Bonesupport Holding AB (publ)

sales for sediment G in the US has now reached 1 billion Swedish krona. Visually, it almost looks as if the last quarter is slowing down, which is, of course, not the case. It is an effect of the sharp drop in dollar to SEC. And if we look at the growth at constant rates for the last 12 months, the LPM in quarter two versus quarter two a year ago, the growth number is 47%. In total, antibiotic eluting serum grew with 49% in the last 12 months for the quarter for the global business. Let's push forward and go to the next slide, please. In North America, Quarter two sales reached 236 million SEC, which is a growth of 36% compared to quarter two last year, or 49% at constant exchange rates. As mentioned, we've seen large swings in the US dollar to Swedish krona rate, which is impacting both reported sales and sales growth. The uncertainty regarding the future of potential tariffs continues. Regardless of outcome in this volatile situation, the impact on bone support will be very small, as we have covered previously in the April press release. Some highlights in the quarter. We're seeing strong progress in the market penetration for Ceramide G, with sales reaching 18.3 million US dollars. The growth is coming from new users, but even more so from increased and expanded use in broader sets of indications by surgeons that have made their first experience with CEREMENT-G six to 12 months ago. We are making steady progress in getting CEREMENT-G approved with hospital systems, and we are quickly approaching 200 systems listings. It takes anywhere between three to nine months to get an approval for a listing with a hospital system. And usually the bigger the system, the longer time it takes. We will continuously see a lot of go, stop, go dynamics. But so far, there's only one or two of the hospital systems that have rejected to list Cerament G. The knowledge of the benefits of bone repair with local elution of antibiotics is increasing. To further nurture the growth driven by increased demand, we have signed up a few specific independent distributors specialized in trauma and specialized in prosthetic joint infection. We've done this for states and regions where we did not have coverage with our legacy distributors. The submission to FDA for market authorization of sediment V was made at the end of March. During quarter two, we received questions and requests for clarification on the data from FDA. The submission follows a 510K pathway where sediment G has been used as a predicate device. The package of questions received should be looked at in the perspective of the very rigid and very demanding requirements on clinical data, elution profiles, and special controls established when the category of antibiotic eluting bone grafts was established by FDA. There is, by the way, only one product in that whole category, and that is the sediment G. But by the end of this year, we hope to be able to add one more product to that category, namely Cerament V. The deadline to respond to FDA's question is in November this year. The expectation is that Cerament V will open up additional avenues for growth in the US market and increase the pace of market penetration for use of local antibiotics. The therapeutic ratio is totally different with local antibiotics versus systemic antibiotics, which has been shown in many clinical studies, among those the Solario study. With both gentamicin and vancomycin in the toolbox, we believe that we completely meet all the US surgeons need for treatment and prevention in relation to bone healing. Go to next slide, please. So finally, when it comes to the US, I would like to give an update on the plan for our spinal procedure market entry. At the capital markets day end of 2023, we announced that we will eventually enter the area of spinal procedures with both Cerament BVF and Cerament G in the US. Since then, supplementary regulatory approval has been accomplished for Cerament BVF and several preclinical application studies have been conducted and even more are ongoing. The launch into the spine segment with Cerament BVF will take place in December of this year. We are launching simultaneously in the US and in Canada. The launch will start with orthopedic departments where Cerament is already fairly established and used for extremities. Cerament is overall starting to become quite well known in the market, and there's a large amount of high quality public data on the bone remodeling capabilities of Cerament, including a level one randomized clinical trial showing equivalence to autograft. This is in extremities. So in spine, while there are some patient case series, there are no published clinical studies yet. This is something that we will address and generate over time with our partner hospitals. Recruitment of specialized independent distributors focused on spinal procedures is ongoing. Details on regulatory and clinical study strategy for Ceramide G in spine procedures will be presented in the autumn 2025 as earlier announced. The pictures on the slide just show a few snapshots of some of the details generated from the preclinical study data. These ones are from a fusion study using Cerament according to the Boden model. Strong fusion results were recorded across the study samples. Now let's turn to Europe. Next slide, please. Sales in Europe came in at 49 million Swedish krona, representing 4% year-over-year growth. which is 7% at constant exchange rate. Sales in Great Britain is in recovery from the NHS imposed surgery priority program. Every month has seen gradual increase in number of surgeries and growth rates versus previous year, leaving the quarter at a percentage growth in the mid teens. Sales growth in percent for the quarter was negatively impacted by fewer surgery days, a strong comparative quarter in 2024, and the ongoing hospital reform in Germany. A number of German federal states have launched cost reduction programs related to hospital consumables and surgical procedures. The programs have resulted in quite a disruption for us, with some hospitals reverting back to the use of autograft at the expense of synthetic bone grafts. What we have seen previously with similar historical cost-driven initiatives is that the dip is rather temporary in nature as it relates to innovative products capable of improving the standard of care and providing strong health economic data. To drive understanding of the benefits of CERAMENT, we intend to further intensify our efforts with decision makers on all levels. CERAMENT has very strong evidence supporting and confirming the benefits given to patients, caretakers and payers. In the quarters, two additional clinical studies were published in well-reputed medical journals. with impact factors of 1.8, respectively 2.8. Reduced amputation rate has previously been shown in clinical studies, both from the UK and from Australia. And the recent study was made at Herlev Hospital in Denmark, shows similar strong patient outcome following a dedicated protocol where Cerament G or Cerament V was used. The second study mentioned here follows a patient group that has been featured in previous publications by Henry and Al-Jawadi. The recent publication shows that the great results on deep infection avoidance and avoidance of amputation withheld and remained also over long-term period follow-up. The study had a 10-year follow-up of patients that previously had been reported on in a four and a half year follow-up. And with that, I will leave to Håkan to do and lead us a deep dive in the numbers.

