Hello, everybody. I would like to welcome everybody to this first ChemoMetec webcast, where we will present the financial results from our fiscal year 2022-2023. My name is Rasmus Kofoed, and I'm the new CEO of the company, and I had the pleasure of starting in this new role one and a half months ago. In terms of structure, we will start out presenting our business update and financial results. This is expected to take approximately 20 minutes, followed by a Q&A, where we will take any questions you might have. As all of you know, please be aware of our disclaimer around forward-looking statements over the next hour. Today's speakers are my colleague, Niels Høy Nielsen, our Group CFO, as well as myself, the Group CEO of ChemoMetec.
As an introduction, ChemoMetec is one of the global leading players providing equipment and services within the cell counting and analysis field. It's a company founded 25 years ago in Denmark by three founders, one still being heavily involved in the day-to-day business. It's globally one of the leading players in this field, and the market we play in are mainly in the cell and gene therapy market. We employ 164 people globally, and we have what we call a full value chain here with a global team in sales, marketing, services, as well as in R&D, quality and production. We sell our products and services in more than 100 countries, with a direct distribution model in U.S. and most of Europe, and through partnerships and distributors in APAC and rest of the world.
ChemoMetec operates what we call a scalable business model, and what we mean with that can be explained maybe a little bit better with the next slide. We look at our business model as a scalable one, as just mentioned, a little bit like the razor and blade or an espresso model, you can say, where we sell long-lasting instruments and link to that following recurring revenues with Consumables and Services. Some of the advantages our customers have by using our equipment and services compared to more conventional cell counting are speed, results efficiency, significantly fewer human errors in cell counting workflows, accuracy and consistency in cell counting and analysis. On top of that, ChemoMetec's Instruments are suited for GMP environments, which is important concept that ensures medical products are consistently produced and controlled according to strict quality standards.
From the visuals on the left-hand side of the slide, you see a typical workflow and steps you go through in a conventional way of doing cell counting versus doing a similar one using our NucleoCounter, with significantly fewer steps and less risks of human errors in the bottom of the slides. If we take the next slide, we want to show kind of a summary of some of the key highlights from the last fiscal year. Yesterday, and despite the headwinds, we released what we, under the circumstances, call an acceptable and solid financial performance in fiscal year 2022 and 2023, in line with our latest guidance. We saw strong growth in sales of Services and Consumables, while sales of Instruments declined significantly.
Due to strong headwinds, again, linked to macroeconomic factors like high inflation, high interest rates, and insecurity in general, we have seen a significant global negative impact in funding in general, also resulting in fewer active clinical areas where many of our customers, existing and new ones, traditionally comes from here in ChemoMetec. If you look at the second part of the slide, we really want to hammer out that we do see great opportunities and attractive prospects linked to our future products and Services portfolio. We expect to launch four new instruments by the end of next calendar year. The first one, XcytoMatic 40, also known as the XM 40, has completed several market tests over the last month with some of our key customers, and the feedback and reactions are very positive and promising.
With the XM 40 and the XM 30, they will help us unlock significant opportunities within the bioprocessing market. And why is that relevant for us? The bioprocessing market is attractive for us as this represents what I would call an additional blue ocean to swim in. But this market is also characterized by having more and financially viable companies with less vulnerability compared to, for example, an early-stage biotech company. If you look at the third part, the third paragraph of the slide here, I want to mention that Niels started as new CFO here in ChemoMetec in November, and as mentioned, I started as new CEO for the company, 1.5 month ago. Together, we will, with the rest of the ChemoMetec team, ensure we take full advantage of having fresh eyes and laser focus on our key opportunities.
One of the key focus areas for us will be to revamp our culture and strategy in the company, and to ensure we fully utilize our strength and opportunities. One of the other key strategic priorities for us last year and in fiscal year 2022 and 2023 has been ESG. And I know Niels here in a few minutes will elaborate a little bit more on our ESG footprint. Before handing over to Niels, I have a couple of more elements to share, and the first one here, and what you see from this slide, is our product portfolio grouped into three buckets. ChemoMetec has a highly specialized and globally recognized product portfolio, which over the years has shown its potential within the cell and gene therapy market.
