Increasing activity levels and double-digit growth with maintained strong profitability
1 April-30 June 2021
- Net sales increased by 15% to SEK 135.5 million (118.0).
- Sales increased organically by 23% (-15), currency effect -8%.
- EBITDA amounted to SEK 47.1 million (36.2).
- EBITDA margin amounted to 35% (31).
- Profit before tax amounted to SEK 38.9 million (34.4).
- Earnings per share before and after dilution were SEK 1.30 (1.14).
- Cash flow from operating activities amounted to SEK 38.9 million (34.1).
1 January-30 June 2021
- Net sales increased by 7% to SEK 269.4 million (252.5).
- Sales increased organically by 16% (-8), currency effect -7%.
- EBITDA amounted to SEK 93.3 million (77.4).
- EBITDA margin amounted to 35% (31).
- Profit before tax amounted to SEK 74.5 million (59.8).
- Earnings per share before and after dilution were SEK 2.49 (1.99).
- Cash flow from operating activities amounted to SEK 65.1 million (49.5).
Significant events during the period
- CellaVision acquired the exclusive rights to a patent portfolio containing a new microscopy technology, Fourier Ptychographic Microscopy, from Clearbridge BioPhotonics. The acquisition gives CellaVision access to and control over an interesting future technology. The total acquisition expense amounted to SEK 31.4 million.
Significant events after the period close
- CellaVision has given notice of termination of the distribution agreement with Mindray Medical International Co., Ltd. The agreement signed in 2018 will be terminated by February 2022.
”We are ramping up market activities, continuing reagent expansion in APAC and executing strategic investments in our innovation pipeline, while reaching our highest profit ever.”
President and CEO
The effects of the COVID-19 pandemic continued to diminish during the quarter with turnover and results in line with our plans. We are ramping up market activities as laboratory interactions have been enabled across countries in Europe and North America. While a gradual normalization is seen in the markets, CellaVision has continued its work with its strategic plan to secure CellaVision’s position as the global market leader within Digital Cell Morphology (DCM) today as well as long-term.
The second quarter in brief
Sales for the Group amounted to SEK 135.5 million (118.0), representing an organic growth of 23 percent, equivalent to a growth of 15% after adjusting for a negative currency impact. In Americas, market conditions improved substantially as the U.S and Canada are returning to a more normal situation. Sales in the region grew by 66 percent compared with the corresponding quarter in 2020, which was heavily impacted by the pandemic. Europe was on par with the second quarter in 2020 with sales of SEK 57.8 million (56.6). In this region, the COVID-19 situation has improved substantially during the quarter, but market conditions are still not yet fully normal with variability across countries. In APAC, many countries maintain varying degree of restrictions, which has hampered our market activities in the region, and sales declined by 8 percent.
The quarter presented the highest EBITDA in CellaVision’s history, which amounted to SEK 47.1 million (36.2), corresponding to an EBITDA margin of 35 percent (31). The Group's total cash flow for the quarter amounted to SEK -20.3 million (18.1) as a result of dividend payout and investment in patent rights while maintaining a strong operating cashflow of SEK 38.9 million (34.1).
As the effects of the pandemic are now subsiding in large parts of the world, CellaVision is preparing to step up marketing and innovation ambitions even further. We will resume our geographical expansion and enter new markets when the conditions seem appropriate. We will also accelerate activities related to local market support within some of our existing markets.
As COVID-19 restrictions ceases across countries, we are intensifying our activities to promote CellaVision® DC-1 in various geographies and in different types of hospital settings. We expect to see continued sales of the DC-1 to standalone laboratories across Europe but also to laboratories taking part in larger networks. The latter is expected to become a dominant target segment for DC-1 adoption throughout the American market. This allows for leveraging the product’s value proposition to its full potential with laboratory connectivity and our CellaVision ® Remote Review Software.
When it comes to RALs hardware and reagents, we are continuing our efforts to globalize this offering to provide customers worldwide with a state-of-the art solution for the entire digital morphology process. Work to leverage and demonstrate the value of using superior reagents and associated protocols is also progressing. We are progressing to demonstrate the value of RAL reagents with our priorities centered across China and the Asian countries. Ongoing evaluations of the reagent portfolio is progressing, which is expected to expand RAL reagent consumption by taking share from local competition.
Partnerships and acquisition
Our commitment and strategic focus to lead Digital Cell Morphology and build long-term sustainable partnerships with our distribution partners remain intact. Nonetheless, after the end of the quarter we have given notice of termination to Mindray Medical International Co Ltd. who has been a distribution partner in China. An agreement was formed in February 2018 and will now be terminated by February 2022. The termination of this agreement is expected to have limited effect for CellaVision. We will continue to service our joint customer base that have CellaVision’s solutions installed.
Throughout the pandemic, CellaVision has continued to invest in innovation. During the second quarter, we acquired the exclusive rights to a patent portfolio containing a new microscopy technology, Fourier Ptychographic Microscopy, from Clearbridge BioPhotonics. The acquisition gives us access to and control over an interesting future technology. We believe it might enable us to retrieve large quantities of information from images with considerable speed, which forms the basis for improved clinical laboratory analysis and workflow enhancements. The feasibility testing of the underlying technology has begun, and we are optimistic and excited to exploit future applications of this technology.
New ways of working
By the end of my first quarter with CellaVision I find it appropriate to express my sincere appreciation to the entire team and the board of directors including our new Chairman Mikael Worning. Collectively, we have continued the work with a methodical strategy process. The aim is to refine our strategic direction to keep delivering superior laboratory solutions and consumables that secure diagnostic certainty by leveraging and developing the core capabilities of CellaVision.
President and CEO