Thank you. Good morning, everybody. It's Zlatko here, in Lund together with Maria Morin, who is head of Corporate Communications here, and also Magnus Blixt, CFO. I will take you through the presentation, and also Magnus will chip in and help me today. I'll start now. Please move to slide number three. For those of you that haven't followed us throughout the years, I think it's important to give a little bit of a baseline and, of course, CellaVision, the vision and mission at the end of the day for us is to replace traditional microscopes in laboratories. Since we have a strong offering, both when it comes to the outcome side, that we can provide a good outcome in blood analysis, and we also improve efficiency by digitalizing the workflow in the lab and automatizing it. We also address the cost base, basically.
Sometimes, we would call this kind of the holy grail, that you deliver value to customers and labs at the end of the day. I think that has, throughout the years, proven to be a success, and thereby also helped CellaVision to penetrate the market throughout the years. If we move down to slide number four, just to give you an overview of the situation out in the market. All in all, there are roughly 4 billion blood samples taken every year globally. 2.5 billion of those are taken in large labs, which we define as the lab that have more than 130 samples per day, and there are 17,000 of those around the world. The whole target and objective of the hematology workflow is to address and assess blood-related diseases that can be clustered, I think, into three groups.
You have the blood cancers, like lymphoma, myeloma, you have anemias, and you also have severe infections, basically. There are 30 of those that, at the end of the day, needs to be diagnosed. The first step in the hematology workflow is there is a cell counter, and the cell counter looks for abnormalities in the blood. If there is an abnormality, you have to do a second step in analysis, which is the microscopy analysis. There are two options since the last 15-20 years. The one is CellaVision, and one is traditional microscopy. Of course, 15% of 2.5 billion blood samples is just below south of 380 million samples per year, roughly, which is the CellaVision market that we step by step try to go for.
Of course, we have over the years, and we continue to do, try to take larger part of that workflow. Of course, as you all remember, we acquired a company called RAL Diagnostics end of last year. They are part of that workflow since then. Basically, we're trying to optimize the whole process. In large labs, we have penetrated roughly a little bit more than 20% of the market end of last year, which means that little bit more than 3,500 labs out of the 17,000 are using CellaVision. That's the setup in the large labs. The other major segment that we address is the small and medium hematology labs, and there are roughly 100,000 of those globally. It's basically the same workflow, but of course, it's much less samples in those labs.
I would say we define that as less than 130 samples per day. There we would then advise or recommend the DC-1s and the smear workflow, the workflow that goes with that we launched, the CE mark, February last year. I'll come back a little bit on the development on that later on as well. That is a market segment we're starting to penetrate now step by step. It's still very low percentages, but we have a few hundred of those out there today, that we have shipped, so to speak, during the last year. That's kind of the two major segments that CellaVision aims to target.
I think another important component, if you go to slide six, in our offering is the business model that we've developed throughout the years, where we've been very loyal to this indirect business model, where we basically partner up with the global hematology players, and we have global long-term agreements with all of them since long, and we're working close to them since long. We complement that with our market support offices, where we now are present in 18 countries, or 18 markets and cover more than 40 countries. You can see all the countries where we have presence listed here. I think Russia is the last one this year that became operational, I would say this summer, basically. That's how it looks like on that.
We have a setup where we basically have, when it comes to the devices part, the systems, we have a third-party manufacturing, and we have in-house production or manufacturing for the reagents or the stains. All in all, we have a little bit less than 200 employees globally. That's CellaVision. I would say the six players, Sysmex, Beckman, Mindray, Siemens, HORIBA, and Abbott, are basically covering the whole hematology market. If a customer wants to buy a hematology line or products, they go to one of these six, and then we are of course, behind them as a part of their offering. That's how it works. As you can also see, Sysmex is a very dominant player.
They have, I would say, more than 65% global market share, which means that they are a little bit, the last years at least, driving the market. The runner-ups are Mindray and Beckman. We, of course, cooperate with all those. The strategic agenda for CellaVision has been also pretty the same for the last few years. If you go to slide seven, we have focused on geographic expansion to be present with local colleagues, in the local markets to penetrate and open up those. We also focused a lot on segment expansion. We moved from one to four segments within the last year, basically, where we now have strong offerings and can start to penetrate and commercialize those.
Innovation has always been high on our agenda, I think at least the last five years it's been more than 50% R&D spend versus sales, which I think is a good KPI on that. Supply chain, focusing on that, and also then, since we have an indirect business model, it's a lot of focus on developed partnerships, basically. You can also see our financial targets that we set up a few years ago, and those are over an economic life cycle. That's that. If we go then to slide number nine, basically just to summarize the presentation, also showing a little bit the products we have is that we have now, I would say, since a year back, so if we would've gone a year back here, we only provided digital morphology systems for large labs, basically.
