Biotage AB (publ)

Well, welcome to this webinar where we are going to present our Q4 results and also a little bit on the full year. And as you know, there is the disclaimer there, and I don't want to say any more of that. What I want to like to start with is a little bit on what we are trying to simplify the message, what kind of company we are. and we are redefining that we are the global go-to separations company to make it more simple and utilizing all of the modalities that we now have in our portfolio going from small molecules to biologics and it makes it much much clearer seen from our point of view to put the message right out to people like yourself and also to our employees and to our stakeholders in general terms. And saying that, I just want to say it has been a fantastic time to come back. Some of you know that I have been here before and are now just for the time being getting in as CEO. And going to more of the executive summary before I led the work to Andrew Kellett that, as you have also seen, is now a permanent CFO and not just an interim CFO. As you can see by the numbers, we have had a fantastic end of the year and a Q4 with, of course, fantastic results out of Australia. We can say now that we really are in a transformation of delivering both very strong revenue and adjusted profits. I also think you can see that we are having a more balanced focus on the defendable markets. Some of you know that since I was here last time, I was aiming at getting to 60-40 on recurring revenue. And you can see now in Q4 that we have reached 76% and for the year 67%. So first time in a full year that we have overshoot our 60-40 rule and hopefully that will continue going forward. There's no doubt also you can see that with the acquisition of Astraea, we wanted to get into other modalities, specifically in therapeutics. And going from, let's say, 4% of our top line in 22, it is now up to one quarter of the whole business, which gives us also a strong belief in going forward with respect to keeping the recurring revenue at a very, very high level going forward. So I don't think it's necessary to speak that much about the numbers right now. That can maybe come. when we have the question session. And by that, I just want to leave the word to our CFO, Andrew.

Thank you, Torben. The business had a great Q4 performance, as Torben has just highlighted. A strong set of results from the core business and has anticipated outstanding results from Australia. The full year, we've delivered over 1.8 billion SEC in revenue and over half a billion SEC in adjusted EBITDA. These results are even more impressive when set against the backdrop of the market environment in 2023. The strength of Viotage is the diversification of products and geography. Viotage now has a strong position in the biologics and advanced therapeutics area, which now represent approximately one quarter of our business compared to 4% a year ago. This complements its existing strength in the small molecule market. For the full year, we grew our revenues in biologics and advanced therapeutics, analytical testing, diagnostics, and water and environmental testing. Our scale-up business grew strongly in Q4, up 32%, recovering some of the declines seen in previous quarters. Overall, our small molecule business did report declines in the year due to the well-publicized challenges with the unwind tale of COVID aftereffects and the near-term customer caution around instrument purchases. Now, just a few words on Astrea. I know there's a lot of interest in the recently acquired Astrea business, so I wanted to provide more color on its performance. In Q4, Astrea delivered 273 million SEC in revenue, a gross margin of 61%, and an adjusted EBITDA of 99 million SEC, or a 36% margin. Since acquisition, Astrea has delivered revenues of 393 million SEC, a gross margin of just under 62%, And then there's just a debit of 109 million SEC, 28% margin. The full year, Australia's revenues were 502 million SEC, an increase of 64%. Since 2021, Australia has grown revenue at a compound annual growth rate of approximately 75%. As I previously commented, Australia is a growing business and not at a stage where it neatly fits into a stable, uniform quarter format like the core business. In 2023, like 2022, we've seen quite large quarter revenue phasing differences. Until the business achieves the largest scale and our investments in the commercial area and wider infrastructure are fully bedded down, we won't be able to properly assess the underlying real phasing patterns quarter by quarter. We believe the phasing in 2024 will not be as marked as it was in 2023. Although, like many of the businesses in the market, we believe H2 will be stronger than H1. Over the last few years, significant investment has been made in all areas of the Australia business, from R&D, commercial, operations support, new systems, new facilities, et cetera. So as the business grows, profits can accelerate, i.e., we have a very scalable business where we can add significant revenue without step changes in the operating cost base. I'd also like to make a brief comment on Australia's recently launched fiber technology, Australia Adept. We are pleased with market reactions since the launch of this technology in late September, 2023. The sales pipeline from a standing Q4 start has grown considerably, as well as very encouraging signals of different customers starting to repeat buy as they trial for themselves how this nanofiber technology transforms cell and gene therapy purification. It's early days, but we've reached, but we're excited about this technology will positively impact the market going forward. Excluding Estrella, our EMA business delivered solid organic growth in Q4 of just under 15%. This helped mitigate a slight softness in the American business in Q4, just under 5%. APAC organic revenue declines continue to moderate. In Q4, it was just under 22%. compared to Q3 of 31%. Overall, our Q4 organic growth rate was just minus 4%. The full year, America's business grew 5% organically. EMA was consistent with 2022, and APAC declined by 27%, with a large proportion of that decline coming from China, which we've clearly flagged in previous commentaries. If we look at our total group business, Americas and EMA grew nicely in Q4 and the full year, and together account for 80% of our business in 2023 compared to 70% last year. Our APAC business in Q4 was steady on Q4 2022, with APAC now accounting for 20% of our total business compared to 30% last year. Our recurring revenue, which we define as consumables and services, were £489 million in Q4, representing 76% of revenue compared to 50% in Q4 2022. With systems, which we classify as non-recurring revenue, of £154 million, representing 24% of our business, compared to 48% in Q4 last year. For the full year, our recurring revenues were approximately 1.25 billion SEC, representing two-thirds of our revenue, with non-recurring of 600 million SEC, representing one-third of our revenue. We are now a far more balanced business, less reliant on equipment sales, sales that are usually the first casualty in any market softness. As I previously commented, the principal KPI we'll be using to assess performance of the business is adjusted EBITDA. This ensures we get clear visibility of real trading performance and can understand trends not affected by either large or one-off unusual costs and non-cash accounting entries. As you can see, overall, we've delivered an outstanding adjusted EBITDA in Q4 of 194 million sec, a 30% margin, which was 119% above Q4 2022. For the full year, we have delivered 518 million second of adjusted EBITDA, a near 28% margin, up 12% over 2022. A reconciliation between the IFRS reported results and adjusted performance figures are supplied in this presentation. So to conclude, The Bataj of today is a stronger, more diversified business, better able to offer customers a broader range of products and services in more markets, and better able to withstand market turbulence now and in the future. It is a business that has attractive gross margins and has the strength to defend those margins, even in a cautious market. It's a nicely profitable business, as we've seen, that in 2023 has delivered 518 million and a 12% increase over 2022, which in itself was a record year. It's a business that is continuing to invest meaningfully in R&D for future success and to be at the forefront of innovation leadership. In 2023, we invested an adjusted 159 million in R&D, approximately 8.3% of sales compared to 6.4% in 2022. We've got a business with a strong balance sheet backed by gross cash of 0.6 billion SEC and a net cash of 335 million SEC. In Q4, our adjusted cash generation from operations was 187 million SEC compared to 133 million SEC in Q4-22. For the full year, it was broadly static at 435 million. Finally, we have an attractive set of assets focused on the right markets, with a highly committed and engaged employee base with a passion to win. We're delivering today and we're excited about tomorrow. Back to you, Torben.

Thank you, Andrew. And as you have just heard from Andrew, fantastic good results in Q4. And of course, that is invigorating us to continue to work on getting the good results also in the coming year. Just I want to remind you all that it's still vulnerable business area we're in and as you have seen other companies cautious in the first half of 24 and just wanted to make everyone aware of that that could be the same for us but so far so good it looks very well and you have seen outstanding numbers for Q4 and with that I will leave it over for questions.