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Introduction & Market Context
BICO Group AB (STO:BICO) presented its Q2 2025 earnings results on August 19, 2025, revealing significant challenges across its business segments. The company’s stock plunged 21.58% following the presentation, closing at SEK 27.40, reflecting investor concerns about deteriorating performance metrics and ongoing operational issues, particularly in the Lab Automation segment.
The presentation, delivered by CEO Maria Forss and CFO Jacob Thordenberg, highlighted persistent macroeconomic headwinds affecting the life sciences sector, including NIH funding cuts and tariff uncertainties that have hampered demand and delayed capital expenditure investments across the industry.
Quarterly Performance Highlights
BICO reported net sales of SEK 324 million for Q2 2025, representing a substantial decline from SEK 423 million in the same period last year. The company posted negative organic growth of 17% and an adjusted EBITDA of SEK -49 million, resulting in a negative EBITDA margin of 15%.
As shown in the following chart of quarterly sales development, BICO has experienced a concerning downward trend over the past year:
The adjusted EBITDA margin has similarly deteriorated, falling from positive 5% in Q2 2024 to negative 15% in the most recent quarter, as illustrated in this chart:
One of the quarter’s key developments was the agreement to divest MatTek and Visikol to Sartorius for USD 80 million on a cash and debt-free basis, a transaction that closed on July 1, 2025. This divestment, which follows BICO’s updated strategy focusing on lab automation and workflows, corresponds to a 2024 sales multiple of 3.7x and an adjusted EBITDA multiple of 15.3x.
Detailed Financial Analysis
The company’s financial performance was severely impacted by challenges in the Lab Automation segment, which experienced a 58% decline in organic growth. This segment generated only SEK 48 million in sales, down from SEK 130 million in Q2 2024, and posted an adjusted EBITDA of SEK -56 million, resulting in a negative EBITDA margin of 116%.
The following chart illustrates the significant impact of project delays in the Lab Automation segment:
According to management, the poor performance in Lab Automation was primarily due to fewer project starts and delays in Biosero, which necessitated a re-estimation of remaining project hours, resulting in a negative impact of SEK 40 million. The segment was also affected by a tough comparable quarter, as Q2 2024 was boosted by a large order won in December 2023.
In contrast, the Life Science Solutions segment showed relative stability with sales of SEK 277 million and modest organic growth of 1%. This segment generated an adjusted EBITDA of SEK 19 million, translating to a 7% margin.
The performance metrics for the Life Science Solutions segment are illustrated in this chart:
Cash flow from operating activities was SEK -28 million, including a positive effect from changes in working capital of SEK 29 million. Total (EPA:TTEF) cash flow during Q2 was SEK -54 million, with cash reserves standing at SEK 636 million by the end of the quarter.
BICO has made significant progress in improving its working capital management, with Net Working Capital to LTM Sales ratio decreasing from 24% in Q2 2024 to 11% in Q2 2025:
Strategic Initiatives
In response to the challenges in the Lab Automation segment, BICO has implemented a comprehensive action plan to enhance processes, leadership, and operational capabilities at Biosero. These transformative actions include:
1. Strengthening management and executive resources on-site at Biosero’s headquarters in San Diego
2. Increasing contract stringency and employing a gate stage project model
3. Investing in operational resources to accelerate the closing of delayed projects
4. Implementing standardization to scale the business and introducing new commercial concepts with shorter lead times
The company has also reorganized its business structure into two distinct areas: Lab Automation and Life Science Solutions, as shown in this overview:
This reorganization aligns with BICO’s strategic focus on lab automation and workflows, as evidenced by the recent divestments of MatTek and Visikol.
Forward-Looking Statements
Despite current challenges, BICO remains committed to becoming "the first-choice Lab Automation partner and provider of selected workflows to pharma and biotech." The company highlighted encouraging signs in the diagnostic market and noted that operational initiatives in SCIENION have resulted in healthy growth and profitability.
Management emphasized that while the transformation in Biosero requires investments in operational resources, there is a continued focus on structural cost reductions and tight expense management going forward. The proceeds from the MatTek and Visikol divestment are expected to significantly strengthen the balance sheet, providing financial flexibility as the company navigates through its operational challenges.
However, BICO acknowledged that macroeconomic headwinds and uncertainties remain persistent, with NIH funding cuts and tariff turbulence continuing to affect demand and capital expenditure decisions across the industry. The company’s ability to successfully execute its transformation strategy in the Lab Automation segment will be crucial for reversing the negative trends observed in Q2 2025.
Full presentation:
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