Medistim ASA

Good morning, everyone, and welcome to Medistim's fourth quarter and preliminary financial results for 2025 presentation. My name is Kari Krogstad and I'm joined with the CFO, Thomas Jakobsen. And we will go through this usual agenda, starting with the highlights. And I'm very pleased to be able to report a new record for sales in the quarter, reaching 182.3 million NOX in Q4. This means that we are continuing the high growth all through the year that we've seen in the first three quarters, ending with 20.6% growth in this fourth quarter. We can see that there is quite a small currency effect when we are comparing to the currency in the same quarter last year. But still adjusting for that, the total sales would be 21.7%. And we're seeing that our own products are doing really well and the sales is up 25%. And it is America's region that is really leading the way with 44.3% currency neutral growth. We also see that EMEA, Europe, Middle East and Africa has a very strong quarter, this fourth quarter being up 24.4%. Our Asia-Pacific region is down by 24.2%, and as we have consistently reported all through the year, we have to expect quarterly variations from Asia-Pacific, but we also expected to see a solid year, which we will show. The third-party products has small 2.2% growth in the quarter, but we know that they had a tremendous start and will finish the year very strong. Also, the operating profit is very strong, 42.3 million, up 63.8% from the same quarter last year. And I just want to mention that the EBIT margin of 23.2%, although being a lot higher than the margin that we reported in the same quarter last year, is impacted by an increase in IT infrastructure expenses of 5.8 million. So this obviously has a negative impact and actually this EBIT margin would have been about 26% without it. But I will leave to my colleague Thomas to give a bit more background for this. but a very decent ending of the year. This is then taking us to a record year for both sales and operating profit. So almost reaching 700 million NOX in revenues, completing the year at 24.4% growth. Slight currency effect and adjusting for that the total sales is up 25.8% and we're seeing that our own product sales is as high as 28.3% growth. Again, it is Americas that is leading the way up 40.5%, but also Asia Pacific, extremely strong at 40% growth and also EMEA with a decent 7% growth for the year. We know that we have a lot of highly penetrated countries in that region. And also our third party products having a record year and growing 12.7% in 25. This takes us to an operating profit record at 196.2 million, up almost 50% from last year. And also giving us the strong EBIT margins at the high 20s that we would like to see of 28%. And this is very much driven by the strong sales of our own products through the direct sales channel. So based on these results, the board will suggest to the General Assembly a dividend of eight NOx per share, a total of 146.2 million. So this means that we are able to add another record year to our history and also meaning that we continue to deliver on our promise of profitable growth consistently over time. So with that, I will leave the word to Thomas.

Thank you very much, Kari. I will, as usual, take us through the financials for the quarter, but also for the year. And since Kari is going through sales revenue more in detail for geography and products, I will not go into that detail here. But I need to mention that, you know, with record sales and especially Sales through our direct markets and especially the USA, this improves our margin going from 77.8% to 80.2%. Having said that, on the negative side, we actually have here a tariff expense of almost 4 million NOX included in the cost of goods sold related to the tariffs implemented in the US, which for Norway is 15%. Salary and social expenses increases as we discussed in previous quarters. We've strengthened our commercial team, but also our R&D team and operations. At the same time, we also have a record year, which means that we have higher commissions and also bonuses related to the results that we are now presenting to you. Then you would expect maybe on other operating expenses with Kari's note that 5.8 million is expense related to IT infrastructure. And when you compare that to last year, the expense is almost the same. And the reason for that is that we had also very high expense level in the fourth quarter in 2024. related to Congresses and especially the launch of the IN2E software. In addition to that, we also had recruitment expenses to our new commercial sales team. So both fourth quarter 2024 and fourth quarter 2025, is then relatively speaking high when we look at these quarters. So what is this IT infrastructure extraordinary expense? Well, we do have an ERP system, a CRM system and a PDM system that is today on-premise, which we are lifting to a cloud solution. If we were to lift this from one on-premise solution to another on-premise solution, this would obviously be an asset for the company. All the expenses related to that work would be company property and therefore an asset. When we do this from on-premise to a cloud solution, still the coding that's MetaStim related is still an asset. But according to the international accounting rules, when you are using