FINANCIAL INFORMATION FOR JANURAY SEPTEMBER IN BRIEF

Transcription

1 Interim Report January 1 September 30, 2015

2 JANUARY - SEPTEMBER IN BRIEF Vigmed took over the supply chain as per September 30 from the Danish partner, MBH A/S. In September Vigmed was granted CE-mark for commercial sales of the new product line Vigmed SWiTCH. Sales to distributors in Germany, France, Italy, Switzerland, Austria, Belgium and Australia/New Zealand were initiated during the first nine months. Feedback from some customers in February pointed out a detail in the design affecting the robustness of the CLiP Winged product line. After thorough analysis, the product design was modified and updated. All distributors were offered a replacement of the products in question. In June Vigmed won, through their partner, CODAN DEHA ApS, a tender for the patented safety catheter, Vigmed CLiP Neo, in Region Nord of Denmark. The Swedish Patent and Registration Office (PRV) announced in May that it intends to grant Vigmed a Swedish patent for a needle safe product within the area of blood collection. FINANCIAL INFORMATION FOR JANURAY SEPTEMBER IN BRIEF Net Sales for January - September amounted to SEK 3.0 million (SEK 0.4 million during January - September 2014). Operating result for January - September for the Group amounted to SEK million (SEK million). Net income per weighted number of shares for January - September amounted to SEK (SEK -0.59). Cash flow from operating activities during January - September amounted to SEK million (SEK million). Cash flow from operating activities is mainly driven by the negative result (SEK million), purchase of inventory of finished goods of SEK -4.4 million and a onetime fee to Supply Chain partner MBH of SEK 3 million. Cash flow from investing activities during January - September amounted to SEK -5.6 million (SEK -6.6 million). Cash and cash equivalents at end of period amounted to SEK 22.6 million (SEK 19.2 million). The shareholders equity at the end of the period amounted to SEK 46.2 million (SEK 31.8 million). 2

3 Key figures Group Q Q Jan-Jun 2015 Jan-Jun 2014 Net Sales (ksek) Operating profit/loss (ksek) Cash & cash equivalents (ksek) at closing day Equity capital (ksek) at closing day Solidity at closing day 48,0% 76,0% 48,0% 76,0% Total assets (ksek) at closing day Profit/loss per share -0,22-0,24-0,57-0,59 Share price at closing day (SEK) 5,45 14,10 5,45 14,10 THE COMPANY Vigmed is a Swedish medical technology company founded in 2009 whose mission is to reduce the risk of disease transmission to healthcare workers by eliminating needlestick injuries in health care. Needlestick injuries is a major problem for doctors, nurses and other healthcare professionals, who are at risk of becoming infected with HIV, hepatitis, Ebola or any other of the approximately 60 blood-borne diseases which can be transmitted by an infected needle. Every year more than 1 million doctors, nurses and other health care staff in Europe alone are injured, while the unreported cases remain substantial. Vigmed develops and markets patented products within infusion and injection with the aim of protecting healthcare staff from needlestick injuries. The significance of needlestick injuries is underlined by a directive implemented by the European Union in The directive stipulates that all public purchased needles and syringes should be equipped with a safety mechanism preventing needlestick injuries. The directive, carried through by national laws in each EU country, requires that the market, during a limited period of time, has to transfer into these new types of safety products. It is on this regulatory transformation that Vigmed, with its unique and patented safety solutions, builds its establishment on the market. The Company's proprietary products are resource efficient and safe combined with excellent ease-of-use and quality. Vigmed's business model is based around one central thought: through deep understanding of the user's requirements we develop, manufacture and deliver products that are convenient to use, safe and cost effective while meeting the market needs of today and tomorrow. The aforementioned require not only technical and medical expertise, but also a welldeveloped ability to cooperate with other leading partners in the value chain, in order to effectively combine various players' resources and abilities. In concrete terms, this entails that Vigmed actively implements its solutions via outsourcing of manufacturing and distribution to end-users. Today Vigmed s products are produced by selected manufacturers in Sweden and India and are sold through well renowned and established distributors in strategically chosen countries. Establishing on the European market and achieving volume sales is currently the Company s highest priority while there is an ongoing parallel process of preparing products and partnerships for the steadily growing Asian market. 3

