Welcome to BICO Q4 2023 report presentation. For the first part of the presentation participants will be in listen-only mode. During the questions and answer session participants are able to ask questions by dialing pound key 5 on their telephone keypad. Now I will hand the conference over to CEO Maria Forss and CFO Jacob Thordenberg. Please go ahead. This call is being recorded. Your line is muted. Welcome to BICO Q4 2023 report presentation. For the first part of the presentation participants will be in listen-only mode. During the questions and answers session participants are able to ask questions by dialing pound key 5 on their telephone keypad. Now I will hand the conference over to CEO Maria Forss and CFO Jacob Thordenberg. Please go ahead. Hello and welcome everyone to BICO's earnings call for our Q4 report for 2023. We released our interim report earlier today at 7:00 A.M. CET, and my name is Maria Forss, and I'm BICO's CEO and President since November 2023. This is my first report for BICO, and together with our CFO Jacob Thordenberg, I will guide you through our financial performance and shed some lights on our strategic priorities for BICO moving forward. Let's move on to the agenda slide. Our agenda for today is divided into four sections before the Q&A. We will give you a summary of the quarter, dive into our financial performance in Q4 and for the full year 2023, as well as our performance per business area. We will also touch upon BICO's strategic priorities. After the presentation, we will move to a Q&A where you can participate and ask questions. The operator will be back with further instructions. BICO released preliminary Q4 and full year 2023 figures earlier this month on February 14, together with information about the goodwill impairment, which amounted to SEK 582 million for the companies Scienion, Visikol, and Nanoscribe. Jacob will elaborate a bit more on this subject later on in the presentation. Sales in Q4 amounted to SEK 636.6 million, a decline of 4.4% compared to a very strong Q4 2022. This also meant that the positive seasonal effect was weaker compared to the corresponding quarter last year. This can primarily be explained by a decline in sales from academia, diagnostics, and biotech segments, and by a more diverse product mix. It was pleasing to see that we delivered an adjusted EBITDA, which amounted to SEK 86.1 million and a double-digit margin of 13.5%. We also divested Ginolis via management buyout in November 2023, and the rationale behind this was that Ginolis didn't manage to transition fast enough to mitigate the post-pandemic downturn. Due to the divestment, Ginolis has been classified as discontinued operation in the financial reporting, and consequently, all the numbers referring to continuing operations except for cash flow numbers, which include Ginolis as well. We're also very proud that Biosero signed the group's largest project to date, worth $28 million in December. This project consists of delivering lab automation solutions to a global pharma customer. I will now hand over to Jacob and the section about our financial performance. Thank you, Maria. I will summarize both Q4 as well as the full year 2023. As Maria mentioned on her first slide, we delivered sales of SEK 636.6 million with a decline in organic sales of -4.4% and -6.1% in constant currency. Adjusted EBITDA amounted to SEK 86.1 million, and EBITDA was SEK 95.1 million thanks to healthy sales levels from Biosero's lab automation projects, as well as an effect of right-sizing and cost control. The gross margin for the quarter amounted to 70.2%, which is in line with the corresponding quarter last year. The net loss for the quarter amounted to -SEK 877 million, whereof SEK 582 million related to the goodwill impairment. If we deep dive into our sales for the quarter, you can see that the sales have increased over the year, and sales for Q4 amounted to SEK 636.6 million, which corresponds to a negative organic growth of 4.4%, as mentioned on the previous slide. This meant that the positive seasonal effect was weaker compared with Q4 2022. This can primarily be explained by a decline in sales in the academia, diagnostics, and biotech segments and our different product mix. We can conclude two main reasons for the decline in sales, which also hampered our industry peers. Firstly, weaker sales than expected from some of our instrument-oriented companies, mainly attributable to reduced or frozen grants within academia and research in both EU and U.S. Secondly, we saw a weaker demand from the diagnostic industry, which resulted in hampered sales in lab automation compared to Q4 2022. On the positive end, we saw an increased demand from pharma customers and for Biosero's lab automation solutions. And if we move on to adjusted EBITDA, adjusted EBITDA amounted to SEK 86.1 million, corresponding to a margin of 13.5%. Compared with Q4 2022, the increase in margin was mainly attributable to right-sizing and cost control, as well as the healthy sales levels in Biosero. During the year, we have worked with initiatives related to operational excellence that targets lower costs both on a short-term and long-term basis. In 2023, this translated into substantially lower personnel costs, as well as cost cuts at BICO Group. Please also note that SEK 12 million was less capitalized in Q4 2023 compared to Q3, explaining the decrease in margin between the quarters. That was Q4 2023. Let's move on to full year 2023. For the full year 2023, we delivered sales of SEK 2,249.9 million, which corresponds to an organic growth of 5.8% and 0.3% in constant currency. Adjusted EBITDA amounted to SEK 217.7 million, and EBITDA was SEK 360.4 million, thanks to sales growth, but foremost our diligence focused on right-sizing