mLINE range with a
new product, and, as a result, the single-channel models cover a
volume range of 0.55,000 microlitres. 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 clotting factors in
blood.
During the third quarter, Biohit launched a new tip design for liquid
handling products, which covers a volume range of 50-1,200
microlitres.
The second quarter saw a new packaging automation system for
disposable tips brought into use at the Kajaani plant. The automation
of the plant was continued, and material management as well as
warehousing were developed further during the reporting period.
In the area of liquid handling, Biohit Oyj was awarded the following
patents: European patent EP 1085944, Japanese patents 3544905 and
3544906, Russian patents 2225758 and 2234371 as well as US patent
6,787,367.
Diagnostics
Biohit continued the evaluations of the GastroPanel during the
reporting period. By the end of the reporting period, 21 clinical
evaluations related to the GastroPanel had been completed, of which 16
were in Europe, three in Asia, and two in North America. The number of
patients studied in the evaluations totalled approximately 17,000.
Some of the results of the evaluations have been published in
international scientific journals and conference abstracts.
At the end of the reporting period, 32 evaluations were in progress,
of which 19 were being conducted 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 ongoing
evaluations totals approx. 32,500.
During the third quarter, Biohit launched a new version of the
GastroSoft software, used in interpreting GastroPanel-test. It has
been developed especially for the needs of clinical laboratories and
research institutes. The new GastroSoft software facilitates the
collection, maintenance, and interpretation of patient information.
When using GastroPanel in conjunction with the GastroSoft software, a
doctor can more easily and accurately diagnose the reasons for a
patients dyspepsia and the state of the stomach mucosa. Also, the
software combination facilitates treatment planning, and it can be
used in the follow-up to treatment.
The above-mentioned report provides information on the following:
- Diagnosis of Helicobacter pylori infection of the mucosa of the
stomach (gastritis)
- Diagnosis of atrophic gastritis of the mucosa of the stomach
(atrophy of the gastric mucosa and a severe disorder) and
determination of its location
- Comment on the increased risk of gastric cancer, if necessary
- Comment on the increased risk of peptic ulcer, if necessary
- Comment on the risk of reflux disease, if necessary
- Provision of a recommendation for gastroscopy and the related
examination of biopsy samples, if necessary
- Recommendation of therapy to eradicate the H. pylori infection, if
necessary
- Notification of when a vitamin B12 deficiency or the risk of a high
level of homocysteine should be taken into consideration, if necessary
If the test result provided by GastroPanel is normal (stomach mucosa
healthy), the cause of upper stomach pain and discomfort is in most
cases functional or due to some other, possibly severe condition.
During the second quarter, Biohit launched the stabilizer for the
Gastrin-17 test kit for 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.
In the third quarter, Biohit finished the further development of the
Gastrin-17 test kit for the GastroPanel. The test enables easier and
faster handling of patient samples. The new Gastrin-17 test will be
launched during the fourth quarter.
Additionally, the international marketing of the quick tests for the
diagnosis of H. pylori infection and lactose intolerance, launched
during the first quarter, was continued. The market feedback can be
considered promising; about 17 % of the adult population of Finland,
and in some countries as much as 90 %, suffers from lactose
intolerance - i.e., a deficiency in 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.
In 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 much as 70-90 % of the
population may suffer from a H. pylori infection. Nearly 50 % of these
patients may suffer from atrophic gastritis, which could develop into,
e.g., gastric cancer and peptic ulcers.
In October 2004, Biohit was granted EUR 750,000 funding for product
development involving the GastroPanels point-of-care analysis unit by
Tekes FinnWell technology programme. The purpose is to develop an
analysis system, which is suitable for decentralised laboratory
diagnostics and the screening and prevention of diseases. In addition
to GastroPanel tests, the system quickly and automatically performs
also other immunoassay-based tests using a blood sample (for, e.g.,
celiac disease, cancer of the large intestine, and prostate cancer
tests) during a doctors appointment.
Approvals for the Diagnostic Tests
In the business area of diagnostics, Biohit was awarded the following
patents during the reporting period: Chinese patent 00812226.1,
Russian patent 2224258, and US patent 6,696,262 related to 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 to the GastroPanel
and lactose intolerance test.
Approvals from the authorities represent a key aspect of the launch of
diagnostic products. 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 for clinical use in Russia and
Canada. These test kits are currently being evaluated for clinical use
by the US Food and Drug Administration (FDA) and Chinas State Food
and Drug Administration (SFDA).
Equity Turnover and Price Development
For the reporting period, the turnover of Biohit B-shares on the NM
List of the Helsinki Exchanges was EUR 1,622,367, and the number of
shares traded 595,749. The highest price during the period under
review was EUR 3.09, the lowest EUR 2.23, and the average EUR 2.72.
The closing price was EUR 2.40. The market capitalisation value of the
B-shares totalled EUR 21,749,105.
Biohit Oyj terminated the market making agreement between Biohit Oyj
and Nordea Securities Oyj on 25 October 2004. The agreement will
expire on 25 November 2004.
Prospects in 2004
In 2003, Biohit launched new liquid handling products, which have
received positive feedback from the customer base. This has had a
positive impact on the development of net sales in 2004.
In the diagnostics business area, Biohit aims to conclude more
distribution agreements and complete a significant number of country-
specific evaluations in 2004. However, the growth of net sales is
affected primarily by the market penetration of the diagnostic product
range.
