Earnings call transcript: CellaVision Q2 2025 sees solid revenue growth

CellaVision AB reported its second-quarter earnings for 2025, showing a solid revenue performance with 191 million SEK, driven by a 7.8% organic growth rate. The company’s stock saw a notable increase of 2.77% in pre-market trading, reflecting positive investor sentiment. Despite missing the revenue forecast of 193.7 million SEK, the company’s strategic initiatives and product innovations contributed to a favorable market reaction. According to InvestingPro analysis, CellaVision maintains excellent financial health with a score of 3.04 out of 5, labeled as "GREAT," suggesting strong operational fundamentals.

Key Takeaways

• CellaVision reported a 7.8% organic growth in Q2 2025.
• The company’s stock rose by 2.77% in pre-market trading.
• Gross margin remained strong at 68%.
• New product innovations, including a bone marrow module, are underway.

Company Performance

CellaVision’s performance in Q2 2025 demonstrated resilience, with a revenue of 191 million SEK, despite missing the forecast. The company’s focus on innovation and expanding its product portfolio has been a key driver of its growth, with a robust five-year revenue CAGR of 9%. CellaVision’s regional performance was particularly strong in the APAC region, which saw a 27% organic growth, highlighting the company’s successful expansion efforts in Asia. The company maintains a strong balance sheet with a current ratio of 3.69, indicating excellent liquidity to support its growth initiatives.

Financial Highlights

• Revenue: 191 million SEK, 7.8% organic growth.
• Gross Margin: 68%.
• Operating Expenses: 41% of sales.
• EBITDA: 60 million SEK, with an EBITDA margin of 31%.
• R&D Spend: Increased to 22% of sales.

Earnings vs. Forecast

CellaVision’s revenue for the quarter was 191 million SEK, slightly below the forecast of 193.7 million SEK. Despite this, the company’s robust organic growth and strategic initiatives contributed to a positive market reaction, as reflected in the stock’s pre-market performance.

Market Reaction

CellaVision’s stock increased by 2.77% in pre-market trading following the earnings release. The stock’s last close was at 180.6 SEK, and this movement highlights investor confidence in the company’s strategic direction and growth potential. Based on InvestingPro Fair Value analysis, the stock currently appears undervalued, presenting a potential opportunity for investors. The stock remains within its 52-week range, with a high of 302 SEK and a low of 147.8 SEK. Notably, the company maintains strong profitability metrics with a return on equity of 19%.

Outlook & Guidance

Looking ahead, CellaVision remains focused on innovation and expanding its digital ecosystem. The company expects potential margin improvements and plans to continue investing in its R&D efforts. The anticipated CE Mark for the bone marrow module by 2026 is set to open new market opportunities.

Executive Commentary

CEO Simon Ostergard emphasized the company’s commitment to innovation, stating, "We are an innovation company." He also highlighted confidence in the company’s strategic pillars, noting, "We have confidence across our strategic pillars."

Risks and Challenges

• Supply Chain Issues: Potential delays in component deliveries, particularly in China.
• Market Saturation: Challenges in maintaining growth amid competitive pressures.
• Macroeconomic Pressures: Economic fluctuations could impact sales and profitability.

Q&A

During the earnings call, analysts inquired about the potential of the bone marrow application market and the company’s R&D investment strategy. The management addressed these concerns, highlighting the significant market potential and the strategic importance of continued innovation.

Overall, CellaVision’s Q2 2025 results reflect a company on a positive trajectory, with strategic initiatives and product innovations driving growth and investor confidence. InvestingPro has identified multiple additional strengths, including strong cash flows and moderate debt levels. Subscribers can access the comprehensive Pro Research Report, which provides detailed analysis of CellaVision’s financial health, valuation metrics, and growth prospects among 1,400+ top stocks.

Full transcript - CellaVision AB (CEVI) Q2 2025:

Conference Operator: And to ask questions by dialing 5 on their telephone keypad. Now I will hand the conference over to CEO, Simon Ostergard. Please go ahead.

