CellaVision AB (publ)

Welcome, everyone, and thank you for joining us today. My name is Steve Ferguson.

Welcome to Celevision Q2 Report 2026. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing pound key 5 on their telephone keypad. Now I will hand the conference over to CEO Steve Ferguson. Please go ahead.

Good morning, everyone, and thank you for joining us today. My name is Steve Ferguson, and with me is our Chief Financial Officer, Monika Jonsson. We appreciate you taking the time to join us this morning as we present CELAVision's results for the second quarter of 2026. Following the presentation, both Monika and I will be happy to take questions. As this is my first quarterly earnings call since joining CELAVision as CEO on June the 5th, I'd also like to take a moment just to very briefly introduce myself. Before joining Cellavision, I spent more than 25 years in international leadership roles across the life science, diagnostic and healthcare industries. Most recently, I was serving as CEO of Medics Biochemica in Finland, following senior commercial and operational leadership positions at Thermo Fisher Scientific, or Fadia, in Uppsala, and prior to that with Lundbeck, based in Saalbu in Copenhagen. I'm really super excited to be part of Cellavision. and to the challenge ahead, and I look forward to working together with our very talented team, our partners, and all of you as we continue to build on the company's strong foundation to advance laboratory workflow and diagnostic certainty through intelligent microscopy. I'm speaking to you this morning from Vancouver, where it's 2 a.m., so I'll do my best to keep our energy high during this call. So with that, please let's turn to our second quarter results. So Cellavision's second quarter represents a solid performance and recovery from the slower start to the year. The quarter resulted in net sales of 200 million sec, an increase of 4.5% over quarter two, 2025. Sales increased organically by 5.6%, where we saw a 1.1% headwind on currency. And EBITDA for the period amounted to 55 million SEK, which corresponds to 27% EBITDA margin. EBITDA for the second quarter was charged with expenses of 9 million SEK associated with the initial costs of the CEO transition. adjusted for these expenses, EBITDA increased compared to the same quarter last year. As we highlight in the report, Americas reached an all-time high sales, fueled by large instruments, and this was driven by the accelerated workflow uptake among mid-size and large laboratory networks. EMEA showed a stable result, but was still slightly affected by the now concluded inventory adjustment from our main distributor partner. And finally, in APAC, we maintained a steady development, though market conditions remain challenging, particularly in China. We see a notable uptake of the reagents business in both Japan and Australia, along with a tender win for the UN, the United Nations. The commercial launch of our bone marrow aspirate application, or VMA, in EMEA marks an important milestone in our expansion into specialized microscopy. Initial customer interest and sales have been encouraging, reinforcing our confidence in this market opportunity and demonstrating our ability to translate our innovation and our R&D investments into commercial results. We continue to progress outside of Europe with the FDA registration process for bone marrow with our aim of obtaining a 510 clearance in the US before year end. And finally, the development of the FPM technology continues to progress through our development phases, forming the foundation of our next generation haematology analyzers, and this strengthens our confidence in FPM as a platform technology for future innovation beyond haematology. These are exciting developments for Cellavision. And right now, let me hand over to Monica to present an overview of the financial development during quarter two, 2026.

Thanks. Let's unpack the P&L and cash flow. Net sales was 200 million SEK in the quarter representing 4% growth or 6% organic growth against the same quarter last year. We had a gross margin of 70% and that entails also an increase in our amortization of capitalized development expenditures for bone marrow and also the upgraded software program that we are amortizing throughout the full quarter. And here we are now amortizing 4 million SEK versus 2 million SEK last year. Operating expenses landed at 100 million SEK, equaling 50% of net sales. And if we unpack that, we see that sales and marketing expenses are kept on a stable level. Administration expenses were impacted by the costs of 9 million SEK associated with the initial phase of the CEO transition. R&D costs before capitalization were 45 million SEK, just a little higher than last year. However, comparing to the same quarter last year, we have a lower capitalization of 50 million SEK versus 20 million SEK the last year. And that results in an R&D cost of 30 million SEK. The lower capitalization is mainly due to different maturity stages of our ongoing projects, and we expect to see some increase in capitalization from Q3 as projects are maturing. The EBTA reached 55 million SEK with an EBTA margin of 27%, and the increased operating expenses related to the initial phase of the CO transition, of course, impact these results. Adjusted for this, EBTA and EBTA margin increased compared to the same quarter last year. We are continuing to invest in R&D with 22% of net sales. R&D investment programs are developing well and maturing according to plan. Finally, operating cash flow was 29 million SEK. Working capital increased by 32 million SEK during the quarter. Accounts receivable increased as a result of the higher sales and contributed negatively to cash flow as did the increased capital tied up in inventory as a preparation for summer break. Total cash flow of minus 58 million SEK for the quarter included dividend to the shareholders of 66 million SEK. And our financial position remains robust with cash and cash equivalents of 172 million SEK sitting on the balance sheet. And let's go into the regional development.

