Extract from annual report 2019/20ChemoMetec offers high-quality cell counting and cell analysis equipment for use in, e.g., life science R&D and the production of pharmaceuticals.

Company reg. (CVR) no.: 19 82 81 31

Contents

3 ChemoMetec at a glance

5 ChemoMetec’s products

7 Highlights

9 Keyfiguresandfinancialratios

10 LetterfromtheCEO–Astrongerproductportfolioandorganisationsupporting sustained growth

12 Developmentsin2019/20

Developmentsin2019/20

Readmoreonpage12

Ourproducts

Read more about our products on page 5

Astrongerproductportfolioandorganisation supporting sustained growth

Readmoreonpage10

Extractfromannualreport2019/20 / ChemoMetec

ChemoMetec specialises in the development, production and sale of high-quality analytical equipment for cell counting and analysis within a broad range of areas. Our analytical equipment is based on a unique patented technology platform that ensures high-quality analytical results, operational reliability, cost effectiveness and ease of use.

ChemoMetec at a glance

Ourbusinessareas

Life science research markets, Cell-based therapy and Pharmaceutical process and production control

87%(Shareofrevenue)

Production and quality control of animal semen

10%(Shareofrevenue)

Production control of beer and quality control of milk

3%(Shareofrevenue)

Our technology and productsOurcoretechnologyconsistsincapturingimagesofapre-pared liquid sample through a special-purpose microscope to subsequently perform an automatic cell count and/oranalysis using digital imaging. This technology allows forhigh-precision counting and analysis of large numbers ofcellsatcompetitiveprices.

ChemoMetec’s analytical equipment primarily comprises analytical instruments and related disposable articles (plas-tic cassettes and glass counting chambers) for preparingand maintaining the sample during measurement.

NucleoCounter NC-202TheNC-202waslaunchedinSeptember2019andisthethirdgenerationoftheNucleoCounterseries–andthesuccessortotheNC-200,ourbest-sellingproductto date.

TheNC-202featuresanumberofimprovementscomparedwiththeNC-200instrument,includingsig-nificantlyreducedtimeofanalysisandimprovedqualityofanalysis.

Ourlatestproduct

ChemoMetec / Extractfromannualreport2019/20 ChemoMetecataglance 3

We aim to offer solutions that make complex analytical processes more simple, more robust and more cost-effective. We pursue this goal by applying state-of-the-art technologies and advanced components to develop complete innovative solutions within our field.

International presence

97% of our revenue is export-driven, and we sell our analytical equipment in around 100 countries

OurheadofficeislocatedinAllerødnorthofCopenhagen,andwehaveanofficeintheUSAas well as sales and support organisations in France,Holland,theUK,GermanyandChina.Wehavearound100full-timeemployees.

 Office

 Salesandsupportorganisation

 Distributor

Our customers Wesellouranalyticalequipmenttoagrowingbaseofcus-tomersengagedwithin,e.g.,cell-basedtherapy,cancerandstemcellresearch,thedevelopmentandmanufacturingofpharmaceuticalsaswellasproductionandqualitycontrolofarangeofproductssuchasbeer,animalsemenandmilk.Thegrowingdemandforoursolutionsisdrivennotleast

byagreaterfocusamongourvariouscustomergroupsonprocessesandcomplianceinconnectionwithresearch,de-velopmentandproduction.Through a number of years,we have built strong long-

termrelationshipswithimportantcustomergroups,andwe

workcloselywithourcustomersandwithcellcountingandanalysisexpertstodevelopnewproductsmatchingourcus-tomers’ needs. Westrivetocontinuouslyimprovetheservicesweofferto

ourcustomers–throughourlocalorganisations,whichhaveexpandedsignificantlyinrecentyears,andbyofferingnew,morecomprehensivesolutionsthatsupportourcustomers’workingprocesses.

ChemoMetec at a glance

ChemoMetec at a glance Extractfromannualreport2019/20 / ChemoMetec4

ChemoMetec’s products

Our product portfolio comprises the NucleoCounter series, consisting

of automatic cell counting and cell analysis instruments, and

the Xcyto 5 for advanced cell analysis.

Ouruniquecassetteplaysakeyrole

Thedevelopmentofthedisposablecas-settefortheNucleoCounterinstrumentsisakeyfactorofoursuccesswithincell

counting. Cellsamplestobeanalysedaresucked

directlyintothecassette.Dyesmaypotentiallybeharmfulandarenotaddedmanually,becausetheyaredepositedwithin

the cassette during production. The customer then places the cassette con-

taining the cell sample in the NucleoCounter instrumentandtherestoftheanalysisisper-formedautomatically.Thecellcountresultsareavailableafterashortwhile,andthesoftware

used to control the entire process is compliant withthestrictFDArequirementsforhandlingdigital data.

