CellaVision AB: Year-end bulletin, Jan-Dec 2019

2020-02-05 - English

Stable quarter including earnings from RAL Diagnostics

The information was submitted for publication at 08.20 CET on February 5, 2020

October 1 - December 31, 2019
Net sales increased by 35 % to SEK 149.8 million (111.0).
Sales grew organically by 7 % (44).
EBITDA was SEK 41.5 million (37.3).
EBITDA margin was 27.7 % (33.6).
Profit before tax was SEK 35.0 million (36.0).
Earnings per share before and after dilution were SEK 1.02 (1.24).
Cash flow from operating activities increased by SEK 24.0 million (12.8).

January 1 - December 31, 2019
Net sales increased by 27 % to SEK 461.8 million (364.8).
Sales grew organically by 15 % (15).
EBITDA increased to SEK 146.7 million (118.4).
EBITDA margin was 31.8 % (32.5).
Profit before tax increased to SEK 129.2 million (112.1).
Earnings per share before and after dilution were SEK 4.16 (3.72).
Cash flow from operating activities increased by SEK 125.0 million (74.1).
The Board of Directors proposes a dividend of SEK 1.50 per share for 2019 (1.50).

CEO’s comments

The fourth quarter of 2019 was CellaVision's best quarter ever despite challenging comparative figures. Including sales from the newly acquired company RAL Diagnostics (RAL), total sales grew by 35 percent to SEK 149.8 million (111.0). CellaVision completed the acquisition of RAL on October 1, 2019, and consequently RAL is financially integrated into the full quarter. The quarter includes external acquisition costs of about SEK 4 million. The acquisition of RAL drives some initial cost increases linked to integration between CellaVision and RAL started in the quarter. The quarter was also charged with initial ramp-up costs for production and depreciation for the new product CellaVision® DC-1 (DC-1). All in all, it was a good quarter for CellaVision, with organic growth of seven percent. Exchange rate impact in the quarter was positive and amounted to about five percent. Profitability was good during the quarter, with an EBITDA of SEK 41.5 million (37.3), corresponding to an EBITDA margin of 27.7 percent (33.6). 

Full year 2019
For the full year sales were SEK 461.8 million (364.8) after growth of 27 percent, corresponding to organic growth of 15 percent. EBITDA was SEK 146.7 million (118.4), corresponding to an EBITDA margin of 31.8 (32.5) percent. Cash flow from operating activities was SEK 125.0 million (74.1).

Market development
The Americas reported a good fourth quarter. Sales were SEK 65.6 million (57.6), corresponding to growth of 14 percent. Sales of analyzers continue to be good in North America and we also see continuously stronger sales of applications and software. For the full year, growth in the Americas was 24.6 percent.

EMEA had a strong quarter, including RAL sales, with a growth of 141 percent, amounting to SEK 60.6 million (25.1). In recent years we have established our own market support organizations in the Middle East, France, the German-speaking countries of Europe, the United Kingdom/Ireland, Spain/Portugal and Italy. They are now fully operative, and we are now seeing continuous sales growth in the region. During the quarter we also saw the first sales impact of the DC-1, which was launched earlier in the year. For the full year, growth in EMEA was 47 percent.

APAC reported a weaker quarter, with sales of SEK 23.6 million (28.3), a decrease of 16 percent. We see a continued high activity level in the region, with important marketing initiatives on all our key markets, not least China, Japan and Australia. For the full year, growth in APAC was four percent.

The acquisition of RAL is a natural step in CellaVision's strategy
The acquisition of RAL was completed on October 1, 2019 and since then the company as a whole has been part of CellaVision. With RAL’s sample preparation products, CellaVision is establishing a recurring revenue stream and we have the opportunity to improve the quality of sample preparation, which is of great significance for the final results of blood analysis.

We have started a series of activities to realize synergies. The now integrated product range and potential to standardize workflows at laboratories the world over means an increase in CellaVision's addressable market in hematology to a total of about six billion SEK.

The initial focus is on integrating RAL financially and commercially. The commercial integration means that step-by-step RAL’s offer will be marketed jointly on the markets where CellaVision has its own representation and an integrated product offer will be established to offer optimum staining protocols for digital morphology. This work will continue throughout 2020.

All in all, the acquisition of RAL strengthens our business in several different ways: we broaden our product offer and gain access to a larger market than before. Through our market support organizations, we will be able to expand sales of RAL’s hematology products to new markets, and we will expand our operations to new areas such as microbiology, cytology and pathology, opening up new future opportunities to apply CellaVision's technology beyond hematology.

Geographical expansion
We are now fully operative in our latest establishments in Thailand, India, Spain/Portugal and Italy. During the quarter we started an establishment in Russia and in 2020 we will also strengthen the organization in some of our current markets, including India, to meet growing demand. Altogether CellaVision now has 18 local organizations offering market support in more than 40 countries.

The DC-1, our new product for small and mid-size laboratories, was CE marked in February 2019. The reception from our various distribution partners has been very positive and most of them have now launched the DC-1 in their own sales channels. In 2019 we gradually increased the rate of production and in 2020 will have the capacity to meet the demand from our customers. In 2019 we obtained commercial approval for the DC-1 in a number of important markets in addition to the EU countries. We have also initiated the action required to take the next step in the application process for sales approval of the DC-1 in the USA and China in 2020.

In the coming quarter CellaVision will launch a complete upgrade of the veterinary portfolio. The Sysmex system, DI-60 Vet, and CellaVision®DC-1 Vet will be launched, while the current CellaVision® DM1200 Vet and CellaVision® DM9600 Vet will be upgraded to the latest software generation. All systems will be able to analyze canine and feline blood. In addition, the DC-1 Vet will also have an application for avian blood analysis.

Geographical expansion and R&D are CellaVision's core areas and we will continue to accelerate investments, primarily within innovation, to secure our growth and future position in our market segment.

Zlatko Rihter,
President and CEO

Key Ratios

Oct-Dec 2019Oct-Dec 2018Full year 2019Full year 2018
Net sales149,8111,0461,8364,8
Gross profit99,982,0336,7270,9
Operating profit31,835,8126,6111,6
Operating margin, %21,232,327,430,6
Profit/loss before tax35,036,0129,2112,1
Total cash flow-116,24,3-67,314,4
Equity ratio, %54,377,954,377,9

Questions concerning the Year-end bulletin 2019 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 replace 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 company´s 17 local market support organizations covering 32 countries. In 2019, sales were SEK 462 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

This information constitutes information that CellaVision AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation and the Swedish Securities Markets Act. The information was submitted for publication at 8:20 a.m. CET on February 5, 2020.

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