Release Date: August 20, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- BICO Group AB (CLLKF, Financial) delivered stable sales levels in a volatile market environment, with sales of SEK534 million.
- All business areas were profitable in Q2, reporting a total adjusted EBITDA of SEK46 million, generating a margin of 9%.
- The gross margin for the quarter improved to 52% compared to 46% in the same quarter last year.
- The company has made strategic additions to the executive management team, including a new Chief HR Officer and Chief Commercial Officer.
- BICO Group AB (CLLKF) has successfully implemented actions to improve working capital, resulting in levels now in line with industry peers.
Negative Points
- Organic growth was negative 2%, indicating a decline in underlying business performance.
- The net loss for the quarter amounted to negative SEK79 million.
- Sales in Asia, particularly China, experienced a significant drop due to lower demand.
- Cash flow from operating activities was negative SEK51 million, with a total cash flow of negative SEK101 million for the quarter.
- Bioprinting segment reported weaker sales with an organic growth of negative 12%.
Q & A Highlights
Q: Can you comment on the trends you are seeing in the market and customer activity, especially regarding CapEx for instrumentation?
A: We continue to see hesitance in capital equipment investments, particularly in academia and the diagnostic sector. However, companies focused on consumables or lab automation are performing better. Sales in North America and Europe remain stable, while Asia, especially China, is experiencing a slower market.
Q: Do you expect to deliver organic growth above 1% in the second half of the year?
A: We do not provide financial guidance, so it's difficult to comment on specific growth expectations.
Q: Can you confirm that CELLINK and Scienion had a negative impact on growth and earnings in the quarter? When should we expect positive earnings from these subsidiaries?
A: Both CELLINK and Scienion were loss-making in the quarter and the first half of 2024. We will not provide specific guidance on when they will become profitable.
Q: Could you elaborate on the negative net working capital development and when we should expect significant improvement in free cash flow?
A: We have reached stable levels in our working capital of around 20%-25%. Improvements in working capital were mainly achieved by the end of 2023. We continue to work on further improvements, but major changes have already been implemented.
Q: How many companies within the group are currently loss-making?
A: We will not provide specific details on the number of loss-making companies. However, we have mentioned CELLINK and Scienion as having profitability issues.
Q: Are there any big deliveries expected in the second half of the year for the Biosciences segment?
A: Q1 had an exceptional delivery related to a $28 million project. Q2 did not have a similar impact, but we expect the lab automation business to continue trending positively, though not at the same level as Q1.
Q: How reassured are you about refinancing your convertible debt in 2025?
A: We are confident in our ability to refinance the convertible bond. We are exploring all options, including credit facilities related to working capital.
Q: Are there any plans for divesting companies that are not performing well?
A: There have been no decisions on divesting any companies within the group. We are focusing on restructuring and improving collaboration between companies.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
