Welcome to BICO Q2 2025 Report pPesentation. 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 five on their telephone keypad. Now, I will hand the conference over to the speakers, CEO Maria Forss and CFO Jacob Thordenberg. Please go ahead. Hello and welcome to BICO's Earnings call, where we will present the second quarter of 2025. My name is Maria Forss, and I'm the President and CEO of BICO, and I will, together with BICO's CFO, Jacob Thordenberg, present the report. Here's today's agenda: first, the summary of the quarter, to be followed by group financial performance, and after that, a deep dive into our two business areas: Lab Automation and Life Science Solutions. This is the first quarter where we report our new business area structure, post the divestment of MatTek and Visikol. I will also give some concluding remarks before the Q&A. The sections before the Q&A will be in listening-only mode, and the earnings call host will be back with further instructions if you wish to participate in our Q&A. I will start to summarize the second quarter of 2025 for the group and comment on the market sentiment and other important events from the past quarter. In the beginning of the second quarter, in early April, we announced an agreement to divest MatTek and Visikol to Sartorius. The closing took place July 1st, after customer regulatory approval was obtained. This transaction significantly strengthens our balance sheet, which means that we now have a net cash position. Jacob will give you some more details in a few slides. When looking at the performance for the second quarter, it's a mixed picture for the group, which means that I need to comment on the business area level. If we begin with Lab Automation, we had fewer project starts and project delays that impacted the quarter negatively, as the organizational capacity has been outpaced by the high demand for Biosero's market-leading solutions. To scale the business and unlock the full potential in the growing Lab Automation market, we're implementing leadership and process changes in Biosero, and I will address these more in the business area section. If we move on to the performance of our largest business area, Life Science Solutions, the business area delivered flat sales with growth in line with peers. The performance of our companies within Life Science Solutions differed depending on the market and customer base. We saw a soft market for our instrument companies catering to academia, while SCIENION showed healthy growth and profitability. If we continue with the macro environment, this quarter was just like the previous quarter, affected by macroeconomic headwinds, and uncertainties remained persistent. Like many of our peers, we continue to experience the effects of these dynamics. For example, cuts in NIH funding in the U.S. have, along with the ongoing tariff turbulence, introduced further uncertainty and led to hampered demand and delayed CapEx investments, especially in the academia segment. At BICO, we have had readiness to manage those uncertainties, and in this quarter, we have, for instance, adjusted some of our logistic routes and reviewed and amended our freight and delivery terms where necessary. Let's move to the next slide and the summary of BICO's quarter two results. For the second quarter, sales amounted to SEK 324 million, corresponding to a negative organic growth of 17%. Adjusted EBITDA amounted to a negative SEK 49 million, corresponding to a margin of negative 15%. The cash flow from operating activities was negative SEK 28 million, and the net working capital per the last 12 months' sales amounted to 11%. I will now hand over to Jacob to present the divestment of MatTek and Visikol. Thank you. As Maria mentioned, the transaction was announced in April and closed on July 1st. This divestment of MatTek and Visikol follows our updated strategy with a focus on Lab Automation and selected workflows. Sartorius has acquired 100% of the shares in both MatTek and Visikol for $80 million on a cash and debt-free basis, corresponding to a 2024 sales multiple of 3.7x and an adjusted EBITDA multiple of 15.3x. Following net debt adjustments and transaction costs, net cash from the transaction amounted to SEK 740 million, which, with the current cash position of SEK 636 million as per Q2, increases BICO's cash position to approximately SEK 1.4 billion. The proceeds from the transaction will be used to strengthen our balance sheet and reduce our debt on our convertible bond. MatTek and Visikol have been treated as discontinued operations in this interim report. I will now move on and comment on the group's financial performance for the second quarter. Please note that all numbers presented in this section are in million Swedish Krona. If we begin with sales, all in all, sales amounted to SEK 324 million for the second quarter, with a total sales growth of -23% and -17% in constant currency. The difference of the 6 percentage points is explained by a weaker U.S. dollar against the Swedish Krona and that BICO has over 90% of sales in U.S. dollar or Euro and around 70%- 80% of our costs in the same currencies, resulting in a significant translation exposure to Swedish Krona, but no significant transaction exposure on EBITDA due to revenues and costs largely being matched and thereby naturally hedged. As Maria mentioned, sales for our largest business area, Life Science Solutions, were flat in the quarter, year- over- year, which is in line with peers and amounted to SEK 277 million. Sales for Lab Automation amounted to SEK 48 million, corresponding to a negative sales growth of 58%. This was impacted by fewer project starts and project delays, where the latter resulted in a substantial re-estimation of remaining project hours of around -SEK 40 million. It is also worth mentioning that the corresponding quarter last year was positively impacted by the large order that Biosero won in late December 2023. If we move on to profitability, the gross margin amounted to 44%, down 8 percentage