Simon Ostergard, CEO, Television: Thank you very much for the intro, and thank you everyone out there who has an interest in Television to hear our presentation for the second quarter in our fiscal year 02/2025. I have, our CFO, Magnus Blicht, with me, and we’ll be pleased to present and discuss the report today. The quarter in brief. Basically, we have categorized and labeled our report robust results and with mixed regional performance. So you can say it’s a it’s a report where we have we are reporting 191,000,000 SEK top line.

So it represents 2% growth equivalent to 7.8 or almost 8% organic growth given the headwind on the currency of around 6%. It’s a report, where or quarter where we have had significant contributions from APAC with some exceptional contributions. And then we’ve had, quarterly variations from Americas and EMEA given the nature of our of our business. But I will try and unfold that as as we progress. First of all, a few highlights on the progress of our strategic directions while executing the power of focus strategy.

We we actually on a number of, like, things, we have a lot of progress on the internal lines both in how we work commercially with our key partner, but also on our investment program into innovation and development. This quarter, we wanna highlight the progress we’ve made with the bone marrow module. The bone marrow analysis and and the clinical trials are, very close to completion. In fact, a number of the studies have have been completed. We’re continuing, certain clinical validations in The US.

And here, we are reporting pretty much as previously. I think previously, we’ve said that we expect the for EU, we expect our documentation to be reviewed by the notified body by the end of the year. And here, we we modify that and say at the beginning of two thousand and twenty six. However, this should still enable our commercial launch in Europe to begin in the beginning of of two thousand and twenty six. So things are according to plan, a little bit out of our hands with regards to the actual review, which includes the the the work with a notified body.

But good progress, and and it’s been a privilege to follow the program. And now we’re really excited to see the and and and we expect to get the approval. So that is exciting for us. We’re also in this quarter, as you know, those of you who have followed Television, we have invested significantly in our r and d and development efforts. And and here, we are highlighting that we’re actually coming out with, an upgraded software for our Celevision d I 60, our integrated system with Sysmex.

It contains both improved user interface and several new features, but it also offers seamless integration with the sis p Sysmex smearing and staining device SP 50. And it’s now, being compatible with our methanol free stain, our proprietary stain. So this is a very important milestone on our journey of doing globalization of our reagent portfolio. So those those were the the really appropriate highlights to emphasize in this quarter. Let’s go to the financial development.

So on on this somewhat busy slide, but very organized slide, you see our q two results spelled out from a p and l perspective, and you have comparison quarters from the last year year to date this year compared with year to date last year, and then the full fiscal year on the very high, right hand side for 02/2024. We will spend the most of our calories on on the first, column, or two. So I said organic growth of of, almost 8%, and a gross margin, which is lifted up against the comparable quarter last year. It’s lifted to 68%. So we’ve had positive contributions from from, somewhat from price increases, but also negative contribution from FX.

We have operating expenses of 41%, as a as a up against sales. That’s primarily a little bit more higher burn rate on the admin, complying with certain systems, regulatory wise, and also, and and slightly increased r and d spend as well according to our our strategy. So that gives us an EBITDA of 60,000,000 in sort of comparable with with the equivalent to to the comparable quarter and an EBITDA margin of 31% in line with our corporate objectives. I can unfold our r and d spend a little. It’s 22%.

It’s increased from 19 to 22%. And in in sort of actual numbers, we’ve spent 42,000,000, versus 36,000,000 last year in the comparable quarter. So here we have approximately 22,000,000, sitting in the p and l, and then we have 20,000,000 capitalized versus last year where we had 20,000,000 sitting in the p and l and and 16,000,000 capitalized. Cash flow wise, we have an operating cash flow of 58,000,000 this quarter. So we’ve had positive contribution from our working capital, 7,500,000.0, primarily due to the fact that we’ve driven down accounts receivable, and we’ve driven down inventory.

So that’s kind of a a shared contribution, if you like. On the investment side, I talked about the capitalized r and d, which is the 20,000,000, which is the majority of the 25,000,000 we have on on the investings investment side of of of our cash flow. And on the financial cash flow implications, we have minus 63,000,000, and that is pretty much 60,000,000 going to dividends of our shareholders. So that leaves us with a total, cash flow of minus 30,000,000, this quarter, which is somewhat stronger than the comparable quarter last year. Still a very healthy company from a financial perspective with hardly any debt, and, and we have, cash and bank equivalents of 155,000,000 sitting on the balance sheet as of as of today as of this quarter.

