SenzaGen AB

Thank you very much. I am Rodnall Wehn and I will guide you through this broadcast. We will start with the presentation of the results and trends. Then we will move on to a Q&A session. where I will be moderating and you have the opportunity to send in written questions and also to be on the phone. So with that, Peter, welcome and present the result.

Thank you very much Rodney and also welcome from my side to this quarterly report for the third quarter. Jag går rakt på och berättar att vi kommer att lägga upp det här med en agenda. Det jag kommer att prata om är den finansiella utvecklingen under kvartal 3. Sen ska jag berätta lite grann om den positiva utvecklingen för Guard och våra dotterbolag. Därefter så, för de som kanske lyssnar på kvartalsrapporteringen för första gången, så blir det en kort introduktion av bolaget. arbeta med och därefter så går vi in på strategi först i form av vår R&D pipeline som går framåt och därefter så avslutar jag med våra strategiska prioriteringar hur vi ska växa bolaget framåt. Och sen kommer vi ju då tillbaka till en frågestund som Rodney kommer att moderera. Vi har haft ett Kvartal 3. Vi pratade under första halvåret och både vår Q1 och Q2-rapportet mycket pekar på att vi skulle ha ett starkare andra halvår än första halvår. Det är också det vi nu ser och har levererat. Vi har nått både tillväxt i kvartalet, 18% icke-valutajusterat, And we have also had a break-even on the EBITDA level in our movement results. So here we see just this turnover of 15.2 million in Q3 2025 compared to 13.2 in 2024. An increase of 15% or 18% if we adjust for the currency against the wind we have in line with the Swedish crown tax. Significantly towards the euro, but even more towards the dollar. Our guard business, which we report separately, grew by 12% or 15% in constant currencies. and we ended up with a gross margin of 66% compared to the previous year of 67%, which you could say is on the same level. And this sum, that we have had such a good increase in revenue and kept our costs stable, has led to us reaching a break-even result on EBITDA at zero. and it is an improvement of 1.2 million SEK and it is also visible in the moving result that you can read about in the result calculation. We have worked disciplined in our entire group to keep our costs down, but I just want to say that the third quarter for us who have a lot of staff in Sweden is normally a lower quarterly rate because of the semester periods. So we have had some help in lowering the costs in the third quarter because of that. But on the other hand, it is something that we also had in the third quarter of 2024. So that we kept the costs stable while we increased the turnover shows that we have very good leverage in our business. Kassan ligger på 29,3 miljoner. Det är ingenting vi är oroade för. Vi har haft väldigt hög fakturering precis i slutet av kvartalet, vilket fått kundfodringarna att hoppa upp lite grann i balansräkningen. Därigenom har vi haft en påverkan på kassaflödet. Let's move on to sales. I'll start by talking about Guard, our core business. We have very good development there. We had 12% growth quarter to quarter, up to 10.5%. You should remember that Q3 is usually a weaker quarter. We have a lot of our business in Europe, 75% all year round in 2024. And with the semester period in August and September in Europe, we get worse sales. What we have also had is that we have continued to see this a little longer lead time for large orders and a certain resistance with the currency. We continue to work very focused on getting new customers. We have 10 new customers that have joined Guard here during the quarter. And the joy is that half of them are such large multinational companies that we know are what we want in the customer portfolio, because then we create a recurring business. We can also see this in customer loyalty in the quarter. 85% of sales come from existing customers. It's a little higher than it usually is. And what makes Q3 sell pretty well for GARD despite the semester period in Europe and this longer period of time for major orders in Europe is that we have had good development in the USA. So we communicated two major orders that came in, one from the chemical industry and one from the pharmaceutical industry. Both two over one million kronor and that has led to a higher share of sales from the USA in the quarter. Sen fick vi ju precis i början av Q3 godkänt på TG497 för Guard och vi har haft ett fantastiskt mottagande av det. Vi ser ett väldigt stort engagemang kring Guard hos våra partners, CROs och distributörer och vi har också väldigt många leads som kommer in nu här och vi tror att det här kommer att ge oss en fin utveckling framöver. VitroScreen, which we are working on developing, here we see now after a weak first half of 2025, where we talked about that we started to see small signs of the pipeline starting to be built on VitroScreen under Q2, we are also delivering a better quarterly result for VitroScreen with 15% growth in constant currencies. The sales are still not at the level where we want VitroScreen, but we see signs of improvement. So we will continue to work with VitroScreen in this way, with a focus on sales, customer acquisition and keeping costs stable. Our second subsidiary, ToxHub, which is an advisor in both pharmacology and toxicology, provides a very strong result. We have, through sales work and marketing focus, which we started one and a half years ago with ToxHub, reached new customers. This