Boule Diagnostics AB (publ) Interim report January–September 2019

Continued strong growth and significantly improved margins

Quarter July–September 2019

  • Net sales amounted to SEK 131.2 million (110.9), up 18.3 percent. Adjusted for the change in exchange rates, this corresponds to an increase of 13.4 percent.
  • Number of instruments sold in the quarter was 1,108 (1,161), a decrease of 4.6 percent.
  • Cash flow from operating activities amounted to SEK 23.9 million (-0.6).
  • Operating profit was SEK 32.3 million (12.8) which corresponds to an operating margin of 24.6 percent (11.5).
  • Net profit amounted to SEK 20.3 million (9.8).
  • Earnings per share before and after dilution amounted to SEK 1.04 (0.50).

Interim period January–September 2019

  • Net sales amounted to SEK 369.6 million (318.2), up 16.2 percent. Adjusted for the change in exchange rates, this corresponds to an increase of 10.0 percent.
  • Number of instruments sold in the period was 3,367 (3,063), an increase of 9.8 percent.
  • Cash flow from operating activities amounted to SEK 34.2 million (16.1).
  • Operating profit was SEK 54.9 million (51.4) which corresponds to an operating margin of 14.8 percent (16.2). Excluding the bad debt reserve of SEK 5.9 million, the operating margin was 16.4 percent.
  • Net profit amounted to SEK 30.4 million (39.6).
  • Earnings per share before and after dilution amounted to SEK 1.56 (2.04).

Significant events during the quarter

Fredrik Dalborg leaves the position as CEO of Boule
Fredrik Dalborg, CEO and Group President of Boule Diagnostics, has as previously communicated decided to leave the company and continue his career with a new assignment outside the Group as CEO of another, larger, Swedish medical device company. Fredrik will remain in his role during his period of notice and the recruitment process for his successor is in its final phase.

Significant events after the period

No significant events have occurred in the time between the end of the period and the publishing of this interim report.

Comments from CEO Fredrik Dalborg

The growth initiatives continue to yield results

“The strong growth trend continues with another quarter of record level sales. Net sales in the quarter were SEK 131.2 million, an increase of 18 percent compared to the third quarter of 2018 and an accumulated growth during the first nine months of the year of 16 percent.

It is gratifying to see good growth in both instruments (14 percent) and consumables for own instruments (18 percent). The trend was positive in all product areas, but especially in the five-part segment. OEM-consumables growth was also good during the quarter and throughout 2019.

Sales increased in all regions during the quarter except in Latin America, where a slightly weaker development followed the strong second quarter when growth was 91 percent. Accumulated sales growth in Latin America for the first three quarters of 2019 was 36 percent.

The growth is a result of the strategic initiatives taken in 2017 and 2018, which include a broadened product portfolio in the human and veterinary areas, strengthened sales and marketing resources and the work to improve and develop the distributor structure.

Significantly improved margins

The profitability trend has been very positive as a result of strong sales of consumables, good sales development in countries with good margins and the increased efficiency of the distributor network. The gross margin increased to 47.5 percent, an improvement over the previous quarter and compared with the third quarter of 2018.

The work to further improve the margins, which includes increasing sale price levels and an increased focus on cost-reduction in production, continues.

Following the investments made in research and development, as well as in the commercial organization, operating expenses were kept at a relatively unchanged level compared to the third quarter 2018. Combined with the sales growth and the improved gross margin, this resulted in a significantly improved operating profit; SEK 32.3 million compared to just below SEK 13 million in last year’s third quarter. In addition, cash flow from operating activities improved significantly and amounted to SEK 23.9 million.

Individual quarters can be affected by major tenders but in the third quarter the good growth was not driven by such an event. Rather, the growth and profitability development are mainly due to previous strategic initiatives as well as a favorable product and geographical mix. With this in mind, it is positive that the growth over the rolling twelve months is 11.9 percent, which is above our growth target of 10 percent on an annual basis. The operating margin for rolling 12 months is 12.2 percent, which is below the target of 15 percent, but was 24.6 percent during the quarter.

Continued initiatives for future growth and profitability

Boule has decided to move forward with plans to establish local manufacturing of hematology reagents in Russia. Boule’s products have been present in the Russian market for over 20 years and Boule has built up a strong market share and a significant base of installed instruments in the Russian market. Boule has a strong ambition to further develop the company’s position and presence in the Russian market. To support Russian patients, customers and distributors, Boule has established a subsidiary in Russia and hired a local team with long experience in the field.

The local manufacturing initiative in Russia is in line with Boule’s global manufacturing strategy to increase production capacity in line with growing demand and strive for regional supply of consumables. The project has already been started and is expected to be completed in 2020.

Continuous focus on quality

Boule continues to drive the quality work and improvements in quality processes with the highest priority. During the third quarter of 2019, Boule has completed the warning letter action plan addressing the seven observations from the May 2018 audit in accordance with the timeline commitments to the FDA. The company received two observations from the audit in July 2019. The two observations from the July 2019 audit are being addressed according to committed plans and will be finalized in mid-January 2020. The organization continues to operate in compliance with the new and improved quality processes. Boule is fully committed to meeting all the requirements from the FDA and the dialogue with the agency continues in a positive way.”


For further information, please contact:
Fredrik Dalborg, CEO and Group President, Boule Diagnostics AB, phone +46 (0)705-58 51 05

Christina Rubenhag, CFO, Boule Diagnostics AB, phone +46 (0)705-46 72 22

About Boule Diagnostics AB (publ)
Boule Diagnostics AB is a global diagnostics company that develops, manufactures and markets instruments and consumable products for blood diagnostics. The company serves hospitals, clinics, laboratories and companies within blood diagnostics, in both human and veterinary hematology. The company operates via subsidiaries in Sweden, the USA, Mexico and Russia. The company products are sold globally primarily through distributors, supported by Boule’s own local sales and support personnel. The Boule shares are listed on Nasdaq Stockholm since 2011.

This information is information that Boule Diagnostics AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above at 15:00 CET on October 30, 2019.


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