SenzaGen AB

Tack så mycket för det och varmt välkomna till den här presentationen då av Sensat Gens första kvartal för 2026. Vi kommer inleda med att Peter Nellstedt, VD, kommer att presentera rapporten och innehållet och sedan så kommer vi öppna upp för frågor. As Bärden said earlier, you can either write them in or have them on the phone. We have a number of questions prepared here. I will now hand over to you, Peter, to present the report.

Thank you, Rodney, and welcome and good morning from my side to all of you. I will make a short introduction of the first quarter of 2026, describe what has driven our growth and how it goes for our completing businesses. Then I will go over a little presentation about the company and how it is intended that we will grow forward. with our strategic initiative and end with a little picture of what our ownership looks like. After that, we will, as Rodney mentioned, go into a Q&A session where it is good that you ask questions. Rodney will moderate that session. So, if we start with the first quarter, we achieved 10% sales growth, while at the same time, during this quarter, we saw increased attention to animal-free methods. And if we look at the financial part of the quarter, we achieved a sales of 15 million kronor. It is a growth of 10%, but we had a currency against the wind and in constant currencies we had a growth of 14%. Man kan se att det som drev vår tillväxt i gruppen är guardförsäljningen som växte lite kraftigare med 16% eller 21% i konstanta valutor till 11 miljoner. and we achieved a gross margin of 69%. 69% is in the range between 65-70%, which we consider to be a historical and normal, reasonable level for the company, even if it is also affected by the currency. During this growth, we managed to maintain a constant cost base, which means that we have increased our efficiency. We also improved our EBIT and EBITDA went down somewhat. This is partly due to the different writing methods that have changed since we introduced IFRS. But in total, you also see that our cash position is very good with 38 million. And this is largely due to the fact that we made an emission during quarter one to Eiffel, which now became the largest owner in Senzaja. So, to go a little deeper and tell you how it went for GARD, because GARD is what drives sales. So you can see that sales growth increased by 16%, as I mentioned earlier. It is the chemical industry and it is the USA that stands out a bit, it is just this quarter. We got 14 new customers in the quarter and that is a good figure. We also have a constant high repeat, so the business is generated to 83% of returning customers. During the first quarter, we carried out our collaboration at the world's largest toxicology conference. i USA, det här året hösten i San Diego. Man kan väl säga att det verkligen bekräftar vår ställning som ledande och drivande inom det här fältet hudallergi och säkerhetstestning inom det. Men också att vi öppnar upp dörren för respiratorisk allergi. Bilden till höger visar konferensrummet där det skulle rymmas 80-90 pärs, vilket vi hade räknat med. Man kan se att det är kö ut ur dörren, vi fick en totalt fullsatt presentation. And together with us, we also had the industry that presented its results at GARD. For example, J&J Medtech and ExxonMobil worked together with us, but also Merck, who talked about respiratory allergies. Så vi tycker att det här bekräftar det starka industriintresset för Guard och att vi kommer att ha fin tillväxt och hög efterfrågan även framöver. Så vi har ju som ni vet ett antal större bolag som testar med Guard. Vi har gjort ett axplock här av sådana som vi under åren har presenterat med och är glada att kunna lägga till fler namn på den här listan vartefter. Our other businesses include Vitroscreen, which adds value to the group in animal-free effect testing. It is a company we acquired in 2021 that is currently undergoing a change. We have strengthened sales capacity by recruiting a new sales manager. And we believe that this will help us to transform the strong pipeline that we have now built up to businesses during this year. And we have also worked a lot with costs. We have introduced a number of cost savings measures and we believe that this will have full effect from and with the second quarter of 2026. We also received a good new order on the flagship product Aura, Bitcoin Screen Aura. which is a spheroid platform, so that you can test on a custom-adjusted model of a piece of weaving, artificial weaving, and thereby show effects on, for example, skin. Here we got a new order, a fairly large order, almost SEK 600,000, and it will affect the turnover here in the second quarter. Att återställa tillväxt och lönsamhet i Vitroscreen är en prioritering, en mycket viktig prioritering för hela gruppens arbete. Vi har ytterligare ett dotterbolag i gruppen, ToxHub. Det är en rådgivningsaffär som hjälper till och de har expertis kring både toxikologi och farmakologi. Both regulatory in many different industries. This is very important for us when we run new businesses, including Guard. But as you can see, this is very good for your own legs. 10% of our turnover, very strong growth, high profitability and a very nice complement to our core business. Om vi då växlar över från Q1 och litegrann in till en bolagsbeskrivning så är ju Sensagen's vision att vi vill skydda och förbättra människors hälsa genom innovativ teknik som ersätter djurtestning. Och vi har kommit en liten bit på vägen med vårt bygge. Sensegen i Lund är ungefär 69 procent av gruppens omsättning. Experter inom djurfri toxikologi, alltså säkerhetstestning. Och med vår plattform Guard så är vi ledande inom hudsensibilisering. And as we mentioned before, two other subsidiaries, VitroScreen, animal-free effect testing, complements this, 21% of the turnover. And then we have ToxHub, which is our regulatory advisory board. If we look at the market we are working on, we have seen that the market for animal-free testing is now estimated at 13 billion dollars. It is a market that is growing between 6 and 9.5% according to the figures we have access to. Vi har trattat ner den marknaden till vår SAM, Serviceable Addressable Market, som är ungefär 500 miljoner dollar. Då ska det motsvara den testmarknad där Sensain idag kan erbjuda lösningar. We see that this market will continue to grow strongly in the future. There are scientific and regulatory progress. Animal-free tests are more cost-effective, and a lot of companies guarantee social engagement in society and thereby want to reduce the burden by reducing animal studies. Europe, North