and cost control during the year. The gross margin for the year amounted to 70.1%, which is in the same span as the previous year. The net loss for the quarter amounted to SEK -1,698 million, which mainly derives from the goodwill write-downs in Q2 and Q4 2023. The goodwill write-downs amounted to SEK 1,350 million. On the next slide, this shows the progress being made during the year, divided into total sales, adjusted EBITDA, and operational cash flow. First, let me comment on sales, which shows a total increase of 6.1%. Adjusting for FX, sales were, however, flat, but in a very tough post-pandemic market where BICO, in comparison to peers, has performed rather well. This was primarily related to increased demand during the second half of 2023 for Biosero and their project-based business, and in addition to some of the group companies in bioprinting and biosciences delivering slightly above expectations on a full-year basis. For Adjusted EBITDA, I want to mention substantial improvements despite flat sales due to significant cost savings, resulting in Adjusted EBITDA increasing to SEK 217.7 million from SEK 126.2 million in 2022. In terms of operational cash flow during the year, we have made significant improvements, mainly driven by improved profitability and net working capital improvements. As can be observed in the table, we delivered SEK 178.4 million in 2023, which is SEK 447.8 million higher than in 2022, with -SEK 269.4 million in operational cash flow. As Maria mentioned in the beginning of the call, we communicated goodwill write-downs on February 14 of SEK 582 million, which are non-cash flow affecting one-off items affecting EBIT in Q4. I will now give you the background to these write-downs, starting off with Scienion. Scienion's performance has during the year been characterized by weak financial development attributable to weaker demand from the diagnostics industry. This would lead to a slower growth pace than previously forecasted, which in turn impacts the goodwill value. We have made major organizational changes and right-sizing during 2023 to mitigate the effects from the weaker demand. On Nanoscribe, it has not been delivering according to the high expectations set in 2021 when the company was acquired. This has resulted in lower growth estimates, which has impacted the goodwill value. Visikol has developed weaker than anticipated over the last quarter. A decision has been made to integrate Visikol into MatTek since we have concluded that Visikol has better opportunities to reach profitability as an integrated part of MatTek. Due to the integration, Visikol's offering will be smaller and more focused on profitability. Given this, future projections have been lowered, resulting in a need for goodwill impairment. And if we move on to the next slide, I will comment on the cash flow. Improving cash flow and working capital have been a priority during 2023, and cash flow from operating activities for Q4 amounted to SEK 162 million. This includes a positive effect from a net decrease of working capital of total SEK 64 million. This effect comprises an increase by SEK 91 million in operating receivables, a decrease of inventories by SEK 23 million, and an increase by SEK 132 million in operating liabilities. Investments in tangible CAPEX amounted to SEK 9 million in Q4. Investments in intangible CAPEX, mainly product development, amounted to SEK 15 million. As previously mentioned, this level was lower than in Q3 2023, which is related to product launches in early Q4, reducing the level of capitalization in the quarter. Earn-out payments amounted to SEK 20 million in the quarter. Estimated remaining earn-out payments amount to SEK 49 million. Total cash flow during Q4 amounted to SEK 307 million, of which SEK 244 million were related to the investment of the building in Berlin, which was completed during Q4. This improved total cash reserves to SEK 861 million per December 31st, 2023. Given the still somewhat weak market sentiment, we believe it's for now beneficial for the group to have a strong cash reserve. This position is something that we continuously evaluate. On this slide, I will further elaborate on the net working capital improvements during 2023. Please note that all net working capital numbers on this slide are excluding Ginolis. Between Q4 2022 and Q4 2023, net working capital has decreased from SEK 670 million to SEK 475 million. The main drivers for this development include accounts receivables, which improved from SEK 665 million to SEK 520 million, which is an improvement by SEK 145 million due to more robust processes, including better collection, payment process, and group guidance. Inventories improved by SEK 55 million. This is due to more stringent processes and agreements in place, which have stopped further increases in 2023, and inventories are expected to slowly show decreasing effects throughout 2024. Working capital liabilities increased by SEK 56 million, primarily driven by the large Biosero order. All in all, total improvements amounted to SEK 195 million, or a decrease from 32%-21% of net working capital in relation to total 2023 sales. We have reached my final slide in this section. Our financial targets were introduced in November 2022, and they are valid on a mid-term basis. For our growth target, we achieved 0.3% organic growth in constant currency. The outcome is below target, however expected given the challenging market environment during 2023. If we move on to our margin target, BICO achieved 11.5% for reported EBITDA and 5.1% for adjusted EBITDA. The outcome is slightly below target if adjusted for earn-out adjustments, but an improvement from previous year. The last of our three targets, the net debt target, was performed as follows: 