C-Rad AB (publ)

Welcome to our Q4 presentation. We close the year with growing order intake and solid profitability. But let me first zoom out briefly and take you through C-RED's long-term strategy and our progress for Q4 and 2024. As most of you already know, C-RED is active within radiation therapy, and more than half of all cancer patients undergo radiation therapy at some point of their treatment. So let me take you through this slide from left to right. First, we have a market-leading, patient-centric portfolio integrated with all leading LENAC, Proton, and CT suppliers. And I'm proud that we have over 1,900 systems supplied globally. Secondly, we have a global reach and are expanding -by-step. And in the fourth quarter, we have successfully broadened our base of installations in APAC, and that is visible in the 112% revenue growth in Q4. Thirdly, C-RED sees an untapped potential in both advanced and developing markets, which we want to capture. And also for this quarter, we had U.S. retrofit wins on Varian Linux. In fact, more than half of the orders are intended for Varian Linux. And this is a good step in the right direction to strengthen our position in the U.S. market, and that is a priority for us. And finally, C-RED has good financial stability, and we continue to display a solid profitability also in Q4. So let's go into a few takeaways for Q4 and the full year. The year ended with a recovered order intake of 168 million SEC, a 13% growth compared to Q4 last year. The main contribution came from EMEA, but also from Americas. And our focus on services paid off in the quarter. The full year was impacted by macroeconomic challenges, and the order intake was down by 7% to 486 million SEC. This was softened, however, by an improved fourth quarter. The order backlog increased from last quarter to 759 million SEC. Revenue declined with 12% to 121 million SEC in Q4. And while APAC showed strong revenue growth, it could not compensate for the decline in EMEA and Americas. However, this is our sixth consecutive quarter with over 100 million SEC. Revenue for the full year increased with 10% to 469 million SEC, and this is mainly driven by strong deliveries in APAC. The operating profit was 20 million SEC in Q4, and that corresponds to an EBIT margin of 17%. For the full year, EBIT margin was a solid 15%, mainly due to sales growth coupled with a stronger gross margin. But let's look further into the regional performance. Starting with EMEA, where the market has been challenging throughout the year, including Q3, and the important German market continues to be slow. But we have really worked hard and our focus on sales and marketing campaigns and actively supporting our customers in their clinical use started to pay off in Q4. Order intake increased to 33% to 84 million SEC, and this is a recovery from a sluggish market in 2024. And in the quarter, we secured multiple long-term service contracts in the important advanced markets of Sweden, Germany, Spain and Italy. And the service contracts in Spain and Italy are connected with the large product orders from 2022 and 2023, and this highlights the quite common time lag between product order and service contract. Revenue in EMEA was down 39% to 48 million SEC, and this is mainly impacted by the lower order intake earlier this year. Moving over to the Americas, and addressing Variant's install base of Linux is part of our long-term focus to strengthen our position in the US market. And this quarter, more than half of the systems were for Variant, but we also received a proton order from Florida as well as the 10 million SEC Mexico order. The order intake for Americas increased by 14% to 26 million SEC in Q4. Revenue in Q4 for Americas is clearly below my expectation, and was negatively impacted by a slower backlog conversion due to installation delays. The quarter was also negatively impacted by an adjustment in service revenue prioritization of 7 million SEC, which will be reported as revenue during 2025. And our operations in APAC had a successful year, and security adoption is growing across the region. Our market leading position in China and Japan, South Korea, Thailand, Vietnam and India were the main contributors to an order intake of 58 million SEC in the quarter. A large number of installations took place in the quarter, and revenue in APAC more than doubled to 63 million SEC in Q4. And with that, over to you Linda for a closer look at the financials.

