CellaVision AB

Stable start of the year with good growth in APAC - Seite 2

Significant short-term effects of COVID-19-pandemic

We see considerable short-term effects of COVID-19, not least in a decline of the number of blood tests in most markets, but also due to our systems being installation products that require our partners to have physical access to hospitals and laboratories, which is difficult at present. The current situation means that we expect the COVID-19-pandemic to have a negative impact on CellaVision's sales and earnings over several months. In the first quarter we have seen effects in the form of a lower installation rate in countries that were hit by COVID-19 at an early stage, above all China. As contagion decreased in China, we noted at the end of the quarter that demand for our products in the Chinese market started to approach normal levels, which is very encouraging. We also expect that sales of reagents will be affected to a considerably lesser extent, since this is a consumable that is used for all blood analysis.

No immediate impact on production

In the long term we also see some challenges regarding our supply chain, since we purchase components and raw materials from many countries. In the short term we see good prospects of maintaining production, but if there is a prolonged effect on society and supply chains it will be a challenge for us.

Focus on cash flow and liquidity

CellaVision has an efficient and scalable business model, using distribution and manufacturing partners, which means that our fixed costs for sales and production are limited. Due to the uncertainty about how long the COVID-19-pandemic will last and how far-reaching the effects will be, CellaVision has decided to put extra focus on safeguarding liquidity. We have therefore implemented several carefully considered actions, where among other things, the Board of Directors has withdrawn the original dividend proposal and proposed instead that no dividend be paid for 2019 (SEK 1.50 / share) at the AGM 2020. We have also decided to postpone the AGM until at the latest June 30. We will publish a new notice as soon as the new date is set.

Unchanged great need for CellaVision's solutions

The underlying need for digital morphology is unchanged. Treatment of patients with blood-related diseases such as leukemia, lymphoma and myeloma have high priority. This means that we make the assessment that our market will return to previous levels when the COVID-19-pandemic sounded.