standard configurations and standard setups, That part of the project, lifting it to the cloud, is not an asset. And therefore, this part of the project is expensed. And what we've seen here for the fourth quarter, 5.8 million has therefore been expensed. And that's the explanation why we have this situation. Even so, EBITDA increases from 21.4% to 27.1%, ending at 49.3 million. Depreciation is slightly higher than last year, but even so, EBITDA percentage increases from 17.1% to 23.2%. ending at 42.3 million. Net finance is currency-based, unrealized gains and losses, ending positively for the quarter with 5.5 million. All in all, profit before tax ends at 47.8 million and profit after tax increases 78% and ends at 38.1 million for the fourth quarter. So going into the total year, yes, we almost end the year at 700 million. So this is definitely a record for Medistim. When we look at margins, same explanation as for the quarter. However, the total tariff expense in 2025 is also 4 million NOX, which means that before the tariff was introduced in the US, we shipped over all the products that we were able to ship to the US to avoid the tariff on those goods, which means that we've been selling from an inventory in the second and the third quarter of 2025 on products that are not affected by the tariff. So we do now see that in the fourth quarter we have the full effect of the tariff and going forward in 26 we will continue to have this effect as long as this tariff of 15% is valid. Salary and social expenses increases and the explanation is the same as for the quarter, only larger numbers. Other operating expenses also increases and we have been very much pushing our sales team to be out with face time to the customers so the increase of the expense is related to our commercial teams being out there traveling visiting customers and we have very good experience that the more face time we have with our customers the better results we will have on on sales so that is something that the new commercial team has been pushing EBITDA percentage increases from 27.7% to 31.6% for the year. EBIT margin also improves from 23.3% to 28% and ends at 196.2 million. Net finance, I can also add, in addition to currency, that we have a positive effect of interest on additional cash, which amounts to about 5 million NOX. All in all, profit before tax, first time over 200 million for Medistim, and then it's at 206.8 million, and profit after tax ends at 159.2 million, up over 50% compared to last year. So a record... year top line and bottom line. Balance sheet, our intangible assets increases. Three major reasons for this. We have the two development projects ongoing, but we also have the IT infrastructure project taking our systems from on-prem to the cloud, increasing the intangible assets. When it comes to inventory, we see that inventory level is at the same level as last year. However, our inventory level peaked by the end of the second quarter at almost 175 million and the reason for this was related to the period when supply chain was an issue and we placed orders which we now have honored and this has been delivered so going forward from a lot of our critical components and some of our most expensive components we do not expect to do purchase on these components in 2026 and the orders that we're now placing is then for delivery in 2027. This means that going forward in 2026, I would expect to see inventory levels actually decreasing. Accounts receivable increases natural when we increase sales. Our cash position is solid at 212.1 million. And as Kari mentioned, our board, based upon the solid cash position, a very good year 2025 profit-wise and a good forward-looking situation in 26 and going forward the board has suggested to the general meeting to pay a dividend of eight crores per share which is 146.2 million NOX in cash payment in total. Our equity and liability, we have a strong balance sheet, more than 70% equity. Also, our long-term liability is not related to bank debt, so we have no interest bearing bank debt, and this is then related to We have extended warranty and service contracts, which is here deferred income, 11.5 million, and we also have a total of 49.3 million in obligations related to our lease contracts, of which 37.5 million is long term. Some key figures. We see that our earnings per share increases quite nicely in the fourth quarter and is at 2.08 NOX. So Krones is the Norwegian termination for NOX. For the year it ends at 8.71 NOK per share which is up and corresponding to the development in our profit obviously. So again a strong year. Our cash flow is also positive. We have a strong cash flow from operations both for the quarter and for the year. Our investments, 36 million in total for the year. We have 22 million related to product development. We have 10 million related to our IT project as the two major investments that we are involved in at the moment. Cash from financing ends at 122.7 million and the majority of that is the dividend we paid in May of 109.5 million. So net change in cash is positive with 32.8 million and we end the year with a cash position 112.1 million, which is also a record actually and going out of the year when it comes to cash. So by that, I leave the word again to Kari to continue this presentation. Thank you.

