Ladies and gentlemen, welcome to the Biotage Audiocast with Teleconference Third Quarter 2022. Throughout the call, all participants will be in listen-only mode, and afterwards, there will be a question- and- answer session. Today, I'm pleased to present CEO Tomas Blomquist and CFO Maja Nilsson. Please begin. Thanks, Lydia. Good afternoon, everyone, and thanks for joining us on the call. With Biotage today are myself, Tomas Blomquist, President and CEO, and Maja Nilsson, our CFO. I and Maja will provide some opening comments, and following our quarter three and year-to-date comments, we will then take your questions. Let's jump right into slide five and our executive summary. We've had another extraordinary quarter performance where again, many stars were aligned for the Biotage Group. Our positive momentum continued in the third quarter with 31.2% net sales growth and solid earnings and cash flow performance. We managed to deliver our eighth consecutive quarter with double-digit organic growth of 12.12%, which is in line with our new long-term financial target. The organic growth for the entire period from January to September was 16%. Biotage was breaking sales record again and now for the sixth consecutive quarter in a row. We reached a significant milestone with the first quarter ever to exceed SEK 400 million in net sales. We continue to outgrow the market, thanks to a great performance throughout the entire group and the tailwind of currency effects. An important success factor behind the net sales growth is that we're now running our business with a customer-centric and proactive approach. This gives us the conditions to meet the rapid changes that our customers and we ourselves must constantly deal with today. Our new customer focus specialist organization also means that we're even more agile in dealing with customers. In our new product development process, for instance, we incorporate customer input to identify the best workflow solutions from their perspective. This ensures that our innovation meets the real needs of our customers. Broken down by geographical markets, we're pleased to report that all three business regions, Americas, EMEA, and APAC, recorded double-digit growth, with the Americas region continuing its fantastic development with a new sales record quarter growth of 40%. China also had a very strong quarter with 34% growth, and we performed double-digit growth in both EMEA and South Korea. All three of our customer focus areas was minimum growing double the market. Red Tech was a key contributor with a growth of 128%, driven by our clinical testing and forensic customers in the Americas and our EMEA region. By our newly launched TurboVap 96 Dual and Extrahera high and low volume instruments, plus our new oligonucleotide diagnostic business. Our highest product area growth was coming from biologics and advanced therapeutics, where our automated plasmid purification system, PhyPrep sales continues to grow and contributed to a growth of 70.7%. Recently, we invested in a new facility in our biologics and advanced therapeutics area by expanding our operation in San Jose, California. We're now continuing to focus on further strengthening our position in this attractive niche with the future in mind. Strong growth was also noted for Analytical Testing with 49.3% growth and water environmental testing with a growth of 32.2%. Now, these exceptional top-line results were driven by our team's outstanding execution and ability to deliver products through a challenging operating environment. We believe that our ability to deliver humankind unlimited innovation to reliably serve our customers and our daily strive for continuous improvements has contributed to market share gains in many of our businesses. Despite the turbulent environment and supply chain constraints, we delivered again positive cash flow from operating activities and a healthy balance sheet development, which gives us good fuel for future growth. Biotage delivered improved profitability with an adjusted operating margin of 27.3% despite the challenging market conditions, including the energy situation and inflation pressure through a record sales quarter volume, solid cost control throughout the entire business, and currency tailwind. To better serve the ASEAN region, Biotage has now established a new sales office in Singapore to further extend our geographical reach, supporting our distributors, as well as our end customers in line with our direct sales strategy. This follows our philosophy of being as close to our customers as possible, both to provide them with better service and support, but also to gain local insights that will help us to develop our products and solutions according to ASEAN customer workload needs and to solving their pain points. With that, I will now turn the call to Maja. Maja? Thank you, Tomas. Let's go to slide seven to take a look at our sales per customer- focus area. As Tomas mentioned, all our three customer- focus areas are showing strong growth, and they are all outgrowing the market. The highest growth is coming from our Red Tech -area with 128% growth in this quarter, supported by currency, of course, but also nice growth with our clinical testing customers and forensic customers in America. In combination with contribution from our acquired oligo business. In White Tech, the growth is evenly spread out with strong performance in all regions. In Blue and Green Tech, the growth is mainly coming from Americas with the environmental customers and the food agriculture customers leading the way. Let's go to slide eight and have a look at our sales per product area. As you can see, we've had a strong quarter in all our product areas as well, except for scale-up. In this quarter, we can see the slowdown of the vaccine-related business in our product area scale-up. Whereas in