Ion Beam Applications SA

Hello and welcome to IBE's FOLIO 2024 results conference call. I am Thomas Pevenage, head of investor relations of IBE. As usual, you will find this presentation on the investor relations page of our website. The question and answer session will follow the formal presentation. Note that this call is being recorded. Moving to the next page, let me draw your attention to the company's usual disclaimer of forward-looking statements. In addition, you will have noticed that we have changed the application of IFRS 15 for revenue recognition of third-party equipment sales, leading to an increase of our reported revenues and cost of goods sold, and a decrease of our gross margin and REBITs margin in percentage. 424 numbers reflect this new method of reporting, and 423 numbers have been restating accordingly. I will now hand over to Olivier Legrand, Chief Executive Officer of IBM.

Thank you very much, Thomas. Good afternoon, everybody. It is a summary of what we will cover today. We'll start with the highlight of 2024, and then we'll take you through the business review of our activities and our financial results for 2024. As we accelerate our transformation journey to improve execution at a new level, we are adapting the reporting of our financial performance. We'll cover this element as well as other methodology changes in the fourth section of the presentation. We'll finally conclude by providing our updated outlook and guidance. Starting with the highlights, today we are proud to announce a record revenue of almost €500 million, €498 million, up 7% on 2023, with a good gross margin improvement of 4.5% year-on-year, thanks to a favorable product mix. Rebid increased significantly year-on-year to €17 million, linked to well-executed backlog conversion, with a strong contribution from other accelerators. Overall, we returned to profitability in 2024, reporting a net result of €9.3 million, an 18 million improvement versus last year. The proposed dividend of 24 cents a share reflects the strength of this year's performance and our confidence in the company prospect. Let's now have a look at our business highlights. On the left-hand side of this slide, you'll see that backlog is stable at a record high level of 1.5 billion euros. 2024 saw an excellent order intake of 321 million euros, driven by the sale of 33 other accelerator systems. Five proton therapy systems were sold. We are pleased by the accelerated momentum in the proton therapy commercial activities as from the second half of 2024. A few other elements are worth mentioning. IBA continues to invest in the future, as illustrated by our joint venture Pantera, which secured important funding for its next step towards large-scale Actinium 225 production. This is a good example of our approach to capital-light investment in selected fields of activities where IBA can be relevant in terms of technologies and market access. As previously announced, we are transforming our internal structure across three entities with dedicated and enhanced focus on execution. We will provide more details later in the presentation. This transformation is underpinned by our view that IBA is at an inflection point. The company has experienced strong growth over the past years, with other accelerators multiplying their top line and profit while proton therapy experience strong growth alongside the high backlog and predictable proton therapy service revenues from our growing install base. This provides a solid foundation for sustainable profitability onwards. In that context, we will share with you an updated midterms of CLUC and initiate a short-term guidance for 2025. Let's now take a closer look at the second half of the year. Building on a solid H1, the second half executed an acceleration of the positive momentum driven by backlog conversion across all business units. As a result, rebate on sales reached 5.8% in the second half. Overall, it was good to see a much more balanced first and second half weighing compared to last year. Here, we present a breakdown of revenue and REBIT progression across our three current segments. Record group revenue was particularly driven by other accelerators, with revenue increased by 18% to €194 million. Proton therapy remained stable, with revenue of €242 million reflecting steady growth, in services, offset by a slight decline in equipment sales. Dosimetry revenue remained flat year on year at 66 million euros, despite some market headwinds. Group rebate increased by 170%, driven by the particularly strong performance from other accelerators. You'll note a decline in dosimetry rebate linked to the late closing of the RadCal acquisition impacted expected synergies some challenges in the Chinese markets, and delays in converting the proton therapy-related backlog. Moving on to backlog, this remains at an all-time high of 1.5 billion, offering significant visibility into future revenue over the next years. I'm pleased at the progress made in accelerating the conversion of this backlog during 2024. Of this, equipment backlog stands 497 million euros for proton therapy, representing 37 projects, and 247 million euros for other accelerators. Service backlog includes the revenues of our long-term proton therapy operation and maintenance contract until their maturity, while the other business units have shorter-term services contracts not included directly. Note that this proton therapy service backlog does not yet include any revenues from the operation and maintenance of our 10 systems in Spain, as the contracts are being discussed with each individual hospital. I would also note that the apparent stability of the backlog over the last three years can be a bit misleading, given the installed base has been growing. The underlying reason is that the backlog decreases as contracts are executed year on year, while contract renewals provide for a one-off boost during the year of their signature. Five contracts are up for renewal during 2025. As a reminder, order intake represents new systems sold