Thank you, Monica. So just briefly a quick comment on the business by region. So if we look first at America, this is an all-time record high quarter, driven, as I said earlier, by large instrument sales, tender wins, and instrument refreshes. Sales increased to 105 million sec up from 66 last year. And really, this is a reflection of our strong partnership in the U.S., Our sales here are really being driven by robust demand in the large and medium-sized laboratory segments, but it's also boosted by strong order books in Canada and LATAM. And this reflects excellent marketing and commercial activities that have been carried out in the run-up to quarter two this year. In EMEA, sales amounted to 75 million, which are slightly down on last year. Here we see the full impact of the now concluded inventory adjustment from our main distribution partner, and we are confident that that inventory adjustment has now been fully executed. The bone marrow launch that I referred to earlier has generated initial sales and a lot of positive customer interest with commercial activities supporting customer evaluations at numerous sites. These activities have remained high throughout the quarter, supported by our presence at key industry events, And it should be noted that instrument sales in EMEA are above quarter one and above the same quarter last year. For APAC, sales amounted to 19 million sec, significantly below quarter 2.25. On the face of it, this looks extremely disappointing. However, there are underlying positives. Here we see the double impact from China, where trading market conditions today remain challenging for current trading, but also we have a tough comparison quarter for Q2 2025. This included significant instrument module shipments to enable us to locally produce in China, which in the long term will make us more competitive. But that quarter last year was particularly tough to compare against. If we look across the APAC region, reagent sales grew strongly, particularly in Japan and Australia. And this is excellent news for us because this is recurring business. Sales were also boosted by a UN tender win, as I mentioned at the start. We quickly then look at sales by product line. Instruments really drove the quarter results up 7% to 113 million sec. As I said, it was an all-time high for large instrument sales, particularly in America. Primary driver here is automated workflows of mid-size and large laboratory networks. The order intake in EMEA is still affected by the concluded inventory adjustment from our main partner there. And there's a steady performance in APAC with sustained traction in key markets outside of China, as I mentioned. If we look at the reagents, sales increased by 11% to 42 million sec in the quarter. EMEA reagent sales were in line with the same quarter last year. despite temporary delays on shipments from our production site due to the recent heat waves in France. So due to excess temperatures, we had to re-qualify materials from the warehouse and this led to some delayed orders, which had not happened, would have posted higher growth. In APAC, there was strong growth across all sub-regions, particularly in Japan and Australia. And then finally, if we look at software and other, the sales amounted to 46 million sec in the quarter. And it should be noted that the software sales aren't completely synchronized with the instrument. Obviously we sell the instruments, but there's then typically a lag or a delay, which would then be, the software would then be consumed once the instrument is actually installed at the customer site. So, quarterly fluctuations in software sales have impacted the MA performance overall here. And then the other segment consists mainly of spare parts, consumables and currency effects. So if we move to slide six, just to summarize the overall picture for the quarter. Key takeaway is that this quarter we delivered an increase in net sales of 4.5% to 2 million SEC. Sales increased organically by around 6% with 1.1 headwind on FX. EBITDA delivered a result of 55 million SEC, which corresponds to 27% EBITDA margin. And this is in line with typical returns given the costs associated initially with the CEO transition. The commercial launch of bone marrow aspirate application marks an important milestone as we expand into specialized microscopy. We continue to progress the FDA registration process and the aim is for F10 clearance in the US before year end. And from an innovation perspective, FPM technology, as I mentioned, it has progressed through our internal development phases significantly. FPM will form the foundation of our next generation haematology analyzers. This progress strengthens our confidence in FPM as a platform technology for future innovation beyond haematology in adjacent markets, such as pathology and cytology. These are excellent markets to be able to penetrate. The results that we're seeing reinforce our confidence in the market opportunities we face, and it demonstrates progress in translating our investments in innovation into commercial results. As I step into the role of CEO, I'm committed to building on this momentum by combining our strong innovation portfolio with more focused commercial execution. And with that, I'd now like to open up to questions. I will be ably assisted with by Monica today. So if there are any questions I can answer, I'm happy to do so. Anything that requires more information or is beyond my five-week knowledge gap, I'll hand over to Monica. But very happy to receive 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 Christian Lee from Pareto Securities. Please go ahead.

