Bioretec Ltd's financial statements bulletin 2023: Another successful year in the growth trajectory

This announcement is a summary of Bioretec Ltd's financial statements bulletin for January-December 2023. The complete financial statements bulletin with tables is attached to this release as a pdf file and available at the company's web pages at https://bioretec.com/investors/investors-in-english/releases.
July-December 2023 in brief
Net sales increased by 33% and amounted to EUR 2,016 thousand (7-12/2022: EUR 1,520 thousand).
Sales margin was EUR 1,483 (1,121) thousand or 73.6% (73.8%) of net sales, with year-on-year growth of 32%.
Net loss for the period amounted to EUR -1,714 (-1,049) thousand.
Earnings per share (undiluted) were EUR -0.09 (-0.07).
January-December 2023 in brief
Net sales grew 33% and amounted to EUR 3,906 thousand (1-12/2022: EUR 2,942 thousand).
Sales margin was EUR 2,810 (2,139) thousand or 71.9% (72.7%) of net sales, with year-on-year growth of 31%.
Net loss for the period amounted to EUR -3,789 (-2,416) thousand.
Earnings per share (undiluted) were EUR -0.19 (-0.17).
The Board of Directors proposes that no dividend be distributed for the financial period 1 January-31 December 2023.
Key events in 2023
In March 2023, Bioretec was granted a De Novo market authorization for its biodegradable RemeOs™ magnesium screw in the U.S.
In April 2023, Bioretec announced that it will update and refocus its product portfolio and refine its U.S. go-to-market strategy, and consequently update its financial targets.
In April 2023, Bioretec successfully completed a private placement and raised EUR 10 million.
In May 2023, Bioretec appointed Dr. Jeremy Dublon as a Regulatory Advisor to support the company's U.S. go-to-market strategy.
In June 2023, Bioretec invested in a CNC machining center to increase the RemeOs™ production capacity.
In August 2023, Bioretec announced its revised Scientific Advisory Board, whose members are the world's leading orthopedic experts in their own specialty.
In September 2023, Bioretec entered into a distribution agreement with Spartan Medical for the RemeOs™ screws launch in the U.S.
In October 2023, Bioretec changed its estimate for the granting of the European market authorization for its biodegradable RemeOs™ trauma screw and estimated that the approval will move to the first quarter of 2024.
In November 2023, Bioretec's Board of Directors initiated a recruitment process for a new CEO.
This financial statements bulletin is unaudited. The full-year 2022 figures are audited.
Key figures
+-------------+------------+----------+-------+----------+----------+-------+
|EUR 1,000    |H2 2023     |H2 2022   |Change,|FY  2023  |FY  2022  |Change,|
|             |            |          |%      |          |          |%      |
+-------------+------------+----------+-------+----------+----------+-------+
|Net sales    |2,016       |1,520     |32.6%  |3,906     |2,942     |32.8%  |
+-------------+------------+----------+-------+----------+----------+-------+
|Sales margin |1,483       |1,121     |32.3%  |2,810     |2,139     |31.4%  |
+-------------+------------+----------+-------+----------+----------+-------+
|Sales margin,|73.6%       |73.8%     |       |71.9%     |72.7%     |       |
|%            |            |          |       |          |          |       |
+-------------+------------+----------+-------+----------+----------+-------+
|EBITDA       |-1,703      |-916      |85.9%  |-2,833    |-2,112    |34.1%  |
+-------------+------------+----------+-------+----------+----------+-------+
|EBIT         |-1,801      |-1,006    |78.9%  |-3,034    |-2,292    |32.4%  |
+-------------+------------+----------+-------+----------+----------+-------+
|Net profit   |-1,714      |-1,049    |63.3%  |-3,789    |-2,416    |56.8%  |
|(loss)       |            |          |       |          |          |       |
+-------------+------------+----------+-------+----------+----------+-------+
|R&D spend on |22.7%       |25.3%     |       |25.6%     |28.1%     |       |
|total costs, |            |          |       |          |          |       |
|%            |            |          |       |          |          |       |
+-------------+------------+----------+-------+----------+----------+-------+
|Equity ratio,|77.3%       |55.2%     |       |77.3%     |55.2%     |       |
|%            |            |          |       |          |          |       |
+-------------+------------+----------+-------+----------+----------+-------+
|Cash and cash|6,910       |1,223     |465.1% |6,910     |1,223     |465.1% |
|equivalents  |            |          |       |          |          |       |
+-------------+------------+----------+-------+----------+----------+-------+
