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Operator: Welcome to BONESUPPORT Year-End Report 2025 Presentation. [Operator Instructions] Now I will hand the conference over to CEO, Torbjorn Skold; and CFO, Håkan Johansson. Please go ahead.
Torbjorn Skold: Thank you, operator, and welcome, everyone, to BONESUPPORT's Q4 and Full Year 2025 Results Call. My name is Torbjorn Skold, I'm the CEO of BONESUPPORT; and with me here today is our CFO, Håkan Johansson. And together, we will use the next 25 minutes to guide you through the Q4 presentation and then open the line for questions. But before we start the presentation, I would like to draw your attention to the disclaimers covering any forward-looking statements that we will make today. So let's look at the financial and operational highlights from the quarter. Q4 was another strong quarter with solid execution across the business. Net sales came in at SEK 313 million, corresponding to a growth of 22% versus Q4 2024. Sales growth at constant exchange rates was 36%, showing that there was a continued strong currency impact on our figures for the quarter. Our adjusted operating results, excluding incentive program effects was SEK 81 million, corresponding to an adjusted operating margin of 26%. Reported operating result was SEK 82 million, and we saw solid cash generation with operating cash flows reaching SEK 54 million. We continue to see strong traction for CERAMENT G in the U.S., where both new accounts and increased use among current users contributed to the strong progress. CERAMENT G sales in the U.S. reached SEK 207 million for the quarter compared to SEK 154 million in the same period the year before. In Europe & Rest of the World, we saw strong momentum, which more than offset the negative effects of the German market reforms. During the quarter, we also advanced our regulatory pipeline. As communicated in early December, the FDA submission for CERAMENT V has now been transferred from the 510(k) pathway to the De Novo process. This change reflects the FDA's assessment that CERAMENT V may constitute an entirely new product category like CERAMENT G in 2022 and positions us for a stronger long-term market entry. In addition, we initiated the early-stage launch of CERAMENT BVF for spine in the U.S., an important step as we continue expanding our portfolio of indications and applications. I will come back to that later in my presentation. Now let's move to the sales development. This chart shows total last 12 months reported sales in Swedish krona by quarter since 2019 in stacked bars per region and product category. As you can see, the launch momentum for CERAMENT G in the U.S. is exceptionally strong. Given that we keep bringing new strong clinical studies and opening up new market segments and new indications, a product like CERAMENT G will remain in launch phase for many years to come. However, throughout 2025, we have seen strong influence from the U.S. dollar to Swedish krona depreciation. Last 12 months growth in Q4 of 31% in the graph corresponds to an even stronger 40% at constant exchange rates. So most of this quarter-over-quarter slowdown in last 12 months sales is due to a strong currency impact. U.S. CERAMENT BVF last 12 months was flat year-over-year in constant currency. In total, antibiotic eluting CERAMENT grew with 54% last 12 months in the quarter in constant currency. Next slide, please. In U.S., sales amounted to SEK 259 million, representing a growth of 40% at constant exchange rate. There was some general variability during the quarter due to the number of working days. At the same time, we continue to experience strong growth of CERAMENT G, driven by both increased access through new accounts and new surgeons as well as wider adoption among existing accounts and surgeons. In trauma, we see expanding access and adoption in Level 1 trauma centers, which is an important validation of CERAMENT G for treating complex infections and bone voids in the most demanding clinical environments. There are roughly 250 Level 1 trauma centers in the U.S. These are the very large and most important centers for advanced trauma treatments. And at the end of 2024, we had sold CERAMENT to 15 of these. At the end of 2025, we had sold to more than 140 Level 1 trauma centers. That said, actual use is evolving gradually as trauma surgeons carefully assess and evaluate new products before they become part of regular use. And remember that full healing and evaluation of a trauma patient can take more than 6 months. As part of our mission to modernize an outdated standard of care in the U.S., we have successfully opened one market segment after another. We started in foot and ankle, followed by trauma and now moving into revision arthroplasty. Interest continues to grow for CERAMENT G in revision arthroplasty and periprosthetic joint infections, 2 areas where the clinical needs remain substantial and where the evidence supporting our antibiotic eluting technology has resonated strongly with surgeons. We've built a solid foundation for our spine strategy over the past quarters by establishing distributor coverage and preparing for the market. In Q4, we initiated the early-stage launch of CERAMENT BVF in spinal procedures with distributors now actively engaging spine surgeons across both existing and new partnerships. As this is a new clinical segment for us, more clinical data is needed to support broader market penetration longer-term. Importantly, the performance of CERAMENT BVF in spine will help confirm the value proposition for the CERAMENT platform, which will pave the way for the future CERAMENT G launch. We have made strong progress in evaluating and preparing the regulatory pathway, and we'll share more on the path forward at our Capital Markets Day this spring. Now let's turn to Europe. Next slide, please. Sales in Europe & Rest of the World came in at SEK 54 million, representing 18% growth at constant exchange rates. Sales in Europe continued to be influenced by the same dynamics as observed in Q3, meaning that hospital reforms and surgical protocol programs in Germany were still impacting our sales. However, direct markets, excluding Germany, delivered at normal growth rates. And by the way, when we say normal growth rates, we mean normal for CERAMENT. The growth rates that we see outside Germany are 4x to 5x higher than growth rates for the market in general. Furthermore, hybrid markets in Southern Europe, Australia and Canada are performing strongly. We see positive traction from the investments made during the first half of 2025 reflected in improved sales performance. Now I'll leave a deep dive into the numbers to Håkan.
