BICO Group AB (publ)

Welcome to BICO Q4 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 BiCo Group's Q4 2025 earnings call. I'm Maria Fors, President and CEO and I will together with BiCo's CFO Jakob Thorndenberg present this year's end report. Here's today's agenda. I will open today's session by summarizing 2025 and also describe how BiCo serves the world's leading pharma and biotech companies with solutions that transform how labs operate, innovate and solve our customer challenges. Following that, I will summarize the full year 2025 as well as Q4 2025 and Jakob will then present the group's financial performance. We will then proceed and comment on our performance in the two business areas, Life Science Solutions and Lab Automation. I will also comment on our R&D pipeline with our ongoing product development efforts. Additionally, I will highlight product launches made at SLAS, the Society of Lab Automation and Screening Congress that took place last week in Boston. The session will conclude by highlighting our focus for 2026 before we open up for Q&A. When summarizing 2025, we can conclude that we finished the year on a strong note with double-digit organic sales growth in lab automation and a strengthened cash position. After the quarter in January 26, we successfully raised new capital, enabling investments to support further growth. 2025 has been a year of strategy execution. We have delivered on all key strategic initiatives and the impact is clear. A portfolio focused on lab automation, significantly reduced debt and a strong cash position. We have leaner operations and a more focused and customer-centric product portfolio, providing a strong foundation for 2026. And before commenting on our performance, I will present how BiCo serves the world's leading pharma and biotech companies with solutions that transform how labs operate and integrate. Our customers share one ambition, reducing time to market and increasing the probability of success. With Biocero's leading software suite, Green Button Go, together with the off-the-shelf automation products as well as bioprinting, our portfolio is in the sweet spot of meeting that ambition and solve the core challenges with long and costly development cycles. Our solutions enable smarter, faster and more efficient labs, and here lies an underlying strong demand. Pharma and biotech companies all face the same fundamental challenge, long, costly development cycles for new therapies. The development of a new therapy often takes more than 10 years and costs between two and four billion US dollars, with probability of approval after phase one at just 10%. To overcome this, our pharma and biotech customers are investing heavily in automation to increase efficiency, speed and quality, to bring innovations to market faster and at a lower cost. Our products and services enable our customers to connect data across systems and apply AI tools to plan, run and optimize experiments in real time. And already today, we're enabling AI driven drug discovery workflows through a green button go platform. We are at the core of this transformation, connecting workflows and data streams and enabling AI powered experimentation. And this is what our vision and mission is all about. Our vision is to enable and automate the life science lab of the future. And our mission is to be the first choice lab automation partner and provider of selected workflows to pharma and biotech. During the fourth quarter, I visited several pharma customers who use BICO lab automation solutions. And they consistently reported measurable gains in productivity and reliability, including reduced hands-on time, faster turnaround times, and higher instrument utilization. and hearing this directly from the scientists using our system every day was both energizing and validating let me show you one example that emphasizes our mission our strategic direction and the value that we deliver to our customers the data shown here are from one of the top 20 pharma customers we are serving they kindly share their efficiency improvements by using our lab automation solutions downstream process and assay development time was reduced by 75 percent The capacity with the existing equipment they already had was revved up by 400% because parallel processing and variable driven robotic processes just allow for more uptime to be squeezed out of each piece of the equipment in the lab. And ultimately, these productivity increases means that their scientists are able to achieve 200% of their original productivity This is because automation was coming alongside them, supporting them and taking over the manual steps and running concurrently in ways that a person just can't manage alone. And this is just one example of a lab leveraging Green Button Go and every lab we work with is looking to see numbers like this. The interest in integration services is strong and it's because we're taking technology and using it to augment the work of humans. We're using technology to get to innovation faster. So to summarize, we lead the way in solving the challenges in life science with speed, accuracy and efficiency. All in all, our customers can run their process faster, improve the quality of the data and ultimately make better decisions. I will now move on to the next section and summarize the fourth quarter as well as the full year 2025. 2025 has been a turnaround year for Byco, building a strong foundation for 2026. Across the industry, 2025 was marked by a challenging market environment. The political developments, including tariffs, created uncertainty and led customers to take a more cautious approach to capex investments. The US academia segment was hit hard by significant NIH funding cuts. FX headwinds with a weaker dollar and euro also weighed on the margins. The diagnostic market normalized, consumables continued to grow, and the instrument sales remained muted but recovered increasingly over the course of the year. I will now present key metrics for the full year and the fourth quarter, and Jakob will later in the presentation give more details about the financial development. Sales for 2025 amounted to 1 billion 497 million, corresponding to a negative organic sales growth of 8%. Adjusted EBITDA amounted to 5 million, corresponding to a margin of 0.3%. And cash flow from operating activities amounted to 68 million. And let's turn over to the fourth quarter, where sales amounted to 451 million, corresponding to a negative sales growth of 4%. Adjusted EBITDA amounted to 56 million corresponding to a margin of 13%. Cash flow from operating activities amounted to 52 million and networking capital in relation to the last 12 months sales was 13%. In late January 26 we issued senior secured bonds and I will now hand over to Jakob to comment further on this.