4 Vigmed has signed exclusive distribution agreements covering all major markets of Europe, except UK, and has an established and well working partnership with these distributors. To establish an agreement for the UK market holds a high priority. The following product lines have been launched on the market: CLiP Ported, CLiP Winged, CLiP Neo, SWiNG Universal and SWiNG Clic-on. A pre-launch of the important product family SWiTCH was initiated in September 2015 and Vigmed is expecting to achieve volume sales from this product line early Vigmed s market penetration has been delayed due to initial production challenges as well as due to a required design adjustment of the Vigclip. These problems are now solved but with the result that the Company s ambition of launching an average of two products a year until 2018 cannot be fulfilled until sustainable volume sales and profitability of already existing products has been achieved. Development work will be focusing on improving and adjusting existing products as well as expanding within the existing range in order to meet customer needs. Vigmed AB, based in Helsingborg, Sweden, is a wholly owned subsidiary of Vigmed Holding AB (VIG). Vigmed was listed on NASDAQ First North in February 2013, and is traded since April 2015 on the First North Premier segment. 4

5 COMMENTS FROM THE CEO As the newly appointed interim CEO I can conclude that Vigmed has not performed according to plan this year, which is of course a disappointment to our employees, partners, shareholders and customers. During the third quarter of 2015, the Board of Directors and management of Vigmed have conducted a thorough review of the business. We have critically analysed underlying reasons that has caused deviations from our original plan, as well as identified appropriate actions going forward. Based on this analysis, the Board of Directors has decided to implement certain changes in the leadership of the Company and to increase Vigmed s focus on sales. It is my view that the changes which are now being implemented enable Vigmed to develop positively going forward. The following actions are being implemented during the fourth quarter: Fully focused on sales: We have merged our supply chain, marketing- and sales functions under one common group; Operations. We now have complete control over the entire supply chain, and an experienced and highly structured leader with an ability to set demanding targets and motivate our employees. At the same time, we are establishing a stronger and more proactive process of continuous dialogue with our distributors and follow-up procedures regarding tenders in the market. Reduced and more focused management team: We are now forming a smaller, more focused management team consisting of four people, which, beside me, will include the CFO, head of R&D and head of Operations. I envisage that we will become a closely-knit, motivated team with a common agenda. Cost reduction: We are temporarily reducing the Company's product development activities and reallocating resources to sales and customer support by fully focusing on sales and customer support. Consequently Vigmed will reduce the number of employees. We are also reducing investments in product development and production equipment for the time being; as we currently have the production capacity needed and established the necessary quality assurance systems, regulatory approvals and certifications. Our cost base will be significantly reduced in 2016 compared to previous years without losing any essential competences. The actions we have taken have created a new momentum within the organisation. We now have a slightly smaller but closely-knitted and motivated team that focuses on the core business and on delivering results. By acting proactively in close cooperation with our distributors and end users, we intend to strengthen the confidence in Vigmed and our products. There are several reasons why we have not achieved our sales target during the past year. Our product launches were severely delayed across all markets due to production challenges with CLiP and SWiNG, design adjustments to the first-generation products, and long processing times for CE approvals. The challenges that we highlighted in February this year related to the robustness of a detail on our CLiP-products made us decide to withdraw the, at the time, ongoing market launch. The first sale of the improved CLiP Neo was completed in July this year. It is satisfying to see that the market response to our product has been very positive. Other improved CLiP products have since launched in all our markets gradually during the late summer and autumn. 5