Håkan Johansson: Thank you, Torbjorn. Net sales improved from SEK 257 million to SEK 312.5 million, equaling a growth of 22% reported sales growth or 36% in constant exchange rates. Torbjorn has already spoken about the solid performance in especially the U.S. and the major drivers behind the sales growth. But as the weak U.S. dollar somewhat hides a continued strong trajectory in the U.S., I would like to share the U.S. sales performance in U.S. dollars. CERAMENT G is the growth driver in the U.S. and this slide shows the quarterly CERAMENT G sales in the U.S. in U.S. dollars with continued solid performance quarter-to-quarter. The number of working days in each period impacts sales, especially in Q4, which is impacted by both Thanksgiving and the holiday season over Christmas and New Year's. Taking this into consideration, a strong net sales per working day is noted during the quarter when looking at the orange line in the presentation. The contribution from the U.S. segment improved by SEK 30 million and amounted to SEK 120.2 million. The improved contribution relates to increased sales after effect from increased costs. Selling and marketing expenses during the quarter amounted to SEK 128 million compared with SEK 108.8 million previous year, of which sales commissions to distributors and fees amounted to SEK 85 million compared with SEK 69.6 million in the same quarter last year. From the graph at the bottom of the screen, showing net sales as bars and gross margin as the orange marker, it can be noted that the gross margin remained stable and strong at around 95% with a minor decline in the period following a gradual impact from U.S. tariffs. In Europe & Rest of World, a contribution of SEK 11.9 million was reported to be compared with SEK 12.8 million previous year. Selling and marketing expenses increased by SEK 4.9 million, including SEK 3.6 million related to the previously communicated commercial investments in the so-called EUROW booster program. From the lower graph and orange marker, a minor drop in gross margin can be noted, mainly impacted by the market mix. Selling expenses, excluding sales commission and fees increased by SEK 8.6 million, mainly in staffing expenses, of which SEK 3.6 million relates to the so-called EUROW booster. The increase from Q3 this year relates to seasonality as Q4 is usually intense in terms of congresses and marketing activities. R&D remained focused on the execution of strategic initiatives such as the application studies in spine procedures and the market authorization submission for CERAMENT V in the U.S. The expense for the quarter includes submission fees and other additional expenses related to the change in regulatory pathway for CERAMENT V in the U.S. And finally, administrative expenses, excluding the effects from long-term incentive programs, reports a small increase for the period, of which SEK 2.8 million relates to the CEO succession. The reported operating result amounted to SEK 81.8 million despite unfavorable currency effects totaling SEK 2.9 million. I will come back to this on a later slide. The newly introduced tariffs in the United States had a gradual impact on costs in the quarter. The full effect of the current 50% tariff will equal a 0.8% impact on U.S. gross margins, which will come gradually with full effect late 2026. The difference between adjusted and reported operating result are costs regarding our long-term incentive programs amounting to a negative expense of SEK 0.5 million in the quarter compared with an expense of SEK 13.7 million previous year, as you can see from the previous slide. The reduced costs are due to the drop in share price. Operating cash flow remains solid with an increase in accounts receivables at the end of the year, mainly as customer payments seem to have been deferred to after the holidays. During the period, the Swedish krona has continued to strengthen against the U.S. dollar. Other operating income and expenses, therefore, contain foreign exchange gains and losses from the translation of the group's receivables and liabilities in foreign currency amounting to a negative SEK 2.9 million. The graph on this slide shows with gray bars how the relationship between the U.S. dollar closing rate and the Swedish krona has varied over time. This is read out on the right Y-axis. The blue dotted line readout on the left Y-axis shows adjusted operating result. The adjusted operating result, excluding translation exchange effects is the orange line and gives a more comparable view of the underlying trend in operating results. In the table below the graph, you can see the FX adjusted operating margin of close to 27% in the period compared with 22.6% in the same quarter last year. And with this, I hand back to you, Torbjorn.
