The Biohit Group had total net sales of EUR 8.1 million during the reporting period (EUR 7.6 million in 1Q/2006). The operating profit for the reporting period was EUR 0.2 million (operating loss EUR 0.0 million). The profit for the period was EUR 0.0 million (loss EUR 0.2 million). NET SALES The Biohit Group's net sales rose by 7 % compared with the corresponding quarter in 2006 and totalled EUR 8.1 million (EUR 7.6 million). Sales of liquid handling products and related after-sales services accounted for 94 % of net sales. First quarter trends in net sales have been in line with expectations. Brisk sales have continued in Russia in particular. The net sales of the liquid handling business amounted to EUR 7.7 million (EUR 7.2 million) and the net sales of the diagnostics business to EUR 0.5 million (EUR 0.4 million). RESULT The operating profit was EUR 0.2 million (operating loss EUR 0.0 million). The profit for the reporting period was EUR 0.0 million (loss EUR 0.2 million). The operating profit of the liquid handling business was EUR 0.8 million (operating profit EUR 0.6 million), the operating loss of the diagnostics business being EUR 0.6 million (operating loss EUR 0.6 million). BALANCE SHEET The balance sheet total was EUR 29.0 million (EUR 28.3 million) and the equity ratio was 46.3 % (49.7 %) on 31 March 2007. The fall in the equity ratio was primarily due to an increase in current non-interest bearing liabilities and a rise in non-current liabilities. LIQUIDITY During the reporting period, the operating activities had a net cash flow of EUR 0.8 million (EUR 0.2 million). At the end of the reporting period, the liquid assets of the Group totalled EUR 1.4 million (EUR 1.0 million). Current ratio was 2.0 (2.6). INVESTMENTS Gross investments in the reporting period totalled EUR 0.9 million (EUR 0.4 million). Investments were primarily earmarked for increasing production capacity and purchasing equipment for the manufacture of liquid handling products in Kajaani. PERSONNEL The average number of personnel in the reporting period was 338 (290), with 171 (157) persons being employed by the parent company and 167 (133) by the subsidiaries. The increase in personnel was mainly due to the start up of the production facility in China. MAIN EVENTS OF THE REPORTING PERIOD Liquid handling business area Biohit's liquid handling business develops, manufactures and markets laboratory equipment and accessories for the pharmaceutical, food and other industries, as well as for use in research institutions, universities and hospitals. Biohit's products are also used to complement the diagnostic test and analysis systems of many global companies. The product range includes mechanical and electronic pipettors as well as disposable tips. In addition, the company offers maintenance, calibration and training services related to these products. Sales trends in the liquid handling business during the reporting period have been in line with expectations. The company continued its focus on product development and OEM co-operation, developing cost-effective production processes and logistics, and expanding the pipettor maintenance services business. Biohit further developed its distribution network to bolster the company's position in its main market areas. The Japanese subsidiary's organisation and distribution network were restructured during the previous financial year and the first quarter of 2007. The move aims to reduce the number of intermediaries in the network, thereby boosting product sales in the Japanese market. Liquid handling production in China, which started in 2006, had still not generated significant net sales during the reporting period. A distribution network is also currently being built up in China. Diagnostics Biohit's diagnostics business develops, manufactures and markets products and analysis systems primarily for the diagnosis, screening and prevention of diseases of the gastrointestinal tract. The product range includes GastroPanel and GastroView examinations for primary health care; lactose intolerance and Helicobacter pylori quick tests for specialised health care; and instruments and analysis systems for laboratories. Additionally, the company runs a service laboratory in Finland. The diagnostics business has continued its focus on developing operations in line with the strategy. In September 2006, Chinese health representatives decided to recommend GastroPanel's tests for use in Chinese healthcare. However, the sale and marketing of diagnostics products requires local distributors with profound expertise. During the reporting period, the company has been