Yes, good morning and welcome to the Q1 presentation for Biotech Pharmakon. I'd like to welcome the people here in Oslo who are present. I also like to welcome people on the web. And I'm sure that there's a lot of colleagues in Tomsu who is also watching this as I've said many times, one of the biggest shareholder groups in the company are the employees of the company. So shareholders for us is a very real thing.
It's something we discuss every day at the lunch table, how the share price is developing because a large number of the employees of the company are shareholders. So a warm welcome to as I said everybody here in Oslo and people on the web. The agenda is what we usually go through. Nothing has changed there. This is just a thing that just to remind people of what we are.
What I think is important that we come from University and we are based in and we have a very good relationship with the university that we benefit from today. So not even not only did actually the company originate from University of Trondvik, but that relationship that we have with the university is still beneficial for us today in a number of areas. So we are happy to be located up in Trondsu and we are happy with the relationship that we have with the university still up there. So these are the highlights of Q1. As we wrote in the Q1 report, we are not a quarter by quarter company.
We are in most of our business areas are business to business and they can fluctuate And especially, we have a number of large customers and whether they order in 1 quarter or the other quarter can influence our numbers, but does not actually influence the overall business we have with them. But that said, it's always nice to have a good quarter. And it's always nice to have a good comparison when we compare to Q1 2018 that how the numbers are developing. And it's always nice to have a good start of the year. So we are happy with this.
We had growth in all high margin areas. That is our Wulcan business, our Artaxonics business and our Consumer Health business. The one area where we did not have growth was in the Animal Health business. There are fluctuations as to when our customer sells their products to their customers. And that is not a concern for us.
They will fluctuate from quarter to quarter, but we are happy and we are confident that the business we have there is in good shape. So growth in all high margin areas and that can also be seen by the EBITDA. EBITDA has been reduced. The deficit has been reduced over last year. We have launched a new product in Arctic Science.
We have a growing Mouldgen business, recurring sales from the same customers in Germany especially. And then we got a grant from Nord Forsenschwelt as we announced in the beginning of February where they will help us develop the new Wulcan products over the next 4 years. So overall, we think as usual a very busy quarter for us, but also a quarter where actually a number of the things that we have put in motion getting the results that we like to see. So for Adesymes, We are seeing a broader customer base in Arctic Symes Simms and that is I think very good news for us. We have as many of you know been very dependent on one customer, relationship that we cherish and a relationship that we really work on because that one customer also put high demands on us.
Those high demands makes us then better equipped to go out and sell to other companies. But we have seen not only a growing business this quarter, but we're also seeing a double digit percentage growth of the sales outside this one big customer. And that indicates to us that we now have a broader customer base and we're not so independent on this one customer whether that customer buys in the quarter or not. So our products are getting a broader acceptance with a wider customer group, which is our strategy and which is nice to see. Secondly, we launched a while back our sand products, mainly for use within gene therapy.
We can actually see now some of our customers in that area also buying some other enzymes. So the fact that we used the sand product as a door opener to these companies, now we can actually also sell some other products to these customers. Again, an important strategic point for us to broaden our customer base so we're not so dependent on this one customer, but we have more customers in the portfolio. So that was good to see. And as you saw, 25% growth over Q1 last year.
We here again, I would caution that it is not a quarter by quarter thing. We sometimes get an order in end of March. Sometimes we get in beginning April and that can influence our quarter in numbers. But the business is in good shape. And of course, as I said before, having a good start to the year is always nice.
We also launched the first ligase. Ligase is an enzyme that binds together DNA. And we are in the process of identifying more ligases. There are in principle 6 subgroups of like is and then there's a number of variations of that. The way we do this is we go out and we talk to our customers.
What do you like to see? What kind of functionality would you like to see in Sysiligase? So this is not us sitting in and trying to figure out this is a fantastic ligase. Let's go out and see if we can sell it. We actually develop it.
We get the ideas from the customers and then we develop it. Secondly, I think also important that we have received a grant of €254,000 to develop more enzymes in together with University of and with the Danish American company. Those enzymes developed in that cooperation, we are free to commercialize and our will once they are there. So I think again a testament to the research environment and development environment we have in Tromsoo, not only do we manage to get fund from North Forsenswold, but we also manage to get funds from European Union to develop new products. So I think a big plus for the people of colleagues of Intramsoo.
We also as we have said many times before, we are looking for inorganic growth opportunities in Arctic Syme's. We can develop and launch new products. Last year, we launched 4 products. Launch of new products and having a wider customer base is key for us to the growth. And we would like to jump start this growth and not only go step by step, but actually can we jump start it.
