Medistim Aktie

Good morning, and welcome to this presentation of Medistim Third Quarter and year-to-date September 2026 financial results. My name is Kari Krogstad. And together with CFO, Thomas Jakobsen, we are here to take you through the results. As always, we like to start with a little reflection on Medistim's track record. We've had the goal and ambition over time to deliver profitable growth. And as these nice graphs are showing, this is exactly what we have been doing. An update to this slide this quarter is actually on the dividend side, which we can also see has been pretty consistent over the years. But this quarter, we're introducing a quarterly dividend for the first time. So we're adding NOK 2.50 per share in addition to the NOK 8 per share that we paid out earlier this year, and we'll get back to this.

So let's get into this quarter's presentation. I will start with going through the highlights. Thomas will take us through the detailed financial statements. And then I will get back to commenting on the various business segments. And today, I will talk a little bit about the patent study as part of our implementing the strategy section. So I'm very happy to be able to present a new sales record for a quarter for Medistim, this quarter, delivering NOK 210 million sales revenues, which is a 25.9% increase over this quarter last year. And as we can see from this table, we do see a negative currency effect here. So when we are adjusting for this currency effect, we see that the currency-neutral sales development on the total sales is actually showing growth of 31.5%. Our own products sales is up 34.6%, currency neutral, and we can see strong contributions from all our sales regions. Americas growing 51.7% this quarter, Asia Pacific growing 44.6% EMEA also growing 5.5%.

In addition, we're seeing a normalized growth from the third-party products this quarter at 5.3%. Then looking at the profitability at the EBIT level, we are delivering NOK 63.1 million, which is 55.7% growth over the same quarter last year. And this means that we are delivering an EBIT margin on the high side at 30.1%, of course, driven by the strong sales of our own products. We are seeing that this quarter, we have a net tariff payment effect of NOK 2.7 million. And this is based on both the tariff that is applicable to this quarter and this period, but also the refund that we have received of NOK 2.7 million. I'm sure that Thomas will comment further on this. And as alluded to, the Board of Directors resolved yesterday to pay a quarterly dividend of NOK 2.50 per share, totaling NOK 45.8 million under the authorization granted by the general assembly.

Then moving on to the highlights for the year-to-date period. And again, of course, with 3 sales record quarters behind us, that also gives us a new record for this period, surpassing NOK 600 million for the first time. So NOK 613.7 million in revenues, 18.6% growth. Again, a negative currency effect here. And when we are adjusting for that, we are seeing that the total sales for Medistim is up 23.6% so far this year. And the own product sales growth is very strong at 30.1%. Again, all the regions are contributing strongly. Americas growing 35.1%; Asia Pacific, 45% and EMEA, 12.5%. The third-party product portfolio is down 13% in the period, which is, of course, related to the very strong sales we had in the beginning of 2025. Then looking at profitability at the EBIT level, NOK 185.5 million in operating profits. That means a 20.6% growth so far this year. And that also gives us a strong EBIT margin at 30.2%, if we dive into the operating expenses, we see that, of course, growing the business also comes with needs for further investments, and we're seeing higher commercial activity.

We're seeing the effect of having added a new direct operating team in Japan and also ongoing IT system migrations to the cloud, a project that has been ongoing for some while is increasing the operating expenses. So with that as highlights, I will leave it to Thomas to take us through the financial statements.

I will take us through the P&L and financials for the third quarter and year-to-date September. And we start with the P&L. I will not go in detail into the sales revenue line. Kari will take us through that in more detail related to both product and split of geography. What we do notice for this quarter is the improvement in gross margin going from 81.5% to 84.5%. And that despite the fact that we now are booking tariff expenses for all transactions that we import to the U.S. As Kari mentioned, we have received a refund of the first tariff that was set into place in 2025, which was deemed law fall.

And some of those have been refunded in the third quarter and around NOK 2.7 million was refunded and is booked as a reduction in cost of goods cost of material in the third quarter. Having said that, we have also booked an expense of NOK 5 million with the existing valid tariffs. So that means that the net tariff expense for this quarter is around NOK 2.7 million. So -- and that is also a part of why we have somewhat improved gross margin. But the main reason is the strong sales we experienced and the continued growth in Norwegian krones of sales in the U.S. So that is the main explanation of why we go from NOK 81.5 million to NOK 84.5 million.

And just as a reminder, in 2025, in the third quarter, we had no tariff expense since we had shipped goods to U.S. before the tariff was valid and was selling from inventory, which was not affected by the tariff. Going further, salary and also expenses increases from NOK 60.3 million to NOK 67.8 million. Two major things to mention here. One is the direct organization in Japan. We did not have that in place in the third quarter last year. And we also had exceptionally good quarter sales-wise, especially in the U.S., and this affects, obviously, the commission and bonus schemes for the sales team in the U.S. in a very positive way. And therefore, the expenses increases.

Other operating expenses also increases with NOK 10 million. There are a lot of activities going on at the moment. I can mention the patent study, which is speeding up compared to where we were last year. We also have the IT infrastructure project, which has been expensed in this quarter. Having said that, we are now about to go live or in October, we went live on parts of this project. So we do expect that going into 2027 that these type of expenses will no longer be there. But we still have these expenses going into the fourth quarter. Also, the direct operation in Japan was not present in the third quarter last year and has given us additional expenses. And in addition to that, 2 other things, high activities related to our commercial operation, but also a higher agent commission. We do have agents in the U.S. and also at times, agent commissions in Asia Pacific.

So those are the main explanations for why we have a higher other operating expenses for this quarter. Even so with higher expenses, and we do experience a solid improvement in EBITDA percentage from just under 28% to 33.6% and EBITDA ends at NOK 70.6 million. Depreciation increases, and this is because of our INTUI cardiac software, which now are being depreciated. Having said that, we are still doing a lot of development work on the INTUI software, but that's related to Vascular. EBIT ends at a solid 31%, up from 24.3% last -- same period last year and ends at NOK 63.1 million. Net finance is negative. This is currency related. Last year, that was very positive and also currency related ended at NOK 5.4 Profit before tax for this quarter ends at NOK 61.8 million. Profit after tax ends at NOK 47.8 a 37%, 38% increase compared to same period last year. So a solid quarter.

Year-to-date numbers, first time after 3 quarters that we are over NOK 600 million in revenue. Also, when it comes to the gross margin, we are maintaining gross margin at the same level as we had last year at 82.1% despite the tariff that we have in the U.S. In total, we have expensed NOK 12.5 million of tariff expenses year-to-date September. And as we communicated earlier, the price increases in U.S. would compensate for the additional expense that the tariff would give us. Salary and social expenses, we have the same type of explanation as for the quarter, only higher numbers. This is also the case for other operating expenses. It's the same type of activity that drives the expenses to a higher level compared to last year. EBITDA ends at 33.4%. That's more or less in line with the accumulated numbers last year, which ended at 33.2%. EBIT ends at 30.2% versus last year, 29.7% and the operating profit increases from 150 -- just under NOK 154 million to NOK 185.5 million. So this is also a record operating profit-wise after 3 quarters.

Net finance is negative. Norwegian krone is strengthening towards U.S. dollars and euro, and that's why we get a negative effect of NOK 3.2 million. Profit before tax ends at NOK 82.2 million and profit after tax ends at NOK 140.3 million, up from NOK 121 million last year. Going further to the balance sheet, intangible assets increases. We have 3 major projects that contributes to that. It is the PATENT project, it's the INTUI project and also our IT infrastructure project. Inventory levels are still high, although lower than what it was at the same time -- same period last year. But again, we are securing critical components, and we expect going forward to have high inventory levels as well.

Accounts receivable are increasing due to higher sales. But at the same time, we are improving our cash position quite positively going from NOK 100 million by the end of Q2 to NOK 175 million -- NOK 175.6 million in -- by the end of the third quarter. And as Kari mentioned, the Board has authorization to now decide quarterly dividend, and they did so at the Board meeting yesterday and a dividend of NOK 2.5 per share, which is a total payment of just under NOK 46 million will then be paid out to our shareholders, and that payment will be in early November. Looking at equity liability, we have, as always, a solid balance sheet with equity more than 71%. Our obligations or long-term liabilities is related to lease contracts and extended warranties. So we have no interest-bearing bank debt as such. And therefore, we have a very solid balance sheet in total with a very high level of equity.

Earnings per share, some key figures. These earnings per share numbers obviously develop in line with the profit and the positive development in profit. Earnings per share ends at SEK 2.61 for the quarter and NOK 7.67 year-to-date. Cash flow, very positive cash flow for this quarter and cash from operation ends at positively at NOK 91.5 million. In addition to strong profit, we also have a change in working capital from -- going from the second quarter into the third quarter, which gives a positive contribution.

Although if we look at the year-to-date number, we do have an increase in working capital, so -- which then affects cash flow from operation negatively and cash from operation year-to-date ends at NOK 146.5 million. Investments are related to the projects I just talked about. And after payment of dividend in May, net cash year-to-date is negative with NOK 36.4 million and going -- and we're then going down from NOK 112 million to NOK 175.6 million in cash by the end of September. But looking at the change from the second quarter to the third quarter, it's a very positive cash development where net cash increases NOK 75.5 million, going from NOK 100 million to NOK 175.6 million. And with that, I give the word further on to Kari. Thank you.

Yes. So let's go through the various business segments here. And starting with the unit sales of our Flow and Imaging systems. So the Flow and Imaging Systems is our flagship product, definitely. And it's a very unique product. We have no competition on this type of product out in the market. It's the highest value and therefore, also highest priced product that we're selling. So of course, success in growing utilization and also new customers for this technology is vital for Medistim. This quarter, we're seeing 27% increase in the number of Flow and Imaging systems compared to this quarter last year. And we're seeing that Americas is really taking the lead here with significant growth in number of units for the quarter. We also see that Europe, Middle East, Africa is showing growth here, while Asia Pacific in this quarter is down by 4 units.

But of course, when we see continued high-volume sale of this high-value product, this drives revenue, especially when the growth comes from the Americas, where we are getting the best prices. So this is something we are very happy to see. Imaging probes, so the probe that works together with this Flow and Imaging Systems. This quarter, we are seeing strong quarterly sales in Americas, which is increasing 30% in units.

In the same quarter, Asia Pacific and EMEA is down with some units. So this points to quarterly variation that we're seeing, I would say, in all product categories and in all regions from quarter-to-quarter and something that we need to keep in mind. If we move then further on to the Flow-only systems in unit sales, here, we're also looking at a healthy 22% increase in number of Flow systems sold. Americas is down by 3 units, of course, directly related to the very strong growth in the Flow and Imaging units that we just talked about. Asia Pacific at the same level as last year, while EMEA is showing a good quarter with growth of 8 units. Flow probes in unit sales growing 8.7% this quarter.

This quarter, Americas is seeing a slower quarter after several quarters of growth. Asia Pacific, on the other hand, showing very strong uptake on the probe sales, reminding that this sales is going through the distributor network in China and not necessarily directly out to the end users. EMEA is at the same level as last year, but overall, 8.7% growth. Looking a little bit on the -- look at the business from the geographical side, starting with Americas, delivering NOK 116.9 million in revenues for the quarter. And then looking at the currency-neutral growth, that is 51.7%, so extremely solid. We saw that we have shown very strong sales in Flow and Imaging Systems, also with very high following sales of Imaging probe. This is, of course, the main reason and explanation why we're seeing this tremendous development for the quarter.

We also pointed to weaker unit sales on Flow probe systems and PPP lease procedure sales, but this is also partly compensated by price increases. U.S.A. is accounting for about 95% of revenues from Americas. Canada is accounting for 4.5% and was increasing 65% in the quarter. So South America, Latin America is a very, very small region here. Diving a little bit further into the unit sales development in the U.S.A. First, starting with the system volumes. We saw that we had growth in units, especially on the capital sales. And for the quarter, we have then sold 19 units, a solid growth over the same quarter last year, and we're pretty flat for year-to-date. But year-to-date, we are seeing the effect of the increased flow and imaging unit sales. So not only good for the quarter, but also positive -- very positive year-to-date. When it comes to total flow procedures, so we are seeing a negative development for the quarter, already alluded to the former quarters where we've seen a very solid growth. And year-to-date, we are looking at a 14.1% growth in number of flow procedures.

Also when it comes to imaging procedures, seeing solid growth for the quarter and also for the year-to-date. There is a lot of quarterly variations, and I think it's very important that we are always keeping the longer time periods in mind. And as the graphs are showing the number of cardiac and vascular flow procedures sold per year in the U.S.A. has been growing very nicely, both on the cardiac side and on the Vascular side, a little bit stagnation there on the Vascular side, which is related to both the dynamics around the INTUI on cardiac and not being available for Vascular and Ultimate systems so far, getting back to that later on.

Asia Pacific, NOK 33.6 million in sales, currency-neutral growth of 44.6%. It's definitely China that is driving this growth. A very strong quarter, 59.5% growth for the quarter, reaching SEK 17.8 million. The sales are going through the local Chinese distributors, and we have to expect quarter variations. So I will not commit to this level of growth every quarter. Very positive to see that Japan is starting to deliver. As we said in the former quarter, we are busy developing the pipeline and have now started to sell the first systems into the customers in the Japan market.

So 35.7% growth, NOK 9 million this quarter, and we are building momentum into the next quarters. We see a weaker quarter sales from the other Asian distributors, down 8.4% this quarter. But looking at year-to-date figures, we're up 41.6%. So again, its very important to always keep in mind the longer period development. Europe, Middle East and Africa delivered NOK 36.9 million in sales, currency-neutral growth of 5.5%.

A good quarter for our direct markets, Spain, Germany, U.K., Scandinavia together delivers 14.8% in NOK for the quarter. Sales through distributor decreased 17.5% for the quarter, but year-to-date, it's a similar growth actually. So again, always keep that in mind. Third-party products, as already mentioned, 5.3% growth for the quarter. So that is taking this part of our business back to a more normalized growth rate. And the third-party product portfolio sales is now making up around 11% of the total Medicine revenues. So summarizing, we are seeing that the total Americas region grew 40.6%. This is then in NOK, so it's not currency neutral.

This is in Norwegian currency, 40.6% for the quarter. You see that U.S.A. is definitely the driver here, but Canada is also contributing. And we're also seeing very positive development for the year-to-date period. Asia Pacific, 33% growth. You see that China is the driver. Japan is now coming as a great contributor for the third quarter. The year-to-date figures have not caught up yet. And then we see that the rest of Asia Pacific, the distributors had a bad quarter, but are delivering very well for the year-to-date period.

EMEA in total, flat for the quarter in Norwegian currency, showing 7.9% year-to-date. And here, we see that it's Europe that is really driving the development this year, while Middle East, Africa is a little bit behind. So this in total, brings the total sales to the 25.9% growth for the quarter and 18.6% growth for year-to-date September. Taking a look into the split of our cardiac versus vascular product portfolios. We see that we have very strong cardiac segment sales in this quarter. So 35% growth in the cardiac product portfolio, also 31.4% year-to-date, so definitely driving this. And now it's starting to see that most of the -- or more and more of the systems that we're selling is with the INTUI software inside on the cardiac side.

So 39% of all the MiraQ Cardiac systems sold this quarter was with INTUI side. If we look at the U.S.A., in isolation, as much as 80% of the systems were with INTUI side. So this will, of course, only continue to grow until all of our new sales of Miracle Cardiac Systems is with INTUI side. We're seeing the flat development on the Vascular Surgery side. And as also explained in the second quarter presentation, this is reflecting a temporary product mix effect, not a shift in underlying demand.

And we are accounting this to the customers, some of them who would otherwise have gone for an ultimate system now have been choosing a cardiac system with the INTUI software, and that impacts the sales recognition since sale of Ultimate system is divided 50% to cardiac and 50% to Vascular. So this is a temporary effect. If we look at the total sales of our own products split into the Flow portfolio and the imaging portfolio, we see that the Flow product is growing 15.4% 22.2% year-to-date. But we are seeing that the imaging product portfolio is really coming back as the big growth driver for us, which is something that we really like to see, 57.9% for the quarter and 28.6% for the year-to-date period. And while we have pointed to that it's really U.S.A. who is driving this growth, we are seeing growth on the imaging products in all the regions.