Torbjorn Skold: Thank you, Håkan. So to summarize Q4 2025, sales grew by 36% in constant currencies, reflecting steady and consistent progress. Adjusted operating margin reached 26%. Cash flow also remained robust, underscoring the strength and scalability of the business. I'm convinced that the most exciting part of our journey still lies ahead. And as I said, to provide a clearer view of what that journey will look like, we will host a Capital Markets Day in Stockholm on the 26th of May this year, which you are, of course, all welcome to join. Now happy to open up the line for questions.
Operator: [Operator Instructions] The next question comes from Viktor Sundberg from Nordea.
Viktor Sundberg: First one on CERAMENT G in the U.S. As you mentioned, year-over-year growth in the quarters are decreasing, but it's mostly FX related, as you mentioned. But when you say mostly, is it anything that indicates any, let's say, underlying headwind in the U.S. in 2025? And also what kind of underlying growth have you baked into your guidance for 2026? And how does that growth compare to 2025 growth in constant exchange rates? That's my first question.
Håkan Johansson: Thank you, Viktor. And I think that the takeaway from the report is 2. One is, again, we see a continued strong trajectory with CERAMENT G in the U.S., especially when looking at sales in average per working day. Taking that in combination also what Torbjorn mentioned in terms of access to Level 1 trauma centers, et cetera. And of course, both these aspects are aspect that's been included in our estimates and our works out ahead of presenting the guidance for 2026. So we remain very optimistic on the continued opportunities for CERAMENT G in the U.S.
Torbjorn Skold: Indeed. And I would like just to add to that. When we look at the performance in '25 and in Q4, we look at 2 important aspects of where the growth comes from in general and also particularly in CERAMENT G. And it relates to new accounts calling access as well as increasing the adoption within existing accounts. So both those 2 levers, independent on whether it's on surgeon level, account level, IDN level or GPO level, we measure that and track it. And what's important for us is to make sure that we have a healthy growth, not only in access and not only in adoption. We want to have it in both. And what we've seen throughout '25 as well as in quarter 4 is that we have a really healthy adoption and the growth rate on the total stems from both of those legs contributing almost to an equal size, which is very positive. And that goes generally as well as for CERAMENT G. On CERAMENT G, in particular, we've already talked about the Level 1 trauma center adoption rate. I mean, in '24, we sold to 15 of them. And in '25, we have sold to more than 140. And what we mean with sell is that we sell at least one product. So again, it's very, very early phase, but it's a really strong indication for us at least that we get access, we get interest among orthopedic surgeons, among the infectious disease doctors, and we have a really strong foundation to build on in trauma for many, many years to come. So that's on trauma. The next segment that we're just about -- or just started to scratch the surface on is revision arthroplasty. Early days, we have very convincing evidence, but it's a pilot study from Charité, indicating very strong results for CERAMENT G in a revision arthroplasty segment. So this also looks very promising for both the short, medium and long-term in the U.S. On top of those parts, meaning trauma and revision arthroplasty, we have foot and ankle, which we still see a lot of potential to continue to build on as we develop more application techniques, as we come out with more clinical studies. And then, of course, very exciting for us is when we get FDA approval for CERAMENT V. We transitioned from a 510(k) process to a De Novo process, which longer-term is actually very positive for us. And that, of course, adds to the total mix. We do not expect a lot of cannibalization on CERAMENT G from CERAMENT V. We believe that's going to be somewhat immaterial in the grander scheme of things. So I think that paints the picture of our outlook short, medium and long-term for CERAMENT G in the U.S.
Viktor Sundberg: Okay. And maybe in Germany and the U.K. also that's been a bit of a drag on growth in '25. How much of this drag is baked into your guidance for 2026? And when do you expect this to turn around? And any sense of what the underlying demand is if funding issues would be a bit better in these countries?
Håkan Johansson: So we communicated already when releasing Q3 that we do not expect somewhat of a swift call it, recovery in Germany. We think that Germany will remain somewhat sluggish throughout 2026. However, when it comes to U.K. and part of that we also saw in Q4 is that we expect the situation in the U.K. to normalize in the sense that surgeries where CERAMENT is used is coming back to normal levels. The surgical backlog in the U.K. is still a launch, which means that somewhat there will be also periods where we see a bit of 2 steps forward, 1 step back, et cetera. But again, we have seen gradual improvements, Q4 confirmed that, et cetera. So we remain optimistic when it comes to the U.K.