Let’s try and unfold the regional highlights on on the on the top line, what happens in Americas, EMEA and and and APAC. So for Americas, we had organic growth of 5%, so that was equivalent to 66,000,000. Say, we we had a pretty healthy contribution from our integrated systems, the d I 60. However, we had a softer contribution this quarter from from our d c one instrument sales catering for the smaller laboratories. Say our analysis is probably more related to internal matters on the diff line where we’ve been transitioning from from one smearing device where we’ve had issues to a more simple smearing device.

So so that has, impacted the the demand side. We still see continued progress in in expanding our market presence in Latin America and and especially in, in, countries like Brazil, where we see attraction for for the d c one instrument format. For EMEA, a little bit more modest, but also on on on the low side organic growth of 1%. So so we had 80 mil we were reporting 80,000,000 here. So a little bit mixed, large and small, but what is good to hear is that there is actually moment momentum across multiple countries.

Also, when we have the communication with our our key partner, there are there are orders coming in from from multiple countries, but, of course, a little bit soft sort of order placement, for installation. That is the nature between, getting the orders from the lab versus, the time of installation. And then I can talk to APAC where I would say a very strong APAC, 46,000,000 organic growth equivalent to 27% after the 5% currency effect there. There is a contribution, sort of, in general from from from APAC, but also an exceptional contribution since, strategically, we’ve been running a program where we are manufacturing the DI 60 out of China. As part of that process, we have shipped a number of components going to the made in China manufacturing line, which is is what you also see in our numbers with a little bit exceptional high, contribution from APAC and especially to China.

But, again, abroad, the integrated solution is is strong, and we have also, over the years, we have, you can say, centralized and and streamlined our commercial operations across APAC to really work closely with with our key partner, being Sysmex. But we have actually also expanded in Southeast Asia with with the resource, to help us and Sysmex drive growth in the region. So we’re still investment investing in the sales and marketing, also on the research side. Yeah. This chart sales per product group, that’s when we carve the, the the revenue, in product categories, instruments, reagents, software, and others, where others refers to, to our spare parts and our oil consumables.

And here, I think I already talked about the instrument dynamic, but but in general, this quarter, it is the large instruments that remains the significant driver. We do have some product mix within that category as well, but also across the small, instrument category as I alluded to. What I wanna highlight on the reagents is especially for EMEA. We have 20% growth versus the comparable quarter for hematology reagents. So hematology reagents and especially in EMEA where we have the majority of our sales is really growing healthy double digits, which is according to our strategy and and and good to see.

Again, our reagent expansion strategic pillar embraces both APAC and and The US. And for APAC, as you will see in in if you digest, some of the, the detailed numbers, then we are we are growing, the APAC, reagent. However, it’s still small numbers spread across multiple markets, but we are increasing with, from 1.5 to 1.8 and and and about a million in increase compared with two two point three million last year, year to date and 3.2 now. So it’s about a million we’ve withdrawn year to date, with the comparable quarter. So that’s that’s, of course, smaller numbers, but the big driver in APAC is is China where we are working on our distribution setup to to, eventually get into China and and combine that with our total offering as the only solution provider who can deliver both instruments, reagents, and superior softwares.

And for The US, I should also say, I mentioned the MCDH, now being available with our software upgrade. I think that is extremely strategically important that Milestone, it endorses for our opportunity to bring MCDH both, to to Europe, but, of course, also to The US where we, via Sysmex, have a large opportunity to improve, and and deliver a much much more environmentally friendly solution to the to the labs. So that is a key milestone that you will hear more about as we plan the big launch for autumn. Yeah. And the remaining part around software is is pretty much in line with our installed base and our instrument sales.