Closing off now with just looking at the split between recurring and capital revenue, and we are defining recurring revenues as revenues from sales of Flow and imaging probes, PPP smart cards and also lease contracts. And we see that for the last 12 months period, the recurring revenues makes up 68% of the total. Then I would take the opportunity to this time talk about vascular surgery and our strategy to build a position within vascular surgery. But let me start by emphasizing how important engagement with surgeons and key opinion leaders is to build awareness, generating interest and ultimately driving adoption of our technology. And here, we can see the growth in publications featuring Medicines technologies over the years across cardiac, vascular and transplant surgery, so steadily growing. And the surgical community is truly global with surgeons collaborating, sharing experience across borders. And this is reflected in the geographical distribution of the publications. And we see that Japan, the United States, Germany and China is leading the clinical research.

And when we compare the annual number of publications with our sales revenues, yes, it seems to be some kind of correlation here. So this is just to stress how important the clinical projects and collaborations is for developing our business. It's really our key marketing investments. I'd also like to highlight the REQUEST study, a registry study published in 2020 that demonstrated the clinical value of combining flow measurement with high-frequency ultrasound. For graft assessment during CABG surgery. And this study showed how our technologies provide real-time guidance prompting surgeons to change their planned surgical approach in as much as 25% of the patients.

And the REQUEST study also reported a very low rate of adverse events, and this study has played a pivotal role in driving the adoption of imaging. And it's a similar transformation we aim to drive in vascular surgery through the PATENT study on peripheral bypass. And peripheral bypass is our #1 target segment within vascular surgery because it's a sizable market segment, and it's a market segment where both the flow measurement and the high-frequency ultrasound are really important technologies and tools to help in this surgery.

So peripheral bypass is a revascularization treatment for patients with critical limb-threatening ischemia, CLTI. And the purpose here is really to reduce the risk of having to amputate a limb.

The timing for the onset of the PATENT study was really great because there was a recent clinical trial that was finalized and published, really showing that while endovascular treatment has been the first choice for these patients, a recent study has shown that open surgery is a better alternative in certain patients. So it really fits very well with an interest and the sentiment in this field right now where they are the surgeons are more open to also consider open surgical alternatives. So what is the PATENT study and why is it important? So the situation today is that the clinical need for improved completion control is really there because about 20% of peripheral bypasses fail within the first year. And there is no standard completion control existing today, while we know and experience that hospitals in the Nordic countries as well as Germany, they use both flow and imaging, but there is very little published clinical documentation on this. So the purpose of this study was to document the clinical benefits of the combined use of flow and imaging and then recommend a standardized protocol for completion control.

And the objectives, the primary endpoint is graft patency rate at 1 year. So of course, we want to have a higher success rate than the current clinical practice is showing with the 20% of failing bypasses. And the design of this study is it's a prospective non-randomized international multicenter trial in 450 patients suffering from CLTI, which is an advanced stage of peripheral artery disease. And we're extremely proud of the investigator team for this study and also to have Professor Michael Conti as the lead investigator who was the first author of the 2019 global guidelines on CLTI management. We couldn't have gathered, I think, a stronger investigator team for such a study. And today, 14 sites are now actively enrolling patients, 5 more sites are in process. And after a slow start, patient enrollment is now progressing very well and is expected to be completed by the end of 2027. Then there will be a 1-year follow-up, and this period will then run through the end of 2028 and then analysis and publication is expected to come in 2029.

And while we are waiting for the final results, we expect investigators to begin presenting and publishing clinical cases, sharing their experience with peers and building awareness, interest and desire among more surgeons to try our technologies, just as we saw during the REQUEST study. So this is a short update on where we are with the PATENT study right now. And I think with that, we can open up for questions.

Yes. And we have a few today, too. The overall revenue from U.S.A. is showing impressive growth, but sales of flow probes and the flow procedure sale were down for the quarter. Can you comment on this development? And how do you see this developing in the future?

First of all, third quarter last year was a very strong quarter for probe sales. So it's a very strong comparable, point one. The other thing is that we have a shift towards PPP customers towards capital and the capital customers have a more random variation quarter-by-quarter because when you buy a set of probes that includes more procedures than buying a stack of cards. So if you buy a probe, it's 50x use. If you buy a card, it's onetime use. So therefore, you will see more fluctuation as such from quarter-to-quarter when it comes to the capital customers. I think that in order to sort of have a good opinion about this, you can't just look at one quarter. We need to look at the trend, as Kari was elaborating to in her presentation in a longer-term picture.

And I would look at year-by-year on how these things develop and not just quarter-by-quarter. But having said that, for the third quarter, the good thing is that when it comes to the imaging products, we had a tremendous good quarter with strong growth in imaging and flow system sales. And actually, of the 19 systems sold, 17 was imaging. So the majority was imaging, and this is -- the opposite of what we've seen earlier in other quarters where the majority is flow. And now we see gradually in the U.S. a shift that most of the customers actually go for the flow and imaging system. So we're gradually building up our portfolio with the premium product. And also what's nice to see in the third quarter is the good growth in imaging probes, which are the recurring -- the additional recurring revenue related to the Flow and Imaging product.

Looking at year-to-date numbers, we have growth in the U.S. underlying growth in volumes of around -- I would estimate around 10%, and that is based upon sales of flow probes and also imaging probes in combination with strong capital sales.

Another one on Americas. What is the growth in Americas and the group if adjusting for price increases in the quarter?

Well, when it comes to growth for the quarter and what's price and what's volume, it's a bit tricky one. On one side, on the procedures sale and Flow Probe sales, we have a decrease. And -- but in revenue, it's an increase, so that's compensated by price increase. When we look at capital sales, this has increased a lot for the imaging part, which when we sell imaging products, gives us twice as much revenue compared to Flow system sales. And when we shift from flow sales to almost being 100% imaging product sales, it gives us a good uptake in revenue. And when we -- in addition to that, have 80% of that on the INTUI software, which we also charge additional amounts for. This drives the growth. So for capital sales, it's a tremendous nice growth. But on the utilization based upon procedure sales and flow product sales, it's actually a decline in this quarter, but compensated by price.

How much cost did you take related to ERP implementation and potential other nonrecurring items in Q3?

ERP was -- or the IT infrastructure project was SEK 2 million for the quarter. Year-to-date, it's been SEK 6 million. And then when it comes to other nonrecurring, well, I can mention PATENT study. The PATENT study will still go on in 2027, but it will have an end when the study is completed. As of year-to-date numbers, the additional expense for that project is NOK 4.5 million and around NOK 1.5 million for the third quarter isolated.

The next one is on deferred income. Is deferred income item related to the software sales or something else?

It's related to system sales, and that's an extended warranty or guarantee that on uptime on the system. So if anything happens with the system, it's kind of like an insurance premium that we will either come out and fix it or replace it.

Thank you. Could you explain how you achieved such a great shift from 50-50 split in and flow and imaging systems sold in the U.S. a few years back to now mainly flow and imaging device sales. Do you expect this to continue?

Yes. So I mean, the current growth that we're seeing from the imaging portfolio, first of all, it's coming, I would say, primarily from winning new accounts for the imaging technology, especially in the U.S.A., but also in Europe, to a lesser extent in Asia Pacific so far. But we're also seeing that in the markets where we are direct, we tend to have higher success with winning with the imaging components as well. So as we now establish ourselves in Japan, we are hoping to see and expecting to see also a very positive development in an Asian country like that. But -- so I think that the major growth is really winning new accounts. But of course, we are also working hard to grow utilizations at our current accounts and we are seeing an opportunity to perhaps increase our engagement with users that have sort of bought the technology and spend more time with education, provide more hands-on support at these current accounts. We think that is going to be critical in order to see real uptake in utilization.

And we've actually launched just recently a sales campaign where we are providing more support to our customers. We have developed some new tools for our sales reps to help them achieve this, among them, a new medicine app that I hope everybody will take notice of. We are very proud of it, and we think it's going to be very useful for our customers. We're receiving very nice feedback already. So -- and we're seeing also already that some sales reps seems to be successful in selling more probes into their accounts due to this sort of strengthening of the both the messaging and the tools that we are providing to help the sales force. But we will see more of this in the periods to come.

The next one is on China. China shows strong growth at more than 50% growth from 2025. The report states that sales are still going through distributors and agents. As you have a local team in China, do you have plans of doing more direct business? Or are you satisfied with the structure you have established?

Yes. I think we are expecting to continue with the current setup, and we will continue to rely on distributors and agents in China for various reasons. But we're also exploring the use of a digital purchasing platform in China to see whether this can really be meaningful as a transaction tool and enable medicine to sell them directly to the hospitals. So we already have a few sort of success stories from using this platform, but it's very early days. So I cannot say to what extent this will be really impactful for us. But we are committed to investigate further and do more with that platform. And hopefully, it will help us drive both the business and, of course, the margins if this is really taking off.

Thank you. The next one is as following. Congratulations on yet another strong quarter. Considering the amount of data you collect, is AI useful for creating more value? Can it radically improve your systems over time?

So is the question relating to our products or to our investigating the business?

Good question. But yes, I think it's more if AI can sort of be of help for Medicine.

[indiscernible] Products? So of course, I mean, as a tool, I mean, in programming, coding, it's already one of the tools that we are using in the business in general. I think we are, as everybody else, exploring what it can do for us and has already proven to become a very -- provide important tools. We want to do more, and we are in early phase there as well. When it comes to product development, we have actually done research on various aspects of how AI machine learning can help us develop maybe even more value to the customers based on the same systems and sort of supporting and strengthening our tools to help our surgeons get answers to the same basic clinical questions. So I can say, yes, we are looking into that. And it's a bit early to say when or how solutions based on machine learning will make an impact on the product side.

Thank you. Thanks for your hard work for the shareholders. How is the opportunity pipeline looking for the near term for your main markets?

The pipeline, I mean, we feel our pipelines are always looking great. That's a short question. I'm pointing to the U.K., I'm not trying to joke here, but we have talked about the pipeline in the U.K. for years, and it has been looking very strong, although it has taken us a long time in the U.K. to actually materialize business from that pipeline. Now I can even point to U.K. being developing very nicely and doing very well so far this year, and we have achieved a decent market share in the U.K. This is a sidetrack. But I think when we look at our pipelines in general, especially, of course, in the direct markets where we have the strongest visibility, we feel we have strong pipelines. Our problem is always to really assess the closure time for each of the product or projects that we are working on. And this is proving a challenge always that we can see that some projects are stalling while other new projects are maybe speeding up. So exactly closure time and those type of things. So to be very accurate in our forecasting is difficult, but we feel very confident about the pipelines that we are seeing.

The next question is on the app that you mentioned. Could you elaborate on the app you mentioned? What problem does it solve?

Yes. So this is an app that takes the users. And when I say users, we're talking both surgeons and nurses, technicians that are helping the surgeons in the operating room to manage the ultrasound device to introduce them to how to use the flow measurement technology, how to use also the imaging technology and how to interpret the data. It's filled with, I would say, short videos and examples of how to use things. It's been developed in a very, very user-friendly, very appealing way. And of course, it's been developed with the input of leading surgeons. And as I said, the feedback that we have received on this app is very, very positive. So until now, we've had a web-based educational tool called EduQ, which is also a very important component of the training materials that we are providing, but it's a bit more cumbersome to sort of enter into the EduQ system. So now with the app available on the phones, can be brought into the OR, always available to people. This is, I think, can be a game changer for our users in solving simple problems and questions immediately in the operating room.

How do you see the impact of Medicaid cuts in the U.S. that start rolling in January?

Yes. What can we say? I mean, so far, we haven't, I mean, seen a lot of that. But these are market factors that are imposed on the industry and will be on Medistim as well. Our job is really to focus on what we have control over, and that is really how we are operating in the market. Our sales force are supporting our customers, what tools we are providing with them and really continue to drive the business in every way that we can. And so far, I think we have a tremendous speed, and I think we have the opportunity to continue progressing.

I think we have to round off, but let's do a question on INTUI first. When do you expect to release your INTUI software for Vascular? Will this be a phased rollout surgery by surgery or are there all main surgeries at once?

Yes. So the INTUI software for Vascular and then also the ultimate systems are in sort of final R&D stage, but it will still take some time to get it all the way to the market. So our aim is as early as possible next year. I don't want to commit to any further than the first half of next year. Our ambition is to launch it as soon as we can. Yes.

Thank you. That was the Q&A session.

Then we thank everybody for the participation this morning, and we will meet again for the fourth quarter presentation.

Thank you.

Thank you.

Very good morning, everyone, and welcome to Medistim Second Quarter and First Half 2026 Financial Results Presentation. My name is Kari Krogstad; and together with CFO, Thomas Jakobsen, we are here to go through the results.

As always, we like to just remind ourselves about Medistim track record. And we are looking back on decades of growth, both in sales and in operating profit. And that has been our promise to our shareholders to deliver constant profitable growth also going forward. If you look at just the recent period from '21 to '25, we are looking to a 13% annual realized growth in sales. So definitely a strong track record to look back on.

So with that, we are entering into the second quarter. The second quarter last year was a strong comparable. And we're seeing that we are beating it with high margin and also setting new records for both sales and EBIT. So this is definitely strong performance. As we can see, we are delivering another record quarter with sales reaching NOK 202 million. We can see here also that due to the strong Norwegian currency versus euros and dollars, we have a negative currency effect here.

And adjusting for this, we are actually looking at currency neutral sales development for total sales, up 27.5%. So a very good development. Our own products are growing by 33.6% currency neutral. And we can see that all the sales regions are really contributing nicely to this result. Americas is up 46.3%, EMEA is up 19.4% and Asia Pacific, up 22.4%. The third-party products is down 7%. We're also setting then a new record for quarterly operating profit, delivering NOK 65.3 million in EBIT this quarter. This gives an EBIT margin on the high side at 32.3%, very much driven by the strong sales development of our own products.

We will see also that this is the first quarter where we are delivering sales through our direct operations in Japan. Looking back at month of May, we paid out a dividend of NOK 8 per share, totaling NOK 146.3 million. And the Board will also propose to the general meeting to authorize a distribution of quarterly dividends going forward. Moving on to looking at highlights for the first half. So this is continue to be very strong numbers. It's a record first half year. The first time we are surpassing NOK 400 million in sales revenues.

And again, we had this negative currency effect. And adjusting for this, we're looking at currency-neutral sales development in total at 23.4%. Again, it's really our own products that are driving this in total, up 31.8%. And again, all regions are contributing very positively. America, 37%; EMEA, up 16%; Asia Pacific, up 43.7%. And the third-party products in the first half is down 19.9%. And we will remember that we had an extraordinary sale in the first quarter last year, equipping new hospitals in Norway so it was not anticipated to being able to repeat that strong sales for the third parties in the first -- or in this year.

We are looking then at very strong first half performance, operating profit reaching a new record of NOK 122.4 million. And again, EBIT margin is on the high side at 30.3%. You will also note that there is a substantial increase in operating expenses. This is reflecting higher commercial activity. So both more people working in the field and also seeking to spend more time with customers and other marketing activities.

We also have now a team of 10 people working for us in Japan, which we didn't have at the same period last year. And also, we see some one-off expenses, which is due to ongoing IT system migration to the cloud. So with that, as an introduction, we will take a closer look at the financial statements and get back to some further details later on.

Good morning, everyone, and I will, as usual, take us through the financials for the first -- sorry, first half and the second quarter for Medistim -- looking at the P&L for the quarter, Kari will go through revenue, more detail when it comes to geographic split and split of units. But again, this is another record quarter for Medistim with revenue more than NOK 200 million for a quarter.

Our gross margin ends at 82.2%. That's an improvement from last year, NOK 81.9 million, and that is despite the fact that on the cost of material, we have expensed NOK 5 million in tariffs related to the U.S. In the second quarter last year, tariff was introduced, but Medistim shipped all the goods that we have available before the tariff was active, which then led to that, Medistim did not pay any tariffs in 2020 before the fourth quarter last year. And I will have some comments -- more comments on that later on.

But anyway, salary and source expenses increases with NOK 4 million. NOK 2 million of this is related to general adjustments from NOK 25 million to NOK 26 million. But the additional NOK 2 million is related to our direct operation that we have established in Japan. This is a quarter with a lot of activities and other operating expenses increases from NOK 30 million to NOK 42 million. And there are some main reasons for that. The IT project that Kari mentioned is actually to take all of our systems to the cloud is expensed in this quarter with around NOK 3 million.