6 With the new version of CLiP and our new SWiTCH product, I believe that Vigmed is heading for a positive fresh start. This feeling is reinforced by the positive responses our distributors receive in their respective markets. Our distributors are currently planning and conducting evaluations of end users and key people that forego upcoming tender processes. Vigmed has an important mission to reduce the number of needlestick injuries in health care and thereby the spread of more than 60 types of blood-borne diseases that needlestick injuries might result in. As we look forward, we see large potential in a market that is growing in Europe as well as globally. The interest in safety in healthcare is increasing globally and last year our products have attracted attention from several new markets. After a challenging period we are now moving forward with a sales-focused strategy and we are fully committed to creating value for our shareholders, distributors, customers and employees. Henrik Olsen, CEO SIGNIFICANT EVENTS AFTER THE REPORTING PERIOD Donya Gholamifar, newly hired CFO, commenced her employment with Vigmed October 1. Donya will work part time during the fourth quarter of 2015 and assume a fulltime position as per January 1, Donya is replacing Mette Gross, who has worked as interim CFO since On October 2, Vigmed received their first larger order on SWiTCH products for delivery during October/November. Vigmed established a new warehouse located with DSV in Landskrona (South of Sweden). The first order was shipped to a customer from the new warehouse on October 9. Vigmed announced on October 12 that the Board of Directors together with management had decided to appoint, with immediate effect, Henrik Olsen as interim CEO. This meant that Finn Ketler stepped down from his position as CEO. The Board of Directors has on a board meeting on October 26 decided to call for an Extraordinary General Meeting to be held on November 12, where proposal for new share issue will be discussed. 6

7 FINANCIAL INFORMATION FOR JANUARY - SEPTEMBER Sales and results Sales for January - September amounted to SEK 3.0 million. Sales in the third quarter amounted to SEK 1 million. Sales for the whole period were negatively influenced by the fact that Vigmed chose to replace existing CLiP Winged products on the market with the upgraded version. Sales are mainly from the CLiP-range: CLiP Ported, CLiP Winged and CLiP Neo. During September, sales of Vigmed s new product range, SWiTCH, were initiated and the products are now being tested on several markets. Capitalized product development costs of SEK 2 million during the third quarter includes internal and external development costs mainly regarding SWiTCH. Raw materials and consumables in the period cover cost of goods soldand freight from contract manufacturers to the warehouse. Further, raw materials and consumables cover costs for replacement products and scrapping of inventory of CLiP Winged products and components of the older discarded design, at a total cost of SEK 1.5 million. In connection with the move of the finished goods inventory as per 30 September, the stock value of the SWiNG products was written down with SEK 1 million. Due to the delayed delivery of the automated SWiNG packaging line, the first orders held a higher manufacturing cost, which are now written down to the expected future purchase cost Apart from recurring operating expenses, other external expenses for January - September mainly cover: Further development of patent portfolio Travel expenses within sales and development organizations Market analysis and registration costs in China Sales and marketing costs Rebuild of production tools and scrapping of components related to the upgrade to the Vigclip 3-version Market data and consultancy expenses for business development Market- and product study in the US Other external expenses during January - September are SEK 3.6 million less than the same period last year. This is mainly explained by 5.6 million SEK expensed in the same period last year, being part of a one-time fee to our Supply Chain partner MBH A/S. During January September 2015 patent costs have increased with SEK 0.7 million compared to the same period 2014 and costs related to the preparatory work for an introduction to the Asian market have increased with SEK 0.6 million. Employee costs for the period January September have increased with SEK 2.5 million compared to same period last year, which is due to the FTE (average) amounting to 18.2 during 2015 compared to 15.4 FTE (average) during Vigmed has initiated a pension scheme for all employees in The cost for this period amounted to SEK 0.4 million (SEK 0) and is reported under employee costs. 7

