Biotage AB (publ) Interim report January – March 2021

Double-digit organic growth in two consecutive quarters
 

• Net sales amounted to 281.4 MSEK (277.3), an increase by 1.4 percent and organically* an increase by 12.0 percent.

• Operating profit amounted to 79.4 MSEK (61.4).
• The operating margin amounted to 28.2 percent (22.1).
• Result after tax amounted to 60.0 MSEK (61.3).
• Earnings per share was 0.92 SEK (0.94) before and after dilution.
• The cash flow from operating activities increased to 67.6 MSEK (60.8).
• Net cash* at March 31 was 189.6 MSEK (157.0).
• Cash and cash equivalents amounted to 422.1 MSEK (371.3).
• Liabilities to credit institutions amounted to 110.0 MSEK (110.0).
• On March 26 notice of the Annual General Meeting, which will be held on April 28, was issued. In order to prevent the spread of COVID-19 the Board of Directors has decided that the AGM will be conducted only by advance voting.

Comments by the CEO

Once again strong growth with historically high margins

During the first quarter Biotage’s growth continued as organic growth increased to 12 percent. In addition, we grew with very good profitability. The operating margin, EBIT, improved by 6.1 percentage points to a new record level of 28.2 percent. The gross margin also reached a new record level of 63.1 percent.

It feels fantastic to be able to continue to grow the company with high profitability. Reported sales in the first quarter increased by 1.4 percent compared to the corresponding period 2020, which organically was an increase by no less than 12.0 percent. This means that Biotage has now delivered two consecutive quarters with double-digit organic growth.

The operating margin, EBIT, improved by 6.1 percentage points in the quarter compared to the previous year and reached a record high of 28.2 percent. We continue to have good cost control, in addition to the fact that especially travel costs have decreased due to the Corona pandemic.

We were able to deliver a good quarterly result despite significant negative effects from the Corona pandemic. We have noticed this particularly in countries where we do not have direct sales, but also in the US, which accounts for the largest share of Biotage’s sales. However, we believe in a turnaround there as society is now starting to open up as a result of the rapid pace of vaccination. All other geographies showed organic growth in the first quarter compared to the same quarter 2020. China and India were the shining stars of the quarter in APAC, but we are also very satisfied that Japan has come back after a period of slightly weaker results, here we had double-digit percentage growth in the quarter. Direct sales in EMEA delivered strongly in the quarter, not least thanks to sales successes in our Scale up product area.

We have long been convinced of the growth potential of Scale-up. Now we can note with satisfaction that the area grew by 16.4 percent in the quarter and now accounts for 17.0 percent of Biotage’s total sales in the quarter. It is particularly satisfying that the sales increase in Scale-up is a result of our efforts to increase the number of collaborations with customers in the area of development and manufacturing of vaccines. I have it particularly close to my heart to be able to assist in this socially important struggle.

The Organic chemistry product area remains Biotage’s single largest and it grew significantly by 6.9 percent in the quarter. These products accounted for 49 percent of the total sales in the quarter. The sales successes were led by our Flash purification systems. The number of units sold remains at a high level, especially in China.

The Analytical chemistry area fell by 11.4 percent. This business is most developed in the US and has suffered from lower activity in our customers’ laboratories as a result of the Corona pandemic. As the US population is being vaccinated we expect the customers’ operations to return to a more normal situation.

The Biomolecules product area decreased by 3.8 percent, while the organic growth for the products amounted to 7.9 percent. Here we are also looking forward with excitement and confidence to the upcoming commercial launch of our automated plasmid purification system Biotage® PhyPrep in maxi, mega and giga scale. This launch is also expected to drive sales of consumables in the product area.

During the quarter our system sales increased, mainly driven by  organic chemistry products in  Japan, Europe, and USA. As a result of these successes system sales accounted for an increased share, 46 percent, of the total sales volume in the quarter. In the latest 12-month period the share was 49 percent.

Our investments in increased capacity and efficiency in manufacturing continue. Work is underway at the production plant in Cardiff, Wales to expand the machinery with automation solutions. There we are also completing a brand-new building that will primarily be used for the production of various types of consumables with improved and more efficient production flows. We expect the first part of the expansion to be completed in the summer of 2021.

We are investing in production automation also for the manufacturing of the PhyTip® consumables in the Biomolecules product area in the US.

Biotage continues to show a strong balance sheet and net cash is still increasing. At the end of the period this amounted to 189.6 MSEK, which is an improvement by 217.1 MSEK compared to the first quarter last year, which reported a net debt of 27.5 MSEK. The operating capital increased, mainly due to a stock build-up of 21.5 MSEK, driven by increased sea freight volumes. This is both more cost-effective and gives a lower environmental footprint. In order to secure our deliveries we now also have larger volumes of materials for consumables in stock with longer lead times for planned production.

When I summarize the first quarter I am very proud of our employees and our business, which continues to deliver at the highest level under continued challenging circumstances. We now hope that society will reopen and that we can return to more normal routines. Either way, we feel well positioned to take on all possible upcoming challenges. We have a number of exciting new collaborations and product launches planned for 2021 that we hope will ensure a continued favorable development of Biotage.

Uppsala April 28, 2021

Tomas Blomquist
President and CEO

Calendar 
All financial reports are published at www.biotage.com

This interim report for Biotage AB (publ) has been issued by the Company’s President and CEO Tomas Blomquist after authorization by the Board of Directors.
Uppsala April 28, 2021

Tomas Blomquist
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, on April 28, 2021 at 15:00 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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