Report for the third quarter of 2020

July – September in brief

• Net sales totaled SEK 14,216 (24,279) thousand. Adjusted for acquired sales, bioprocess sales in 2019 and changes in exchange rates, growth rose by 18%.
• Gross profit totaled SEK 15,487 (20,814) thousand.
• Operating profit before depreciation and amortization (EBITDA) totaled SEK 3,262 (7,987) thousand.
• Operating result totaled SEK 1,715 (7,019) thousand.
• Comprehensive income was SEK 662 (7,473) thousand.
• Comprehensive income per share, basic and diluted, totaled SEK 0.01 (0.12).
• Cash flow from operating activities was SEK 1,191 (7,448) thousand.
• Cash and cash equivalents at the end of the period totaled SEK 46,231 (15,303) thousand.

January – September in brief

• Net sales totaled SEK 41,180 (47,719) thousand. Adjusted for acquired sales, bioprocess sales in 2019 and changes in exchange rates, growth rose by 14%.
• Gross profit totaled SEK 39,609 (44,123) thousand.
• Operating profit before depreciation and amortization (EBITDA) totaled SEK 2,377 (13,072) thousand was negatively impacted by non-recurring items for acquisitions and restructuring costs of SEK 2.5 million.
• Operating result totaled SEK -1,465 (profit: 10,589) thousand.
• Comprehensive income totaled SEK -4,376 (10,444) thousand.
• Comprehensive income per share, basic and diluted, totaled SEK -0.07 (0.17).
• During the year Genovis acquired all shares of QED Bioscience Inc. Total cost of the acquisition, including transaction costs, is SEK 20 million
• In the first quarter Genovis raised SEK 50 million for the Company before issue expenses in a directed share issue.

Comments from Fredrik Olsson, Chief Executive Officer

In the third quarter, organic growth for the core business for enzymes within Analytics was 18%, which is a doubling compared with the second quarter this year. Organic growth for the nine-month period for the core business was 14%.

We have periodically experienced challenges in various geographic markets as a result of local restrictions associated with the pandemic. Customers have reduced the number of employees working at the same time in laboratories to reduce the risk of spread of infection, which negatively affects productivity and the number of analyses carried out. Nevertheless, the revenue in our core business grew and we remain strongly convinced that the markets will improve over time when the restrictions can be reduced.

QED, which sells antibodies for the diagnostics industry, has been impacted by the general reduction of tests conducted within health services since fewer people seek care that is not related to the ongoing pandemic. However, at the beginning of the fourth quarter we have seen customer activities resume in QED’s antibody business as the diagnostics market recovers and more customers return to laboratories within industry and academia.

As it has become more apparent that our normal marketing activities, such as scientific conferences, trade shows and customer encounters, have all been postponed, we have transitioned to investing in our customer support systems and electronic marketing channels. The basic strategy remains the same – scientific communication with solutions and unique products for our customers within the global biopharma industry. We have streamlined the work in our electronic channels to prioritize business opportunities and new sales. With these initiatives, the inflow of new customers has continued and our customer base has continued to grow during the quarter.

We have not received any government relief, nor have we furloughed any employees, despite the uncertain situation over the past six months Instead, we have chosen to lean forward and focus our resources on bold initiatives for the future.

A strong focus on our product development projects has culminated in three product launches, two of which are completely new enzymes for analysis within the biopharma industry. We have maintained good momentum in our development pipeline and intend to launch additional products at the end of the year in order to be even better equipped for 2021.

We have also worked intensively to broaden and strengthen our industrial partnerships. This is a key component of our strategy to build customer value by offering our customers several automated workflows with our products.

Our efforts to ensure production capacity in both the short term and the long term are proceeding according to plan: in the short-term through skilled subcontractors, and in the long term through planned investments in our own infrastructure and capacity to meet our anticipated growth over time.

Despite the continued uncertainty about market conditions in the short term as a result of the pandemic, my assessment is that Genovis’ business opportunities moving forward will be strengthened as a result of initiatives with an increased focus on research, diagnostics and biological drugs in the wake of the pandemic.

I am extremely impressed by the innovation and resilience of my employees as they cope with these new circumstances, which have led to the continued strong organic growth of the core business in a challenging business climate.

Although the external situation is difficult to assess in the short term, I am convinced that our innovative efforts and business model will enable us to fulfill our high ambitions with continued strong growth over time.

For more information, please contact: Fredrik Olsson, CEO, Genovis AB Tel: 0046 (0)46 -101233 fredrik.olsson@genovis.com

Genovis’ business concept is to apply its knowledge and imagination to design and provide innovative tools for the development of the drugs of the future. Today Genovis sells several enzyme products known as SmartEnzymes all over the world in innovative product formats that facilitate development and quality control of biological drugs.The Group consists of Genovis AB and the wholly owned subsidiary Genovis Inc. (USA). Genovis shares are listed on Nasdaq First North Growth Market and Erik Penser Bank is the Company’s Certified Adviser, certifiedadviser@penser.se, T: +46 (0)8-463 83 00.

Published reports can be downloaded from the Genovis website:
https://investor.genovis.com/en/financial-reports/

This information is information that Genovis AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, by the contact person set out above, on November 5, 2020.

This press release is a translation of the Swedish original. In the event of any discrepancy between this translation and the Swedish original, the Swedish version shall prevail.