So let’s take the key takeaways. It’s a little bit rich, but I’m actually pretty proud of of what we are reporting on this slide. Again, we we see this mixed regional performance, but we see organic growth. There is some let’s call I I shouldn’t say seasonality, but there there is a function as to when when when are we hearing about orders at hospitals versus when we when we need to deliver. And if I look at the power of focus strategy and I I think about the strategic partnership that we have closed, we’re continuing to to, to improve, the way we work, and the way we work marketing wise, sales wise, sales support wise.

But we’re also investment we’re also increasing our engagement in the investment program and really making, some progress. And I think these these bullets these sub bullets speaks to to our progress. The clinical trials for bone marrow, are now completed for Europe, and and we we can really start to envision a CE mark. There is obviously insecurity around when you file before you get the actual approval of your documentation. However, we’re confident that we will have a CE Mark by the 2026 leading to our launch.

I have introduced today without sort of announcing the actual launch and and the content, But we’re very proud, and I’m very proud of the team who has actually done this, improved software version that we will launch, this year. And then I also wanna emphasize that our r and d spends entails the adaptation of of our our superior technology for your titigraphic microscopy, FPM, which we are lifting into our core hematology business and the next generation solution. So that is progressing according to plan. And and so is the continued exploration of our FPM in adjacent fields, such as pathology and cytology, where we’re also really refining and and improving the technology, and having external engagement and conversations around that superior superior and proprietary technology. So we do con continue to on our journey to continue pushing the limit of of delivering cutting edge solutions, reaffirming our market position, in in line with our strategic, plan.

So finally, I mean, before we we go to to question and answers, I think it’s a super special day for me and not at least for Magnus, our CFO. Magnus has decided to to to to leave television after twelve years. So this is actually your your final call. That’s right.

Magnus Blicht, CFO, Television: It is.

Simon Ostergard, CEO, Television: You’ve been there almost sitting here for 50 times, I guess. But, of course, I I wanna thank you so much for what you’ve done for the company and the journey you’ve been on from a very small to a midsized company where we are on a very interesting trajectory. I think with your capabilities, you will have all opportunities going further, but, of course, I wanna thank you also in this community where you work closely with multiple investors to thank you for for all you have done for the company. So thanks, Magnus. Thank you, Simon.

It’s been excellent twelve years.

: Thanks a lot.

Simon Ostergard, CEO, Television: Wonderful. And with that, I think it’s appropriate to open the mic and and have some questions for the ones who have not reached the beach yet. Thank you very much for listening in.

Conference Operator: If you wish to ask a question, please dial 5 on your The next question comes from Ulrich Trotter from DNB Carnegie. Please go ahead.

Ulrich Trotter, Analyst, DNB Carnegie: Thank you very much. And I hope you can hear me all right. A few short questions on my end. First being related to the deliveries to China. Did we consider this to be the inventory buildup and for this to be actually sequentially a little bit weaker in the coming quarters?

That would be my first question.

Simon Ostergard, CEO, Television: Thanks, Ulrik. I would say that’s a what you imply in the question, that’s probably a fair assumption. So we’ve shipped, multiple, components and modules, to to China, which is part of validating the manufacturing line, and they will be, targeted for the Chinese market. So so there is a we could expect a little bit of weakness coming from from that situation. However, we still see, demand from the Chinese market.

So, but but but the, the assumption is fair. Yep.

Ulrich Trotter, Analyst, DNB Carnegie: Great. Thank you. And and kind of a follow-up on that. In my mind, this sort of MaxEllavision combination and integration with the smearing device and the methanol free reagents is a bit ahead of time. And I guess it’s a big opportunity for you to grow globally with your reagents.

So kind of there are multiple questions here. How should we view this short term in terms of global ramp up of this? How unique is this product? And and thirdly, where does it stand in terms of pricing versus your your legacy products in terms of reagents?

Simon Ostergard, CEO, Television: Yeah. I think I think what we’re reporting here is is, also if we go, years back, at the Capital Market Day, we we said there was a there’s a prerequisite that needs to be fixed in order for us to actually run MCDH with with especially with Sysmex on the SP 50. And that is what we are reporting that that seems to be fixed by now. That’s a really a a milestone. So where we are is that we are we we can now start to do customer get customer feedback from the stains.