But in the coming year, ChemoMetec will start targeting the bioprocessing market, led by the introduction of XcytoMatic 40, as just mentioned. But as mentioned as well, we do expect to launch four new instruments, latest by the end of next calendar year, starting with XM 40, followed by XM 30, as well as our NC-203 and Xcyto 5. So we are quite happy and look forward to that journey over the next year, year and a half. If we take the next slide, I want to share a couple of words regarding the market we aim. I mentioned already in the beginning that we've been faced with headwinds last year from a macroeconomic point of view.
And what you see from this slide is how severe market conditions has changed when it comes to willingness to fund or invest, for example, in biotechnology, clinical trials, IPOs, or capital raised through means of borrowing over the last year versus the years before. If you look at the left-hand side of the slide, it shows the entire biotech industry and the amount of capital raised in EU and U.S. in $ billion over the last five years. What you see is that from 2019 to 2020, we saw a huge increase of 75% in capital raises. However, from 2021 to 2022, similarly, a significant decrease with 53%. We have some indications as well from some European countries that 2023 might be similar or even lower compared to the level of 2022.
If we look specifically at our key market, the cell and gene therapy market, and in U.S., you can see from the graphs on your right-hand side of the slide that also here, funding has decreased significantly in 2022 and 2023 versus 2020 and 2021. In fact, a drop of 58% in available funding from 2021 to 2023. When it comes to number of active trials, active clinical trials here in phase I- III, we also do see a significant drop in 2023 versus the years before. A drop of -16%. The biotech industry, the cell and gene, the cell and gene therapy market, and the number of clinical trials are all important factors for us here in ChemoMetec, as this is where we and, of course, some of our peers in the industry, have significant part of our current and new customers.
From here, I would like to hand over to Niels, our CFO, for more insights in our financial performance in fiscal year 2022 and 2023. So Niels, over to you.
Thank you, Rasmus. Hello, everyone. My name is Niels Høy Nielsen, and I am the group CFO, and I will take you through the financials, ESG, and also the guidance for fiscal year 2023-2024. First of all, if we look at the financial results for fiscal year 2022-2023, they came in within the latest guidance with a top line of DKK 442 million and EBITDA at DKK 251 million. The guidance being between DKK 430 million-DKK 460 million on the top line, and DKK 245 million-DKK 260 million on EBITDA. Top line grew 4%. However, at constant exchange rate, it was a decrease of 1%, and this is significantly down from last year's growth of 52%. EBITDA grew solidly 13% and margin-wise, percent on the margin.
Margin expansion amounted to 460 basis points, and I will explore this a little bit later. If you look at the profit before tax, it also showed a solid 13% growth. On the cash flow, we generated a solid cash flow from operations of DKK 154 million . This was down from last year, mainly due to increased inventory and less receivables. The company's level of solvency increased to 81%.... Overall, we have a very strong balance sheet at ChemoMetec. I think these all key ratios display the ChemoMetec financially is in a very strong position. If you look at the solid margins, solid cash flow, and also solid balance sheet, we are really well positioned financially.
If we look at the geographical revenue split and growth, we still see North America to be, with the, the market with the most, the highest share of revenue, and here 59%. U.S. is, of course, a key market for us, and it showed a growth of 6%, but at constant exchange rate, the revenue declined by 2%. Europe increased by 1%, and rest of the world by -2%. All three regions on the back of high double-digit growth last year, now down to low single-digit growth or declines. If we look at our product groups on the graph, on the left-hand side of the slide, Instrument sales were down 17%, while Consumables and Services were growing at a high pace of respectively 19% and 39%. So very strong there.
