Year-end report January - December 2019
Investments in growth brings Biotage’s annual sales past the billion SEK milestone
Fourth quarter October - December 2019
Net sales amounted to 288.6 MSEK (234.6), an increase by 23.0 percent compared to the corresponding quarter last year. At comparable exchange rates and adjusted for acquisitions1) sales increased by 8.7 percent.
Operating profit increased by 5.9 percent to 37.9 MSEK (35.7).
Result after tax amounted to 18.5 MSEK (27.3).
Earnings per share amounted to 0.28 SEK (0.42) before and after dilution.
The cash flow from operating activities increased by 47.9 percent to 76.3 MSEK (51.6).
Net debt1) at December 31 was 69.2 MSEK (-67.6). Cash and cash equivalents amounted to 185.9 MSEK (177.0). Liabilities to credit institutions amounted to 109.6 MSEK (109.4).
On November 6 Tomas Blomquist took over as CEO.
At the Extraordinary General Meeting on November 7 Åsa Hedin was elected new board member and Torben Jørgensen new Chairman of the Board.
Full year January - December 2019
Net sales amounted to 1,101.4 MSEK (910.9), an increase by 20.9 percent compared to the corresponding period last year. At comparable exchange rates and adjusted for acquisitions1) net sales increased by 9.3 percent.
Operating profit increased by 20.7 percent to 208.1 MSEK (172.5).
Result after tax increased by 11.4 percent to 186.8 MSEK (167.6).
Earnings per share increased by 10.8 percent to 2.87 SEK (2.59) before and after dilution.
The cash flow from operating activities increased by 36.6 percent to 211.8 MSEK (155.0).
Dividends to the shareholders were paid in May to the amount on 97.8 MSEK (90.6).
The Board of Directors intends to propose to the AGM that dividends to the shareholders relating to 2019 are paid to the amount of 1.60 SEK (1.50) per share, corresponding to 56 percent of the result after tax. According to the dividend policy Biotage shall distribute at least 50 percent of the net profit.
The acquisition of PhyNexus Inc. was completed on January 15 2019. The purchase price amounted to approx. 21.3 MUSD (approx. 190.6 MSEK2), of this sum approx. 4.8 MUSD (approx. 43.2 MSEK) in cash payment and approx. 6.6 MUSD (approx. 58.6 MSEK) in newly issued shares in Biotage was paid in connection with taking possession. The remaining approx. 10.0 MUSD (approx. 89.3 MSEK) is expected future additional purchase price payments based on future results.
The issue of consideration shares for the acquisition increased the number of shares in Biotage from 64,714,447 to 65,201,784, which has resulted in a dilution of 0.7 percent for existing shareholders.
See definition on pp. 15-16
Based on an exchange rate SEK/USD of 8,93
Comments by CEO Tomas Blomquist
It is with great joy that I deliver my first report for Biotage. The year ends with yet another sales record for the quarter and the full-year is better than ever before – in 2019 Biotage’s sales for the first time exceed the one billion SEK milestone.
The sales successes mean that Biotage exceeds the financial goal of an average annual organic sales growth of 8 percent measured over a three-year period. At the end of 2019 we achieve an average organic growth of 10.0 percent measured according to the financial target. At comparable exchange rates and adjusted for acquisitions sales increased by 8.7 percent in the quarter and by 9.3 percent in the full-year.
The gross margin for the quarter as well as for the full-year also exceeds our strategic goal of 60 percent. For the quarter the gross margin increases to 62.0 percent and for the whole of 2019 it is 62.2 percent.
The average operating margin at EBIT level for the last three-year period increases to 18.6 percent, compared to 17.2 percent one year ago. The long-term goal is a 20 percent average over a three-year period. The investments in Biotage’s future continued growth journey results in increased operating costs, however. This in combination with the net difference in impact from exchange rate changes in other operating items of more than minus 16 MSEK between the third and the fourth quarter, results in a lower reported EBIT margin for the quarter than what we have achieved earlier in the year. Profitability for the year as a whole continues to be good with an EBIT margin of 18.9 percent.
The Americas had a strong last quarter and show strong growth for the year. The Asian countries continue to show increased sales in the full-year as well as in the quarter. It is especially encouraging that our investment in our own organization in India has turned out well. Strong sales in Europe in the fourth quarter result in a good annual turnover for Europe. To sum up, all geographic regions show growth in the period as well as in the full-year.
The single largest product area, Purification, continues to lead the way with increased sales. The number of Flash purification systems sold is higher than ever, mainly due to our sales successes in China. Also our Industrial products had a strong last quarter and viewed over the whole year this product area has really developed well. The demand for Industrial products has been uneven over time, but we now see a larger customer base and extended application areas that create a basis for more stable sales in the future.
During the year we have continued investing in our semiautomatic sample preparation system Extrahera™, which is an important product for Biotage in the product area Analytical chemistry. In early 2020 we launched a new software for Extrahera requested by those parts of the market that require full traceability and connectivity to their own IT information systems. This launch increases the area of application for Extrahera and opens up for new customer groups.
In January 2019 we took possession of the American company PhyNexus, Inc. and during the year we have worked hard with the integration of the company and further development of existing products and products under development. In 2020 Biotage plans to launch PhyNexus’ automated separations solutions for plasmids. This will create additional width in our product range for separation and purification and bring us into the important and growing biomolecules area. This will make Biotage a more comprehensive separation company offering solutions both for traditional chemical substances and for biomolecules. With the ongoing initiatives we believe that Biotage has good possibilities to build a product range coveted by the market in this new exciting and growing product area.
In 2020 we will also continue investing in our production plant in Cardiff, Wales in order to further improve efficiency and increase our in-house production capacity. In connection with these investments we are also reviewing how we can reduce our environmental footprint, something which is also always a part of the development of new products. During 2019 the production in Lund was transferred to the plant in Cardiff as part of the continuously ongoing efficiency process. The production transfer caused some one-off costs in connection with relocation and reorganization.
Biotage is a healthy company and I intend to continue building profitable growth also in the future. One example is the fact that Biotage in December was presented with the “SwedenBIO Award 2019”. The citation said that we have contributed to social benefits through our achievements in research and development, business development and growth. To be able to lead a global company based in Sweden contributing to a more sustainable world with humanity and environment in focus has great emotional value for me and I am looking forward to continuing developing and refining Biotage’s offer to the market.
Coming financial reports
The Annual General Meeting 2020 will be held on April 28, 2020.
The interim report for the first quarter 2020 will be published on April 28, 2020.
The interim report for the second quarter 2020 will be published on July 17, 2020.
The interim report for the third quarter 2020 will be published on November 5, 2020.
The year-end report for 2020 will be published on February 12, 2021.
The Annual Report for 2019 is planned to be made public in week 14 2020.
All reports are available at Biotage’s website from the above dates.
This report has not been reviewed by the company’s auditors.
Uppsala February 7, 2020
President and CEO
For further information:
Tomas Blomquist, President and CEO
phone: +46 705 23 01 63
Erika Söderberg Johnson, CFO
phone: +46 707 20 48 20
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, at 08.30 CET on February 7, 2020.
Biotage offers efficient separation technologies from analysis to industrial scale and high quality solutions for analytical chemistry from research to commercial analysis laboratories. Biotage’s products are used by government authorities, academic institutions, contract research and contract manufacturing companies, pharmaceutical and food companies, among others. The company is headquartered in Uppsala and has offices in the US, UK, China, Japan, South Korea and India. Biotage has approx. 460 employees and had sales of 1,101 MSEK in 2019. Biotage is listed on NASDAQ Stockholm. Website: www.biotage.com