systematically building up a distribution network in China to harness the country's market potential. In Finland, the company has boosted sales and marketing of diagnostics products with organisational restructuring and recruitment. During the reporting period, Biohit signed an agreement with the Finnish company Fennobon concerning the manufacture of XyliCyst chewing gum, a consumer-oriented functional food product. Biohit is currently looking for distributors for the product. XyliCyst chewing gum eliminates carcinogenic acetaldehyde that forms in the mouth during smoking and thus helps reduce the risk of cancers in the upper digestive tract. These types of cancer may be caused by smoking and use of alcohol. Plans to separate the diagnostics business At a meeting held on 26 January 2007, the Board of Directors decided to investigate the possibility of hiving off the diagnostics business into a separate limited company with its own equity. The move would boost international marketing and distribution and rapidly and effectively leverage the significant potential of existing and forthcoming products. The decision forms part of the company's new strategy, which aims to clarify the differences and synergies between its business areas and derive the full benefit from their strengths, as well as to boost the Group's business as a whole and improve earnings. The investigation process is currently ongoing. EQUITY TURNOVER AND PRICE DEVELOPMENT Biohit Oyj's series B shares are listed on Helsinki Exchanges in the Small cap / Health care group. --------------------------------------------------------------------- | BIOBV / OMX Helsinki | 1Q/2007 | --------------------------------------------------------------------- | Highest, EUR | 3.29 | --------------------------------------------------------------------- | Lowest, EUR | 2.02 | --------------------------------------------------------------------- | Average, EUR | 2.78 | --------------------------------------------------------------------- | Closing price, EUR | 2.65 | --------------------------------------------------------------------- | Total turnover, EUR | 3,417,500 | --------------------------------------------------------------------- | Total turnover, volume | 1,229,323 | --------------------------------------------------------------------- | Market capitalisation value on 31 March 2007, EUR | 23,904,192 | --------------------------------------------------------------------- DECISIONS OF THE ANNUAL GENERAL MEETING The Annual General Meeting (AGM) of Biohit held on 23 April 2007 decided in accordance with the proposal by the Board of Directors that no dividends will be paid for the financial year 2006 and that the loss of EUR 973,878.40 will be transferred to the retained profit and loss account. Furthermore, the AGM decided that the number of the members of the Board of Directors is six. The AGM re-elected the current members of the Board: Peter B. Coggins, Tero J. Kauppinen, Reijo Luostarinen, Peter Tchernych, Mårten Wikström and Osmo Suovaniemi. The AGM appointed authorized public accountant PricewaterhouseCoopers Oy as the auditor. RISKS AND UNCERTAINTY FACTORS In accordance with the principles of good corporate governance, Biohit has assessed the risks associated with the company's business operations. The most significant risks stem from the international nature of the company's business and the market and financial risks this brings, such as those associated with currency exchange rates. The main responsibility for risk management is held by the parent company's Board of Directors and the Management Team. Market growth for liquid handling products has levelled out in Western countries and price competition has heightened in emerging markets in particular. Falling prices place cost pressures on production and logistics. Biohit is meeting this challenge in various ways, such as by developing the most cost-effective Group-wide production processes possible and by establishing the Chinese production facility, which primarily serves China and its neighbouring markets. Entry into the diagnostics market is slow. The lengthy periods required before approvals are received from the relevant authorities affects the company's growth potential in certain market areas. Taking full advantage of market potential also requires proactive publishing for both the scientific community and the customer base, training healthcare personnel, as well as outlays on sales, marketing and a competent distributor network. Changes in exchange rates and in particular a strengthening Euro currently pose notable financial risks that are inherent in