CellaVision's best quarter ever with strong growth
October 1 - December 31, 2018
· Net sales increased by 46% to SEK 111,0 million (76.1).
· Organic growth increased to 44% (6)
· Operating profit increased to SEK 35.8 million (21.7).
· The operating margin increased to 32.3% (28.5).
· Profit before tax increased to SEK 36.0 million (21.7).
· Earnings per share increased to SEK 1.24 (0.73).
· Cash flow for operating activities amounted to SEK 12.8 million (28.9).
January 1 - December 31, 2018
· Net sales increased by 18% to SEK 364.8 million (309.3).
· Organic growth was 15% (16).
· Operating profit increased to SEK 111.6 million (90.9).
· The operating margin increased to 30.6% (29.4).
· Profit before tax increased to SEK 112.1 million (90.3).
· Earnings per share increased to SEK 3.72 (2.92).
· Cash flow for operating activities amounted to SEK 74.1 million (87.9).
· The Board of Directors proposes a dividend of 1.50 SEK per share in 2018 (SEK 1.50).
Significant events after period close
· The CellaVision® DC-1, for small and mid-sized laboratories, received CE-marking in February 2019 and is now commercially available.
CEO's comments
Fourth quarter - CellaVision's best quarter ever
The fourth quarter of 2018 was CellaVision's best quarter ever after strong growth in all regions and sales that for the first time in an individual quarter exceeded SEK 100 million. Sales were SEK 111 million (76.1), corresponding to organic growth of 44 percent. Profitability progressed well during the quarter, with an operating profit of SEK 35.8 million (21.7), corresponding to an operating margin of 32.3 percent (28.5). The profitability trend is a result of CellaVision's effective indirect sales model that enables ambitious geographical expansion with continued sound cost control. Exchange rate impact was low in the quarter, about two percent.
Full year 2018
Sales for 2018 amounted to SEK 364.8 million (309.3), corresponding to organic growth of 15 percent. The operating profit was SEK 111.6 million (90.9), equivalent to an operating margin of 30.6 percent (29.4). CellaVision has thus again delivered a year in line with our financial targets. All regions performed well. APAC had the strongest growth during the year, with 28 percent, closely followed by EMEA, which after a few weaker years, grew by 25 percent. The Americas, with the well-penetrated markets in the USA and Canada, grew by 11 percent.
Market development in the fourth quarter
The Americas again experienced a strong quarter, with sales growing by 49 percent to 57.6 million (38.6). The number of installations for end customers continues to increase and market penetration is developing at a stable rate. Our investment in our own organization for local market support in Brazil, which was established in mid-2017, is now starting to make a positive contribution to sales growth in the Americas.
EMEA had a stable fourth quarter, with sales growing by 30 percent to 25.1 million (19.3). This is a result of our consistent focus on market expansion in the region. In the past 18 months new organizations for local market support were established in the Middle East, France, Europe's German-speaking countries and the United Kingdom/Ireland. These organizations are now fully operative and we see how the rate of sales is increasing step by step.
APAC again experienced a strong quarter, with sales growing by 56 percent to 28.3 million (18.2). Marketing activities continued at a high level in the key markets of Japan and China.
Geographical expansion
Geographical expansion is crucial to CellaVision's growth. In 2018 we established our own organizations for local market support in Mexico, India and in South East Asia, based in Thailand, as well as extending the organization in China so that we now have a local presence in the Chengdu area as well. In early 2019 we will establish more organizations for local market support in Spain/Portugal and Italy. At the end of 2018 CellaVision had 15 local organizations that together offer market support in more than 30 countries.
Innovation
Development of our new technology platform, the CellaVision® DC-1 for small and mid-size laboratories, is now completed and the product was given CE marking in February 2019. We have carried out careful launch preparations and are now starting commercialization of this strategically important product. It is important to remember that 2019 will be a launch year. From initially low sales volumes we expect to see continual growth in sales of the CellaVision® DC-1 in coming years.
During the quarter we acquired a system for blood smears from the Swedish company Molek. This technology acquisition means that we will supplement our offer with blood sample preparation, which is an important component to ensure high quality in our systems' image analysis. The system, to be called CellaVision® Diffsmear, will be optimized in 2019 for use together with our analyzing systems.
Distribution expansion
During the year we signed agreements with all relevant distribution partners to reach small and mid-size laboratories globally and thus are well prepared for the launch of the CellaVision® DC-1.
Investments in continued growth
Geographical expansion and innovation are key strategies for CellaVision's future growth. We are continuing to add new geographical markets with their own local organization for market support, while innovation and product development are gaining growing significance. Our organization is constantly being strengthened and we put great energy into recruiting leading-edge expertise to ensure our future innovative power, thus further strengthening our growth opportunities.
Zlatko Rihter,
President and CEO
Key Ratios
| (MSEK) | Oct-Dec 2018 | Oct-Dec 2017 | Full year 2018 | Full year 2017 |
| Net sales | 111,0 | 76,1 | 364,8 | 309,3 |
| Gross profit | 82,0 | 55,4 | 270,9 | 223,2 |
| EBITDA | 37,3 | 23,9 | 118,4 | 99,3 |
| Operating profit | 35,8 | 21,7 | 111,6 | 90,9 |
| Operating margin, % | 32,3 | 28,5 | 30,6 | 29,4 |
| Profit/loss before tax | 36,0 | 21,7 | 112,1 | 90,3 |
| Total cash flow | 4,3 | 25,5 | 14,4 | 22,4 |
| Equity ratio, % | 77,9 | 80,1 | 77,9 | 80,1 |
Questions concerning the report can be addressed to:
Zlatko Rihter, CEO, CellaVision AB, Tel: +46 (0) 733-62 11 06.
E-mail: zlatko.rihter@cellavision.com
Magnus Blixt, CFO, CellaVision AB, Tel: +46 (0) 708-33 81 68
E-mail: magnus.blixt@cellavision.com
About CellaVision
CellaVision is an innovative, global medical technology company that develops and sells its own leading systems for routine analysis of blood and other body fluids in health care services. The products replaces manual laboratory work, and secure and support effective workflows and skills development within and between hospitals. The company has leading-edge expertise in image analysis, artificial intelligence and automated microscopy. Sales are via global partners with support from the parent company in Lund and by the market support organizations in the US, Canada, China, Sweden, Japan, United Arab Emirates, South Korea, Australia, France, Germany, Brazil, Great Britain, Mexico, India and Thailand. In 2018, sales were SEK 365 million and the company's growth target is 15 % per year over an economic cycle. CellaVision's registered office is in Lund, Sweden. The share is listed on the Nasdaq Stockholm, Mid Cap list. Read more at www.cellavision.com
