Interim report January-September 2008

Continued strong growth in sales, profitability and cash flow from operating activities

• Sales increased by 17 percent to SEK 166.1 (141.4) million. Calculated in local sales currencies growth was 19 percent. During the third quarter sales amounted to SEK 50.9 (44.6) million, corresponding to an increase of 14 percent. Calculated in local sales currencies growth was 15 percent. During the third quarter a particularly large increase was noted for fertility products in Europe, 25 percent, which is Vitrolife’s largest region in terms of sales.

• Gross income increased by 18 percent to SEK 115.1 (97.5) million, the gross margin was 69 percent (69). Gross income for the third quarter increased by 15 percent to SEK 35.2 (30.5) million and the gross margin was 69 (68) percent.

• Operating income increased by 21 percent and amounted to SEK 21.7 (17.9) million, which gives an operating margin of 13 (13) percent. For the third quarter operating income increased by 24 percent and amounted to SEK 5.1 (4.1) million.

• Operating income before research and development costs increased by 19 percent to SEK 44.5 (37.5) million. This corresponds to a margin of 27 (27) percent. For the third quarter the increase was 20 percent to SEK 12.6 (10.5) million.

• Consolidated net income increased by 25 percent adjusted for last year’s capitalization of the deferred tax asset in loss carry-forward for tax purposes to the tune of SEK 12.3 million. Net income was SEK 20.0 (28.2) million, which gives earnings per share of SEK 1.01 (1.42). For the third quarter net income was SEK 5.9 (7.7) million and earnings per share were SEK 0.30 (0.39). Last year’s figure includes capitalization of a deferred tax asset in loss carry-forward for tax purposes to the tune of SEK 4.1 million.

• The equity/assets ratio amounted to 84 percent (83).

• The cash flow from operating activities increased by 50 percent and amounted to SEK 27.1 (18.0) million. The cash flow for the third quarter was SEK 5.8 (5.6) million.

• Acquisition of a further 9 percent of the Italian subsidiary A.T.S., according to plan.

• Investment in a new, more efficient, production facility in Gothenburg.

• Buying back of the company’s own shares during the period.

• New unique needle, Swemed Sense™, launched and approved for sales in Europe.

• First lung transplantation outside Sweden using Steen Solution™ carried out.

• Approval given for a clinical study on STEEN Solution™ in Canada, which will form the basis of the application for sales approval in the USA and Canada.

• The first three transplantations in Canada were carried out at the end of the period.


October 22, 2008
Kungsbacka, Sweden

Magnus Nilsson
CEO

Queries should be addressed to:
Magnus Nilsson, CEO, phone +46 31 721 80 00 or +46 708 22 80 61.
Anna Ahlberg, CFO, phone +46 31 721 80 13 or +46 708 22 80 13.