So let's take a deeper look into the various products and segments, starting with the flow and imaging systems in units. So we see that we have volume growth in all regions, giving a net five more flow and imaging units sold this quarter. And we are, of course, very happy to see this development both for the quarter, but even more so for the full year. You see strong volume growth in America, which is in volume growing by 84% and also in Asia Pacific up 75%. And as we all know, this is really the The most important product from Medistim, it is really what separates us from competition, having these two modalities in one system, both imaging and flow, and it's the higher value, higher priced product. So it's very important for us to see increase in sales of this particular product. EMEA, as we can see, is down for the year by 14%, but it's growing on the flow system side. When we are selling more imaging systems, we also expect to see more imaging probe sales. This particular quarter it is down, but we are noting that the third quarter this year was exceptionally strong, so not really a big surprise. And again, for the full year with the very strong performance in Americas of the sales of the imaging products, we also see this strong volume growth on the probe side with a growth of 81%. Asia Pacific and EMEA was done in volume for imaging probes. When we're then looking at the flow-only systems, we are down for the quarter. But for the full year, flow-only system volume was down in the Americas by 36%. Of course, this is related to the high growth that we're seeing on the imaging side in the Americas. But we're also seeing that Asia Pacific, also growing on imaging, is actually growing 25% on the volume side with the flow-only systems, which is very strong. EMEA also up 6% on the volume side here. So we are seeing after a couple of challenging years that the imaging sales are gaining momentum again. And flow only units then rose 4.3% to 121 units, while the combined flow and imaging units surged at 39% to 92 units. So about 43% of the total number of systems was actually including the imaging in 2025. Also, when it comes to flow probes in units, we've had a great quarter and a great year. So for the quarter, we're growing 26.5% in units. And for the full year, flow probe volume sales is up 20.7%. This is very much driven by the strong 17% growth in capital sales of all systems. And yeah, so as a conclusion here, it is both the capital system sales, but also increase in use that is driving the demand for these consumable flow probes. Looking at the regions in a little bit more detail, so starting with Americas, and as we know, more than 90% of the revenues from this region actually comes from the United States. We are ending Q4 at 86.1 million, meaning 44.3% currency neutral growth. And we're seeing that total capital system sales declined by two units, but we are selling two more imaging units and these are really high priced products. So it really compensates for the lower number of units. We also saw strong probe sales for the quarter, flow probes up 56%, imaging probes up 15%. So extremely good performance in the USA and also we are seeing positive contributions from the smaller parts of this region. Our new direct market Canada has shown very positive performance all through the year and had a growth of 56% in the fourth quarter. Latin America is a very small region here. Close a look into the Americas. Here we can see what the impact of selling more capital systems on the flow and imaging configuration. This is really what drives the revenues from America. So 28.6% growth in volume for the quarter, but 84% growth in volume for the full year. Also, when we're counting the number of procedures coming from sales, whether it's from the smart cards and the lease agreements that we have or directly from selling flow probes to the capital customers, we're noting that this is increasing tremendously, 72.6% from the flow probes to capital customers for the quarter and 60% for the year. And this actually ends at over 100,000 procedures, flow procedures in America for the full year. So this is definitely a new record. And when we are then adjusting for some of these probes being sold to vascular customers, we are now estimating that we have an adoption rate in the US, not at 37% as we reported last year, but at 40%. Also, it's interesting to note that procedures from imaging probes to capital customers is growing nicely, ending at 83% growth for the year. Looking at Asia-Pacific, so as I stated, it's a slow quarter, it's down 24%, but up 40% for the full year. So definitely a success and finally being out of the challenging period after the transition into a direct organization in China. China is the biggest region here. Sales were down 49% for the quarter, but up 32% for the year, ending at 45.7 million NOX. And we have to remember that actually all countries in