BICO Group AB (publ)

Welcome to BICO Q2 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 five 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 Beico's earnings call where we will present the second quarter of 2025. My name is Maria Fors and I'm the President and CEO of Beico and I will together with Beico's CFO Jakob Thorndenberg present the report. Here's today's agenda. First the summer of the quarter to be followed by group financial performance and after that a deep dive into our two business areas, lab automation and life science solutions. This is the first quarter where we report our new business area structure, post the divestment of Matic and Visigol. And I will also give some concluding remarks before the Q&A. The sections before the Q&A will be in listening only mode. And the earnings hall host will be back with further instructions if you wish to participate in our Q&A. I will start to summarize the second quarter of 2025 for the group and comment on the market sentiment and other important events from the past quarter. In the beginning of the second quarter, in early April, we announced an agreement to divest Matek and Visicol to Sartorius. The closing took place July 1st, after customary regulatory approval was obtained. This transaction significantly strengthens our balance sheet, which means that we now have a net cash position. Jakob will give you some more details in a few slides. When looking at the performance for the second quarter, it's a mixed picture for the group, which means that I need to comment on business area level. And if we begin with lab automation, We had fewer project starts and project delays that impacted the quarter negatively, as the organizational capacity has been outpaced by the high demand for Bicero's market leading solutions. To scale the business and unlock the full potential in the growing lab automation market, we're implementing leadership and process changes in Bicero. And I will address these more in the business area section. If we move on to the performance of our largest business area, Life Science Solutions, the business area delivered flat sales with growth in line with peers. The performance of our companies within Life Science Solutions differed depending on the market and customer base. We saw a soft market for our instrument companies catering to academia, while Cyanian showed healthy growth and profitability. And if we continue with the macro environment, this quarter was just like the previous quarter affected by macroeconomic headwinds and uncertainties remained persistent. Like many of our peers, we continue to experience the effects of these dynamics. For example, cuts in NIH funding in the US have, along with the ongoing tariff turbulence, introduced further uncertainty and led to hampered demand and delayed CapEx investments, especially in the academia segment. At Baico, we have had readiness to manage those uncertainties. And in this quarter, we have, for instance, adjusted some of our logistic routes and reviewed and amended our freight and delivery terms where necessary. Let's move to the next slide and the summary of Baico's quarter two results. For the second quarter, sales amounted to 324 million, corresponding to a negative organic growth of 17%. Adjusted EBITDA amounted to a negative 49 million corresponding to a margin of negative 15% and the cash flow from operating activities were negative 28 million and the networking capital per the last 12 months sales amounted to 11%. I will now hand over to Jakob to present the divestment of Mattek and Visicom.

Thank you. As Maria mentioned, the transaction was announced in April and closed on July 1st. This divestment of Matic and VisiCall follows our updated strategy with a focus on lab automation and selected workflows. Sartorius has acquired 100% of the shares in both Matic and VisiCall for 80 million US dollars on a cash and debt-free basis, corresponding to a 2024 sales multiple of 3.7x, and an adjusted EBITDA multiple of 15.3x. Following net debt adjustments and transaction costs, net cash from the transaction amounted to 740 million SEK, which with the current cash position of 636 million SEK as per Q2, increases Biocos cash position to approximately 1.4 billion Swedish krona. The proceeds from the transaction will be used to strengthen our balance sheet and reduce our debt on our convertible bond. Matic and Visigoth have been treated as discontinued operations in this interim report. I will now move on and comment on the group's financial performance for the second quarter. Please note that all numbers presented in this section are in million Swedish crowns. If we begin with sales, all in all, sales amounted to 324 million for the second quarter with a total sales growth of negative 23% and negative 17% in constant currency. The difference of the six percentage points is explained by a weaker US dollar against the Swedish krona and that Baico has over 90% of sales in US dollar or Euro and around 70 to 80% of our costs in the same currencies. resulting in a significant translation exposure to Swedish crowns, but no significant transaction exposure on EBITDA due to revenues and costs largely being matched and thereby naturally hedged. As Maria mentioned, sales for our largest business area, Life Science Solutions, were flat in the quarter, year over year, which is in line with peers, and amounted to 277 million. Sales for lab automation amounted to 48 million, corresponding to a negative sales growth of 58%. This was impacted by fewer project starts and project delays, where the latter resulted in a substantial re-estimation of remaining project hours of around negative 40 million. It is also worth mentioning that the corresponding quarter last year was positively impacted by the large order that Biosera won in late December 2023. And if we move on to profitability, The gross margin amounted to 44%, down 8 percentage points year over year, negatively impacted by the development in business area lab automation and the re-estimation of remaining project hours. Adjusted EBITDA amounted to negative 49 million, corresponding to a margin of negative 15%. The negative adjusted EBITDA can be explained by the development in lab automation and the re-estimation of the remaining project hours. We are not satisfied with the profitability levels for the quarter. And in combination with the leadership and process changes being carried out in BioZero, we will continue to have a clear focus on structural cost reductions and tight expense management for the group. Although the transformation in BioZero requires investments in operational resources. And if we move on to the next slide and our cash flow. Cash flow from operating activities for the quarter amounted to negative 28 million and primarily related to negative profitability in the quarter. The effects of changes in working capital amounted to positive 29 million in the quarter. Investments in tangible capex amounted to less than 1 million and investments in intangible capex in the quarter amounted to 2 million. Total cash flow during Q2 amounted to negative 54 million. In connection with this, I will also comment on Baico's outstanding convertible debt and cash position. We have made three buybacks in our convertible bond to a nominal amount of 118 million in November 2024. an additional 276 million in February 2025 and 98 million yesterday as of August 18th. Post buybacks, the convertible debt now amounts to nominal 1 billion and 8 million. The rationale for the bond buyback is to optimize BICO's capital structure and further reduce long-term debt and the net proceeds of 740 million from the divestment will be used to resolve the outstanding convertible bond, which matures in March 2026. To conclude on our cash position, we closed Q2 with 636 million in cash, and with 740 million divestment proceeds, our cash reserves stood at around 1.4 billion on a pro forma basis at the quarter end. Following the post Q2 convertible bond buyback announced yesterday and the remaining convertible debt of 1 billion 8 million, Baico had a net cash position of roughly 270 million, all else equal. As mentioned on the previous slide, the effects of changes in working capital amounted to positive 29 million in the second quarter. Out of this, 9 million was related to an increase in operating receivables. Inventories decreased by 8 million and operating liabilities increased by 29 million. In percentage of last 12 months, sales networking capital in the quarter corresponded to 11%. confirming that the operational excellence actions implemented in 2023 and onwards have been successful. For Q1 and Q2 2025, the further decrease in net working capital to low double digits is primarily an effect of less net working capital in BioZero due to decreases in receivables and the re-estimation of project hours. I will now hand back to Maria for presentation of the business area performance.