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Boule Diagnostics AB (publ) Interim report January–June 2019

The trend of strong growth in sales continues  

Quarter April–June 2019

  •  Net sales amounted to SEK 119.7 million (107.8), up 11.1 percent. Adjusted for the change in exchange rates, this corresponds to an increase of 5.3 percent.
  •  Number of instruments sold in the quarter was 1,100 (962), an increase of 14,3 percent.
  •  Cash flow from operating activities amounted to SEK 15.6 million (10.0).
  •  Operating profit was SEK 5.9 million (19.8) which corresponds to an operating margin of 5.0 percent (18.4). Excluding the bad debt reserve the operating margin was 9.8 percent.
  •  Net profit amounted to SEK 0.3 million (14.9).
  •  Earnings per share before and after dilution amounted to SEK 0.01 (0.77).

 Interim period January–June 2019

  •  Net sales amounted to SEK 238.4 million (207.3), up 15.0 percent. Adjusted for the change in exchange rates, this corresponds to an increase of 8.3 percent.
  •  Number of instruments sold in the period was 2,259 (1,902), an increase of 18,8 percent.
  •  Cash flow from operating activities amounted to SEK 10.3 million (16.7).
  •  Operating profit was SEK 22.6 million (38.7) which corresponds to an operating margin of 9.5 percent (18.7).
  •  Net profit amounted to SEK 10.1 million (29.9).
  •  Earnings per share before and after dilution amounted to SEK 0.52 (1.54).

Significant events during the quarter

In connection with changes in the distributor structure in Russia, a credit risk has been identified. Therefore, Boule has made an increase of the bad debt reserve of SEK 5.9 million.

Significant events after the period

Fredrik Dalborg leaves the position as CEO of Boule

Fredrik Dalborg, CEO and Group President of Boule Diagnostics, has decided to leave the company and continue his career with a new assignment outside the Group as the CEO of another larger Swedish medical technology company. Fredrik will remain in his role during his period of notice.

Comments from CEO Fredrik Dalborg
The trend of good growth in sales continues

“Good growth especially in Asia, the US, Eastern Europe and Latin America. We are especially pleased to see improvements in Russia, which is a very important market for us.

Most product segments showed good growth in the quarter but for consumables for own instruments, growth was somewhat weaker in the second quarter after a very strong first quarter. Growth for consumables for own instruments was 17 percent for the first six months of 2019.

Focus on improving margins

The gross margin is currently not at the desired level. We are obviously not happy with this.

Boule has a sales mix where prices vary depending on the geographical market. The variation is greatest for instruments. In the last four quarters, the sales of instruments have increased faster in markets with lower prices than in the markets where we have higher prices.

An important reason for this is found in India, where we have had very strong sales of instruments at low margins. This was mainly a result of the company’s largest tender ever, which required low prices on the instruments. The margins on reagent sales in India meet our margin targets.

We continue to work on several initiatives to improve the margins, which among other things include increased prices and an increased focus on cost-reductions in production going forward.

Initiatives for future growth

The sales of the product platforms launched in the veterinary market in 2018 continue their rapid growth and agreements with new distributors have been signed.

The growth in the 5-part segment is very good. Previous problems with the Quintus system have been solved and sales are again increasing. The newly launched 5-part systems Lumi and M51 are showing strong growth and the feed-back from customers has been positive.

Boule is driving the development of the next generation product platform with full force. The new product platform will include versions for 5-part systems, 3-part systems and veterinary applications. Key recruitments have been made and important milestones have been achieved during the quarter.

During the quarter, the company biosurfit, of which Boule owns 25 percent, launched new versions of tests for CRP (infection) and HbA1c (diabetes). The new versions are much easier to handle, which is very important in the near-patient market segment. The first units have already been sold through Boule's distributor network.

Continued progress with the quality work

Boule continues to drive quality work and improvements in quality processes with the highest priority. We have worked hard to complete the work on the plan of action communicated with the FDA. In July, the FDA conducted an on-site inspection at the manufacturing site in Spånga, Sweden, to follow up on our work. The result of the inspection indicates that we are on the right track. Some improvements remain. In summary, the organization has responded well to the challenges we faced last fall and we are experiencing a positive dialogue with the FDA.”

THE INTERIM REPORT FOR JANUARY– JUNE 2019 IN ITS ENTERITY IS FOUND BELOW.

For further information, please contact:
Fredrik Dalborg, CEO and Group President, Boule Diagnostics AB, phone +46 (0)705-58 51 05
Christina Rubenhag, CFO, Boule Diagnostics AB, phone +46 (0)705-46 72 22


About Boule Diagnostics AB (publ)

Boule Diagnostics AB is a 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, the USA, Mexico and Russia. 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.com 

This information is information that Boule Diagnostics AB is obliged to make public pursuant to the EU Market Abuse Regulation and the Swedish Securities Markets Act. The information was submitted for publication, through the agency of the contact person set out above at 15:00 CET on August 14, 2019.