Q1 2023/24 - Lower revenue in a challenging market
ANNOUNCEMENT NO. 247
Trading statement for Q1 2023/24 (1 July - 30
September 2023)
Lower revenue in a challenging
market
Revenue for the first quarter of 2023/24 was, as
expected, affected by continuing challenging market conditions,
declining 20% to DKK 91.1 million from DKK 113.8 million in the
year-earlier period. The lower revenue was mainly due to a 50% drop
in sales of instruments. EBITDA fell to DKK 41.5 million in the
first quarter from DKK 65.2 million in the same period last year,
while the EBITDA margin was 46%, down from 57% in the same period
last year.
Based on developments in the first quarter, the
full-year revenue and EBITDA guidance is maintained.
Highlights
- Q1 2023/24
revenue amounted to DKK 91.1 million, a year-on-year decrease of
20%.
- The lower
revenue was primarily the result of a 50% drop in sales of
instruments from DKK 48.8 million to DKK 24.3 million.
- Revenue in
ChemoMetec’s core business area, Life science research, Cell-based
therapy and Bioprocessing (LCB), was down 21% in Q1 and accounted
for 91% of overall revenue.
- Q1 EBITDA
amounted to DKK 41.5 million, down 36% from DKK 65.2 million in the
year-earlier period. The Q1 EBITDA margin was 46%, against 57% in
the same period of last year.
- Both revenue and
EBITDA were adversely affected by a lower USD exchange rate than in
Q1 2022/23.
- In Q1 2023/24,
ChemoMetec focused on establishing the production of the XcytoMatic
40 (XM40), and the next step will be the final, full launch of the
instrument. Sales of the new products are expected to gradually
contribute to revenue from the second half of 2023/24.
- ChemoMetec
maintains its full-year guidance for 2023/24, expecting revenue in
the DKK 400-435 million range and an operating profit (EBITDA) in
the DKK 200-220 million range.
Market conditions
As expected, ChemoMetec’s revenue for the first
quarter of 2023/24 remained adversely affected by external factors
such as the higher level of interest rates and subdued investment
sentiment in our primary business segments. This dampened our
customers’ level of activity and thus the demand for ChemoMetec’s
instruments. The challenging market conditions also affected the
revenue performance in the last two quarters of the 2022/23
financial year in particular.
The USD exchange rate was on average 7% lower
than in the year-earlier period, and this also had an adverse
impact on revenue and EBITDA in the first quarter of 2023/24.
Revenue
Revenue by product segment and
geographyRevenue was DKK 91.1 million in the first
quarter, down from DKK 113.8 million in the first quarter of
2022/23, a year-on-year decrease of 20%. The decline is in line
with expectations and was mainly caused by lower sales of
instruments across all three regions; USA/Canada, Europe and the
rest of the world (RoW). Sales of instruments were down 50% to DKK
24.3 million from DKK 48.8 million, still significantly affected by
external factors, including the reduced availability of new capital
to ChemoMetec’s most important customer segment, life science and
biotech businesses.
Sales of consumables, comprising cassettes,
glass slides, reagents and test kits, declined by 2% to DKK 43.2
million in the first quarter to account for 47% of revenue compared
with 39% in the year-earlier period.
Sales of services, including service contracts,
developed satisfactorily. In the first quarter, sales of services
amounted to DKK 22.7 million, a year-on-year increase of 21%.
Revenue from services accounted for 25% of total revenue in the
first quarter, compared with 17% in the year-earlier period. Both
USA/Canada and Europe saw solid growth in revenue from services of
15% and 40%, respectively.
ChemoMetec’s largest geographical market is the
USA/Canada, which accounted for 60% of revenue in the first
quarter. Revenue in the USA/Canada was down 18% from DKK 66.7
million to DKK 54.6 million. The decline was mainly driven by a 51%
drop in sales of instruments from DKK 23.8 million to DKK 11.6
million. Revenue in the North American market was furthermore
adversely affected by the weaker USD exchange rate compared with
the same period last year.
In the European market, revenue was down 9% to
DKK 28.2 million from DKK 31.1 million in the year-earlier period.
The declining revenue was due entirely to a 37% decrease in sales
of instruments, as sales of consumables and services increased by
10% and 40% respectively.
In the RoW region, revenue declined by 48% from
DKK 16.0 million to DKK 8.3 million, due to sales of instruments
and consumables dropping 67% and 15% respectively. Sales of
services remain very limited in the RoW region.
Q1 2023/24 revenue broken down by
product segment and geography
DKK’000 |
USA/Canada |
Europe |
Other (RoW) |
2023/24 Q1
Total |
|
2022/23
Q1Total |
|
Change,% |
|
|
|
|
|
|
|
|
|
Instruments |
11,588 |
9,415 |
3,295 |
24,298 |
|
48,838 |
|
-50 |
Consumables |
25,799 |
12,511 |
4,851 |
43,161 |
|
43,970 |
|
-2 |
Services |
16,476 |
6,075 |
127 |
22,678 |
|
18,804 |
|
+21 |
Other |
749 |
191 |
61 |
1,001 |
|
2,209 |
|
-55 |
Total |
54,612 |
28,192 |
8,334 |
91,138 |
|
113,821 |
|
-20 |
Revenue broken down by product segment
and business areaIn the largest business area, LCB,
revenue was down 21% in the first quarter, mainly due to a 51%
decline in sales of instruments.
