Burgdorf – Ypsomed (SWX: YPSN) increased sales by 4.6% or CHF 8.7 million in the first six months of 2020/21 compared to the previous year, and generated an operating profit (EBIT) of CHF 8.3 million. The company continued on its growth course in a challenging environment, driving forward all strategic initiatives and creating 102 new jobs at the same time.
During the first six months of the financial year 2020/21 Ypsomed achieved a consolidated turnover of CHF 199.3 million (previous year: CHF 190.6 million). This corresponds to a growth of 4.6% or CHF 8.7 million compared with the previous year. The operating profit amounted to CHF 8.3 million (previous year: CHF 9.0 million) and net profit to CHF 6.5 million (previous year: CHF 7.6 million).
"Our medical devices for simple and safe selfcare are vital for chronically ill people. We can see that our future-oriented business model is proving to be successful and are therefore continuing our growth strategy unchanged",
comments Simon Michel, CEO of Ypsomed, on the business performance.
Injection Systems grows by 21.7 %
Turnover in the Ypsomed Delivery Systems (YDS) segment grew by 18.9 % or CHF 17.2 million to CHF 108.3 million in the first half year of 2020/21 compared to the same period last year (CHF 91.1 million). In particular, this development was fuelled by the pleasant 21.7% growth in the pen business. Next to the YpsoMate autoinjector, the pen platforms UnoPen and FixPen as well as revenues from project contributed to increased turnover. Sales in Contract Manufacturing were also 10.3% higher than the previous year’s level.
Gaining new customers for insulin pumps difficult
In the Ypsomed Diabetes Care (YDC) segment, Ypsomed's sales in the first half year 2020/21 decreased from CHF 92.1 million to CHF 83.9 million. Whereas part of the decrease is due to currency effects, sales of the mylife YpsoPump in particular were greatly affected by COVID-19. Compared to the previous year, sales of the YpsoPump decreased by 13.7%. As it was difficult to impossible in all markets to reach people with diabetes directly in hospitals, hardly any new users decided to switch to an insulin pump. With the newly offered online training courses, it was only possible to train people with existing pump experience on the YpsoPump. Overall, the patient base could only be increased slightly.
The loss of a customer in the U.S. together with stockpiling due to COVID-19 at the end of the previous financial year led to a 12.3% decline in sales of pen needles.
Ypsomed is increasing its financial flexibility by selling the YpsoPod development project to TecMed AG, a company controlled by Ypsomed’s company founder Willy Michel. This sale will bring a profit of around CHF 4 million and it enables Ypsomed to invest its resources on those activities that will contribute more quickly to profitability. Ypsomed can participate in later success of YpsoPod and has the option to buy back the market-ready product.
Outlook
Due to the COVID-19-pandemic it is difficult to provide a reliable outlook for the group, especially as it is not possible to foresee how many patients can be put on insulin pump therapy in the coming six months. Ypsomed is using the time to implement the mylife Loop program, integrating the Dexcom G6 Continuous Glucose Monitoring (CGM) system into the YpsoPump proposition, and to prepare the market entry of the YpsoPump in the U.S.
Based on a diversified business model, Ypsomed expects a slight increase in sales in operating profit from core operating activities for the 2020/21 financial , despite the pandemic. Strict cost control in operations will support this target.
The company still considers its medium-term EBIT target of CHF 100 million to be achievable.
Expansion of capacity for sustainable growth
Ypsomed is pushing ahead with its growth strategy and invested CHF 59.6 million in the first six months of 2020/21 (previous year: CHF 52.9 million). Investments in fixed assets amounted to CHF 35.4 million (previous year: CHF 42.3 million). Ypsomed invested primarily in automated assembly systems (mainly for autoinjectors), injection moulding machines and tools at the production plant in Schwerin as well as in full expansion of its Swiss sites. Of the CHF 28.6 million invested in intangible assets (previous year: CHF 13.3 million), approximately CHF 15 million were invested in the further development of the YpsoPump and different software solutions, such as the mylife App, the impending CGM-integration and the future digital pump control via smartphone. The majority of the remaining investments went into the further development of the existing pen platforms and into the new high-volume patch injector platform YpsoDose.
With a continued solid and healthy financing structure and equity of CHF 382.1 million (equity ratio of 53.4 %), Ypsomed is well prepared for the upcoming growth.