It has been estimated that the Biohit Groups profit in 2004 will
improve compared with previous year.
Group Income Statement
1-9 1-9 1-12
2004 2003 Change Change 2003
MEUR MEUR MEUR % MEUR
Net sales 19.6 18.9 0.7 4 26.3
Operating expenses -18.1 -17.6 0.5 3 -24.5
Ebitda 1.5 1.3 0.3 21 1.8
Depreciation without
goodwill amortization -1.1 -1.2 0.0 -3 -1.6
Operating profit before
goodwill amortization 0.4 0.1 0.3 295 0.2
Goodwill amortization -0.2 -0.3 0.1 -31 -0.4
Operating profit / loss 0.2 -0.2 0.4 194 -0.2
Financial expenses (net) -0.1 -0.2 -0.1 -65 -0.2
Profit/ loss before
extraordinary items 0.1 -0.4 0.5 134 -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 0.1 -0.4 0.5 134 -0.5
Profit / loss for the period -0.2 -0.6 0.4 72 -0.7
Net Sales and Operating Profit before Goodwill Amortization by
Quarters
2004 2003
Q3 Q2 Q1 Q4 Q3 Q2 Q1
Net Sales 6.1 6.9 6.6 7.5 6.1 6.3 6.4
Operating profit
before goodwill
amortization 0.0 0.2 0.2 0.1 0.2 -0.1 0.0
Profit/loss for
the period -0.3 0.1 0.0 -0.1 -0.1 -0.2 -0.3
Group Balance Sheet
30.9.2004 30.9.2003 31.12.2003
Assets MEUR % MEUR % MEUR %
Non-current assets
Intangible assets 3.6 17 3.8 17 3.7 17
Tangible assets 6.1 28 6.3 28 6.2 28
Financial assets 0.0 0 0.0 1 0.0 0
Current assets
Inventories 3.9 18 4.2 19 4.1 19
Receivables 5.3 25 5.6 25 5.7 26
Deferred tax
assets 0.9 4 1.2 6 1.1 5
Cash and cash
equivalents 1.6 8 1.2 4 1.1 5
Total assets 21.4 100 22.3 100 21.9 100
Liabilities and
shareholders
equity
Shareholders equity
Share capital 2.2 10 2.2 10 2.2 10
Share premium 13.1 61 15.4 69 15.4 70
Accumulated losses -1.4 -7 -3.4 -15 -3.6 -16
Capital loans 1.2 6 1.2 6 1.2 6
Minority interest 0.0 0 0.1 0 0.1 0
Long term
liabilities 2.2 10 2.6 12 2.3 11
Short-term
liabilities 4.1 20 4.2 18 4.3 19
Total liabilities
and shareholders
equity 21.4 100 22.3 100 21.9 100
Cash Flow Statement
1-9/2004 1-9/2003 1-12/2003
MEUR MEUR MEUR
Cash flow from operating
activities:
Profit / loss before
extraordinary items 0.1 -0.4 -0.4
Adjustments 1.4 1.6 2.2
Change in net working
capital 0.6 -0.3 -0.6
Interest and other
financial items paid -0.3 -0.3 -0.4
Interests received 0.2 0.1 0.2
Income taxes paid -0.1 -0.2 -0.1
Net cash flow from
operating activities 1.9 0.5 0.9
Net cash flow from
investing activities:
Investments in tangible and
intangible assets -1.2 -1.0 -1.1
Grants received 0.0 0.0 0.0
Proceeds from the sales of
other investments 0.0 0.1 0.1
Investment in shareholdings
of subsidiaries -0.1 0.0 0.0
Net cash flow from
investing activities -1.3 -0.9 -1.0
Net cash flow from
financing activities:
Proceeds from share issue 0.0 0.0 0.0
Increase in long term loans 0.4 0.7 0.6
Repayments of long term
loans -0.5 -0.5 -0.8
Net cash flow from
financing activities -0.1 0.2 -0.2
Net increase (+) / decrease
(-) in cash and cash
equivalents 0.5 -0.2 -0.3
Cash and cash equivalents
at the beginning of the
period 1.1 1.4 1.4
Cash and cash equivalents
at the end of the period 1.6 1.2 1.1
1-9/04 1-9/03 Change Change-% 1-12/03
Investments, gross
fixed assets MEUR 1.2 0.9 0.3 24 1.2
% net sales 6.0 4.7 4.5
Employees average 294 298 -4 -1 298
Mortgages and shares pledged for liabilities and leasing commitments
30.9.2004 30.9.2003 31.12.2003
MEUR MEUR MEUR
Loans from financial
institutions 1.9 2.3 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 3.3 2.8
30.9.2004 30.9.2003 31.12.2003
Ratios
Equity ratio, % 65.1 64.3 64.7
Earnings per share, EUR -0.01 -0.04 -0.06
Shareholders equity per
share, EUR 1.07 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 12.937.627 12.937.627 12.937.627
Interest on Capital Loans
The unrecorded interest accrued on capital loans totalled MEUR 0.6 on
September 30, 2004 and MEUR 0.5 on September 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 November 5, 2004
Board of Directors of Biohit Oyj
Osmo Suovaniemi
President & CEO
Additional information: Osmo Suovaniemi, President & CEO
Tel: +358-9-773 86, 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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