C-Rad AB (publ)

Your line is muted. Call recording is on. Welcome to the C-RAD Q3 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 CFO and Acting CEO Linda Frolian and Deputy CEO Johan Danielsson. Please go ahead.

Thank you, and welcome to our Q3 presentation. This time, the presentation will be somewhat different compared to what you have seen before. The agenda will be key takeaways from the quarter, followed by some comments on the regional performance. After that, Johan will present the service business, and then we will conclude with the financials. And with that short introduction, let's look into the takeaway Q3. The performance in the quarter varied across regions. Order intake grew 11% and revenue grew 16% in constant currencies. The increase in both order intake and revenue were driven by the performance in EMEA together with our services business. We saw positive EBIT development and the operating margin increased to 19% in the quarter. Important drivers behind the increase are favorable market mix coupled with a strong contribution from services, which Johan will talk more about in just a minute. And we also have some one-time adjustments affecting our cost of goods, which will be explained in the financial section. Hello, cash has been a focus area, and we had a strong operating cash flow in the quarter, which amounted to 24 million SEK. And with that, let's look into the regional performance. Starting off with the Americas, both order intake and revenue declined. Order intake was down 40% and revenue followed with a 15% drop. This reflects market uncertainty and slower decision making, and we are not satisfied with the performance in the quarter. Moving over to EMEA, which clearly stands out, showing continued good momentum. Order intake increased by 112% and revenue grew 52%. Our position in Central Eastern Europe was further strengthened by the 10 million SEK Czech Republic multi-site product and services contract. Finally, in APAC, a region with strong comparison figures for 24, order intake declined 16% and revenue had a 3% decline. The lower order intake was mainly related to Japan and Hong Kong, while other markets in the region were more stable. And with that, I will hand over to you, Juan, for a closer look at services.

Thank you, Linda. So we want to take this opportunity to speak more in detail about services compared to what we have done before. As it is a key offering, we are very focused on growing this part of the business. So as you can see here on the And on this slide, our results demonstrate the continuously growing service business with increasing revenues from service contracts over the last two-and-a-half-year period. The figure on the left shows the quarterly service percentage of Sierra's total revenues. Again, increasing trend over the years. On the right-hand side, you have a rolling 12-month service revenue contribution, which in this quarter generates about 90 million SEK plus. And as mentioned before, our contracts are typically in the range of three to five years and renewed on expiration, unless systems are up into latest and generational technology. With that said, we can move to the next slide, where to give you a better view of what we deemed as services. So the mission of scope for global services is that once a commercial agreement is made with the customer and we have confirmed the order, the service organization takes on the project management and supervise the order fulfillment process, including technical installation of the products in the customer clinics. But we also perform application training for the end users so that they are enabled to actively use and apply the system to their patients. So we have taken from the last two years to optimize both phases, both the technical installation part but also the application training part to reduce the time we need in the field to complete an installation and finally perform an acceptance test, which is the final system handover to the customer. and also the start of the warranty period. The application training in itself, we have revamped over the last year to provide much level of access to our technical trainers and our clinical specialists so that the customers really become very enabled and long-term successful in their use of our systems. So that said, one key driver for the business and for the customer success is to have long-term service contracts. So if we go forward, this gives you an overview of the services lifecycle. So as mentioned before, once the acceptance test is in handover, the warranty period starts, and then it's followed typically by a three- to five-year contract. And we have multiple options here for the different customer demands and needs, what is included in each contract. But typically, we supply a premium contract, which has a very extensive coverage in both technical and clinical support. Once these contracts expire, then the contracts are normally renewed, unless the systems are upgraded to the latest generation technology. And if that happens, obviously, the warranty period starts all over with the service contract and renewal phase following. This is the general lifecycle, and this is how the business is running over a typical contract period. And in the end, we want our customers to be very enabled and also very successful, able to share their knowledge with their peers in the industry.