CellaVision AB (publ)

Thank you very much. So I'm Simon Oestergaard, President and CEO of Cellevision, and I have Magnus Blixt, our CFO, with me today. We appreciate you listening in in this summer season to hear about our Q2 results that we are halfway through 2024 results. So we're pleased to share the outcome. Let's just jump right into it. So what we call the quarter in brief. Yeah, we landed the quarter at 11% growth. So organically, that was 10%. So hardly any FX impact on our results of 188 million in revenues. The EBITDA for the quarter, we landed at 60 million EBITDA. corresponding to 32% so just over our financial ambition of having 30 or more percent in EBITDA and I'd say the highlights if we talk about the the the quarter here and there was stability however with some fluctuations and Top level, I would say we were very pleased to what we've seen in APAC across multiple countries. We see consistent performance out of EMEA. So that is positive. And then we saw this quarter somewhat of a temporary slowdown in Americas. In terms of progressing on our strategic direction, our strategic pillars, here we highlight that we have successfully concluded on the internal clinical preclinical studies for our bone marrow applications so that we are now sort of ready to entertain the external clinical validation throughout autumn so that is an exciting place to be we have spent a lot of calories and efforts in interacting with new sysmex colleagues across the regional organizations to implement and really adopt the strategic alliance agreement that we closed and signed with sysmex in the beginning of february this year All right. But let me unpack the numbers a little bit more. I know this is a busy format, but nevertheless, very informative. And here we have all the compares we want. So talk about the drop line. So on the very left hand side, that's the new numbers we report today. And then in the middle column, we have the year to date for the year. So we are now at 188 million for this quarter, which brings us to 358 million this half year. So that represents an organic growth of 16% year to date. Gross margin, we are still also this quarter reporting 66%. That's a little bit sort of low given both levers around product mix. We also have had throughout the year increased material and product costs. However, we have not a significant effect on the price increases that we implement this year. So we should see them influence our gross margin when we get to Q3. Operating expenses. We have spent 75 million versus 73 in the comparable quarter last year. So I think we've been very successful in maintaining our cost base and sales despite some inflation increases. That is due to some restructuring we did in autumn last year. the full impact of that. On the admin, we are also pretty much in control, increasing a little bit. We're spending, we're building a muscle for some of the regulatory requirements. So here we are spending a little bit more on consultants to be prepared and built, support our business. On R&D, it goes a little bit down. We are capitalizing a little bit more from 14 to this quarter, 16 million. So that is really a sign of the maturity in our development programs. So that's good to see. I mentioned the EBITDA of 60 million, which translated into 32%. So despite the somewhat little lower gross margin still, we have a healthy EBITDA margin of 32%. And cash flow wise, We had a cash flow before adjustment for working capital of 54. So given the overarching, a good quarter, a solid quarter as we say. However, given the growth we have, then we have some outstanding accounts receivable and that brings our operating cash flow down to 40 million. And then if we deduct the investment activities, especially capitalized R&D of 16 million, but also on the financial activities that influences the cash flow, then we have both dividends payout of 54 million and we also have the amortization and leasing of around 11 million. So that brings us down to a total cash flow of negative 44 million. So that's sort of the brief run-through of the P&L. Let's try and just give a little bit of regional highlights. So as I said, on the top line side, A little bit low or soft on the Americas, and that is primarily on the large instrument side. So here we did have some, we noticed that there were some operational matters that actually impacted the installation pace. So there has been a little bit of a drag in Americas this quarter. We don't believe it's systemic with regards to market demand. we have seen continued interest and double-digit growth in our small instruments. And that is actually an interest that goes across the entire Americas. So that's still super promising and really, really emphasizes the opportunities we have to serve the ITN networks in that part of the world, but also in South America, in fact. Looking at EMEA, Sales increased to 83 million versus 76. Again, a quarter where we see growth in Americas. So that is promising. 