points year- over- year, negatively impacted by the development in business area Lab Automation and the re-estimation of remaining project hours. Adjusted EBITDA amounted to -SEK 49 million, corresponding to a margin of -15%. The negative adjusted EBITDA can be explained by the development in Lab Automation and the re-estimation of the remaining project hours. We are not satisfied with the profitability levels for the quarter, and in combination with the leadership and process changes being carried out in Biosero, we will continue to have a clear focus on structural cost reductions and tight expense management for the group, although the transformation in Biosero requires investments in operational resources. If we move on to the next slide and our cash flow, cash flow from operating activities for the quarter amounted to -SEK 28 million and primarily related to negative profitability in the quarter. The effects of changes in working capital amounted to +SEK 29 million in the quarter. Investments in tangible CapEx amounted to less than SEK 1 million, and investments in intangible CapEx in the quarter amounted to SEK 2 million. Total cash flow during Q2 amounted to -SEK 54 million. In connection with this, I will also comment on BICO's outstanding convertible debt and cash position. We have made three buybacks in our convertible bond to a nominal amount of SEK 18 million in November 2024, an additional SEK 276 million in February 2025, and SEK 98 million yesterday as of August 18th. Post-buybacks, the convertible debt now amounts to nominal SEK 1.008 billion. The rationale for the bond buyback is to optimize BICO's capital structure and further reduce long-term debt, and the net proceeds of SEK 740 million from the divestment will be used to resolve the outstanding convertible bond, which matures in March 2026. To conclude on our cash position, we closed Q2 with SSEK 636 million in cash, and with the SEK 740 million divestment proceeds, our cash reserves stood at around SEK 1.4 billion on a pro forma basis at the quarter end. Following the post-Q2 convertible bond buyback announced yesterday and the remaining convertible debt of SEK 1.8 billion, BICO had a net cash position of roughly SEK 270 million, all else equal. As mentioned on the previous slide, the effects of changes in working capital amounted to +SEK 29 million in the second quarter. Out of this, SEK 9 million was related to an increase in operating receivables. Inventories decreased by SEK 8 million, and operating liabilities increased by SEK 29 million. In percentage of last 12 months, sales net working capital in the quarter corresponded to 11%, confirming that the operational excellence actions implemented in 2023 and onwards have been successful. For Q1 and Q2 2025, the further decrease in net working capital to low double digits is primarily an effect of less net working capital in Biosero due to decreases in receivables and the re-estimation of project hours. I will now hand back to Maria for the presentation of the business area performance. Thank you, Jacob. I will start by briefly outlining the rationale behind our new business area structure and then move on to the performance of our business areas. After the divestment of MatTek and Visikol, the remaining companies from the business area Bioprinting, that is, CELLINK and ABM, have moved to business area Life Science Solutions. Consequently, from this quarter, BICO reports in two business areas: Lab Automation and Life Science Solutions. The divestment also increases our focus towards Lab Automation and selected workflows, where Lab Automation products and solutions can be found in both our business areas, which you can see on the next slide. Products from CYTENA, DISPENDIX, QInstruments, Cellenion, and SCIENION have automation-ready products and solutions, which are used all the way up to fully integrated Lab Automation solutions. Let's now move to the business area's quarter two performance, where I will start commenting on Lab Automation. As we have commented on earlier during this call, fewer project starts and project delays in the business area Lab Automation impacted the quarter negatively, as the organizational capacity has been outpaced by the high demand for Biosero's market-leading solutions. Sales amounted to SEK 48 million, which resulted in negative organic growth of 58%, and adjusted EBITDA amounted to -SEK 56 million, corresponding to a negative adjusted EBITDA margin of 116%. The project delays resulted in a substantial re-estimation of remaining project hours of around negative SEK 40 million in the quarter. In Biosero, we apply a percentage of completion, which is commonly used for project-based businesses. It's based on anticipated costs, and revenue is recorded as costs occur in the project, including labor hours spent. This means that if the expected remaining hours increase, the level of completion decreases, resulting in a negative impact on revenues. As I mentioned on the previous slide, quarter two was impacted by fewer project starts and project delays, as well as the re-estimation of the remaining project hours, which generated a negative impact of SEK 40 million. It's also worth mentioning that Lab Automation had a tough comparable quarter, where quarter one 2024 was boosted by the large order won in December 2023. We are now executing a comprehensive action plan and significantly enhancing processes, leadership, and operational capabilities to scale up Biosero to meet the high underlying demand. Recently, we have made a turnaround in both CELLINK and SCIENION, and we're now focusing our efforts on Biosero to scale the business. We're coming from a situation with rapid growth and large demand that has outpaced our internal processes, impacting scalability and product delivery. Earlier commercial decisions, including contract structures, have pressured our margins. Legacy projects and resource-intensive deliveries have limited flexibility and tied up our capacity. Our current operations require better