8 Other operating income includes a grant from Nopef for the establishment-preparations in China of SEK 0.4 million. Interest cost for financial leasing of equipment is reported under net financial costs and amounted during January - September to SEK 0.9 million (SEK 0). Equipment consists of production tools at Euroform (manufacturing of SWiNG) and production tools and equipment at AMB (manufacturing of SWiTCH). Investments & depreciations Investment in product development includes capitalized internal costs and external product development of projects in the development phases. Costs for progression of projects in research stage are expensed immediately. Continuous investments in SWiTCH and CLiP have been made during the first nine months. Depreciation of product development and patents for the product lines CLiP Ported, CLiP Winged, CLiP Neo and SWiNG amounted to SEK 1.3 million (SEK 0.3 millions). Depreciation of production equipment is volume based (leased equipment included) and amounted during the period to SEK 2.3 million (SEK 0 million). Other depreciations relate to furniture, installations and software and amounted to SEK 0.4 million (SEK 0.2 million). Cash, cash equivalents & debts At end of the period the cash and cash equivalents amounted to SEK 22.6 million (SEK 19.2 million). Since the manufacturing of commercial SWiTCH products were initiated in September, the financial leasing contract with AMB has been accounted for in Vigmeds balance sheet, as a fixed asset and long- and short term debts. Depreciation of the leased assets follows the same depreciation principles as other manufacturing assets, and are calculated based on manufactured volume. The leasing debt is amortized through the finished goods that Vigmed purchases, and the cost is accounted for as cost of goods sold, interest and depreciations. Since 2014 a financial leasing debt regarding tools for the manufacturing of SWiNG is accounted in the balance sheet and the total leasing asset hold a net value of SEK 41.9 million at the end of the period. Corresponding interest bearing financial leasing debt at the end of the period amounts to SEK 43 million (of which SEK 38.6 million is long-term debts) There are no other interest bearing debts in the Company. Equity Shareholders' equity for the Group at the end of the period amounted to SEK 46.2 million (SEK 31.8 million). 8

9 Cash Flow Cash flow from operating activities during January - September amounted to SEK million (SEK million). In January 2015, Vigmed took ownership of the inventory of finished goods, with a negative impact on the cash flow from operating activities of SEK -4.4 million. During January - September Vigmed has paid SEK 3.0 million of the total one-time fee of SEK 6.5 million to the Supply Chain partner MBH A/S. During 2014 SEK 1.5 million was paid and the remaining debt of SEK 2.0 million is expected to be paid during the fourth quarter, when the partnership comes to an end. Cash flow from investing activities during the period was SEK -5.6 million (SEK -6.6 million). This amount is related to internal and external product and patent development, mainly on CLiP and SWiTCH product lines. During the third quarter components for production tools regarding the older discarded Vigclip design were scrapped, which is accounted as a positive investment in fixed assets. Amortization of SEK -1.7 million of financial leasing debt, related to SWiNG manufacturing tools, which lowered the interest bearing debt. Employees On September 30, the number of employees amounted to 19 (18), of which one is employed in the parent company. Director of Quality Assurance, Ola Lindau, has resigned from his position and will leave Vigmed at the end of November. The responsibility of quality assurance will be assumed by Annelie Hagström, who is already responsible for the regulatory work. Accounting principles The financial statement has been prepared in accordance with IFRS. Vigmed s agreement with the contract manufacturer HMD (India) is classified as operational leasing agreement, and the leasing fee consists of the goods purchased from the manufacturer which are expensed as cost of goods sold. Vigmed s agreement with AB Euroform regarding production equipment for the manufacturing of the SWiNG-line is not yet accounted in the balance sheet (only tools are) as the production line is not yet up and running. In the 2014 interim reports Vigmed presented a function-based income statement. In preparation of the 2014 annual report according to IFRS principles, Vigmed decided to present the income statement by cost type in the annual report and future interim reports. Definitions Solidity Specifies the percentage of the assets that are financed with Equity capital. Calculated as Equity capital divided with total assets. 9

10 THE SHARE, PARENT COMPANY AND OWNERSHIP STRUCTURE Share capital, at the end of the period, amounted to SEK divided into 43,833,332 shares. The Company has one class of shares and all shares have equal rights to dividends. In March 2014 the Company issued 755,000 stock options to key employees of the subsidiary Vigmed AB, with the right to subscribe for the same number of shares in Vigmed Holding AB at a share price of SEK 24 per share. The options were issued at market terms. The options are exercisable from 15 January to 31 January 2017 and may increase the share capital by up to approximately 15,339 SEK, corresponding to a maximum of 2% of the current share capital. The incentive program is not expected to incur any significant costs for the company. Apart from the above mentioned there are no outstanding share options, convertible bonds or similar financial instruments which may be eligible to subscribe for new shares or otherwise affect the share capital. Vigmed Holding AB was listed on NASDAQ OMX First North in Stockholm in February Development of share capital and ownership as of September 30, 2015 is shown below. Change capital (SEK) Accumulated share capital Change (number (SEK) of shares) Accumulated number of shares Par Value Incorporation Split ,02 Issue in kind , , ,02 Issue new shares , , ,02 Issue new shares , , ,02 Shareholder Shares Percentage Per Knutsson (incl. comp.) ,4% Bure Equity AB (publ) ,0% Ulf Mossberg ,9% Nomura Securities Co. Ltd ,8% Rikard Roos ,9% Lennart Holm (incl. family & comp.) ,8% Cecilia Karlsson ,5% UBS AG Client Account ,3% SI Technology Investments AB ,3% Finn Ketler (incl. family & comp.) ,0% Others ,2% Total ,0% (Official share register and nominee list as well as information known to the company as of September 30, 2015) 10