In addition, our direct operation in Japan, we had expenses, other operating expenses amounting to NOK 1.6 million. Patent study, we talked about before. And in this quarter, we expensed around NOK 3 million related to that study. And last but not least, we're also having a high level of commercial activities like traveling and exhibition participation and so forth amounting to more than NOK 2 million for the quarter. So all in all, a very high activity level -- activity level.

Operating profit EBITDA ends at NOK 71.3 million versus NOK 60.5 million last year. an EBITDA percentage at almost the same as last year, 35.3% versus 35.8% last year. Depreciation, no major changes, same level as last year and our EBIT for the quarter ends at 32.3% versus 32% last year. Again, I'd just remind everyone about the tariff expense this quarter of NOK 5 million. Net finance ends a positive at NOK 3.6 million, and this is currency related, converting U.S. dollars and euros to Norwegian krones.

Profit before tax ends at NOK 68.9 million. That's up 22% compared to last year, and profit after tax ends at NOK 52.2 million versus NOK 42.9 million last year. If you then look at year-to-date or the first half for '26, a new record for Medistim, revenue ending at NOK 403.7 million. Gross margin is down from NOK 82.5 million to NOK 80.9 million. Again, here is a tariff expense on the cost of material of NOK 10 million.

Salaried social expenses and other operating expenses has more or less the same explanations as for the quarter, only larger numbers. So I don't go into that detail. However, under other operating expenses, we -- I just want to remind that we had in the first quarter an agent commission of around NOK 2.5 million. EBITDA ends for the first half at NOK 134.6 million versus NOK 125.2 million last year. Depreciation at the same level, more or less, a little bit higher than last year, but not by much.

And operating profit ends at NOK 122.4 million versus NOK 113.3 million last year and EBIT margin of 30.3%. And Net finance negative for the first half, again, related to currency. And profit before tax ends at NOK 120.4 million and profit after tax at NOK 92.5 million.

Last comment I want to make for the P&L is related to the tariff, U.S. tariff that was on the full deemed now fall in the U.S. And you probably heard about companies that get refund for this unlawful tariff. And to our understanding that the U.S. customs are now gradually refunding this month by month. And the last that we heard is that they refunded as of July 2025. As I mentioned earlier, Medicine did not pay any tariff before the fourth quarter 2025.

And as we speak, we are working on documenting and putting all the paperwork together in order to file a refund for the tariff that we paid in the fourth quarter of 2025. This amounts to USD 760,000 and that is not reflected in these financials that we now are presenting to you. So this will be an upside when we get the refund.

If I look at the balance sheet, intangible assets increases, and this is mainly because of our development projects ongoing and the automated production project and also our software project related to IT, but also the IT project related to taking our systems to the cloud. No investments in fixed assets this year and therefore, a decline. Inventory levels are -- has gradually been reduced quarter-by-quarter when -- after our peak in the first half of '25 and ends at NOK 156.5 million.

However, we will continue to keep high inventory levels, both because of critical components that we need to have security stock of and also if there are end of life on components that we are dependent on before we can get new regulatory approvals. Accounts receivable are increasing, and that is because we also have a very strong sales, so that's a natural increase, and it also increases our working capital.

Cash ends at NOK 100 million, and that is after paying NOK 146.3 million in dividend in May. And as Kari mentioned, the Board is now proposing that they are authorized to pay a quarterly dividend, and we will have to come back on that later on. And Yes, we will comment on that when we send out -- there will also be sent out a notice to the -- with a general meeting to give the Board this authorization.

Equity and liability, strong balance sheet, more than 70% equity, no interest-bearing bank debt. The long-term liability is related to extended warranties and lease obligations that we have.

Key figures. Earnings per share followed obviously, the increase in profits. So we have a strong development here in the second quarter. And by the first half, we have earnings per share of just over NOK 5 per share. Cash flow. Cash from operation suffers a bit from the increase in change in working capital, as you can see, both for the quarter and for the first half. And the main reason is explained by the increase in accounts receivables.

Investments is our development projects and the IT projects we talked about and cash from financing is negative with NOK 152 million, where the majority is dividend, and the remaining is payment of our lease obligations. Net cash is negative in the first half, or NOK 112 million, and cash ends at NOK 100 million by the end of the first half, an improvement from last year's NOK 96.3 million.

And with that, I leave the word to Kari. Thank you.

Yes. So let's take a look further into the details of the markets and product segments. And starting with looking at how we're doing on the Flow and Imaging Systems sales in units. Of course, this is a very important product for us is the higher value and also higher priced product. We can see that we're delivering a total of 22 systems this quarter on the same level as this quarter last year. and very important for us to see that we are at this level in total. Funny enough, each region is actually delivering exactly the same number of units as this quarter last year.

When it comes then to the imaging probes in units, we are 2 units down this quarter. Of course, there are quarterly variations, as we can see, this graph is also depicting Americas this quarter is up by 5 units, while EMEA is down by 5 units and Asia Pacific is also down by 2 units.

Looking at the flow only systems in units. We are 3 units down. Americas delivered at the same level as last year. EMEA is also at the same level with 12 units and we see this quarter particularly strong contributions from the distributors in EMEA. This is also something we see varying from quarter-to-quarter. Sometimes, the direct market is sort of the stronger part and sometimes the distributors are the ones that are growing the most.

Asia Pacific, down 3 units for the quarter. And we can note that we had a very strong first quarter in terms of number of units for Asia Pacific. So I wouldn't be very worried about this.

Looking at Flow probes in unit, which is, of course, a good indicator of both utilization and sales in general of the new equipment. We see a good development of 16.5% growth in this quarter. Americas as a region is delivering the same level in number of as last year. but I should already now note that U.S.A. is definitely showing an increase in number of flow probes, and we will see that reflected in the number of procedures in a little while.

It is Canada and South America that is having a lower number of probes this quarter and Americas then ends up at the same level as last year. EMEA very strong, up 22.5% and Asia Pacific also up 20.6%. Yes. So looking further into the Americas region. So delivering NOK 103.7 million, so more than 50% of the total for revenues in Medicine for the quarter. Currency neutral, as already mentioned, up 46% for the quarter.

I just mentioned that the total units of Flow probes and systems sold for the region are at the same level as last year. And the revenue growth that we will see from the probes and systems are then driven by price increase. We will also note that there is good growth in number of flow procedures to lease and PPP accounts and also the imaging pro unit sales is up. Sales in Canada increased 19%. So this is more driven by systems than probes.

And further detail on the unit sales development in U.S.A. in isolation. Already mentioned, the flat development on the system sales for the quarter, we're actually down 2% for the first half, and these are lease out placements that we did last year that we're not repeating this year, but the number of capital sales of systems is the same. When we're looking at number of procedures from the various components here, we see really good and strong development all over.

We see, especially, as I mentioned, flow probes which was flat for Americas, it's definitely growing from the -- for the U.S., and this is reflected in actually 20,739 procedures coming from this capital probe phase for the quarter. And that gives the 28.6% growth. And you can also see for the first half, very strong development in number of procedures from capital probe sales, 32.1%. Also worth noticing imaging probes to capital customers also definitely going in the right direction, 10% growth for the quarter, 12.5% growth in the first half.

Asia Pacific, NOK 26 million in the quarter. currency neutral. This translates to 22.4% growth. And we are, of course, following the development in China very closely, where we have been direct now for a couple of years, up 15.9% for the quarter and reaching NOK 14.8 million. So very good quarter and then also a strong first half for China. We just always want to remind that still we are selling through local subsidiaries and agents, and this will sometimes end up with some quarterly variations. So there will be some inconsistency in the developments over the quarter.

Japan, we established our own team and the subsidiary in Japan in the end of the first quarter. And now in the second quarter, this is the first time we're actually delivering sales through this organization. It is quite modest for the first quarter. This is just representing probe sales, and we are now working in the field to build the pipeline to replace old systems out in Japan. We know we have a very high penetration rate there and also working in the vascular side to establish new customer opportunities.

I also note that other Asian distributors have a strong quarter, growing 28% and then delivering NOK 8 million in sales. The EMEA region delivers NOK 48.9 million in the quarter. This is currently neutral, 19.4% growth. As I alluded to earlier, it is really the distributors that are providing the highest growth this quarter. Actually, we're growing 59% currency neutral. While the direct markets are relatively at the same level as last year. And this is also something we have noted over time that we have this variations from quarter-to-quarter, whether it's the direct markets or the distributors that are really driving the development in EMEA.

We can just also keep in mind that the direct markets account for about 55% of the revenues in EMEA and distributors around 45%. So both sales channels are, of course, important.

When it comes to the third-party products, I already mentioned this. So 7% down for this quarter. It was a tougher first quarter here. So at the first half of the year are then looking at the 19.9% decline so far this year. And I saying that with a very, very strong first quarter in 2025. Summarized, we are looking at -- and this is in Norwegian currencies are not currency adjusted. We look at the Americas region, 31.4% growth for the quarter, 23.2% for the half year. Asia Pacific, up 17.5% for the quarter, up 37.3% for the first half. EMEA up 14.3% for the quarter and 11.3% for the first half.

So strong performance from all regions and bringing us to the total of 19.5% growth for the quarter and 15.1% for the first half.

Here, we can see that the Cardiac Surgery segment is really driving the growth, both for the quarter and for the first half. very strong performance of our cardiac product portfolio. When it comes to the Vascular, we will remember that in first quarter, we reported 1% increase in vascular sales and now in the second quarter, we are looking at 9.3% decline. And this is definitely weaker than we've seen in the recent years. You will remember that we have had 20% and 30% growth in the vascular product portfolio in recent years.

And what we're seeing right now is not reflecting a shift in the underlying demand. It's rather a temporary product mix effect. And I'll try to explain this because this Ultimate systems that we are providing is delivering both the cardiac and the vascular applications. And we sell this as sort of a broad-based package and enabling the hospitals to use our technology, both in the cardiac department and in the vascular department. Now it's the fact that we have launched a new into software and currently, it's only available on the cardiac systems. So that has led to a lower number of ultimate system sales and a higher level of cardiac system sales.

For instance, in the U.S. in the first half, we have sold 5 less Ultimates and 8 more cardiac systems. And then also reflecting around the high price of the ultimate system of around USD 220,000, -- of course, a shift like that has an impact on the revenues. And it's also important to just remember that the revenues from the ultimate sales is allocated and 50% to Cardiac and 50% to vascular. So this is the product mix effect that is driving this sort of negative development for the vascular sales reporting that we are seeing right now.

We will continue to see this, we believe, until we are launching the Intu software also making available for the Vascular and the Ultimate systems. And that's planned to happen at least in the first half of next year as early as possible, of course. When it comes to the split between flow products and imaging products, we see that the flow products are continuing to develop very nicely, both for the quarter and for the first half. Our imaging products are also really going in a nice direction. We will remember that the imaging products has shown high growth for a number of years but had a dip in 2023 and '24 in the tougher macroeconomic circumstance that we saw.

This came back really nicely in 2025, and we also see continued strong performance in first half of '26. So -- this is good to see. We have never lost confidence in our imaging portfolio. We always experience really high interest from new users in that technology. So we're continuing to be optimistic for it going forward.

Yes. The component of recurring revenues versus capital revenue. Here, we continue to see really high contribution from the recurring products. So that means capital probes and PPP cards and lease contracts. And the last 12 months period is showing a 70% part of recurring sales. So quite in line with historical performance.

So that's a review of details when it comes to performance for the quarter and for the first half. And I would like to comment a little bit about sort of our outlook going forward. This is our simplified description of our growth strategy, and we can see that we are targeting the CABG market, the vascular surgery market in this are also the transplant procedures and other open surgery, which is connected to CABG, you could say. Today, I would like to point to the size of the annual revenue opportunity here, NOK 7 billion in total opportunity.

And remembering our sales performance last year in 2025, we reached about NOK 700 million. So meaning that the are addressing only 10% of the estimated market opportunity. So highlighting then the significant runway for continued growth. If we're also looking at market penetration in terms of procedure shared and start discussing the CABG market. We've always taken a deliberate conservative view of the global CABG market, and we don't want to exaggerate the size. So we always said it's more than NOK 700,000 -- and although we can actually find data to say that perhaps this market is about 800,000 and 900,000 procedures. But the sources are not always that reliable.

So we've kept it are very conservative at 700,000. And that would mean that we're currently serving around 40% of these procedures with our flow technology. That also means that there's, of course, a big incremental opportunity to convert these flow only users to flow and imaging users. When it comes to the vascular market, we're looking at a total of up to 1.3 million procedures annually. And based on last year's number of probes sold, we can estimate that we are serving somewhere between 5% and 6% of this total market.

So of course, at the completely different level compared to CABG, but definitely showing that we're making progress in this market and that it represents a big growth opportunity for us going forward. Based on this, I just mentioned in my introduction, the 13% annualized sales growth that we have shown over the past 5 years. We can also think back on the 6 record quarters that we've just reported on. And with this big growth opportunity that I've just described. I will like to sort of update our long-term outlook for our business.

And as part of our annual strategy review with the Board in June, we have updated our view on this. Our revised plan indicates that we are expecting to see actually a higher growth trajectory than achieved over the past 5 years and that it should definitely be possible to deliver continued margin expansion in this scenario.

And that also means that based on this outlook, we expect to reach our first milestone of NOK 1 billion in annual revenue in just a couple of years. And our confidence is supported not only by sort of past success, but the continued expansion and increasing effectiveness of our sales organization. Of course, we have gone direct in more countries. We have invested in broadening the sales force, and we are prepared to continue to expand our direct sales forces and continuing also to work on the effectiveness part of this.

Together with the upcoming launches, as I just mentioned,MiraQ Ultimate, MiraQ Vascular coming now in Tui sometime next year. And also in this period, we will see the report out of large important trials such as the patent for peripheral bypass and Smart low, the randomized clinical trial for CABG. Of course, all long-term projections are subject to uncertainties, so we would like to highlight that. But again, we feel it's right to share our positive view on our future here.

So with that, as a final statement, I guess we will open up for questions.

Yes. And we have quite a few questions today. The Americas region is again showing impressive growth. As the capital sale is quite similar to previous quarters, a lot of the growth come from procedure sale and price increases. How do you think this will develop in the future?

The capital sales and the comparable from last year is very strong. So in a sense, it's encouraging that we are at least at the same level. However, I think going forward, -- we will continue to see that the growth and the growth driver in the U.S. will still be on the capital side and not on the procedure side. So -- and we've seen that over the past 5, 6, 7 quarters, that the main driver for the growth is increased capital sales of flow and Imaging Systems and what follows with probes and imaging probes. So going forward, I would still say that I would expect higher growth on capital than on procedures.

Another 1 on the U.S. market here. Pricing, can you quantify the -- and this is on one-offs. Can you quantify the amount of one-off costs you took in the quarter, for example, what is the underlying EBIT?

Cost is related to what I mentioned with the IT project, taking our systems to the cloud. that was around NOK 3 million for the second quarter, and we are expecting to go live in the fourth quarter this year. We also have the painting expense. That is, to what extent 1 of the patent study will still be ongoing, but it's not part of our ordinary operational expenses as such. So even though it will continue going forward, it will be an end to it in '27, '28 -- so that is, in that sense, a one-off.

And when it comes to the operating expenses related to Japan, that will be definitely continue to be ongoing going forward, although we had some additional expenses when we are establishing ourselves, but I would say maybe around NOK 0.5 million there is additional expenses. And then that is in 1 way a one-off, but we will still continue to build the Japanese organization, so to say exactly what other operating expenses will be there. It's a bit hard to predict going forward. So I think that is my answer to that.

Thank you. Another 1 on the U.S. here. The U.S. is showing very strong momentum for you. Is it anything temporary that we should be mindful of when looking at the pipeline and what is your U.S. team communicating back to you? How would you describe the outlook? I think you touched on it.

So I mean just looking back at the and so far in '26, there has been consistent, very positive, strong performance from our U.S. team. And also, historically, we shouldn't forget that going back, U.S.A. has been the growth driver for Medistim in many years. And then things goes a little bit up and down, but it's definitely come back very strongly in '25 and so far in '26. As mentioned before, we have made changes to the organization in the U.S., and we have made changes to compensation plans.

