Burgdorf – Ypsomed (SWX: YPSN) increased its consolidated sales by CHF 9.4 million to CHF 403.7 million in the financial year 2020/21 (prior year: CHF 394.3 million). The two business segments developed differently during the Corona pandemic: while the business with pens and autoinjectors was encouraging, the sales of insulin pumps remained at a low level. Ypsomed has set an important course in the financial year 2020/21 to improve the sales opportunities for YpsoPump. The increased importance of self-treatment of chronic diseases has reinforced the company’s growth strategy. Ypsomed has therefore advanced all strategic initiatives and further improved its own competitive position. The company invested a total of CHF 142.7 million for this purpose while at the same time creating 110 new jobs. To expand financial flexibility for the future, the Board of Directors will propose an authorised increase in capital at the Annual General Meeting.

The financial year 2020/21 was marked by the following highlights:

• A growth in turnover of 10% and the acquisition of 36 new projects in the Delivery Systems segment.
• Cooperation with Eli Lilly and Company for the market entry of the YpsoPump in the USA.
• Integration of the Dexcom G6 continuous glucose monitoring (CGM) system into the mylife YpsoPump therapy solution and the mylife Loop program for an higher automated insulin delivery were driven forward.
• Business risks were reduced through the agreement with Insulet Corp. as well as the sale of the YpsoPod development project.
• Implementation of the sustainability strategy, integrated reporting as well as the begin of marketing the YpsoMate Zero, the world’s first CO2-neutral autoinjector.
• Further expansion of production capacities in Switzerland and expansion of the site in Germany.
• Establishment of a software development hub in Barcelona.
• Finalised preparations for the EU Medical Device Regulation (MDR), which will apply as of 26 May 2021 .

„The successful self-treatment of chronic diseases eases the lives of those affected and sustainably relieves the burden on the healthcare system. With the integration of the CGM sensor, the introduction of a bolus delivery via the smartphone and the strategic partnership with Lilly, we are aligning our insulin pump for a promising future“,

comments Simon Michel, CEO of Ypsomed, with regard to the business development.

Outlook
Ypsomed expects a growth of around 20% for the injection systems business in the financial year 2021/22. Ypsomed is convinced there will be a pent-up demand for insulin pumps once the COVID situation normalises. Ypsomed expects the situation to ease with regard to new recruitments for insulin pumps during the second half of the financial year 2021/22 and is preparing the integration of the Dexcom G6 CGM sensor and bolus delivery via smartphone.
For the financial year 2021/22, Ypsomed currently expects a sales growth in double-digits as well as a doubling to tripling of the operating profit with a stronger second half of the financial year.

Ypsomed Delivery Systems increases turnover by 10%
Turnover in the Ypsomed Delivery Systems (YDS) segment increased by 10.0% or CHF 19.1 million in the financial year 2020/21. The turnover for the reporting period amounts to CHF 211.2 million (previous year: CHF 192.0 million).

• In the segment of pens and autoinjectors, Ypsomed achieved a growth in sales of 10.9%.
• Sales in the contract manufacturing segment were 7% higher than the previous year’s level. 

Ypsomed Diabetes Care within expectations
In the Ypsomed Diabetes Care (YDC) segment, we achieved sales of CHF 177.7 million in the financial year 2020/21 (previous year: CHF 187.7 million). Half of the decrease is due to negative foreign currency effects of around CHF 5 million.

• Turnover for the YpsoPump increased by 12.8% in the reporting period. This growth was enabled by higher revenues from development services in the field of infusion systems for partners to the amount of approximately CHF 6 million.
• Commercial sales of the mylife YpsoPump decreased by 7.5% due to difficulties in reaching out to people with diabetes in hospitals.
• Business with pen needles was 14.8% below the previous year’s level due to the sales development in the USA.
• Business with blood glucose monitoring systems is 8.1% below the previous year.
• DiaExpert sales were 6.3% lower than in the previous year due to currency effects and the impact of the situation on the inpatient business. 

„We can once again look back on a very successful business year in the field of injection systems, a year in which we were able to acquire numerous new customer projects. The development in the Diabetes Care segment is unsatisfactory due to the Corona pandemic, but in line with our expectations. We have used the year intensively to further develop our offering and thus improve our prospects“,

comments Simon Michel, CEO of Ypsomed on the contrasting business performance of the two business segments.