Yes, thank you and good morning. I have a couple of questions and I will take them one by one. The first is regarding the exceptionally high growth in America. Since you already have high large instrument penetration in North America, was this growth driven by Latin America or by replacement cycle activities?

Thanks for the question, Christian. The main driver for sales here is robust demand for the larger instruments in the medium and lab segment. And the drivers here, again, were tenderwinds and instrument refreshes in those segments. The LATAM and Canada business are showing promising growth within that, but the main driver here is that lab segment, those two lab segments.

Okay, thank you. If I remember correctly, I believe you have almost 100% penetration rate in North America. So how come you can show this kind of growth rate in the second quarter?

Yeah, I would say that we have a high market share in the large and medium lab segments. So there's refresh and tender wins that are coming up. They are continual. So there's a lifecycle on laboratory systems that we have an opportunity to win new business, but also to refresh. But there are other segments outside of that that are probably touching on commercial focus. I'd like to explore more. So the smaller labs where perhaps our partners aren't present, there may be more opportunities for growth here in the future for us. It's by no means saturated. I think there's still room for growth in America and that region.

Okay, perfect. Thank you. My second question is regarding EMEA and with the inventory adjustment now concluded at your main distributor there. How do you see the Q3 demand trajectory and Could you also perhaps give us some color on the share of EMEA sales that this partner is representing? Thank you.

Yeah, so the share, we have a strong partnership with our main distributor partner, and the majority of our business goes through them. The order book looks promising for EMEA. It looks like we have a strong order book for quarter three. overall, but we're confident that the inventory depletion has now been run down and we're seeing orders in Q3. Monica, if there's anything to add there?

No, that is correct. So inventory adjustment has been completed and the orders are coming back to normal levels now in Q3.

Perfect. Thank you very much. That's all from me.

The next question comes from Simon Larsson from Danske Bank. Please go ahead.

Yeah, good morning. Maybe also following up on the America Sprint, just wondering if you are aware of any Shannon stuffing in this very strong second quarter and maybe how you could help us, yeah, line out the future here for the second half. If it's something to be extrapolated or if, yeah, just sort of be a more normalized pattern in second half for what you see in Americas.

Yes, I missed a word there. Sorry, could you repeat the what stocking?

Yeah, so if you're aware of any channel stuffing or like stocking effect in Americas, yeah, given the strong print, I mean, and how we should think about it when we... think about our estimates for the remainder of the year in America specifically?

Yeah, so I would say there's no evidence there at the moment, Simon. If anything, it's the opposite with the inventory normalization, if that's the right word, that impacted us in EMEA. There was also some of that in in America as well. And we've seen units being consumed. So as a response to this, we've had much stronger dialogue with our partners. And we have set up processes that will give us much clearer, much more transparent visibility into their inventory levels. So we're confident that actually the order book for both America and EMEA will be robust for the second half of the year.

Okay, cool. That sounds reassuring. And also on the bone marrow application, which I think you sold your first couple of units here in the quarter, are you still sticking to your former statement on, I think it was like one or maybe two percentage point incremental growth here for second half from that product? Or what internal expectations do you have for that product here in the second half?

Yeah, thanks again, Simon. We maintain the same view. The initial feedback, there's obviously a long lead cycle in in vitro diagnostics, especially in diagnostics as customers evaluate new technology, they have evaluations on site, qualify the instruments and the analyzers on site. So there is a long lead cycle. But having said that, the news that is coming back from the market, the number of evaluations and the customer reactions is extremely encouraging. And we still hold our position that by year end, the bone marrow sales should account to 1% to 2% growth, that range.

Perfect, perfect. And also in APAC, the reagent side of the business, a couple of strong quarters in a row now. Just curious to what drives that adoption, what kind of users, if you can name any countries, stuff like that, just to get a grip of that business.

Mm-hmm. So in the quarter, the main customers are anyone who's producing or staining microscope slides. So that could be any laboratory, any research institute. It could be partners that we're selling through. The growth is encouraging. As you said, sustained now. We're starting to see momentum in that area. And it's a role, it's a model for us to look at. for the other regions. Looking at the country specifically in APAC, it's Japan and Australia that are really driving the growth. And like I said earlier, this is pleasing because that is recurring business for us. So those are the two that would highlight in that. And that's despite significant headwinds in China for not just Cellavision, but for the industry broadly. So to see that the region growth in APAC is very, very encouraging.

Yeah, and are these like pilot projects that are now transformed into returning customers, so to say, or how is that sort of, yeah, what's the development been like when it comes to, yeah?

