CellaVision AB
STO:CEVI
US |
Fubotv Inc
NYSE:FUBO
|
Media
|
|
US |
Bank of America Corp
NYSE:BAC
|
Banking
|
|
US |
Palantir Technologies Inc
NYSE:PLTR
|
Technology
|
|
US |
C
|
C3.ai Inc
NYSE:AI
|
Technology
|
US |
Uber Technologies Inc
NYSE:UBER
|
Road & Rail
|
|
CN |
NIO Inc
NYSE:NIO
|
Automobiles
|
|
US |
Fluor Corp
NYSE:FLR
|
Construction
|
|
US |
Jacobs Engineering Group Inc
NYSE:J
|
Professional Services
|
|
US |
TopBuild Corp
NYSE:BLD
|
Consumer products
|
|
US |
Abbott Laboratories
NYSE:ABT
|
Health Care
|
|
US |
Chevron Corp
NYSE:CVX
|
Energy
|
|
US |
Occidental Petroleum Corp
NYSE:OXY
|
Energy
|
|
US |
Matrix Service Co
NASDAQ:MTRX
|
Construction
|
|
US |
Automatic Data Processing Inc
NASDAQ:ADP
|
Technology
|
|
US |
Qualcomm Inc
NASDAQ:QCOM
|
Semiconductors
|
|
US |
Ambarella Inc
NASDAQ:AMBA
|
Semiconductors
|
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
52 Week Range |
151.0841
296.5
|
Price Target |
|
We'll email you a reminder when the closing price reaches SEK.
Choose the stock you wish to monitor with a price alert.
Fubotv Inc
NYSE:FUBO
|
US | |
Bank of America Corp
NYSE:BAC
|
US | |
Palantir Technologies Inc
NYSE:PLTR
|
US | |
C
|
C3.ai Inc
NYSE:AI
|
US |
Uber Technologies Inc
NYSE:UBER
|
US | |
NIO Inc
NYSE:NIO
|
CN | |
Fluor Corp
NYSE:FLR
|
US | |
Jacobs Engineering Group Inc
NYSE:J
|
US | |
TopBuild Corp
NYSE:BLD
|
US | |
Abbott Laboratories
NYSE:ABT
|
US | |
Chevron Corp
NYSE:CVX
|
US | |
Occidental Petroleum Corp
NYSE:OXY
|
US | |
Matrix Service Co
NASDAQ:MTRX
|
US | |
Automatic Data Processing Inc
NASDAQ:ADP
|
US | |
Qualcomm Inc
NASDAQ:QCOM
|
US | |
Ambarella Inc
NASDAQ:AMBA
|
US |
This alert will be permanently deleted.
Ladies and gentlemen, welcome to the CellaVision AB audiocast and teleconference Q1 2019. Today, I am pleased to present CEO, Mr. Zlatko Rihter. [Operator Instructions] Speaker, please begin.
Good morning, everybody. It's Zlatko here from Lund. Together with me today, I have as always, Magnus Blixt, our CFO; and Maria Morin, who is Head of HR and Corporate Communications. So there are 3 of us to support you today. And of course, I will head into the presentation as usual and we'll ask for -- moving to the next slide, Slide #3 please. And just the kind of update on CellaVision in short and also give an update on kind of our mission. Again, we have a mission to replace traditional microscopes in laboratories. And so far we're focused on hematology, which is blood analysis, and we also believe strongly that we have a very attractive offering since we both can offer improved patient diagnostics and also at the same time have a very strong case in reducing the labs cost base since we replace people basically or BMAs at the end of the day. So investing into CellaVision usually means that you have a pay over less than a year and you get an improved diagnostics at the same time. The challenge is of course that the microscopes has been in the labs for, let's say, 150 years. So when you come with something new, sometimes it takes some time for the customers to accept the new technology. So that's kind of our mission and mission in life. If you move to Slide 4. I think we updated this slide in the last call. Nothing new has happened since then but just to give you a repetition, we believe that there are roughly 17,000 large labs out there in the world. A large lab for us is labs that have more than 100 -- that handle or analyze more than 130 blood samples per day. Then we define them as large lab. If it's less than that, we have now defined that as a small- or medium-sized lab. We see in large labs. That there are roughly 2.5 billion samples analyzed every year globally. As you all know, it's a 2-step approach. First step is the cell counter, which is also provided by our partners. And in that first step basically, you look for abnormalities in the samples and if you find those, it's flagged out and roughly 15% of all samples are flagged out and there is a need for a second part of the analysis. And that's kind of where we come in. And 15% out of 2.5 billion samples is around 380 million samples. When you do that, you have 2 options to do it, either you do it in a traditional microscope with a BMA, a biomedical analyst that looks into it or you do it CellaVision way. And we have by now roughly 18% penetration in this segment, which means that we have more than 3,000 labs running CellaVision. And since we have a unique -- I would say unique offering today, we have no competition, so we have more or less 100% of that segment at this stage. And of course, our drive and strategy is much about trying to as fast as ever possible transfer customers into our world instead of traditional microscopes. I think we've been very successful in many markets, but if I have to pick 4 where we're concerted I would say U.S, Canada, Denmark and Sweden where I would say we have created kind of a new global standard in the way how microscopes analysis are done in hematology. If we then move to Slide #5. That shows the same type of setup, but here we focus in the small and medium labs. And that is again labs that have less than 100 -- less than 130 samples per day and it's the same procedure. It's a little bit less samples of course. Globally, it's roughly 1.5. So in total, there are 4 billion blood samples. First step is the cell counter, which is usually a little bit lower technology than in the large labs because it's less volumes but still roughly 15% are flagged out. Means 220 million samples that needs to be [ indiscernible ] analyzed microscope again or in a CellaVision system. And there, we now have