in the period, meaning contract signed and first payment received from the customer. We maintain solid order intake momentum in 2024, increasing 11% from €288 million to 321 million. You will remember that the performance in 2022 was related to the boost from 10 proton therapy systems signed in Spain. The strongest equipment order intake is in order accelerator, which recorded a 43% increase. Proton therapy saw a slowdown in 2024, but had strong traction in the second half, continuing in the start of 2025. We will provide more commentary on this in the proton therapy review. Dosimetry remains stable with order intake at 66 million euros. The book-to-bill ratio, which is the ratio of equipment order intake to revenues, remains close to one, as order intake did cover most of the conversion of the existing backlogs. As already announced in our first half 2024 result, IBR is certified as a B Corporation with an improved score of 114, placing the company in the top 10% over 9,500 B Corp globally. This, amongst other initiatives, highlight the company commitment to advance sustainability as a key differentiator to attract talent, secure contract, maintain a robust supply chain, and more generally, mitigate execution risk. Let's now take a deeper look at the performance of each business unit, starting with Proton Therapy. The service revenue grew by 7%, supported by our expanding install base, while equipment revenues declined by 4% due to the cycle of backlog conversions. Rebate increased by 2 million euros during the period, driven by improved growth margin. We continue, however, to see impact on profitability from delivery of older, lower-margin projects, like the 10-room order Proteus One in Spain, as well as a few large-scale Proteus Plus projects in China. The economics of more recent contracts confirm IBA's leadership position in the market. SAIT contracts will gradually positively impact the proton therapy PNL as older projects are delivered. In addition, as we will explain later in the context of the new segment approach, several costs will be reallocated from proton therapy to other activities. Therefore, the rebate for 2024 will become a loss of €12 million rather than a loss of €21 million as presented in this table. As well as executing on the sizeable backlog, we remain focused on targeted investment into the future of proton therapy to remain at the forefront of this market. In 2024, we continue to advance key strategic initiatives aimed at strengthening our proton therapy business. We saw steady progress in backlog conversion with 37 projects under construction of our installation. Our service business expanded further supported by renewed customer contracts and improved site performance. Our installed base of 44 centers generating revenues is expected to approximately double over the next four to five years. Clinical evidence supporting proton therapy continues to build, with a notable first-day study from MD Anderson Cancer Center demonstrating reduced side effect in head and versus conventional radiation therapy. I also take the opportunity here to tell you that the follow-up of this study is showing actually an increase of survival rate in favor of proton therapy, which in my opinion is a big game changer for proton therapy in the future. Innovation remains a focus With the launch of AdaptInSight 2.3 in 2024, as well as working closely with clinical partners to progress research in dynamic arc and conformal flash. We continue to expand the global footprint of our proton therapy solutions. Order intake in 2024 reached €116 million, with three Proteus-1 contracts secured in the US, including a repeat order of two Proteus-1 by our partners. partner, Penn Medicine. We also secured a new order in India, where IBM maintained its very strong position, having already installed two proton therapy systems in the country, one in Chennai and one in Mumbai. In addition, there was a new procurement contract for a Proteus Plus system in China through our partnership with CGM. We are in active discussion with a range of potential customers with particular interests from the US and several prospects in Asia. With 44 active sites now generating service revenues worldwide, we remain committed to driving further expansion and adoption of our proton therapy technology. IBA continues to lead the market in proton therapy. In 24, we have secured 56% of all new proton therapy system sales, and we maintain a more than 40% market share of all operational proton therapy homes globally. Let's turn next to dosimetry. Net sales in dosimetry reached 66 million, reflecting stable performance despite economic and market challenges, in particular in China. Backlog was maintained at €42 million. The decline in Rebit was related to a number of factors, delayed acquisition synergy from RadCal due to the closing timeline, a lower share of high margin sales in China, and reduction in proton therapy related business due to project timing. Order intake for Dosimetry remained solid at €66 million, reflecting sustained global demand. During 24, we have continued to focus on reinforcing our quality assurance leadership, as underlined by the acquisition of Radcal Corporation in March. This acquisition has significantly enhanced our product range and geographical footprint in the QA space. In the year ahead, we look forward to making the most of our broadened portfolio and expanded international presence in quality assurance. On this slide, we have laid out our global reach and breadth of our products. With the RadCal acquisition and other investment, we now have access to a supply chain across North America, Europe, India, and China, further strengthening our position globally. We launched RadCal's T3 standalone multimeter in July, and we look forward to further launches in the next future. I will now hand over to Henri de Romeray, Deputy CEO, who will take us through the performance of our radiopharmaceutical and industrial business currently under the other accelerator banner. Henri, the stage is yours.

