Interim Report January-September 2023

Strong growth and investments for the future

July – September 2023   

• Net sales totaled SEK 30,186 (22,979) thousand, with a growth rate of 31%. Growth is 25%, adjusted for currency effects. Organic growth adjusted for license revenues in 2022 is 41%, and 34% when also adjusted for currency effects.   
• Operating profit before depreciation and amortization (EBITDA) totaled SEK 7,555 (6,997) thousand. Adjusted for non-recurring costs for moving to new premises, EBITDA is SEK 8,193 thousand.
• Operating profit (EBIT) totaled SEK 4,488 (4,993) thousand. Adjusted for non-recurring costs for moving to new premises, EBIT is SEK 5,662 thousand.
• Profit for the period totaled SEK 3,138 (5,708) thousand.
• Earnings per share totaled SEK 0.05 (0.09).
• Comprehensive income for the period totaled SEK 4,051 (5,869) thousand.
• Cash flow from operating activities was SEK 9,611 (5,042) thousand.
• Cash and cash equivalents at the end of the period totaled SEK 119,131 (80,987) thousand.

January – September 2023   

• Net sales totaled SEK 130,925 (76,646) thousand, with a growth rate of 71%. Growth is 61%, adjusted for currency effects. Organic growth adjusted for license revenues is 41%, and 31% when also adjusted for currency effects. 
• Operating profit before depreciation and amortization (EBITDA) totaled SEK 60,330 (20,824) thousand.
• Operating profit (EBIT) totaled SEK 53,867 (15,320) thousand.
• Profit for the period totaled SEK 61,920 (18,699) thousand.
• Earnings per share totaled SEK 0.95 (0.29).
• Comprehensive income for the period totaled SEK 65,237 (19,766) thousand.
• Cash flow from operating activities was SEK 57,884 (3,605) thousand.
• Cash and cash equivalents at the end of the period totaled SEK 119,131 (80,987) thousand.

Comments from Fredrik Olsson, Chief Executive Officer

We continue to show strong growth during the third quarter. Sales rose by 31% compared with the corresponding quarter last year. Growth in the core business was 41% after adjusting for license revenue. Adjusted for currency fluctuations, growth in the third quarter was 35%. Enzymes in analytics grew by 38% and the antibody business by 4%.

We saw continued strong demand for our enzyme products, mainly in the North American market, but also in Europe. Compared with the second quarter, we see some improvement in the Chinese market but sales in Asia remained sluggish due to lower customer activity in China. Other markets in Asia continued to show good growth. The subdued growth for antibodies is related to some volatility between individual quarters for production orders for diagnostic applications, but the underlying business continues to show solid growth. 

In general, we experience robust activity in our business and demand is mainly driven by major global pharmaceutical companies focusing on antibody drugs – especially new formats such as bispecific antibodies, fusion proteins and antibody conjugates, known as ADCs. Interest in our enzyme-based technologies for antibody conjugation is rising and we see good growth for our technologies, particularly in connection with a general increase in interest in the development of ADCs as a therapeutic modality. These drugs are also more complicated to analyze, which drives enzyme sales for biochemical analysis of ADCs.

With a clear commercial focus, coupled with our investment in our sales and marketing organization, we continue to drive growth. In a challenging market landscape, we leverage our increasingly diverse range of offerings to recognize and seize business opportunities. Through a collective effort and strong support from every facet of the organization, we have kept our momentum robust and ensured our operational effectiveness during this period, all while relocating laboratories to new premises. Our product development is following our activity plan, where we have launched three products so far this year. I expect additional product launches toward the end of the year and our pipeline for 2024 includes several strategic projects to support our future growth ambitions.

The third quarter was characterized by our move to new, specially designed premises that offer improved opportunities for scaling up and continued growth. The new facilities and related investments have therefore impacted our cost base. In addition, we had non-recurring costs of just over SEK 1 million during the quarter related to the move and double rent expenses, which will gradually diminish as the year comes to an end.

I am pleased with our robust growth and earnings for the quarter, especially in light of the investments and temporary costs related to our growth aspirations. Adjusted for non-recurring costs, our operating profit has improved year-on-year. Our ability to maintain strong growth in a challenging market landscape with industry-specific and macroeconomic challenges shows that our continuously expanding offering creates value for our customers. As we continue to invest in future growth prospects, our strong cash flow enhances our liquidity, empowering us to proactively seize opportunities as they emerge.

I would like to convey my heartfelt thanks to all my colleagues at Genovis who work tirelessly to assist our customers in their efforts to develop and manufacture the medicines of the future. I would also like to extend a particularly warm thank you to all employees who have done a fantastic job over a long period of time, enabling our move to brand new premises - another milestone in the growth journey at Genovis.

This disclosure contains information that Genovis AB is obliged to make public pursuant to the EU Market Abuse Regulation (EU nr 596/2014). The information was submitted for publication, through the agency of the contact person, on 15-11-2023 08:00 CET.