INTERIM REPORT JANUARY – MARCH 2014
· Net sales rose by about 4% to SEK 1,984k (1,906k).
· Comprehensive income improved by SEK 108k to SEK -3,838k (-3,946k).
· Comprehensive income per share, basic and diluted, improved by SEK 0.14 to SEK -0.19 (-0.33).
· Cash flow from operating activities was SEK -6,213k (-4,429k).
· Genovis carried out a private placement in January that raised SEK 3.6 million before issue expenses on the same terms and conditions as the rights issue in December, which raised SEK 23.7 million for the Company before issue expenses.
· Genovis decided to switch to dedicated direct sales in Europe and the US. In other markets Sigma-Aldrich has a non-exclusive distribution agreement.
Comments from Sarah Fredriksson, CEO
During the quarter, we followed through on the strategically important decision to pursue direct sales in the US from now on. Genovis has representation in place, based in Boston, Massachusetts. The conversion will be fully implemented at year-end when the US distributors no longer sell Genovis products. The main reason for the change is to achieve direct contact with our customers. It is crucial for us to understand the needs of our customers and to be able to assist them as they implement our products in more extensive and a greater variety of analytical processes. We see a clear trend in that FabRICATOR (IdeS) will also be used in analytical methods other than mass spectrometry, as was recently described in a publication in mAbs* by researchers in MSD Pharmaceuticals (Merck, Sharp & Dohme). It is important for Genovis’ R&D and sales activities to have direct contact to be able to offer the right product formats for our key customers moving forward. We have also chosen to switch to direct sales in Europe and Israel during the first quarter, as well as to offer direct sales in the rest of the world alongside distribution through Sigma-Aldrich.
During the first quarter we saw a continued increase in sales to customers in Europe and a recovery in the US market, though we did not fully reach the level we expected. This has been affected by the shift from distributor to direct sales; in addition, distributors have kept products in stock since the previous quarter. Certain investments were made during the period, primarily in equipment to streamline production and for quality control. A private placement conducted in early January, and the December 2013 rights issue that was registered in 2014 both had a positive impact on cash flow.
Sarah Fredriksson
President & CEO