|Earnings per |-0.09       |-0.07     |18.0%  |-0.19     |-0.17     |13.3%  |
|share        |            |          |       |          |          |       |
|(undiluted)  |            |          |       |          |          |       |
+-------------+------------+----------+-------+----------+----------+-------+
|Earnings per |-0.07       |-0.05     |28.6%  |-0.15     |-0.12     |23.4%  |
|share        |            |          |       |          |          |       |
|(diluted)    |            |          |       |          |          |       |
+-------------+------------+----------+-------+----------+----------+-------+
|Number of    |19,536,858  |14,111,858|       |19,536,858|14,111,858|       |
|shares at the|            |          |       |          |          |       |
|end of the   |            |          |       |          |          |       |
|period       |            |          |       |          |          |       |
|(undiluted)  |            |          |       |          |          |       |
+-------------+------------+----------+-------+----------+----------+-------+
|Number of    |24,908,133  |19,608,126|       |24,908,133|19,608,126|       |
|shares       |            |          |       |          |          |       |
|(diluted)    |            |          |       |          |          |       |
+-------------+------------+----------+-------+----------+----------+-------+
|Number of    |37          |28        |32.1%  |37        |28        |32.1%  |
|personnel at |            |          |       |          |          |       |
|the          |            |          |       |          |          |       |
|end of the   |            |          |       |          |          |       |
|period       |            |          |       |          |          |       |
+-------------+------------+----------+-------+----------+----------+-------+
Timo Lehtonen, CEO of Bioretec Ltd:
"In 2023, Bioretec achieved a historic milestone by becoming the first player to receive an FDA market authorization in the U.S. for a biodegradable metal product with our RemeOs™ magnesium alloy screw. This landmark achievement not only signifies our entry into the world's largest orthopedic market but also sets a strong foundation for the future commercialization of our innovative RemeOs™ product line. Our continuous efforts in developing advanced, bioabsorbable orthopedic solutions also resulted in the year ending with the highest net sales in Bioretec's history.
Following the FDA market authorization, we conducted a diligent evaluation process for various distribution channels, which resulted in a partnership with Spartan Medical. This collaboration is particularly strategic, given Spartan's network and experience in both civilian and Department of Defense and Veterans healthcare (DOD & VA) markets. After signing the distribution agreement, we initiated the hospital approvals processes and the roll-out of our RemeOs™ products in chosen top-tier U.S. academic centers and hospitals. As these processes are time-consuming, we are currently awaiting approvals from these selected academic centers and hospitals. The shipments of the RemeOs™ magnesium screws to Spartan started in the fourth quarter of 2023, and the first surgery using the RemeOs™ screws has been performed.
Last spring, we took in a significant stride in fortifying our financial position through a successful funding round. Despite the challenges presented by the financial market conditions, we managed to secure EUR 10 million in gross proceeds through a directed share issue targeting institutional and other experienced investors. This capital infusion is vital for our company, as it will catalyze the acceleration of commercialization and distribution efforts for our RemeOs™ product line. Additionally, the funds will be instrumental in furthering our product development initiatives and expanding our production capacity, positioning us well for future growth. Therefore, after the funding round, we marked an anticipated decision in Bioretec's growth trajectory by investing in a new CNC machining center currently dedicated only to our RemeOs™ screws, and the commissioning was completed in January 2024. To further support our growing operations, we've embarked on expanding our production facility space. Additionally, we are investing in a new ERP system scheduled for implementation in 2024. This system is designed to streamline our operations and enhance efficiency, enabling us to surpass our 2023 achievement of delivering products for more than 35 thousand surgical operations. Parallel to these measures, we are also accelerating our product development by expanding our organization and continuing to innovate to meet the evolving demands of the market.