the global nature of the company's business. The nature of our business, international operations and the structure of our organisation also place pressure on cost structure and profitability, thereby creating challenges for financing as well. The growth of Biohit's operations and the diversity of its business environment mean the company must focus on continually improving the expertise of its personnel. Recruiting the expert personnel required to achieve growth expectations also sets its own challenges. OUTLOOK FOR 2007 In its financial statements published on 17 February 2006, the company estimated that the favourable trends in net sales of liquid handling products to continue in 2007. The diagnostics business is forecast to develop well in new market areas such as China, where a consensus report by scientists is expected to increase GastroPanel sales. An FDA approval is also awaited in the USA for GastroPanel's Pepsinogen I and II tests. The company therefore estimates that the Group's net sales will exceed those of the previous year. Increased costs from business growth - due to outlays on marketing - will continue to burden earnings in 2007. The operating result is highly dependent on growth in the diagnostics business. Trends during the reporting period support the company's previous outlook and the company sees no reason to change the estimates. ACCOUNTING PRINCIPLES FOR THE INTERIM REPORT This interim report has been prepared in accordance with IFRS (International Financial Reporting Standards) using IFRS recognition and measurement principles. This interim report does not comply with all of the requirements of IAS 34 (Interim Financial Reporting). New financial statement standards, amendments and interpretations have been published and became effective as of 1 January 2007. They are presented in detail in the financial statements of 2006. Their adoption did not cause the kind of changes in financial statement accounting policy that would have required a retroactive change in the comparison information presented. All the figures in the interim report have been rounded up or down, due to which the sums of figures may deviate from the sum total presented. The figures in the interim report have not been audited. CONSOLIDATED INCOME STATEMENT -------------------------------------------------------------------------------- | | 1-3 | 1-3 | Change | Change | 1-12 | | | 2007 | 2006 | | | 2006 | -------------------------------------------------------------------------------- | | MEUR | MEUR | MEUR | % | MEUR | -------------------------------------------------------------------------------- | Net sales | 8.1 | 7.6 | 0.5 | 7 | 31.4 | -------------------------------------------------------------------------------- | Other operating income | 0.0 | 0.0 | 0.0 | 26 | 0.0 | -------------------------------------------------------------------------------- | Change in inventories of | 0.5 | 0.3 | 0.2 | 61 | 0.9 | | finished goods and work in | | | | | | | progress | | | | | | -------------------------------------------------------------------------------- | Raw materials and | -1.7 | -1.5 | 0.1 | 10 | -6.0 | | consumables | | | | | | -------------------------------------------------------------------------------- | External services | -0.3 | -0.3 | 0.0 | -8 | -1.4 | -------------------------------------------------------------------------------- | Employee benefit expenses | -3.5 | -3.2 | 0.3 | 10 | -12.7 | -------------------------------------------------------------------------------- | Depreciation | -0.4 | -0.4 | 0.0 | 1 | -1.8 | -------------------------------------------------------------------------------- | Other operating expenses | -2.6 | -2.5 | 0.0 | 1 | -10.6 | -------------------------------------------------------------------------------- | Operating profit / loss | 0.2 | 0.0 | 0.2 | 726 | -0.1 | -------------------------------------------------------------------------------- | Financial expenses (net) | -0.1 | -0.1 | 0.0 | 19 | -0.5 | -------------------------------------------------------------------------------- | Profit / loss before tax | 0.0 | -0.1 | 0.2 | 134 | -0.6 | -------------------------------------------------------------------------------- | Income taxes | 0.0 | -0.1 | -0.1 | -79 | -0.2 | -------------------------------------------------------------------------------- | Profit / loss for the | 0.0 | -0.2 | 0.3 | 114 | -0.8 | | period | | | | | | -------------------------------------------------------------------------------- BY BUSINESS SEGMENT Group net sales by business segment -------------------------------------------------------------------------------- | | 