We have then expanded by acquisitions, but also with our organic development with the DC-1. Now we can cover the whole workflow. Once the blood has to be analyzed in a microscope, we can basically cover everything that is needed since a year back, basically. Now, of course, our challenge is to commercialize this in all key markets, because there are always some tweaks in every country that needs to be addressed. That's basically what we have in front of us. We spent a lot of time, I would say, last years, to really put this portfolio together, which is now ready and also, in many ways, commercialized already. I think it's important when we discuss that you understand that this is the setup we have. That's that.
If we move a little bit into the financials, which is the key point of this call. We reported a 24% decline in sales versus last Q3, as you've all seen. Of course, the majority of that part is related to COVID and the challenges we've had with that the last few quarters. If you look a little bit region by region, on slide 11. Americas has been, I would say, a few tough quarters behind us. I think if we just give a status where we are today, we got the 510(k) clearance for CellaVision DC-1. As you remember, we have for a long time said that we target Q4, and we're quite proud and happy that we managed to deliver 510(k) clearance in Q4. That basically means that we, as of now, also can start to commercialize and sell basically DC-1 in U.S.
We have two major partners there. That's Beckman and Sysmex, and they're both ready and prepared to do that. We'll start that basically immediately. We got the 510 clearance last Friday, so it's pretty fresh. We've also seen a very tough year in U.S. I think we're not the only company. U.S. has been a tough market, and we've seen a lot of negative impact due to COVID-19, in Q3 especially. I think it's basically so that our products are installation products, which basically means that there needs to be a team that goes into the lab and, together with Sysmex and the lab personnel and others, install the products, set up all the IT structure, et cetera, before it's operational. That has been tough, the last two quarters, basically.
What we see now is that, in U.S. especially, we see that the low point in sales has been passed now, and we see during the end of last quarter and now when we move into quarter four, is that we see installations increasing again, from the low levels, which I think is a very positive sign. If you look at attachment rates, so basically if you look at how many of all installations include CellaVision, they are still as high as before. When we look at our partners, in this case, Sysmex and Beckman, they have suffered as much as we have in U.S. during the last, let's say, two quarters. We now together start to increase sales again. Of course, it's always hard to predict the future right now, but I think now we see at least a stable improvement coming up.
Meanwhile, we have also signed global distribution partnerships when it comes to slide preparation, which is especially reagents/stains, which means that we can now start to address also markets in our partners in Americas with the RAL stains. That's been a closed market before CellaVision acquired RAL a year ago, that's also been a good progress. Right now, in the middle of discussing how we will start to build up that business, basically. All in all, if we summarize U.S. or Americas and U.S. for that matter, it's been a few tough quarters behind us. We see that the low point has been passed. We see increased installations again. We see a DC-1 that is now cleared for sales. I think we have a global partnership, global distribution agreements with our key partners.
That means that we now can start to push on the gas again, and start to move ahead. That's that. If we look at APAC, a little bit of a weak quarter, but if you look at year-to-date growth, it's 34%. I think what happened there was that we had a few distributors that, especially in China, that were a bit nervous about our capabilities to keep up production during the pandemic in Q2. We saw some inventory built up in Q2 basically, that has limited us in Q3. I think all in all, if we summarize APAC, that's probably the region that's mostly back to, let's say, a normal situation or pre-corona situation when it comes to business. Both China and also Japan have shown strength, I would say, and is showing that. From an activity perspective, it's more or less back to normal.
That means that all the activities that we do to build penetration and market improvements are being done. I think the two markets that still are a little bit shaky, if I may say so, is India and Australia. We see that there are restrictions in those markets, but I think the key markets are coming together. Also in APAC, we've now signed global partnerships, which basically means that also there, we're now running pilots in some key markets. Korea, Hong Kong are two examples of that. We're moving to other markets also with stains the coming months, and we'll start to build our presence there, where it's very closely linked to, of course, our digital morphology products. EMEA, of course, there we have growth, but that's also part to a lot of the RAL Diagnostics.
This is the last quarter when we are not fully comparing apple to apple on that. We see that there is a commercial integration of RAL that is finalized. Of course, there is a lot of focus around still in Europe, because that's the historical base for the RAL sales. We are also trying to grow that market. We have had also there a negative impact due to COVID, especially, I would say, in Q3. There, we're also seeing that the market is opening up again. I think at least the last month, we've seen a return to normalization. We've also seen now that the DC-1 orders are coming in again, which was not the case for a quarter or so. Also to finalize EMEA, we now have a fully operational market support organization in Russia that can start to address that market.
