Boule Diagnostics (publ) interim report Q3 2023

Increased net sales and positive cash flow

Quarter July-September 2023

  • Net sales amounted to SEK 139.6 million (125.6), an increase of 11.2 percent. Adjusted for currency effects, an increase of 4.3 percent.
  • Gross profit was SEK 57.8 million (51.1), corresponding to a gross margin of 41.4 percent (40.7).
  • Operating profit was SEK 7.9 million (3.6), corresponding to an operating margin of 5.7 percent (2.9).
  • Profit for the period amounted to SEK 4.6 million (2.4).
  • Basic earnings per share amounted to SEK 0.12 (0.09) and diluted earnings per share amounted to SEK 0.12 (0.09).*

*Fund issue elements from the new share issue in Q4 2022 has been taken into account in the calculation of earnings per share before and after dilution, which is why the comparative figures have been recalculated.

CEO Jesper Söderqvist
Growth in a challenging market and strengthened operating cash flow

We are delivering good growth in most markets. The strongest growth is in Latin America, where we won a significant strategic order. This order was accepted at a lower price, which puts pressure on the gross margin; on the other hand, we ensure recurring sales of consumables for many years to come. In Western Europe, we are growing thanks to the start of sales of our new veterinary instrument. In Asia, sales are flat but there is great potential, especially in India. We continue to decline in Eastern Europe as a result of Russia's war in Ukraine. OEM sales of consumables increased by 21 percent in the quarter and have grown by 12 percent in the first nine months.

Despite conflicts and economic instability globally, we have managed to compensate for reduced sales in some markets with new business in others, delivering growth of 4 percent after currency adjustments.

Financial performance
Cash increased by SEK 7 million during the quarter. Operating cash flow was SEK 28 million as a result of lower accounts receivable and reduced inventory.

The gross margin improved by 0.7 percentage points despite a product mix in the third quarter of both a significantly higher share of instruments, where the margin is lower, and the instrument business in Latin America at lower prices. For the first nine months of the year, the gross margin improved by three percentage points compared to the same period last year.

We have initiated a couple of major projects to reduce production costs, particularly in our Swedish operations. The investments will deliver gradual reductions in manufacturing costs in 2024.

New business initiatives in India
During the quarter, we signed a license agreement for instrument manufacturing in India. The production transfer is expected to take approximately one year. India is an emerging market where significant investments are being made in the health sector by the Indian government.

The decision to establish local licensed instrument production in India, in addition to the reagent production already started, was taken because of increasingly strict "make in India" requirements in public procurement. In addition, we benefit from shorter lead times, reduced costs, and a lower environmental impact from transportation. The instruments that will be produced in India are slightly simpler and are built using proven technology from our older instruments. In the coming years, sales to India will gradually shift to license revenues, which will increase gross profit and improve margins, but reduce net sales.

Investments and future growth
In the near future, we see good opportunities to increase sales to veterinarians thanks to our expanded product portfolio, which now includes both 4-part and 5-part hematology instruments. The partnership with Fujifilm Europe has increased our market reach to veterinarians.

Our strategically important platform project made major advances during the quarter. The improvements identified in the spring have now been implemented, and we are entering the final phase of development. The focus is now on preparing the external clinical validation to be carried out in the first half of 2024.

During the third quarter, SEK 21 million was invested in the new platform, an increase of SEK 3 million compared to the previous quarter. The increase is due to more purchases of materials for preproduction, investments in production tools and preparation of regulatory applications. The investment rate will decrease in the coming years as a consequence of the first 5-part product approaching completion. The launch will start in 2024, and revenues are expected to take off in 2025.

With new distributors in Africa and the Middle East, continued improvements in our customer offering and expanded service, we can partly compensate for lower sales in regions where there is conflict and economic instability.

Our commitment to training through our Boule Academy service is paying off. Participation is increasing, and our courses have received overwhelmingly positive feedback, strengthening the Boule brand.

The war and unrest in different parts of the world are affecting our sales, and we are working tirelessly to adapt. Thanks to the strong commitment of our staff and partners, we continue to develop our business, even in challenging times.


Presentation of the interim report
At 10.00 CEO Jesper Söderqvist and CFO Jan Benjaminson will present and comment on the interim report.
After the presentation there will be time for audience questions. The presentation will be held in English.

Please follow this link to attend!

For more information, please contact:
Jesper Söderqvist, CEO and Group President, Boule Diagnostics AB, phone +46 (0)70-689 05 90
Jan Benjaminson, CFO, Boule Diagnostics AB, phone +46 (0)70-666 93 88

About Boule Diagnostics AB (publ)
Boule Diagnostics AB (publ) is a global diagnostics company specializing in near-patient, decentralized blood diagnostics and one of the few companies in the global diagnostics market that conducts its own development, manufacturing and marketing of instruments and consumables for blood diagnostics. The Company primarily serves hospitals, clinics, laboratories and other diagnostics companies to which it offers complete systems for blood diagnostics (hematology) in both the human and veterinary areas. Boule has strong positions in important emerging markets such as in Asia and in recent years has improved its position in the fast-growing veterinary market. Operations are conducted through operating subsidiaries in Sweden, the United States, Mexico and Russia. The Group reported net sales of SEK 548 million in 2022 and has more than 200 employees. Sales are conducted globally, predominantly through the company’s 200 or so distributors in over 100 countries, supported by Boule’s own local sales and service personnel. Boule has been listed on Nasdaq Stockholm since 2011.

This information is information that Boule Diagnostics AB (publ) 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 07:30 CET on November 9, 2023.

Boule Diagnostics Interim report Q3 2023

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