This is a more simple and more precise concept than the ones used by competing cell counters cur-rentlyonthemarket,anditeliminatesmanyofthefactorsusuallycausingmeasurementvariationsandinconsistenciesbycalibratingallcassettesindividual-

ly during the production process.Mostrecently,wehavedevelopedanewversion

ofthecassetteforournewcellcounter,theNC-202.Combiningthenewly-developedcassettewiththeNC-202providesthemostconsistentandstandardisedcellcountingprocessavailableinthemarket–across

users and instruments.

ChemoMetec / Extractfromannualreport2019/20 ChemoMetec’sproducts 5

The Xcyto 5 is an image- based cell analyser and the instrument can analyse both suspendedcells,i.e.cellscontained in an aqueous solution,aswellasadher-ent cells that grow on solid surfaces.

The Xcyto 5 can automat-icallyidentifyandmarktheindividualcellsandprovideaccurateinformationaboutwherethevariousfluores-centmarkersarelocatedinside the cell.

The unique Xcyto tech-nologymakesitpossibletointegrate image analysis and presentationofdatainoneprocess.

The most important mar-ketsforXcyto5arefoundwithin Cell-based therapy.

NucleoCounter NC-202TheproductisafurtherdevelopmentoftheNC-200and is based on the ad-vancedXcytotechnology.WiththeNC-202wecanofferourcustomersonecellcountingprotocolforallcelltypes,ananalysistimeofaround25secondsperanalysis,improvedscreendisplay as well as the option tooptimiseworkflowsandprocesscontrol.Atthesametime,anewdisposablecassettehasbeendevelopedfortheNC-202,whichincombination with the new advancedlogarithmsenablesthedetectionofcellswhichareeitherdyingorhavejustdied.TheNC-202primarilytar-

getstheLifescienceresearchmarkets,Cell-basedtherapyand Pharmaceutical process and production control.

NucleoCounter NC-200 TheNC-200offersfastandsimplecellviabilitydeter-mination,andcellcountsandviabilityanalysiscanbeperformedusingonlyonecassette without manual additionofeitherdyeorauxiliaryreagents,whilealsoprovidinginformationonaveragecellsizesandcellclumping. TheNC-200primarilytar-

getstheLifescienceresearchmarkets,Cell-basedtherapyand Pharmaceutical process and production control.

NucleoCounter NC-250TheNC-250isacompetitivetop-of-the-lineproductof-feringfastandcost-effectivehigh-precisioncellviabilitydetermination.TheNC-250usestwo-or

eight-chamber glass slides forcellviabilitydetermina-tion.Inaddition,theNC-250canperformcellcycleanalysis. TheNC-250primarilytar-

getstheLifescienceresearchmarkets,Cell-basedtherapyand Pharmaceutical process and production control.

NucleoCounter NC-3000TheNC-3000isaneasy-to-operate,flexibleanalysisplatform.Incontrasttoflowcytometers,theNC-3000makesitpossibletoqualifythe analytical results by way ofavisualinspectionofthecapturedimagesofcells.

The instrument easily and cost-effectivelyperformsrelativelysimpleandusuallytime-consuming cell analysis and cell counts.

The instrument is being usedforcancerresearch,immunologyandtoxicologyworldwide by a number ofleadingbusinessesandinstitutions.

The NucleoCounter 100 seriesTheNC-100seriesprovidesattractivecellcountingandviabilityanalysisoptionsforawiderangeofbusinessesand institutions within their respectivebusinessareas.TheNC-100seriesconsists

oftheNC-100(usedprimarilyinlifescienceresearchaswellasforproductionand quality control in the pharmaceuticalindustry),theSP-100(productionandqualitycontrolofsemenforbreedingprogrammes),theYC-100(soldprimarilytobreweriesforbrewingyeastqualityoptimisation)andtheSCC-100(measurementofso-maticcellsinmilk).Wehavesoldsome2,500instrumentsto businesses and organisa-tionsallovertheworld.

The NucleoCounter products Xcyto products

ChemoMetec at a glance Extractfromannualreport2019/20 / ChemoMetec6

Highlights2019/20 was yet another good year for ChemoMetec, although the latter part of the financial year was impacted by the Covid-19 outbreak. We managed to keep up momentum across the organisation, and we continue to see attractive growth opportunities within our various business areas.

