Perbio Science AB. Interim Report January-March 2002

Interim report Perbio Science AB January-March 2002 A strong start to the year · Net sales up 30% to SEK 552 (425) million · Operating profit before amortisation of goodwill up 33% to SEK 104 (78) million · Profit after financial items up 27% to SEK 95 (75) million. Last year's financial items included exchange gains of SEK 11 m, of which there were none this year; excluding these exchange gains, profit after financial items climbed 48% · Net profit up 29% to SEK 58 (45) million · Stronger market position: - Media factory completed in the USA - New raw material base for serum production due to acquisition from Selborne Biological Services Pty. Ltd. in Australia - New BioProcess Container technologies due to acquisition from Float Mach Inc. in the USA Summary: January-March 2002 Perbio Science has continued to cement its position as one of the world's leading suppliers of products for the research, development and production of protein-based pharmaceuticals. Sales for the period climbed 30% to SEK 552 (425) million. The USD was around 7% stronger against the SEK relative to the same period last year but the average exchange rate for the period was slightly below that for the fourth quarter of 2001. The gross margin was 0.8 percentage points down on the same period last year due to a lower gross margin for the Milwaukee operation and very strong growth at the Cell Culture division pushing up the division's share of the group's overall sales. Profit before amortisation of goodwill increased by 33% to SEK 104 (78) million. Net profit climbed 29% to SEK 58 (45) million. Research and development expenses increased by 37% to SEK 33 (24) million and now account for 6.0% (5.6%) of the group's sales. The main benefactors have been the Bioresearch division and the Cell Culture division's BioProcess Container (BPC) business. The new plant for the production of cell culture media based on BPC technology was completed during the period. The plant will be validated and tested during the second quarter and commercial production is expected to begin during the third quarter. The divisions: January-March 2002 Bioresearch Sales increased by 4% to SEK 205 (198) million. Sales from the plant in Milwaukee were down 25% on the same period in 2001, due primarily to the amidite products (reagents for DNA synthesis) taken over from Amersham Biosciences in September 2001. Sales of amidites fell back in 2001 but are now higher than in the fourth quarter. The drop in sales from Milwaukee cut the division's growth during the period by ten percentage points. The table below shows how sales from the division's plant in Milwaukee have developed: Q1 Q2 Q3 Q4 Q1 (USD m) 2001 2001 2001 2001 2002 Sales 6.3 6.5 4.8 3.8 4.4 The division's gross margin narrowed slightly relative to the same period last year because sales of amidites are attracting lower margins than before. Margins on other products increased, due partly to a higher proportion of sales being channelled through subsidiaries directly to end-customers in Europe and partly to higher prices for new products. Cell Culture Sales rose by 58% to SEK 304 (193) million, all of this growth being organic. Both sales and margins improved during the period in all three product areas: serum, cell culture media and BioProcess Containers (BPCs). The development of BPCs and interest among customers in the new single-use production system based on BPC technology has rapidly increased. The continued very rapid rate of growth is attributable to growing market share and strong demand for cell culture media for the production of vaccines and protein pharmaceuticals. Prices for high-quality serum also rose slightly, with the average price for high-quality serum (FBS) 4% up on the same period last year. Two acquisitions were made during the period to safeguard this strong growth and develop the BPC technology. The acquisition of Australian company Selborne Biological Services Pty. Ltd.'s FBS business has improved the group's access to serum raw material, while the acquisition of US company Float Mach Inc's BPC business has strengthened our activities in the BPC field. These acquisitions did not have a material impact on the group's results for the period. The division has continued to step up its investment in research and development in BPCs and special cell culture media. The new plant for the production of cell culture media based on BPC technology is now complete. Customers have shown considerable interest and commercial production is expected to begin during the third quarter. The new technology offers a strong alternative to traditional production plants and enables customers to rationalise their own production. Medical Device Sales climbed 26% to SEK 43 (34) million. The division reported rapid growth in two areas during the period: voice prostheses/heat & moisture exchangers (HMEs) and contract production of obesity products. HMEs were the fastest-growing product group and gained reimbursement status in France in March, which will boost sales in the French market. The HME product Provox FreeHands HME, which was launched successfully in a number of European countries during the fourth quarter of 2001, has been warmly welcomed by the market. The gynecology product MenoTreat was licensed out during the period. ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2002/05/02/20020502BIT00160/wkr0001.doc The Full Report http://www.waymaker.net/bitonline/2002/05/02/20020502BIT00160/wkr0002.pdf The Full Report