Operator: The next question comes from Erik Cassel from Danske Bank.
Erik Cassel: First, of course, everyone cares about the CERAMENT G U.S. number and what that was organically. If I pulled the data correct, it looked like it was up 55% organically and that we have a USD number that was 21.9% essentially. Could you give any more detail on that sort of number, if I'm correct in that assumption? Because that would imply like an FX rate of minus 21%.
Håkan Johansson: Again, largely, the numbers could be recognized. We're not sharing the exact dollar numbers because we're reporting in Swedish krona. But as we shared in the presentation, you have both the absolute numbers in U.S. dollar sales and also the average sale per working day. And again, as communicated here, we see a continued very strong and solid trend.
Erik Cassel: But the 55% organic, that seems reasonable to you, do you think?
Håkan Johansson: Again, if you just look at it from Q3 to Q4 in U.S. dollars and not taking workdays in consideration, it is a small growth in Q4 to Q3.
Erik Cassel: Okay. I'll leave it there. But can you maybe talk a bit on what sort of indications that happen to grow, say, faster than the overall CERAMENT G sales in the U.S. and which indications may be lagging that growth rate a bit, so we sort of can understand what's driving this going forward?
Torbjorn Skold: Yes. So I think if we look at the U.S. and CERAMENT G sales only and then we look at the 3 segments that we are in today and actively sell into. Foot and ankle, of course, is the segment where we have been the longest period of time. That's where BONESUPPORT started really. But still both in absolute as well as in relative terms, an important contributor to the growth of CERAMENT G. But given the size of it and given that we've been there for a number of years, it's further on in its life cycle, so to say. Second is trauma. And here, of course, a relatively new segment. You saw the numbers in terms of access. So that's clearly a segment that will continue to drive growth rates both short and medium-term. So we're very bullish about trauma as well as we are on revision arthroplasty. So I think you can sort of relate how long we've been in the respective segments to how much relative growth rates we can expect from them. But having said that, all 3 segments are very important in absolute terms for us short and medium-term. And just to be totally transparent and perhaps obvious to several of you on the call, CERAMENT G for spine is not yet approved in the U.S. and will, therefore, not drive any growth in the short-term. But longer-term, we expect CERAMENT G once it's approved and launched in the U.S. for spine to be an important segment also in parallel to the 3 segments that we're already in.
Erik Cassel: Okay. Should I read that as the osteomyelitis indication being a bit more matured, maybe not growing as much right now?
Torbjorn Skold: I wouldn't read that into it. Osteomyelitis is actually an indication that can happen in foot and ankle. It can happen in trauma and also technically it can happen in -- also in revision arthroplasty. So I wouldn't draw that conclusion. Osteomyelitis is an underserved indication with a lot of unmet clinical need where CERAMENT G and V play an important role. So I would not draw that conclusion that we've reached a saturation or maturity on osteomyelitis in general. It's a very healthy and fast-growing segment for us.
Erik Cassel: Okay. And then I just have a question on commission rates. They sort of hit a new low here in this quarter. Does that sort of imply that fewer and fewer distributors are hitting their sort of bonus quotas? And if that's the case, could you maybe share a bit on sort of what's required for them to get to that sort of, I guess, 35% commission rate. This was, I think, high and say normalized lower. What's the difference there and how much they need to sell and grow the accounts to get different bonus levels?
Håkan Johansson: So a good question, Erik. So it sounds like an area for clarification because I guess the line is defined as commission and fees and involves everything from commission to the distributors, GPO fees, credit card charges for the customers paying by credit card, et cetera. And it's the combination of these that is down a few percentage points and so on. So it's small movements in percentage of sales. Commission remains relatively stable around 30%. The commission are somehow included certain incentives if the distributors are exceeding their so-called quotas substantially, but we see very little movement in the average commission rate to sales. So the reason why it's down a few percentage points more relates to the other aspects of fees.
Torbjorn Skold: And to that, in terms of the distributor turnover, it's part of the beauty of the model that we have in BONESUPPORT in the U.S. is that we want distributors to be on the journey with us. We want them to share the same goals. So we actively add new distributors. And when we have distributors that are not performing in line with the targets and goals and principles that we set, we don't hesitate to phase them out. So turnover among distributors, we've always had. We will continue to have that. But as Håkan said, that is not one of the reasons why we see lower commission rates on the contrary.
