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Boule Diagnostics AB (publ) Interim report January – June 2017

Stable sales following a strong first quarter, restructuring expenses burden profitability

Quarter April–June 2017

  • Net sales amounted to SEK 104.3 million (102.0), up 2.3 percent. Adjusted for the change in the USD and EUR exchange rates, this corresponds to a decrease of -1.4 percent.
  • Number of instruments sold in the quarter was
  • 1,092 (1,143), a decrease of 4 percent.
  • Cash flow from operating activities amounted to SEK   5.0 million (-1.1).
  • Operating profit, including non-recurring costs for efficiency improvements, was SEK -0.7 million (12.6) which corresponds to an operating margin of -0.7 percent (12.3).
  • Net profit amounted to SEK -1.1 million (9.0).
  • Earnings per share before dilution amounted to SEK
  • -0.24 (1.91) and after dilution to SEK -0.24 (1.89).

Interim period January-June 2017

  • Net sales amounted to SEK 210.9 million (186.4), up 13.2 percent. Adjusted for the change in the USD and EUR exchange rates, this corresponds to an increase 9.0 percent.
  • Number of instruments sold in the period was
  • 2,235 (1,838) an increase of 22 percent.
  • Cash flow from operating activities amounted to SEK   23.5 million (5.0).
  • Operating profit, including non-recurring costs for efficiency improvements, was SEK 11.2 (21.0) which corresponds to an operating margin of 5.3 percent (11.2).
  • Net profit amounted to SEK 7.5 million (15.2).
  • Earnings per share before dilution amounted to SEK 1.60 (3.24) and after dilution to SEK 1.56 (3.20).

Significant events during the quarter

Actions to increase efficiency and profitability  

During the quarter, the company has completed several processes to increase efficiency and future profitability. These actions, including the discontinuation of the Chinese production facility, affects several functions and divisions and have been costly, but is expected to yield improvements in efficiency and profitability already by the third quarter of 2017. The company has reserved a total of around SEK 4 million for these events.

Non-recurring costs

The quarter has been affected other non-recurring costs, in addition to the aforementioned costs associated with the profitability improvements, of about SEK 8 million. These costs include additional costs for the CEO succession, costs for the employee option programs and write-downs of accounts receivable. 

Significant events after the quarter

Boule’s CFO is leaving the company

Fredrik Alpsten, who have served for six years as the CFO of the company, has informed the company that he wishes to resign from his post and leave the company. He will leave his post at the latest during early 2018 for a position at a new employer. We would like to thank Fredrik Alpsten for his valuable contribution and wish him all the best in his future endeavors. The process to recruit a new CFO has been initiated.    

Comments from CEO Fredrik Dalborg

”In the first quarter of 2017, we saw sales growth of 26% and a 65% increase in number of instruments sold. Second quarter sales that amounted to MSEK 104.3 (102.0) are approximately in line with the previous quarter. However, compared to quarter 2, 2016, when we won major procurements in Mexico, for instance, sales growth was 2%. For the first six months of the year however, the increase in sales was 13% and on a rolling 12-month basis 17%.

We have chosen to take action and incur costs in this quarter to increase our efficiency and profitability in the future. Our growth and profitability targets remain, even though quarterly variations may occur as a consequence of tenders etc.

In 2017, we have put a greater focus on India and Asia where there is strong growth and good market potential. According to our assessment India is now the world's largest hematology market. During the quarter, we won another public procurement in the Indian state of Assam. The procurement is for 140 instruments that will be used in mobile units. To build our position in these markets we accept selling instruments at a somewhat lower price, which reduces our gross margin. However, in our assessment, higher sales of consumables will gradually compensate for this and eventually deliver better gross margins. During the month of July we raised our reagent prices in India, and it was encouraging to note that growth in consumables in Asia was over 50% in the quarter. At the same time, we are reviewing our structure in these countries to improve growth and margins. 

We will now continue to work to strengthen the company and take it to the next level. As previously communicated, our priorities are:

  1. Further measures to support and strengthen the company's sales and profitability growth,
  2. To continue to improve current products and develop new ones,
  3. To strengthen and expand our product portfolio via distribution agreements, OEM contracts and possible acquisitions.”

For further information, please contact:
Fredrik Dalborg, CEO and Group President, Boule Diagnostics AB, tel +46 705-58 51 05 

About Boule Diagnostics AB (publ)
Boule Diagnostics AB is a rapidly growing global diagnostics company that develops, manufactures and markets instruments and consumable products for blood diagnostics. The company serves hospitals, clinics, laboratories and companies within blood diagnostics, in both human and veterinary hematology. The company operates via subsidiaries in Sweden and the USA. The company products are sold globally primarily through distributors, supported by Boule’s own local sales and support personnel. The Boule shares are listed on Nasdaq Stockholm since 2011. www.boule.se 

This information is information that Boule Diagnostics AB is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact person set out above, at 08.45 CET on August 25, 2017.