coordination to unlock the full margin potential. Longer project timelines have delayed repeat orders from key customers. As the strong demand continues, steps are underway to free up capacity and better balance intake with delivery. We have refined the commercial model, including pricing strategies and stricter contract reviews to protect our margins. We're actively managing the complex projects and legacy commitments to free up resources and have put in place new operations and project management leadership alongside a gate-stage project model to enhance governance as well as execution. We're also standardizing components and developing new concepts, driving shorter lead times and scalable growth. This will, all in all, ensure that we can deliver on our mission to be the first choice lab automation partner and provider of selected workflows to pharma and biotech. To conclude and to unlock the full potential of the lab automation market, we're now executing a comprehensive action plan that significantly enhances processes, leadership, and operational capabilities. We have improved leadership during the quarter and instilled operational excellence by strengthening management and executive resources on site at Biosero's headquarters in San Diego. To enhance the resource planning and project executions, we have increased contract stringency and employed a gate-stage project model. This ensures more robust project management and reduces the risk of scope creep. To free up resources for both existing as well as new projects, we have made substantial investments in operational resources for the benefit of our customers to accelerate closing of delayed projects. We're also implementing more standardization to scale the business and introducing new commercial concepts with shorter lead times to balance the project portfolio. We have made good progress in the transformation of Biosero this quarter, and we are confident that these actions will show results over time in the coming quarters. However, it will require patience and time before reaching the full effect. These actions, along with our commitment and tenacity, will in time realize the full potential of Biosero. If we move on to Life Science Solutions, the business area Life Science Solutions delivered flat growth in line with peers compared with the corresponding quarter last year. The mixed performance resulted in a revenue of SEK 277 million, resulting in an organic growth of 1% compared with quarter two 2024. The business area's adjusted EBITDA was SEK 19 million, which corresponds to an adjusted EBITDA margin of 7%. Within our largest business area, Life Science Solutions, as previously mentioned during this call, the performance of our companies differed depending on the market and the customer base. Academia especially saw a softer quarter due to the macro development in the U.S. However, it's really encouraging to see that the diagnostics market is picking up and that operational improvement initiatives made in SCIENION have resulted in a healthy growth and profitability. Before the Q&A, I will give some concluding remarks on the quarter and the road that lies ahead of us. We continue to execute on our strategy, BICO 2.0, towards an integrated group, harnessing both operational as well as commercial synergies. We're collaborating as an integrated organization, which allows us to streamline resources, harmonize processes, and fully leverage our critical assets for greater impact in Lab Automation. In the short term, we face challenges with macroeconomic uncertainties, particularly in the U.S., and the transformation to strengthen and scale up Biosero. However, the transient macroeconomic conditions do not offset the long-term trend of growth and high demand in the life science sector. In this quarter, we have made meaningful progress in transforming BICO to capitalize on these long-term trends. This was our final slide before the Q&A. I will now hand over to the earnings call host for further instructions. 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 DNB Carnegie. Please go ahead. Thank you very much. Just a few questions on my end, most of them regarding your Lab Automation business. The SEK 40 million roughly in re-estimation of projects, how much do you still believe is left to adjust for in the second half of the year? Do you think that you have done most of the work to clean out the project portfolio, as well as how much of a quick fix is this? You have done organizational changes, and if you can speak a little bit more into what exactly you've done, that would be helpful. Thank you, Ulrik. Maybe I can start with answering the first question around the re-estimation of hours, and then Maria can answer your other questions. If we start with that, we always do each monthly and then quarterly end, we do an estimate of remaining hours in the project as percentage of completion is based on anticipated costs. In this, labor hours is one of the elements or one of the anticipated costs. We continuously do re-estimates of remaining hours. In this quarter, which Maria described in the earnings call, we have done accelerated efforts in Biosero to strengthen the organization. In these efforts, we have concluded that the remaining hours in our project portfolio are longer than we have previously estimated. When doing this work, we concluded that we needed to do a negative re-estimation that amounted to SEK 40 million. With that said, with the operational excellence activities and the action plans that we're now implementing, we are confident that we will not see similar revisions in upcoming quarters. If I can go to the second part of your question, Ulrik, in terms of the organizational changes. In essence, we are not only enhancing the processes, but also strengthening the leadership to execute on these processes, as well as improving the operational capabilities. We have, during the quarter, strengthened the management substantially and other executive resources on site in Biosero's