1-3 | 1-3 | Change | Change | | | 2007 | 2006 | | | -------------------------------------------------------------------------------- | | MEUR | MEUR | MEUR | % | -------------------------------------------------------------------------------- | Liquid handling | 7.7 | 7.2 | 0.5 | 7 | -------------------------------------------------------------------------------- | Diagnostics | 0.5 | 0.4 | 0.0 | 2 | -------------------------------------------------------------------------------- Group operating result by business segment -------------------------------------------------------------------------------- | | 1-3 | 1-3 | Change | Change | | | 2007 | 2006 | | | -------------------------------------------------------------------------------- | | MEUR | MEUR | MEUR | % | -------------------------------------------------------------------------------- | Liquid handling | 0.8 | 0.6 | 0.2 | 40 | -------------------------------------------------------------------------------- | Diagnostics | -0.6 | -0.6 | 0.0 | 4 | -------------------------------------------------------------------------------- CONSOLIDATED BALANCE SHEET -------------------------------------------------------------------------------- | | 31.3.2007 | 31.3.2006 | 31.12.2006 | -------------------------------------------------------------------------------- | | MEUR | % | MEUR | % | MEUR | % | -------------------------------------------------------------------------------- | Assets | | | | | | | -------------------------------------------------------------------------------- | Non-current | | | | | | | | assets | | | | | | | -------------------------------------------------------------------------------- | Tangible assets | 7.3 | 25 | 6.7 | 24 | 6.9 | 25 | -------------------------------------------------------------------------------- | Goodwill | 2.6 | 9 | 2.6 | 9 | 2.6 | 10 | -------------------------------------------------------------------------------- | Other intangible | 1,6 | 5 | 1.5 | 6 | 1.6 | 6 | | assets | | | | | | | -------------------------------------------------------------------------------- | Deferred tax | 2.2 | 7 | 2.0 | 8 | 2.1 | 8 | | assets | | | | | | | -------------------------------------------------------------------------------- | Total non-current | 13.6 | 47 | 12.9 | 47 | 13.2 | 48 | | assets | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Current assets | | | | | | | -------------------------------------------------------------------------------- | Inventories | 6.2 | 21 | 5.0 | 16 | 5.8 | 21 | -------------------------------------------------------------------------------- | Trade and other | 7.8 | 27 | 8.9 | 31 | 7.5 | 28 | | receivables | | | | | | | -------------------------------------------------------------------------------- | Cash and cash | 1.4 | 5 | 1.4 | 6 | 0.9 | 3 | | equivalents | | | | | | | -------------------------------------------------------------------------------- | Total current | 15.4 | 53 | 15.3 | 53 | 14.2 | 52 | | assets | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total assets | 29.0 | 100 | 28.3 | 100 | 27.3 | 100 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Equity and | | | | | | | | liabilities | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Share capital | 2.2 | 8 | 2.2 | 8 | 2.2 | 8 | -------------------------------------------------------------------------------- | Share premium | 0.2 | 1 | 13.0 | 47 | 0.2 | 1 | | fund | | | | | | | -------------------------------------------------------------------------------- | Fund for | 12.2 | 42 | | | 12.2 | 45 | | investments of | | | | | | | | non-restricted | | | | | | | | equity | | | | | | | -------------------------------------------------------------------------------- | Retained earnings | -1.2 | -4 | -1.2 | -4 | -1.2 | -4 | -------------------------------------------------------------------------------- | Total equity | 13.4 | 46 | 14.0 | 51 | 13.4 | 49 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Non-current | | | | | | | | liabilities | | | | | | | -------------------------------------------------------------------------------- | Interest-bearing | 6.6 | 23 | 7.6 | 28 | 6.3 | 23 | | liabilities | | | | | | | -------------------------------------------------------------------------------- | Deferred tax | 0.1 | 0 | 0.1 | 0 | 0.1 | 0 | | liabilities | | | | | | | -------------------------------------------------------------------------------- | Pension | 0.0 | 0 | 0.1 | 0 | 0.0 | 0 | | obligations | | | | | | | -------------------------------------------------------------------------------- | Other liabilities | 1.1 | 4 | 0.7 | 3 | 1.0 | 4 | -------------------------------------------------------------------------------- | Total non-current | 7.8 | 27 | 8.4 | 31 | 7.4 | 27 | | liabilities | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Current | | | | | | | | liabilities | | | | | | | -------------------------------------------------------------------------------- | Trade and other | 6.0 | 21 | 5.1 | 15 | 5.0 | 18 | | payables | | | | | | | -------------------------------------------------------------------------------- | Current | 1.7 | 6 | 0.8 | 3 | 1.4 | 5 | | interest-bearing | | | | | | | | liabilities | | | | | | | -------------------------------------------------------------------------------- | Total current | 7.8 | 27 | 5.9 | 18 | 6.5 | 24 | | liabilities | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total liabilities | 15.6 | 54 | 14.3 | 49 | 13.9 | 51 | -------------------------------------------------------------------------------- | Total equity and | 29.0 | 100 | 28.3 | 100 | 27.3 | 100 | | liabilities | | | | | | | -------------------------------------------------------------------------------- CONSOLIDATED CASH FLOW STATEMENT -------------------------------------------------------------------------------- | | 31.3.2007 | 31.3.2006 | 31.12.2006 | | | MEUR | MEUR | MEUR | -------------------------------------------------------------------------------- | Cash flow from operating | | | | | activities: | | | | -------------------------------------------------------------------------------- | Profit / loss before tax | 0.1 | -0.1 | -0.6 | -------------------------------------------------------------------------------- | Adjustments | 0.6 | 0.5 | 2.2 | -------------------------------------------------------------------------------- | Change in working capital | 0.2 | -0.1 | -0.9 | -------------------------------------------------------------------------------- | Interest and other financial | 0.0 | -0.1 | -0.4 | | items paid | | | | -------------------------------------------------------------------------------- | Interest received | 0.0 | 0.0 | 0.1 | -------------------------------------------------------------------------------- | Income taxes paid | 0.0 | 0.0 | -0.2 | -------------------------------------------------------------------------------- | Net cash flow from operating | 0.8 | 0.2 | 0.2 | | activities | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Cash flow from investment | | | | | activities: | | | | -------------------------------------------------------------------------------- | Investments in tangible and | -0.5 | -0.3 | -1.8 | | intangible assets | | | | -------------------------------------------------------------------------------- | Investments in funds and | 0.0 | 0.0 | 0.0 | | deposits | | | | -------------------------------------------------------------------------------- | Capital gain from investments | 0.1 | 0.6 | 2.6 | | in funds and deposits | | | | -------------------------------------------------------------------------------- | Net cash flow from investment | -0.4 | 0.3 | 0.8 | | activities | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Cash flow from financing | | | | | activities: | | | | -------------------------------------------------------------------------------- | Proceeds from loans | 0.5 | 0.0 | 0.1 | -------------------------------------------------------------------------------- | Repayment of loans | -0.3 | -0.2 | -1.0 | -------------------------------------------------------------------------------- | Net cash flow from financing | 0.2 | -0.2 | -0.9 | | activities | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Increase (+) / decrease (-) in | 0.6 | 0.3 | 0.1 | | cash and cash equivalents | | | | -------------------------------------------------------------------------------- | Cash and cash equivalents at | 0.9 | 0.7 | 0.7 | | beginning of period | | | | -------------------------------------------------------------------------------- | Cash and cash equivalents at | 1.4 | 1.0 | 0.9 | | end of period | | | | -------------------------------------------------------------------------------- STATEMENT OF CHANGES IN EQUITY Consolidated statement of changes in equity on 31 March 2007 -------------------------------------------------------------------------------- | MEUR | Share| Share| Trans-| Fund for| Earnings | Equity | | | capital| premium| lation| investments| | | | | | fund| diff.