Interim report January – June 2012

Strong sales growth and higher margins

Quarter April – June 2012*

• Net sales amounted to SEK 71.0 million (57.6), up 23.3 percent. Changes in the USD and EUR exchange rates had a positive impact of SEK 3.3 million on net sales.
• Operating profit totaled SEK 8.3 million (1.4).
• Profit after tax was SEK 4.7 million (0.2).
• Earnings per share amounted to SEK 0.99 (0.05). 

Interim period January – June 2012

• Net sales amounted to SEK 135.2 million (120.8), up 11.9 percent. Changes in the USD and EUR exchange rates had a positive impact of SEK 4.6 million on net sales.
• Operating profit totaled SEK 12.8 million (7.4).
• Profit after tax was SEK 6.8 million (4.9).
• Earnings per share amounted to SEK 1.44 (1.41). 

 
Key events during and after the second quarter of 2012

••• Major order for instruments
Boule received an order for 245 instruments – the company’s largest single order for instruments to date. The order was placed by Piramal Healthcare, one of the company’s distributors in India. India is a large and rapidly growing market for Complete Blood Count and the order will provide a favorable platform for Boule to continue to capture market share in the Indian market.

••• The Annual General Meeting was held on May 3, 2012
The Annual General Meeting resolved to re-elect Lars-Olof Gustavsson, Britta Dalunde, Eva-Lotta Kraft, Åke Nygren and Gösta Oscarsson as Board members for the period until the end of the next Annual General Meeting. Lars-Olof Gustavsson was re-elected Chairman of the Board. In other respects, the Annual General Meeting adopted the submitted proposals. A complete press release from the Annual General Meeting is available on Boule’s website: www.boule.se.

••• New distributor in Russia
In July, Boule shipped its first delivery to Diakon ZAO, new distributor of the Swelab system in the Russian market. Russia is a large and rapidly expanding market for Complete Blood Count and with Diakon as a complement to the existing distributors, there is major potential for Boule to continue to capture market share in the Russian market.

 
Comments by the CEO
The second quarter of 2012 started with our largest single order for instruments to date – 245 instruments were ordered by one of our two distributors in India. When we summarize the quarter, we can confirm that we achieved sales of SEK 71.0 million, the company’s highest quarterly sales to date and a year-on-year increase of more than 23 percent. The gross margin rose from 44.5 percent to 46.0 percent. We are satisfied with the strong sales and margin trend, but it is also important to emphasize that it is difficult to compare various quarters due to our customers’ irregular purchasing patterns.

In North America, our principal market, sales of human instruments continued to increase, while sales of veterinary instruments remained at the same level as the year-earlier period. Sales to the veterinary market in North America are managed by a large distributor with the capacity to stock both instruments and consumer products, which impacted our sales between the quarters. The trend in the South American market was steady, albeit somewhat weaker than in the year-earlier period, primarily due to a one-off delivery in 2011.

Sales of both human and veterinary instruments in Europe continue to display strong growth and in Russia, where we added another distributor, a very positive sales increase was noticeable. The trend in the Asian market also remained stable, with China displaying substantial growth, while our sales in India were slightly below last year’s level. Looking ahead, we see that consolidation of the fragmented Indian market will begin, still maintaining a high growth rate.

Sales of consumables to our own instruments are increasing steadily and according to plan. A positive sales trend was also noted for CDS reagents (Boule’s reagents for competitors’ systems), while sales of OEM reagents declined slightly compared with the year-earlier period. However, our assessment remain that reagents to our own systems will display a strong sales development. Also for OEM reagents we expect good future opportunities whereas CDS reagents are more difficult to forecast.

Furthermore, during the second half of 2012, we will be increasing the launching efforts for our most sophisticated product – the Quintus five-part system – where we have implemented various improvements and developed training programs to ensure satisfactory support for installation and service.

In conclusion, it is gratifying that the new production facility for reagents in Sweden is in operation and that we have already produced more than we did during the entire 2011, due in part to the relocation of sections of the reagents production from the US to Sweden. This will result in improved logistics for customers and enhanced production economy.

Ernst Westman, President and CEO, Boule Diagnostics AB

The information in this interim report is such that Boule Diagnostics AB (publ) is obligated to publish under the Swedish Securities Market Act. (CET).

Ernst Westman                                                                 Fredrik Alpsten
President and CEO                                                             CFO
+46-8-744 77 00                                                                 +46-8-744 77 00
ernst.westman@boule.se                                                    fredrik.alpsten@boule.se