Erik Cassel: Okay. And just the last question. So far, I mean, we saw that sort of surgical volumes per day was up a bit in Q4. Can you say anything on the sort of pace that has been now through January and February, if we're seeing the daily averages being roughly the same, increasing, just so we can think about the Q1 number we could expect?
Torbjorn Skold: Yes. No, thank you for the question. I mean we don't comment on Q1, as you know. But similar to -- we got a lot of questions on Q4 when we released Q3, I mean we feel confident in the journey that we're on. We feel confident in the guidance that we have said, indicating that we should grow in constant exchange rates at least 35%. And if we see any reason to change that, we will communicate it adequately and accordingly.
Operator: The next question comes from Mattias Vadsten from SEB.
Mattias Vadsten: I have a couple of questions as well. First one, what you shared there regarding Level 1 trauma centers, 140 versus 15 end of 2024. So just if you could share some color on how important this has been whilst establishing the sales guidance for '26. And of course, also interesting to hear some insights on adoption rates in sort of early Level 1 trauma centers as well? That's the first one.
Torbjorn Skold: Sure. So starting with your first question around the guidance of 35 -- more than 35% growth in constant exchange rates. So first of all, we have also communicated that we expect CERAMENT V to be approved by the FDA around mid this year. Of course, if we get an earlier approval and we launch earlier than that, then of course, we will distance ourselves or we expect to distance ourselves more on the upside versus the 35%. But however, let's say that we get late approval or no approval, then we will, of course, be close to the 35%. I think that's important to just point out that, that's the role of CERAMENT V. Now when we did the guidance for '26, there's not only one factor, of course, that we take into account. We look at growth potential across the geographies. We look at the growth potential of the different segments, of course, trauma in the U.S. is an important segment for us and the data point that we have on the Level 1 trauma centers is an important data point as there are others as well, in foot and ankle, in revision arthroplasty in both U.S. as well as Europe & Rest of the World. What is very important for us, and we've said this before, and it's important to continue to say that, it's the balance between access and adoption that is very important. We don't want to just only grow by getting new accounts. We don't only want to grow by increasing the adoption in existing accounts. We want to have a healthy balance between the 2. So that's also a very important factor when we put the guidance together. Another also very important factor is when we simply again recalculate the penetration, meaning that the number of surgeries that we are in by geography, by market segment versus what we think is a realistic or a longer-term outlook. We still believe that we have a long runway to get to what we think are perfectly realistic penetration levels. So I think, Mattias, it's not just the trauma number, but it's an important factor as -- and combined with many other factors, as I just described.
Mattias Vadsten: Good. And are you happy with what you see in terms of adoption in the Level 1 trauma centers that you won early days?
Torbjorn Skold: Yes, very happy.
Mattias Vadsten: Good. Then I just have a follow-up on the revision arthroplasty segment that you discussed here in the presentation, which was good. Your position here and maybe how much work is yet to be done for BONESUPPORT in terms of evidence and so forth to be able to have an ideal position, call it, for a more material contribution and better sales pitch around the segment? That's my next one.
Torbjorn Skold: Yes. Very good. So it's early days for us in revision arthroplasty. We have a fantastic pilot study that came out of Charité as communicated last year. I mean the results from that couldn't have been better from a BONESUPPORT and CERAMENT point of view, showing excellent results. But again, it's a pilot study and the number of patients is limited. We're building on that study going forward. And I think this is an area where we, over several years, will need to do a lot more, which is perfectly natural, and that's part of the BONESUPPORT approach to penetrate a new market segment, meaning that we always lead with evidence. We know that our product is very innovative. It has unique capabilities in terms of its handling and in terms of how it elutes antibiotic. But we always lead with evidence. So a lot more work remains to be done in revision arthroplasty on the evidence side. So more specific evidence. And we're working on it. We've initiated new studies, and we will continue to initiate new studies in this field. However, orthopedic surgeons, in general, they understand the unmet clinical need in the space of revision arthroplasty, where typically you face 2 challenges. Number one, how do you heal the bone? How do you make sure that you grow bone in areas where you, for example, have bone voids as a result of explanting the implants in a revision situation. So having to deal with bone voids is normal, and it's standard for revision arthroplasty surgeon. We have a great solution for that with CERAMENT. Also, infections in revision arthroplasty is one of the key reasons why primary implants need to be revised because the patients have infections. So dealing with infections is also high on the agenda of the revision arthroplasty surgeons. And there with CERAMENT G and V in Europe and hopefully, when we get the approval for V in the U.S., we have a very, very intuitive solution that we already see now, surgeons are willing to try and test. Some of the surgeons actually already use it as part of their standard routine. Several surgeons want to wait until we have more evidence. But nothing is stopping us to enter this segment and penetrating this segment already now. But of course, we need more evidence. In addition to that, we believe very much in specialization of our sales channels, meaning that a revision arthroplasty surgeon is not the same guy that does trauma, who is not the same guy that does foot and ankle. So we need specialization in our go-to-market channels. So that's, of course, another aspect that we need to make sure that we get relevant sales channels, whether that's distributors as well as direct people to go deeper in the respective market segments. So I hope that answers your question.