Asia Pacific depends on distributors. And still in China, where we have our own employees and we are, of course, supporting end users as well, we still are relying on distributors and agents. And this will always give variability in the quarterly sales, as we have consistently informed. Sales to Japan were down for the quarter, but is showing a solid year, 71% growth ending at, I would say, a normalized 20.6 million when we're looking at historical sales. And as we have announced earlier this month, Medistim will now go direct in Japan. I will get back to that in a few minutes. Also, the other countries and other Asia-Pacific distributors are actually contributing very positively, 95% growth for the quarter and 38% growth for the year, ending at 25.8 million. Europe, Middle East and Africa, 56.2 million in sales in Q4. That is currency neutral growth of 24.4%, so a really strong finish from the EMEA region. It's particularly strong quarter for the direct markets, which we of course like to see. We're talking about Spain, Germany and all the Scandinavian countries, where we see currency neutral increase of 13.5 for the quarter. Also, sales through distributors was up with a current neutral increase of 34.3% for the quarter, ending at this 7%, which again, I feel is a decent result, but we have ambitions to grow this in the future. Third-party products, 2.2% for the quarter, 12.7% growth for the year. This is a highly diversified product portfolio. Mentor and their breast implants, eye care and their ophthalmology products and AMI with their urology and proctology products are the biggest contributors here. And we remember that it was ophthalmology products sold to new hospitals in Norway that was really driving the high growth that we saw in 2025. And this took the third party product portfolio to a new record of 101 million NOC. So this summarizes and shows that it's a really good performance, I would say, from all regions. But I have to highlight the contributions from Americas and the fact that we are growing 35.9% in total from a very high base of 237 million to 322 million in 2025. Taking a look at the split of cardiac versus vascular sales, we're happy to see that we see strong growth in both cardiac and vascular products. But we are continuing to see that the vascular surgery products continue to have higher growth rates than the cardiac surgery products. And we're also seeing that it's gradually taking a larger share of the total sales of OWN products. And in 2025, we ended at almost 20% of the revenues from OWN products coming from Vascular. So this is also a positive development. If we look at the split of Flow only products versus the imaging systems and probes, We then see that after this challenging period in 23 and 24, the revenues from imaging products are back with the highest annual growth so far at 47.4%. And now the revenues from sale of imaging products make up 31% of sales of own products. Also, when we are checking how we're doing with our recurring revenues coming from sales of paper procedure, smart cards and lease revenues, and also sales of our probes, we are seeing that 25 is ending at just above 70% as the percentage of recurring revenues. So pretty much consistent with what we've seen over the years. Then allow me to provide some comments also on how we're doing in implementing our strategy, reminding everyone that our vision is actually to place a MediSteam system in every operating room all over the world. That's a big task and we are making progress, but there are still very high growth opportunities here. A couple of years ago, we launched our mid-term goal of reaching 1 billion knock-in sales in a few years. And with the 700 million that we are delivering in 2025, we are well on the way of achieving this goal. And the strategy to actually get there is this combination of converting the high penetrated flow only cabbage markets to flow and imaging. It is to continue to grow in those markets where we are underway with flow and getting increased adoption of our flow technologies in every market. It's also to be flexible and provide entry-level solutions in price sensitive markets. And absolutely to build a position in vascular surgery, which I just showed that we are also progressing on. Expanding direct market coverage is also a very critical part of our strategy. And now on the 2nd of February, we sent out the press release to say that as of 16th of March, Medistim opens a direct sales office based in Tokyo. And I can report that we already have a solid team with experienced leader in place. And our situation in Japan is well known. We have 90% of the approximately 17,000 cabbage surgery procedures performed in the market. And as just reported, we ended 2025 with sales to our current distributor there at 20.6 million NOK. so the growth opportunity is of course coming from our experience of getting closer to the end users is