To summarize it a little bit, I think APAC and EMEA, especially APAC, are really in full activities. EMEA, close to full activities. Americas has passed the, let's call it, the low point that happened during this quarter. I think all in all, it's more positive than it's been the last two quarters where we have indicated clearly that we have challenges in the markets. If we move to slide number 12, just to give a little bit more other highlights in Q3. First of all, again, we got the 510(k) clearance last Friday. That means that we'll start to ship DC-1s. We can do that. That's the focus area now. We'll start to penetrate the U.S. market, which is, of course, under normal circumstances, our number one market.
Of course, next steps for us is to also get registration or regulatory clearance, commercial clearance in China, because that's now the only market where DC-1 is not yet approved, which is something that will take place next year, basically. For all other markets now, we can ship DC-1. As you all know, it's a year ago since we acquired RAL Diagnostics. We spent quite a lot of time this year to develop integration activities, and those are now finalized, and they're institutionalized. We also recently launched a new global organization that is now operational, and that should drive so that we optimize all the synergies here that goes with the RAL Diagnostics acquisition. On the COVID-19 side, I think some highlights there, or maybe highlights is the wrong word, but some comments on that.
I think what we see now, especially where we have installed CellaVision systems since before, is that they are used more than ever. We are a little bit, if we stretch it a little bit, we're a little bit like MS Teams or Microsoft Teams or Zoom for the hematology lab. That basically means that if you sit in the lab and have a CellaVision equipment, you don't have to be in the lab. You can work remotely. If you have traditional microscopy, you have to sit in the lab and do the analysis. As you all know, it's in all areas, people are asked to work from home. We see in labs where we are installed, we see very high usage of our systems, especially the connectivity part of it, more than ever.
Of course, we have also, as I would say, all other companies, but we can do it even more than others because we have this kind of digital solution at the end of the day. We can implement all the virtual work methods and make sure that we can run remote customer training, and there is a very high focus to implement these remote access procedures and applications that we have in labs. That's extremely hard, important. The challenge we've had the last two quarters is basically to be able to install new installations. The pipeline is there. It's just that you have to get the lab to open up and then it can be installed. That's been key since we have hardware that has to be physically installed in the lab. Yeah.
The reagents or the RAL Diagnostics product lines, we are now launched that globally. We need to launch that. I think RAL was strong in five European markets prior to the acquisition. We target to be strong in 40 to 50 markets globally in the coming years. That's, of course, a process that's ongoing. Of course, the first step there is always to have distribution contracts with your partners so that you can start to sell. Of course, once you have that, you take the next step. We also launched a complete veterinary system or offering into the veterinary system, there we also have a close partnership now with Sysmex and some pilot installations in one of the largest veterinary lab chains, which is IDEXX, basically, where we are supporting with the digital pathology. That will be a rollout.
It's still, I would say, a small fragmented part of the business, but now we have a tangible way forward here. Still, it's a small part of the total business for us. I think it's one important step forward in that area, where we now have a substantial possibility to start to penetrate that segment as well. That's both for the DC-1 and the large lab systems, since we have veterinary versions of all those. Summarizing that's basically, I would say, the highlights. Then we have one other highlight, and that is, of course, as you may know, I will leave end of November, since I've been appointed a CEO at another company. This is also my last quarterly report, 24th and last for now at least.
We have also appointed an acting CEO that will step in when I leave, and that is Magnus Blixt, basically, who has been the CFO for the last seven years at CellaVision. I think we have a very good acting CEO coming in here.
I will also hand over to Magnus now and allow him to go through the financial numbers more in detail, I would say so. Magnus, the stage is yours.
Okay. Thanks a lot, Zlatko. Yes. I will take you through the last slides here, the financials. Starting with page number 13, we have a quarterly overview of some of the key ratios in our income statements. We can see that we ended up Q3 with the sales of SEK 88 million. If you look at the trend, you can see that it's a clear dip to a normal trend curve like we have. As Zlatko has explained, we've been affected with the COVID pandemic, has affected our revenue. It's 8% down year-over-year. If we exclude currency effects and structural effects, it's 24% down. It's quite significant. Nevertheless, we've been able to preserve results at a fairly good level. We have an EBITDA of 24.6. That is around 28% EBITDA margin.
