Bactiguard Holding AB (publ)

Thank you, Operator, and a warm welcome to everyone joining us for Back to Guard's second quarter presentation for 2026. I'm joined today by our CFO, Patrick Buck, and I'll take you through the quarter's strategic highlights and then hand over to Patrick for a closer look at the numbers before we open the line up for your questions. Today's title, solid performance driven by revenue growth, captures exactly where we landed this quarter. Strong top line momentum across the business, confirming that the slower start to the year was simply a matter of timing rather than any change in trend. So let's drive straight into the quarter. And let's start with the numbers. We're pleased to report second quarter net sales growth excluding currency of 16%. The main driver was a recovery in BD revenues alongside one of the strongest quarters our wound management portfolio has ever recorded. This quarter confirms that the softer start to the year was a matter of timing, not a change in trend, as I said, and our strategy execution is on track. Adjusted EBITDA came in at 5.6 million SEC, up from SEC 4.4 million a year ago, lifted by sales growth and continued cost discipline. It's a good illustration of how top-line growth flows through to earnings in a scalable licensed business, and it gives us room to keep investing in future growth. Cash flow from operations amounted to $12.4 million, a clear step up from the $1.7 million in the same quarter last year. Strategically, it was an eventful quarter too. We signed a new long-term agreement that deepens our already 35-year partnership with BD. We're seeing growth in the use of patients of Bactiguard-coated implants with Zimmer Biomet, and we had strong momentum in our early partner dialogues. Let me take you through these one at a time. Let's turn to BD. In May, we announced a new long-term agreement with BD, deepening a partnership that goes back to 1990, more than 35 years. Few things illustrate the long-term value of our coding technology that creates for partners better than this, or how embedded back-to-guard coded products become in patient care once adopted. What started as a collaboration covering select markets has steadily grown into a true global partnership. Today, it spans the full value chain from technology development to global market execution and is focused on expanding adoption of our infection prevention technology. The restated agreement modernizes the partnership terms and strengthens that foundation further. It builds on the December 2023 extension under which BD was granted worldwide exclusivity for back to guard coated Foley catheters outside of China. Alongside the commercial terms, a key part of the agreement has been aligning on the regulatory approvals needed to support smooth market transitions, something that's been a shared focus with BD over the past two years, and that has now enabled recent launches in the Nordics, Poland and parts of the Middle East. We have backed each of these commercialization initiatives with technology training across the regions, and we continue to transition our KOL relationships and former customers to support market access and commercial execution for BD. As I said when we announced the agreement back in May, this is a great example of the power and potential of our license-focused strategy, a partnership that's global, growing, and built on shared success. In the quarter, BD revenues came in 50% above the weak second quarter of last year and are also up 8% so far this year, reaching $28.2 million on a reported basis. As in prior quarters, BD revenues are shaped by the timing of concentrate shipments into their supply chain, which can create variation from one quarter to the next, but we continue to see underlying growth, both from existing and new markets. Now to Zimmer Biomets. Our partnership continues to focus on driving commercial adoption. Actiguard is leading the work to transition the trauma implants to the MGR regulatory requirements in Europe and supporting the post-market clinical studies. We are very pleased to note that the first of the ongoing multicenter studies is now complete, which is an encouraging step, and the key comparative study is progressing according to plan. We are especially pleased to see growing use of back to guard coded implants in patients. There's still meaningful headroom here given how small a share of the total trauma market coded implants represent today. Overall, we see the partnership as financially stable with revenues of 3.8 million in the quarter in line with our expectations, double digit growth in product sales and clear long-term potential as adoption continues to build. Let's turn to business development. We spent a good part of the quarter on new business development, meeting potential future partners at conferences and in direct discussions across the US and Europe. Since launching our five focus therapeutic areas back in March of 2025, we have now completed a full annual calendar of conferences across all of them, where we focus on business development activities. The need to find infection prevention solutions is especially recognized in orthopedics, and it is clear that the strongest engagement with Bactiguard is here. We are also enabled to capitalize on this category by having rights in various orthopedic segments available for licensing since amending our agreement with Zimmer Biomed at the end of 2025. We remain focused on advancing these discussions with potential partners while recognizing that in a licensed business, Dialogues like these can take time to mature into signed agreements. Now to wound management, which had a standout quarter. The portfolio delivered very strong performance indeed with 67% revenue growth for the quarter and 25% over the first six months. Our flagship Hydrosyn Aqua line led the way supported by stabilization in sutures. with growth in the portfolio across the Middle East, Europe, and Asia. Tender business in select regions also gave a positive boost in the quarter. Alongside the strong commercial execution, we continue to strengthen the product portfolio, invest in availability of products in new markets, and build out our operational setup in Malaysia. As we've said before, we continue to expect double-digit growth from the combined wound management portfolio fuel by high double-digit growth from hydrogen aqua and a stable contribution from sutures. And this quarter confirms that we continue to be on track. With that, over to Patrick for a closer look at the numbers.