We haven't set other and stricter expectations when it comes to field time and face time with customers. We have also invested in much higher quality training programs for our sales force. So we are definitely supporting them in a better way than before. So I think there is a logical explanations as to why we are seeing increased performance. Of course, pricing and I would say, having the courage to actually work actively with pricing is also a positive contributor here. And going forward, we are not guiding, but -- but our pipelines are looking good when it comes to the deal pipeline.

Yes. And 1 on pricing. Can you quantify the effect of the price increases for the flow and imaging products?

We see in the second quarter, the increase in revenue since we had the same level of number of units sold, that in itself is related to price increases. If we look at the underlying growth, the way we look at it, the total growth in the U.S. for the quarter carries neutral was 46%. And Around 9% of that is volume growth, and the rest is pricing. So the pricing is quite impactful.

Good. Then it's a question on Japan. How has the direct operation in Japan developed so far?

Well, I think the priority for our team has to build the team and to adjust the team and making sure that we have the right people in the various roles and their priority then has been, of course, to present themselves to the market and the customers and really start building direct relationships with the users. As we know, we have more than 90% penetration in the Japanese market for CABG and the Flow technology. So there's a lot of customers there. There's a lot of hospitals. There's a lot of connections to be made and that has been our priority so far.

And I think I mentioned that the model sales we saw in the second quarter, that's based on probe sales to our current customers. But we are also, of course, building the pipeline for replacement sales of systems and also we're working to establish a business with the vascular, which has not been really entertained at all so far by our former distributor. And we are then expecting to see a more positive, of course, development in -- from a sales perspective in the second half.

What else? I think I can report that from the users and the customer side, the feedback we're receiving is that we feel very welcome by the surgical community that Medistim manufacturer and owner of the technologies are present in the market. So that has certainly been a very positive effect. And then I guess I should mention that we are not expecting to see any problems similar to what we saw in China when we went direct in China.

As you will remember, we had some stalling effects in China due to the former distributor than selling a lot of products into the local distribution chain, through the local distributors in China. This is not happening in Japan. We had a much shorter transition period, and there has not been any such sort of end of life type of buildup. So that's a positive aspect that we should also keep in mind.

Thank you. What is the rationale for changing to quarterly dividend distributions?

Well, we have over several quarters now shown solid results and also very good cash flow. So I guess this is kind of a gesture to our shareholders that instead of paying it annually, we will look at a quarterly payout. And also, what's the reasoning behind it is that instead of Medistim collecting cash at bank interest, we would rather distribute that excess cash that the company is generating to the shareholders and then they can reinvest or whatever they -- how they want to utilize that excess cash to the best for themselves rather than Medistim have it sitting in the bank account.

Thank you. Could you please elaborate on what's driving the relative increase in accounts receivables?

Very easily, the increase in sales that we see over the quarters. And there is also somewhat timing from quarter-to-quarter when you have a quarter end and how customers are paying and so forth. But the general thing is that when we increase sales as much as we have done with more than NOK 50 million for the first half. It's natural that the accounts receivable are also increasing. We are very much focused on it.

We have goal of having a data sales outstanding around 45 days, which we previously was at 60 days. Now with what we've seen, we are closer to 60 days. So we will definitely put focus on trying to get that down to 45 days.

Thank you. Then there's a question on Vascular. I didn't fully catch the effect you explained in the Vascular segment and the ultimate machine. Can you please repeat?

Yes, it is a bit complicated. But we have 3 modalities or 3 versions of our system. You can buy it as a cardiac specific application system. So with the software that has really been adapted to the cardiac procedures. Or you can buy it as a vascular system. And again, software is adapted to the vascular procedures, including transplant or you can buy it as an Ultimate and then both these software versions are included in the ultimates and that can be a very good solution if you are planning to maybe you're starting with the cardiac procedures, but you have a vision of taking that into the vascular space later on.

Of course, this is also -- can make sense in finding the financing at the hospital that you have -- you're buying something that is can provide value to the broader sort of surgical departments. In the current position, if you are -- if a customer is in that position, so they want to buy a new system, they are primarily or in the beginning, only going to use it for cardiac. And they know that we have a cardiac system with the new Intuit software, which we have, of course, promoted quite heavily, and they are very interested in getting hold of this new software.

Well, then there is a chance that they will in this situation than opt for the cardiac version. And if they do so, that's a lower-priced version than the Ultimate naturally because you only get access to the cardiac application support and not the vascular application support. When we are selling Autometthen this higher price, 50% of that is recorded as cardiac revenue, 50% reported at Vascular revenue.

So a lower number of ultimates that will hurt the vascular revenue recognition as we are seeing it in the reports. So this is a more technical product mix issue at this point in time, it will go away as soon as we have the Intu also available for the vascular systems and for the ultimate systems.

Thank you. And many questions coming in here. Have you seen any impact on U.S. sales from the removal of the COVID subsidies to the Affordable Care Act. Some U.S. hospital systems have reported weaker patient numbers, especially on elective procedures as U.S. patients a health care insurance.

Yes. I can that we have seen any effects of that.

Thank you. What is your current view on share buybacks?

Well, over the years, we have done that occasionally. But I think our Board is more is a little bit reluctant to do a buyback of shares. We have done so relatively recently to support the share program for management and key personnel. But in general, our Board would rather pay out a dividend than do a buyback of shares. And and that is also reflected in what we reported here today that they will seek the authorization to actually make a dividend on a quarterly basis.

Thank you. Thanks for the hard work for us shareholders. You mentioned the Board has turned up the growth plan for the next years. Can you give some insights into where the outlook has improved? Is it U.S., vascular, imaging?

I would say that as contributors -- all of that is -- we -- as I said, we had growth opportunities in the CABG market still. Several geographies are lower penetrated. USA is actually 1 of them and there are new markets like India and Turkey and with big numbers of procedures where we are just getting started. So CABG in itself for flow is actually a growth opportunity. Then you have the conversion to imaging, which continues to be a big opportunity.

And the traction that we're seeing in our direct markets, again, U.S. as the leader -- but over the years, very strong performance in Germany, in Spain -- and in China, not the least, very, very strong results after we sort of got normalized the situation over there. And again, expecting to see more traction also from Japan, then we are taking control there. So it's both geographies that's opening or not opening but are continuing to provide really big opportunities.

And it's both sort of the historical performance, but also the near-term, the recent term performance that we have pointed to over the past 1.5 years and the changes we've made and also upcoming product launches and so on, all this together gives us the confidence that we should be able to actually accelerate that growth rate and keep it at even stronger margins.

From the procedure sale overview, we can see that the probe sales are strong for all regions. Given your manual production process, will the pro sales growth be a challenge going forward?

Yes, of course, production capacity and ability to deliver is pivotal for us. It's a great problem to have, just to say that. And -- as we have reported previously, we have a project ongoing in order to establish a semi-automated production line of our high-volume flow probes. This is technically quite complex, and then you have both verification validation challenges, and you have, of course, the regulatory process also that will take some time.

So it's not an immediate solution, but it's something that we are investing quite heavily in. So that's the longer-term solution for us in order to make sure that we have the right capacity. In the nearer term, we just continue to add heads to our production and making sure that we are coping that way.

Yes. I think we'll round out there and I hope we have replied most of the questions. It's a lot sitting here, and it's a bit overlapping. So I think we have touched into most of that.

Okay. Then I guess we close the call, everybody for participating.

Thank you.

A very good morning from sunny Oslo, and welcome to Medistim's presentation of our first quarter 2026 financial results. My name is Kari Krogstad, and together with CFO, Thomas Jakobsen, who will together take you through the results.

Before getting into the highlights, we like to start this presentation just reminding ourselves on Medistim's track record and also just highlighting that our growth over the past 10 years in sales has been close to 11%. And on our EBIT, we have been growing close to 15% over the past 10 years in a CAGR way. So that's a reminder of our promise to continue to deliver profitable growth.

Let's now dive into the first quarter. So I'm very happy to be able to present another record sales quarter from Medistim. So for the first time, we are exceeding NOK 200 million in revenues. That means 11.1% growth in NOK. We can see that we have some negative currency effects here. So if we adjust for this, we will see that the currency-neutral sales development is actually up at 18.5%.

And further, looking at sales of our own products, which is, of course, the strategic product portfolio and the most important part of our business, we see that this is up a solid 28.8%. All regions are contributing to this result. Americas is up 30.9% currency neutral this quarter. EMEA up 11.5% and Asia Pacific have a tremendous 57.5% growth. We're also noting that our third-party products is down by 30.2%. And we will remember that the beginning of last year was very, very strong due to sales to new hospitals in Norway, and we couldn't expect that to be repeated in this quarter.

When we look at the EBIT at NOK 57.1 million, that is also a very, very strong operating result. It's actually the second-best operating result ever, just beaten by the same quarter last year. And if we are adjusting for currency effects here, we would actually see close to 4% improvement in the EBIT for this quarter.

We know that the U.S. tariff is making an impact this quarter, so impacting our gross margin, and that's also the EBIT margin. The margin remained strong at 28.3%, a little bit lower than the same quarter last year, but still at the high level that we would like to see. Of course, very much driven by the sales -- strong sales of our own products.

We will note and have some explanation to some higher operating expenses this quarter. Of course, some of that is connected to the establishment of the direct operation in Japan. We are also seeing increasing higher activity levels throughout our sales organization, which is a very deliberate effect that we want to see. And we're also taking some expenses on an IT infrastructure upgrade.

The general assembly yesterday decided that we will pay out a dividend of NOK 8 per share. So that will be a total of NOK 146.2 million.

So with that introduction, I will leave the word to Thomas.

Thank you very much, Kari, and good morning, everyone. I will take us through the first quarter profit and loss balance sheet and cash flow. And going directly to the profit and loss, Kari will take us through total revenue splits per region and per product. So I will not go into that detail. However, we do have a weaker gross margin in percent this quarter, and this is explained by our sales channels.

We have communicated before that our margin is very much dependent on the sales channel we are selling through, either through distributor network or if we are direct in a market, and there's also variances between different regions. So for this first quarter, relatively speaking, we have strong sales to our distributor network, but we also have very strong sales to our APAC region, which affects gross margin and gives us a little bit weaker gross margin as such, not much, but it is a little bit lower than our margins in the U.S. market.

And also, what Kari mentioned is the tariff. The U.S. tariff was not implemented in the first quarter 2025. We have full effect of that in 2026, and it amounts to NOK 5.1 million. And that was an expense, obviously, we did not have last year. Salary and social expenses are at the same level more or less as last year, but we do have additional operating expenses this quarter, and that's related to a lot of activities, which Kari has touched upon. We do have this IT infrastructure project, which we also spoke about in the fourth quarter. And in this quarter, we expensed NOK 1.5 million related to that project.

We also have the establishment of our direct operation in Japan, and it has -- that has added another NOK 1.5 million expenses to our P&L. We also had recruitment expenses. We recruit and grow the business continually and the recruitment expenses for this quarter was NOK 1 million higher compared to last year. And last but not least, we do have a high level of commercial activities, which was NOK 3 million higher this quarter compared to last year, and it's very much travel and face time with customers we've been talking about.

Last but not least, we also have an agent commission for this quarter. This is not very normal in Medistim because we either sell through distributor or our direct sales network. However, some hospitals require that they have a contract directly with Medistim, and that's happened this quarter. And these contracts are then controlled through letter of credits, then -- which controls the cash flow from the hospital to the manufacturer and also controls that the hospitals are actually getting the delivery and secure the delivery that they have been promised. And this happened in the first quarter, and then we have an agent commission then of NOK 2.1 million, which are then the return commission to our distributor for the services that they provide.

So given all this, our EBITDA ends at NOK 63.3 million, a little bit weaker than first quarter last year that ended at NOK 64.7 million. Depreciation increases. We do have additional lease obligations, which is the reason for the increased depreciation. And our operating profit ends at NOK 57.1 million and an EBIT margin of 28.3%. That's weaker than the first quarter last year. But I think, looking at the big picture of the fiscal year 2025, our EBIT margin was 28%. So we are well in line with what we communicated earlier that our EBIT margin should be in the high 20% area.

Net finance is negative. We have experienced a strengthening of the Norwegian krone, especially towards U.S. dollars, but also towards euro. So the net effect of finance is negative by NOK 5.5 million. And profit before tax then ends at NOK 51.5 million and profit after tax ends at NOK 40.3 million.

Looking at our balance sheet. Our intangible assets increases. We have 2 major development projects ongoing, which are recognized as an asset in our balance sheet, but we also have this IT infrastructure project, which I mentioned in the P&L. Basically, what we're doing with the IT infrastructure project is that mainstream code and setup are expensed and Medistim unique code and setup is recognized as assets. So it's a combination of those 2.

Inventory level, same level as the end of the year. So the increase in our working capital is related to accounts receivables that increases from NOK 86 million to NOK 104 million. Cash position is solid, ends at just under NOK 210 million, a little bit below the cash position by the end of the year, and I will comment that a little bit further later on in the cash flow statement.

Equity is strong, ends at over 74% and we have no interest-bearing bank debt, haven't had that for many years. Our long-term liabilities are related to 2 things. We have lease obligations of a total of NOK 46.2 million, where NOK 11.6 million is short term. And the deferred revenue is extended warranty contracts, 2- to 3-year contracts, which then -- revenue are then recognized over that time period.

All in all, we do have now decided that we are going to pay out a dividend, and that will be paid, I think, estimated 18th of May. That will obviously affect our equity when we are then closing the second quarter. NOK 146 million, so will then reduce our total equity and equity percent but it's still a solid equity as such.

Earnings per share, still solid, more than NOK 2 per share this quarter. And we do have also a strong equity position, as you can see, 70.9% by the end of the year, increased now to 74.3%.

Cash flow, we do experience that our cash flow from operation is relatively weak this quarter, and there are reasons for that. First of all, we have prepayments of income tax of NOK 14.1 million. We do have the increase in working capital related to increase in our accounts receivables. But we also have what is called here other, which are accrued expenses in 2025 that we now have paid out in the first quarter. And a lot of this is related to commissions and also yearly bonuses that has been achieved based upon the results that Medistim delivered in 2025. So net cash from operation is then NOK 7.2 million.

In addition to that, we have investments related to our development project and the IT infrastructure project and also we have paid lease obligations of NOK 2.9 million. So net negative cash flow is then NOK 2.3 million, which then leaves us with a cash position pretty much the same as we entered the year into with, so NOK 210 million.

And with that, I leave the word to Kari. Thank you.

Yes. And let's then dive into our business segments update, starting with the flow and imaging systems sold in units. So this is obviously our most important part of the product portfolio since it's our absolutely unique product offering. We are the only company out there providing combined flow measurements and high-frequency ultrasound technology in the same system, which is providing really high value both to cardiac surgeons and to vascular surgeons. And as you know, we are selling this product that's about double the price of a flow-only system. So this is very important for us to see a continued uptake and adoption of this technology.

For the quarter, we see it's a good quarter for us. It's -- we sold 28 systems this quarter. EMEA and Asia Pacific sold more than the same quarter last year. Americas down by 4 units this quarter. These typically vary from quarter to quarter. But all in all, a strong quarter for flow and imaging unit sales.

When we are selling these systems, the imaging probe sales tend to follow, and we're also seeing, therefore, strong imaging probe unit sales this quarter. And here, Americas is up by 2 units, EMEA up by 7 and Asia Pacific down by 1 unit.

When we look at the flow-only systems, it's also very reassuring to see that this is also growing. So strong flow system unit sales this quarter, up 8 units quarter-over-quarter. And Americas is up. EMEA is a bit down here. We recognize that they had the higher flow and imaging sales. So this tend to sort of level out a little bit. And then we're seeing that Asia Pacific growth by 10 units this quarter, and this is very much driven by growth in our sales to China.

When it comes to flow probes in units, we see that it's a very strong continuation of growth here, so up 27% this quarter and a really strong contribution from all the territories. And as we know that the strong capital system sales are driving the probe sales across all of these regions.

Looking a little bit more into the regions, starting with Americas. So Americas this quarter delivered sales revenues of NOK 84.8 million. And if we adjust to the same currency as we had last year, we look at an underlying growth of 30.9% for the quarter. As we know, the U.S. is the majority of Americas and looking at U.S. in isolation, the currency-neutral growth was 33%. And we have increased our prices significantly in the U.S. And the growth this quarter, we see that about 50% of the 33% is coming from price increases. It's then very reassuring to see that we have good system volume sales as capital, although not as high as the same record quarter last year and also very strong flow probe volume growth at 46%.

