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Operator: Welcome to BICO Q4 2025 Report Presentation. [Operator Instructions] Now I will hand the conference over to the speakers, CEO, Maria Forss; and CFO, Jacob Thordenberg. Please go ahead.
Maria Forss: Hello and welcome to BICO Group's Quarter 4 2025 Earnings Call. I'm Maria Forss, President and CEO; and I will together with BICO's CFO, Jacob Thordenberg, present this year's end report. Here's today's agenda. I will open today's session by summarizing 2025 and also describe how BICO serves the world's leading pharma and biotech companies with solutions that transform how labs operate, innovate and solve our customers' challenges. Following that, I will summarize the full year 2025 as well as quarter 4 '25 and Jacob will then present the group's financial performance. We will then proceed and comment on our performance in the 2 business areas, Life Science Solutions and Lab Automation. I will also comment on our R&D pipeline with our ongoing product development efforts. Additionally, I will highlight product launches made at SLAS, the Society of Lab Automation and Screening Congress, that took place last week in Boston. The session will conclude by highlighting our focus for 2026 before we open up for Q&A. When summarizing 2025, we can conclude that we finished the year on a strong note with double-digit organic sales growth in Lab Automation and a strengthened cash position. After the quarter in January '26, we successfully raised new capital, enabling investments to support further growth. 2025 has been a year of strategy execution. We have delivered on all key strategic initiatives and the impact is clear; a portfolio focused on lab automation, significantly reduced debt and a strong cash position, we have leaner operations and a more focused and customer-centric product portfolio, providing a strong foundation for 2026. Before commenting on our performance, I will present how BICO serves the world's leading pharma and biotech companies with solutions that transform how labs operate and innovate. Our customers share 1 ambition, reducing time to market and increasing the probability of success. With Biosero's leading software suite, Green Button Go, together with their off-the-shelf automation products as well as bioprinting, our portfolio is in the sweet spot of meeting that ambition and solve the core challenges with long and costly development cycles. Our solutions enable smarter, faster and more efficient labs and here lies an underlying strong demand. Pharma and biotech companies all face the same fundamental challenge, long costly development cycles for new therapies. The development of a new therapy often takes more than 10 years and costs between USD 2 billion and USD 4 billion with probability of approval after Phase I at just 10%. To overcome this, our pharma and biotech customers are investing heavily in automation to increase efficiency, speed and quality; to bring innovations to market faster and at a lower cost. Our products and services enable our customers to connect data across systems and apply AI tools to plan, run and optimize experiments in real time. And already today, we're enabling AI-driven drug discovery workflows through our Green Button Go platform. We are at the core of this transformation, connecting workflows and data streams and enabling AI-powered experimentation, and this is what our vision and mission is all about. Our vision is to enable and automate the life science lab of the future. And our mission is to be the first choice lab automation partner and provider of selected workflows to pharma and biotech. During the fourth quarter, I visited several pharma customers who use BICO lab automation solutions and they consistently reported measurable gains in productivity and reliability, including reduced hands-on time, faster turnaround times and higher instrument utilization. And hearing this directly from the scientists using our system every day was both energizing and validating. Let me show you 1 example that emphasizes our mission, our strategic direction and the value that we deliver to our customers. The data shown here are from 1 of the Top 20 pharma customers we are serving. They kindly share their efficiency improvements by using our Lab Automation Solutions. Downstream process and assay development time was reduced by 75%. The capacity with the existing equipment they already had was revved up by 400% because parallel processing and variable-driven robotic processes just allow for more uptime to be squeezed out of each piece of equipment in the lab. And ultimately, these productivity increases means that their scientists are able to achieve 200% of their original productivity. This is because automation was coming alongside them, supporting them and taking over the manual steps and running concurrently in ways that a person just can't manage alone. And this is just 1 example of a lab leveraging Green Button Go and every lab we work with is looking to see numbers like this. The interest in integration services is strong and it's because we're taking technology and using it to augment the work of humans. And we're using technology to get to innovation faster. So to summarize, we lead the way in solving the challenges in life science with speed, accuracy and efficiency. All in all, our customers can run their process faster, improve the quality of the data and ultimately make better decisions. I will now move on to the next section and summarize the fourth quarter as well as the full year 2025. 2025 has been a turnaround year for BICO, building a strong foundation for 2026. Across the industry, 2025 was marked by a challenging market environment. Geopolitical developments, including tariffs, created uncertainty and led customers to take a more cautious approach to CapEx investments. The U.S. academia segment was hit hard by significant NIH funding cuts. FX headwinds with a weaker dollar and euro also weighed on the margins. The diagnostic market normalized, consumables continued to grow and the instrument sales remain muted, but recovered increasingly over the course of the year. I will now present key metrics for the full year and the fourth quarter and Jacob will later in the presentation give more details about the financial development. Sales for 2025 amounted to SEK 1.497 billion corresponding to negative organic sales growth of 8%. Adjusted EBITDA amounted to SEK 5 million corresponding to a margin of 0.3%. And cash flow from operating activities amounted to SEK 68 million. And let's turn over to the fourth quarter where sales amounted to SEK 451 million corresponding to a negative sales growth of 4%. Adjusted EBITDA amounted to SEK 56 million corresponding to a margin of 13%. Cash flow from operating activities amounted to SEK 52 million and net working capital in relation to the last 12-month sales was 13%. In late January 26, we issued senior secured bonds and I will now hand over to Jacob to comment further on this.