Thank you, Maria. As just mentioned, we issued senior secured bonds on January 28th with a total nominal value of 40 million euro. The bonds have a tenure of four years and carrying a floating interest of three months euro plus a margin of 5.9%. The bonds were issued at 96.81% of par and were placed with a consortium of Swedish institutional investors. The new capital puts us in a position to support further growth and capture market recovery while navigating ongoing macroeconomic uncertainty. The transaction also serves as a clear testament to the capital markets continued confidence in Baico. I will later in the presentation describe what this means for Baico in terms of cash reserves post settlement of our current convertible bonds. I will now give some more details to the numbers just presented by Maria. Sales amounted to 1 billion 497 million, which corresponds to an organic sales growth of negative 8%. With most of the portfolio being instruments and the industry-wide capex restraints, as well as a muted academia market, the week first half of the year could not be fully compensated by a stronger second half of the year, despite increased demand. Improvements in Cyanian and Cellink strengthened the results while the week first half for BioZero and challenges in the US academic segment impacted the full year results substantially. BioZero has gained positive momentum with new ways of working, new management in place and finished the year with double-digit growth in the fourth quarter. The adjusted EBITDA was 5 million corresponding to a margin of 0.3%. The updated cost estimates in ongoing projects in business area lab automation and declined gross profit were the main factors impacting the adjusted EBITDA margin compared to prior year, while continued cost control had some positive effects. Operational cash flow amounted to 68 million. In Q4, our seasonally strongest quarter, sales amounted to 451 million corresponding to a negative sales growth of 12% and a negative organic sales growth in constant currency of negative 3.7%. The nine percentage points difference can be explained by FX headwinds with a weaker US dollar and euro against a stronger Swedish krona. It is also worth mentioning that the corresponding quarter last year was strong in lab automation And the life science solutions we saw, especially in the US, significant budget release prior to the installment of the new US administration. Adjusted EBITDA amounted to 56 billion, corresponding to a margin of 13%. During the year, we have continued to be very cost conscious to mitigate the adverse effects of lower sales. When looking at the module development, it is also worth mentioning that we have had a more conservative approach on which R&D costs we capitalized due to a more comprehensive R&D governance with the implementation of a gate stage project model. BICO will continue our clear focus on structural cost reductions and tight expense management in 2026. And if we move on to cash flow in Q4. Cash flow from operating activities amounted to 52 million, impacted by working capital changes of negative 12 million. Total cash flow during the fourth quarter amounted to 36 million. Cash reserves by end of the year was 1 billion 282 million. These cash reserves will be used to settle the remaining balance of our current convertible debt of 1 billion and 8 million. The original debt amount of 1 billion and 500 million have over the years been reduced by early bond buybacks to an nominal amount of 482 million, resulting in savings of more than 50 million. Following the settlement of the existing bonds, based on Q4's cash reserves and all else equal, Veike will have a strong cash position of around 670 million. Maria will later in the presentation describe how we plan to allocate this capital. As mentioned on the previous slide, the effects of changes in working capital amounted to negative 12 million for the quarter and out of this operating receivables increased by 62 million Inventories decreased by 26 million. Operating liabilities increased by 24 million. In percentage of last 12 months sales, networking capital in the quarter corresponded to 13%, confirming that the continued operational excellence actions have been successful. The quite low levels of net working capital is primarily an effect of less net working capital by zero due to decreases in receivables. Long term, we expect working capital in relation to sales to be in line with industry standards of closer to 20% of sales. I will now hand over to Maria to present the results in our two business areas.