10% growth in this quarter and 15% year over year. I think here it's really also good to see how we have started to work and establish joint action plans across the multiple markets. getting a better understanding and how we support it, also how we leverage our system and our materials to really convert and adopt digital cell morphology across this region. We also have very, very positive feedback from our participation at the ISLH show in Nantes, in France, in May. So that was rewarding and also very motivating for us to giving the first-hand customer feedback also on some of the innovation pieces we're working on. In APAC, it's pretty much a record high, so 198% growth, 37 million versus 13. I think that's obviously a very high growth number. Again, it fluctuates quite a bit also in that region because we're very dependent on when we ship to that part of the world where we sometimes ship quite a lot of instruments and sometimes there is hardly any for certain jurisdictions. What I'm very pleased about with this number is actually that it's spread across multiple jurisdictions. So it's really, we're seeing we're coming back on track in Japan. We've been suffering We pretty much had a year with with inventory sort of issues in Japan, but we are out of the woods. So there's a healthy demand from from from Japan, also from China again. And we actually also starting to see really, really interesting things happening in Australia. And so it is not just a high revenue number, but it's also a very positive outlook, also given the more collaborative approach that we are starting to implement with our distribution partners across that region. If we slide the numbers per product group, as you see here, So again, 16% growth on the instrument side taken together, so 107 million. And that is really a significant increase from the comparable, if we take the six month period, 199 million versus 158. So that's a healthy number. And again, I really, RAC instrument sales and APEC, as I just alluded to, but also I would highlight here the DIF line, which is our smear box, the stain box and the DC one that goes for the small laboratory segment that is starting to get a lot of traction and attention in Canada and Latin America. So here we are. We're really working on getting ready for that and having the registrations there. But the pre-marketing and the conversations with the labs are ongoing and that seems to really resonate. the value proposition of this diff line really resonates with the labs in those markets. On the reagent side, 1%, it's a bit soft at face value. So it's definitely lower than when we take quarter by quarter than usual. I think here, Actually, our full year, or year-to-date, sorry, our year-to-date number of 10% really demonstrates that we had a strong Q1. So there's a little bit of facing here. And then I also want to say that our compare here is actually relatively high when we talk about growth, because we also had some production issues, which means that in last year, which meant that we shipped quite a bit in the Q2. So the compare is also a little bit tough against us in this very quarter. Still momentum across the business. We are really pushing out the reagent, especially hematology reagents that where we see growth across EMEA. So we are really, starting to also get the benefits of the capacity expansion that we implemented with the new factory completing at the end of the last calendar year. On the software side, we increased a few millions to 44 million versus the compare. And here I think the highlight is definitely that we are starting to see not only the EMEA growth in general, but the software sales is picking up. It's really good. It is a sign of them also adopting our remote review. So that is very healthy. Yeah, I think that is probably the relevant comment for that. So I had to sort of summarize the key takeaways for what we define as a solid quarter. Of course, in this business, it's not a consumable business. Then we do have some soft things here that we actually don't believe are systemic. But we definitely saw the appetite and the orders coming from APAC as a highlight. And as a soft light, we saw a little bit on the installation pace in Americas that we believe will be recovered. Again, very to see the software in EMEA. Good progress today. I chose to report a little bit on the bone marrow as just to follow through, given our previous communication that we expect to commercialize our bone marrow module during 2025. That is the plan we are pursuing. And then again, really collaborative efforts with Sysmex in particular are really progressing and I really highly appreciate the way we've started to work at multiple levels within the organizations. So that gives also a very energizing impact within our organization here at Cellevision. And with that, I will open for 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 Ulrich Trattner from Carnegie. Please go ahead.

Hi, thanks for taking my questions. A few. Perhaps you could start off with Americas and the things that you are seeing as temporarily declining. And you talk about operational matters impacting installation. If you can allude a little bit more to that and if there is any chance of that sort of picking up in Q3 that is lagging or what these operational matters include? That would be my first question, please.