Yeah, maybe Monika, you can add to this, but the business that we see coming from Japan and Australia in Q2, that is definitely recurring. I think the majority of the sales elsewhere tends to be recurring, but Monika, if you want to comment on that.

Yeah, you're right, and we have spent a lot of resources on really getting into those markets here in Japan and Australia, and it is recurring revenue.

Yeah, good. Maybe a final one from my end to you, Steve, because I noticed in the CEO letter that you talked about commercial execution a couple of times. So I was just wondering what that sort of entails for you, given the tight relationship with your main partner today. Maybe one would think that there's maybe not that much you can tweak in the go-to-market strategy. Please correct me if I'm wrong. I mean, what are you seeing when you speak about commercial execution? What can be done better or more from CyberVision's side?

Sure. Great question, Simon. I think, firstly, let me talk about our major distribution partner. The fact that we want to be more commercially focused is actually a reflection that we want to invest more in that relationship. I think that partnership is successful for both parties. It has been a great relationship, and we want to make sure that we sustain that and nurture it. I think there's a lot more that we can do. We are serving the customers that we jointly serve extremely well, but there are other segments out there and other laboratory segments where perhaps our partner is not playing that I would like to get closer to. And that could in turn throw up more opportunities for the partnership. But I want to make sure that every laboratory everywhere in the world that has a microscope is aware of the Cellavision technology. And that's an opportunity for us to take more responsibility in that, looking more at the horizon and really understanding the customer need more closely. But I would like to stress that we do that in partnership with our major partner globally. The other thing to talk about is that as we expand through FPM, there could be other segments outside of hematology that we really want to get to know better. So when I talk about commercial, I want to really understand that we understand the customer need, the end customer, and that we're continually evolving our solutions to meet those needs fully.

Yeah, cool. Thanks so much for the answers. I'll get back in queue.

Thanks, Simon.

The next question comes from Ludvig Lundgren from Arctic Securities. Please go ahead.

Hi. Thank you for taking my questions, and congrats on the appointment, Steve. So I have a few questions, and I'll take them one by one. So maybe just starting off a bit of a clarification here on the destocking you saw on the instrument side in EMEA in Q2. If you're able to quantify approximately how much this affected in the quarter, And then also as well, how much, if you can quantify the reagents delayed in shipment in Q2.

I will start with that one, the first question on how much the EMEA inventory stocking impacted Q2. It was not that much. It was mainly in the beginning of April where we saw it was still slow, but then throughout the quarter, we saw that orders were coming back. So the impact was not that big in Q2. And then when it comes to the reagents delay in France, it's a couple of million sec that were delayed into Q3. And if you remember in Q1, there were some other delays happening that we now got in that was the UN tender. So things happen between the quarters, but about a few million sec. were delayed due to the heat wave in France.

Thank you, very clear. And then also a bit of follow-up on large labs in Americas. And I wonder if you have seen any change in lab investments or large lab investments and tender activity during the quarter? Because I know that AIBOT guided for accelerated core lab demand in H2. Do you share that view or, yeah?

I think, if I can, the results from our side would indicate that those segments in America are growing strongly, but we haven't seen anything specific that we would call out from an external perspective, as Abbott have done.

Thanks, Claire. And then on the cost side, I note that admin expenses was up about 10% even after adjusting for the CEO transition costs. So I just wonder if there's anything you can call out there if there was any other non-recurring items.

There were some additional consultant costs that came in as part of the admin costs this quarter.

All right. So like if trying to dissect an underlying admin cost, would you say that it's more flat year over year or How should we think about that one as we head into H2?

Yeah, there is some increase due to salary increases that happened from 1st of April on all personnel costs in the company. There has also been some investments, especially in the IT area, and that is going into administration costs as well. That could be more fluctuating throughout the quarters.

All right, very clear.

Thanks.

And then the final one just on the total or R&D, including the capitalized portion, grew quite a bit here year over year, which I assume might relate to the upcoming US launch of the bone marrow. So maybe, yeah, help us how we should think about this as we head into H2. Is this a new level we should kind of extrapolate or how to think about this number?

R&D costs excluding capitalization are increasing slightly, exactly as you say, as we are spending some resources also on the FDA applications and also increased focus on innovation. But if we then start thinking also about what we capitalize, then we will see higher capitalization starting from Q3 due to the fact that we have some projects that are advancing in the majority. So that will compensate for some of the increase.

Okay, great. Thanks. And then if I just could squeeze one more in, just on the estimated timeline for bone marrow launch in the US, is there any news there or like FDA application?

