First quarter January – March 2013

• Net sales amounted to SEK 63.4 (64.3) million, down 1.4 percent. Changes in the USD and EUR exchange rates had a negative impact of SEK 2.0 million on net sales.
• Operating profit totaled SEK 0.5 million (4.5).
• Loss after tax was SEK 1.7 million (profit 2.1).
• Loss per share amounted to SEK 0.36 (profit: 0.45).

Key events during the first quarter 2013

Higher investments in emerging markets
A subsidiary was established in Mexico to increase focus on the Latin American market. The subsidiary will enable Boule to meet demand for the company’s products with greater efficiency and provide better support to distributors in the region. Boule also established a sales office in Dubai. This will enable closer contact with the company’s customers in the attractive emerging markets in the Middle East and Africa.

Key events following the end of the reporting period

New premises for expansion of the OEM business
Boule continues to invest in the development of products for industrial customers, known as OEM products. To meet the predicted increase in the production of these products, a new lease was signed in early April.

Comments from the CEO

As previously communicated, the buying behavior of our customers varies considerably, which always makes individual quarters difficult to compare. This also applies to the first quarter of 2013.

In our largest market, North America, sales of human systems declined due partly to starting the year with changes in our sales and support organization. However, sales of veterinary systems rose compared with the preceding year. Sales declined in Latin America due to inefficient market penetration. This trend was already evident in 2012. Since opening the sales office in Mexico in January 2013, we have worked intensively to evaluate new and existing distribution channels in the region with the intention of capitalizing on this market’s major potential.

Sales in the EU were also weak during the first quarter, but continued to rise in Eastern Europe, particularly in Russia. In Asia, several countries contributed to an increase during the period, while sales in China showed a weak trend, partly due to inventory accumulations by distributors during the preceding quarter and more intensive competition from 5-part systems. However, market performances in Africa and the Middle East were strong and we are now beginning to see the results of our long-term efforts to penetrate these markets. The establishment of a local sales office in Dubai proceeded according to plan and entails a significant boost for our efforts in this part of the world.

In conjunction with the production of prototype instruments and cassettes for the POC system, in preparation for the planned clinical trials, we did not achieve the level of robustness required. We will now solve these problems before confirming a revised launch plan. This also entails that we can devote more attention to other areas of the business during the period, such as OEM production, where several interesting projects are currently taking place.

To summarize, the first quarter opened somewhat weaker than expected, but from what we know about our markets we remain convinced that ongoing investments in our core business will continue to drive high growth and contribute to the achievement of Boule’s growth and profitability objectives.

Ernst Westman, President and CEO, Boule Diagnostics AB

   
For further information, please contact:
Ernst Westman
President and CEO
+46-8-744 77 00
ernst.westman@boule.se

The information in this interim report is such that Boule Diagnostics AB (publ) is obligated to publish under the Swedish Securities Market Act. The information was submitted for publication on April 23, 2013 at 8:00 a.m. (CET).