Vitrolife AB (publ)

effects arises from the net investment in foreign subsidiaries. Revelation impacts the equity. Assets and liabilities translated at the closing date rate. Revelation impacts other operating items. Transaction effects attributable to income and expenses converted at the average rate for the period. However, transactions in foreign currency are measured in functional currency at the exchange rate that applies on the transaction date. Now over to impact that has been observed in this result for the period. In Q1, if I could draw your attention to the arrow on the right hand side, we can clearly see a significant strength in Swedish crown versus other currencies by the end of the quarter one, which impacted the result with translation effect of minus 13 million SEK, but no major transaction effects in the period. In Q2, Swedish crown currency has been less volatile and we can see less impact of translation effect in the operating expenses amounted to minus 5 million SEK for the quarter, but significant transaction effects in the result. Going to the currency effects in sales Q2 2025, it's amounted to 73 million SEK, corresponding to minus 8% for the quarter. And currency effects on the sales year-to-date 2025 totaled to minus 77 million SEK, representing approximately minus 4% for the period. Notably, only minus 4 million SEK of this impact relates to the transaction effects from Q1 2025. A large part of the transaction effect was visible already in the gross result. But when it comes to operating costs, there is a counteract effect of foreign cost and their currency impact. But still, we have a large part of the operating cost in Swedish krona. As a reference, in 2024, changing the Swedish crown exchange rate against Vitrolab Group all top currencies of plus minus 10% would have an effect on income before tax of plus minus 141 million SEK for the full year. We are short in Danish crowns and in Swedish crowns, long in all other currencies as shown in the annual and sustainability report for 2024 in new 2. And by that, I will hand over to you, Bronwyn, again.

Thank you, Helena. We can now move to the next slide titled Sales and Growth for Geographical Segment. Sales in the Americas region increased by plus 5% despite the very challenging IVF climate in the United States post the IVF executive order that I have previously mentioned. The growth that we delivered was primarily driven by share gains in genetic services in North America. The comparables in technologies were exceptionally challenging as we grew 174% in technologies in Q2 2024 due to closing a large embryoscope deal with the clinic chain. Even with these very high comps, Technologies America were only minus 1% behind the previous year. A strong performance in our largest region, EMEA, driven by what has to be said an exceptional performance in our consumables business across the region, delivering 17% growth in local currencies, excluding discontinued business. We most definitely took share from competitors in several categories. This region also had substantial comparable challenges in technologies as we grew plus 50% in Q2 in 2024. um sales in apac were flat with continued market weakness in china although we saw a more robust recovery in southeast asia the overall cost of raising a child in apac appears to be impacting cycle numbers in the wider region and if i can draw your attention then to the share of total sales you can see that emea continues to be our largest region with 33 share of total sales followed by america's with 34 okay i'll now move on and we'll take a deeper look at market region emea so as i said a strong performance by our largest region driven by europe a vitralife group stronghold it has to be said where we continue to expand our market leadership position in several key markets and parts of the portfolio In the region, our total growth was minus 8%, impacted by minus 5% in currency and minus 8% in discontinued business in the quarter. To repeat, our organic growth in local currency excluding discontinued business was plus 5%. Sales in consumables were plus 17% in local currencies, excluding discontinued business. And I want to thank the team for the fantastic job that they did taking share across the portfolio in all markets. Sales in genetics in this region were impacted by the situation in the Middle East, but we did see steady growth across the portfolio in other markets, which was encouraging to see. then a tough quarter here for technologies in the region as i previously mentioned however what is very encouraging to see here is that the revenue per installed embryoscope is increasing steadily okay we will now move to market region americas so tough market conditions as i mentioned in parts of the america region and this is as a result of the ivf executive order which started to impact cycle levels as we moved into Q2. In the vitro life group, we conducted a patient survey across the high volume IVF states in America, and it confirmed that couples