Medistim ASA

and welcome to Medisim's first quarter 2025 results presentation. My name is Kari Kragstad, and together with the CFO, Thomas Jakobsen, we are going to take you through the first quarter's results. And we will start with the highlights. But before that, we like to also remind everyone of Medistim's track record, which has been very positive, showing a consistent delivery of sales growth, profitable sales growth over the years. And as the last 12 months 2025 columns are indicating, we can already from this graph disclose that Q1 was a very strong start to 2025 for the company. So let's go directly into the highlights for the first quarter. This is really a quarter when the business is firing on all cylinders. It is an exceptionally strong sales and EBIT for a quarter, representing a new record for both. 181.5 million NOX in revenues. That's actually 20% higher than our previous record, which we set in the fourth quarter last year. So that ends up with a 35.7% growth in total, which is of course extremely high. We see that we have a little bit help from currency, but still adjusting for that, the total sales is up 31.8%. And as I said, it's really firing on all cylinders. So Americas is up 28%, EMEA is up 18%, Asia Pacific is up almost 63%. And also the third party products is showing fantastic growth this quarter. This is of course also enabling us to deliver a very strong operating profit for the quarter. So 59.2 million, that's actually 84% better than the same quarter last year. And it's very much related to the strong growth that we're seeing in our own products. And we will go into all of these details through the presentation. News from the first quarter, we have worked with strengthening our commercial operations with some organizational changes and adaptations, and I'll get a little bit back into that. And yesterday, the General Assembly decided to pay out a dividend of six knots per share, a total of 109.6 million. So with that introduction, I leave the word to Thomas.

Thank you, Kari. I will take us through the financial statements as usual. And as Kari is going to comment on sales by region and product later on, I will not go into details related to that. So I will go straight to the gross margin, which is improved here by almost 2%. And that despite the fact that third-party products is increasing with more than 40%. However, third party products are less than 20% of total revenue. And when we at the same time increase sales of our own products with almost 35%, we are able to increase our gross margin with almost 2%. Salary and social expenses increases. There are two major reasons for it. Kari had this word here with strengthening commercial operations. That's one explanation. We'll strengthen our team there. In addition, we've had a fantastic quarter with uh growth in all regional areas and the fantastic growth in third-party products and as a result we we do have a higher commission and bonuses related to that fantastic result in addition to that we we do have salary adjustments from 2024 which was adjusted with effect from april so that we bring into the first quarter this year as a difference And we also have currency effects, increasing expenses since the Norwegian kron is weaker this quarter compared to the same quarter last year. All in all, top line increases almost 36%. Total operating expenses, including custom material, increases 22%. That gives us a strong operating profit before depreciation ending at 64.7 million, which is about 65% increase. Depreciation expense is down. That means that previously product development projects are fully depreciated and we do not depreciate on the two major development projects that we have going. We are only capitalizing on those since the products are within TUI. It's just about to be launched and we also have this automation project related to flow probes that are not completed. This brings us an EBIT of 51.2 million. That's up 84.5% compared to your last year. So it's a very strong quarter, obviously. And an EBIT margin of over 30%, 32.6% to be exact. Net finance is related to our currency positions. And the Norwegian kron has strengthened itself towards especially dollar, but also euro throughout the first quarter, leaving us with a net finance negative with just under 2.5 million. Profit before tax ends at 56.7 million then and profit after tax ends at 43.4 million. That's up 78% compared to the same period last year. So again, an excellent quarter. If you go to the balance sheet, we have an increase in tangible assets. And I touched upon the reason in the P&L comments, since we do capitalize more on development projects than what we are depreciating. When it comes to fixed assets, it's the opposite situation. Inventory this quarter is increasing. We are still securing critical stocks in the same manner as we've done before so the policy hasn't changed. We have however on critical components adjusted our orders so we should expect a decline in the inventory related to our own products going forward. However, we still have some deliveries on those old orders that goes 12 to 18 months back in time. So the main reason for our inventory increase this period is related to third party products. And as you've seen, we have an excellent quarter in the first quarter for third party products. And one of the major reasons is that we are equipping a new hospital in Norway, Dramundssykehus. And that is still not complete by the end of the quarter. So with this increase in revenue, we also have to, of course, purchase the equipment that is needed for the hospital. So this is a temporary increase in the third party product inventory level as such. Accounts receivable increases. Sales for the quarter increases almost 48 million. So it's then expected that accounts receivable also increases. So we end the quarter with an increase here of 23 million. Cash processing is strong, as you can see. And as Kari mentioned, and as we announced yesterday after the general meeting, there will be a dividend of NOK 6 per share paid out by, I think, 19th of May. And that will be a payout of just under 110 million Norwegian kroner. Equity and liability. Strong equity over 75%. However, with the dividend of 110%, that will clearly adjust our equity as such, but we do have strong profit going for this quarter and hopefully going forward, so that will soon be recovered. We have no interest-bearing debt. The long-term debt that we do have is related to extended warranty. So it's deferred revenue, but the major part is related to our lease obligations related to premises. Yes, so that was the total for the balance sheet. Looking at some key figures, we do see that we have a strong earning per share. It's a good growth from last year, 78% growth. which is the same as the profit, obviously. And we also see that as of this first quarter, we do have earnings per share being 42% of the total earnings per share in the fiscal year 2024. So that obviously tells you that we have had a very strong start in 2025. When it comes to cash flow, we are sharing some additional information this quarter and going forward. Even though we have a strong profit for the quarter, cash flow operation is only 18.8 million. Two major reasons and that is prepayment of taxes, 15.5 million that is. And with the increased sales, the working capital also increases quite dramatically, almost 20 million. So that's the main reason for cash flow from operation being lower than the profit for the period. Cash flow from investments, 3.6 million is related to development project. The remaining is related to infrastructure. Cash from finance ends at negative 10 million. We do have this share back program that we initiated in March and ended in April. By the end of the first quarter, we paid 7.9 million buying back our own shares. The remaining 2.2 million is related to lease obligations and net cash for the period ends at a positive 4.2 million and cash equivalents end at 183.4 million by the end of the quarter. So that is a good place to be when it comes to cash. So with that, I will pass on the word further on to Kari. Thank you.

