BICO Group AB (publ)

BICO Q1 2025 report presentation. For the first part of the presentation, participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing pound key 5 on their telephone keypad. Now I will hand the conference over to the speakers, CEO Maria Force and CFO Jacob Thordenberg. Please go ahead.

Hello and welcome to Baiko's earnings call where we will present the first quarter of 2025. My name is Maria Fors and I'm the president and CEO of Baiko and I will together with our CFO Jakob Thorneberg present the report. Today's agenda is divided into three sections before the Q&A. We will begin to summarize the first quarter and comment on the market development. We will then focus on the group's financial performance followed by a presentation of how our three business areas have performed during quarter one. These three sections will be in listening-only mode. After the presentation, we invite you to participate in the Q&A. The earnings call host will then be back with further instructions. I will start to summarize the first quarter of 2025 and will begin to comment on significant events and business highlights. Quarter 1 is a seasonally weak quarter for Baico. Business areas life science solutions and bioprinting showed growth thanks to commercial as well as operational excellence, primarily in selling in Sajanian, while our project business in lab automation was impacted by pure project starts and closures in combination with a high comparison quarter. Like many of our peers, we saw continued uncertain macroeconomic dynamics, for example, changes to US policy focus and reduced NIH funding, which resulted in slower academic purchases. There were also industry cutbacks in capex budgets and the potential tariffs instilled further insecurity in the market. To stay proactive, we have established a global tariff task force to ensure preparedness. We have also reduced our debt further by repurchases of convertible bonds in February to a total nominal amount of 276 million Swedish kronors. After the end of the quarter, we entered into an agreement to divest Mattek and Visico, which Jakob will present more about later in this call. Due to the divestment, we expect to move into a net cash position during Q2 2025. Let's now move on to the key Q1 highlights. On a high level, here is the summary of Q1 2025. Sales amounted to 389 million, corresponding to a negative organic growth of 19%. Despite the decline in sales, adjusted EBITDA was in line with Q1 2024 and amounted to negative 12 million, corresponding to a margin of negative 3%. This is due to the positive development in life science solutions and bioprinting. The cash flow from operating activities was 77 million and the net working capital per last 12 months sales amounted to 12%, which can be explained by the cash collection from Q4 sales in 2024 and less sales in Q1. If we move on to look at the market development sales per geography, as you can see on this slide, sales in North America are lower than last year. And this is attributable to the large buy zero order, one in late 23, which created a growth spike in quarter one, 24. This impacted the sales distribution for Europe and Asia in quarter one, 24. Asia is now up significantly compared to last year. Many thanks to Cellink. In addition, we are focusing even more on our commercial activities. And to name a few examples, we are accelerating our commercial initiatives to gain market shares in markets such as Asia and India, and further strengthening our presence in Europe. We're also working on one focus area from an updated strategy, and that is the shift in focus to pharma and biotech customers at the expense of academia. I've already mentioned the continued uncertain macro dynamics and that we have established a tariff task force. Let me give you some more details on the measures we are taking in this volatile macro environment. We have since before adjusted our manufacturing sites to have readiness for future scenarios. For instance, we have moved the majority of the manufacturing out of China as well as adjusted our logistic routes. Our outsourcing strategy presented last fall considers suppliers with a global footprint, enabling us to have flexibility to produce in Europe or in the US. We have also in-house manufacturing in the US. We're working diligently with supply chain adjustments, allowing greater proximity to reduce or eliminate tariffs and to improve our logistic cost effects. I will now hand over to Jakob to present the divestment of Matic and Visicol.

Thank you, Maria. And I will summarize the divestment of Muttek and Visicle announced earlier this month on April 4th. Muttek is a market leading provider of 3D microtissue models and primary cells for in vitro testing. And Visicle specializes in advanced imaging and digital pathology. The divestment follows our updated strategy with a focus on lab automation and selected workflows. The proceeds from the transaction will be used to strengthen Byco's balance sheet and further accelerate the growth agenda. Both companies were acquired in 2021 and in 2024, Bisicode was integrated into Mathec. Sartorius will acquire 100% of the shares in both Matic and Visigold for 80 million US dollars on a cash and debt-free basis, corresponding to a 2024 sales multiple of 3.7x and adjusted EBITDA multiple of 15.3x. The closing of the transaction is subject to customary regulatory approvals expected to be obtained during Q2 2025. The effects on enterprise value in terms of net debt, working capital and other adjustments are expected to be limited. Matic and Visicle will be treated as discontinued operations from Q2 2025 in Bicol's financial reporting, subject to timing of closing. The expected net cash proceeds, in combination with our current cash position of 684 million, will be used to resolve the outstanding convertible bond, which matures in March 2026, as well as support the acceleration of ICO's growth agenda. The divestment also means that we will report in new segments from Q2, We are moving from the current structure with three business areas into a structure with two reporting areas, lab automation and life science solutions. This will further enable us to execute on our strategy and support us on our journey to be the first choice lab automation partner and provider of selected workflows to pharma and biotech customers. The updated strategy and the new business area structure have also affected our operating model, which Maria will present on the next slide.