Financial results• TheCovid-19outbreakhadasomewhatnegativeimpactonChemoMetec’sgrowthinthelatterpartofthefinancialyear,andanumberofmeasureswereimplemented to protect the employees and customers as well as to mitigate the impactofCovid-19.

• ChemoMetecgeneratedrevenueofDKK214.1millionin2019/20,a22.0%increase(2018/19:DKK175.5millionand56%).Revenueincreasedinallregions.

• Revenuefromanalyticalinstrumentswereupby17%,whileconsumableswereupby21%(2018/19:63%and44%).

• Revenuefromservicecontractsin-creasedfromDKK0.2milliontoDKK6.8million.

• SalesoftheNC-202,whichwaslaunchedduringthefinancialyear,gotofftoagoodstart.Atotalof47instrumentsweresold,including30inthefourthquarter.

• EBITDAincreasedby43%toDKK92.6million(2018/19:DKK64.9million),whiletheEBITDAmarginwasupby6percent-agepointsfrom37%to43%.

• TheprofitfortheyearwasDKK59.2mil-lion,correspondingtoDKK3.51pershare(2018/19:DKK41.8millionandDKK 2.69pershare).

• DespitetheCovid-19outbreakbothrev-enueandEBITDAsignificantlyexceededthe guidance announced in connection withthereleaseofthe2018/19annu-alreport,whichwasattributabletohigher-than-expectedaveragesellingprices,thesaleofsignificantlymoreservicesandgenerallylowercoststhananticipated.

• TheBoardrecommendstotheshare-holders at the annual general meeting thatadividendofDKK1.50bedistribut-ed to the shareholders.

Revenue (DKK)

214.1m

Market capitalisation (DKK)

5.5bn

Growth

22.0%EBITDA margin

43.3%

Breakdown of revenue by geography

Breakdown of revenue by segment

Breakdown of revenue by business area

2019/20

2018/19

2019/20

2018/19

2019/20

2018/19

 USA/Canada Europe Othercountries(ROW)

 Instruments Consumables Service Other

 LCPmarket Productionandqualitycontrolofanimal semen Productioncon-trolofbeerandquality control ofmilk

 

ChemoMetec / Extractfromannualreport2019/20 Highlights 7

Product development• TheNC-202hasbeenfullydevelopedandputintoproduction.ThelaunchoftheNC-202isexpectedtopavethewayforwinningadditionalmarketshareinthecellcountermarketintheyearsahead.TheNC-202featuresanumberofimprovementscomparedwiththeNC-200instrument,includingsignificantlyreducedtimeofanalysisandimprovedqualityofanalysis.

• ThedevelopmentofXcytoMatic,ahigh-speed cell counter based on the Xcyto technology and targeted at the cellcountingmarket,primarilywithinpharmaceuticalprocessdevelopment,continuedin2019/20.However,thedevelopmenthasbeendelayedduetotheCovid-19outbreak,andthus,theXcytoMaticproductisexpectedtobefullydevelopedaroundApril2021andnotbytheendof2020aspreviouslyannounced.

• Duringthefinancialyear,workwason-goingtocompletetwoproductupgrades,oftheXcyto5andtheXcyto10,respec-tively.Theworkincludesstandardisingthe instruments to ensure they generate

highly consistent analytical results and simplifyingworkproceduresrelatedtothehandlingofwhatinfluorescenceanalysisiscalledspectralunmixing.Theseupgradeshavenowbeenimple-mentedintotheXcyto5,andattheendofthefinancialyeararelaunchoftheXcyto 5 was being planned.

Guidance for 2020/21• For2020/21,ChemoMetecexpectsreve-nueofDKK240-250millionandEBITDAofDKK100-105million.

• In2020/21,ChemoMetecexpectstoin-vestsomeDKK35millionin,e.g.,productdevelopment,productionfacilitiesandintellectual property rights.

• Theguidanceissubjecttohigherun-certaintythanusualduetotheCovid-19situation.