| of non-| | | | | | | | restricted| | | | | | | | equity| | | -------------------------------------------------------------------------------- | Equity on 1 | 2.2 | 0.2 | 0.1 | 12.2 | -1.3 | 13.4 | | Jan 2007 | | | | | | | -------------------------------------------------------------------------------- | Translation | | | 0.0 | | | 0.0 | | differences | | | | | | | -------------------------------------------------------------------------------- | Result for the | | | | | 0.0 | 0.0 | | period | | | | | | | -------------------------------------------------------------------------------- | Equity on 31 | 2.2 | 0.2 | 0.1 | 12.2 | -1.3 | 13.4 | | March 2007 | | | | | | | -------------------------------------------------------------------------------- Consolidated statement of changes in equity on 31 March 2006 -------------------------------------------------------------------------------- | MEUR | Share | Share | Trans- | Earnings | Equity | | | capital | premium | lation | | | | | | fund | diff. | | | -------------------------------------------------------------------------------- | Equity on 1 Jan | 2.2 | 13.0 | 0.2 | -1.1 | 14.3 | | 2006 | | | | | | -------------------------------------------------------------------------------- | Translation | | | -0.1 | | -0.1 | | differences | | | | | | -------------------------------------------------------------------------------- | Result for the | | | | -0.2 | -0.2 | | period | | | | | | -------------------------------------------------------------------------------- | Equity on 31 | 2.2 | 13.0 | 0.1 | -1.2 | 14.0 | | March 2006 | | | | | | -------------------------------------------------------------------------------- INVESTMENTS AND PERSONNEL -------------------------------------------------------------------------------- | | 31.3.2007 | 31.3.2006 | Change | Change-% | 31.12.2006 | -------------------------------------------------------------------------------- | Investments, | 0.9 | 0.4 | 0.5 | 132.0 | 1.9 | | gross, MEUR | | | | | | -------------------------------------------------------------------------------- | % of net sales | 9.5 | 4.9 | | | 6.1 | -------------------------------------------------------------------------------- | Average number of | 338 | 290 | 48 | 16.6 | 310 | | employees | | | | | | -------------------------------------------------------------------------------- COLLATERAL, CONTINGENT LIABILITIES AND OTHER COMMITMENTS -------------------------------------------------------------------------------- | MEUR | 31.3.2007 | 31.3.2006 | 31.12.2006 | -------------------------------------------------------------------------------- | Mortgages and pledged assets | | | | -------------------------------------------------------------------------------- | Loans from financial | 2.0 | 2.2 | 1.7 | | institutions | | | | -------------------------------------------------------------------------------- | Corporate mortgages | 1.6 | 1.6 | 1.6 | -------------------------------------------------------------------------------- | Mortgages on real estate | 1.4 | 1.4 | 1.4 | -------------------------------------------------------------------------------- | Other long-term liabilities | 0.4 | 0.5 | 0.4 | -------------------------------------------------------------------------------- | Mortgages on real estate | 0.8 | 0.8 | 0.8 | -------------------------------------------------------------------------------- | Leasing commitments | 5.9 | 3.5 | 4.5 | -------------------------------------------------------------------------------- | Mortgages and pledged assets | 0.2 | 0.0 | 0.2 | -------------------------------------------------------------------------------- KEY RATIOS -------------------------------------------------------------------------------- | | 31.3.2007 | 31.3.2006 | 31.12.2006 | -------------------------------------------------------------------------------- | Equity ratio % | 46.3 | 49.7 | 49.4 | -------------------------------------------------------------------------------- | Earnings per share, EUR | 0.00 | -0.02 | -0.06 | -------------------------------------------------------------------------------- | Shareholder's equity per share, EUR| 1.04 | 1.08 | 1.04 | -------------------------------------------------------------------------------- | Average number of shares | 12,937,627 | 12,937,627 | 12,937,627 | -------------------------------------------------------------------------------- | Number of shares at the end of | 12,937,627 | 12,937,627 | 12,937,627 | | period | | | | -------------------------------------------------------------------------------- Helsinki on 4 May 2007 Board of Directors of Biohit Oyj Further information: Osmo Suovaniemi, M.D., Ph.D., Professor President & CEO Tel: +358-9-773 861 Mobile: +358-40-745 5605 Email: osmo.suovaniemi@biohit.com Distribution: Helsinki Exchanges Financial Supervisory Authority Press http://www.biohit.com