the CellaVision DC-1 as an offering and this is of course something new. It was CE marked in February and I'm coming back a little bit later on the development on that. And this is of course something we try to open up now, step by step, as a market segment for us. Currently, this is all microscopy or in some cases, where the glass slides are transported by vehicle from the satellite labs or the small lab to a large lab where it's analyzed and then that information is going back. So of course, we strongly believe that we have a good case in driving efficiency in this type of settlement. We then move to Slide 6. A short update on our business model. It remains. I think what we've done since we talked last time, we have a market support organization now in place in Iberia based in Madrid covering both Spain and Portugal, and we also have a market support organization in place in Italy for sometime. This means that we have 17 market support organizations out there in 17 different countries, covering more than 30 markets today. And I think we have a step-by-step expanded in a great way the last 2 years, and we now cover many of the key markets for us in a good way. As you might remember, we also moved into India and Southeast Asia during Q4 '18 and of course, those teams are becoming operational as we speak now. So we have moved into 4 new markets the last 6 months you could say. And hopefully, we will see some results of that investment the coming year. It usually takes a year or 2 or even more than that before we really see the -- kind of the sales growth we would like to see. Summarizing the business model, also indirect, we have our partners. We work with them. We've signed up all of them today, which is great. That means that wherever in the world, there is a customer that wants digital hematology, CellaVision can for different partners provide that to the customers, and we see ourselves covering roughly -- or more or less 100% of large labs with our partners, and I would say more than 80% of small- to medium-sized labs have access to our technology as we speak. We still have some small regional gaps, which we will of course try to step-by-step cover but we have a very good coverage already stated. And as we've talked about before, distributors, we sell the system. They take care of the installation, after-sales service and they also integrate our CellaVision system with their own cell counters. And then they have the complete hematology line. And the integration is both sometimes mechanically but also in most -- all cases, there's an IT information flow integration. And moving to Slide #7. Another slide that we showed that for some time, we are very consistent with our strategy and we'll continue to be so. We have focused a lot on geographic expansion, which is one of our key strategies the last 3 years. I think in 4 years, we moved from 3 to 17 markets present, which is great. And I think we've also seen a good leverage on those investments in most -- [ all ] cases. Segment expansion, of course, large labs, small labs. We also have a veterinary business, which is fragmented and I would say still not taking off. But if we look at the larger small labs, we have the -- so far all sales more or less is in large labs and we are now opening the small labs. So we'll continue to try to be successful in maybe more than 1 segment. That's been the historic case for us. Innovation is key. CellaVision invests a lot of innovation [ -- into ] innovation. We have -- when we measured a KPI of that, it's usually R&D spend versus net sales. We are consistently over 15%, and we will continue to develop or invest into innovation. We still believe that there are many, many developments and innovations that needs to be done, the coming years. And that's why it's so important for us. We are a technology company, we'll continue to drive that. Streamlined supply chain of course is to manage the product cost, the costs in a good way and make sure that we deliver efficiently. And partnerships is of course part of our indirect business model that we've been developing, I think, very well the last few years. And it's a part of our success because that makes us quite -- rather very, I would say, efficient business model today, and we will continue to operate in that context. So that's that. Then moving over to Slide #9. Just to give you a little bit flavor of our portfolio. We have 4 key components that together parallel built up it. So we have the hardware, which large systems carrying labs that do over -- more than 130 samples per day. To been there for a long time both with our own systems, and also the OEM-branded DI-60 that we have together with Sysmex. They are on the same technology platforms, so it's basically the same system but with different casings and slightly different capacities. We have our applications, we have our connectivity offering and also our competence offerings. And then we now are adding the DC-1 to that and that also means that any lab networking -- we see that segment growing quite fast. There is a [ productization ] ongoing, which means that there are more and more lab chains, private lab chains or -- emerging both in Europe and I would say Americas. And they ask for support because they sometimes have 20, 30, 40, 50 labs that needs to be working together efficiently, and we see a second wave here on efficiency when we -- historically, we focused a lot on optimizing the workflow within a lab. Now we're kind of able -- can both optimize the workflow within a lab, but also can connect the whole lab chain and make that