Canada has a little bit weaker quarter in the beginning of this year, while the Latin American distributors delivered a strong quarter, but of course, from a much lower base.

Diving a little bit further into the U.S. So we can see here in the table, the system sales and also the outplacements on PPP or lease contracts. And the total number of units that we have then sold or outplaced this quarter is 14 versus 18 last quarter last year. So we're seeing this fewer number of systems sold, but we also see strong sales of consumables to the capital customers.

If we look in the second table, the number of procedures from flow probes to capital customers, we see that, that is growing by the high 35%. We're also seeing very high growth of imaging probes to capital customers of 15%. So new customers are increasingly coming in as capital accounts. And we also see that some of the current PPP or lease customers tend to convert to capital. So this is a trend that is continuing.

To the right in this slide, we have split out the flow procedures, splitting out the cardiac part of these procedures and the vascular part. So now we can follow the development of flow procedures to cardiac here highlighted in orange, either by year or by quarter. And this means that it's very easy to calculate the penetration or the adoption of our technology in the U.S. in CABG. So the cardiac number for 2025 is about 80,000 procedures. And then considering a market of around 200,000 procedures, that leads us to a share of 40% covered by Medistim in the U.S. CABG market. So hopefully, this would be useful to follow going forward.

Moving on to Asia Pacific. So here, we're delivering NOK 42.7 million in sales, making this currency neutral, the increase is actually 57.5%. And we see that the sales to China is making up the majority of this and growing as high as 74.6% for the quarter. And we have continued to explain that we have to expect quarterly variations in our sales to China because we do have, of course, sales office with our own staff, but we still rely on local distributors and agents, and that will inevitably result in some quarterly variability.

Japan, it is a new era for us in Japan, and Q1 was the final quarter where we're selling through a distributor there. So it was on the low side at NOK 2.7 million, much lower than the same quarter last year. But this also means that there will be no inventory buildup in the distribution channel as we saw in China when we went direct there. So we know that when we are starting to sell from the second quarter onwards, that will be through our own team, and there should be no unexpected inventory issues going forward.

We also see this quarter quite strong contribution from the other Asia Pacific distributors, up 105% and contributing then in total with NOK 14.7 million. In Europe and Middle East, the region delivered NOK 52.1 million in sales in the first quarter. Currency neutral, this corresponds to an increase of 11.5%. We note that our direct markets delivered sales in line with the prior year. So no big change there, while the distributor sales is actually providing the growth contribution this quarter, going up 26% currency neutral.

And just thinking back at the EMEA performance also through 2025, varying quite a lot. Direct markets from time to time, contributing very strongly and in other quarters, a bit weaker. So I expect to see a bit variation going forward here as well. But really good news that we, in the first quarter, are already growing by 11.5% currency neutral. That's very encouraging.

The third-party products, as mentioned in the introduction here, the revenue is down 30%. And we are reminded that the first quarter last year represented an exceptionally strong comparable because we sold a lot of ophthalmology products to 2 new hospitals in Norway. So we could not plan for or expect to repeat that sales in this quarter. Other than that, we have a highly diversified product portfolio, and it's Mentor, Icare, and A.M.I, which are the biggest contributors in the whole portfolio.

This table is just summarizing the growth in NOK from the direct markets and also from the distributor parts and regions. So I will not go through the details here. Of course, we are following closely the development of the vascular sales since this is the new market that we are establishing a position in. In this specific market, we see that growth is missing in the vascular segment. It's just 1% up from the same quarter last year. We see that the cardiac sales growth was 24.5%. So that's really at the high side and is then, of course, responsible for being the driver of the total growth this quarter.

Still vascular sales is accounting for 17% of our own product sales, so which is -- it's not a bad proportion. It was a little bit higher than when we looked at the 2025 numbers. But here, we are just expecting the vascular growth to continue and yes, going forward will be in line with what we've seen in previous years.

We also follow the split of flow portfolio versus the imaging product portfolio closely. And we can see this quarter that both the flow products and the imaging products are contributing nicely to the total growth, 23% from the flow products and 12.6% from the imaging products. So that is a solid performance as well.

Closing up here now, taking a look at the recurring versus capital revenues. And we can see that this quarter, we are seeing 20% growth in our recurring revenues, which is quite in line with also how the capital revenues are growing. And the last 12 months takes us to a 70% share of recurring revenues of the total, which is quite in line with the historic levels.

Then a few comments on our strategy. Yes. Just to go through this really quickly, we have a strong position in the coronary bypass segment or the cardiac segment. And we have some markets with really high market share with our Medistim technology, Japan, China, the Nordic countries, the German-speaking countries and other European countries as well with really high share up to 80% to 90% on the procedures covered. And here, it is important for us to continue to convert the dominant flow-only installed base to a flow and imaging installed base. So this is gradually increasing and ongoing.

We are also working to grow our adoption in what we regard as underpenetrated markets, including the U.S. at 40%. Of course, it's growing, but still regarded as underpenetrated in our view. And clinical marketing, the studies that we are doing, really critically important in order to get that traction.

Flexible pricing and business models are important in some particular areas. We have mentioned India before. There are other areas also where we are finding different business models and ways of making our products available and affordable to the customers. So that's part of our strategy. And as I mentioned, building a position in vascular has been a focus for quite some time already, and we are getting traction there.

Last but not least, to expand our direct market coverage and getting closer to our customers, that leads us into the change that we announced the 2nd of February this year that we're opening our direct sales office in Japan. So as of 16th of March, we are direct. We have now a very solid team in place. We have 10 employees there and a very experienced leader with background from the vascular area, which is really very important and provides optimism in terms of breaking into a vascular market also in Japan.

We know that we -- Japan is the strongest market for us in terms of the market penetration, 90% of the CABG surgery procedures are already supported with our technology. And the question is then how to continue this growth. So by getting closer to the end users, we want to get high traction of the conversion from flow-only systems to flow and imaging systems. Of course, we get, let's say, the one-off effect of capturing the distributor margin. So that's also important. And then we will then seek to untap this potential from vascular procedures as well.

So last year, we had sales through our Japanese distributor of about NOK 21 million. And that gives some idea about what we could expect for this year, taking into account that the distributor margin would be now going to Medistim.

As also mentioned in the previous quarterly presentation, that related to the first quarter, I want just to remind that we are now sponsoring a new randomized clinical trial in CABG surgery, the so-called SMARTFLOW trial. And being a large randomized clinical trial comparing the use of flow technology versus no use of flow technology, this could be a breakthrough into providing the evidence to make our technology being eligible for guideline inclusions in the United States, which is the country where we are lacking that kind of support.

And the lead investigator of the trial, Professor Mario Gaudino, well known, really one of the -- well, I would say, the stars on the CABG heaven at this time. He was also the first author of the circulation paper that we have been referring to many, many times, which is an absolutely critical consensus paper stating that this group of highly renowned surgeons are saying that TTFM should be used in every CABG case. But this paper is also concluding that there is a lack of randomized clinical data, and this is now the project that they want to go through.

So we know that the first patients have been enrolled in this trial. It is going to be 1,242 patients enrolled. And there will only be Medistim's MiraQ flow measurement system that will be used, that will be mandatory. And then we will, of course, also encourage the surgeons to use the imaging component while this is not mandatory. It will be a relatively big trial with 20 centers in U.S., Canada, Europe and Asia, so good coverage there. And the goals of the study to begin with is to determine whether TTFM reduces the rate of graft failure. This will be checked within 1 to 3 months of the surgery, and it's going to be documented by coronary CT angiography.

Then the idea is that this provides a platform to continue the study and evaluate the impact of TTFM on the longer-term clinical outcomes. Then we're talking about myocardial infarction, repeat revascularization, survival and quality of life. And these are the outcomes that are relevant for guidelines considerations. So we really believe and hope that the whole -- the platform study will be prolonged into this long-term clinical outcomes study.

So exciting days. Our enrollment here, of course, it's a scientifically independent trial, but we are making a limited financial contribution of USD 500,000, which will be supporting the study over the course of the trial.

At the side of, of course, the main objective, which is to provide this evidence is also providing us with an opportunity to facilitate upgrade of the imaging at the sites that are currently not imaging users. So that's, let's say, a very interesting business opportunity. And then we will also encourage and help the centers to get hold of the newest INTUI software. So this is also a great opportunity.

Yes. Then I think we can open up for questions.

And we have some questions today, too. Congratulations on surpassing NOK 200 million in first quarter revenue. APAC delivered strong growth in this quarter, accounting for around 24% of sales of own products. What is your ambition for this region? And which markets do you see offering the greatest growth potential from today's levels?

Absolutely. So I think the moves we made in Asia Pacific first by establishing our own team in China and going through a little bit of a rough patch in the early days there with some distribution channel issues, we now see that we are really getting a return on that initiative and investment. So it was really encouraging us to move forward also with going direct in Japan.

Then Asia Pacific is, of course, many other interesting countries and opportunities, and we've highlighted India as one of the next big growth opportunities in the territories. And that will also be a region where we will be placing, I guess, more resources and give more attention and continue the great collaboration we have with LivaNova in that territory.

So yes, Asia Pacific is the runners up for driving growth for Medistim. But the Americas and U.S., in particular, will continue to be the major and foremost growth driver also in the sort of near term or the next few years.

Thank you. On the cost side, other operating expenses increased significantly. Do you view this as one-offs? Or should we expect higher operating expenses going forward?

I'll answer that, Kari.

[Audio Gap]

Well, of the increase of just over NOK 10 million, I would say around NOK 5 million is one-off expenses, and that is related to the IT infrastructure project that will be a project that we will finalize during the year. We also have this agent commission, which are unusual NOK 2.1 million.

In addition to that, I would say that the -- establishing of the Japanese office around NOK 1 million are one-off expenses. But going forward, we will still have that operations ongoing, but this is kind of like a one-off to establish everything. So those are the one-offs.

The recruitment, I mean, Medistim is growing, so we will always recruit. So that will be ongoing. It could be timing related to that when the expenses are coming. And our commercial activities are something that we are actually driving to make sure that our sales force are getting out there and make sure that they have a face time with the customers. So around NOK 5 million, I would say, are one-off expenses.

Thank you. The next one is on currencies. Currency movements have had a noticeable impact on this quarter results. Could you outline your currency strategy and how Medistim manages FX risk?

It's actually very simple. We do not speculate in currency. So that means that most of our cash coming in, in U.S. dollars and euros are then converted to Norwegian kroner as they come into us. However, we do have some hedging contracts that we enter when we do see that the currency is favorable for Medistim. So in that sense, we are a little bit speculative. But in general, it's more like a spot conversion to Norwegian kroner.

This has been the case for Medistim in many, many years. We try to make hedging contracts in order to reduce the risk, but we do see that whether you do that or you enter or convert on spot currencies, all in all, you will -- you could lose or gain regardless. If we do have a secured cash flow for a large project, it makes sense to have a hedging contract because you know then you will have an amount of euros or U.S. dollars coming in.

Our cash flow is not like that. It's more a random cash flow stream that comes into Medistim, and therefore, it's a little bit more difficult to plan that in that sense.

Thank you. The third-party business showed a decline of some 30% compared to 2025. Can you elaborate on the development and the expectation going forward?

Yes, I can perhaps say something about that. I mean, as you know, we had a tremendous year last year. So the first quarter and maybe a bit into second quarter as well, we provided a very strong result and growth for the third-party portfolio last year.

Going back, it has been a lot of variation, but I would say maybe the growth rate has been around 5%, so much more moderate. And I think in sort of a normal circumstance, it's probably around there that expectation should be.

So yes, there's no real changes that we're seeing. I mean we have a solid portfolio of products. We are managing those working closely with the suppliers that we are serving. And we're also seeking new agencies on a regular basis.

So I'm very happy with the third-party team that we have. They are operating a lean organization, providing good margins on their work. Yes. So I'm expecting that to continue sort of in the more historical levels.

The last question is on the public chat. What kind of gross margin level on own products is to be expected going forward?

Well, what we've seen throughout the years is that our own products are increasing more than third-party products. And as we do that, the gross margin increases in percent and also the EBIT margin. So to answer that, I mean, we do have in our reports the split of the segments, sales of our own products and sales of third-party products. And based upon that split, you could see what margins are to be expected from sales of our own product and EBIT margin as well.

The thing though that could affect it is that if we continue to grow, and that is expected in our direct markets, these margins will actually continue to grow as well as we shift more business from direct operation compared to distributor operation.

Thank you. And that was all the questions. Just a sec. [indiscernible]. Could you give us an update on your factory automation project?

Yes. So we have mentioned that one of the projects that we're working on has been to, well, redesign our probes and making them possible to automate. And that part of the project has come to, well, almost a conclusion, and we are in the phase of sort of looking into various options on how to actually move forward with that automation.

So I can't give very specific information about that, but this is a very important and critical project for us. We want to make sure that we have really a future-proof production process that not only provides improved COGS levels for us, but are securing the high volumes that we will be needing to supply the market with when we are fulfilling our growth objectives.

So yes, it's moving forward, and we will give more information when it's becoming more concrete.

Then we are through. Thank you.

Thank you.

Thank you very much, and we look forward to the next encounter. Thank you.

Good morning, everyone, and welcome to Medistim's Fourth Quarter and Preliminary Financial Results for 2025 presentation. My name is Kari Krogstad, and I'm joined with the CFO, Thomas Jakobsen.

And we will go through this usual agenda, starting with the highlights. And I'm very pleased to being able to report a new record for sales in the quarter, reaching NOK 182.3 million in Q4. This means that we are continuing the high growth all through the year that we've seen in the first 3 quarters, ending with 20.6% growth in this fourth quarter. We can see that there is quite a small currency effect when we are comparing to the currency in the same quarter last year. But still adjusting for that, the total sales will be -- could be 21.7%.

And we're seeing that our own products are doing really well, and the sales is up 25%. And it is AMERICAS region that is really leading the way with 44.3% currency-neutral growth. We also see that EMEA, Europe, Middle East and Africa, has a very strong quarter, this fourth quarter being up 24.4%. Our Asia Pacific region is down by 24.2%. And as we have consistently reported all through the year, we have to expect quarter variations from Asia Pacific, but we also expect it to see a solid year, which we will show.

The third-party products has a small 2.2% growth in the quarter, but we know that they had a tremendous start and will finish the year very strong. Also, the operating profit is very strong, NOK 42.3 million, up 63.8% from the same quarter last year. And I just want to mention that the EBIT margin of 23.2%, although being a lot higher than the margin that we reported in the same quarter last year is impacted by an increase in IT infrastructure expenses of NOK 5.8 million. So this obviously had a negative impact. And actually, this EBIT margin would have been about 26% without it. But I will leave to my colleague, Thomas, to give a bit more background for this. But a very decent ending of the year.

This is then taking us to a record year for both sales and operating profit. So almost reaching NOK 700 million in revenues, completing the year at 24.4% growth. Slight currency effect and adjusting for that, the total sales is up 25.8% and we're seeing that our own products sales is as high as 28.3% growth. Again, it is AMERICAS that is leading the way, up 40.5%, but also Asia Pacific, extremely strong at 40% growth and also EMEA with a decent 7% growth for the year. We know that we have a lot of highly penetrated countries in that region.

And also our third-party products having a record year and growing 12.7% in '25. This takes us to an operating profit record at NOK 196.2 million, up almost 50% from last year and also giving us the strong EBIT margins at the high 20s that we would like to see of 28%, and this is very much driven by the strong sales of our own products through the direct sales channel.

So based on these results, the Board will suggest to the general assembly a dividend of NOK 8 per share, a total of NOK 146.2 million. So this means that we are able to adding another record year to our history and also meaning that we continue to deliver on our promise of profitable growth consistently over time.

So with that, I will leave the word to Thomas.

Thank you very much, Kari. I will, as usual, take us through the financials for the quarter, but also for the year. Since Kari is going through sales revenue more in detail for geography and products, I will not go into that detail here, but I need to mention that with record sales and especially sales through our direct markets and especially the U.S.A., this improves our margin going from 77.8% to 80.2%. Having said that, on the negative side, we actually have here a tariff expense of almost NOK 4 million included in the cost of goods sold related to the tariffs implemented in the U.S., which for Norway is 15%.

Salary and social expenses increases as we discussed in previous quarters, we've strengthened our commercial team, but also our R&D team and operations. At the same time, we also have a record year, which means that we have higher commissions and also bonuses related to the results that we are now presenting to you.

