Release Date: July 22, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Boule Diagnostics AB (STU:8BD, Financial) has a strong foundation of skilled personnel committed to delivering quality medical equipment and services.
- The company has unique capabilities in developing and manufacturing the entire hematology lifecycle, from analyses to aftermarket service support.
- Boule Diagnostics AB (STU:8BD) has a strong brand recognition and loyal customer base due to its pioneering history in hematology.
- The company has made strategic adjustments to improve cost efficiency, including an organizational restructure resulting in SEK8 million in annual savings.
- Boule Diagnostics AB (STU:8BD) has achieved significant milestones in its portfolio strategy, including the inauguration of a new reagent manufacturing plant in India.
Negative Points
- Net sales for Q2 2024 decreased by 2.5% year-on-year, with organic growth down 3.5%.
- The company faced challenges in the Latam and Asia Pacific regions due to competition from low-cost Chinese manufacturers.
- Hematology sales in Q2 2024 were soft, with a 10% decrease in the number of instruments sold compared to the previous year.
- The operating margin was impacted by SEK8.5 million in one-time restructuring expenses and tax penalties.
- The company is facing a competitive and decentralized hematology market, necessitating improvements in processes and operating efficiency.
Q & A Highlights
Q: Can you elaborate on the focus areas you've defined and whether you need to invest in building an organization to implement your action plan?
A: We don't expect to build a new organization for strategic growth. Our focus is on expanding veterinary care by building a stronger distributor network. We have the commercial organization to support this but need to invest more effort in developing that network. Gradual improvements from these efforts are expected.
Q: Are these initiatives aimed at reaching your current financial targets, or will you need to update them regarding growth and margins?
A: It's difficult to answer definitively now. We are investing in future growth, not just short-term performance. However, I won't make forward-looking statements about the expected outcomes of these initiatives.
Q: Can you provide any indication regarding growth in the second half, considering tougher comps?
A: We are not providing forward-looking statements or forecasts at this stage. Orders are not long-term, and there's nothing specific to comment on for the second half.
Q: Will the cost savings on COGS be visible this year, or are they more long-term?
A: The staffing reductions initiated in the second quarter will have an immediate impact, supporting lower costs going forward.
Q: Will there be additional restructuring costs in the second half?
A: We are continuously evaluating the organization, and will update if further restructuring initiatives are taken.
Q: The installed base on a trailing 12-month basis appears lower than a year ago. Should we expect this to increase again?
A: We cannot comment on forward-looking statements. The installed base count can be difficult to track accurately due to our indirect sales model through distribution channels.
Q: Is the lower D&A in Q2 a new level we should expect going forward?
A: Some fixed assets have reached the end of amortization. The second quarter's run rate is a better proxy for future quarters.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
