Biotage AB (publ) Interim report January - June 2020
Challenging quarter and improved cash flow
April - June
- Net sales amounted to 254.2 MSEK (282.1), a decrease by 9.9 percent and organically* a decrease by 12.1%.
- Operating profit amounted to 24.5 MSEK (56.1).
- Result after tax amounted to 32.21) MSEK (54.2).
- Earnings per share was 0,491) SEK (0.83) before and after dilution.
- The cash flow from operating activities increased by 13.9 MSEK to 57.0 MSEK (43.1).
- Net cash* at June 30 amounted to 32.1 MSEK (net debt 69.2).
- Cash and cash equivalents amounted to 260.7 MSEK (185.9).
- Liabilities to credit institutions amounted to 109.6 MSEK (109.6).
- On April 17 Biotage’s Board of Directors announced that the proposal for a dividend of 1.60 SEK per share was withdrawn and that it instead proposed that no dividend should be paid in connection with the Annual General Meeting. The Board also announced that it sees an opportunity to summon an Extraordinary General Meeting later this year to decide on a dividend for 2019.
- The Annual General Meeting was held on June 4th.
January - June
- Net sales amounted to 531.6 MSEK (530.1), an increase by 0.3 percent, and organically* a decline by 2.6 percent.
- Operating profit amounted to 85.9 MSEK (105.9).
- Result after tax amounted to 93.61) MSEK (101.7).
- Earnings per share amounted to 1.441) SEK (1.56) before and after dilution.
- The cash flow from operating activities amounted to 117.8 MSEK (55.6).
1) The period’s result includes revaluation of additional purchase sum to the amount of 27.6 MSEK.
* See definition on pp. 19–20
Comments by the CEO
Like a wave, the Coronavirus pandemic (COVID-19) has washed from east to west during the year and continues to affect us all. In general, Biotage’s business is negatively affected, although we see that sales of parts of our product range are actually increasing as a direct result of the Corona pandemic. In view of all the challenges resulting from the current circumstances, I am pleased with the result we have managed to achieve during the challenging second quarter.
Sales decreased by 9,9 percent in the second quarter compared to the corresponding period 2019. During the first six months of the year sales were almost unchanged compared with the previous year. Organically there was a decline of 12.1 percent for the quarter and 2.6 percent for the six months period. This is of course not in line with our expectations, but we are still grateful that the business has not been worse affected. The fact that Biotage’s operations in many countries are regarded as important to society has contributed to Biotage not being affected to a greater extent than what is currently the case. A further explanation is Biotage’s global presence and wide range of products. For example, we saw that sales of our products in the environment area were almost unaffected in the quarter and even increased in some parts of the world. However, the effects of the Corona pandemic will continue to cause shifts in sales as well as lost sales.
During the second quarter sales records were also set by Biotage’s flash purification systems. It was mainly in China that the sales successes were significant.
System sales in the quarter accounted for 49 percent and aftermarket products for 51 percent. The gross margin amounted to 60.6 percent (62.3) for the quarter and to 61.6 percent (62.0) for the first six months of the year.
The Americas is Biotage’s biggest single geographical market and we see a clear impact of the Corona pandemic on the sales during the quarter. Above all it is system sales that are affected. Compared to the corresponding period previous year the growth in the Americas is negative, while the trend for the first six months remains unchanged. In the APAC region, sales in India are hit even harder by the mobility restrictions imposed during the quarter, while the business in China is recovering and grew by more than 50 percent compared with the second quarter 2019. Sales in South Korea are recovering reasonably well and show growth in relation to the comparative period. EMEA sales were negatively affected by the Corona pandemic and experienced a negative growth.
The operating margin, EBIT, decreased to 9.6 percent (19.9) for the quarter and to 16.2 percent (20.0) for the half-year. Other operating items include currency effects that have negatively affected the operating margin, EBIT, by 12.0 MSEK in the quarter and 0.9 MSEK in the half-year. The negative contribution from currency effects in the quarter means a net effect from currency changes on the quarterly result of no less than 10.2 MSEK between the quarters.
All in all, during the first six months of the year we have seen that the operations have been affected by the Corona pandemic. Asia was initially hit the hardest, while later in the period, and especially in the second quarter, other countries suffered similar effects. Both China and South Korea had a positive organic growth in the quarter as well as in the half-year. There is still considerable uncertainty as to how quickly the economy and the operations in the various geographies can fully recover.
It is still too soon to say with certainty how quickly society as a whole and Biotage’s business in particular can fully return to normal. Our employees are doing a fantastic job looking for alternative solutions to physical meetings, and so are many of our customers. However, not everything can be replaced by virtual meetings.
Biotage has a strong financial position and I am grateful that the Board of Directors made the decision to hold off on the dividend for the 2019 financial year, which of course gives Biotage financial sustainability if the effects of the Corona pandemic turn out to be long-lasting.
Finally, I believe that Biotage is well positioned for the future, with implemented reinforcements to corporate management and talented employees in place.
Uppsala July 17, 2020
President and CEO
Coming financial reports
Interim report January-September November 5 2020
Year-end report 2020 February 12 2021
All financial reports are published at www.biotage.com
The Board of Directors and the CEO certify that the interim report provides a true and fair overview of the parent company's and the Group's operations, financial position and result and describes the significant risks and uncertainties faced by the parent company and the companies included in the Group.
Uppsala July 17, 2020
President and CEO
For further information:
Tomas Blomquist, President and CEO
phone: +46 705 23 01 63
Annette Colin, CFO
phone: +46 703 19 06 76
This information is information that Biotage AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact persons set out above, at 15:00 CET on July 17, 2020 at 08:00 CET.
Biotage in brief
Biotage offers efficient separation technologies from analysis to industrial scale and high-quality solutions for analytical chemistry from research to commercial analysis laboratories. Biotage’s products are used by government authorities, academic institutions, contract research and contract manufacturing companies, pharmaceutical and food companies, among others. The company is headquartered in Uppsala and has offices in the US, UK, China, Japan, South Korea and India. Biotage has approx. 460 employees and had sales of 1,101 MSEK in 2019. Biotage is listed on NASDAQ Stockholm.