Mattias Vadsten: Absolutely. Good answer. And my last one is fairly quick. In terms of working days that you discussed here, how many fewer working days was it Q4 vis-a-vis Q3? Was it like 2 days or...
Håkan Johansson: It was 3 days shorter, if I remember, 3 or 4 days, but my memory is not skewing me 3 days shorter.
Operator: The next question comes from Kristofer Liljeberg from Carnegie.
Kristofer Liljeberg-Svensson: I have 3 or 4 questions. The first one on this sequential growth for CERAMENT G in the U.S. per surgery day seems much stronger in Q4 versus pretty weak third quarter. So could you explain, is there any particular reason for this or just natural swings between quarters?
Håkan Johansson: Again, as much as we refer to underlying natural swings quarter-to-quarter in Q3, that explanation remains in Q4 because again, it's -- as with the forward-looking estimates, there are several parameters that is moving and so on. So I don't see any specifics, and I'm looking at Torbjorn, but I think that we share that view.
Kristofer Liljeberg-Svensson: Okay. Good. And the better growth in Europe, would you say that's sustainable, just making sure that there is no positive one-off larger orders or anything this quarter, explaining the much better growth in Q4 versus what we have seen previously.
Håkan Johansson: Again, what was positive to see, Kristofer was the improvement in the U.K. to see what's been in our analyzer to see that also realized. But at the same time, we're -- we remain modest. We have to remain modest because again, as I mentioned in the call, the surgical backlog remains long in the U.K. So there could be short periods of swings back to a slower momentum and then swing back again, et cetera. But again, I think it's -- we're remaining optimistic, good to see the improvements in Q4. When we look at the investment markets, I call it, we expect that momentum to continue when looking outside our direct markets and investments made in our so-called hybrid markets, Italy, Spain, Australia, South Africa, Canada, just to mention a few. And again, there, we start from quite a low penetration level, and there are so much market potential remaining in these markets. And we believe that the investments done is a good way to capture that potential.
Kristofer Liljeberg-Svensson: Okay. Good. And then my third question, you mentioned the increased number of trauma centers that you are selling to, still early days, but have you reached good adoption already at some of those centers? Or is that also too early to see?
Torbjorn Skold: No. I mean, clearly, in some of them, but still it's a very small number where we have reached a solid adoption level, but it's really early days. And if you -- again, the definition that we use here is that selling to meaning that we've sold minimum 1 packet of CERAMENT. Of course, some of them, early adopters that were early out, we have a good adoption level, but not even close to what we think is the potential. And most of these -- I mean, just do the math. Most of these trauma centers that we've sold to are still very, very early in their journey. So yes, we'll keep ourselves busy to increase the adoption in these Level 1 trauma centers in the U.S.
Kristofer Liljeberg-Svensson: Okay. And then finally, just a clarification when it comes to guidance for 2026. So you have included, as it seems then, very little or no CERAMENT V sales in the guidance?
Torbjorn Skold: Yes, that's correct. And that's to be prudent because we only know what we know. And although we have a great dialogue with FDA, you never know with FDA, and we follow their guidance similar to what we did now in Q4 in terms of transferring CERAMENT V from a 510(k) to a De Novo. We think that although unexpected to us, we think it was a very good decision longer-term for us. And it is important that we follow and deliver on what FDA wants us to. But of course, if we don't get CERAMENT V, we still believe that the 35% growth rate is definitely realistic, but it's going to be a lot easier to overdeliver if we get an early approval of CERAMENT V in the first half of this year.
Operator: The next question comes from Sten Gustafsson from ABG Sundal Collier.
Sten Gustafsson: As a follow-up on the U.S. market penetration and adoption. I think to ask it in a different way. But I think in the past, you have shared with us a number of surgeons you have trained. And I believe maybe I'm mistaken here, but the last number I have in my head is 1,000 surgeons. I was wondering if you could update me on where you are today on that number.