America, three quarters of the market, the rest is more or less in Asia, but a little bit in some countries in Latin America. And we work quite broadly on both cosmetics, medtech, chemicals, drugs and also in the food market. We have seen a very strong increase in visibility for animal-free methods in the last few years. Backward earlier, we have an increase in a number of messages, both from the EU, UK and also the US, that the authorities there want to see a transition to animal-free methods. And we also received another receipt for this during quarter one, when TV4 here in Sweden showed a report on how the EU is working to drive this change. And we are very happy that we were able to contribute with our expertise and what we contribute with, to restore testing to animal-free in skin allergies. We will continue to grow on this interesting market in the future with four strategic initiatives. One is that we want to establish GARD as an industry standard within Medtech. Vi kommer att fortsätta utveckla Guard-plattformen genom ytterligare regulatoriska godkännanden, men också uppgraderingar tekniskt. Vi kommer att skala bolaget med nya innovationer som vi har i vår pipeline, där vi kommer att ta djurfri testning till andra områden. Och sen jobbar vi kontinuerligt med att utöka vår marknadstäckning. And in parallel with these four growth initiatives, we are working with looking at strategic acquisitions that can complement and strengthen the growth of our existing business. And how are we doing with these initiatives? We continue to move forward quickly. As for Medtech, we are preparing to enter this ring trial. We are in the first stage of it. Vi har avtal på plats med Ring Trial Partners och vi väntar nu klartecken från kommittén på att gå vidare med ett with our Ring Trial. The Ring Trial aims to confirm that Guarded Skin Medical Device works just as well in labs regardless of each other. We have already shown that the method works perfectly for the MedTech application. We have already been approved for that before. Vi har gjort en vidareutveckling av Guard Skin i det vi kallar för dose response. Det är ett sätt att mäta vilka nivåer av ett ämne där du kan börja få problem med allergenicitet. Därigenom kan du formulera produkter så att du har säkra dosnivåer av problematiska ämnen. Vi säljer testet redan idag, vi säljer ganska mycket av det. Vi vill gärna få in det här som en regulatorisk standard. Vi jobbar med att få in det här som en OECD test guideline. Det här har vi ett samarbete med myndigheterna kring. Vi siktar på att få det färdigt under 2027. We have said from 2027 to 2028. We will do this as soon as we can. It also depends on how fast the authorities can handle such events. We continue to develop our market reach. This means that we want to reach customers on new markets. with new distributors and new license partners, but of course also to reach new large customers and continue to establish strong collaborations with the industry. And we think we have taken a step forward during the first quarter, where we have shown our collaboration or customer project together with ExxonMobil, J&J Medtech and Halion, which is before this GSK, their consumer medical business. And we have also seen a very interesting thing here with Guard Air, our respiratory solution, where the American company Nicetam and top pharma company Merck presented their work with GuardAir. So these three were a very good basis. We then look to accelerate growth with our product development. We are implementing complementary methods in our lab here in Lund. We have implemented one more method that we just started up with new customer orders now. And we show that this VitroScreen Aura platform, the steroid test platform is attractive. We got a new order during the first, just at the beginning of the second quarter and have many more in the pipeline. And then we continue to look at new areas. Photo, oops, now we change, we'll go back. phototoxicity, neurotoxicity and AI. And if we go a little further here, we look at these initiatives that we have made progress with and how we have put them out in time. So in the short term, we assume that we are currently in a break-even phase. Here we will see growth, which is what we delivered in the first quarter, and good and good cost control. We will, when our initiatives are completed between 2027 and 2028, enter a more expansive phase with a strong revenue development. We believe that we will get approval within MedTech and DosResponse. And thereafter, we will be able to scale the company with new markets and new test methods that are in the pipeline. If you look at how this can look, we have made this indicative growth plan that shows good growth here where we are now around 2026, which accelerates under 2027-2028 and which we can then scale up. And then of course it is intended that this will also grow under increased profitability from and with the break-even phase. A little about our ownership. got a new big institutional owner, Eiffel Investment Group. It is an independent French institution, 7 billion euro assets under management. They make a relatively large fund from a global perspective. And they have a long-term sustainability focus on their investments. Look at growth companies in technology, life science, etc. And we carried out a targeted emission of 17.5 million, which has taken them up to 9.5% of our shareholder. And they have become our largest owner. Our next largest owner is CheapQ. It is a shareholder that came in in connection with an emission that we carried out in 2024 to finance our growth initiative. Det är en tysk långsiktig investeringsfirma som fokuserar på small och midcap europeiska tillväxtbolag. Vi tycker att det är en fin kvalitetsstämpel på Sensagen att vi har fått in de här två fina institutionella ägarna i bolaget. Utöver kvalitetsstämpeln så har vi nu också storägare som har en alignment med våra planer. This will make it easier for us to strengthen our execution of our 2030 growth plan and also support potential accelerations or initiatives that may take us a little faster on that curve than what we showed in the previous picture. So, this was my last picture. I thank you so much for your attention on this quarter. My closing remark is that we have a strong sales growth, effective cost base, a very strong financial position, and in that way, Sense is in an incredibly good position to be able to deliver, continue to deliver on the growth plan we have communicated. Tack så mycket för mig och då kommer vi att gå över till en liten frågestund. Jag lämnar över ordet till dig Rodney.