headquarter. Also, to improve the project planning and project executions, improving contract stringency, as well as implemented a gate-stage project model. Both these in combination will ensure a more robust project management, as well as reducing the risk for scope creep, which is one of the major reasons for project delays. To also free up resources, not only for the existing, but also for new projects, we have also made substantial investments in operational resources to benefit our customers and, of course, also to accelerate the closing of the delayed projects. Those are the minority of the total number of projects. The majority are trading the way they should do. We are also then implementing more standards and standardization to scale the business, as well as introducing some more new commercial concepts that have shorter lead times. This is then to balance the project portfolio overall. These are some examples of the comprehensive action plan that Jacob mentioned that we also talked about in the call. We have made good progress during the past quarter in this transformation in Biosero. We will show good results in the coming quarters, but it will require, of course, both patience and time before we reach the full effect. Sure, that's great. On the topic, you talk about sort of delayed projects or sort of delayed completion of projects, and you're talking about investing into managing new contracts. Does that entail that you are a bit limited in the second half of the year to take on new contracts and new project starts? How does the sort of pipeline look like for the second half of the year to initiate new starts? What is your ability? I would say in terms of commenting on our pipeline, given that we are the only Lab Automation company that are listed and report Lab Automation separately, that would be exposing us to something which would be not good competitively-wise. I can say that with the changes that we have made, it's definitely not an issue to take on new projects, but we will work in a different way in terms of when promising when you can start and also when these projects can be finished. With the gate-stage project model, we now have much better scrutiny of how the different stages of the projects can be done and a much better dialogue with the customers on when done is done. The scope is much clearer, which will change the way that we are working together with the customers. That has been received in a very positive way. Okay. Last question on my end. Throughout the last year, you've done quite a lot on the cost side of the business and improved the profitability of BICO. In this sort of struggling environment that you're in currently, what is your ability to, like if we were to assume that this underlying market development continues, what's your ability to increase profitability further, or is this sort of where we're at, the level that is manageable without doing cuts that would impact you significantly in the medium term? I think we need to, I mean, in this environment, you need to have both one foot on the gas pedal and another one on the brake. Ensuring now as a more integrated group that we can utilize the synergies by centralizing more functions, there are some cost synergies to reap. At the same time, we need to make sure that we invest in the growing areas such as Lab Automation and also in new product development. You have seen some recent launches from us. I don't foresee that you will see major cost cut initiatives, but we will cut where needed and on an ongoing basis, as all companies do. You have a stringent cost management, but at the same time, you make sure that that cost management allows you to invest where you can reach the best return on investment. I think what I can add, Ulrik, is because I think what you're alluding to is what will happen to margins when the market comes back, right? I think the way you should look at it is the margin development that we had, especially Q4 last year, where we had sort of high 20% EBITDA margins. The operations in BICO are indeed scalable, and when the market comes back, we should surely be able to scale on our current cost base, if that was part of your question. Yeah, absolutely. That was all on my end, and I'll get back into the queue. Thank you. Thank you, Ulrik. The next question comes from Ludvig Lundgren from Nordea. Please go ahead. Hi, and thank you for taking my questions. First, I wanted to continue on Ulrik's question here on Lab Automation. I appreciate the call on what caused this sales slowdown here in Q2, but I wonder if you can help us set reasonable expectations here for sales for Biosero in H2. With the current project pipeline as it looks today, is it fair to assume H2 sales to be higher than H1, given that Q2 here was negatively affected by somewhat of a one-off effect? That would be my first question. Thank you, Ludvig. As you know, we don't give any guidance, but I think it's safe to assume that we will not see any negative revisions as we saw in Q2. All else equal, the second half should be stronger than the first half. With that said, we don't give any guidance, but we can be confident that we will not see a similar type of negative revision as we saw in Q2 this quarter. Yeah. To add to that, Ludvig, the investment that we're making now in Biosero is to make sure that we can really, really capitalize on the underlying growing Lab Automation market. The underlying demand is definitely there. That is not the issue. Perfect. Thank you very much. I had a question on Life Science Solutions. Slight organic growth here or constant exchange rate growth here in the quarter. I wonder if you have seen any significant difference or change in the market dynamic during this quarter, if comparing the end versus the beginning, so to say. I would say that we see a continued uncertain macroeconomic environment just as in quarter one. In quarter one, we saw there was uncertainty of what would happen with tariffs. That itself, together with the stipulated NIH