Boule Diagnostics - Regaining confidence in a market recovery
Q1: group organic growth -6% though US grew by 6% Market recovery seems ongoing in most geographies ’21e placements should indicate good coming years Instrument sales surprised on the upside Boule’s end-markets remain under undeniable pressure from COVID-19, but we are encouraged by the comeback in demand for Instrument sales. The 6% organic growth drop in Q1 still beat our expectations by 4pp, driven by strong deliveries of 931 instruments (830 ABGSCe); a q-o-q improvement of ~100 units. Consumable sales still suffered as significant COVID restrictions remain, especially in Boule’s Asian regions. With a weaker mix and low capacity utilisation, the gross margin of 44.
4% was 80bp below our expectations. As such, the majority of the Q1 EBIT beat (SEK 6. 8m vs.
ABGSCe SEK 4. 3m) stemmed from continued lower than usual operating expenses, chiefly related to sales and marketing. Order book stronger than usual Management seemed more upbeat than in recent quarters and, in our view, with good reason.
The order book on the Instrument side is strong, and actually larger than normally. In terms of geographical markets, the US is clearly leading the way: sales grew by 6% organically, and saw good demand on both Instruments and Consumables. In our view, this signals that similar progress should be visible as Boule’s other markets continue to make progress with their vaccination programmes.
Some supply chain disturbances remain present, and while these seem to have continued into the beginning of Q2, it appears that Boule seem has managed them rather well owing to good internal efforts. ’22e-’23e EBIT up by 3-4% due to ’21 Instrument placements The effect of lifting our Instrument sales for 2021e becomes neutral as we expect lower Consumable sales in Q2’21e. Nevertheless, the higher placements for the current year should mean a good consumable contribution for the coming years.
Thus we raise ‘22e-‘23e EBIT by 3-4%. Boule is now entering an interesting time, with sales.