has led to a tripled sales for ToxHub in the quarter. And it's a trend we've had during this year, because in total, during the first nine months, Toxab now accounts for 9% of the group's sales. And throughout the year, in 2024, we were at 5%. So we have a very strong development for Toxab, and it's also a very profitable part of our business. Ja, lite grann här kring de kunder. Vi jobbar ju med världsledande bolag med Guard. Vi vill nå in till de här stora bolagen som L'Oreal i kosmetika-industrin, Sonova i medical device-industrin, ExxonMobil i... the chemical industry, Lundbäck in the pharmaceutical industry. Because we know that when these customers have started to use GARD, they will return to a very large extent, both during the same year, but also later when we get a loyalty and an increase in our business, which we have seen for several years now. Therefore, these new five large customers, which are in parity with some of these brands, you can see on this slide, are very good for us. Vår vision med gruppen är ju att ersätta djurförsök och på det sättet så bidrar vi till att förbättra hälsa och skydda människor från skadliga kemikalier i omvärlden. Men vi vill göra det utan att offra miljontals djur i processen. And to explain that, we have a group that consists of three companies today. We have Sensagen in Lund, which has developed the revolutionary GARD test, which I have just announced the sale of. We also have another toxicological testing in our GLP certified lab. Sensagen accounts for 65% of the company's turnover and there are 21 employees in the company. Vi har ett datorbolag VitroScreen i Milano som kompletterar Senseian genom att erbjuda så kallade 3D-vävnadsmodellstestning och har en testplattform som heter Aura. stands for 30% of our turnover and has 10 employees. And then we have our advisor, ToxHub, which in 2024 stands for 5% of sales and has three full-time employees, but a network of other expertise that they can draw on when you need to meet the needs of customers. I'll tell you a little bit about our market. We operate on a growth market. It grows between 6 and 9.5% and we are looking at the animal-free toxicology and effect testing market. The total market for this is estimated at 13 billion dollars. And we have, as I said, brought that down to a SAM, serviceable addressable market, at about half a billion dollars. So that is the market we theoretically could sell today if we reach all customers and take 100% market share within the services we can offer today. We believe that this market will continue to grow. There are four big drivers. One is that we have scientific development. There has been progress in AI, but also in cell and molecular biology and similar models that make it possible to look at what is happening today in biologically complex organisms such as humans, and thereby get closer to what could happen when we are exposed to chemicals in our natural environment. We also have regulatory forces, There will be legislation similar to the Cosmetica that introduced an animal testing ban in the EU in 2014. There will be similar preparations for new legislation elsewhere in the world. There will also be a lot from the USA in both NIH, National Institute of Health, and FDA, to encourage companies to switch to animal-free testing in their preclinical operations. Furthermore, animal-free testing is often more cost-effective than animal testing, and it lowers the company's development costs. And it can also improve time-to-market, it's faster to do animal-free tests, you don't have to make any ethical applications. The last thing is that companies also work on their social engagement and to reduce the number of animal trials is one way to get engagement and improve your footprint. So the four of them work together and we believe that this market will grow many years ahead. Today it is Europe and North America that are the major parts of our growth market. 75% There are signs that things are happening in Asia. Now China is starting to take hold of this message as well. But our focus with Sensagen Group is on the European and North American markets. Vi jobbar ganska brett med flera olika industrier, så nära till hands tänker man kanske på kosmetika när det gäller djurtester. Det är en väldigt viktig marknad för oss också. Men man ska komma ihåg att medical device och medicinteknik också gör mycket djurförsök. Faktum är att när det gäller kontaktdevices, produkter som är i kontakt med huden, They are the main part of the animal experiments that are done today in the field of skin sensitization. So if this industry could change, you would save a lot of animals. And we could reach a very large market with the sensor again. The chemical industry is also an important industry. Medicines, and there is also testing in nutrition and food. Jag skulle säga att alla de här branscherna är viktiga och en sak att ta med sig är ju att Sensein rör sig i ett fält där vi inte är beroende av att en enskild bransch rör på sig eller inte. Vi har en aktiv tillväxtagenda och för att fokusera in lite grann på vår R&D, vi är ett teknikbolag och vi har tagit fram världsledande teknik som vi lyckats få godkänd. Vi fortsätter investera i den teknikplattform vi har utvecklat och vi tror att det kommer att leda till väldigt stark försäljningsutveckling framåt som ni kan se på den här illustrativa grafen. One project we are working on is about dose response. It is about developing GuardSkin regulatory. Today we have an approval where GuardSkin