And so it doesn’t just drop straight into a launch plan, but the launch is not too far away. It is a function of and its decision also made by Sysmex, obviously, as to when and where. But but but the launch, for, next year is is is probably what you should be looking at. But it’s a major, milestone, and it’s a major opportunity now to finally, start considering and opening up the market opportunity in, The US where we hardly have any sales today. With regards to the

Ulrich Trotter, Analyst, DNB Carnegie: And just in terms of the yeah.

Simon Ostergard, CEO, Television: Yeah. With regards to the the pricing piece, that is that is a balance, and I I think I’m not gonna comment on that. That’s obviously also a a question we well, a discussion we have with Sysmex. It’s also a function of the final protocol in terms of the consumption of, the different regions where the specific COX lands. But it’s gonna be it can be a little bit adjustment to the pricing.

Of course, it comes with a higher value proposition than the classic stains, since it’s environmentally friendly. There’s also there’s improved waste management, and there is less service needed when you start running the RAL stains, including the methanol free. So there is an operational improvement, which should also be reflected in the pricing.

Ulrich Trotter, Analyst, DNB Carnegie: Great. And and last question on my end relates to these prolonged order cancellation times, which we have seen across the board for for Menti companies. Does it suggest how much of a, like, delayed or postponement are you experiencing based on sort of historical numbers?

Simon Ostergard, CEO, Television: Yeah. Yeah. Typically, we, we we’ve used to say that that from orders, are placed by by labs, then we even though it can take many years, then we’ve typically said two to six months. But now we’re we’re seeing we hear that it’s probably more two to nine months. So so there is a there’s a little bit more slack in in when the orders comes in and and then when is the, when is everything in line to actually do the implementation, when our resources at the laboratories, IT, etcetera, available for the actual implementation.

So that that’s a little bit, prolonged, but it’s not significantly, but but, but but it is prolonged.

Ulrich Trotter, Analyst, DNB Carnegie: Great. Thank you very much. And now, unfortunately, I didn’t have any questions for you, Magnus, but, thanks for for all the support throughout the years, and and good luck in your future endeavors.

Simon Ostergard, CEO, Television: Thank you, Ulrik. Appreciate it. Yeah. Thanks, Ulrik. The

Conference Operator: next question comes from Richard Romanius from Redeye. Please go ahead.

Richard Romanius, Analyst, Redeye: Hello. I had, some questions. Could you tell us the sales potential for the bone marrow, application?

Simon Ostergard, CEO, Television: Yeah. So the the the bone marrow application is is what we define as, it’s under the header of our specialty, analysis. So it’s analysis that are done. Actually, this is not done on the peripheral blood, but it’s done on the bone marrow samples. So it’s more of a specialty analysis.

And we believe that the market potential is close to 1,000,000,000 per year. And the that’s for the entire specialty segment, but the majority of that is actually the the biggest application or opportunity refers to bone marrow. So that is that is kind of, I would say, the majority of that number is is is bone marrow. It’s a it’s a market that sits in the large lab segment. So it’s a it’s a market where we anticipate we can target it or we will target it with our d c one platform.

So the instrument that has previously or is being positioned for the small lab segment, that will be the engine that will be targeted for the large lab segment, and then it will host the actual software application, the the the AIPs that classifies the different cells in bone marrow. So it’s an opportunity that sits in the large lab segment for the for the majority. That’s how we we we read the market and what we expect we where we expect we will generate the the revenue from.

Richard Romanius, Analyst, Redeye: Would you sell would you say this is an opportunity to the DC one instruments?

Simon Ostergard, CEO, Television: Yeah. Upsell, yes. It will expand the addressable market for DC one. I think I’ll phrase it in that way. Because all of a sudden, the d c one was designed for the small lab segment.

But given the fact that very few labs have have a high number of blood of of bone marrow samples, then it can actually easily accommodate the needs of bone marrow samples in the large lab environment. So so so there, it’s it’s really it’s it’s tying into the, to the large lab and and being an opportunity for the large lab to, standardize their work flow and save time when they do bone marrow analysis, assist their bone marrow analysis, which is a critical, analysis because this is actually the analysis where you typically you deal with leukemia, lymphoma patients. So it’s it’s getting into severe patient supporting severe patient diagnosis.