Our EBITDA journey, if you look at the right-hand side, has been tremendous during the past five years. We have actually increased our EBITDA margin from 37% - 57%. If I dig into the EBITDA margin here on the next slide, you can see from the 52% to the 57%, it's an increase of 460 basis points. It's mainly due to three key factors. Firstly, we see significant positive contribution from the stronger U.S. dollar, predominantly in the first half of the fiscal year. Secondly, we have seen reduced staff cost from lower bonus payout, as we didn't meet the top line, and also profit target, and also from the revised estimate on our direct production hours. Thirdly, we see an impact from more profitable product mix, with less share of instruments and more services included.
This concludes our financial update for fiscal year 2022 and 2023. I'll now move on to the ESG. During the last nine months, we have had increased focus on ESG. It has actually become a strategic priority. We have performed an initial materiality analysis, assessing our principal risk within the three sustainability dimension, the E, environment, the S, social, and the G, governance. We assess the materiality of this risk in terms of financial impact, in terms of ChemoMetec's reputation, and in terms of climate and social issues. Further, we've also chosen the relevant sustainable development goals that we tap into. They are also outlined at the bottom of this slide here. Based on these discussions, we established our strategic roadmap that is guiding us also into the fiscal year 2023, 2024.
While we were addressing, you know, the strategic roadmap, we also continued focusing on reducing our climate and environmental impact during fiscal year 2022 and 2023. I have some examples from you to you. We did actually have continued transfer of our molding process to more energy efficient sub-suppliers. We also focused on waste reduction and the production of Consumables through a systematic effort to actually improve processes and equipment. We also have a focus on increased use of recycled materials in our packaging. A fourth example is actually that we are collaborating with one of our transport companies, planning to actually transition to using containers and electrically powered trucks. A lot of different examples how we actually keep the focus on the environment and the climate impact that we have.
We did strengthen our cybersecurity, the key findings that we actually saw when we did the risk-based approach here. And we have done penetration tests, and we have actually also been clearing out all the findings there. So we are really in a good position. Further, we've also looked a bit forward, if something should happen, and also done contingency planning. Lastly, we have also, this fiscal year, actually implemented a whistleblower with the aim to support ChemoMetec's commitment to ensure responsible and ethical business behavior across the company and also towards our third parties. If we look forward, we have a lot of interesting and comprehensive deliverables in terms of ESG. We are going to implement a code of conduct that we have been working on the past six months. Importantly, we will actually build the platform for reporting on the CSRD directive going forward.
We will also carry out an engagement survey in order to baseline the well-being of our people and make sure that we prepare action plans on how we can improve. So a lot of interesting ESG activities going forward. This is a high and very important strategic priority. I will move on to the 2023-2024 guidance. For the next fiscal year, we estimate a revenue in the range of DKK 400 million-DKK 435 million, which is a decline of 10%-2% versus last year. We still see a challenging market outlook, as Rasmus also already captured. It's worth noting also that we do see a positive contribution expected from XM40 in the second half of the fiscal year. On EBITDA level, we estimate to end in the range of DKK 200 million-DKK 220 million.
This is a decline of 20%-12% versus last year. As overall comments, we expect the EBITDA margin to remain above 50%. With these words, I hand back to Rasmus.
Thank you, Niels, and thank you for the insights there. As a closing slide, I know these were a lot of information, but as a closing slide, we would like to share some of our top priorities for the coming month and use that as a wrap-up before we move into the Q&A session. So short term, we will focus on launching our new innovations with XM40, the XM30, the NC-203, and the Xcyto 5. We will put full focus and steam on execution and sales of these new innovations. We will do that simultaneously and maybe with a midterm ambition to focus on transforming our organization by revamping culture, our strategy, and with that, build upon strength, our strength, and create an even stronger foundation in our company here.
We believe this will help us remain focused, sharp, and ready for the near future. Also, ESG remains a strategic priority for us in the year ahead. So those are some of the key focus points for us the coming months. So all in all, and despite the headwinds we face at the moment from macroeconomic factors, we remain optimistic about the future of our company, our abilities, and our opportunities ahead of us. And with that, I would like to hand it back over to our host, Sharon. Sharon, for the Q&A.