all the other product areas, we're seeing strong growth. Biologics & Advanced Therapeutics is the main driver, with the continued success of our Biotage PhyPrep system in America. Analytical testing is also a great contributor, with high system sales growth in both Americas and EMEA. Let's go to slide nine to take a look at our aftermarket sales. The acquired oligo business is driving the growth of our service business, but we also see nice growth of the service business in China. The Analytical Testing business is driving the increase of consumable sales, but the main growth is coming from system sales in this quarter, with Analytical Testing and Biologics & Advanced Therapeutics growing in Americas, as well as Analytical Testing in EMEA, and Small Molecules and Synthetic Therapeutics in APAC. Let's go to slide 10 to take a look at the regional sales. We're very happy to see that our global sales force is doing well, with double-digit growth in all regions. The biggest growth comes from America, with the growth of the Biologics & Advanced Therapeutics business, in combination with continued strong growth in Analytical Testing. In APAC, the growth engine is China, where the growth is mainly coming from Small Molecules and Synthetic Therapeutics. The weakened vaccine-related business in scale-up is mainly impacting the EMEA sales. Still, we can see a very strong growth also in EMEA in this quarter, which is a great achievement. That's coming from a nice growth in Small Molecules and Synthetic Therapeutics, and a strong growth in Analytical Testing. Let's go to slide 11 to see our profitability performance, here illustrated by the development of our adjusted EBITDA margin. In the third quarter this year, we're seeing impact from the challenging global environment of the currency rates. The war in Ukraine, the global post-pandemic supply challenges, the energy crisis, and the overall inflation pressure are all putting strain on our ambition to serve our customers well and to show continuous profitable growth. I'm so proud of our team at Biotage and how we continue to deliver, finding ways to mitigate the issues and getting our solutions and products out to our customers. As Tomas has already alluded to, we can see the results of those efforts in the strong net sales growth. There is, of course, a cost associated to these issues, and we can see that impact on our gross profit margin. However, in the third quarter, this was offset by the high net sales volume and the very favorable currency tailwind. Our underlying OpEx, non-acquisition related, are kept at a healthy level. We do see negative impact on OpEx on the currency rate effect from a continued weak Swedish krona, but we have been stringent in keeping our investments for future growth at reasonable level, hence creating a profitability leverage on the strong sales development. Our adjusted EBITDA margin, when adjusting for the impact from acquisitions included in our OpEx, meaning the amortization of excess values and the deferred earn-outs from the Astrea Bioseparations acquisition, continues to show strong development against last year. The high sales volume at maintained gross profit margin, in combination with the strong currency tailwind, are the key drivers to this positive development. We are, of course, following the development of the global business environment closely, as the uncertainty related to the inflation pressure, the political instability, and the early speculations of a global recession would naturally impact Biotage as well, but still too early to tell where this is taking us. We can go to slide 12, showing our financial overview. I know that this is a business line, and much of these numbers have already been commented, but I would like to briefly comment on our cash flow development in this quarter as well. The third quarter this year shows a positive development of cash flow from operating activities versus last year. This is really nice to see, and it's putting Biotage in a great position to take on the global uncertainty and the challenges ahead. The improved profit in the quarter is the key driver, whereas working capital is a limited detractor. The mentioned global supply chain issues have been driving the inventory build-up during this year, and we see that impact on working capital in the third quarter as well. Back to you, Tomas. Thanks, Maja. With that, we will now open up for questions. Thank you. Ladies and gentlemen, if you have a question for the speakers, please press zero-one on your telephone keypad. Thank you. The first question comes from Karl Norén from SEB. Please go ahead. Hello, Tomas and Maja. Great quarter, so congrats on that. A couple of questions from my side. Maybe we can take them one by one and start by scale-up sales, which were quite a bit below previous quarters in terms of volumes. I'm just wondering if you think there were any COVID-19 sales recognized in the quarter, and if we should see this level as a new kind of baseline for sales going forward here. Well, I can start. First of all, thank you, Karl. We agree, we had a very successful quarter. When it comes to the scale-up business and the COVID-related business as part of that, it's still there in this quarter. It hasn't disappeared, but it's becoming of less relevance in this quarter, I would say. To add to that, thanks for the nice words by the way, Karl. Like we have always said, the sales of business is volatile, as there are long sales cycles. We should also know that our sales of business is not only covering the COVID-19 related vaccine parts. What we also can say is that we also see somewhat of a change in customer behavior, which most likely is linked to more of a normalization when it comes to supply chain and lead time efforts. With all that taken into consideration, you will also see that we're impacted also