Mentice AB (publ)

Welcome, Frans and Ulrike. Thank you, Richard. Thanks for having us. So, the scene is yours. Thank you, Richard. So, we were going to present the Q2 interim report, which we have, and the earnings call today. So, myself, Frans Venker, together with Ulrike Drots, our CFO for Mantis. And what we have today is first of all highlights in an overview which I will present, the financial results by Ulrica. I have some concluding remarks and then we have questions and answers effectively what we see. So what we see is overall key strategic measures that we implemented within the MENTUS organization. In a cautious market. And so we had net sales of 63 million. And what we saw is that the rolling 12 months net sales came out at 261 compared to 281 last year, of the last quarter, which is 7% lower than effectively the previous quarter on a rolling 12 months. Order intake, 57.5 million, also rolling 12 months down 3%, due to primarily weaker demand in APAC. And that's also what we see, is flat sales activities across EMEA and Americas. We see the order intake growing in EMEA and Americas, but APAC is where we see weaker demand, and that is primarily also due to the lumpiness of the business but also the development that we need to do with the medical device industry in order to capture that growth overall we saw we had fda approve of clearance but also brazilian clearance for our new release of ankiras And that is really advancing our product offering across those markets. And also what we see is that we are tracking towards the business case that we had when we implemented this also as an acquisition for Ankyras. And we're tracking well in that and also are discussing also with other companies, medical device industry companies, in order to sign up towards Ankyros and make them part of the ecosystems in order to drive flow diverters as also measurement of our pre-procedure planning. What we did this quarter was as well as a strategic workforce alignment, which was initiated and announced in June of this year. And it enables an estimated annual cost savings of approximately 25 million SAC. We have finalized and implemented this realignment now. And so that is in full execution. And we expect also the first results already to come in also in Q3 of this. What we also did with this is a rights issue towards our shareholders, up to 10% of the shares. And what is very good news is that there is a significantly high underwriting of these shares up to 66%, which means that there is strong support, not only from our current shareholders, but also from our board, as I said, also our management team, towards the strategy that we have implemented for growth. And for that reason, we see it as a positive outlook. Healthcare systems business, as we also stated in the first quarter, is under review, and we're looking for ways in order to drive a compelling value proposition also in this space that can be grown. We're doing this together with a team in order to see what kind of proposition actually can scale and how we can drive revenues for the next years for our hospital business. What we do see, of course, is that in the United States, a new bill was being released, the One Big Beautiful Bill, and that will also require us to be very specific on clinical evidence towards how we are going to drive solutions in the market and how they impact actually healthcare systems in, first of all, improving outcomes but reducing also their cost base. And that's what our simulation solutions are designed for. And that clinical evidence will be part of that health care systems business review that we have implemented. So in all, if you look at the business highlights, as I stated, we did a strategic workforce alignment. that we initiated in June and already have implemented now towards July, where the cost savings are coming in in Q3. We did this with quite a bit of speed in order to make sure that those benefits are kicking in effectively quite soon. And as stated also, this will help us with 25 million SEC on an annual basis from a cost-based reduction standpoint. What we do is also did as part of that reorganization is that we consolidated our research and development, but also manufacturing activities for physical simulation towards Denver to Denver, Colorado. And that finalizes then also the vascular simulation and also biomodex integration that we initiated a few years ago as part of acquisitions. And that basically finalizes then the integration of that. Now, we have continued partnerships with 27 of the 30 largest medical device industry companies, and they are really rewarders for our unique capabilities that we have towards our realism, and realism that we offer as part of simulation towards devices that we implement for device companies and help physicians and care providers to provide patient care. But our strong commitment, what we see from those device companies, is helping us also towards the solid activity that we see in the remainder of the year for business going forward. We have done and are doing a strategic view of our healthcare systems market, as I initiated as well, and see for ways for sustainable, profitable growth for the years to come. I explained as well in Q2 what we saw is that we got clearance in Brazil and in the United States, and that is helping us and will drive already profitable growth also for Q3 from an impact standpoint and helps us also to become part of the treatment base and the treatment market of our business. Then finally, what we have done is for foreign exchange, we have hedged our dollar and euro for the remainder of this year. And so that will help us in order to compensate for fluctuations that are coming towards, yeah, basically the Swedish krona. And finally, the rights issue, what I explained, up to 10% of the share capital, which was announced. We expect this to be closed by September. And as I stated also, this was quite positive and underwritten from the current shareholders, but also supported by the board and the management team of Mentes. So in all, that will help us set up for future growth and profitable growth for the future to come. Maybe Ulrike, if you could give a little bit more details towards the financials, please.

