Biotage AB (publ)

Good morning, good afternoon, good evening, depending which part of the world you're joining us. It's my pleasure today to introduce our entering report, Q4 and 40 years 2024. Joining me today is our CFO, Andrew Kellett. On the agenda today, I will briefly introduce our vision and missions. Then I will turn it over to Andrew to give a deep dive on our Q4 and 40 years highlights. I'll cover as well our strategic priorities, and Andrew will finalize it with the financials updates. Next slide, please. Our mission statement of empowering our customers to simplify and accelerate discovery and development is defining on how we drive our long-term growth and industry leadership. This is how we create value to our customers and shareholders. As we reflect on our Q4 2024 results and subsequently on our 2025 priorities, we are staying true to our vision and mission. Despite increased volatility and macroeconomics challenges affecting the sector, BioTech is very pleased to report a 10.5% growth in revenue during 2024. We have seen a slightly improved growth margin, reaching 62.7%. Adjusted cash from operations increased 33% year-over-year, equivalent to 106% of our adjusted EBITDA. In summary, these results show that our product and services remain in high demand and that we can face both current and future headwinds in the sectors without deviating from our long-term strategy. I'm particularly pleased by the performance of our core business that is now reporting sequential quarter-over-quarter growth and excluding China, is resuming back to mid-single-digit growth. As we've seen in quarter four, our business can be quite volatile on a quarter-by-quarter view. Our revenue is derived by our customers' base that use our product in productions. While our long-term growth is defined by how many new customers we get specified in clinical phase two, our short-term revenue is defined by those customers in production mode. We remain true to our long-term growth strategies, and we are pleased to report that we continue expanding our customers' base in clinical phase two. But we also have to balance this with our short-term imperative. As such, our 2025 priorities will be to further integrate the Astra businesses to realize full revenue and cost, as well as knowledge synergies between the two businesses. We have put new leadership in place to execute the strategy execution and derive the cost savings initiative that we have defined. We will remain true to our executing our long-term vision for the Astra business, which aims to develop new solutions to address customers' needs in partly expanding our service offering in column packing and binding ligands to our beads. Astra will continue to be volatile through 2025. We are completing our strategic review of Oligo businesses, which we have defined as not being part of our future strategic focus for the company. Through the year of 2025, we will continue deriving discipline operational executions, pivoting to profitability and cash maximizations, streamlining our cost structures and deriving operational excellence across the business. We will continue focusing on high growth drivers and enabler, accelerating our application development and executing our new product launches. As such, we will increase market penetration in the attractive peptides and purifications market. We continue remaining committed to our three years revenue plan and profitability targets. I'm now turning over to Andrew to give you a deep dive on our financial results.

Thank you, Fred. Good morning, everybody. The Q4 report, along with the presentation available on the BITARGE website under the investor section, and then financial reports. As Fred has just indicated, the business had a solid Q4 performance and continued momentum for the full year. Revenues for the first time exceeded 2 billion and grew by 10.5% on prior year. We also grew gross margins, underlying EBITDA, and underlying cash from operations in the year. For the full year, our core biotage business grew revenues 1.3% excluding China and narrowed the decline to just minus 1.9% including China. China continues to be a smaller part of our total business, below 5%. At Astraea, full-year revenues grew 23%, and our full-year recurring revenues remained strong at 72%. In drug discovery and development, we delivered full-year revenues of 1.46 billion, up 11%, and this accounted for 71% of our total revenues. In analytical testing, we delivered full-year revenues of 596 million, up 9%, and this accounted for 29% of our total revenues. In the fourth quarter, we saw similar trends to what we've seen throughout the year, with gradual momentum building in our key Western markets and continued headwinds in China. Total revenues in Q4 were $582 million, down 9.5%, reflecting the very high weighting of Australia revenue in Q4-23. Highlights in Q4 include the sequential quarter-on-quarter growth in the core biotage business of 6%, small molecules backing growth at 2%, and growth in systems revenue of 3%, with Q4 systems revenue the highest quarter since Q4-2022. Large molecules declined in the quarter, as expected, attributed to the strong comparable period, although they were still very strong at 220 million. Our gross margins for the full year were 62.7% at one percentage point, with Q4 margins 61.8% at 0.7%. Estrella had a very strong margin performance, delivering 71% in Q4, up 10 points, and 66.7% for the full year, up 5 points. The core biotage business delivered full year margins of 61% and Q4 margins of just under 57%. In Q4, in our core biotage business, margins were impacted by the softness in the oligo service business, which had a negative impact of approximately 1.8 points. Some provisions on a small number of specific inventory items with an impact of 1.5 points, a mix which had a negative impact of 2 points. FX had a positive impact of 0.4 points. Q4 mix was impacted by both higher system sales and the composition of specific product sales. Broadly, systems deliver margins at high 50s, early 60s percent, whereas recurring revenues deliver margins in the high 60s, early 70s percent, depending on the type of product sold in a particular period. For the full year, the oligoservice business had a negative impact on the existing biotage margins of approximately 0.6 points. FX had a negative impact of 0.5 points, and MIX had a positive impact of 0.4 points. Excluding the oligoservice business, margins were comparable year on year. We are now in the process of a strategic review of our oligoservice business and will report when we have concluded this. In Q4, we delivered an adjusted EBITDA of 167 million and for the full year, 547 million, up 6%. In the quarter, we delivered adjusted cash flow from operations of 181 million and for the full year, 579 million, up 33%. clearly demonstrating our ability to successfully convert profits into physical cash. We finished the year with gross cash of £434 million and net cash of £184 million. In the year, we funded acquisition earn-out payments of £287 million, a dividend of £128 million and investments in tangible and intangible assets of £169 million for future growth. So to conclude, we've delivered a good full year performance, delivering revenue, margin, EBITDA and cash flow growth, despite the market headwinds we have faced. As we look at 2025, we will have a disciplined approach into the operational execution of our strategic priorities. We will pivot to profitability and cash maximization, streamlining our cost structure and driving operational excellence throughout the business. We plan to further integrate Australia to enable us to fully realise the long-term revenue, cost and knowledge synergies. This will incur estimated one-off integration costs of approximately 25 to 30 million in 2025. With the leadership changes in the commercial teams that have already occurred and future ones we are making in Australia, we are likely to see much more revenue volatility in 2025. As we enter 2025 with an Australia backlog down on what we entered 2024. And as that backlog typically gets converted in H1, we can expect this to have a corresponding impact on reported revenue. Despite the short-term volatility, we still believe we will deliver on our long-term vision for the business. We're also focused on high-growth drivers and enablers, accelerating application development and execution of new product launches, and increasing our market penetration in the attractive peptide purification market. Above all, we remain committed to our three-year revenue and profitability goals. I think we're now... Happy to take questions.

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 Mathias Hegblom from Handelsbanken. Please go ahead.