Operating result at the previous year’s level
The operating result for the 2020/21 business year was CHF 9.3 million (previous year: CHF 9.7 million). The following factors have affected the result of the past business year:

• The increase in turnover and higher utilisation of the production capacity for Ypsomed Delivery Systems as well as continued high project revenues made a positive contribution to earnings.
• The operational business with the YpsoPump burdens the result with CHF -43.8 million (previous year: CHF -47.2 million).
• The commissioning of the Schwerin production site with increasing write-offs burdens the business year with a total of CHF 9 million.
• A one-time charge of CHF 9 million from the settlement with Insulet Corp.
• A one-off gain of around CHF 5 million from the sale of the YpsoPod development project compensated for lower licensing income.

Ypsomed’s net financial result in the financial year 2020/21 amounts to CHF -3.2 million (previous year: CHF -1.8 million), of which CHF 1.7 million are interest expenses. In the financial year 2020/21, Ypsomed generated a net profit of CHF 5.8 million (previous year: CHF 11.7 million). The previous year’s result included positive income from income taxes of CHF 3.9 million. The earnings per share were CHF 0.46 (previous year: CHF 0.93).

Investments in growth
In the financial year 2020/21, Ypsomed generated an operative cash flow of CHF 85.8 million from business activities (previous year: CHF 49.1 million). In the reporting period, the cash flow for investments in property, plant and equipment amounted to CHF 59.2 million. Approximately CHF 23 million were invested in capacity expansions at the new Schwerin production plant. The remaining amount was used primarily for the further expansion of capacities at the Swiss sites. Ypsomed invested an additional CHF 67.4 million (previous year CHF 42.0 million) into intangible assets. In particular for the YpsoDose large-volume patch injector and the SmartPilot, the SmartServices as well as the further development of the YpsoPump digital therapy management system.

Sustainable dividend policy
In the interests of a sustainable dividend policy, the board of directors will propose to the Annual General Meeting that approximately CHF 14.7 million be distributed in dividends. This takes into account that the agreement in the legal dispute with Insulet Corp. resulted in additional receipts of USD 36 million. Shareholders will be paid CHF 1.16 per registered share for the financial year 2020/21 (previous year CHF 0.20). CHF 0.58 are to be paid out from reserves from capital contributions and CHF 0.58 from retained earnings.

Proposal for generating authorised capital
Ypsomed is accelerating the further expansion of production capacities to cope with the expected growth and is investing undiminished in innovation and research & development, especially with regard to digitisation and expansion of the portfolio to cover digital services. To expand the strategic room for manoeuvre as well as the financial flexibility for possible opportunities, the Board of Directors proposes an authorised increase in capital to the Annual General Meeting. This authorises the Board of Directors to increase the share capital at any time until 29 June 2023 by issuing a maximum of 1 million fully paid registered shares with a nominal value of CHF 14.15 each.

Expansion of the Board of Directors
Ypsomed increases its Board of Directors to broaden its base. It proposes to the 2021 Annual General Meeting elect Ms Betül Susamis Unaran as a new member of the Board of Directors. She is the Chief Strategy and Digital Officer and a member of the Executive Board of the Zur Rose Group. The expert on digitisation in the healthcare sector studied Industrial Engineering at Bogaziçi University in Istanbul and holds an MBA from INSEAD. At present, she also acts as Senior Advisor to Arsenal Capital Partners, a private equity firm in New York.

Change in the Executive Management
At the end of the 2021/22 business year, Dr Eberhard Bauer, Senior Vice President Ypsomed Diabetes Care, will be leaving the company and taking up early retirement. Eberhard Bauer joined Ypsomed in 2011 and has been instrumental in developing the Ypsomed Diabetes Care segment. Under his leadership, Ypsomed established the mylife Diabetescare brand and expanded and professionalised its sales organisation.

Sustainability
Ypsomed thinks long-term and therefore considers sustainable conduct to be a fundamental core principle. The company has therefore integrated sustainability into its established corporate strategy as a strategic cornerstone in the 2020/21 business year. The newly developed sustainability strategy has also been incorporated into the annual report, which takes an integrated approach for the 2020/21 business year and transparently illustrates the progress of Ypsomed’s efforts. Ypsomed has set itself the goal of becoming climate neutral (net zero carbon dioxide across the entire value chain) by 2040. To this end, the company is developing a climate action plan with verifiable, emissions reduction targets. These targets are in line with the Science Based Targets Initiative, which Ypsomed joined this year.

Annual General Meeting of Shareholders 2021
Due to the ongoing exceptional circumstances in the COVID 19 pandemic and the prevailing ban on events, this year’s Annual General Meeting of Ypsomed Holding will take place on 30 June 2021 without the presence of shareholders, in compliance with the legal requirements. Ypsomed’s Board of Directors has therefore decided that physical attendance at the Annual General Meeting will again not be possible this year and that shareholders will be able to exercise their voting rights exclusively via independent proxy.