January – March

• Net sales amounted to SEK 361 (386) million, an decrease of 6.4 percent and an organic* decrease of 12.8 percent.

• Operating profit amounted to SEK 54 (96) million and adjusted* to SEK 71 (101) million.

• The operating margin was 14.8 percent (24.9) and adjusted to 19.8 percent (26.3).

• EBITA* amounted to SEK 61 (103) million. and adjusted to SEK 79 (108) million.

• The EBITA margin* amounted to 16.9 percent (26.7) and adjusted to 21.8 percent (28.1).

• Profit after tax amounted to SEK 43 (71) million.

• Earnings per share were SEK 0.65 (1.08) before and after dilution.

• Cash flow from operating activities decreased to SEK 11 (57) million.

• Net cash* as of March 31 was SEK 188 (199) million.

• On February 15, 2023 an agreement was announced to acquire Astrea Group Holdings Company Ltd. ("Astrea").

• On March 9, it was announced that Lars Bäckman, Chief Legal Officer, will retire and leave Biotage in September 2023.

Message from the CEO
March was the best month of the quarter, with record sales in the Americas. We also reported sequentially positive earnings growth, for example with an adjusted EBITA, OPEX and gross margin, which performed better than in the previous quarter. Our aftermarket business accounted for 59% of the sales, with the Service business developing well.

At the same time, there were positive aspects and many of our other business areas are doing and developing well. Like other companies, we were affected by the market’s focus on cash flow and working capital. Developments indicate that many clients are postponing purchases until a later date.

Our European Scale Up business with lipid purification related to the production of mRNA vaccines against COVID-19 declined a lot, while we see a weaker CRO segment in the Chinese market. In general, customers have also been destocking and being cautious about capital purchases.

Of course, we take the deteriorating growth and profitability seriously. We are working on efficiency gains and allocating resources in the best possible way. At the same time, we want to avoid reacting prematurely. During the pandemic, we learned the value of finding a good balance in response. At Biotage, we base our work on the same principles as we did then – we look at how we should act to take care of our business, our clients, and our employees in the best possible way.

Together with our leadership in China, we are working hard to complement the weakened contract manufacturing market with an increased focus towards our other customer segments. Our largest contract manufacturing customer in China still has a lower demand for our products, which is probably related to lost orders at their side with a connection to the previous large investments in China due to the COVID-19 pandemic.

The fact that individual imbalances in the market can hit our business hard proves our strategy to make sense, as it is entering new, attractive niches achieving a wider range of solutions for our customers. With acquisitions such as ATDBio and our successful integration of that business, Diagnostics experienced double-digit growth. We are targeting more markets and becoming less vulnerable. We are now working with the Astrea Bioseparations merger, which is subject to approval of the transaction at the Annual General Meeting on April 27. At the end of the second quarter, we will start our global chromatography collaboration, which will take both organizations to the next level.

Our global presence and diversified product portfolio are helping to mitigate the impact of the slowdown in China and the lipid purification business in EMEA. Americas and ASEAN showed double-digit growth during the quarter, and our business in Korea and the whole distribution business also grew rapidly during the first quarter.

Two of our three client-focused areas grew in this quarter. White Tech experienced a weaker quarter, while Red Tech and Blue & Green Tech reported growth.

When it comes to individual product areas, we see that in Red Tech, sales experienced double-digit growth figures in Diagnostics driven by our oligonucleotide business and Analytical Testing. Blue & Green Tech also reported double-digit growth figures in Water & Environmental Testing. In the White Tech areas Small Molecules & Synthetic Therapeutics and Scale Up sales declined, but continued to grow in Biologics & Advanced Therapeutics. If we disregard lipid purification, our underlying Scale-Up business also remained strong.

In keeping with our strategy, our work on digititalization took another step forward with the introduction of new software solutions for Biotage® Selekt, our world-leading platform for purification of small molecules. The solutions have been developed in cooperation with our customers and enable remote control and interconnection of several systems. This makes it possible to streamline workflows in the laboratories that are used to develop new pharmaceuticals.

Another important focus for us is sustainability, and we received confirmation that our efforts are delivering results – we saw a shift from Medium Risk to Low Risk in Morningstar Sustainalytics’ global ESG Risk Ratings. Fortunately, our efforts to be an employer that offers equal opportunities is also bearing fruit, which is made clear by the results of the 2022 Swedish salary survey. Our equality index rose from 97.3 to 101.0, while the Swedish average is 95.8.

Going forward, we aim to strengthen our position in drug development in attractive niches and modalities with higher volumes, growth, and gross margins. We want to strengthen our recurring sales and product lines used in the commercial phase. From this perspective, I look to the future with more confidence than ever, as we hope to soon be able to welcome our new colleagues from Astrea Bioseparations.

Uppsala, April 27, 2023

Tomas Blomquist
President and CEO