cuts, instilled further insecurity in the market. It's been the same trend in quarter two, really, so not much of a difference. Of course, we can see how it has impacted us. With the measures that we took prior to the Trump administration, when it comes to where we manufacture and also how we route goods, et cetera, the changes that we have made have meant that our impact by the tariffs has directly been quite small. Indirectly, the overall insecurity that all the changes that are happening in the macroeconomic environment has, of course, made less investment in capital investments, which we can see especially in the academic segment. The diagnostic market is picking up even further, so that's positive. Okay. Just a quick follow-up on that. Both Q1 and Q2 saw quite solid diagnostics demand, it seems. Do you expect there to be some kind of tariff pre-buying effect here, or is it just that the market is coming back? It's a good question, Ludvig. We have seen both some buying earlier and some delaying. The net effect for us in quarter two is really, really neutral. Let's see what the tariffs will mean these coming quarters. So far, it's been neutral. Okay. That's all of my questions. Thank you very much. Thank you. The next question comes from Suzanna Queckbörner from SHB. Please go ahead. Hello. Suzanna Queckbörner, Handelsbanken. I also have a question on Biosero. I just wanted to find out a little bit more about the new commercial concepts that you're introducing with Biosero. Maybe also, can you talk about how you think the investments in Biosero are going to impact your profitability there, and how should we think about those going forward? Yeah, I will start with your first question, Suzanna, in terms of the new commercial concepts. It's still in development, and the launch is happening soon. It's about using an existing installed base of instruments that are in the market. These new commercial concepts are developed together with collaboration partners. We have started with two collaboration partners. I cannot, at this stage, pre-announce anything since those collaboration partners are also listed companies, and we are preparing joint releases. You will have to bear with us. It's utilizing existing equipment on the market and automating those as a more off-the-shelf solution, which means shorter lead times. That also means that we can balance our product portfolio with shorter lead times and less complex projects with the more complex projects that we have. You had a question about the investments in Biosero. We are doing investments in operational resources, ensuring that we can execute and accelerate the closing of our legacy and delayed projects. This will mean that we will increase our capacity to even further improve our ability to grow with the Lab Automation market. Okay. How should I think about that going forward in terms of the specific profitability of Biosero? Suzanna, as I told Ludvig earlier, we don't give any type of guidance, but the way you should think of it is that we will continue to do everything in our power to execute as quickly on the projects and install sort of a stronger operational excellence in Biosero. By doing so, we should, over time, reach much higher profitability levels. The timing of that, we cannot comment on. We will, as Maria also said earlier, have to continue investing into operations, which most likely will have a negative impact on profitability for the coming quarters. I can also say that part of the, as I commented on Ulrik 's question, part of the issue with eroding margins is not only the lack of scalability at the moment, but it's also that we have had contracts that have not been in our favor. The fact that we now are implementing more contract stringency as well as better project management means that there will be less risk for scope creep and hence less risk of delays. That will also protect our margins moving forward. Great. Okay. One very simple question. Can you just explain what is the source of these delays? Where is the bottleneck here? We have done a full analysis of every single project, and we have a top list of what are the key cracks and the key reasons for the delays. For competitive reasons, I will not go into what those details are, but we are addressing every single piece of those, and we're seeing good traction in quarter two in improving those. Okay. Just one quick question on Life Science Solutions. You've previously said that your intention is to pivot away from academic clients more towards pharma and biotech. Maybe you can give me an update on that. Also, the same with regards to the geographies that you're looking more to Europe and APAC to sort of counterbalance the macro uncertainties for the U.S. Oh, that's correct, Suzanna. In terms of in BICO 2.0, our strategy there was to improve and increase our sales to pharma and biotech at the expense of academia. When we are decreasing the bioprinting part of our business, that also means that we will have less sales to academia since bioprinting is mainly academia. Although part is also pharma, most is academia. We still have some companies that are catering to academia, but trying to move towards, through regulatory readiness, move to more professional customers in pharma and biotech because that will also give more repeated business since they have several labs around the world. In terms of geographies, as you can see, we're still quite exposed to the U.S., and there are several initiatives to increase our distributor base in Asia and to also cater to European and Asian customers to a larger extent. Hence, we're investing in further sales resources in those regions. Okay, thank you. As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. There are no more questions at this time. I hand the conference back to the speakers for any closing comments. Thank you for the questions during the Q&A session and all for your participation. Together with Jacob Thordenberg, I would like to wish everyone a great Tuesday. Thank you and goodbye.