Tack så mycket Peter och tack för den här fullödiga presentationen. Ja, vi går in nu i en frågestund. Det går bra att ringa in och det går bra också att skriva frågorna. Jag tänkte bara öppna upp med ett par frågor själv innan vi släpper in publiken. And I'm thinking more broadly about the quarter. You provide a good income growth, while the EBITDA is still a bit negative. But how would you describe the quarter more broadly and how you are in relation to your plans?

Yes, Rodney, we have good growth and despite the fact that we We are a bit handicapped by the fact that the effects of the currency hit quite hard on our revenues, while we are replacing VitroScreen. And that means that we are staying at 10% growth, and at the same time we have achieved gross margin at a normal level. So we are more or less exactly where we wanted to be when it comes to our cost level. And we might have been able to increase the turnover a little more in a more normal market.

And just a little bit about the costs. So you basically have unchanged costs despite a 10% income growth. So how would you like to describe the scalability in that? And can you continue to maintain this cost base even with continued growth on the income side?

Yes, we have shown in the past that we can. We even have a lower cost base this quarter than we have had before. And we have grown. So what you can say is that it does not require much now to tip over to the other side. And I think you have to see this a little longer than during a single quarter. Since we believe that we are in a break-even phase. So kan enskilda kvartal ligga både lite över och lite under nollsträcket beroende på exakt tajming av större ordrar och sådana saker.

Just det. And if we look at the sales of these three parts in the group, if we start with GARD, there is a very good growth in GARD and that is mainly driven by the chemical industry and the USA in this quarter. But how do you see the long-term growth potential in GARD? Where do you see it coming from?

Yes, if you look at individual quarters, it will be a little different. It can be large American companies we have had test applications for, it can be a little larger European companies that take over right there. Just this quarter, as you said, it was the chemical industry and the American chemical industry that drove our growth. But in the future, we expect that the Medtech area will become very important for us. We see that it is the area in the world where absolutely most animal tests are still taking place within skin allergies. Plus that it is necessary to test pre-head allergies on all Medtech products that come in contact with the head. So this is our large growth area. I reckon that a slightly larger part of the sales will come from there.

If you look at the daughter company, ToxHub, it has produced a very, very strong growth in a few quarters. Now it stands for 10% of the group's revenue. What drives this growth? Would you say that you have managed to establish ToxHub on a structurally higher level?

