Release Date: November 26, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- BICO Group AB (CLLKF, Financial) reported a total adjusted EBITDA of SEK40 million for Q3, with all business areas being profitable.
- The company achieved a 26% organic growth year-to-date in lab automation, indicating strong demand for integrated lab automation solutions.
- BICO Group AB (CLLKF) has successfully reduced its net working capital from SEK550 million to SEK456 million, aligning with industry peers.
- The divestment of Nanoscribe is expected to generate a capital gain of approximately 10% above book value, aiding in debt reduction.
- The company has launched a sharpened commercial agenda for CELLINK, focusing on long-term stability and profitability.
Negative Points
- BICO Group AB (CLLKF) experienced a negative organic growth of 13% in Q3, primarily due to a soft market for instrument sales.
- The company reported a net loss of SEK248 million for the quarter.
- Sales in the life science solutions business area declined by 12% organically, impacted by slower diagnostic and academia markets.
- The lab automation segment saw a negative organic growth of 25% in Q3 due to fewer project starts.
- The company is undergoing rightsizing in CELLINK, resulting in a 20% reduction in workforce, which may impact operations.
Q & A Highlights
Q: Can you quantify the impact of the CELLINK restructuring on the group's top-line and OpEx, and when do you expect CELLINK to be profitable? Also, are there similar restructuring plans across the group?
A: The restructuring is expected to save approximately SEK40 million annually. We believe CELLINK has reached a stable sales level, and no other rightsizing activities are currently active in the group. Our focus is on operational excellence and achieving efficiencies rather than further rightsizing.
Q: What signals or data points are you monitoring to anticipate improvements in the academia and government segments, particularly regarding NIH funding?
A: We monitor grant applications and funding cycles, which typically range from one to three years. We are also observing the new administration's focus on driving efficiencies, which aligns with our portfolio's strengths in lab efficiency.
Q: In Q1, you mentioned positive signs from Europe and North America. Has this changed, and what parts of the business have deteriorated?
A: The market optimism for recovery has not materialized as expected, leading to continued softness. However, consumable sales have shown improvement, which is typical in the current macro environment, with instruments expected to follow.
Q: Could you provide details on the $28 million order for lab automation and the current pipeline for Biosero projects?
A: A significant portion of the order's revenue was recognized in the first half of 2024. We continue to see strong demand and a solid pipeline for lab automation projects, although procurement processes are taking longer due to cost control pressures in the pharma industry.
Q: Regarding the CELLINK rightsizing, how many employees are affected, and when will the savings be realized?
A: Approximately 20 employees, or 20% of CELLINK's workforce, are affected. The savings are expected to be realized by late Q1 or early Q2, following union negotiations.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
