Surgical Science Sweden AB (publ)

Good evening and a warm welcome. With me today is Gisli Hennemark. Welcome Gisli.

Thank you so much.

You are the CEO of Surgical Science and you have closed the books for the second quarter. How has this period been?

It has been hectic. We have focused both on the business and then we have worked very intensively with a contract that we completed after the quarter.

That's right, and we'll talk more about that. But before we get into that, I thought we'd take a look at the figures. The net turnover landed at about 40 million, almost twice as much as the corresponding period last quarter. And the moving results are also higher, 2.2 million compared to 800,000. What is it that drives growth?

Yes, but now we are actually comparing one Covid quarter with another Covid quarter. So that on our educational products, our own products to university hospitals, it is above all the USA and China that have done well for us. But there are other markets where we Säljer lite eller i princip ingenting. Och så på Industry OEM, där vi licenserar teknologi till medicinteknikbolag, där är vår större kundbas som nu återigen då, precis som första kvartalet, börjar få genomslag. Så vi får då fler licensintäkter från fler företag. Så att det spelar ingen roll hur man liksom... If we divide this, 77% growth in terms of bookkeeping, if we look at local currencies it is almost 100% and if we look at local currencies on comparable units, so if we were to put back historically the acquired business it is 60%. So that is the organic underlying growth.

Yes, those are nice numbers.

Yes, we are happy about that.

And as you mentioned in the beginning, you have made an acquisition of Symbionics, is that the name of the company? Yes, that's right. Tell us, who are they and what do they do?

Symbionics has been our biggest competitor. They have existed just like Sturdyco Science for over 20 years. They are incredibly talented. An Israeli company that has been owned by a larger American company, a 3D printer company in the USA, which is also a noted company. So it was a little challenging business. to convince the owners to sell to us and at the same time focus on these important key people and get them to get into Söderko Science with energy and they have really done that. To be an important part, a large part, of a pre-fertilized simulation company is much more exciting than being a small part of a 3D printer company.

How will the integration work look like now and in the future?

Yes, but now we will start to focus primarily on R&D when we develop the basic technology that we then build applications on. Because then we get the opportunity to continue to be technology leaders. In our industry, it is incredibly important that we are technology leaders. We get a robot surgery portfolio, which means that we together are actually the supplier to all the companies that we know have bought in simulation to their robot surgery platforms. And we get a broader product portfolio. Because Symbionics is actually, in terms of turnover, about three and a half times as big as Söderco Science. So we acquire a company that is significantly larger than us. And then they have products in many different application areas. They also work with hard materials, vascular surgery, ultrasound and so on. And that is important to bring forward, since new areas are digitized. And we can then import softwares from the medical technology company's own products to several areas. So this is for us a dream acquisition. A top acquisition. Yes, really.

Let's move on. You also have this collaboration with Aris Health. We have talked about it earlier. But tell us, how fast is that?

But we also commented on that in part of the report today, because it has changed a little. Initially, when we made this collaboration public, which we are very proud of, we said that we appreciate that these adaptation revenues, that is, when we If we add in our softwares, we have a certain number of consultations, which we estimated to be 10 million kronor when we started the collaboration. But now the estimated project is 20-25 million kronor. Yes, significantly larger. Yes, significantly larger. But what you should remember is that Söder & Kosainz is not a consulting company. We say no when we receive all possible proposals to do one or the other on a consulting basis. We only work with this type of software development services when it is linked to future licensing revenue.

So this shows that it is important. As a way inwards, or into companies, or into future collaborations and so on.

Yes, we want to work with our own softwares that will give us royalties in the future. But it shows that AORUS Health is really investing in simulation as an important part. And that the project is bigger, that's positive. It's a sign that there will be license revenue in the future.

Apart from Symbionics, you have also bought Mimic Technologies. How has your business changed and how do you work now that you have become so much bigger? You have two new acquisitions.

Yes, now we are a company with approximately 200 employees, 210 employees, a large office in Tel Aviv, and then we have Gothenburg, Stockholm and Seattle. So it will be a much larger business, but we also have prepared ourselves and built infrastructure in the company to be able to be bigger. Then there will be a lot of extra costs with administrative IT systems and so on, because when we buy Symbionics from 3D Systems, So it is a business that has been quite for itself, but system-wise they have been integrated with 3D Systems. So there we will need to add some structure. So there is a lot of work to do here in the fall.

But do you think we will see even more in the future?

Yes, I could imagine. I mean, we have a contractual agenda. We have worked very structured according to it. We are very pleased with the order here on the puzzle pieces. Sense Graphics, Mimic and then Symbionics. And there are more pieces in our contractual agenda. But then when it can be, we will see. But it will still be an important part of our strategy.

Finally, Gisli, what are your expectations for the second half of 2021?

The most important thing is that the energy and positivism that we have as a company continues. It's incredibly fun to get to know these new colleagues in Tel Aviv and Seattle and get the organization together. Then you hope that the Covid effects will start to subside. Everything can go at full speed. We had a quarter where we grew 77%, but then there are still parts that can do even more. And then it will be very exciting to continue to follow our Robot 20 customers now that they have come to the market. Medtronic is a company that is a customer to us that announced in spring that they have sent in a CE application. It would be very exciting to see if they get regulatory approval in Europe and when that happens. So there are a lot of exciting things.

Then maybe you have a little trip to Tel Aviv to look forward to?

I hope so.

If Corona allows it.

Yes, I absolutely count on that. Especially if it gets a bit autumn-rush here in Sweden. I hope it gets a lot of work in Tel Aviv.

I understand. Gisli, thank you for coming here and talking about the quarter.

Thank you so much, Kajsa.