Embla Medical Hf S/Adr

At this time, I would like to welcome everyone to this Q3 2025 conference call. Today's call is being recorded. If you have any objections, please disconnect at this time. All participants will be on listen-only mode throughout the presentation, and afterwards there will be a question and answer session. I would now like to introduce President and CEO Svend Selvason and CFO Anna Svendstadir. I will now send a call over to your speakers. You may now begin your presentation.

Thank you, operator. And good morning and welcome to the Ampla Medical Conference call where we will review the third quarter of 2025. I am Svend Selvason, President and CEO of Ampla Medical. And joining me on today's call from Copenhagen is our Chief Financial Officer, Artur Svensdottir, and Angela Merikos, Head of Investor Relations at Kaussintag. The presentation should take approximately 15 minutes, after which there will be an opportunity to ask questions during a Q&A session. And if you please go to the next slide. Sales in the third quarter amounted to 237 million, representing 7% organic growth, And our reported growth was 11% for the quarter, including three percentage point impact from FX and one percentage point from M&A. As expected, and as we had communicated, our growth picked up here in the third quarter, driven principally by double-digit growth in prosthetics and neuro-orthotics, while sales growth in patient care remained modest, and sales and fundraising and support segment came in flat for the quarter. The EBITDA margin was strong at 22% here in the coaster and on par with the coaster last year, while our margin increased by a full percentage point to 21% for the first nine months compared to the same period last year. The margin increase was driven by robust sales in prosthetics and neuro-orthotics business area, solid efficiency gains in manufacturing, and continued cost discipline in SG&E. In line with our performance recorded here in the first nine months of 2025, our guidance for the full year has been or is reiterated. On our strategic initiatives, we are pleased with the progress we are making. Late August, we announced the closing of the majority investment in stricter net oil production. We are very excited about this investment, which is a strong strategic fit with our Goal 27 strategy and will enable Ampla Medical to reach more patients as a full range provider in the broader OMP space. We're also pleased here in the quarter to announce the successful launch of Odyssey IQ, which is a new hydraulic microprocessor food solution by College Park. The Odyssey IQ is a lightweight and low-profile food solution suitable for various environments and activities, levels offering long-lasting battery and fast response time. We have seen good reception of this product in the Americas market since the introduction during the summer. In neuro-orthotics, we are tracking in line with expectations. Since last year, our focus and strategy has been to expand into new international markets while maintaining the growth of methamphetamine in our existing German business. Juergen was recently also awarded a new reimbursement code in the United States for their microprocessor-controlled knee joint, which is a significant milestone for the introduction of neuro-orthotics in the important US market. We continue to monitor the external environment closely as dynamics remain volatile, whether it relates to tariffs or other trade restrictions potentially impacting our business. In the third quarter, we experienced some impact on tariffs in the U.S. and continue to assume some absorption in our guidance. as well as taking short-term mitigation initiatives, including initiatives on the cost side to mitigate the impact of these tariffs. Lastly, the U.S. Department of Commerce published a notice for public consultation on a possible Section 232 investigation concerning medical consumables and medical equipment, including prosthetics and orthopedic appliances, with the objective to determine the effects on the U.S. national supply security. We are currently assessing the scope and potential implications and the potential trade restrictions that might result from this investigation. However, as several factors remain uncertain at this stage, we still deem it too premature to discuss potential impact until more clarity has been revealed. If you turn to the next slide, please. We had solid growth across all our regions in the third quarter, mainly again driven by prosthetics and neuro-orthotics. Our sales growth was especially strong in the APAC region with 18% growth, while our EMEA region and Americas delivered 7% and 5% growth, respectively. Return to the next slide, please. If we look at our prosthetics and neuro-orthotic segment, organic growth was 13% in the third quarter. The strong momentum in EMEA continues across markets and growth was driven by strong, we have both volume growth and solid uptake across all our key product categories. Especially in categories such as bionics and feed solutions where we saw strong growth supported by our innovation, namely Navi and EcoPlex Terra. We're also encouraged by the strong sales growth or sales growth recovery in Americas following a soft start to the year. The growth in Americas was led by key product categories in both upper and lower lymph aesthetics and supported by our recently launched innovation. Also, our College Park portfolio showed very good sales growth in this quarter following the launch of our new Bionic Food Solution, Odyssey IQ, among others. Lastly, our performance in APAC. was very strong with growth across markets driven here in quarter three by China, Japan, and very good performance in Australia. In neuro-orthotics, the business is moving ahead according to plan, and during quarter three, we saw good wrap-up in select new markets based from a low base. If you turn to the next slide, please. Sales and pricing reports were flat in the third quarter. In the May, sales ended soft despite good performance in some markets. In America, sales were flat, continued headwind in the U.S. market, but we see solid growth in our Canada pricing business. Lastly, APAC demonstrated some scattered performance with solid growth in Australia and New Zealand, but partly offset by softer performance in most other markets. If you turn to the next slide, please, sales in patient care grew modestly at 1% for the quarter. We saw mixed performance by key regions in both EMEA and Americas, while our APAC region demonstrated very strong performance across our clinics in Australia. And as a reminder, Australia is the only market in APAC where we operate in patient care. So back to the big picture in patient care, the market is estimated to grow in the range of 3 to 5% with also healthy operating margins. Our patient care business has, over the last few quarters, experienced lower than expected growth, mainly in EMEA and America's regions. This performance can possibly be ascribed to softness and timing in patient volumes, particularly in the first half of the year. However our patient care business has also been delivering below market growth in this term. This recent weakness can be ascribed to internal change initiatives including the promotion rebrand rollout, platform-wide integrations of new ERP and operating systems and other change management initiatives impacting ways of operating. It's a top priority for management to get back on track in patient care, and we have an extensive focus on performance management and other key initiatives that will strengthen our execution in this part of our business. Now, this concludes our performance overview for the quarter. I would like to hand it over to Artna to go through the financials in more detail. Artna, please.