Yes, absolutely. We have established it at a higher level because we have seen for quite some time now that the turnover has stabilized at a level that is much higher. And then it is mainly a broad customer base. We have simply succeeded well with the marketing and positioning of the company. Plus that we have very good consultants in the company that has satisfied customers. We also have a large number of returning customers in that business. What is mainly our potential for Toxa is to develop this business more outside of Italy. We still have a large number of customers in Italy.

Okay, interesting. And as far as VitroScreen is concerned, you have been working with the transformation for over a year now, if I remember correctly. And now you have got a new seller in place. Do you expect that it will be enough to speed up the growth? And how far do you have with VitroScreen? And do you think that additional measures need to be taken? And when is that?

We want to start with the fact that we are incredibly engaged from the board, management and, of course, also operational in the company to get our growth back on the vitro screen. And we really needed to find a new and better sales channel. Now I think we have found it and it has taken a while to find the right individual who also has the right experience. But I think we've got it right now. And when we are well now to get some speed on the growth, then the profitability will come quickly, since we have scaled down the cost picture quite a lot. So I am quite hopeful, I am very hopeful that we have scored right now, Rodney. And as for how long time and patience we have, one can say that here there is a running evaluation from our side. But right now we have our absolute focus on just getting right with growth and profitability. We believe that we are on the right track.

Okay, that's good. I'm looking here now, we haven't received any questions via the web, but how does it look? Are there any who have called in some questions? I'm asking the operator now.

There are no questions on the teleconference. If you want to ask a question, press square five. We can wait a few seconds to see if anyone wants to raise their hand. It doesn't seem like that, so I'll pass it back to you, Rodney.

Thank you very much. Let's continue with some questions about margins. You have a gross margin of 69% in the quarter and you have an expectation of between 65 and 70. So you are in the absolute right part of your expected interval. What is it that drives this margin and do you think you will be able to continue with this in the future?

Yes, but we will be able to deliver a gross margin in that interval. And when Guard stands for a large part of the sales, we end up here since Guard is around 70%. And that's also when we have some currency against the wind, because the income, the main part of the gross margin calculation, is negatively affected. There's not much to get back on the cost side. So that's the part that drives, but then you can ask why we can keep 70% plus within Guard. Vi har ju otroligt fin effektivitet, vi gör många guardtester, vi har jobbat i många år med att hitta ett effektivt sätt att behandla många kundeprover på samma gång så att säga och införa automatisering i vårt labb och så vidare. Det här har varit ett fokusområde som Vi tror att det här kommer att gå att fortsätta, som sagt. Det kommer att både upprätthålla den prisbild vi ser nu, men också på att ytterligare hitta effektivisering när vi ökar på volymen ännu mer.

Men skulle du säga att av de här tre områdena ni har, är det Gart som har högst bruttomarginal? Och hur ser det ut i så fall i Vitroscreen och ToxHub?

Jo, men det stämmer. Här blir det ju lite grann så att When we calculate gross margin and how we calculate it, we calculate both material and time. So it's both direct material and direct salary that you see in our margins. I think you should remember that if you were to only count material margins, we would probably see materials of 85% or more. And Toksab, which is more of an advisory board, is still very good for gross margin of 50-60%. What I would say is that in that interval, also VitroScreen is there, even if we don't provide it separately. There are also some things that hit a little bit in that. We have some internal trade between companies and such, so it would not be right for us to bring all those things up.

This is a spontaneous follow-up question regarding TOCSAB. You say that you have a lower gross margin, but since it is more advice, would you say that on the EBIT or EBITDA level, does it keep the same level as GARD?

No, thank you for pointing that out. The EBITDA level at TOXAB is very high. It contributes to a very large profitability to the group. I would say that they are at a 30% EBITDA level.

Okay, exactly. So that if we see lower gross marginals in the future, if Toxa continues its good growth, then you don't have to worry and lower the result calculation.

That's right, because it will get a breakthrough in an improved EBIT or EBITDA margin.

Looking at your EBITDA level, you are still unprofitable. You have talked for a while now about being in a break-even phase in the development of the company. So the question is, what will be required for you to reach a break-even on the EBITDA level?