And therefore, we are spending quite some time on identifying cooperation partners that being mergers, that being acquisitions whatever in Europe for companies that are interesting for Artix Labs where we can actually benefit and becoming bigger and have the scale that we'd like to have quicker than doing it ourselves. So that work is ongoing and we are very active. We have hired a company to help us with those endeavors. And of course, the minute we have something to announce, you will hear about it. The Bieder Glugan side of the business.
Wulgen, as you saw, 1,200,000 sales, up from Q4. We now see a steady increase in the business. We see a lot of repeat buys from Germany especially and that is for us a good sign that we see the same customers actually ordering more and more. We also get orders from England. We get orders from Nordics.
But the big bulk of the growth and what we see here is from Germany. We also signed, as you saw on Friday, we signed a new distribution deal with Publioloc in Austria. Publioloc is part of a company called Public Care, which is a home care company based in Switzerland. They have operations in Switzerland, in Austria and in Germany. And we now signed a deal with them in Austria.
They will then need to go to the authorities to get the product reimbursed, which is a bit of a process as you're all aware. And we will not see any sales until end of this year, beginning next year once they have the reimbursement. But again, a good sign that a company is willing to go into these doing these efforts in terms of getting doing the work of getting reimbursement. And I think that also is a testament not only to the clinical documentation we have on the product that actually works, but also the rumors coming out of the German market that actually there's something here that is worthwhile of pursuing. We also signed a deal with a Portuguese company.
We didn't think this was big enough for a stock exchange announcement, but we have a distribution deal with a small Portuguese company who are very well connected within Portuguese healthcare system. So we've been down there. We've been training their nurses. We've been having meetings with KOLs. And they will now start selling.
We had the first small order from them here in April. But this will not turn the company around, but it was a good sign again that Wulcan is can be accepted. And it is part of our strategy. And I'll go on the next slide, I will show the same slide as we actually showed in Q4. But a number of shareholders have asked us what is actually the new strategy for Wulcan.
And there it is in Europe, find partners who can help us sell this product, who are willing to put some resources behind it because we do not have the resources. They will mainly be in areas where we can get a decent price because there has to be some room for the companies to earn some money. So that's what we're doing and public block in Austria, XLderma in Portugal, a testament to that strategy that this is what we're doing. We also, as you probably saw in the I'm not sure you saw it in the quarterly report, we got the first conclusions from the PMCF study that was done. As you know, we have to as part of the deregistration of a product to get the CE mark, the regulation is you have to follow-up that everything you claimed in the registration does it actually work, is it safe the product and so forth and so on.
That study as we announced finished in December. The last patients were exited in December and we now have the kind of the first result of the report from the investigators saying that the product is safe, the product is useful and therefore they will report back to the MHRA in England which is our notified authority to say that, yes, the product does perform in line with the CE mark. And therefore, it's safe to use and we can continue with that. So that was a good kind of a tick mark to get that done. And we will, of course, constantly monitor the performance of Vulcan.
This is what you have to do when you have a medical device that you have to monitor performance, adverse events, anything that goes on there and report to the authorities if you see anything that is not right. So the PMCF is just one part of it. It's an ongoing thing, but at least now we have confirmed that the things we put into the CE Mark is okay and we will report that back to the authorities. The Wulcan strategy is 2 things. 1 is we would like to promote SPG as an active ingredient which it is.
It is an active pharmaceutical ingredient. And therefore, this is the thing that makes Wulcan so different from anything else that we have SPG inside. So we like to promote that. The sales focus will be on Wulcan, of course, because that's what we have today as a product. And we have also, as announced in January, we will also launch more products as we go on.
We now got the funding from Nors Vossenshall to launch a wider portfolio of SPG Wound Care products. We're also looking for partners especially outside Europe. Inside Europe, we want to kind of take the our destiny in our own hands and therefore going country by country identifying partners who are willing to put resources behind it because we can we don't have the resources. But outside Europe looking for partners and if somebody outside would like to not have Wulcan, but use SPG, saying, well, we have a dressing, we have something where we actually think that SPG would be a good fit to put in. We have no problems having an agreement with such a partner that they can use SPG for their use, whether we then do license deal, royalty, whatever that remains to be seen.
But this is what we do. So not only Wulcan, we sell it in Europe through distributors. We're looking for partners outside Europe. We are developing more products within the Wulcan range, and we are also looking for partners who would like to use SPG as an actual ingredient in whatever shape and form they would like to do. The assortment will not be something we produce ourselves.