Thank you. To ask a question, you will need to press star one and one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. If you wish to ask a question via the webcast, please type it into the box and click submit. Once again, if you would like to ask a phone question, that is star one and one on your telephone keypad. We will now go to your first question. One moment, please. Your first question comes from the line of Simon Larsson from Danske Bank. Please go ahead. Your line is open.
Yeah. So hi, Rasmus and Niels. A few questions from my side, please. Maybe starting on the XM40 launch here. So what kind of customers will you be targeting first? Are there, is it larger pharma, big pharma companies building out new capacity or anything else? So how are you thinking about the go-to-market strategy initially here? Thanks.
Hi, Simon, and thanks for the question. In terms of XcytoMatic 40, what we will be addressing will probably be what we call an existing market, but also in a new way, you can say, as we know that some of our peers in the industry have informed the market to pull out some products there that we believe are the XM40 has a perfect fit for. So you would say that in a way, it's a new market, because we would go head-to-head with competition at the same time as moving into a bioprocessing market.
Okay. Yeah, thank you. Yeah, it's also... maybe it's my understanding that you worked that you haven't worked that much with price increases over the years, right? So Rasmus, as you know, new CEO coming in here, how do you think about, you know, using price as a way, as a way to grow? I mean, obviously, your products are very sticky. Customers seldom seem to churn, so would make sense, at least from my point of view, to maybe start to increase prices here. So what's your philosophy on that going forward?
Yeah. Thank you, Simon. And we are actually discussing that as well. And that might be, you can say, a relevant outcome here over the next yeah weeks and months. So we are definitely looking into this as an opportunity. We haven't really increased our prices for quite a while. So this might be in our agenda the coming weeks for sure.
And should we expect that to be price increases, like, across the product portfolio, or do you like specific pinpointing, I don't know, Consumables, or how do you think about that?
Yeah. We are debating how we want to move forward here, and we'll definitely not close any doors, but we will look at all opportunities we have here and of course consider that in a fair way. So that's maybe what I want to say with the price piece.
... Yeah, yes. And maybe the final one, yeah, so you say a positive contribution is expected from the XcytoMatic 40 here in the second half of this fiscal year. Could you quantify that contribution a bit for us, please?
Yeah, we can. Without going again into the details, we expect that probably a lower double-digit million DKK amount is what we have dialed in our outlook for the XM 40 specifically.
Yep. Okay, that's very clear. Thanks so much. I'll get back in line.
Thanks for the question, sir.
Thank you. We will now go to your next question. One moment, please. Your next question comes from the line of Rickard Anderkrans from Handelsbanken. Please go ahead.
All right. Good day, and, thank you for taking my questions and hosting this call. This is Rickard Anderkrans from Handelsbanken calling. So, two questions for me, please. First one, in the report you mentioned, is sort of a stabilizing demand, by the end of the fiscal year, and you also called it out here on the call. Could you elaborate a little bit more what indicators and data points you're basing this observation on? That'd be my first one. Thank you.
Yeah, maybe I should take that. Thank you, Rickard, for the question. I mean, of course, we have looked into the sales level, the past six months, of course, and this is what we can see in terms of the Instrument sales. So that has been a clear indicator for us that has come down to a lower level, but it has also kind of stabilized there. And then this is, of course, also giving us guidance on the forward-looking piece here. So we have looked into our data, basically, Rickard.
All right. So it's more internal analytics. Perfect, then I understand. And second question: In the report, you mentioned particular headwinds from small businesses and startups in cell-based Therapy space. Can you approximate the share of group sales that come from these types of companies? Would be very helpful.
Yeah, I know that is highly interesting, Rickard, to get the segmentation into this one, but for competitive reasons, we don't share that detail into this.
Fair enough. All right, thank you for taking my questions. I'll get back to the queue.
Yes, thank you for the question, Rickard.
