Embla Medical Hf S/Adr

Welcome to EMPLA Medical Q1 2026 conference call. Today's call is being recorded. If you have any objections to this, please disconnect your line. All participants will be in a listen-only mode throughout the presentation. And afterwards, there will be a question and answer session. To ask a question, please press 5 star on your telephone keypad. I would like to introduce President and CEO, Sven Silverson. and CFO Arne Svensdottir. Sven, please begin.

Thank you very much. Good morning, and welcome to the AmpliMedical conference call, where we will review the first quarter results for 2026. I'm Fred Salvestrøm, President and CEO of AmpliMedical, and joining me on today's call is our Chief Financial Officer, Arne Svensdottir, and AmpliMedical's Head of Investor Relations, Carl Sindahl. The presentation should take approximately 15 minutes, after which there will be an opportunity to ask questions during a Q&A session. Now, if you would please go to the next slide. We are seeing good progress at the beginning of 2026. Sales in the first quarter amounted to 232 million, representing reported growth of 15% and organic growth of 4%. We delivered strong performance in prosthetics and neuro-orthotics, driven by continued momentum and solid volume growth across reasons and categories. Growth in rating and support was moderate, and patient care experience was off course, largely driven by timing effects in Europe. Our EBITDA margin for the quarter came in at 17%, and is down one percentage point from the comparable quarter last year, largely due to external factors such as effects and tariffs. We delivered strong net profit, growth driven by growing operating results and favorable changes in net financial expenses. During the first quarter, we continued to roll out of our promotion brand in patient care, and the global re-branding rollout is now more than 90% complete and expected to conclude during the second quarter. In patient care, we are seeing the, or starting to see the benefits from the change in initiatives we implemented in the second half of last year to enhance long-term goals and profitability in our patient care business. And I will cover the performance in patient care factor later in the presentation. I also wanted to highlight progress in RFD in the first quarter with the launch of the AeroFit event, a liner that minimizes sweat accumulation in the soil. Lastly, we are reiterating our earlier guidelines of 5 to 8% organic sales growth and 20 to 22%, even the most. If you please go to the next slide. In APAC, sales growth was strong in the first quarter with 14% organic growth driven by strong performance across all three segments. EMEA and Americas also posted good growth for the quarter driven by prosthetics and neuro-orthotics, which, however, was partly offset by softer growth in the other business segments. And we cover the specifics and dynamics in each of our segments on the following slide. And if you please go to the next slide. Prosthetics and neuro-orthotics delivered 9% organic growth. In EMEA, we continue to see strong regional momentum with a broad-based contribution from bionics, our feed products, and other key categories. In addition, our neurobiotics business continues to progress well across several European markets, reflecting our strategy to expand the current Gens portfolio internationally. Growth in Americas was also strong, driven by recently launched innovation in bionics, as well as our feed solutions across both our Australia and College Park brands. Pure Robotics has begun to ramp up in the U.S. with a more meaningful contribution expected during 2026, as we brought in the launch of our first bionic metron, which received a reimbursement quote last summer in this important market. Lastly, we saw a very strong quarter in APAC across key markets and all product categories. If you turn to the next slide, please. Sales and pricing and support grew 1% in the first quarter. In America, sales growth was flat, and the market continues to be affected by shifting dynamics and competitive pressure, including increased price sensitivity. In EMEA, sales were soft, consistent with trends seen in Americas. Lastly, our basis for business and impact delivered strong growth in Polo 1 across the region with strong growth contribution in Asia and as well as Australia and New Zealand. We turn to the next slide, please. Sales in patient care declined 1%. In Europe, we saw sales underperform here in the first quarter, largely due to timing effects, as we are both following a strong fourth quarter from 25, and Easter volatility has partly overlapped into March. We expect the patient care business in Europe to return to more consistent sales performance in line with market during 26. Sales in America recovered in the first quarter in line with the internal change initiatives implemented during the second half of 25. In ATAC, sales performance in patient care remained solid in Australia. We remain confident that the patient care business in both America and Europe will deliver in line with the structural growth of the OMP industry as the year progresses, as well as gradually contribute to increasing margins as we see profitability moving in the right direction during quarter one. With this overview of our performance for the first quarter, I would like to hand it over to Artna to go through the financials in more detail. Artna, please.

Thank you, Fred. Please turn to the next slide for an overview of our financials. In the first quarter, the gross profit margin was 62% compared to 63% in quarter one, 2025. The gross profit margin was positively impacted by strong sales in the prospective renewal prospects. but offset by all items such as FX and TARIS in the U.S. All tax was 52% of sales in Q1. This is the same ratio of sales as in the comparable period. OPS grew 3% organic in line with our continued focus on cost control. Consequently, we delivered an EBITDA margin of 17%. This is one percentage point below the comparable quarter, mainly due to FX headwinds and TARIS. The negative effects on our EBITDA margin come from changes in currencies amounting to roughly 50 basis points, net of hedging in Q1, when compared to the same period in 2025. Finally, I'm very pleased to see that we delivered strong net profit in the quarter, as our net profit grew 21%. The increase is driven by growing operating shows and favorable changes in net financial expenses. If you please turn to the next slide for the status on our cash flow and leverage. During the first quarter, CapEx was $5 million, or 2% of sales, which is below a normalized level of 3% to 4% of sales due to timing of investments. Our cash flow generation was lower than comparable period last year, mainly driven by negative effects related to timing in our net working capital. In addition, it was highlighting that cash flow generation is seasonal low in the first quarter. That amounted to 2.4 times at the end of the quarter, which is in line with our target range of two to three times. We therefore continue with our share buyback program. And during the quarter one, we bought back $2.6 million worth of shares. And this is our view on our financial and hand-holding steps before we close in remarks and comments around the guidance.