Thank you, Sven. Here's the next slide for an overview of our financials. In the third quarter, the gross profit margin was 63% on par with Q3 2024. The gross profit margin was positively impacted by the strong performance in prosthetic and neural prosthetics, coupled with manufacturing efficiency. The margin was, however, negatively impacted by modest growth in patient care and patient support, in addition to some impact from U.S. tariffs. For the first nine months in 2025, our gross profit was 63% versus 62% in the same period last year, and on par when excluding special items. Office growth was 5% organic in the third quarter, or two percentage points below our organic sales growth, and aligned this continued focus on cost management on the HB&A side. Consequently, we delivered an EBITDA margin of 22% for the quarter, on par with quarter 324. And the third quarter EBITDA margin was negatively affected by around 30 basis points from FX. In line with our plan to expand EBITDA margin, the EBITDA margin for the first nine months was 21%, compared to 19% reported for the same period last year, or 20% before special items. Net profit grew 17% in both quarter three and for the first nine months. Growth in net profit was driven by strong operating results. Please turn to the next slide for status on our cash flow and levels. During the third quarter, CapEx was $8 million, or 3% of sales, and within the guided range of 3% to 4% of sales. CapEx decreased slightly in comparison to Q2 and the comparable quarter last year. Particular timing of investment and CapEx returning to normalized levels. Our free cash flow was strong for the quarter as it generated 38 million in the quarter compared to 33 million for the same period last year. Our free cash flow benefited from strong operating results, as well as posted impact from net working capital and normalized CapEx levels. It should be noted that the second half of each year is seasonally higher than the first six months in terms of cash flow generation. Neskint has been in debt to EBITDA corresponding to 2.5 times at the end of the quarter and within the range of two to three times. That is the target rate. Lastly, we issued around 2.8 million new shares in early September in support of the maturity investment in stipulated offshore production. We also bought back roughly 525,000 shares in the third quarter as part of our on-going share buyback program at a market value of $2.7 million. With this overview on financials, I will hand over to Chris for his closing remarks and comments around our guidance.