Considering the downturn on top line, the financial results are quite good anyhow on the bottom line. Much of that is through what we call cost-conscious operations. We have prioritized our activities in our projects and focus on the necessary ones only. By doing that, we've been able to keep our cost under good control. That has resulted in a fairly good outcome on the bottom line. Comment on the gross margin, it's 64.8% this year versus 76.1% last year. This year, it includes also the product line from the acquisition that we did in Q4 2019. The gross margin on that product line, the reagents, is lower than the average before. That's the explanation of the downturn there. Okay, next slide. Slide number 14. A few more comments on the Q3 outcome.
If we look at the sales, we can see that, yes, organically it was 24% down. FX effects was negative 5% in the quarter. The structural effect is solely related to the RAL acquisition that was done in Q4 last year. This is the last quarter where we will have this structural effect in the comparison. Expenses. I talked about cost-conscious operations. You can see that expenses decreased 21% versus last year. If we exclude the RAL expenses, we can see that the downturn is actually 32%, so quite significant there. We need to mention also that we released accruals for incentive programs worth SEK 6.6 million in this quarter, so that's also part of the low cost, low expenses. Capitalized R&D, that's the project that we're working on, and that's the R&D work that is going to render new products in the future.
We're happy to see that that has actually increased in the quarter compared to last year. The focused activities that we have is to keep the important R&D projects running at full speed. SEK 5.5 million this year versus SEK 3 million last year. From a cash flow point of view, it was negative for the quarter by SEK 20 million, last year at the same time, it was positive with almost SEK 28 million. The difference between the years is that we, this year, have started to depreciate on loans related to the acquisition. We didn't have any loans last year, this is the first year we have that. Also, cash flow from operation, SEK -3.9 million, there is a negative effect on working capital, mostly related to inventory build, actually. That's where we have that from. All right. Next slide number 15.
Here we can see more year-over-year trends. If we look at the rolling 12s, we can see that it's SEK 490 million in sales. That represents a 16% growth versus last period, last rolling 12-period, same time last year. It's an increase, but a little bit slower increase than we are used to seeing. If we look at the last line in the table, the EBITDA margin, we can see that we have an EBITDA of 29%, which is a little bit lower, but still fairly good considering the situation in the market, I would say. A key ratio for us that it's quite important is the operating expenses in relation to sales. We can see that it's fairly low. Even though that sales are low, we have been able to keep the same ratio almost here. 44% in that ratio.
If we look at the chart down to the right in this picture here, if you look at the blue bars, you can see that the sales trend, the growth trend is somewhat slower here for the rolling 12 numbers, the effect of the COVID. If you look at the lighter blue line, you can see that, yeah, the growth rates in operating expenses has also been reduced significantly. This is where we run the cost-conscious operations, and you can see the scalability in the CellaVision business model here on this slide. That's basically it for my side.
Yeah. Okay. That's it for today from a presentation perspective. We open up for questions, basically.
Thank you. If you do wish to ask a question, please press zero one on your telephone keypad now. Our first question comes from the line of Ulrik Trattner from Carnegie. Please go ahead.
Thank you very much. First of all, thanks for this time, Zlatko, good luck at Mölnlycke.
Thank you.
I have a few questions. I feel like you're emphasizing weak U.S. markets, but note that European and APAC is much worse off on a Q2 to Q3 comparison. Do you see the same type of inventory buildup in these markets throughout Q2 that have affected Q3 as well?
Yeah. APAC, if I comment on that, it was clearly so that when the pandemic come, that came first to China, of course, which is at the end of the day our number two market. Then it came to Europe in March, basically, which was end of Q1, early Q2. I think where China reacted, and I don't think it was only us, is that they basically were scared that we couldn't deliver. In Q2, then if you look at the growth in Q2, I think it was 100% or so versus Q2 last year. They placed extra orders to be safe if something happens because they didn't trust our ability to deliver. That, of course, affected Q3 because now they have to empty out that safety stock.
Going forward, I think we have a more normal situation where we don't see the same stock-up, and we see higher trust because we were able to deliver throughout the whole pandemic, and we are able to deliver also now. I think we will see a little bit less volatility here where I think APAC has been in one quarter +100% and the next quarter minus whatever, minus a lot, at least 40%-50%. Still when I then summarize the first three quarters, I think in Asia, we see a strong performance in that region with 34% growth, basically. That's where we are. I think Q2 was gigantic for us, and then Q3 was a little bit more painful for that region.
Okay. Thank you. On to the next ones. I note that RAL has quite a dramatic drop in gross margin by 10 percentage points compared to Q2. Is there any specific reason for that major drop? I note that the volume in terms of sales is not down that dramatically, but 10% seems to be quite a steep drop in gross margin.