Thank you. We will now go to your next question. One moment, please. Your next question comes from the line of Yiwei Zhou from SEB. Please go ahead.
Hi, thank you for taking my question. First of all, Rasmus, congrats to your new role, and happy to see you are now up and running. A few questions from my side. First, is regarding your guidance, and you put in the annual report saying the sales of service contracts are expected to continue to rise substantially. But as I can see, the quarterly trend it has been not growing that much and even decline a bit over the recent quarters. So what gave you the confidence to expect the rise? I'll do one question at a time.
Thank you, Yiwei, for the question, and thank you for the words. I would say that we have been providing very strong growth over the last fiscal year in Services. And we are also pretty confident with what we see at the moment in Services that will be continuing in one way in a positive way, for sure. That's what we see. We also know that in our eyes, we only have seen the beginning of what we might provide in terms of Services to the market.
We have a lot of innovative ideas and a lot of great things on the table here that we would like to throw in under the bucket of Services going forward. So we believe that Services is really here to stay, and we expect that will continue going forward as well.
Okay, maybe could you indicate a bit how much of the service revenue contribution you have assumed to come from the XM 40 launch?
I didn't get that again. Sorry, Yiwei.
I mean, the revenue, the service revenue contribution, what have you expected, assumed in your guidance from the XcytoMatic 40 launch?
Yeah, we will not go into the details of that piece and maybe just again highlight the fact that as Simon were asking about before, that the XM 40 contribution in general would be at the lower double digits million DKK level. That's what we see. We will not go into, you know, the details of how many of those we assume will bring, you can say, additional services. So, yeah.
Could you confirm that the double-digit, lower double-digit revenue that is a combination of the Services revenue and also the Instrument sales?
... Absolutely. That is true. That is confirmed.
Okay, sure. Okay, clear. My next question here is on the XM, order on XM 40. I mean, many life science companies reported quite weak sales and down, downgrade guidance, and also, they expect the weak bioprocessing market to continue in the coming quarters. And now you're launching new products in a challenging sort of market. Any pushback from your customers, when you launch, or when you talk to them? Isn't it bad timing for you to go into the market now?
I think, I think that what we hear from our customers, that they are actually super excited with what we bring to the market. And as we mentioned a little bit earlier, we have very promising feedback from specifically the XM 40 that has been tested and demoed with many of our or several of our customers around the world. And what is feeding back to us is that this is super, super promising and exciting. So, much more positive vibes, I would say linked to this one, and not necessarily whether it's bad timing. Actually, many are waiting for something new to come in the marketplace. So that's also why we, we, we look at the future with optimism.
Okay. And I just wanna follow up, you just mentioned some existing peers are pulling out their products. Could you elaborate a bit here why they are sort of retreating from the market?
No, I cannot speak to what our peers or competitors might do, but we do see information in the market confirming that they are actually discontinuing some products for whatever reasons, right? And yeah, so I will not comment on their rationale for doing such thing. But we scan the market, and we jump on any opportunity we might have in relation to this, of course.
Okay, fair enough. And next question is on the margin, sorry, on the EBITDA guidance. You indicated it's still about 50%, but it is, if you compare it to 2022, 2023, it is a setback. And apart from the FX movement, anything else will sort of explain the decline?
Yeah, maybe I should comment on that one. Of course, you already alluded to the exchange rate. We had a tailwind on that fiscal year 2022-2023, so we don't know what to expect, of course, for the fiscal year 2023-2024. We did also those very low level of bonus paid out in the organization due to us not meeting the top line and bottom line targets. Now, going forward, of course, we need to put in also bonus plans so our employees and sales people can be motivated and so forth. So this is something that we need to put in here. As well as also mentioned in the annual report, we need to also invest in people as well.
The staff costs will be higher, and that will eat into our EBITDA margins as well. So this will be my comment on that.
