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Boule Diagnostics interim report Q3 2024

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Strong improvement in profitability

Quarter July - September 2024

  • Net sales amounted to SEK 130.4 million (139.6), corresponding to a decrease of 6.6 percent. Organic sales growth amounted to -2.0 percent, currency effects amounted to -4.6 percent.
  • The number of instruments sold decreased by 29.1 percent to 716 (1,010).
  • Gross profit amounted to SEK 61.0 million (57.8), corresponding to a gross margin of 46.8 percent (41.4).
  • Adjusted operating profit amounted to SEK 15.3 million (7.9), corresponding to an operating margin of 11.8 percent (5.7).
  • Non-recurring expenses amounted to SEK 294.2 million, mainly attributable to the impairment of intangible assets of SEK 265 million, restructurings of SEK 3.0 million and the impairment of assets in Russia of SEK 26.2 million. The total impairment of Russia was SEK 43 million, but SEK 16.8 million affected the Swedish legal entity.
  • Operating profit amounted to SEK -278.9 million (7.9), corresponding to an operating margin of -213.8 percent (5.7).
  • Profit for the period amounted to SEK -229.2 million (4.6).
  • Earnings per share before and after dilution amounted to SEK -5.90 (0.12).
  • Cash flow from operating activities amounted to SEK 5.2 million (27.8).
  • The Group's available cash and cash equivalents, including unutilized overdraft facilities, amounted to SEK 47.7 million (112.1) as of 30 September.

Comments by the CEO Torben Nielsen

Strong improvement in profitability

Sales in Q3 reached SEK 130M and declined organically by 2%, currency impacted with -4,6%. Reagents sales declined partly due to our transition to a license model in India. OEM sales was very strong and exceeded Q3 last year by 51%.

While the overall demand for our instruments remains stable, we see a need for further development of our instrument portfolio as the market continues to shift to 5-part technology and cost-effective value offerings. Consequently, we decided to narrow the scope of the BM900 platform project to not include a premium 3-part option. This decision together with the project delays have adversely impacted the valuation of the project, leading to an impairment and a one-off non-cash cost of SEK 265M.

Gross margin improved to 46.8% (41.4), despite lower sales. It was positively impacted by growing licensing fees from India, strong OEM sales and efficiency improvements in our production. Operating expenses decreased by 6.6% due to our continued restructuring initiatives and in this quarter, we further reduced headcounts resulting in SEK 16M of annual savings. Adjusted operating profitability improved 93,7% to SEK 15.3M (7.9) with an operating margin of 11.8% (5.7%)​.

To manage the geopolitical risks and ensure the sustainability of our business, we decided to change our local presence in Russia by initiating the process of divesting our Russian manufacturing facility. Consequently, we have communicated a write down of our assets.

Defining our strategy for 2025

As we look toward 2025, our vision remains unwavering: to drive innovation, foster sustainable profitable growth, and create value for our stakeholders. The rapid pace of technological advancement and evolving market dynamics require us to be more agile and forward-thinking than ever before. During my first two quarters as CEO, we have taken a very detailed look at our business, reviewed the market in which we operate and devised a strategic plan based on three focus areas which will direct our actions as we move forward:

Expand operating margins through reductions in structural cost

To achieve sustainable and profitable growth, we will undertake a comprehensive restructuring of our organization. This will involve consolidating functions and sites to streamline operations and reduce overhead costs. Additionally, we will lean out our processes to enhance efficiency and foster innovation. Implementing these strategic initiatives, we aim to create a more agile, responsive, and competitive organization.

Accelerate growth through strategic organic investments

We will expand and strengthen our channel reach in high-growth markets with a primary focus on introducing our veterinary portfolio into new and emerging markets. Additionally, we will establish a local presence in strategic locations to enhance our market penetration and customer engagement. These initiatives will position us to capitalize on emerging opportunities and deliver value to our customer base.

Building a better, stronger, growth-oriented portfolio

Finally, we aim to develop a portfolio that is resilient, focused on high-potential areas and positioned for long-term growth. We need cost effective solutions for the Value segment as well as more differentiated solutions for the premium segments of the market. Additionally, we look to expand our offerings beyond hematology to diversify our product range. These initiatives will help us meet customer needs, enhance our market presence.

While our focus on profitability and our recent decisions related to Russia and the BM900 project may seem defensive by nature they will allow us to focus our efforts on initiatives that will drive future growth and increase profitability.

Thank you for your continued support and trust in our vision. Together, we will build a stronger business.

THE INTERIM REPORT IS FOUND BELOW AS A PDF.

Presentation of the interim report
At 10.00 CEO Torben Nielsen and CFO Holger Lembrér will present and comment on the interim report. After the presentation there will be time for audience questions. The presentation will be held in English.

Enter the Teams live event and download presentation material at:

https://boule.com/investor-relations/

For more information, please contact:
Torben Nielsen, CEO and Group President, Boule Diagnostics AB, phone +46 (0)70-558 51 05 torben.nielsen@boule.com

Holger Lembrér, CFO, Boule Diagnostics AB, phone +46 (0)72 230 77 10 holger.lembrer@boule.com

About Boule Diagnostics AB (publ)

Boule Diagnostics AB (publ) is a global diagnostics company specializing in near-patient, decentralized blood diagnostics and one of the few companies in the global diagnostics market that conducts its own development, manufacturing and marketing of instruments and consumables for blood diagnostics. The Company primarily serves hospitals, clinics, laboratories and other diagnostics companies to which it offers complete systems for blood diagnostics (hematology) in both the human and veterinary areas. Boule has strong positions in important emerging markets such as in Asia and in recent years has improved its position in the fast-growing veterinary market. Operations are conducted through operating subsidiaries in Sweden, the United States, Mexico and Russia. The Group reported net sales of SEK 571 million in 2023 and has more than 200 employees. Sales are conducted globally, predominantly through the company’s 200 or so distributors in over 100 countries, supported by Boule’s own local sales and service personnel. Boule has been listed on Nasdaq Stockholm since 2011.http://www.boule.com

This information is information that Boule Diagnostics AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 08:00 CET on October 25, 2024.

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