Thank you, Jakob. Let's now turn to our largest business area, Life Science Solutions. Sales in 2025 amounted to 1,108,000,000 with an organic sales growth of 1%, which is an improvement year over year with 11%. Adjusted EBITDA amounted to 83,000,000 corresponding to an adjusted EBITDA margin of 8%. When looking at our peers, we can conclude that peers with a significant amount of instrument business, which is comparable with life science solutions, reported negative sales growth for the year. The flat sales development, which we have seen over the year, was primarily driven by a weaker demand in the US academic segment. US academic customers have reduced instrument purchases following funding-related constraints, primarily in the US, and biotech activity has also remained soft amid longer investment cycles. In contrast, the diagnostic segment continued to perform comparatively well, supported by a normalization of the diagnostic market and adoption of automation-linked solutions. Consumables continued to show healthy demand in Q4, in line with previous quarter during the year. We have also spent a lot of effort together with the management teams of Cyanian and Cellink, respectively, to sharpen the commercial offering and strengthen operational excellence during 2025. This work has paid off and both companies have adapted into a new way of working, a more right-side cost costume and clear focus on profitable growth. And if we move to quarter four, results for Life Science Solutions business area. Given the continued tough market, the year ended on a strong note, excluding U.S. academia-dependent business units, which continued to struggle, as mentioned previously. The corresponding quarter 2024 was also very strong due to a lot of U.S. academic sales before the new U.S. administration when they were to cut NIH funding, which results in a tough comparison that Jakob mentioned earlier. The life science solutions delivered in a seasonally strongest quarter, 326 million in sales, meaning a negative 9% organic sales growth. The adjusted EBITDA amounted to 49 million, corresponding to a 15% adjusted EBITDA margin. The profitability was pressured by softer sales, less favorable product mix and tariffs and cost-related impacts. And if we move on to our business area lab automation. Revenue for the full year 2025 amounted to 391 million and organic growth a negative 26%. Adjusted EBITDA amounted to negative 31 million, corresponding to an adjusted EBITDA margin of negative 8%. The very weak first half of BioZero, including a revision of estimated hours in quarter two, with a negative effect of 40 million, impacted the full year results substantially. Transformative actions to scale up BioZero have been executed since quarter two, and the focus has been to significantly enhance processes, leadership and operational capabilities. As Jakob mentioned earlier, BySERO has gained positive momentum with new ways of working, new management in place and we finished the year with double-digit growth. New operational capacities in BySERO are hence paying off and when legacy projects are finalized, the operations will be able to scale and operate in a more sustainable and profitable way. The lab automation business area finished the year on a strong note. Sales for the quarter amounted to 125 million, which equals an organic sales growth of 15%. This sales growth was mainly driven by hardware revenue from the large orders won in quarter 3 and accelerated project completions, sales of service contract and software business. The adjusted EBITDA was 18 million, corresponding to an adjusted EBITDA margin of 15%. The profitability was supported by higher volumes and increased hardware contribution from the large orders, but also partially offset by continued substantial investments in operational resources for the benefit of our customers to accelerate the closing of legacy projects that have been delayed. I will now move on to the next section where I will comment on the R&D portfolio. One area for growth for Baico is continuous product innovation. And we have a solid R&D pipeline and roadmap in place. And this is based on the portfolio strategy, which is part of Baico 2.0. And before I comment on some of our recent launches coming from our R&D efforts, it's worth repeating that our current product portfolio covers the full spectrum of lab automation solutions and selected workflows. It's important to emphasize that we have lab automation products and solutions in both our business areas. And this is illustrated on this slide where you can see instruments from various BICO business units positioned along different stages of the lab automation continuum. Products in the business area Life Science Solutions are also automation ready and can be powered by Green Button Go. Here are some examples. C-Station is a unique product. It's a standardized integrated work cell for pharmaceutical cell line development. This is also an example of synergies in the group as the product includes products from Citina, Q-Instruments and BioZero. To the right you can see the benefits of automation and how this off-the-shelf lab automation solution saves both time and money to the customers through lower staff requirements as well as lower capex investments. The optimized workflow shortens cell line development by four weeks, accelerating product delivery. If we move on to another solution, GPREP, combining products from Satina and Ispendix. GPREP is a miniaturized NGS workflow, enabled by non-contact liquid handling. It reduces reagent consumption with up to 90%, as well as pipette usage and plastic waste, delivering return on investment within 12 months to the customers. And these are just two examples of technology and solutions delivering customer value. And if we take a look at our R&D pipeline and roadmap, On this slide, you can see our comprehensive product development pipeline within Byco's prioritized focus areas. The majority of the R&D investments are made in software development and the use of AI, while there are several upgrades of instrument portfolio as well, meeting customer needs. Multiple product launches are planned for this year, and these include both software, instruments and consumables. And we have already launched a few products last week during the SLES, the Society of Lab Automation and Screening Congress in Boston. And for those of you who are not familiar with this Congress, it's the most important Congress within lab automation in the year, generating a lot of sales opportunities. At SLES, one of the products launched was GoSimple by BioZero. which is designed to simplify workflows, reduce hands-off time, increase sample throughput and enable extended lab operations. GoSimple is initially launched with commercial partnerships covering selected instruments from Sartorius and Becton & Dickinson and Company. And this product is an example how we are introducing new commercial concepts in lab automation with shorter lead times to balance the project portfolio. And given the high interest we saw at SLES, there might be additional collaborations added over time, including expanded work with existing partners as well as new partnerships. And the partners will promote GoSimple alongside their instruments. And this approach strengthens market adoption with the aim of positioning GoSimple as a preferred automation ready solution across multiple work cells. Biocero has also made an early access release for the new assistive AI toolset during SLES, where our software suite Green Button Go enables workflow creation, review and troubleshooting using natural language instead of code. The assistive AI solution is designed to improve speed, usability and error resolution in lab automation, while maintaining full human oversight and validation. It also uses AI responsibly by augmenting workflow development and not by introducing autonomy. This early access program is available to a limited group of customers through a controlled access program, and this approach allows us at BuyZero to learn alongside the users and evolve the capabilities based on real-world needs. Before the Q&A, I will repeat our strategy and give some concluding remarks and highlight our focus for 2026. Here you can see our strategy BICO 2.0 on a page. Our five strategic focus areas to drive our top line and profitable growth are enabling end-to-end lab automation and scientific workflow solutions, coupled with further development of integrated data, AI and software solutions. To enable increased sales to pharma, we need to ensure regulatory compliance readiness, and we also want to expand strategic partnerships such as the one with Sartoris and Becton Dickinson, as well as increasing the recurring revenue. In 2026, we will continue to execute our strategy with focus on commercial excellence, an R&D pipeline that delivers clear customer value and financial discipline for profitable growth. And with this strengthened cash position, we can accelerate commercial as well as R&D initiatives and also more seriously engage in dialogues for Bolton acquisitions, strengthening our portfolio further. The new capital puts us in a position to support further growth and capture a market recovery. We will strengthen our innovation efforts, including software solutions and the use of AI. And above all, we remain committed to supporting our customers' research and enabling the lab of the future. For us, automation isn't just about efficiency. It's about empowering scientists to accelerate innovations that shapes healthier societies. Before the Q&A, I want to sincerely thank our customers, business partners and shareholders for your continued trust throughout 2025. And I also want to extend my appreciation to all BICO colleagues around the world. Thanks for your dedication and meaningful contributions this year. This was our final slide before the Q&A. I will now hand over to the earnings call host for further instructions.