Yes, so let's look at some of the details on the sales side here. So starting with the number of flow and imaging systems sold in units, this is obviously our highest value and priced ultrasound system, so very important to see good developments here. This quarter we are selling 11 more of these units compared to the same quarter last year, and we can see that it's really the Americas region that is driving this quarter's result. EMEA down with one unit, Asia Pacific up by three. And it's really a very high correlation with results and the number of imaging units also. This is really a development that we like to see. And as we saw through 2023 and 2024, we've had some headwinds in selling these higher valued systems. Although we never lost confidence that our customers are interested in purchasing this technology and adopting it. So we've always explained that this has been temporary delays in purchasing processes. And now we're seeing that we're capitalizing on a built up demand in our pipeline. When it comes to imaging probes, so naturally imaging probes has a tendency to follow the development of imaging systems. So we're selling 13 more imaging probes this quarter, 39 in total. Again, Americas as the driver. When it comes to the unit sales of flow-only systems, this quarter we have an increase of seven units. When it comes to Americas, that is down, but of course related to the much higher growth in the flow and imaging systems for the quarter. EMEA, on the other hand, is up by 10 units, and we can see that this growth is coming both from our distributed channels and also from our direct markets. Asia-Pacific also up by two. Flow probes in units, the sales is up 18.5% in the first quarter to 2,000, more than, I can't even see, 800, yes. And again, we can see that Americas is really driving this, and we will analyze a little bit further why that is so. EMEA is up 1%, Asia Pacific coming back also strongly after a softer period, up 60% this quarter. Okay, so taking a closer look at the Americas, so 74.1 million in sales this quarter. Currency neutral, we're looking at a very high growth of 28.4% for the quarter. So just keeping in mind that 2023, we actually had a decline in sales revenues of 6.5%, coming back stronger. with 11.6% growth last year, with really increasing growth through last year. And we are then following up in the first quarter this year with this very strong growth. So we saw that the total number of systems sold as capital is up four units in total, but it's really the flow and imaging system that is driving the revenues with these nine units. Also part of the Americas region, Canada and Latin America. So Canada has a new direct market for us. They had a very strong first quarter last year and they are repeating the same level this first quarter. While the distributors in Latin America had a very low sales this particular quarter. But of course, this is a smaller part of the total sales. Further looking into our performance in the USA. It's a busy slide, but let's start with taking a look at the system sales and outplacement. So we're seeing that we are outplacing and selling a total of 18 units this quarter compared to the same number last year. But as already explained, we have a higher portion of these units being sold as capital, and that is of course driving the quarterly revenues. We can also say now that the capital sales of systems are at an improved level. I wouldn't say at the highest level, but it's really starting to stabilize again at a higher level. When we are selling more capital systems in the US, that will also influence the number of flow probes that we're selling. So we can see from the table below that the number of flow probes to capital customers are growing by 32%. And this is typically driven because a new capital customer will buy a startup probe package with a number of probes. So this will be counted as procedures. And as we have explained before, the number of procedures, we're using that as an estimate for utilization. But obviously, this high number of procedures are not used immediately. So it's only an estimate. If you look at the number of flow procedures as in relation to market share, because of course that translates into market share. On the top here we can see the past several years and we can see that 22 to 24 was really flat development in number of flow probes or flow procedures sold. That actually told us that we had about 35% of the total number of cabbage procedures in the USA, which is counting around 200,000 procedures a year. If we're now making a new last 12-month number here based on the growth in the first quarter, that actually is increasing and suggesting somewhere close to 37% of the US cabbage procedures. Again, only estimates. And when it comes to the number of flow procedures sold in US per quarter, of course, we can see in the graphs on the low end here, the high growth that we are delivering in the first quarter. So positive developments here, absolutely. But also the other areas are going very well this quarter. So Asia Pacific, 27.9 million in sales, currency neutral. This is a growth of almost 63%. As we've talked about extensively through, I would say, both 23 and 24, we have gone through some changes, of course, in China, where we established a direct sales operation. And we've also here been very confident that we would see a recovery of that normalization of that sales in China. And that is what we're seeing here. So Q1 was very strong, up 72% in China specifically. And I would warn that we will continue to see some quarterly variations. from China and Asia Pacific, but we are definitely expecting this to be a normalized year. Also Japan showed further signs of normalizing. We've had quarters in 24 where we saw very low sales and of course causing some concern. We came back quite strong in the fourth quarter and this is continuing into the first quarter. So then we will follow on