The LCB business area accounted for 91% of
overall revenue and semen analysis for 7%, while the other business
areas combined accounted for 2%.
Q1 2023/24 revenue broken down by
product segment and business area
DKK’000 |
LCBmarket |
Animal semen* |
Beer and milk** |
2023/24 Q1
Total |
|
2022/23
Q1Total |
|
Change,% |
|
|
|
|
|
|
|
|
|
Instruments |
23,363 |
615 |
320 |
24,298 |
|
48,838 |
|
-50 |
Consumables |
36,276 |
5,834 |
1,051 |
43,161 |
|
43,970 |
|
-2 |
Services |
22,678 |
- |
- |
22,678 |
|
18,804 |
|
+21 |
Other |
900 |
77 |
24 |
1,001 |
|
2,209 |
|
-55 |
Total |
83,217 |
6,526 |
1,395 |
91,138 |
|
113,821 |
|
-20 |
* Production control and quality control of animal
semen** Production control of beer and quality control of milk
EBITDA
Operating profit (EBITDA) for the first quarter
amounted to DKK 41.5 million, a year-on-year decrease of 36% from
DKK 65.2 million. Q1 2023/24 costs were generally marginally higher
than in the year-earlier period, driven mainly by higher selling
costs, administrative expenses and staff costs. However, the
greater part of the decrease in EBITDA was attributable to the
declining revenue, which had an adverse effect on both EBITDA and
EBITDA margin. The EBITDA margin was 46%, against 57% in the
year-earlier period. The USD exchange rate also adversely affected
EBITDA.
Product development and
production
In the first quarter of 2023/24, we focused on
establishing the production of the XcytoMatic 40 (XM40), and the
so-called 0 serie is expected to be in production by the second
quarter of the financial year. The instrument has been presented at
several trade fairs and been met with great interest from potential
customers. The next step now is the final, full launch of the
instrument and production and delivery to customers who have
already placed orders.
ChemoMetec is also in the process of completing
the development of the XcytoMatic 30 instrument (XM30), and initial
in-house testing is in progress. Production of the XM30 is expected
to be established during the second quarter of 2023/24, followed by
the gradual launch of the instrument.
The launch of the new products will represent an
important strategic milestone and is expected to contribute
significantly to ChemoMetec’s future revenue growth. Sales of XM40
are expected to gradually contribute to revenue from the second
half of 2023/24.
Organisation
Rasmus Kofoed was appointed Chief Executive
Officer of ChemoMetec on 1 August 2023 and now makes up the
Executive Management together with Niels Høy Nielsen, CFO.
The past quarter also saw a number of changes in
the management team below the Executive Management.
At 1 October 2023, Martin Helbo Behrens was
appointed Vice Chief Operating Officer (Vice COO) with
responsibility for production, logistics and quality. Before the
appointment, Martin was responsible for finance and logistics at
ChemoMetec’s US subsidiary.
Furthermore, Christopher Runchel, who for the
past six years has headed up the US subsidiary, will assume
responsibility for global sales as Chief Sales Officer (CSO) from 1
December 2023.
Also, at 1 December 2023, Marta Anglada
Planagumà will take up a new position as Chief Marketing &
Strategy Officer (CMSO) with responsibility for Strategy, Marketing
and Product Management. Marta has more than 20 years’ experience,
mainly with marketing in the pharmaceutical and medtech
industries.
These new appointments will serve to strengthen
ChemoMetec’s management capabilities and ensure the efficient
execution of our strategic priorities, not least the successful and
gradual launch of our four new products (XM40, XM30, NC-203 and
Xcyto 5) before the end of 2024.
Guidance for 2023/24
Based on developments in the first quarter of
2023/24, we maintain our guidance for financial year 2023/24, as
announced in connection with the release of the annual report for
2022/23 on 13 September 2023. Accordingly, revenue for 2023/24 is
expected in the DKK 400-435 million range and operating profit
(EBITDA) is expected in the DKK 200-220 million range.
For further information, please
contact
Rasmus Kofoed, CEOTel.: (+45) 2672
6819
Niels Høy Nielsen, CFOTel.: (+45) 2551 8724
About ChemoMetec A/S
ChemoMetec develops, manufactures and markets
instruments for cell counting and a wide range of other
measurements. ChemoMetec’s instruments are marketed to the
pharmaceutical, biotech and agricultural industries worldwide.
ChemoMetec’s customers include some of the world’s leading
pharmaceutical companies, such as Novartis, Novo Nordisk, H.
Lundbeck, Merck, AstraZeneca and Johnson & Johnson.
ChemoMetec was founded in 1997 and is listed on
Nasdaq OMX Copenhagen. For further information, go to
www.chemometec.com.
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