BICO Group AB (publ)

Wonderful. Thank you so much, everyone, for taking the time, and thanks for joining.

We're very excited to be reporting the BICO Q1 2022 earnings. I'm here with Mikael Engblom, Hector Martinez and a few others of the team to ensure that we can provide you with a good update on our performance for Q1.

Next slide, please. The agenda for the meeting, we will be going through a group overview.

We will be going through commercial synergies, organic growth and profitability. We'll be talking about financial summary, key takeaways for the first quarter, and we will end off with a Q&A session.

Next slide, please. I would like to start-off by thanking the entire team for the tremendous efforts in Q1.

It's been truly great pleasure to be working with everyone, and expanding our global market reach and continue our growth story. We're on an exciting journey together to create the future of life-saving treatments together with our customers.

So it's with great excitement and gratefulness that I can report our Q1 numbers. Building on organic growth of 44% in 2021, which is above our intended target of 35%, we have continued this trend in 2022 by achieving 52% organic growth in the first quarter.

On top of the robust sales, our adjusted EBITDA amounted to SEK6 million, which corresponded to a margin of 1.3%. Our gross profit in the first quarter amounted to SEK352.6 million, which means the gross margin of 73.9% and that's reflecting a change in sales mix compared to the corresponding period last year.

Our goal is positive EBITDA for the full year 2022, which we're right on track to achieve. Next slide, please.

Starting with this Q1 report, we're committed to reporting according to our organizational structure and architecture. The Q1 report is the first highlighting the performance and results from each of the business areas that we have.

The establishment of these business areas and integration structure has been ongoing for the last couple of quarters, and we're excited to proceed with reporting on the progress within them. It's especially exciting to see the strong organic growth within each of the business areas as well as the contribution they do to the overall group organization.

We're very excited to continue to support these great companies and teams all around the world. Next slide, please.

At this time, we're fully focused on integration and building commercial success through technical and administrative synergies within and across these three business areas. And these business areas are Bioprinting, Biosciences and Bioautomation, as you saw on the previous slide.

In order to support our global integration effort across these business areas, and then to ensure robust financial reporting processes, we have strengthened the financial team and the finance functions. We're really happy to welcome our new Interim CFO, Mikael Engblom; VP of Finance, Tommy Niklasson; as well as our Senior Vice President and Head of IR, Åsa Hillsten.

Worth mentioning as an example of commercial synergies that we have achieved during this quarter and the previous quarters is starting to show results of our simple, but powerful lead sharing portal, which was established back in September 2021. It has already generated more than 100 leads and over US$1 million in revenue between the businesses and the companies.

Next slide, please. As we continue to deliver on our growth strategy, we're also of course committed to deliver on our profitability target, where strategy in place led by the right team and leadership to ensure that we'll continue to move in that direction.

But with that being said, it's important to focus on some of the commercial synergies that I want to highlight, and one of these are the C.STATION. C.STATION is definitely one of the highlights of the quarter, and it's the first sale of the C.STATION system to a European gene therapy company.

The unique platform offers an automated workflow for single-cell cloning of transected cells to selecting higher producing clones and upscaling. It's a beautiful example of our bioconversion strategy of combining some of the great technologies that we offer within the group, especially the automation software from our recently acquired Biosero, Inc.

Next slide, please. We continue to see strong demand for our products across all regions as well as product portfolios.

Our technical teams have done a great job positioning the company's products well in line with customer demand, both for today and for tomorrow. With the recent partnerships with the Bruker and Thermo Fisher Scientific, we see a strong interest for our OMX offering and our single-cell technologies that are perfectly positioned to deliver on the customer needs in terms of sample preparation.

We continue to see publications being generated by highly regarded institutions, both piling the innovative level of our offering as well as the value being generated by the use of our products. Next slide, please.

We're very excited to continue to show the strong organic growth for the quarter and are thankful for the continued efforts of our commercial teams and what they're doing around the world. As previously mentioned, organic growth for the group amounted to 52% and total growth amounted to 268%.

During Q1, we attended one of the most important conferences together, which is the SLAS conference. This time it was in Boston.

It's a global laboratory automation conference where eight of our daughter companies were represented in a BICO conference to exhibiting our broad bio-convergence product portfolio. As I previously mentioned, we're now starting to report in our business areas, and we're very satisfied to report such strong organic growth across all of these areas.

Biosciences is reporting 88% organic growth, Bioprinting is reporting 42% organic growth and Bioautomation is reporting 30% organic growth. Next slide, please.

We continue to see strong demand for our products from all around the world, and we're excited to even see strength in demands from the US, our most important market. We're also seeing great uptick in demand for our systems and products at APAC.

And during the quarter, we have made great progress and expansion in China, one of our more important markets in 2022 and beyond. Next slide, please.

And I will take you through the financial summary. As Erik mentioned, organic sales growth was 52% during the first quarter, whereof the strengthening of the US dollar in relation to SEK contributed with approximately 5 percentage points of this growth.

The EBITDA margin was minus 4.1%, in line with the previously announced preliminary results. The Bioautomation business area contributed with an EBITDA of SEK6.2 million, corresponding to a margin of 4.4%.

The Biosciences business area contributed with an EBITDA of SEK10.2 million corresponding to a margin of 4.8%. The Bioprinting business area reported an EBITDA of minus SEK4.9 million, corresponding to a margin of minus 4%.

The adjusted EBITDA margin was 1.3%, and I will take you through that -- through those adjustments in a few minutes. The cash flow from operating activities amounted to minus SEK69.2 million, of which minus SEK58.6 million was attributed to inventory buildup during the quarter.

This is planned and intends to reduce the risk of the delivery disruptions and price adjustments that the group sees with subcontractors. Capital tied up in operating receivables decreased slightly during the quarter, as a result of payments from the seasonally strong fourth quarter.

The financial focus areas for 2022 are growing into the cost base by combining the organic sales growth with cost control, for example, through a more cautious recruitment space. Another priority is to reduce accounts receivable and must add is through an improved collection process.

Furthermore, our focus area is to improve the internal reporting and financial planning. One important activity to achieve this is the implementation of a new ERP system.

Next page, please. The EBITDA was minus SEK19 million and as in the previous report, we present an adjusted EBITDA, which amounts to plus SEK6 million.

The key adjustments include the cost for option programs, acquisition and integration costs, as well as the cost for the new ERP Cisco. Next page, please.

A few words on the gross profit, the gross profit was SEK352.6 million, which meant a gross margin of 73.9% compared to 77.3% in the first quarter last year. The gross margin is slightly higher than the average in 2021.

In Q1 2021, the gross margin was higher, mainly as a result of a higher share of service revenue. Next page, please.

Thank you, Michael. So, as mentioned today and in the report, we continue to see strong organic growth across the world and across all business areas.

We're well aligned to cater to the demands for our Bioconvergence products, and we're advancing our commercial strategy through market expansion and commercial synergies. We focus on profitability, and we have strengthened the internal organization with the right people in the right place and appropriate strategies to deliver on this plan.

I would like to once again take the time to thank the entire team for the tremendous efforts in Q1. It's truly been a great pleasure working with everyone, expanding our global market reach and continuing our growth story.

We're also thankful for all the shareholders and investors, who continue to support us on this journey. Next slide, please.

We're committed to our vision and mission, which is to be the future of life-saving treatments by reducing the organ shortage and speed up drug development by providing accessible life science solutions that combine biology and technology. And with that, I'd like to thank you for your time.

And we welcome and invite any questions you may have.

Well, in that case, we'd like to once again, thank you so much for your time. We appreciate your support, appreciate you joining us today, and I wish you a great day.