Jacob Thordenberg: Thank you, Maria. As just mentioned, we issued senior secured bonds on January 28 with a total nominal value of EUR 40 million. The bonds have a tenure of 4 years and carrying a floating interest of 3 months Euribor plus a margin of 5.9%. The bonds were issued at 96.81% of par and were placed with a consortium of Swedish institutional investors. The new capital puts us in a position to support further growth and capture market recovery while navigating ongoing macroeconomic uncertainty. The transaction also serves as a clear testament to the capital markets' continued confidence in BICO. I will later in the presentation describe what this means for BICO in terms of cash reserves post settlement of our current convertible bonds. I will now give some more details to the numbers just presented by Maria. Sales amounted to SEK 1.497 billion, which corresponds to an organic sales growth of negative 8%. With most of the portfolio being instruments and the industry-wide CapEx restraints as well as a muted academia market, the weak first half of the year could not be fully compensated by a stronger second half of the year despite increased demand. Improvements in Scienion and CELLINK strengthened the results while the very weak H1 for Biosero and challenges in the U.S. academic segment impacted the full year results substantially. Biosero has gained positive momentum with new ways of working, new management in place and finished the year with double-digit growth in the fourth quarter. The adjusted EBITDA was SEK 5 million corresponding to a margin of 0.3%. The updated cost estimates in ongoing projects in business area Lab Automation and declined gross profit were the main factors impacting the adjusted EBITDA margin compared to prior year while continued cost control had some positive effects. Operational cash flow amounted to SEK 68 million. In Q4, our seasonally strongest quarter, sales amounted to SEK 451 million corresponding to a negative sales growth of 12% and a negative organic sales growth in constant currency of negative 3.7%. The 9 percentage points difference can be explained by FX headwinds with a weaker U.S. dollar and euro against a stronger Swedish krona. It is also worth mentioning that the corresponding quarter last year was strong in Lab Automation. And in Life Science Solutions, we saw, especially in the U.S., significant budget release prior to the installment of the new U.S. administration. Adjusted EBITDA amounted to SEK 56 million corresponding to a margin of 13%. During the year, we have continued to be very cost conscious to mitigate the adverse effects of lower sales. When looking at the margin development, it is also worth mentioning that we have had a more conservative approach on which R&D costs we capitalized due to a more comprehensive R&D governance with the implementation of a gate stage project model. BICO will continue our clear focus on structural cost reductions and tight expense management in 2026. And if we move on to cash flow in Q4. Cash flow from operating activities amounted to SEK 52 million impacted by working capital changes of negative SEK 12 million. Total cash flow during the fourth quarter amounted to SEK 36 million. Cash reserves by end of the year was SEK 1.282 billion. These cash reserves will be used to settle the remaining balance of our current convertible debt of SEK 1.008 billion. The original debt amount of SEK 1.50 billion have over the years been reduced by early bond buybacks to a nominal amount of SEK 482 million resulting in savings of more than SEK 50 million. Following the settlement of the existing bonds based on Q4's cash reserves and all else equal, BICO will have a strong cash position of around SEK 670 million. Maria will later in the presentation describe how we plan to allocate this capital. As mentioned on the previous slide, the effects of changes in working capital amounted to negative SEK 12 million for the quarter and out of this, operating receivables increased by SEK 62 million, inventories decreased by SEK 26 million, operating liabilities increased by SEK 24 million. In percentage of last 12 months sales, net working capital in the quarter corresponded to 13% confirming that the continued operational excellence actions have been successful. The quite low levels of net working capital is primarily an effect of less net working capital by 0 due to decreases in receivables. Long term we expect working capital in relation to sales to be in line with industry standards of closer to 20% of sales. I will now hand over to Maria to present the results in our 2 business areas.