Thank you, Christine. We are very happy to present solid growth this quarter. For Q2, we report both revenue growth, continued profitability, increased cash generation, and we see positive momentum across the business. Total revenue came in at 57 million SEK, up from 52. Total revenues grew 12%. Net sales grew 16%, excluding currencies. As said, this is driven by strong growth in BD revenues and a very strong quarter from our management portfolio. In fact, the strongest quarter and the strongest revenues on a rolling 12-month basis ever. Looking closer at our core license business, we see license revenues lifted by the strong growth in BD, which came at 28.2 million. This is up 50% versus a weak second quarter last year, but up 8% versus the first half of last year. And as I said, we see strong continued underlying momentum in the BD business and the BD partnership. CIMA Biomed contributed with approximately 4 million in the quarter, in line with our expectations, and reflecting in fact a double-digit growth in the sales of the CNN Bectiguard coated nails. The reason for the decline in the total license revenues is found in the high comparable on CIMA last year, in which Q2 included a full year of minimum royalties from the previous agreement. As communicated, fixed fees in our new agreement will be consistent across the quarters going forward. Across both partnerships, we continue to see positive in-market volume growth, and we are excited to see the future demand from customers and clinicians for our technology, which underpin and adds to the risk reduction efforts healthcare professionals must deal with on a daily basis. On OPEX, we remained cost conscious and with cost discipline during the quarter, while also investing selectively to support growth. This includes, for example, within our regulatory capabilities, within business development activities, as well as strengthening our teams and operations globally, including in our Malaysian business. For the quarter, we did see an increase of total OPEX of 11%, while the half year period holds about a one and a half percent total increase in OPEX. The Q2 increase mainly pertains to timing effects on bonus accruals, which was reversed in Q1, 2026 versus Q in Q2 last year in 25, i.e. a lower comparable for Q2. As communicated previously, we will continue to operate with the cost discipline while ensuring the right investments in growth. On adjusted EBITDA, we came in close to 6 million for the quarter, up from 4.4 million in Q2 last year. driven by sales growth and a set continued cost discipline. Our margin on adjusted EBITDA increased to 10% for the quarter, as well as approximately 10% for the first six month period. Net profit for the quarter was minus 8.2 million in line with the 8.1 million in Q2 last year. On cash flow, we see cash flow from operating activities amounted to a bit more than 12 million for the quarter, a substantial improvement of more than 10 million versus the 1.7 in Q2 last year. Also cash flow, total cash flow for the period was positive at 7.4 million and our total Cash and cash equivalents at the quarter end amounted to 43.5 million, up from 35 million approximately at the end of Q1. So with that, back to you, Christine.

Thank you, Patrick. With growth across all of our businesses, including double-digit increase in wound management, our focus now is on converting these investments into sustained traction. we are on the right track, and we will keep executing towards our strategic targets. I want to be clear that nothing about previous quarters changes our strategic direction or the fundamentals of the business. To sum up, This was a quarter of broad based growth with net sales up 16% and further improvements in both EBITDA and cashflow. We renewed and deepened our 35 year partnership with BD and we continue to see growing momentum with Zimmer Biomet with double digit growth in product sales as coded implant use in patients builds. Wound management delivered one of the strongest quarters ever up 67%. and we have a strong partnership pipeline building, particularly in orthopedics. Taken together, we remain firmly on track. With that, let's open up for questions.

If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Maria Karlsson-Osipova from DNB Carnegie. Please go ahead.

Hi, Kristin and Patrick. Maria here from DNB Carnegie. Thanks for taking my questions. Great quarter, so congratulations on that as well. Some questions, however, on the COGS level. Historically, we've seen some lumpy gross profits and we see COGS increase in this quarter. How should we think about the gross margin profile going forward? I mean, this is mostly a wounded portfolio effect, but still, what do we see going forward?

Thank you, Maria, for your question. You're absolutely right. We have seen historically a bit lumpy Cox profile. We obviously try to have it less lumpy going forward. I think what we see in Q2 is not the same picture you will see going forward. Part of what drives the Q2 is product mix. We saw a higher sale of wound management, obviously with the high growth on wound management. And we've also had some additional scrapping in Q2. So going forward, I think you can assume the level that we have seen consistently in the past periods.

All right, thank you. And talking about wound management, is this high growth repeatable? I mean, you mentioned high double-digit growth there and you also mentioned tender business positive boost. Is there any proportions that you could talk to us about?