Okay. Quite clear. Thanks. And I have one final question, then I'll jump back to the queue. You mentioned you need two new products apart from the XM 40 and 30, NC-203, and then also relaunch of Xcyto 5. Could you maybe comment on the rationale for those two product launch and maybe comment a bit more on the NC-203? Is it a more like a product upgrade, or is it targeting some new segment?
Yeah. We consider those two, Xcyto 5 as well as the NC-203, as products in you can say our—we call it, you know, the existing business, you can say. But both Instruments will come with significant new innovations compared to the existing portfolio we have in the area, like the NC-202 and 200, right? So it will come with more nuances, with more opportunities, greater stability, more focus, these types of things. So definitely an upgrade, a significant upgrade compared to some of the instruments we have already.
Okay. Could you indicate the potential price for NC-203?
No, not yet. It's too early.
Okay. And if you launch before the year ends, then I guess this will be sort of sales contribution for 2025.
Yes, correct.
Okay, okay.
We are planning. The ambition is that we would put actually all four new instruments, as mentioned here, in the market latest by the end of next calendar year, so in the end of 2024. Meaning that, that will be part of the fiscal year 2024/2025, if it comes in the end of next calendar year. Correct.
Okay, great. Thank you. I jump back to the queue.
Thank you, Yiwei.
Thank you.... Once again, if you would like to ask a question, please press star one and one on your telephone keypad. If you wish to ask a question via the webcast, please type it into the box and click Submit. We will now go to our next phone question. One moment, please. And your question comes from the line of Niels Granholm-Leth from Carnegie. Please go ahead.
Thank you. Good morning, and thank you for taking my questions. First question would be on your inventories. Could you talk about what's in your inventories? We've seen quite an increase in your inventories over the past couple of years. How much of that would be finished goods, and how much of that would be components? So that would be my first question. My second question would be on revenue from Consumables. You are expecting growth in revenue from Consumables in fiscal 2024. However, we did see quite a deceleration in quarter four. So could you talk about how you see the development of Consumables revenue in the coming year?
Should we expect a slow beginning to the year and then an acceleration towards the end of the year? Thank you.
Yeah, thank you, Niels, for your questions. The first one on the inventories, the major part is finished goods, and you also correctly mentioned that we have increased our inventories the last couple of years. It is important for us to be able to deliver to our customers and also in high quantities, and so this is a strategy that we have been used. And going forward, that will also be the case. Also, now we have XM40 that we are building up. We will also build some inventories, of course, XM40, as we do launch. We don't wanna enter into a launch where we don't have the instruments. So and so we prepare basically to have the finished goods available. So that would be the main part of it.
For the second question on the Consumables?
Yeah, maybe I can take that as well. Thanks for the questions, Niels. In terms of revenue contribution from Consumables in fiscal year 2024, without again fleshing out the exact details, we can say that we are projecting a low double-digit but positive growth for the Consumables line in the years to come.
Great. Thank you. And just returning to inventories. So you mentioned that you have a decent amount of finished goods there. So would there be many of the NC-200, so some of the older products in your warehouse?
Yeah, it would be, I think, a fair good split that... I mean, we had 200s and 202s, of course. And, you know, we still have a lot of customers still asking for the 200. You know, they don't become obsolete because people, if they're in a clinical phase, they will not change Instruments, because it's part of their protocol. So they will keep on with their, maybe the 200. They cannot change this necessarily to the 202 without prolonging the clinical trial. So that's why they, they add some stickiness to, to also old instruments, from our customers. So-
So you don't see a risk of having to sell the older instruments at a discounted price now that you're introducing a newer version?
No, no, we don't see that.
Okay. And then just, finally, on a number of employees, how do you expect the number of employees to develop in the coming year?
Thanks for the question, Niels. I think, as mentioned in the beginning here, we have 164 colleagues around the globe at the moment. The plan is actually to I cannot throw out a number, but obviously, we will look into the investments we might need. We kind of have, I would say, an approach that we would like to invest into pushing the top line more than anything. So what that might mean in terms of additional investments in people, we will see. But we do expect, and I think Niels mentioned it a little bit earlier, that we do want to invest in people and the team.