No, but if you look at this quarter, you can see that there is not much higher growth that is required or much higher sales that is required for us to go break even with this cost base. And we have also invested a little bit in some cost savings this quarter that we will see full effect of during the second quarter. Among other things, we have invested in better economy management on VitroScreen, which means that we will be able to reduce the consulting fees quite a lot for that company. I mean that we partly have a good base, partly maybe we will see an additional decrease in the cost level and partly you have to see this a little bit over a longer period of time than a specific quarter. I mean that Vi tycker att det är en breakeven för oss. Vi kommer vissa kvartal att göra en liten vinst och vi kommer vissa kvartal att göra en liten förlust. Det tycker vi är normalt när vi håller på att växa och ta marknadsandelarna.

Ja, det är bra. And as you mentioned in your presentation, you have got a new major owner in the form of Eiffel, the largest owner. Apart from the fact that they are owners, do you have any further expectations that they will contribute to the development of the business and have they talked about a boardroom and so on?

No, but the dialogue there, because you may have asked them directly, Rodney, how they resonate with the board and so on. They are then... We have a vote here later today. And the election proposal is that the sitting board is chosen. That is the proposal that applies to that vote. So maybe you have an answer to that question when they think. But we know that Eiffel has invested in this company because they share our vision of an animal-free transformation into animal-free testing. And they have done a thorough due diligence of both our technology and our customer base. Interviewed large customers to us, among other things. So they have done a great job and I expect them to be a big, important owner that gives stability to our initiatives and our business many years ahead.

And at the same time, in connection with the fact that they came in as owners, you got quite a lot of money. And it's not money that you really need, because you already had a stable and good cash register before. And now you have a real cash register. I have a question for you. Are these money burning in your pocket? Are you in a hurry to use them?

Or how do you see your budget? As you said before, we saw that we had enough capital to carry out our strategic initiatives. And we also had enough capital for our ongoing operations. And in that running drift, profitability is a priority. So it's completely right that we didn't need it that way. But we're looking at ways we could use this strong financial position to bring the future a little closer today. Can we accelerate our initiatives that are already ongoing? Is there anything else we can do to take the company one level up a little quicker? So that's what we're working on right now. I would not say that they are burning in their pockets from that perspective. We have found good investments for this.

We have received a few questions here from Alexander Maximilian. One question we have already touched on, but you may still be able to repeat it. When do you reach break-even at the corporate level?

We have not set an exact goal, but we say that we are in a break-even phase and that means that we On a corporate level, we should actually be there from now on. I can't promise that the second quarter will be like that because we can hit a little around zero.

Another question from Alexander here. Something new from regulation in the United States about sound attempts or other geographies with new regulations that can drive demand?

The new thing there is that the US came up with two new things quite recently, where they have an initiative for animal-free testing for the evaluation of monoclonal antibodies as a drug, where they want to avoid primal testing. So they are trying to ape, and I see them in animal-free methods, among other things. And then we also have their largest, I think it's the world's largest contributor within medical research, NIH, National Institute of Health, has gone out and said that you will not support proposals that only include animal testing, but that you should see animal-free alternatives. So those are the two government initiatives that have come now. Even the UK came up with a very detailed framework for how the expansion will go, and it will come here this year, in fact, during the first quarter. So things are happening on a regulatory level, that you are trying to legislate on this.

Good, thanks for that. I have one last question here. During the quarter, you have had increased visibility, partly in this TV4 report, but you have also participated in the world's largest toxicology conference, which you have mentioned and generated a significant number of qualified leads. What can you say more about the leads and the impact of this contribution?

Leads means that they are potential customers who work for large companies who have a pronounced interest in the Guard platform that we came into contact with at this conference. And when we say that they are qualified, it means that we have some kind of dialogue about the fact that there is a test requirement. And then there is a normal sales cycle for us. It has shortened a little. We may be down to three months now, but in many cases it still takes six to twelve months. So my belief is that just what we worked on this year, it will have an effect on this year's sales, but maybe more from Q3 onwards.

That's good. Now I have no more questions, and there are no more questions on the web. I'll ask the operator one more time. Are there any questions on the phone?

No questions on the telephone conference.

Thank you very much for that, and I'll hand the floor over to you, Peter, for the concluding remarks.

Thank you very much. We are pleased that we achieved growth during this quarter, with a slightly better flow with the currency being relatively good. That we continue to grow and keep costs under check and achieve gross margin at a normal level. At the same time, we see continued increased interest, increased visibility for animal-free testing in the world and specifically also for our methods. Så vi anser att vi har en väldigt bra position för att ta det här bolaget till nya nivåer framöver när vi nu jobbar oss igenom break-even-fasen för att sedan gå in i en accelererad tillväxt. Så, tack så mycket!