Then you would expect maybe on other operating expenses with Kari's note that NOK 5.8 million is expense related to IT infrastructure. And when you compare that to last year, the expense is almost the same. And the reason for that is that we had also a very high expense level in the fourth quarter in 2024 related to congresses and especially the launch of the INTUI software. In addition to that, we also had recruitment expenses to our new commercial sales team. So both fourth quarter 2024 and fourth quarter 2025 is then relatively speaking, high when we look at these quarters.

So what is this IT infrastructure external expense? Well, we do have an ERP system, a CRM system and a PDM system that is today on-premise, which we are lifting to the cloud -- to a cloud solution. And if we were to lift this from one on-premise solution to another on-premise solution, this would obviously be an asset for the company. All the expenses related to that work would be company property and therefore, an asset. When we do this from on-premise to a cloud solution, still the coding that's Medistim related is still an asset. But according to the international accounting rules, when you are using standard configurations and standard setups, that part of the project lifting it to the cloud is not an asset, and therefore, this part of the project is expensed. And what we've seen here for the fourth quarter, NOK 5.8 million has therefore been expensed, and that's the explanation why we have this situation.

Even so, EBITDA increases from 21.4% to 27.1%, ending at NOK 49.3 million. Depreciation is slightly higher than last year. But even so, EBIT percentage increases from 17.1% to 23.2%, ending at NOK 42.3 million. Net finance is currency-based realized and unrealized gains and losses, ending positively for the quarter with NOK 5.5 million. All in all, profit ends at -- before tax ends at NOK 47.8 million and profit after tax increases 78% and ends at NOK 38.1 million for the fourth quarter.

So going into the total year, yes, we almost end the year at NOK 700 million. So this is definitely a record for Medistim. When we look at margins, same explanation as for the quarter. However, the total tariff expense in 2025 is also NOK 4 million, which means that before the tariff was introduced in the U.S., we shipped over all the products that we were able to ship to the U.S. to avoid the tariff on those goods, which means that we've been selling from an inventory in the second and the third quarter of 2025 on products that are not affected by the tariff. So we do now see that in the fourth quarter, we have the full effect of the tariff. And going forward in '26, we will continue to have this effect as long as this tariff of 15% is valid.

Salary and social expenses increases and the explanation is the same as for the quarter, only larger numbers. Other operating expenses also increases, and we have been very much pushing our sales team to be out with face time to the customers. So the increase of the expense is related to our commercial teams being out there traveling, visiting customers, and we have very good experience that the more face time we have with our customers, the better results we will have on sales. So that is something that the new commercial team has been pushing.

EBITDA percentage increases from 27.7% to 31.6% for the year. EBIT margin also improves from 23.3% to 28% and ends at NOK 196.2 million. Net finance, I can also add in addition to currency that we have effect of -- positive effect of interest on additional cash, which amounts to about NOK 5 million. All in all, profit before tax, first time is over NOK 200 million for Medistim and ends at NOK 206.8 million and profit after tax ends at NOK 159.2 million, up over 50% compared to last year. So a record year of top line and bottom line.

Balance sheet, our intangible assets increases. 3 major reasons for this. We have the 2 development projects ongoing, but we also have the IT infrastructure project, taking our systems from on-prem to the cloud, increasing the intangible assets. When it comes to inventory, we see that inventory level is at the same level as last year. However, our inventory level peaked by the end of the second quarter at almost NOK 175 million. And the reason for this was related to the period when supply chain was an issue, and we placed orders, which we now have honored and this has been delivered.

So going forward, from a lot of our critical components and some of our most expensive components, we do not expect to do purchase on these components in 2026. And we will then -- the orders that we're now placing is then for delivery in 2027. This means that going forward in 2026, I would expect to see inventory levels actually decreasing. Accounts receivable increases natural when we increase sales. Our cash position is solid, ends at NOK 212.1 million. And as Kari mentioned, our Board, based upon the solid cash position, a very good year 2025 profit-wise and a good forward-looking situation in '26 and going forward, the Board has suggested to the general meeting to pay a dividend of NOK 8 per share, which is NOK 146.2 million in cash payment in total.

Our equity liability, we have a strong balance sheet, more than 70% equity. Also, our long-term liability is not related to bank debt. So we have no interest-bearing bank debt. And this is then related to extended warranty and service contracts, which is here deferred income, NOK 11.5 million. And we also have a total of NOK 49.3 million in obligations related to our lease contracts, of which NOK 37.5 million is long term.

Some key figures. We see that our earnings per share increases quite nicely in the fourth quarter ends at NOK 2.08. So Krones is the Norwegian termination for NOK. For the year, it ends at NOK 8.71 per share, which is up and corresponding to the development in our profit, obviously. So again, a strong year. Our cash flow is also positive. We have a strong cash flow from operations, both for the quarter and for the year. Our investments, NOK 36 million in total for the year, we have NOK 22 million related to product development. We had NOK 10 million related to our IT project as the 2 major investments that we are involved in at the moment.

Cash from financing ends at NOK 122.7 million, and the majority of that is the dividend we paid in May of NOK 109.5 million. So net -- change in cash is positive with NOK 32.8 million, and we end the year with a cash position of NOK 112.1 million, which is also a record actually going out of the year when it comes to cash. So by that, I leave the word again to Kari to continue this presentation. Thank you.

Yes. So let's take a deeper look into the various products and segments starting with the Flow-and-Imaging systems In units. So we see that we have volume growth in all regions, giving a net 5 more Flow-and-Imaging units sold this quarter. And we are, of course, very happy to see this development both for the quarter, but even more so for the full year. We see strong volume growth in AMERICAS, which is in volume growing by 84% and also in Asia Pacific, up 75%. And as we all know, this is really the most important product from Medistim, it is really what separates us from competition, having these 2 modalities in 1 system, both imaging and flow. And it's the higher value, higher priced products.

So it's very important for us to see increase in sales of this particular product. EMEA, as we can see, is down for the year by 14% but it's growing on the Flow system side. When we are selling more imaging systems, we also expect to see more imaging probe sales. This particular quarter, it is down, but we are noting that the third quarter this year was exceptionally strong, so not really a big surprise. And again, for the full year, with the very strong performance in the AMERICAS of the sales of the imaging products, we also see the strong volume growth on the probe side with a growth 81%.

Asia Pacific and EMEA was done in volume for imaging probes. We're then looking at the Flow-only systems, we are down for the quarter. And -- but for the full year, Flow-only system volume was down in AMERICAS by 36%. Of course, this is related to the high growth that we're seeing on the imaging side in AMERICAS, But we're also seeing that Asia Pacific also growing on imaging is actually growing 35% on the volume side with the Flow-only systems, which is very strong. EMEA also up 6% on the volume side here. So we are seeing after a couple of challenging years that the imaging sales are gaining momentum again. And Flow-only units then rose 4.3% to 121 units, while the combined Flow-and-imaging unit surged at 39% to 92 units. So about 43% of the total number of systems was actually including the imaging in 2025.

Also when it comes to flow probes in units, we've had a great quarter and a great year. So for the quarter, we're growing 26.5% in units. And for the full year, flow probe volume sales is up 20.7%. This is very much driven by the strong 17% growth in capital sales of all systems. And yes, so as a conclusion here, it is both the capital system sales, but also increase in use that is driving the demand for these consumable flow probes.

Looking at the regions in a little bit more detail. So starting with AMERICAS. And as we know, more than 90% of the revenues from this region actually comes from the United States. We are ending Q4 at NOK 86.1 million, meaning 44.3% currency-neutral growth. And we are seeing that total capital system sales declined by 2 units, but we are selling 2 more imaging units, and these are really high-priced products. So it really compensates for the lower number of units.

We also saw strong probe sales for the quarter. Flow probes up 56%, imaging probes up 15%. So extremely good performance in the U.S.A. And also, we are seeing positive contributions from the smaller parts of this region. Our new direct market Canada has shown a very positive performance all through the year and had a growth of 56% in the fourth quarter. Latin America is a very small region here.

Closer look into the AMERICAS. Here, we can see what the impact of selling more capital systems on the Flow-and-Imaging configuration. This is really what drives the revenues from AMERICAS. So 28.6% growth in volume for the quarter, but 84% growth in volume for the full year. Also, when we're counting the number of procedures coming from sales, whether it's from the smart cards and the lease agreements that we have or directly from selling flow probes to the capital customers, we are noting that this is increasing tremendously, 72.6% from the flow probe to capital customers for the quarter and 60% for the year. And this actually ends at over 100,000 procedures, flow procedures in Americas for the full year.

So this is definitely a new record. And when we are then adjusting for some of these probes being sold to Vascular customers, we are now estimating that we have an adoption rate in the U.S., not at 37% as we reported last year, but at 40%. Also, it's interesting to note that procedures from imaging probes to capital customers is growing nicely, ending at 83% growth for the year.

Looking at Asia Pacific. So as I stated, it's a slow quarter. It's down 24%, but up 40% for the full year. So definitely a success and finally being out of the challenging period after the transition into a direct organization in China. China is the biggest region here, sales were down 49% for the quarter, but up 32% for the year, ending at NOK 45.7 million. And we have to remember that actually all countries in Asia Pacific depends on distributors. And still in China, where we have our own employees, and we are, of course, supporting end users as well, we still are relying on distributors and agents, and this will always give variability in the quarterly sales as we have consistently informed.

Sales to Japan were down for the quarter, but is showing a solid year, 71% growth, ending at, I would say, a normalized NOK 20.6 million when we're looking at historical sales. And as we have announced earlier this month, Medistim will now go direct in Japan. I will get back to that in a few minutes. Also, the other countries and other Asia Pacific distributors are actually contributing very positively, 95% growth for the quarter and 38% growth for the year, ending at NOK 25.8 million.

Europe, Middle East and Africa, NOK 56.2 million in sales in Q4. That is currency-neutral growth of 24.4%. So a really strong finish from the EMEA region. It's particularly a strong quarter for the direct markets, which we, of course, like to see. We're talking about Spain, Germany and all the Scandinavian countries, where we see currency-neutral increase of 13.5% for the quarter. Also sales through distributors was up with currency-neutral increase of 34.3% for the quarter, ending at this 7%, which again, I feel is a decent result, but we have ambitions to grow this in the future.

Third-party products, 2.2% for the quarter, 12.7% growth for the year. This is a highly diversified product portfolio. Mentor and their breast implants, Icare and their ophthalmology products and A.M.I with their urology and proctology products are the biggest contributors here. And we remember that it was ophthalmology products sold to new hospitals in Norway that was really driving the high growth that we saw in 2025. And this took the third-party product portfolio to a new record of NOK 101 million.

So this summarizes and shows that it's a really good performance, I would say, from all regions, but I have to highlight the contributions from AMERICAS and the fact that we are growing 35.9% in total from a very high base of NOK 237 million to NOK 322 million in 2025.

Taking a look at the split of Cardiac versus Vascular sales. We're happy to see that we see strong growth in both Cardiac and Vascular products. But we are continuing to see that the Vascular surgery products continue to have higher growth rate than the Cardiac surgery products. And we're also seeing that it's gradually taking a larger share of the total sales of own products. And in '25, we ended at almost 20% of the revenues from own products coming from Vascular. So this is also a positive development.

If we look at the split of Flow-only products versus the Imaging systems and probes, we then see that after this challenging period in '23 and '24, the revenues from imaging products are back with the highest annual growth so far at 47.4%. And now the revenues from sale of Imaging products make up 31% of sales of own products. Also, when we are checking how we're doing with our recurring revenues coming from sales of paper procedure, smart cards and lease revenues and also sales of our probes, we are seeing that '25 is ending at -- just above 70% as a percentage of recurring revenues. So pretty much consistent with what we've seen over the years.

Then allow me to provide some comments also on how we're doing in implementing our strategy, reminding everyone that our vision is actually to place a Medistim system in every operating room all over the world. That's a big task, and we are making progress, but there is still very high growth opportunities here. A couple of years ago, we launched our midterm goal of being reaching NOK 1 billion in sales in a few years. And with the NOK 700 million that we are delivering in 2025, we are well underway of achieving this goal.

And the strategy to actually get there is this combination of converting the high penetrated Flow-only CABG market to Flow-and-Imaging. It is to continue to grow in those markets where we are underway with flow and getting increased adoption of our flow technologies in every market. It's also to be flexible and provide entry-level solutions in price-sensitive markets and absolutely to build a position in Vascular surgery, which I just showed that we are also progressing on.

Expanding direct market coverage is also a very critical part of our strategy. And now on the 2nd of February, we sent out a press release to say that as of 16th of March, Medistim opens a direct sales office based in Tokyo. And I can report that we already have a solid team with experienced leader in place. And our situation in Japan is well known. We have 90% of the approximately 17,000 CABG surgery procedures performed in the market. And as just reported, we ended 2025 with sales to our current distributor there at NOK 20.6 million.

So the growth opportunity is, of course, coming from our experience of getting closer to the end users is really critical to maximize the value from the market. And the first thing that will happen is that we will capture the distributor margin. And then longer term, we will have the opportunity to continue to grow with our Flow product to convert from Flow-only devices to Flow-and-Imaging devices. We have a decent uptake of imaging system, but it's still only maybe around 35%. So there's definitely continued growth opportunity in CABG surgery. And then comes an untapped potential from Vascular procedures as well.

Another part of our growth strategy is to support activities that will grow adoption in underpenetrated markets for Flow. And clinical marketing is critical. So on the 24th of February, we announced that we will sponsor a new trial, SMARTFLOW, which is a randomized clinical trial in CABG surgery. And we're very excited about this study. First of all, it's going to be led by Professor Mario Gaudino, a very prominent surgeon at Weill Cornell Medicine in New York. And this opinion leader is the first author on the consensus paper published in circulation in 2021, where a group of surgeon experts made 10 expert statements, including the very famous transit-time flow measurement should be used in every CABG case. So it was an extremely positive and supportive article in a prominent paper supporting our technology.

At the same time, in the conclusion in this paper, they stated that, of course, it is desirable to perform a large randomized clinical trial to really -- to provide the best evidence for this claim. And that's exactly what they are now seeking to do. This is a quote from Professor Mario Gaudino. He says that most existing studies evaluating TTFM are small, observational and methodologically heterogeneous. Although expert consensus supports its use, the lack of adequately powered randomized evidence remains a barrier to widespread adoption in clinical practice. This is his words. He also says that SMARTFLOW has been designed as the first appropriately powered randomized trial to rigorously evaluate intraoperative graft assessment with TTFM in CABG.

And by generating high-quality randomized data on the impact of TTFM on early graft failure and by providing a platform that can be extended to assess clinical outcomes, the SMARTFLOW program has the potential to inform future guideline recommendations and promote a more consistent evidence-based approach to intraoperative graft assessment. So this is Professor Gaudino's words. The study design of the SMARTFLOW is that it's expertise-based. That means that 1,242 patients that will be enrolled in the study will be randomized to either a surgeon, an expert surgeon, doing flow measurements routinely or to a surgeon who is not doing flow measurements. So this is the concept of an expertise-based trial.

And the graft patency will be assessed with Medistim's MiraQ TTFM. And the imaging modality will also be available, but it's not mandatory to use that in this study. And we're talking about 20 centers in the U.S., in Canada, in Europe and in Asia that will partake in this trial. And the goal is to evaluate whether TTFM reduces the incidence of graft failure within 1 to 3 months post surgery as assessed by coronary CT angiography. So there are plenty of studies that are already providing evidence for this, but this is going to be a higher quality, larger study randomized that will hopefully provide really the next level of evidence for this.

And providing a positive outcome here, the study may be extended to evaluate the impact of TTFM on longer-term clinical outcomes, and that would include myocardial infarction, repeat revascularization, survival and quality of life. When it comes to Medistim's enrollment here, of course, it's completely scientifically independent trials. We have nothing to do with the interpretation of results or anything. And the study is primarily supported by philanthropic donations and federal funding, but Medistim is then serving as the only industry sponsor, and we will contribute with, I would say, a pretty modest USD 500,000 over the duration of the trial.