We don't produce Wogen ourselves today. We produce SDG ourselves, but the gel, the packaging, everything else is done from the outside. And the same goes for the products that we are going to develop. We will develop the products in cooperation with contract manufacturing organizations that's a CMO, who knows how to build or produce these various products and we will identify those partners and then build the new products. We cannot have manufacturing for that in Trumpsuit or wherever.
This is not our core. We need to identify partners who can help us produce it and develop this with us. So that's the adjusted Wulcan strategy. This is what we're doing. This is what Finn Kittler is working actively on, identifying partners in Europe that are willing to put resources behind it so we can see the sales and Wuhan expand, develop more products so we are more relevant.
And then outside Europe, find a global partner. And if somebody wants to use SPG, we have no problem selling SPG as an active ingredient in somebody else's product. It's a bit like GORE TEX, a company called like GORE TEX. They sell their technology to a number of different clothing companies, but it's the same technology. We have an SPG inside instead of GORE TEX inside, it's SPG inside, it's like Intel inside in the computer.
We would like to use SPG Insight to other companies who can then use it in their applications. In the other beta globin segments, we are still recruiting patients in New York. As you know, this is a the neuroblastoma cancer is an awful cancer that affects children. Sloan Catering is in a very renowned institute in New York. They are getting patients actually from a number of countries outside the U.
S. Who are then trying to get into New York and to be treated at Sloan Kettering because Noroblastoma is not a very big indication, but it's a very deadly indication for children. And Sloan Kettering is one of the best institutes in the world, has most experience in the world with this. So we're still recruiting patients in this double study, double where we have 2 legs. And it remains to be seen just what the results is.
What they're trying to do here is to give the vaccine upfront and in one part of the study they give the SPG 6 weeks later and the other part they give it at once to see if there is a if they can isolate the effect of SPG in the study as an adjuvant. So no results as of yet, but of course, fairly exciting for us. I've also been in pharma long enough to know that these studies can suddenly turn upside down. And therefore, it's we are cautiously optimistic, but we'll have to see the final results before we can make any conclusions. In consumer health, we have a had a good quarter, mainly driven by sales in Asia and in U.
S. This is an area which is very competitive. If you go into Amazon. De or Amazon dot com, you will find at least 150 to 200 beta glucan products in all sorts of shapes. We don't have any IP in this area.
This is gone. We have a very lot of IP in the upper area within SPG. But within consumer health, this is more a something that somebody else can do. We think our products are better and we sell it as being better, but there's a lot of competition there. And within Animal Health, we had, as I said in the beginning, we had lower sales this quarter than we had in Q1 'eighteen.
We did sign a big deal with a Norwegian marine feed company here in beginning of April. And we are confident that this business is in good shape. So what we see here, we see some quarterly fluctuations, but we have heard nothing from neither the marine farmers out in Norway nor from our partner here that there's any noise in terms of the beta glucan acceptance or anything else. So we are confident we'll get this the business back and we actually got a fairly big order in the beginning of April here. So this is more a quarterly swing, nothing that worries us.
So this is a yes, this is how the business went in Q1. Very busy. We grew the business in all high margin areas. We lowered the deficit. We had good cost control and we launched new products.
And I think most important thing is not only do we have some very demanding customers out there, and we can attract these demanding customers, But their end consumers, they need our products. And I think that's the most important thing that the products we are selling are really relevant to the end consumers. And that's important for the business going forward. So with this, I will hand over to Berge for the financials and I will come back to talk about the
outlook. Thank you, Christian. And as you all have seen, we have basically seen improvements in all areas of the business now in the last quarter. And going straight into one of the most important aspects, looking at the cash flow, we see that our first quarter changes have we had a cash outflow of SEK3.5 million for the quarter. Last year in the same quarter, we had SEK10.6 million in cash burn, and this gives us an improvement of more than SEK7 1,000,000 on a quarterly basis.
We also see that our receivables, they are unchanged from the same quarter last year. We see that our payables are actually reduced. So this gives us a better position as well. We also see at the end of the quarter, we had a cash balance of SEK28.2 million. Dollars And if you look at the tables here, you see that our cash position has flattened out.
In the past, the curve has been much steeper here. So we actually see now a positive trend here on the cash side, on the cash balance side. We hope that this will continue in the coming quarters. On the sales side and as Christian touched upon, our business has grown in all of the high margin areas. We see that we are really happy to see that Volcan has actually grown now.
Comparing it to the same quarter last year, we actually grown the sales now 140% and we have grown them 30% compared to the Q4 2018 results.
Arctic Syme is also growing their sales.
