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Strong sales and earnings growth in line with improving market conditions

1 July-30 September 2021

  • Net sales increased by 50% to SEK 132 million (88).
  • Sales increased organically by 52% (-24), currency effect -2%
  • EBITDA amounted to SEK 42 million (25).
  • EBITDA margin amounted to 32% (28).
  • Profit before tax amounted to SEK 33 million (16).
  • Earnings per share before and after dilution were SEK 1.09 (0.56).
  • Cash flow from operating activities amounted to SEK 49 million (-4).

1 January-30 September 2021

  • Net sales increased by 18% to SEK 401 million (340).
  • Sales increased organically by 24% (-12), currency effect -6%.
  • EBITDA amounted to SEK 136 million (102). 
  • EBITDA margin amounted to 34% (30).
  • Profit before tax amounted to SEK 107 million (76).
  • Earnings per share before and after dilution were SEK 3.59 (2.55).
  • Cash flow from operating activities amounted to SEK 114 million (46).

“As the pandemic subsides, we are accelerating activities, increasing manufacturing capabilities, reactivating paused projects and resuming our geographical expansion plans.”

Simon Østergaard, President and CEO

CEO’s comment
The effects of the COVID-19 pandemic continued to diminish in Europe and North America during the quarter. In Asia we have seen new or maintained restrictions, which have slowed down recovery in this region.

The third quarter in brief
Sales for the Group amounted to SEK 132 million (88), representing an organic growth of 52 percent. The Group's total cash flow for the quarter amounted to SEK 20 million (-21). Operating cash flow amounted to SEK 49 million (-4).
CellaVision’s sales have historically experienced seasonal variations. As a result of lower activity levels during vacation seasons, sales in the third quarter are generally subject to a slight decline. In the quarter, all geographic segments reported an increase in relation to relatively weak comparative figures.

In the Americas, sales grew by 51 percent to SEK 48 million (31), compared with the corresponding quarter in 2020, which was heavily impacted by the pandemic. Compared to the previous quarter, a slight seasonal decline was experienced. However, this pattern was much less accentuated than what has been seen in the past, indicating a continued underlying recovery, which was also confirmed by increased activity levels and physical product demonstrations to end-customers.

In APAC, sales grew by 14 percent in the quarter to SEK 18 million (16). While a temporary downturn was encountered in Japan as a result of the order timing in the second half of 2021, sales in the Chinese market has been stable. However, several historically smaller markets for CellaVision have shown strong improvement during the quarter.

In EMEA, sales grew by 63 percent in the quarter to SEK 66 million (40). Invoiced sales of reagents in the quarter received a boost by SEK 3 million rollover from the previous quarter, but even excluding this one-time effect, sales of reagents, especially hematology reagents, has shown substantial growth in the quarter as well as year to date.

Continued focus
As COVID-19 restrictions are lifted across countries, we are intensifying our activities to promote CellaVision® DC-1 in various geographies and in different types of hospital settings. We see opportunities of continued sales of the DC-1 to laboratories integrated in larger networks but also to stand-alone laboratories as the effects of the pandemic continue to subside.

CellaVision is actively working to create awareness and educate the market for the DC-1 through trade fairs and customer visits. With the product’s value proposition including laboratory connectivity and our CellaVision® Remote Review Software, we see possibilities for a healthy growth journey to come. However, as for all the company’s instruments the DC-1 has a long sales cycle. The process involves building product knowledge with distributors and laboratory personnel as well as timing the acceptance of the solution with budgeting processes at hospitals and laboratories before actual purchases can be realized.

When it comes to sales of our RAL reagents, we continue to see growth in Europe driven by increasing sales of hematology reagents through CellaVision’s network of partners. As part of our strategy to expand sales of RAL’s products internationally, we are currently investing in manufacturing capabilities at our plant in France to be able to meet increasing demands in the future. Our efforts to globalize this product offering are currently centered to Asia as we see opportunities to convert reagent consumption of local suppliers across the Asian market. In the Americas, we see opportunities to penetrate the market with our high-quality methanol-free RAL reagent (MCDh) which also offers unique environmental benefits.

Distributor partnerships
As communicated in our previous interim report, CellaVision has given notice of termination of the distribution agreement with Mindray Medical International Co., Ltd. The current agreement will be terminated by February 2022, since Mindray has launched their own Digital Cell Morphology (DCM) solution. CellaVision will continue to service our joint customer base that have CellaVision’s solutions installed, and our commitment and strategic focus to lead Digital Cell Morphology and build long-term sustainable partnerships with our distribution partners remain intact.

CellaVision continues to monitor competitive offerings and study the successes and shortcomings of new entrants to Digital Cell Morphology. We are pleased to see more DCM solutions in the market that can aid in promoting the use of digital medical solutions for end users in all parts of the world.

Raw material supply
In the quarter, the global supply shortage of semiconductor chips also affected CellaVision. The supply chain disturbance was resolved quickly, and delivery capacity remained intact during the quarter. We continue to monitor the situation and we are working proactively to handle potential supply chain disturbances going forward. Throughout the quarter, we have validated second sourcing of certain key components and will continue to do so dependent on the supply chain development.

Post-pandemic direction
As the effects of the pandemic are subsiding in large parts of the world, CellaVision is preparing to step up marketing and innovation ambitions even further. Accordingly, paused projects are reactivated and our geographical expansion plans are being resumed. We are also preparing to accelerate activities related to local market support within some of our existing markets, as well as preparing for recruitments to our operations in EMEA and the Americas.

Simultaneously, we are working to refine the company’s strategic direction, to keep delivering high quality solutions and consumables that secure diagnostic certainty by leveraging and developing CellaVision’s core capabilities. We intend to seize growth opportunities through accelerating our efforts in developing industry-leading DCM solutions for the benefit of patients, and laboratory personnel throughout the world. This direction is being operationalized in our plans for 2022 and will be executed upon as the world returns to a more normal situation.

Simon Østergaard,
President and CEO