Yes, thank you. I'm happy to. So I will start with giving you some of the highlights for the second quarter of 2025. Net sales 63 million. Compared to last year, yes, it's a decline organically of almost 33%. And we need to remember that Q2 2024 was the so far all time high record with sales over 100 million. So we are comparing with a very, very strong quarter from last year. Fair point. The order intake, 58 million. An organic decrease of 40 million. Yes, there is an FX effect as well. And when we look at, as Frans mentioned, the cautious medical device industry market, and Americas being our biggest market, this actually affects, the main impact comes from the Americas. And above all, also from APAC. From an EBDA level, it's a minus result of 8 million. We have in these minus 8 million, it's costs taken for the strategic realignment that Frans mentioned. So adjusted, it's more or less a quarter where we reach a zero level of EBDA. The order book has a growth of 4.3% if we compare with the second quarter 2024, although there is an effect of FX with a reduction of minus 5%. Of the order book of 112 million, the majority is planned for 2025, almost 62 million. And the operational cash flow, yes, it's affected by the result during Q2, so it's minus with 7 million. To comment a bit more about the cost and the effect of the strategic realignment. And we've said many times in these earnings calls that we prefer to look at our business from a rolling 12 months perspective. And the following graphs that you will see are based on a rolling 12 months perspective. So the sales have had a negative development of minus 7%. And the EBITDA, what was, as I mentioned, affected with 7.6 million, that was taken in the quarter, and we estimate this to be the full cost for the strategic realignment. And these costs are related to two separate areas. The biggest one is the workforce reduction, where the majority has happened in Sweden, but also in the US, France, and Spain. And the second part is cost for consolidating the physical sim business from Paris and Stony Brook, outside of New York, to Denver and Colorado, which Franz also mentioned. And we estimate the annual cost savings of these actions to be towards 25 million Swedish crowns. On a rolling 12 months perspective, looking at the order intake, we see a growth within the MDI, the medical device industry segment, which is our biggest segment. We see an increase in the Americas region and in the EMEA. And this is unfortunately more than offset by the drop in APAC. And the second quarter last year was a very strong quarter for APAC. So this actually also affects these figures. Looking at HCS, the healthcare segment, there is a stable growth in all the regions. Looking at net sales, order intake becomes net sales. So from a rolling 12 months perspective, we see a decline of the 7%. This is an effect of the very strong quarter in 2024 and the cautious market within the MDI segment, which affects the region Americas and APAC. And we see for EMEA a stable growth, both within the MDI segment and the healthcare segment. And finally, some comments about the recurring revenues, where we see an increase of 9% versus last year. And we see the biggest increase in the software licenses, where we also see that we have 58% of these revenues coming from the region EMEA and 35% from the Americas.

Very good. Thank you. So I would like to make some concluding remarks. So what we see is a cautious market overall due to macroeconomical factors, and that is affecting our business also. Still, we have a solid pipeline and interest from the medical device industry, despite what longer sales cycles that we currently see. New clearances for Anquiras, which we have, for Brazil, but also the United States. And that gives us on track, let's say, for growth, but also contribution, profitable contribution in the third quarter. Positive effect on basically the reduced cost that we implemented for the strategic workforce and the realignment that we have done, as also the rights issue that we implemented and just announced also. Again, it means a 25 million SEC on an annual basis from a cost-based reduction standpoint. The rights issue will generate approximately 32 million SEC, and will contribute towards, first of all, our cash position, but also our investments that we're doing towards growth, both in R&D, but also in our sales organization in order to capture profitable growth for the years to come. And again, I would like to state that it was underwritten well by currently the first and foremost, the shareholders in place. but also the board and the management team, which really underlines and supports the strategy that we have implemented for growth, not only in the medical device industry segment, but also for health system sales as also for robotics. And also that latter part, the continuous long-term strategic focus on strengthening the business for our healthcare systems market is going to be critical. And despite laws that are basically implemented in the United States, we see ways in order to truly drive profitable growth there and make sure that we have a profitable future for the years to come. So in that, what we see is that business highlights It is what we see, as I stated, extended procurement cycles. We have done the workforce alignments, regulatory milestones, as also our approach that we're currently looking towards the image-guided interventional therapy space. With that, I would like to give it back to you, Richard.