Interim report January – March 2014

Increased sales, improved cash flow and improved earnings
Quarter January–March 2014

  · Net sales totaled SEK 73.3 million (63.4), up 15.6 percent. Changes in the
USD and EUR exchange rates had a positive impact of SEK 0.6 million on net
sales.
  · Cash flow from operating activities totaled SEK 9.1 million (1.4).
  · Operating profit was SEK 6.3 million (0.5).
  · Net profit was SEK 4.3 million (loss: 1.7).
  · Earnings per share amounted to SEK 0.91 (loss: 0.36).



Key events during the period

New organization and efficiency-enhancement program

A new functional Group organization was introduced in the first quarter. The new
organization should primarily facilitate better cooperation and more efficient
utilization of the resources in the Swedish and US operations.

An efficiency enhancement program has been initiated with the aim of improving
earnings and cash flow. The aim is to achieve Boule’s 2015 profitability
targets.

Expanded Group Management

Boule’s Group Management was expanded through the addition of two executives:
Hans Johansson and Michael Elliott. Hans Johansson, Head of Production, has been
employed at Boule since 2001. He has extensive knowledge of production and, with
his involvement, has developed the production units in Sweden and China to
supply world-class quality products. Michael Elliott, Head of Chemistry
Development, has been employed by the wholly owned US subsidiary, Clinical
Diagnostic Solutions Inc. (CDS), since 2000. With his background at Coulter
Corp. and his time at CDS, he established a network in the US diagnostics
industry. He has contributed to the building of a separate operating area in OEM
production that constitutes an independent operation with significant growth
potential for Boule.

Comments from the CEO

As we ended the first quarter of 2014, we could confirm that, compared with the
year-earlier period, sales continued to grow, our margins improved and, not
least important, cash flow improved. While we definitely face short-term
challenges, including what is now happening in Eastern Europe, we are basically
active in a stable industry where we continue to capture market share in several
of our key markets.

Sales increased in the first quarter of 2014 by 15.6 percent, thus exceeding our
long-term growth target of an average of 10 percent. At the same time, the gross
margin improved by 1.6 percentage points – an improvement mainly attributable to
the increased sales of consumables, the margins for which are higher than for
our instruments. Operating expenses, as well as total investments in R&D, were
also reduced. Altogether, this contributed to the strong increase in operating
profit in the first quarter, from SEK 0.5 million to SEK 6.3 million.

The better earnings also had an impact on cash flow, which improved compared to
last year. The next step to achieve higher margins and by extension achieve our
profitability targets is a program to further enhance the efficiency of
operating activities. The program was launched during the quarter and is
scheduled to be completed in 2015.

Boule’s sales continue to vary strongly from quarter to quarter due to the
customers’ purchasing patterns, which was also the case this quarter. Although
instrument sales to the human market were somewhat lower year-on-year, this was
offset by significantly stronger sales of veterinary instruments. Sales of
consumables for Boule’s proprietary systems continued to rise, which resulted in
system sales (Boule’s proprietary instruments and consumables for them)
increasing despite unchanged instrument sales. Sales of other consumables (OEM
and proprietary consumables for competing instruments) decreased somewhat.

Demand for our products is stable in a world market where the healthcare sector
continues to be expanded, particularly in the emerging regions. As I mentioned
in the introduction, it is not unlikely that the uncertainty in Eastern Europe
could affect markets where we have prominent positions.

Nothing indicates this yet, but we will also be able to adapt to such a
development and we stand by our long-term profitability target of an EBITDA
margin in excess of 15 percent.

Ernst Westman

President and CEO
For more informtion, please contact:

Ernst Westman
CEO/President
ernst.westman@boule.se
+46-(8)-744 77 00
Fredrik Alpsten
CFO
fredrik.alpsten@boule.se
+46-(8)-744 77 00