Year-end report 2014

Higher sales, profit and cash flow during the quarter and for the year

Quarter, October–December 2014

  • Net sales amounted to SEK 90.1 million (72.2), up 24.8 percent. Adjusted for changes in the USD and EUR exchange rates, this represents an increase of 18.0 percent.
  • Cash flow from operating activities amounted to SEK 12.8 million (2.6).
  • Operating profit was SEK 7.1 million (3.3).
  • Net profit amounted to SEK 14.8 million (-1.9).
  • Earnings per share before and after dilution amounted to SEK 3.14 (-0.40).

Interim period January–December 2014

  • Net sales amounted to SEK 306.7 million (276.8), up 10.8 percent. Adjusted for changes in the USD and EUR exchange rates, this represents an increase of 7.7 percent.
  • Cash flow from operating activities amounted to SEK 31.0 million (20.7).
  • Operating profit was SEK 26.6 million (-82.4).
  • Net profit amounted to SEK 30.3 million (-70.1).
  • Earnings per share before and after dilution amounted to SEK 6.44 (-14.89).
  • The Board of Directors proposes a dividend of SEK 0.60 per share for 2014 (0.50).

Key events in the quarter

Introduction of a new generation of instruments
Boule exhibited its new generation of automatic blood cell counters at the leading trade fair Medica in Düsseldorf, Germany. These instruments will gradually replace current products under the Medonic and Swelab brands.

Key events after the period

Strategic sales to Östergötland County Council
In tough international competition, Boule won the procurement for instruments for blood cell counting in primary care in Östergötland. This contract included 35 instruments from its new generation of instruments, Swelab Alfa Plus. The installation will start in the second half of 2015.

Comments from the CEO

Sales and profit
In the fourth quarter sales increased by 23 percent. This meant that sales for 2014 as a whole amounted to SEK 307 million, up 10 percent on 2013. Although the increase in sales in the fourth quarter was primarily due to sound instrument sales, the USD exchange rate also had a positive impact on revenues.

These good sales figures, combined with the cost and efficiency savings from the P20 productivity project that was launched during the year, resulted in an operating profit of SEK 7 million in the fourth quarter of 2014, compared with SEK 3 million in the same quarter of 2013.

The operating profit for 2014 as a whole was SEK 27 million, an improvement of SEK 14 million on the previous year, excluding the impairment charges for the POC project in 2013. Although this operating profit produced a better EBITDA margin of 10 percent (6), this is lower than our target of 15 percent.

Cash flow also improved in 2014, mostly due to the higher profit figures, but also due to less operating capital being tied up and less investment in intangible assets. Cash flow from operating activities before changes in working capital amounted to SEK 32 million (21).

Market development
As expected, the global hematology market grew by 3-4 percent during the year, while growth in some of the developing countries continued to be strong amounting to more than 10 percent. Growth in Europe and North America remained almost non-existent, where sales of instruments mostly involve replacing machines.

Boule’s strategic focus on developing countries resulted in the company growing better than the global market in 2014, which is great to see. Sales of Boule System (our own instruments and their consumables) reported stronger growth in the markets in Europe, the Middle East, Asia and Africa, while sales in North America remained unchanged. Sales of OEM products and CDS Brand products also remained on the same level during the year.

Next generation of products
In 2013 and 2014 we carried out a major development project to develop an updated generation of our most important products, our three part instruments. Developing new instruments forms part of our work to consolidate our position in the world market for our core operations, blood cell counters for small and medium-sized laboratories. These new instruments will replace our current products under the Medonic and Swelab brands.

These new systems will start to be delivered in the second quarter of 2015. They will gradually be launched through our distributor network, as we receive registration approvals in each of the countries. We can see the potential of these new products to improve both our competitiveness and our profitability.

When we have completed the development work for this new generation of products, our total development expenses will fall. However, the development expenses that we allocate to earnings will increase from the second quarter of 2015 due to a lot of the previous development expenses were capitalized. From the second quarter of 2015, our development expenses will primarily relate to product care, cost-cutting projects and preliminary projects for future systems.

The procurement for Östergötland County Council that we won at the beginning of the year, despite tough international competition, is proof that there is demand for this new generation of products. This procurement is for a total of 35 instruments, making it the largest of its kind in recent years in this segment in our domestic market.

We will continue to focus on improving our profitability in 2015 and the P20 project that was started in 2014 will carry on. Sales and profit may vary significantly for individual quarters. However, these variations will gradually reduce as we increase our installed base of instruments, as this will increase our sales of consumables. This is the strenght of our business model – selling consumables at a good profit for our installed base of our own systems, which is steadily increasing.

Ernst Westman, President and CEO

For further information, please contact:

Ernst Westman 
President and CEO 
+46-8-744 77 00

Fredrik Alpsten 
+46-8-744 77 00

The information in this interim report is such that Boule Diagnostics AB (publ) is obligated to publish under the Swedish Securities Market Act. The information was submitted for publication in Swedish on February 13 at 12:00 p.m. (CET).


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