really critical to to maximize the value from the market and the first thing that will happen is that we will capture the distributor margin and then longer term we will have the opportunity to continue to grow with our flow product to convert from flow only devices to flow and imaging devices We have a decent uptake of imaging system, but it's still only maybe around 35%. So there's definitely continued growth opportunity in CABG surgery. And then comes an untapped potential from vascular procedures as well. Another part of our growth strategy is to support activities that will grow adoption in under-penetrated markets for flow. And clinical marketing is critical. So on the 24th of February, we announced that we will sponsor a new trial, SmartFlow, which is a randomized clinical trial in cabbage surgery. And we're very excited about this study. First of all, it's going to be led by Professor Mario Gaudinho, a very prominent surgeon at Vale Cornell Medicine in New York. And this opinion leader is the first author on the consensus paper published in circulation in 2021. where a group of surgeon experts made 10 expert statements including the very famous transit time flow measurement should be used in every CABG case. So it was an extremely positive and supportive article in a prominent paper supporting our technology. At the same time, in the conclusion in this paper, they stated that, of course, it is desirable to perform a large randomized clinical trial to really provide the best evidence for this claim. And that's exactly what they are now seeking to do. This is a quote from Professor Mario Gaddino. He says that most existing studies evaluating TTFM are small, observational and methodologically heterogeneous. Although expert consensus supports its use, the lack of adequately powered randomized evidence remains a barrier to widespread adoption in clinical practice. This is his words. It also says that SmartFlow has been designed as the first appropriately powered randomized trial to rigorously evaluate intraoperative graft assessment with TTFM in CABG. And by generating high-quality randomized data on the impact of TTFM on early graft failure, and by providing a platform that can be extended to assess clinical outcomes, the Smart Flow Program has the potential to inform future guideline recommendations and promote a more consistent evidence-based approach to intraoperative graft assessment. So this is Professor Gaudinho's words. The study design of the SMART flow is that it's expertise-based. That means that 1,242 patients that will be enrolled in the study will be randomized to either a surgeon, an expert surgeon doing flow measurements routinely, or to a surgeon who is not doing flow measurements. So this is the concept of an expertise-based trial. And the graft patency will be assessed with MEDISTIN's Miracu TTFM system. And the imaging modality will also be available, but it's not mandatory to use that in this study. And we're talking about 20 centers in the US, in Canada, in Europe and in Asia that will partake in this trial. And the goal is to evaluate whether TTFM reduces the incidence of graft failure within one to three months post-surgery as assessed by coronary CT angiography. So there are plenty of studies that are already providing evidence for this, but this is going to be a higher quality, larger study, randomized, that will hopefully provide really the next level of evidence for this. And providing a positive outcome here, the study may be extended to evaluate the impact of TTFM on longer-term clinical outcomes, and that would include myocardial infarction, repeat revascularization, survival and quality of life. When it comes to Medistim's involvement here, of course, it's a completely scientifically independent trial, so we have nothing to do with the interpretation results or anything. And the study is primarily supported by philanthropic donations and federal funding. But Medistim is then serving as the only industry sponsor, and we will contribute with, I would say, a pretty modest US$500,000 over the duration of the trial. This will, of course, be a great opportunity for us to facilitate upgrades to imaging in those centers that haven't already started using imaging. And it's a great way of also getting our newest Intui software into the hands of these very good centers. We are also facilitating the study with our case cloud solution for data collection, storage and analysis, the same as we're doing in the patent study. So with a good, I would say a great probably, 25 behind us and also already moving into 26 with opening up a new market for us in Japan and also sponsoring and partaking in this exciting new trial to support our cabbage surgery market. We are moving into 2026 as one team making bolder moves with excellence accelerated. Then we say thank you for this time and we will see each other for the first quarter report. Thank you.