this month. Okay. If we look at next year, I know you don't guide, but do you think it's fair to assume that maybe we shouldn't expect growth in the scale of business for 2023? I think what you should look into is that we have a very tough comparison quarters, yeah, now and looking forward, which should be taken into consideration. Okay, thank you. Then just a general question on the, let's say, customer demand. I mean, we've seen some companies are coming out with some lower, they have lowered their guidances, et cetera. I'm just wondering if you're seeing any slower development from your customers, let's say, within drug discovery and research, or are you seeing any slowdown in demand at all if we exclude the, let's say, COVID-19 related demand? Well, first of all, of course, we don't provide guidance for the future, so I will be very careful here. Yeah, we can see some customers are facing uncertainties and are a bit more hesitant, but so far we haven't been that impacted in Biotage. As we have been discussing previously, we have a very well diversified customer portfolio. We are not that risk- exposed. Yes. Okay. Just on the gross margin side, and price increases, First, if you can say anything about price increases and how much that's impacted, because I guess previously you've seen quite little impact from price increases. It's my understanding, and your organic growth has been mostly volume driven. Is that still the case? Maybe secondly, on the gross margin side, I mean, you're still above 60%, but it's still below, I mean, if you look at 2019 levels, and I guess that it's to some extent driven by supply chain issues and cost inflation, et cetera. But can you maybe just give a brief explanation of why the gross margin is, let's say, 200 basis points below 2019 level? Thank you. Yeah. I can start with that. Well, basically we have seen some nice developments. We have been working with automation on our side, so we get some productivity improvements. We have been working also on these pricing pieces, that is a slow tool. The full impact of that is not yet visible, I would say. On the other hand, the detractor, of course, is the supply chain issues that we have been facing this year. That is putting a strain on gross profit levels. We have taken some conscious decisions to make sure to be able to provide our solutions to our customers, and that is really getting some impact to the gross profit. I think, and I can say that now with this result of Q3 as well, that has been a very profitable bet for our side. Okay, great. Just the last one for me on the PhyPrep launch. What can you say in regards to the launch? I mean, you're still growing very nicely here. Is demand still as good as you would have expected? Are you happy with the development? Yes. Yes, we are. Again, it's the Americas that is the main driver behind the strong results. We're also happy that we're starting seeing progress also elsewhere in other geographies. Okay, thank you. That was all for me. Thank you. Thank you. The next question comes from Odysseas Manesiotis from Berenberg. Please go ahead. Hi, Tomas. Hi, Maja. Congrats on the impressive results. First one on the top- line, I mean, impressive growth in analytical chemistry in particular. Can you take us through the key moving parts here? I mean, I understand the Extrahera relaunch was well anticipated by your client base, but have you been seeing any trends of accelerating adoption for mass spectrometry, and that is helping your franchise here? No, but indeed, successful launches is a key driver. Apart from that, we have a steady ship with Americas driving Analytical Testing. What is even more pleasant for us is that we see a amazing performance also from the EMEA region. Those coming together, combined with the launches is really driving the 49% growth rates. Very pleased with that. Perfect. One on profitability, just follow- up from the previous question. I mean, your EBITDA margin is staying quite resilient here despite the inflationary and supply chain pressures you mentioned. Could you take us through what the FX benefit was and whether you had any, let's say, one-off product mix benefits this quarter? As in, should we look at this 27% EBITDA margin as something that can sustainably stay there for the next few quarters? I mean, I understand your question on this, Odysseas, but of course, I cannot provide that guidance for the coming quarter. Yes, I can say that so far in this year, we have had a lot of support of the currencies and also that's true for the third quarter. You can see we publicly share that the top line contribution, which was the 15.2% in this quarter. Also of course, we have some impact elsewhere in the P&L. You have that impact also on other operating income, which is regarding the revaluation of liability. If that's to stay for the future, well, that's a very speculative thing that I will not comment on. That's the piece of what you want to ask. Sure. No thanks, Maja. I had to ask, right? On last one on net financials, I'm seeing these are a bit above street expectations. Could you take us through the moving parts here and what sort of sustainable level for this line be in the next few as much detail as you can provide, of course? Sorry, which line did you refer to? Net financials below EBITDA. Okay. Yeah. I mean, that is also very much driven by the FX effect and the currency impact. Also I can say that that's the truth of the year-to-date impact and what will happen in the future, I speculate. Okay. All clear. Thank you. Okay. Thank you, Odysseas. Thank you. The next question comes from Mattias Häggblom from Handelsbanken. Please go ahead. Thank you so much for taking the questions. I have two follow-ups sort of related to previous topics, but I'll see if we can learn something more still. On the supply chain challenges, sounds like