1.6% for reported EBITDA and 2.6% for adjusted EBITDA. The strong cash flow in Q4 decreased the ratio, which is well in line with the target. I will now hand over to Maria, who will comment on our three business areas. Thank you, Jacob. Let's move on to the next slide, where I will briefly summarize our business areas. For quarter four, the bioprinting business area reported net sales of SEK 171.3 million, representing 27% of the total group sales. The organic growth in the segment was -18.2%, and the Adjusted EBITDA was SEK 9.2 million, corresponding to a margin of 5.4%. The business area showed weaker sales development compared to the corresponding very strong quarter last year, and the lower sales levels were primarily attributable to the academia segment in relation to a strong corresponding quarter last year. The weaker profitability was also attributable to weaker sales compared to quarter four 2022. Moving on to our next business area, biosciences. In quarter four, the business area's net sales amounted to SEK 325 million, representing 51% of the total group sales. The organic growth was 9.9%, and the Adjusted EBITDA was SEK 59.1 million, corresponding to a margin of 18.2%. This business area continued to deliver stable sales development compared with the other business areas in the quarter. The profitability was positively impacted by the sales growth, primarily from project-based Lab Automation in Biosero, as well as right-sizing of the companies. Our third business area, Lab Automation, reported in quarter four net sales of SEK 140.5 million, representing 22% of the total group sales. The Organic Growth for the quarter was -12.7%, and Adjusted EBITDA amounted to SEK 43.5 million, corresponding to a margin of 13.9%. Ginolis was divested in November 2023 and is treated as discontinued operations from the quarter four report. Lab Automation delivered weaker sales in the quarter, which can be explained by a significant decline in sales in the diagnostic segment, which contributed to a very strong corresponding quarter in 2022 when excluding Ginolis. Profitability for the quarter improved significantly with Ginolis excluded and with regards to the divestment of the building in Berlin. Before the Q&A, I would like to brief you about BICO's strategic priorities as well as our focus for the months to come. Since I joined BICO in late November 2023, I have together with Jacob done site visits to all our companies in Sweden, Germany, and the U.S., and have done a thorough review of the current state of all our businesses. BICO acquired many companies during 2021, and successful integration of acquisitions requires lots of resources and established internal infrastructure as well as experience. Therefore, the last two years have been spent on improving financial processes, addressing company-specific challenges, and establishing group-wide processes. These are needed to be able to run an efficient global organization. During 2023, our efforts were centered around cost control and initiatives related to operational excellence. We have demonstrated progress in these areas, but we still have many challenges and areas for improvements that we'll have to focus on during 2024. My direction going forward is clear. I will together with my team spend time on addressing challenges that I have seen, and in parallel, we will work to set the strategy for BICO. The work with the updated BICO strategy has been initiated, and the launch will be made during 2024. In order to address the challenges, our four strategic priorities for improvement have been defined, and these are driving the commercial excellence to improve and strengthen the commercialization effectiveness of our strong portfolio, as well as further explore opportunities for collaborations and partnerships. Secondly, completing a strategic review, and this review consists of an assessment of the R&D roadmap as well as the group's product portfolio and offering in the light of the market landscape. The findings from the review will highlight commercial opportunities and synergies, i.e., how can we further develop our offering and product portfolio, which will be essential in BICO's new strategy given the current macro environment as well as the geopolitical situation. Thirdly, invest in people and culture. We will invest more in people and culture, and to coordinate these efforts, a global head of HR has been appointed. This role will be responsible for shaping and executing BICO's global HR strategy to build a people and high-performance culture. The fourth and last area to focus on is to continue our operational excellence initiatives. The BICO Group will continue to address the challenges related to improving processes and continue to keep strict cost control. We will proactively monitor all our businesses during the business reviews in order to keep pace to be able to reach progress in improvement projects that have been identified. This area entails work with the inventory management as well as supply chain-related synergies also during 2024. We will continue the ERP implementation and an establishment of a project management office. I believe that these priorities will pave the way for the updated BICO strategy, which will capture current commercial growth opportunities as well as unlocking future potential, and they will guide us through 2024. With that being said, it's time to open up for Q&A. Please follow the instructions from the financial hearing host. Thank you. If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Ulrik Trattner from Carnegie. Please go ahead. Thank you very much. A few questions on my end. Let's start off with the market environment. I note that some of your peers are projecting an improved market outlook year over year