Richard Romanius, Analyst, Redeye: Yep. Very well. I had a modeling question, but I could rephrase it like this. You’re investing quite large amounts of money either through the costs or through R and D or through capitalization. But once these investments are completed, how do you think that will affect your EBITDA margin?

Do you think it will improve, or do you think you will always have a similar level of investment into into research and that will the investments will simply translate into better sales?

Simon Ostergard, CEO, Television: That’s a tricky one in terms of outlook. I I would say, though, that the the value creation we as an innovation company can come with I think there’s a strong value creation by actually investing in own programs. So I think the shareholders are very well off that we tie together, continue to develop and innovate. I think that’s that is what we are proving with the power of focus strategy where we, over the years, have increased our our spends. But but now we’re actually starting to see things come out of it.

So I I think it’s important for us to stay faithful to the innovation profile and and that translate into investments. However, I would also emphasize that we are in a phase where we have invested on multiple strategic pillars, which has increased our our investment profile significantly. There is a scenario where we can take that down a little bit. However, we are looking to invest in new things in our road maps after having completed what already sits there. So I I don’t wanna send the expectation that we just get through and then we have this based on what whatever innovation we have.

Having said that, I’m cautiously saying that, hey. We we we know we’re at a high level, and we could potentially, bring it down, but I re I really wanna, reserve and be transparent to the shareholder, to the shareholder community that we are an innovation company. I think that’s why our if you like, it is about driving the innovation. This is why we’ve been successful, so we shouldn’t leave that profile. But there can be a little bit of a, let’s call it, a financial upside, given the fact that we’re in a historical situation right now.

That was a little bit wordy, but I hope I hope you understand my my perspective here.

Richard Romanius, Analyst, Redeye: Yeah. Yeah. It certainly makes sense. Perhaps a bit a bit of both how we interpreted it as a bit of slight margin improvement, but also I think sales trajectory would be my Yeah. Understanding.

But could you say also how much or or rather rather, can you capitalize any of the investments going into the FPM project?

Simon Ostergard, CEO, Television: Yeah. So I think it’s it’s twofold. We capitalize investments that goes into into FPM on the hematology analyzer that we’ve we’ve we also hear on the actual slides where we’re talking about the adaptation of FPM for for the our core hematology business. That is capitalized because that is due to the maturity level of the program. However, if we we have activities on FPM where it’s more immature or where we refine at the you can say it’s before development.

It’s more in the innovation phase, the feasibility testing. That is not capitalized. That is sitting in the p and l right away. So we have a development model where we after a certain stage gate, then we start capitalizing. But certain prerequisites needs to be in place in order for us to to capitalize.

So that’s really how you should review it. So it’s a little bit of a mixed bag, but the majority of the program is on the hematology side, and that is capitalized. Magnus, Magnus, will correct me if I’m off I’m nodding here. You can’t hear it, but I’m nodding here, and I agree with what you say. So Sure.

Richard Romanius, Analyst, Redeye: Okay. Last question. You have a quite healthy balance sheet, cash, 55,000,000, very limited loans. Why do you maintain this position instead of, let’s say, paying it out in dividends? Are there any potential uses like acquisitions?

Simon Ostergard, CEO, Television: It’s a great question. And it’s obviously also a discussion ongoing discussion, I should say, we have in the boardroom as to how to leverage our financial situation. As you can hear, we are we are very cognizant that that that the key value driver is actually investing on our own programs. In terms of acquisitions, we acquired the FBM technology. We acquired the RAN diagnostics.

That were two, we, believe are really long term attractive and and successful acquisitions. So we are not refusing that, oh, if there is technology that comes along or other opportunities also supply chain wise, there can be opportunities where to expand our business. We may pick up, something on that along those lines. But it is also important for me to emphasize that the vision we have with the power of focus strategy is building the digital ecosystem. So everything has to work within our current solutions, which makes it a little bit more difficult just to plug and play something from the outside.