I would expect that we would see probably some additions to the team over the next month.
Great. Thank you, and thank you for hosting the call.
Thank you.
Thank you for your questions.
Thank you.
I think that was. Was that the last one, Sharon, here, right? And then we should maybe have a look at the web questions. I think there are quite a few as well here.
Yeah, we do have 13 web questions, so I think we'll just, just, take them as we go along here. So there's a question from Matthias Saracen, and the question is: You mentioned in the report that a need an entire organization, that there is a need in the entire organization to consider new opportunities and new ways of doing things. Can you elaborate on that, please?
I can maybe share a few thoughts. It's still early days for me. As mentioned, I started only a little more than a month ago. But I had the chance and the pleasure of joining our US teams actually a few weeks ago, and I've talked to many of the team members already here in the headquarters, as well as our field-based team members across the globe. And there are lots of great stuff here. The foundation is quite amazing. A lots of talents and amazing, I think, portfolio, very solid innovations coming.
And then I think also, and that would be my, you know, own words here, that ChemoMetec has delivered more than 30% growth, and a lot of focus has been on really expediting those orders. And with that, I think we have a great opportunity to, let's say, key processes in the organization and spend some time on ensuring that we are fully up to speed there. One of the things, as we mentioned already, that we will focus on is really going into an in-depth strategy session, looking at our, you know, values, our mission, what is the strategy to get us to where we want to be.
Those are just examples of things that personally I think we can elaborate on over the next year or so. So lots of great things and also great opportunities to sharpen the sword even more in the near future. I hope that answers the question, Mathis.
All right. We'll take the next question. That is, that is from Christian France. Do you plan share buyback, since this might be more tax efficient than dividends? We have the option to do so, and we are considering that, of course, but nothing is planned at all. So that would be my answer to that question. We have another question from Niels Hannibalsen: How is your market share developing?
Yeah. I think in general, there are very little, you can say, solid reporting or statistics when it comes to market share within the cell counting business. But there is a little bit available, and I think what is available indicates that we are probably in ChemoMetec around the top three players, with close to 18%-20% market share. But again, it is—There's not a lot of, I would say, reliable reporting and statistics on market share in the field we are playing.
Then I have another question from Michael Raun, or actually several questions. Hi, both. What are your more precise expectations to the new products in terms of turnover and growth? Is XM 40 the biggest launch? In percentage, how much will the new products affect the year 2024?
Yeah, and I think we probably have covered some of that piece, and the closest we can get, specifically with the XM 40, which will be the first one of the new four products, new four instruments we will launch. XM 40 will be the first one we put to market, and we have dialed in, as mentioned, a double-digit DKK millions into our outlook. That's probably how close we can be on that one.
Then we have a question from Tony Cockhorn. He's been a bit silent in terms of communicating PR. Will ChemoMetec focus more on promoting new products, using no need?
I think it's... I mean, I, I can speak for, I think myself, and again, being new to the business here, that, I think communication, PR, are extremely important, and, and this will be high on, on the agenda and on the list of priorities, as well, going forward. But I would also say that there might be a few other things that are equally important or maybe even more important, and for us, that would be to bring four new products to the market successfully. And looking at, strategy and, vision and mission, as we, as we talked about before, ESG, as mentioned, would be key to our agenda, going forward as well.
I would also say that communication in general, PR, is definitely a part of that part of that game as well.
I have a question from Lars Skjøth . Who are your biggest competitors, and who are they? Are they experienced the same headwinds as you?
Yeah. I think I can maybe take that one, Niels, as well.
Yeah.
Without going into so long list of potential peers in the group, we have a couple of big players like Danaher with Beckman Coulter, and we have a few others, massive, you can say, players in the field that might produce and provide Instruments and Services to laboratories and in general. I think we can also say there are no such thing as such a clean and dedicated and unique company within the field of cell counting as ChemoMetec. I think we're probably one of the only ones globally. So, yeah, I don't know if that answered the question, but..