Thank you, Emil. So net sales improved from 219.8 to 284.4 million, equaling a reported sales growth of 29% or 40% in constant exchange rates. Emil has already spoken about the strong performance in especially the US and the major drivers behind the sales acceleration. But as the weak US dollar somewhat hides the continued strong trajectory in the US, I would like to share the US sales performance in US dollars. This slide shows the quarterly sales in the US in US dollars. Not only can we see a strong performance in this quarter, but also a strong performance over the years. with double sales in recent six quarters and triple sales over the recent nine quarters. The dollar growth in a quarter of 49% should be viewed in perspective of a record strong quarter Q2 last year. The contribution from the North America segment improved with 37.6 million and amounted to 104.4 million. The improved contribution relates to increased sales of the defect from increased costs. Sales and marketing expenses during the quarter amounted to 117.8 million compared with 98.3 million previous year, of which sales commission to distributors and fees amounted to 78.5 million compared with 61.6 million the same quarter last year. From the lower graph showing net sales as bars and gross margin as the orange marker, it can be noted that the gross margin remains stable and strong around 95%. In Europe and rest of the world, a contribution of 13.6 million was reported to be compared with 14.2 million previous year. Sales and marketing expenses increased with 2.2 million, including 2.1 million related to the previously communicated commercial investments in the euro booster program. From the lower graph and the orange marker, a minor drop in gross margin is noted, mainly impacted by market mix. The decrease in selling expenses is due to a depreciated US dollar, but also an effect of seasonality, depending on how the expense for large conferences play out. As mentioned previously, the quarter also included 2.1 million related to the euro booster program. R&D remained focused on the execution of strategic initiatives, such as the application studies in spine procedures and the market authorization submission for Sermon V in the US. These initiatives have been progressing well during the quarter and, among others, leading up to the launch of our product Sermon BVF in spine later this year. And administrative expenses, excluding the effects from the long-term incentive programs, remain on a stable level, involving 1 million in non-recurrent expenses in the quarter. The reported operating profit amounted to 54.9 million, despite unfavorable currency effects totaling 11.4 million. And I will come back to this in the following slide. There is no impact from tariffs in the quarter, and we are following the conversations between EU and the US with great interest. It should be said that regardless of the final outcome, the impact on bone support is expected to be non-material. As an example, a 10% tariff implemented in our business would have meant an EBIT reduction on the just reported quarter Q2 this year of 1.3 million SEC, or about 2% of reported adjusted EBITs. A worst-case scenario with 30% tariff would have meant a reduction of the reported EBIT of 4 million. The difference between adjusted EBIT and reported EBIT are costs related to the long-term incentive programs amounting to an expense of 7.6 million in the quarter compared with 7.3 million previous year, as you could see on the previous slide. Cash conversion remains solid with a fourth consecutive quarter with strong cash flow and an increase in cash during the period with 42.6 million. With this report, with a strong adjusted operating result, despite unfavorable currency effects and a solid cash flow, we continue to confirm a strong operating leverage and business scalability. During the period, the Swedish krona has continued to strengthen against the US dollar. Other operating income and expenses therefore contain foreign exchange gains and losses from the translation of the group's assets and liabilities in foreign currency amounting to a negative 11.4 million. Simply put, the negative 11.4 million is mainly driven by the operating assets in the US, such as inventories and trade receivables. These are originally valued in US dollars and at quarter end translated into a much stronger Swedish currency versus the last quarter. The graph on this slide shows with the gray bars how the relationship between the US dollar closing rate and the Swedish krona has varied over time. This is read out on the right eye axis. The blue dotted line read out to the left of the eye axis shows reported adjusted operating result. The adjusted operating result, excluding translational change effects, is the orange line. In Q4 2024, the US dollar to SEC rate was 11.03, which gave a positive effect of 20 million SEC. And therefore, the blue dotted line is above the orange line. In Q1 this year, the U.S. dollar rate was 10.02, creating a negative impact of 30 million. And in Q2, the U.S. dropped down to 9.49, creating a negative impact of 11 million, meaning that the blue dotted line drops below the orange line for these two quarters. The orange line eliminates the translation exchange rates and give a more comparable view of the underlying trend in operating profit. In the table below the graph, you can see the FX adjusted operating margin of 26% in the period compared with 16.8% in the same quarter last year and compared with 24.6% in Q1 this year. And with this, I hand back to Emil.

Thank you, Oka. So to summarize, we've seen a strong momentum in 2025 with 40% sales growth at constant exchange rate in the quarter and 44% in constant exchange rate for the first six months. The continued success for Cerament G in the US is one of the main drivers for this strong growth. And yet this product has just begun the journey towards its full potential. We have a strong underlying profit development and operational cash flow of 50 million SEC in the quarter. So all in all, we are confident in our guidance of sales growth above 40% in constant exchange rate for the full year. Bone support continues to perform steadily, converting an outdated standard practice into technically advanced patient centric care. And we remain committed to expanding into new geographies and indications as we're now starting the ramp up for the December spine launch. So let's open the line for questions.