Sales amounted to SEK 320 million in Q4´18, corresponding to a growth of 12 percent in local currency. In the media business unit, sales grew by 10 percent in local currency and amounted to SEK 156 (135) million. The company reported that growth was seen across all market regions. With three consecutive quarters of stable growth, we believe that the weak first quarter of 2018 was more of temporary nature. In the whole year of 2018, media sales grew by about 6 percent in local currency, which indicates a growth in line with the overall market.
In the disposable devices business unit, sales increased by 32 percent in local currency and amounted to amounted to SEK 49 (35) million. According to the company, growth was seen across all products in the business unit. In the earnings call, management pointed to an increased production capacity as one of the key factors behind the result. While we see the result as impressive, we recognise that the comparison quarter was relatively weak and that the order intake can vary significantly from quarter to quarter. Further, the company reported that embryo transfer technology that was acquired in early 2018 will see a delay in the launch plan due to expanded product development. In the earnings call, management guided for a 12-15 month delay due to findings from clinical testing during the year, where the company saw opportunity for improvement. Keeping these factors in mind, we foresee a growth more in line with the overall market in 2019 (5-10 percent).
Sales in the time-lapse business amounted to SEK 94 (79) million, corresponding to a growth of 14 percent in local currency. Although the last three quarters appear to signal a slowdown, we argue that significant growth opportunities still remain. We argue that the USA and China offer significant growth potential in near to mid-future. Support for increased acceptance for time-lapse in the USA has been shown in the last two quarters, where the company has reported strong growth in the market. Additionally, we expect that the upcoming approval of the EmbryoScope+ in China will improve the prospects for growth.
Sales in the ART equipment decreased by 19 percent in local currency and amounted to SEK 15 (17) million. The result was in line with the outcome in the previous quarter, causing us to believe that the sales erosion has peaked. We forecast a flat sales in 2019 and mid-single digit growth in the following years.
The gross margin came in at 67 (64) percent in Q4. The EBITDA reached an impressive SEK 135 million, corresponding to an EBITDA margin of 42 (38 percent). The net margin was 27 (25) percent during the quarter. Going forward, we expect to see a slightly lower profitability, negatively affected by the lower gross margin for the products provided by Illumina.
We will return with updated estimates shortly.
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