We had SEK6.3 million in the same quarter last year and now we are seeing SEK7.9 million. And so we have there is a good traction here. We see the growth and we are happy with that one. And as Christian said, Animal Health, we had a small decline in this quarter, but still we see a good growth in the consumer health side. We had some good orders in the Q1, and we're really happy with that.
And we hope that this will continue in the coming quarters as well. On the group level, our sales figures were SEK14,800,000, up from SEK14,200,000 in the same quarter last year. We even know that the growth is not that high, but we have seen the growth in all of the right places now. We see the growth in all of the high margin areas and that's where we focus our efforts. That's really good to see here.
And we continue to improve our EBITDA. We had for this quarter we had minus SEK3.9 million in EBITDA, improvement from SEK5.1 million in the same quarter last year. And the improvement is primarily related to sales. On the cost side, we have kept the cost level at a steady state, but we have increased the activity leverage substantially in the business area. You can also say that we have IFRS 16 that maybe some of you are know a little bit about.
It was implemented on January 1, 2019. It has an effect for our figures. It basically means that everything relating to property, plant and equipment now is put on the balance sheet and it's now just as an asset and a liability. In practice, it means that the expenses that we had on property, plant and equipment is now it will now be depreciated. So what happens is that our EBITDA is improved on a quarterly level.
If you look at the actual figures we presented last year, they were SEK 700,000 worse than the SEK 5 point SEK1 1,000,000 we have now. So it was more SEK5,700,000 last year. But we have done all of our 2018 figures to make to be able to compare the figures now. On an annual basis, this will actually this will mean that we are moving around NOK3 million from property, planner equipment to depreciation. It's a technical exercise, but it needs to be done as well.
But the important thing here, we are improving our business. We are reducing our deficits as well. Going into the Adesheim side of the business, as you see, we have grown the sales figures from SEK6,300,000 to SEK7,900,000. And we also see that Adesheims has increased their expense base from SEK7,600,000 to SEK8,800,000 in the same quarter last year. And this has the expenses are primarily related to personnel and some external expenses.
We are now switching some of the personnel that we have in on the production side of biotic bleu cans over to Artic Science Stans because we have such a high activity level there. That means that some of the expenses will increase in Arctic Stans, but they will decrease in bioticbethoglucans as well. And as you can see here, even though we have increased our expenses, we still managed to improve our EBITDA on the bottom here. So even though it's just a marginal improvement from minus €400,000 to minus €200,000 it is an improvement that we are happy to see.
On the better looking side,
sales are a little bit lower than last year. It's $1,000,000 lower than we had in the same quarter last year. But and then as we had in the Q4 as well, we see that even though the sales numbers are lower, it's lower in the right places. It's on the animal health side where the margins are lower. We still manage to increase our gross profit here.
We see that we have SEK500,000 in improved gross profit here because we do we have it in the high margin areas. It is in Embroldgen. It is on the consumer health side. So it is a good thing to see.
And we also see it as I talked about with Adelisheim,
we have managed to reduce our expenses here close to SEK1.4 million here. And it's also because we have moved some of the personnel expenses from BPG to Adix Times. And it's also because we reduced some of the external consultants that we have used. EBITDA improved by SEK1.6 million and we're really happy to that that we are seeing a good improvement in profitability now. And with that, in conclusion, I would say on the financial side, a lot of things are looking really good now.
We are on the right track. We have made some we have done some efficiency steps in the organization. We are trying to utilize more of the organization in a better and more economic way. And we need to continue now. We have a constant focus on our cash burn and we need to see that getting closer to breakeven now on a longer level, lower side.
And I think that we are saving cash or saving, maybe not saving cash, we want to generate more cash and we want to have control over our costs in the future now. That's what we
need to know. And I think with that, I think I'll leave it to Christian to
take us through the last few outlook for 2019.
Yes. As Berke said, cash is important for us and something that we talk about every day and managing our cash is a key requirement for us. And so we do these switching of personnel. We do whatever we can to get synergies out between the two business areas and thereby saving resources. As Berge also said, the activity level has gone up quite a bit.
You might not see so much in terms of sales, but if you see that animal health sales is maybe one customer, which doesn't actually require a lot of transactions. And we saw that going down maybe, but that doesn't really help us on the resource side. We have done a number of new Artisan customers. We have a number of new working customers. That is actually something that is taking resources out.
And with that still, we maintained a very almost flat cost development, including also the salary increases that we had last year that is in those numbers and including also that we have spent some money on external resources for identifying partners for Artex Hymes. So all that is managed within the same cost figure. So cost management is key for us. Cash management is key for us. We have reduced the space we have in to save some resources there.
