Good profitability in a stable first quarter
January 1-March 31, 2018
- Net sales decreased by 17 % to SEK 77.6 million (93.1).
- Organic growth was -20 % (60).
- Operating profit was SEK 23.2 million (34.3).
- The operating margin was 29.9 % (36.9).
- Profit before tax was SEK 23.6 million (34.5).
- Earnings per share were SEK 0.80 (1.06)
- Cash flow was SEK -2.4 million (15.6).
CEO's comments
CellaVision's sales are volatile by nature, with large fluctuations between individual quarters and between our three regions. This was particularly evident in the first quarter of 2017, when sales increased by 60 percent. Seen in this light, CellaVision had a good first quarter in 2018, with sales of SEK 77.6 million (93.1) resulting in the quarter being the third strongest in CellaVision's history.
The challenging comparative figure from the previous year means, however, that organic sales decreased by about 20 percent. Total cash flow for the quarter decreased to SEK -2.4 million (15.6). The decrease is mainly attributable to increased trade receivables. Profitability progressed well during the quarter, with an operating profit of SEK 23.2 million (34.3), corresponding to an operating margin of 29.9 percent (36.9). The sound profitability is a consequence of CellaVision's effective business model and continuing good cost control.
Market development
The Americas reported stable growth in the quarter, even though sales decreased by 27 percent to SEK 40.8 million (56.0) compared with the strong first quarter of 2017. The number of installations for end customers continues to increase and market penetration is developing according to plan.
EMEA reported satisfactory growth in the quarter of 10 percent to SEK 24.6 million (22.3). By establishing several new organizations for local market support, CellaVision has considerably increased activities in EMEA in the past six months. Our assessment is, however, that it will take a further few quarters before we derive full benefit from the investments we have made in penetrating the market.
CellaVision is conducting intensive marketing in APAC and is continually strengthening its position in all key markets in the region. The strong first quarter of 2017, when sales grew by 188 percent, makes comparative figures difficult to achieve and sales decreased by 18 percent to SEK 12.2 million (14.8) compared with the corresponding quarter in 2017.
Geographical expansion
Geographical expansion is important for CellaVision's growth and during the quarter we established our own organization for local market support in Mexico. Geographically, the new team will cover the Spanish-speaking part of Latin America.
Distribution expansion
CellaVision signed a global distribution agreement during the quarter with Mindray, a leading hematology supplier based in China. CellaVision thus has global distribution agreements with all relevant hematology suppliers. During the quarter we also signed a supplementary agreement with Beckman Coulter for sales to small and mid-size laboratories.
Innovation
Development of a new technology platform, aimed at broadening our offer to include small and mid-size laboratories in both human healthcare and the veterinary market, is going to plan. The project has just entered an intensive phase with careful market preparations ahead of the launch in late 2018.
CellaVision has innovation as a key strategy for future growth. To enable us to realize more ideas commercially in the future we will invest further in our research and development. With an enhanced research and development organization, we create future growth opportunities by realizing the ideas we have in digital image analysis. In 2017 CellaVision invested the equivalent of 17 percent (16) of net sales in research and development. This is an increase in line with our strategy in which product development will continue to be a strong focus for us.
Zlatko Rihter,
President and CEO
| Key Ratio | |||
| (MSEK) | Jan-Mar 2018 | Jan-Mar 2017 | Jan-Dec 2017 |
| Net sales | 77.6 | 93.1 | 309.3 |
| Gross profit | 57.7 | 68.0 | 223.2 |
| EBITDA | 25.3 | 36.4 | 99.3 |
| Operating profit | 23.2 | 34.3 | 90.9 |
| Operating margin, % | 29.9 | 36.9 | 29.4 |
| Profit/loss before tax | 23.6 | 34.5 | 90.3 |
| Cash flow for the period | -2.4 | 15.6 | 22.4 |
| Equity ratio, % | 81.3 | 83.4 | 80.1 |
Questions concerning the interim report can be addressed to:
Zlatko Rihter, VD, CellaVision AB, Tel: 0733-62 11 06,
E-mail: zlatko.rihter@cellavision.se
Magnus Blixt, CFO, CellaVision AB, Tel: 0708-33 81 68
E-mail: magnus.blixt@cellavision.se
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 and Mexico. In 2017, sales were SEK 309 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
