Embla Medical Hf S/Adr

At this time, I would like to welcome everyone to this EMBLA Medical Q2 2026 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'll be a question and answer session. I would now like to introduce President and CEO Sveinn Solvason and CFO Arna Sveinsdottir. Sveinn, over to you.

Thank you very much. Good morning and welcome to EMPLA Medical's conference call to review our second quarter 2026 results. I'm Sveinn Solvason, President and CEO of EMPLA Medical. Joining me today are our Chief Financial Officer Anna Sveinsdottir and our Head of Investor Relations Klaus Sindahl. The presentation will take approximately 15 minutes followed by a Q&A session. If you please turn to the next slide. The first half of 2026 was strong. We delivered good organic growth, an increase in profitability, and solid free cash flow. Sales in the second quarter were $259 million, corresponding to 11% reported growth and 6% organic growth. Prosthetics and neuro-orthotics continued to do very well, with double-digit growth in the quarter. This was driven by strong execution, good volume growth in mainly EMEA and APAC, and contributions from recently launched products. Raising in support grew at a more modest pace and patient care declined, but we're seeing very encouraging progress. EBITDA margin was strong at 22% for the quarter. This was supported by the good performance in prosthetics and neuro orthotics, continued cost discipline and a net US tariff refund of around $3 million. Net profit was strong, increasing by 39% and this was mainly due to strong operating results and favorable movements in net financial expenses. During the second quarter we completed the Formotion brand rollout in patient care. All patient care facilities have now moved to the Formotion brand. This is an important milestone in our patient care transformation as it brings our global Clinic network together under one patient-centered brand. And in patient care, as I mentioned earlier, we continue to see progress. However, Q2 sales were below our expectations, especially in May. And I'll come back to patient care in more detail later in the presentation. I also wanted to highlight the good progress we made in R&D during the Q2 where we launched six new products. Furthermore, we're also progressing as planned with our first dedicated microprocessor need for less mobile users, generally referred to as K2 users. We've now assembled a fully integrated system prototype which will be used for upcoming verification and validation work and we remain on track for launch in late 2027. Lastly we completed our 10 million dollars year buyback program last week and yesterday we started a new program of a similar size. Over the past five years we've invested close to 200 million dollars in R&D and innovation. As the business grows we expect to invest more while keeping a clear focus on attractive returns. On this slide, you can see some of our key product launches from recent years. They show the strength of our innovation capabilities and our consistent launch track records. We always track the impact of innovation through a metric we call R&D impact. It measures the share of annual sales generated by product launches through R&D over the last five years. In recent years, R&D impact has increased from around 15% to more than 25%. We want to increase this further by focusing our portfolio on the greatest unmet needs for the patients that we strive to serve as best we possibly can. Go to the next slide, please. MA and APAC were the main drivers of sales growth in the quarter, supported by strong prosthetics and neuro-orthotics performance in both established as well as new markets, including Ukraine. In the Americas, overall growth was more modest, but we are beginning to see prosthetics and neuro-orthotics gain momentum. We'll now go through each segment in more detail and if you turn to the next slide please. Prosthetics and neuro-orthotics grew 12% organically in the quarter. In EMEA we continue to see very strong momentum. This was driven by mainly prosthetics in key European markets as well as newer markets and again including Ukraine. Growth was supported by strong volumes and brought demand across key product categories, including bionics. And the recently acquired Stripenedder business also made a solid contribution. In the US prosthetics, growth has also started to pick up. This was supported by our core portfolio and continued momentum in bionics. NeuroOrthotics performed well in EMEA and we continued to build momentum in the US with strong growth but from a very low base. And we expect more meaningful contribution over time as the rollout of our first bionic knee joint expands. Lastly, APEC delivered another strong quarter with 9% growth, where Australia led the region with broad strength across product categories and solid growth in the rest of Asia. We turn to the next slide, please. Sales in bracing and support grew 1% in the second quarter. EMEA declined mainly due to tough competition and changing market dynamics. We had a successful launch of the new OA move brace and the form-fit Walker boot, but they were not enough to offset the decline in the region. In America, sales growth in bracing was solid, driven by higher volumes and broad demand across core products. APEC also performed well especially Australia and New Zealand. If you go to the next slide please. Sales in patient care declined 2% in the second quarter. Over the last 18 months we've been focused on building and integrating a global patient care business. Our strategic priorities are centered around enabling our clinical workforce to provide excellent patient care. as well as standardization in ways of working, ultimately building scalable systems and processes. We see consistent progress towards normalization of our top-line growth. America's region has now shown quarter-over-quarter increase in operating results for the last three consecutive quarters. APEC remains stable, while the shortfall in top-line is related to two markets in Europe, Sweden and France. In Sweden we are seeing the effects of a challenging market situation while in France we are working through integration related topics in an overall healthy market. We remain committed to our strategic priorities in patient care and expect sales performance to get better over the coming periods and gradually return to growth broadly in line with the O&P industry. That concludes my overview of the quarter, and I will now hand over to Arna to take us through the financials in more detail. Arna, please.

Thank you.