Biotage AB (publ) Interim report January – September 2021
Positive development creates opportunities
- Net sales amounted to SEK 305 (263) million, an increase of 16.3 percent and an organic* growth of 17.8 percent.
- The operating profit amounted to SEK 68 (61) million.
- The operating margin was 22.3 percent (23.1).
- Profit after tax amounted to SEK 53 (37) million.
- Earnings per share were SEK 0.81 (0.57) before and after dilution.
- Cash flow from operations increased to SEK 89 (74) million.
- Net cash* as of September 30 amounted to SEK 244 (157) million.
- Liquid assets amounted to SEK 359 (371) million.
- Liabilities to credit institutions amounted to SEK 0 (110) million.
- On July 1, it was announced that Maja Nilsson has been appointed as the new CFO, starting October 1.
- Net sales amounted to SEK 890 (794) million, an increase of 12.1 percent and an organic* growth of 20.3 percent.
- The operating profit amounted to SEK 210 (147) million.
- The operating margin was 23.6 percent (18.5).
- Profit after tax amounted to SEK 159 (131) million.
- Earnings per share were SEK 2.44 (2.01) before and after dilution.
- Cash flow from operations increased to SEK 249 (192) million.
- On May 10, Annette Colin announced that she would be resigning from her position as CFO. On July 1, Biotage announced that Maja Nilsson has been appointed as the new CFO, starting October 1.
Significant events after the end of the reporting period
- On October 20, Biotage acquired ATDBio, Ltd.
- Maja Nilsson took office as Biotage's new CFO on October 1.
Message from the CEO
Our efforts are producing good results
Biotage’s profitable growth journey has continued in the third quarter with a new sales record and strong cash flow. Our strategic focus is on finding attractive niche areas while making our business more efficient and sustainable. The positive development will enable investments in the future.
In the third quarter of the year, Biotage’s organic growth continued at a rate that is significantly higher than for the market as a whole. We have maintained double-digit organic and reported growth in both our regions, the Americas and International. As in the second quarter, we achieved sales of more than SEK 300 million with an operating margin, EBIT, which exceeded our long-term target of 20%. We see a good geographical mix on both sides of the Atlantic, and a healthy distribution between aftersales and system sales of 52% and 48%, respectively, driven by consumables.
Our ongoing efforts to generate new revenue and improve operational efficiency are paying off. Some time ago, we set an internal goal to strengthen our balance sheet and cash flow. The fact that we have now achieved this gives us good conditions to invest for continued growth. A recent example of this is the acquisition of the British company ATDBio, which brings us expertise and key platform solutions in the rapidly growing sector for the synthesis and purification of DNA and RNA-oligonucleotides.
In our efforts to increase efficiency, quality and sustainability in our operations through digitalization, we worked intensively during the quarter to implement the production module in our business system at our facility in Salem, NH, USA. This was put into operation on October 1. At our facility in Cardiff, Wales, the new large-scale flash chromatography unit has been in full operation for a couple of months. Moving all other column chromatography to another new and larger unit has begun and is expected to be completed during the fourth quarter. Work is also under way in Cardiff to significantly reduce the use of organic solvents in the manufacture of certain consumables. This could bear fruit as early as next year, with lower costs, but more importantly, with a positive impact on the environment.
We continue to see an impact of the pandemic on raw material purchasing prices and shipping costs. There are also some problems in the supply chain concerning a general shortage of certain input products. So far, we have been able to meet these challenges to a large extent, including allowing for a larger inventory build-up than under normal circumstances. If the raw material situation in general does not improve, the longer lead times can also cause problems for Biotage.
During the third quarter, Biotage grew in all four of its product focus areas: Analytical Chemistry, Organic Chemistry, Scale-up, and Biomolecules. For the entire period of January-September, all areas have shown double-digit organic growth. Overall, organic growth is 20.3%. It is particularly pleasing that our strong underlying business in Analytical Chemistry in our largest region, the Americas, has helped us to make a strong comeback following the pandemic. The Americas is showing its strongest quarter ever.
In EMEA, growth is driven by our lipid purification scale-up solutions used in the development and manufacture of COVID-19 vaccines. This is the fourth quarter since the start of this business deal, and will therefore not have the same impact on our growth figures going forward. The deal demonstrates how we, as an impact tech company, can contribute to solving societal problems, and how we can quickly and flexibly adapt to customer needs. We are constantly looking for new niche areas where we can make a difference.
In Japan, we have concluded our cooperation with a company in which we distributed a product, and thus we can now refine the business for the sale of our own products. This is having a short-term sales effect, but paves the way for future growth by, among other things, allowing us to improve our aftersales services. We also intend to establish a commercial hub in Singapore in 2022 to serve ASEAN countries, which will contribute to a more focused business in Japan.
Biotage continues to contribute to the Swedish life sciences industry, not only through its own innovation, but also through various collaborations. Together with several higher education institutions and a number of other companies, we are now part of the GeneNova consortium. With Vinnova as financier and KTH as coordinator, we can work towards a more efficient production of gene therapy for individualized treatment.
Internally, preparations for a new customer-focused and uniform specialist department have continued during the quarter. There is also a strong focus on corporate culture. A purpose-driven company like Biotage can only achieve its goals if all its employees and managers share its values and attitudes. During the quarter, as part of our efforts to unite the entire Group, we launched our values and leadership model internally in a publication that we call “the heart and soul of Biotage”.
Maja Nilsson has now been appointed as the new CFO, and we have also carried out strategic recruitment to strengthen our marketing team in areas such as mRNA, biomolecules and plasmid purification. I am pleased to note that we are generally seeing an increasing interest in Biotage as an employer.
Finally, I would like to express how great it feels to finally be able to return to the office and meet with colleagues, customers and partners again. With this positive energy and together with our new colleagues from ATDBio, we are excited to enter new, exciting emerging markets. We believe that, as a team, we can take our combined and broader offering further into attractive new niches.
Uppsala October 28, 2021
President and CEO
All financial reports are published at www.biotage.com
Year-end report 2021 February 11, 2022
Interim Report January-March 2022 April 28, 2022
Annual General Meeting 2022 April 28, 2022
The Annual Report for 2021 is planned to be published week 14, 2022
Interim Report January-June 2022 July 19, 2022
Interim Report January-September 2022 November 2, 2022
Year-end Report 2022 February 15, 2023
The 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, October 28, 2021
President and CEO
For further information:
Tomas Blomquist, President and CEO
phone: +46 705 23 01 63
Maja Nilsson, CFO
phone: +46 733 25 51 70
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 October 28, 2021 at 15.00 CET.
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.