Highlights Extractfromannualreport2019/20 / ChemoMetec8

2017/18 2018/19 2019/202016/172015/16

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Key figures and financial ratios for the GroupDKK’000 2019/20 2018/19 2017/18 2016/17 2015/16

Income statementRevenue 214,101 175,513 112,687 90,329 85,232EBITDA 92,610 64,888 30,072 15,865 22,628EBIT 77,470 54,079 24,284 10,419 15,897Netfinancials -1,547 -368 -982 -1,767 -2,125Profitfortheyear 59,163 41,845 18,215 7,486 10,483Comprehensiveincome 59,166 41,849 18,204 7,528 10,499

Statement of financial positionAssets 263,116 238,215 113,995 97,620 90,379Networkingcapital 35,108 26,813 20,448 17,450 12,346Investedcapital 118,357 100,195 82,880 72,689 62,771Equity 202,751 173,341 73,010 64,377 56,849Netinterest-bearingdebt -94,650 -79,400 10,203 9,675 8,351

Cash flowsCashflowfrom operatingactivities 72,016 58,310 25,436 9,757 17,200Cashflowfrom investingactivities -26,605 -27,060 -16,462 -10,281 -28,441Cashflowfrom investingactivities -46,260 57,779 -7,927 -355 12,117

2019/20 2018/19 2017/18 2016/17 2015/16

Financial ratiosEBITmargin(%) 36.2 30.8 21.5 11.5 18.7EBITDAmargin(%) 43.3 37.0 26.7 17.6 26.5Taxrate(%) 22.1 22.1 21.8 13.5 23.9Returnoninvestedcapital(%) 70.9 59.1 31.2 15.4 33.6Revenue/Investedcapital 1.8 1.8 1.4 1.2 1.3Netinterest-bearingdebt/EBITDA -1.0 -1.2 0.3 0.6 0.4Financialgearing -0.5 -0.5 0.1 0.2 0.1Returnonequity(%) 31.5 34.0 26.5 12.4 20.3Averageno.ofemployees 102 85 69 65 46

Per share ratios Marketpricepershare(DKK) 315.0 158.0 61.0 32.5 33.8Earningspershare(EPS)(DKK) 3.51 2.68 1.17 0.48 0.67Bookvaluepershare(DKK) 11.7 10.0 4.2 3.7 3.0Dividendpaidpershare(DKK) 20.50 - - - -

Definitionsoffinancialratiosaresetoutinnote5.1

Revenue EBITDA and EBITDA margin EBIT and EBIT margin

 EBIT     EBITmargin EBITDA     EBITDAmargin

DKKm DKKm DKKm

ChemoMetec / Extractfromannualreport2019/20 KeyfiguresandfinancialratiosfortheGroup 9

A stronger product portfolio and organisation supporting sustained growth

Despite the negative impact of the Covid-19 outbreak on our markets in the latter part of the financial year, we generated revenue growth of 22% and a significant increase in earnings, which reached DKK 93 million, in 2019/20. This is a satisfactory performance in these very special circumstances. During the year, we maintained a strong focus on the launch of our new cell counter, the NC-202, which is the successor to ChemoMetec’s best-selling cell counting instrument – and the market responded favourably to the new product.

Focusing on protecting our business and maintaining momentum despite the Covid-19 outbreakLike most other businesses, ChemoMetechas been negatively impacted by theCovid-19 outbreak and the restrictions im-posed. Following the Covid-19 outbreak,our revenue has on the one hand beenimpacted by postponed and cancelled or-ders as well as by a general reluctance in connectionwiththeplacingofneworders.On theotherhand,wealso saw inventory

buildingofconsumablesamongsomecus-tomers due to increased uncertainty, andcustomersengaginginthedevelopmentofvaccines and treatment for Covid-19 havebought more instruments – although thiswasnotsufficienttooffsetthenegativeim-pactonrevenuegrowth.In the first phase, we focused onmain-

tainingourproduction,qualitycontrolandlogistics functions to the greatest extentpossible under the extensive restrictionsand with due consideration for both em-

ployees and customers. Consequently,we initiated a number of initiatives acrosstheentirevaluechain,andthismeantthatthroughout the entire period we managed to maintain nearly normal operations ofthesefunctions–andthatwewereabletodeliverorderswithoutunduedelay.Eventhoughanumberofrestrictionswere

graduallyeasedandmanyof the laborato-riesusingourinstrumentsbegantoreopen,our sales and customer support continue to beimpactedbytherestrictionsstillinforce.Ouractivities in theseareasstill takeplaceviavirtualmeetingsandpresentations,andextensiveeffortsaremade tokeepingmo-mentumand serving the customers in thebest possible way under the changed condi-tions.Thisformofcontactworksreasonablywellforexistingcustomers,whereassalestonew customers are naturally more challeng-inginthisframework.The part of the development work re-

lated to product testing among potential customers is also complicated and thus,not all planned product testing has been commenced,andnewproducttestingmaypotentiallyprovedifficult.