Maria Forss: Thank you, Jacob. Let's now turn to our largest business area, Life Science Solutions. Sales in 2025 amounted to SEK 1.108 billion with an organic sales growth of 1%, which is an improvement year-over-year with 11%. Adjusted EBITDA amounted to SEK 83 million corresponding to an adjusted EBITDA margin of 8%. When looking at our peers, we can conclude that peers with a significant amount of instrument business, which is comparable with Life Science Solutions, reported negative sales growth for the year. The flat sales development which we have seen over the year was primarily driven by a weaker demand in the U.S. academic segment. U.S. academic customers have reduced instrument purchases following funding-related constraints primarily in the U.S. and biotech activity has also remained soft amid longer investment cycles. In contrast, the diagnostics segment continued to perform comparatively well supported by a normalization of the diagnostic market and adoption of automation-linked solutions. Consumables continued to show healthy demand in quarter 4, in line with previous quarter during the year. We have also spent a lot of effort together with the management teams of Scienion and CELLINK, respectively, to sharpen the commercial offering and strengthen the operational excellence during 2025. This work has paid off and both companies have adapted into a new way of working, a more rightsized cost and clear focus on profitable growth. And if we move to quarter 4 results for Life Science Solutions business area. Given the continued tough market, the year ended on a strong note excluding U.S. academia dependent business units, which continued to struggle as mentioned previously. The corresponding quarter 2024 was also very strong due to a lot of U.S. academic sales before the new U.S. administration when they were to cut NIH funding, which results in a tough comparison that Jacob mentioned earlier. The Life Science Solutions delivered in a seasonally strongest quarter SEK 326 million in sales meaning a negative 9% organic sales growth. The adjusted EBITDA amounted to SEK 49 million corresponding to a 15% adjusted EBITDA margin. The profitability was pressured by softer sales, less favorable product mix and tariffs and cost related impacts. And if we move on to our business area, Lab Automation. Revenue for the full year '25 amounted to SEK 391 million, an organic growth of negative 26%. Adjusted EBITDA amounted to negative SEK 31 million corresponding to an adjusted EBITDA margin of negative 8%. The very weak first half for Biosero, including a revision of estimated hours in quarter 2 with a negative effect of SEK 40 million, impacted the full year results substantially. Transformative actions to scale up Biosero have been executed since quarter 2 and the focus has been to significantly enhance processes, leadership and operational capabilities. As Jacob mentioned earlier, Biosero has gained positive momentum with new ways of working, new management in place and we finished the year with double-digit growth. New operational capacities in Biosero are hence paying off and when legacy projects are finalized, the operations will be able to scale and operate in a more sustainable and profitable way. The Lab Automation business area finished the year on a strong note. Sales for the quarter amounted to SEK 125 million, which equals an organic sales growth of 15%. This sales growth was mainly driven by hardware revenue from the large orders won in quarter 3 and accelerated project completions, sales or service contract and software business. The adjusted EBITDA was SEK 18 million corresponding to an adjusted EBITDA margin of 15%. The profitability was supported by higher volumes and increased hardware contribution from the large orders, but also partially offset by continued substantial investments in operational resources for the benefit of our customers to accelerate the closing of legacy projects that have been delayed. I will now move on to the next section where I will comment on the R&D portfolio. One area for growth for BICO is continuous product innovation and we have a solid R&D pipeline and road map in place and this is based on the portfolio strategy which is part of BICO 2.0. And before I comment on some of our recent launches coming from our R&D efforts, it's worth repeating that our current product portfolio covers the full spectrum of lab automation solutions and selected workflows. It's important to emphasize that we have lab automation products and solutions in both our business areas and this is illustrated on this slide where you can see instruments from various BICO business units positioned along different stages of the lab automation continuum. Products in the business area Life Science Solutions are also automation-ready and can be powered by Green Button Go. Here are some examples. C.STATION is a unique product. It's a standardized integrated work cell for pharmaceutical cell line development. This is also an example of synergies in the group as the product includes products from CYTENA [Audio Gap] Instruments and Biosero. To the right, you can see the benefits of automation and how this off-the-shelf lab automation solution saves both time and money to the customers through lower staff requirements as well as lower CapEx investments. The optimized workflow shortens cell line development by 4 weeks accelerating product delivery. And if we move on to another solution, G. PREP combining products from CYTENA and Dispendix. G. PREP is a miniaturized NGS workflow enabled by noncontact liquid handling. It reduces reagent consumption with up to 90% as well as pipette usage and plastic waste, delivering return on investment within 12 months to the customers. Now these are just 2 examples of