Yeah, I think there are two reasons. I can take one, and then I will allow Magnus to explain the other one. First of all, RAL had a very good development the first two quarters. Despite the pandemic and all that, they had a solid growth. There was some stock-up building in EMEA, especially for RAL stains, especially by our partners, Sysmex. Of course, in Q3, also it's vacation times and all that in Europe, so we saw a softer Q3. Of course, you have a lower top line. The gross margins are affected in RAL. That's one explanation. We also had another kind of a cutoff thing that happened in the Q3 that Magnus can explain more in detail.
Yeah, I can explain it a little bit. Of course, when you recognize your sales, your sales recognition should be aligned with your delivery terms, your [ Incoterms]. Here we found a difference between how it was done in the past and how we want to do it in the future. When identifying that, we did a one-time correction here in Q3, and that hit the top line with about SEK 1 million to get that correction in there. That's a one-time effect that we see.
Yeah. That's the two reasons for that.
Great. Just on the margin and the cost expansion, because I know that this was your fourth consecutive quarter with negative EBIT growth, and this despite RAL contributing in three of these quarters. Could you shed some light on the cost expansion trend going forward? Is what we're seeing on a rolling 12-month basis what we should expect going forward as well?
Yeah. One thing that we have worked very hard with the last, I would say at least five years, if not more, is our business model to make it as scalable as possible. That means that we can follow top line with our cost base. We are ready to accelerate activities, which means that you increase your OpEx base as soon as we see the light in the tunnel. We, as many other companies, put the contingency plan in place in March this year, where we basically parked certain activities, and really went for the most important activities. Some were, of course, natural. It was hard to travel for the team and so forth.
What we've done now is that since we see, as I mentioned here, in all regions, basically, in different ways, a light in the tunnel, if I may say so, we have now started to accelerate some activities again, some projects, and also some other activities in marketing or so. We will monitor the market development closely. We are dependent here on, of course, Beckman Coulter and Sysmex and the other ones. Once they can go in and install again, we will follow. As I said, we have the same attachment rates as before. That basically means that as soon as they can go out and start to install, we will follow with that, and then we will also accelerate. Maybe accelerate is a strong word, but start to increase our activities and thereby our OpEx.
Should anything go down the drain, let's say that we have a second global wave, and we have lockdown globally, we can also follow down and go back to the contingency state, and we can do that quite fast. We don't sit with a lot of product manufacturing personnel or a big sales force out there. We can be very agile to what's happening in the market and adapt all the time. I think that's one of the benefits with the business model we have, and that's what we use now. We can quite quickly, if we see a good trend, which we, I would say, do right now, then we can adapt to that, and start to initiate activities again. That's how we will do. We try to monitor the market development all the time. How does it look?
How many installations are going on? How much can our partners in different markets go out and install things or systems? Then we follow with activities. I think that's how it would look like for the coming years, at least until the pandemic is here.
Okay, great. Thanks.
To make sure that we safeguard our business or balance sheet at the end of the day.
Great. Two last questions. One in regards to the veterinary segment. You have been selling to the veterinary segment with your prior platform. Just from a legacy perspective, how much have veterinary segment contributed to total sales, percentage-wise? The second question is, have you taken any orders as of today on the DC-1 platform for the veterinary segment?
Yeah. I think percentage-wise, for those of you that have followed us a few years, in the past, we had direct sales, and we won a big deal, I think it's five years ago now, for Antech, where we installed a lot of veterinary instruments. We had a tough journey because, again, we operate best in indirect models. We turned around and said, "We have to find other ways." We spent a lot of time to get partners on board, and primarily Sysmex stepped on board. At the same time, we also had to adjust our offering basically to make it more attractive to the market. We now have veterinary applications both for DC-1 and also for DI-60, which is the Sysmex OEM product.
Sysmex together with IDEXX, which is the major player here on the customer side, so to speak, have started up a big hematology installation program. They have a product called ProCyte, which is the Sysmex CBC in that cell counter, that segment. They are now also starting to promote digital morphology into that segment. That, of course, is a DC-1 or a DI-60, dependent on the size of the lab. We have pilot installations in U.K., we have pilot installations in U.S. where we've sold, and also we have sold a few DC-1 VETs also. That's starting up right now. We should see some development there the coming year. The long-term outlook for that market segment is very hard to say. It's a few percentages of our sales currently.
I wouldn't put the number, but it's a low number, low percentage at this time. Now we have a partner, and we have a partner that is promoting digital morphology into that segment, which is a big change versus before.