Revenue has more than tripled in five yearsWiththeimprovedrevenuein2019/20,ourrevenue has more than tripled over thepast five yearswhichwasnot least drivenby our ability to build a particularly strong marketpositionintheimmune-basedther-apygrowtharea.Thedevelopmentofnewtherapies in this area is still growing in the USA, EuropeandAsia.However, growth iscurrentlyatalowerlevelaswearenowina phase where important new therapies

Steen SøndergaardCEO

Letter from the CEO

LetterfromtheCEO Extractfromannualreport2019/20 / ChemoMetec10

are not being approved, and this part ofthemarketisalsoimpactedbytheCovid-19lockdown ofmany laboratories. Scaling ofthe use of approved therapies also takesplace at a moderate pace. We continue to expectsignificantgrowthinthisareainthecoming years as immune-based therapy is a verypromising typeof therapy. There iseveryindicationthatwemayseeasecondwaveofapprovalsofnewtypesoftherapieswithintheforeseeablefuture.

Continued strong growth in the US market, while Europe lags behindDuringthepastfinancialyear,growthratesintheUSmarketremainedatahighlevelofaround30%,althoughdownonrecord-highgrowthoftheyearbefore.Still,thisiscon-sidered satisfactory under the prevailingmarket conditions. We continue to seea substantial future growth potential intheUSmarketandaspartof theongoingstrengtheningofourpresencethere,wearenowintheprocessofopeningoursecondofficeintheUSA.It is locatedinCalifornia,soinfuturewewillhaveaphysicalpresenceboth on the east and the west coast. IntheRestofWorldregion,whichprimar-

ilycomprisesChina,Japan,SouthKorea,Sin-gaporeandTaiwan,growthrateswereatasatisfactoryleveljustbelow30%.On the other hand, growth in Europe

overallwasnotsatisfactoryin2019/20.Thisis due to our strong focus on the biggestmarket, the US, in the past year, but alsoto the fact that thecurrent sales set-up inEuropeisnotfunctioningfullysatisfactorily.Consequently,wearecurrentlystrengthen-ingoursaleseffortsinEuropeandrestruc-turing the sales organisation to create the rightplatformfordrivinggrowthinthecom-ing period.

The launch of the NC-202 is progressing well … After around three years’ development ef-forts, we launched our latest analytical in-strument, the NC-202, in September 2019.BeingafurtherdevelopmentoftheNC-200,our best-selling analytical instrument, thisproduct is based on the Xcyto technology andtheXcytosoftware,andweexpectthatthe new instrument will help support growth inourmost importantarea, lifesciencere-search,cell-basedtherapyandpharmaceu-ticalprocessandqualitycontrol(LCP).The NC-202 offers a range of improve-

mentscomparedwiththeNC-200.Firstandforemost, the timeofanalysishasbeen re-ducedsubstantiallyfromapprox.45secondsto approx. 25 seconds, enhancing the cus-tomer experience as well as increasing theanalysiscapacitysignificantly.MeasurementshavealsobeenimprovedcomparedwiththeNC-200,andthenewNC-202isuniqueinthesensethatitcandeterminethevolumeofcel-lulardebris,which,amongotherthings,isanindicationofthehealthofthecells.ThemarketingeffortsfortheNC-202were

stepped up gradually in the past financialyear, and sales of the new instrument areprogressingwell.Inthelongerterm,theNC-202isexpectedtotakeoverthepositionfromtheNC-200asourbest-sellinginstrument.

… and may pave the way for entering new areasWe also expect that the NC-202 and theupcomingnewanalyticalinstrument,Xcyto-Matic, may pave the way for us to enternewareas, includingbioprocessing,which,amongotherthings,comprisestheproduc-tionofantibodiesandbiologicalmedicines.Bioprocessing is a big and lucrative areainwhichwecurrentlydonothaveamajor

presence. With the launch of the NC-202andtheXcytoMaticinstrument,wewillhavethe technology tomakeadifference–un-likeinthepastsinceNC-200measurementswere not sufficiently fast for this market.This is,however,alsoanareawithseveralexisting players and tougher competitionthanwithin,e.g.,cell-basedtherapy.Inthecomingfinancialyear,wewillfocus

on targeting biotech companies workingwith bioprocessing, with the ambition tomake the bioprocessingmarket a new at-tractivebusinessarea forChemoMetec.Atthesametime,wewillincreaseourfocusonsales tonewareas amongour verybroadandlargegroupofexistingcustomers.