And and this is also part of the where television has been successful in in building something that really works. We see that also from, from entrants coming into this field that it’s not easy to make things work, which is why m and a targets, there are not that many that fits into our core hematology strategy. But outside and supply chain wise, there could be opportunities. And this is where we’re we’re we’re well suited to to onboard such an acquisition if we see someone is is fit.

Richard Romanius, Analyst, Redeye: K. Perfect. Thanks for answering my questions.

Simon Ostergard, CEO, Television: Thanks, Richard.

Conference Operator: Next question comes from Ludwig Lundgren from Nordea. Please go ahead.

Magnus Blicht, CFO, Television: Yes. Hi, Simon and Magnus.

Simon Ostergard, CEO, Television: Hi, Ludwig.

Magnus Blicht, CFO, Television: First, I wanted to continue a bit on the Rickard’s question on R and D costs. So R and D was $43,000,000 here in Q2. And is it possible to quantify about how much of this relates to the bone marrow application? And then if you have any external costs here at the end of this project that might disappear when you launch this product.

Simon Ostergard, CEO, Television: Yeah. Ludwig, I I I think the I can I can start answering a little bit overall? The, the actual, cost for the bone marrow has been has increased given the fact that we are using external labs for the clinical validations. So the burn rate for the for the bone marrow program in these last two quarters ish have been somewhat higher, I would say. I’m not sure we dissect our cost base at the project basis, so I I’d probably be a little bit cautious in doing so.

But, but it has been, and and and I should also emphasize that all the costs related to bone marrow that we use they they have been capitalized. But it’s a it’s a significant program. It’s a significant program. It’s it’s it’s it’s not just a small thing, which is also why it has taken us three years to to bring it out.

Magnus Blicht, CFO, Television: Okay. Great. So, yeah, I assume then that a significant part of the the increase here on the capitalized side then relates to to these external programs.

Simon Ostergard, CEO, Television: Yeah. It’s really it’s external. It’s a ramp up on the bone marrow, but it also entails a ramp up on the on our other investment programs. And you can see them here. We also emphasizing the fact that we’ve met a a big step milestone on our software, upgrades that will be launched in autumn, and we are pursuing our next gen.

So they are also, maybe, I’d say, incrementally, you’re right. The majority could be, bone marrow. That that’s that’s a fair assumption, actually. But but the others have also increased a little according to my to to the details.

Richard Romanius, Analyst, Redeye: Okay.

Magnus Blicht, CFO, Television: Perfect. Thank you. And then I want wondered a bit about funnel activity here during the quarter. And if you’ve seen any change in customer behavior throughout the quarter or if that’s been it has been stable throughout this month?

Simon Ostergard, CEO, Television: Relatively stable. We hear, sort of despite a quarter that’s sort of political has been very unstable, then we haven’t actually, gotten feedback that it has transferred into significant instability in terms of order placements, along the lines of what we saw in q three, q four when we had the presidential elections. We we’ve heard nothing about that, basically.

Magnus Blicht, CFO, Television: Okay. Thank you. And then final one, wondering about this software upgrade for for the AI 60 that you mentioned. How will the sales process look for this? And is there a significant price difference compared to to to the software that that you currently have have for this product?

Simon Ostergard, CEO, Television: Now the the sales model so this is our integrated product with Sysmex, so that will continue according to that. However, the the user experience and also the several new features, including, you you can say, a more tight integration with with Sysmex will make us more competitive also in accounts where they are about to replace, then this will be a very attractive product upgrade in order to replace and choose another d I 60. So you could see it as a life cycle management move with significant customer value. That’s how you should look at it.

Magnus Blicht, CFO, Television: Okay. So so mainly to new DI six installations then, I suppose.

Simon Ostergard, CEO, Television: And and and to new accounts. It will be even more attractive to to choose it. So so but I’m just what I’m saying is that, of course, it will lift significantly also for, for accounts who has been running, or who’s changing the dot line. Here, they will actually get, more customer benefits.

Magnus Blicht, CFO, Television: Okay. Great. Those were my questions. So, yeah, good luck to you, Magnus, and thanks for the help, all the help during this year.