technology and solutions delivering customer value. And if we take a look at our R&D pipeline and road map. On this slide, you can see our comprehensive product development pipeline within BICO's prioritized focus areas. The majority of the R&D investments are made in software development and the use of AI while there are several upgrades of instrument portfolio as well, meeting customer needs. Multiple product launches are planned for this year and these include both software, instruments and consumables. We have already launched a few products last week during the SLES, the Society of Lab Automation and Screening Congress, in Boston. And for those of you who is not familiar with this congress, it's the most important congress within lab automation in the year generating a lot of sales opportunities. At SLES, one of the products launched was GoSimple by Biosero, which is designed to simplify workflows, reduce hands-off time, increase sample throughput and enable extended lab operations. GoSimple is initially launched with commercial partnerships covering selected instruments from Sartorius and Becton, Dickinson & Company. And this product is an example of how we are introducing new commercial concepts in lab automation with shorter lead times to balance the product portfolio. And given the high interest we saw at SLAS, there might be additional collaborations added over time, including expanded work with existing partners as well as new partnerships and the partners will promote GoSimple alongside their instruments. And this approach strengthens market adoption with the aim of positioning GoSimple as a preferred automation-ready solution across multiple worksites. Biosero has also made an early access release for the new assistive AI tool set during SLAS where our software suite Green Button Go enables workflow creation, review and troubleshooting using natural language instead of code. The assistive AI solution is designed to improve speed, usability and error resolution in lab automation while maintaining full human oversight and validation. It also uses AI responsibly by augmenting workflow development and not by introducing autonomy. This early access program is available to a limited group of customers through a controlled access program and this approach allows us at Biosero to learn alongside the users and evolve the capabilities based on real-world needs. Before the Q&A, I will repeat our strategy and give some concluding remarks and highlight our focus for 2026. Here you can see our strategy BICO 2.0 on a page. Our 5 strategic focus areas; to drive our top line and profitable growth are enabling end-to-end lab automation and scientific workflow solutions coupled with further development of integrated data, AI and software solutions; to enable increased sales to pharma, we need to ensure regulatory compliance readiness; and we also want to expand strategic partnerships such as the one with Sartorius and Becton Dickinson as well as increasing the recurring revenue. In 2026 we will continue to execute our strategy with focus on commercial excellence, an R&D pipeline that delivers clear customer value and financial discipline for profitable growth. And with this strengthened cash position, we can accelerate commercial as well as R&D initiatives and also more seriously engage in dialogs for bolt-on acquisitions, strengthening our portfolio further. The new capital puts us in a position to support further growth and capture a market recovery. We will strengthen our innovation efforts, including software solutions and the use of AI. And above all, we remain committed to supporting our customers' research and enabling the lab of the future. For us, automation isn't just about efficiency. It's about empowering scientists to accelerate innovations that shapes healthier societies. Before the Q&A, I want to sincerely thank our customers, business partners and shareholders for your continued trust throughout 2025. And I also want to extend my appreciation to all BICO colleagues around the world. Thanks for your dedication and meaningful contributions this year. This was our final slide before the Q&A. I will now hand over to the earnings call host for further instructions.
Operator: [Operator Instructions] The next question comes from Ludvig Lundgren from Nordea.
Ludvig Lundgren: So I have 3 and I take them one by one. So starting off on Life Science Solutions. You highlighted a slow academic spending here and it has been rather slow throughout 2025. But outside of this end market, it seems as if demand has been rather good actually lately. So I know you don't provide any guidance, but given that you have started talking about the slowdown in academic spending already I think in Q1 '25, is it fair to assume organic growth to improve from here looking into H1?
Maria Forss: As you say, Ludvig, there has been slow academic spending throughout 2025 and I think we as well as our peers, there are difficulties to make predictions about what's happening in 2026. The assumption from peers in the market is that the NIH budget cuts will not be further cut, but there will likely be a more stable situation during 2026, but it's still unsecured. So I think we will have to just see what the future has in its -- and see where things are going. But remember that we have normally a seasonally variation when it comes to Life Science Solutions where quarter 1 is usually our weakest quarter and quarter 4 is our strongest quarter.
Ludvig Lundgren: Okay. Very clear. And just a follow-up to that. Would you say that like looking this far into Q1, is the market, so to say, worse than what it was in Q1 last year when you like initially saw this slowdown in academic or is it -- it sounds like it's somewhat of the same market basically.
