C-Rad AB (publ)

Welcome to the C-RAD QT 2025 report presentation. For the first part of the presentation, participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing hash 5 on their telephone keypad. Now I will hand the conference over to CEO Cecilia DeLeu and CFO Linda Frolian. Please go ahead.

Welcome to our Q2 presentation and thank you for joining us today in the middle of the Swedish summer. We have concluded a busy quarter with high activity in all markets with an increased order intake and winning deals despite market uncertainty. And as many of you know, the foundation for our offering is the demand and need for safer cancer treatments with a focus on the patient's quality of life. And it's also about increasing efficiency in the customer's clinics. And we are on a journey. We are building an even stronger CWED, working hard on our financial strengths so that we can access both established and untapped markets globally with our world-leading products and services. So now let's take a look at the Q2 performance and the key takeaways. Q2 was indeed a busy quarter and we are taking steps towards our financial targets. And I am pleased that the hard work done by the team, driving marketing activities, participating in trade shows, organizing reference site visits, which is common in the final phase of the customer buying process, and all this hard work is paying off. We took a number of larger deals in both US and EMEA in the second quarter. Our order intake grew 11% in constant currencies. The main contribution came from EMEA and Americas. And we ended the quarter with a strong order backlog of 735 million SEC. And when looking at the backlog, approximately half of the order backlog consists of products and the other half of service contracts. And service contracts are typically three to five years. And this does, of course, provide good recurring revenue invoiced at the start of each quarter. Revenue year on year declined with 13% in constant currencies. And the main reason is a softer order intake during 2024. And it's also worth noting that Q2 last year was boosted by approximately 20 million sec of China deliveries due to the product registration approval. And the weaker top line had a direct impact on EBIT, and we came in on a moderate 8 million sec. However, we have a stable gross margin, and Linda will share more soon, and a solid growth in service revenue. Our EBIT margin in the quarter was 8%. We are step by step improving the operational efficiency and have reduced OPEX by 10% compared to Q2 last year. And the focus on cost efficiency is now part of our DNA, which means that we are continuously driving both cost control and implementing measures to streamline operations. And that said, we have more work to do. So let's look into the regional performance in the quarter, and I'll start off with the Americas. And our long-term focus is to strengthen our position in the US market. And we had good progress also for this quarter, despite US market uncertainty. And this is mainly due to tariffs. The two large orders in the quarter that we are showing here on the slide are representing different aspects of our untapped opportunity. The product order to a prominent Texas cancer center is for bankers in their newly built satellite facility. And I am delighted that this existing customer decided to expand their footprint with us. The other large order is a pure service contract with a renowned cancer center on the East Coast. And this is a renewal, which is important to us. And it's a clear indication of the strength of our offering and our focus on customer retention. Order intake for Americas increased 11% to 31 million SEC in Q2 and revenue grew 26% in the quarter. Moving over to EMEA. And the hard work by the team is paying off in the quarter. We have good momentum and we were rewarded an 8.5 million SEC strategic multi-site product and services contract in France with the leading private care provider, Ron Say Santé Group. And we are motivated by this as France is a market where we are coming from a challenger position. We can also see signs of recovery in the important German market. And I'm pleased that we received a 9 million SEK product and service contract from one of the most important healthcare providers in the dynamic Stuttgart region in Southern Germany. Order intake increased 47% to 46 million SEK. And revenue in EMEA was down 11% to 43 million SEK, still impacted by a lower order intake during last year. And finally then APAC. And APAC had a softer second quarter. Q2 last year was fueled by vital hold order intake from the earlier Japanese market launch in the end of 2023. However, APAC is still our largest market and there is untapped demand in advanced markets as well as the large developing markets in the region. We have a healthy market mix and see an increasing uptake of SGRT and it's starting to become a given in the clinical workflow. Order intake declined 15% to 58 million SEC and revenue in APAC declined 34% to 44 million SEC in Q2. And as I mentioned earlier, it's impacted by strong China deliveries last year. And if we adjust for these deliveries, APAC had a 1% growth in constant currencies. And with that, over to you, Linda, for a closer look at the financials.

Thank you, Cecilia. So I will take you through some of the main financials for a second quarter. As Cecilia has already explained order intake and revenue I will not go into that again but rather focus on gross margin, cost levels, earnings and cash flow. Gross profit for the quarter was 70 million SEK compared to 88 million SEK a year ago. The decrease in gross profit is following the decrease in revenue year on year, as we had the 20 million sec in high margin proton revenues from the long awaited product registration approval in China last year. The gross margin for the quarter was 67% versus 68% last year, and the current levels are in line with what we have had in previous quarters and within the range of what we would have expected. The decrease in the gross margin year on year is explained by the high amount of proton revenue last year, which was partly compensated by a higher share of service revenue in this quarter. We had no proton revenues in this quarter. Looking at our main operating expenses, you see to the left of this slide that they decreased 10% year on year from 68 million SEK last year to 61 million SEK in this quarter. The decrease is mainly related to lower external expenses as we have gradually replaced external consultants with own employees. To the right of this slide you see that quarter on quarter OPEX is up 9% from 56 million SEK in Q1 to 61 million SEK in this quarter. The increase is mainly related to payout of sales commissions related to earlier quarters that were not fully provided for. The increase is also related to lower personnel expenses in Q1 due to holidays. We are monitoring our cost levels closely and we are happy to see that our efficiency measures are showing results. Our yearly OPEX levels are now down by 31 million SEK from the peak in Q3 last year, as we have now reached a more stable level. EBIT for the second quarter was 8 million SEK compared to 18 million SEK a year ago. The decrease in EBIT for this quarter is fully explained by the lower revenue, as both gross margin and OPEX are in line with our expectations. I can also mention that unrealized currency effects in this quarter were only minor. Our increased focus on smart spending is moving us in the right direction, and looking back a few quarters, C-Ride shows continuous improved earnings and an increased profitability over time. With this development as a foundation, we are well equipped to continue to grow as we believe we can increase the EBIT margin even more over time according to our medium-term financial targets, even if we may have short-term deviations. Our cash balances decreased by 3 million SEK during the quarter and stood at 158 million SEK at quarter end compared to 161 million SEK at the beginning of the quarter. Cash flow from working capital was minus 8 million SEK which is a great improvement from last year but still on the negative side. The increase in working capital is related to accounts receivables as a large number of old orders were invoiced late in the second quarter. A few orders on our balance sheet that have been awaiting final acceptance tests have been paid during the quarter and many have also been invoiced after completed final acceptance tests. Some of these are expected to be paid during Q3. Last but not least, I would like to remind you that Searide is a company with a strong balance sheet and with no long-term debt. And with that, I will hand over back to Cecilia for some closing comments.