If you wish to ask a question, please dial pound key 5 on your telephone keypad. To enter the queue, if you wish to withdraw your question, please dial pound key 6 on your telephone keypad. The next question comes from Ludvig Lundgren from Nordia. Please go ahead.

Yes, hi, and thank you for taking my questions. So I have three, and I take them one by one. So starting off on life science solutions, you highlight the slow academic spending here, and it has been rather slow throughout 2025, but outside of this end market it seems to, as if demand has been rather good actually lately. So I know you don't provide any guidance, but given that you have started talking about this slowdown in academic spending already, I think in Q1 2025, is it fair to assume organic growth to improve from here, looking into H1?

As you say Ludvig, there has been slow academic spending throughout 2025, and I think we as well as our peers, there are difficulties to make predictions about what's happening in 2026. The assumption from peers and the market is that the NIH budget cuts will not be further cut, but there will likely be more stable situation during 2026, but it's still unsecure. So I think we will have to just see what the future has and see where things are going. But remember that we have normally a seasonally variation when it comes to life science solutions, where quarter one is usually our weakest quarter and quarter four is our strongest quarter.

Okay, very clear. And just to follow up to that, would you say that like looking this far into Q1, is the market, so to say, worse than what it was Q1 last year when you like initially saw this slowdown in academic or is it, it sounds like it's somewhat of the same market basically?