Perfect. Last question is on the DC-1. As you stated in this report and during this call, the U.S. market is problematic right now. Obviously, it seems to be trending in the right direction end of the quarter. Do you see the current state of the market as problematic launching the DC-1?
Could you just repeat the question? I didn't fully follow you.
Yeah, sure. I'll try to just keep it short. Do you see it as problematic or more problematic to launch the DC-1 in the U.S. based on sort of current market dynamics with, or sort of current market conditions with COVID-19?
Absolutely. If you ask me, I would prefer not to have COVID-19 every day of the week. That would make our life much easier. That being said, we can still do it now. I think six months ago, or three months ago, it would've been much tougher. Now it's opening up at least step by step. Now we can go ahead. In the perfect world, there would be no COVID-19, then we could have gone full ahead, so to speak.
Okay, great.
Of course we can do it, but it's not as optimal as it could be, if I say so. It's much better than it was three months ago.
Okay, perfect. I'll go back to the queue. Once again, good luck, Zlatko. Magnus. Welcome to the CEO chair.
The next question comes from the line of Felix Wienen from SFO. Please go ahead.
Yeah. Hi, Zlatko. Hi, Magnus. Thanks.
Hello.
Opportunity to ask questions again. A couple. The first one on inventory levels or stocks in the supply chain. Can you just briefly talk about China again? Are levels now below average, and are customers reordering or are they in line with longer term averages? Just what you see there.
Yeah, I think Ulrik had the same question. What you can do here to get kind of the full picture, I would say Q1 was normal, you have to take Q2 and Q3 and sum up and divide by two basically, because that's normal. Q4 will be more normal again, if you understand what I mean. Q2 was extraordinary in one way, and Q3 was extraordinary in the other way.
Okay. Very clear.
Do you follow me?
Thank you. Yep. On your own balance sheet, I noticed that, and Magnus touched on it, the inventory levels are significantly higher on a year-on-year comparison, but also compared to Q2. Can you just shed some light into that? Probably Magnus, was that related to the DC-1?
Yeah. You want to answer that?
Is that related to that?
I can see two. There are two effects basically. One is that if you sell a little bit less instruments, you tend to have a little bit more finished goods on inventory. Then on the other hand, for components, we made some last time buy of critical components to our systems. Yes, of course, when you do that, you have a negative impact on the cash flow. You build some inventory, then as you use that inventory, you'll get your money back sort of, you have a positive effect later on then on the cash flow statements. Yeah, we're going to have a little bit higher inventory in the near future, let's say.
Okay. Very good. On leverage, Magnus, again to you. I noticed that the debt on the balance sheet is coming down quite nicely. Can you just elaborate again on the maturity profile of the long-term debt and whether you plan to refinance that or whether you plan to pay it down in full? Also give a rough indication about the quarterly repayment rate. Is it around SEK 10 million or where does it sit?
Well, it's a little less by quarter. To be exact, if I remember correctly, it's about SEK 5.7 million that is related to the loan, for the acquisition, that we repay each quarter. The plan is it's a straight amortization, and the plan is just to pay it back here now. Of course, we follow the cash situation closely, but so far, during the pandemic, we're still generating cash and have a fairly good cash position. We continue to amortize on the loan.
Okay, perfect. Then both of you, or whoever wants to take it, again on the raw product, the reagent. From the sales there and probably also through your machines, the connectedness to your database that you can see, can you see that the number of blood samples that are being analyzed? Can you see a pattern going through the pandemic that we've reached a low point and now the number of samples being analyzed is increasing? Where are we compared to the level of pre-COVID? Probably give some kind of indication of how that shape looked. Was it very deep? If we look at some companies, they see the Q2 being down, I don't know, 40%, 50%, or was it down more, sort of like 15%.
Just some any kind of indication would be fantastic.
Yeah. I can answer that. We've seen the same pattern more or less in every market. When the pandemic came, now you have to remember that we take care of the more severe blood samples. We are not as much affected as all the blood samples, so to speak. What happened is in every market, basically China in Q1, then Europe in Q2, and U.S. in Q2, as a few examples. We also seen that lab chains have reported the same development, and we've done our own studies showing the same figures, is that first two, three months of the pandemic, it went down 40%-50%. The blood samples as such, I think our part of it, because 15% are reviewed, I think that's been a little bit higher. That number has been a little lower.
Then gradually going back, and I would say now we're more or less 90% to 100% back on track pre-COVID, so to speak. It's been like a six months journey in every market, down 40%, 50%, and then slowly back to close to 100%.
Okay. Very clear. Perfect. Thank you.
I think now we are back to the old numbers in most markets.