Simon Ostergard, CEO, Television: Thank you, Ludwig. Yeah. Thanks, Ludwig.

Conference Operator: The next question comes from Bobby Poir from Liantrust Asset Management.

: Hopefully, you can hear me.

Simon Ostergard, CEO, Television: Yes, very well. Thanks.

Richard Romanius, Analyst, Redeye: Yes. Brilliant. Thank you very much

: for the presentation, Simon, and congratulations on great twelve years, Magnus. I just had a question on your comment on small labs where you’ve seen a bit of softer demand in The U. S. I just wondered if you could give a bit more detail on the drivers of that and whether that’s just been a phenomenon you’ve seen in The Americas in the quarter or other regions too. Thank you.

Simon Ostergard, CEO, Television: Yes. Sure. No. We’ve been a little bit exposed given the fact that we’ve had issues with one of the components in what we call the diff line, and that is the smearing component, where we’ve had some inconsistencies. So we’re doing a root cause analysis on on this smearing device.

That is kind of what has hindered that has impacted our our DC one sales. That’s how we analyze the situation. So you should see my comment as more of an internal thing affecting the customers rather than a switch in demand for the the DC one. So so that so so this is an internal matter that we are we are searching for the root cause, also with the mitigation strategy. You have a more simple smearing device, which we already have, which will be positioned together with the, the stain box and and the DC one.

So that’s kind of how we should look at it. And that has Absolutely.

Richard Romanius, Analyst, Redeye: Thank you.

Simon Ostergard, CEO, Television: I should add, that that has impacted the The US the most since we historically, we’ve seen, the small lab market being, very attractive for the DC one, and it still is, given the IHN network structures of hospitals, which we also see in Europe, but not to the same extent. So so this is why our numbers in The US have been more affected than than in in Europe.

Richard Romanius, Analyst, Redeye: Brilliant. Thank you very much, And

: then I just had a second question just on, I think you mentioned pricing had been a positive contributor in the quarter. I was wondering if you could talk through your your pricing strategy for this year compared to, last year. It’d be great. Thank you.

Simon Ostergard, CEO, Television: Yeah. So, essentially, the the the pricing, for the majority of the it’s it’s we do annual price adjustments. And the reason why you can say we don’t have the full impact of the price adjustments in in in q two is that everything that has booked for delivery in in q two but has been placed prior to q two operate is is is is charged based on the old pricing scheme. This is why the full impact typically of of the price adjustments that takes place as per April 1 comes into effect in in q three. That’s kind of the the dynamic, and that is for for the majority of our business.

We do have multiple contracts also on the reagent side and so forth. But I’d say in general for the instrument side, given the fact that also we we are serving the most of our business goes via ISSMICs, then that that is the main contributor. And the timing of the price increases is the same this year as it was last year? Yeah. That’s right.

: Thank you so much, guys.

Simon Ostergard, CEO, Television: Pleasure. Thanks for the questions.

Conference Operator: There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

Simon Ostergard, CEO, Television: Yeah. Thank you very much, and and thank you everybody out there listening in. We appreciate your your interest in television, as you know. Again, my closing comment is is really, today, we are reporting robust results with regional performance. I think what I reflected upon is that the three years after communicating the vision of of Television, which we captured in the power of focus strategy three years ago, I’m extremely proud on behalf of the team to say that now output is really starting to to get out there.

We are starting to unfold the the many investment programs we have internally. So even though there are always insecurities and and and things when you deal with regulatory approval and sort of so forth, we have confidence across our strategic pillars that we will, make a difference and and launch really superior, contributions to our to our winning, ecosystem. So thanks again for, for the continued attention, as I said. Also, thanks to all our staff for making, this happen. You all deserve a very, a very good summer break, and I’m I’m sure the ones on the call also deserve a summer break.

So, finally, thanks to to you, Magnus. You certainly also deserve a summer break. We, we will, be back here in in autumn. I think we have our next call on November 6 where we report on the on the q three results. We will do a lot of hard work before then.

But for now, I wish everybody a great summer, and take care out there. Thanks.

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