were delaying their IVF treatment while awaiting clarity on financial support. The statement from the White House, just for those of you who haven't had a chance to read it, the statement from the White House, and I will quote was, to aggressively reduce out of pocket costs for IVF. Clearly, when this materializes, this will be good for patients, but we are still in a holding pattern awaiting further news from the US administration. Total growth of minus 6% impacted by minus 11% currency factor here. So an organic growth in local currencies of plus 5%. As I mentioned before, an exceptionally strong comparable quarter last year for technologies due to a large purchase from one of the biggest clinic chains, cross-border clinic chain in fact. But what I would say, despite the drop in cycles and the very strong comps and technologies, we still managed to deliver growth. And this is due to share gains in our genetic services business, which is performing very strongly this year across the entire portfolio. So some good, strong share gains and momentum in genetic services. Okay. I'd now like to move on and take a deeper look at market region APAC. Market conditions in APAC are quite mixed from one market to another. Cycles have not returned to pre-Dragon levels in China and Australasia is flat and even negative in certain parts. But Southeast Asia is showing good signs of recovery. What we are seeing across the region is the delaying of capital purchases as chains and individual clinics, in fact, manage their cash. Total growth of minus 8% impacted by minus 7% due to currency fluctuations, so a flat organic growth in local currencies. Negative growth in technologies despite a healthy sales funnel of embryoscopes because we are impacted by these delayed capital purchases, especially in the larger markets. The shining light here is again our consumables business, which is performing well due to share gains from competitors as opposed to cycle growth. And in fact, consumables performed well in all markets, even those impacted by lower cycle growth rates. So with that, I will hand you back over to Helena, who will take us through the geographical segments.

Thank you, Rowan. We are now on page number 10. where I will provide a more detailed analysis of the geographical segments Americas, EMEA and APEC. Starting on the right hand side, as Bonwin mentioned earlier, tutors sales amounted to 871 ms with a gross margin of 58%. In comparison with the previous year sales were 941 ms with a gross margin of 59.9%. The market contribution was 302 million SEK with a contribution margin of 34.7%. In the same quarter last year it was 369 million SEK with a contribution margin of 39.2%. A decrease of 4.5 percentage points primarily driven by currency fluctuation changes and slightly increased supply chain costs. Let us now take a closer look at the geographic segments. On the left hand side, in the Americas, sales totalled 295 million SEK, reflecting a 5% organic growth in local currencies, but a decline of 6% in SEC. negatively impacted by currency of minus 11%. As Bromin mentioned earlier, we had a solid growth despite a significant drop in cycles following the US IVF executive order. Gross income totaled 160 million SEK with a gross margin of 54.2%. This compares to last year's gross income of 181 ms and a margin of 57.3%. A decline primarily driven by currency fluctuations, however, an improvement by 0.5 percentage points compared to previous quarter. Selleck's expenses for the quarter rose from 63 million SEK to 75 million SEK, reflecting ongoing investments in sales and marketing in the US, as previously announced. The market contribution margin for the quarter was 29%, representing an improvement of 3.7 percentage points compared to previous quarter. Sales in EMEA declined by 3% in local currencies and by 8% in SEC, totaling 326 million SEC. The sales were negatively impacted by currency of minus 5%. Excluding discontinued business, sales increased by 5% in local currencies. Gross income was 195 million SEK with a gross margin of 59.9% compared to 250 million SEK and a margin of 60.5% last year. The decrease was mainly due to currency effects and product mix. Selling expenses decreased from 90 million SEK to 81 million SEK. The market contribution margin for the quarter was 35%, slightly down from 31.5%, affected by currency fluctuation, product mix and lower selling expenses. In APEC, the sales amounted to 250 million SEK, reflecting flat organic growth in local currencies, but an 8% decrease in SEK, primarily due to a minus 7% currency impact. Gross income was 150 million SEK with a gross margin of 59.8%, which is lower than previous year's gross income of 169 million SEK and a gross margin of 61.6%. However, there was an improvement of 1.5 percentage points compared to the previous quarter. Selling expenses increased from 42 ms to 47 ms, and the market contribution margin for the quarter was 41%, down from 46.7% last year. Let's move on to slide number 11. On