Torbjorn Skold: Yes. No, good question, Sten. Thank you very much. So first of all, to put your question into context, this relates to all the sort of relevant surgeons in the fields that we're in today, excluding spine. So that relates to foot and ankle, trauma and revision arthroplasty. The boring part of my answer is that, no, we're not going to provide an update to that number. We don't have that routine yet. But when we have that routine and when we have updated numbers that we are willing to disclose, we will, of course, do that. But having said that, we are not slowing down. We're putting our foot on the gas to accelerate, which I think we see from both the financial as well as the operational numbers, including that reference point around the major trauma centers because clearly, you don't really get access without training an orthopedic surgeon.
Sten Gustafsson: I understand. And those Level 1 trauma centers, on average, do they have like 50 or 100 different surgeons? Or what's the size like?
Torbjorn Skold: I mean, it, of course, varies depending -- I mean, in total, U.S. as per our segmentation, we have 250 Level 1 major trauma centers. If you're major trauma centers, you're not running around with only sort of 5 trauma surgeons. You're not the major trauma centers. But it can vary. And I don't want to put a number out there, but it could be anything from -- I would only be guessing, but there are several -- quite a number of trauma surgeons on these different centers. And our ambition in the first place is to focus on the market segments, of course, where we focus on, so foot and ankle and trauma and then focus on the most complex, difficult cases within trauma where we see that CERAMENT G adds the most clinical value. And then you typically start with 1, maybe 2 surgeons and 1 ID doc. You start there, only one indication or one type of case and then you expand from there. And that's a journey that honestly can take several years. And of course, we want to do it in the right way and make sure that we and our product adds value to not only the orthopedic surgeon, but also the hospitals and the health care system.
Sten Gustafsson: Makes sense. My next question would be on BVF and spine in particular. And I noticed a nice uptick in the -- and change in growth trajectory for CERAMENT BVF in North America. And I was wondering how much of that is sort of quarterly variation? And how much is related to spine?
Torbjorn Skold: Well, given the fact that we honestly launched -- we initiated the launch in December on spine BVF, and we try to keep it a very focused launch. In Q4, I wouldn't draw any conclusions that it is the spine launch in the U.S. with the CERAMENT BVF that sort of made that number look the way it looks. It's more normal variations.
Sten Gustafsson: Okay. Excellent. My final question is India. What's the timeline looking like? And what type of potential are we -- or should we consider for India?
Torbjorn Skold: Yes. No, India, I mean -- so of course, no sales in Q4 for India. When we look at India strategically long-term, it's an attractive market for a couple of reasons. The main reason is it's a lot of people in India. And second, there's a lot of people who are willing to pay for care in India. So the approach that we take is a very focused approach on private payers and the hospitals that serve this patient population. When we look at that patient population in terms of size, it's a sizable segment, very attractive longer-term. And what we see now in India is first early steps -- and longer-term, give it a couple of years, it could be an important contributor for us. But most importantly, it's another growth leg to have in Europe & Rest of the World because we say that a lot of times, even in Europe & Rest of the World, we're very, very early phase. I mean, we depend and have depended a lot on U.K. and Germany, and we've been painfully aware of that when we have had the market reforms in Germany. So adding India is an attractive segment. But again, as with all countries, it will take time. But if you count the total population and if you segment that population into how many of them do have private insurers and how many of them have access to certain private hospitals, we feel very confident about that number, and we expect sales to start in India already in the first half of 2025 -- 2026, sorry.
Operator: The next question comes from Oscar Bergman from Redeye.
Oscar Bergman: I just have 3 questions for you. The first one, I think, at U.S. ambassador sites for bone infection, could you give sort of a ballpark figure of what percentage of relevant procedures on Berlin-CERAMENT G today? I mean, have they -- or have you become the type of standard of care at some of the centers in the U.S.
Torbjorn Skold: Great question. To answer that last part, I would dare to say, yes, but it's still only a relatively small number where we have genuinely become the standard of care. And of course, it goes to what's the definition of standard of care. Do you only look at one patient indication? Do you look at several, et cetera, et cetera. So I think we're getting traction. Clearly, one very important way to establish this for us is to look at our great collaboration with the Oxford Bone Infection Unit in the U.K., and we have a fantastic collaboration and partnership with them. And one of the best ways we can educate patients in the U.S. -- sorry, educate the surgeons in the U.S. is simply by sending them to Oxford and see how they work with it. And we see great results, including changing the standard of care, moving to more CERAMENT use in their daily practice. But I would say, yes, there are centers in the U.S. that have changed their standard of care, but it's still very early days. But I don't have any hard data to share.