11 Parent Company Vigmed Holding AB covers executive functions and governance, and the management of its wholly owned subsidiary Vigmed AB. The operating profit for January - September was SEK -1.8 million (SEK -1.5 million). The Parent Company has provided shareholder contributions to Vigmed AB of SEK 25.5 million during January - September, which is included in net financial costs. Group Structure Via its wholly owned subsidiary Vigmed AB, Vigmed Holding AB holds a company in Hong Kong (70% ownership) and a subsidiary to this in China; Vigmed Medical Device (Beijing) Co. Ltd. An additional company is under establishment in Taiwan. The structure is established to initiate product registrations in China as well as to enable future financing of operations in Asia. FOR FURTHER INFORMATION Henrik Olsen, Interim CEO Lennart Holm, Chairman Phone: Phone: ho@vigmed.com lennart.holm@lehdab.com Address: Certified advisor: Vigmed Holding AB Remium Nordic AB Garnisonsgatan 10 Kungsgatan Helsingborg Stockholm Sweden Sweden Web: Phone: Phone:

12 Organization number: Vigmed Holding AB, Vigmed AB, The share: Ticker: VIG ISIN code: SE FUTURE REPORTS Year End Report February 18, 2016 Annual General Meeting 2016 May 12, 2016 Interim Report Q May 12, 2016 This report has not been audited by the auditor. Helsingborg, October 27, 2015 Vigmed Holding AB (publ) The Board of Directors 12

13 Income statement (Group) ksek Q Q Jan-Sep 2015 Jan-Sep 2014 Net Sales Capitalized development costs Raw materials and consumables Other external costs Employee costs Depreciations and write-downs Other operating income Other operating costs Operating profit/loss Net financial income/expense Profit/loss after financial items Number of shares (weighted average in period) Profit/loss per share -0,22-0,24-0,57-0,59 Balance sheet (Group) ksek Fixed assets Intangible fixed assets Tangible fixed assets Total fixed assets Current assets Inventory Short-term receivables Cash and bank balances Total current assets Total assets Equity capital Long-term liabilities Short-term liabilities Total equity capital & liabilities Cash flow analysis (Group) ksek Q Q Jan-Sep 2015 Jan-Sep 2014 Net cash flow from op. act. before changes in work. capital Changes in working capital Net cash flow from operating activities Investments tangible assets Investments intangible assets Net cash flow from investing activities Issue of new shares Share options 14/ Amortization leasing debt Net cash flow from financing activities Cash flow for the period Cash & cash equivalents at the beginning of the period Cash & cash equivalents at the end of the period

14 Equity capital (Group) ksek Equity capital at the start of the period Issue of new shares Issuance cost Share options 14/ Profit/loss for the period Equity capital at the end of the period Income statement (parent company) ksek Q Q Jan-Sep 2015 Jan-Sep 2014 Net Sales Other external costs Employee costs Depreciations and write-downs Operating profit/loss Net financial income/expense Profit/loss after financial items Balance sheet (Parent Company) ksek Fixed assets Tangible fixed assets Financial assets Receivables group companies Total fixed assets Current assets Short-term receivables Cash and bank balances Total current assets Total assets Equity capital Short-term liabilities Total equity capital & liabilities Equity capital (parent company) ksek Equity capital at the start of the period Issue of new shares Issuance cost Share options 14/ Profit/loss for the period Equity capital at the end of the period