Biotage AB (publ) Interim report January – June 2021

Record quarterly net sales

April–June

• Net sales amounted to SEK 303.5 (254.2) million, an increase of 19.4 percent and an organic* growth of 32.1 percent.
• The operating profit amounted to SEK 62.5 (24.5) million.
• The operating margin was 20.6 percent (9.6).          
• Profit after tax amounted to SEK 46.0 (32.2) million.
• Earnings per share were SEK 0.71 (0.49) before dilution and SEK 0.70 (0.49) after dilution.
• Cash flow from operations increased to SEK 92.3 (57.0) million.
• Net cash* as of March 31 amounted to SEK 161.1 (157.0) million.
• Liquid assets amounted to SEK 278.6 (371.3) million.
• Liabilities to credit institutions amounted to SEK 0 (110.0) million.
• A dividend of SEK 1.50 per share was paid for a total amount of SEK 97.8 million.
• On May 10, Annette Colin announced that she would be resigning from her position as CFO.

January–June

• Net sales amounted to SEK 584.8 (531.6) million, an increase of 10.0 percent and an organic* growth of 21.6 percent.
• The operating profit amounted to SEK 141.9 (85.9) million.
• The operating margin was 24.3 percent (16.2).          
• Profit after tax amounted to SEK 106.0 (93.6) million.
• Earnings per share were SEK 1.63 (1.44) before dilution and SEK 1.62 (1.44) after dilution.
• Cash flow from operations increased to SEK 159.9 (117.8) million.
• On May 10, Annette Colin announced that she would be resigning from her position as CFO.

Significant events after the end of the reporting period

• On July 1, Biotage announced that Maja Nilsson has been appointed as the new CFO, starting October 1.

Message from the CEO

Third consecutive quarter with double-digit growth

During the second quarter, Biotage continued to grow with good profitability. While we increased efficiency during the pandemic, we also secured our revenue streams. In line with our strategy, we are moving into attractive niche areas in pharmaceutical development and manufacturing, and helping our customers to achieve more efficient and environmentally friendly workflows.

Biotage continues to grow significantly more than the market. The second quarter was the third consecutive quarter with double-digit organic growth. During this period, reported sales increased by 19.4 percent, organically by 32.1 percent and, for the first time, we reported a single quarter with sales of more than SEK 300 million. Our business growth journey continues with good margins. The operating margin, EBIT, for the quarter was 20.6 percent, an increase of 11.0 pervcentage points compared to the same period previous year.

We see that our ongoing work to generate new revenue and by streamlining operations is paying off. Further, our focus on cash flow have strengthened our balance sheet. The pandemic has resulted in reduced travel costs, among other things, which we now want to build on in order to further strengthen our strong financial position. The work to expand capacity and automate production at our unit in Cardiff, Wales, is proceeding according to plan. The first part of the extension there is expected to be completed this summer.

In June, we entered another interesting niche in the field of biomolecules, with the launch of our innovative and automated platform for cleaning plasmids, Biotage® PhyPrep. Together with our consumables Biotage® PhyTip, we enable our customers to discover new treatment methods for patients using biological molecules. This is yet another example of how Biotage helps to unlock the potential of science to solve global societal issues.

The pandemic has led to an increase in raw material purchasing prices and freight costs. There are several problems in the supply chain surrounding a general shortage of certain input products, but we still feel confident that we are well positioned to meet any challenges in the coming quarters.

During the quarter, Biotage grew in all four of our product areas: Analytical chemistry, Organic chemistry, Scale-up and Biomolecules. One driving force behind the development is that we meet customers’ needs for effective solutions to improve and develop their own processes. At the same time, our heightened environmental ambitions are highly appreciated. Our core technologies enable laboratories to reduce solvent use by up to 70 percent.

All our geographic markets showed double-digit organic growth during the quarter. Biotage is growing in all of the Asian markets, as well as in North America, our largest sales region, which has seen the negative effects of the pandemic subside as society opens up again. We are growing in the USA with a strong underlying business that is generally solid.

In EMEA, growth is largely driven by our scale-up solutions for lipid extraction, which are used in the development and manufacture of COVID-19 vaccines. This is an example of the way in which Biotage contributes to positive social development in line with our ethos HumanKind Unlimited. At the same time, it is a fruit of our strategy to relocate resources to growing niche markets in the development and manufacture of pharmaceuticals. We are also investing in expanding our aftersales. During the quarter, aftersales accounted for 52 percent and systems for 48 percent of total sales.

Another product launch during the quarter was the compact test processing workstation, Biotage® Extrahera LV-200. This product contributes to increased automation and more efficient workflows in forensic, clinical and doping laboratories worldwide. The new product was launched at a time when many laboratories were able to resume operations following closure due to the pandemic.

Internal work to prepare for the introduction of a more customer-focused specialist organization continued during the quarter. Once it is in place, we can give our customers an even better experience of Biotage as a supplier, with a unified organization and a comprehensive global offer with the customer’s needs in focus - One Biotage. 

Biotage is a company that focuses on and cares about people, and I am proud of the results in our global employee survey. Throughout the Group, we live up to employees’ expectations with regards to working methods and the way in which we conduct ourselves. We are a value-driven company, and, at the time of writing, we are working hard to further clarify our identity and our values internally.

An important new hire is Maja Nilsson as CFO, a position which we were quickly able to fill following the resignation of Annette Colin. Nilsson’s background includes numerous managerial roles within Getinge. With solid experience in the life sciences industry and coming from an international company that has seen a rapid scale-up, she is the perfect match for Biotage. She will take up her position on October 1, 2021.

In the second quarter, we were pleased to note that Berenberg Bank is beginning to follow Biotage through its Equity Research – Med Tech & Healthcare Services team. This is positive not least in view of our ambition to broaden and internationalize our shareholder base.

We are well-positioned for continued growth as a global impact-tech company. By investing in our employees, ensuring high business ethics and taking powerful measures to help customers manage their workflow challenges, we can maximize the company’s long-term value.

Uppsala July 16, 2021

Tomas Blomquist
President and CEO

Calendar 

Uppsala, July 16, 2021

Tomas Blomquist
President and CEO

Dan Menasco
Employee representative, deputy

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 required to make public pursuant to the EU Market Abuse Regulation and the Securities Market Act.
The information was submitted for publication, through the agency of the contact persons set out above, on July 16, 2021 at 13.00 CET.

About Biotage
Biotage is a Global Impact Tech Company committed to solving society’s problems. We offer workflow solutions and products to customers in drug discovery and development, analytical testing and water and environmental testing.

Biotage is contributing to sustainable science with the goal to make the world healthier, greener and cleaner – HumanKind Unlimited.

Our customers span a broad range of market segments including pharmaceutical, biotech, contract research and contract manufacturers as well as clinical, forensic and academic laboratories in addition to organizations focused on food safety, clean water and environmental sustainability.

Biotage is headquartered in Uppsala in Sweden and employs approx. 485 people worldwide. The Group had sales of 1,092 MSEK in 2020 and our products are sold in more than 70 countries. Biotage’s share (BIOT) is listed in the Mid Cap segment on the NASDAQ Stockholm.
Website: www.biotage.com

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