Year-end Report January – December 2018

October – December in brief

• Net sales rose by about 51 percent to SEK 10,537k (6,974k).

• Gross profit for the periodimproved by SEK 4,013k to SEK 10,956k (6,943k).

• Operating profit/loss before depreciation and amortization (EBITDA)* totaled SEK 2,954 (loss: 574k).

• Operating profit/loss improved by SEK 3,056k and totaled SEK 1,912k (loss: 1,144k).

• Comprehensive income for the periodimproved by SEK 2,542k to SEK 1,285k (loss: 1,257k).

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

• Cash flow from operating activities was a loss of SEK 235k (loss: 1,436k).

• Genovis was certified to ISO 9001:2015. Quality certification means that the management system meets the requirements imposed by International Standard ISO 9001:2015. The certification covers product development, production and sales. 

The full year in summary

• Net sales rose by about 51 percent to SEK 34,568k (22,867k).

• Gross profit improved by SEK 11,975k to SEK 33,816k (21,841k).

• Operating profit/loss before depreciation and amortization (EBITDA)* totaled SEK 4,091k (loss: 6,226k).

• Operating profit/lossimproved by SEK 6,875 to a loss of SEK 960k (loss: 7,835k).

• Comprehensive income for the full year improved by SEK 6,552k to a loss of SEK 1,560k (loss: 8,112k).

• Comprehensive income per share**, basic and diluted, improved by SEK 0.11 to SEK -0.03 (-0.14).

• Cash flow from operating activities was a loss of SEK1,250k, (loss: 8,355k).

* Genovis has chosen to apply IFRS 16 in advance, as well as the simplification rule regarding short-term leases. Consequently, this will not have any effect on the figures reported for 2017. Costs for rent and leases are therefore recognized under depreciation and amortization and beginning in 2018 will not affect EBITDA for the Group.  Readmore under accounting policies, page 12.

** Earnings per share is calculated by dividing comprehensive income by the weighted average number of shares during the year. There is no dilution effect.

Comments from Fredrik Olsson, Chief Executive Officer  

We ended an extremely successful 2018 with our best quarter ever in terms of both sales and profit. Sales jumped 51 percent compared with the same quarter last year and adjusted for currency effects, organic sales growth was 41 percent. 

For the second consecutive quarter we can report an operating profit – in the fourth quarter it hit SEK 1.9 million, which gives an operating margin of 18 percent. Operating profit improved significantly both year on year and quarter on quarter. 

We see growth in both the quarter and the full year in all main geographic markets – North America, Europe and Asia – and the percentage increase in sales is broadly distributed across the entire product portfolio. 

Sales for the full year reached SEK 34.5 million, which represents growth of about 51 percent compared with 2017. We have achieved strong and steady growth for four consecutive years as a result of our dedicated hard work following clear strategies for productdevelopment, production, support and marketing.  

The substantial improvement in our operating profit compared with the previous year clearly confirms that our business model delivers. In 2018 we laid the foundation for the future expansion of Genovis.  

Our focus on enzymes for glycan analysis has demonstrated clear value in both academic and industrial applications. In particular, the considerable attention received by scientific publications from the FDA and Johns Hopkins University indicates the value of the products in research. We will continue our product development within glycan analysis moving forward in order to offer products that both improve and simplify the efforts of our customers to develop new and better drugs. 

An important milestone for the year was the certification of our operations in compliance with ISO 9001:2015. The work with quality certification has been extensive and was carried out at the same time as our new product launches and the expansion of both production and the marketing organization. 

As I look ahead to 2019, I see several exciting new business opportunities that can contribute to the continued development of Genovis. With a strong 2018 behind us, we will focus our product development on new enzymes, as well as on added-value products from our current enzyme base. One example is FabRICATOR-HPLC, which we launched during the autumn. Refining and adapting products for automated analysis systems is an important aspect for solving the challenges our customers in the biopharma industry need to address moving forward – with increasing requirements for productivity and product safety. Closer collaboration with leading suppliers of instruments and technology is crucial if we are to make quick progress in this area, for which reason it will be the focus of our efforts during the year. 

In summary, 2018 was a breakthrough year for Genovis and confirmation that our agile and customer-focused organization continues to build value for customers, employees and shareholders. 

I would like to thank our shareholders and the Board of Directors for their support and dedication during the year. At the same time, I would like to warmly thank my colleagues for their wonderful contributions during 2018 which have enabled Genovis to make major advances in its development.  

We expect continued sales growth in early 2019 and I look forward with great excitement and dedication to our continued journey 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, certifiedadviser@penser.se, 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 26, 2019.

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.