BICO Q1 2025 slides: sales decline 19% as company pivots strategy with key divestment

Introduction & Market Context

BICO Group AB (STO:BICO) reported a significant decline in sales for the first quarter of 2025, with organic growth falling 19% year-over-year amid continued macroeconomic uncertainty. The company’s stock price dropped 11.72% following the April 29 earnings release, reflecting investor concerns about the performance reversal after a strong Q4 2024.

The life sciences company announced a strategic pivot with the post-quarter signing of an agreement to divest MatTek and Visikol to Sartorius for 80 million USD, a move aimed at strengthening its balance sheet and resolving outstanding convertible debt.

"Continued uncertain macro-economic dynamics" and potential tariffs created market insecurity during the quarter, prompting BICO to establish a tariff task force to ensure preparedness for potential trade disruptions.

Quarterly Performance Highlights

BICO reported Q1 2025 net sales of SEK 389 million, down from SEK 470 million in the same period last year. Adjusted EBITDA was negative at SEK -12 million, representing a -3% margin, while cash flow from operating activities remained positive at SEK 77 million.

As shown in the following chart of quarterly financial highlights:

The company’s sales trajectory shows a significant decline from the previous quarter’s strong performance:

Despite the sales decline, BICO maintained adjusted EBITDA levels relatively in line with Q1 2024, though still negative:

Performance varied significantly across BICO’s three business areas:

1. Lab Automation: Reported SEK 94 million in sales with -58% organic growth and -3% adjusted EBITDA margin. The decline was attributed to "fewer project starts and closures in combination with a high comparison quarter."

2. Life Science Solutions: Generated SEK 191 million in sales with 4% organic growth but a -6% adjusted EBITDA margin.

3. Bioprinting: Delivered the strongest performance with SEK 105 million in sales, 41% organic growth, and 14% adjusted EBITDA margin.

Strategic Initiatives

The most significant strategic development was BICO’s agreement to divest MatTek and Visikol to Sartorius for 80 million USD on a cash- and debt-free basis. The transaction represents a 3.7x EV/2024 sales multiple and 15.3x adjusted EBITDA multiple, with closing expected during Q2 2025.

The divestment details include:

This transaction aligns with BICO’s updated strategy focusing on lab automation and selected workflows. The proceeds will be used to strengthen the balance sheet and resolve the outstanding convertible bond maturing in March 2026.

Following the divestment, BICO will reorganize from three business areas to two, eliminating Bioprinting as a separate segment:

The company is also transitioning from a decentralized structure to an operationally integrated group with harmonized global functions to strengthen commercial capacities, improve synergies, and eliminate cost duplications.

Detailed Financial Analysis

Despite the sales decline, BICO showed improvement in working capital management. Net working capital decreased from SEK 402 million in Q1 2024 to SEK 227 million in Q1 2025, with NWC/LTM sales improving from 20% to 12%.

The working capital improvements are illustrated in this chart:

Cash flow from operating activities was positive at SEK 77 million, including a SEK 126 million positive effect from changes in working capital. However, total cash flow during Q1 was negative at SEK -229 million, primarily due to bond buybacks of SEK 276 million in February 2025.

The company’s cash reserves stood at SEK 684 million by the end of Q1 2025, with nominal outstanding convertible debt at SEK 1,106 million. BICO expects to achieve a net cash position during Q2 2025, likely aided by the proceeds from the MatTek and Visikol divestment.

Forward-Looking Statements

BICO’s geographic sales distribution has shifted, with North America representing 55% of sales (down from 69% in Q1 2024), while Asia increased to 13% (up from 4%):

Looking ahead, BICO is focusing on becoming "the first-choice lab automation partner and provider of selected workflows to Pharma and Biotech." The company is accelerating commercial initiatives to gain market share in Asia, India, and Europe while shifting focus from Academia to Pharma & Biotech customers.

In response to potential tariffs, BICO has moved the majority of manufacturing out of China, adjusted logistics routes, and implemented supply chain adjustments to reduce or eliminate tariff impacts and improve logistics costs.

The company’s financial calendar indicates upcoming events including the Annual General Meeting on May 8, 2025, and the next quarterly report scheduled for August 19, 2025.

This strategic repositioning comes after a challenging quarter that contrasts sharply with the previous quarter’s strong performance, when BICO reported a 25% adjusted EBITDA margin for Q4 2024 and saw its stock surge 14.56% following those results.

Full presentation:

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