OssDsign AB (publ)

Hello and welcome to today's webcast with OsterSign, where CEO Martin Henneveld and CFO Anders Svensson will present the report for the third quarter of 2024. After the presentation, there will be a Q&A. So if you have any questions, you can submit them via the form to the right. And with that said, I hand over the word to you guys.

Thank you very much and welcome everyone. My name is Martin Henneveld. I'm the CEO of OsterSign. And as always, I have our CFO Anders Svensson with me here today. Today, we want to walk you through our third quarter and first nine month result. And I'm pleased to report that OsterSign continues to deliver sustained high growth while significantly improving profitability and cash flow. As always, when we do these presentations, the normal disclaimer. Before we go into the details, this quarter now marks one year since we announced our strategic shift to become a pure play orthobiologics company. And as we emphasized at the time, the orthobiologics business is highly attractive and it's highly scalable. And I believe this was clearly proven in the quarterly report we just released today. If we go into the highlights of the quarter, We saw several improvements on the fundamentals in the company. Firstly, the third quarter now marks the 10th consecutive quarter of triple digit growth in the US. That's 30 months in a row with growth above 100%. Of course, we're coming from a base of zero, but this is quite an achievement that we are incredibly pleased with. Secondly, We continue to see very strong traction on the key fundamental drivers for growth, broader access in the market and deeper usage in the account. Thirdly, the strategic shift and focus has allowed us to optimize the company, even though it's still early days. This has already produced some very significant results, where among other things, we have seen a material improvement in our sales force efficiency, as well as in our production efficiency, clearly demonstrating the scalability of a pure play of a biologics company and allowing us to realize the inherent economies of scale that comes from operating a bigger business both now but also in the future. As mentioned earlier, the third quarter also clearly shows the operating leverage in the company. The quarter that we just reported today is also the first quarter in 2024 without what I would call the overhang from the non-recurring cash outflow related to the cranial business, which has adversely impacted cash in the first half of this year. The much improved cash flow is therefore a truer picture of the performance, which we're now showing here in Q3. And last, but certainly not least, we are seeing a very strong improvement in our gross margin as a result of the previously mentioned production efficiency. And as a result of that, We have increased our guidance from previously at or above 90%, and now expect the gross margin to be above 93% going forward, albeit the exact number will inevitably be subject to quarterly fluctuations. And with that, I'll hand you over to Anders to walk you through the financial results for both the quarter and the first nine months.

Thank you very much, Morten. Just before we go into the numbers as such, and as we also mentioned in our first quarter presentation, I just want to reiterate that given that the company no longer operates in the cranial space during 24, we will only compare to previous periods of orthobiologic sales. But when it comes to gross margin, this can't be separated out for the comparative year. So we will therefore only compare to the previous blended gross margin rate for that period. as morton mentioned we continue to see high growth in the company during the quarter reporting growth of 121 percent on a constant currency basis compared to the same period last year the reported growth was adversely impacted by approximately seven percent exchange rate headwind and it came in at 114 percent compared to q3 23. now If we go to the actual sales numbers, we reported 35.7 million SEC in sales for the third quarter, which, as mentioned, corresponds to 114% reported growth. And for the first nine months, we reported 92.5 million SEC in sales, which is equal to an impressive 145% reported growth. As we have also stated before, growth will not necessarily be linear. It's pretty clear it will not. It will more take the form of a staircase where we will increase accounts and users in one quarter and then may slow down somewhat in the following quarter as we get new customers up and running. And then we go back and increase again. So the best way to look at this really to smooth it out is to look at the underlying momentum in the company, looking at the rolling 12 month run rate or LTM. As you can see in this chart, the third quarter continues to very strong trajectory from before. And the LTM momentum is up 163% compared to a year ago. That's an excellent performance that we are highly satisfied with. Over to the gross margin then. So the gross margin for us to sign catalyst took a significant step up in Q3 and came in at 96.9%. That's 370 basis points up just in this previous quarter, and 17.3% against the blended rate in Q3 23. Now, the increase in Q3 was somewhat extraordinary. It was driven by, to a large extent, increased or improvements in production efficiency. But it was also supported by the release of some provisions that we saw fit to make earlier in the year. and now found it suitable to release. For the first nine months then, we've now delivered a gross margin of 94.7% against 75.5% in the first nine months of last year, which is an increase of 19.2%. We are now raising our guidance, as Morten mentioned, to above 93% going forward from previously having said at or above 90%. And with that, I will now hand you back to Morten.