We will continue the ChemoMetec build-up So far, we havemade it through the Cov-id-19periodreasonablywell,butweareofcourseattentive to the fact that thedevel-opmentof thisvirusmay impactourbusi-ness both in the short and long term. We will continuously consider the situation and adaptourbusinesstotheprevailingmarketconditions in the best possible way.

Inthecurrentsituation,wewillcontinuethe build-up across the business to create anevenstrongerplatformforfuturegrowthand earnings. This means, among otherthings, that we will invest in people andcompetenciesthatcansupportthefurtherdevelopment of our business, thatwe arecommittedtostrengtheningourinnovativecapability and developing new products,and that we are upgrading our production technology. Afterayearwhichendedwithanumberof

veryspecialchallengesinhandlingthecon-sequencesoftheCovid-19outbreak,Iwouldlike to thank everyone at ChemoMetec fortheirdedicatedeffortsandflexibilityunderthese difficult working conditions. Your ef-fortshavebeencrucialforourworktoadaptour business and sustain momentum.Abigthankyoutoourcustomersfortheir

understanding and valuable collaboration.Iwouldalsoliketothankourshareholdersfortheircontinuedsupport.

Steen SøndergaardCEO

The launch of our new analytical instrument, the NC-202, was an important event in 2019/20. The advanced technology combined with great user-friendliness and stability match our customers’ needs – and allow us to move into new business areas.

Steen Søndergaard,CEO

ChemoMetec / Extractfromannualreport2019/20 LetterfromtheCEO 11

Developments in 2019/20ChemoMetec’s revenue increased by 22% in 2019/20 from DKK 175.5 million to DKK 214.1 million, and after a good start to the financial year, revenue in the latter part of the financial year was negatively impacted by the Covid-19 outbreak. EBITDA increased from DKK 64.9 million to DKK 92.6 million, a 43% increase. As in previous years, growth was primarily driven by increasing sales to customers within cell-based therapy in the US market. Sales of the new cell counter, the NC-202, got off to a good start.

Sales performance and market developmentsChemoMeteccontinuedtoexperiencegoodprogress in 2019/20. Revenue was up byDKK38.6milliontoDKK214.1million,a22%increase. ChemoMetec’s revenue growthsignificantly outperformed the estimatedglobalmarketgrowthof5-7%,andthusthecompanycontinuedtowinmarketshares.In the latter part of the financial year,

ChemoMetec was negatively impacted bythe Covid-19 outbreak and the restrictionssubsequently imposed in the individualmarkets. During the initial phase, amajorpartofthelaboratoriesusingChemoMetec’sinstrumentswereclosedandanumberoforders were postponed or cancelled. Atthesametime, therestrictionsmadeface-to-facemeetingsimpossible,andsalesandmarketingactivitieswerethereforehandledvia virtual meetings and presentations.Someoftherestrictionswereeasedatthe

endofthefinancialyear,andmanylabora-toriesreopened,butingeneral itwasonlypossibletoholdvirtualmeetingswithexist-ingandpotentialcustomers.Consequently,oursalesandmarketingactivitiescontinueto be impacted by the Covid-19 situation,justlikethecustomersaregenerallyaffect-edbytheuncertaintyrelatingtothefutureCovid-19developments.As intheprecedingfinancialyears,reve-

nuegrowth isprimarilydrivenbya signifi-cantincreaseinsalestotheUSmarketwith-in theareaofcell-basedtherapy, including

particularly cell-based immunotherapy. The customer group in this area comprises large andsmallcompaniesdevelopingand/orof-feringapprovedtherapies,especiallyagainstcancer in the blood and lymphatic system. ChemoMetec’s sales within cell-based thera-pyprimarilycomprisetheNC-200cellcount-ing products.In the past financial year, we sold 775

instrumentsand4.8milliondisposablecas-settes (2018/19: 775 instruments and 4.2milliondisposablecassettes).Attheendofthe2018/19financialyear,ChemoMetecin-troducedNC-200andNC-202servicepackstoitscustomers,andtheyweresubsequent-ly verywell received in themarket. In the2019/20financialyear,wesold463servicepacks,andwhenaddingservicepackssoldinthe2018/19financialyear,salesreachedalmost500activeservicepacks.Theservicepackscomprisesupport,extendedguaran-tee and validation of the instrument. Thesaleofthesepackswillberecognisedastheservicesarerendered.ChemoMetec’snewcellcountingproduct,

theNC-202, has beenwell received in themarketsinceitslaunchforsaleinSeptem-ber 2019, and we have high expectationsthat the instrument will become a worthy successortothebest-sellingNC-200instru-ment. In the financial year, 47 NC-202 in-strumentsweresold,44ofwhichweresoldduringthelastfivemonthsofthefinancialyear. Sales of the NC-200 will, however,continueforseveralyearsoutofconsider-ation for the customerswhohave alreadyvalidated/approvedtheproduct.

