Continued strong performance in all regions

July 1-September 30, 2018

• Net sales increased by 37 % to SEK 84.3 million (61.3).
• Organic growth increased to 33 % (-11).
• Operating profit increased to SEK 21.0 million (10.2).
• The operating margin increased to 24.9% (16.7).
• Profit before tax increased to SEK 20.7 million (9.9).
• Earnings per share before and after dilution increased to SEK 0.70 (0.32).
• Cash flow before dividend increased to SEK 22.2 million (5.6).

January 1-September 30, 2018

• Net sales increased by 9 % to SEK 253.8 million (233.2).
• Organic growth was 6% (19.5).
• Operating profit was SEK 75.8 million (69.2).
• The operating margin was 29.9% (29.7).
• Profit before tax was SEK 76.1 million (68.6).
• Earnings per share before and after dilution were SEK 2.48 (2.20).
• Cash flow before dividend was SEK 45.9 million (32.4).

CEO's comments

Third quarter

The third quarter of 2018 was another strong quarter for CellaVision with sales of SEK 84.3 million (61.3). Compared with the same period in 2017, sales increased organically by 33 percent, with growth in all our regions. Profitability progressed well in the quarter, with an operating profit of SEK 21.0 million (10.2), corresponding to an operating margin of 24.9 percent (16.7). The profitability trend is a result of CellaVision's effective indirect sales method that enables geographical expansion with continued sound cost control. Cash flow for the quarter strengthened to SEK 22.2 million (5.6). The increase is primarily a result of the higher invoicing volume.

Market development

The Americas had a strong quarter in which sales grew by 28 percent to 40.1 million (31.3). The number of installations for end customers continues to increase and market penetration is developing at a stable rate.

EMEA developed well in the third quarter, with growth in sales of 73 percent to 26.0 million (15.0). This is partly explained by weak comparative figures but is above all the result of CellaVision's consistent focus on market expansion in the region. In the past 18 months new organizations for local market support were established in the Middle East, France, Europe's German-speaking countries and the United Kingdom/Ireland. These organizations are now fully operational and make a positive contribution to development in the region.

APAC also developed well in the third quarter, with growth in sales of 22 percent to 18.2 million (15.0). Marketing activities continued at a high level in the key markets of Japan and China. During the quarter CellaVision's digital morphology also saw an important breakthrough in the Australian market after winning a public procurement contract in New South Wales. The procurement means that around sixty laboratories will install CellaVision's solution in the coming years to compare with only a few instruments on the entire Australian market historically.

Geographical expansion

Geographical expansion is crucial to CellaVision's growth. In 2018 we established our own organizations for local market support in Mexico and India, as well as establishing a local presence in the Chengdu area of China. In coming months, we will establish more organizations for South East Asia and the southern parts of Europe. CellaVision currently has 14 local organizations that together offer market support in more than 25 countries.

Distribution expansion

During the quarter CellaVision signed a supplementary agreement for small and mid-size laboratories with Sysmex. With this agreement in place we now have distribution agreements with the most relevant distribution partners for reaching small and mid-size laboratories globally.

Innovation

The development of our new technology platform, CellaVision® DC-1, for small and mid-size laboratories in both the human healthcare and veterinary markets, is going to plan. DC-1 is now undergoing external clinical studies at five European laboratories as a key part of future CE registration. DC-1 attracted great attention at its first external presentation at the AACC Annual Scientific Meeting in Chicago in summer this year.

Geographical expansion and innovation are key strategies for CellaVision's future growth. We are continuing to add new geographical markets with their own local organization for market support, while putting major focus on innovation and product development. Our organization is constantly being strengthened and we are putting great energy into recruiting more leading-edge expertise to ensure our future innovative power and growth opportunities.

The CellaVision Story was published just recently. The book was written by CellaVision's very first customer, Per Simonsson, at Malmö General Hospital in 2001. A readable account story that I warmly recommend.

Zlatko Rihter, President and CEO

Key Ratios

About CellaVision
CellaVision is an innovative, global medical technology company that develops and sells its own leading systems for routine analysis of blood and other body fluids in health care services. The products replaces manual laboratory work, and secure and support effective workflows and skills development within and between hospitals. The company has leading-edge expertise in image analysis, artificial intelligence and automated microscopy. Sales are via global partners with support from the parent company in Lund and by the market support organizations in the US, Canada, China, Sweden, Japan, United Arab Emirates, South Korea, Australia, France, Germany, Brazil, Great Britain, Mexico and India. In 2017, sales were SEK 309 million and the company's growth target is 15 % per year over an economic cycle. CellaVision's registered office is in Lund, Sweden. The share is listed on the Nasdaq Stockholm, Mid Cap list. Read more at www.cellavision.com