this slide, I will comment on Q2 financial highlights. As earlier mentioned, the sales amounted to 871 million SEK compared to previous year with a sales of 941 million SEK corresponding to a flat growth in local currencies, a 7% decrease in SEK and 3% in local currencies excluding discontinued business. As part of our ongoing risk assessment procedure and to ensure we continue to comply with all applicable international sanctions, we decided to discontinue activities in certain markets in EMEA as we announced in the Q4 2024 report, representing less than 3% of our annual revenue effect from 1 January 2025. The gross income amounted to 505 ms compared to 564 ms previous year, corresponding to a gross margin of 58% down from 59.9% previous year, negatively impacted by current fluctuations and slightly increased supply chain. In the second quarter operating expenses increased primarily attributable to the previously communicated investment in expanding sales and marketing capabilities in the US as well as increased administrative expenses driven by ongoing activities within the company and part of it is to be considered as one of costs. Operating expenses were also impacted by minus 5 ms when revealing assets and liabilities at the closing rate by the end of the quarter. All in all, this gives us an EBITDA of 243 million SEC compared to 327 million SEC previous year, which consequently gives us an EBITDA margin of 27.8% compared to 34.7% last year. The decrease in margin is heavily impacted by transaction and translation effects driven by a strengthened SEC against other currencies. Furthermore, the margin was also affected by increased selling expenses, mainly in US, combined with the impact of product and market mix. Let's move on to slide number 12. Some comments about our operating expenses. As previously communicated, we continue to invest in sales and marketing capabilities in key markets resulting in an increase in selling expenses from 196 million SEK to 203 million SEK. R&D expenses have risen slightly year-over-year by 2 million SEK. Administrative expenses are higher and related to ongoing activities within the company and part of it to be considered as one of costs. Other operating expenses totaled to 6 million SEK remaining flat compared to same quarter last year. However, the operating expenses are mainly affected by translation effects of minus 5 million SEK in the quarter versus minus 3 million SEK in the comparable quarter. related to revaluation of assets and viability at the closing rate. Let's move on to slide number 13. Let us now look at some key financials. Here I will focus on the year-to-date numbers. Sales for the first half year amounted to 1.7 billion SEK corresponding to a flat growth in local currencies, a decrease of 4% in SEK and a 3% decrease in local currencies excluding discontinued business. The gross margins decreased from 58.6% to 57.7% and the EBITDA amounted to 500 million SEK compared to 600 million SEK corresponding to an EBITDA margin of 29.2% versus 33.6% previously. The decrease in margin is heavily impacted by transaction and translational currency effects driven by strengthened SEC against other currencies, but the margin was also affected by increased selling expenses mainly in US and the product and market mix. The financial net amounted to minus 15 million SEK compared to minus 48 million SEK previous year. Primarily positively impacted by foreign exchange gain by 8 million SEK compared to minus 4 million SEK previous year. Interest expense amounted to 31 million SEK compared to 48 million SEK previous year. Net income amounted to 198 NOK compared to 258 NOK previous year, heavily impacted by currency fluctuations, which gives earnings per share of 0.74 Swedish kronor compared to 1.06 Swedish kronor previous year. Taxes amounted to minus 73 million SEK compared to minus 77 million SEK previous year and the effective tax rate was 26.9% for the first half year compared to 23% same period previous year. The increase this year is driven by restructuring activities with holding taxes and geographical market mix, main part effective in Q1 2025. Historically, the normalized average tax rate amounted to approximately 23-25% depending on the geographical market mix. Operating cash flow amounted to 220 million SEK for the first half year compared to 434 million SEK previous year. Changes in the working capital had a negative effect of 134 million SEK this year compared to 62 million SEK previous year affecting all working capital items. The tax pay with a year-over-year increase of 81 million SEK is a timing matter. And we have a strong balance sheet with an equity ratio of 78.8% and the net debt to EBITDA on 0.8 compared to 1.0 previous year by the end of the quarter. And additionally, in the beginning of July, we also have signed a 300 million euro loan agreement consisting of the return loan to refinance the existing debt and evolving a facility for general purposes. And I will now hand over to you again, Roni.