This will, of course, be a great opportunity for us to facilitate upgrades to imaging in those centers that haven't already started using imaging, and it's a great way of also getting our newest INTUI software into the hands of these very good centers. We are also facilitating the study with our Case Cloud solution for data collection storage and analysis, the same as we're doing in the PATENT study. So with a good, I would say, great probably '25 behind us and also already moving into '26 with opening up a new market for us in Japan and also sponsoring and participating in this exciting new trial to support our CABG surgery market. We are moving into 2026 as one team, making bolder moves with excellence accelerated.

So with that, I think we will open for questions.

Yes. And we have a number of questions today. The first one is on Japan. Congratulations on the opening of an office in Tokyo. How do you see the growth opportunities in Japan? And will you focus on developing the vascular market there?

Yes, I can comment on that. So first of all, I think we will -- our ambition is to run a more efficient operation in Japan with our own people on the ground. And as I explained, we still have growth opportunities in CABG surgery, first and foremost, from converting from the Flow-only system to Flow and Imaging. But certainly, vascular surgery is also adding growth opportunities. And I might add that the leader of -- the General Manager of our Japanese office actually is coming from a company, a medical device company serving the vascular surgery community. So he is well connected to vascular surgeons in Japan and will really be a great champion for us in our endeavor there.

It's another one on Japan. When you went direct in China, we saw a longer period of low sales and negative margin impact. Should we expect a similar situation in Japan?

Well, we had some learning from our Chinese experience. And one of the learnings was that we have shortened the transition period from 12 months to 3 months. And with the 12 months transition period in China, the distributor had the opportunity to fulfill their pipeline to a much larger extent because of having 9 additional months to fulfill that. So with shortening this period with 2 to 3 months, we have seen actually a limited possibility for our Japanese distributor to do the same thing as our Chinese distributor did.

And also, we have -- although we honor those orders that come in that is tender related that our distributor has worked through, we have also been very restrict on typically larger probe orders if that were to come in. Having said that, we haven't seen that as of yet. So we are actually quite optimistic that this Japanese transition will be much smoother than the Chinese one. And also, in addition to that, our position in Japan, where we have 19% coverage at least on CABG. We have a very strong recoverable revenue stream. And we do believe that in the first year of '26, we will at least have an EBIT margin or breakeven situation in Japan maybe even a slight positive contribution. But at least going forward into 2027, we are convinced that Japan will give us a positive contribution to our profits.

The next one is on the tariffs. The report indicates that price increases have been absorbing the tariffs in the U.S. How has the price increases been received in the market? And do you think the price increases can affect sales volumes going forward?

I take that too, Kari. Well, I don't think any customer will embrace a price increase as such. But having said that, we haven't seen any significant resistance in the U.S. related to the price increase either on systems or on probes, and we do see that capital sales are continuing to grow and also probe sales. And we introduced this price increase effectively end of June. And what we've seen at least on probe volumes is that flow probes in the second half compared to the first half increased with 38% in volume.

And the same for imaging probe, which has increased 50% in volume. So, so far, we have not experienced that this price increase is actually decreasing volumes. It's rather the opposite. So going forward, we are quite optimistic that this price has been accepted.

We have more questions on tariffs. Does the NOK 4 million hit due to the tariffs imply that all the products sold in the U.S. in the fourth quarter were tariffed? Or will this number continue to increase as more and more stock run out that was not tariffed?

Fourth quarter, all products were tariffed. So that is the level that given the same sales volume in the U.S. going forward. So this actually started the last days in September actually in the third quarter. So fourth quarter is a full quarter of -- with full effect of tariffs.

Yes. And it's a follow-up on that. How high do you expect the annualized run rate for tariff expenses in the U.S. to be once all inventory is sold?

This is more or less answered and this is all dependent upon the level of sales in 2026. We do have a tariff of 15% -- 50% sorry -- 15%, sorry, 1-5. And the effect of that for us when we import to the U.S. is that we will have to increase our external pricing with 9% in order to neutralize it. And as we've seen from our report today, we more than neutralize it by actually increasing our gross margin. But to say how much tariff we would pay would kind of for me today, be impossible to say an exact number.

The next one is on the number of procedures. How come there is such huge jump in the procedures in the U.S.? Have there been higher demand for probes due to the announced price increases?

No, I would say that the increase in capital sales and the way that we are approaching it is also always selling sort of a start-up package with probes. And I think that has also probably grown with the new approach from the new sales team. So it's really connected to getting new users started with the Flow technology. Of course, some of this is then, you could say, for inventory, it will take some time for these new customers to consume all of these probes, but -- and that's what we're trying also to estimate when we're saying that adoption rate has grown. But with the large increase that we're seeing, part of this is definitely due to increased utilization.

Then we have some questions from the chat. Could you comment on development in larger EU economies and whether you have plans to go direct in new markets there?

Yes. Europe is still very interesting for us. We have pointed to Turkey as actually a new target market for the EMEA region. And Turkey actually have a higher CABG number of procedures, for instance, than Germany as, of course, the largest European country as such. So that's the progress we made in 2025, working with our distributors to refine our business strategy and model there. So that's definitely a new market that we will invest more deliberately in and provide more support to in '26 and onwards.

Then we also have interesting, I mean, markets that's been worked by our distributors for a long time, we talked about Italy and France, which are currently at around 40% adoption of Flow technology. So obviously, a lot to do there, both to increase the use of Flow, but then also to convert to imaging and of course, the Vascular also to follow. So -- and in general, I can just give the answer that we have a list of countries which are of interest when it comes to being targets for the next go direct strategy.

Congratulations on the strong year. Regarding the U.S., what has been the main trigger for the strong growth acceleration there? Is it insurance policy changes or industry becoming more aware of the value proposition? And do you expect penetration to keep rising at a similar pace this year?

I think the fantastic results we're seeing from AMERICAS this year is a result of numerous factors. First of all, '23, '24 was more challenging on getting the capital sales of imaging systems as we pointed to. And really selling imaging, high value, high priced is very important for continued high growth. So getting back into that situation where actually the interest in our imaging technology is actually successfully converted into a sale that has happened in 2025. And that is, of course, due to our long commitment to positioning the imaging technology, and we're seeing the results of that. We never lost confidence that the surgeons wanted the imaging technology, but it was the economical situation in '23 and '24 that was postponing a lot of the sales processes. So that's one factor.

But then I think the change with a strengthened commercial leadership and also intensive and significant investments in supporting our sales force in the U.S., but also in all our direct markets. We've done a lot when it comes to improving our training for our sales reps this year. We provided numerous events for training, both on the technical, clinical and definitely on the sales side of the sales process. So I think that also contributes very well. And of course, the attitude, the strategy from sales leadership, which is, I would say, more forward-leaning, more ambitious and definitely showing very much a can-do attitude. So I think it's multiple things.

Of course, pricing, we have increased prices as well. That's also contributing. But as we have shown, this is combined with the increasing volumes as well. When it comes to whether this will continue, I think it will be very hard to keep it at the current or the '25 growth levels going forward. As I said, a lot of this is coming from the comeback of the imaging systems and probes, which were really low in '23 and '24. So that growth level will not be there in 2026. But the investments we made in the team and also increasing the confidence and going after the vascular opportunities will continue to provide opportunities and support further growth in the U.S.

The next question is on INTUI. INTUI has been mentioned in your previous presentations, how much of the growth last year was done to this new launch?

Yes, actually very little. We have to remember that we started selling the INTUI in the second half. And that means that we are then starting to introduce the INTUI into the sales -- the new sales processes. When it comes to quotes that were already out there based on the former configuration and former pricing, that was for the large part, just kept as it is. So I think we had a total of 8 INTUI sales in the second half.

And then we also have to remember that for now, we are selling the INTUI for the cardiac-only systems. We're not making it available yet for the Ultimate systems and the Vascular systems. The Ultimate is the combined solution for both Cardiac and Vascular. So this really means that when we're going forward, more and more of our sales will be on the INTUI. That means that the upside from the INTUI launch is still ahead of us, which I think is a great thing.

You announced your support to the SMARTFLOW randomized clinical trial on TTFM reducing graft failure led by Prof Gaudino recently. Do you think this will affect Medistim sales going forward?

As I said, we're very excited about this study. I think it's that lacking piece of evidence that everybody has been talking about and found it very difficult to address because it will be costly to do a large trial like this. And also there are ethical aspects that we never got flow users, surgeons that are using flow to accept not to do the flow measurements on some of their patients. That's why they come up with this expertise-based randomization strategy. But I would again also point to the fact that we have achieved a very high adoption rate in many countries. I mean, 90% in Japan, 80% in Central Europe and Nordics and well underway in the U.S. with 40% right now.

So I -- there's no reason to wait for the trial and think that we will not be able to grow. We will grow year-by-year without the data from this trial and also without the guidelines that can come out of it, which is, of course, many years ahead. So -- but I think the value of it is really to keep attention to flow technology and really the question of the value of using this technology versus not using it. So I think it will keep the topic relevant and interesting. It will be talked about in the conferences for the years to come, which is all positive for Medistim and for the sales of our product. So I do think it will be supportive. I don't think that we are depending on it.

Thank you. That was all the questions this time.

Thank you.

Then we say thank you for this time, and we will see each other for the first quarter report. Thank you.

Good morning, everyone, and welcome to the presentation of Medistim's third quarter results. So my name is Kari Krogstad, and I have my CFO, Thomas Jakobsen, with me, and we will take you through the results.

Before entering into the highlights, I would like to remind ourselves on our track record and our commitment to deliver profitable growth consistently over time. And as these graphs are describing, that is a promise we have delivered on.

So let's look into the highlights for the third quarter. And after a record start of the year with the first half providing records both for sales and revenues, I'm very happy to present our best third quarter ever for both sales and revenues or operating profits. We can see that we are delivering NOK 166.8 million in revenues. That's a 25.7% growth. And EBIT also growing very nicely, ending at NOK 40.6 million, 27.1% growth. We can see that we have very little currency effect this quarter. That means that the total sales is almost the same, 25.9%.

And looking at the sales of our own products, we see that, that is at almost 30%. So a very, very nice contribution from our own products this quarter. And Americas is continuing to take the lead here, up 35.7%. And of the NOK 34 million of growth this quarter, Americas are actually delivering NOK 21.5 million. So 63% of the total nominal value here is coming from Americas, just highlighting the importance of this region for Medistim's growth. Asia Pacific also delivering very nicely, 194% growth. And the only disappointment here this quarter is that EMEA is a bit down. It is the European part that is showing a decline this quarter, while the Middle East, Africa section of it is actually growing, and we will get back to more details into what's happening this quarter in EMEA.

The third-party products has a normal growth, we would say, looking back at historical levels that has been around 5%, so 4.4% is in line with that. We can remember that we had a fantastic first quarter due to some new hospitals establishing their practices here in Norway. So this is really getting back to a more normal situation.

This strong sales performance has led to some higher commissions and accruals for year-end bonuses, and we will see that the operating expenses has increased also quite a lot this quarter. Still, the operating profit is up by 27% and at a margin of 24.3%, so pretty decent.

Looking then at the year-to-date situation. So that means that we are still at the best level yet, record sales revenues and EBIT year-to-date, NOK 517.5 million, 25.8% growth on revenues, ending up at NOK 153.9 million in EBIT, a 46.2% increase. Again, very little currency effect here. So total sales up 26%. Our own products, very high, 28% growth. And Americas, as indicated, really taking the lead here in the growth year-to-date at 36.2%. Asia Pacific also contributing very nicely, 73%. And year-to-date, EMEA is up at 1%. Third party, well, this is an effect of the tremendous first quarter we had. So year-to-date, this is growing at 16.2%. And operating profit up 46%, a strong EBIT margin at almost 30%, and this is related to strong sales of our own products.

So with those highlights, I will leave the floor to Thomas to go through the P&L and some of the other numbers, and I'll return with some more details on the business segments.

Thank you for that, Kari, and good morning, everyone. I will take us through the P&L, our balance sheet and cash flow for this quarter and year-to-date. And since Kari is going through sales figures in units split of sales per product and geography, I will not go into that detail in my presentation here. However, cost of goods sold and gross margin is increasing with 1.2%. That despite the fact that we have a strong increase in sales of our imaging portfolio. As we've said before, our Imaging portfolio has a slightly lower margin than our flow products, but we have very high pricing on the imaging products, and it's very profitable for Medistim. And this is partly compensated with high sales to our direct organizations, especially in the U.S. And therefore, we have an improved gross margin of 1.2%, ending at 81.5%.

Salary and social expenses increases from NOK 46 million to NOK 60 million. Yes, we have increased our capacity in our commercial organization and elsewhere in the organization. But the main driver for this increase is actually related to incentives and commissions and bonuses. In the third quarter last year, we did realize that our internal goals would not be achieved. So we had actually a reversal of the accrual that we made in the first half of last year in the third quarter. So practically 0 commission and bonuses was recorded in the third quarter last year. This is obviously not the case in this quarter and so far this year, and this is the main explanation for why our salary and social expenses increases the way it's -- that we can see here.

Other operating expenses is also increasing and, again, related to our commercial activities. We have much more travel expenses and face time with customers through our sales force and marketing departments and so forth. Therefore, we have increased other operating expenses as well, as a consequence.

Our EBITDA increases NOK 8.7 million, ending at NOK 46.4 million. Depreciation increases. It consists of both lease obligations, but also depreciation on development products and other fixed assets. And our operating profit increases 27%, ends at NOK 40.6 million. Net finance is very positive this quarter related to currency, but also hedging contracts and a net positive contribution of NOK 5.4 million. Profit before tax then is about NOK 15 million higher than last year, ends at NOK 45.9 million. And profit after tax ends at NOK 34.7 million, up 48% compared to last year. So strong growth in profit this quarter.

If you look at the year-to-date numbers, the explanations are the same very much as for the quarter, only bigger numbers. And still, the increase that we see here on salary and social expenses is also actually with the same explanation as for the quarter, where we had very low accruals and commissions in 2024, where we did not reach our internal goals, again, this is not the case in 2025. And we've also seen that the incentives that we set for this year has actually given us great results in many of our regions, especially Americas and also in the APAC region as such.

EBITDA increases around NOK 48 million, ends at NOK 171.7 million. Depreciation being at the same level, our operating profit ends at NOK 153.8 million. That's up 46%. And if you look at the top line, we increased with more than 25%. And our expenses increases only 20%. This gives the very positive impact on our EBIT and profit as such. Net finance is also positive year-to-date, ends at NOK 5.1 million, again, currency related. Profit after tax ends at NOK 159 million. Profit after tax, NOK 121.1 million, up 47% compared to last year. So a strong year-to-date so far for Medistim.

Our balance sheet, intangible assets increases. We have our 2 major development projects that we are investing in. Fixed assets decreases. That means we depreciate more than we have invested so far this year. Inventory ends at NOK 167 million. That's up from the beginning of the year. However, it's actually down from end of Q2, which ended at NOK 174 million. So we have now seen a decline in inventory, based upon what also was communicated with those orders that we have committed to that are now fulfilled from our end. Accounts receivable is increasing, ends at [ around NOK 73 million ]. And we have a strong cash position now recovering after our dividend payment of NOK 110 million in the second quarter, and we are now well above last year's position, NOK 127 million. In this quarter, we're at NOK 157.7 million. So strong and good cash position.

Further on our balance sheet, we have a strong balance sheet with equity of almost 73%. No interest-bearing debt is from bank or other credit institutions. So our long-term debt is related to lease obligations and extended warranty. The long-term liability related to this is NOK 28.6 million. Total obligation is NOK 37.9 million.

Yes, some key figures. When we have strong profit, obviously, our earnings per share is following, and we have already NOK 1 per share more at the end of September compared to the whole fiscal year 2024. So good performance so far.

Our cash flow, strong cash flow from operations year-to-date, but also very strong cash flow from operation this quarter. And apart from good profit, we also had a reduction in the working capital, decreasing both inventory levels but also accounts receivable, and gives us a solid cash from operation of NOK 69 million. Investments, NOK 6 million, mainly related to our development projects, as I mentioned earlier. And net cash from financing is basically our lease obligation. So net change in cash this period is NOK 61 million, which is drastically up from last year's third quarter, which was only NOK 20. 3 million in comparison. So again, we end the period with a good and solid cash position, ending at NOK 157.7 million.

And with that, I leave the word again to Kari. Thank you.

Yes. Let's take a look into the details here. So starting with the unit sales of Flow-and-Imaging systems in units. So we see here that we have a net positive number of 9 more systems sold this quarter compared to the same quarter last year. And it's really Asia Pacific that is driving this. We see that they are up by 8 units. Americas is up by 2 units. America -- or EMEA is down by 1, and we will see that EMEA is actually down on all of the different product categories this quarter as a number of units.