Many thanks, Olivier. We are obviously very pleased with the strength of the other accelerator order intake in the period with 33 accelerator sold. Net sales reached a record high of 194.2 million euro, an 18% increase year-on-year supported by strong backlog conversion and demand across industrial and radiopharma applications. Service revenues remained stable at 34.8 million euro, despite the 7 million impact from the discontinuation of the Dynamitron product line following a strategic review of the industrial portfolio of activities. Adjusting for this underlying growth was 25 percentage points. Rebid improved 63% year-on-year to 34.7 million. Under strategic initiatives, starting with radiopharma first, we continue to strengthen our leadership in the targeted alpha therapies. In October, the European Commission approved the Accelerate.eu project, co-led by IBA, which is looking at the development of a value chain for astatine-211. Post-period end, we signed a memorandum of understanding with Framatome for the development of an Astatine 211 production network in Europe and in the U.S. We considered this investment under the new segment, new venture. In our core business, Radio Pharma has seen excellent levels of activities, most notably the strategic agreement with Jubilant Radio Pharma in the U.S. for five-cycle cube to support the expansion of their network. Our industrial solution business unit delivered a strong revenue increase driven by the execution of backlog conversion. Strong appetite from our customer and prospect has confirmed the relevance of our value proposition for safer and efficient sterilization solution driving our intrinsic momentum in this activity. Alongside this, interest is increasing in some newer application with landmark sales related to polymer enhancement as well as the treatment of Phytosanitary products with Benebion in Mexico. Finally, the team continues to explore other applications for the Rodotron, including the launch of the PFAS Blaster project, targeting the treatment of forever chemicals in wastewater and carbon filters. For those familiar with IBA earning calls, you note that we have a new section. We thought it would be helpful to lay out our work and collaborations in cutting edge technologies under new ventures, which would become even more visible under our new segment report. To start with, we are incredibly proud of the success of Pantera, our joint venture with SCKCN, dedicated to the production of alpha emitter actinium 225. In Q3, Pantera successfully closed a 93 series A, 93 million series A round led by EQT, valuing the company at approximately 200 million euro post money, resulting ultimately in a 31% stake for IBE. Small batch production, thanks to the partnership with TerraPower Isotope, is expected to start by mid-2025, while capacity reservation agreements were signed with Bayer and other undisclosed partners. Construction of Pantera's large-scale production facility is expected to begin later in the year, ensuring long-term production capacity. We remain very excited about the Actinium-225 Opportunity and Pantera, given the isotopes importance in next generation cancer treatment. In addition, IBA invested in MI2 Factory, a German startup specializing in advanced semiconductor processing using an ion beam technology. IBA will support MI2 in advancing towards an industrial grade solution and will provide updates as key milestones are being reached Then, and as already outlined in the radiopharma solution sections, we have signed an MOU with Framatome for the development of an Astatine 211 production network, which will lead eventually to the incorporation of a new venture. Finally, an update on our private-public partnership Normandy Arbonne Therapy. You may recall its purpose is to develop a first carbon ion therapy system aiming at further advancing radiation therapy, including for radiation-resistant tumors. Assembly and installation are underway, with the first beam being expected by late 2026, early 2027. I'll now take you through our financial results in more details. As said before, there was a significant improvement in our gross margin as compared to 2023, which was driven by the higher proportion of revenues from other accelerators alongside a margin improvement in proton therapy. The 16% increase in OPEX reflects the continued investment in the future growth of the business. You can see in the chart on the right how the year-on-year evolution of OPEX is broken down. Research and development makes up the majority of the increase in OPEX as we accelerate projects including imaging, dynamic arc, conformal flash and development of cyclone icon. We are also making selected strategic investments to support the future growth of the business, mainly in sales and marketing, digitalization and infrastructure. The next slide shows the other item impacting our bottom line. As mentioned, Pantera raised 93 million euros as part of a Series A round during the year. As a result of this, IBA has recognized an 11.6 million revaluation gain through the PML. Separately, the contribution from Pantera, as consolidated under the equity method, is a loss of 2.1 million since the company continued its R&D investment and business development efforts. Also impacting the bottom line were some one-off projects. The main two large ones are our 4.2 million investment in the upgrade of our ERP system continuing over 2025 with the same order of magnitude as 2024, as well as the transformation of the organization to support profitable growth for 1.8 million. Alongside this, Argentina has had more than 100% inflation throughout 2024. Applying hyperinflation accounting under IFRS, the margin of the Buenos Aires PT installation contract is somewhat preserved, yet against this impact in financial results. Negative impact can still be expected until the completion of the local installation works by 2026, though with a reduced magnitude as per current expectations. I will now hand over to Thomas, who will comment on our cash and financial position.