efficient. And we have the right tools to do that since a few years back, and we see that, that part of our business has -- there's an increased interest among customers because there are more of those types of customers. So that would also kind of highlight a little bit on Slide 10 where we have a picture of how that could work together. Some of you have seen this before, but I think it's very important to understand that you see a world now where large, small and different types of labs are connected together. And we see also a scenario where more and more of our customers are structuring that way where we try to find efficiencies beyond 1 hospital or 1 lab. And that of course makes our offering quite strong. Then I think another highlight of the quarter for us. Moving to Slide #11. Artificial intelligence, it's on top of everybody's minds these days. It's a lot of talk about that. Digitalization and other buzz words are also used frequently. For us, that's daily business. CellaVision is kind of -- started from the AI perspective in the mid-90s, and we worked with that type of if you call them buzz words since Day 1. The offering we have is based upon that customers want to digitalize their work process, and that they want to utilize the benefits of artificial intelligence. And 2 of our coworkers, Jesper Jönsson and Emmy Sjöstrand, just won the Swedish AI Society award for the best master thesis 2019, which is of course -- makes us extremely proud and it also shows that we are somehow at the technology frontier here. And CellaVision will continue to try to be there the coming years, and this is of course very, very important for us to make sure that we are on the edge of technology and within our key areas, which is robotics, digitalization and artificial intelligence in different ways. And getting all those 3 technologies together into 1 system or product is key for us. So this is extremely nice to see, and we're proud of that. And it's important to remember that a lot of people talk about AI, but we've delivered AI for some 20 years. So that's that. Then let's move over to numbers, Slide 13, and just a quick update on quarter 1. I think we had a -- I think we've had another strong quarter. I think this is the third quarter in a row where we have more than 30% organic growth. We had 3% FX effect and of course that makes us -- makes it into quite strong quarter. If we just comment on the different regions. Americas had another strong quarter. I think we've shown over and over again the last 3 years that we can grow a market that might be seen as more mature than the other ones. And in this quarter, we had 28% growth. We see both U.S. and Canada growing very strong. We see that we are now, I would say, the golden standard of microscopy. There are a few if any customers today would choose traditional microscopy in the U.S. or Canada. Not everyone goes CellaVision. And there are many reasons for that. But one is that we've been in U.S. and Canada for a very long time. We've been there soon 10 years with our teams, and of course, they have [ steadfast ] penetrated that market. So it's a timing effect also on where we can be when we talk about penetration rates. I think the same goes for Sweden and Denmark, which is the home markets where we've been for a long time, where we also have very high penetration rates. And then the other markets, dependent a little bit of how long we've been there, we see different scenarios. Another highlight is that Brazil is continuing to develop well for us and is -- and we have quite a lot of [ inclinations ] there so that makes us quite happy as well. Asia Pacific had a little bit less growth this quarter, 6%. Again, as you all know, it's quite volatile if you take this quarter by quarter, both ups and downs. Japan did well, China did okay, and then we're still waiting for -- we've done the first few installations in this. If you remember, we won a big referral -- a big tender in New South Wales in Australia and the first unit has now been installed. So -- but this is like -- which is big -- it is in these big tenders is usually a 1- to 2-year installation period and we're just in early days of that one in Australia. So Australia is becoming one of our mature markets as well once it's up and running. And then maybe the highlight of Q1 is EMEA where we had 57% growth. And I think our strategy of geographic expansion making sure that we have CellaVision teams in the key markets has started to pay off. And we also see a few -- I think we have successes all over Europe. Of course, you have to have that if you have these type of growth rates but you have to pick one market. France has been fantastic the last few quarters where we have really picked up a lot of sales. And as I said before, Italy and Iberia are operational as of, I'd say, March this year basically so we're still early days there. But all in all, that gives -- sums up to 31%. If we then move to Slide 14. Of course, DC-1 is a very important product for us. And just to give you an update on where we are there. Again, we're targeting the mid- to small-sized labs that until now has not had any access to digital solutions when they do blood cell analysis. We again believe there are around 100,000 of those around the world. And long term, we see that, that market can be maybe even larger than the large labs market of course. Now it will take some time to get to that point. But market-wise, it's like that. We launched at the MEDLAB in Dubai in February. Where we also had the CE mark. And since then, on top of the countries that immediately accepts