Arcoma AB

Then we say hello and welcome everyone to Penser Access by Carnegie. My name is Hjalmar and I work as an analyst and I am here today with Mattias Leire, who is the CEO of Arcoma. Welcome, Mattias.

Thank you very much.

We are going to talk a little bit about the Q2 report that you released today. I think we'll start with North America. There is still a very strong development here in the region. How should we look at that? You also mention the expectations of continued strength when we look forward. What activities do you see in the region and how should we look at the future there?

We see strong activity, a lot of commercial investments and that gives fruit. We see a lot of installations, so it's fun. We see very positive in North America in the future.

Is there anything you can bring up there? Do you see the order situation? How does the visibility differ in North America compared to what we see in Europe and so on? How confident are you about this outlook?

We have a little different, Europe is often a little earlier orders and North America a little later, but we see it as a very positive picture and a lot of discussion about North America more about capacity and delivery times than anything else.

If we look at the rest of the segment, Europe and Asia, it was a bit in line with the development we have seen earlier. Asia accelerated a bit, driven by the Korean order, but we will come back to that. As you mentioned, indications of an increased business situation in the EMA. What makes this happen? Is it that you see the order situation? Is it that they are still in agreement with the customers? Do you see deals? What are the indications?

We see more deals out there. But as we say, it's still a different situation in Germany.

And is this on a broad front, or is it centred on certain regions here, because the EMEA is very broad in itself, or how can you break it down a bit more?

It's still quite broad, and I think the market is going up and down a bit in general, so I think it's quite broad.

We were talking about the first delivery to Korea after the agreement you made during Q2 last year. Can you briefly tell us how this has gone? Has it been according to plan? What potential do you see in Korea and how has the cooperation gone so far?

We think it went well. Of course, it could have gone a little faster, but I still think we have reached a good goal. There are always some technical things with a new market, especially in South Korea, that we have solved and get all the papers in place. There are processes that we run and that the distributor runs. But we see a good potential. There is profitability in the system and we sell via Canon, which is a strong partner that we have a strong history of in other markets. So we look positive at South Korea and see that we

We can deliver good installations in the future. And you mentioned a bit about things that need to be in place, but can you interpret it as that now that the first delivery is here, you have overcome those obstacles and from here it can accelerate further?

From here it is to win projects, so we are over the threshold now.

That sounds great. And how do you see the underlying market in the region in terms of projects and deals and so on?

We see, as on many markets, that you need to get the first installations in place and then build momentum in the market. And we see that positively in the future.

You also mentioned a good aftermarket business, a positive development that we see here. How does it look if we look at it regionally? Where is the emphasis on that growth and do you see any region where you see potential for this business?

I think we have had discussions, we have found the opportunities for upgrades. We also see that we are starting to get an installed base with established distributors where you make the active exchange of certain components. And then find the right price range for more standard components so that we can take those deals as well. So I think it feels good. We have already from the beginning of the year had an active discussion with our distributors about the importance of aftermarket and to do the right things there. So I think it starts to bear fruit.

That sounds great. If we look at the results, there is a good cost control here in the quarter. What is it that drives this compared to how it looked last year? Do you feel a need to invest more in the second half of this year? Or how should you look at the cost base?

No, but I think it's important to be careful with the costs and we manage to produce and keep the cost base intact. We always want to make selective investments. We make investments in our products. We released our i3 in the quarter, our last generation. and Intuition, which has been well received by the entire market. So it feels like it has really gained a boost in its segment. But we have a continuous discussion about investments and what we should choose to put money on. I think it is important for profitability that we have continued control.

How do you feel about your capacity in production and where you are right now?

We have made very big steps around our efficiency and production. We have the opportunity to take orders with much shorter sales, we see a completely universal flexibility towards what we have had before and fast cost-effective production. Many weeks later, we have worked actively with this to be able to meet customers' demands and today we get business because we can, when necessary, deliver with very short deadlines.

Super good. If we look at the cash flow, you invested a little more relatively with the same quarter last year here in the quarter. Can you talk about terms of product development? What have they noticed and how will the pace look in the future? Can you draw some conclusions about the investments you made here?

We released our i3. It was quite a big upgrade and a generational shift. We see that we will continue to make some investments in the product. It is important to have a relevant product and meet the needs of the market. We see that we will continue to invest. Given the balance sheet we have, we see that we have the opportunities now. We continue to invest.

And then you can imagine, maybe from a longer perspective, if we look into 2025-2026, that it will continue with product development here. Is there any initiative that you can bring forward or something you feel that you would like to... No, we continue to drive the product and do within what we are good at.

To make it effective, create in the premium segment and have an attractive product that is easy to work with and create efficiency for both the healthcare staff. Super.

Thank you very much, Mattias, for coming here today to answer our questions.