We're in line with expectations, Ludvig, that that should be there by year end. So we're in dialogue and the process is going according to plan.

Okay, great. Thank you very much. I'll jump back into the queue. Thanks, Ludvig.

The next question comes from Elvin Roelder from DNB Carnegie. Please go ahead.

Good morning, Steven and Monica. A lot of questions asked already, but maybe I'll ask a follow-up on one of Simon's questions regarding kind of the commercial execution part. I hear that you want to accelerate the partnership with Sysmex.

But kind of a follow-up to that, is there any kind of,

Now, I know that it's early days for you, Steve, but are there any kind of, if we look on a regional basis, where you feel that Celevision perhaps has been lacking a bit historically, where you feel that you can accelerate either salespeople or support functions in order to capture kind of a higher share of growth? I know that you've invested quite a bit in the Americas, but are there any kind of regional white spots where you feel that you're able to kind of accelerate the organization a bit, if you can comment?

Yeah, great question, Elvin, and thank you for that. I think, firstly, the relationship with Sysmex is vital for us, and I think it's symbiotic. I think there's a lot of value for both parties. Together, our combined value proposition is greater than the sum of the individual parts. If you look just at the results, the relationship in the Americas is particularly strong, and I think that's the role model for us, and that's the discussion that we're already having with Sysmex and how can we win together more effectively using, for example, the Americas as the strongest model. Having said earlier, I think it was Christian or Simon's question about market share in America, I still think there's more in America that we can go after. and I think that in every country we can be more effective together and that's why we want to invest, take ownership of that responsibility for it, for our part of that and really drive much more effective commercial activities.

Great, thank you. Maybe then a question on smaller instruments. For the second quarter now, I believe you mentioned that there has been some elevated inventory levels in America for smaller instruments. Can you give some sort of outlook or guidance on when you expect these effects to kind of normalize and when smaller instruments can pick up again in the region, or how should we view that for H2 and onwards?

Yeah, from what we're able to see, and again, Monica, please chip in if I misunderstood this, but from what we're seeing, we think that the inventory normalization has washed through. So we did see consumption from their inventory in quarter two, and also we have an order book. We have orders placed already for Q3.

Okay, perfect. And then finally for me, a nitty-gritty question or perhaps irrelevant, but you say that the quarter was charged with SEK 9 million for the initial phase of the CEO transition. Should we expect any further CEO transition-related costs in Q3 or is that, how should we think of that?

Yeah, thanks, Ed. I think the The costs incurred so far are a mixture of the CEO severance, the recruitment costs, and then other involved consultants. The discussion is still ongoing, so it's not possible to comment any further on that. This is obviously a transition period, but the costs associated to that first phase have come to £9 million in quarter two. At this point, I can't really comment any further on that.

As a reminder, if you wish to ask a question, please dial pound key 5 on your telephone keypad. The next question comes from Christian Lee from Pareto Securities. Please go ahead.

Yes, thank you. I have a follow-up question regarding your R&D expenses. Monica, you mentioned that you expect capitalizations to increase in the third quarter. Is that in absolute terms compared to the second quarter? And could you also give us some color on how we should consider the total R&D investments including the capitalizations starting from the third quarter. Thank you.

Yes, so they will increase versus what we have seen now Q1 and Q2 capitalization has been quite low. We believe we'll go back to levels where we were in the beginning of last year and probably a little beyond that as well when it comes to capitalization as we have some bigger projects now advancing through our different toll gates which means that we are starting to capitalize them. And then your question was also about the total R&D costs and there we see some increase versus previously but that one is not It's not huge, it's a gradual increase as that is hiring more people into the organization takes more time, it's a more gradual increase. So there will be a positive impact on R&D costs, including the capitalization. Okay, great. Thank you.

There are no more questions at this time, so I hand the conference back to the speakers for any closing comments.

Okay, thanks everyone for joining the call this morning and for following us here at Cellavision, and thank you in particular to the four analysts who asked us questions. Before I close today, I'd like to thank all of the team at Cellavision for their very warm and their very patient Welcome, as I get up to speed, as a new CEO. I want to thank, in particular, Simon Ostergaard, the outgoing CEO, who has been really working with me on a very professional and very smooth handover. And not just for this, I also want to thank Simon for his contribution over his five-year tenure as CEO at Cellavision. Simon's work and that of Zlatko before has built a tremendously strong company with huge opportunities for growth. And I'm really excited to be at the helm to help the company realize its potential going forward. Our next interim report will be published on the 29th of October, 2026. And I look forward to commenting on that report with you then and to take your questions at that point. Thank you for joining this morning and have a great day.