you've managed to meet customer demand, but at a higher than normal cost. I was just wondering if it was possible, if at all, to quantify the negative impact that you had to take? No, no, we haven't disclosed that, Mattias, I'm sorry. If you look at the numbers, and you see the strong top line volume and the currency tailwind, and you think about that leverage, you can almost backtrack what kind of impact has been on the cost side. That's fair. On this net finances of SEK 12 million, which followed the second quarter where I think it was SEK 18 million. I'm trying to understand, you know, if assuming FX volatility continues, is this a line that may continue to be surprising us on the outside going forward? Or is there any of the internal processes where you're trying to, say, control this that can lead to a more, call it normal level going forward? Or is it all down to FX? Well, it's mainly FX impact here. I can say that there are some intercompany related items in that, which is impacting, and we are looking into those as well. As it is right now, yeah, FX will have a major impact on that. That's all for me. Thanks so much. Thanks, Mattias. Thank you. The next question comes from Josefine Persson from Nordea Equity Research. Please go ahead. Hello, Tomas and Maja, and congratulations on another record quarter. Thank you. I think we have taken most of the questions already. Just to add something, it's great to see that you're progressing well in biomolecules and advanced therapies with your PhyPrep rollout. You mentioned that you also expanded your capacity in San Jose to meet the growing demand. Can you elaborate a bit on today's product mix in this product area? So would you say that it's driven mostly by the instruments now, or is it the PhyTips itself, the consumables that is driving sales? And the follow-up question on that is, h ow much of the consumable sales now would you say is due to the, let's call it the old PhyTips, that are not related to the PhyPrep? I'm starting with the last question. Yes. When it comes to the consumable sales in that product area, I would say it's more the legacy that's driving it today. We haven't yet captured that potential that will follow with the launch of the PhyPrep system. In this quarter, the growth is more leaning towards the system sales. Even with the legacy PhyTips? Yes. Yeah, that was actually the only question I had, because others already covered my other questions. Thank you very much. Yeah. Thank you. Thank you. Ladies and gentlemen, just a reminder, in order to ask a question, please press zero one on your telephone keypad. The next question comes from Karl Norén from SEB. Please go ahead. Yes. Just some follow-ups on the one question, if you could comment maybe how much of your customer base that you would expect to be loss-making currently. I think that is quite a big question out there now with the current financing problems for a lot of small startups. If you can comment on that, I think it would be really, really helpful. Yeah. I'm not able to share that with you or disclose that. We don't disclose that level of detail, unfortunately, currently. Is there a high- level question maybe I can answer? Yeah, I think it's more of a high- level. I mean, I know you have a lot of the big pharma customers that are of course profitable. I think it's a question that we get a lot from investors. Some kind of answer would be helpful, I guess. The question is how are we acting with the customers or looking into our customers' profitability? Was that the question? Yeah. If you have an, like, understanding of how much of your No. How much of your net sales are going to customers that are monthly cash flow positive, very basically? We don't disclose that to Maja's comment. What we can say also to early statements, we have a very diverse customer base. We have a long legacy turning 25 years old. A majority that we're working with is the major pharma and biopharma companies and CRO companies. That's all we dare to say. Yeah. Thank you. Okay. A follow-up on another topic here on China, actually. I think you have been managing this situation quite good, even despite the lockdowns, et cetera. I think you entered the year also with quite a good, like, a backlog in China. Are you seeing any, let's say, signs of weakness or anything to comment on in China? Or should that continue to develop strongly? I mean, well, that comes back again to the guidance for the future. I mean, what we can state is that so far in this year, we have had a very successful year with China. That tendency hasn't occurred yet. Okay. Yeah. That's all. Thanks. Yeah. Thank you. Thanks, Karl. Thank you. Ladies and gentlemen, there are no further questions. I will now give back the floor to Mr. Tomas Blomquist. Thank you. Okay, thank you. To wrap up, we are very pleased with our third quarter financial results and yet another record sales quarter on our daily mission to support our customers to make the world healthier, greener and cleaner. Putting it all together, the strength of our platform solutions and balance sheets, combined with our talented global team and the broad workflow solution offerings, provides an outstanding foundation for delivering sustainable long-term results. We've had an outstanding journey so far this year, despite a turbulent environment, and I'm very proud of our aligned global team and all customer focus efforts that has led Biotage to this successful quarter and setting us up for further strategic investments with recurring revenue in attractive niches. With that, I'm coming to a close, and we're looking forward to our next touch point in February 2023. Thanks everyone for your interest in supporting Biotage, and take care. Ladies and gentlemen, this concludes today's conference call. Thank you all for your participation. You may now disconnect your lines.