I think it's interesting to note that this quarter, we are actually selling around 50% of the total number of systems sold for Medistim is with the imaging inside. And this is a very nice and positive development. I think historically, we have been around 40% of systems being on the -- with the imaging components integrated. So this is definitely a development that we like to see. Also very good this quarter, imaging probe sales in units is growing as high as 73%. And it is Americas that is driving this unit sales, 27 imaging probes sold this quarter, which is extraordinary. Asia Pacific also doing well here. EMEA down by 10 units.

Looking at the Flow-only systems in units. We are up 5 units in total. Asia Pacific, up by 9. And both Americas and EMEA is slightly down in number of units here. Flow probes also have a very strong performance this quarter, 22% growth in number of units. And again, Americas is really driving this growth, 66% growth in number of flow probes sold in the Americas. And of course, Americas is U.S. for the most part, although Canada and South America is also contributing. Asia Pacific, up 59%. EMEA, down 10%.

So let's take a closer look into the Americas. So we are delivering NOK 83.2 million in sales in the third quarter; currency neutral, 35.7% growth. We see that the number of systems sold is really on the same level as last year, but we're selling more imaging units. So that is, of course, contributing to the higher revenues. Also mentioned strong probe sales for the quarter, both from the flow probes and the imaging probes. Canada also continuing to contribute, growing this quarter with 68%. And also Latin America is growing -- or a little bit lower actually, but it's very small numbers. So it doesn't really have a big impact.

Looking at the number of procedures that's coming out of the U.S.A. I've already commented on the number of systems. So that's the first table here. But look at the number of procedures. Here, we can see really the impact of the many flow probes that were sold this quarter. So that translates into an extremely high number of procedures. And also, when we have this very high number of imaging probe sales, that, of course, also translates into a very high number of imaging procedures. This is not to say that this is a measure of the utilization of the systems for the same period. I have to be very clear about that. But certainly, it's a nice development. And if we look then at the number of Flow-only procedures sold in the U.S.A. per year, and we're looking at the year-to-date numbers here, we see that we are covering or supporting around 37% of the CABG procedures in the U.S. with our technology so far, so steadily improving.

When it comes to Asia Pacific, ending up at NOK 25.2 million in sales, 194% growth. And the most important thing to note here is really that we are seeing a continued normalization in the sales to China. So this was our promise at the beginning of this year that we expect to see quarterly variations, but a normalized year. So in the third quarter then, we saw that the sales was up 143% in China specifically. Also contributing to the great results in Asia Pacific for the quarter is Japan, contributing with NOK 6.7 million, but we had 0 sales from Japan in this quarter last year. And also, other distributors are contributing.

So EMEA: EMEA is -- as you see, EBITDA (sic) [ sales ], NOK 37.1 million, down by 11.8%, currency neutral. And this quarter, it is actually our normally highly performing markets, the direct markets, Spain, Germany, also Scandinavia, which is showing a decline for the quarter, 26.8%, while the distributor portion of the business is having a good quarter with 22.3% growth. So I think that we have to keep in mind that both Spain, Germany and Scandinavia as well are markets where we have a very high penetration in the CABG part of the business. So with the flow technology, it's really almost fully penetrated. So the growth needs to come from conversion to imaging, which is steadily ongoing, but still that will continue to take some time. And for the future, we really rely on building and developing the market for our vascular products. And of course, there will be some new target markets. We're currently working our way into the Turkish market. That will also contribute to the future growth here.

The third-party products, as mentioned, started on an extremely high note, revenue up 4.4% for the quarter. And then, with this first quarter strength, we are looking at a year-to-date growth of 16.2%. So all in all, a very, very strong performance from the third party.

So this leads to the regional performance as we see in this table. U.S., up 32%; Canada, up 68%; South America, up 251%. China, as we see, 143% up. The rest of Asia Pacific, up 84%. And then, Europe, especially the European direct markets this quarter, down 17.9%. Middle East, Africa, up 133%, of course, from a much lower number. And this leads to the total sales growth of 25.7%.

When we look into the split of Vascular and Cardiac, we see that we are having an unusually slow development for the Vascular products this quarter. It's growing only by 3.7%. Then, I will ask everyone to keep in mind that both Q1 and Q2 actually delivered more than 40% growth. So this is leading to the year-to-date situation where we're growing at 29%. And looking a little bit back into our history, the growth in Vascular has probably been around 20%. So we are still delivering very good developments in Vascular, and some quarterly variations always have to be expected. Also, I would like to point to the fact that the Cardiac product portfolio is also developing extremely nicely, almost 37% growth for the quarter and 27% growth year-to-date.

And we are always interested in seeing the imaging development. And this year, we are seeing terrific performance here. So almost 40% growth for the quarter and 52% growth year-to-date, meaning that the interest in our imaging products is as solid as ever. And this business is really coming back after weaker 2023 and '24.

When it comes to the recurring revenues, this is when we are counting sales from capital probes, PPP smart cards and lease revenues, continues to be high. It's for the quarter, 72%. And for the last 12 months, we are at 69%, so also very solid.

So it's typically a business as usual quarter for us. No big news to talk about. However, I would like to just reiterate how we started the year, and I know I've been talking about this every quarter. But in the beginning of the year, we knew that we were standing at, as we said, a pivotal moment for the company. We were just about to launch the INTUI software platform, and we were also starting the patent study. So we felt it was a perfect time to strengthen our commercial efforts. And I've talked about the organizational changes that we've made and also some of the operations that we have changed in that part.

I also would like to say that something we have invested quite a lot of time and resources on this year is to establish or reestablish the Medistim Academy. We have actually revamped our training and education program for the sales force. This is part of the efforts of really strengthening our commercial operations at large and really supporting our sales reps and enable them to do the best possible job out in the field. So this is a new program with theoretical and practical exams. It will lead to a certification for the individual sales reps. And the content is, of course, both on product, on clinical application knowledge and also on the selling skills. So we have developed our own sort of model for how we want sales to be performed by representing our products in the best possible way.

So with this, I will leave you with the theme for the year, one team, bold moves, excellence redefined. And we should open up for questions.

Yes. And as usual, we have quite a few questions, and the first one is quite general. Congratulations on another strong quarter. Americas is driving the growth, while relative growth is even higher in APAC. EMEA, on the other hand, seems softer. Going forward, where do you expect growth to come from?

Yes. So I mentioned that today, Americas is actually contributing with 57% of the total sales of our own products. And I think it's with the investments that we are making in the U.S. in terms of building out the sales force and really continuing to build on the momentum that we're seeing there. There's every reason to believe that the U.S. and Americas will be the growth driver also in the near term, in the near years to come. And this is driven both by increasing key opinion leader support, more awareness steadily increasing, strengthening the sales force, as I mentioned. We really have a lot of things going for us in the U.S. So that will be the most important growth driver also going forward.

But Asia Pacific is really the medium to longer-term growth engine for us. And you should remember that we have the highest growth market in the world in China and in India, growing in number of procedures -- CABG procedures more than 10%. So of course, that's the motivation for developing our own direct sales organization in China and also for our heavy involvement and collaboration with LivaNova for India. So I think that will be the next one.

And when it comes to Europe and Middle East, as I said, it is a much higher penetrated market for coronary bypass surgery, CABG, but we still have growth opportunities in Vascular. So for us to grow in EMEA, it will be to increase our efforts on the Vascular side, add some additional markets, of course, also go direct when the time is right.

The next one is on the U.S. You are presenting significant growth in procedures in the U.S., both for TTFM and imaging. Is this due to orders being placed prior to price increases? Or is this down to other market factor? And is the price increase both for TTFM and imaging products?

Yes. We did a general price increase as of the third quarter. And of course, we've been very curious to see whether that would impact the volumes. What we can see that the high volumes of probes sold in this quarter was at the new pricing. So that's at least an early reassurance that we are -- yes, that the new pricing is accepted. But of course, we will need to see that also a little bit further into Q4 and see what the achieved selling price really will be. But so far, yes, it was not a stocking up before a price increase.

Thank you. Vascular shows slower growth this quarter, around 4%. What do you expect from this segment going forward?

Yes. So I think in our quarterly variations, we see it all the time. It can happen in regions. It happens to the different products. That will always be the case. And all in all, we see a very solid development from the Vascular. But the reason why we believe that Vascular can be trusted to be a significant growth driver for the company going forward, that's really the response that we're seeing now that we are making more deliberate efforts in creating this interest awareness through the patent study and building all of these centers that are participating. For now, we have about 55% enrolled in the study. We are still getting the last study sort of up and ready for starting to enroll.

So this is a slow process, but it's moving forward. And we feel there's enthusiasm in this group of investigators, and they are already talking about the technology. And as we know, it's an extremely influential group. So with that investment and everything that we do also on the sales side, I should mention that on the training and education program that I just talked about, we have focused on peripheral bypass as the #1 application area where we really wanted to lift the sales force and support them in how to engage with vascular surgeons. So we are determined to support, invest in the area. We're seeing that we are getting a response from the market. So that will be very positive, I think, going forward.

Thank you. And there's a question on cost. Your cost base is growing. Can you elaborate on the increase? And how flexible are you if you experience lower sales for some time?

Do you want to...

I can answer that question probably. Well, I was touching upon the topic in my presentation. And what we -- when we look at our increase in salary and social expenses, it can look like we have hired a lot of new employees. Yes, we have hired some, but the main driver for the growth is actually related to incentives and internal goals that we've been setting. So obviously, when these costs are then increasing, this is related to the fact that our internal goals have actually been reached. For instance -- and the main driver for this is U.S. And what we have done for this year is actually to lower the fixed part of compensation and increase the variable one. And if they reach their targets, then they will receive a good commission or they [ reach ] their incentive. And we've seen that throughout this year. And also, as a consequence, we have seen a good growth on our top line.

If they would not reach their targets, the consequence, for instance, for the third quarter would be a reduction in expenses of around NOK 10 million, and for the first 9 months, more than NOK 20 million. So that means that we, in that sense, have actually a quite flexible model when it comes to goal setting and reaching our targets. So when targets are reached, yes, then the expense will increase. But if it's not reached, then there will also be a reduction in expenses.

Thank you. There's a question on Turkey. You mentioned Turkey as a new market. Will you start this market with the distributor? Or will you go direct from the start?

Yes. No, we will follow our traditional method of always starting with a distributor in order to understand the market, map the market and also see whether that's resonating with the users in that market. And then, we also want to have a certain level of business before we even starting to consider to go direct. So definitely, we have started with a distributor. So our job now will be to really support that distributor and follow up closely and ensure that we have selected the right one and that we're seeing the development and results that we need to see. So that's for the future to evaluate a direct operation there.

Thank you. There is a question, a wide one. Can you comment on France, Brazil, Japan and India? Are there any plans of going direct in these countries?

France is pretty -- well, it's a challenging country for us. I believe our penetration today is probably around, I don't know, 30%, a little bit more maybe, but still not in the highest end in Europe, definitely. It's one of the countries that it's reasonable to look at for a direct operation. So you could say that's on the list.

Japan is -- yes, it's been -- we have had a great development with our distributors for, I would say, 20 years or more. So they have done a tremendous job for us in developing the cardiac market for flow. They have also done a good job in developing and the conversion to imaging in the market. But as we've seen over the past several quarters, there's been some reasons for concern, and the total business have been challenged and we haven't seen the steady development that we used to. And of course, this is a profitable business. It is also one of the countries that we should think about for going direct.

And then, you mentioned Brazil. Brazil -- well, South America in total is -- hasn't been really the highest priority part of the market for us. Brazil is the most interesting country in South America. And we do have some business there. We do have some installed base there. And we know that there is interest from Brazilian surgeons definitely for the products. So it's a part -- it's a geography where we are considering to increase our efforts, absolutely not going direct in any near future.

Did you mention India?

India, well, again, we are in a starting phase. I would say, we have 2%, 3% coverage of the procedures performed. As I said, it's growing more than 10%. It will soon actually be larger than U.S.A. and then take the lead as the biggest market in the world in isolation. So definitely a place to be, a place to focus on, a place to ensure that we are present and supporting the local distributor. We are very happy with LivaNova. But we need to work it a little bit further before it becomes even a question to go direct.

Thank you. There's another one from the web. Can you comment on the performance of the direct Europe markets? Why was it down so much after being so strong in the past?

So again, quarter-by-quarter, we do see a lot of variation. And there can be customer projects that are being closed or not being closed entering into the next quarter and so on and so forth. That's something that we've seen historically and we'll continue to see. But -- and that is, of course, if you're not winning the customer or closing the opportunities in the quarter, that will affect everything, like we saw it was down on both system sales and probe sales. So this is, of course, part of the same issue.

I think that we -- of course, our ambition is to continue to grow and especially in the direct markets. We have different challenges. Germany as one market, very, very highly penetrated, rather price sensitive, not easy to just compensate by increasing price. In Spain, we've seen some resistance to buying capital, and we then introduced more consumables-based deals, which will then result in less revenue at the time of sales, but really then securing the future growth from the Spanish market. So Spain is in really good condition and Germany for that matter. When it comes to U.K., well, it's the occasional close of sale, still haven't really cracked the nut in the U.K., as we talked about many times.

Yes. Then it's a question on Medistim Academy. Could you comment on the Medistim Academy? Is this for internal sales reps only or also for distributor partners?

Yes.

Should I do the [ answer ]? It's a 3-part question. Why did you see the need of reestablishing this? Any particular event? And how would you like your sales force to sell the product? And what does an ideal sales process look like?

Great question. Big question. Well, first of all, of course, we have trained the sales force in the past as well. It's just that now we have revamped the content that we are -- the training materials and approach. We are using a combination of face -- let's say, classroom situations and digital solutions as well in order to do the training. So it's really to elevate the quality of the training.

And talking about how we want to sell, so we have defined and for a long time, defined the Medistim sales process. And we have a very clear understanding of what we need to do prior to the sales and also during the sales process and when we had closed the sales, and how important it is for us to really be present and ensure that our technology is being used, it is being used correctly, it creates enthusiasm and that we are upselling within the customer that we have just sort of won. So it's too long to go into detail about the sales process here. But for sure, we are rolling this out also to the distributors. And even more, we have a goal to establish a similar certification system for customers. But customers -- some of our customers have actually asked for, is there a way that we could certify our team in the hospital in order to make sure that we have some certified nurses and technicians that can really provide the internal training at the hospitals, which we think is a great idea, and that's on our sort of our next to-do list to build out the Medistim Academy.

We have one more -- yes, there's one more from the web here. Americas recurring revenue was strong in the quarter, around 43% year-over-year, but not quite as strong as I might have thought, given the price increases and very strong unit growth of probes. Could you please explain why?

Well, I don't know what the expectation really was, but we feel that the number of units sold was extremely high. And as I say, we managed to sell this high volume of units at the higher price. So yes, I think that's -- I don't know whether you would...

I think I'd maybe add something to that because, yes, the probes sales in units and the pricing we achieved there is obviously within the new pricing. But having said that, we do also have a lot of lease and PPP contracts, which are lasting over a period of time. So the price increase that we implemented from the 1st of July would not affect those accounts. So therefore, a good portion of the number of procedures that we have been -- sold in the third quarter is based upon the old pricing when it comes to the PPP customers and the hybrid customers. So that probably explains why the increase in revenue is slightly lower than one could have expected. Having said that, I'm not sure what the expectation was here, but this is partly explanation.

Thank you. Another one coming in here on incentive structure. Could you elaborate on the new incentive structure and the flexibility that Thomas hinted? Our goal is always set in a way that incentivizes for year-over-year growth. What would happen if bonuses -- to bonuses if growth year-over-year was not to happen?

As I said, it is -- we were setting new targets every year. And of course, if those targets are not reached, then the incentives will not kick in. So again, going into the detail of the incentive plans for U.S. will take too long time. But again, the main principle has been to lower the fixed compensation and then to give the carrot to sort of make sure that you perform because when you perform -- and performance is either -- both increase the existing recurring revenue on one side, and on the other side, actually drive capital sales. So those 2 are the main factors that will drive the incentive for the sales force.

So with that, we say thank you for being with us for this presentation and look forward to meeting again for the fourth quarter presentation. Thank you.