I would say that this is the new normality and the market has adapted to that. And there are no news that is making any more insecurities than before. So if anything, it's more stable than last year.

Okay, great. Thanks. And then I want to jump over to lab automation. And you mentioned SLAS here. And we saw a lot of pharmaceutical companies announcing new AI drug discovery initiatives with LILI, I think, being the largest one that I saw, at least. So I just wanted to hear, are you already seeing an effect from this on BioZero in terms of new project proposals or so on? Or is this more of a long-term growth driver for for Biosero?

I think if we split AI in machine learning that has been around for decades and the use of language, large language models, those are two different things. And overall, AI is something that supports our business model that we work with Biosero. So initially, what we do with the AI is to ensure that we can help our customers make more efficiencies. by reducing their time that they are using for managing large amounts of information and complexity, so they can easier reach their potential on automation. and for ai to work you need a lot of data without data you cannot contextualize data without that you cannot make any good algorithms that help makes ai help you and since we have been around for such a long time with biosero and have so much data we can then use utilize that in in advancing our different solutions uh forward so AI and data and software coupled with end-to-end lab automation, that is the large demand from our pharma customers when they are trying to get products to market faster and with a higher probability of success.

Okay, great. Very clear. And then a final question from my side is on the OPEC side. Excluding the one of here in the quarter, it seems to be down quite a bit, both sequentially and year over year. And that's despite, of course, Q4 being a high sales quarter, so to say. So I just wanted to set some reasonable expectations here for 26. Is it fair to view this OPEX level here in Q4 as a new base? Or how should we look at the current OPEX level? Yeah.

Well, thank you, Ludvig. I would say yes. I would say that the OPEX levels in Q4 are indeed sort of a good proxy and where we hope to stabilize. Some of the decrease that you see between 2024 and 2025, I believe, is also related to impairments in R&D in 2024. So that's driving some of the decline in OpEx because that's included in OpEx. But in addition to that, we have also been cost conscious and made savings in 2025. And we are quite happy with the current cost base. We believe that we perhaps could do a little bit more, but not from sort of the elevated levels that we saw in terms of reductions in 2024. And the ambition going into 2026 is, of course, that we should be able and are able to scale on our current cost base.

Okay, great. Thank you very much. I'll jump back into the queue. Thank you.

The next question comes from Philip Einarsson from Red Eye. Please go ahead.

Hello, everybody, and thank you for taking my questions. I'll actually start with some of the recent news relating to the launch of Go Simple. Can you leave some color or any immediate impressions on the launch?

Philip, it's a very bad line. Can you please repeat the question?

Do you hear me?

We can hear you now. Please repeat the question.

So my question relates to the new flow and maybe the launch of Go Simple. I'm curious if you could share some immediate impressions of the launch, maybe provide some color on that.

Yeah, sure. So at SLES in Boston, where we launched GoSimple, both with instruments from Becton Dickinson and Company and also Sartorius, there was a huge interest from customers, but also other potential collaboration partners. So we have a quite long list of other potential collaboration partners that want to do the same that we have now done with Sartorius and Becton Dickinson. When it comes to what the different sales leads will generate in terms of actual sales, that is something that is being followed up as we speak. So that I will know in a few weeks time. But by just looking at the flow in the booth and the immediate feedback, it was a successful launch.

Okay, good. And just a short follow-up. Sort of from our point of view, when should we expect this to become a material part of the sales mix? Could you provide any sort of guidance there?

I think overall in terms of the business case for GoSimple it's a complement to balancing the portfolio with large more complex projects and I mean it takes some time before you can see effects of the sales given the sales cycles but you should still think about the large complex projects being the largest revenue stream for BioZero and GoSimple is a complement to it for now.

Okay, good. I'm a bit curious also, you talked about academia being headwinds, obviously, but I'm also curious on other customer segments. I hear from other actors in the industry that activity among biotech customers, for example, is improving. It's your view as well, and will you comment on how that has progressed?

I would say that the second half of last year we saw increased demand in all different segments. In essence, as we commented, diagnostic increased, the consumables market continued to go well in terms of growth and so did lab instruments. So it's really the academia US segment that has been muted while we see positive development in all the other areas.

Okay, thank you. I'll go back and do the Q&A.

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

Thank you for the questions received, and thank you for your continued interest and support in Biker Group. Together with Jakob, I wish you all a great Wednesday. Thank you and goodbye.