Year-end Report January – December 2017

October – December in brief

Genovis has continued to expand in Asia and signed another distribution agreement for the Chinese market with Shanghai Titan Scientific Ltd., as well as a distribution agreement with Allianz Bioinnovation for the Indian market. As a result of these agreements Genovis has expanded its presence in one of the world’s largest and most exciting markets, Asia. Both the Chinese and Indian markets for the biopharmaceuticals are undergoing strong growth.

• Net sales rose by about 26 percent to SEK 6,974k (5,551k).

• Gross profit improved by SEK 1,418k and totaled SEK 6,943k (5,525k).

• Gross margin* was 93 (93) percent.

• Operating result before depreciation and amortization totaled SEK -574k (-1,973k).

• Operating result improved by SEK 1,154k and totaled -1,144k (-2,298k).

• Comprehensive income for the period improved by SEK 1,126k to a loss of SEK 1,257k (loss: 2,383k).

• Comprehensive income per share, basic and diluted, totaled SEK -0.02 (-0.04).

• Cash flow from operating activities was a loss of SEK1,114, (loss: 2,074k).

January–December in brief

• Net sales rose by about 23 percent to SEK 22,867k (18,542k).

• Gross profit totaled SEK 21,841k (23,281k).

• Gross margin* was 90 (92) percent.

• Operating result before depreciation and amortization totaled SEK -6,226k (-13,475k).

• Operating result improved by SEK 6,934k and totaled -7,835k (-14,769k).

• Comprehensive income for the period improved by SEK 6,906 to a loss of 8,112k (loss: 15,018k).

• Comprehensive income per share, basic and diluted, improved by SEK -0.18 to SEK -0.14 (-0.32).

• Cash flow from operating activities was a loss of SEK8,034k, (loss: 16,075k).

*Excl. other revenue and “Change in inventory, finished goods”

Comments from Fredrik Olsson, CEO

More products and larger geographic presence provide strong position for future growth  

I’m pleased to report that 2017 was yet another successful year for Genovis. We ended the year with our strongest quarter ever, in terms of both sales and earnings before depreciation and amortization. We have thereby demonstrated high and stable organic growth for 13 consecutive quarters.

Fourth quarter sales totaled almost SEK 7 million, representing organic growth of about 26 percent compared with the corresponding period the previous year. Our operating result before depreciation and amortization is the best in a single quarter in the history of the company and it is particularly satisfying that we retained a gross margin of over 90 percent despite our sales growth and the addition of new products. This achievement clearly confirms that our business model is scalable and can be used to leverage continued growth.  

Net sales for the full year ended at SEK 22.9 million, an increase of 23 percent compared with the previous year. New customers and a higher rate of repurchases, especially during the second half, have provided a clear boost to sales. The result for the full year has also shown a clear improvement.

We continue to maintain a high pace in our marketing campaigns through efforts such as participation in several conferences and customer encounters. We have received further confirmation from our customers that the new glycan analysis products perform better than other established products. As a result of our technical support and our strong customer relationships, sales are also taking off faster than previously. This trend is especially clear for the recently launched products that are initially used in the discovery and preclinical phase. But we have also noted during the year that customers are starting to use our established protein analysis products in early clinical phase.  

Significant growth in the product portfolio characterized 2017 and we have positioned ourselves as the leading innovator in enzymes for protein analysis. We note a clear difference in how customers and competitors perceive Genovis, which opens new opportunities for growth, partnerships and continued strong product development.

Our operational objectives for 2017 were to expand the product portfolio with at least three new product launches and to establish a geographic presence in strategically important markets. We can now check off these goals. We have launched an impressive five new products this year and have strategic partnership agreements in both China and India.  

As I look forward to 2018, I continue to see ample opportunity for growth and expansion. There is an underlying growth in the market, which means new opportunities for Genovis. Our customer base has shown strong growth in 2017 and these customer relationships have given clear indications of needs that we will be able to capitalize on moving forward.  

Sales at the beginning of 2018 are at a higher level than at the same time in 2017, which means that we still have a positive fundamental outlook for full year 2018. As previously, we also expect seasonal variations in sales to lead to some displacements of revenue between individual quarters, but underlying growth will continue to be strong. 

We will need to recruit several highly educated employees to our growing organization, especially to the marketing organizations in the US and Europe. Our aspiration is to continue to maintain a high launch rate with the goal of three new products per year. Another objective is to establish partnerships in a few more Asian markets. Genovis is currently a global business based on solid revenue streams and our successes in 2017 has thereby built a solid platform for 2018 and the future. 

I would like to thank our employees, the Board of Directors and our shareholders for their dedication this past year and look forward with confidence to a new exciting year at Genovis. 

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

ABOUT GENOVIS

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 Stockholm and Erik Penser Bank is the Company’s Certified Adviser. T: +46 (0)8-463 83 00.

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 February 28 2018.

This Year-end Report  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.