So we had 2 floors before, now we're only 1 floor. And we put people together and see how much we can save and having flying offices we don't need to have all of us having offices up there. So savings wherever we can and put the resources where they actually make a difference, namely in the sales, the development of new products. That's where we put them and we try to save on anything else. The outlook for 'nineteen is the same as we presented end of January.
We expect revenue growth in the 2 focus areas, Adesams and Wulken. This is where we put the resources, this is where we see the benefit from the shareholders point of view that those two business areas needs to be growing. We would like to grow the business in Alexey Sands organically and we have plans and we're doing that. But we're also looking at inorganic growth opportunities in order to jump start to be a bigger company faster than we are today. It takes some time with the resources we have available to build it.
And if we can find a partner, we can merge with, we can buy, then suddenly we are in a different league to put forward there again. But it's about increasing sales in existing and new territories and finding partners who are willing to put resources behind it. We cannot put resources behind it. We have limited resources. We need to find partners who are saying, we think this is a great product.
We think there's something in it for us. We like to do as we saw in Austria. We would like to put it through the reimbursement process. And those are the kind of partners we're looking for. And then we'd like to expand the portfolio for Wulgen.
I think as I've said a few times to use a kind of a picture for that if you come with a maybe a Ford Focus, I do not know, but I think it's a fairly good car. It does everything it's supposed to do. It does the trick, but it's not as relevant if you go to the Volkswagen Group or you go say where we have a Ford Focus. It's more interesting if we have a family of cars. Saying we have a whole family here.
How do you like that? We have this product today and we'll have those products in the future. When you can picture that, when you can describe that picture to partners, it's a completely different picture than having only one product. And that's what we try to do. Having Wulgen and then saying we have more products in pipeline, we have received funding from Nord Forsenshall and we are out there looking for partners who can help us produce and develop these products.
So that's your outlook. Organic growth, focus on cash consumption, cost control. And Alexan is looking for inorganic growth opportunities to see if we can jump start the business. And with that, presentation is finished, but I'm sure there are questions here or there are questions on the web. I'm happy to take your questions.
Can we expect any new products this year Or will it be for next year for the Woundon side?
We are working very hard on new products. I would not I don't think we can manage to do it in 2019. It's just it's too short for that. One thing is to develop the product and that's but then you have to go through the registration, you have to go and make sure that actually works And that process is pretty long. So technically to have a product that works is you can be done within a year or something, but then you have to go through the whole process of actually getting it reimbursed, getting it CE Mark, getting it
2 or is it 5 or could you tell a little bit about that?
We're looking for new distributors in Europe. Outside Europe, we are looking for partners who are maybe have a more regional scope or a global scope. There we do not go country by country. It is basically is too far away from us. We don't have the resources to be able to support distributor side.
So outside Europe, we're looking for regional or global partners. Inside Europe, we are growing country by country. This is an area we know, this is close to home. And there we are mainly looking for countries where we see there is a fairly high price and there's a willingness to pay for new and innovative products. How many countries we are working on a number of countries.
I would like to love to announce it when we have them. But at this point, I'll just say we're working on several new countries in Europe as we speak.
Thanks.
I have one question from one of the listeners on the line. What do you think about the market potential for Rogen in Germany based on your experience so far? Is there what we expect from sales revenues on that side?
I would be very hesitant to come up with a number because I know that number is almost will be wrong for a lot of reasons, either it's too little or too much. We think there's a bigger potential, which is why we're working so much on it and which is why we are having we're seeing more and more home care companies coming to us. We're educating more and more home care nurses. These are the nurses that actually go out and treat the wounds in the patients on a daily or weekly basis. And what the team is tracking, they're tracking how many nurses have we trained in Germany and the other countries when because we see that as an indicator of that at some point if we have trained so many nurses, there will be sales coming in.
So we are tracking on a monthly basis from all our distributors. We are asking them to come back how many nurses have you trained this month and therefore to have an indication of when can we see sales coming in. Germany is the largest medical device market in Europe. How big our sales can be there, I would not put a number on, but it's definitely bigger than it is today. But what the limit is, I would not come with a number.
Any other questions?
Then I would like to thank you, the people who showed up in Oslo. I'd like to thank you people who are listening on the web for the questions. And of course, you're always willing to as you do, and we are very happy with that. Write to us, call us in between the quarterly meetings here, so we have an understanding of what you're interested in and what your worries are and we can address it and we can then have these discussions also as I said outside these meetings. So thank you.