and see how this is continuing to developing into the rest of this year. Europe, Middle East and Africa, so ending at 47.9 million in sales for the first quarter, currency neutral. This is corresponding to an 18.2% growth for the quarter. And it's very satisfying to see that this continued growth. Strong development is seen both from the direct markets and also from the distributor markets. So direct markets are growing currency neutral 16.1 and distributors at 22.2. Very solid. Third-party products, over time, I guess we've seen around 5% annual growth from the third-party product portfolio. So quarterly growth of 41.2% is extraordinary, definitely. We've seen good developments all through last year as well. I think we're making good progress with establishing our Scandinavian third party distribution franchise, adding new agencies to our portfolio as well. But as Thomas was explaining, the strong results this quarter is very much connected to equipping the new hospital outside of Oslo. Of course, driving this very, very high growth. So summarizing everything, and this is in Norwegian currency, 35% growth from Americas, 66% from APAC, 20% from EMEA, 41.2% from the third party, ending at a total of 35.7%. And we are, of course, very interested in following closely the development in the vascular business. So this quarter, we see that the vascular product portfolio is growing also at a very high level, 45% growth over the same quarter last year, now making up 20% of the total sales of own products. There's no particular news really to provide on the patent study, but just as a reminder, the patent study for peripheral bypass surgery is one of the key initiatives and investments we're making in developing this vascular surgery business for Medistim, and we're making progress in patient enrollment and getting all the centers able to start enrolling. Of course, many of the centers that are participating in the study are actually new users to the technology and they need time to get acquainted and get trained on the technology before they can be allowed to enroll patients. It's also very good when you see that vascular, of course, is growing at a higher percentage, which is to be expected, but cardiac sales is also very strong for the quarter, 32% growth. When it comes to imaging, yeah, imaging already mentioned been weak through 2023 and 24. Actually, we've seen a decline in the sales from the imaging product portfolio in both years, coming back very strongly this quarter, 85% up. And as I said, we have really expected this to come back. Because all the feedback we're getting from potential new users is really that people get the concept of adding imaging to the cabbage procedures first and foremost. And I'm sure that we will see the same tendency in Vascular as we build that business as well. But extremely good to see this development. When it comes to recurring and capital revenues and the split between them, so we're looking at flow probe sales, PPP card sales and also our lease contracts. We regard all of that as recurring revenues. And it's typically been laying around, well, 70%. This first quarter is that the recurring is making up 67.7%, so a little bit lower than the same quarter last year. Of course, directly a consequence of the high capital sales this quarter. And the last 12 months, 2025, is at 71.6%. So that was really going through the details of the sales performance within the different areas of the business. Just as a reminder, we have our growth strategy adapted to the various markets and related to the market position that we have in any geography. We are continuing to push, of course, conversion from flow to imaging in strong cabbage markets, and then we're using marketing efforts to get adoption also in the under-penetrated markets, a lot to do with the clinical markets and the clinical projects that we are engaged with. We are continuing to be flexible on pricing and offering various business models in order to also find solutions for emerging markets such as India, and working very hard to build our position in vascular surgery. Going direct in more markets, the last market was China and Canada and Sweden, and we will see what will be the next market here. I mentioned briefly that we have made very deliberate, strong investments in our vascular space with the patent study. As we have also talked about, we are in the launch phase of the Intui software platform. And that's also starting to find its way out to the market. I can say that in first quarter, we had no sales influence from Intui. So that was not the cause of the great results this first quarter. But it's going to be booked revenues from the Intui systems in the second quarter. But as I stated in the press release in the end of January, this is really a perfect time to strengthen our commercial efforts. We want to make sure that we have the best possible organization and operations that can really handle and develop these markets with the new tools that we are providing. So this has been announced before, but it's worth repeating and it belongs to the first quarter. We have organized now all our regions into one common leader. So Mike Karim has been appointed as our chief commercial officer. And we've also appointed Tony Winter as our vice president of the America's sales region. And this is, of course, to make sure that we are optimizing all our strategies, all our tools, and also sharing best practices across these regions. And from what we've seen through the first quarter, I think we're making very good progress with this new organization. So we entered 2025 with this slogan, one team, bold moves, excellence redefined. And I think we've started very well according to this slogan. Okay, so with that, we are thanking everyone for the attention and participation during this first quarter presentation. And we look forward to meeting again for the second quarter results. Thank you very much.