Boule Diagnostics AB

Good morning, everybody, and welcome to the second quarter earnings call for Bull Diagnostics. I'm Holger Lemberg, CFO for Bull Diagnostics, and with me, I have our CEO, Torben Nielsen. After our presentation, we will open up for questions. Please also feel free to type questions in the chat field. With that, I'm handing over to you, Torben.

Thank you, Holger, and good morning, and welcome to all of you joining this Q2 earnings call. Let's begin by looking at the highlights of the quarter. The second quarter of the year saw the continued effects of the geopolitical instability with longer than usual supply chain lead times, delayed payments from key customers due to continuing bank restrictions and unfavorable effects development from a weakening US dollar. CO2 was overall and relatively speaking a stable quarter. with a 3.3% organic decline compared to last year. Instrument unit sales grew 17% year over year, however, at a lower average selling price. This is part of our strategic focus to grow our install base as a way of investing in future reagent business growth. Our five pound instrument sales more than doubled in both the quarter and year to date. reflecting the higher demand for five-part technology in the market. Consumable sales came in 12% below last year, largely due to the delayed payments, which then delayed shipments, and we ended up closing the quarter with a larger than usual backlog, like what we experienced in Q1. OEM sales were in line with our expectations and on level with last year's sales due to timing of orders, However, we do expect continued good development in the second half of the year. Gross margin declined in the quarter to 38.7% due to product mix. Our instrument sales grew, but at a lower average selling price, which diluted the gross margin. Cost control continued to be in focus and because of all implemented restructuring initiatives in the past 12 months, we've now lowered our operating expense spend by 47%. The operating margin declined to 4.5% compared with 7.2% last year as a direct result of lower sales and gross margin and adjusted average closed at 5.8 million SEC. Despite a challenging quarter, we delivered a positive operating cash flow in Q2 of 2.9 million SEC. This is a critical milestone and a result of our diligent efforts to balance the structural cost, working capital and position pool to invest in the future. To support our strategic transformation, we are strengthening our executive leadership team with deep subject matter expertise in R&D and proven track records in project execution. In May, we welcomed Eva Sperling to our team as Chief of Staff Eva brings significant project management and lean experience from heading up the R&D project management office at Cepheid, a world leader in molecular diagnostics. And in June, we promoted Lucy Yerian, the chief technology officer, to support our strategic focus on OEM and blood controls development. Lucy has a PhD in analytical chemistry and brings more than 15 years of industry experience as research scientist, lab manager,

and head of R&D.