In 2023, we experienced robust growth, with net sales increasing by 33 percent from the previous year, reaching EUR 3.9 million. A significant contributor to this growth was the introduction of our new RemeOs™ screw in the U.S. market, amounting to EUR 374 thousand in its first half year. Meanwhile, China remained a key market for the Activa product group, representing over 50% of our Activa product sales totaling EUR 3.5 million. The sales of RemeOs™ and Activa products in the U.S. showed convincing growth, resulting in nearly 22% of total net sales. In Europe, we faced several market challenges. The discontinuation of deliveries to Russia significantly impacted our operations in Europe. Additionally, this region is still grappling with the aftereffects of the pandemic and acute shortage of hospital staffing, further straining our sales in this market.
As we progress into the first quarter of 2024, we anticipate that we will finally obtain the market authorization for our RemeOs™ trauma screw in Europe. The delay is due to prolonged Notified Body approval processes. Obtaining the CE mark will pave the way for the product's commercialization in the European market. Concurrently, we are set to continue the roll-out of the RemeOs™ screws in the U.S. market and are dedicating substantial resources towards the development of new products in the RemeOs™ series. As part of the expansion plans, we are preparing the next U.S. market authorization application for the RemeOs™ screws, and we have entered into an agreement to conduct a clinical trial of the RemeOs™ DrillPin at the Medical University Hospital in Graz, Austria. This trial is an essential step towards our objective of commercializing the DrillPin in 2025.
As the first half of the year 2024 will partly be burdened by production interruptions (e.g., validation and the ramp-up of our new CNC machining center), we expect our net sales to be generated to a greater extent during the second half of the year. Also, as our RemeOs™ product pipeline is mainly in the development and commercialization phase, we will continue to invest heavily both in S&M and R&D in the forthcoming year. The recruitment process for Bioretec's new CEO is currently underway, and I am transitioning into another leadership position within the organization. I am thrilled to focus my efforts on the future for supporting the RemeOs™ product pipeline's forthcoming endeavors. I am confident that together with the new CEO, we will strengthen our growth to transform bone fracture care and significantly enhance patients' quality of life."
Financial reporting and Annual General Meeting in 2024
In 2024, Bioretec will publish the following financial reports:
annual report for 2023 during week 11/2024 at the latest (week commencing on 11 March 2024)
business review for January-March 2024 on Thursday 16 May 2024
half-year report for January-June 2024 on Thursday 15 August 2024
business review for January-September 2024 on Thursday 14 November 2024
The releases will be available online at Bioretec Ltd's website at
https://bioretec.com/investors/investors-in-english/reports-and-presentations.
Bioretec Ltd's Annual General Meeting is planned to be held on Friday, 26 April 2024. The company's Board of Directors will convene the Annual General Meeting separately later.
Tampere, 16 February 2024
Board of Directors
Bioretec Ltd
Further inquiries:
Timo LehtonenJohanna Salko
CEOCFO
+358 50 433 8493+358 40 754 8172
timo.lehtonen@bioretec.comjohanna.salko@bioretec.com
Certified advisor:
Nordic Certified Adviser AB, p. +46 70 551 67 29
Information about Bioretec
Bioretec is a globally operating Finnish medical device company that continues to pioneer the application of biodegradable orthopedic implants. The company has built unique competencies in the biological interface of active implants to enhance bone growth and accelerate fracture healing after orthopedic surgery. The products developed and manufactured by Bioretec are used worldwide in approximately 40 countries. 
Bioretec is developing the new RemeOs™ product line based on a magnesium alloy and hybrid composite, introducing a new generation of strong biodegradable materials for enhanced surgical outcomes. The RemeOs™ implants are absorbed and replaced by bone, which eliminates the need for removal surgery while facilitating fracture healing. The combination has the potential to make titanium implants redundant and help clinics reach their Value-Based Healthcare targets while focusing on value for patients through efficient healthcare. The first RemeOs™ product market authorization has been received in the U.S. in March 2023, and in Europe, CE mark is expected to be received during the first quarter of 2024. Bioretec is positioning itself to enter the addressable over USD 7 billion global orthopedic trauma market and to become a game changer in surgical bone fracture treatment.
Better healing - Better life. www.bioretec.com
Appendix
Bioretec Ltd's financial statements bulletin January-December 2023 (pdf)