Biotage AB (publ) Year-End report January - December 2020

Double-digit organic growth

October - December

• Net sales amounted to 298.1 MSEK (288.6), an increase by 3.3 percent, and organically* an increase by 10.0 percent.
• Operating profit amounted to 59.6 MSEK (37.9).
• The operating margin amounted to 20.0 percent (13.1).
• Result after tax amounted to 44.4 MSEK (18.5).
• Earnings per share was 0.68 SEK (0.28) before and after dilution.
• The cash flow from operating activities increased to 87.5 MSEK (76.3).
• Net cash* at December 31 was 157.0 MSEK (net debt -69.2).
• Cash and cash equivalents amounted to 371.3 MSEK (185.9).
• Liabilities to credit institutions amounted to 110.0 MSEK (109.6).
• On November 4 the Board of Directors announced that a decision was taken to not convene an Extraordinary General Meeting to decide on dividends due to the continued uncertainty concerning the effects of the Corona pandemic.

January - December

• Net sales amounted to 1,092.3 MSEK (1,101.4), a decrease by 0.8 percent, and organically* an increase by 1.4 percent.
• Operating profit amounted 206.2 MSEK (208.1).
• The operating margin amounted to 18.9 percent (18.9).
• Result after tax amounted to 175.3¹⁾ MSEK (186.8).
• Earnings per share was 2.69¹⁾ SEK (2.87) before and after dilution.
• The cash flow from operating activities amounted to 279.0 MSEK (211.8).
• On August 18 the Board of Directors decided to carry out a new share issue and to repurchase 243,313 class C shares in accordance with the resolution of the Annual General Meeting.
• On August 31 it was announced that the total number of shares increased by 243,313, corresponding to 24,331.3 votes after the new issue of class C shares, and that the shares had been repurchased.
• The Board of Directors intends to propose to the Annual General Meeting a dividend to the shareholders for 2020 of 1.50 SEK (0) per share, corresponding to 55.8 percent of the result after tax. According to the dividend policy Biotage shall distribute at least 50 percent of the net profit.

Comments by the CEO

Double-digit organic growth –a record quarter

It is with immense pride that I present this report on the last quarter and the full year 2020, especially under the challenging conditions caused by the ongoing Corona pandemic (COVID-19).

I note with satisfaction that we after the second and third quarters, that were greatly affected by the pandemic, now once again deliver a strong quarter. In fact, our sales are the highest ever in a single quarter, for the full year this means continued organic growth for the Group. For the fourth quarter the reported sales were 3.3 percent higher compared to the corresponding period 2019, which organically was a 10.0 percent increase. For the full year the corresponding figures were a decrease by 0.8 percent and an organic growth by 1.4 percent.

The operating margin, EBIT, improved by 6.9 percentage points in the quarter compared to last year and achieved a margin of 20.0 percent.

For the full year the EBIT margin amounted to 18.9 percent, the same as last year.

It was our largest single product area, Organic chemistry, that contributed the most to the success in the fourth quarter, as its share of our sales increased by no less than 7 percentage points, from 46 to 53 percent, and 51 percent for the full year. All geographical areas except Japan showed growth for these products in the fourth quarter. The Asian countries had the strongest development, but it is also worth noting that the US came back strongly with a double-digit percentage sales increase and a record for the quarter.

Biotage’s Scale-up product area saw a sales decrease, which was due to a reduction of CBD sales in the US. Instead, we focused resources and activities on parties active in vaccine manufacturing. This contributed to increased sales and some recovery for Scale-up, which we see as very positive. We have long striven to broaden our customer and application base for the area and we have now further strengthened this work.

Many of our customers in the Analytical chemistry product area are among those who have been hit hard by the consequences of the pandemic. This applies in particular to commercial laboratories working with the analysis of patient samples. Here, however, we saw a gradual increase in activity levels during the quarter, which hopefully may indicate a trend break.

Another effect of the covid-19 pandemic was that Biotage’s sales and beta testing in the Biomolecules product area was limited as we had fewer opportunities to visit customers. A commercial launch of our automated plasmid purification system at maxi, mega and giga scale is approaching and is planned for the first half of 2021.

Our product mix continued to have an overweight of system sales in the quarter, accounting for 51 percent. Great sales successes for our purification systems in all regions except Japan contributed to this.

Geographically we continue to build a stronger presence in Asia. China and South Korea remain double-digit growth markets for Biotage. We also see great potential in India which, however, was hard struck by the restrictions resulting from the pandemic. Fortunately, we still noted a strong recovery of the operations in India in the latter part of the year. In Japan sales did not meet our expectations, but also here we saw positive signs with increased sales in the last quarter. After two quarters with weaker figures, the Americas ended the year with recovery in the last quarter, and I am very delighted to see that EMEA showed growth both in the quarter and the full year.

Looking at important investments during the year, we have expanded the machinery with automation solutions at our production unit in Cardiff, UK to strengthen manufacturing capacity. This work will continue in 2021. Furthermore, we have started work on the completion of a completely new building in Cardiff. It will be used primarily 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 efficiencies also in our production of the PhyTip^® consumables in the Biomolecules product area in the US. In 2020 we started a project to introduce automation solutions that are currently undergoing production tests. We expect to be able to deploy them in the spring of 2021.

For our future development it is reassuring to see our strong balance sheet with a net cash of 157.0 MSEK, which is a 226.2 MSEK improvement compared to last year’s net debt of 69.2 MSEK. Through focused work we have improved our operating capital by 9.2 MSEK compared to the last full year.

The year has certainly been very challenging for us all, professionally as well as on the private level. For many the Covid-19 pandemic has blurred the boundary between home and workplace. This has been and continues to be a challenge in terms of work environment issues and the balance between work and leisure. Throughout this period, Biotage has constantly been working to maintain a high level of information to the Group’s employees, both on the global level and as country specific instructions in the various regions. We have utilized digital meetings and tried to facilitate homework for all employees by providing mobile computers, screens, office chairs, etc.

It is our assessment that we will continue to live with the limitations of the pandemic also in 2021. Through the lessons we take with us from this time, we are likely to work differently also when the pandemic is finally over. During the pandemic we have learned to work with greater flexibility. We have also travelled less both within and across national borders, which contributes to diminishing our environmental footprint and to increasing sustainability. We have developed new methods of working and been forced to be innovative and swift in order to overcome various problems.

Finally, I would like to take this opportunity to thank all our talented employees who, despite very challenging external circumstances, have enabled the Group to continue to perform at such a high level. Biotage is well positioned and I am very much looking forward to continuing with another successful year 2021.

Uppsala February 12 2021

Tomas Blomquist
President and CEO

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All financial reports are published at www.biotage.com

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 February 12, 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 February 12, 2021 at 08:00 CET.

Biotage in brief

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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