Inthefinancialyear,onlyafewsalesandmarketingstaffmemberswerededicatedtothe Xcyto products.One reason for this isthat ChemoMetec has decided to give toppriority to sales of the cell counting prod-ucts within the cell-based therapy area. Two importantproductupgradesfortheXcyto5wereimplemented,butsofarthemarketingof theproduct hasmoreor less beenputonholdsinceChemoMeteccurrentlygivespriority to fully focusingonpromoting thesaleoftheNC-202andpositioningthenewinstrumentinthemarket.With a view to supporting growth, we

spent considerable resources in 2019/20onstrengtheningandadjustingtheChemo-Metec organisation, both in Denmark andabroad. The number of employees at theheadoffice inAllerød increasedby 12 full-timeemployeesfrom62to74,whereas inChemoMetecoverallwesawanetincreaseof 17 full-time employees from 85 to 102duringthefinancialyear.Withinsales,prod-uct management, marketing and productsupport, we saw a net increase of 11 full-timeemployees.Thenumberofemployeesattheinternationalofficesamountedto28attheendofthefinancialyear,20ofwhichwereemployedintheUSsubsidiary.We believe that recent years’ revenue

increase is largely due to ChemoMetec’s long-standing presence in themarket andthetopprioritygiventoprovidingcustomerservice and support. Combined with solidhigh-quality instruments, this has resultedin regularandsatisfiedcustomerswho, toawideextent,useandrepurchaseChemo-

In 2019/20, we generated growth of 22% – and we sold 775 instruments and 4.8 million disposable cassettes.

Developmentsin2019/20 Extractfromannualreport2019/20 / ChemoMetec12

Customers and markets• Continued expansion of our cus-tomer relationships, among otherthingsbywayof:• Increased proximity to our cus-tomersviaaphysicalpresenceinmainmarketsandclosedialoguesabout our customers’ wishes and needs

• Saleofservicepacks• Using digital solutions for e.g.meetingsandongoingservicing

• Increased sales to existing custom-ers,e.g.bywayofsalestomorefunc-tionsoftheindividualbusinesses

• Focusing on bioprocessing as a new business area

• OpeningofanewofficeinCalifornia• Restructuring of sales set-up inEurope with a view to improvingsalesefficiency

Products and innovation • Positioning the NC-202, the latest

cell counting instrument • CompletionofXcytoMatic,thenewhigh-speedcellcounter,andsubse-quent launch

• Increasing focus on developingsoftware that may contribute toautomationandefficiencyimprove-ments among customers who are typically required to meet high standards with respect to docu-mentation and quality control

• Investing in new competencies tostrengthen the basis for creatingcontinuedinnovation

• Upgradingourproductiontechnol-ogy with a view to improving effi-ciency and production capacity

Metec’s analytical instruments and con-sumables.Moreover, the strong customersatisfaction means that existing custom-ers’ employees often recommend Chemo-Metec’s products to their new employers iftheychangejobs,andthatleadstomanynewcustomersforChemoMeteceveryyear.In the past year, we spent a lot of re-

sourcesonmarketingChemoMetec’sprod-ucts. The main purpose is to generate more leads for our sales staff and distributors.The efforts primarily target electronicme-dia,e.g.LinkedIn-basedcampaigns,GoogleSEO optimisation, onlinewebinars and di-rectmarketingcampaigns.Theimportanceof theseweb-based activities will increasegradually,andnot least inconnectionwiththe Covid-19 situation, the new tools areoften theonlywayChemoMeteccancom-municate with both potential and existingcustomers.The markets which ChemoMetec ad-

dresses are estimated to grow overall inthe range of 5-7% annually, and this gen-erally provides a good basis for achievingfuture growth. During the past six years,Chemo Metec has generated annual organic growthofaround30%onaverage,andthisgrowth was primarily created on the basis

ofnewmarketshares.ChemoMetec’sglob-almarketsharewithincellcountingisesti-mated at around 10-15%, ranking Chemo-Metec among the three largest players in the globalmarket. In the coming years,ChemoMetecexpectstobeabletowinad-ditionalmarketshareandthustooutgrowthemarket.Itisdifficulttopredicthowtheuncertainty

relatedtoCovid-19willaffectChemoMetec’srevenueinthecomingperiod.AsaresultoftheCovid-19situation,ChemoMetecissell-ing many products to customers engaging in the development of vaccines or treat-mentforCovid-19.If,however,theCovid-19situationturnssubstantiallymorenegativethanatpresent,manyexistingandpoten-tial customers are expected to close theirlaboratories,andamajor lockdownacrossmarkets will undoubtedly have a materialadverseimpactonChemoMetec’srevenue.Othersignificantthreats includetradeten-sionsbetweentheUSAandChina,thehard-nessof the imminentBrexitaswellas thedevelopment in theUSD, as a strongUSDwould have a beneficial effect on Chemo-Metec.