I think in short, we would love if we continue to report plus 50%, 60% growth for management, but that I think is certainly not our expectations to the business. As we've said before, we have a confident long-term view on the business to deliver a sustained double-digit growth that includes both the hydrogen part of the business and the sutures business combined. As we've said before, we see the sutures business more as a stable business, whereas in our Hydrosyn portfolio, we see continued high double-digit growth, which we expect going forward. I think with this quarter, obviously, we have continuous confirmation that we see positive demand by customers, obviously, from our distributors of the HydroSyn portfolio. And as we've said, we have seen a stabilization of the sutures business this year, which affected us a bit last year. So we have a continued positive view on the growth coming from our Malaysian-based wound management business. As we've talked about before, we see growth across the regions, notably from the Middle Eastern region, from Europe, as well as our legacy markets in Asia.

All right, and just a little more focus on costs. The MDR spend, have you guided previously on what do you expect the total MDR expenses to be? What should we wait in the second half of the year? And maybe some timelines, how long are you planning to carry the work with MDR?

Yeah, I appreciate your question. I think in short, no, we have not guided regarding that for the full year. We have this year an increased amount of non-recurring costs that we can single out that relates to MDR. This is what we highlight in the report in the adjusted EBITDA as related to MDR costs. We have highlighted in that that we see this potentially in 26 and 27. I do believe that we will see more cost and the majority of the cost in 26 versus 27. And we're halfway through the year. But we don't have a specific guidance on the total number of costs. But we will obviously continue to incur costs that are MDR related and that we see non-recurring. also in the remaining Q3 and Q4 of this year, certainly. Obviously, in addition to these regulatory costs, we have normal regulatory costs in our business, which we obviously do not single out. But we will continue to report these MDR-related non-recurring costs in the report for Q3 and Q4 as well, obviously.

And Maria, this is Christine. From a qualitative standpoint, we can also comment that with BD, the underlying Foley product portfolio has already been upgraded to the MDR regulatory guidelines. So that product portfolio is complete from an MDR standpoint and is approved and is currently regulated under MDR. And we are currently working on both the transitions of the Zimmer Biomet trauma implants as well as the portfolio for our wood management portfolio, all of which are, of course, device-related under the MDR regulations.

All right. Thank you for the addition there. That was all my questions. Thank you very much. And yet again, congrats on the good quarter. Thank you.

Thank you. The next question comes from Matthias Vadsten from SEB. Please go ahead.

Hi, thanks for your questions. I think it was good to see the BD revenues normalizing this quarter, a quite good step up from Q1. I just want to ask if you would say this represents the sort of run rate you're at right now and with no specific item either helping or carrying it down. And if we are likely to see lower volatility in the BD revenue line going forward or if if the volatility will still be there, based on your understanding.

Yes, thank you Mathias for your question. We are of course also very happy to be able to report numbers that I think sustain what we have communicated is a very solid and positively underlying sort of growing partnership and momentum for BD. What we have stated and obviously what we've talked about in the past quarters is that we did see an effect of some of the delayed registrations in Europe. We believe and we of course work as much as we can to ensure that there will be less volatility going forward. So that is what we expect, that is what we hope, that is what we focus on, Mathias. What you see in the Q2 for this quarter is obviously more similar to Q3 and to Q4 of the last year, which were, as we also reported, as more normal quarters. So I believe, yes, in short, this is about sort of the level that we are very happy to see from BD. And from there on, of course, we still continue and expect to grow. But we do expect sort of less volatility going forward. But of course, it's sometimes out of our hands. We're not able to guide fully on this. But as we said before, we see continued positive underlying growth in the BD business with mid single digits, at least for the sort of volume growth in the markets. And as Christine also communicated, we see a positive response from many new geographies preparing already sort of having products available with Back to Guard Co-Defolies in BD's markets.

I think that's a very clear answer. The next question relating to BD would be what share of the revenues there that are new markets sort of outside US, Japan, etc. Do you have that level of insights?

Thanks for your question, Mattias, just to understand. So what share of revenue is in the new markets that they will potentially or have launched in versus the existing markets?

Yes, such as India and Europe that were added to the agreement you had before with the

I mean, in short, we don't have sort of their or the splits on these markets. And I think in fact, which is what obviously we and PD are trying to do together. is not to necessarily capture market share from existing other coded catheters. This rarely exists. But to rather build the markets. We know today that obviously the existing markets, with the US being the biggest, has the biggest potential. So of course we're trying to build a lot of additional markets that in size will not obviously be bigger than the existing business. And it will take time, but this is the work that we are committed to and that BD is committed to, and we see very positive response from these markets that have not had coated catheters available before. And we see positive response from their sales teams that they would like to offer this to their customers and to the patients ultimately. So we believe that the additional markets that obviously we have now under the new global agreement will definitely sustain positive growth for BD going forward. But obviously for the foreseeable future, it will still be a lesser portion on the total revenue base versus the existing markets.

Thank you very much. Those were the questions I had today.

Thank you, Matthias.

There are no more phone questions at this time, so I hand the conference back to the speakers for any written questions and closing comments.

Thank you, Operator. Thank you for all your questions and for your continued interest in VactorGuard. We appreciate the dialogue and look forward to updating you at our next available opportunity. And with that, back to you, Operator, for closing out the call.