Oscar Bergman: Okay. And do you know those centers are typically university hospitals?
Torbjorn Skold: Yes. I mean one of the key strategies in the U.S. that we have and had for several quarters and potentially years is that we target academic medical centers. And that is simply because that's where they are very evidence and research focused. So they actually pay a lot of attention to the evidence that we have. You know that one of the key pillars in our strategy is to invest in and promote and lead by evidence. So that sort of fits like a hand in the glove to that. Commercially, it's a really good way to sell and target academic medical centers because they train a lot of fellows that when they're done training and when they're done with their fellowships, they go to somewhere else. They could go to a different academic medical center or they could start their own practice or go somewhere else. So definitely, our product fits very well in academic medical centers simply because it's much higher evidence level on our product than what's currently on the market.
Oscar Bergman: Okay. And India, it was very interesting to hear about. I assume that the regulatory processes there are piggybacking CE marks for CERAMENT G and BVF, right?
Torbjorn Skold: Yes. I mean, of course, we use the clinical data, we'll use the material that we've produced for U.S. that we've used for Europe. India is a particular country and with a somewhat complicated process, but the team has done a fantastic job on that, and we're getting very close to starting the launch in India in the first half of 2026.
Oscar Bergman: Okay. And are there any other markets that you aim to launch at in the near to medium-term? I think we spoke about Japan before, very high level, of course, but it would be interesting to hear about Japan.
Torbjorn Skold: Yes. I mean, Japan is still on the list. It's a very attractive orthopedic market. Similar to India, somewhat complex regulatory pathway to enter in Japan, but we're actively working on it. We've said that before also. So there's no change in that strategy. And we're getting closer to launch. But from a timing-wise, India will happen before Japan.
Oscar Bergman: Okay. And you also mentioned some safety inventory and the longer payment terms due to the holidays. Is it a fair assumption then to make that your free cash flow conversion should normalize already in Q1?
Håkan Johansson: And again, I think that -- when you look at that, Oscar, it's key to see you have some accounts receivables, but you also have accounts receivables in combination with some of the so-called K sheets that is reported as accrued revenue. So part of the increase in accounts receivables in Q4 relates to a reduction in accrued revenue or open K sheets end of Q4 compared to Q3. And the rest is simply that payments has been deferred from December to after the holidays. So with that, yes, we can expect to see the situation stabilize and normalize going into Q1. But again, the balance sheet is measured on the clock on 1 day. So there will always be volatility in the balance sheet. But over time, cash flow never lies.
Operator: The next question comes from Viktor Sundberg from Nordea.
Viktor Sundberg: Just to follow-up on your progress in trauma. One of the worries in the market with regards to trauma in the U.S. has been that maybe surgeons do not always feel the acute need to prophylactically use infection prevention in the surgery risk with the products such as CERAMENT G that comes with a bit of a price premium to other products without infection prevention in contrast to osteomyelitis when the infection is already always present at the intervention. So can you just comment on that as you have met more surgeons day-to-day at these Level 1 centers and got their feedback if this is correct or not to look at adoption in trauma in that way? And maybe also quickly, the NTAP here, any more color on how the added NTAP for trauma and the dropped NTAP for osteomyelitis will impact U.S. sales when we have moved a bit into 2026 and you might have gotten a bit more data on this dynamic?
Torbjorn Skold: Yes. So we'll start with the second question first for simplicity and then we'll comment on the first one. So in Q4, we did not see any material impact -- negative impact of the lost NTAP, that actually came into effect 1st of October. So we don't see that we lose volume due to that. Again, early days, but in Q4, we didn't have any signals on that. I think to your point on trauma surgeons prophylactically or not, I think we need to start even more basic in trauma, meaning that actually, when there is a very high risk of infection or actually that they have confirmed infection, that's where we start with in trauma. And I don't think that we have reached any maturity or saturation on that level. Once we've done that, then, of course, it comes to prophylactically. Prophylactically, of course, is always more challenging than the starting point. But once you get the starting point right, my experience is at least that once you get that right, you see -- you get the surgeons to understand and see the value that CERAMENT has, then moving into that prophylactic stage becomes more natural. And different surgeons, different clinics, different centers are in different parts of this journey. But I would argue that still prophylactically is further out, but we're making really good progress by starting with the basics and getting them to be aware and understand the role of CERAMENT G in these type of cases.
Operator: There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.
Torbjorn Skold: No. With that, thank you all for your interest, and we wish you all a great rest of the day. Thank you.