Yeah. Then just on RAL again, on the global rollout. Can you give some kind of just an idea about what the contribution will be to either revenues or in 2021 or just the shape of that rollout? How will it be? Just to give us a better idea of what we should be factoring in.
Yeah. I can give a little bit high level because, when we set targets, it's a little bit that if you look at where historically they've been growing, say 5%, 10% the last three, four years, I think if I take out the pandemic, under normal circumstances, the plan is, of course, to grow 15% there as we do in the other part of the business. The way to do that is, of course, to continue to grow in the core markets where RAL has been very successful, markets like France, Germany, Benelux, the core market, and parallel with that, also introduce RAL to many other markets where CellaVision has been successful. Our focus right now is, of course, to expand within Europe, but also to introduce RAL, especially in APAC.
Markets like Korea, Hong Kong, and we'll take that further to China, Japan, and Australia in the next step. That's where we're spending time to prepare for that and make sure that we can start to deliver to those markets. I think pilot cases in Korea and Hong Kong have been successful, so we've got a great start. This is a step-by-step process, of course. Then, of course, to Americas is next step as well. Then also with DC-1, just to be clear, that is launched with a RAL stain already today. Even if you have small installed base, that will step-by-step increase, of course. There we have the RAL stains attached. There is a protocol which is also supported by Sysmex, for example.
Very interesting. That's very interesting. Just following up on the RAL product, I remember a couple of quarters ago in a conference call, we had a discussion about the competitive environment there and difficulty of getting the RAL products or winning market share from existing players. Probably you can share some more experience or feedback from customers take up. Anything you've seen in the marketplace would be great just to have some more flash on that debate.
I think what we're doing is we're utilizing our relationship with our partners as we had before. We're adding a component in that. When we discuss with Sysmex, Beckman, or whoever it is, now we also discuss slide preparation, offering reagents, and all the equipment, the smear making, and the staining devices. Of course, the first steps there has been to sign global distribution. That's kind of the ticket to play. Once you've done that, you have to start to go local, basically, or regional, discuss with the different management teams in the different markets of how to launch it. We have parallel discussions. Of course, in the perfect world, there will be no COVID, you can travel and do hands-on training and all that.
Since we have limitations in that, we focused on virtual training sessions, which has worked quite okay. Of course, it's a little bit more challenging. The next steps now is to move into new markets. There's always some tweaks you have to do for each market. That always goes for everything you do in your life.
Okay. The end customers of Sysmex and so on, they don't turn the product down and say, "Hey, I've got a better alternative."
No. RAL are seen as a very high-quality product. Of course, it's known in four or five markets where they have been around for a long time and are really well penetrated. If you come to Korea with RAL, then you have to kind of start from scratch and build a reputation. That's what I mean. You have to do the same thing in Hong Kong and so on, basically. We're very determined to be successful in all markets, so we just have to do the homework and the classic blood, sweat and tear part of it, which we're in the middle of now.
Yeah. Very clear. Okay, just two more quick questions. The first one to you, Zlatko. In terms of thinking forward as you leave the company, what are the best ideas that you would give for your successor? Might it be Magnus or might it be another person? As I understand, Magnus is an interim decision. The first question is that.
I think what makes CellaVision successful in the last five, six years, or even before that, is the focus and that you take a larger and larger part of the hematology workflow with RAL, with DC-1, and all the things we're doing. I think now we have the portfolio. We have a complete portfolio also for the vet segment, but especially the human segment. Now it's all about doing the same trick as we've done in maybe U.S. and Scandinavia in the whole world, basically, to turn every market into a success.
That is, we need to do what we did in those markets in maybe 40, 50 markets at the end of the day, and come to a situation where we have very high attachment rates for the small and large labs, and on top of that, you also kind of positioning protocols where you show value to the customers and then push that. I think continue to do what we do, but do it in a focused way. It's a lot of energy, but you get a good return on investment there. I think we've proven that before, and I think we just should continue to do that for now.
Great. Thank you.
That will be my number one focus.
Then to Magnus. I think as I judge it, Zlatko's focus is very much on the commercial agenda, driving distribution, building up the sales offices and so on, and then ultimately getting the orders in. How do you plan to fill that role and in particular, divide your time between these tasks and then the CFO role? Relates to that, will you probably distribute some more responsibility to the Head of the Sales Department and just about that?
Yes, for sure. Zlatko has been very strong in the commercial area. There is another good thing, that he's been building a very strong team too. We are a capable team of driving these projects, all the way through product development, through commercialization. There is a strong team. Sure I will take part in that team and try to coordinate operations the best I can. I made sure to have some relief on the finance side, so I actually can spend some more time on the overall business and I'm looking forward to this. It's an interim period, so it's a window of time and I will do the best of this time.