Thank you Cecilia. Regarding the Q4 financials, I want to take you through some of the main events that has shaped our fourth quarter. As Cecilia has already explained order intake and revenue, I will not go into that again, but rather focus on gross margin, OPEX levels, EBIT margin and cash flow. Gross profit for the quarter was 79.9 million SEC compared to 90.4 million SEC a year ago. The decrease in gross profit is following the decline in revenue year on year. Gross margin for the quarter though was 66% versus 65% last year. Current levels are in line with what we have had historically and within the range of what we would have expected. As you all know, we had a boost in the gross margin during Q2 and Q3 due to deliveries of proton orders. We had no deliveries of proton orders during Q4. Looking at our main operating expenses, you see at the left hand side of this chart that they decreased year on year from 73.4 million SEC last year to 57.1 million SEC in this quarter. Q4 of 23 was impacted by expenses of 13 million SEC related to the settled dispute with a former employee. Adjusted for this OPEX year on year was down 3 million SEC and the decrease is mainly due to lower provisions for annual bonuses following the lower order intake for the full year. At the right hand side of the chart, you see that quarter on quarter OPEX is up from 54 million SEC in Q3 to 57 million SEC this quarter. And the increase is related to lower personnel expenses in Q3 due to summer holidays, but also to higher sales commission in Q4 due to higher order intake in the quarter. EBIT for the fourth quarter was 20.4 million SEC compared to 11.5 million SEC a year ago. And as I mentioned, Q4 last year had one-off expenses of 13 million SEC. Looking back a few quarters, Searide shows continuous improved earnings and an increased profitability over time. This paves the way for continued investments for growth as we believe we can increase the EBIT margin even more over time. Our cash balances increased with 32 million SEC during the quarter and stood at 151 million SEC at quarter end compared to 129 million SEC at the beginning of the quarter. Main driver behind the increase is the improved EBDA together with a modest cash flow from working capital of 3 million SEC. Working capital for the quarter was positively affected by payments from customers, but offset by new customer invoices and orders on the balance sheet still awaiting completed final acceptance tests. Managing the balance sheet is a priority and we are working on this throughout the organization and it will be a focus area going forward. Last but not least, I would like to remind you that Searide is a company with a strong balance sheet with no long-term debt. And with that, I will hand over back to Cecilia for some closing comments.

Thank you, Linda. And before moving into Q&A, let me summarize. We close the year with an order intake recovery, solid profitability and a strong financial position. And looking ahead, I'm excited to take on the opportunities to capture the demand for STRT. And our key priorities are growing US, which is our long-term ambition. Ensure EMEA's success and there are priorities to capture the untapped demand in advanced markets. And key to both US and EMEA is to build long-term customer partnerships. And in 2024, it is worth mentioning, we increased the number of reference clinics with eight in EMEA and six in the US. And that's the first good step. Happy customers are our best sales reference. And we will continue to capitalize on STRT demand in selected emerging markets. And lastly, invest in product innovation and a stronger sales and delivery organization as its fundamental to increase sales and drive a sustainable, profitable business. And with that, over to you, moderator, for Q&A.

If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Christian Lee from Pareto Securities. Please go ahead.

Yes, thank you. Good morning. Thanks for taking my questions. You had solid order intake growth for services in the quarter. Was it mainly in EMEA?

Yeah, that's true. The majority, hi Christian, the majority of the service order intake was in EMEA. And as I mentioned before, to these advanced markets.

All right. Can you please talk about the outlook for EMEA? If you see continued recovery and if there are any significant panders in 2025?

The situation continues to be pretty much the same with a challenged macroeconomic situation in a slower Germany. But we work with everything we can and what we can influence. So that is the current status of the situation.

Okay, thank you. Can you please elaborate on how you're investing in future growth? I noticed that the capitalized expenses have decreased by half compared to last year.

Yeah, the capitalized expenses was the question.

Yeah, how you're investing in future growth

in

general.

Yeah. So, you know, not everything is visible at this point right now. It depends on what type of projects we are running. But we are continuously investing in future growth.

Is it through employing more FTEs?

Yes, over the year we have added more FTEs into R&D. That's correct.

Okay, thank you. My final question. During the quarter you had canceled orders of almost 15 million. Do you see any risk of further cancellation?

I can answer that. And yes, we have a larger amount in this quarter. And we believe it's a normal course of business that some deals do not materialize. And we have had canceled orders historically too, but they have been smaller amounts. And when it comes to each individual quarter. And I think that this quarter we have done a more thorough review of the older orders in the backlog. And therefore more cancellations have surfaced. So it's pretty natural. But given the size of the order backlog as such, we don't think that the amount is significant. But it may be a large amount in the isolated quarter. And which is why we wanted to be transparent about it. But it's not a large amount over time in that sense.

Okay, perfect. Thank you very much. I will jump back to the queue.

Thank you. As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

Thank you all for attending our Q4 presentation. And we are 100% committed in our fight against cancer. Thank you.