can be used for so-called hazard identification and say if an item is allergenic or not. Vår dosresponsmetod, som vi har färdigutvecklade och redan säljer av, säger istället vid vilka koncentrationer som ett ämne börjar bli farligt. Det här är en väldigt viktig sak för bolag att titta på, och vi försöker få ett direkt rapport godkännande även på den här koncentrationen. The second major growth project we are working on is in medicine technology, which I talked about earlier. This is an area that still does a lot of animal testing. What the industry follows is an ISO standard, and there are all tests, even animal tests, defined how they should be done. In this, there is no standardized animal-free test today for skin sensitization. We work with SensiM, probably the first method that comes into this. We work with it with a project where we have already developed the method and we will go through what is called Ring Trial. The last is that we work with Aura and it is VitroScreen that has a technology platform for tissues. And there we work with utveckla nya plattformar så att kunderna kan titta på nya effekter. Sista vi jobbar med inom Guard så jobbar vi med att förbättra vår teknikplattform i sig. Sista ledet vi jobbar med där är en så kallad gen-expressionsanalys. Genom att byta ut det steget mot ny, mer modern teknik så kommer vi att öka vår bruttomarginal och få upp vår licensförsäljning. So a little bit of progress. This has gone with our initiatives. I mention two here. First, we have the DOS Response project. There we have sent our application to ECWAM, which is the EU's authority to evaluate methods in order to then be able to recommend them for OECD inclusion. And it is OECD that controls standardization in our test industry. And this process is quite long. We have gone through it once with GuardSkin. We think it is reasonable that we can get a complete OECD approval in 2027. And that will significantly increase the demand for our dose-response test. Then we have our MedTech project. We have presented the MedTech data for ISO's working group. Resultatet av den presentationen och den datan som för övrigt ser fantastisk ut, vi klarar i princip av att identifiera alla hudallogener. Det var också konklusionen från arbetsgruppen som rekommenderade att GARD nu går vidare att genomföra en så kallad ring trial. Ring trial betyder att vi ska undersöka och bevisa att vår metod funkar on three labs independent of each other. We have prepared this process, and we are in the final phase right now with trading up test labs. And the goal is to start up our ring trial already now, during this quarter. And then we should reach an ISO inclusion in 2027. beroende på hur snabbt den här ISA-arbetsgruppen arbetar. Men det vi gör är att den delen vi kan kontrollera som handlar om att nu få igång den här ringtime, det ska vi få till så fort som möjligt. Så, vad ska vi göra framöver? Ja, vi ska skala upp affären, fortsätta förbättra effektiviteten, alltså få hävstång på våra kostnader, och lägga investeringarna i de här viktiga tillväxtprojekten inom Medical Device Dose Response, Aura. Organic sales and organic growth means that we continue to establish direct sales, improve our position on our existing markets by increasing our customer portfolio. We have several partners. We give the opportunity to expand to new markets. The CRO we have, for example, is responsible for the American market, which we signed almost a year ago. We see that we are starting to get a certain traction now. I have already talked about the test portfolio, the initiatives we have there. Very, very important to drive our future growth. And then the way we reach our customers and we get customers to test on Guard, it is through this thought leadership to drive scientific communication. vi har också gjort två lyckosamma förvärv fått till en breddning av vår testportfölj som annars skulle tas flera många många år och den här konsult och rådgivningsverksamheten Toxab som bidrar så fint till vår lönsamhet. Vi ser att förvärv som kompletterar gruppen har en plats men vi vill att det ska vara rätt bolag som tillför rätt kompetens och rätt pusselbit så att vi kan ytterligare förbättra vår organiska tillväxt. Jag tackar så mycket för att ni har lyssnat på den här kvartalsgenomgången och vi ska arbeta med framåt. Och jag vill nu flagga för att vi den 10 november, nu på måndag, kommer att hålla en kapitalmarknadsdag där vi kommer att gå igenom i bättre detalj vår strategi framåt och mer exakt våra målsättningar och vad de kommer att leda till de närmaste åren. Vi har ett väldigt starkt program med externa talare, experter inom djurfrittestning och också ett par kunder som kommer att uttala sig för vår räkning om Sensagen. Så jag rekommenderar varmt den här eventen. Inleds på plats i Stockholm 11.30 med lunch, med en presentation och kommer att ta vid vid klockan 13. Det går också bra att delta digitalt. Så det finns ett par platser kvar för den fysiska eventen så anmäl er där om ni inte har gjort det via mail eller anmäl er till online-eventen. Tack så mycket och jag lämnar tillbaka till dig Rodney för Q&A. Thank you so much, Peter.

As I mentioned, you can both send in questions in writing or you can also put yourself in the telephone queue and we will let you in in order. But before that, a few questions from me. You mentioned that you have received 10 new guard customers this quarter. Can you say something about what trends you see, what industries, industries and testing methods are common?