Total sales in Q2 was spot on our estimate and amounted to SEK 56 (46) million, corresponding to an increase of 15% in local currency. Following a quarter with no deliveries, durable goods showed strong growth and came in at SEK 5.9 (3.8) million. The result was better than our forecast – we had assumed delivey of one machine and sales of SEK 2.9 million.
Sales related to warm perfusion (excluding durable goods) did, however, come in slightly lower than expected. Growing by about 25%, sales amounted to about SEK 23 (18) million (we forecasted sales of SEK 26 million). Recognising the strong comparison quarter and the continued expansion of the installed base, once again validating the strong interest for the product offering, we do not interpret too much into the discrepancy between the outcome and our forecast.
Sales related to cold preservation came in slightly higher than expected. Growing by about 15%, sales in the segment amounted to SEK 28 (24). Our forecast assumed sales of SEK 27 million. While growth was highly impressive during the quarter, we also recognise that the growth in Q2’18 was relatively weak and that the company has enjoyed a currency tailwind.
The gross margin for non-durable goods was in line with expectations and amounted to 77% (77%). Higher-than-expected sales of durable goods resulted in a total gross margin of 74% (72%), compared to the forecasted 75% percent.
EBIT failed to meet our expectations and came in at SEK 2 million (compared to the forecasted SEK 10 million), corresponding to a margin of 11% (17%). OPEX was higher than expected (mainly due to high selling expenses) and grew by 37% (vs. the forecasted 10%). Costs attributed to the share-based bonus program had a negative impact of SEK 4 million. Adjusted for the share based bonus program, the EBITDA was SEK 11,3, corresponding a margin of 20% (20%).
Overall, we have a positive view of the report. The main growth driver (sales related to warm perfusion) did not live up to our expectations and profitability was lower than expected. We do, however, see that the continued expansion of the installed base gives a strong validation of the Xvivo’s product offering (especially now that a competing product – Transmedic’s OCS Lung – is approved for expanded criteria donor lungs) and expect that profitability will increase in the upcoming quarters.
We will return with an updated analysis.
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