Biotage AB (publ) Year-end report January – December 2021

Strong growth, both organic and acquired

October–December
 

• Net sales amounted to SEK 341 (298) million, an increase of 14.5 percent and an organic* growth of 10.0 percent.
• The operating profit amounted to SEK 61 (60) million, and adjusted to SEK 70 (60) million.
• The operating margin was 18.0 percent (20.0), and adjusted was 20.7 percent (20.0).
• EBITA* amounted to SEK 67 (62) million, and adjusted to SEK 76 (62) million.
• EBITA margin* was 19.5 percent (20.9) and adjusted was 22.2 percent (20.9).
• Profit after tax amounted to SEK 46 (44) million. 
• Earnings per share were SEK 0.69 (0.68) before and after dilution.
• Cash flow from operations increased to SEK 104 (88) million.
• Net cash* as of December 31 amounted to SEK 51 (157) million.
• Maja Nilsson took office as Biotage's new CFO on October 1.
• On October 20, Biotage acquired ATDBio, Ltd.

January–September
 

• Net sales amounted to SEK 1,232 (1,092) million, an increase of 12.7 percent and an organic* growth of 17.5 percent.
• The operating profit amounted to SEK 271 (206) million, and adjusted to SEK 283 (206) million.
• The operating margin was 22.0 percent (18.9), and adjusted was 23.0 percent (18.9).
• EBITA* amountd to SEK 284 (216) million, and adjusted to SEK 396 (216) million.
• EBITA margin* was 23.1 percent (19.8), and adjusted was 24.0 percent (19.8).
• Profit after tax amounted to SEK 205 (175) million. 
• Earnings per share were SEK 3.13 (2.69) before and after dilution.
• Cash flow from operations increased to SEK 353 (279) million.
• On October 1, Maja Nilsson succeeded Annette Colin as CFO
• On October 20, Biotage acquired ATDBio, Ltd.
• The Board of Directors intends to propose to the Annual General Meeting a dividend to the shareholders for 2021 of SEK 1.55 (1.50) per share, corresponding to 50 percent of the result after tax. According to the dividend policy Biotage shall distribute at least 50 percent of the net profit.

Message from the CEO

A strong end to the year

Biotage has managed to deal with the global challenges in the supply chain and ended 2021 with another sales record in the fourth quarter. At the same time, the integration of the newly acquired British company, ATDBio, got off to a quick start and reflects our strategic focus on finding key roles in attractive niche areas.

We once again broke the sales record in the fourth quarter, with sales exceeding SEK 341 million. Even when we exclude currency effects and the SEK 10 million brought in by ATDBio, we are showing double-digit organic growth figures for the quarter. Comparative figures are also being released for the first time, from a quarter when we began to gain an impact on our business with Scale-up solutions for lipid purification, which are part of the development and manufacture of COVID-19 vaccines.

In the wake of the pandemic, the global challenges in the supply chain continued during the quarter. They show no signs of slowing down and affect almost all industries, with high purchase prices for raw materials and freight costs, a general shortage of certain input products and long lead times. Biotage have also been affected, but with an incredibly strong effort, our organization has managed to deal with this in a fantastic way throughout the year and a challenging fourth quarter. We have kept to our delivery times, and, thanks to a good combination of products and markets as well as the large sales volume with positive currency effects, which counteract the impact from the supply chain, we succeeded in achieving one of our strongest quarters in a long time with a gross margin of 62.1 percent.

I am extremely proud of the steps Biotage has taken on its profitable growth journey in 2021. In total, we have grown organically by 17.5 percent, well above the financial target of 8 percent over three years. The operating margin, EBIT, was 22 percent for the year, which is fully in line with our strategy of achieving profitability in order to be able to invest in new, innovative products and segments.

However, if we look at the fourth quarter alone, the operating margin is slightly lower, which is explained by costs associated with the acquisition of ATDBio. In addition to the direct transaction costs that impact this quarter, there has also been an effect on our operating costs that we will have to live with some time. This is due to an expected additional consideration to the sellers. The acquisition-related costs correspond to 2.7 percentage points on the margin; the adjusted operating margin for the quarter is 20.7 percent, which is in line with our financial goal that the operating margin should amount to a minimum average of 20 percent over a three-year period. However, the acquisition of ATDBio is an investment in the future that brings us expertise and important platform solutions. We have succeeded in filling a gap that existed in our product offering, which would streamline our clients’ workflows.

Combined with Biotage’s capacity in both its production processes and ability to reach out to markets all over the world, ATDBio offers big potential for us to build on. The synthesis and purification of DNA and RNA-oligonucleotides is today a rapidly growing sector with applications in the development of new drugs, therapies, diagnostics – for example, the PCR testing we have become so familiar with recently – as well as DNA and RNA sequencing.

Following the acquisition, we applied the new Integration Playbook for the first time, as part of our efforts to improve and streamline the integration of acquired companies and get a quick return on the deal. Only two days after the agreement was signed, our effective and structured process was under way, and it has since proceeded according to plan.

During the fourth quarter, Biotage grew in all four product focus areas: Analytical Chemistry, Organic Chemistry, Scale-up, and Biomolecules. Scale-up accounted for particularly strong growth. In the reported figures, ATDBio accounted for two-thirds of the area’s growth, while organic growth was mainly driven by the aforementioned lipid purification business. In the case of Biomolecules, we have not yet achieved full effect in the roll-out of our new product PhyPrep, which is expected to take off in 2022.

Both the Americas and International regions (which include EMEA and APAC) showed good growth. In particular, sales grew in EMEA, where the lipid purification business is concentrated. In the Americas, sales of consumables grew strongly in Analytical Chemistry, as normal sampling operations started during a quieter period of the pandemic. For APAC, it was primarily China that drove growth through a sharp increase in system sales in Organic Chemistry as a result of new investments by pharmaceutical and contract research companies.

An area where we are now strengthening our focus even more is sustainability. When global sustainability assessment company EcoVadis, which has audited and ranked tens of thousands of companies in sustainability, conducted an independent external audit of our sustainability work in 2021, we were given a “gold medal”. This means that we rank among the top 5 percent of companies audited. We now want to sharpen up even more. Among other things, we decided to introduce new manufacturing processes in 2022 with the aim of further reducing the use of organic solvents at our production facility in Cardiff, where we also aim to reduce our carbon footprint with the help of solar panels.

In summary, we are now putting a very successful 2021 behind us, and I would like to thank all our employees who have put so much effort into getting us where we are today. I would also like to thank all our shareholders for their continued confidence, and I look forward to continuing the success in 2022 with new records.

Uppsala, February 11, 2022

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 11, 2022

Tomas Blomquist

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 February 11, 2022 at 08.00 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 497 people worldwide. The Group had sales of 1,232 MSEK in 2021 and our products are sold in more than 80 countries. Biotage’s share (BIOT) is listed in the Large Cap segment on the NASDAQ Stockholm.

Website: www.biotage.com

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