Okay, I have another one. Out of the -9% decrease in Q4, what part came from FX?
... I think already allude to that our dollar effect came, or impact came in, in the first half of the fiscal year, 2020 to 2023. So it's actually minor here. I don't have the exact figure, but it's really minor. Then I have another question from Jacob Swinson. When do you expect the market to come back to solid growth again? And regarding the soft guidance, do you see this as a postponing revenues or what growth figures to expect once the sentiment turns? Yeah, I think, thanks for the question, Jacob. I think nobody knows. If we knew exactly when the market would turn around in terms of funding, I think that would be a great thing to know, right? So I don't, I don't think anyone would know, right?
We have seen the impact of that market condition change. We presented it a little bit earlier. It's quite significant. As mentioned, the biotech industry in U.S. and Europe has declined with more than 50% over the last year. Whether the market will bounce back in a year, in half a year, or two years, I think it's difficult to say, right? We try to look at what we know for a fact, and that's also kind of you know linked into the figures we have shared on the guidance there. So, we will see. But we will sharpen our pen in the meantime, right?
As I already mentioned here, we have a lot of things to sharpen the pen and prepare ourselves for, hopefully for exciting product launches over the next year and a half. The next question is from Steven Rama: In which areas will you staff up? Yeah. I think we can, it's still early days here for me personally. But I can maybe mention that. And I think we have shared it as well, that sales in general will be key for us going forward. Being able to launch products like we shared, four new instruments in the next year and a half, will be absolutely key for us. So commercial competence will be key.
I think we have also mentioned that, one of the key priorities we have will be ESG, for example. That could be an area as well that we are considering in staffing up. It could be on investor relations, as mentioned as well. And I think also, it is key that we keep the momentum going when we're talking about innovation in general and in our R&D and operations team. So there are plenty of areas that we could consider in terms of investing even more. And I have a question from Carl Norén: How much consumables will be used with X, XM40, similar to the NC-200/202? Yeah, I think, ballpark figure, that would be the same ratio there. So yes.
Then there's a question from Steven Rama: How big is consumable inventories with your customers? And the answer here is that we don't have that insight, exactly how many consumables. They order, you know, ongoing as well, so we don't have insights. We don't manage their inventories, so we don't have the exact number there, of course. I think that concludes the questions. I don't know if we should... Sharon, did we have any additional questions coming in on the phone?
We do have one additional question. Just as a reminder, please limit yourself to one to two questions. The follow-up question comes from the line of... One moment, please. Yiwei Zhou from SEB, please go ahead.
Hi, it's Wei from SEB again, and just one follow-up question. Not a follow-up question, but a housekeeping question. On OpEx, you guide DKK 70 million CapEx for 2024. And could you maybe give me a better understanding of how would that spread to the PP&E and the R&D?
Of course, we have a neighboring site here that we will invest in. In the next calendar year, we will refurbish the base, and then also we will update as well. So, that will be the main part of it, and that will probably be two-thirds of it, and one-third will probably be related into the R&D. I think that's how specific I can be about that.
Okay, quite very clear. And maybe could you give us some sort of guidance on the depreciation, since you will launch, like, 4 products, should we expect a ramp up on depreciation for next year?
Of course, there will come something in on the XM40, of course, but I think it will not be a dramatic increase there. You know, for the past two years, we've had around DKK 20 million, and I think it will be around that level again, maybe a little bit higher. That would be my answer.
Okay. Thanks.
Thank you.
Thank you.
Oh, sorry, sir. I just wanted to advise there are no further phone questions. I will hand the call back to you.
Are there any more web questions, Niels? No?
No.
Okay. So we'll, I think, we'll cut it here then, and I just want to thank you on behalf of ChemoMetec, Niels and myself here. We want to thank everybody for dialing in, for all the questions, and we hope to see and talk to many of you in the near future as well. So thank you very much for your interest today. Thank you.