from a challenging 2023, perhaps more tilted towards the second half of 2024. What's your take on the current market environment? Then in addition, I note that both Eli Lilly and AstraZeneca, they're doing quite a lot of work in lab automation, and they are including your Biosero products, right? Just what's the current ambition out there in the market to invest CAPEX in lab automation? I can start with your second question, Ulrik, and then lead into the first one. Looking at lab automation, that is one of the buzzwords today in more or less all presentations during the J.P. Morgan conference. The big pharma companies were talking about lab automation as an important part to increase the speed of development of their different development activities, but also in terms of manufacturing. So with Biosero and the software Green Button Go, which is an industry-leading software solution for orchestrating lab flows, I believe we are in a good position to utilize the hot topic and lab automation and the need that is addressing in the market. And having said that, I think the weaker market we saw in 2023 is likely to continue during part of 2024, and hopefully there will be a better increase in the latter part of the year. Of course, we are keeping our eyes on the ground to see what's happening there. Okay, great. And you mentioned the Green Button Go and Lab Automation, obviously very, very sort of encouraging trends. And also note that you've been awarded contracts for the software. But I would like to touch base on your ability to sell additional systems into a workflow where you have established a contract with Biosero or the Green Button Go. Are you seeing the synergies there, or is there further improvement needed in that area? One of the beauties with the Green Button Go software is that it's totally instrument-agnostic. That means that we can incorporate whichever instruments from any provider that suits the needs of our customer. Of course, we will also utilize the different instruments that we have in our portfolio that are also strong. And in the event that the customers want to have those instruments included, that will be included together with other instruments to optimize the workflow in the labs. But do you feel that the positioning of your systems has improved with the sort of inclusion of the Green Button Go, or is it just more of the same? I know it's agnostic, but have you felt that you are able to deliver on more high-volume contracts with other systems enabled by Biosero? Asking customers why they choose us, it's because we have the gold standard in the industry in terms of software, and also that we have the flexibility of addressing both the products that we have in our portfolio, which is quite broad, but also other companies' products. So I think there are still opportunities to even more highlight the breadth of our portfolio, but so far it's gaining rather than being negative for us. So I don't know if that answers your question, Ulrik, or if you have another question connected to it. No, no, that's fine. But if we can continue on sort of the projections for 2024, two follow-up on that one. The first being Sartorius will now be distributing your products in Asia, and what should we expect from that? And the second being, obviously, we have seen this negative or hampering effect on the academia, and I note that the NIH have just increased their budget just slightly above 2% for 2024. And if we are to expect a sluggish 2024 for the academia, i.e., a sluggish year for bioprinting overall, or if that can be aided by Sartorius selling your products into Asia? When it comes to Sartorius, it's a partnership and collaboration that both Sartorius and BICO are very keen to make sure that that is running in the best way and both are dedicated to do so. I believe when it comes to academia and the outlook, then I like the fact that in the BICO portfolio, we are present in many different areas. So we are not dependent on solely academia. We are selling to pharma. We're selling to biotech. We're selling to many other sectors. And the fact that we also are not depending on a single geographical area makes me sleep better at night because then we can utilize the breadth of our portfolio as well as the geographical footprint with sales in over 61 countries. So I'm not particularly concerned about academia per se. Moving on to margins, can you give us sort of, I note you have less capitalized R&D, at least versus my expectations. Is there any reasons for bioscience at lower margins in Q4 versus Q3? Well, as you say, Ulrik, it's partially related to the less capitalization in Q4 and then partially due to a different product mix than in Q3. If you want to not extrapolate either Q3 or Q4 margins as sort of the base. Can you say that again? You broke up, Ulrik. Sorry. So we should not extrapolate to Q4 margins, and perhaps we should not have extrapolated the very strong Q3 margins either. I think you should extrapolate the development that you have seen between 2023 and 2022. Okay. Yeah, that's fine. That's fine. Two more questions on my end. First, noting really solid improvements here in cash flow. Can you give us some background here to improved inventory management? It's obviously something positive here in Q4. Is this finalized and optimized, or are we to expect further improvements on the operational cash flow heading into 2024? Yeah. But I mean, as you saw from the presentation, we have seen sort of significant improvements from net working capital between 2023 and 2022. So I don't foresee that we will see similar improvements going into 2024. We are quite happy with the levels of accounts receivables and also payables. However, we do believe that we could do further improvements in inventory, but