SciBase Achieves Strong Q4 Growth Despite Operational Losses in 2024

Year-End Report Summary for SciBase

SciBase Holding AB unveiled its year-end report for the 2024 fiscal year, detailing a remarkable turnaround in net sales while grappling with persistent losses. For the fourth quarter, the company reported net sales of TSEK 8,598, a substantial increase from TSEK 5,764, translating to a 49% growth compared to the previous year.

Despite this impressive sales performance, the company faced a loss after tax amounting to TSEK 17,462, representing an improvement from the loss of TSEK 20,541 reported for the same quarter last year. The loss per share was also reduced, standing at SEK 0.08, compared to SEK 0.17 in Q4 2023. However, cash flow from operating activities remained in the negative, registering at TSEK -12,548 compared to TSEK -17,352 in the corresponding period from the previous year.

The gross margin during the fourth quarter fell slightly to 68.5%, down from 73.5% year-on-year, indicating some potential pressure on profitability despite higher sales volume. The number of electrodes sold increased significantly by 42%, totaling 17,132 units, with repeat purchases from existing customers rising by 36%, signaling strong customer loyalty and demand.

Annual Review

When examining the annual performance from January to December, SciBase reported net sales of TSEK 29,705, up 28% from TSEK 23,245 in 2023. However, losses after tax for the year expanded to TSEK 61,125 from TSEK 55,585. This translates to a loss per share of SEK 0.34, down from SEK 0.51 the previous year. The cash flow from operations showed a negative trend, amounting to TSEK -57,383 compared to TSEK -51,984 in 2023. However, the gross margin slightly improved to 71.0% from 69.0%, suggesting effective cost management in the face of rising sales.

Electrode sales for the year reached 62,210 units, compared to 51,920 in the previous year, with a notable 16% increase in repeat sales suggesting growing satisfaction and trust among customers in the product lineup.

Key Highlights from Q4

1. Sales Growth Across Markets: Overall sales surged by 49% in the fourth quarter, with the German skin cancer segment seeing an impressive increase of 27%. Notably, sales in the US skin cancer market skyrocketed by 319%, though sales in the skin barrier segment witnessed a 21% decline.
2. Capital Raise Initiatives: In a strategic move to improve liquidity, the Board of Directors decided to proceed with a directed issuance of approximately SEK 22.5 million alongside a rights issue aiming to raise up to SEK 59.3 million. This capital raise was eventually approved by an extraordinary general meeting held on December 13, 2024.
3. International Expansion Efforts: SciBase initiated sales collaborations in Italy, enhancing its international strategy and market presence.
4. Research Innovations: A notable study conducted at Koç University in Istanbul highlighted Nevisense's potential as a skin barrier assessment device, showcasing the technology’s importance in managing treatment outcomes for patients suffering from atopic dermatitis (AD).
5. Management Developments: A Nomination Committee was established for the upcoming Annual General Meeting in 2025, indicating a commitment to corporate governance and strategy.

Post-Period Developments

Following the conclusion of the reporting period, SciBase announced that the Mayo Clinic, a leader in US healthcare, will conduct pilot tests of Nevisense. The outcomes of the directed and rights issues were specified, providing insights into the company's financial maneuvers to strengthen its position.
Additionally, Nevisense was included in the updated German imaging guidelines for detecting melanoma and non-melanoma skin cancers, further validating the technology’s role in dermatology. SciBase continues to expand its operational footprint in the US dermatology market, onboarding several practices focused on skin cancer detection.

Conclusion

In summary, SciBase is navigating a complex landscape of growth and operational challenges as it closes the 2024 fiscal year. While the company is making strides in net sales, the persistent losses and negative cash flow underscore the need for effective strategies to achieve long-term sustainability and profitability. The ongoing efforts in research, international collaboration, and capital acquisition might pave the way for healthier operations and growth in the near future.

For more detailed insights or specific inquiries regarding the report, please contact Michael Colérus, CFO of SciBase.