Ion Beam Applications SA

Welcome, everybody, to the IBA Half Year 2022 Results Conference Call. At this time, all remote participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. I would now like to turn the conference over to Olivier Legrain, Chief Executive Officer of IBA. Olivier.

Thank you, Olivier. Thank you, and good afternoon, everybody, especially our two guests here in the room. and more to come. And thank you for joining us for our half-year result call. I'm Olivier, the CEO of IDA, and I'm here with many, many people. But I will give the presentation today together with Soumya Chandra Mouli, our CFO. Before we start, I'd like to draw your attention to the company disclaimer on the forward-looking statement. So first of all, to start today, I think I'd like to especially thank the entire IBA team for their continued hard work over the first half of this year, even though it has been more of a normal year. It's still a bit challenging for many, many reasons that I think everybody knows, especially our colleagues in China that are still sometime in lockdown and that we have our time to visit so far. I'm confident it will change soon. So we are pleased to see that the hard work is paying off with the incredible resilience of our business. And I'm delighted to report on our positive progress over the year. As always, I will give an overview of our business and progress in the first half. Sumia will then summarize our financial statement and then after I will discuss the outlook and we will be happy, of course, to take any questions. Looking at the overview of the numbers, as you know, the group is funded on our expertise in particle beam in technology. We have four core business line, proton therapy, radiopharma solution, industrial solutions, and dosimetry. Each of these businesses continue to perform extremely well. We see actually quite an acceleration of the demand across the board for our product. And they will all be profitable, or they were all profitable in the first half of 2022. The key driver for the business unit, well, for each business unit, we made progress. We have increased our share of the patient QA market with stronger intake from dosimetry in the first half. You have seen that we have announced yesterday also a strategic partnership with Candidos in Sweden, which will further strengthen our product portfolio in the patient QA segment. As you may have seen, we come on top of another acquisition in the first lab in Canada, MODUS. where they're fully integrated yet, so I tend to forget the original name. In proton therapy, we have seen an acceleration in the conversion of the backlog, which we anticipate will continue in the second half. I'm very happy about the partnership with CGNNT and the first result we can witness there. We have announced already some sales of the first proton therapy center CGNNT was able to complete. also in proton therapy we were pleased to be able to partner with very very strong name in academia and industry through the recently launched conformal flash alliance with the aim of bringing conformal flash proton therapy to the clinic our radio pharmaceutical partnership with skcen uh in the development of actinium 255 25 so i'm a bit tired and now with north star for the production of isotope continue to evolve positively we continue to develop a new area for our business with the icon the new 30 mev cyclotron for the production of novel isotope And last but not least, on the medical device sterilization side, the IBA Rodotron is supporting a very strong increase in order of volume and is confirmed, let's say, or even more so important strategically for IBA. Now, let's take a look at some of our key highlights for the first half of the year. I will now take you through the key operational highlights. In terms of the business unit progress, we were pleased to sell four new proton therapy systems, one Proteus Plus in China, and three Proteus One machines in the U.S. and Europe, which is an excellent start of the year. Other accelerators I've seen record order intake. 21 systems were sold in the period and one announced already post-period end. The pipeline remained extremely active. This was compared to 14 machines sold at the end of last year. So, significant growth in the demand for our product. Our new proton therapy installation and nine in other accelerators started in the first half. despite the pandemic-related restrictions with two new proton therapy centers starting to generate revenues. As mentioned, backlog is at a record high, and while there has been good conversion with proton therapy, conversion across the business, especially in other accelerators, remains in the first half impacted by macroeconomic challenges, as well as COVID-19-related travel restrictions. The backlog sits at 1.2 billion euros, with equipment backlog reaching another record high at almost 500 million euros. Dosimetry has proved a resilient business unit, with order intake up 11% on the same period last year. The acquisition of the Canada-based Modus medical device completed earlier this year, complementing our Dosimetry portfolio. and increasing our dosimetry footprint in North America. Our strong performance is confirmed, let's say, by a strong balance sheet with 202 million gross cash. It's the first time we are above 200 million, I believe, and 137 million net cash. It is also worth highlighting that we completed the share buyback program that we initiated in 2021 representing a total over 300 000 shares moving to post period and highlights recently we announced a multi-year research collaboration with d hutch or let's say fred hutchinson cancer center at the university of washington for conformal flesh more recently we shared the news of our selection as the only bidder qualifying for the second round of the so-called spanish ministry of health standard to supply 10 proton therapy units in the country this is clearly a very significant and very exciting opportunity and we really look forward to sharing further updates in the future the radio pharma side this week we were pleased to announce the fourth cyclone icon sales since the product launch to Chengdu new radiomedicine technology company. Finally, yesterday we announced our latest dosimetry news with the agreement of a strategic alliance with Candidos, including IBA acquiring a 90.1% stake in the company. I now will pass on to Soumya to talk through our focus Thank you Olivier.

