Financial Reports
Interim report January - June 2016
OPERATIONS
Weakened growth during the second quarter, in line with expectations
The very strong rate of growth during the latter part of 2014 and 2015 has, as expected, slowed down during the first six months of 2016. During the first half of the year, net sales increased by 9% to SEK 149.5 (136.7) million, of which SEK 34.8 (44.0) million in the Nordic region, SEK 60.4 (48.4) million for Northern Europe, SEK 48.0 (40.0) million for Southern Europe and SEK 6.3 (4.2) million in Rest of World. The increase in sales has been fueled by markets outside the Nordic region and sales in the Nordic countries fell during the period.
Despite the lower rate of growth, there was further improvement in gross margin. For the first half of the year, gross margin was 49.0% compared to 44.9% in the same period last year, which corresponds to an increase of 4.1 percentage points. The improvement in gross margin is attributable to lower shipping costs and higher efficiency in inventories, which has resulted in lower obsolescence costs. For the first six months of the year, gross profit increased by 19% to SEK 73.3 (61.4) million compared to the same period last year, which, together with higher economies of scale, has resulted in positive EBITDA of SEK 7.2 (2.7) million.
During the second quarter, Bluefish won a new contract in Spain, which enables the company to maintain its level of sales and profitability in one of its most important markets. The first deliveries will be made during the last quarter of 2016 and then continue for a period of two years. During the period, the company also invested in new products for the Spanish market, which are expected to fuel growth in 2017 and beyond.
Optimization of the product portfolio
Market approval was also obtained during the period for the company’s first product that was developed in-house, Hydroxyzine Bluefish. Another product that has been developed in-house is currently in the registration phase and the registration procedure and launch are progressing on schedule.
During the first half of the year, Bluefish signed its first licensing agreement, which was for Hydroxyzine. Product licensing provides the company with opportunities to create sales in markets where Bluefish does not have its own operations. Launch of the product is expected sometime during the 18-24 months subsequent to signing the agreement.
The composition of the product portfolio in each market is critical to the company’s future growth and profitability. The expected earnings potential of products is also continually evaluated. Thus, the company continued investing in new product licenses and development projects. Investments are made selectively and only in the markets where Bluefish feels there is high potential in terms of both sales and profitability. During the second quarter, the product portfolio grew with the addition of two licensed products for a diverse number of markets. In total, three new products were added to the portfolio during the year. Current products that are now in the registration phase are expected to be launched during 2017 and 2018.
FUTURE OUTLOOK
The growth in sales and improved profitability in 2015 has created a strong platform for the company’s continued development. The company expects both sales and profitability to stabilize in 2016 at comparable levels to 2015. Delivery problems for a number of the company’s major products are expected to have a negative impact on sales during the remainder of 2016. The planned product launches will, to a certain extent, compensate for the lost sales resulting from inventory shortages.
For more information, contact
Karl Karlsson, President & CEO Bluefish Pharmaceuticals
Tel. 46 8 519 116 00
Email: karl.karlsson@bluefishpharma.com
Susanna Urdmark, CFO Bluefish Pharmaceuticals
Tel. 46 8 519 116 00
Email: susanna.urdmark@bluefishpharma.com
About Bluefish Pharmaceuticals
Bluefish has undergone significant international expansion since the company was founded in 2005. Bluefish focuses on the development, manufacture and sale of generic pharmaceuticals. The company conducts marketing operations in a large number of European markets and is expanding into territories outside Europe. The product portfolio consists of a total of approximately 80 products and is growing.
www.bluefishpharma.com