I would just like to add, I might have perceived being quite commercial. Meanwhile, we have invested a lot into innovation and we have developed the DC-1 the last five years that we just launched, which is a completely new product from scratch into a new segment. We have also invested into RAL to have that as part of our portfolio, which is maybe, I would say, call it non-organic R&D at the end of the day. Now we have that part of our portfolio. I think we as team have focused on both. Maybe I think in all the quarterly reports and so we maybe pushed a little bit more for the business model and commercial part. I think we have invested a lot in innovation.
I think that if you look at the CellaVision innovation team, it's three times as big as it was four or five years ago in personnel, which means that we can do three times as many activities. Of course, since it's R&D, we are a little bit cautious in kind of telling what we're doing before we can launch things basically. That's maybe why when we sit in a quarterly report or have discussions, we focus more on the commercial part because that's a little bit more, it's less secret and more transparent in that way.
Sure. Okay, perfect. Thank you very much. Zlatko, to you obviously all the best. Magnus, I look forward to hearing you on the next conference call.
Thank you.
The next question comes from the line of Carl-Oscar Bredengen from Berenberg. Please go ahead.
Hi, good morning. I have a follow-up question to the launch of the DC-1 or the market approval in the U.S. How should we think about the market uptake here? We touched a little bit about the current trading, but given that you have now received the market launch, is the product readily available for the distributors to apply and sell into different tendering processes? Is this happening immediately or is there a specific lead time for the sale?
I think, of course, formally it's cleared. That means that we can ship it if there comes an order. What we've done in parallel is that our partners, they have kind of Americas organizations, and when they did their preparation to launch that, both Sysmex and Beckman, Canada is also part of Americas, and there it's been available for a year or so. They basically prepared the launch completely. U.S. was already pending at 510(k) clearance, which now has happened. They're ready to go basically. Of course, you need to start the sales cycle. There is probably a few extra going away now because it's been kind of early adopters. Then you have to start the sales cycle.
The sales reps have to go out and get the deals and then you have installation X weeks or months after that and then you start to build up the pipeline and that has to happen now because if the customer wants the product, we need to be able to ship it and a very important part of that is 510(k). Meanwhile we prepared here in production and all that so we have industrialized the product and ramped up production and all those things that we talked about last year, but we were really focusing on industrializing the product. We are ready to ship if and when orders come.
Okay, thank you. You mentioned that obviously the physical presence at the laboratories for installations is taking a toll on weighing on the sales. How should we think about the actual tendering processes and the interaction between distributors and the clients? Is there a building pipeline of new sales installations that needs to be taken that have been postponed this year coming out? Is the new progress and pipeline continuing to build or has it also been put at a halt alongside the installation?
I think there was a hit in Q2, Q3 definitely. What I think also it's two things. Again, we're a little bit back on track because we see that installations are going up, labs are opening up again. I think the other part is that both distributor, ourselves, and customers have learned to work virtually, you can do a lot through Teams or Zoom. A lot of the interactions take place in that forum these days, also tender processes. That means that at the end of the day, I think it's back to normal, but it's more now, it's a different type of forum. You don't meet physically, you meet over Teams, you do the processes there. I think that is happening.
Okay, thank you. Just lastly, I think some of the previous comments we got on the amount of unit sales for the DC-1 was sort of a ballpark estimate of between 100-200 units sold so far. Is there any updated number you can provide us with that, how the progress has gone? Because this has sort of been the ballpark estimate for some time now. If any light we can shed on the development or sale of DC-1?
Yeah, I would say 200+ at this stage. I think what's happened is that we were ready in Q4, then we could start to eat up the backorders and really ship last year, Q4. In Q1, we went into the quarter with full speed ahead, and then the COVID came, so Q2, Q3 were dead more or less, and now we see an uptick again. It's like a sinus curve, I think somebody said. It really looks like that these days. Now it's kind of climbing up again. Of course, we hope that the U.S. DC-1 will give it a boost on top of that. What we see in EMEA, for example, is that they were back to call it the normal pre-COVID on DC-1, which was a very good sign for us a month ago or so.
Okay. Thank you very much. That was all for me.
Yeah. Thank you.
As there are no further questions, I'll hand it back to the speakers for closing remarks.
Okay. Thank you again for calling in, and good luck to everybody. We might meet in other forums somewhere else sometime, who knows? I'm convinced that Magnus and the team here will take you through the coming quarterly reports in a fantastic way. Thank you and have a good day.