we will not see the same magnitude of improvements in 2024 as we did in 2023. So if I could summarize, I would say that in 2023, we did major improvements, as you can observe. And I think in 2024, we could do slightly more improvements, but not in the same magnitude as we saw in 2023. And these improvements then being mainly focused on inventory and inventory management. Great. Thank you. Last question on my end. Obviously, you received the funds from the sale lease back in Berlin here in Q4, but you still have the Finland property left on your balance sheet. I note it's a challenging environment, and it's a tricky one to decipher what the value of this property will be. But where are you at in that process, as well as can you give some rough estimation on what's the book value of this property? I won't go into the book value of the property given sort of the sensitive nature of that figure. We are currently evaluating either to lease out the building or to divest the building. Okay. Great. Thanks for taking my question. I'll get back into the queue. Thank you. Thank you. The next question comes from Rickard Anderkrans from Handelsbanken. Please go ahead. Good morning, and thank you for taking my questions. I'll start off with a follow-up on Biosero, please. So it seems like Biosero has done very well in Q4 and for the full year. What type of organic growth did Biosero deliver in Q4 and the full year, just to get a sense of the sort of relative performance of that subsidiary? Thank you. Yeah, Rickard, we won't go into specific numbers of Biosero and how much of our business that comprises. But Biosero is a significant part of our bioscience business area. All right. And following up on the potential for synergies with Biosero orders. So for example, if we take the $28 million order you recently announced from a big pharma company, is it reasonable to assume that you could get additional $28 million in BICO instrument sales on top of that as a synergy? Or how should we think and scope for the synergy potential as you view it as sort of a base case thinking? Well, I mean, as Maria mentioned to Ulrik in one of his questions, Biosero is a hardware-agnostic business, i.e., that's one of their sort of competitive advantages, is that they could provide any instrument a customer would like to include. With that said, we are, of course, trying to cross-sell BICO products onto the Biosero lab automation flows, but it's not something that we will sort of push on customers. So there are potential synergies, but out of the 28, it's not equal that that will be all BICO synergies, but some of it may very well be sort of synergies within the group. All right. So the $28 million order is including some of the instruments as well from BICO? Yes, it is. It's including the hardware, labor, and software connected to automating that lab then for that order. All right, clear. I wanted to follow up also on the sort of broader-based performance. Are all of the subsidiaries in the group profitable on an EBITDA level now sort of exiting the year, just to get a sense of the breadth of the earnings here? No, not all of the companies. Okay. Can you share if it is one or two companies which are not profitable on an operating level, or just to get a sense of the magnitude and the split? I think one or two is a fair assumption. That's helpful. So final question for me, please. So I noticed that the share of product revenues from consumables has been relatively steady in recent quarters. Wanted to follow up again on that one and see how should we think about the share of consumables in product sales over time? What's the reason for the slower consumable pull-through on the installed base or relatively stagnant level? Just wanted to follow up there. Thank you. I think that's a very good observation, Rickard. We have made the same observation, and that is something that we address with all of the companies that are sort of having a consumable part of their offering. It's not something that we are satisfied with, and we will continue to focus on that 2024 to increase the consumable parts of our business and also the service business. All right. So if we try to put a fine point on it, based on how the current portfolio looks, are you aiming for 40% consumables of sales? So just to get a sense of the potential of where we could be in a few years' time or your internal ambitions, at least. Yeah, I think that's internal ambitions. I understand your question, Rickard. I think we will sort of have to come back to my earlier comment, and that is that we also see that consumables and services are not growing as rapidly as one could wish, and that is something that we will focus on 2024 and onward. But I won't give you sort of our internal target number for sort of our long-term ambitions when it comes to that mix. All right, fair enough. I guess we should assume that we will see a capital markets day with the updated strategy Maria mentioned sometime this year as well. Yes, correct, Rickard. We will continue our work with the updated strategy, the work that we have commenced that I referred to before. When we are ready with that, we will invite you and definitely share the updated strategy and continue the transparency on our journey to profitable growth. All right. Thank you for taking my question. That's all from my end. Thank you, Rickard. Thank you, Rickard. As a reminder, if you wish to ask a question, please dial pound key 5 on your telephone keypad. There are no more questions at this time, so I hand the conference back to the speakers for any closing comments. Thank you to all participants who have listened in, and thank you for all the questions. Together with Jacob, I would like to wish you a great Tuesday. Thank you and goodbye.