CE mark, it's also approved for sales in Australia, Japan, Canada and Singapore on top of all the EU markets and markets close to EU. So we are kind of now -- it's registered in all the correct ways in all these markets. We are ready to sell it. We have delivered the first DC-1 systems to customers. They've left our production and are being shipped, and we are now ramping up production according to plan I would say. As you all know -- I mean we will do this, I will call it, kind of a controlled ramp-up. We will secure quality, and we have extra measures for the first units that have been produced to make sure that we check them a little bit extra before they go out to customers. We are very keen to keep our reputation. At the end of the day, there are 600 components that have to be assembled and then work together, and when you push start it should work. So we're making sure to have extra attention to that now in the beginning. But as we ramp up and we stabilize the production, of course, that will be a more normal setup. So 2019 is kind of a controlled ramp-up year. But we have shipped the first systems. We have the first orders in the system, and we will try to deliver according to those. Of course in Q1, there are no sales of DC-1s yet for us. So that's that. And then of course, as always, we try to take the next step. And the next step from a regulatory perspective is to get the products, the DC-1s approved both in U.S. and China. So we are starting up the necessary clinical studies that hopefully will lead to an FDA 510(k) submission down the road. And somewhere, I would say, mid next year hopefully, we should have an approved product also in U.S. and then late -- a few months later on in China. But we need to -- this is of course steps that are necessary, and we will sell the DC-1 through the global distributor network and that -- those are more or less all in place. And if somebody -- for example, we'll meet at MEDLAB in Barcelona in 2 weeks, which is one big [ reveal ] congress, you will see the DC-1 in several booths or [ members ] there. So we are out there and pushing for it and selling and promoting it. And then of course, the last key topic is that we strongly believe that there are even more to be done. And we will continue to develop and build our team here and hopefully [ indiscernible ] in the world to make sure that we increase innovation capabilities. We need a lot of good engineers down the road. So that's that. If we then move to Slide 15. Just to describe it, you all know we have a -- if you measure us quarter by quarter, we have a quite volatile business. The last few quarters been volatile in the positive remark. And as I said in the beginning, we had 3 quarters in a row with a growth above 30%, organic growth above 30%. We have pretty stable gross margin. And then of course, with a strong top line, OpEx versus sales becomes -- improves over the time. We're now down to low 40s in percentage term. And that together, all that together, when that plays out the way it does, we have a strong operating profit and we ended up with almost SEK 35 million or 33% EBIT in Q1. I would say that OpEx is under control. And of course, our business model allows us to have this type of leverage. And I think we approved -- improved on most aspects versus Q1 the year before. A few more comments. In Slide 16, if you [ mixed ] it up, on the financial side. 31% organic growth. You have to know that at the same time, we are investing into the business, both geographic expansion and R&D has a pretty high increase and then -- which is, I think, good. The admin side has a little bit lower increase, which means that we are investing into the areas supporting our strategy, which is a lot around geographic expansion, building distributors' network and innovation. So that's quite nice. We had a little bit lower capitalized R&D ratio. Simple reason for that is that CellaVision is still a small company. We usually run 1 major project at a time. And since the DC-1 project, as you can see now, is more or less finalized and the product is produced. We have a little bit less capitalization on that, and we haven't fully ramped up other R&D projects yet. So for a while, we will see a little bit lower capitalized R&D versus historical numbers. The plan is of course to balance that out. And then we have a strong cash flow in Q1 as well, where a lot of customer invoices were paid basically. So we had a little bit weaker the last quarter but it's almost quite good, which means that all those -- that area is back to normal, I would say. If we move to Slide 17, which kind of summarizes the last few years that you can see more kind of a -- a more clear picture on how the development of CellaVision has been. As you know, I mean we're a purely organic company so far, started from nothing in 2001 and have grown the business organically since then. And hopefully, we'll continue to do that in a good way. Right now, if you look at the rolling 12, we have 33% growth and that's kind of the major comment on that. And that's basically it from my side, input on today's presentation. For those of you that are in Lund, you're warmly welcome to the Annual General Meeting that will take place tomorrow. And thereby, I will open up for questions basically.
[Operator Instructions] There are no questions from the phone line. I hand the conference back to you.
Okay. So then it was clear as crystal water today to everybody. By that, thank you for listening in and I wish you all a good day. And we'll probably meet up again during Q2 in July. Take care. Have a good day.