Focus areas in 2020/21ChemoMetec’s goal is to create a basis for continued growth and strong earnings through in-depth insight into customer demand and needs as well as by continuing to strengthen the advanced technological platform. In the coming financial year, focus will mainly be on the following areas.

We continued to strengthen the overall organisation in 2019/20 to support future growth.

ChemoMetec / Extractfromannualreport2019/20 Developmentsin2019/20 13

Inlinewiththecontinueddevelopmentofourproductportfolio,wearealsostrengtheningouropportunitiestoservecustomersacrosstheentirevaluechain,whichoftencomprisesresearch,productdevelopment,processde-velopment,productionandqualitycontrol.Previously,wehavehadastrongpresencewithinresearchandproduct

development,butthelaunchofourlatestanalyticalinstrument,theNC-202,andthefutureXcytoMatic instrumentwillenableustoget incontactwithbothexistingandnewcustomerswithinprocessdevelopment,productionand quality control.Bioprocessingwill be a special focus area for us in future, andwewill

particularly target the area comprising the production of antibodies andproteinsforuseinpharmaceuticals–astronglygrowingareadrivenbythedevelopmentofmoreandmorenewtherapieswithinthisfield.Inprinciple,cell-basedtherapymayalsobeincludedunderbioprocessing,andwehavealreadybuiltauniquepositioninthisfield.There is a significant need for cell counting and viability determination

withinbioprocessing,anarea involvingworkwith livingcellsand inwhichthenumberofcellsareessential.WiththeNC-202andtheXcytoMatic,wecanofferourcustomersfasteranalysisandhigheranalysiscapacityaswellasgreatstabilityofthemeasuringequipmentwhichreducesmaintenancecostsconsiderably.ThesoftwareusedintheNC-202andtheXcytoMaticalsoenables customers to manage data electronically and to automate their data flows.This isofmajor importancetocustomerswithinbioprocessingasasubstantialamountofresourcesisrequiredtomeetvariousdocumentationrequirementsandgenerallytomeettherequirementsforGMPproduction(GMP:GoodManufacturingPractice, the commonquality standardwithintheproductionofpharmaceuticals).Ourambitionistobuildanew,attractivebusinessareawithinbioprocess-

ingoverthecomingyears.

Case: Bioprocessing

Bioprocessing may be an important new business area

Developmentsin2019/20 Extractfromannualreport2019/20 / ChemoMetec14

The NC-202 creates greater efficiency for our customers The new NC-202 cell counter has been well received by our customers. Biolabs, one of these customers, has chosen the NC-202 for its laboratories. Biolabs is a network of mainly small biotech businesses sharing laboratories in various important innovation clusters in the USA.

“We allow our member businesses to concentrate on their research and development– thenwe takecareof the restandprovide thebestequip-mentfortheirshareduse.This isnotalwaysaneasytaskasourmemberbusinesseshavedifferentneeds,particularlywithincellcounting.Someofthemdemandhighspeed,othersdemandprecisionandGMPcertification.BeforewestartedusingtheNucleoCounterproducts,itwasnecessarytouseanumberofdifferentcellcounterstomeettheneedsofourmemberbusi-nesses–andthisledtoahighmaintenancerequirementandmanyques-tionsrelatedtothevaryinganalyticalresults.Afterwe’vechangedfirsttotheNC-200andthentotheNC-202inourcelllaboratories,ourresearchershaveaccesstocellcountersthatareeasytouseandmaintain,andtheyproducereproducible results, meeting the GMP requirements and other relevantquality standards.” AndreyGorin,LaboratoryManageratBiolabs

Case: NucleoCounter NC-202

ChemoMetec / Extractfromannualreport2019/20 Developmentsin2019/20 15

Designan

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ChemoMetec A/SGydevang43DK-3450AllerødDenmark

Telephone(+45)48131020www.chemometec.comcontact@chemometec.com

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