Boule Diagnostics: Another solid quarter in Q1 - ABG

Sales in line with better instrument deliveries
Strong orderbook but supply and geopolitical uncertainty
Presentation at 14.00 CET

Q1 numbers
Boule Diagnostics delivered Q1 sales in line with expectations at SEK 133m (0% vs ABGSC 132m) while growing 23% organically (ABGSC 24%). The gross margins declined 1.5% y-o-y as it is held back with ~5pp. from higher component prices and production disruptions, but the 42.9% was still in line with expectations (-0.1pp vs ABGSC 43.0%). EBIT at SEK 10m was slightly below expectations (-33% vs ABGSC 15m) on the back of higher opex, for an EBIT margin of 7.8% (-3.9pp vs ABGSC 11.7%), Net profit was SEK 5m (-56% vs ABGSC 11m). It delivered a solid 1,207 instruments (ABGSC 1,115) in the quarter, despite the tougher component situation, and the OEM business had another record quarter. Regionally, Eastern Europe held up better than expected while Africa and Middle East was below expectations following multiple recent strong quarters.

Outlook and estimate changes
Boule is cautious on the near-term outlook as it expects the war in Ukraine to impact its Eastern European business (13% of FY’21 sales) as well as the tougher component situation. The orderbook remains higher than usual despite the strong instrument deliveries. It is on track to launch the new cloud platform towards the end of 2022 and the launch of the first instrument in early 2023. We believe most of the geopolitical uncertainty and supply-chain headwind should already be reflected in consensus estimates. We see consensus making small positive revisions to ‘22e sales but also expect higher opex to drive high single digits negative revisions to EBIT

Final thoughts
The share has been weak into the numbers down 5% over the past week, compared to OMXSPI which is flat. The share currently trades at 10x EV/EBIT on unrevised 2022e estimates.
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