Maria Forss: I would say that this is the new normality and the market has adapted to that and there is -- there are no news that is making any more insecurities than before. So if anything, it's more stable than last year.
Ludvig Lundgren: Okay. And then I want to jump over to lab automation and you mentioned SLAS here and we saw a lot of like pharmaceutical companies announcing new AI drug discovery initiatives with Eli Lilly I think being the largest one that I saw at least. So I just wanted to hear like are you already seeing an effect from this on Biosero in terms of new project proposals and so on or is this more of a long-term growth driver for Biosero?
Maria Forss: I think we have -- if we split AI in machine learning that has been around for decades and the use of large language models, those are 2 different things. And overall, AI is something that supports our business model that we work with Biosero. So initially what we do with AI is to ensure that we can help our customers make more efficiencies by reducing their time that they are using for managing large amounts of information and complexity so they can easier reach their potential on automation. And for AI to work, you need a lot of data. Without data -- you cannot contextualize data; without that, you cannot make any good algorithms that help makes AI help you. And since we have been around for such a long time with Biosero and have so much data, we can then utilize that in advancing our different solutions forward. So AI coupled -- AI and data and software coupled with end-to-end lab automation, that is the large demand from our pharma customers when they are trying to get products to market faster and with a higher probability of success.
Ludvig Lundgren: Okay. Very clear. And then a final question from my side is on the OpEx side. I think excluding the one-offs here in the quarter, it seems to be down quite a bit both sequentially and year-over-year and that's despite of course Q4 being a high sales quarter so to say. So I just wanted to set some reasonable expectations here for '26. Is it fair to view this OpEx level here in Q4 as a new base or how should we look at the current OpEx level?
Jacob Thordenberg: Ludvig, I would say yes. I would say that the OpEx levels in Q4 are indeed sort of a good proxy and where we hope to stabilize. Some of the decrease that you see between 2024 and 2025 I believe is also related to impairments in R&D in 2024. So that's driving some of the decline in OpEx because that's included in OpEx. But in addition to that, we have also been cost conscious and made savings in 2025 and we are quite happy with the current cost base. We believe that we perhaps could do a little bit more, but not from sort of the elevated levels that we saw in terms of reductions in 2024. And the ambition going into 2026 is of course that we should be able and are able to scale on our current cost base.
Operator: The next question comes from Filip Einarsson from Redeye.
Filip Einarsson: I'll actually start with some of the recent news relating to the launch of GoSimple. Can you give some color or any immediate impressions on the launch?
Maria Forss: Filip, it's a very bad line. Can you please repeat the question?
Filip Einarsson: So my question relates to the recent news flow on maybe the launch of GoSimple. I'm curious if you could share some like immediate impressions on the launch and maybe provide some color on that.
Maria Forss: Yes, sure. So at SLAS in Boston where we launched GoSimple, both with instruments from Becton, Dickinson & Company and also Sartorius, there was a huge interest from customers, but also other potential collaboration partners. So we have quite a long list of other potential collaboration partners that want to do the same that we have now done with Sartorius and Becton Dickinson. When it comes to what the different sales leads will generate in terms of actual sales, that is something that is being followed up as we speak. So that I will know in a few weeks' time. But by just looking at the flow in the booth and the immediate feedback, it was a successful launch.
Filip Einarsson: Okay. Good. And just a short follow-up. Sort of from our point of view, when should we expect this to become a material part of the sales mix? Could you provide any sort of guidance there?
Maria Forss: I think overall in terms of the business case for GoSimple, it's a complement to balancing the portfolio with large and more complex projects. And I mean it takes some time before you can see effect of the sales given the sales cycles, but you should still think about the large complex projects being the largest revenue stream for Biosero and GoSimple is a complement to it for now.
Filip Einarsson: Okay. And I'm curious also, look, you talked about academia being headwinds obviously. But I'm also curious on sort of other customer segments. I hear from other actors in the industry that activity among biotech customers for example is improving. Is it your view as well? And could you comment on how that has progressed?
Maria Forss: I would say that the second half of last year, we saw increased demand in all different segments in essence as we commented: diagnostic increased, the consumables market continued to go well in terms of growth and so did lab instruments. So it's really the academia U.S. segment that has been muted while we see positive development in all the other areas.
Operator: There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.
Maria Forss: Thank you for the questions received and thank you for your continued interest and support in BICO Group. Together with Jacob, I wish you all a great Wednesday. Thank you and goodbye.