Hello everyone. You see a quick snapshot here as usual of the financial highlights as announced this morning. A few highlights that I will mention. Group revenue was 160 million up 17% versus the last year. With the excellent order intake, of course, as activity picked up, you've seen that we've reached 175 million in gross order intake for equipment versus around 228 million last year for the full year. So we are really on progress towards beating our last year's order intake levels and, of course, reaching a record order intake for the full year. The gross margin was 39%, which was an improvement versus the 33% last year, but this was influenced on the one hand by increased activity in proton therapy backlog conversion by a rather high margin product mix, but also by indemnities recognized following the bankruptcy of Rutherford in the UK and Forex gains on the strengthening of the US dollar. Group Rebit was Euro 4.6 million, the increase from last year reflecting all of the above, but also influenced by inflation, investments and OPEX and some write-offs with a net loss of Euro 1.7 million. Order intake was very strong and in the period there were four proton therapy rooms and 21 other accelerator systems sold, as Olivia already mentioned earlier. That's quite a record. And we reported another record equipment of service backlog of Euro 1.2 billion and the pipeline continues to remain extremely strong across all of our businesses. Finally, our balance sheet is very strong with 137 million net cash and that provides us with significant stability for the future periods despite the current economic situation that we're seeing. Look at some of the numbers in more detail. The group sales in the first half were 160 million, up 17% as I said from last year. largely due to increased activity and accelerated backlog conversion, as well as the Rutherford impact. Rebit profit increased to €4.6 million from €3.9 last year, reflecting strong top line and improved gross margin and the indemnities on the Rutherford bankruptcy, offset by increased investment and inflation, which led to higher OPEX. We've been catching up quite a bit on investments since COVID and that certainly has an impact and we increased FTE by more than 4% over the period to support growth and increasing operations in our businesses. That's around 50 hires over the period. Total group loss decreased to €1.7 million and improvement of €0.2 million from last year. On the balance sheet, as I already mentioned, we reported a gross cash position of €202 million. That's an absolute record, I think, since the history of IBA, and €137 million net cash. We also have €37 million undrawn short-term credit lines available, so significant capacity to be able to invest in the future too. In proton therapy and other accelerators, sales were up 20% from last year, reflecting all the things we just spoke about earlier, despite some travel difficulties, and as Olivia mentioned, the fact that in China we're not completely out of the lockdown yet in all regions. There were four new sales in proton therapy and 21 new sales for other accelerators in H1, with one more machine sold in other accelerators, and actually more if I count today, after end of period, and the pipeline continues to remain very promising. Now, this compares with one PT sale last year for the same period and 13 sales for other accelerators in H1 2021. On the proton therapy equipment front, if you look more in detail, backlog conversion resulted in revenues improving by 15%. Four new orders were received in H1. with a total of 24 projects in progress now, and services, which are, of course, an important revenue stream for us, have also seen very strong performance, with two new PT centers starting treatment in Asia and in the U.S. Nine new installations started in other accelerators, and 18 new should start in H2, as some of these issues are resolved. So we really expect revenue recognition to catch up significantly in both proton therapy and other accelerators. If you look at the group order intake a little bit more in detail, indeed, it's extremely high at 175 million already at the end of H1, and we can see that we are approaching 2021 year-end levels after six months. The same goes for the number of PT rooms sold and for order intake of PT and other accelerators, where we've already exceeded the previous year and are approaching year-end 2021 numbers. We also have a very high book-to-bill ratio in both PT and other accelerators, as well as in dosimetry, if you look at it. To the extent that we are seeing higher order intake, then we are burning backlog. That's obviously very positive for us, and we hope to be able to maintain that into 2023. We have growing sales in rototrons, especially for disposable medical device and bioprocessor sterilization, as well as for radiopharmaceutical equipment, thanks to the newly developed machines that allow us to serve a larger range of isotopes for our customers. Now, looking more specifically at backlog, this has increased to an all-time high of 497 million, as you can see, up from 449 million end of 2021. Of this Proteus 1 now represents 37% and other accelerators an impressive 38%. On the services front, revenues were up more than 11% to €51 million, growing for the fifth consecutive year despite the Rutherford bankruptcy. Services backlog is now at €661 million and did decrease due to the reduction of the Rutherford sites. 38 IBAPTC sites are now generating service revenues worldwide and these sites have remained fully operational. Now taking a look at our dosimetry business unit which had a very strong H1 driven by the MODIS acquisition on top line. Conventional radiation therapy and medical imaging performance. Order intake also was strong at €30 million and increased 11%. Backlog grew to a record €20.8 million versus the end of 21%. and we announced a strategic alliance with Scandidos that Olivier already explained. However, Revit did decrease to Euro 1 million versus last year, partly as a result of inflation, but also due to additional investments that we've been making in supply chain management to support future orders, the high order intake, and high-cost one-off purchases related to the shortage of electronic components in the worldwide market. Now, I'll hand back to Olivier to take you through a more in-depth business update.